<SUBMISSION>
<ACCESSION-NUMBER>0001169232-02-002675
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20020930
<FILING-DATE>20021112
<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>02817140
</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>d52480_10-q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
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     <!-- Control Number: 02-12345                                                         -->
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     <!-- Client Name:    ABC Company                                                      -->
     <!-- Project Name:   Form 10-Q                                                        -->
     <!-- Firm Name:      CCH Wall Street                                                  -->
     <TITLE>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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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>|X| QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE<BR>SECURITIES EXCHANGE ACT OF 1934
</FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the quarterly
period ended September 30, 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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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>|_| TRANSITION REPORT
PURSUANT TO SECTION 13 0R 15(d) OF THE<BR>SECURITIES EXCHANGE ACT OF 1934
</FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the transition
period from _______________ to _______________ . </FONT></H1>


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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" SIZE=2><B>BIOCRYST
PHARMACEUTICALS, INC.</B><BR>(Exact name of registrant as specified in its charter)
</FONT></P>

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<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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;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: 17,657,097 shares of the Company&#146;s Common Stock, $.01 par value, were outstanding
as of October 31, 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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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <td colspan=2><font face="Times New Roman, Times, Serif" size=2></font></td>
    <td colspan=1 align=CENTER><font face="Times New Roman, Times, Serif" size=2>Part
      I. Financial Information</font>
      <hr width=0% size=1 NOSHADE>
    </td>
    <td colspan=3 align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>Page
      No.</b> </font>
      <hr width=100% size=1 NOSHADE>
    </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=80% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Financial
      Statements:</font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td width=4% 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>&nbsp;</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 &#150; September 30, 2002 and December 31, 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>2</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;</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 &#150; Three and Nine 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>&nbsp;</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;&nbsp;&nbsp;September
      30, 2002 and 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>3</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;</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 &#150; Nine Months Ended September 30,</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;</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;&nbsp;&nbsp;2002
      and 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>4</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;</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=RIGHT><font face="Times New Roman, Times, Serif" size=2>5</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT valign="top"><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<br>
      &nbsp;&nbsp;&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=RIGHT><font face="Times New Roman, Times, Serif" size=2>6</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>17</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 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>Controls
      and Procedures</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>18</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;</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>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </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>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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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 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=RIGHT><font face="Times New Roman, Times, Serif" size=2>18</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;</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=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 valign=Bottom>
    <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;</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Certifications</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>21</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
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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>PART I. FINANCIAL
INFORMATION </FONT></H1>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 1.  Financial
Statements</FONT></H2>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST
PHARMACEUTICALS, INC.<BR>CONDENSED BALANCE SHEETS<BR>September 30, 2002 and December
31, 2001<BR>(In thousands, except per share data)</FONT></H1>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2002<br>
      (Unaudited)</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2001<br>
      (Note 1)</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
  </tr>
  <tr valign=Bottom>
    <td width=77% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Assets</b>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td width=8% 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>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>$&nbsp;&nbsp;&nbsp;13,537</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&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&#150;to&#150;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>13,628</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>717</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>27,882</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&#150;to&#150;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>11,254</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>4,867</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>89</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>$&nbsp;&nbsp;&nbsp;44,092</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&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 valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Liabilities
      and Stockholders&#146; Equity</b> </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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;460</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&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>474</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>934</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: shares authorized &#150; 5,000</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;Series
      A Convertible 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;&nbsp;&nbsp;authorized
      &#150; 1,800; shares issued and outstanding &#150; 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;&nbsp;&nbsp;Series
      B Junior Participating Preferred Stock, $.001 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;&nbsp;&nbsp;authorized
      &#150; 21.5; shares issued and outstanding &#150; 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;&nbsp;&nbsp;Common
      stock, $.01par value, shares authorized &#150; <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45,000; shares issued and outstanding
      &#150;17,657 in 2002 and <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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>177</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&#150;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>131,905</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>(89,224</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>42,858</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;44,092</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>
</table>
<BR>

