In a July 2 research note, analyst Jason Kolbert with H.C. Wainwright & Co. reported that Adamis Pharmaceuticals Corp. (ADMP:OTCBB) entered into a partnership with Sandoz, a division of Novartis AG (NVS:NYSE) to commercialize Adamis' Symjepi. Symjepi is a single dose injection of epinephrine for the emergency treatment of allergic reactions in patients weighing 66 pounds or more.
"While the deal took longer than expected, the term, a 50:50 split, is better than we anticipated," Kolbert noted. H.C. Wainwright's model on Adamis was updated to reflect the 50% royalty rate from the estimated 30%, resulting in an increased target price on the biopharma to $10 per share from $7. The stock is currently trading at around $4.50 per share.
Per the partnership agreement, Sandoz has the United States rights for Symjepi, which will include a pediatric version once it gains approval. This is likely to happen by the end of this year. Sandoz has the right of first refusal to sell the therapy in any ex-U.S. regions as well. "We see a great partner in Sandoz," noted Kolbert. "Sandoz is an established leader in the generic space and ideally positioned to compete with Mylan's EpiPen."
Along with Sandoz's capability as a "generic powerhouse," Kolbert purported that Symjepi should successfully compete with EpiPen because it is a "best-in-class product" and should be competitively priced. In comparison studies against EpiPen and other epinephrine-based products, such as Adrenaclick and Auvi-Q, Symjepi showed "superior injection reliability" and a higher preference rate among users.
Symjepi is expected to launch in late Q3/18 or early Q4/18, "in time for the 'back to school' season, which is typically a factor in ensuring proper inventory levels," Kolbert indicated.
H.C. Wainwright has a Buy rating on Adamis.
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Disclosures from H.C. Wainwright & Co., Adamis Pharmaceuticals Corp., Target Price Revision, July 2, 2018
I, Jason Kolbert, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Adamis Pharmaceuticals Corp. (including, without limitation, any option, right, warrant, future, long or short position).
As of May 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Adamis Pharmaceuticals Corp.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Adamis Pharmaceuticals Corp. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Adamis Pharmaceuticals Corp. as of the date of this research report.