BioDelivery Sciences: After FDA Approval, Still Room To Run

Jun.10.14 | About: BioDelivery Sciences (BDSI)

Summary

BEMA Buprenorphine's early July 2014 data read-out provides a substantial catalyst for shareholders.

Clonidine Topical Gel development helps to provide another catalyst that has the potential to meaningfully impact shareholders.

Shareholders will have catalytic events to wait for as BioDelivery prepares for the third-quarter launch of Bunavail.

BioDelivery Sciences (NASDAQ:BDSI) got some good, and largely expected news from the FDA, when it announced that the FDA has approved Bunavail as a maintenance treatment for opioid dependence in the United States. With most stocks, following the FDA approval of their lead pipeline product, they are largely dead after approval. This is usually due to the fact that they will not have other products in their pipeline that are rapidly progressing. As such, investors have to wait as the company builds up a sales force and then prepares for the commercial launch of the product. This is not, however, the case for BioDelivery. BioDelivery has multiple near-term catalysts that could still help to provide substantial returns for investors.

BEMA Buprenorphine

BioDelivery is expecting very important results for its BEMA Buprenorphine program in early July. These results are from a Phase III trial of Buprenorphine in opioid-experienced patients with chronic pain. These results would help to lay the groundwork for a potential NDA filing. Notably, BioDelivery has already experienced success for the drug in the relief of chronic pain for opioid-naive patients. These results have the potential to substantially move Biodelivery shares, should they ultimately be positive.

The BEMA Buprenorphine program is partnered with Endo Pharmaceuticals (NASDAQ:ENDP). This is significant, as BioDelivery would not have to go through a lot of the costs associated with marketing the drug. Endo would take care of marketing the drug, and BioDelivery would receive a royalty on the sales of the drug. Having a large pharmaceutical company like Endo as a partner should help to make sure that sales reach their full potential.

With the potential success of the BEMA Buprenorphine program hanging in the balance, investors will be closely watching the clinical trial results in early July. Should the results not be successful, it is still possible that BioDelivery and Endo will try to seek approval in opioid-naive patients. However, that would substantially lower the potential revenue from BEMA Buprenorphine, while potential results will help to further increase the market potential for BEMA Buprenorphine.

Clonidine Topical Gel

BEMA Buprenorphine's are not the only important results that BioDelivery is expecting soon, however. BioDelivery is also expecting results from its Clonidine Topical Gel program. Clonidine Topical Gel is being developed for the treatment of diabetic neuropathy. Biodelivery is expecting an interim analysis of the data from the Phase III trial in the third quarter of 2014. This product will have the potential to also meaningfully impact the growth at Biodelivery. Having a gel for diabetic neuropathy may provide ease of use for patients, that is currently missing in the market place.

This drug will enter a rather crowded market place, but will still have the potential to generate significant returns for shareholders. Should BioDelivery be able to successfully market the drug, it should be able to provide a large amount of profit for its shareholders. Investors will be watching the results closely because of the market potential. If the interim data read-out is positive, investors will get an idea of the development timeline for the drug, and subsequently, will grow more positive towards the idea that the drug will ultimately be approved by the FDA.

Conclusion

Many companies who have recently obtained FDA approval will drop because of a lack of imminent catalysts. That is not the case for BioDelivery, where the company has a myriad of upcoming catalytic events which should help to guide the direction of the company. These events will give shareholders something to watch for while BioDelivery continues to build up a sales force to launch Bunavail. BioDelivery is expecting a third-quarter launch for Bunavail, and these catalytic events will help to provide shareholders with the potential for significant returns while they wait for BioDelivery to launch Bunavail. It is a very exciting time in the history of Biodelivery, and the next few quarters will help to meaningfully impact the long-term growth trajectory of the company.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.