BioCryst Pharmaceuticals has received a boost with the news that the US Department of Health and Human Services has awarded the firm a $102.6 million contract to advance development of its injectable antiviral flu drug, peramivir.

The four-year contract provides funding to see whether peramivir, a neuraminidase inhibitor, can effectively treat “seasonal and life-threatening influenza,” including H5N1 or avian flu.

The award is part of a larger HHS initiative to pursue the development of new therapies and vaccines which may help the USA respond quickly to a potential pandemic and BioCryst said that the contract “ further confirms the potential importance of peramivir as an effective antiviral agent.” HHS secretary Mike Leavitt noted that “our antiviral strategy includes not only stockpiling existing antiviral drugs but also seeking out new antiviral medications to further broaden our capabilities to treat and prevent all forms of influenza.”

The drug was filed with the US Food and Drug Administration in November 2004 and was granted fast-track status by the agency a year ago. If approved, peramivir will be competing against Roche's Tamiflu (oseltamivir) and GlaxoSmithKline's inhaled Relenza (zanamivir).

The announcement pushed up BioCryst shares just over 8% to over $12 as investors saw the possible benefits of a potential treatment for bird flu.