It is a common practice of small pharma companies to enter into
agreements with larger pharma companies for the development and
commercialization of products. Such deals fetch milestone payments
and royalties for the smaller pharma companies.
Earlier this week,
Adamas Pharmaceuticals, Inc.
) received a milestone payment of $25 million from
) related to MDX-8704.
The amount was paid following the acceptance of the New Drug
Application (NDA) for MDX-8704 by the FDA. MDX-8704 is a
fixed-dosed combination of Forest Labs' Namenda XR (memantine HCl)
) Aricept (donepezil HCl). Forest Labs is looking to get MDX-8704
approved as a once-daily treatment of moderate-to-severe dementia
of the Alzheimer's type.
Forest Labs and Adamas collaboration deal for MDX-8704 dates back
to Nov 2012. While Forest Labs enjoys exclusive U.S.
commercialization rights to the candidate, Adamas will market it
exclusively outside the U.S.
Adamas had received $65 million as an upfront payment from Forest
Labs. Adamas also received a $40 million payment related to the
development of MDX-8704 in the fourth quarter of 2013. Further,
Adamas is eligible to receive up to $30 million on the FDA approval
of the candidate.
The 2012 agreement also includes Forest Labs' Namenda XR
(moderate-to-severe dementia related to Alzheimer's disease).
Adamas will be receiving royalties on U.S. net sales of Namenda XR
and MDX-8704 (if approved) after five years from the date of their
We note that Adamas currently has no approved products. The
company's lead wholly-owned candidate is ADS-5102. The company
expects to initiate a phase III study on the candidate for the
treatment of levodopa-induced dyskinesia. ADS-5102 is also being
developed for the treatment of chronic behavioral symptoms
associated with traumatic brain injury. We believe the successful
development of ADS-5102 is crucial for the company.
Adamas currently carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the healthcare sector include
), carrying a Zacks Rank #1 (Strong Buy).
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ADAMAS PHARMA (ADMS): Free Stock Analysis
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