UPDATE: Cowen Starts Adamas Pharmaceuticals (ADMS) at Outperform

Cowen initiated coverage on Adamas Pharmaceuticals (NASDAQ: ADMS) with an Outperform rating and a price target of $45. Analyst Ken Cacciatore thinks ADS-5102 will be a success.

"Given our consultants' conviction in ADS-5102, as well as our belief in the likelihood of additional innovative products, we would add at these levels," said Cacciatore.

The analyst continued, "For ADS-5102 in LID, we assume a potential approval and launch by late 2017 in the US. We estimate roughly a 30% penetration in the treatable moderate/severe LID patient population by 2025, which would result in roughly 60K treated LID patients and $350-500MM in annual sales. By 2019 we assume contribution from either Europe, and/or additional indications, potentially yielding an additional $200MM+ from this program. Adamas will also receive future royalties on Namenda XR and Namzaric sales. For Namenda XR, Adamas will receive royalties from mid-2018 to 2020, which we estimate will be somewhat immaterial. For Namzaric, we expect sales to grow to $400MM+ by 2020, and from mid-2020 to 2028, Adamas will receive low-to-mid-teens royalties that we estimate will peak at $65MM per year and total $500MM. Using the sales estimates provided above, we arrive at a DCF valuation of $45 per share. We view ADS-4101 for epilepsy and other undisclosed programs largely as upside to our thesis."

For an analyst ratings summary and ratings history on Adamas Pharmaceuticals click here. For more ratings news on Adamas Pharmaceuticals click here.

Shares of Adamas Pharmaceuticals closed at $25.01 yesterday.

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