Durham drug developer BioCryst Pharmaceuticals’ stock plummeted 40 percent on Thursday after the company said late Wednesday it is suspending development of an influenza treatment that had been supported with $235 million in federal research funding.
It was the second major setback for BioCryst in as many weeks.
The company, with 42 employees in Durham and 31 in Alabama, said in a conference call with analysts Thursday that it is planning to restructure and cut costs as its major source of funding dries up. BioCryst had spent about two-thirds of the federal research grants that had kept the company afloat.
The company has lost much of its value in recent weeks as its stock nosedived from a high of $4.69 a share last month to $1.46 at close of trading on Thursday.
The suspension of peramivir, which was deemed ineffective for influenza by an independent panel of experts, is BioCryst’s second drug cancellation. A week ago the company said it was suspending work on a hepatitis C drug in response to concerns about the drug’s toxicity.
Analyst Ed Arce of MLV & Co. said that BioCryst is in “duress” but not doomed. He noted that BioCryst has $44 million in cash, but that its pipeline of projects has been diminished and delayed.
The recent developments dramatically reduce BioCryst’s portfolio of drugs under development. They also throw into doubt a pending merger, announced three weeks ago, with West Coast drug company Presidio.
In Thursday’s conference call, BioCryst officials said they will continue to look for a partner to take BioCryst’s experimental gout treatment into human testing. Officials also announced a new drug, 4430, for which they will seek federal research funding.