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Needling BioCryst

CNBC.com

BioCryst Pharmaceuticals drew the short straw, er, needle. The biotech company says a majority of patients in a mid-stage clinical trial of its experimental seasonal and pandemic flu antiviral Peramivir got the drug using too short of an injection needle.

In other words, BioCryst claims those patients didn't get enough of the drug in their system to fight off the bug and that's why the study didn't meet its goal or achieve statistical significance and the stock has been selling off since the announcement after the closing bell yesterday.

Nonetheless, the company says that by the end of this year it still plans to push Permaivir into late-stage, Phase 3 clinical trials -- typically the last step before seeking FDA approval. If it works, Peramivir would be an alternative to GlaxoSmithKline's inhalable flu fighter Relenza and the oral capsule Tamiflu from Roche and Gilead Sciences . Peramivir would be injected or infused especially in acute cases.

So, here's a bull and bear take on the data: Rodman & Renshaw biotech analyst Ren Benjamin is telling clients in a research note this morning to stay on the sidelines. He thinks BioCryst is making a mistake by moving into Phase 3: "...we believe the timeline may be too aggressive... [and] that it is in the best interest of both the company and the shareholders that an additional Phase 2 trial be conducted to gain more confidence on the efficacy of the peramivir IM (intramuscular) injection before the initiation of 1000-patient Phase 3 trials." R & R makes a market in BCRX and wants to bank it.

Meantime, "ChangeWave Biotech Investor" newsletter editor Michael Shulman, who has owned BCRX shares for several years, is telling his subscribers it's time to jump in. He writes, "...hang in there and see this for what it is, a buying opportunity."

But he also takes BioCryst to task over the short needle thing: "It turns out the company switched needles [to a smaller size] and this led to fully two-thirds of the people in the trial never actually getting the drug. As it happens, fat butts block intramuscular injections if the needle isn't big enough. This stuff is rocket science?

In a world of widening airline seats and extreme market volatility, this dumb mistake, along with the poor wording in the press release, cost shareholders more than $100 million in market cap overnight. The bottom line here is that some joker didn't bother to check and see if the needles worked and just cost us a small fortune."

But Shulman was just getting started -- he really lets 'em have it on his blog.

Questions? Comments? Pharma@cnbc.com