Summary
- ADMA Biologics has shown substantial progress of late, opening another plasma collection facility and growing sales 78% in H1 2020 over the prior year.
- Recently, ADMA has sold back off to around $2.50/share on news that plasma had limited effectiveness as a COVID-19 treatment.
- Despite strong growth prospects, ADMA trades for just 5x this year's sales and under 3x next year's, and now the FDA issued an EUA for plasma in COVID-19 after all.
ADMA Biologics (ADMA) is a long-term holding of mine that I previously wrote about back in April. At that time, the company had recovered well off its mid-March lows during the broader market sell-off, but ADMA remained significantly below the roughly $4/share level it had been at before.
Figure 1: ADMA Stock Chart (source: finviz)
Since then, ADMA rallied over $3.50/share, but now within the last week has gotten back to the $2.50/share level after news that experts were suggesting that the FDA was going to move slower on approving plasma therapy for COVID-19 based on recent data. In this article, I discuss why I remain very bullish on ADMA and view this pullback as a great long-term buying opportunity.
ADMA Has Continued Its Pattern Of Steady Execution Over The Last Few Months
As I discussed in my prior article, ADMA management has a clearly expressed that it wants to build out its plasma infrastructure towards a goal of being able to produce enough of its products to generate $250 million+ in yearly revenue within 3-5 years.
Figure 2: Summary of ADMA’s Short and Long Term Strategy (source: ADMA’s August 2020 Corporate Presentation)
Since April, ADMA has shown significant progress towards this goal. In July, the company announced that it had opened a second plasma collection center in Knoxville, Tennessee in addition to its original facility in Kennesaw, Georgia. This should roughly double ADMA’s capacity to generate plasma once the facility has been up and running for a full cycle ((7 to 12 months)). On top of that, ADMA announced in its Q2 update that a third facility will open by year end and that construction will start on a fourth facility by year end 2020.
