DHHS to Expand Opioid Dependence Class; Additional Tailwind For BioDelivery Sciences’ Bunavail, Says William Blair

In a research report issued Friday, William Blair analyst Tim Lugo reiterated a Buy rating on shares of BioDelivery Sciences International, Inc. (NASDAQ:BDSI) with a $17 price target, after the Department of Health and Human Services (DHHS) convened representatives from all 50 states to focus on preventing opioid overdose and opioid use disorder. Furuthermore, the DHHS Secretary Sylvia M. Burwell announced an intention to update “the current regulation around buprenorphine as an important step to increasing access to evidence-basedtreatment.” 

Lugo commented: “While the launch of Bunavail to date has largely been driven by Suboxone switch patients, we would view the expansion of the whole market by DHHS as a significant positive for the class. We believe the expansion of the class should bring in new patients, which are a much easier target for Bunavail starts versus patients that are well controlled on Suboxone.”

Furthermore, “While we believe this expansion likely will not affect the class until 2016, we see the news as an additional tailwind for Bunavail. We note that BioDelivery Sciences is making significant strides to increase prescription growth in Bunavail. Earlier this month, the company announced that it had signed a two year-contract with Tennessee Medicaid (TennCare) granting exclusive preferred formulary status for Bunavail. According to the company, preferred coverage means that all patients with opioid dependence in Tennessee will receive Bunavail with the only exception being that other products can be used following trial and failure, contraindication, or intolerance starting on October 1.”

The analyst concluded, “We believe that the company could generate some significant momentum with increasing prescription growth and the upcoming PDUFA date of Belbuca on October 23 acting as a major catalyst for shares.”

As of this writing, all the 8 analysts polled by TipRanks.com rate Biodelivery Sciences stock a Buy. With a return potential of 126%, the stock’s consensus target price stands at $17.13.

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