SEC Filing | BioCryst Pharmaceuticals, Inc.

View:

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to e 240.14a-11(c) or e 240.14a-12

BioCryst Pharmaceuticals, Inc.
------------------------------
(Name of Registrant as Specified In Its Charter)

Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

BIOCRYST PHARMACEUTICALS, INC.
2190 Parkway Lake Drive
Birmingham, AL 35244

NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
MAY 20, 1998

To the Stockholders:

Notice is hereby given that the Annual Meeting of Stockholders (the "Meeting")
of BioCryst Pharmaceuticals, Inc., a Delaware corporation (the "Company"), will
be held at The Harbert Center, 2019 Fourth Avenue North, Birmingham, Alabama on
Wednesday, May 20, 1998 at 3:00 p.m., Central Daylight Time, for the following
purposes:

1. To elect three (3) directors to serve for a term of three years and
until their successors are duly elected and shall be qualified.

2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on March 22, 1998 as the
record date for the determination of stockholders entitled to receive notice of
and to vote at the Meeting or any adjournment thereof. The Meeting may be
adjourned from time to time without notice other than announcement at the
Meeting, and any business for which notice of the Meeting is hereby given may be
transacted at any such adjournment. A list of the stockholders entitled to vote
at the Meeting will be open to examination by any stockholder, for any purpose
germane to the Meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the Meeting at the principal executive offices of the
Company in Birmingham, Alabama.

A copy of the Company's Annual Report for the year ended December 31, 1997 is
enclosed, but is not deemed to be part of the official proxy soliciting
materials. Stockholders failing to receive a copy of the Annual Report may
obtain one by writing to the Secretary of the Company at the address stated
above.

Your attention is directed to the accompanying Proxy and Proxy Statement.

BY ORDER OF THE BOARD OF DIRECTORS
John A. Montgomery, Ph.D., Secretary

Birmingham, Alabama
April 13, 1998

ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY DATE, SIGN AND RETURN THE ENCLOSED
PROXY. A POSTAGE PREPAID ENVELOPE IS PROVIDED FOR MAILING. A PERSON GIVING A
PROXY HAS THE POWER TO REVOKE IT. IF YOU ATTEND THE MEETING, YOUR PROXY WILL NOT
BE COUNTED WITH RESPECT TO ANY MATTER UPON WHICH YOU VOTE IN PERSON.

BIOCRYST PHARMACEUTICALS, INC.
2190 Parkway Lake Drive
Birmingham, AL 35244

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors (the "Board") of BioCryst Pharmaceuticals, Inc. (the
"Company") for the Annual Meeting of Stockholders of the Company to be held at
The Harbert Center, 2019 Fourth Avenue North, Birmingham, Alabama on Wednesday,
May 20, 1998 at 3:00 p.m., Central Daylight Time, and any adjournment thereof
(the "Meeting") and for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to the voting thereof, by giving written notice to
the Company or by voting in person at the Meeting. All valid, unrevoked proxies
will be voted as directed. In the absence of any contrary directions, proxies
received by the Board will be voted FOR the election of all nominees for
director of the Company and, with respect to such other matters as may properly
come before the Meeting, in the discretion of the appointed proxies.

Only holders of record of the Company's common stock (the "Common Stock") as of
the close of business on March 22, 1998 (the "Stockholders") will be entitled to
notice of and to vote at the Meeting. At March 22, 1998, there were 13,940,210
shares of Common Stock outstanding. Each share of Common Stock is entitled to
one vote on all matters on which Stockholders may vote. There is no cumulative
voting in the election of directors. The presence, in person or by proxy, of a
majority of the outstanding shares of Common Stock of the Company is necessary
to constitute a quorum at the Meeting. Shares of Common Stock represented by a
properly executed and returned proxy will be treated as present at the Meeting
for purposes of determining the presence of a quorum without regard to whether
the proxy is marked as casting a vote for or against or abstaining with respect
to a particular matter. In addition, shares of Common Stock represented by
"broker non-votes" (i.e., shares of Common Stock held in record name by brokers
or nominees as to which a proxy is received and (i) instructions have not been
received from the beneficial owners or persons entitled to vote, (ii) the broker
or nominee does not have discretionary power and (iii) the record holder had
indicated that it does not have authority to vote such shares on that matter)
generally will be treated as present for purposes of determining the presence of
a quorum but as described below, such broker non-votes will not have any effect
upon the election of directors at the Meeting.

The affirmative vote of the holders of a plurality of the outstanding shares of
Common Stock of the Company present in person or represented by proxy at the
Meeting is necessary to elect the nominees for directors named in the Proxy
Statement. Accordingly, abstentions and broker non-votes with respect to the
election of directors will have no effect upon the election of directors at the
Meeting.

