Adamis Pharmaceuticals (NASDAQ:ADMP) received a new CRL from the FDA late last week. Here is company’s disclosure regarding the letter:
“Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) (“Company”) announced that after the close of the stock markets on June 3, 2016 it received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) Epinephrine Injection USP 1:1000 0.3mg Pre-filled Single Dose Syringe (PFS) product. PFS is for the emergency treatment of acute anaphylaxis, which is a severe allergic reaction. A CRL is issued by the FDA’s Center for Drug Evaluation and Research when it has completed its review of a file and questions remain that preclude the approval of the NDA in its current form.
Because of the improvements that were made to the PFS in response to the FDA’s original CRL dated March 27, 2015, the FDA indicated that in order to support approval of the product, the Company must expand its human factors study (patient usability) and reliability study (product stress testing), both of which were part of the final PFS NDA. The Company believes that it can finalize the study protocols with the FDA and complete the additional testing within a relatively short period of time at an immaterial cost, and submit the data back to the FDA sometime in the second half of 2016. It should be noted that the Company has successfully completed the “volume delivery” issue that was associated with the initial CRL. The FDA has indicated that the NDA will remain open until these issues are resolved.
Dr. Dennis J. Carlo, President and CEO of Adamis, stated, “We look forward to working with the FDA to resolve the remaining issues. Our goal is to submit the protocols for these studies to the FDA within a matter of weeks and begin the testing as soon as we receive their feedback. We are confident that we can deliver all of the data requested by FDA and will continue to work closely with the agency to facilitate their continued review of our NDA. Adamis remains committed to bringing the epinephrine PFS to market.””
Our analysis: We have been recommending Adamis to our premium subscribers since August 2014 when the shares were trading at $4.02. We also published a free report in April 2015 reiterating this recommendation. Adamis shares surged above $8 this year as the PDUFA date for its PFS NDA approached. We believed there is a 80-905 probability that the FDA would approve its product. After all this isn’t a new formulation, it is just a cheaper delivery mechanism of an existing formulation. Unfortunately for ADMP investors, FDA wants more testing before approving this product. This means ADMP will take another 6-12 months to gather the newly requested data points and FDA will take an additional 6 months to review and decide.
As a result of these delays, ADMP shares lost about 50% of its value. Currently it trades at $4.19. This price is consistent with ADMP’s price in November 2015 before it submitted its NDA. We believe ADMP’s stock price over the next 12 months will range between $3 and $6 depending on the performance of its recently acquired compounding business. If the company completes the additional studies, gathers the newly requested data, and submits it to the FDA by the end of this 12 month period, we will likely see an additional $4 increase in its stock price until the decision date. We maintain our view that FDA will eventually approve this low risk product.