Late last year, generic pharmaceuticals giant, Mylan (NASDAQ:MYL) found itself caught in the crosshairs of a nationwide controversy involving steep increases in the pricing of its life-saving drug injector, EpiPen. Since 2009, the price of an EpiPen two-pack has risen from $100 to over $600 today. These results have been great for Mylan's financials, as last year, EpiPen was responsible for approximately $1 billion in revenue and accounted for 40% of Mylan's total operating profits. But it has been a public relations nightmare.

On the backs of this controversy, Mylan reacted by announcing that the company would be launching a generic version of the EpiPen late last year. This generic version would be priced at half the cost of the branded EpiPen -- around $300. Even so, at half the sales, this would still be a $500 million indication. And one tiny biotech is chomping at the bit in its efforts to dethrone Mylan's EpiPen empire.

Money and pills on opposite ends of a scale

Image source: Getty Images.

The promise of Adamis

Adamis Pharmaceuticals (NASDAQ:ADMP) is a small biopharma company working on developing an alternative to the EpiPen. Similar to the EpiPen, Adamis' product is a pre-filled syringe designed to deliver a single dose of epinephrine as treatment for anaphylaxis (a severe, whole body allergic reaction).

The company estimates that around 8% of American children have some form of food-based allergy and that 38% of these children have a history of severe allergic reactions. As this type of reaction is both immediate and life-threatening, a lower-cost epinephrine auto-injector is in high demand.

A series of unfortunate events

While the controversy involving the EpiPen is rather new, Adamis' quest to produce a low-cost alternative has been going on for several years now. The company first submitted a New Drug Application (NDA) to the FDA for its EpiPen alternative in May of 2014. Unfortunately, the company received a Complete Response Letter (CRL) in 2015 indicating that the FDA had further questions to be resolved before it could approve Adamis' product. Importantly, these issues had nothing to do with the safety or efficacy of Adamis' product -- only the volume of drug contained within Adamis' syringe.

After resolving the issue, Adamis resubmitted its NDA to the FDA in December of 2015. Again, the company received a CRL from the FDA indicating the company needed to expand its "patient usability" and "product stress testing" studies before the product could gain FDA approval. Shares quickly sold off to around the $3 mark and haven't moved much since.

Risky business

Again, following the completion of its "patient usability" study, Adamis resubmitted its NDA to the FDA in December of last year. In January,  the FDA accepted this resubmission and considers it to be a complete response to the earlier CRL sent in 2016.

Overall, while competition has been growing, I still find the risk-reward profile for Adamis to be enticing. Currently sitting at only an $80 million market cap, should Adamis' EpiPen alternative be approved, the stock could gain multiples of its current share price. For the highly risk-tolerant investor, I'd consider Adamis a buy today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.