While many Nasdaq biotech plays suffered in a lateral correction during the first half of this year, ADMA Biologics Inc (NASDAQ:ADMA) shares powered higher, rising over 70% during the first four months of 2018. The stock is back on the rise over the past 30 days, breaking out on the company’s Q2 report. The pullback we have seen over the past 10 days is a potential trading opportunity for those looking to buy into a pullback. The stock just bounced off its 50-day simple moving average on Monday, holding well above the $5/share level in the process.
The big picture here is that of a strong research team that is managing to maintain a strong balance sheet, which suggests they will continue to have the resources to bring assets to market over time. “During the quarter we strengthened our balance sheet by completing a $46 million financing with well-known healthcare institutions and insider participation. This financing, coupled with our previously existing cash balance, provides funding for ADMA through several key regulatory and commercial milestones. We are pleased with our quarter-over-quarter revenue growth attributed to the commercial assets that we received as part of the Biotest Therapy Business Unit (“BTBU”) transaction in June 2017,” stated Adam Grossman, President and Chief Executive Officer of ADMA.
Getting to Know ADMA
ADMA Biologics Inc (NASDAQ: ADMA) bills itself as a vertically integrated commercial biopharmaceutical company that manufactures, markets and develops specialty plasma-based biologics for the treatment of Primary Immune Deficiency Disease (“PIDD”) and the prevention and treatment of certain infectious diseases.
By the end of Q2 2018, the company was sitting on cash and cash equivalents of $55.2 million, as compared to $43.1 million at December 31, 2017. In other words, as noted above by the company’s president, resources are not diminishing despite the active R&D activity.
According to its recent report, “ADMA’s net working capital as of June 30, 2018, was $66.7 million, as compared to $53.7 million as of December 31, 2017. In the second quarter of 2018, the Company completed an underwritten public offering of its common stock and received net proceeds of $42.9 million.”
ADMA’s mission is to develop and commercialize plasma-derived, human immune globulins targeted to niche patient populations for the treatment and prevention of certain infectious diseases.
The target patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disease, or who may be immune-compromised for other medical reasons. ADMA has received U.S. Patents 9,107,906, 9,714,283, 9,815,886 and 9,969,793 related to certain aspects of its lead product candidate, RI-002.
Drilling into the Numbers
Traders will note 13% added to share values of the stock over the past month of action. Furthermore, the listing has seen a growing influx of trading interest, with the stock’s recent average trading volume running above 100% over what the stock has registered over the longer term.
It pays to take note of this fact given the stock’s tiny trading float of just 12.8 million shares. One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.
Now commanding a market cap of $259M, ADMA has a significant war chest ($55.2M) of cash on the books, which is balanced by virtually no total current liabilities. One should also note that debt has been growing over recent quarters. ADMA is pulling in trailing 12-month revenues of $25.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 37%.
This may be a very interesting story and we will look forward to updating it again soon.