BioDelivery Sciences International, Inc.

Q3 2021 total net revenue was $41.1 million, up 4% from $39.4 million a year ago and at the high end of the recently provided $38 million to $42 million range. Excluding the Q3 2020 channel refresh and BUNAVAIL, total net revenue growth was 29% year over year; total product net revenue for BELBUCA and Symproic combined was up 7.5% year over year, or 32% excluding Q3 2020 gross-to-net accruals. BELBUCA net sales were a record $36.9 million, up 6% year over year, and Symproic net sales were $4.1 million, up 20% year over year. Gross margin was 85% versus 86% in Q3 2020 and 89.7% in Q2 2021; management said margins should be in the mid-80s going forward. GAAP EPS was $0.07 versus $0.09 in Q3 2020, and GAAP EPS beat consensus by $0.02. EBITDA was $11.1 million, or 27% of net sales, and operating cash flow was approximately $7 million. Cash and cash equivalents were $100.7 million at September 30, 2021. Full-year 2021 guidance was lowered to total net revenue of $162 million to $167 million from $170 million to $180 million previously; BELBUCA net sales guidance was reduced to $144 million to $148 million from $155 million to $165 million. Operating expenses are expected to be $115 million to $120 million, EBITDA is expected to be at the lower end of the $40 million to $50 million range for the ongoing base business and below $40 million including ELYXYB investments, and the company still expects positive operating cash flow in 2021. ELYXYB long-term net sales are projected at $350 million to $400 million, including preliminary estimates for a pediatric label expansion.

Jeff Bailey framed the quarter as a transition period with three themes: continued growth in the core pain business, improved operating efficiency, and the addition of ELYXYB as a third growth driver. He said the BELBUCA disruption from Alvogen is fading, highlighted all-time highs in BELBUCA share and prescribers, and expressed confidence in the team’s execution under unusual market conditions. His tone was upbeat and strategic, emphasizing portfolio diversification into neurology and the company’s ability to leverage its existing commercial infrastructure.

Terry Coelho focused on the quarter’s financial performance and balance sheet strength. She cited $41.1 million of revenue, 85% gross margin, $11.1 million of EBITDA, $6.7 million of GAAP net income, and $10.3 million of non-GAAP net income, along with $100.7 million in cash and $27.3 million of year-to-date operating cash flow. She also detailed uses of cash in the quarter: a $20 million early, penalty-free debt prepayment that should save about $4.4 million of interest, and a $6 million upfront payment to Dr. Reddy’s for ELYXYB. She said gross margins should stay in the mid-80s and noted that operating expenses remain elevated because of launch preparations for ELYXYB.

Analysts pressed management on the size and persistence of the Alvogen-related BELBUCA disruption, and Jeff Bailey said the impact is still present but declining, with the team having moved quickly to address payer and compendia issues. Several questions focused on the pain market’s weakness, especially face-to-face patient visits, and management said those visits remain far below pre-COVID levels, which limits switching and new starts even though the market appears more stable sequentially. Analysts also asked about the ELYXYB launch ramp, formulary timing, telemedicine, and gross-to-net pressure; management said payer contracting is being worked through in stages, they expect early launch friction and higher gross-to-net deductions, and they are pursuing telemedicine platforms and digital channels but still see face-to-face visits as the main driver for BELBUCA switching.