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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>3 </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>Periods Ended September
30, 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 colspan=2><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>Three Months</font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>Nine Months</font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2002</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2001</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2002</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2001</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
  </tr>
  <tr valign=Bottom>
    <td width=53% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Revenues:</b>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td width=8% 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=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td width=8% 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=8% 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;3,400</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;7,737</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>412</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>731</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>1,412</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>2,817</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>
    <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>412</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>4,131</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>1,412</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>10,554</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>
    <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"><b>Expenses:</b>
      </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>3,172</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>2,830</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>12,935</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>8,073</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>655</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>689</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>2,296</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>2,045</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>Impairment
      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>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>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>374</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>
  </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>195</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>444</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>
    <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>3,827</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>3,714</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>15,605</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>10,562</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>
    <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>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net income
      (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>$(3,415</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;417</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>$(14,193</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8</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>
    <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" size="2"><b>Amounts
      per common share:</b> </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 income
      (loss) (Note 2)</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;-Basic</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>$&nbsp;&nbsp;&nbsp;&nbsp;(.19</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02</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>$&nbsp;&nbsp;&nbsp;&nbsp;(.80</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.00</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>
    <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" size=2>&nbsp;&nbsp;-Diluted</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>(.19</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>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;(.80</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;&nbsp;&nbsp;.00</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>
    <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" 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>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;-Basic</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>17,650</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>17,565</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>17,638</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>17,548</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;-Diluted</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>17,650</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>17,602</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>17,638</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>17,548</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
  </tr>
</table>
<BR>


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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>4 </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 CASH FLOWS<BR>Nine Months Ended
September 30, 2002 and 2001<BR>(In thousands)<BR>(Unaudited)</FONT></H1>


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</TD>
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<BR>

<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2002</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1>2001</font>
      <hr width=100% size=1 NOSHADE>
    </th>
    <th colspan=1><font face="Times New Roman, Times, Serif" size=1></font></th>
  </tr>
  <tr valign=Bottom>
    <td width=70% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Operating
      activities:</b> </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>$(14,193</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8</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>937</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>750</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>Amortization
      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>3</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>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Impairment
      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>374</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>
  </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>444</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>(7,737</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>114</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>108</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>(1,349</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>(435</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;<b>Net
      cash used in operating activities</b> </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"><b>(14,114</b>
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>)</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>(6,878</b>
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>)</b>
      </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"><b>Investing
      activities:</b> </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>(408</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>(1,829</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>(123</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>(31</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>(4,085</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>(24,450</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>13,279</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>43,979</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;</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></font></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;<b>Net
      cash provided by investing activities</b> </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"><b>8,663</b></font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>17,669</b>
      </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"><b>Financing
      activities:</b> </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>(10</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>123</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>166</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;<b>Net
      cash provided by financing activities</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>123</b>
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>156</b>
      </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>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>(5,328</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>10,947</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" size=2>18,865</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" size="2"><b>Cash
      and cash equivalents at end of period</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>$&nbsp;13,537</b>
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;</b>
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size="2"><b>$&nbsp;19,403</b>
      </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>
</table>
<BR>


