BioDelivery Sciences: Signs of Life

Sep.10.10 | About: BioDelivery Sciences (BDSI)

Don't look now, but BioDelivery Sciences (NASDAQ:BDSI) is showing signs of a pulse.

On September 2nd, the company announced a positive meeting with the US FDA and BioDelivery's Onsolis partner, Meda.

Discussed in the meeting were "significant modifications to the Risk Evaluation andMitigation Strategy (REMS)
program for Onsolis," according to a pressrelease issued by BioDelivery. The proposed modifications are intended to reduce existing barriers to prescribing Onsolis while expanding access to patients deemed "appropriate."

The initial REMS put into effect upon Onsolis approval has limited theproduct's effectiveness in the marketplace over the past year, putting a lid on the predicted sales growth by many speculators.

The proposed changes by Meda and BioDelivery - if accepted by the FDA - should make the product morecompetitive on the market, allow more Doctors to prescribe it and could boost sales numbers enough to satisfy
shareholders who have grown impatient over the past year.

VFC's take on this news is that it's definitely a positive event, although I did get a chuckle out of a Triange Business Journal article that claimed a "surge" in the BDSI share price when the meeting news was released.

I don't call anything under a 10% move a surge, especially not in the smallcap sector. I believe BDSI only moved a little over a dime that day - hardly a "surge."

But to each his own.

In another significant development, BioDelivery announced earlier this week the appointment of Benny Ward as the company's new Executive Vice President of Business and Strategic Development. Mr. Ward, for ten years, played a large role in building Closure Medical from a start-up to a Nasdaq listed company that was ultimately acquired by Johnson & Johnson.

Given that history, the appointment of Mr. Ward has fueled speculation and buzz amongst investors that he could also bring BioDelivery to the cusp of a buyout deal; an enticing thought, especially given the potential of the pipeline and the BEMA dru delivery technology.

However, the longer BioDelivery can sustain itself as a stand-alone, then the more the value of the company will grow as the pipeline develops and the true potential of BEMA reveals itself. I wouldn't be a fan of a buyout offer just yet, I'd like to see this one ride.

In yet another positive development, on September 7th Rodman & Renshaw initiated coverage of BDSI with a rating of 'MKT OUTPERFORM.' The drawn out and dramatic drop of this stock since the approval of Onsolis looks to have finally subsided - if not turned the corner - and the golden opportunities to buy for just above two bucks may be fading in the rear view mirror.

With the REMS issue on the way to being resolved, the appointment of Mr.Ward and the R&R coverage, BioDelivery is on a streak of decent news, meaning the long term potential of the stock could start being realized over the short to mid term.

We'll see, it's still a speculative stock in a speculative and volatile market, so anything can happen; but one thing that is not so speculative, is that BDSI continues to look like a great long term growth pick.

I'm continuing to stash
shares in my IRA.

Disclosure: Long BDSI.