BioDelivery Sciences Primed To Grab Its Share Of The $1.5B Opioid Market

Submitted by Scott Matusow as part of our contributors program.

These days, prescription drugs have become a source for legal and illegal abuse. This abuse can lead to a medical diagnosis called opioid dependence, which is when a patient that is addicted to opioids such as morphine, hydrocodone, oxycodone, or even heroin. Recently, it has become a significant concern of the Federal Drug Administration (FDA) to take careful consideration in granting approval for drugs with a potential for abuse. Conversely, creating a better therapy for patients with pain or a treatment for drugs that can cause opioid dependence has become very important. It is the goal of several biotechnology companies to develop these therapies and capture a share of the $1.5 Billion opioid market.

BioDelivery Sciences International (NASDAQ:BDSI) is a company developing several therapies for pain management and opioid dependence. The company uses its BioErodible MucoAdhesive (BEMA) technology to develop and commercialize drugs in the areas of pain management and addiction medicine. The company states, “Our marketed products and those in development address serious and debilitating conditions such as breakthrough cancer pain, chronic pain, painful diabetic neuropathy and opioid dependence.”

BioErodible MucoAdhesive Technology

There are several ways to deliver a drug to a patient, each with their own advantages and disadvantages. For example, intravenous delivery is the most rapid, but also can be the most toxic because the drug is delivered throughout the entire body. BEMA technology delivers its drug across the mucous membrane, which can be more effective than oral pill form. BEMA technology is very valuable in situations where intravenous, subcutaneous, or oral forms of drug delivery are ineffective. Delivery through the mucous membrane is effective because it dissolves and enters the body quickly, but also can be less toxic. The drug dissolves across the mucosal membrane in about 15 minutes and patients testify that it is easy to use and leaves little to no aftertaste. Since patient compliance and reduced toxicity has recently become of the utmost important to the FDA, Bio Delivery Sciences International has used its BEMA technology to develop several products.

The company’s website shows some interesting information concerning the rates of prescription painkiller sales, deaths and substance abuse treatment admissions (1999-2010).

*National Vital Statistics System, 1999-2008; ARCOS, Drug Enforcement Administration (DEA), 1999-2010; Treatment Episode Data Set, 1999-2009.

The website further states:

Opioid dependence is a medical diagnosis that is characterized by the inability of an individual to stop using opioids, both prescription opioids such as morphine, hydrocodone and oxycodone, as well as illicit opioids such as heroin, even when it is in the best interest of the individual to do so. Opioid dependence is a complex medical condition that often requires long-term treatment and care. The treatment of opioid dependence is important to reduce both the associated health and social consequences and to improve the well-being and social functioning of people affected.

The main goals of treating persons with opioid dependence are to reduce dependence on illicit drugs, reduce morbidity and mortality, improve physical and psychological health, reduce criminal behavior, and facilitate reintegration into the workforce and education system and to improve social functioning. The ultimate achievement of a drug free-state is the ideal and ultimate objective, but this may not be feasible for all individuals with opioid dependence, especially in the short term. As no single treatment is effective for all individuals with opioid dependence, diverse treatment options are needed, including psychosocial approaches and pharmacological treatment.

BioDelivery Sciences International is combining its BEMA technology with a molecule called buprenorphine to create two market opportunities. Buprenorphine is currently marketed as Subxone and Subutex, with buprenorphine products used for the treatment of opioid dependence exceeding $1.5 billion in 2012. Its delivery with a low dose formulation can be used for treatment of chronic pain, while the high dose formulation with naloxone can be used for treatment of opioid pain. With only one drug on soluble film currently on the market, which is sold by Reckitt Benckiser in the U.K., there is room for a company like BioDelivery Sciences to grab market share. With the potential to capture a portion of the $1.5 million opioid dependence market and between $300-$500 million of the Buprenorphine Schedule II drug market, BioDelivery Sciences International is currently under spec-valued with a market cap of only $182 Million.

BUNAVAIL

As noted above, opioid dependence has become a significant problem in the U.S. According to the 2010 National Survey on Drug Use and Healthy, nearly 2 million people are dependent on prescription opioids. Additionally, the National Institute of Drug Abuse states that there are over 200 million opioid prescriptions dispensed per year. Each year, the amount of people using opioids for non-medical needs is growing.