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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>5 </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 September 30, 2002 and the condensed statements of
operations and cash flows for the nine months ended September 30, 2002 and 2001 have been
prepared by the Company in accordance with accounting principles generally accepted in
the United States 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 September 30, 2002 and the results of
operations and cash flows for the nine months ended September 30, 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 Income (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 income (loss) per share in accordance with Statement of Financial
Accounting Standards No. 128, <I>Earnings per Share</I>. Basic net income (loss) per share is
based upon the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per share is based upon the weighted average number of common
shares outstanding and dilutive common stock equivalents during the period. Common stock
equivalents are options under the Company&#146;s stock option plan and common shares expected
to be issued under the Company&#146;s employee stock purchase plan and are calculated under
the treasury stock method. Common equivalent shares from unexercised stock options are
excluded from the computation when there is a loss, as their effect is anti-dilutive. </FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the three months ended September 30, 2002, common stock equivalents of approximately
5,698 shares were not used to calculate net loss per share because of their anti-dilutive
effect. For the three months ended September 30, 2001, common stock equivalents of
approximately 36,570 shares were included in the weighted average shares outstanding used
to calculate diluted income per share. For the nine months ended September 30, 2002 and
2001, common stock equivalents of approximately 43,176 and 80,316 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" SIZE=2>Note 3.  Stockholder&#146;s Equity </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 2002, our board of directors adopted a stockholder rights plan and, pursuant
thereto, issued preferred stock purchase rights (&#147;Rights&#148;) to the holders of our common
stock. The Rights have certain anti-takeover effects. If triggered, the Rights would
cause substantial dilution to a person or group of persons who acquires more than 15%
(19.9% for William W. Featheringill, a Director who already owns more than 15%) of our
common stock on terms not approved by the board of directors. The rights are not
exercisable until the distribution date, as defined in the Rights Agreement by and
between the Company and American Stock Transfer &amp; Trust Company, as Rights Agent. The
Rights will expire at the close of business on June 24, 2012, unless that final
expiration date is extended or unless the rights are earlier redeemed or exchanged by the
company. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Right entitles the registered holder to purchase from the Company one one-thousandth of a
share of Series B Junior Participating Preferred Stock (&#147;Series B&#148;), par value $0.001 per
share at a purchase price of $26.00, subject to adjustment. Shares of Series B
purchasable upon exercise of the Rights will not be redeemable. Each share of Series B
will be entitled to a dividend of 1,000 times the dividend declared per share of common
stock. In the event of liquidation, each share of Series B will be entitled to a payment
of 1,000 times the payment made per share of common stock. Each share of Series B will
have 1,000 votes, voting together with the common stock. Finally, in the event of any
merger, consolidation, or other transaction in which shares of common stock are
exchanged, each share of Series B will be entitled to receive 1,000 times the amount
received per share of 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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<TD>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note 4.  Impairment of long-lived
assets </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company periodically reviews its patents and licenses for impairment in accordance with
Statement of Financial Accounting Standards No. 144, <I>Accounting for the Impairment or
Disposal of Long-Lived Assets </I>(&#147;Statement No. 144&#148;) to determine any impairment that
needs to be recognized. During the quarter ended June 30, 2002, the Company abandoned the
development of peramivir, its influenza neuraminidase inhibitor. As a result, the Company
recognized an expense of $374,000 during the quarter ended June 30, 2002 related to the
patents for our neuraminidase inhibitors, as they no longer have any readily determinable
value to the Company. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note 5.  Recent Accounting
Pronouncements </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 2002, the FASB issued Statement of Financial Accounting Standards No. 146,
<I>Accounting for Costs Associated with Exit or Disposal Activities </I>(&#147;SFAS 146&#148;), which is
effective for exit or disposal activities that are initiated after December 31, 2002. The
Company adopted this statement on July 1, 2002. On July 10, 2002, the Company streamlined
its operations, reducing its workforce from 75 employees to 45 employees in order to
conserve its resources and provide a longer timeframe in which to advance its other
programs. As a result of early implementation of SFAS 146, the Company recognized all
expenses related to this reduction in staff during the third quarter of 2002. As of
September 30, 2002 total compensation paid, plus benefits, related to this staff
reduction was $259,742. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Note 6.  Commitments and
Contingencies </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
August 5, 2002, at the request of the compensation committee, our board of directors
approved a reduction in salary by 25% for both Dr. Charles E. Bugg, our Chairman and
Chief Executive Officer and Dr. J. Claude Bennett, our President, Chief Operating Officer
and Medical Director, effective August 1, 2002. In the event of any change of control
of the Company, any cumulative salary reductions up to the date of the change of control
would become due and payable to them. This arrangement has not been documented in any
formal written agreement. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 2.  Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><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 statements. 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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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>small-scale
synthesis of compounds;</FONT></TD>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>conducting
preclinical studies and clinical trials;</FONT></TD>
</TR>
</TABLE>
<BR>


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


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>recruiting
our scientific and management personnel;</FONT></TD>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>raising
capital.</FONT></TD>
</TR>
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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. The Company recognizes revenue 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 are not likely 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 September
30, 2002 was $89.2 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></FONT></TD>
<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>&#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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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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>&#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>
</TR>
</TABLE>
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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>&#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>
</TR>
</TABLE>
<BR>

