ADMA Biologics (ADMA) PT Raised to $14 at H.C. Wainwright

H.C. Wainwright analyst Raghuram Selvaraju raised the price target on ADMA Biologics (NASDAQ: ADMA) to $14.00 (from $13.00) while maintaining a Buy rating.

The analyst commented, "Yesterday, ADMA Biologics announced that it had entered into a five-year manufacturing and supply agreement with an undisclosed partner to produce and sell plasma-derived intermediate fractions from ADMA’s FDA-approved Immune Globulin (IG) manufacturing process. Management estimates that these additional revenues from the sale of these fractions should add $5 - 10M to the company's annual revenues for 2020 and 2021, respectively. Depending on future plant capacity utilization and potential expansion, as well as the forecasted IG production ramp, this contract has the potential to generate $10 - 20M per year from 2022 through 2024. In our view, this announcement constitutes a potentially meaningful incremental positive development for ADMA, since the intermediate fractions in question are generated as part of the manufacturing process for the company's BIVIGAM product and previously were not being monetized. From our vantage point, the arrangement is beneficial because ADMA's partner is slated to simply purchase the intermediate fractions in question to manufacture plasmaderived proteins (PDPs) that ADMA itself does not produce (e.g., Factor VIII, albumin, C1 esterase inhibitor and alpha 1 anti-trypsin), thus enabling ADMA to derive revenue from material that otherwise would have had to be stored indefinitely or simply discarded. There are considerable supply constraints in the PDP market and thus we believe that ADMA may be able to extend this arrangement beyond the current five-year term. As BIVIGAM production increases, the amount of intermediate fraction material produced shall also rise and ADMA's partner ought, in our view, to be willing to purchase all of it. ADMA may need to add a few more personnel per manufacturing shift but otherwise does not have to incur any further costs in producing the intermediate fraction material. We reiterate our Buy rating, while raising our 12-month target to $14 from the previous $13 per share."

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