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Joe Springer
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  • The Adamis Family 31 comments
    Apr 9, 2014 3:01 PM | about stocks: ADMP

    Email joespringernews@gmail.com to be added to my free newsletter, sent this out yesterday morning:

    Hey guys,

    I wanted to give you a heads up that I am working on an in-depth article on Adamis Pharmaceuticals (OTCQB:ADMP).

    Adamis is similar to Tonix in that they just raised funds/reverse split/uplisted to Nasdaq, and also did a reverse merger to go public so they never had an IPO (or the accompanying fanfare). Like Tonix they are also bringing their products along the 505(b)(2) path to approval.

    Some key points:

    1) Epinephrine PFS - Adamis should announce an NDA for their first product this quarter, an epinephrine pre-filled syringe, which has an excellent chance to be approved in early 2015.

    This product will compete with the epi-pen, which is sold in packs of two for almost $400, and goes bad after about a year. The market in the US is almost $1 billion, and one nice thing about this is that Adamis intends to bring it to market by themselves, targeting hospitals and institutions with about 10 of their own salespeople (rather than primary care physicians with an army sales people), as a lower cost alternative to the epi-pen.

    Doctors and nurses are not squeamish, and the epi-pen was designed for people that don't like to see the needle. We think a lower cost alternative could take a lot of market share, and the syringes are not complex or expensive to make. This can generate revenues starting next year, and has an excellent chance for approval in that epinephrine is already approved and this is not a new formulation. Even if Adamis only gets a small share of the market it would represent a lot of revenue.

    2) APC-5000 - Adamis acquired the rights to a 3M Dry Powder Inhaler to compete as a branded generic alternative to the Advair Diskus device in asthma and chronic obstructive pulmonary disease (COPD). This DPI technology is superior to the current Advair device, and Advair comes off patent in early 2016. How is business for Advair? It's doing $8 billion in annual global sales, $4 billion in the US. Again this is low risk in that the drug is already approved, the inhaler just needs to perform, and 3M's products have one of the best records in inhaler approvals.

    APC-5000 is the big upside for Adamis, and could ultimately surpass a billion in annual revenue. This one screams for a partner - the market is vast and a superior product could take a lot of share. Adamis will run its first trial this year, and is targeting 2016-17 for approval.

    3) A deep pipeline - Adamis also has APC-1000, an inhaled oral steroid, to compete as a low cost alternative with QVAR. QVAR does $1 billion in annual sales in asthma and COPD, and comes off patent next July. Adamis will run a phase 3 trial in the second half of this year, and should apply for approval next year. Again this is not a new formulation so the approval risk is very low.

    They also have APC-3000, a gas-propelled nasal treatment for allergic rhinitis to compete with unpleasant liquid treatments, which could be up for approval by 2017.

    Additionally they have four cancer vaccine technologies that seem to be on the back burner for now, but represent an interesting call option - the patents were funded with $18 million in federal grants and were thought enough of to be litigated over in court.

    4) Value - 27 institutions recently funded Adamis at $5.95 per share, including reputable Sabby and Special Situations, the recent biotech pullback really pulled Adamis down and it is currently trading at a discount to that funding.

    Fully diluted Adamis has 14 million shares. If we use MAP Pharma as a comparison (got bought out last year, did an early partnership for development) and value Adamis at 2X peak revenues (assuming approvals, which are likely), then the share price can go much higher. A quarter billion in sales is hardly out of the question, and a $500 million market cap means $35.71 per share, and that could just be the beginning, especially in the Advair market.

    The two analysts that have initiated coverage have a $15 price target:

    http://a.eqcdn.com/harbingerresearch/media/5ab8dc06408349398a81d4d2958f641c.pdf

    https://docs.google.com/file/d/0Bwgu6jYVrAKiOW9xbFBPVzBCOWZMN0s0bGYxbk9KZmpXRzhr/edit?pli=1

    Attached you can find the latest investor presentation, and here is the latest quarterly report:

    http://www.sec.gov/Archives/edgar/data/887247/000138713114000542/admp-10q_123113.htm

    Please do your due diligence on this one if you like it, I like it but there are no guarantees,

    All the best,

    Joe

    Disclosure: I am long ADMP.