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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>&#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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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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, on June 25, 2002, we announced preliminary Phase III
clinical trial data for peramivir, our investigational oral influenza neuraminidase
inhibitor. The trial indicated no statistically significant difference in the primary
efficacy endpoint between groups treated with peramivir and groups treated with placebo.
Based on these data, we discontinued the development of peramivir. During the first nine
months of 2002, our cash expenses related to this trial were approximately $4 million.
After terminating the development of peramivir, the Company streamlined its operations,
reducing its workforce from 75 employees to 45 employees in order to conserve its
resources and provide a longer timeframe in which to advance its other programs. </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>8 </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Results of Operations
(three months ended September 30, 2002 compared to the three months ended September 30,
2001) </FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues
decreased 90.0% to $412,000 in the three months ended September 30, 2002 from $4,131,000
in the three months ended September 30, 2001. The decrease was primarily due to the
termination by Ortho-McNeil Pharmaceutical, Inc. (Ortho-McNeil) and The R.W. Johnson
Pharmaceutical Research Institute (RWJPRI) of the worldwide license agreement with
BioCryst for peramivir, the Company&#146;s neuraminidase inhibitor. As a result, we had no
collaborative revenue during the third quarter of 2002 as compared to $3,400,000 in the
third quarter of 2001. In addition, interest and other income decreased 43.6% to $412,000
in the third quarter of 2002 from $731,000 in the third quarter of 2001, due to a
reduction in cash from funding operations and renovation of our facilities completed in
February 2002, plus the effect of lower interest rates on some of our investments. </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 12.1% to $3,172,000 in the three months ended
September 30, 2002 from $2,830,000 in the three months ended September 30, 2001. The
increase is primarily attributable to the final clinical trial expenses related to the
Phase III development of peramivir, a program discontinued earlier this year, as well an
increase in animal studies for other programs. General and administrative expenses for
the three months ended September 30, 2002 decreased 4.9% to $655,000 as compared to
$689,000 for the same period in 2001. Royalty expense decreased 100.00% to $0 in the
three months ended September 30, 2002 from $195,000 for the three months ended September
30, 2001, as a result of the termination agreement with Ortho-McNeil and RWJPRI. </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Results of Operations
(nine months ended September 30, 2002 compared to the nine months ended September 30,
2001)</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Revenues decreased 86.6% to
$1,412,000 in the nine months ended September 30, 2002 from $10,554,000 in the nine
months ended September 30, 2001. The decrease was primarily due to the termination of
Ortho-McNeil and RWJPRI&#146;s agreement with BioCryst. As a result of this change, we had no
collaborative revenue during the first nine months of 2002 as compared to $7,737,000 in
the first nine months of 2001. In addition, interest and other income decreased 49.9% to
$1,412,000 in the nine months ended September 30, 2002 from $2,817,000 in the first nine
months of 2001, due to a reduction in cash from funding operations and renovation of our
facilities completed in February 2002, plus the effect of lower interest rates on some of
our investments. </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 60.2% to $12,935,000 in the nine months ended
September 30, 2002 from $8,073,000 in the nine months ended September 30, 2001. The
increase is primarily attributable to an increase in clinical trial expenses related to
the Phase III development of peramivir, a program discontinued earlier this year. General
and administrative expenses for the nine months ended September 30, 2002 increased 12.3%
to $2,296,000 as compared to $2,045,000 for the same period in 2001, primarily due to an
increase in expenses related to the adoption of a stockholder rights plan and other
professional fees. Royalty expense decreased 100.00% to $0 in the nine months ended
September 30, 2002 from $444,000 for the nine months ended September 30, 2001, as a
result of the termination agreement with Ortho-McNeil and RWJPRI. During the second
quarter of 2002, the Company recorded a non-cash impairment loss of $374,000 related to
the influenza patents, as this program was terminated effective June 25, 2002. There were
no impairment charges in 2001. </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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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 pursue 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;On
June 25, 2002, the Company announced we were discontinuing the development of peramivir,
our investigational oral influenza neuraminidase inhibitor designed to treat and prevent
influenza. After terminating the development of peramivir, the Company streamlined its
operations in order to conserve its resources and provide a longer timeframe in which to
advance its other programs. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
August 5, 2002, at the request of the compensation committee, our board of directors
approved a reduction in salary by 25% for both Dr. Charles E. Bugg, our Chairman and
Chief Executive Officer and Dr. J. Claude Bennett, our President, Chief Operating Officer
and Medical Director, effective August 1, 2002. In the event of any change of control
of the Company, any cumulative salary reductions up to the date of the change of control
would become due and payable to them. This arrangement has not been documented in any
formal written agreement. </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
three years. The Company has not realized any losses from such investments. In addition,
at September 30, 2002, approximately $7.7 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 September 30, 2002, our
cash, cash equivalents and securities held-to-maturity were $38.4 million, a decrease of
$14.5 million from December 31, 2001, principally due to the funding of current
operations, which included the Phase III development of peramivir, a program that was
terminated in June 2002. </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 September 30,
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 renovated 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 renovation was completed in December 2000.
Another phase of renovation was completed in February 2002 for approximately $2.6 million
to add two chemistry laboratories and purchase additional equipment. Currently, there are
no plans for additional renovations. </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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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a
result of the reduction in our staff during July 2002, we now have approximately 14,000
square feet of excess space we are currently attempting to sublease. </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;We
plan to finance our needs principally from the following: </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>


