Adamas Pharmaceuticals Inc (ADMS) Analyst Explains Why Osmotica’s FDA Approved Drug Isn’t a Viable Threat


Adamas Pharmaceuticals Inc (NASDAQ:ADMS) saw its shares crater by as much as 21% today on exceptionally high volume. This drop was triggered by the announcement that privately held Osmotica has won FDA approval for its extended release formulation of amantadine (Osmolex ER), a product that could compete with Adamas’ lead drug Gocovri.

However, Mizuho analyst Irina Rivkind Koffler urges investors to ‘buy on weakness’ as Adamas shares plunge. Why? The analyst doesn’t view Osmolex ER as a viable threat for two important reasons:

  • Osmotica may have legal hurdles before it enters the market, and may not impact Gocovri ramp even if it’s priced as a generic.
  • Osmotica’s drug is not differentiated from immediate release amantadine generics, and may struggle to gain any commercial traction.

As such, Koffler reiterates a Buy rating on Adamas Pharmaceuticals shares, with a price target of $48, which represents a potential upside of 78% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a yearly average return of 14.5% and a 49.5% success rate. Koffler has a 71.1% average return when recommending ADMS, and is ranked #285 out of 4759 analysts.

Wall Street agrees with Koffler that this biotech player is one to watch. TipRanks reveals that ADMS has a Strong Buy analyst consensus rating with 7 back-to-back buy ratings in the last 12 months. Meanwhile the average analyst price target of $49.5 suggests the stock still has upside potential of just over 84% from the current share price for the next 12 months.

 

Adamas is using its deep understanding of time-dependent biology to redefine the treatment experience for patients suffering from chronic neurological diseases. The company is building upon the commercial launch of Gocovri (amantadine) extended release capsules (previously ADS-5102), the first and only FDA-approved medicine for the treatment of dyskinesia in patients with Parkinson’s disease, with a pipeline of differentiated investigational programs, which includes ADS-5102 in development for the treatment of multiple sclerosis walking impairment; and ADS-4101, a high-dose, modified release lacosamide in development for the treatment of partial-onset seizures in patients with epilepsy.