BioDelivery Sciences International, Inc. - Mark A. Sirgo

• On 12:28 pm EDT, Tuesday October 20, 2009

67 WALL STREET, New York - October 20, 2009 - The Wall Street Transcript has just published its Biotechnology Report offering a timely review of the sector to serious investors and industry executives. This 70-page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Trend Toward Orphan Disease Drug Development - Generic Drug Competition - Current Length Of FDA Approval Process - Ownership Ego Preventing Shareholder Returns - IPO And Secondary Offering Window Opening - Big Pharma R&D Pipeline - Decreased Clinical Development Risk - Impact Of Health Care Reform - Convergence Of Large-Cap Biotech And Pharmaceutical Companies - Easier Credit For Small Cap Biotech Companies - Developments In Cancer Chemotherapeutics - Gene Delivery Technology

Companies include: ADVENTRX (ANX); Abbott Labs (ABT); Advaxis (ADVX); Amedisys (AMED); Amgen (AMGN); Amylin Pharmaceuticals (AMLN); Antares Pharma (AIS); BioDelivery Sciences (BDSI); Biogen Idec (BIIB); Biomarin (BMRN); Boston Scientific (BSX); Bristol Myers (BMY); CVS Caremark (CVS); Celgene (CELG); Cerner (CRN); Cerus (CERS); Coke (KO); CombiMatrix (CBMX); Coventry Health Care (CVH); DARA (DARA); Eisai (ESALY); Eli Lilly (LLY); GenVec (GNVC); Gilead (GILD); GlaxoSmithKline (GSK); Health Management Associates (HMA); Human Genome Sciences (HGSI); Inspire Pharmaceuticals (ISPH); Intellect Neurosciences (ILNS.OB); InterMune (ITMN); International Stem Cell (ISCO.OB); Javelin Pharmaceuticals (JAV); Johnson & Johnson (JNJ); Keryx Biopharmaceuticals (KERX); Kraft (KFT); MAP Pharmaceuticals (MAPP); Medco (MHS); Merck (MRK); Merit Medical (MMSI); Novartis (NVS); Novelos (NVLT.OB); Novo Nordisk (NVO); Nutrisystem (NTRI); OSI Pharmaceutical (OSIP); Orexigen (OREX); Pepsi (PEP); Pfizer (PFE); Rite Aid (RAD); Schering-Plough (SGP); Takeda (TKPHF); Teva Pharmaceuticals (TEVA); Viropro (VPRO.PK); Walgreens (WAG); Wyeth (WYE); XOMA (XOMA); ZIOPHARM (ZIOP).

In the following brief excerpt from the 70-page report, Mark A. Sirgo, CEO of BioDelivery Sciences International, Inc., discusses the outlook for the sector and for investors.

TWST: Tell us about your drug delivery systems.

Dr. Sirgo: We have two proprietary drug delivery systems in the company. One is BEMA, which we acquired from a company called Atrix Pharmaceuticals. The Bioral technology, which is the second platform, was developed internally. We use these to reinvent proven therapeutics. We take generic drug substances, and we place them in these technologies to create products that we think meet unmet market needs. We look towards the markets, and we have a particular focus in oncology supportive care and pain. So we try to apply the technologies to those two therapeutic categories, and that's what we have done with our current portfolio.

TWST: Are you looking at other markets where you may want to deliver pain medication quickly outside of the hospital environment, such as the military or ambulances?

Dr. Sirgo: Yes, we are currently exploring other potential indications. We don't have an indication to be used outside of cancer pain right now. But clearly, when you are out of the hospital environment, you may still need something that works very quickly. That absolutely would be another potential use for these types of delivery systems.

TWST: Do you have any partnerships at this time?

Dr. Sirgo: We are partnering on the commercial side on the first product, ONSOLIS. We've partnered with a company called Meda. They are going to be distributing ONSOLIS to oncologists and pain specialists. Our business model at this point is to use our drug delivery platforms to create products to meet unmet needs. We will take them through the regulatory process, and then we look to partner the products with companies that already have established a sales force. We would like to get into selling at some point in the future, but at this early stage it's just not cost effective to do that. So we have got a partnering model for the time being. The partnership is around the ability of Meda to commercialize or sell it. They don't make it nor did they develop it. We manufacture it and we completed all the clinical development work and got the product approved through the FDA. We then turned it over to them to market and sell it. BioDelivery Sciences owns the technology and Meda has the distribution rights to our first product.

TWST: There has been a lot of talk about health care reform and cutbacks in the pharmaceutical industry. Has that impacted your operations?

Dr. Sirgo: 2008 was probably the worst year in a long, long time for companies to try to raise any capital, and particularly for early-stage or development-stage companies. It was very difficult. We are fortunate that we had our first product, ONSOLIS, so far along, and we already had a commercial partnership established. That differentiates us from a lot of development-stage companies, many of which have now gone out of business because they couldn't raise capital to keep their companies moving forward. When the capital markets tightened, they typically looked for investment opportunities of low risk. Development-stage speciality pharma companies are not low risk, generally speaking. We were fortunate to get through 2008, but we did it because we had a product that was under review at FDA, and we had already established a commercial partnership. Because of this we didn't need to raise money, thankfully, but we're now in a position where not only is the market improving, but we had a nice milestone payment and royalty revenues to start shortly.

TWST: Looking ahead, what will the next several years look like for BioDelivery Services?

Dr. Sirgo: Number one, we expect that ONSOLIS will be a successful product, our first product that is going to be launched in October. And around that we will receive sufficient royalties to help us begin to build the company in a larger way. We discussed our pipeline briefly. We've got two other products right now in human testing, and we hope to have two more by the first half of next year. So we are using the proceeds from the partnership and from the sales of ONSOLIS to facilitate or accelerate our pipeline products, around which we would hope to secure other commercial partners. Ultimately, what we want to be able to do is create our own sales force so that we can retain more of the revenue from our products versus having to provide a large portion of that to our commercial partners. Looking out five years, we would like to become a fully integrated pharmaceutical company whereby we not only create and develop the products, take them through the FDA approval process, but we actually sell them. That's the big picture.

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