On May 9, 2019 Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) reported financial results for the first quarter ended March 31, 2019 and provided a business update (Press release, Adamis Pharmaceuticals, MAY 9, 2019, View Source [SID1234536046]).
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Dr. Dennis J. Carlo, President and Chief Executive Officer of Adamis Pharmaceuticals, stated, "With the launch of our SYMJEPITM product this year, I believe Adamis is transitioning from a development-stage company with product candidates in the pipeline, into a commercial-stage company with multiple sources of revenue. Currently, I anticipate revenues from three sources for our company. First, SYMJEPI sales, mainly coming from the Sandoz retail launch, which we believe will occur shortly; second, sales from US Compounding, which have been steadily increasing; and finally, upfront payment and sales from anticipated commercialization arrangements relating to our naloxone product candidate. With all of the possible developments and potential revenue streams, I believe 2019 will be a very good year for Adamis."
Product Updates
SYMJEPI (epinephrine) Injection (0.3mg and 0.15mg)
On January 16, 2019, we announced that Sandoz had launched SYMJEPI (epinephrine) 0.3 mg Injection in the U.S. market. SYMJEPI will be rolled out via a phased launch and will initially be available in the institutional setting, an established channel where Sandoz has a significant experience and knowledge, followed by anticipated introduction into the retail market. We also anticipate that Sandoz will launch the lower dose SYMJEPI (epinephrine) 0.15 mg Injection product in the U.S. markets. With the continued rollout of SYMJEPI into the retail market, the company anticipates that the revenue stream to Adamis will increase in future quarters.
APC-6000 (naloxone)
On March 14, 2019, Adamis announced that the FDA had accepted the company’s New Drug Application (NDA) for review and provided a target agency action date of October 31, 2019. Naloxone is an opioid antagonist used to treat narcotic overdoses. The company believes that its higher dose naloxone product candidate, if approved, could be an important part of the solution to this growing health crisis. The company is in discussions with several potential commercial partners for the naloxone injection product candidate.
Other Pipeline Products
In order to focus resources on the naloxone product candidate, and in an effort to reduce operating expenses, the company has slowed development of its other pipeline product candidates for the near term. This includes a delay in the continuation of the start of patient enrollment for the company’s Phase 3 study for beclomethasone HFA (APC-1000) and a hold on the company’s sublingual tadalafil (APC-8000) product candidate. The company will prioritize future development for these products based on the availability of capital to support them and its ongoing evaluation of commercial potential.
Drug Outsourcing Facility
During the first quarter of 2019, the company continued to make changes in its wholly-owned subsidiary, US Compounding (USC), including the elimination of many lower margin products, reductions in operating cost and overhead, changes to senior leadership, and investments in and improvements to manufacturing processes, with the goals of improving overall efficiency, reducing operating expenses, and improving margins.
First Quarter 2019 Financial Results
Revenues were approximately $4.9 million and $3.2 million for the three months ended March 31, 2019 and 2018, respectively. Revenues increased by approximately $1.7 million in the first quarter of 2019 compared to the comparable period of 2018. This represents an approximate 18% increase over the last quarter of 2018 and an approximate 53% increase over the first quarter of 2018. The increase in revenues reflected the continued growth in sales of the USC division and, in part, revenues from the initial launch of SYMJEPI.
Selling, general and administrative expenses ("SG&A") for the first quarter increased approximately 23% over the first quarter of 2018, which were approximately $8.0 million and $6.5 million respectively. The single largest contributor to this increase was the initial annual maintenance fee paid to the FDA for SYMJEPI and the balance was due to an increase in direct materials, supplies and obsolete inventory caused by an increase in production of SYMJEPI and at US Compounding.
Research and development expenses for the first quarter of 2019 decreased $5.6 million from the fourth quarter of 2018. The bulk of this reduction was due to the completion of two late stage development projects for the company’s naloxone injection (APC-6000) and the sublingual tadalafil (APC-8000) product candidates.
Cash and equivalents at the end of the first quarter was $9.2 million. The company’s goal for the last three quarters of 2019 is to keep net cash used in operating and investing activities in the range of approximately $9-12 million. The company currently believes that the combination of reduced spending, cash on hand, an increase in cash flows from Sandoz and USC, and anticipated licensing fees or payments if we enter into a commercialization agreement relating to the naloxone product, would provide sufficient funding for the company through the end of 2019.
Targeted Future Milestones
●Launch by Sandoz of the SYMJEPI 0.3mg and 0.15mg products for the U.S. retail market;
●FDA approval for the higher dose naloxone product candidate – target agency action date of October 31, 2019;
●Commercial agreements for the naloxone product candidate and for the SYMJEPI products outside of the U.S.; and
●US Compounding becoming net positive for Adamis in 2019.
Conference Call
Adamis will host a conference call and live webcast on Thursday, May 9, 2019 at 2:00 pm Pacific Time to discuss its financial and operating results for the first quarter 2019 as well as provide an update on business developments and activities.
US Dial-in (Toll Free): 1-800-458-4148
TOLL/International Dial-in: 1-323-794-2597
Conference ID: 1311319
Webcast: View Source
In addition, a telephone playback of the call will be available after approximately 5:00 pm PT on May 9, 2019. To listen to the replay, call toll free 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally (toll). Please use the replay PIN number 1311319.