Friday, June 24, 2022

Adamas Pharmaceuticals Inc (NASDAQ:ADMS) Soaring on FDA Approval

Adamas Pharmaceuticals Inc (NASDAQ:ADMS) is a micro-cap stock that has started to engage some major eyeballs among traders and investors focused on new growth potential in the biopharma space after the stock went into orbit to close out last week. In this case, the catalyst for the action was quite clear: the company just announced that the U.S. Food and Drug Administration (FDA) has approved GOCOVRI (amantadine) extended release capsules (previously ADS-5102) for treatment of dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy, with or without concomitant dopaminergic medications. GOCOVRI, previously granted orphan drug status by the FDA, is the first and only medicine approved by the FDA for this indication.
“GOCOVRI’s approval is an important advancement for the treatment of Parkinson’s disease, as it is the first FDA-approved medicine for the treatment of dyskinesia in Parkinson’s disease patients,” said Rajesh Pahwa, M.D., Laverne & Joyce Rider Professor of Neurology at the Kansas Medical Center and Director, Parkinson’s Disease Center of Excellence at the University of Kansas Health System. “Notably, GOCOVRI is the first Parkinson’s disease medicine proven in controlled trials to reduce both dyskinesia and OFF time in Parkinson’s disease patients receiving levodopa. Treatment of dyskinesia and OFF time continues to be an unmet need in the medical management of Parkinson’s disease and the approval of GOCOVRI is a major step in that direction.”
Adamas Pharmaceuticals Inc (NASDAQ:ADMS) promulgates itself as a pharmaceutical company that discovers, develops, and sells chrono-synchronous therapies for chronic neurologic disorders.
The company’s product portfolio comprises ADS-5102, a chrono-synchronous amantadine therapy for the treatment of levodopa-induced dyskinesia in patients with Parkinson’s disease. Its portfolio also comprises of Namzaric (memantine hydrochloride extended-release and donepezil hydrochloride) capsules; and Namenda XR (memantine hydrochloride) extended release capsules for the treatment of moderate to severe Alzheimer’s disease.
ADMS’s products under development include ADS-4101, a chrono-synchronous lacosamide therapy that has completed first Phase I clinical study for the treatment of partial onset seizures in patients with epilepsy.
The company was formerly known as NeuroMolecular Pharmaceuticals, Inc. and changed its name to Adamas Pharmaceuticals, Inc. in July 2007. Adamas Pharmaceuticals, Inc. was founded in 2000 and is headquartered in Emeryville, California.
According to company materials, “At Adamas, we believe in the power and the promise of medicines derived from a deep understanding of time-dependent biology. Our expertise lies in uncovering and mapping the relationship between disease and drug activity. From there, we strive to create medicines with therapeutic profiles that match the pattern of disease to drive a more significant and durable clinical effect.”
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As noted above, shares of ADMS exploded higher to close last week on the back of the company’s announcement that the FDA has approved GOCOVRI (amantadine) extended release capsules for treatment of dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy, with or without concomitant dopaminergic medications. That could be huge news for the company. The stock was up over 40% in response to the headlines.
“Dyskinesia can significantly compromise quality of life for people with Parkinson’s disease,” said Dr. Todd Sherer, Chief Executive Officer of The Michael J. Fox Foundation for Parkinson’s Research. “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.”
We’ve witnessed 39% piled on for shareholders of the stock during the trailing week. The situation may be worth watching. ADMS has a history of dramatic rallies. Furthermore, the name has seen an influx in interest of late, with the stock’s recent average trading volume running topping 880% over the long run average.
This is important to note as well considering that we are dealing with a stock here that has an extremely tight float, at just 21.6M shares. That type of tight float and rising volume can combine to produce a squeeze risk, which suggests shorts should be very wary here.
Currently trading at a market capitalization of $456.6M, ADMS has a significant war chest ($33.6M) of cash on the books, which must be weighed relative to virtually no total current liabilities. ADMS is pulling in trailing 12-month revenues of $177K. However, the company is seeing declines on the top line on a quarterly y/y basis. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $ADMS stock, as well as our other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: We hold no position in $ADMS, either long or short, and we have not been compensated for this article.

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