BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is a rapidly growing specialty pharmaceutical company dedicated to patients living with serious and complex chronic conditions. The company has built a portfolio of products that includes utilizing its novel and proprietary BioErodible MucoAdhesive ("BEMA") drug-delivery technology to develop and commercialize new applications of proven therapies aimed at addressing important unmet medical needs.

Business Overview

BioDelivery Sciences is focused on the commercialization of its existing products, BELBUCA and Symproic, while also exploring opportunities to acquire or license additional products that meet the needs of patients living with debilitating chronic conditions. The company's BELBUCA (buprenorphine buccal film) is an opioid analgesic indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative options are inadequate. Symproic is a peripherally acting mu-opioid receptor antagonist (PAMORA) indicated for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non-cancer pain.

In September 2021, the company completed the acquisition of the U.S. and Canadian rights to ELYXYB™ (celecoxib oral solution), the only FDA-approved ready-to-use oral solution for the acute treatment of migraine, with or without aura, in adults. This acquisition allows BioDelivery Sciences to expand into the migraine market and deepen its presence in neurology. The company plans to launch ELYXYB in the first quarter of 2022.

Financials

BioDelivery Sciences has demonstrated strong financial performance in recent years. For the full year 2021, the company reported annual net income of $84.86 million, annual revenue of $166.70 million, annual operating cash flow of $41.04 million, and annual free cash flow of $40.62 million.

On a quarterly basis, the company's Q3 2021 results showed net income of $20.97 million, revenue of $41.09 million, operating cash flow of $27.29 million, and free cash flow of $27.29 million. These strong financial results were driven by the continued growth of BELBUCA and Symproic, as well as the successful integration of the ELYXYB acquisition.

BELBUCA, which accounted for 90% of the company's net product sales in Q3 2021, has seen consistent growth, with net sales increasing from $100.57 million in the first nine months of 2020 to $109.84 million in the first nine months of 2021. Symproic, which made up 10% of net product sales in Q3 2021, also saw its net sales increase from $11.05 million in the first nine months of 2020 to $12.56 million in the first nine months of 2021.

Liquidity

As of September 30, 2021, BioDelivery Sciences had cash and cash equivalents of $100.71 million, which the company believes is sufficient to manage the business as currently planned. The company generated $27.29 million in cash from operations during the first nine months of 2021, demonstrating its strong cash flow generation capabilities.

BioDelivery Sciences has also maintained a healthy balance sheet, with a current ratio of 2.45 and a quick ratio of 2.08 as of September 30, 2021. The company's debt-to-equity ratio stands at 0.31, indicating a conservative capital structure.

Guidance and Outlook

BioDelivery Sciences has not provided specific financial guidance for the full year 2022. However, the company has expressed confidence in the continued growth of its core products, BELBUCA and Symproic, as well as the successful launch of ELYXYB in the first quarter of 2022.

The company's management has highlighted the strong underlying demand for BELBUCA, driven by its unique profile, growing physician interest, policy tailwinds, and expanding payor access. Additionally, the company sees Symproic as a complementary asset that can leverage the specialized commercial infrastructure established for BELBUCA.

Regarding the ELYXYB acquisition, BioDelivery Sciences believes this will allow the company to expand into the migraine market and deepen its presence in neurology, further diversifying its product portfolio and revenue streams.

Risks and Challenges

As with any pharmaceutical company, BioDelivery Sciences faces various risks and challenges, including regulatory uncertainties, intellectual property disputes, and competition from generic or alternative therapies. The company is also exposed to the potential impact of the COVID-19 pandemic on its operations and the healthcare system.

The company's ongoing litigation with Aquestive Therapeutics and Indivior regarding the patents for its BELBUCA and BUNAVAIL products is an area of concern, although BioDelivery Sciences remains confident in the validity of its intellectual property and is committed to vigorously defending its rights.

Additionally, the successful integration and commercialization of the ELYXYB product will be crucial for the company's future growth and diversification efforts.

Conclusion

BioDelivery Sciences is a rapidly growing specialty pharmaceutical company with a diversified product portfolio and a strong commercial infrastructure. The company's focus on delivering innovative therapies for individuals living with serious and debilitating chronic conditions, coupled with its robust financial performance and healthy balance sheet, position it well for continued success.

The successful commercialization of BELBUCA and Symproic, as well as the anticipated launch of ELYXYB, are key drivers for the company's future growth. While BioDelivery Sciences faces certain risks and challenges, its experienced management team, commitment to innovation, and strong cash flow generation capabilities suggest a promising outlook for the company and its shareholders.