Biocryst (BCRX)

Rare Disease Therapeutics

Biocryst (NASDAQ: BCRX)

[This page is created by Reza Ganjavi who is an investor in BCRX in order to share his due diligence with the public. It is not an investment or medical advice. Do your own research. This page is NOT sponsored by Biocryst and is purely a personal endeavor.

Biocryst's website: https://www.biocryst.com/science/pipeline/

25 April 2024 Going Down As Expected Due To Incompetent CEO & Self-Serving Board

I warned Jon Stonehouse a long time ago. I hate telling ineffective, self-serving CEO's I Told You So. But they don't give a damn about shareholders when they keep racking up huge salaries and bonuses and the Board and Management apparently scratch each others' backs.

Main problem with Biocryst is management, and in particular Jon Stonehouse. I said this a long time ago, I say it again. Wall Street is unforgiving when it comes to lousy management. They have some good people but the problem is at the very top, and a bloated ship in terms of expenses, and a CEO who is clueless about what constitutes shareholder value and how to build company value (which accountants measure in dollars and nothing else).

5 Jan 2024 Layoffs

They're finally listening. I pressed on this point so much the last couple of months. "Reduction of 59 jobs (10 percent of total organization) in the first quarter of 2024."

Layoffs was a must no matter what. They need to cut another 10% too with Jon on the list himself. He's excess fat in my view.

6 Dec 2023 Sharp Drop

BCRX had a sharp drop today - from 6.20 to 5.10. Apparently two factors caused the drop, which was overdone anyway, and the stock came back up to 5.50 area right now.

1) A potential competitor, Pharvaris, which an analyst said will be better than BCRX's lead drug Orladeyo. I don't understand the metrics of measurement enough to comment on it.

2) Novartis got approval on Fabhalta (iptacopan) "offering superior hemoglobin improvement in the absence of transfusions as the first oral monotherapy for adults with PNH."

Fabhalta is a competitor for BCRX's BCX10013 which is in Phase 2 which the company is pumping a lot but some are calling it "smoke and mirrors".

My biotech guru Dr. Joseph commented that he expects more oral drugs to come to the market in the years ahead which may put at risk BCRX's goal of a billion in sales. He said for BCRX price to see significant upside it needs good data, which is quite a ways out. His sentiment is a "hold" on the stock. I personally have a 7.50 cost basis which I am not too confident that it would get there in the kind of time-frame I expected. I also don't like the CEO but I like the science. Sounds familiar?

Just my opinions. Not an investment advice. To be removed reply with Remove.

Calling a spade a spade

29 NOV 2023

Dear Jon

You made it sound like the debt is not debt. If it's not debt why are you paying tens of millions of investor dollars in interest? Fact is it's a bad set up and you should have raised money when the stock was much higher, before your mismanagement debilitate the stock. These mistakes are directly a result of you having never gone to business school and having never run a company before. Experience counts. Your learning on the job (not sure if you have the humility to admit to mistakes and learn) has cost shareholders a lot of money and has killed the company value. The stock will take off the day you announce retirement.

By the way, phrases like "I mean" without having said anything before it to clarify, is not polished speaking.

Best Regards
Reza

29 NOV 2023

I found Jon's presentation as an embarrassment. He uses unprofessional unpolished phrases. His answer about the huge debt and the mistake they made to use that structure instead of raising capital when the stock was much higher, before it dives largely because of mismanagement of the company including a wasteful, inefficient empire Jon has built which has a lot of "fat" to be trimmed. That would have prevented tens of millions in interest and complexities that can deter big pharma from acquiring the company. The analyst specifically brought up the point and Jon's answer was incompetent BS, making it look it it's really not debt, which it is otherwise they wouldn't be paying tens of millions in interest which is a shot in the leg every quarter; and making it sound like it's just a matter of investor education! Too bad this great science is in hands of such incompetent CEO who never went to business school, nor ran a company before. Very weak CEO profile https://www.linkedin.com/in/jon-stonehouse-3063777

~~~

Biocrust BCRX short interest has shown grave resilience and power, purely because of CEO/Board's weakness, in my opinion. Shorts know the leadership is a perfect punching bag with no teeth, so they've pounded the hell out of the stock. Science and sales are strong but it takes more than that to command valuations when you're talking over a billion dollars. Many companies with good science and sales are far below a billion in valuation. I don't think the BCRX can get properly valued as long as Jon is the CEO. Just my opinion based on experience and seeing similar situations. The stock has the potential, but needs a boost from inside, and best thing that could happen is for Jon to announce his retirement. The way the company is organized is very very top heavy, and extremely inefficient and wasteful. 531 mouths to feed, and add a few C level suits who are not in this list https://finance.yahoo.com/quote/BCRX/profile?p=BCRX