    Stocks: ADMP
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Comments (31)
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  • Bio Bull
    , contributor
    Comments (227) | Send Message
     
    Adamis Family... that one practically wrote itself :) Will be a challenge coming up with more like that!
    9 Apr, 03:06 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » It edged out "Levine" and "Lambert" : )
    9 Apr, 03:11 PM Reply Like
  • James W. Burke
    , contributor
    Comments (32) | Send Message
     
    Joe - Looking forward to your article. Here's a link to my ADMP article published back in November:

     

    http://bit.ly/1g7Vwgi

     

    Nice to see others climbing aboard. This one is a keeper.
    9 Apr, 03:39 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » Thanks James, I liked your article, nice early find!
    9 Apr, 03:43 PM Reply Like
  • Ocean Man
    , contributor
    Comments (536) | Send Message
     
    Is that Guy Adami's family?
    9 Apr, 04:44 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » That's a good one OM, I'll have to work that in!
    9 Apr, 04:49 PM Reply Like
  • User 7639241
    , contributor
    Comments (15) | Send Message
     
    when can we expect this article ? have you finished writing it ?
    thanks.
    9 Apr, 06:57 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » I am working on the article but don't have a timetable, it will be a little while.
    9 Apr, 07:02 PM Reply Like
  • Justreward
    , contributor
    Comments (111) | Send Message
     
    Hi Joe,

     

    I've been slowly building a position in ADMP over the past couple of months. Won't bother me none if you're not in a rush. :)

     

    Have a great day!
    10 Apr, 04:28 AM Reply Like
  • sheldond
    , contributor
    Comments (1024) | Send Message
     
    Adamis not Eve's .....forbidden fruit

     

    I got nuthin.

     

    Nice pick.

     

    D
    9 Apr, 10:11 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » Yeah I played with the Adam/Eve thing, didn't do any better : )
    9 Apr, 10:16 PM Reply Like
  • Brooks Was Here
    , contributor
    Comments (28) | Send Message
     
    Doesn't seem to be much downside from here Joe, only one way to go! (very similar to TNXP when you initially covered/uncovered)

     

    People won't want to Ada"mis" this one - too much?

     

    Thanks again!

     

    Brooks
    10 Apr, 11:17 AM Reply Like
  • denann
    , contributor
    Comments (7) | Send Message
     
    Hey Joe, awesome that you are writing this article. Reading your blog, you show (OTCQB:ADMP) instead of NASDAQ. Also adding up the fully diluted shares, I can on only come up with 11.8 million. And didn't Adamis fully acquire the 3M DPI? Thanks. and looking forward to your article...I'm very long ADMP since January.
    10 Apr, 01:38 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » Thank you denann, yeah I saw that ticker, Seeking Alpha automatically does that, I'll email them to update Adamis.

     

    With warrants it comes to 14:

     

    http://1.usa.gov/R6tLPT

     

    Yes they fully have the rights - "Adamis acquired the rights to a 3M Dry Powder Inhaler"
    10 Apr, 01:43 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » Emailed SA RE: OTC
    10 Apr, 01:45 PM Reply Like
  • Jeb Walport
    , contributor
    Comments (242) | Send Message
     
    Is the 3M dry powder inhaler already approved by the FDA?
    13 Apr, 09:37 AM Reply Like
  • homerun
    , contributor
    Comments (39) | Send Message
     
    It seems the obvious potential partner/buyer screaming for ADMP would be TEVA...eventually.
    14 Apr, 11:11 AM Reply Like
  • brichnyc
    , contributor
    Comments (33) | Send Message
     
    Teva would buy OPKO who just bought Inspiro Medical who has a similar product and device.
    22 Apr, 03:37 PM Reply Like
  • Kevin Townsend
    , contributor
    Comments (2) | Send Message
     
    Hey Brichnyc. The Inspiromatic is an electronic device that uses a bunch of components like micropumps, sensors, processors, and USB interfaces to make sure that people who are unable to use a dry powder inhaler properly, get the correct dosage. Such people are currently serviced by measured dose inhalers not dry powder inhalers. The additional layers of complexity will likely make it more expensive than current inhalers.

     

    Whereas the Adamis's delivery device uses 3M's "blister strip" technology to eliminate the need for excipients such as lactose to keep the powder intact until use. The removal of exipients improves drug delivery efficiency. Thereby, reducing the amount of drug required. No fancy electronic gadgets needed. It seems reasonable to assume it will not only be better than the current dry powder inhaler but also significantly less expensive.

