Please ensure Javascript is enabled for purposes of website accessibility

Here's Why BioCryst Pharmaceuticals Collapsed Today

By Maxx Chatsko - May 21, 2019 at 1:18PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This is a case study of when a successful phase 3 trial isn't successful enough.

What happened

Shares of BioCryst Pharmaceuticals (BCRX -3.71%) 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.

A pink trendline crashing through the x-axis of a chart on a chalkboard.

Image source: Getty Images.

So what

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.

Now what

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BioCryst Pharmaceuticals, Inc. Stock Quote
BioCryst Pharmaceuticals, Inc.
BCRX
$8.57 (-3.71%) $0.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.