Last Updated on January 15, 2019 by Sultan Beardsley
Admais Pharmaceuticals (Nasdaq: ADMP) was down 20% at one point yesterday after missing revenue expectations by $1.43 million and a downgrade from buy to neutral by a B.Riley/FBR analyst who slashed the price target from $7.50 to $2.50. ADMP held its ground though closing at $2.62.
The analysts rationale was not completely unfounded. A $1.43 million revenue miss is not a drop in the bucket. On top of that ADMP’s lead product Symjepi .30 has been FDA approved since June of 2017, but has not launched. It took a year for Admais to secure Sandoz as a commercialization and distribution partner. Then almost 5 months later and after approval of Symjepi .15 mg in September of 208 neither product has made it to market.
Demand for epinephrine delivery devices are high and a commercial launch delay in a competitive market environment has shareholders questioning managements competency. Specifically Admis’s CEO Dennis J. Carlo. Many are even calling for his resignation. That said, there are positives factors at play that could strengthen ADMP’s share price in end of 2018 and in 2019.
Two More NDA’s In 2018
ADMP maintains that they plan to file two more NDA’s this year; one for a sublingual tadalafil (cialis) and the other a Naloxone prefilled syringe. Each filing should be a mini-catalysts of sorts. Unlike epinephrine delivery devices there is only one commercial Naloxone applicator, Narcan. And as everyone knows the U.S. is amid an opioid epidemic. At the moment, Narcan is the only product fulfilling the antidotal need to reverse overdoses. ADMP’s naloxone prefilled syringe uses the same proprietary symject technology as the Symjepi epinephrine products. Therefore, it stands to reason odds of approval are about the same as they were for Symjepi .15 mg. So, in the not to distant future ADMP and sandoz could have incoming revenue from the Symjepi line, and two more NDA filings with good chances of approval.
The markets ADMP is penetrating are large and growing. Within the next 6 years the epinephrine auto-injector markey should reach $2.4 billion. The largest share of the market currently belongs to Mylan and their Epipen. Other companies though are encroaching on their market share offering comparable products for less money. If ADMP’s prefilled syringe is well received it could capture a sizable piece of the pie. The same goes for their sublingual cialis. Erectile dysfunction affects nearly 70% of men in their 70’s and 40% of men at age 40. It’s market value is expected to reach $3.2 by 2022. Let’s not forget U.S Compounding (USC) is actively pursuing indications in the veterinary space which opens a whole new market landscape.
U.S. Compounding Performance
Part of the logic behind the analysts downgrade of ADMP yesterday does not quite make sense to me. He stated that the compounding facility’s performance has been “lackluster”. Though from 2017 to 2018 the company increased revenue 11.6%, much of which was attributable to increased sales of pharmaceutical formulations from said compounding facility. It appears this is B.Riley analyst is relatively alone in his position. The consensus rating from 6 top firms covering ADMP is a buy rating and a price target of $8.63. The highest expectations are by Maxim Group who reaffirmed a buy rating and slapped on a $13 price target. The lowest of the 6 was by H.C Wainwright who assigned a $7 target and a buy rating.
The bottomline is there is much in the works and much to be seen with regards to ADMP’s product performances on the market, both human and veterinary. If they’re impact proves disruptive and lucrative for ADMP a buyout could be in the stars. Investors just need to be patient now and see how things unfold.
I am long ADMP