BDSI faces cash crunch if FDA denies drug
Triangle Business Journal - by Chris Coletta
BioDelivery Sciences International, a Raleigh drug company hoping to win U.S. approval later this year for its lead product, has enough money to last only a few more quarters. But help could be on the way in the form of U.S. regulatory approval of BDSI's lead product.
BDSI's annual report contains a "going concern" statement from auditors - essentially a warning that the company's financial situation means there's a risk that it could go out of business.
Specifically, the report says, BDSI had about $16.6 million in cash and a certificate of deposit as of Dec. 31, 2007 - enough to last through just the third quarter of 2008. The company also had a negative stockholders' equity, meaning that its liabilities outweighed its assets.
The solution? In a press release, BDSI (NASDAQ: BDSI) says it hopes to get out of the quandary through U.S. Food and Drug Administration approval of BEMA Fentanyl, the company's mouth patch that would treat severe, acute pain in cancer patients.
An FDA decision on whether that drug can hit the market is expected Aug. 31, 2008. If the FDA approves the treatment, BDSI is scheduled to receive a $30 million payment from its commercial partner on the drug, Swedish company Meda. It also would receive royalties on sales of the drug, for which BDSI estimates the annual market at $250 million.
If the FDA doesn't give the drug the green light, BDSI says, it will need to turn to outside investors for money - not a sure bet.
"If additional financing is not available when required or is not available on acceptable terms, we may be unable to fund our operations and planned growth, develop or enhance our technologies, take advantage of business opportunities or respond to competitive market pressures," BDSI says in its report.
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