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ADMA: Moving Forward with RI-002; On Track for Second Half 2016 Approval

By: Nisha Hirani, MD & David Bautz, PhD 


ADMA (ADMA) had a very busy third quarter, and in our opinion, the company has achieved several significant, value-creating milestones during this time period. Below, we will offer a financial and business update on the ADMA story and milestones that the company recently achieved. We believe that the company remains laser focused on getting RI-002 approved and continues to move in the right direction towards this goal. 

Financial & Business Update 

On November 10, 2015, ADMA Biologics, Inc. (ADMA) reported financial results for the third quarter ended September 30, 2015. ADMA reported revenues of $1.9 million for the third quarter 2015 vs. revenues of $1.4 million for the third quarter 2014. Product revenues were above our expectations, and the increase in quarter-over-quarter product revenues was primarily attributable to sales of normal source plasma collected at the ADMA’s recently FDA approved second plasma center. Revenues also included a milestone payment from Biotest AG as a result of the filing of the BLA for RI-002 with the FDA, which is in accordance with the license agreement entered into on December 31, 2012.  

ADMA reported a net loss of $5.1 million, or $0.48 per share, for the third quarter 2015, as compared to a net loss of $3.4 million, or $0.36 per share, for the third quarter 2014. The increased net loss was primarily attributable to higher research and development as well as general and administrative costs, and was above our expectations. R&D expenses were $2.1 million for the third quarter 2015, compared with $1.5 million for the third quarter of 2014. This increase in R&D expenses was primarily due to regulatory and third-party consulting fees and other costs incurred from the filing of the BLA for RI-002 with the FDA. We believe that R&D expenses will be lower throughout 2015 vs. 2014 as a result of the BLA filing and acceptance by the FDA for RI-002 during the third quarter 2015 and the completion of the Phase 3 clinical study of RI-002 during the fourth quarter 2014. For the third quarter 2015, G&A expenses were $2.1 million, compared to $1.0 million for the same period in 2014. The increased G&A expenses for the third quarter 2015 are primarily attributable to consulting expenses associated with pre-commercialization activities. R&D as well as G&A expenses were above our expectations for the quarter. We continue to anticipate increases in G&A expenses in the fourth quarter 2015 as a result of heightened pre-launch, commercial planning, and market research efforts, in addition to the hiring of additional staff as part of the commercial development plan for RI-002 as ADMA continues to prepare for a second half 2016 commercial launch of RI-002. 

As of September 30, 2015, ADMA had $20.9 million of total cash and short-term investments (consisting primarily of $9.2 million of cash and cash equivalents and $11.8 million of short-term investments) as compared to $23.8 million at June 30, 2015. Our model suggests current cash provides adequate funding into the second half of 2016. 

FDA Accepts BLA for RI-002

On September 21, 2015, ADMA announced that the Biologics License Application (BLA) for RI-002 was accepted for review by the U.S. Food and Drug Administration (FDA). The PDUFA date for the FDA to complete the review is scheduled for the second half of 2016. As a reminder, on July 31, 2015, ADMA announced submission of its RI-002 BLA to the FDA, seeking marketing authorization of its lead product candidate, and the FDA had 60 days to review the application to determine whether ADMA’s BLA submission for RI-002 was complete and acceptable for filing. If all goes well and the BLA is approved, we could see a potential approval of RI-002 during the second half of 2016. Management believes that first commercial sales could also occur in the second half of 2016.

FDA Approves Second Plasma Center

On September 17, 2015, ADMA announced that its second plasma center received FDA approval to sell human source plasma within the U.S. The center is located in Marietta, GA, and is over 10,000 square feet with the potential to support over 50 donor beds. We were expecting the facility to receive approval in the fourth quarter of 2015 or the first quarter of 2016, and so we view this early news as great for the company. We still believe that ADMA continues to retain plasma in order to build up inventory in preparation for commercial manufacturing of RI-002 related to the anticipated product launch during the second half of 2016, and that any plasma that is not used to manufacture RI-002 will be released for sale. We are happy to report that ADMA began generating additional revenues from the newly approved second plasma center sooner than anticipated in the third quarter 2015.

We like the concept of ADMA BioCenters because it is a revenue-generating and cost-lowering operation. ADMA BioCenters are FDA-licensed source plasma collection facilities that provide a portion of plasma for the manufacturing of lead product candidate, RI-002, in addition to a revenue stream. As per ADMA, a fully operational plasma center can generate more than $6 million/year. 