The proxy solicitation is being made primarily by mail, although proxies may be
solicited by personal interview, telephone, telegraph or letter. The Company
will pay the cost of this solicitation, including the reasonable charges and
expenses of brokerage firms and others who forward solicitation materials to
beneficial owners of the Common Stock. This Proxy Statement and the accompanying
form of proxy card are first being mailed to Stockholders on or about April 13,
1998.

1. ELECTION OF DIRECTORS

The Composite Certificate of Incorporation of the Company provides that the
number of directors shall be determined by resolution of the Board but shall
consist of not less than six (6) nor more than twelve (12) members. The Board
has by resolution established the number of directors of the Company at ten
(10). It is proposed to elect three (3) directors to serve until the annual
meeting of stockholders in 2001 and until their successors have been duly
elected and qualified. Proxies cannot be voted for more than three persons. It
is intended that shares represented by the Board's proxies will be voted FOR the
election of the three persons listed for terms expiring in 2001:

Served as
Director
Name Age Position(s) with the Company Since

NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING OF STOCKHOLDERS IN 2001

Charles E. Bugg, Ph.D. 56 Chairman, Chief Executive Officer
and Director 1993
John A. Montgomery, Ph.D. 74 Senior Vice President, Secretary, 1989
Chief Scientific Officer and Director
Edwin A. Gee, Ph.D. 78 Director 1993

The following persons shall continue to serve as Directors for the terms
indicated:

DIRECTORS WITH TERMS EXPIRING AT THE ANNUAL MEETING OF STOCKHOLDERS IN 1999

William W. Featheringill 55 Director 1995
Lindsay A. Rosenwald, M.D. 42 Director 1991
Joseph H. Sherrill, Jr. 57 Director 1995

DIRECTORS WITH TERMS EXPIRING AT THE ANNUAL MEETING OF STOCKHOLDERS IN 2000

J. Claude Bennett, M.D. 64 President, Chief Operating Officer
and Director 1997
Zola P. Horovitz, Ph.D. 63 Director 1994
William M. Spencer, III 77 Director 1986
Randolph C. Steer, M.D., Ph.D. 48 Director 1993

Charles E. Bugg, Ph.D. was named Chairman of the Board, Chief Executive Officer
and Director in November 1993 and President in January 1995. Dr. Bugg
relinquished the position of President in December 1996 when Dr. Bennett joined
the Company in that position. Prior to joining the Company, Dr. Bugg had served
as the Director of the Center for Macromolecular Crystallography, Associate
Director of the Comprehensive Cancer Center and Professor of Biochemistry at The
University of Alabama at Birmingham ("UAB") since 1975. He was a Founder of
BioCryst and served as the Company's first Chief Executive Officer from
1987-1988 while on a sabbatical from UAB. Dr. Bugg also served as Chairman of
the Company's Scientific Advisory Board from January 1986 to November 1993. He
continues to hold the position of Professor Emeritus in Biochemistry and
Molecular Genetics at UAB, a position he has held since January 1994.

John A. Montgomery, Ph.D. has been a Director since November 1989 and has been
Secretary and Chief Scientific Officer since joining the Company in February
1990. He was Executive Vice President from February 1990 until May 1997, at
which time he was named Senior Vice President. Dr. Montgomery was a Founder of
BioCryst. Prior to joining the Company, Dr. Montgomery served as Senior Vice
President of Southern Research Institute ("SRI") of Birmingham from January 1981
to February 1990. He continues to hold the position of Distinguished Scientist
at SRI, a position he has held since February 1990.

Edwin A. Gee, Ph.D. was elected a Director in August 1993. Dr. Gee, who retired
in 1985 as Chairman of the Board and Chief Executive Officer of International
Paper Company, has been active as an executive in biotechnology, pharmaceutical
and specialty chemical companies since 1970. He is Chairman Emeritus and a
director of Oncogene Science, Inc., one of the leading biotechnology companies
for the diagnosis and treatment of cancer.

William W. Featheringill was elected a Director in May 1995. Mr. Featheringill
is Chairman and Chief Executive Officer, since June 1995, of Electronic
Healthcare Systems, a software company, and President, Chief Executive Officer
and director, since 1973, of Private Capital Corporation, a venture capital
management company. Mr. Featheringill was Chairman and Chief Executive Officer
of MACESS Corporation, which designs and installs paperless data management
systems for the managed care industry, from 1988 to November 1995. MACESS
Corporation merged with Sungard Data Systems in late 1995. From 1985 to December
1994, Mr. Featheringill was the developer, Chairman and President of Complete
Health Services, Inc., a health maintenance organization which grew, under his
direction, to become one of the largest HMOs in the southeastern United States.
Complete Health

Services, Inc. was acquired by United HealthCare Corporation in June 1994. Mr.
Featheringill is a director of Citation Corporation.

