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BioDelivery (BDSI) Q3 Earnings, Sales Beat Estimates

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BioDelivery Sciences International, Inc. (BDSI - Free Report) reported a loss of 21 cents per share in the third quarter of 2017, narrower than both the Zacks Consensus Estimate of a loss of 22 cents and the year-ago loss of 30 cents.

BioDelivery’s shares have traded significantly above the industry so far this year. The stock has soared 60% while the industry has registered a gain of 2.7%.

Revenues were $11.3 million in the reported quarter, significantly up 211% from the year-ago period and 29% sequentially. The top line also surpassed the Zacks Consensus Estimate of $9 million. The year-over-year increase in revenues was mainly driven by the recognition of product revenues for Belbuca in comparison to royalties recorded in the year-ago quarter.

We remind investors that BioDelivery reacquired worldwide rights to Belbuca earlier in January from Endo Pharmaceuticals, a subsidiary of Endo International Plc (ENDP - Free Report) . As a result of this reacquisition, the company started recording product revenues for Belbuca compared with the royalties, recorded previously.

Quarter in Detail

BioDelivery’s opioid-dependence drug, Bunavail, recorded a 30% sequential increase in sales to $1.7 million in the reported quarter. The company believes that Bunavail business has become stable and the company is presently trying to enhance Bunavail sales through new and improved managed care contract.

Good news is that in October, BioDelivery announced that it has entered into a settlement agreement with Teva Pharmaceuticals (TEVA - Free Report) , 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 quarter under review, the company recorded revenues of $6.4 million from Belbuca, marginally down 3% from the previous quarter. However, the prescription volume for Belbuca expanded 15% in the third quarter compared with the previous one. This growth also continued into the fourth quarter as the company recorded monthly total prescriptions in excess of 8,000 in October, reflecting an all-time high during the period.

Research and development expenses decreased 54.5% to $2 million from the year-ago period. Selling, general and administrative expenses were, however, up 23.3% year over year to $14.8 million.

Other Updates from the Quarter

Notably, in the second quarter, Belbuca received an approval in Canada. The company also signed a deal with Purdue Pharma in July for the commercialization of Belbuca in Canada. Per the terms of the agreement, BioDelivery will receive C$4.5 million as upfront and milestone payments along with royalties on sales. The company expects a launch in early 2018.

BioDelivery has another product in its portfolio, 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 and signed a licensing agreement with Collegium for marketing Onsolis in the United States. The company is presently planning to file a regulatory submission later this year to qualify a new manufacturer for Onsolis. A potential re-launch of the drug is expected in the first half of 2018.

Zacks Rank & Key Pick

BioDelivery carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Ligand Pharmaceuticals Inc. (LGND - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up from $3.68 to $3.70 for 2018 over the last 30 days. The company delivered positive earnings surprises in two of the trailing four quarters with an average beat of 6.19%. Share price of the company has surged 42.5% year to date.

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