Biodelivery Investors Await FDA Approval, Hope for Surge in Stock Price

The Food and Drug Administration [FDA] was due to issue an approval decision regarding Biodelivery Science's (BDS) treatment for pain in cancer patients, Onsolis, by June 15th, but a Monday morning press release issued by the company stated that the FDA decision has been delayed. However, the time frame for the delay is expected to be short enough where the FDA did not feel the need to issue an extension letter.

Shares of BDSI soared to over eight dollars in early trading Monday only to resettle in the mid seven dollar range as investors await final word from the FDA.

The fact that the FDA informed Biodelivery that a decision is close and an extension letter would not be needed is a positive sign, in my opinion. A negative response would most likely have been accompanied by an extension letter so that the FDA could be perceived as acting 'by the book'. With the BDSI stock price slowly inching up over the past few months chances of an Onsolis approval are good.

In a Complete Response letter in August 2008 the FDA stated that the only deficiency in the New Drug Application [NDA] was the lack of a Risk Evaluation and Mitigation Strategy [REMS], a new requirement at the time. The REMS has since been submitted.

A final decision is imminent and I expect an approval for Onsolis bringing to the stock price to a range of between ten and twelve dollars.

Disclosure: VFC is long BDSI.

Comments

[David White:]

Lidenburg Thalmann reiterated their buy rating on BDSI today. It is comforting when the analysts agree with you. It seems like most people still think BDSI is very likely to gain approval from the FDA. Usually analysts are wary of taking risks. This buy reiteration indicates that the possible upside more than justifies the risk. Usually analysts are conservative when there is one time news involved. Perhaps the stock will double or more on positive news.

Jun 16 03:35 PM

[Ganesh:]

Why were there so may insider sell transactions between 3rd to 8th June, if postive news was awaited.

Jun 16 04:21 PM

[David White:]

Some more good news on BDSI today. According to DJ it will soon join the Russell 3000 Index. Generally inclusion in an Index (or movement to a more highly thought of index) makes some mutual funds,etc. buy the stock. Others follow along. This should be a positive for the BDSI share price.

Jun 18 09:49 AM

[wary:]

What is your take on the Million + insider sell-off. BDSI

Jun 22 12:31 PM