ADMA Biologics Inc (NASDAQ: ADMA) is headed for the top in the market this morning, and for good reason. The company said that the FDA has granted approval for its expanded manufacturing process.
Here’s the scoop:
ADMA Biologics Announces FDA Approval
In the press release, ADMA Biologics said that the United States Food and Drug Administration has granted approval for the Company’s expanded manufacturing process, enabling fractionation and purification of a 4,400-liter plasma pool for the manufacture of Intravenous Immune Globulin.
The company went on to explain that the 4,400-liter IVIG plasma pool scale for BIVIGAM will allow ADMA to expand its manufacturing plant’s total capacity from 400,000 liters to an anticipated peak throughput of up to 600,000 liters.
Importantly, this approval gives the company the ability to produce BIVIGAM at an expanded capacity with the same high quality as the previous manufacturing scale, all while using the same equipment, release testing assays, disposables and labor force. So, essentially, capacity is climbing with minimal increase to cost.
As a result, the company said that this will likely equate into meaningful gross margin improvements as production throughput flows through the standard 7 to 12-month manufacturing cycle for plasma-derived therapies.
Moreover, the approval gives the company the ability to offer BIVIGAM in two vial sizes, 50 mL and 100 mL.
In a statement, Adam Grossman, President and CEO at ADMA, had the following to offer:
The FDA approval of the 4,400-liter IVIG plasma pool production scale process is a transformative milestone for the ADMA organization and will allow the Company to produce significantly more IVIG for the U.S. market and for patients living with immune deficiencies.
The expanded plasma pool production scale allows us to confidently commit to generating peak revenues in excess of $300 million and this approval solidifies the pathway to meaningful gross margin expansion beginning potentially in the second half of 2021 and accelerating throughout 2022. In addition to the increase in ADMA’s multi-year financial guidance, the Company is reiterating its expectation for quarter-over-quarter revenue growth throughout 2021 and beyond. We commend our employees’ dedication in achieving this important manufacturing milestone and look forward to increasing our production capacity rapidly over the forward-looking quarters.
The Bottom Line
The bottom line here is simple. This news is absolutely huge. Over the next year or so, we should see greatly improved margins, which will equatel to a better bottom line and likely growth in the value of the stock. All told, ADMA stock is well worth paying close attention to.