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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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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, and</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>


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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 of
assets and liabilities and the results of operations. </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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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>


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<BR>

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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><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;The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 101,
<I>Revenue Recognition in Financial Statements </I>("SAB 101"). 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><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><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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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Patents and Licenses</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para 10" FSL="Workstation" -->
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patents
and licenses are recorded at cost and amortized on a straight-line basis over their
estimated useful lives or 20 years, whichever is lesser. These costs are reviewed
periodically in accordance with Statement of Financial Accounting Standards No. 144,
<I>Accounting for the Impairment or Disposal of Long-Lived Assets </I>("Statement No. 144") to
determine any impairment that needs to be recognized. </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>

<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Workstation" -->
<H2 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></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 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 September 30, 2002, our accumulated deficit was approximately
$89.2 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 are not likely 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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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>12 </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>


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<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Workstation" -->
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><I>Our future revenue
generation is uncertain</I> </FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
revenue from collaborative agreements is dependent upon the status of our preclinical and
clinical programs. If we fail to advance these programs to the point of being able to
enter into successful collaborations, we will not receive any future milestone or other
collaborative payments. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Workstation" -->
<H2 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></H2>

<!-- MARKER FORMAT-SHEET="Para 10" FSL="Workstation" -->
<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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</TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>management
of our regulatory function; and</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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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. 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 or manage our regulatory function 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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<BR>

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<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=LEFT 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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<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=LEFT 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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<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=LEFT 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>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>


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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 may never receive any
milestone or royalty payments. </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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</TD>
</TR>
</TABLE>
<BR>

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<H2 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 complete absence of product related revenue</I> </FONT></H2>

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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 complete absence of
product related revenue. The clinical trial process is complex and uncertain. Because of
the cost and duration of clinical trials, we may decide to discontinue development of
product candidates that are either unlikely to show good results in the trials or
unlikely to help advance a product to the point of a meaningful collaboration. 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><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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<H2 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></H2>

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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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</TR>
</TABLE>
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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TD>
<BR>

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

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</TD>
</TR>
</TABLE>
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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TD>

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

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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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<H2 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></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
drug candidates 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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<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=LEFT 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>
</TABLE>
<BR>

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<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=LEFT 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;</FONT></TD>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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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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<H2 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></H2>

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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.
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. </FONT></P>

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

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

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</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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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=LEFT 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>
</TR>
</TABLE>
<BR>

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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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<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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<H2 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></H2>

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<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>

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<H2 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></H2>

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<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>



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

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</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>

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<H2 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></H2>

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<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 $5.0 million per occurrence and $5.0 million in the aggregate, with an additional $2.0
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>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><I>If our computer systems
fail, our business will suffer</I> </FONT></H2>

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<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>

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<H2 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></H2>

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<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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<H2 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></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of
September 30, 2002, our directors, executive officers and some principal stockholders and
their affiliates, including Johnson &amp; Johnson Development Corporation, beneficially owned
approximately 44% (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>

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<H2 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></H2>

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<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 3,178,500 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>




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

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</TD>
</TR>
</TABLE>
<BR>

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<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>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 2002, our board of directors adopted a stockholder rights plan and, pursuant
thereto, issued preferred stock purchase rights (&#147;Rights&#148;) to the holders of our common
stock. The Rights have certain anti-takeover effects. If triggered, the Rights would
cause substantial dilution to a person or group of persons who acquires more than 15%
(19.9% for William W. Featheringill, a Director who already owns more than 15%) of our
common stock on terms not approved by the board of directors. </FONT></P>

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<H2 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></H2>

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<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 September 30, 2002, the 52-week range of the market
price of our stock has been from $0.60 to $6.10 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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</TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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=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=LEFT 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=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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT 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>
</TR>
</TABLE>
<BR>

