BCRX Stock: BioCryst Climbs on Approval

BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) is headed up in the market this morning, and for good reason. The company announced that its ORLADEYO product has been approved for commercialization in Japan. Here’s what’s happening:

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BioCryst Pharmaceuticals Announces ORLADEYO Approval

In the press release, BioCryst Pharmaceuticals said that the Ministry of Health, Labor and Welfare in Japan has granted marketing and manufacturing approval for oral, once-daily ORLADEYO. 

Importantly, the treatment was approved as an option for patients with hereditary angioedema in adults and pediatric patients 12 years of age and older. This approval marks an important point in history as ORLADEYO is the first treatment to receive regulatory approval for an HAE treatment in the history of medicine in Japan. 

BCRX went on to explain that the treatment will be commercialized by Torii Pharmaceuticals Co., Ltd., it’s Japanese commercialization partner. Moreover, OrphanPacific, Inc. is the company’s representative partner in Japan and holds the marketing authorization. 

Once BCRX completes pricing negotiations with the Japanese Health Insurance System, Torii will immediately move to commercialize the drug across the region. 

As a result of the regulatory approval in Japan, BioCryst Pharmaceuticals will receive a milestone payment in the amount of $15 million from Torii upon the receipt of reimbursement price approval from Japan’s National Health Insurance System. Moreover, BCRX will receive royalties ranging from 20% to 40% of net sales in Japan. 

Management Commentary

In a statement, Goichi Matsuda, President at Torii, had the following to offer:

Until now, HAE patients in Japan had no therapies approved to prevent attacks, so the approval of ORLADEYO marks a significant advance in HAE treatment. We are pleased to have the opportunity to bring the first oral treatment option to Japanese HAE patients and are actively preparing for the commercialization.

The above statement was followed up by Jon Stonehouse, President and CEO at BCRX. Here’s what he had to offer:

Today’s approval of ORLADEYO in Japan represents important progress towards our goal to bring an oral, once-daily treatment to HAE patients around the world. Thank you to the HAE patients who participated in our APeX-J trial, to the investigators who conducted it, and to Torii and OrphanPacific for their partnership to achieve this milestone to offer a much-needed new treatment option to HAE patients and physicians in Japan.

Why Investors Are Excited

This is overwhelmingly exciting news. After all, BioCryst Pharmaceuticals is gearing up for the global commercial launch of a drug that could become the goose that lays the golden eggs for the company. 

Don’t forget, the United States Food and Drug Administration approved ORLADEYO in the United States and in Europe, an EMA Market Authorization Application is under formal review with a decision expected in the second quarter of 2021.

All in all, BCRX is working to bring this treatment to the market around the world, and is moving at lightning pace to do so. With the approvals in the United States and Japan, the treatment is likely to hit the ground running as commercialization starts to roll out, leading to excitement surrounding potential revenue growth and a push to profitability. 

What Analysts Think About BCRX Stock

According to TipRanks, there are currently nine analysts weighing in on BCRX stock. Of the nine analysts covering the stock, seven rate it a Buy, two rate it a Hold, and there are no Sell ratings. 

Price targets on BioCryst Pharmaceuticals range from $9 per share to $16 per share with a consensus target of $11.63, representing the potential for a more than 20% upside over the next year. 

Nonetheless, keep in mind that analysts often have a vested interest in the stocks they cover. As a result, it’s never a good idea to blindly follow their opinions. Nonetheless, it is wise to use analyst opinions as a source of validation for your own.  

Risks to Consider Before Buying BCRX Stock

When you invest, you’re taking on the risk of loss. Even putting money into your savings account is risky business as a result of inflation. If you plan on investing in BCRX stock, you should consider the following risks first:

  • Speculative. An investment in BCRX is a bet that the company’s ORLADEYO product is going to take off. Commercialization is just in its infancy at the moment, and if sales aren’t quite what investors want to see, significant declines may be the result. 
  • Profitability. BioCryst Pharmaceuticals operates at a loss. While ORLADEYO could change that quickly, if the company isn’t able to produce profits before the money in its bank account runs dry, it may look to sell newly-issued shares as a way to raise funds. Should this take place, existing shareholders will experience dilution and declines could be the result. 
  • Regulatory Risk. To date, ORLADEYO has been approved in the United States and Japan. However, Europe is also a massive market and the approval decision hasn’t come down the line yet. If Europe decides to reject the company’s marketing authorization application, we could see significant declines. 

Final Thoughts

Sure, there are risks involved in investing in BioCryst Pharmaceuticals stock. However, any investment you make will come with risk. All in all, BCRX stock has the potential to be a massively lucrative investment. 

Think about it, HAE is a massive global market, generating billions of dollars annually. At the moment, there are few effective treatment options, and in many regions, no approved treatment options. So, the company has the potential to take the lion’s share of the market. 

All in all, as the commercialization process moves forward, I’m expecting to see tremendous gains in the value of BCRX stock.