Miami, FL – September 14, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Adams Pharmaceutical Corp. (NASDAQ: ADMP).
Following the approval of US Food and Drug Administration (FDA)for generic giant Teva Pharmaceuticals (NYSE: TEVA)to sell its generic Epinephrine Auto-injector, investors were quick to sell Adamis Pharmaceutical Corp. (NASDAQ: ADMP) shares.
The market’s reaction to the news, however, was expected. Investors have grown wary over Adamis’ ability to commercialize their lead product Sympjepi.
It did not help that ADMP’s management has kept investors in the dark, with their failure to communicate key company developments. Apparently, Adamis’ CEO Dennis Carlo Dennis Carlo seems indifferent towards investors, with no clear plans to improve the company’s communications. While the company did provide some recentbusiness updates, there was nothing new in their disclosure – including the ability of their commercial partner Sandoz to bring the product to the market, nor did they discuss Sympjepi’s potential advantages over other existing Epinephrine products in the market.
Cost of Delay
On 15thJuly 2017, ADMP disclosed that the company received an FDA approval on their lead product, an Epinephrine Pre-filled Syringe called Sympjepi. The product is used for the emergency treatment of Type I allergic reactions including anaphylaxis. Management said that Sympjepi is a solid contender in the Epinephrine market, based on anticipated lower cost, small size, and user-friendly design.
When it normally takes just a few months for a developmental biotech company to finalize a commercial agreement, it took Adamis a year to secure a partnership agreementwith Novartis’s (NYSE: NVS) generic arm Sandoz. The delay also highlighted management’s incompetence and raised concerns over their ability to bring Sympjepi to market.
On the other hand, the recent FDA approval on TEVA’s application to sell its Epinephrine Auto-injector provided a good head start against ADMP, as TEVA could immediately attempt to eat up market share from the dominant leader, Mylan Pharmaceuticals (NASDAQ: MYL).
Another cost of delay is their dwindling cash reserves. Given the company’s significant spending on developmental products, its financial resources were near depletion. Accordingly, management was forced to dilute existing shareholders with an additional $35 million offering. Moreover, Sandoz is expected to provide an upfront fee payment to Adamis, which could also boost the company’s coffers. All being said, the cash burn issue has been addressed, and should not concern investors at this juncture.
Strong Market Potential
Despite the commercialization delays and other management concerns, there is a substantial opportunity for ADMP in the Epinephrine market. Based on recent industry studies, the global Epinephrine Auto-injector is expected to grow steadily at a compounded annual growth rate of 15% through 2021. One of the major drivers is the increase in the prevalence of allergies in food items, food additives, and dust, especially in industrially developed countries such as the US and the United Kingdom. Moreover, Epipen supply shortage issuesbode well for a low-cost alternative product such as Sympjepi to hit commercial success in this market.
ADMP could easily register global sales of $100 million in the medium term, assuming a modest 10% share in the Epinephrine market. At these sales level, ADMP could be worth $8.20 per share, based on 2.7x average industry sales multiple, and could double from current price levels.
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