Shares of BioCryst Pharmaceuticals (NASDAQ:BCRX) fell as much as 54% today after the company reported positive results from an important phase 3 trial. An oral formulation of BCX7353 was tested as a prevention of hereditary angioedema (HAE) attacks, characterized by severe swelling of the body triggered by trauma, stress, or for unknown reasons. The late-stage trial met its primary endpoint of reducing the rate of attacks compared with placebo in both dose levels evaluated. The highest dose achieved a 44% reduction compared with placebo.
Despite the magnitude of attack prevention compared with placebo and a successful outcome, Wall Street thought that oral BCX7353 needed to achieve a reduction of at least 50% to compete in the market. The top injectable drug on the market today can reduce attacks by 87%.
As of 1 p.m. EDT, the stock had settled to a 52.8% loss.
Last summer, Shire (NASDAQ: SHPG) reported that the U.S. Food and Drug Administration granted marketing approval for Takhzyro (lanadelumab) for the prevention of HAE attacks. The drug was the reason Shire acquired Dyax for $6.5 billion in 2015, as it was thought to pose a threat to the company's older-generation HAE prevention drug Cinryze. That proved correct.
In a phase 3 trial, Takhzyro reported that 44% of patients receiving the highest dose every two weeks remained attack-free during the 26-week study. Those patients also achieved a mean monthly reduction in attacks of 87% compared with placebo. Shire thinks the drug can achieve peak annual sales of $2 billion.
That enormous market opportunity had investors excited about the potential of oral BCX7353, but the difference between attack reductions of 87% and 44% is going to be difficult for BioCryst Pharmaceuticals to overcome.
Could there still be an opportunity for an oral HAE prevention drug? Perhaps, but HAE attacks are severe enough that patients might not be willing to trade a very effective injectable drug for a moderately effective oral drug. BioCryst Pharmaceuticals might be able to compete on price, as BCX7353 is a small-molecule drug, which will undoubtedly be cheaper than Takhzyro, a biologic drug. But even that might not be enough to grab a significant market share.