Adamis Pharmaceuticals Corp (NASDAQ:ADMP) was on a downward slide for most of the past five years. However, for several months in 2020, and again early in 2021, it came to life. Last year, it peaked with a $1.45 close in July. In 2021, ADMP stock closed at a nearly two-year high of $1.79 on Jan. 22, but has since slipped back into penny stock territory.
It’s now down around 50% since that January high. Does that make Adamis a buying opportunity? Or, is the latest slide a sign the stock should be avoided?
At its current valuation, Adamis Pharmaceuticals has a market capitalization of around $125 million. There’s nothing inherently wrong with small-cap stocks like this one. Unlike much larger companies, they have more runway for growth. That opens up the potential for big returns. They’re also inexpensive — ADMP stock is under a buck a share.
This is a stock that gets a “B” rating in Portfolio Grader. Not without risk, but a better prospect than its recent share price performance might indicate. Let’s have a look at the Adamis Pharmaceuticals’ situation.
ADMP Stock: It’s All About the Latest Product News
Small-cap stocks, and smaller pharmaceutical companies in general, often see big movements in their share prices based on breaking news about products in development. These companies typically have modest revenue, so any breakthrough could have a material impact on revenue and profitability — and stock price.
Adamis fits firmly in this model and is still seeking to reach the point of profitability. In its most-recent quarter, the company reported revenue of $4.3 million and a loss of 10 cents per share.
Look at the big movements for ADMP stock over the past 12 months, and you’ll see a direct correlation with press releases.
That spike last July had ties to several press releases. The first was news that Adamis had re-submitted an application to the FDA for approval of ZIMHI. The naloxone HCI Injection drug is used for treatment of opioid overdoses. The second was an update on the company’s SYMJEPI drugs, used for treatment of acute allergic reactions, including anaphylactic shock. Adamis announced a new exclusive distribution and commercialization agreement with US WorldMeds. The new licensing agreement has the potential to significantly increase sales of these drugs.
In January, ADMP stock shot up on news the company had filed with the FDA to investigate treatment of Covid-19 with its drug Tempol. The Adamis drug has been shown to reduce severe lung damage from Acute Respiratory Distress Syndrome (ARDS) in animals. In a press release, the company’s CEO noted:
“With over 23 million COVID-19 infections in the US and over 394,000 deaths in the US (according to the CDC), additional treatments are urgently warranted. We believe that Tempol could play a pivotal role not only in the treatment of COVID-19, but actually in preventing hospitalization.”
That was followed up the next day by news that the company’s SYMJEPI injectables were being prominently featured at a discount as part of a national pharmacy retailer’s prescription savings club.
The combination was enough to push ADMP stock up by nearly 130% in just one week.
Taking advantage of its stock price, on Jan. 28, Adamis announced it would be releasing more stock. Concern over dilution of share value has been a big part of the slump in stock since then.
Bottom Line on ADMP Stock
Adamis may be a small-cap stock, but it definitely has growth potential. It has products in retail channels, with signs of increased popularity. It also has drugs in clinical trials — like Tempol for Covid-9 treatment — that could prove to be breakout releases.
If you’re interested in an ADMP stock investment, keep an eye on the company’s Q4 earnings, which are due to be reported any day. In three of the four most-recent quarters, the company missed Wall Street estimates and share prices slid as a result. Based on those odds, a day or two post-earnings might be the better time to make a move.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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