Biocryst joins growing trend in tight labor market, offering ‘inducement grants’

DURHAM — In this tight labor market with unemployment at record lows and demand for talent climbing, Biocryst Pharmaceuticals Inc., a Durham-based company focused on rare disease drug development, is trying to stay competitive using an increasingly popular recruiting offer.

Its strategy: to offer new hires “inducement grants.” A lesser-used distribution vehicle, it allows companies to grant awards without dipping into equity plan pools approved by shareholders.

Biocryst

Recently, the firm announced that it granted three newly hired employees this sweetener to get them to sign on the dotted line.

In this case, the employees got the option to purchase an aggregate of 33,000 shares of BioCryst common stock on June 30, approximately $3.79 per share.

Megan Sniecinski, the company’s new chief business officer who joined BioCryst from PTC Therapeutics, got an even better deal. She got to purchase an aggregate of 500,000 shares on July 1, at around $3.71 per share.

“The options were granted in accordance with NASDAQ Listing Rule 5635(c)(4),” the company said in its release.

Considering Biocryst stock was hovering around the $10-mark back in January, there appears to be room to grow, making it a win-win for all.

However, the rise of inducement grants isn’t a surprise to some.

“The highly competitive hiring environment in the technology and life sciences sectors is driving up the use of new-hire awards in general, and when a company’s shareholder-approved equity pool is strained by such grants, there is a strong case to be made for inducement grants,” Edward Speidel recently noted in an industry paper recently.

Earlier this year, Biocryst received a $100 million loan from Midcap Financial Trust towards developing its drug BCX7353.

This drug was created for prevention of angioedema attacks, which cause rapid swelling under the lower layer of tissue of the skin and mucous membranes. Back in August 2018, it was granted “Fast Track Designation,” giving it priority review.

Biocryst intends to file a new drug application by the end of 2019.

At the time of that announcement, its shares rose to $9.35.