ADMP is one of the biggest losers in the health sector on Monday after Adamis Pharmaceuticals Corp (NASDAQ:ADMP) said that the US Food and Drug Administration did not approve its opioid overdose treatment, Zimhi.
Major Setback for the Company
The opioid crisis in the United States has seen the emergence of companies that are involved in creating treatments for opioid overdose, and Adamis Pharmaceuticals Corp is one of the well-known ones. That being said, the company had a massive setback today after the United States Food and Drug Administration refused to approve its product Zimhi, which is meant for treating opioid overdose. It goes without saying that this is a massive setback for Adamis, and the reaction in the market was immediate during early trade.
However, there is more. The FDA issued a complete response letter (CRL), in which it laid out the reasons behind the rejection. The regulatory body raised questions about quality control, manufacturing process, and the chemistry of the product. That being said, no questions were raised with regards to either the efficacy or the safety of Zimhi, as per the statement from Adamis Pharmaceuticals.
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ADMP stock plunged by as much as 50% at 0.63 after the news broke.
The Chief Executive Officer of the company, Dr. Dennis J. Carlo, stated that the issues raised by the FDA can be managed, and Adamis will fully cooperate with the regulatory agency.
He explained, “We believe the comments and recommendations stated in the CRL are manageable and plan to fully cooperate with the FDA. We remain committed to this product.” Adamis Pharmaceuticals went on to add it is going to set up a meeting with the FDA as soon as it possibly can and submit its application once again for approval. It remains to be seen how it all works out for the company once it does so.
The drop in ADMP stock is perhaps an indication that investors genuinely felt that the approval for the product could ease Adamis’s dependence on its allergy shot product. An analyst at Maxim Group estimated (prior to the FDA’s decision) that Zimhi could generate as much as $70.8 million in peak sales in 2028, and hence, the plunge in ADMP stock price is not entirely surprising.
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