William Blair has initiated coverage of Adamas Pharmaceuticals (NASDAQ:ADMS) with an “outperform” rating and price target of $35. The stock closed at $20.01 on Friday.
Adamas is focused on therapies for the treatment of central nervous disorders; specifically, a pipeline that spans treatments for Alzheimer’s disease, Parkinson’s disease, and traumatic brain injury.
These pipeline products are composed of extended-release and fixed-dose combinations of existing products, which will follow the 505(b)(2) regulatory pathway, a strategy that should enable lower-risk clinical development, writes analyst Tim Lugo.
The disclosed pipeline at Adamas includes three products, two of which—Namenda XR and the Namenda XR/donepezil fixed-dose combination will play a critical role in solidifying the $1.6-billion Namenda franchise for development partner Forest Laboratories.
“Given the high-profile acquisition of Forest by Actavis for $25-billion, we believe the Namenda royalty stream has been de-risked,” Mr. Lugo said.
“While we wait for the Namenda franchise royalties to begin in 2018, we believe investor focus should remain on the development of ADS-5102, a product for levodopa-induced dyskinesia (LID) in Parkinson’s disease,” he added. ADS-5102 data suggests efficacy well beyond immediate-release amantadine for LID.
“While experience with amantadine in Parkinson’s disease dates to the 1970s, the extended-release formulation of ADS-5102 allows for more tolerable and effective dosing, which we believe has led to best-in-class data from the Phase 2/3 EASED study,” said. Adamas will initiate the second Phase 3 study for ADS-5102 in the near term, with data likely to report out in 2016.