Lindsay A. Rosenwald, M.D. has been a Director of the Company since December
1991. Dr. Rosenwald is President and Chairman of Paramount Capital Investments,
LLC, a medical venture capital and merchant banking firm; President and Chairman
of Paramount Capital, Inc., an investment banking firm specializing in the
health sciences industry; and, since 1994, President of Paramount Capital Asset
Management, Inc., a fund manager. From June 1987 to February 1992, he served in
various capacities at the investment banking firm of D. H. Blair & Co., where he
ultimately became a Managing Director of Corporate Finance and manager of their
Health Care Services Group. He is Chairman of the Board of Interneuron
Pharmaceuticals, Inc., which he co-founded in 1988, and a director of Sparta
Pharmaceuticals, Inc., Neose Technologies, Inc., Titan Pharmaceuticals, Inc.,
Avigen, Inc. and VIMrx Pharmaceuticals, Inc.

Joseph H. Sherrill, Jr. was elected a Director in May 1995. Mr. Sherrill served
as President of R. J. Reynolds ("RJR") Asia Pacific, based in Hong Kong, where
he oversaw RJR operations across Asia, including licensing, joint ventures and a
full line of operating companies from August 1989 to his retirement in October
1994. Prior management positions with RJR include Senior Vice President of
Marketing for R.J. Reynolds International, President and Chief Executive Officer
of R.J. Reynolds Tabacos de Brazil, and President and General Manager of R.J.
Reynolds Puerto Rico. Mr. Sherrill also serves as a member of the Board of
Directors of Savers Life Insurance Company.

J. Claude Bennett, M.D. was named President and Chief Operating Officer in
December 1996 and elected a Director in January 1997. Prior to joining the
Company, Dr. Bennett was President of UAB from October 1993 to December 1996 and
Professor and Chairman of the Department of Medicine of UAB from January 1982 to
October 1993. Dr. Bennett served on the Company's Scientific Advisory Board from
1989-96. He also serves as a member of the Board of Governors of the Magnuson
Clinical Center of the National Institutes of Health. He also continues to hold
the position of Distinguished University Professor Emeritus at UAB.

Zola P. Horovitz, Ph.D. was elected a Director in August 1994. Dr. Horovitz was
Vice President of Business Development and Planning at Bristol-Myers Squibb from
1991 until his retirement in April 1994 and previously was Vice President of
Licensing at the same company from 1990 to 1991. Prior to that he spent over 30
years with The Squibb Institute for Medical Research, most recently as Vice
President Research, Planning, & Scientific Liaison. He has been an independent
consultant in pharmaceutical sciences and business development since his
retirement from Bristol-Myers Squibb in April 1994. He serves on the Boards of
Directors of Avigen, Inc., Clinicor Inc., Diacrin, Inc., Magainin
Pharmaceuticals, Inc., Procept Corporation, Roberts Pharmaceutical Corporation
and Synaptic Pharmaceutical Corp.

William M. Spencer, III has been a Director of the Company since its inception.
Mr. Spencer, who is retired, is also a private investor in Birmingham, Alabama.
He served as Chairman of the Board of BioCryst from its founding in 1986 until
April 1992. He co-founded and operated Motion Industries from 1946 through its
merger into Genuine Parts Company in 1976. He has founded several businesses and
has served on the Board of Directors of numerous private corporations.

Randolph C. Steer, M.D., Ph.D. was elected a Director in February 1993. Dr.
Steer has been active as a consultant to biotechnology and pharmaceutical
companies since 1989. Dr. Steer serves on the Board of Directors of Techne
Corporation.

Should any nominee be unable or unwilling to accept election, it is expected
that the proxies will vote for the election of such other person for the office
of director as the Board may then recommend. The Board has no reason to believe
that any of the persons named will be unable to serve or will decline to serve
if elected.

Committees of the Board

The Company has an Audit Committee (the "Audit Committee") consisting of Messrs.
Featheringill, Gee and

Spencer, which is responsible for the review of internal accounting controls,
financial reporting and related matters. The Audit Committee also recommends to
the Board the independent accountants selected to be the Company's auditors and
reviews the audit plan, financial statements and audit results. The Audit
Committee did not meet in 1997, but did meet in February 1998 to review the 1997
audit results.

The Company also has a Compensation Committee (the "Compensation Committee")
consisting of Messrs. Gee and Rosenwald. The Compensation Committee is
responsible for the annual review of officer compensation and other incentive
programs and is authorized to award options under the Company's 1991 Stock
Option Plan (the "1991 Option Plan"). The Compensation Committee held one
meeting during 1997.

The Company has a Nominating Committee (the "Nominating Committee") comprised of
all outside directors with terms not expiring in the current year for which the
Nominating Committee will be nominating persons for election or re-election as
directors. The Nominating Committee held one meeting during 1997. The Nominating
Committee will consider nominees recommended in writing, including biographical
information and personal references, by stockholders to the same extent as
nominees recommended by management. Nominations for 1999 must be received by the
Nominating Committee by December 15, 1998.

