Adamis Shows Off Symjepi's Value. Now It Needs To Close The Deal
Summary
- Adamis presented the results of a human factors study on Symjepi, its FDA-approved epinephrine injector.
- The results showed Symjepi to be highly intuitive, with high probability of successful use compared to other auto-injectors.
- The market reacted favorably to the news, sending shares up more than 10%.
- Investors continue to wait for a promised commercial partnership, which remains the key to a successful rollout of Symjepi to market.
- The human factors study demonstrates Symjepi's distinctive value proposition, further reflecting its value to potential partners as a highly lucrative, low-cost alternative to the ubiquitous EpiPen.
Shares of Adamis Pharmaceuticals (ADMP) took a precipitous plunge in late February as investors' fears that partnership discussions for the commercialization of Symjepi, the company's FDA-approved epinephrine injector, had stalled - or even fallen apart completely. A timely update on February 23rd from the company's notoriously tight-lipped management team arrested that fall.
March 3rd brought further good news when Adamis presented the results of a highly successful human factors study to the joint congress of World Allergy Organization and the American Academy of Allergy, Asthma, and Immunology or AAAAI. Releasing the results to the general public via press release on March 6th, the study demonstrates Symjepi's intuitive design and ease of use, which compared highly favorably to similar studies conducted on other auto-injector models.
The human factors study represents a big step for Adamis, though the ultimate test - securing a commercial partner to market Symjepi against the market leader, Mylan's (MYL) EpiPen - has yet to be passed. That said, the human factors study gives investors further reason for optimism.
Let's take a look at the results of the study and what they mean for Adamis in both the near-term and long-term.
An Unambiguous Success
The human factors study was unambiguously successful in bearing out Adamis' claims about Symjepi's ease of use compared to other epinephrine injectors. The problems with current auto-injectors are well known and recapitulated quite succinctly in the study's introduction:
"Epinephrine remains the treatment of choice for acute anaphylaxis. However, currently available auto-injectors are costly, and studies have demonstrated human factor issues resulting in incorrect use (lacerations) as well as device failures. Correct auto-injector use has been noted to be as low as 20% in some studies."
A 20% correct usage rate is staggeringly low and has been the cause of many unnecessary deaths and long-term suffering.
Using Symjepi is a five-step process, and the human factors study breaks down the success rate of the 82 participants at each step of the way:
- Step 1: Open the case (100% success)
- Step 2: Retrieve prefilled syringe (100% success)
- Step 3: Remove needle cap (100% success)
- Step 4: Insert needle in the thigh (93% success)
- Step 5: Press plunger until it stops (99% success)
Step 4 is obviously the most important since it is accurate insertion of the needle that will determine if the epinephrine is to be injected correctly. A 93% success rate shows a remarkably high level of accuracy, surpassing currently available options.
Combined with Adamis' intention to market Symjepi as a low-cost alternative to the EpiPen, the demonstrated higher success rate should make the upstart company's offering an instant blockbuster.
Bouncing Up On the Good News
The positive result sent Adamis' stock up substantially, with shares trading around $3.80 at time of writing on March 7th - an approximately 14% jump above the pre-announced price. The company's share price remains severely depressed as commercial partnership talks have drawn out far beyond what anyone had anticipated, including me. Indeed, I have been describing the inking of a commercial partnership as imminent since late October.
The news that Symjepi has an exceptionally high success rate among users vindicates the company's long-standing claim that its ease-of-use surpasses that of incumbent products. That is hugely important for an emergency injection device since failure to use it properly can result in death. Human factors are hugely important when considering the value of self-use medical devices, especially when they are frequently in the hands of children. Symjepi Jr., the low-dose version of the already-approved product, is currently under review by the FDA under a supplemental NDA submitted last year.
The human factors study further crystalizes the value of Symjepi for the youth market; not only is it a lower-cost alternative but it is also more likely to be used effectively - and thus save the life of the person experiencing a violent allergic reaction.
Investor's Eye View
I have opined in the past that Symjepi, if properly marketed, could bleed Mylan dry. Of course, that is contingent on Adamis securing a commercial partner. The long wait time has investors worried - and not unfairly. As MarketWatch recently reported, it has been eight months since the product was approved, which is far longer than usual to wait for the announcement of a commercial partner. The MarketWatch article cites an investor as saying, "Shareholders are feeling duped."
Certainly, it has taken much longer than I anticipated - or that most anyone anticipated. However, the process is still ongoing as the February release revealed. The company appears at long last to be close to clinching a deal. That is important, since the company's cash position, while strengthened recently by the exercise of various warrants, is not sufficient to see it through many more quarters. The longer the wait, the less leverage Adamis has to negotiate a good deal. After Q3 2017, the company had about $23 million in the bank, giving it about three quarters' worth of runway at the current burn rate. In other words, the company needs to close a deal in Q2 2018 to avoid a serious crunch at the current burn. However, it is reasonable to assume that it can cut costs and slow-walk expenses to keep the lights on through Q3 2018. Still, time is clearly of the essence.
In summary, then, the human factors study throws the superlative value of Symjepi into starker relief. The finalist partner candidates are no doubt aware of this as well. While no official timeline is set, it appears we are at last in the end-game of negotiations. Patient investors ought to be rewarded for staying the course despite the delays.
This article was written by
Analyst’s Disclosure: I am/we are long ADMP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Comments (38)
I would like to know your opinion about the business update.
Fine-sounding words but still no facts...
http://bit.ly/2Da7d8jHere's the full text. Notice the picture comparing Symjepi size to EpiPen:
http://bit.ly/2DbFsMyNothing really left to say. They need to sign a deal and move on. They have wasted so much time and potential revenues while losing so much in market cap value. Management needs to get it done.
https://www.xolair.com?cid= xol_PS_MIXLCUWB0056_11... MIXLCUWB0056&dclid=CO6H4- e3tdkCFU8LDAodGYQDCgHow perfect would it be to include Symjepi with the Xolair removing the need for the separate EpiPen prescription and purchase? It would seem any way of getting Symjepi included with any other meds that could cause an anaphylactic reaction is a no brainer. I can only assume the management at ADMP is aware and pursuing this application.
Why don’t they approach IPXL or VRX