BioCryst Pharmaceuticals(US:BCRX)2024-11-05 22:19Part I. Financial Information Financial Statements The unaudited consolidated financial statements for Q3 and nine months ended September 30, 2024, present revenues, net losses, and key balance sheet figures, highlighting ORLADEYO sales and significant liabilities Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2024, shows total assets of $491.3 million, with $349.4 million in cash, and total liabilities of $959.8 million, leading to a stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents, and investments | $349,439 | $388,987 | | Total current assets | $427,125 | $495,966 | | Total assets | $491,254 | $516,960 | | Liabilities & Stockholders' Deficit | | | | Total current liabilities | $153,567 | $149,988 | | Royalty financing obligations (non-current) | $481,775 | $508,034 | | Secured term loan | $314,333 | $303,231 | | Total liabilities | $959,817 | $972,488 | | Total stockholders' deficit | $(468,563) | $(455,528) | Condensed Consolidated Statements of Comprehensive Loss For Q3 and nine months ended September 30, 2024, revenues increased to $117.1 million and $319.2 million, respectively, with net losses narrowing to $36.1 million and $62.1 million Financial Performance Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $117,085 | $86,742 | $319,178 | $238,011 | | Total operating expenses | $98,663 | $98,663 | $317,213 | $299,050 | | Income (loss) from operations | $(11,921) | $(11,921) | $1,965 | $(61,039) | | Net loss | $(36,149) | $(36,149) | $(62,086) | $(164,808) | | Net loss per share | $(0.19) | $(0.19) | $(0.30) | $(0.87) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash used in operating activities significantly improved to $46.8 million, with $34.8 million provided by investing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(46,807) | $(86,223) | | Net cash provided by (used in) investing activities | $34,796 | $(103,025) | | Net cash (used in) provided by financing activities | $(1,740) | $35,658 | | Decrease in cash, cash equivalents and restricted cash | $(13,383) | $(153,750) | Notes to Condensed Consolidated Financial Statements The notes detail significant accounting policies, revenue recognition for ORLADEYO, and key disclosures on royalty financing obligations, the Pharmakon Loan Agreement, and workforce reduction costs - The company's primary revenue source is ORLADEYO, with sales recognized upon delivery to customers, and net revenue recorded after estimating variable considerations like government rebates, chargebacks, and co-payment assistance5153 - The company has significant long-term liabilities from royalty financing agreements with RPI and OMERS, totaling $514.8 million as of September 30, 2024, for rights to future royalties on ORLADEYO and BCX10013 sales129131143 - In April 2023, the company entered into a $450 million loan agreement with Pharmakon, drawing an initial $300 million tranche to repay previous debt, with the loan bearing interest at SOFR + 7.00% and maturing in April 2028145 - In January 2024, the company implemented a workforce reduction, incurring $3.4 million in severance and related costs recognized in 2023, with an additional $1.3 million in one-time termination benefits recognized in Q1 2024199200201 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's rare disease focus, led by ORLADEYO, pipeline developments including BCX10013 discontinuation, and financial performance, affirming sufficient liquidity for the next 12 months Overview and Recent Developments BioCryst, a rare disease biotech, highlights ORLADEYO's market expansion, pipeline advancements for BCX17725 and avoralstat, discontinuation of BCX10013, and a new $69 million HHS contract for RAPIVAB - The company anticipates the global commercial market for ORLADEYO could reach a peak of $1 billion in annual net revenues, with approximately 80% expected from the United States209 - Development of BCX10013, an oral Factor D inhibitor, will be discontinued due to observed clinical activity being less than other therapies on the market214229 - In September 2024, the company was awarded a contract by HHS for the procurement of RAPIVAB (peramivir injection) for the Strategic National Stockpile, worth up to $69 million over five years, with the first order of $13.9 million executed230231 Results of Operations Q3 2024 revenues increased to $117.1 million, driven by ORLADEYO sales, while R&D expenses decreased and SG&A expenses rose to support commercial growth Q3 2024 vs Q3 2023 Performance (in millions) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $117.1 | $86.7 | +$30.4 | | R&D Expenses | $41.1 | $46.9 | -$5.8 | | SG&A Expenses | $65.1 | $50.6 | +$14.5 | | Interest Expense | $24.8 | $27.3 | -$2.5 | Nine Months 2024 vs 2023 Performance (in millions) | Metric | 9M 2024 | 9M 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $319.2 | $238.0 | +$81.2 | | R&D Expenses | $125.2 | $146.5 | -$21.3 | | SG&A Expenses | $185.7 | $149.5 | +$36.2 | | Interest Expense | $74.1 | $83.7 | -$9.6 | Liquidity and Capital Resources The company's liquidity, primarily from cash and investments totaling $349.4 million, is deemed sufficient for the next 12 months, supported by reduced operating cash burn and no additional debt draws - As of September 30, 2024, the company's principal sources of liquidity were approximately $96.8 million in cash and cash equivalents and $252.6 million in available-for-sale investments253 - The company believes its financial resources are sufficient to fund operations for at least the next 12 months, having no immediate plans to access capital markets and having not drawn down additional available debt266 - Net cash used in operating activities for the nine months ended September 30, 2024, was $46.8 million, a significant reduction from the $86.2 million used in the same period in 2023254255 Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk from its variable-rate Pharmakon Loan Agreement and foreign currency risk from international sales, but does not currently use hedging instruments - The company is subject to interest rate risk from its variable-rate Pharmakon Loan Agreement, where borrowings accrue interest based on SOFR303 - Foreign currency risk arises from European sales denominated in Euros and British Pounds, and Japanese royalties in Yen, though the company does not currently engage in foreign currency hedging307308 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with a previously reported material weakness now remediated - The CEO and CFO concluded that as of September 30, 2024, the company's disclosure controls and procedures are effective311 - The material weakness that was reported in the previous quarter has been remediated312 Part II. Other Information Risk Factors The company faces significant risks including a history of losses, drug development uncertainties, reliance on third parties, commercialization challenges, substantial indebtedness, and intellectual property concerns - The company has a history of losses and may need to raise additional capital in the future, which may not be available on acceptable terms315318 - Success is heavily dependent on managing the product pipeline, advancing candidates through uncertain clinical trials, and receiving regulatory approvals, with failures possible at any stage321323 - The company relies heavily on third parties for manufacturing and distribution, and any failure by these vendors could significantly delay development and commercialization368369 - Significant indebtedness under the Pharmakon Loan Agreement includes restrictive covenants that limit operational flexibility and could lead to default if breached437441443 Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q3 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024516 Exhibits This section lists exhibits filed with the Form 10-Q, including the Equity Award Retirement Policy, CEO/CFO certifications, and Inline XBRL financial statements - Key exhibits filed include the BioCryst Pharmaceuticals, Inc. Equity Award Retirement Policy, CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and XBRL data files518