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Why BioDelivery Sciences International Stock Was Up 28.5% Monday

By Jim Halley – Dec 20, 2021 at 5:25PM

Key Points

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The biotech company received a favorable court ruling regarding its lead therapy.

What happened

BioDelivery Sciences International (BDSI) saw its shares rise 28.5% on Monday. The company, which closed at $2.60 on Friday, opened at $2.65 on Monday, then kept climbing to a daily high of $3.34 by midafternoon. The stock's 52-week range is $2.50 to $4.99. So far this year, it is down a little more than 21%.

A doctor checks on a patient's back pain symptoms.

Image source: Getty Images.

So what

The biotech company, which is focusing on pain-management and neurology therapies, saw its biggest one-day rise in years after it received a favorable ruling on two patents for its pain therapy Belbuca, according to a report by Bloomberg Law. A decision by a trial judge in Delaware will prevent Alvogen from selling a generic version of Belbuca. The patents were set to expire in 2027 and 2032.

Belbuca is a medication that contains an opioid and is designed to manage chronic long-term pain. The drug was the company's top seller in the third quarter, with a reported $36.9 million in sales, up 6.3% year over year. The drug was responsible for the lion's share of the company's sales in the quarter with Symproic ($4.1 million) and $20,000 of royalty revenue responsible for the rest.

So keeping the company's patents viable is a huge deal for BioDelivery's bottom line. The drug reached 121,000 prescriptions in the third quarter, 7.7% higher over the same period last year.

Now what

While the biotech stock still has some risks, the court's decision makes it a much better buy. As it is, the company's fundamentals show improvement. BioDelivery has increased revenue for five consecutive years and net income for three. It also has improved its margin for earnings before interest, taxes, depreciation, and amortization (EBITDA) to 27% in the third quarter.

Besides Belbuca and Symproic, which treats opiod-induced constipation, the company has migraine drug Elyxyb, which it acquired from Dr. Reddy's Laboratories (RDY 0.84%) this year and expects to launch in the first quarter of 2022.

In the company's third-quarter earnings call, it mentioned that its ongoing lawsuit with Alvogen was a drag on resources. Now that the issue is out of the way, the company can focus on its Elyxyb launch. It has said it sees the drug having the potential for $300 million to $500 million in revenue annually.

Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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