During 1997, the Board held twelve (12) meetings. Each member of the Board
attended at least 75% of the meetings of the Board and of the committees of the
Board of which he is a member, except that Mr. Spencer was absent from four (4)
of the 12 Board meetings during 1997.

Director Compensation

Directors do not receive a fee for attending Board or committee meetings.
Outside directors are reimbursed for expenses incurred in attending Board or
committee meetings and while representing the Company in conducting certain
business. Individuals who first become non-employee Board members on or after
March 3, 1994, at the time of commencement of Board service, receive a grant of
options to purchase up to 40,000 shares (25,000 shares prior to May 15, 1997)
pursuant to the automatic option grant program under the Company's 1991 Stock
Option Plan, and, under the Company's 1991 Stock Option Plan each non-employee
director, including those persons presently serving as directors, will receive
grants of options to purchase 40,000 additional shares of Common Stock every
four years while they continue to serve as directors. A special one-time grant
was given to those directors not scheduled to receive a periodic automatic
option grant at the conclusion of the 1997 Meeting so as to equalize the rate at
which they vest options with those directors scheduled to receive a grant at the
end of the 1997 Meeting. All current outside directors of the Company have
received options to purchase 25,000 shares of Common Stock. In May 1997, Drs.
Gee and Steer received grants to purchase 40,000 shares, Messrs. Featheringill
and Sherrill received grants to purchase 7,500 shares and Messrs. Horovitz,
Rosenwald and Spencer received grants to purchase 3,750 shares. Options vest 25%
after one year and 1/48 per month thereafter until fully vested after four
years, except that Dr. Gee's option, which was granted prior to March 3, 1994,
vested over a two-year period and the special one-time grants vest over a two-
or one-year period. Dr. Horovitz and Dr. Steer also serve as consultants to the
Company for a quarterly fee of $4,000 each.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee consists of Dr. Gee and Dr. Rosenwald. There are no
Compensation Committee interlocks.

EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term compensation paid by the
Company during the 1997, 1996 and 1995 fiscal years to the Company's Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers whose annual salary and bonus for the 1997 fiscal year
exceeded $100,000 (collectively the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE
--------------------------

Long-term
Compensation
------------
Awards-Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Compensation
--------------------------- ---- ------ ----- ------------ ------------

Charles E. Bugg, Ph.D. 1997 $244,992 $50,000 (1) $3,000 (2) 125,000
Chairman, President and 1996 212,808 50,000 (1) 1,959 (2) 50,000
Chief Executive Officer 1995 207,000 50,000 (1) 0 100,000

J. Claude Bennett 1997 220,008 (3) 0 0 35,000
President and Chief Operating 1996 800 0 0 103,000
Officer 1995 0 0 0 0

John A. Montgomery, Ph.D. 1997 150,000 0 0 37,000
Executive Vice President, Secretary 1996 133,656 0 0 12,000
and Chief Scientific Officer 1995 130,008 0 0 11,000

Ronald E. Gray 1997 119,784 0 2,396 (2) 14,400
Chief Financial Officer, Treasurer 1996 109,088 0 1,959 (2) 5,400
and Assistant Secretary 1995 98,520 0 0 11,000

John L. Higgins 1997 118,142 (4) 0 0 8,400
Executive Vice President, 1996 136,896 0 1,959 (2) 28,400
Corporate Development 1995 103,728 0 0 50,000

- ------------
(1) Paid pursuant to Employment Agreements dated December 17, 1996 and November
19, 1993 between the Company and Dr. Bugg. See "Executive Compensation -
Employment Agreements."

(2) Represents the Company contribution to the 401(k) Plan.

(3) Paid pursuant to an Employment Agreement dated December 19, 1996 between the
Company and Dr. Bennett. Dr. Bennett will be paid an annual salary of $220,000
in 1997. See "Executive Compensation - Employment Agreements."

(4) Mr. Higgins left the Company in September 1997.

Employment Agreements

Charles E. Bugg, Ph.D. entered into a new three-year employment agreement with
the Company on December 17, 1996 for the years 1997, 1998 and 1999 (the "Bugg
Agreement"). Under the terms of the Bugg Agreement, Dr. Bugg will serve as
Chairman of the Board of Directors and Chief Executive Officer of the Company.
Dr. Bugg will receive annual compensation of $245,000 and a discretionary bonus
of $50,000. The Board may, in its discretion, grant other cash or stock bonuses
to Dr. Bugg as an award or incentive. Dr. Bugg is also entitled to all employee
benefits generally made available to executive officers. Dr. Bugg may, if he
desires, also hold positions at UAB, provided that he does not devote more than
ten percent of his time to such activities. The term of the Bugg

Agreement is for three years unless terminated (i) by the Company for cause or
(ii) upon the permanent disability of Dr. Bugg.

