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Call Accumulation in Small Cap Biotech with Strong Commercial Sales Story

by | Jul 6, 2022

BioCryst (BCRX) seeing some bull flows of late with August $10 calls bought 2000X on 6/24, the August $11 calls bought 5500X on 6/24 and September $10 calls bought 3800X on 6/28. BCRX shares have jumped more than 40% off the May lows and breaking out above June highs this week with room to extend to the 200-MA near $13.15. BCRX is a commercial-stage biotechnology company that discovers novel, oral, small-molecule medicines with a focus on oral treatments for rare diseases in which significant unmet medical needs exist and an enzyme plays the key role in the biological pathway of the disease. ORLADEYO is an oral, once-daily therapy discovered and developed by BioCryst for the prevention of hereditary angioedema (“HAE”) attacks. ORLADEYO sales have been strong, despite COVID-related headwinds, and they see a big long-term opportunity to win share against competitors like Takeda as more patients look to switch from current care, likely an acute approach. BCRX also has upside optionality from pipeline projects like BCX9930, an oral Factor D inhibitor to treat paroxysmal nocturnal hemoglobinuria or PNH, a significant market opportunity. The company is starting pivotal trials this year with readouts expected in mid-2023. BCRX has a $2B market cap and trades 6X FY23 Sales and 4.6X Cash. Revenues are seen rising 74% this year and 30-35% each of the two years to follow with profitability seen in 2024. A meeting with the FDA late Q3 on BCX9930 which was paused due to elevated serum creatine levels in some patients could remove an overhang. Short interest is high at 16.5% of the float and the average analyst target is near 17.50. In November, insiders active buying stock including a $440K investment from the CFO at $12.50 and Baker Brothers has a large 12.7M share position as its 8th largest holding. Piper has a $19 target seeing a solid commercial story trading at attractive valuation. Evercore sees Orladeyo topping $500M in sales by 2025 alone.

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