<SUBMISSION>
<ACCESSION-NUMBER>0001005477-02-001971
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20020331
<FILING-DATE>20020503
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BIOCRYST PHARMACEUTICALS INC
<CIK>0000882796
<ASSIGNED-SIC>2836
<IRS-NUMBER>621413174
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-23186
<FILM-NUMBER>02633444
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2190 PKWY LAKE DR
<CITY>BIRMINGHAM
<STATE>AL
<ZIP>35244
<PHONE>2054444600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2190 PARKWAY LAKE DR
<CITY>BIRMINGHAM
<STATE>AL
<ZIP>35244
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d50537_10q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
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     <!-- Project:        untitled                                                         -->
     <!-- Control Number: d50537                                                           -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Biocryst Pharmaceuticals                                         -->
     <!-- Project Name:   10-Q                                                             -->
     <!-- Firm Name:      ADP                                                              -->
     <TITLE>FORM 10-Q</TITLE>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>UNITED STATES<BR>
SECURITIES AND EXCHANGE
COMMISSION <BR>
Washington, D.C. 20549 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM 10-Q </FONT></H1>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[X] </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </FONT></TD>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the quarterly
period ended March 31, 2002</FONT></H1>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>OR </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[_] </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>For the transition
period from ____________ to _____________ .</B></FONT></FONT> </P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Commission File Number
000-23186 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2"><B>BIOCRYST
PHARMACEUTICALS, INC.</B><BR>
(Exact name of
registrant as specified in its charter) </FONT></FONT></P>

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           DELAWARE<BR>
(State or other jurisdiction of<BR>
incorporation or organization) </FONT></TD>
<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          62-1413174<BR>
(I.R.S. employer<BR> identification no.) </FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2190 Parkway Lake
Drive; Birmingham, Alabama 35244 <BR>
(Address and zip code
of principal executive offices) </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>(205) 444-4600<BR>
(Registrant&#146;s telephone
number, including area code) </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>NONE <BR>
(Former name, former
address and former fiscal year, if changed since last report) </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days:  </FONT></P>



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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Yes [X]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
[_]  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate the number of shares
outstanding of each of the issuer&#146;s classes of common stock, as of the latest
practicable date: 17,636,465 shares of the Company&#146;s Common Stock, $.01 par value,
were outstanding as of April 26, 2002.  </FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.</FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INDEX</FONT></H1>

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     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="center" COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Part I. Financial Information</FONT></TD>
     <TD COLSPAN="2" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><B>Page No.&nbsp;&nbsp; </B> </FONT></FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="CENTER"><HR NOSHADE SIZE="1" width="53%"></TD><TD ALIGN="CENTER"></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="9%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 1.</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="71%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Financial Statements:</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="12%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="2%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Condensed Balance Sheets &#151; March 31, 2002 and December 31, 2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Condensed Statements of Operations &#151; Three Months Ended</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;March 31, 2002 and 2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Condensed Statements of Cash Flows &#151; Three Months Ended March 31,</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;2002 and 2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Notes to Condensed Financial Statements</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 2.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Management&#146;s Discussion and Analysis of Financial Condition and</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Results of Operations</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 3.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Quantitative and Qualitative Disclosures About Market Risk</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Part II. Other Information</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 1.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Legal Proceedings</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 2.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Changes in Securities and Use of Proceeds</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 3.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Defaults Upon Senior Securities</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 4.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Submission of Matters to a Vote of Security Holders</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 5.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Other Information</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Item 6.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Exhibits and Reports on Form 8-K</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">18</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">   </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Signatures</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">19</FONT></TD>
        <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>1 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART I. FINANCIAL
INFORMATION</FONT></H1>

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<TD WIDTH=7%><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Item 1.</B></FONT></FONT> </TD>
<TD WIDTH=1%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=92%><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Financial
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.<BR>
CONDENSED BALANCE
SHEETS<BR>
March 31, 2002 and
December 31, 2001<BR>
(In thousands, except
per share data)</FONT></H1>

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     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002<BR>(Unaudited) </FONT></TH>
     <TH ALIGN=CENTER></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2001<BR>(Note 1) </FONT></TH></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
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     <TD WIDTH="71%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Assets</B></FONT></FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Cash and cash equivalents</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;18,636</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;18,865</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Securities held-to-maturity</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,621</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13,122</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Prepaid expenses and other current assets</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">718</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">416</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">29,975</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">32,403</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Securities held-to-maturity</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17,394</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">20,954</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Furniture and equipment, net</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,349</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,396</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Patents</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">453</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">343</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total assets</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;53,171</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;59,096</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Liabilities and Stockholders&#146; Equity</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Accounts payable</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;617</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Accrued expenses</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,185</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,365</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,535</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,982</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Deferred revenue</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">300</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">300</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Stockholders&#146; equity:</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Preferred stock, $.01 par value, shares</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;authorized &#150; 5,000; shares issued and outstanding - none</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Common stock, $.01 par value, shares authorized &#150;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;45,000; shares issued and outstanding &#150;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;17,636 in 2002 and 17,607 in 2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">176</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">176</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Additional paid-in capital</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">131,807</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">131,669</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Accumulated deficit</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(80,647</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(75,031</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total stockholders&#146; equity</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">51,336</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">56,814</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total liabilities and stockholders&#146; equity</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;53,171</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;59,096</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes to condensed
financial statements.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.<BR>
CONDENSED STATEMENTS
OF OPERATIONS<BR>
Three Months Ended
March 31, 2002 and 2001<BR>
(In thousands, except
per share)<BR>(Unaudited)</FONT></H1>

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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH ALIGN=CENTER></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002</FONT></TH>
     <TH ALIGN=CENTER></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2001</FONT></TH>
     <TH ALIGN=CENTER></TH>
</TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="67%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Revenues</B>:</FONT></FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="11%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="11%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Collaborative and other research and development</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;703</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Interest and other</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">539</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,184</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total revenues</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">539</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,887</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Expenses</B>:</FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Research and development</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,387</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,530</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">General and administrative</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">768</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">700</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Royalty expense</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">40</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Total expenses</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6,155</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,270</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Net loss</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$(5,616</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$(1,383</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Amounts per common share</B>:</FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Net loss (Note 2)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;(.32</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;(.08</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Weighted average shares outstanding (Note 2)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17,627</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17,539</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes to condensed
financial statements.  </FONT></P>

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<BR>
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>3 </FONT></P>