~~~

Questions they rudely ignored on the latest call:

"How do you address the problem of valuation, and the huge short position which is a real problem for investors as it is artificial supply that significantly damages the company's value and investor return. Is shareholder value in a realistic time-frame (not 2029) a matter of concern for you? Or shareholders are not even on your radar and you just needed them when you needed to raise money? Thanks."

"You've made great progress in science, however, company value has dropped to a third in the last year, which is a huge problem, given investors expect a return. Do you see that as an issue? If you don't, you can't solve it!"

~~~

post, on site

For Jon Stonehouse and Every Member of Board of Directors.

Hi Jon

Please send a copy of this to every Board member. Thanks in advance.

Management-101: Public company Directors and Executive Management are hired to serve shareholders. Serving themselves instead is a breach of their duties. Directors can be held accountable.

There is gross incompetence on the part of the Board members, including yourself, in driving shareholder value because you have no clue how to do that, including how to run a lean organization. Instead, you serve yourselves with big salaries, options, bonuses, perks, and have become complacent and have forgotten why you were hired.

This cannot go on forever. Your bottomless ATM machine will turn on you some day, in the form of a Class Action, Derivative, civil lawsuits,, and that day is fast tracked the more your incompetent mismanagement of the company erodes company value.

Your exculpatory clauses will be worthless, because there is no excuse, including, "we didn't know", of continuing to erode shareholder value, while continuing the worth of your bank accounts. Your options however, will be worth a lot more if you resign Jon, and let a "Wall Street Wise" CEO who knows how to gain investor confidence, how to kick the shorts' ass (unlike you who've been getting kicked in the ass, repeatedly by people who are much smarter and wiser than you and know how to play you like a yo-yo -- a CEO who understands the simple formula that determines company value, as function of supply and demand.

Meanwhile, the stock will be the slave of the short sellers, who bitch slap it and manipulate it up and down as they wish, because of your lack of leadership skills as it pertains to driving company value. What is it going to take Jon for you to be humble enough to see your weaknesses and step down?

Regards

Reza Ganjavi, MBA - shareholder and veteran biotech investor.

~~~

For Jon Stonehouse and Every Member of Board of Directors.

Hi Jon

Please send a copy of this to every Board member. Thanks in advance.

Interesting facts:

Revenues the past 2 1/2 years ~ $580MM.

Cost of R&D the past 2 1/2 years ~ $560MM.

Assets advanced in the pipeline during that time ~ basically zero.

Assets killed in the pipeline during that time ~ 2 that I remember off the top of my head.

Company's mismanagement is the sole reason, headphones love to kick the stock around like a flat ball in a ghetto.

Regards

Reza

~~~

The scientific accomplishment is very impressive. It's beyond my level to comment on the science but the analysts were clearly very interested and appreciative of the presentations. CEO Jon Stonehouse and CFO Anthony Doyle bragged about how the company is in great shape financially, to which I said Bullshit! Just look at how much interested they pay every quarter. An analyst even asked about that and Anthony gave a BS answer. What was clearly missing from Stonehouse's radar was the share price, and shareholder value. In fact, John Bluth (IR) rudely ignored two questions I sent in (and probably the same question from other shareholders) about the share price having lost 2/3 of its value, and if shareholder value is important to them. SV is not an abstract figure TBD in 10 years, but a concrete number that can be calculated any time, and CEO Jon Stonehouse seems utterly incompetent and arrogantly ignorant of it and the importance of influencing its factors. Time for a new CEO.

~~~

Jon already let the cat out of the box by saying "new Orladeyo" will be announced!!!! Unbelievably clueless IR strategy.

So shorts will be prepared.

