BioDelivery Sciences International, Inc.

BDSI Details

BioDelivery Sciences International, Inc. (NASDAQ: BDSI) is a specialty pharmaceutical company that focuses on providing therapies for patients living with serious and debilitating chronic conditions. BDSI leverages its proprietary BioErodible MucoAdhesive (BEMA) drug-delivery technology to develop and commercialize new applications of therapies aimed at addressing important unmet medical needs. The company's product candidates include BELBUCA (buprenorphine buccal film) for chronic pain and Symproic (naldemedine) for opioid-induced constipation.

Diversifying Product Portfolio: On September 09, 2021, BDSI acquired the US and Canadian rights to ELYXYB, the first and only FDA-approved ready-to-use oral solution for treating acute migraine in adults, with or without aura, from Dr. Reddy's Laboratories Limited. BDSI plans to launch ELYXYB in Q1FY22 and intends to launch an ELYXYB paediatric research, which can address the substantial unmet needs of paediatric and adolescent migraine patients. In addition, this acquisition enables BDSI to expand its portfolio in neurology which is an excellent strategic fit with its pain franchise.

Q2FY21 Results: The company reported YoY growth of 13.28% in total revenues to USD 41.44 million in Q2FY21 (ended June 30, 2021) compared to USD 36.58 million in Q2FY20. The Product sales, which accounted for 97.79% of the total revenue in Q2FY21, reported YoY growth of 11.19%. Net income for Q2FY21 increased to USD 9.06 million from USD 1.17 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents of USD 119.85 million and total debt of USD 78.63 million.

Key Risks: The success of BDSI products depends on the endorsement and willingness of physicians to prescribe the products to the patients. Any failure or delay in educating physicians about the intended pharmaceutical formulations could postpone or reduce the demand for the company's products.

Outlook: In FY21, BDSI expects to generate between USD 170 and 180 million in total sales, including USD 155 to 165 million from BELBUCA sales. The estimated range for FY21 operating expenses is USD 115 to 120 million, with EBITDA ranging from USD 40 to 50 million.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BDSI Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: BDSI's stock price decreased 2.09% in the past month and is currently leaning towards the lower band of its 52-week range of USD 3.04 to USD 4.99. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 47.49. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 4.15. Considering the slight correction in the stock price, a surge in profitability, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 3.75, down 3.88% as of October 01, 2021, 2:05 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.