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ADMA Biologics Stock Soars 76.2% in 3 Months: Right Time to Invest?
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ADMA Biologics, Inc.’s (ADMA - Free Report) shares skyrocketed 76.2% in the past three months compared with the industry’s growth of 9.6%. The stock also hit a new 52-week high of $19.34 on Sept. 9.
The stupendous rally can be attributed to the company’s impressive performance year to date. Sales in the first half increased 61%. Last month, the company also raised its annual guidance for 2024 and 2025 revenues and net income, based on the continuous growth of its unique and proprietary immunoglobulin, Asceniv.
ADMA Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
ADMA Biologics markets plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases. The innovative portfolio and the company’s efforts to further develop a pipeline of plasma-derived therapeutics in this dynamic biotech sector are commendable.
Investors were also impressed with the company’s strong second-quarter results and raised outlook. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.
Asceniv’s Perfomance Fuels ADMA’s Growth
ADMA Biologics markets plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases. The company’s top line currently comprises sales of three FDA-approved products — Bivigam (an Intravenous Immune Globulin [“IVIG”] product to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease or PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Asceniv, an IVIG product, is indicated for the treatment of PIDD or inborn errors of immunity in adults and adolescents. It is manufactured using ADMA’s unique, patented plasma donor screening methodology and tailored plasma pooling design, which blends normal source plasma and respiratory syncytial virus (RSV) plasma obtained from donors tested using the company’s proprietary microneutralization assay.
The product’s strong sales growth is driving the top line. Its prescriber and patient base continued to increase last year and is expected to grow further in 2024. Last year, ADMA started manufacturing Asceniv at the 4,400-liter production scale for the first time. This has not only improved the product’s margin profile but also increased plant production capacity, as fewer batches are needed to support the company’s revenue goals.
Potential Label Expansion of Asceniv
The company plans to leverage its previously conducted randomized, double-blind, placebo-controlled phase II clinical trial evaluating RI001 in immune-compromised, RSV-infected patients to explore Asceniv for the treatment of RSV or other potential respiratory viral pathogens, as well as in other patient populations.
In connection with the FDA’s approval of Asceniv in April 2019, the company is required to perform a pediatric study to evaluate the safety and efficacy of Asceniv in children and adolescents. The ongoing post-marketing study for Asceniv may provide a label expansion opportunity to include pediatric-aged PI patients.
The late-stage study in 59 PIDD patients met the primary endpoint of no serious bacterial infections reported during the 12 months of treatment. Secondary efficacy endpoints further demonstrated the benefits of Asceniv in the low incidence of infection, therapeutic antibiotic use, days missed from work, school and daycare, and unscheduled medical visits and hospitalizations.
ADMA expects this clinical data, together with the FDA approval for the treatment of PIDD, to better position it to further evaluate the product in immune-compromised patients infected with or at risk of contracting RSV infection or other respiratory viral pathogens in the future.
ADMA Raises Financial Targets
Along with reporting strong second-quarter results last month, ADMA raised its outlook for 2024 and 2025. ADMA expects to generate total revenues of more than $400 million in 2024 and $445 million in 2025 (previous guidance: more than $355 million in 2024 and $410 million in 2025). Net income is projected to exceed $105 million in 2024 and $155 million in 2025 (up from the prior guidance of $85 million in 2024 and $135 million in 2025).
Margin Improvement
ADMA’s higher-margin product portfolio now accounts for more than 50% of its total revenues. The company is working to increase Asceniv's supply further. If successful, Asceniv will account for more than a significant majority of ADMA's total revenues over time, further advancing its potential margin expansion and earnings growth.
Valuation & Estimates
ADMA is currently trading marginally below its 52-week high of $19.34.
Going by the price/sales ratio, ADMA’s shares currently trade at 9.83x forward sales, higher than its mean of 3.30x and 1.73x for the industry.
ADMA Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has gone up to 49 cents from 35 cents over the past 60 days after the company raised its annual forecast.
ADMA Estimate Movement
Image Source: Zacks Investment Research
It’s worth noting that the annual EPS estimate for 2025 has also jumped 11 cents to 64 cents.
Conclusion
ADMA Biologics, which competes with Takeda (TAK - Free Report) and Grifols (GRFS - Free Report) in the market of plasma-derived products in the United States, is poised to perform well in the upcoming quarters as incremental additional penetration of Asceniv should accelerate near-term revenue growth.
The rise in annual guidance for sales and earnings boosts investors’ confidence. Management expects additional opportunities for ADMA to continue to grow substantially in the underserved, immune compromised and co-morbid patient population despite the availability of standard-of-care therapy.
The stock recently hit its 52-week high, with room for further growth. Large biotech companies are generally considered safe havens for investors interested in this sector. Hence, any dip can be used as a buying opportunity.
