Tuesday, March 26, 2013

Adamis Pharmaceuticals (ADMP) Preps Its Pipeline

Adamis Pharmaceuticals (ADMP) makes stuff I never knew existed.  I had no idea there were things called pre-filled epinephrine syringes but Adamis has one that they want to compete head-to-head against a leading brand.  They also have their "Savvy" broad spectrum anti-bacterial gel.  The syringe is in Phase 3 trials and the gel has completed Phase 3; my regular readers know that those are the gateways I use to consider whether a biotech company can de-risk its discoveries and deliver shareholder value.

Is there a market for any of these things?  EpiPen is a leading anti-allergen autoinjector.  This product seems to have experienced double-digit growth for several years and Pfizer's 2010 acquisition of King Pharmaceuticals tells us a lot about EpiPen's success.  If the EpiPen was about 56% of Mylan's Specialty division's $124M per quarter in revenue (I'll annualize it to $496M), then its sales were about $278M in 2010.  Extrapolating from those double-digit growth figures (34% in 2011, 42% in 2012) gives me estimated sales in 2012 of about $529M, although one anonymous analyst buried in this NYT article figured it would make $640M in 2012.  I have no idea what the real numbers are, so if you're that curious then go ask Pfizer's CEO.

My rough estimate is probably really far off the mark but my general point is that EpiPen is big business.  It has a near-monopoly on the U.S. autoinjector market, so Adamis has its work cut out if it expects to make a dent in that market share.  They will also have to compete against Teva, which has the right to sell a generic version of EpiPen starting in 2015 if it can obtain FDA approval.  The good news for Adamis is that they just closed a $500K private placement, but they lost -$5.6M in the last nine months of 2012 (according to their 10-Q from February 2013).  Adamis does have other potential solutions in its pipeline, so I'll probably check back if something else makes it to Phase 3.

Full disclosure:  No position in ADMP at this time.