Drug company BioDelivery Sciences International has more than doubled its cash hoard with a $40 million stock sale to institutional investors.
The Raleigh-based company has earmarked the cash it raised Monday to complete Phase 3 trials of its experimental treatment for chronic pain.
The money will also be used to complete the steps necessary to seek Food and Drug Administration approval of BNX, an experimental drug for patients dependent on pain medications, by the end of the second quarter of 2013. BioDelivery had $31.3 million in cash as of Sept. 30.
The company has projected that BNX could generate peak annual sales of $300 million.
BioDelivery sold 6.8 million shares of common stock for $4.21 per share and 2.7 million shares of convertible preferred stock for the same price.
“A telling sign is more than 70 percent of the shares went to investors who already own BDSI stock,” said Al Medwar, vice president of marketing and corporate development. “It is great to have your existing investors have that kind of confidence.”
Wall Street’s confidence has boosted BioDelivery shares more than 400 percent this year. The stuck plummeted below $1 in September 2011 when the company reported that its chronic pain treatment failed to outperform a placebo.
But BioDelivery, believing the results were skewed by patients unaccustomed to taking narcotics such as morphine and oxycodone, stuck with the drug – a decision that bore fruit when it signed a $180 million licensing deal for it at the outset of this year.
BioDelivery is in the midst of two Phase 3 trials of the pain drug that it hopes will demonstrate that its faith isn’t misplaced. One of those trials is expected to be completed in the third quarter of next year, while the second is on track to be completed in the fourth quarter of 2013 or early in 2014, Medwar said.
BioDelivery believes its pain drug could achieve peak annual sales of $500 million.
Currently, BioDelivery has one product on the market, Onsolis, an oral pain patch for cancer patients. Sales for the product have been disappointing to date.
The company is planning a “relaunch” of the drug in the wake of new regulations for narcotic painkillers that it believes will help improve sales.
BioDelivery shares closed Monday at $4.29, up 4 cents. Its shares started the year below a dollar and rose as high as $6.78 in October.