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BioCryst Pharmaceuticals (Nasdaq: BCRX) Galidesivir for the Treatment of COVID-19

In a matter of months, a novel strain of coronavirus infamously known as COVID-19 has spiraled from a local outbreak in China into a global pandemic. To date, there have been 1.5M+ confirmed cases and 88.3K deaths worldwide. The epicenter has shifted in a short period of time from Wuhan China, to Milan Italy, and most recently, to our own backyard in New York City. At first many people including myself dismissed the disease as an overblown flu-like-illness that would quickly subside. How wrong we were.

Unlike like the flu, there are no vaccines or approved medical treatments for COVID-19, aside from the controversial Hydroxychloroquine approved in the U.S for emergency use. While the fatality rate seems low relative to previous coronavirus outbreaks (like MERS and SARS) its highly contagious. In mild cases people are able to recover isolated at home. Others, though, become moderately to severely ill requiring hospitalization and thus impose a contamination threat to healthcare professionals. Consequently, COVID-19 has wreaked havoc on the global economy due to forced shutdowns of schools and businesses. Furthermore, the virus has tested the limits of global healthcare systems as hospitals struggle to find enough beds for patients, medical supplies to keep the patients alive, and personal protective equipment for medical professionals/emergency responders.

Several companies are working on vaccines, but they won’t be available for 12+ months. Top though leaders in the medical community like former FDA commissioner Dr. Scott Gottlieb agree that life will not return to normalcy until we have effective treatments to manage COVID-19. In this article I argue that BioCryst Pharmaceutical’s (Nasdaq: BCRX) galidesivir is superior to Gilead Sciences (Nasdaq: GILD) in the context of COVID-19, and that it will play a significant role in COVID-19 treatment paradigm.

GILD has 6 active clinical trials globally testing remdesivir against COVID-19, two of which are phase 3 studies in the U.S. The first phase 3 study is testing two dosing regimens of remdesivir in addition to the standard of care in severely ill COVID-19 patients. The second is testing the same doses with the standard of care in mild/moderately ill patients. Both studies use the standard of care alone as the control. Based on animal and preclinical data for remdesivir the latter study has the highest probability of success, in our view. In mice and monkey studies remdesivir was most efficacious against SARS/MERS corona viruses when administered prior to infection. Treatment 2+ days after infection did not provide a therapeutic benefit in mice despite lessening the viral load. The same trend was observed in monkeys. Furthermore, in a phase 3 study for Ebola remdesivir underperformed compared to its peers. This was potentially due to less optimal dosing given that the maximum dose without running toxicity risks did not compare well. According to GILD’s trial design key inclusion criteria for the severely ill and mild/moderately ill studies is ≤12 days and ≤8 days since disease onset, respectfully. Therefore, patients treated with remdesivir earlier in the disease cycle (i.e. those in the moderate disease study) should see the most therapeutic benefit.   

Remdesivir vs. Galidesivir

Remdesivir and galidesivir are antiviral adenosine nucleoside analog prodrugs (prodrug= they become biologically active after cleavage of their phosphate group) and work by inhibiting RNA-polymerase dependent RNA replication. Specifically, they dock/bind to newly formed viral RNA strands disabling further replication. In-vitro studies in SAR/MERS-CoV indicates that remdesivir has greater potency. Of note, however, is that galdesivir was tested in Vero-E6 cells (kidney cell line from African green monkey) which were inefficient at converting galidesivir into its biologically active form. Whereas remdesivir was tested in human airway epithelial cell lines with greater conversion efficiency. The takeaway that is to get a clearer sense of galdesivir’s potency in SARS/MERS-CoV and COVID-19 we need additional in-vitro and in-vivo data, both of which we anticipate are forthcoming. With regards to what we do know, there are key chemical and structural differences between remdesivir and galdesivir that we argue make it superior for combating COVID-19.

Figure 1: 3D Structure of ATP (cellular energy currency)
Figure 2: Galidesivir 3D Structure
Figure 3: Remdesivir 3D Structure

Figure 1 depicts the 3D molecular structure of Adenosine-5′-triphosphate (aka ATP). During the replication process for RNA viruses like COVID-19 ATP is utilized as material for RNA synthesis. It follows then that an anti-viral candidate with the greatest structural resemblance to ATP would have the greatest RNA binding affinity. A visual comparison of figure 2 and 3 relative to figure 1 clearly shows galidesivir is most convincing ATP impostor. 

Next our ideal anti-viral should be sleek and agile. Here galidesivir wins again with a molecular weight 2.27 X less than remdesivir. Remdesivir also has a bulky sidechain which although facilitates greater potency makes it an all-around more cumbersome molecule and likely contributes to its dose limiting attributes. From a pharmacokinetic standpoint galidesivir should be more diffuse achieving lower overall plasma concentrations due to greater cellular uptake (which translates to increased antiviral activity). This is supported by data in rats where the plasma concentration of active vs inactive galidesivir was 10-100X greater within 30-minutes of intramuscular injection followed by rapid clearance into cells. This effect was sustained for 24-hours.

To make this discussion well-rounded let’s look at another anti-viral favipiravir with a similar mechanism of action. Favipiravir has shown some encouraging preliminary clinical efficacy and is approved in Japan to treat influenza. Unfortunately, in-vitro data against COVID-19 showed minimal efficacy

BCRX Fundamentals

BCRX is fundamentally sound and has a successful track record with developing oral, intravenous, and intramuscular small molecules. As of 4Q19 earnings the company has $158M in cash and marketable securities compared to $85 million in total debt. In 2019 total revenue was $39.7M, $13.9M of which was derived from a contract with the CDC for their commercial anti-viral product Rapivab for treating influenza. One drawback is the company’s high cash burn which was ~$536M in 2019. This is a bit high for our taste relative to BCRX’s market capitalization of $320M. 

