Why BioDelivery Sciences International, Inc. Stock Soared

BioDelivery Sciences shares soar after delivering positive top-line phase 3 data from a key pipeline product. Find out what this means for BioDelivery and investors.

Jul 7, 2014 at 3:04PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of BioDelivery Sciences (NASDAQ:BDSI), a specialty pharmaceutical company focused on developing therapies to manage pain care and oncologic support, surged higher by as much as 20% after it announced positive top-line phase 3 results involving BEMA buprenorphine for chronic pain patients that had previously been treated with an opioid-based therapy.

So what: According to the company's early morning press release, it and development part Endo Pharmaceuticals, a subsidiary of Endo Health Solutions (NASDAQ:ENDP), reported that BEMA buprenorphine met its primary endpoint of a statistically significant reduction in pain as measured by the mean change in the daily average pain numerical rating scale versus the placebo over a 12-week period. In addition, BEMA buprenorphine also met a number of key secondary endpoints. BioDelivery and Endo are both expected to meet with the Food and Drug Administration to discuss and subsequently file a new drug application as soon as possible. In lieu of the successful phase 3 results BioDelivery Sciences notes that it triggered a $10 million milestone payment from Endo.

Now what: Chronic pain management is a huge market opportunity for BioDelivery Sciences, but it's also a very crowded field, so even having Endo in its corner won't necessarily guarantee BEMA buprenorphine success. A lot will depend on drug pricing, insurance coverage, and physicians' willingness to prescribe the product. Although the company is being projected to turn the corner to profitability next year by Wall Street, I'm a bit concerned about its huge run-up into today's results. Given the crowded treatment field behind chronic pain patients, I'd suggest observing BioDelivery Sciences from the sidelines until we've witnessed a substantial pullback.

BioDelivery Sciences may have surged, but the growth potential behind this new product could leave it eating dust! 
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multibagger returns you will need The Motley Fool's new free report on the dream team responsible for this game-changing blockbuster. CLICK HERE NOW.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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