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<BR>





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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.<BR>
CONDENSED STATEMENTS
OF CASH FLOWS<BR>
Three Months Ended
March 31, 2002 and 2001<BR>
(In thousands)<BR>
(Unaudited)</FONT></H1>

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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH ALIGN=CENTER></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002</FONT></TH>
     <TH ALIGN=CENTER></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2001</FONT></TH>
     <TH ALIGN=CENTER></TH>
</TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="70%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Operating activities:</B></FONT></FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Net loss</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$(5,616</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$(1,383</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Depreciation and amortization</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">287</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">235</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Deferred expense</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">41</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Deferred revenue</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(703</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Non-monetary compensation</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">37</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">36</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Changes in operating assets and liabilities, net</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(749</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(457</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;<B>Net cash used in operating activities</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>(6,041</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>)</B></FONT></FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>(2,231</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>)</B></FONT></FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Investing activities:</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Purchases of furniture and equipment</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(240</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(611</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Purchases of patents and licenses</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(110</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(13</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Purchases of marketable securities</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(560</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(16,433</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Maturities of marketable securities</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6,621</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">27,429</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;<B>Net cash provided by investing activities</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>5,711</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>10,372</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Financing activities:</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Principal payments of debt and capital lease obligations</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(7</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Proceeds from sale of common stock</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">101</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">20</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;<B>Net cash provided by financing activities</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>101</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>13</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Increase (decrease) in cash and cash equivalents</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(229</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8,154</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Cash and cash equivalents at beginning of period</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">18,865</FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8,456</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="1"></TD><TD></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Cash and cash equivalents at end of period</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>$&nbsp;18,636</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>$&nbsp;16,610</B></FONT></FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="2"></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE="2"></TD><TD></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes to condensed
financial statements.  </FONT></P>


