US Keeps Tight Rein on Biocryst Flu Drug

BIRMINGHAM, Ala. (TheStreet) -- BioCryst Pharmaceuticals(BCRX Quote) is giving back some of the gains made Monday after the U.S. government approved the emergency use authorization for its experimental flu drug peramivir.

BioCryst has been a momentum-driven stock hinged to H1N1 flu headlines since this summer. The EUA announcement Monday was highly anticipated by investors, who largely played it like the trading event it was.

Shares of BioCryst jumped 13% Monday but gave back 4% Tuesday and were down another 4% in Wednesday trading. The stock is still well below its Sept. 1 high of $13.47 when hype around H1N1 and peramivir was at its peak.

The full details of the EUA agreement for peramivir -- laid out here in full detail by the Centers for Disease Control and Prevention -- might also be giving investors pause and preventing BioCryst from holding onto Monday's gains.

Peramivir has been portrayed by the bullish followers of BioCryst as a miracle, life-saving drug in the fight against H1N1 flu -- the only drug, in fact, capable of staving off a massive, virus-induced death wave, especially in children.

BioCryst bulls believe peramivir, with an EUA in place, will become the de facto standard for treating H1N1 flu patients and huge government orders for the intravenous drug -- both domestic and foreign -- will flow into BioCryst.

However, the U.S. government, through the CDC, is tightly restricting access to peramivir. This means BioCryst is not allowed to ship peramivir to hospitals across the country on a pre-emptive basis, nor is the company allowed to promote peramivir use, according to CDC documents.