Adamas Pharma – Starting The Year Off Right?

Shares of Adamas Pharmaceuticals Inc. (ADMS) have recovered 140% from their 52-week low of $1.90 recorded on Mar.18, 2020, and trade around $4.50.

Adamas is a commercial-stage pharmaceutical company with a growing portfolio of therapies for neurological diseases. The company’s flagship product is GOCOVRI, a FDA-approved medicine for the treatment of dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy, with or without concomitant dopaminergic medicines.

The sales of GOCOVRI have increased over the years ever since its launch in the fourth quarter of 2017. The drug raked in sales of $568 thousand in 2017; $34.05 million in 2018; $54.64 million in 2019; and $51.5 million in the nine months ended Sep.30, 2020.

Adamas has proposed a revision to the indication statement to include GOCOVRI as an appropriate therapy for the treatment of OFF episodes in Parkinson’s disease patients receiving levodopa and the FDA decision is expected on February 1, 2021.

According to Neil McFarlane, Chief Executive Officer, of Adamas, “If the proposed indication statement is approved, it would reflect the full spectrum of GOCOVRI’s therapeutic benefit in PD motor complications and better support physicians to identify appropriate treatments for their patients. Many PD medications necessitate a trade-off between reducing OFF time and exacerbating levodopa-induced dyskinesia. GOCOVRI is the first medication clinically proven to reduce both.”

Adamas also has a partnered product Namzaric, which is approved for the treatment of moderate to severe dementia of an Alzheimer’s type. This drug is marketed in the United States by Allergan plc, now part of AbbVie (ABBV). Adamas began earning royalty revenue on net sales of Namzaric beginning May 18, 2020 and royalties will be earned quarterly through 2024.

Q3, 2020 Highlights

The company’s total revenue for the third quarter of 2020 was $20.2 million, including GOCOVRI product sales of $19 million and Namzaric royalty revenue of $1.2 million. This compares with total revenue of $13.9 million in the third quarter of 2019.

Net loss for Q3, 2020, narrowed to $11.9 million or $0.42 per share from $27.6 million or $0.99 per share in Q3, 2019.

Cash, cash equivalents, and available-for-sale securities as of September 30, 2020, totaled $92.5 million.

Settlement of Disputes

The company began 2021 on a positive note by settling an ongoing patent litigation with Osmotica Pharmaceutical US LLC, a subsidiary of Osmotica Pharmaceuticals plc (OSMT), related to Parkinson’s drug Osmolex ER. This drug is approved for the treatment of Parkinson’s disease and drug-induced extrapyramidal reactions in adult patients.

As part of the patent dispute settlement, which was closed as recently as Jan.5, Adamas acquired the global rights to Osmolex ER for $7.5 million.

Last November, Adamas entered into a Memorandum of Understanding to settle one of its previously disclosed class-action lawsuits in the California Superior Court for the County of Alameda for $7.5 million. This settlement agreement remains subject to approval by the California State Court. A final non-appealable closure of this court action is expected mid-2021.

ADMS has traded in a range of $1.90 to $6.13 in the last 1 year. The stock closed Wednesday’s trading at $4.57, down 1.30%.

Given the strong GOCOVRI sales, improving Namzaric royalties, and the upcoming FDA decision, Adamas is a stock worth following.

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