Updated from 3:56 p.m. EST

The power of promise is immense in the biotech universe, a place where no-name companies can be made celebrities overnight, has-been stocks can rebound as must-haves and laggards can be transformed into leaders in the blink of an eye.

As evidence, there's BioCryst Pharmaceuticals ( BCRX), a firm that traded north of $30 at the outset of the millennium but has gone as low as $3.68 in the last 52 weeks.

However, with the help of two big developments, BioCryst has turned from a straggler to a sprinter in just a few short months. The latest news involves a deal in which the Swiss pharmaceutical giant Roche agreed to pay BioCryst $30 million for the worldwide rights to an early-stage immune system drug.

BioCryst said Roche's payments could reach $530 million based on various milestones, not including possible royalty payments if the drug reaches the market.

The arrangement sent shares of the Birmingham, Ala., biotech soaring 37.5% to $16.24 on more than 10 times its average trading volume.

Roche bought an exclusive license to BioCryst's BCX-4208 compound, a so-called PNP-inhibitor that the companies hope will help transplant patients avoid having the new organ rejected.

For five years, Roche will have a right of first negotiation on other PNP inhibitors BioCryst is already working on for autoimmune diseases or transplant rejections. BioCryst retained the right to co-promote BCX-4208 in the U.S. for several indications. Any new PNP inhibitor discovered after the agreement will be exempt.

BioCryst has completed an early-stage dosing trial for the compound this year and has started a trial to evaluate the safety and tolerability of multiple oral doses of BCX-4208. The company is hoping its product proves to be more effective in treating autoimmune diseases and transplant rejections than drugs that are currently available.

Next month, BioCryst will be presenting data on another PNP inhibitor, fodosine, or BCX-1777, at a meeting of the American Society of Hematology. Fodosine is meant to treat late-stage cancer of the T-cells, as well as cutaneous T-cell lymphoma, a type of blood cancer that affects the skin, in patients whose disease hasn't responded to a prior therapy. T-cells play a large role in the body's immune system.

Even before the Roche deal, BioCryst shares have been on the comeback thanks to a drug called Peramivir. BioCryst says the drug can treat several strains of the common flu, but what really got investors' attention are Peramivir's prospects for fighting the H5N1 strain of the bird flu, the virus that's causing worry amid fears it could lead to a worldwide pandemic.

Peramivir, originally co-developed with Johnson & Johnson ( JNJ), was shown to stop the replication of the avian flu in lab mice in 2001. However, late-stage studies missed their targets and the partnership dissolved, with J&J saying it wanted to focus on higher-priority drugs. Biocryst has said safety wasn't a factor in the decision to end the venture.

"In June this was a $4 stock," says Stephen Brozak of WBB Securities. "Five months later, the company is now a household name."

BioCryst shares reached a five-year high of $18.42 in October. As media coverage of the bird flu, which has been active in Asia and appears to be moving westward, diminished, shares of BioCryst eased lower to around $12. That was before the Roche deal reignited interest.

Of course it never hurts to be reminded that while BioCryst may in fact be experiencing a sustainable turnaround, what the market gives, it can just as easily take away.

If the FDA approves BioCryst's Peramivir application to enter human clinical trials, tests are expected to begin early next year. In collaboration with the National Institutes of Health, the company plans to develop two versions of the drug, an injection into the muscle for early-stage patients and an intravenous injection for acutely ill patients.

"We believe that positive data anticipated from the proposed phase I trial along with success in its efficacy studies in animals will provide BioCryst with the necessary data for Peramivir to become eligible for government stockpiling," analyst Vinny Jindal of Wedbush Morgan wrote in a recent research report.

According to Jindal, BioCryst has a chance to have one of three major avian flu drugs with Peramivir. The others are Tamiflu, marketed by Gilead ( GILD) and Roche, and Relenza, sold by Australia's Biota and GlaxoSmithKline ( GSK) of the U.K.

Wedbush Morgan does and seeks to do business with companies covered in its research reports.

Until recently, large pharmaceutical companies lived by a business model focused on marketing prowess and patent protection, according to Brozak. Now, companies like Roche are beginning to focus on understanding technology and acquiring novel developmental drugs.