     

    So yes they are both new inhaler technologies. But they are targetting very different portions of the market.
    5 May, 06:32 PM Reply Like
  • Jake Wang
    , contributor
    Comments (2) | Send Message
     
    Joe- looking forward to your article. Advair has a $7.7B market globally now. Once the patent comes off, will GSK have to charge a fraction of what they do now facing the competitions including ADMP. If this is the case, the market will be significantly smaller. Does ADMP have exclusive right to the 3M device?
    14 Apr, 09:22 PM Reply Like
  • Jake Wang
    , contributor
    Comments (2) | Send Message
     
    Joe- looking forward to your article. Advair has a $4B US market but once the patent comes off, GSK can only charge a fraction of what they used to, considering generic competitions. How big will the market be then? Also, does ADMP have exclusive right for the 3M device?
    15 Apr, 07:59 AM Reply Like
  • Pmony
    , contributor
    Comments (31) | Send Message
     
    Jake Wang Advair has been off patent since 2010 & NO generic competition yet as barriers to entry ( dry inhaler) & dual drug have been major hurdles that Teva & others have failed to accomplish. 3M has built a better product then Glaxos diskus which by the way comes off patent late 2016. ADMP owns the dry inhaler asset from 3M with 3M retaining all manufacturing rights & IT property related to their tape inside the inhaler. ADMP can now out license their dry inhaler to other co.s if they desire. Due to the high barriers to entry I believe Advair & generics will still command a hefty price & high value market.
    15 Apr, 08:56 AM Reply Like
  • Brooks Was Here
    , contributor
    Comments (28) | Send Message
     
    Tough day at the office!
    15 Apr, 01:00 PM Reply Like
  • User 7639241
    , contributor
    Comments (15) | Send Message
     
    Are we expecting article soon ?
    17 Apr, 10:48 AM Reply Like
  • Brandon H.
    , contributor
    Comments (3) | Send Message
     
    Don't slamis Adamis or Harold Ramis, Ga'll Damis:)
    24 Apr, 04:30 PM Reply Like
  • gibbiesmalls
    , contributor
    Comments (6) | Send Message
     
    Aren't those two analysts that recently started "coverage" paid for? In other words, Adamis is a client of Harbinger Research and paid to have this "analysis" done. It's also the reason why they're listed as "Clients" in Harbinger Researches website.

     

    http://bit.ly/1rw6Cmx

     

    I realize it's not uncommon for companies to pay for this type of service, but I've always found it to be very questionable.

     

    Additionally, looking at Harbinger's recent "initiated coverage" and the stocks performance since those "Strong Buy" ratings leaves a lot to be desired.

     

    Full Disclosure: just doing due diligence
    26 Apr, 08:17 AM Reply Like
  • Bio Bull
    , contributor
    Comments (227) | Send Message
     
    Hi Gibbie,

     

    Correction to your due diligence there - please see the disclaimer of the Harbinger report (2nd sentence). The research was not paid for by Adamis, but instead was paid for by a 3rd party. A 3rd party conducting due diligence isn't unusual in the business world, and I wouldn't be surprised if it were one of the institutions who own ADMP.
    26 Apr, 11:56 AM Reply Like
  • gibbiesmalls
    , contributor
    Comments (6) | Send Message
     
    Thank you sir.

     

    Wonder why then they'd be listed as clients on their website.
    27 Apr, 04:46 AM Reply Like
  • Bigfella44
    , contributor
    Comments (3) | Send Message
     
    Joe,

     

    Thanks for your research. Is the supply agreement been finalized between 3M and ADMP to your knowledge? I found the sales agreement online with 3M, but cannot locate teh supply agreement. Seems this will be key. Story seems a bit too good to be true, as I cannot figure out why someone wouldn't easily outbid ADMP for the 3M technology. I know big Pharma is slow and deliberate, but a generic for a global $8 billion drug seems like a big deal to all. I cannot quite piece this one together.
    3 Jun, 03:22 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2171) | Send Message
     
    Author’s reply » The agreement is in place Bigfella44 but the details will not be made public for competitive reasons. CEO told me that it's very fair and I would guess that 3M would be in for a win-win rather than an unfair agreement. For reference the margins I projected in the article were conservative if you see how I arrived at them:

     

    http://seekingalpha.co...

     

    The CEO did not balk at all when I ran those margin projections by him, I think he said something like "Oh, easily"
    3 Jun, 03:31 PM Reply Like
  • RVMeter
    , contributor
    Comment (1) | Send Message
     
    Joe, Any insight on the talk of a second offering for ADMP or the recent sell off?
    16 Jul, 08:28 PM Reply Like
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