Friday’s Biotech News: Adamas Pharmaceuticals Inc (ADMS), XOMA Corp (XOMA), Kamada Ltd (KMDA)

A Peek Into Three Volatile Biotech Stocks: ADMS, XOMA, KMDA


Adamas Pharmaceuticals Wins FDA Approval; Shares Soar 40%

Adamas Pharmaceuticals Inc (NASDAQ:ADMS) shareholders celebrate a 40% gain in the stock after the drug maker announced that the FDA has approved GOCOVRI (amantadine) extended release capsules for treatment of dyskinesia in patients with Parkinson’s disease. GOCOVRI, previously granted orphan drug status by the FDA, is the first and only medicine approved by the FDA for this indication.

Adamas CEO Todd Sherer commented, “Dyskinesia can significantly compromise quality of life for people with Parkinson’s disease […] We are pleased that patients have another option to manage this aspect of the disease and glad the Unified Dyskinesia Rating Scale – a tool our support helped develop and validate – could show clinical efficacy of GOCOVRI for the treatment of dyskinesia.”

In the wake of the FDA announcement, JMP Securities analyst Jason Butler raised his price target to $33.00 (from $29.00), while reiterating a Market Outperform rating on the stock. In addition, Cowen’s Ken Cacciatore lifted his price target to $55.00 (from $45.00) and reiterated an Outperform rating. Finally, analyst Irina Rivkind Koffler of Mizuho reiterated a Buy rating on ADMS, with a $26.00 price target, which implies a 25% upside from current levels.

XOMA Reaches Significant Milestone

Image result for XOMA Corporation

XOMA Corporation (NASDAQ:XOMA) shares are rising nearly 15% in Friday’s trading session, after the drug maker announced it has licensed the global commercial rights to gevokizumab, a novel anti-IL-1 beta allosteric monoclonal antibody, to Novartis. In a separate agreement, XOMA has granted Novartis a license to its intellectual property covering the use of IL-1 beta targeting antibodies in the treatment of cardiovascular disease.

Under these agreements, XOMA will receive $31 million in upfront payments, including a $5 million equity investment, and is eligible to receive significant pre- and post-commercialization milestone payments plus tiered high-single to mid-double-digit royalties on net sales of gevokizumab. XOMA is also eligible to receive low-single-digit royalties on canakinumab sales in cardiovascular indications rising to mid-single-digit royalties under certain circumstances. Novartis has agreed to settle XOMA’s €12 million debt to Les Laboratoires Servier and extend the maturity date on XOMA’s debt to Novartis from September 2020 to September 2022.

XOMA CEO Jim Neal commented, “Today, we achieved a significant milestone in the transformational change that we initiated in March of this year. The immediate impact of these licensing agreements for gevokizumab and our IL-1 beta intellectual property eliminates almost half of XOMA’s outstanding debt, more than doubles our cash position, and generates potential recurring revenues through royalties. It also validates both the value of XOMA’s scientific advances and our business strategy to build shareholder value by licensing our portfolio of assets and intellectual property to partners who will continue the asset’s clinical development.”

On the ratings front, XOMA has been the subject of a number of recent research reports. In a report issued on August 14, Wedbush analyst Liana Moussatos reiterated a Hold rating on XOMA. On August 10, H.C. Wainwright’s Carol Werther reiterated a Buy rating on the stock and has a price target of $15.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Liana Moussatos and Carol Werther have a yearly average return of 7.7% and 21.6% respectively. Moussatos has a success rate of 41% and is ranked #608 out of 4610 analysts, while Werther has a success rate of 57% and is ranked #361.

Kamada Scores FDA Approval for Rabies Infection Treatment

Kamada Ltd’s (NASDAQ:KMDA) shares had a nice run today after the drug maker and its partner Kedrion Biopharma announced that KEDRAB has received FDA approval for passive, transient post-exposure prophylaxis of rabies infection, when given immediately after contact with a rabid or possibly rabid animal. KEDRAB should be administered concurrently with a full course of rabies vaccine. Rabies is a life-threatening condition that impacts approximately 40,000 people in the U.S. each year, representing an annual market opportunity of $100 million-plus. KEDRAB will launch in the U.S. in early 2018.

Kamada CEO Amir London commented, “This significant achievement for Kamada represents the second FDA approval for the Company […] We are proud that our unique and advanced immune globulin purification technology was used in the development of KEDRAB, and look forward to a successful launch of the product with Kedrion Biopharma. The BLA approval may also serve as basis for registration in other countries. This treatment represents an annual market opportunity of over $100 million in the U.S., of which we expect to take a significant market share. Moreover, this has the potential to be a highly profitable product for our companies. Meaningful sales from KEDRAB are expected to ramp up in 2018, during its first full year of launch. Revenues from this product are not included in our guidance of reaching $100 million in total revenue in 2017.”

Kedrion CEO added, “The approval of KEDRAB by the FDA marks an exciting and important milestone in the evolution of Kedrion Biopharma as we continue to grow our U.S. business […] The approval of KEDRAB represents the first product that Kedrion Biopharma has had a role in developing throughout its clinical development and through to commercialization in the U.S. Rabies is a deadly, but entirely preventable disease, and we are pleased to offer physicians another safe and effective option. As Kedrion Biopharma is one of the world’s leading suppliers of high-titer rabies plasma, we are well-positioned to maximize the potential of this product, and we look forward to working with Kamada to launch KEDRAB in the U.S.”

 

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