ADMA Biologics ADMA shares have skyrocketed 275.7% in a year against the industry’s decline of 14.3%. The stock has also outperformed the sector and the S&P 500 during the aforementioned period.

ADMA also hit a 52-week high of $23.64 on Nov. 11. The stupendous rally can be attributed to the company’s consistently strong quarterly performance and raised 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, its lead product, 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 completed their treatment schedule.  ADMA expects to file its supplemental biologics license application over the coming quarters, with a potential approval for label expansion in the first half of 2026. A potential label expansion should strengthen ADMA’s product portfolio.

ADMA’s Financial Targets

While reporting third-quarter results, ADMA raised its outlook for 2024 and 2025 once 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 8.86x forward sales, higher than its mean of 3.31x and the industry’s 1.69x.

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Estimate Movement

The estimate for 2024 and 2025 earnings per share has remained stable at 52 cents and 78 cents, respectively over the past 60 days.

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Conclusion

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

The targeted market has significant growth 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.

However, the exceptional rally witnessed by the stock might limit any further gains. We advise investors to wait for now. For investors already owning the stock, staying invested would be a prudent move.

ADMA currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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