H7N9 Influenza Strain Spikes BCRX

4:29:19 PM EDT, Monday, April 8, 2013 · by Brian L. Wilson / Bio-Wire

H7N9 Influenza Strain Spikes BCRX – Data current as of 4/8/2013 @ 5:50 PM EST

Alongside the release of our most recent note on BCRX, news came out of China that a new strain of the Bird Flu – H7N9 had infected up to 26 people, and killed up to 6. Panic over the H7N9 strain isn’t on par with panic over H1N1 a few years ago, although the head of the CDC’s influenza division Nancy Cox told ABC news the following:

“Although H7N9 is more easily transmittable from birds to humans than the original bird flu strain, H1N1, Cox said she expects to see limited human-to-human transmission.

Since H7N9 is not as deadly to birds as it is to humans, it will be harder to track because there won’t be large bird kill-offs, Cox said.”

BioCryst Pharmaceuticals (NASDAQ: BCRX), developer of the neuramindase inhibitor Peramivir, moved as high as $2.21 per share in early trading although the rally eased down a bit, closing at $1.92 per share (or 12.94% higher than the price at last Friday’s close).

It is clear that there are some traders who expect BCRX to rally much higher based on hype surrounding H7N9, as was discussed in our note:

“It was partially because of Peramivir’s potential success that BCRX was trading north of $10 per share in 2009, although that past move was more of a speculative bubble surrounding peramivir, the H1N1 epidemic, and other neuraminidase inhibitors.”

Since it is possibly the best-in-class neuramindase inhibitor for this specific influenza strain, we can infer that this will incentivize the FDA to approve the antiviral IV drug for in-patient use in the United States.

Timing couldn’t be better for BioCryst, as the stock is about to have important meetings with the FDA regarding peramivir’s path to a NDA submission and eventual approval, as well as the Biomedical Advanced Research and Development Authority (BARDA). Note that BARDA is a division of the Department of Human Health and Human Services which provides BioCryst with contract financing for the clinical development of peramivir, and is essential to the company’s ongoing success.

Keep a close eye on the spread of the H7N9 strain, because it will heavily influence the performance on BCRX going forward. Also, don’t expect revenues from this specific influenza outbreak as the company holds no patents in China.

 

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