Shares of ADMA Biologics Inc. (NASDAQ:ADMA), a biopharmaceutical company that develops and manufactures plasma-derived biologics, fell hard after receiving a complete response letter (CRL) from the Food and Drug Administration (FDA). Disappointed investors expecting the company to announce Bivigam's relaunch pounded the stock 45.6% lower on Thursday.
ADMA Biologics collects and sells plasma and plasma-derived products -- albeit poorly. The company hasn't earned a gross profit since 2017, and operations lost a frightening $44 million during the first nine months of 2018.
Investors were hoping the FDA would approve a prior approval supplement for Bivigam, a collection of antibodies derived from plasma for patients with primary immunodeficiency. Although approved in 2012, ADMA hasn't been able to sell any new Bivigam since the FDA shut down production in December 2016. The stock is getting hammered because it looks like the CRL the FDA delivered yesterday pertains to the same manufacturing site issues that have hounded ADMA for years.
Bivigam isn't the only biologic that ADMA's having trouble manufacturing. An application for a similar treatment called RI-002 received a CRL for manufacturing site issues in 2016. ADMA reapplied, and the FDA is expected to issue a decision in April. Following the company's inability to get it right with Bivigam, another CRL wouldn't surprise anyone.
Someday, investors might forgive ADMA Biologics for buying a manufacturing site it wasn't prepared to run, but you shouldn't expect forgiveness in the near term. There was just $42 million in cash on ADMA's balance sheet at the end of September after the company lost $48 million during the first nine months of the year. It's going to feel awkward, but the company will need to tap the equity markets for more capital soon.