Here's Why You Should Add BioDelivery Stock To Your Portfolio

BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is focused on the development and commercialization of treatments in the areas of pain management and drug addiction. The company’s portfolio consists of three marketed products — Bunavail (buprenorphine/naloxone buccal film — opioid dependence), Symproic (opioid induced constipation) and Belbuca (buprenorphine HCl buccal film — chronic pain). Belbuca is the major revenue generator for the company.

Here we discuss five reasons why adding BioDelivery stock to one’s portfolio may prove to be beneficial in 2020.

Favorable Share Price Movement: Strong performance of BioDelivery’s marketed drugs has enabled the company to outperform the industry. Shares of the company have rallied 56.2% in the past six months compared with the industry’s growth of 6.7%.

Strong Performance of Belbuca: The drug generated $69.3 million in sales in the first nine months of 2019, representing a year-over-year growth of almost 130%. Moreover, sales of the drug grew sequentially in the last three reported quarters. The company expects the growth momentum to get reflected in the fourth-quarter results.

It expects full-year sales for the drug to be at the upper end of $105-$110 million, suggesting an increase of more than 139% from 2018. Sales growth is also expected to continue in 2020 as well.

The sales growth can be attributed to the company’s efforts to increase accessibility to Belbuca for covered patients in the United States. The company has several commercial agreements with Medicare insurers in the country, including Cigna Corp. (NYSE:CI) , and has brought more than 165 million patients under coverage for Belbuca. Notably, it re-acquired all rights to the drug from Endo International (NASDAQ:ENDP) in 2017.

Acquisition of Constipation Drug Symproic: In April 2019, BioDelivery acquired U.S. commercial rights to Symproic from Japan-based Shionogi. The drug is approved as treatment for opioid induced constipation in adult patients with chronic non-cancer pain. The acquisition seems encouraging as the drug has demonstrated rapid growth.

During the third quarter of 2019, total Symproic prescriptions were 15,686, an all-time high, and represented more than 39% growth from the prior-year period. The company expects Symproic to generate sales of $7-$9 million in 2019. The company is also focusing on placing the drug on preferred formulary position of pharmacy benefit managers.

It has brought more than 40 million commercially covered lives with expanded access to the drug so far. These efforts should drive sales higher in the coming quarters.

Encouraging Guidance for 2020: BioDelivery expects total sales for 2020 to be between $165 million and $175 million. This indicates nearly 60% growth at mid-point compared to full-year sales expectation for 2019, primarily driven by Belbuca. The company expects 2020 sales for the drug to be in the range of $150-$160 million.

Rising Estimates: BioDelivery’s earnings estimates for 2020 have increased 7.1% in the past 90 days. In fact, the company came up with impressive earnings performances and exceeded expectations in three of the trailing four quarters. It recorded an average positive earnings surprise of 159.38%.

Conclusion

Belbuca and Symproic are likely to be key drivers for the company’s top-line going forward. However, we note that performance of BioDelivery’s third marketed drug, Bunavail, has been lackluster. The drug is facing significant competition from generics of London-based Indivior’s opioid treatment drug, Suboxone. Moreover, Belbuca also targets a highly genericized, crowded and competitive market and faces competition from Butrans and opioid drug abuse deterrent formulations, which include Pfizer’s (NYSE:PFE) Embeda.

Nevertheless, BioDelivery sports a Zacks Rank #1 (Strong Buy) and looks like a good investment now. You can see the complete list of today’s Zacks #1 Rank stocks here.

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