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<BR>
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>4
 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.<BR>
NOTES TO CONDENSED
FINANCIAL STATEMENTS</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note 1. Basis of Preparation </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
condensed balance sheet as of March 31, 2002 and the condensed statements of operations
and cash flows for the three months ended March 31, 2002 and 2001 have been prepared in
accordance with generally accepted accounting principles by the Company and have not been
audited. Such financial statements reflect all adjustments that are, in management&#146;s
opinion, necessary to present fairly, in all material respects, the financial position at
March 31, 2002 and the results of operations and cash flows for the three months ended
March 31, 2002 and 2001. These condensed financial statements should be read in
conjunction with the financial statements for the year ended December 31, 2001 and the
notes thereto included in the Company&#146;s 2001 Annual Report on Form 10-K. Interim
operating results are not necessarily indicative of operating results for the full year.
The condensed balance sheet as of December 31, 2001 has been prepared from the audited
financial statements included in the previously mentioned Annual Report.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note 2. Net Loss Per Share </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company computes net loss per share in accordance with Statement of Financial Accounting
Standards No. 128, <I>Earnings per Share</I>. Net loss per share is based upon the
weighted average number of common shares outstanding during the period. Common equivalent
shares from unexercised stock options and warrants are excluded from the computation, as
their effect is anti-dilutive. For the three months ended March 31, 2002 and 2001, common
stock equivalents of approximately 90,005 and 189,691 shares respectively, were not used
to calculate net loss per share because of their anti-dilutive effect. There were no
reconciling items in calculating the numerator for net loss per share for any of the
periods presented.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Item 2. Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations</B></FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This
Quarterly Report on Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company. Such
statements are only predictions and the actual events or results may differ materially
from the results discussed in the forward-looking stat</I>e<I>ments. Factors that could
cause or contribute to such differences include those discussed below as well as those
discussed in other filings made by the Company with the Securities and Exchange
Commission, including the Company&#146;s Annual Report on Form 10-K.</I> </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Overview</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
our inception in 1986, we have been engaged in research and development activities and
organizational efforts, including:  </FONT></P>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>identification and licensing of enzyme targets; </FONT></TD>
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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>drug discovery; </FONT></TD>
</TR>
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<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>structure-based design of drug candidates; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>small-scale synthesis of compounds; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>conducting preclinical studies and clinical trials; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>recruiting our scientific and management personnel; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>establishing laboratory facilities; and </FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>5 </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>raising capital. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
revenues have generally been limited to license fees, milestone payments, interest
income, collaboration research and development fees. Prior to January 1, 2000, the
Company recognized research and development fees, license fees and milestone payments as
revenue when received. Effective January 1, 2000, the Company changed its method of
accounting for revenue recognition in accordance with SEC Staff Accounting Bulletin No.
101, <I>Revenue Recognition in Financial Statements </I>(&#147;SAB 101&#148;). Research
and development revenue on cost-reimbursement agreements is recognized as expenses are
incurred, up to contractual limits. Research and development fees, license fees and
milestone payments are recognized as revenue when the earnings process is complete, the
Company has no further continuing performance obligations and has completed its
performance under the terms of the agreement, in accordance with SAB 101. License fees
and milestone payments received under licensing agreements that are related to future
performance are deferred and taken into income as earned over the estimated drug
development period. The Company has not received any royalties from the sale of licensed
pharmaceutical products. It could be several years, if ever, before we will recognize
significant revenue from royalties received pursuant to our license agreements, and we do
not expect to ever generate revenue directly from product sales. Future revenues, if any,
are likely to fluctuate substantially from quarter to quarter.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have incurred operating losses since our inception. Our accumulated deficit at March 31,
2002 was $80.6 million. We will require substantial expenditures relating to the
development of our current and future drug candidates. During the three years ended
December 31, 2001, we spent 26.9% of our research and development expenses on contract
research and development, including:  </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>payments to consultants; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>funding of research at academic institutions; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>large scale synthesis of compounds; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>preclinical studies; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>engaging investigators to conduct clinical trials; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>hiring contract research organizations to monitor and gather data on clinical trials; and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>using statisticians to evaluate the results of clinical trials. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
above expenditures for contract research and development for our current and future drug
candidates will vary from quarter to quarter depending on the status of our research and
development projects. For example, in September 1998, we entered a worldwide license
agreement with The R.W. Johnson Pharmaceutical Research Institute (RWJPRI) and
Ortho-McNeil Pharmaceutical, Inc. (Ortho-McNeil), both Johnson &amp; Johnson companies, to
develop and market products to treat and prevent viral influenza. On April 30, 2001, we
announced that Ortho-McNeil and RWJPRI gave BioCryst four months prior notice of
termination of the worldwide license agreement. The final termination of this agreement
was effective on September 21, 2001. Subsequently, we decided to move forward in the
United States to complete the Phase III clinical trial of peramivir (RWJ-270201) that was
initiated in Europe in February 2000, while we seek a new development partner. During the
first quarter 2002, the Company announced that patient enrollment was complete in the
first Phase III trial of once-a-day orally administered peramivir and preliminary data
from the trial will be available during the third quarter 2002.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes
in our existing and future research and development and collaborative relationships will
also impact the status of our research and development projects. Although we may, in some
cases, be able to control the timing of development expenses, in part by accelerating or
decelerating certain of these costs, many of these costs will be incurred irrespective of
whether or not we are able to discover drug candidates or obtain collaborative partners
for commercialization. As a result, we believe that quarter-to-quarter comparisons of our
financial results are not necessarily meaningful and should not be relied upon as an
indication of future performance. If we fail to meet the research, clinical and financial
expectations of securities analysts and investors, it could have a material adverse
effect on the price of our common stock.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>6 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Results of Operations (three
months ended March 31, 2002 compared to the three months ended March 31, 2001)</B> </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues
decreased 71.4% to $539,000 in the three months ended March 31, 2002 from $1,887,000 in
the three months ended March 31, 2001. The decrease was primarily due to a change in
accounting estimate in the quarter ended June 30, 2001 following termination by
Ortho-McNeil and RWJPRI of the worldwide license agreement with BioCryst for peramivir,
the Company&#146;s neuraminidase inhibitor. As a result of this change, we had no
collaborative revenue during the first quarter of 2002 as compared to $703,000 in the
first quarter of 2001. In addition, interest and other income decreased 54.5% to $539,000
in the first quarter of 2002 from $1,184,000 in the first quarter of 2001, due to a
reduction in cash from funding operations and expansion of our facilities.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research
and development expenses increased 112.9% to $5,387,000 in the three months ended March
31, 2002 from $2,530,000 in the three months ended March 31, 2001. The increase is
primarily attributable to an increase in clinical trial expenses related to the Phase III
development of peramivir, plus increased personnel and other research and development
expenses related to our other programs.  </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Liquidity and
Capital Resources</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
expenditures have exceeded revenues since the Company&#146;s inception. Our operations
have principally been funded through various sources, including the following:  </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>public offerings and private placements of equity and debt securities, </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>equipment lease financing, </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>facility leases, </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>collaborative and other research and development agreements (including licenses and
options for licenses), </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>research grants and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>interest income. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we have attempted to contain costs and reduce cash flow requirements by renting
scientific equipment and facilities, contracting with other parties to conduct certain
research and development and using consultants. We expect to incur additional expenses,
potentially resulting in significant losses, as we continue to expand our research and
development activities and undertake additional preclinical studies and clinical trials
of compounds, which have been or may be discovered. We also expect to incur substantial
expenses related to the filing, prosecution, maintenance, defense and enforcement of
patent and other intellectual property claims.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company invests its excess cash principally in U.S. marketable securities from a
diversified portfolio of institutions with strong credit ratings and in U.S. government
and agency bills and notes, and by policy, limits the amount of credit exposure at any
one institution. These investments are generally not collateralized and mature within
four years. The Company has not realized any losses from such investments. In addition,
at March 31, 2002, approximately $15.1 million was invested in the Merrill Lynch Premier
Institutional Fund, which invests primarily in commercial paper, U.S. government and
agency bills and notes, corporate notes, certificates of deposit and time deposits. The
Merrill Lynch Premier Institutional Fund is not insured. At March 31, 2002, our cash,
cash equivalents and securities held-to-maturity were $46.7 million, a decrease of $6.3
million from December 31, 2001, principally due to the funding of current operations,
which includes continuing Phase III development of peramivir.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>7 </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have financed some of our equipment purchases with lease lines of credit. We currently
have a $500,000 general line of credit with our bank, secured by a pledge of $600,000 in
marketable securities. There was nothing drawn against this line as of March 31, 2002. In
July 2000, we renegotiated our lease for our current facilities, which will expire on
June 30, 2010. We have an option to renew the lease for an additional five years at
current market rates. The lease, as amended effective July 1, 2001 for an additional
7,200 square feet, requires us to pay monthly rent starting at $33,145 per month in July
2001 and escalating annually to a minimum of $47,437 per month in the final year, plus
our pro rata share of operating expenses and real estate taxes in excess of base year
amounts. As part of the lease, we have pledged a U.S. Treasury security deposited in
escrow for the payment of rent and performance of other obligations specified in the
lease. This pledged amount is currently $455,000, which will be decreased by $65,000
annually throughout the term of the lease.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2000, we remodeled our facilities to gain additional laboratory space, update our
existing laboratories, and add a small good manufacturing practices (GMP) clean room. In
addition, we updated our general office facility to provide for growth and efficiencies.
The total cost of these changes, including furniture and laboratory equipment, was
approximately $2.7 million. This phase of remodeling was completed in December 2000.
Another phase of remodeling was completed in February 2002 for approximately $2.6 million
to add two chemistry laboratories and purchase additional equipment. Currently, there are
no immediate plans for additional remodeling.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December 31, 2001, we had long-term operating lease obligations, which provide for
aggregate minimum payments of $567,123 in 2002, $580,803 in 2003 and $594,897 in 2004.
These obligations include the future rental of our operating facility.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
September 1998, we entered a worldwide license agreement with RWJPRI and Ortho-McNeil,
both Johnson &amp; Johnson companies, to develop and market products to treat and prevent
viral influenza. Under the terms of the agreement, we received $6.0 million in cash up
front, and $6.0 million from Johnson &amp; Johnson Development Corporation in the form of
a common stock equity investment in 1998, and milestone payments of $2.0 million and $4.0
million in 1999 and 2000, respectively. On April 30, 2001, we announced that Ortho-McNeil
and RWJPRI gave four months prior notice of termination of the worldwide license
agreement. Subsequently, all rights to peramivir and all other patented compounds were
returned to the Company. Ortho-McNeil indicated that this business decision was not
related to safety or efficacy of the drug, but that other of its drug development
programs were of a higher priority. The final termination of this agreement was effective
on September 21, 2001. Subsequently, we decided to move forward in the United States to
complete the Phase III clinical trial of peramivir that was initiated in Europe in
February 2000, while we seek a new development partner. During the first quarter 2002,
the Company announced that patient enrollment was complete in the first Phase III trial
of once-a-day orally administered peramivir and preliminary data from the trial will be
available during the third quarter 2002.  </FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have projected to spend approximately $7 to $9 million more than our normal annual
operating expenses on the Phase III clinical trial, which began in the quarter ended
December 31, 2001. If we are able to find a new corporate partner to continue and
complete the development of peramivir, our future costs associated with this drug will be
limited. We cannot assure you that we will find a new corporate partner that will
continue to develop the product, or, if they do so, that such development will result in
receiving milestone payments, obtaining regulatory approval, or achieving future
royalties from sales of licensed products.  </FONT></P>



