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BioDelivery Up on Striking Deal with TennCare for Bunavail

BioDelivery Sciences International, Inc.BDSI announced that it has inked a two-year agreement with Tennessee Medicaid (also known as TennCare) for its opiod-dependence drug, Bunavail (buprenorphine and naloxone buccal film). With this deal, Bunavail becomes the only buprenorphine/naloxone treatment for opioid dependence to gain preferred coverage status on TennCare's preferred drug list (PDL). BioDelivery's shares were up 4.6% on the news.

According to the press release issued by the company, preferred coverage status implies that all patients starting Oct 1 will have access to Bunavail with the exception that other products (non-preferred products) can only be used following trial and failure, contraindication or intolerance to the preferred product (Bunavail).

We note that Bunavail, which is on the U.S. market since Nov 2014, has recorded slower-than-expected initial sales. The company has been trying to increase awareness of the drug by expanding the product's reach through improved managed care access, particularly Medicaid, expanded pharmacy stocking through special programs like the pharmacy locator program and enhanced physician targeting.

Bunavail prescriptions dispensed increased 27% sequentially and the prescriber base expanded to 1,728 with 684 new prescribers added during the second quarter of 2015. The company is aiming about 3,800 active prescribers.

The news comes as a huge boost for the company. Considering that Tennessee is the single largest state in the country with regard to Medicaid prescriptions for buprenorphine/naloxone products for the treatment of opioid dependence, the TennCare deal should help ramp up Bunavail sales. The company expects sales to pick up in the second half of 2015 through 2016.

We remind investors that the company has a key regulatory event coming up next month (Oct 23) with the FDA expected to render a decision on its chronic pain drug, Belbuca. Upon approval, the company stands to receive a milestone payment of up to $50 million from Endo International plc ENDP . BioDelivery has a licensing and development agreement with Endo for the drug.

We expect investor focus to remain on the approval status of Belbuca.

BioDelivery is currently a Zacks Rank #4 (Sell) stock. Gilead Sciences Inc. GILD and Regeneron Pharmaceuticals, Inc. REGN are some better-ranked stocks in the health care sector, each carrying a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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