Perfect example of management who is absolutely clueless about games of power, and ignorant as to the power of its enemies who are there for a very good reason: because of cluelessness of the CEO about these topics, so perfect punching bag, yo-yo, toy, and you get played right into their hands.

While if you had any clue about this subject, you're not announce anything till you announce it. Shorts / hedge funds hate surprises. I know this first hand (think SAC Capital).

So they have you under their thumbs, until you wake up and understand some key facts. But I don't think that's possible because counting on Jon changing is not wise. So we're stuck -- we're hostages of this mismanagement and the stock keeps tanking because of your mismanagement.

Perhaps the best solution is a derivative lawsuit -- that might wake up the board to this miserable, wasteful, complacent, incompetent mismanagement of shareholder value.

~~~

Dear Jon, I'm sure you have external forces to blame for the consistent erosion of shareholder value but that finger should be pointing inward. The buck stops at the top. But you don't care do you, as long as you collect your millions, funded by bagholders who trusted you into buying the stock above $15.

The kind of erosion happens to mismanaged companies whose CEO is clueless, I repeat, clueless about games of power and politics, and how you get screwed up when you don't understand the forces that are out to screw you up.

Time to go Jon. Spare us. Good Karma for you to step aside, and see the share price soar. You'll get a lot of good wishes. Vs. sticking around and seeing the stock go sub-4, and you make your millions still, but eternally blamed for putting yourself ahead of what you were paid to do, which is to drive shareholder value (in dollars and cents). You're a master of destruction of shareholder value Jon. Please resign.

~~~

WASTEFUL MANAGEMENT

One key reason the stock is in 7's instead of 15's where it should be, is the wasteful culture of the company that burns through cash like there's no tomorrow. Remember, they're losing millions of dollars, of shareholder money, yet they spend like it's their rich daddy's money and as a result the stock has gotten damaged and become a yo-yo in the hands of shorts and manipulators who know how to play it. They run it up, bring it down, bitch slap it, suck in buyers, suck in sellers, and play it as they want, because of weak management and the buck stops at the top, so Jon needs to retire.

13 November 2023

Good post:

The company is not worried. Blind faith to stay invested here? Perhaps, but I am not blind. Here are my confidence boosters:

1. Company is burning <$20M of their nearly $400M in cash per q.

2. Revenue is growing >15% per year($375M-$420M guide FY24 is my prediction)

3. R&D expenses expected to grow marginally to +$15M more per qtr.for the additional 5 programs in the pipe

4. Macro market will improve next year (cutting rates)

5. Multiple drugs in the pipeline being pursued cautiously. (They cut 9930 and FOP) A clear sign that discipline is being implemented.

6. 10013 will likely show similar/better results. Orladeyo took 2 tries. If we see positive news in this program SP will rise 3X from here, minimum IMO. (Proof their program optimization/discovery is working and is likely replicable)

7. BRIAN ABRAHAM'S RAISED PT.

8. Short interest decline

9. > 90% tutes owned

2 November 2023

Piper Sandler analyst Christopher Raymond maintained a Buy rating on BioCryst (BCRX – Research Report) today with a target price of $19.00. “Market is significantly discounting Orladeyo’s $1B peak rev opportunity”

A look at the last 2.5 years - 8 Oct 2023

For Jon Stonehouse and Every Member of Board of Directors.

Hi Jon

Please send a copy of this to every Board member. Thanks in advance.

Interesting facts:

Revenues the past 2 1/2 years ~ $580MM.
Cost of R&D the past 2 1/2 years ~ $560MM.
Assets advanced in the pipeline during that time ~ basically zero.
Assets killed in the pipeline during that time ~ 2 that I remember off the top of my head.

Company's mismanagement is the sole reason, headphones love to kick the stock around like a flat ball in a ghetto.

Regards

Reza

13 Oct 2023 - Letter to Board

For Jon Stonehouse and Every Member of Board of Directors

Jon,

What happens with utterly mismanaged companies like Biocryst, regardless of the science and sales, is they get debilitated due to the self-serving management who are rolling in their fat packages and failing to drive company value. Here's your recent track record:

There's every sign of an incredibly incompetent CEO in this picture. The Board is therefore put on notice hereby to perform their fiduciary duties to oust this horrible CEO, or face a derivative lawsuit.

