Adamis Pharmaceutical Corporation (OTCBB:ADMP) Continues Up on Great Optimism

Adamis Pharmaceutical Corporation (OTCBB:ADMP) does what drug companies do best: grasp onto a piece of positive news and rise as high as possible, before the optimism is lost. The ticker gained 40% on Thursday, reaching 70 cents easily, on dollar volumes above $474,000. The buying is close to the record levels for this company, unseen since 2012.

ADMP holds enough risk, despite the lack of promotion- the historical graph shows times of relentless climbing, and also deep cuts. In the past 12 months, the ticker moved between a peak of $1.10 and a trough at 20 cents, from where it made its latest rebounce.

ADMP was further boosted by a positive Seeking Alpha article a few days ago, and the current upward leg of the journey is not so unusual.

But ADMP has the rare combination of a department dealing with novel treatments, and a conventional pharmaceutical department that would provide short-term revenues. The biggest scourge of pharma companies are the long waiting periods to approve and market a treatment. Thus, the financials for ADMP reveal the effect of robust activity:

• $119,579 cash

• $3.52 million total assets

• $8.45 million total liabilities

• $2.45 million locked in a convertible promissory note

• $31,995 quarterly net loss

ADMP has a market cap of above $108 million, due to the recently boosted prices. Also worrying are the above 104 million shares outstanding, and the further 175 million authorized shares. It seems like ADMP would not be fully able to finance its research division through its conventional pharmaceutical operations.

ADMP recalls the stories of other strong climbers from the same sector. This ticker has the advantage of rising mostly on its own schedule, still not taken up by paid promoters. Elite Pharmaceuticals, Inc. (OTCBB:ELTP) made a large upward swing, only to retreat toward the 12-cent levels.

ADMP has the advantage of holding a proprietary inhaler system, which could compete with market leaders. ADMP has a license to use the 3M technology for building a new model of inhaler, which could compete with Advair by GlaxoSmithKline, potentially taking a piece of a large market serviced by a single product.

But other companies with novel technologies, have suffered setbacks. Biozone Pharmaceuticals, Inc. (OTCBB:BZNE) went ahead with a strong start, but still trades between 40 and 65 cents, often sliding down significantly in a few short days.

ADMP still needs to add data and clarity to its future plans. A setback may kill off the enthusiasm, and cause one of the deep corrections we have seen in past months. If you want to take up ADMP, plan the size and timing of your investment well.