ORLADEYO Pipeline Will Deliver New Therapeutic Opportunities

Key Takeaways

• ORLADEYO's revenue growth, patient conversion, and reduced royalty payments enhance profitability, cash flow, and financial stability for BioCryst Pharmaceuticals.
  
• Advancements in diverse clinical pipelines and new NDAs could significantly diversify future revenue and boost high-margin therapeutic offerings.
  
• Heavy reliance on ORLADEYO and unaudited financials poses risks to revenue growth and margins amidst potential competitive and market challenges.

Catalysts

A biotechnology company, develops oral small-molecule and injectable protein therapeutics to treat rare diseases.

• Improved revenue generation from ORLADEYO, especially due to acceleration in converting patients from free to paid status, anticipated to increase annual revenue and foster revenue growth moving forward from $580 million to $600 million, demonstrating a 33% to 37% increase over the previous year.
  
• Achievement of financial targets earlier than planned, enhancing company profitability, reducing debt, and accelerating cash flow, impacting net margins and improving financial stability.
  
• Pipeline advancements with ORLADEYO's pediatric NDA filing and ongoing clinical trials for other products like BCX17725 and avoralstat expected to diversify future revenue and introduce new potential high-margin therapeutic options.
  
• Reduced royalty payments on ORLADEYO sales above $550 million and the anticipation of reaching $1 billion in global revenue by 2029, likely improving net margins and operating cash flows.
  
• Enhanced payer confidence and increasing patient preference for ORLADEYO indicates sustained demand and revenue opportunity, aiming for a total of 10,000 U.S. hereditary angioedema patients, directly influencing revenue growth potential.

BioCryst Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming BioCryst Pharmaceuticals's revenue will grow by 17.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from -10.6% today to 22.6% in 3 years time.
• Analysts expect earnings to reach $183.0 million (and earnings per share of $0.79) by about May 2028, up from $-53.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $243.4 million in earnings, and the most bearish expecting $103.7 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.0x on those 2028 earnings, up from -38.8x today. This future PE is greater than the current PE for the US Biotechs industry at 18.2x.
• Analysts expect the number of shares outstanding to grow by 1.39% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.72%, as per the Simply Wall St company report.

BioCryst Pharmaceuticals Future Earnings Per Share Growth

Risks

• The uncertainty in forward-looking statements and reliance on unaudited financial information present risks that actual results may deviate from expectations, potentially impacting projected revenue growth and earnings.
  
• The sustainability of rapid paid patient conversion rates is uncertain, as future changes in healthcare policy or payer dynamics could revert improvements, impacting revenue consistency.
  
• High dependence on a single product, ORLADEYO, for revenue, especially as a large portion comes from the U.S., increases vulnerability to competitive pressures or negative market shifts, potentially affecting revenue and net margins.
  
• The company's assumptions about achieving market leadership and accelerated adoption in pediatric markets could face challenges if competitive alternatives or lower-than-expected adoption rates emerge, risking revenue forecasts.
  
• Pipeline advancements, such as those in Netherton syndrome and diabetic macular edema, are subject to clinical trial risks, including potential delays or unfavorable outcomes, which could impact future revenue projections and long-term earnings growth.

Valuation

• The analysts have a consensus price target of $16.583 for BioCryst Pharmaceuticals based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $30.0, and the most bearish reporting a price target of just $11.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $811.0 million, earnings will come to $183.0 million, and it would be trading on a PE ratio of 24.0x, assuming you use a discount rate of 6.7%.
  
• Given the current share price of $9.92, the analyst price target of $16.58 is 40.2% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.