ADMA Strengthens Intellectual Property Portfolio

On August 31, 2015, ADMA announced that the U.S. Patent and Trademark Office (USPTO) issued United States Patent 9,107,906 entitled, “Compositions and Methods for the Treatment of Immunodeficiency.” The patent relates to the use of human plasma immunoglobulin compositions containing select antibody titers that are specific for a plurality of respiratory pathogens; methods of identifying human donors and donor samples for use in the compositions; methods of manufacturing the compositions; and methods of utilizing the compositions by prophylactic and/or therapeutic treatments (such as passive immunization). The term of the newly issued patent extends to January 2035. As a reminder, on June 30, 2015, ADMA announced that the U.S. Patent and Trademark Office (USPTO) had issued a Notice of Allowance for U.S. patent application 14/592,721 entitled “Compositions and Methods for the Treatment of Immunodeficiency.” We believe this is great news for ADMA as it not only strengthens the company’s intellectual property portfolio, but also offer protection of RI-002 and is an important step towards commercialization of RI-002, if approved. 

Additional Data that Supports RI-002 

ADMA’s lead candidate, RI-002, is a specialty intravenous immunoglobulin (IVIG) product that contains polyclonal antibodies against various infectious agents that are derived from human plasma. RI-002 contains standardized, high levels of antibodies to respiratory syncytial virus (RSV) in addition to naturally occurring polyclonal antibodies (such as Streptococcus pneumoniae, Haemophilus influenzae type B, Cytomegalovirus, measles, tetanus, etc.). RI-002 is intended to prevent infections in a subset of patients diagnosed with Primary Immunodeficiency Disease (PIDD), and in particular Primary Humoral Immunodeficiency. The polyclonal antibodies that are found in RI-002 are expected to prevent infections in this population group. ADMA plans to seek approval for RI-002 for a target population range of approximately 8,000 to 15,000 patients primarily suffering from PIDD presentations. Potential off-label follow-on indications may include: (1) hematopoietic stem cell transplant (HSCT);2) solid organ transplant (lung, heart, liver, and multi-organ; and (3) cancer patients receiving chemotherapy.

ADMA presented a poster entitled “Protection Against Palivizumab Resistant RSV with an IVIG Containing High Titer Anti RSV Neutralizing Antibodies,” at the 2nd International Primary Immunodeficiencies Congress held November 5-6, 2015 in Budapest, Hungary. The data compared the effectiveness of anti-RSV monoclonal antibody, palivizumab (Synagis®), to that of high titer anti-RSV RI-002 when administered prophylactically to RSV infected cotton rats. The data demonstrated the presence of higher anti-RSV neutralizing activity in RI-002 as compared to that which is present in palivizumab in the animal model (p < 0.0039; Student t test, 2­tailed), and that IVIG containing high titer neutralizing antibodies to RSV can prevent infection in cotton rats infected with a palivizumab resistant strain of RSV. We believe the 4 to 8 fold greater increase in the anti-RSV neutralizing antibody titers from the serum of cotton rats using RI-002 as compared to the rats injected with palivizumab further supports the unique antibody profile of RI-002.

Management believes that there is no other IVIG product currently on the market that contains standardized, high levels of RSV antibodies. Additionally, RI-002 is produced with reported consistent lot-to-lot potency. We believe that these features are what differentiates RI-002 from currently marketed IVIG products. More importantly, if approved, physicians and patients would have an additional selection for IVIG therapy, which in our opinion, could lead to enhanced quality of life for patients. The goal is for RI-002 to replace standard IVIG therapy during the winter months for the subset of patients with PIDD. 


ADMA had a very busy third quarter, and the company has achieved several significant, value-creating milestones during the quarter. With the BLA for RI-002 in patients with PIDD accepted for review, FDA approval of the second plasma center in place (which is now generating revenue), and a key patent issued that further expands ADMA’s RI-002 intellectual property portfolio, we see things as continuing to move in the right direction. We also see the new data demonstrating the ability of RI-002 to prevent infection in the cotton rat with a palivizumab resistant strain of RSV as additional support for the unique antibody profile of RI-002. We continue to view the area of infection prevention (such as RSV) in immunocompromised patients (specifically PIDD, transplantation, and chemotherapy) to be one of significant unmet medical need. There is a well-established FDA regulatory path to approval, and we see RI-002 gaining approval during the second half of 2016. Management anticipates product launch as early as the second half of 2016 if FDA approval is received in accordance with the standard review timeline. 

Due to the unique antibody profile of RI-002, we believe that ADMA has the opportunity to charge a premium over currently marketed standard IVIG products if approved. Although it may take some time for the product to gain momentum, given management’s experience of launching and commercializing plasma derived biological products and the sizeable market for RI-002, we believe this is a very attractive opportunity for investors. 

Based on our assumptions, we calculate a fair value for ADMA at approximately $250 million. With a market cap of approximately $110 million, we feel that the market does not yet fully appreciate ADMA’s potential. Should RI-002 prove to be an effective treatment for additional indications, there is the possibility for significant upside to this valuation. We continue to view ADMA as a compelling investment opportunity, and look forward to seeing management execute on its strategy. We are maintaining our price target of $20 per share, and continue to rate the stock a ‘Buy’.

Follow Nisha on Twitter @HiraniMD


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