Trading the FDA: BioDelivery Sciences Could Have a Big '09 (BDSI, rated BUY)
Posted on December 15, 2008 at 20:24 PM EST
Trading the FDA: BioDelivery Sciences Could Have a Big '09 The accompanying table [click to enlarge] includes an updated FDA calendar of 68 expected decision dates included in the ETF Innovators [ETFI] New Drug Regulatory Catalyst Index. Since my last update , the following FDA action has occurred: 1.) BioDelivery Sciences (BDSI) re-submitted its Risk Evaluation and Mitigation Strategy [REMS] for pain drug candidate Onsolis (BEMA fentanyl) based on the feedback it received from the FDA's complete response ruling on the NDA in August. Since the FDA has informed BDSI that all other aspects of the NDA review are complete, the prospects for Onsolis approval are excellent – although investors and traders will likely have to wait six months since the Company has guided expectations for a Class II review designation. The Company's BEMA drug delivery technology allows for the rapid absorption of drugs through the cheek, which is ideal for breakthrough pain drugs such as Onsolis. The U.S. market for breakthrough cancer pain drugs is $778M with expected growth to $1.9B by 2016, dominated by brand drugs such as Cephalon's (CEPH) Fentora with $181M in sales and many generic formulations of opiate painkillers. Swedish specialty pharma company Meda AB ( Stockholm: MEDAA ) ($1.7B U.S. Dollar market cap) will market the drug and BDSI is set to receive $30M upon FDA approval + market launch, an additional $30M for sales milestones, and a "significant" but undisclosed double-digit royalty on sales. The CEO of Meda AB, Anders Lonner, expects Onsolis to generate "well over $200M" in peak annual sales within the breakthrough cancer pain market, thanks to its sales force of over 400 reps in the U.S. which includes coverage of specialists who focus on pain management. BDSI expects to generate positive cash flow from operations next year with approval of Onsolis likely by mid-2009 and the $30M milestone payment upon FDA approval + market launch is a significant catalyst by itself given the Company's current market cap of around $48M. 2.) Abbott Labs (ABT) received FDA approval today for cholesterol drug TriLipix, which is classified as a fibrate and is the first drug in this class approved for use in combination with the widely used statin drugs such as the world's best selling drug, Lipitor. ABT is working with AstraZeneca (AZN) to combine TriLipix with AZN's statin drug Crestor and expect to file a NDA next year. 3.) Genzyme (GENZ) received approval today for Mozobil to be used in combination with granulocyte-colony stimulating factor (e.g. Neulasta, Neupogen, Granocyte) to mobilize stem cells from the bone marrow into the circulating blood for collection and transplantation in patients with non-Hodgkin’s lymphoma and multiple myeloma.