Some investors may be apprehensive that Adamas Pharmaceuticals Inc (NASDAQ:ADMS) is taking its time with its 2018 launch of amantadine capsule Gocovri, the first drug to win FDA approval in Parkinson’s, all while finding consensus expectations potentially overblown.
However, Mizuho analyst Irina Rivkind Koffler is out with a bullish case on this drug maker, continuing to see this biotech player as “undervalued.” After Analyst Day, ADMS management just blew Koffler’s expectations for annual Gocovri pricing out of the water. Whereas the analyst had been modeling a $14,400 price tag, management came out with a far higher than expected $28,500 per patient for annual Gocovri pricing.
In fact, though the analyst acknowledges investor concerns, likewise reigning in her own launch projections for 2018 after taking under account conservative outlook, she meanwhile has lifted forecasts for the Multiple Sclerosis (MS) gait program.
With the biotech firm’s team achieving beyond the analyst’s wildest Gocovri pricing expectations, and as Koffler spotlights a “greater opportunity in MS,” she reiterates a Buy rating on ADMS stock while meaningfully hiking the price target from $26 to $48, which implies a 127% increase from current levels. (To watch Koffler’s track record, click here)
“We better appreciate the pipeline opportunity in MS gait,” says the analyst, who subsequently has lifted peak projections significantly from $92 million up to $266 million while raising risk-adjusted revenues for levodopa-induced dyskinesia (LID).
Koffler notes, “Importantly, we lowered Gocovri estimates in 2018 after management conservatively guided to less than 1% market penetration but steepened our ramp trajectory after 2019 once reimbursement improves and MS gait may get approved in 2020. We still assign no value to the ADS-4101 program in epilepsy, which may get out-licensed, but see this asset as a sense of future upside.”
Though investor worries are certainly valid, “[…] ADMS is not a one-trick pony, in our view, and we expect a stream of catalysts to maintain visibility,” surmises Koffler, underscoring: “These include updates on Gocovri formulary coverage, the outcomes from FDA meetings on the MS and Epilepsy programs, and presentations at scientific meetings. All of these may be just as interesting to potential acquirers, and we expect takeout chatter to escalate as Gocovri quarterly run rates increase (due to scarcity of novel marketed CNS drugs).”
How does Koffler’s bullish bet weigh against the word of the Street? It appears the analyst is not alone in her confidence on the drug maker, as TipRanks analytics demonstrate ADMS as a Strong Buy. Out of 6 analysts polled by TipRanks in the last 3 months, all 6 are bullish on Adamas stock. With a return potential of 72%, the stock’s consensus target price stands at $36.40.