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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
plan to finance our needs principally from the following:  </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our existing capital resources and interest earned on that capital; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>payments under collaborative and licensing agreements with corporate partners; and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>through lease or loan financing and future public or private financing. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that our available funds will be sufficient to fund our operations at least
through 2004. However, this is a forward-looking statement, and there may be changes that
would consume available resources significantly before such time. Our long-term capital
requirements and the adequacy of our available funds will depend upon many factors,
including:  </FONT></P>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the progress of our research, drug discovery and development programs; </FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>8 </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes in existing collaborative relationships; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our ability to establish additional collaborative relationships; </FONT></TD>
</TR>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the magnitude of our research and development programs; </FONT></TD>
</TR>
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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the scope and results of preclinical studies and clinical trials to identify drug
candidates; </FONT></TD>
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<BR>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>competitive and technological advances; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the time and costs involved in obtaining regulatory approvals; </FONT></TD>
</TR>
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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent
claims; </FONT></TD>
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</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our dependence on others for development and commercialization of our product candidates,
in particular, peramivir, our influenza neuraminidase inhibitor, and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>successful commercialization of our products consistent with our licensing strategy. </FONT></TD>
</TR>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional
funding, whether through additional sales of securities or collaborative or other
arrangements with corporate partners or from other sources, may not be available when
needed or on terms acceptable to us. The issuance of preferred or common stock or
convertible securities, with terms and prices significantly more favorable than those of
the currently outstanding common stock, could have the effect of diluting or adversely
affecting the holdings or rights of our existing stockholders. In addition, collaborative
arrangements may require us to transfer certain material rights to such corporate
partners. Insufficient funds may require us to delay, scale-back or eliminate certain of
our research and development programs.  </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Critical
Accounting Policies</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have established various accounting policies that govern the application of accounting
principles generally accepted in the United States in the preparation of our financial
statements. Our significant accounting policies are described in the footnotes to the
financial statements of the Company&#146;s most recent Annual Report on Form 10-K.
Certain accounting policies involve significant judgments and assumptions by management
that have a material impact on the carrying value of certain assets and liabilities;
management considers such accounting policies to be critical accounting policies. The
judgments and assumptions used by management are based on historical experience and other
factors, which are believed to be reasonable under the circumstances. Because of the
nature of the judgments and assumptions made by management, actual results could differ
from these judgments and estimates which could have a material impact on the carrying
values assets and liabilities and the results of operations.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe the following critical accounting policies affect our more significant judgments
and estimates used in the preparation of our financial statements.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>
<I>Revenue Recognition </I></FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January 1, 2000, we changed our method of accounting for revenue recognition in
accordance with SEC Staff Accounting Bulletin No. 101, <I>Revenue Recognition in
Financial Statements</I> (&#147;SAB 101&#148;). Research and development revenue on
cost-reimbursement agreements is recognized as expenses are incurred, up to contractual
limits. Research and development fees, license fees and milestone payments are recognized
as revenue when the earnings process is complete, the Company has no further continuing
performance obligations and has completed its performance under the terms of the
agreement, in accordance with SAB 101. License fees and milestone payments received under
licensing agreements that are related to future performance are deferred and taken into
income as earned over the estimated drug development period. Recognized revenues and
profit are subject to revisions as these contracts or agreements progress to completion.
Revisions to revenue or profit estimates are charged to income in the period in which the
facts that give rise to the revision became known.  </FONT></P>






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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>9 </FONT></P>

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<P ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>
<I>Valuation of
Financial Instruments </I></FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
carry our held-to-maturity securities at amortized cost, as adjusted for
other-than-temporary declines in market value. In determining if and when a decline in
market value below amortized cost is other-than-temporary, we evaluate the market
conditions and other key measures for our held-to-maturity investments. Future adverse
changes in market conditions could result in losses or an inability to recover the
carrying value of the held-to-maturity investments that may not be reflected in an
investment&#146;s current carrying value, thereby possibly requiring an impairment charge
in the future.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>
<I>Deferred Taxes </I></FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have not had taxable income since incorporation and, therefore, we have not paid any
income tax. We have deferred tax assets related to net operating loss carryforwards and
research and development carryforwards. We record a valuation allowance to reduce our
deferred tax assets to the amount that is more likely than not to be realized. While we
have considered future taxable income and ongoing prudent and feasible tax planning
strategies in assessing the need for the valuation allowance, in the event we were to
determine that we would be able to realize the deferred tax assets in the future in
excess of the net recorded amount, an adjustment to the deferred tax asset would increase
income in the period such determination was made. Likewise, should we determine that we
would not be able to realize all or part of the net deferred tax asset in the future, an
adjustment to the deferred tax asset would be charged to income in the period such
determination was made.  </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Certain Risk Factors
That May Affect Future Results, Financial Condition and the Market Price of Securities</FONT></H2>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
We
have incurred substantial losses since our inception in 1986, expect to continue to incur
such losses, may never be profitable and may need additional financing</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
our inception in 1986, we have not been profitable. We expect to incur additional losses
for the foreseeable future, and our losses could increase as our research and development
efforts progress. As of March 31, 2002, our accumulated deficit was approximately $80.6
million. To become profitable, we must successfully develop drug candidates, enter into
profitable agreements with other parties and our drug candidates must receive regulatory
approval. These other parties must then successfully manufacture and market our drug
candidates. It could be several years, if ever, before we receive royalties from any
future license agreements. In addition, we never expect to generate revenue directly from
product sales. If we do not generate revenue, or if our drug development expenses
increase, we may need to raise additional funds through new or existing collaborations or
through private or public equity or debt financing. If financing is not available on
acceptable terms or not available at all, we may not have enough capital to continue our
current business strategy.  </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
Because
Ortho-McNeil Pharmaceutical, Inc. (Ortho-McNeil) and The R.W. Johnson Pharmaceutical
Research Institute (RWJPRI) terminated their worldwide license agreement with us, our
future revenue generation is uncertain</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
April 30, 2001, we announced that Ortho-McNeil and RWJPRI gave BioCryst four months prior
notice of termination of the worldwide license agreement with us to develop and market
products to treat and prevent viral influenza. The final termination of this agreement
was effective on September 21, 2001. As a result, we have lost a substantial amount of
our expected revenue. After applying SAB 101 on a pro forma basis, none of our revenues
for the three months ended March 31, 2002; approximately 69.3% of our revenues for the
year ended December 31, 2001 and approximately 43.3% of our revenues for the year ended
December 31, 2000 resulted from this license agreement. These revenues represent
approximately 39.1% of our total revenues since our inception in 1986. Because of the
termination of this agreement, we will not receive any future milestone or other payments
from RWJPRI or Ortho-McNeil.  </FONT></P>



