BioDelivery (BDSI) Q4 Loss Wider-Than-Expected, Sales Up Y/Y

BioDelivery Sciences International, Inc. (NASDAQ:BDSI) reported a loss of 29 cents per share in the fourth quarter of 2017, wider than the Zacks Consensus Estimate of a loss of 22 cents. However, the reported loss was in line with the year-ago figure.

BioDelivery’s shares have outperformed the industry in a year’s time. The stock has gained 7.9% versus the industry’s decline of 3%.

Revenues were $12.5 million in the reported quarter, significantly up 220.5% from the year-ago period and 10.6%, sequentially. The top line also surpassed the Zacks Consensus Estimate of $10 million. The year-over-year increase in revenues was mainly driven by the recognition of product revenues for Belbuca in comparison to royalties recorded a year ago.

We remind investors that BioDelivery reacquired the worldwide rights to Belbuca in January 2017 from Endo Pharmaceuticals, a subsidiary of Endo International Plc (NASDAQ:ENDP) . As a result of this reacquisition, the company started registering product revenues for Belbuca compared with the previously grossed royalties.

Quarter in Detail

BioDelivery’s opioid-dependence drug, Bunavail, recorded $1.7 million sales in the quarter under review, up 15% year over year. However, revenues from the drug remained unchanged sequentially. The company is trying to enhance Bunavail sales through new and improved managed care contract.

Good news is that in October 2017, BioDelivery entered into a settlement agreement with Teva Pharmaceuticals (NYSE:TEVA) , resolving its Bunavail patent litigation. Pursuant to this non-exclusive license agreement, Teva is anticipated to get permission to begin selling its generic version of Bunavail in the United States not before July 2028.

In the fourth quarter, the company logged revenues of $9.4 million from Belbuca, up 47% from the third. However, the prescription volume for Belbuca expanded 10% compared with the previous quarter. Further, this growth momentum continued into the first quarter of 2018 with the company having recorded monthly total prescriptions in excess of 8,600 earlier this January, thereby reflecting an all-time high.

Research and development expenses surged 33.3% to $6.8 million from the year-ago period. Selling, general and administrative expenses also increased 26.5% year over year to $14.8 million.

2017 Results

Full-year sales stood at $62 million, beating the Zacks Consensus Estimate of $54.9 million. Moreover, the top line significantly skyrocketed 300% compared with the year-ago figure of $15.5 million.

The full-year earnings of 9 cents per share missed the Zacks Consensus Estimate of 15 cents. However, the company reported a loss of $1.25 a year ago.

Other Updates From the Quarter

Notably, in January 2018, BioDelivery along with partner Purdue Pharma announced that Belbuca was made commercially available in Canada following an approval in the country during second-quarter 2017. BioDelivery signed a deal with Purdue Pharma last July for the commercialization of Belbuca in Canada. Per the terms of the agreement, BioDelivery is entitled to receive royalties on net sales of the drug and will be eligible for potential future sales related milestones.

Moreover, BioDelivery has recently signed a commercial agreement with Humana (NYSE:HUM), the second largest medicare insurer in the United States, for adding Belbuca as a preferred agent for both companies’ commercial and medicare patients. This in turn validates BioDelivery’s managed care progress for the drug.

The company’s portfolio consists of another product called Onsolis (fentanyl buccalsoluble film; a breakthrough in cancer pain in opioid-tolerant adults). In May 2016, the company re-acquired the North American rights to Onsolis from Meda, a subsidiary of Mylan (NASDAQ:MYL) , and signed a licensing agreement with Collegium for marketing Onsolis in the United States. BioDelivery plans to file a regulatory submission next month to qualify a new manufacturer for Onsolis.

Zacks Rank

BioDelivery carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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