What happened

Shares of BioCryst Pharmaceuticals (NASDAQ:BCRX) were sinking 11.3% as of 11:33 a.m. EST on Tuesday. The decline came after the company announced results from the first part of a clinical study evaluating galidesivir in treating COVID-19 patients. BioCryst stated that it expects the National Institute of Allergy and Infectious Diseases (NIAID), which is providing significant funding for the study, to discontinue testing the experimental drug in treating COVID-19.

So what

BioCryst went out of its way to underscore the fact that the clinical trial evaluating galidesivir wasn't designed to show efficacy in treating COVID-19 patients. The focus of the study was on safety. On that count, the experimental drug appeared to fare pretty well.

Coronavirus with stock chart trending down

Image source: Getty Images.

Regardless of what the study was designed to measure, though, there's always some expectation that efficacy will be demonstrated. However, BioCryst said that no efficacy benefit was observed with galidesivir compared to placebo. NIAID isn't likely to want to pour more money into an indication for which no efficacy promise was shown.

That doesn't mean it's the end of the road for the antiviral candidate, though. BioCryst thinks that NIAID will likely continue funding galidesivir with a focus on biodefense threats including Marburg virus disease.

Now what

BioCryst is talking with NIAID about potential next steps for the galidesivir program. The more important potential catalyst for the biotech stock over the near term, though, is its U.S. launch of Orladeyo (berotralstat) in treating hereditary angioedema (HAE). BioCryst anticipates that its HAE drug could achieve peak annual sales of more than $500 million. 

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