Dr. Bugg will receive an additional stock option to purchase 100,000 shares of
Common Stock under the Company's 1991 Stock Option Plan upon BioCryst's
submission to the FDA of any new drug application and another additional stock
option to purchase 100,000 shares of Common Stock under the Company's 1991 Stock
Option Plan upon the final approval by the FDA of each such new drug
application. The exercise price shall be the fair market value of the Company's
Common Stock on the date such additional stock option is granted. These
additional stock options will vest 25% one year after the date of issuance and
the remaining 75% will vest at the rate of 1/48 per month thereafter.

The options may be exercised immediately in the event of a merger or acquisition
of the Company. The options may be exercised within 24 months of Dr. Bugg's
death or permanent disability. In the event Dr. Bugg's employment is terminated
for cause he may exercise the options within three months of the date of such
termination to the extent such options were exercisable immediately prior to
such termination. In the event Dr. Bugg's employment is terminated for a reason
other than cause, death or permanent disability, the options then outstanding
shall become immediately exercisable in full.

All options granted to Dr. Bugg pursuant to the Bugg Agreement are intended to
qualify as incentive stock options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, except to the extent the portion of such
options which become exercisable in any year have an aggregate exercise price in
excess of $100,000. All options shall expire no later than ten years from the
date of grant.

J. Claude Bennett, M.D. entered into an employment agreement with the Company on
December 18, 1996 (the "Bennett Agreement"). Under the terms of the Agreement,
Dr. Bennett will serve as President and Chief Operating Officer of the Company.
The Company will also use its best efforts to elect Dr. Bennett as a director of
the Company. Dr. Bennett will receive annual compensation of $220,000. Dr.
Bennett was also granted an option to purchase 100,000 shares of Common Stock of
the Company and the Company will use its best efforts to provide that Dr.
Bennett is elected a Director of BioCryst. The Board may, in its discretion,
grant other cash or stock bonuses to Dr. Bennett as an award or incentive. An
option to purchase 35,000 shares of Common Stock was granted in December 1997.
Dr. Bennett is also entitled to all employee benefits generally made available
to executive officers. Dr. Bennett may, if he desires, also hold positions at
UAB, provided that he does not devote more than ten percent of his time to such
activities. The term of the Bennett Agreement is for three years unless
terminated (i) by the Company for cause or (ii) upon the permanent disability of
Dr. Bennett.

Option Grants in 1997

The following table shows, with respect to the Company's Named Executive
Officers, certain information with respect to option grants in 1997. All of the
grants were made under the Company's 1991 Stock Option Plan. No stock
appreciation rights were granted during such year.

Potential Realizable
Value at Assumed
Annual Rates of
Number of Stock Price
Securities % of Appreciation for
Underlying Total Exercise Option Term(1)
Options Options Price Per Expiration --------------
Name Granted Granted Share Date 5% 10%
---- ------- ------- ----- ---- -- ---

Charles E. Bugg, Ph.D. 50,000 8.5% $ 14.13 05/13/2007 $444,157 $1,125,581
75,000 12.7 6.50 12/09/2007 306,586 776,949

J. Claude Bennett, M.D. 35,000 5.9 6.50 12/09/2007 143,074 362,576

John A. Montgomery, Ph.D. 12,000 2.0 14.13 05/13/2007 106,598 270,139
25,000 4.2 6.50 12/09/2007 102,195 258,983

Ronald E. Gray 5,400 .9 14.13 05/13/2007 47,969 121,563
9,000 1.5 6.50 12/09/2006 36,790 93,234

John L. Higgins 8,400 1.4 14.13 05/13/2007 74,618 189,098

- ------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options at the end of the ten-year option term. The assumed 5% and
10% rates of stock appreciation are mandated by rules of the Securities and
Exchange Commission and do not represent the Company's estimate of the future
market price of the Common Stock.

Aggregate Option Exercises in 1997 and Year-end Option Values

The following table shows, with respect to the Company's Named Executive
Officers, the number and value of unexercised options held by the Named
Executive Officers as of December 31, 1997. No stock appreciation rights were
exercised during the 1997 fiscal year and no such rights were outstanding at the
end of that year.

Number of Securities
Underlying Values of Securities Underlying
Shares Unexercised Options Unexercised Options (1)
Acquired on Value ------------------- -----------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----- ----------- -------- ----------- ------------- ----------- -------------

Charles E. Bugg, Ph.D. 0 0 375,000 237,500 $565,625 $96,875
J. Claude Bennett, M.D. 0 0 33,478 112,522 9,853 18,647
John A. Montgomery, Ph.D. 0 0 94,250 54,250 247,094 19,031
Ronald E. Gray 0 0 60,100 26,700 114,594 11,031
John L. Higgins 17,156 $42,457 0 0 0 0

- ------------
(1) Amounts reflect the net values of outstanding stock options computed as the
difference between $7.00 per share (the fair market value at December 31, 1997)
and the exercise price therefor.

BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

General

The Company's compensation program for executive officers is primarily comprised
of base salary, annual bonus (CEO only) and long-term incentives in the form of
stock option grants. Executives also participate in various other benefit plans,
including medical, dental, 401(k), life insurance, disability insurance and
vacation plans, generally available to all employees of the Company.

Compensation of executive officers of the Company was based upon individual
assessments of the amount of compensation required to attract individuals to
fill positions with the Company and motivate such individuals to focus on
achieving the objectives of the Company, but such determinations were made on an
individual basis and were not necessarily reflective of a systematic or
comprehensive survey of comparable salary levels within either the Company's
industry or the Birmingham, Alabama area. The Compensation Committee did,
however, compare salaries to those in the Biotechnology Compensation Survey
Report 1997 prepared by Radford Associates.

The Company strongly believes in tying executive and employee rewards directly
to the long-term success of the Company and increases in stockholder value
through grants of stock options. The Company also believes that the grant of
stock options should be reflective of the Company's success in meeting
objectives established for the Company by the Board and each individual
officer's ability to effect, and contribution toward meeting, such objectives.
The stock options awarded to the Company's executive officers in May 1997 and
December 1997 were based on a subjective evaluation by the Compensation
Committee of the Company's achievement of objectives for 1996 and 1997,
including, without limitation, concluding a private and a public placement of
Common Stock and making progress with respect to its clinical and basic research
projects, each individual officer's contribution to the Company's achievements
of its objectives and the Compensation Committee's subjective determination of
the appropriate level of stock options for persons holding the officer's
position with the Company. No specific relative weight was assigned to any of
the factors considered and, the Compensation Committee did not generally
consider the amount of options previously awarded to the executive officers in
determining the level of awards.

Chief Executive Officer

Charles E. Bugg, Ph.D. entered into a new three-year employment agreement with
the Company on December 17, 1996 for the years 1997, 1998 and 1999 (the "Bugg
Agreement"). Under the terms of the Bugg Agreement, Dr. Bugg will serve as
Chairman of the Board of Directors and Chief Executive Officer of the Company.
Dr. Bugg will receive annual compensation of $245,000 and a discretionary bonus
of $50,000. The Board may, in its discretion, grant other cash or stock bonuses
to Dr. Bugg as an award or incentive. Dr. Bugg is also entitled to all employee
benefits generally made available to executive officers. Dr. Bugg may, if he
desires, also hold positions at The University of Alabama at Birmingham,
provided that he does not devote more than ten percent of his time to such
activities. The term of the Bugg Agreement is for three years unless terminated
(i) by the Company for cause or (ii) upon the permanent disability of Dr. Bugg.

Dr. Bugg will receive, on the last day of each year during the term of the Bugg
Agreement, an additional option to purchase a minimum of 25,000 shares of Common
Stock of the Company under the Company's 1991 Stock Option Plan. The exact
number of shares will be determined by the plan administrator, which is
presently the Compensation Committee, based on Dr. Bugg's performance and the
results of operations of the Company during such year. Under the Bugg Agreement
and his previous employment agreement, Dr. Bugg received an option to purchase
75,000 shares of Common Stock at the end of 1997, 50,000 shares of Common Stock
at the end of 1996, 50,000 shares of Common Stock related to 1996 performance
granted in May 1997 after the 1991 Stock Option Plan was amended, 100,000 shares
of Common Stock at the end of 1995 and 1994 and 200,000 shares of Common Stock
in November 1993. In assessing the performance of the Company and Dr. Bugg in
determining the number of options to be granted under his contract for 1997, the
Compensation Committee relied solely on a subjective evaluation of the Company's
progress with respect to its research projects and Dr. Bugg's contribution
toward these results. No specific criteria were utilized in evaluating such
performance, however, and no relative weight was assigned to any

specific factors considered. The Compensation Committee did not consider the
amount of options held by Dr. Bugg in determining the amount of options to be
awarded to him for 1997 under his contract. Such review in 1997 resulted in the
Compensation Committee granting Dr. Bugg an option to purchase 50,000 shares of
Common Stock at $14.13 per share in May 1997 for 1996's performance and an
option to purchase 75,000 shares of Common Stock at $6.50 in December 1997 for
1997's performance.

Section 162(m)

The Compensation Committee has reviewed all compensation programs for compliance
with Section 162(m) of the Code. Currently, options granted by this Committee
are exempt from the $1 million limit on deductibility of executive compensation
under the rules.

Members of the Compensation Committee

Edwin A. Gee, Ph.D. Lindsay A. Rosenwald, M.D.

