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ADMA Biologics (ADMA) Hits 52-Week High: More Room to Grow?
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ADMA Biologics, Inc.’s (ADMA - Free Report) shares have surged 31.4% in a month compared with the industry’s growth of 1.4%. The stock hit its 52-week high of $17.87 on Aug 14.
The significant growth can be attributed to the company’s better-than-expected second-quarter results, wherein both the top and bottom-lines beat their estimates. 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 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 for 2024 and $135 million for 2025), reflecting an estimated 48% year-over-year improvement.
Investors were impressed with the second-quarter performance and raised outlook. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.
ADMA Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Asceniv Perfomance Will Drive 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 (to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease (PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Asceniv is indicated for the treatment of PIDD or inborn errors of immunity in adults and adolescents. The product’s sales growth is driving the top-line. The drug’s 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 ongoing post-marketing pediatric clinical study for Asceniv may provide label expansion opportunities, if successful.
The late-stage study in 59 PIDD patients met the primary endpoint of no Serious Bacterial Infections (“SBI”) 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.
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 $17.87.
Going by the price/sales ratio, ADMA’s shares currently trade at 9.30x forward sales, higher than its mean of 3.24x and 2.02x for the industry.
Image Source: Zacks Investment Research
Estimate Movement
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has gone up to 49 cents from 35 cents over the past 30 days after the company raised its annual forecast.
It’s worth noting that the annual EPS estimate for 2025 has also jumped 11 cents to 64 cents.
Image Source: Zacks Investment Research
Conclusion
ADMA Biologics, which competes with the likes of 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 is confident of 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 (ADMA) Hits 52-Week High: More Room to Grow?
ADMA Biologics, Inc.’s (ADMA - Free Report) shares have surged 31.4% in a month compared with the industry’s growth of 1.4%. The stock hit its 52-week high of $17.87 on Aug 14.
The significant growth can be attributed to the company’s better-than-expected second-quarter results, wherein both the top and bottom-lines beat their estimates. 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 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 for 2024 and $135 million for 2025), reflecting an estimated 48% year-over-year improvement.
Investors were impressed with the second-quarter performance and raised outlook. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.
ADMA Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Asceniv Perfomance Will Drive 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 (to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease (PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Asceniv is indicated for the treatment of PIDD or inborn errors of immunity in adults and adolescents. The product’s sales growth is driving the top-line. The drug’s 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 ongoing post-marketing pediatric clinical study for Asceniv may provide label expansion opportunities, if successful.
The late-stage study in 59 PIDD patients met the primary endpoint of no Serious Bacterial Infections (“SBI”) 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.
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 $17.87.
Going by the price/sales ratio, ADMA’s shares currently trade at 9.30x forward sales, higher than its mean of 3.24x and 2.02x for the industry.
Image Source: Zacks Investment Research
Estimate Movement
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has gone up to 49 cents from 35 cents over the past 30 days after the company raised its annual forecast.
It’s worth noting that the annual EPS estimate for 2025 has also jumped 11 cents to 64 cents.
Image Source: Zacks Investment Research
Conclusion
ADMA Biologics, which competes with the likes of 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 is confident of 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.