882796--3/9/2010--BIOCRYST_PHARMACEUTICALS

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{product, candidate, development}

{cost, contract, operation}

{product, liability, claim}

{personnel, key, retain}

{property, intellectual, protect}

{cost, regulation, environmental}

{cost, operation, labor}

{capital, credit, financial}

{control, financial, internal}

{product, market, service}

{stock, price, operating}

Risks Relating to Our Business We have incurred substantial losses since our inception in 1986, expect to continue to incur such losses, and may never be profitable. Our success depends upon our ability to advance our products through the various stages of development, especially through the clinical trial process. Our clinical trials may not adequately show that our drugs are safe or effective. If we fail to obtain additional financing, we may be unable to complete the development and commercialization of our product candidates or continue our research and development programs. If HHS were to eliminate, reduce or delay funding from our contract, or dispute some of our incurred costs or other actions taken under the contract, this would have a significant negative impact on our revenues, cash flows and the development of peramivir. Our contract with HHS has special contracting requirements, which create additional risks of reduction or loss of funding. If we fail to successfully commercialize or establish collaborative relationships to commercialize certain of our drug product candidates or if any partner terminates or fails to perform its obligations under agreements with us, potential revenues from commercialization of our product candidates could be reduced, delayed or eliminated. We have not commercialized any products or technologies and our future revenue generation is uncertain. If our development collaborations with third parties, such as our development partners and contract research organizations, fail, the development of our drug product candidates will be delayed or stopped. Our development of peramivir for influenza is subject to all disclosed drug development and potential commercialization risks and numerous additional risks. Any potential revenue benefits to us are highly speculative. There are risks related to the potential emergency use or sale of peramivir. Because we have limited manufacturing experience, we depend on third-party manufacturers to manufacture our drug product candidates and the materials for our product candidates. If we cannot rely on third-party manufacturers, we will be required to incur significant costs and potential delays in finding new third-party manufacturers. If we or our partners do not obtain and maintain governmental approvals for our products under development, we or our partners will not be able to sell these potential products, which would significantly harm our business because we will receive no revenue. We face intense competition, and if we are unable to compete effectively, the demand for our products, if any, may be reduced. If we fail to adequately protect or enforce our intellectual property rights or secure rights to patents of others, the value of those rights would diminish. There is a substantial risk of product liability claims in our business. If we are unable to obtain sufficient insurance, a product liability claim against us could adversely affect our business. If our facility incurs damage or power is lost for a significant length of time, our business will suffer. If we fail to retain our existing key personnel or fail to attract and retain additional key personnel, the development of our drug product candidates and the expansion of our business will be delayed or stopped. Our stock price is likely to be highly volatile and the value of your investment could decline significantly. If, because of our use of hazardous materials, we violate any environmental controls or regulations that apply to such materials, we may incur substantial costs and expenses in our remediation efforts.

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882796--3/9/2010--BIOCRYST_PHARMACEUTICALS_INC