BioDelivery Inks New Contract With CVS/Caremark, Shares Up

BioDelivery Sciences International, Inc.’s (NASDAQ:BDSI) shares increased more than 5% after the company announced an agreement with CVS/Caremark, a subsidiary of CVS Health Corporation (NYSE:CVS) . The agreement will extend access to BioDelivery’s pain management product Belbuca and opioid dependence product Bunavail through 2020.

The company has also separately announced that Belbuca prescription sales had reached its highest point of 1,657 prescriptions this month. Per the Symphony Health data, this publicized figure has exceeded the previous peak from Dec 2016. The new managed care contract with CVS/Caremark may expand the recent gains in prescriptions for Belbuca.

BioDelivery is presently exploring commercial options for for both Belbuca and Bunavail’s longer-term growth within and outside the U.S. The company is working on securing new or improved positioning on other managed care contracts either on an exclusive or preferred status. The new managed care contract with CVS/Caremark holds potential as it represents a significant portion of the covered lives in the U.S.

We remind investors that Belbuca was launched in Feb 2016 in the U.S. by Endo Pharmaceuticals (NASDAQ:ENDP) . However in Jan 2017, BioDelivery reacquired worldwide rights to Belbuca from Endo. This was followed by a strategic decision announced by Endo in Dec 2016 to discontinue the commercial efforts for the U.S. branded pain business. As a result, the company started recording product revenues for Belbuca against royalties being recorded previously.

BioDelivery’s shares have significantly outperformed the Zacks classified Medical-Biomed/Genetics industry so far this year. Shares of the company rallied 57.1%, while the industry registered an increase of 10.5%.



Apart from the CVS/Caremark deal, BioDelivery is also pursuing additional managed care wins for Belbuca and is in contracting discussions with Cigna (NYSE:CI), ProCareRx, EnvisionRx, Envolve, Health Partners and Kaiser.

BioDelivery also continues to work on improving Bunavail’s performance. In the first quarter of 2017, Bunavail recorded 52.4% year-over-year surge in sales to $3.2 million. The improved prescription potential in new managed care contracts should boost sales and profitability of Bunavail further.

Zacks Rank & Key Picks

BioDelivery currently carries a Zacks Rank #3 (Hold). A better-ranked stock in healthcare sector is Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron’s earnings per share estimates increased from $10.16 to $10.52 for 2017 and from $10.90 to $12.10 over the last 60 days. The company has delivered positive earnings surprises in two of the four trailing quarters with an average beat of 0.45%.

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