This notice will be included in future communication with the Board which will not go through Jon and John and they will not appreciate being kept in the dark.

I hate to tell you in a year "I told you so", but I've invested in biotechs for decades, have been involved in ousting two public company CEOs as investor activist (so don't under-estimate me), and time and again I've seen the same thing play out which is happening to Biocryst.

Let me predict: if the status quo continues -- a huge cost structure -- a horrible CEO who should have never got out of sales -- a CEO who spills the beans -- a CEO who has absolutely no talent and no idea how to drive company value -- a CEO who does not understand the forces that affect company value, etc. -- then the stock will be driven lower and lower.

When the stock goes below 5, and the market cap below certain thresholds, you lose some major institutional investors.

You become more of a sex toy of the hedge funds, as you are today. They know all the things you have no clue about Jon because you are so incredibly incompetent and clueless about this subject. They know the politics of power. They know you're about to lose a lot of institutional investors because of market cap and stock price issues.

Then they drive the stock in the 2 dollar range and even below.

At that time, Jon Stonehouse starts worrying about his salary and bonus, so just as all the bad managers who act reactively and selfishly, he starts doing layoffs which he should have done 18 months ago.

What to do now?

Get a life! Resign! Retire!

The Board should fire Jon Stonehouse immediately or face threat of a derivative lawsuit for failure of their duties.

The company has to do a serious round of layoffs. 20% right now, across the board.

Jon should reboot his brain's buggy operating system that thinks shareholders will indefinitely fund his self-serving gig that benefits himself and the self-serving Board which is asleep on the wheel, complacent, happy about their fat packages, and scratching each others' backs to maintain the profitable status quo.

Meanwhile, company value keeps tankig -- Jon Stonehose is burning through cash like a drunken sailor, pampering his empire that's too obese by at least 30% -- and he has no talent or clue in driving company value. He obviously doesn't understand anything about politics of power and knows diddly about his enemies and how they operate (look at the astronomic short interest), and always has the finger pointing upwards.

WAKE UP. If the shorts could drive the share price from 15 to 5, they can drive it to 2, because of Biocryst's absolutely pathetic, incompetent, self-serving governance.

This has to come to a stop. You cannot get away with this forever.

Regards

R. Ganjavi

PS --

The enemies of the company who've taken on a huge short position, are not against the science. They're against the management because they know how horrible Jon is as a CEO. You've probably gotten used to brushing off such criticism and never look in the mirror.

Those entities Jon is totally ignorant of, have access to information. It's called channel checks, and they pay a bundle for it with money and with perks and relationships. It's illegal but they do it. I know this directly as a fact, from a broker involved. If you just think they act legally, that's part of your ignorance. They already knew yesterday the scrips would suck today.

They can only do this because Jon is a horrible CEO. He has no conception of running a tight ship and what it takes to "make it". He is of the old, debunked school of thinking, do everything right and investors will line up. Wrong. You don't know what it takes Jon because you're incompetent as a CEO, and you've been sinking this ship, and I hate to tell you in a while when the stock is $2 that I told you so.

Unless you stop smoking whatever you're smoking and come down to Earth and look at facts, and do a:

- 20% layoff NOW. Trust me, when the stock is $2 you'll be at point of no return, and will go down in history as eternal goofballs.

- Travel freeze

- Salary freeze

- Executive salary cut for 6 months at least to be reviewed.

- hiring freeze

It's urgent. Mark my words.

"New Orladeyo" - 11 Oct 2023

Jon already let the cat out of the box by saying "new Orladeyo" will be announced!!!! Unbelievably clueless IR strategy.

So shorts will be prepared.

While if you had any clue about this subject, you're not announce anything till you announce it. Shorts / hedge funds hate surprises. I know this first hand (think SAC Capital).

Perhaps the best solution is a derivative lawsuit -- that might wake up the board to this miserable, wasteful, complacent, incompetent mismanagement of shareholder value.

~~~

From a biotech PhD guru

"Sad but true. I think Stonehouse should have stayed in sales. Has no business being a CEO of a technology company."

What it takes to drive shareholder value - 9 Oct 2023

~~~

Fiduciary duties - 4 Nov 2023

For Jon Stonehouse and Every Member of Board of Directors.