PERFORMANCE GRAPH FOR BIOCRYST
Indexed Comparison Since IPO

[GRAPHIC OMITTED]

[THE FOLLOWING CHART WAS DEPICTED BY A LINE GRAPH IN THE PRINTED MATERIAL]

Beginning Investment Investment Ending Ending
Investment at at Investment Investment
3/04/94 12/31/94 12/31/95 12/31/96 12/31/97
------- -------- -------- -------- --------

BioCryst Pharmaceuticals, Inc. $ 100.00 $ 71.15 $ 142.31 $ 251.92 $ 107.69
The Nasdaq Stock Market 100.00 96.10 135.91 167.16 205.13
Nasdaq Pharmaceutical Stocks 100.00 81.51 149.11 149.55 154.53

The Performance Graph for BioCryst measures the change in a $100 investment in
the Company's initial public offering, based on a price of $6.50 on March 4,
1994 and its month-end closing price thereafter. BioCryst's relative performance
is then compared with the CRSP Total Return Indexes for The Nasdaq Stock Market
(US) and Nasdaq Pharmaceutical Stocks.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of the
Company's Common Stock as of March 22, 1998 by (i) each director, (ii) each of
the Named Executive Officers, (iii) all directors and executive officers of the
Company as a group and (iv) each person known to the Company to be the
beneficial owner of more than five percent of the Company's Common Stock:

Number of Percentage
Common Shares of
Beneficially Outstanding
Name and Address Owned (1) Shares
---------------- --------- ------
William W. Featheringill 2,203,178 (2) 15.8%
100 Brookwood Place, #410
Birmingham, Alabama 35209

Lindsay A. Rosenwald, M.D. 588,632 (3) 4.2
787 Seventh Avenue, 44th Floor
New York, New York 10019

William M. Spencer, III 544,172 (4) 3.9

Charles E. Bugg, Ph.D. 479,030 (5) 3.3

Joseph H. Sherrill, Jr. 408,978 (6) 2.7

John A. Montgomery, Ph.D. 143,886 (7) 1.0

Ronald E. Gray 70,300 (8) *

Randolph C. Steer, M.D., Ph.D. 60,000 (9) *

J. Claude Bennett, M.D. 46,084 (10) *

Zola P. Horovitz, Ph.D. 27,187 (9) *

Edwin A. Gee, Ph.D. 25,000 (9) *

John L. Higgins 8,685 (11) *

All executive officers and directors as a group
(12 persons) 4,605,132 (12) 30.8

- -----------
(*) Less than one percent.

(1) Gives effect to the shares of Common Stock issuable within 60 days after
March 22, 1998 upon the exercise of all options, warrants and other rights
beneficially held by the indicated stockholder on that date.

(2) Includes 65,000 shares of Common Stock held by his brother of which Mr.
Featheringill is a beneficial owner, 299,900 shares of Common Stock held by the
Featheringill Family Trust of which he is a beneficial owner and 21,978 shares
of Common Stock issuable upon exercise of stock options.

(3) Includes 120,239 shares of Common Stock issuable upon exercise of certain
Common Stock warrants, 21,187 shares issuable upon exercise of stock options and
3,125 shares of Common Stock which Dr. Rosenwald holds jointly with his spouse.
Also includes 77,539 shares of Common Stock held by Dr. Rosenwald's spouse
individually and as custodian for their minor children, as to which Dr.
Rosenwald disclaims beneficial ownership. Dr. Rosenwald has granted options to
five individuals to purchase an aggregate of 15,950 shares of Common Stock held
by him at purchase prices ranging from $0.60 to $7.20 per share.

(4) Includes 49,400 shares of Common Stock issuable upon exercise of certain
Common Stock warrants, 27,187 shares of Common Stock issuable upon exercise of
stock options, 10,000 shares of Common Stock held by Mr. Spencer's spouse and 38
shares of Common Stock held Mega Holdings, Inc. Liquidation Trust of which Mr.
Spencer is Trustee and a beneficiary. Mr. Spencer disclaims beneficial ownership
of the 10,038 shares of Common

Stock held by his spouse and Mega Holdings, Inc. Liquidation Trust.

(5) Includes 413,538 shares of Common Stock issuable upon exercise of stock
options.

(6) Includes 11,978 shares of Common Stock issuable upon exercise of stock
options, 10,000 shares of Common Stock which Mr. Sherrill holds jointly with his
spouse and 10,000 shares of Common Stock held by Mr. Sherrill's spouse. Mr.
Sherrill disclaims beneficial ownership of the 10,000 shares of Common Stock
held by his spouse.

(7) Includes 100,792 shares of Common Stock issuable upon exercise of stock
options and 19,400 shares of Common Stock held by Dr. Montgomery's spouse. Dr.
Montgomery disclaims beneficial ownership of the 19,400 shares of Common Stock
held by his spouse.

(8) Includes 1,500 shares of Common Stock held by the retirement accounts of Mr.
Gray and his spouse and 64,304 shares of Common Stock issuable upon exercise of
stock options.

(9) Includes shares of Common Stock issuable upon exercise of stock options.

