Recent FDA approval of a novel treatment has caused this microcap stock’s price to soar today, but is it a wise investment for the future?
Oct. 18, 2021
Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) is a California-based specialty biopharmaceutical company. It specializes in developing and commercializing various products across multiple therapeutic areas. Today, the company announced that its latest product, ZIMHI, has received FDA approval. ZIMHI is a high-dose naloxone injection that has been developed specifically to treat the effects of an opioid overdose.
So what does this mean for investors?
This morning, Adamis’ price had risen by 23% pre-market following the announcement of ZIMHI’s FDA approval. This put the stock at a 6-month high with investors reacting extremely positively to the news.
Adamis also recently announced that it has moved its latest COVID-19 treatment into clinical adult trials. The drug, named Tempol, is an oral antiviral that is in development to attempt to counteract the immediate symptoms of COVID-19. If this works, it has the potential to reduce hospitalizations caused by COVID-19 infection. It also has the distinct benefit of being a non-injected drug, which could increase popularity among needle-averse patients.
Its share price rose 2.7% following the news of advancement to clinical trials, and a further boost would be likely if the drug was granted FDA approval. Similar spikes in COVID-19 related pharmaceutical stocks have been seen previously in companies such as Moderna and Novavax following drug approval so it’s likely Adamis would follow suit.
So should I buy Adamis Pharmaceuticals stock?
Despite soaring stock prices following its recent FDA approval, Adamis presents quite a significant amount of risk as a stock pick. With a market cap of $201 million, Adamis is classed as a microcap stock.
Another title often given to this company is a “Penny Stock.” These stocks are typically incredibly volatile and can be susceptible to price manipulation. Here at MyWallSt, we prefer to take the approach of investing in established companies with brilliant track records, AND that we’re comfortable holding for 5-10 years at least!
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