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<TD>
<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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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>18 </FONT></P>


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</TD>
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</TABLE>
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<BR>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 4.  Controls and
Procedures</FONT></H2>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The
Chairman and Chief Executive Officer and the Chief Financial Officer of BioCryst
Pharmaceuticals, Inc. (its principal executive officer and principal financial officer,
respectively) have concluded, based on their evaluation as of a date within 90 days prior
to the date of the filing of this Report, that the Company&#146;s disclosure controls and
procedures are effective to ensure that information required to be disclosed by BioCryst
in the reports filed or submitted by it under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the SEC&#146;s rules and forms, and include controls and procedures designed to
ensure that information required to be disclosed by BioCryst in such reports is
accumulated and communicated to the Company&#146;s management, including the Chairman and
Chief Executive Officer and Chief Financial Officer of BioCryst, as appropriate to allow
timely decisions regarding required disclosure. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
There were no significant changes in the Company&#146;s internal controls or in other factors
that could significantly affect these controls subsequent to the date of such evaluation. </FONT></P>



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

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 1.&nbsp;&nbsp;Legal
Proceedings:</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>


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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 2.&nbsp;&nbsp;Changes in
Securities and Use of Proceeds:</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>


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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 4.&nbsp;&nbsp;Submission of
Matters to a Vote of Security Holders:</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>

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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Item 6.&nbsp;&nbsp;Exhibits and
Reports on Form 8-K:</FONT></H2>

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<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=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>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Number&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Description</FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Top>
     <TD WIDTH="16%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=78% ALIGN=LEFT><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>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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;</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;</FONT></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2</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>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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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;</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;</FONT></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1</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>Rights Agreement, dated as of June 17, 2002, by and between the Company and American Stock Transfer &amp; Trust Company, as Rights Agent, which includes the Certificate of Designation for the Series B Junior Participating Preferred Stock as Exhibit A and the form of Rights  Certificate  as  Exhibit  B.  Incorporated  by
reference to Exhibit 4.1 to the Company&#146;s Form 8-A dated June 17, 2002.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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;</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;</FONT></TD></TR>
</TABLE>
<BR>

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<TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>19 </FONT></P>


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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </font></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </font></TH></TR>
<TR VALIGN=Top>
     <TD WIDTH="16%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1 </font></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD>
     <TD WIDTH=78% ALIGN=LEFT><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>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;10.2 </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>Employment Agreement dated December 27, 1999 between the Registrant and Charles 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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.3# </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>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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;10.4 </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>Employee Stock Purchase Plan. Incorporated by reference to Exhibit 99.1 to the Company&#146;s Form S-8 Registration Statement dated June 14, 2002 (Registration No. 333-90582). </font></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5# </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>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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6# </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>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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;10.7 </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>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><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;10.8 </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>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 for the second quarter ending June 30, 2002 dated August 7, 2002. </font></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;99.1 </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>Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. </font></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><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; </font></TD></TR>
<TR VALIGN=Top>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;99.2 </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>Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. </font></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </font></TD></TR>
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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=LEFT 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=88%><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></FONT></TD>
<TD ALIGN=LEFT 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=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reports
on Form 8-K:  None</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>20 </FONT></P>



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


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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 ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>
<BR><BR><BR>Date: November 12, 2002<BR><BR><BR><BR><BR><BR><BR>Date: November 12, 2002</FONT></TD>
<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BIOCRYST PHARMACEUTICALS, INC.<BR>
<BR><BR><BR>/s/ CHARLES E. BUGG<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
<BR>Charles E. Bugg<BR>Chairman and Chief Executive Officer<BR><BR><BR><BR>/s/ MICHAEL A. DARWIN
<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
<BR>Michael A. Darwin<BR>Chief Financial Officer and Chief Accounting<BR>Officer</FONT></TD>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>21 </FONT></P>

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


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Charles E. Bugg, certify that: </FONT></P>


