According to the Asthma and Allergy Foundation of America, anaphylaxis – severe life-threatening allergic reactions – occurs in at least 1 in every 50 people in the US, and likely as high as 1 in every 20 people. The most common triggers in children are food allergies, according to the Mayo Clinic, such as to peanuts, tree nuts, fish, shellfish and milk. Triggers in adults include medications, insect stings and latex. A series of allergy shots might reduce the body’s allergic response and prevent a severe reaction in the future, but “unfortunately, in most other cases there’s no way to treat the underlying immune system condition that can lead to anaphylaxis.” The only other practical steps available are to try to avoid known allergy triggers and to carry self-administered epinephrine.
Alternative to Mylan’s EpiPen
Readers will recall that Mylan (Nasdaq: MYL) has come under intense criticism and scrutiny since last year for the extraordinary 6-fold price increase (from $100 for a two-pack to $609 last year, according to Fortune) it mandated for its EpiPen injectable epinephrine that made the company “a poster child for pharmaceutical greed,” according to the Northwest Herald. Adamis Pharmaceuticals (Nasdaq: ADMP) received FDA approval in June for its pre-filled epinephrine syringe called Symjepi that will be significantly cheaper than Mylan’s EpiPen and, according to Adamis, much easier to use. CEO Dennis Carlo, PhD, said, “With an anticipated lower cost, small size and user-friendly design, we believe Symjepi could be an attractive option for a significant portion of both the retail (patient) and non-retail (professional) sectors of the epinephrine market.”
Symjepi delivers the same 0.3mg single dose as Mylan’s EpiPen. According to a Reuters article, Mylan has owned more than 90% of the $1 billion+ emergency epinephrine injector market and its own authorized generic has even recently surpassed sales of the branded version. David Maris, who covers Mylan for Wells Fargo, said, “With an anticipated lower cost and attractive design, we believe Symjepi will be a meaningful competitor to EpiPen.”
Compounded Medications and Development Pipeline
Symjepi is Adamis’ first commercially approved product that has been developed in-house. The company derives revenue from its subsidiary, US Compounding, which was acquired last year and which markets compounded medications, i.e., the tailoring of medications by prescription for a particular patient’s strength and dosage needs. US Compounding’s products include corticosteroids, hormone replacement therapies, hospital outsourcing products, injectables, urological preparations, ophthalmic preparations and topical compounds for pain. Adamis reported $6.5 million in revenue last year since the April 2016 acquisition of US Compounding, and $3.0 million in Q1 2017.
The company has three additional compounds in the pipeline, including an inhalable oral form of beclomethasone, a steroid, for asthma and chronic obstructive pulmonary disease (COPD) and powder inhaler forms of albuterol, a bronchodilator, for bronchospasm and fluticasone, a steroid, for asthma/COPD.
Source: Adamis Pharmaceuticals website
CEO Dennis Carlo
Dr. Carlo co-founded Adamis and has been President and CEO since 2006, prior to which he was president of Telos Pharmaceuticals. Dr. Carlo was one of the co-founders of Immune Response in 1985, for which he served as President and CEO from 1994 to 2002, and Chief Scientific Officer and COO before that. He was VP of Research and Development and Therapeutic Manufacturing at Hybritech, the first biotechnology company in San Diego, until its acquisition by Eli Lilly (NYSE: LLY) in 1985. Early in his career, as Director of Developmental and Basic Cellular Immunology and Director of Bacterial Vaccines and Immunology at Merck (NYSE: MRK), Dr. Carlo oversaw research and product development for several vaccines including Pneumovax, Meningovax A, Meningovax C, Meningovax AC and Haemophilus influenzae type b (Hib).
ADMP Stock
ADMP spiked 50% on the Symjepi approval in June but has given back about half of those gains since then to reach a current market valuation of $135 million. We like where the company sits on the risk-reward spectrum given the underlying revenue of the compounding business, the commercial potential of Symjepi to capture a meaningful portion of the emergency epinephrine market and the balance of the developmental pipeline. We refer readers also to the FDA’s record-setting pace of generic drug approvals that we highlighted last week. Investors
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