BioCryst Bull Blames Conspiracy for Stock's Fall: BioBuzz

BIRMINGHAM, Ala. (TheStreet) -- BioCryst Pharmaceuticals'(BCRX Quote) stock price has been falling for some very obvious reasons: (1) Requests from doctors for its H1N1 flu drug peramivir has been weaker than expected; (2) H1N1 flu activity in the U.S. has been on the wane; (3) foreign governments have not yet purchased large stockpiles of peramivir; and (4) BioCryst pushed through a five million-share, discounted stock offering despite evidence that demand from institutional investors wasn't all that high.

Yet, apparently, none of these reasonable explanations for BioCryst's recent woes satisfies Michael Murphy, the investment newsletter author and outspoken BioCryst bull.

Murphy believes a vast conspiracy of government agencies and Wall Street evildoers have joined forces to destroy BioCryst. Murphy laid out his accusations in a letter he wrote to BioCryst management, a copy of which he posted to his subscribers-only Web site Monday.

"I know that some of what follows probably will seem conspiratorial or paranoid. But as the old joke goes, it isn't paranoia if they really are out to get you," writes Murphy.

So, who's out to get BioCryst, according to Murphy? Short-sellers and hedge funds, naturally, but also certain unnamed officials at the Food and Drug Administration and the Securities and Exchange Commission, who have been "captured" by the hedge funds, Murphy alleges.

Morgan Stanley, BioCryst's investment banker and the lead underwriter of the company's recent offering, employs someone who is "dangerous" to BioCryst because he or she is working from the "short's playbook," claims Murphy.

In his letter, Murphy accuses independent health care analyst Kevin McNamara of BioLogic Research -- a critic of BioCryst with a "sell" rating on the stock --- of being paid to write negative research reports on BioCryst, a practice Murphy describes as "illegal."