What's in the Cards for BioDelivery (BDSI) in Q4 Earnings?

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We expect BioDelivery Sciences International, Inc. BDSI to beat estimates when it reports fourth-quarter 2017 results in March 2018. Last quarter, the company delivered a positive earnings surprise of 4.55%.

BioDelivery's earnings history has been a mixed bag so far with the company having surpassed expectations in two of the last four quarters and missing in the other two. The average beat was134.36%.

Let's see how things are shaping up for this announcement.

Factors to Consider

BioDelivery's key products include Belbuca (chronic pain) and Bunavail (opioid-dependence).

Bunavail's sales performance has been lackluster in 2017. However, BioDelivery is working to improvethe drug's performance. To that end, the company has reduced the number of sales territories to focus on the most growth-oriented ones to increase Bunavail's profits.

The company also streamlines its attention on securing new or improved positioning of other managed care contracts either exclusively or on a preferred status. Moreover, BioDelivery runs a highly targeted Bunavail-focused, direct-to-patient digital advertising campaign across four cities. Though Bunavail sales plunged in the second quarter of 2017, it picked up in the third, a trend which we expect to be continued in fourth-quarter release as well.

Belbuca's start has also been slower-than-expected due to pain market pressure. We remind investors that BioDelivery had reacquired worldwide rights to Belbuca in January 2017 from Endo Pharmaceuticals, a subsidiary of Endo International plc ENDP . As a result of this reacquisition, the company started logging product revenues for Belbuca compared with royalties recorded previously.

On a further positive note, the return of rights has led to higher Belbuca revenues of late. Additionally, the prescription volume for Belbuca expanded 15% in the previous and we believe this momentum to continue in the fourth quarter too. Meanwhile, Belbuca was made commercially available in Canada this January for severe pain management.

In February, BioDelivery entered into a settlement agreement with Teva, under which, the latter gets a non-exclusive license to first begin selling its generic version of Belbuca in the United States on Jul 23, 2027 or earlier under certain circumstances. We expect an update on this settlement deal on fourth-quarter conference call.

Earnings Whispers

Our proven model shows that the stock is likely to beat on earnings this quarter as it has the right combination of the two key ingredients - a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - for this to happen.

Zacks ESP: BioDelivery has an Earnings ESP of +19.36%, representing the percentage difference between the Most Accurate estimate of a loss of 20 cents and the Zacks Consensus Estimate of a loss of 25 cents.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: BioDelivery has a Zacks Rank #3, which increases the predictive power of ESP and together with a positive ESP, chances of beating estimates in the stock's upcoming release are always pegged higher.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

BioDelivery Sciences International, Inc. Price and EPS Surprise

BioDelivery Sciences International, Inc. Price and EPS Surprise | BioDelivery Sciences International, Inc. Quote

Other Stocks That Warrant a Look

Here are some other health care stocks with the right combination of elements to also beat on earnings this time around:

Gemphire Therapeutics GEMP is expected to release fourth-quarter 2017 results on Mar 21. The company has an Earnings ESP of +8.01% and a Zacks Rank #1.You can see the complete list of today's Zacks #1 Rank stocks here.

Aptose Biosciences, Inc. APTO is expected to report fourth-quarter financial figures on Mar 27. The company has an Earnings ESP of +20.00% and is a Zacks #3 Ranked player.

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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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