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Snowball research notes – price crash series

Why Adamas Pharmaceuticals, Inc. (ADMS) Shares Crashed 33%?

by | Mar 6, 2019

Adamas Pharmaceuticals, Inc. (ADMS)

M.Cap: $223 million

The company manufactures GOCOVRI™ (amantadine) extended-release capsules, which is the first and only FDA-approved medication indicated for the treatment of dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy, with or without concomitant dopaminergic medications. GOCOVRI was approved for marketing by the US Food and Drug Administration, or FDA, on August 24, 2017, with seven years of orphan exclusivity and additional patent protections out to 2034, and was fully launched with a deployed sales force in January 2018.

Reason for the stock price crash

In spite of posting stellar financial performance in the fourth quarter 2018, shares of Adamas Pharmaceuticals fell 32.8%. The company reported GOCOVRI net product sales of $13.3 million for the three months ended December 31, 2018, compared to $0.6 million for the three months ended December 31, 2017. It is to be noted that only from 2018, the company started generating meaningful revenue.

So, the reason for the price crash could be due to the fact that the company was experiencing slower growth in “total prescriptions” in the latter part of 2018 and in the first part of 2019.

The approximate number of total prescriptions in the third and fourth quarter of 2018, were 4,740 and 5,730, respectively, a sequential quarterly increase of 1,310 and 990, respectively. The rate of total prescription growth slowed in the latter part of 2018, and we have continued to see this slowing in the first part of 2019.


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