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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>10 </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
our development collaborations with other parties fail, the development of our drug
candidates will be delayed or stopped</I></FONT></H3>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
rely completely upon other parties for many important stages of our drug development
programs, including:  </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>discovery of proteins that cause or enable biological reactions necessary for the
progression of the disease or disorder, called enzyme targets; </FONT></TD>
</TR>
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<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>execution of some preclinical studies and late-stage development for our compounds and
drug candidates; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>manufacturing, sales, marketing and distribution of our drug candidates. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
failure to engage in successful collaborations at any one of these stages would greatly
impact our business. For example, we cannot assure you that we will license our
proprietary influenza neuraminidase inhibitor peramivir to a new corporate partner to
facilitate final development and potential commercialization on acceptable terms, if at
all. If we do not license enzyme targets from academic institutions or from other
biotechnology companies on acceptable terms, our product development efforts would
suffer. Similarly, if the contract research organizations that conduct our initial or
late-stage clinical trials breached their obligations to us, this would delay or prevent
the development of our drug candidates.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Even
more critical to our success is our ability to enter into successful collaborations for
the late-stage clinical development, regulatory approval, manufacturing, marketing, sales
and distribution of our drug candidates. Our strategy is to rely upon other parties for
all of these steps so that we can focus exclusively on the key areas of our expertise.
This heavy reliance upon third parties for these critical functions presents several
risks, including:  </FONT></P>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>these contracts may expire or the other parties to the contract may terminate them; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our partners may choose to pursue alternative technologies, including those of our
competitors; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>we may have disputes with a partner that could lead to litigation or arbitration; </FONT></TD>
</TR>
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<BR>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our partners may not devote sufficient capital or resources towards our drug candidates;
and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>our partners may not comply with applicable government regulatory requirements. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
problems encountered with our current or future partners could delay or prevent the
development of our compounds, which would severely affect our business, because if our
compounds do not reach the market in a timely manner, or at all, we will experience a
significant decrease in milestone payments received by us and may never receive any
royalty payments.  </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
the clinical trials of our drug candidates fail, our drug candidates will not be
marketed, which would result in a decrease in, or complete absence of, revenue</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
receive the regulatory approvals necessary for the sale of our drug candidates, we or our
licensees must demonstrate through preclinical studies and clinical trials that each drug
candidate is safe and effective. If we or our licensees are unable to demonstrate that
our drug candidates are safe and effective, our drug candidates will not receive
regulatory approval and will not be marketed, which would result in a decrease in, or
complete absence of, revenue. The clinical trial process is complex and uncertain.
Positive results from preclinical studies and early clinical trials do not ensure
positive results in clinical trials designed to permit application for regulatory
approval, called pivotal clinical trials. We may suffer significant setbacks in pivotal
clinical trials, even after earlier clinical trials show promising results. Any of our
drug candidates may produce undesirable side effects in humans. These side effects could
cause us or regulatory authorities to interrupt, delay or halt clinical trials of a drug
candidate. These side effects could also result in the FDA or foreign regulatory
authorities refusing to approve the drug candidate for any targeted indications. We, our
licensees, the FDA or foreign regulatory authorities may suspend or terminate clinical
trials at any time if we or they believe the trial participants face unacceptable health
risks. Clinical trials may fail to demonstrate that our drug candidates are safe or
effective.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>11 </FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clinical
trials are lengthy and expensive. We or our licensees incur substantial expense for, and
devote significant time to, preclinical testing and clinical trials, yet cannot be
certain that the tests and trials will ever result in the commercial sale of a product.
For example, clinical trials require adequate supplies of drug and sufficient patient
enrollment. Delays in patient enrollment can result in increased costs and longer
development times. Even if we or our licensees successfully complete clinical trials for
our product candidates, our licensees might not file the required regulatory submissions
in a timely manner and may not receive regulatory approval for the drug candidate.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
1998, we signed an agreement to license our flu drug candidate to Ortho-McNeil and to
RWJPRI, who conducted clinical trials. On April 30, 2001, BioCryst announced that
Ortho-McNeil and RWJPRI gave four months prior notice of termination of the worldwide
license agreement with BioCryst to develop and market products to treat and prevent viral
influenza. Ortho-McNeil returned all rights to BioCryst&#146;s proprietary influenza
neuraminidase inhibitors, including peramivir, back to the Company. Ortho-McNeil
transferred to BioCryst all improvements, information, data and materials connected to
the licensed product including, but not limited to, clinical and chemical data,
regulatory filings, specifications and third party agreements. Ortho-McNeil indicated
that this business decision was not related to safety or efficacy of peramivir, but that
other of its drug development programs were of a higher priority. The final termination
of this agreement was effective on September 21, 2001.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the first quarter 2002, the Company completed patient enrollment in the first Phase III
trial of once-a-day orally administered peramivir, and we continue to seek a new
corporate partner to facilitate the final development and potential commercialization of
this drug candidate. Even if we or any potential licensee continues certain Phase III
clinical trials, the trials may not be successful. We do not know when, if ever, our drug
candidate will complete all the required Phase III clinical trials, or when, if ever, it
will receive FDA or foreign regulatory agency approvals for, or when, if ever, marketing
of peramivir will begin. If we or any partners are unable to complete the clinical trials
or demonstrate the safety and efficacy of our compounds, the loss of our future revenues
that depend on the success of peramivir will harm our business. Even if the results of
the Phase III trials are positive, a product is not likely to be commercially available
for three or more years, if at all.  </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
we or our licensees 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</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We or
our licensees must obtain regulatory approval before marketing or selling our future drug
products. If we or our licensees are unable to receive regulatory approval and do not
market or sell our future drug products, we will never receive any revenue from such
product sales. In the United States, we or our partners must obtain FDA approval for each
drug that we intend to commercialize. The FDA approval process is typically lengthy and
expensive, and approval is never certain. Products distributed abroad are also subject to
foreign government regulation. The FDA or foreign regulatory agencies have not approved
any of our drug candidates. If we or our licensees fail to obtain regulatory approval we
will be unable to market and sell our future drug products. We have several drug products
in various stages of preclinical and clinical development; however, we are unable to
determine when, if ever, any of these products will be commercially available. Because of
the risks and uncertainties in biopharmaceutical development, our drug candidates could
take a significantly longer time to gain regulatory approval than we expect or may never
gain approval. If the FDA delays regulatory approval of our drug candidates, our
management&#146;s credibility, our company&#146;s value and our operating results may
suffer. Even if the FDA or foreign regulatory agencies approve a drug candidate, the
approval may limit the indicated uses for a drug candidate and/or may require
post-marketing studies.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
FDA regulates, among other things, the record keeping and storage of data pertaining to
potential pharmaceutical products. We currently store most of our preclinical research
data at our facility. While we do store duplicate copies of most of our clinical data
offsite, we could lose important preclinical data if our facility incurs damage. If we
get approval to market our potential products, whether in the United States or
internationally, we will continue to be subject to extensive regulatory requirements.
These requirements are wide ranging and govern, among other things:  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>12 </FONT></P>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>adverse drug experience reporting regulations; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>product promotion; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>product manufacturing, including good manufacturing practice requirements; and </FONT></TD>
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<BR>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>product changes or modifications. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
failure to comply with existing or future regulatory requirements, or our loss of, or
changes to, previously obtained approvals, could have a material adverse effect on our
business because we will not receive royalty revenues if our licensees do not receive
approval of our products for marketing.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 1995, we notified the FDA that we submitted incorrect data for our Phase II studies
of BCX-34 applied to the skin for cutaneous T-cell lymphoma and psoriasis. The FDA
inspected us in November 1995 and issued us a List of Inspectional Observations, Form FDA
483, which cited our failure to follow good clinical practices. The FDA also inspected us
in June 1996. The focus was on the two 1995 Phase II dose-ranging studies of topical
BCX-34 for the treatment of cutaneous T-cell lymphoma and psoriasis. As a result of the
investigation, the FDA issued us a Form FDA 483, which cited our failure to follow good
clinical practices. BioCryst is no longer developing BCX-34; however, as a consequence of
these two investigations, our ongoing and future clinical studies may receive increased
scrutiny, which may delay the regulatory review process.  </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
our drug candidates do not achieve broad market acceptance, our business may never become
profitable</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
drug candidates, including peramivir, our influenza neuraminidase inhibitor, may not gain
the market acceptance required for us to be profitable even if they receive approval for
sale by the FDA or foreign regulatory agencies. The degree of market acceptance of any
drug candidates that we or our partners develop will depend on a number of factors,
including:  </FONT></P>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>cost-effectiveness of our drug candidates; </FONT></TD>
</TR>
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<BR>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>their safety and effectiveness relative to alternative treatments, such as Hoffmann-La&nbsp;Roche&#146;s
and GlaxoSmithKline&#146;s influenza neuraminidase inhibitors, amantadine, rimantadine,
or vaccines for prevention of influenza;  </FONT></TD>
</TR>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>reimbursement policies of government and third-party payers; and </FONT></TD>
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<BR>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>marketing and distribution support for our drug candidates. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Physicians,
patients, payers or the medical community in general may not accept or use our drug
candidates even after the FDA or foreign regulatory agencies approve the drug candidates.
If our drug candidates do not achieve significant market acceptance, we will not have
enough revenues to become profitable.  </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
competitive products from other companies are better than our product candidates, our
future revenues might fail to meet expectations</I></FONT></H3>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
biotechnology and pharmaceutical industries are highly competitive and are subject to
rapid and substantial technological change. Other products and therapies that either
currently exist on the market or are under development could compete directly with some
of the compounds that we are seeking to develop and market. These other products may
render some or all of our compounds under development noncompetitive or obsolete.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>13 </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our
influenza neuraminidase inhibitor drug candidate, peramivir, receives FDA or foreign
regulatory approval, it will have to compete with a number of products that are already
on the market such as vaccines, the two influenza neuraminidase inhibitors already on the
market, the drugs amantadine and rimantadine and with additional products that may beat
peramivir to the market. If approved, peramivir will be, at best, the third neuraminidase
inhibitor to the market, because the FDA has approved both GlaxoSmithKline&#146;s and
Hoffman-La Roche&#146;s neuraminidase inhibitors in the U.S. and both companies have also
obtained approval in several other countries. Both GlaxoSmithKline and Hoffmann-La Roche,
the companies responsible for the development and marketing of Relenza&reg; and Tamiflu&reg;,
the two neuraminidase inhibitors that reached the market before peramivir, are large
multinational pharmaceutical companies that have significant financial, technical and
human resources and could therefore establish brand recognition and loyalty with
consumers before peramivir is on the market. Products marketed by our competitors may
prove to be more effective than our own, and our products, if any, may not offer an
economically feasible or preferable alternative to existing therapies. 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.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
success will depend in part on our ability and the abilities of our licensors to obtain
patent protection for our products, methods, processes and other technologies to preserve
our trade secrets, and to operate without infringing the proprietary rights of third
parties. If we or our partners are unable to adequately protect or enforce our
intellectual property rights for our products, methods, processes and other technologies,
the value of the drug candidates that we license to derive revenue would diminish.
Additionally, if our products, methods, processes and other technologies infringe the
proprietary rights of other parties, we could incur substantial costs. The U.S. Patent
and Trademark Office has issued to us a number of U.S. patents for our various inventions
and we have in-licensed several patents from various institutions. We have filed
additional patent applications and provisional patent applications with the U.S. Patent
and Trademark Office. We have filed a number of corresponding foreign patent applications
and intend to file additional foreign and U.S. patent applications, as appropriate. We
cannot assure you as to:  </FONT></P>