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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>1. </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>I have reviewed
this quarterly report on Form 10-Q of BioCryst Pharmaceuticals,
Inc.;</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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </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>Based
on my knowledge, this quarterly report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this quarterly
report;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </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>Based
on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </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
registrant&#146;s other certifying officers and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this quarterly report is being prepared; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT 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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c)  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented in
this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Effective Date;
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </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 registrant&#146;s
other certifying officers and I have disclosed, based on our most recent
evaluation, to the registrant&#146;s auditors and the audit committee of registrant&#146;s
board of directors:</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all significant
deficiencies in the design or operation of internal controls which could
adversely affect the registrant&#146;s ability to record, process, summarize and
report financial data and have identified for the registrant&#146;s auditors any
material weaknesses in internal controls; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT 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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant&#146;s internal controls; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. </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 registrant&#146;s
other certifying officers and I have indicated in this quarterly report whether
there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.</FONT></TD>
</TR>
</TABLE>
<BR><BR>

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<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: November 12, 2002</FONT></TD>
<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ CHARLES E. BUGG
<BR>&#151;&#151;&#151;&#151;&#151;&#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>
</TR>
</TABLE>
<BR>

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<TD>
<BR>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>22 </FONT></P>


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<BR>

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


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Michael A. Darwin, certify that: </FONT></P>


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</TD>
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</TABLE>
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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </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>I have reviewed
this quarterly report on Form 10-Q of BioCryst Pharmaceuticals,
Inc.;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </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>Based
on my knowledge, this quarterly report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this quarterly
report;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </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>Based
on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </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
registrant&#146;s other certifying officers and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 in 2" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this quarterly report is being prepared; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 in 2" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT 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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the
&#147;Evaluation Date&#148;); and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented
in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Effective
Date; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </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 registrant&#146;s other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant&#146;s auditors and the audit committee of
registrant&#146;s board of directors:</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all
significant deficiencies in the design or operation of internal controls which
could adversely affect the registrant&#146;s ability to record, process, summarize
and report financial data and have identified for the registrant&#146;s auditors any
material weaknesses in internal controls; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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 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=LEFT 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=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant&#146;s internal controls; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<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=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. </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
registrant&#146;s other certifying officers and I have indicated in this quarterly
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.</FONT></TD>
</TR>
</TABLE>
<BR><BR>



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<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: November 12, 2002</FONT></TD>
<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ MICHAEL A. DARWIN<BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Michael A. Darwin<BR>Chief Financial Officer and Chief Accounting Officer</FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>23 </FONT></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>d52480_ex99-1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
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     <!-- Project:        X:\JOBS\02-52480\d02-52480.eep                                   -->
     <!-- Control Number: 02-12345                                                         -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    ABC Company                                                      -->
     <!-- Project Name:   Form 10-Q                                                        -->
     <!-- Firm Name:      CCH Wall Street                                                  -->
     <TITLE>Exhibit 99.1</TITLE>
</HEAD>
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<P align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Exhibit 99.1</B> </FONT> </P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT
TO<BR>18 U.S.C. SECTION 1350,<BR>AS ADOPTED PURSUANT TO<BR>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the Quarterly
Report of BioCryst Pharmaceuticals, Inc. (the &#147;Company&#148;) on Form 10-Q for the period
ending September 30, 2002 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, Charles E. Bugg, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that: </FONT></P>

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<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1) The Report fully complies with the requirements of section 13(a) or          15(d) of the
Securities Exchange Act of 1934; and </FONT></TD>
</TR>
</TABLE>
<BR>

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(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Charles E. Bugg<BR>Charles E. Bugg<BR>
Chief Executive Officer<BR>November 12, 2002 </FONT></P>

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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>d52480_ex99-2.htm
<DESCRIPTION>CERTIFICATION
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     <!-- Control Number: 02-12345                                                         -->
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     <!-- Client Name:    ABC Company                                                      -->
     <!-- Project Name:   Form 10-Q                                                        -->
     <!-- Firm Name:      CCH Wall Street                                                  -->
     <TITLE>Exhibit 99.2</TITLE>
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<P align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Exhibit 99.2</B> </FONT> </P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT
TO<BR>18 U.S.C. SECTION 1350,<BR>AS ADOPTED PURSUANT TO<BR>SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002  </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the Quarterly
Report of BioCryst Pharmaceuticals, Inc. (the &#147;Company&#148;) on Form 10-Q for the period
ending September 30, 2002 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, Michael A. Darwin, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that: </FONT></P>

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(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and </FONT></TD>
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(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Michael A. Darwin<BR>Michael A.
Darwin<BR>Chief Financial Officer<BR>November 12, 2002 </FONT></P>

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