Hi Jon

Please send a copy of this to every Board member. Thanks in advance.

Management-101: Public company Directors and Executive Management are hired to serve shareholders. Serving themselves instead is a breach of their duties. Directors can be held accountable.

Regards

Reza Ganjavi, MBA - shareholder and veteran biotech investor.

LETTERS TO MANAGEMENT

20 Sep 2023

I've invested in biotechs for decades. Shorts can only play companies like a yo-yo which have weak management. Just look at the number of Jon's direct reports!! Clean up the management and the stock will soar. Best solution is for Jon to retire and enjoy his time with loved ones, and let a more effective CEO streamline the management and significantly cut costs. Solving the issues of bloated cost structure and fat organization, which are hallmarks of a weak CEO, will make BCRX a more attractive acquisition target which will make all of you much richer, including Jon, post retirement.

15 Sep 2023

Jon, please resign

In my opinion you're a very fine man Jon but as a CEO you're a liability for Biocryst. Please make an arrangement with the Board to keep your stock options and retire, and enjoy your time doing other things, and let a more suitable leader make the company the lean and mean company it needs to become, and a perfect candidate for a Pharma takeover.

Otherwise, the current cost structure makes Biocryst a perfect ball for shorts to kick around, and Pharma likes it: it's a documented fact that Pharma gets engaged in debilitating and manipulating a potential takeover target's stock.

Unfortunately it seems you're too attached to your big package and so not wanting to let go. Calculate your net worth with your options if you resign and the stock is double. It beats your package. But if you stay you're holding the company down, in my opinion, based on years of seeing this same scenario play out with biotechs who suffer from inadequate management.

Best Regards
Reza Ganjavi

AUG 2023

Dear Biocryst Management

You absolutely need to cut down your costs. Your cost structure is not sustainable. Wall Street is going to continue to punish you. I have worked with many world-class organizations and even the best of the best still tighten their belts. You can always cut the fat. Biocryst can do a 10 - 15% staff reduction across the board from every department for example.

Executives can take a salary cut. Your stock options will compensate for it when company value grows.

Impose travel and salary freeze across the board. There are many layoffs in biotech so you don't have to worry about not being able get qualified staff.

Your cost structure is unsustainable. I repeat this because it really needs to register and be on the forefront of your minds.

The organization has a lot of room for becoming lean financially. If your CFO cannot pull this off get a new CFO.

Do not get complacent with your salaries, bonuses and benefits; Wall Street will crush you. You need to have driving company value at the forefront of your minds every morning when you wake up. That's why you were hired. And that means putting shareholder value ahead of your personal interest however lucrative and comfortable it is to make thousands of dollars everyday no matter how the company performs. That is a myopic view which gets punished. I'm not accusing you of that but it is so easy and it is common unfortunately, and every company whose executives fall into that trap of self-serving gets doomed.

Your higher calling is and should be driving company value and you will go in history either as success or failure in that, and for failing no excuse is valid because you have a great drug, but your expenses including yours and the Board's is unsustainable

The 1 billion sales mark seems more irrelevant the more you discuss it, for example at the last investor conference, because of your cost structure, and the proof is you're not being valuated accordingly. You seem incompetent of running a lean company, a proper business that grows value, despite hundreds of millions in revenue because of a cancerous cost structure.

Investors are tired of sustaining a money losing company with lots of promises and promising assets but failure to drive shareholder value because of your cost structure. So there is something fundamentally wrong with the management team and usually it's the CEO or the CFO who are too comfortable with the status quo, and neither one have neither the courage nor the character to stand up and say enough is enough, we're going to do a significant cost reduction regiment, and make this into such a lean organization where profitability is on the horizon.

And you should also be promoting yourselves or at least keeping the door open for prospective buyers.

And if you don't have somebody with this particular skill then get someone. This could be part of your overpaid underperformed useless board of directors who have been a failure in driving shareholder value (remember the stock has been halved since recent history). You need somebody who can get a competitive bid going. This should be ideally the CEO but I don't know if our CEO has it in his blood.

I'm also not sure if our CEO is so happy with his compensation package that if he even wants a buyout because that might put him out of work, but his stock options and that of the Board should want you to sell at the right price, unless you can turn around this company fundamentally not superficially and tame this massive spending machine. Your burn rate is mind-boggling. I hope you're not enjoying the egotistic boost of running an empire with hundreds of employees probably 20% of whom should be laid off.

