Here's Why ADMA Biologics Is Getting Hammered Today

What happened

Shares of ADMA Biologics Inc. (NASDAQ: ADMA) , a biopharmaceutical company that develops and manufactures plasma-derived biologics, fell hard after receiving a complete response letter  (CRL) from the Food and Drug Administration (FDA). Disappointed investors expecting the company to announce Bivigam’s relaunch pounded the stock 45.6% lower on Thursday.

So what

ADMA Biologics collects and sells plasma and plasma-derived products — albeit poorly. The company hasn’t earned a gross profit since 2017, and operations lost a frightening $44 million during the first nine months of 2018.

Businesspeople looking down at a fallen colleague who is face down on the floor.

Image source: Getty Images.

Investors were hoping the FDA would approve a prior approval supplement for Bivigam, a collection of antibodies derived from plasma for patients with primary immunodeficiency. Although approved in 2012, ADMA hasn’t been able to sell any new Bivigam since the FDA shut down production in December 2016. The stock is getting hammered because it looks like the CRL the FDA delivered yesterday pertains to the same manufacturing site issues that have hounded ADMA for years.

Bivigam isn’t the only biologic that ADMA’s having trouble manufacturing. An application for a similar treatment called RI-002 received a CRL for manufacturing site issues in 2016. ADMA reapplied, and the FDA is expected to issue a decision in April. Following the company’s inability to get it right with Bivigam, another CRL wouldn’t surprise anyone.

Now what

Someday, investors might forgive ADMA Biologics for buying a manufacturing site it wasn’t prepared to run, but you shouldn’t expect forgiveness in the near term. There was just $42 million in cash on ADMA’s balance sheet at the end of September after the company lost $48 million during the first nine months of the year. It’s going to feel awkward, but the company will need to tap the equity markets for more capital soon.

10 stocks we like better than ADMA Biologics

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and ADMA Biologics wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.

Wealth Empire Newsletter
Register now for free updates and alerts

Subscribe By

Note: I have the ability to revoke this permission at any time and ask for the removal of my personal data collected by contacting us or simply clicking Unsubscribe.