On Nov 25, 2016, we issued an updated research report on BioDelivery Sciences International, Inc. BDSI.
On Nov 9, BioDelivery announced third-quarter 2016 results. The specialty pharmaceutical company posted wider-than-expected loss in the quarter even though its revenues beat estimates. The top line also improved significantly on a year-over-year basis backed by an upfront payment from Collegium Pharmaceutical, Inc. COLL in exchange for the licensing rights to Onsolis in the U.S.
BioDelivery’s portfolio consists of three approved products – Onsolis (breakthrough cancer pain in opioid-tolerant adults), Bunavail (opioid dependence) and Belbuca (chronic pain). The company has not been able to realize the full potential of its marketed drugs. While Belbuca’s launch has been slower than expected due to pain market pressures, Bunavail’s performance has been largely lackluster so far.
The company is aggressively working to ramp up the performance of its key drug, Bunavail. The company has reduced the number of sales territories and is focusing on the most growth-oriented territories.
Meanwhile, BioDelivery is working on securing new or improved positioning for Bunavail on other managed care contracts on an exclusive or preferred status. Since this July, the company has secured improved positioning in six new managed care contracts, providing preferred access to the drug. The improved prescription potential in these six new managed care contracts should boost the sales and profitability of Bunavail.
Moreover, the company has signed a licensing and development agreement with Endo International plc ENDP for Belbuca. Belbuca was launched in Feb 2016 for the management of pain.
This deal is expected to be a major positive for BioDelivery. It has not only generated funds for the company but has also provided it with a strong partner in Endo, which has significant marketing strength and a solid presence in the pain management market.
However, pipeline setbacks are a major concern for BioDelivery. The company’s pipeline comprises clonidine topical gel (painful diabetic neuropathy/PDN) and buprenorphine depot injection (opioid dependence and chronic pain). In Mar 2015, the company reported disappointing results from a late-stage study on clonidine topical gel in patients with painful diabetic neuropathy (PDN).
Positive data from this study and the commencement of a second phase III study would have allowed the company to file a regulatory submission in the U.S. in 2016. Any more development or regulatory setback could have a material impact on BioDelivery’s shares. Moreover, Onsolis’ commercialization was temporarily suspended following discussions with the FDA regarding certain appearance-related issues in 2012.
Additionally, BioDelivery’s marketed products as well as its pipeline candidates target highly genericized and crowded markets, which exposes them to stiff competitive pressures.
Zacks Rank & Key Picks
BioDelivery currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the health care sector is Cambrex Corp. CBM, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cambrex’s earnings estimates increased from $2.46 to $2.55 for 2016 and from $2.91 to $3.06 for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%. Its share price has increased 6.3% year to date.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research