April 09, 2013 at 16:12 PM EDT
Biotech Drug Approved in China Amid Bird Flu
BioCryst Pharmaceuticals (NASDAQ: BCRX) almost had to fold its flu drug research, but the rise of bird flu cases in China caused a fast-track of the drug...

This Article Originally was Published here: http://www.wealthdaily.com/articles/biotech-drug-approved-in-china-amid-bird-flu/4166

China has recently reported two new cases of bird flu (H7N9 virus), a development that led authorities to shut down live poultry markets in Nanjing, as well as suspend all trade in poultry. The cases were reported in Shanghai, says Reuters. That makes a total of 18 human infections thus far, with six deaths noted in those two cities.

In light of these new developments, the Chinese FDA announced that it has gone for a fast-track approval for an intravenous anti-flu drug, Peramivir, which is manufactured by a U.S. biotech firm called BioCryst.

This is pretty big news for BioCryst Pharmaceuticals (NASDAQ: BCRX), which not long ago was considering shutting down the Phase III trials for Peramivir. At the time, the trials fared weakly and suffered from a lack of patients.

Other systemic problems troubled the company, such as the layoffs of half its staff last December. But with news of the possibly renewed attention to Peramivir and its viability, BioCryst shares went up 25 percent on April 1, according to Fierce Biotech.

Over in China, mass bird slaughters are in progress, and the World Health Organization has been at work assuring the media that human-to-human transmissions have not (yet!) been recorded.

Reuters reports:

"More than 530 close contacts of the confirmed cases are being closely monitored. In Jiangsu, investigation is ongoing into a contact of an earlier confirmed case who developed symptoms of illness," the Geneva-based WHO said in a statement on Saturday.

Well, then, we don’t really have to panic about the flu yet. Rather, this should be read as a great example of how the biotech industry works.

Biotech Growth

The biotech sector is often plagued by long payoff times and risky ROIs, and startups have an especially tough time of convincing profit-hungry investors of the viability of their products.

The problems experienced by BioCryst are definitely not far from the norm in the industry at large. But everybody’s trying to be the next Amgen (NASDAQ:AMGN).

The lure is obvious, of course. Who wouldn’t want to be the smart investor who put his faith in a tiny startup that went on to discover a cure for Alzheimer’s? As we told you yesterday, back in 1999, Regeneron (NASDAQ: REGN) had a market cap well under $250 million. In 2013, that had gone up over $17 billion.

But it took more than a decade to get there. That’s the sort of timeline investors must learn to work with rather than pressuring companies to produce speedy results.

Along the way, of course, such fortuitous events (Chinese bird flu/BioCryst) can occur, which can dramatically alter the calculus. Whereas here BioCryst faced problems that threatened to stall and perhaps shut down its entire Peramivir project, it seems likely that the company will now need to deal with booming demand from China as that nation battles bird flu.

Necessity, then, can hasten the natural gestation period for biotech products. However, we should not hope for an outbreak every time we want to test the efficiency of a potential breakthrough in biotech developments.

Instead, entities like the Biomedical Advanced Research and Development Authority (BARDA) need to allow biotechs more leniency in terms of research and development frameworks. BARDA, after all, was funding most of the Peramivir research (to the tune of around $234.8 million), and they’re the ones who had issued a stop-work order on the project. The order basically covered everything "except for certain activities primarily related to the upcoming FDA Type C meeting which is scheduled." (Fierce Biotech).

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BioCryst's Future

That FDA meeting could now prove crucial, since Peramivir may well receive its trial by fire over in China far sooner than anyone could have expected. Nonetheless, BioCryst President and CEO Jon P. Stonehouse is clearly hoping for good things.

From BioCryst’s press release:

"We are encouraged by these recent communications, and we look forward to advancing our Peramivir discussions with the FDA and BARDA/HHS. Our ultimate objective is the approval of Peramivir as an intravenous treatment option that could benefit patients in the United States. The Stop—Work Order is understandable, as it focuses the scope of reimbursable activities to those that are essential and supportive to continuing regulatory communications, with the objective of preparing an NDA submission. If the conversations with the FDA and BARDA/HHS are successful, BioCryst stands ready to file an NDA for Peramivir as soon as feasible."

China may prove to be the crucial friend BioCryst needs—as well as an example for all other would-be biotech breakthrough companies.

 

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This Article Originally was Published here: http://www.wealthdaily.com/articles/biotech-drug-approved-in-china-amid-bird-flu/4166



Biotech Drug Approved in China Amid Bird Flu originally appeared in Wealth Daily. Wealth Daily, a free daily newsletter, offers practical investment analysis and contrarian stock market advice.
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