In an Aug. 23, 2018 research note, analyst Jason Kolbert with H.C. Wainwright & Co. indicated the recent weakness in Adamis Pharmaceuticals Corp. (ADMP:OTCBB) shares is an opportunity.
The lower share price resulted from the announcement that Teva Pharmaceuticals received U.S. Food and Drug Administration (FDA) approval to begin selling a generic version of Mylan's EpiPen. "The good news is that Sandoz, Adamis' partner, is well aware of Teva's initiatives and remains committed to the launch of Adamis' Symjepi," Kolbert noted. "We hope to see Sandoz aggressively launch Symjepi in time for the 'back to school' season."
Kolbert explained that while Teva's generic EpiPen "is a competitive threat," Adamis' Symjepi has "critical advantages" over it, including its small size, reliability and manufacturing cost. The cost to produce Symjepi is estimated to be lower than that for Teva's product, which should afford Adamis some flexibility in the consumer price to compete.
Symjepi will likely be adopted more in the professional market, which includes hospitals, institutions and the military, whereas generic EpiPen may be strongest in the retail segment. Also, Adamis' partner on Symjepi, Sandoz is well positioned as a market leader in generics to compete with Teva's new product.
In the report, Kolbert covered other recent news. For one, Adamis received FDA approval to start its Phase 3 trial for the beclomethasone metered dose inhaler. The start of enrollment is scheduled for Q4/18.
Two, the company raised $40 million ($40M) in capital by selling 13.3M shares at $3 apiece. Current cash on the balance sheet, wrote Kolbert, is an estimated $38M.
Three, Adamis reported its Q2/18 financials. During the quarter, the company generated $3.9M in revenues from its compounding pharmacy business, which was as expected.
Expenses "were high," Kolbert pointed out, $4.8M for research and development and $6.3M for general and administrative. The latter was due in large part to the company working on two new drug applications, for Naloxone and sublingual tadalafil.
Adamis' Q2/18 net loss was $9.7M, or $0.29 per share.
H.C. Wainwright adjusted its model on Buy-rated Adamis, accounting for the new shares issued during the capital raise. This led to a decrease in its target price on the biopharma to $7 per share from $10. In comparison, the stock is trading now at around $2.77 per share.
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Disclosures from H.C. Wainwright & Co., Adamis Pharmaceuticals Corp., August 23, 2018
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
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 July 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 receive compensation from Adamis Pharmaceuticals Corp. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Adamis Pharmaceuticals Corp. during the past 12 months.
The Firm does not make a market in Adamis Pharmaceuticals Corp. as of the date of this research report.