Sunday, June 7, 2009

This Could be the Week for Biodelivery Sciences (BDSI)

After weeks of speculation and volatile trading, the time may have finally arrived for an FDA decision on Biodelivery's (BDSI) lead drug candidate, Onsolis, a treatment for pain in cancer patients that utilizes Biodelivery's BEMA technology.

The stock closed last week at a new 52-week high (it seems to be doing that a lot lately) of $6.65 and approached the seven dollar mark in after hours trading.

The recent trading would indicate that investors are betting on approval. Just a few months ago BDSI was trading in the two dollar range before steadily climbing upwards as the FDA's decision date approached.

Methodical rises in price are routine for small pharma and biotech stocks as approval decisions approach, but often times the trading in the days just before the announcement will indicate which way the decision is going to go. Let's be honest, news is not supposed to leak in the investment world, but everybody knows that it does.

Nothing is a sure thing in the stock market world, but in my opinion, the odds are pretty good that Onsolis will gain approval this week and, depending on how the broad market is trading at the time, the stock price will hit ten dollars or higher.

While approval looks promising, it's also a good idea to protect your investment and take some profit while you can. If this rally turns out to be a head fake and Onsolis is not approved, your investment will drop significantly. By selling a small chunk of your shares now, you're guaranteed to have some gains no matter what happens. The biggest mistake investors make in the market, especially new investors, is getting too greedy and hesitating to realize profits when the opportunity arises.

That being said, I feel good about BDSI and I expect to hear news regarding the Onsolis decision by the weekend.

Disclosure: VFC is long BDSI.

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