(10) Includes 42,957 shares of Common Stock issuable upon exercise of stock
options.

(11) These shares of Common Stock are held jointly with his spouse.

(12) See Notes (1) through (11).

COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Act")
requires the Company's officers, directors and persons who beneficially own more
than 10% of a registered class of the Company's equity securities (collectively,
"Reporting Persons"), to file reports of ownership with the Securities and
Exchange Commission. Reporting Persons are required by the Act regulations to
furnish the Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain Reporting Persons that no Form 5s were
required for those persons, the Company believes that during 1997 its Reporting
Persons were in compliance with all applicable filing requirements, except that
Messrs. Rosenwald and Spencer were late in filing their Form 4 for September and
October, respectively.

CERTAIN TRANSACTIONS

Dr. Bugg, an executive officer and Director of the Company, is a Professor
Emeritus of UAB and is paid an annual stipend of $8,040 by UAB. Dr. Bennett, an
executive officer and Director of the Company, is a consultant to and
Distinguished University Professor Emeritus of UAB and is paid an annual stipend
of $12,500 by UAB Education Foundation. The Company paid approximately $791,000
to UAB in 1997 for conducting certain clinical trials, research and data input.

Dr. Montgomery, an executive officer and Director of the Company, is a former
executive officer of SRI. The Company paid approximately $350,000 to SRI in 1997
for certain research, laboratory rental and supplies. Dr. Montgomery is
currently a Distinguished Scientist at SRI and was paid approximately $8,248 by
SRI in 1997 for various consulting services unrelated to the services performed
by SRI for the Company.

INDEPENDENT AUDITORS

The principal independent public accounting firm used by the Company during the
fiscal year ended December 31, 1997 was Ernst & Young LLP. It is currently
anticipated that Ernst & Young LLP will be retained as the principal

accounting firm to be used by the Company throughout the fiscal year ending
December 31, 1998. The Company anticipates that a representative of Ernst &
Young LLP will attend the Meeting for the purpose of responding to appropriate
questions. At the Meeting, this representative will be afforded an opportunity
to make a statement if he or she so desires.

STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be presented at the Company's 1998 Annual
Meeting of Stockholders must be received by the Company by December 15, 1998 to
be considered for inclusion in the Company's proxy statement relating to such
meeting.

OTHER MATTERS

Management does not intend to present to the Meeting any matters other than
those hereinbefore mentioned and does not presently know of any matters that
will be presented by other parties. If other matters should properly come before
the Meeting it is intended that the holders of the proxies will act in respect
thereto and in accordance with their best judgment.

GENERAL INFORMATION

Copies of the Company's Annual Report for the year ended December 31, 1997 were
mailed with this Proxy Statement. If you did not receive a copy, you may obtain
one from Ronald E. Gray, the Chief Financial Officer of the Company, without
charge, by persons who were stockholders beneficially or of record as of March
22, 1998.

BY ORDER OF THE BOARD OF DIRECTORS
John A. Montgomery, Ph.D., Secretary

Birmingham, Alabama
April 13, 1998

BIOCRYST PHARMACEUTICALS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 20,1998
(This Proxy is Solicited by the Board of Directors)

The undersigned stockholder of BioCryst Pharmaceuticals, Inc. hereby
appoints Charles E. Bugg and john A. Montgomery, and each of them, with full
power of substitution, proxies to vote the shares of stock which the undersigned
could vote if personally present at the Annual Meeting of Stockholders of
BioCryst Pharmaceuticals, Inc., to be held at The Harbert Center, 2019 Fourth
Avenue North, Birmingham, Alabama, on May 20, 1998, at 3:00 P.M., Central
Daylight Time, or any adjournment thereof.

(To be Signed on Reverse Side)

|X| Please mark your
votes as in this
example.

FOR all nominees at WITHHOLD
right (except as AUTHORITY
marked to to vote for all
the contrary) nominees at right
1. ELECTION
OF |_| |_|
DIRECTORS
(for terms as described in the Proxy Statement).

INSTRUCTION: To withhold authority for any individual nominee write that
nominee's name in the space provided below.

- ------------------------------------------------------------------------

MANAGEMENT RECOMMENDS A VOTE FOR ALL THE NOMINEES.

Nominees: Charles E. Bugg 2. In their discretion, upon such other matters
John A. Montgomery as may properly come before the meeting.
Edwin A. Gee, Ph.D.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE PERSONS NOMINATED
BY MANAGEMENT AS DIRECTORS

SIGNATURE____________________ DATE_____ SIGNATURE____________________ DATE_____

NOTE: Please date and sign exactly as your name appears on the envelope in which
this material was mailed. If shares are held jointly, each stockholder should
sign. Executors, administrators, trustees, etc. should use full title, and if
more than one, all should sign. If a stockholder is a corporation, please sign
full corporate name by an authorized officer.