What happened
During a trading session in which most of the Nasdaq Composite and S&P 500 were headed downward, shares of BioDelivery Sciences International (BDSI) rose by 12.2% on Monday. The specialty pharmaceutical company's stock closed at $3.36 a share on Friday and opened at that same price on Monday, but rose to $3.77 early in the afternoon. The company has a small market cap of $362 million and its stock has seen a 52-week low of $2.50 and a 52-week high of $4.68. Shares are down more than 14% over the past year but up more than 16% in 2022.
So what
The move Friday was just a continuation of an upswing that began last week when BioDelivery Sciences released updated guidance before the market opened on Thursday. That day, it jumped from $3.04 to $3.35. On Friday, the stock rose from its opening price of $3.15 to a high of almost $3.55.
In the company's updated guidance, it said that it expected yearly revenue between $165 million and $167 million, up from earlier guidance of $162 million and $167 million. At the high end, that means a 6.7% rise year over year. and even at the low end, it represents a climb of 5.5% over 2020.
Image source: Getty Images.
BioDelivery Sciences also said it expected yearly earnings before interest, taxes, depreciation and amortization (EBITDA) between $40 million and $45 million, compared with the previous estimate of $40 million. The company reported EBITDA of $40.5 million in 2020.
The company has three drugs approved by the U.S. Food and Drug Administration, led by chronic pain reliever Belbuca, which is expected to bring in between $147 million and $148 million in 2021, the company said. The drug is a partial opioid agonist, still powerful but less habit-forming than full opioid agonists such as morphine and oxycodone. It is administered via a small polymer film that adheres to the inner lining of the cheek.
The company's other two drugs are Symproic, an opioid antagonist to treat opioid-induced constipation in adult patients with chronic noncancer pain, and migraine drug Elyxyb, a ready-to-use oral solution that the company said it expects to launch this quarter.
Now what
Since the start of the year, investors have been divesting themselves of overvalued stocks and that creates an opportunity for underpriced healthcare stocks that appear to be on the upswing such as BioDelivery Sciences, which has a price-to-earnings ratio of 11.71 and a forward P/E of 10.45. The company appears to be headed for its second consecutive profitable year, and now with a new drug on the way that the company said could bring in $350 million to $400 million in annual sales, it is easy to see why some investors are becoming bullish on the stock.
