On March 15, 2019 Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) reported financial results for the year ended December 31, 2018 and provided a business update (Press release, Adamis Pharmaceuticals, MAR 15, 2019, View Source [SID1234534400]).
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Dr. Dennis J. Carlo, President and Chief Executive Officer of Adamis Pharmaceuticals, stated, "There were several significant developments for our company during 2018. I view the marketing and distribution agreement with Sandoz for our SYMJEPI products, approval of the SYMJEPI 0.15mg product and submission of a new drug application (NDA) for our higher dose naloxone injection product to be the most significant developments, laying the groundwork for what I hope will be a transformative year for the company. We are also encouraged by the performance of US Compounding in early 2019 and we look forward to expanding our production capacity."
Select Events Since Last Business Update:
First commercial product delivered to Sandoz;
NDA submitted to the FDA and accepted for review for the higher dose naloxone injection product candidate;
NDA submitted to the FDA and received a refusal to file letter for the tadalafil product candidate;
Drug Outsourcing Facility (U.S. Compounding) increased revenue by 15%; and
Sandoz announces launch of SYMJEPI 0.3mg product to the institutional market in the U.S.
Product Updates
SYMJEPI (epinephrine) Injection (0.3mg and 0.15mg)
As announced in the third quarter of 2018, the company entered into a commercialization and distribution agreement with Sandoz, a division of Novartis, to market and sell SYMJEPI (epinephrine) Injection 0.3mg and SYMJEPI (epinephrine) Injection 0.15mg (upon approval) in the U.S. The company also granted Sandoz a right of first negotiation for territories outside the U.S. On September 27, 2018, the FDA approved the SYMJEPI 0.15mg product. In January 2019, Sandoz announced the launch of SYMJEPI 0.3mg product for the institutional market in the U.S.
APC-6000 (naloxone)
As announced in December 2018, the company filed an NDA relating to its higher dose naloxone injection product for the treatment of opioid overdose. On March 14, 2019, the company received notice from the FDA that it had determined the NDA was sufficiently complete to permit a substantive review and provided a target agency action date of October 31, 2019. Please refer to the company’s March 14, 2019 press release for additional information.
APC-8000 (sublingual tadalafil)
In December 2018, the company announced that it had filed an NDA for a fast-disintegrating sublingual tadalafil (APC-8000) product candidate. On February 26, 2019, the company received a refusal to file letter from the FDA indicating it had determined that the submitted NDA was not sufficiently complete to permit a substantive review. The FDA requested that the company supplement and include in a resubmitted NDA additional data and information. The company continues to evaluate the FDA’s comments, and it may seek immediate guidance from the FDA, including requesting a Type A meeting, to discuss the letter and the specific deliverables the agency would require for a resubmitted NDA to be deemed complete.
APC-1000 (beclomethasone)
In 2018, the company submitted an IND application and received clearance from the FDA to begin Phase 3 efficacy studies for APC-1000. In Q4 2018, it initiated the start-up phase of the phase 3 studies of APC-1000. The company anticipates that trial enrollment will commence in 2019; however, the timing of enrollment and completion of such studies could be affected by a number of factors as described in the company’s Form 10-K.
APC-4000 (fluticasone)
During 2018, the company completed development and manufacturing work on the patented dry powder inhaler (DPI) technology that the company acquired from 3M. Adamis is now focused on continuing and completing the drug development work, which includes loading fluticasone onto the tape and into the device, in order to demonstrate the device can achieve the targeted dosing. Once completed, the company may seek a development or commercial partner to help advance the product through a regulatory pathway.
Drug Outsourcing Facility
The company’s wholly-owned subsidiary, US Compounding (USC), has continually grown its revenues year over year since Adamis acquired the division. During 2018, USC continued to make improvements in its processes and efficiencies while maintaining its focus on quality. Although net revenue grew 15% over 2017, it did not meet the company’s previously stated growth target. Therefore, during the first quarter of 2019, Adamis has made changes to USC personnel and strategy with the objective of achieving profitability for the division during 2019.
2018 Financial Results
Revenues were approximately $15.1 million and $13.1 million for the years ended December 31, 2018 and 2017, respectively. The increase of approximately $2.0 million reflected an increase in sales of USC’s compounded and non-compounded pharmaceutical formulations resulting in part from price increases, increase in unit sales production capacity in order to meet product demand, and marketing personnel efforts.
Selling, general and administrative expenses (SG&A) for the years ending December 31, 2018 and 2017 were approximately $26.0 million and $22.8 million, respectively. SG&A expenses consist primarily of depreciation and amortization, legal fees, accounting and audit fees, professional/consulting fees and employee compensation. Compensation expense for SG&A employees increased by approximately $2.0 million for 2018 compared to 2017, primarily due to new hires, increases in salary expenses and bonus accruals, and expenses associated with equity compensation and other employee benefits. Approximately $0.5 million of the increase for 2018 was due to PDUFA fees, marketing, selling, insurance, consulting, outside services and travel expenses; approximately $0.3 million of the increase was due to increases in patent fees; and approximately $0.4 million of the increase was due to increases in occupancy costs, insurance, supplies, taxes, and other related expenses.
Research and development expenses (R&D) were approximately $18.8 million and $7.5 million for the years ended December 31, 2018 and 2017, respectively. The increase in R&D for 2018, compared to 2017 was primarily due to an increase of approximately $8.8 million in development costs of the company’s product candidates, including APC-1000, APC-4000, APC-6000 and APC-8000. Compensation for R&D employees, consulting, and other operating expenses increased by approximately $1.6 million for 2018 compared to 2017, primarily due to new hires and cash and equity compensation expenses. As noted in its November 2018 press release, the company experienced increased research and development expenses for the fourth quarter of 2018.
At December 31, 2018, the Company had cash and cash equivalents of $19.3 million.
Targeted Future Milestones
FDA approval for the higher dose naloxone product candidate – target agency action date of October 31, 2019;
Sandoz’s launch of the SYMJEPI 0.3mg and 0.15mg products for the U.S. retail market;
Commercial agreements for the naloxone product candidate and for the SYMJEPI 0.3mg and 0.15mg products outside of the U.S.; and
US Compounding reaching profitability in 2019 (targeted by mid-year).