Why is Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) so hot right now? There are several reasons. Insider Monkey readers are very familiar with Adamis Pharmaceuticals Corporation since August 2014 when we issued a buy recommendation at $4.02 in our premium monthly newsletter. Nine months after that we published a free report reiterating our buy recommendation when ADMP’s shares were trading at $4.88. That was about a year ago.
Insider Monkey’s main profit source is its premium newsletters and we usually don’t share our stock picks publicly. We don’t even share them with almost all of our editors and writers (unless they are involved in the production of the newsletters). The free Adamis report was the only premium report we shared during the last 12 months. Most subscribers want to know about our stock picks before they subscribe which is why we made this report available. Even today, if you open any article on our site (including this article) you will see our free report “Biotech Insider Alert – $5 Stock To Hit $40“. You can download a copy of this report here if you haven’t already done so.
Biotech stocks lost around 30% of their value since we published our report. Even Adamis Pharmaceuticals Corporation shares lost more than 30% of their value at one point in August. However, it was our highest conviction idea, so we kept our buy recommendation over the last 12 months. Adamis was our top idea because it is working to get an extremely simple drug application accepted by the FDA. The stock started to deliver strong gains in December when it resubmitted its “New Drug Application” for its Epinephrine Pre-filled Syringe (“PFS”) product candidate.
Adamis’ acquisition of US Compounding was also viewed favorably by the market and the shares closed April at $8.29, a gain of 70% since our recommendation in April 2015. On April 30th, I published an article on Insider Monkey with the title “My #1 Best Idea In the World With a 10% Guaranteed Return in One Month“. In the article I explained why I believe Adamis is one of the best stocks to buy until June 6th and I guaranteed a 10% return if readers decide to subscribe to our healthcare newsletter. On Tuesday, we emailed this article to our more than 100 thousand email subscribers.
Later that week we shared an update from Sio Capital regarding ADMP. Here is the quote from Sio Capital’s Michael Castor that was shared in our newsletter:
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“Adamis at the end of last month acquired a compounding pharmacy. It is a state of the art facility that should be immediately financially accretive and produce cash flows and in looking at the transactions that company paid by five times EBITDA. It’s a tremendously savvy transaction and this is really the hallmark of how Dr. Dennis Carlo the CEO has really run the company. This transaction alone in my estimation is worth about $4 per share for Adamis. The company was trading at about $6 per share.
The company has four drugs that are better versions of extremely large products that are already existing on the market. Their first one is due to be approved on June 4th. It’s an epinephrine syringe that will compete with EpiPen, the billion dollar product sold by Mylan and I continue to believe that these four products on aggregate are worth anywhere from $25 to $35 per share in total, so the acquisition the Adamis did at the end of last month not only provides cash flow for the company but it brings in a sales force that can be used to sell Adamis’s epinephrine syringe when it wins approval. Fantastic transaction. The stock price appreciated on the heels of that.”
Adamis shares returned another 10% following our email and the publication of our newsletter.
Today, we sent another email to our more than 100 thousand email subscribers and provided an update about our recommendation and the performance of Adamis Pharmaceuticals Corporation’s shares. It was also a very strong day for most biotech stocks and ADMP shares closed the day at $10.12. Insider Monkey recommended ADMP shares because Michael Castor was one of our favorite hedge fund managers and he was extremely bullish about the stock. We know that Sio Capital hasn’t sold a single ADMP share until the end of April (we don’t know yet what they did in May) and we will keep following ADMP closely and keep our readers updated.
Update: On May 10th Adamis announced an exclusive licensing agreement with Allergan (AGN) “to commercialize Adamis’ Epinephrine Pre-filled Syringe (“PFS”) product candidate for the emergency treatment of anaphylaxis.” It is possible that this news somehow leaked on May 9th and contributed to the 12% jump in Adamis shares. We will send an email update to our subscribers shortly sharing Michael Castor’s latest views on this transaction.