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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the degree and range of protection any patents will afford against competitors with
similar products; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>if and when patents will issue; or </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>whether or not others will obtain patents claiming aspects similar to those covered by
our patent applications.  </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the
U.S. Patent and Trademark Office upholds patents issued to others or if the U.S. Patent
and Trademark Office grants patent applications filed by others, we may have to:  </FONT></P>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>obtain licenses or redesign our products or processes to avoid infringement; </FONT></TD>
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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>stop using the subject matter claimed in those patents; or </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>pay damages. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may
initiate, or others may bring against us, litigation or administrative proceedings
related to intellectual property rights, including proceedings before the U.S. Patent and
Trademark Office. Any judgment adverse to us in any litigation or other proceeding
arising in connection with a patent or patent application could materially and adversely
affect our business, financial condition and results of operations. In addition, the
costs of any such proceeding may be substantial whether or not we are successful.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
success is also dependent upon the skills, knowledge and experience, none of which is
patentable, of our scientific and technical personnel. To help protect our rights, we
require all employees, consultants, advisors and collaborators to enter into
confidentiality agreements that prohibit the disclosure of confidential information to
anyone outside of our company and require disclosure and assignment to us of their ideas,
developments, discoveries and inventions. These agreements may not provide adequate
protection for our trade secrets, know-how or other proprietary information in the event
of any unauthorized use or disclosure or the lawful development by others of such
information, and if any of our proprietary information is disclosed, our business will
suffer because our revenues depend upon our ability to license our technology and any
such events would significantly impair the value of such a license.  </FONT></P>

