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BioCryst: Orladeyo on Track to Reach Top of the HAE Market

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  • BCRX

It has been no fun being a BioCryst (BCRX) Investor this week; the market appeared unsatisfied with the biotech’s Q3 earnings and over the past two sessions has sent shares down by 24%.

In the quarter, revenue dropped by ~18% sequentially (due to a Q2 one-off payment), although the top-line figure came in at $41 million, just ahead of the consensus estimate of $40 million.

Most of the company’s revenue is derived from Orladeyo, BioCryst’s oral treatment for the prevention of hereditary angioedema (HAE) attacks, which was granted FDA approval last December. Orladeyo notched sales of $37 million in Q3 vs. the $28.5 million generated in the prior quarter.

However, the net loss increased by ~27.5% from the same a period a year ago to $58.8 million as SG&A expenses rose by ~103.5% to $35 million. While the market has expressed its lack of approval, Cantor analyst Brian Cheng is not concerned.

“We believe the Orladeyo launch is going in line with our expectations with key launch metrics (e.g., new patient starts, size of prescriber base) continuing to track very well as we head into the new year.”

Additionally, while BCRX increased its FY21 sales guidance from $100 million to between $115 million and 120 million, Cheng thinks this outlook is a “conservative one.”

“We note that 18% q/q growth in 4Q will be needed to achieve the top end of the range, which we believe is totally achievable based on the current momentum,” the analyst explained. Expecting 15% sequential growth in Q4, Cheng’s forecast calls for FY21 Orladeyo sales of $119 million, close to the top end of the guided range.

In fact, Cheng thinks the treatment is on course to become the “go-to, most prescribed prophylactic option” for hereditary angioedema (HAE). That notion is given credence due to the fact market leader and competitor Takhzyro’s sales dropped by 2.2% year over year in the quarter, indicating Orladeyo is taking market share.

All in all, then, there’s no change to Cheng’s Overweight (i.e., Buy) rating or $21 price target, suggesting room for robust 81% growth in the year ahead. (To watch Cheng’s track record, click here)

The Street’s overall target is also bullish; at $20.5, the figure suggests 12-month gains of 76%. Rating wise, the stock has a Moderate Buy consensus rating, based on 6 Buys vs. 3 Holds. (See BioCryst stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.