BioDelivery Sciences pain drug fails study, shares plunge

By Samantha Kareen Nair (Reuters) - BioDelivery Sciences International Inc said its pain drug failed to meet the main goal of a late-stage study, sending the drugmaker's shares down nearly 30 percent. The company said its Clonidine topical gel was not effective against a placebo in treating painful diabetic neuropathy, a condition that damages nerves in the legs and feet. "Based on the results of our previously announced positive interim analysis, this outcome was unexpected," said Andrew Finn, BioDelivery's executive vice president of product development. Janney Montgomery Scott LLC's Chiara Russo said the fall in share price was overdone as the company is developing another promising pain drug. "The Clonidine gel for me was only a 'buck' worth of my fair value. The main drug for us is obviously going to be the pain product that was partnered with Endo," Russo said. Biodelivery, which is developing an opioid treatment with Endo International Plc, submitted an application with the U.S Food and Drug Administration in December to market the drug. Russo said about 20-50 percent of the 26 million diabetic patients in the United States experienced neuropathy pain and estimated that the market for treatments like Clonidine gel could be worth over $100 million. Roth Capital analysts said they expect that this setback could delay the Clonidine gel program by 1-1.5 years. BioDelivery's shares were trading at $10.09 on the Nasdaq on Monday morning. Up to Friday's close, the stock had risen 73 percent in the past 12 months. (Reporting By Samantha Kareen Nair; Editing by Saumyadeb Chakrabarty and Savio D'Souza)