Major Volatility Seen In BioCryst (BCRX) Shares

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BCRX Hot Sheet

Overall Analyst Rating:
NEUTRAL (= Flat)

EPS Growth %: +55.2%

Investors are betting on wild action in BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX), which hopes at this time are pinned on flu drug peramivir for swine flu.

Recently BioCryst received orders from the U.S. for 10,000 courses of intravenous peramivir for H1N1 after the company was granted emergency use authorization from the FDA after a request by the CDC.

According to option strategists at Susquehanna, during morning trading investors in BioCryst got long both the March 10 calls and December 20 puts, roughly 2,000 times each. On this the firm said "it is likely that these investors are positioning for higher levels of volatility in shares of BCRX."

Currently peramivir is authorized only for hospitalized adult and pediatric patients for whom therapy with an i.v. drug is clinically appropriate, based on one or more of the following reasons:

1. the patient is not responding to either oral or inhaled anti-viral therapy, or
2. when drug delivery by a route other than an intravenous route -- e.g., enteral (absorbed by the intestines) or inhaled -- is not expected to be dependable or feasible;
3. for adults only, when the clinician judges i.v. therapy is appropriate due to other circumstances.

There have been stories so far of great success with peramivir in H1NI, but bears note that the government also has orders for intravenous versions of Tamiflu and Relenza, which are much cheaper than peramivir. Bears suggest once the swine flu hype is over, gains will disappear.

Wall Street coverage is pretty scant on the stock. Only five analysts cover the stock. One rates it a Buy, three rate it a Hold and one rates it a Sell.

Shares of BioCryst are up 2.6 percent today to $12.10.

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