BioDelivery Sciences International to integrate its Newark operations with company’s headquarters in Raleigh

BioDelivery Sciences International, Inc. (Nasdaq: BDSI), today announced the consolidation of the company’s laboratory and other operations in Newark, New Jersey to the company’s headquarters in Raleigh, North Carolina. BDSI will vacate its Newark facility by September 30, 2009.

This action was based in part on the company’s determination that the need for the Newark facility (which had served principally as the company’s laboratory for the formulation development of Bioral Amphotericin B) was no longer necessary now that Bioral Amphotericin B is in clinical development in the U.S. Bioral Amphotericin B is BDSI’s lead product candidate utilizing the company’s licensed Bioral drug delivery technology.

As part of this transition, Dr. Raphael Mannino, BDSI’s Executive Vice President and Chief Scientific Officer, will step down as an officer of the company and all four employee positions in Newark will be eliminated, for an aggregate savings to BDSI of nearly $1 million per year. Dr. Mannino’s employment agreement with BDSI will be formally terminated effective September 30, 2009.

The company also announced that it is in discussions with Dr. Mannino to potentially sublicense to Dr. Mannino or his affiliates specific and limited applications of the Bioral technology to develop certain therapeutics. This agreement will not include Bioral Amphotericin B, the rights to which will remain exclusively with BDSI. The terms of such sublicense are subject to ongoing negotiation between the parties and review and approval by BDSI’s board of directors. Dr. Mannino is the inventor of Bioral technology. BDSI does not anticipate making any financial investment in any potential sublicense agreement with Dr. Mannino.

Dr. Mark Sirgo, President and Chief Scientific Officer of BDSI, stated, “We continue to believe in the value of the Bioral drug delivery platform and, in particular, the significant potential for Bioral Amphotericin B. We believe our actions announced today will allow us to capture and progress the most advanced potential Bioral application in a more cost effective manner.”

Regarding Dr. Mannino, Dr. Sirgo stated, “On behalf of our board of directors and management, I want to sincerely thank Dr. Mannino for the significant contributions he has made to BDSI as the inventor of the Bioral technology and a founder of BDSI’s predecessor in 1995, as well as in his capacity as a long time officer and former director of the company. We look forward to continuing our discussions with Dr. Mannino on a potential sublicense of certain Bioral applications, which would allow him to continue his dedication to the advancement of this technology and also allow BDSI and its stockholders to potentially participate in the benefits thereof in the future.”