Image: Bigstock
ADMA Biologics Stock Soars 76.2% in 3 Months: Right Time to Invest?
ADMA Biologics, Inc.’s (ADMA - Free Report) shares skyrocketed 76.2% in the past three months compared with the industry’s growth of 9.6%. The stock also hit a new 52-week high of $19.34 on Sept. 9.
The stupendous rally can be attributed to the company’s impressive performance year to date. Sales in the first half increased 61%. Last month, the company also raised its annual guidance for 2024 and 2025 revenues and net income, based on the continuous growth of its unique and proprietary immunoglobulin, Asceniv.
ADMA Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
ADMA Biologics markets plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases. The innovative portfolio and the company’s efforts to further develop a pipeline of plasma-derived therapeutics in this dynamic biotech sector are commendable.
Investors were also impressed with the company’s strong second-quarter results and raised outlook. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.
Asceniv’s Perfomance Fuels ADMA’s Growth
ADMA Biologics markets plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases. The company’s top line currently comprises sales of three FDA-approved products — Bivigam (an Intravenous Immune Globulin [“IVIG”] product to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease or PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Asceniv, an IVIG product, is indicated for the treatment of PIDD or inborn errors of immunity in adults and adolescents. It is manufactured using ADMA’s unique, patented plasma donor screening methodology and tailored plasma pooling design, which blends normal source plasma and respiratory syncytial virus (RSV) plasma obtained from donors tested using the company’s proprietary microneutralization assay.
The product’s strong sales growth is driving the top line. Its prescriber and patient base continued to increase last year and is expected to grow further in 2024. Last year, ADMA started manufacturing Asceniv at the 4,400-liter production scale for the first time. This has not only improved the product’s margin profile but also increased plant production capacity, as fewer batches are needed to support the company’s revenue goals.
Potential Label Expansion of Asceniv
The company plans to leverage its previously conducted randomized, double-blind, placebo-controlled phase II clinical trial evaluating RI001 in immune-compromised, RSV-infected patients to explore Asceniv for the treatment of RSV or other potential respiratory viral pathogens, as well as in other patient populations.
In connection with the FDA’s approval of Asceniv in April 2019, the company is required to perform a pediatric study to evaluate the safety and efficacy of Asceniv in children and adolescents. The ongoing post-marketing study for Asceniv may provide a label expansion opportunity to include pediatric-aged PI patients.
The late-stage study in 59 PIDD patients met the primary endpoint of no serious bacterial infections reported during the 12 months of treatment. Secondary efficacy endpoints further demonstrated the benefits of Asceniv in the low incidence of infection, therapeutic antibiotic use, days missed from work, school and daycare, and unscheduled medical visits and hospitalizations.
ADMA expects this clinical data, together with the FDA approval for the treatment of PIDD, to better position it to further evaluate the product in immune-compromised patients infected with or at risk of contracting RSV infection or other respiratory viral pathogens in the future.
ADMA Raises Financial Targets
Along with reporting strong second-quarter results last month, ADMA raised its outlook for 2024 and 2025. ADMA expects to generate total revenues of more than $400 million in 2024 and $445 million in 2025 (previous guidance: more than $355 million in 2024 and $410 million in 2025). Net income is projected to exceed $105 million in 2024 and $155 million in 2025 (up from the prior guidance of $85 million in 2024 and $135 million in 2025).
Margin Improvement
ADMA’s higher-margin product portfolio now accounts for more than 50% of its total revenues. The company is working to increase Asceniv's supply further. If successful, Asceniv will account for more than a significant majority of ADMA's total revenues over time, further advancing its potential margin expansion and earnings growth.
Valuation & Estimates
ADMA is currently trading marginally below its 52-week high of $19.34.
Going by the price/sales ratio, ADMA’s shares currently trade at 9.83x forward sales, higher than its mean of 3.30x and 1.73x for the industry.
ADMA Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has gone up to 49 cents from 35 cents over the past 60 days after the company raised its annual forecast.
ADMA Estimate Movement
Image Source: Zacks Investment Research
It’s worth noting that the annual EPS estimate for 2025 has also jumped 11 cents to 64 cents.
Conclusion
ADMA Biologics, which competes with Takeda (TAK - Free Report) and Grifols (GRFS - Free Report) in the market of plasma-derived products in the United States, is poised to perform well in the upcoming quarters as incremental additional penetration of Asceniv should accelerate near-term revenue growth.
The rise in annual guidance for sales and earnings boosts investors’ confidence. Management expects additional opportunities for ADMA to continue to grow substantially in the underserved, immune compromised and co-morbid patient population despite the availability of standard-of-care therapy.
The stock recently hit its 52-week high, with room for further growth. Large biotech companies are generally considered safe havens for investors interested in this sector. Hence, any dip can be used as a buying opportunity.
ADMA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.