On August 21, 2023 Adamis Pharmaceuticals Corporation (NASDAQ: ADMP), a commercial-stage biopharmaceutical company, reported financial results for the second quarter ended June 30, 2023, and provided an update on recent corporate developments (Press release, Adamis Pharmaceuticals, AUG 21, 2023, View Source [SID1234634592]).
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Q2 2023 Corporate Highlights
· In May, the Company closed the merger with DMK Pharmaceuticals Corporation (DMK), a private, clinical-stage biotechnology company at the forefront of endorphin-inspired drug design focused on developing novel treatments for opioid use disorder and other neuro-based diseases. Ebrahim Versi, MD, PhD, CEO of DMK, was named CEO of Adamis and Chairman of the Board of Directors. David J. Marguglio, previously Chief Executive Officer of Adamis, assumed the role of President and Chief Operating Officer of the combined company. Changes to the composition of the Board of Directors were also made.
· In June, management participated in the White House Roundtable with Opioid Reversal Product Manufacturers hosted by White House Office of National Drug Control Policy Director, Dr. Rahul Gupta, White House Domestic Policy Council Advisor Neera Tanden, U.S. Assistant Secretary for Health Admiral Rachel Levine, and U.S. Assistant Secretary for Mental Health and Substance Use Dr. Miriam E. Delphin-Rittmon. While in Washington, D.C., management also met individually with 12 members and/or staff of the House of Representatives and Senate, from both parties, and discussed the opioid crisis and potential ways it could be mitigated.
· Also in June, the Company announced that its wholly owned subsidiary DMK was the recipient of a grant from the National Institute of Alcohol Abuse and Alcoholism (NIAAA) of the National Institutes of Health (NIH) to support the development of a novel bifunctional small molecule for the treatment of alcohol use disorder.
· In July, the Company committed to an unrestricted research grant to the Leiden University Medical Center Anesthesia and Pain Research Unit, to fund a ZIMHI clinical study by Albert Dahan, MD, PhD, a world expert on opioid-induced respiratory depression, otherwise known as an opioid overdose. The objective of the work will be to assess the efficacy of the Company’s ZIMHI product compared to 4mg of intranasal naloxone, which is comparable to NARCAN, and the respective number of doses required to reverse fentanyl-induced respiratory depression.
Recent Corporate Updates
· On August 4, 2023, the Company announced the closing of a public offering of 5,930,000 units at a public offering price of $1.35, with each unit consisting of one share of common stock (or pre-funded warrant in lieu thereof) and one warrant to purchase one share of common stock. The Company received gross proceeds of approximately $8.0 million before deducting fees and other estimated offering expenses at the closing, and has received additional proceeds resulting from exercises after the closing date of some of the warrants issued in the transaction.
Q2 2023 Financial Highlights
· Revenues for the second quarter ending June 30, 2023 were $0.0 million compared to $0.0 million for the same period in 2022. Revenues were negligible in both periods because no manufacturing of commercial products occurred in the second quarter in 2023 or 2022. Revenues for the six months ending June 30, 2023 and 2022 were approximately $1.5 million and $1.2 million, respectively. The increase was due to higher manufacturing demand for ZIMHI in the first quarter of 2023 versus 2022.
· Selling, general and administrative (SG&A) expenses for the three months ending June 30, 2023 were $4.0 million compared to $4.2 million for the second quarter of 2022. SG&A expenses for the first six months ending June 30, 2023 and 2022 were $8.8 million and $7.6 million, respectively. The increase was primarily attributable to approximately $1.3 million in transaction costs associated with the DMK merger.
· Research and development (R&D) expense for the second quarter of 2023 was $0.4 million compared to $3.2 million in the second quarter of the prior year. R&D expense for the first six months of 2023 was $1.7 million, compared to $7.5 million in the same period in 2022. The decline in both periods was due to terminating the clinical development activity related to a previous product candidate.
· Net loss for the combined (continued and discontinued) operations for the second quarter of 2023 was $8.6 compared to a net loss of $8.4 million in the second quarter of 2022. The increase was primarily attributable to a charge of $6.5 million for DMK’s in-process research and development acquired in the merger. Net loss for the six months ended June 30, 2023 and 2022 was $17.5 million and $18.8 million, respectively.
· Cash and cash equivalents as of June 30, 2023, were approximately $0.6 million. Additional cash infusions subsequent to the close of the second quarter include net proceeds of approximately $1.8 million from the sale of assets related to the discontinued US Compounding operations and net proceeds of approximately $7.0 million from the Company’s equity financing transaction that occurred in August.