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<BR>
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>14 </FONT></P>

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<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
we fail to retain our existing key personnel or fail to attract and retain additional key
personnel, the development of our drug candidates and the expansion of our business will
be delayed or stopped</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are
highly dependent upon our senior management and scientific team, the loss of whose
services might impede the achievement of our development and commercial objectives.
Competition for key personnel with the experience that we require is intense and is
expected to continue to increase. Our inability to attract and retain the required number
of skilled and experienced management, operational and scientific personnel, will harm
our business because we rely upon these personnel for many critical functions of our
business. In addition, we rely on members of our scientific advisory board and
consultants to assist us in formulating our research and development strategy. All of the
members of the scientific advisory board and all of our consultants are otherwise
employed and each such member or consultant may have commitments to other entities that
may limit their availability to us.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
users of our drug products are not reimbursed for use, future sales of our drug products
will decline</I></FONT></H3>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
lack of reimbursement for the use of our product candidates by hospitals, clinics,
patients or doctors will harm our business. Medicare, Medicaid, health maintenance
organizations and other third-party payers may not authorize or otherwise budget for the
reimbursement of our products. Governmental and third-party payers are increasingly
challenging the prices charged for medical products and services. We cannot be sure that
third-party payers would view our product candidates as cost-effective, that
reimbursement will be available to consumers or that reimbursement will be sufficient to
allow our product candidates to be marketed on a competitive basis. Changes in
reimbursement policies, or attempts to contain costs in the health care industry, limit
or restrict reimbursement for our product candidates, would materially and adversely
affect our business, because future product sales would decline and we would receive less
royalty revenue.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If
we face clinical trial liability claims related to the use or misuse of our compounds in
clinical trials, our management&#146;s time will be diverted and we will incur litigation
costs</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
face an inherent business risk of liability claims in the event that the use or misuse of
our compounds results in personal injury or death. We have not experienced any clinical
trial liability claims to date, but we may experience these claims in the future. After
commercial introduction of our products we may experience losses due to product liability
claims. We currently maintain clinical trial liability insurance coverage in the amount
of $1.0 million per occurrence and $2.0 million in the aggregate, with an additional $5.0
million potentially available under our umbrella policy. The insurance policy may not be
sufficient to cover claims that may be made against us. Clinical trial liability
insurance may not be available in the future on acceptable terms, if at all. Any claims
against us, regardless of their merit, could materially and adversely affect our
financial condition, because litigation related to these claims would strain our
financial resources in addition to consuming the time and attention of our management.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
If our computer
systems fail, our business will suffer</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
drug development activities depend on the security, integrity and performance of the
computer systems supporting them, and the failure of our computer systems could delay our
drug development efforts. We currently store most of our preclinical and clinical data at
our facility. Duplicate copies of all critical data are stored off-site in a bank vault.
Any significant degradation or failure of our computer systems could cause us to
inaccurately calculate or lose our data. Loss of data could result in significant delays
in our drug development process and any system failure could harm our business and
operations.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
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</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
research and development involves the controlled use of hazardous materials, chemicals
and various radioactive compounds. We are subject to federal, state and local laws and
regulations governing the use, storage, handling and disposal of these materials and some
waste products. Accidental contamination or injury from these materials could occur. In
the event of an accident, we could be liable for any damages that result and any
liabilities could exceed our resources. Compliance with environmental laws and
regulations could require us to incur substantial unexpected costs, which would
materially and adversely affect our results of operations.  </FONT></P>



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<BR>
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>15 </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
Because stock
ownership is concentrated, you and other investors will have minimal influence on
stockholder decisions</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
directors, executive officers and some principal stockholders and their affiliates,
including Johnson &amp; Johnson Development Corporation, beneficially own approximately
42% (directors and officers own 28%) of our outstanding common stock and common stock
equivalents. As a result, these holders, if acting together, are able to significantly
influence matters requiring stockholder approval, including the election of directors.
This concentration of ownership may delay, defer or prevent a change in our control.  </FONT></P>



<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
We have
anti-takeover provisions in our corporate charter documents that may result in outcomes
with which you do not agree</I></FONT></H3>


<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors has the authority to issue up to 5,000,000 shares of undesignated
preferred stock and to determine the rights, preferences, privileges and restrictions of
those shares without further vote or action by our stockholders. The rights of the
holders of any preferred stock that may be issued in the future may adversely affect the
rights of the holders of common stock. The issuance of preferred stock could make it more
difficult for third parties to acquire a majority of our outstanding voting stock.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, our certificate of incorporation provides for staggered terms for the members
of the board of directors and supermajority approval of the removal of any member of the
board of directors and prevents our stockholders from acting by written consent. Our
certificate also requires supermajority approval of any amendment of these provisions.
These provisions and other provisions of our by-laws and of Delaware law applicable to us
could delay or make more difficult a merger, tender offer or proxy contest involving us.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Sub 1" -->
<H3 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>
Our stock price is
likely to be highly volatile and the value of your investment could decline significantly</I></FONT></H3>

<!-- MARKER FORMAT-SHEET="Para 10" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
market prices for securities of biotechnology companies in general have been highly
volatile and may continue to be highly volatile in the future. Moreover, our stock price
has fluctuated frequently, and these fluctuations are often not related to our financial
results. For the twelve months ended March 31, 2002, the 52-week range of the market
price of our stock has been from $3.00 to $8.00 per share. The following factors, in
addition to other risk factors described in this section, may have a significant impact
on the market price of our common stock:  </FONT></P>

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</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>announcements of technological innovations or new products by us or our competitors; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>developments or disputes concerning patents or proprietary rights; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>status of new or existing licensing or collaborative agreements; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>we or our licensees achieving or failing to achieve development milestones; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>publicity regarding actual or potential medical results relating to products under
development by us or our competitors; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>regulatory developments in both the United States and foreign countries; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>public concern as to the safety of pharmaceutical products; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>actual or anticipated fluctuations in our operating results; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes in financial estimates or recommendations by securities analysts; </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>16 </FONT></P>