Fortunately, galidesivir is not the company’s only asset at play. BCRX have a PDUFA date on 12/03/20 for their second potential commercial asset berotralstat for the prevention of hereditary angioedema (HAE) attacks. Berotralstat is also up for approval in Japan and the European Union this year. BCRX has two additional compounds in their pipeline. Last but not least BCRX has a solid institutional investor base that cumulatively owns nearly 90% of the outstanding shares. Two noteworthy stakes being 9.99% by Baker Bros and 14.9% by Julian Baker. Another 

Government Ties

BCRX has a long-standing relationship with National Institute of Allergy and Infectious Diseases (NIAID/HHS) and the U.S. Department of Health and Human Services (BARDA/HHS). During the 2009 H1N1 outbreak Rapivab was awarded a $77.2M contract from the U.S. Department of Health & Human Services (HHS) to fund a phase 3 trial in complicated influenza. One month later in October 2009 BCRX was given emergency use authorization (EUA) at the request of the CDC (prior to the phase 3 study) for the treatment of certain pediatric and adult patients hospitalized with suspected, or confirmed cases of H1N1.

Since 2013, BCRX has been developing Galidesivir under contract with the same government partners (NIAID/BARDA/HHS) to combat viral threats to national health and security. Although the initial targets were the Marburg virus, Yellow Fever, and Ebola, one would probably agree that the COVID-19 also fits the bill. Furthermore, Galidesivir is being developed under the Animal Rule which allows for animal efficacy data to suffice for marketing approval so long as there is adequate human safety data  (click here for phase 1 safety data for Galidesivir). Per remarks made during the latest earnings call (3/5/20) and Barclays investor conference (3/10/20) we know that BCRX has been engaged in discussions with the government regarding 1) In-vitro testing against COVID-19. 2) Advancing into clinical trials. 3) Increasing drug supply. After a little digging it became apparent discussions of this nature began years before the COVID-19 crisis (figure 4).

Figure 4: BCRX June 2017 Corporate Presentation

Concluding Remarks

In conclusion, we feel that galidesivir will either be advanced to phase 2/3 clinical trials in the coming weeks or receive emergency use authorization for treating suspected/confirmed cases of COVID-19. A comment from BCRX President and CEO Jon Stonehouse at the Barclays Investor Conference last month leads me to believe the latter may happen once efficacy in humans is confirmed. 

Clinical development in this kind setting is not like clinical development for other programs. What is important here is that they (the government) get data that its drug is Safe and some benefit and then they can go to EUA. We did this in 2009 with Peramivir before we even started a phase 3 study and got EUA. Getting some clinical data that shows some clinical benefit will be helpful in getting it (galidesivir) more broadly used. “- John Stonehouse

Granted this is only my opinion/interpretation. Nonetheless, it confirms that the company is in active discussions with the government regarding the potential use of galidesivir in addressing the COVID-19 crisis. Based on points made in this article, we feel that galidesivir is a more practical choice over remdesivir for treating moderately ill, and potentially severely ill COIVD-19 patients. In our view, it’s a misconception that the most potent drug (remdesivir) is optimal for the task at hand. In a trial conducted by the CDC investigators noticed some worrisome side effects that included rectal bleeding, elevated liver enzymes, nausea, and vomiting. With dose limiting toxicity issues like these and considering remdesivir is most efficacious when given while the viral load is still low (i.e. patients are still healthy), it makes little sense to treat patients with such a compound. galdesivir on the other hand has not had the same issues at comparable doses.  

There are dozens of compounds under development for the treatment of COVID-19 ranging from antivirals to antibodies and immunogenic therapies. Several of these product candidates have shown efficacy against COVID-19 in-vitro. However, as Bill Gates pointed out, it’s important to realize that what works in a test tube does not translate to efficacy in humans. With galidesivir we have a robust data bank of pre-clinical, animal, and human data against a broad range of viruses, including coronaviruses. We feel remdesivir also has a place in the COVID-19 treatment paradigm but is less versatile than galidesivir which can be administered at higher doses either via intramuscular, intravenous injection, or orally. For these reasons we have placed our bet on BCRX and galidesvir.

I am/we are long BCRX. This article reflect the authors opinions and have not been reviewed or endorsed by BioCryst Pharmaceuticals.

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  1. […] Many of the current retail shareholders in BCRX (including myself) originally showed by for galidesivir as COVID play. The potential we saw in galidesivir as a therapeutic for COVID-19 has not changed. Management has maintained since April data from Part 1 of the ongoing clinical study in Brazil should be announced this summer. Based on remarks made in July by the study’s lead investigator the study is probably amid cohort 3 of 4. We anticipate data from the study in late August or September. Of note, this study is fully funded by NIAID and if the study continues into a larger Phase 3 study it will continue to be funded by NIAID. BCRX has been working with the government since 2013 to develop galidesivir for an event such what we are experiencing with COVID. Based on galidesivir’s mechanism of action (same as remdesivir), sleek resemblance to ATP, low-toxicity, and prior in-vitro as well as in-vivo data against a range of virus including coronaviruses we are bullish on the prospects for galidesivir as a COVID-19 therapeutic. For more on our view of galidesivir read this article. […]

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