Congratulations BioDelivery Sciences Longs!

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 |  About: BioDelivery Sciences International, Inc. (BDSI)
by: VFC's Stock House

D-Day was Thursday for BioDelivery Sciences (NASDAQ:BDSI) as the FDA finally granted approval to market and distribute Onsolis, a treatment for pain in cancer patients.

The FDA delayed issuing the Onsolis approval for over a month; a time frame that saw the BDSI stock slide from eight dollars to six. Some investors, myself included, were sceptical of the actions of the FDA and others were turned off by the large amount of insider sales after the delay was announced mid-June.

The combination of investor skepticism and insider selling took the wind out of BDSI's sails and the stock closed the day on approval day a mere 2.5% to the positive, although it did hit $7.25 at one point during afternoon trading.

Many predictions, mine included, had the stock trading as high as between $10-$12 after approval before settling into the $8-$10 range, but that was before things started to look suspect in late June.

Long term investors who hung in there waiting for a nice spike after approval were quite disappointed yesterday, but there's no reason to worry or panic sell now because the stock will rise again; it's just a matter of time.

In fact, with the Onsolis approval now a done deal, I see BDSI as a BUY while trading for $6.

Today's recessionary market is not a normal one. The stocks of both Antigenics (NASDAQ:AGEN) and Epicept (OTC:EPCT), for instance, both actually traded down when they received market approvals over the past year (Oncophage in Russia for AGEN and Ceplene in Europe for EPCT). Their situation, in my opinion, created great buying opportunities for those who have the patience to load up low and wait. AGEN has already began to come back and I don't think there is any doubt that BDSI will, too.

There's no telling why the stock traded as it did today, we can only speculate. Those who saw the news of approval ready to hit the wires probably shorted at the $7.25 high, and it could be that some of the insiders that sold now want back in. Both scenarios would indicate that the big boys will play this stock to suit their needs until their positions are set and the real move can begin.

The small investor should not fall prey to the games of the big boys. Hold onto your shares and wait for the stock to rise. With Onsolis approved, a revenue stream is all but guaranteed- and that's on top of the $27 million milestone payment that the company will now receive.

Something that investors may find troublesome is the fact that the Onsolis approval came with some FDA restrictions in order to keep patients from overdosing or becoming addicted to the drug. Labels such as this one can scare away potential customers, and therefore hurt revenue, and some may have altered their value of potential future drug sales based on these FDA restrictions. That may be another reason why a spike to above $10 did not occur.

Additionally, investors who were counting on Michael Jackson's Doctors getting a hold of Onsolis to increase distribution will undoubtedly be disappointed with the recent heat being brought on prescription medications.

All being said, I know the price action yesterday did not indicate it, but it is a day for shareholders of BDSI to celebrate. HOLD onto your shares. While the stock may be volatile for a little bit longer, with an FDA approved drug and a potentially blockbuster delivery system, BioDelivery is a much safer investment on Thursday than it was on Wednesday.

I did not sell today; I'm going to wait for the eventual rise in price before I sell any shares. As I've described before, I'm playing on house money with this one.

Congrats, BDSI longs.

Disclosure: VFC is long BDSI.