The house is on fire. Short sellers have had this company by its private parts for eternity because of management weakness. What is it going to take to accept that fact, and accept that there is serious management shortcoming which is the cause of that? It's not the drug.

So this Thursday you should announce that you have started a strategic initiative to significantly cut costs, and that you will report on that within 30 days.

And then do a 10 or 15% across the board layoffs, a 10% executive pay cut across the board, and ideally including the board of directors. Impose salary and travel freeze. And mandate that all expenditures require a Director or above approval. You are also very top-heavy. Your expense structure is out of control, unsustainable and incompetently mismanaged.

Best regards

R. Ganjavi

PS --

You have FOURTEEN (14) C-level executives. For a "small biotech" that's a hell of a lot of "Chief Officers" and their salaries, overhead, bonuses, options, and expenses contribute to your cancerous runaway expense train.

Bottom line, in my view, is a weak CEO. Jon Stonehouse is a nice man but I perceive him as much more of a nerd than a businessman who knows how to build company value.

If Jon were an effective CEO, he'd cut this "C level" circus to half immediately -- do a 20% staff reduction across the board, and apply other cost cutting measures discussed below. These steps to make the company lean and mean, instead of a fat, splurging Jon's Empire, will be hugely rewarded by the investment community.

Not doing that, you're effectively funding an over-bloated runaway cost structure that's funded by shareholders, and you're arrogantly and unprofessionally and inappropriately expect that to keep continuing as you burn through hundreds of millions of investor cash per year to fund this disastrous, wasteful status quo - and you wonder why the stock is in the toilette.

Aside from John and your CFO, your Board is really at fault for not taming this bull. They're probably complacent, fat, lazy and happy with their packages and don't give a damn as long as their own gig continues.

If you don't like the valuation and your own stock options being underwater, take the right steps:

Jon, I would resign if I were you, it's much better than getting fired -- or going down in history as someone who burned through billions of investor cash and failed to build company value, failed to acknowledge his own weaknesses, failed to get a strong CFO or demand that the current CFO cut costs meaningfully, we're talking to the tune of tens of millions more per quarter. It can be done in the right, competent hands who have their priorities straight in terms of company value.

Otherwise, you sit there baffled about why the shorts have the upper hand and manipulate and play the stock like a yo-you at your cost and your shareholders' cost. It's all your own doing, and the buck stops at the top. If you were running a lean, mean, performant company which can be run at almost half the current spending, things would be very different.

I provided you with lots of tips, from other great companies I worked with, and these tips work. On the subject of layoffs, you mandate each department head to cut 15% of staff. It might be a tough choice, but they can and will do it. You'll be surprised. And nothing will be impacted because my hunch is you have at least 15% fat, in terms of productivity, unless you're running a fun science lab, and a holiday club.

Best Regards

R. Ganjavi

Question for Mr. Bluth: what is the official path of getting a letter to the Board members? Thanks.

Consequence of reactive management:

Karyopharm announced a 20% layoff today -- another company with a sick cost structure. Shareholders have been calling for that for a year and half. The company was too lazy and incompetent and complacent in the status quo that they continued to spend like mad and the ensuing years and half their stock was slaughtered. Today they finally announced a 20% headcount reduction -- too little too late, and obviously the stock continued to go down because the stock is sick.

BCRX is still alive but it's on a fast track to oblivion like KPTI if you don't take action now and if you're not proactive now. Don't wait for a year and half now and react when it's too late - it'll be too late. Question and shake up the dysfunctional status quo -- your cash burn is absolutely cancerous.

Best Regards

Reza Ganjavi, MBA

~~~

10 Aug 2023 - From a response I wrote to IR:

There's a real risk if it's not an issue already, of the company being an enrichment source for the insiders who get complacent about their lucrative packages combined with incompetence in driving company value which has been the case in our case if you look at the collapse in the company value and share price, and they forget why they are on this job, which is to build shareholder value and of course doing the noble task of developing novel drugs. The former is priority because without it the latter could not happen. You cannot develop medicines without money, and investors don't put their money in charity when they invest in a biotech company.