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ADMP And Its Cloud Of Uncertainty - Why It's Time To Buy

|Includes: Adamis Pharmaceuticals Corp. (ADMP)

The ADMP drop since the shelf filing has certainly rattled investor confidence. I did not anticipate such a deep drop, but I am taking advantage of it. I added on Friday at 2.70. I believe this is the most undervalued the stock has been in the several years I have been following it, even more so than when I wrote my original article last November.

ADMP market cap is now under $30M - this for a stock that raised $25M+ in an over-alloted offering in December issuing no warrants to do so and uplisting to Nasdaq. Since the offering they have secured the purchase of a first class inhaler from 3M, paid off debts, and filed an NDA for their EPI PFS expected to bring revenues in 1H15. They have laid out their plan to get the APC-5000 Proof Of Concept (POC) trial started in 2H14 with the hopes of landing a partner either domestic or international. They plan to start APC-1000 Ph3 trials in 2H14 with a product that addresses a $3B market. Their plan to go the 505(b)(2) pathway for generics that address large markets is a wise one IMO.

Here are some of the investment highlights taken from their June 2014 Investor Presentation:
-May 2014: submitted New Drug Application to the FDA for single dose pre-filled epinephrine syringe PFS
-Four product launches anticipated between 2015 and 2017 in allergy and respiratory markets
-Revenues from the PFS expected 1H 2015
-Begin Phase III studies in 2H 2014 for our BeclomethasoneHFA product (Asthma/COPD)
-Acquired Dry Powder Inhaler (DPI)/ technology from 3M (develop AdvairĀ®-like product)
-Compare Adamis' Advair product with GSK's AdvairĀ® in 2H 2014
-Begin Phase III studies for our allergic rhinitis product in 2015
-505(b)(2) submissions for all current specialty pharmaceutical products
-Seek partnership opportunities

The presentation can be found here and I encourage you to review:
http://bit.ly/1oUfMFm

While their focus is on Specialty Pharma, their oncology portfolio of drugs is impressive and is basically being given no value right now, a free call option as CRT puts it.

The bashing management is taking here and other boards would make you think the company is going bankrupt, which is certainly not the case. The company will need to raise money and when they do the cloud of uncertainty will be cleared, IMO, and the stock will advance. I think Joe Springer's analysis still holds, despite him being less confident publicly on the stock. His SA PRO article on ADMP concluded as I did last November, that ADMP was worth 200-250M right now based on what they have.

Just as a few questionable management moves made everyone sour on the stock, a few positive moves here could get everyone wanting in - the story is a good one, IMO. Recall the stock was in the $6-7 range just 3 months ago, and I don't think it will take much for it to return there. Yet, ADMP is not a trade for me. I'm not looking to get out on a quick pop. ADMP may take a few quarters, but once EPI gets approved and revenues start, bigger money will want in. I still believe investors in this company will be well rewarded for the next few years, especially at these levels.

I am long ADMP.

Disclosure: The author is long ADMP.