BioCryst Bets on New Ebola Drug to Fight Bioterror, Outbreak Threats

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Marburg drugs with government funding. But Cambridge, MA-based Sarepta (NASDAQ: SRPT) and Vancouver, BC-based Tekmira (TSX: TKM) have had to halt some of their research. Sarepta’s Ebola research program was terminated in 2012 due to government funding constraints. The Marburg program was left intact and Sarepta reported positive results in phase 1 tests earlier this year. The FDA in early July placed a clinical hold on Tekmira’s Ebola drug tests in healthy human volunteers, seeking more data on how the drug works at higher doses. The FDA also asked for changes in Tekmira’s study to ensure patient safety. Meanwhile, Colorado company Corgenix Medical (OTC: CRTX) was awarded a $2.9 million NIH grant in June to develop an Ebola diagnostic.

Sheridan says that while foreign governments could be interested in building a stockpile of antiviral reserves to guard against bioterror attacks, he expects the U.S will be the only one that will commit funding for BCX4430. To develop the compound beyond phase 1, BioCryst plans to seek more federal dollars, perhaps from the U.S. Department of Defense or the Biomedical Advanced Research and Development Authority (BARDA). BioCryst has been down this path before.

BioCryst’s roots are in Alabama, where the company was founded in 1986 by Charles Bugg, a University of Alabama at Birmingham biochemistry professor and the company’s first CEO. BioCryst went public in 1994, focusing for years on developing treatments for immunological and infectious diseases and disorders. In 2006, BioCryst opened a North Carolina office to handle clinical and regulatory operations. The company formally relocated its headquarters to Durham in 2010 but kept its labs in Birmingham.

BioCryst had little clinical success until peramivir, an experimental antiviral flu drug. In 2007—the year Stonehouse joined as CEO—BARDA awarded BioCryst a $102.6 million contract to develop the treatment to prepare for possible flu pandemics. Additional funding in later years brought the total to $235 million. Peramivir brought BioCryst revenue through licensing deals with companies in Japan and South Korea, where the drug has since been approved. BioCryst filed for FDA approval for peramivir last December.

Stonehouse points to peramivir’s development as a model for the company. BARDA funding of peramivir allowed BioCryst to take the compound through clinical testing without resorting to sales of additional BioCryst stock to finance clinical trials. In a similar fashion, Stonehouse says revenue from government purchase orders could cover BioCryst R&D expenses without a stock sale that would dilute shareholders.

BioCryst is not going to become an Ebola drug company or even an antivirals company. No company can build a business around stockpile orders from the government, Stonehouse says. But those government orders of antivirals would financially support what Stonehouse now says is BioCryst’s core focus: rare disease drugs. BioCryst’s lead rare disease drug is currently in mid-stage clinical trials as a possible treatment for the rare genetic disease hereditary angiodema (HAE). Stonehouse says government orders of BCX4430 could finance commercialization of the HAE drug, should the latter treatment secure FDA approval.

BCX4430 should have a shorter regulatory path than peramivir. Unlike peramivir, BCX4430 won’t have to go through lengthy and expensive phase 2 and phase 3 clinical trials. The same risks that require Marburg and Ebola to be tested in a BSL-4 facility also mean that the drugs to treat these viruses aren’t tested in humans in randomized placebo-controlled clinical trials. Instead, BioCryst will test BCX4430 under the FDA’s animal safety rule. Like all drugs vying for FDA approval, BioCryst must show its compound is both safe and effective. But animal results—likely from more monkey tests—will be enough to meet the efficacy threshold under the animal rule. To demonstrate safety, BioCryst needs only to test BCX4430 in healthy humans using the same drug levels used to cure monkeys infected by the virus.

What’s more, BCX4430 may be able to treat more than Ebola and Marburg: additional virus targets are on the horizon. The compound is a broad spectrum antiviral that has shown effectiveness against a wide range of pathogens, which Stonehouse boils down to the phrase “one drug, many bugs.” Already, a BioCryst collaboration with Utah State University scientist Justin Julander showed that BCX4430 was effective treating hamsters infected with yellow fever. The potential to address multiple pathogens would give the government more bang for its buck in its own effort to develop and stockpile antivirals, Stonehouse says. And if the FDA approves BCX4430 in Marburg, adding another disease would require only an additional animal trial to show efficacy for that disease. The preclinical, toxicology, and safety studies will have already been done.

Stonehouse expects BioCryst will be ready to file an investigational new drug application for BCX4430 and start phase 1 clinical trials early next year. By the end of 2015, if BioCryst can show the drug is safe in people—still a big if—Stonehouse says the company will be in a position to provide the drug during a virus outbreak. The current Ebola outbreak now exceeds 900 cases and 600 deaths, according to the WHO.

Stonehouse says BioCryst has no intention of making money off of viral outbreaks in Africa. If BCX4430 wins FDA drug approval and the U.S. government buys the drug as a bioterror countermeasure, Stonehouse says, the company will give away its remaining stores of the drug when and where it’s needed. That could mean working with health organizations such as WHO or nonprofit groups such as the Bill & Melinda Gates Foundation. The company has already had discussions with Medicins Sans Frontieres.

“If we get a stockpiling order, we’ve achieved our business goal,” Stonehouse says. “So then it’s doing what’s right, which is to make it available to these places that can’t afford it.”

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