Adamis Pharma (ADMP) Stock: Next Stop, $7.50?

It’s a big day for Adamis Pharma (NASDAQ:ADMP). The drug maker announced a commercial partnership for its generic EpiPe Symjepi with Novartis (NYSE:NVS) subsidiary Sandoz, sending shares rising nearly 35%.

Under the terms of the agreement, Sandoz will obtain the U.S. commercial rights to Symjepi in exchange for an upfront fee and potential performance-based milestones payments. Additionally, Adamis and Sandoz will equally share net profits, as defined in the agreement, generated from sales of Symjepi in the U.S. As part of the agreement, Sandoz will have commercial rights to the FDA-approved Symjepi Injection 0.3mg product, as well as the Symjepi Injection 0.15mg product if approved by the FDA. Under the agreement, Adamis will retain the right to commercialize both products in territories outside of the U.S., but has granted Sandoz the first right of negotiation for such territories.

In reaction, B.Riley FBR analyst Andrew D’silva lifts his price target on ADMP to $7.50 (from $6.25), while maintaining a Buy rating on the stock. (To watch D’silva’s track record, click here)

D’silva commented, “ADMP’s announcement provided some context on the terms of the agreement, although certain aspects were not released. What we do know is that ADMP will receive an undisclosed upfront fee, could receive performance-based milestone payments, and will equally share in net profits generated from Symjepi. Over the long haul, we believe a 50% net profit share compares favorably to the 15% rev/share we were previously modeling for; although, initial revenue tied to the profit share agreement will likely take slightly longer to hit ADMP’s top-line, given Sandoz will need time to scale up Symjepi sales before the product is profitable. Since we expect the net profit share agreement will likely result in increased economics to ADMP over the agreement’s lifespan, versus if it was established as a 15% rev/ share, we are conservatively lowering our upfront fee assumption from $10M to $5M. As a result, we are updating our estimates, and increasing our price target from $6.25 to $7.50.”


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