A BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Exposure Just Got Cheaper

Back in September, we published this piece covering BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX).At the time, the company just picked up an expanded approval for one of its lead assets and should have been trading North.It was trading relatively flat, however, and we suggested that this underwhelming market response to the development could be an opportunity to pick up shares ahead of a rebalancing. BCRX Daily ChartFast-forward a month or so and not only has the company failed to pick up any upside momentum, it actually declined pretty substantially towards the end of last week. Right now, BioCryst shares go for around $4.67 apiece – a more than 10% discount to mid-September highs.First up, it's worth noting that nothing has hit press since our previous coverage that would justify a decline from last month's pricing. The company hasn't raised any money, hasn't filed anything with the SEC that would imply dilution or anything like that and, from an operational perspective, things have been relatively quiet (at least, that is, in terms of communication on operational updates).As such, the elements that underpinned our previous thesis on this one remain very much in place and unaltered, with the only difference being that an exposure to this thesis is now available at a 10% discount to the price at which it was first outlined .So what was our argument?The drug that was approved ahead of our previous coverage was RAPIVAB, which is an injectable formulation of peramivir for pediatric use (i.e. patients between ages 2 and 18) in influenza.This is a drug that was initially approved back in 2014 for adult use, but the latest approval expanded the population to include the above mentioned younger age group and, for us, the ability to target this age group is a game changer in terms of revenue potential for this asset in this space.The thing is, the drug is an injectable formulation of an already established influenza treatment. The already established asset, however, is only available as an oral formulation (i.e., taken by way of a pill). For adults, swallowing a pill is (generally) no problem. For children, especially those between ages two and six (and further, especially those suffering from a viral infection like influenza at such an early age), swallowing a pill can be incredibly tough.The ability for a physician to offer an alternative in the form of an injectable version of the treatment is a great benefit for parents who are looking to get their children treated as quickly and as easily as possible and who are unable to force them to swallow a large pill.The strategy going forward then, from a company perspective, and in terms of where we think management should focus resources, is rooted in pushing this injectable asset in the pediatric market in the US.There is around $80 million cash on hand right now that the company is using primarily to develop and (with any luck) launch another drug, called BCX7353, targeting acute attacks in patients with angioedema. As we outlined last time, however, there is a good chance that a portion of these funds are going to be used to bolster the commercialization effort for injectable peramivir in children, meaning we should see an uptick in sales over the coming quarters as the marketing efforts filter through to topline.There is also very little risk of future near-term dilution given the proximity of the recent equity raise, making an allocation at current prices a relatively low-risk exposure to a 12-month period that should involve top line growth and should also bring with it a host of catalysts associated with the above-mentioned BCX7353 asset in angioedema.It's not risk-free, sure, and we aren't looking at a billion-dollar market for pediatric peramivir. With that said, however, this company looked undervalued last month and this month this undervaluation has deepened.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on BCRX, sign up below!Image courtesy of Neil Landreville via FlickrDisclosure: We have no position in BCRX and have not been compensated for this article.