BioDelivery shares in meltdown after pain drug flunks PhIII placebo study

After the markets closed yesterday BioDelivery Sciences in Raleigh, NC put out a release detailing the late-stage failure of its pain drug, BEMA Buprenorphine. And despite the best efforts of the CEO and R&D chief to make it sound like nothing more than a bump in the road to final success, its shares ($BDSI) went into a nosedive, losing more than half their value.

The drug failed a simple standard in pain studies: Significantly beating out a placebo for pain relief. But CEO Mark Sigo focused on the positive findings, including a near-miss in the opioid experienced arm of the study. Now the biotech is planning a second late-stage study while continuing a hunt for a partner. The R&D chief put the trial failure down to an unusually high placebo response.

"We witnessed a high placebo response in the opioid naive segment of our patient population, particularly at our starting dose, which accounted for the overall lack of efficacy that was observed in this trial," said Dr. Andrew Finn, EVP of product development at BDSI. "This group of patients, who are not accustomed to taking opioids and prone to higher placebo effects, accounted for nearly two-thirds of the total study population. When we eliminate the BEMA Buprenorphine starting dose from the analysis, where the greatest placebo response occurred, particularly in the opioid naive group, we achieved a pain score difference between BEMA Buprenorphine and placebo that approached statistical significance (p=0.066). This starting dose 'phenomenon' is not dissimilar to what has been observed with other approved opioids."

CEO Sirgo went on to insist that the drug is still a winner which will eventually bring in $500 million a year.

"This opportunity has never been an 'if' but a 'when,' and this study affirms our belief in this regard," continued Dr. Sirgo.  "We continue to believe that BEMA Buprenorphine has the opportunity to be the first transmucosal product for the treatment of chronic pain to reach the marketplace. Our previously announced market projections for the product of $500 million in annual peak sales should not change based on the delay this outcome creates, and we will continue our ongoing partnering discussions in earnest, including the sharing of these results, which we believe should be viewed positively."

Words, however, failed to achieve what the data couldn't. By mid-day the stock price had dropped 56% to $1.33.

- here's the press release