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<BR>




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<TR VALIGN=TOP>
<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>economic and other external factors or other disasters or crises; and </FONT></TD>
</TR>
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<BR>

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<TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>period-to-period fluctuations in our financial results. </FONT></TD>
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<BR>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 3.
Quantitative and Qualitative Disclosures about Market Risk</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary objective of our investment activities is to preserve principal while maximizing
the income we receive from our investments without significantly increasing our risk. We
invest excess cash principally in U.S. marketable securities from a diversified portfolio
of institutions with strong credit ratings and in U.S. government and agency bills and
notes, and by policy, limit the amount of credit exposure at any one institution. Some of
the securities we invest in may have market risk. This means that a change in prevailing
interest rates may cause the principal amount of the investment to fluctuate. To minimize
this risk, we schedule our investments to have maturities that coincide with our cash
flow needs, thus avoiding the need to redeem an investment prior to its maturity date.
Accordingly, we believe we have no material exposure to interest rate risk arising from
our investments. Therefore, no quantitative tabular disclosure is provided.  </FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II. OTHER
INFORMATION</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 1. Legal
Proceedings:</FONT></H2>

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None</FONT></TD>
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<BR>

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<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 2. Changes in
Securities and Use of Proceeds:</FONT></H2>

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None</FONT></TD>
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<BR>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 3.
Defaults Upon Senior Securities:</FONT></H2>

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<TD WIDTH=6%>&nbsp;</TD>
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None</FONT></TD>
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<BR>

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<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 4. Submission of
Matters to a Vote of Security Holders:</FONT></H2>

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None</FONT></TD>
</TR>
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<BR>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 5. Other
Information:</FONT></H2>


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<TD WIDTH=6%>&nbsp;</TD>
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None</FONT></TD>
</TR>
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<BR>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>17 </FONT></P>

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<!-- MARKER FORMAT-SHEET="Head Minor" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 6.
Exhibits and Reports on Form 8-K:</FONT></H2>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibits:</FONT></TD>
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<TD ALIGN="center" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Number</B></FONT></FONT> </TD>
<TD WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="center" WIDTH="84%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Description</B></FONT></FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Composite
Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit 3.1 to
the Company&#146;s Form 10-Q for the second quarter ending June 30, 1995 dated August 11, 1995.</FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bylaws
of Registrant. Incorporated by reference to Exhibit 3.1 to the Company&#146;s Form 10-Q
for the second quarter ending June 30, 1995 dated August 11, 1995. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See
Exhibits 3.1 and 3.2 for provisions of the Composite Certificate of Incorporation and
Bylaws of the Registrant defining rights of holders of Common Stock of the Registrant. </FONT></TD>
</TR>
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<TD WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1 </FONT></TD>
<TD WIDTH="2%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH="84%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1991
Stock Option Plan, as amended and restated as of March 6, 2000. Incorporated by reference
to Exhibit 99.1 to the Company&#146;s Form S-8 Registration Statement dated June 16, 2000
(Registration No. 333-39484).</FONT></TD></TR>

<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
Agreement dated December 27, 1999 between the Registrant and Charles&nbsp;E. Bugg, Ph.D.
Incorporated by reference to Exhibit 10.10 to the Company&#146;s Form 10-K for the year
ending December 31, 1999 dated March 24, 2000. </FONT></TD>
</TR>

<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.3# </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
Agreement dated April 15, 1993 between Ciba-Geigy Corporation (now merged into Novartis)
and the Registrant. Incorporated by reference to Exhibit 10.40 to the Company&#146;s Form S-1
Registration Statement (Registration No. 33-73868).</FONT></TD>
</TR>

<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.4 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employee
Stock Purchase Plan. Incorporated by reference to Exhibit 99.4 to the Company&#146;s Form S-8
Registration Statement (Registration No. 33-95062).</FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5# </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
Agreement dated as of September 14, 1998 between Registrant and The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil Pharmaceutical, Inc. Incorporated by
reference to Exhibit 10.23 to the Company&#146;s Form 10-Q for the third quarter ending
September 30, 1998 dated November 10, 1998. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6# </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Stock
Purchase Agreement dated as of September 14, 1998 between Registrant and Johnson &amp; Johnson
Development Corporation. Incorporated by reference to Exhibit 10.24 to the Company&#146;s
Form 10-Q for the third quarter ending September 30, 1998 dated November 10, 1998. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.7# </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Stockholder&#146;s
Agreement dated as of September 14, 1998 between Registrant and Johnson &amp; Johnson
Development Corporation. Incorporated by reference to Exhibit 10.25 to the Company&#146;s
Form 10-Q for the third quarter ending September 30, 1998 dated November 10, 1998. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.8 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Warehouse
Lease dated July 12, 2000 between RBP, LLC an Alabama Limited Liability Company and the
Registrant for office/warehouse space. Incorporated by reference to Exhibit 10.8 to the
Company&#146;s Form 10-Q for the second quarter ending June 30, 2000 dated August 8,
2000. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.9# </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Termination
Agreement dated as of September 21, 2001 between Registrant and The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil Pharmaceutical, Inc. Incorporated by
reference to Exhibit 10.9 to the Company&#146;s Form 10-Q/A for the third quarter ending
September 30, 2001 dated January 15, 2002. </FONT></TD>
</TR>
<TR>
     <TD><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp; </FONT></TD></TR>

<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN="RIGHT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.10 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Change
of Control Agreement dated May 25, 2001 between the Registrant and W. Randall Pittman.
Incorporated by reference to Exhibit 10.10 to the Company&#146;s Form 10-K for the year ending
December 31, 2001 dated March 22, 2002.</FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2># </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Confidential
treatment granted.  </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b. </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reports
on Form 8-K: </FONT></TD>
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None</FONT></TD>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES</FONT></H1>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.  </FONT></P>

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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR><BR>Date: May 3, 2002 </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST PHARMACEUTICALS, INC.<BR><BR>
<BR>By: /s/ CHARLES E. BUGG<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Charles E. Bugg<BR>Chairman and Chief Executive Officer</FONT></TD>
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<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR><BR>Date: May 3, 2002 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>
<BR>By: /s/ W. RANDALL PITTMAN<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
W. Randall Pittman<BR>Chief Financial Officer and Chief Accounting Officer</FONT></TD>
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