Dawson James starts ADMA Biologics at buy; PT $7

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Dawson James initiated coverage of ADMA Biologics (NASDAQ:ADMA) with a “buy” rating and $7 price target. The stock closed at $2.34 on Dec. 27.

ADMA is focused on bringing a high-value, potent intravenous immunoglobulin (IVIG) product, RI-002, to the $5-billion-a-year U.S. market for patients who need a more potent IVIG product for the treatment of primary immune deficiency disease and certain infectious diseases. The FDA has set a PDUFA date of April 2 for a decision on RI-002.

Last week, ADMA received a complete response letter from the FDA in response to its drug substance prior approval supplement submission, causing the stock price to lose nearly half of its value. It touched a high of almost $7 in September 2018.

“All this is a reaction to what we see as a delay of maybe a few months before BIVIGAM is approved and being sold again,” writes analyst Jason Kolbert. “The irony here is that the issue really isn’t the delay in BIVIGAM, it’s what impact (if any) does this have for the timing of RI-002. We believe the answer is none.”

ADMA obtained BIVIGAM and another FDA-licensed product, Nabi-HB, through the acquisition of the assets of CMO, Biotest Pharmaceuticals, including its manufacturing and testing operations, in order to control product quality and bring its RI-002 to market.

Mr. Kolbert is forecasting that BIVIGAM will resume production by mid-2019. “At about the same time, we expect to see approval for RI-002,” he added.

Stephen Kilmer