Evaluating biotech companies is no mean feat. The case of BioCrystPharmaceuticals (NASDAQ:BCRX) nicely illustrates just how tricky a task it is. While investors have been snapping up its shares for some months, it's only today that there seems to be well-founded justification for enthusiasm.

No one would question the fact that news cycles spark investing trends. One of the biggest stories in recent months has been the avian flu virus and fears of a potential mass outbreak. Companies like Gilead Sciences (NASDAQ:GILD), Roche, and Motley Fool Income Investor recommendation GlaxoSmithKline (NYSE:GSK) with marketed products that mitigate bird flu's impact, have received plenty of attention.

But the general excitement for a bird flu treatment has also spilled over into companies with experimental treatments. One such firm is BioCryst.

Until today, BioCryst could have been considered just another biotech riding the wave of publicity on bird flu. BioCryst partnered with Johnson & Johnson (NYSE:JNJ) back in 1998 to develop a drug called peramivir to treat influenza. Johnson & Johnson pulled out of the partnership in 2001, and in 2002, the drug failed to meet expectations in phase 3 trials. Peramivir looked finished.

Then, when bird flu became a global news story, peramivir's prospects were revived. Shares in BioCryst are up more than 220% through yesterday's close, most likely based on peramivir's potential. But peramivir has not even begun clinical trials. Investors were clearly betting a lot on a drug that is still in early phase testing and had failed in the past.

But today's announcement of BioCryst's agreement with Roche may have proved investors right about the biotech company, although for the wrong reasons. Roche is licensing the rights to BioCryst's BCX-4208, a compound in phase 1 development for the prevention of transplant rejection and treatment of automimmune diseases. Roche's decision to license the drug at such an early stage for such a healthy up-front price, $25 million, suggests that Roche has a lot of faith in the compound. BioCryst could receive up to $530 million if the drug moves forward, in addition to royalties.

The deal comes none too soon for BioCryst. The company had just $34.9 million in cash at the end of the third quarter, with no sizable revenue-generating activity in sight. Still, it looks now like BioCryst may just make it, even if it does so by a path not anticipated by investors.

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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.