BioDelivery Sciences International is developing Bunavail as a therapy for patients with opioid depencence. The company combines buprenorphine and naloxone with its BEMA technology to develop a therapy potentially better than the current drug on the market, Suboxone.

So far, clinical studies have shown that Bunavail is equivalent or better than Suboxone in several ways. Bunavail has shown a lower incidence of side effects such as headache, constipation, nausea, agitation, and anxiety. Additionally, Bunavail shows better efficacy and less toxicity due to a better bioavailability and less buprenorphine needed to deliver the desired effects. In recent studies, surveyed patients have stated that BEMA technology was easy to use and had a pleasant taste. Bunavail’s ease of use should lead to better patient compliance, which has also become an important factor in determining approval by the FDA.

Even though Bunavail contains the same drug components as Suboxone, BEMA technology makes the drug a better therapy for opioid dependence. If eventually approved by the FDA, BioDelivery Sciences International can capture a large part of Suboxone sales, which exceeded $1.5 Billion in 2012. Furthermore, this market grew greater than 20% in 2012 and there continues to be a desperate need for viable treatments.

BEMA Buprenorphine

BioDelivery Sciences International is also developing a low dose version of buprenorphine using BEMA technology for the treatment of chronic pain. BEMA Buprenorphine offers several advantages over current treatments. It is classified as a Class III opioid, meaning that patients are less likely to become addicted, while offering pain relief similar to a Class II opioid like morphine. Additionally, BEMA Buprenorphine has the potential for fewer side effects such as respiratory depression, constipation, and cognitive function. Since patients with chronic pain have to use these treatments daily for a long period of time, it is important that side effects be kept to a minimum.

BioDelivery Sciences International partnered with Endo Pharmaceuticals (NASDAQ: ENDP) in January 2012 for BEMA Buprenorphine for the treatment of chronic pain. Currently in Phase III clinical trials, the company is eligible receive up to $180 Million in milestone payments, with $30 Million to be received for completion of the trial. The company will also receive an additional $50 Million for FDA approval and even more in potential sale milestones. The estimated market potential for its BEMA technology is $300 million according to Dr. Mark Sirgo, CEO of BioDelivery Sciences. There is considerable political pressure mounting for these types of drugs to be more readily available on the market, since there are a plethora of addictive pain drugs on the market being abused.

Onsolis

Onsolis is an FDA approved drug that also utilizes the BEMA drug delivery technology, which consists of a small, bioerodible polymer film for application to the buccal mucosa (inner lining of the cheek). Onsolis is an opioid analgesic indicated only for the management of breakthrough pain in patients with cancer, 18 years of age and older, who are already receiving and who are tolerant to opioid therapy for their underlying persistent cancer pain.

Near Term Catalyst

BioDelivery Sciences International is expecting to submit a New Drug Application for BUNAVAIL in mid-summer 2013. In its 2012 10K, the company states:

Additionally, we completed a $40 million registered financing which will assist in funding the clinical trial programs for both BEMA Buprenorphine and BUNAVAIL, while also providing a strong balance sheet as we continue BUNAVAIL licensing discussions in the U.S. and abroad and consider commercializing BUNAVAIL ourselves. We look forward to an exciting 2013 and working to achieve a number of key milestones, including the anticipated mid-year filing of our NDA for BUNAVAIL and moving the Phase 3 studies for BEMA Buprenorphine for chronic pain toward completion. We will also be determining whether to move forward with commercializing BUNAVAIL on our own or through a commercial partnership here in the U.S.

Continued progress was made in the development of BioDelivery’s two buprenorphine-containing products with the completion in January 2013 of the safety study for BUNAVAIL for the treatment of opioid dependence. The study, which included 249 patients who were switched from Suboxone to BUNAVAIL, demonstrated the ease of use and tolerability of BUNAVAIL.

Future Catalysts

BioDelivery Sciences International has several upcoming milestones in 2013 that can drive shareholder value. The company is focusing its resources on achievement of the following key milestones:

BUNAVAIL commercialization opportunities. BDSI will continue to evaluate its strategic options for the commercialization of BUNAVAIL, which include partnership, internal approaches or a combination of these. BDSI expects to finalize its strategy in the second half of 2013.
Recruitment of two Phase 3 studies for BEMA Buprenorphine. BDSI and Endo expect to continue recruitment in the two Phase 3 efficacy studies for BEMA Buprenorphine for chronic pain, one in opioid experienced and one in opioid na