ADMA Biologics ADMA is witnessing a phenomenal run this year. Its shares have skyrocketed 320.6% year to date against the industry’s decline of 7.4%. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.

ADMA has recently hit a new 52-week high of $23.64 on Nov. 11. The stock fell 19% since then and is currently trading at $19.01.

The stupendous rally can be attributed to the company’s consistently strong quarterly performance and increased guidance.

ADMA Outperforms Industry, Sector & S&P 500

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Asceniv’s Performance 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 is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies. These antibodies are proteins used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent infection and disease. Asceniv 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 with respiratory syncytial virus plasma obtained from donors tested using the company’s proprietary microneutralization assay.

Total revenues in the third quarter jumped 78% due to increased sales of Asceniv and third-party plasma sales by ADMA’s BioCenters business segment.

ADMA’s Efforts to Expand Asceniv’s Label

In connection with the FDA’s approval of Asceniv in April 2019, ADMA is required to conduct 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.

All pediatric patients in Asceniv’s post-marketing pediatric study have now successfully completed their treatment schedule, and the clinical trial database is on track to be locked in the fourth quarter of 2024.

ADMA expects to file its supplemental biologics license application (sBLA) over the coming quarters, with a potential approval for label expansion in the first half of 2026. A potential label expansion will strengthen ADMA’s product portfolio.

ADMA’s Financial Targets

While reporting third-quarter results, ADMA raised its outlook for 2024 and 2025 yet again. ADMA now expects to generate revenues of more than $415 million in 2024 and $465 million in 2025 (previous guidance: more than $400 million in 2024 and $445 million in 2025). Net income is projected to exceed $120 million in 2024 and $165 million in 2025 (up from the prior guidance of $105 million for 2024 and $155 million for 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. If successful, Asceniv will account for a significant portion of ADMA's total revenues over time, further advancing its potential margin expansion and earnings growth.

Valuation & Estimates

Going by the price/sales ratio, ADMA’s shares currently trade at 9.19x forward sales, higher than its mean of 3.46x and the industry’s 1.72x.

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The bottom-line estimate for 2024 earnings per share has increased 3 cents to 52 cents over the past 60 days, and the same for 2025 has jumped 14 cents.

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Conclusion

ADMA Biologics, which competes with Takeda TAK and Grifols GRFS in the U.S. market for plasma-derived products, is poised to perform well in the upcoming quarters. Incremental additional penetration of Asceniv should accelerate near-term revenue growth.

The targeted market has significant potential. 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.

Large biotech companies are generally considered safe havens for investors interested in this sector. Despite the exceptional rally this year, the stock will likely grow further, given the investors’ confidence in its prospects. Hence, any dip can be used as a buying opportunity.

For investors already owning the stock, staying invested would be a prudent move.

ADMA currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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