BioDelivery Provides Corporate Update And Reports Second Quarter 2016 Financial Results
RALEIGH, N.C., Aug. 9, 2016 /PRNewswire/ -- BioDelivery Sciences International, Inc. (NASDAQ: BDSI) today reported financial results for the second quarter ended June 30, 2016, and provided an update on recent business highlights and upcoming milestones.
BDSI's total net revenue for the three-months ended June 30, 2016, was $5.0 million, an increase of 65% over the first quarter of 2016 and an increase of 189% over last year's corresponding quarter. BUNAVAIL (buprenorphine and naloxone) buccal film (CIII) net revenue for the three months-ended June 30, 2016 was $2.1 million.
BUNAVAIL prescription sales remained stable in the second quarter from the prior quarter despite BDSI's previously announced sales force consolidation and restructuring in May, while overall unit (film) sales increased 2%.
Net revenue per BUNAVAIL prescription increased in the second quarter over the first quarter of 2016, which is expected to continue through 2017. Cost of goods (COGS) decreased 16% due to the transition to a high-speed packaging line in May and are expected to improve an additional 30% by the end of 2017. As a result of the aforementioned improvements, the gross profit for BUNAVAIL improved by nearly 200% in the second quarter versus the first quarter.
Operating expenses decreased by $1.9 million from $18.4 million in the first quarter to $16.5 million in the second quarter. BUNAVAIL commercial costs remained comparable between quarters due to one-time expenses related to the consolidation and transition of the sales force from Quintiles to BDSI in May. However, savings of approximately $3 million per quarter are expected to be realized beginning with the third quarter of this year.
Managed care contracts remain central to the future growth of BUNAVAIL, and two important new agreements were finalized recently. As announced in July, BDSI secured access to a commercial plan that will allow BUNAVAIL to move from its current non-formulary position to a preferred formulary position within this plan, while the current market leader is made non-preferred. The other branded buprenorphine/naloxone product will share preferred status with BUNAVAIL. This contract will go into effect on January 1, 2017, though the transition may begin sooner for some plans under the agreement. Additionally, and not previously announced, BUNAVAIL has been added to a second plan where it will replace Zubsolv and share preferred status with Suboxone film. BDSI did not previously have access within either plan.
Progress was made this past quarter in enacting important legislation increasing patient access to treatment for opioid dependence, which began with the final ruling by the Department of Health and Human Services (HHS) which increased the cap from 100 to 275 patients an individual physician can treat with buprenorphine. This ruling went into effect yesterday. HHS estimates that this could expand access to up to 90,000 additional patients in the first year following implementation which could translate into over half a million additional prescriptions. It is anticipated that participating doctors will begin having an impact on the prescription market starting in the fourth quarter of this year. Additionally, the President recently signed new legislation, referred to as the Comprehensive Addiction and Recovery Act, or CARA, which further expands access to care including allowing nurse practitioners and physician assistants to prescribe buprenorphine and provides funding for grants to expand access to medication assisted treatment.
"We are focused on bringing BUNAVAIL to profitability by the end of 2017 and made significant advances in that regard during the quarter," said Dr. Mark A. Sirgo, President and Chief Executive Officer. "Our plan for bringing our commercial expenses more in line with our revenue began with the restructuring and consolidation of the sales force in May around high performing and future growth territories. This will result in the elimination of approximately $20 million in expenses through the end of 2017. We are actively seeking to drive BUNAVAIL prescription growth by improving our position on or securing additional managed care contracts as well as initiatives focused on driving more patients to BUNAVAIL in conjunction with the lifting of the patient cap and our direct to patient program. Simultaneously, we will continue efforts to improve our operating margins as we strive to achieve our goal of bringing BUNAVAIL to profitability by the end of 2017."
Dr. Sirgo concluded, "Regarding the rest of our portfolio, we continue to be optimistic about the long-term success of BELBUCA based on both the considerable commercial and post-marketing effort that our partner Endo is putting behind the launch and initial favorable reports from healthcare providers and patients. BELBUCA also has favorable managed care receptivity and coverage.
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