Before BioDelivery Sciences International (NASDAQ:BDSI) released early phase 3 clinical trial results showing its pain drug missed the primary target of its study, the company had gotten as far as term sheets and draft definitive agreements with pharmaceutical companies interested in a partnership to commercialize a new pain treatment whose sales were projected to top $500 million.

BDSI stands by those sales projections and this morning in a conference call with analysts to discuss the trial results, CEO Mark Sirgo said he sees no reason why partnering discussions should not continue.

“When you look across the pain category, this represents one of the few opportunities of this magnitude,” Sirgo said.

Raleigh-based BDSI has not yet discussed the latest results with the prospective drug partners. Partnering discussions could resume as early as next week. But Sirgo said the potential drug partners are experienced in the pain drug space, understand the issues that BDSI has encountered in clinical trials and know how to work with “the nuances” of opioid drugs. (Read an earlier report here.)

BDSI released preliminary trial results late Wednesday showing that BEMA Buprenorphine did not perform better than a placebo in relieving pain. That placebo effect was highest in patients who have never taken opioid medication before, said Dr. Andew Finn, BDSI’s executive vice president of product development. This effect was most pronounced in the lowest dose group and is common with other opioids, Finn said. When the lowest dose group is removed from the results, near statistical significance for the drug is achieved. Finn declined to say what the dosage levels were for competitive reasons.

BDSI plans another BEMA Buprenorphine phase 3 trial and the company believes adjustments to the trial’s design will lead to statistical significance in pain relief. The changes could include keeping patients at the starting dose for a longer period of time or forcing patients to the next dose level before proceeding to the randomization stage of the study.

“We believe we understand the problem and how to fix it,” Sirgo said.

BDSI aims to make BEMA Buprenorphine the first buprenorphine product with transmucosal delivery. Buprenorphine is already a Food and Drug Administration-approved drug for pain treatment. But BDSI’s buprenorphine candidate uses the company’s bioerodible mucosal adhesive technology – a small piece of film placed on the inside of the cheek that quickly delivers a drug dosage as it dissolves. BDSI’s technology works. It has already been approved for Onsolis, a product that BDSI developed for breakthrough cancer pain. The company is also studying its technology as a treatment for opioid dependence; a new drug application on that drug candidate is expected in early 2012.

A second BEMA Buprenorphine trial will take about nine months and cost an estimated $8.5 million. Sirgo said that through the end of the second quarter of this year, BDSI has $21 million in cash and enough money to last through the second quarter of 2012 without any cutbacks. Sirgo said he hopes to avoid turning to the capital markets to raise money. The second phase 3 trial could start in the first quarter of 2012.

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