BioDelivery Sciences International has entered into an agreement with Endo Pharmaceuticals, Inc. (Endo) terminating their licensing of rights for BELBUCA™ (buprenorphine) buccal film. This transaction follows a strategic decision made by Endo regarding their U.S. branded pain business.
As a result of the agreement, the world-wide rights to BELBUCA will be transferred back to BDSI. While specific financial terms of the agreement have not been disclosed, the total cost of the transaction to BDSI will not materially impact BDSI's cash flow going forward. Furthermore, BDSI will not be responsible for future royalties or milestone payments to Endo, and Endo will not be obligated to any future milestone payments to BDSI. The agreement goes into effect on January 6, 2017.
The return of BELBUCA immediately adds additional topline revenue and is expected to be accretive by improving BDSI's net income and earnings per share in 2017. The recent annual run-rate for BELBUCA gross sales exceeds $27 million based on the most recent available monthly sales data.
"We respect Endo's strategic decision regarding its U.S. branded pain portfolio and appreciate its role in bringing BELBUCA to the market," said Dr. Mark A. Sirgo, President and Chief Executive Officer of BDSI. "While this change in direction is not what we originally envisioned for BELBUCA, Endo has laid a significant foundation for BELBUCA, and in so doing, has created a significant opportunity for BDSI. We recognize the hard work put forth by both companies since we entered our licensing and development agreement in 2012, and we appreciate the exceptional working relationship that has existed. We look forward to Endo's support behind the upcoming transition."
While BDSI plans to provide additional details on its commercial plans for BELBUCA at an event in late January, significant physician targeting work has identified the early and most likely adopters of BELBUCA. BDSI will initially leverage its existing sales force and capitalize on commercial synergies with BUNAVAIL for a focused commercial approach targeting identified healthcare providers which BDSI believes creates the potential to incrementally grow BELBUCA sales without the requirement of significant resources. BDSI will also explore other options for longer-term growth for BELBUCA both within and ex-U.S.
Given the greater long-term commercial and profitability opportunities with BELBUCA, BDSI will transition its primary commercial emphasis to BELBUCA while BUNAVAIL efforts will be limited to current BUNAVAIL prescribers and on driving sales from upcoming and future managed care contracts.
Dr. Sirgo concluded, "We believe BELBUCA is well positioned to provide healthcare providers and their patients a responsible solution for the treatment of chronic pain while also addressing the widespread concerns over the growing problem of opioid abuse, addiction and overdose in this country. BELBUCA provides important patient benefits and is well differentiated from other opioids. And as such, we believe BELBUCA has promising growth potential and the ability to add tremendous value to our company."