BioCryst Winners and Losers: BioBuzz

BIRMINGHAM, Ala. (TheStreet) -- A rundown of the winners and losers in the ongoing bull-bear battle over BioCryst Pharmaceuticals(BCRX Quote):

Bulls win Thursday because the $2,250-per-course price for peramivir paid by the U.S. government is higher than the bears expected. BioCryst bears were predicting peramivir pricing of roughly $300 to $600 per course.

Bears win because the government is only buying 10,000 courses of peramivir. Bulls were hoping for more, especially since the government could have bought up to 40,000 courses under the initial order request.

Bulls win because BioCryst shares are up 17% to $11.83 Thursday, aided by a strong market overall. This gain is on top of Wednesday's 8% rise fueled by takeover rumors after BioCryst cancelled an appearance at an investor conference.

Bears win because BioCryst shares have still not recovered to their $13.47-a-share high reached Sept. 1. (The stock's most recent closing high was $12.80 on Aug. 26.)

This tug-of-war over BioCryst continues, of course. Bulls expect the U.S. government to snap up another 30,000 courses of peramivir. They also look to BioCryst's plans calling for the manufacture of 130,000 courses of the drug by December as evidence of imminent foreign government purchases.

Bears say the U.S. government will take a long time to work through 10,000 courses of peramivir, which makes additional orders doubtful. And even if more peramivir is purchased, the revenue generated doesn't support BioCryst's current valuation.

A 40,000-course order at $2,250 per course yields $90 million in revenue to BioCryst. A 90% profit margin nets the company $81 million, which equates to $2.13 a share (based on 38 million outstanding shares.)

Bulls counter with "valuation schmaluation. Who cares, the stock is en fuego!"

And for now, they're right.

Cel-Sci's Lawyer Speaks

(At 10:40 AM ET)

An attorney representing Cel-Sci Corp.(CVM Quote) contacted me last night via email, demanding a retraction to my story Wednesday concerning the mysterious Byron Biopharma and the South African licensing deal for Cel-Sci's cancer drug Multikine.

Jay Auslander, a partner with the New York law firm Siller Wilk, took issue with my claim that Cel-Sci sold "deeply discounted stock" to Byron as part of the South African licensing deal.

"Cel-Sci did not issue the stock at a deep discount; on the contrary Cel-Sci issued the stock at a premium," Auslander writes, demanding an immediate correction.

No correction is necessary because Cel-Sci's stock sale to Byron involved stock and warrants, which when taken together represent a deeply discounted sweetheart deal for Byron. The "three-fer" deal helped Byron book millions of dollars in profits -- realized or on paper, depending on if Byron sold the stock and warrants.

What I found more interesting about Auslander's letter, however, was what he didn't complain or ask about. Nowhere in his letter does he claim that Byron Biopharma is a real company and not just some paper entity, as my story lays out in great detail.

If Byron was a real operating company and its partnership with Cel-Sci was totally on the up and up, you'd think Auslander would be screaming from the rooftops about it. He would have offered me definitive proof that Byron was a real company, if for no other reason than to shoot down the central premise of my story.

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