1. ORGANIZATION AND BUSINESS
|3 Months Ended|
Mar. 31, 2016
|Accounting Policies [Abstract]|
|1. ORGANIZATION AND BUSINESS||
ADMA Biologics, Inc. (ADMA or the Company) is a late stage biopharmaceutical company that develops, manufactures, and intends to commercialize specialty plasma-based biologics for the treatment and prevention of certain infectious diseases. The Companys targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disease or who may be immune-suppressed for medical reasons. ADMA also operates its wholly-owned subsidiary, ADMA BioCenters Georgia, Inc., (ADMA BioCenters), a source plasma collection business with U.S. Food and Drug Administration (FDA) approved facilities in Norcross, Georgia and Marietta, Georgia. Each facility holds certifications from the German Health Authority (GHA) and the Korean Ministry of Food and Drug Safety (MFDS). ADMA BioCenters provides ADMA with a portion of its raw material plasma for the manufacture of RI-002, ADMAs lead product candidate, which is intended for the treatment of Primary Immune Deficiency Disease, (PIDD). A Biologics License Application (BLA) for RI-002 was submitted to the FDA and accepted for review during the third quarter of 2015. The Companys Marietta, Georgia center received FDA approval to sell human source plasma within the U.S. during the third quarter of 2015.
The Company has experienced net losses and negative cash flows from operations since inception in 2004 and expects these conditions to continue for the foreseeable future. Since inception, the Company has needed to raise capital from the sales of its equity securities and debt financings to sustain operations.
In October 2013, the Company completed an Initial Public Offering (IPO) to raise gross proceeds of approximately $29.1 million. In March 2015, ADMA completed an underwritten public offering of its common stock, raising gross proceeds of approximately $11.3 million. In June 2015, ADMA entered into a Loan and Security Agreement (the LSA) with Oxford Finance LLC (Oxford), as collateral agent and lender, pursuant to which ADMA accessed an initial term loan in the aggregate principal amount of $16.0 million, of which approximately $15.7 million was used to repay a prior loan balance of approximately $15.0 million to Hercules Technology Growth Capital, Inc. (Hercules), along with approximately $0.4 million of interest and approximately $0.3 million of prepayment premium and other fees, under its prior loan and security agreement, dated December 21, 2012, with Hercules (the Prior Loan Agreement), as amended on February 24, 2014, (see Note 3). ADMA may elect to access an additional term loan under the LSA in the aggregate principal amount of $5.0 million if it receives approval of its BLA for RI-002 from the FDA on or before January 31, 2017, which funding would also extend its interest only period for an additional six months pursuant to the May 2016 amendment to the LSA. In May 2016 the Company amended its LSA with Oxford. This amendment provided ADMA with an additional $4.0 million term loan, the availability of which was predicated on completing an equity financing of its common stock of at least $10.0 million in gross proceeds no later than May 31, 2016. In May 2016, the Company completed an underwritten public offering of its common stock, raising gross proceeds of approximately $14.1 million, (see Note 8 for additional details on the equity financing and loan amendment) and subsequently borrowed an additional $4.0 million from Oxford under the amended LSA, which brings the total principal borrowed to $20.0 million.
As of March 31, 2016, the Company had working capital of $13.1 million, consisting primarily of $8.9 million of cash and cash equivalents, $2.7 million of short-term investments, $1.0 million of accounts receivable, $4.0 million of inventories, and $0.7 million of prepaid expenses, offset primarily by $2.4 million of accounts payable, $1.7 million of accrued expenses and $0.1 million of deferred revenue. Based upon the Companys projected revenue and expenditures for 2016 and 2017, including the ongoing implementation of the Companys commercialization and expansion activities, management currently believes that its cash, cash equivalents, short-term investments and accounts receivable as of the date of this report are sufficient to fund ADMAs operations, as currently conducted, into the second half of 2017. Because the Company does not anticipate receiving FDA approval for RI-002 earlier than the second half of 2016, if at all, the Company would not expect to generate revenue from the commercialization of RI-002 earlier than such time, if at all. Furthermore, if the Companys assumptions are incorrect underlying its estimated expenses, timing of FDA approval for RI-002, or estimated revenues for RI-002, it may have to raise additional capital sooner than anticipated. The Company has the option to borrow an additional $5.0 million through its current LSA with Oxford, based upon the Company receiving BLA approval by the FDA for RI-002 by January 31, 2017. Other than this additional $5.0 million, the Company does not have any existing commitments for future external funding. The sale of additional equity or debt securities, if convertible, could result in dilution to the Companys stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict the Companys operations or other financing alternatives. Additional equity or debt financing, grants, or corporate collaboration and potential licensing arrangements may not be available on acceptable terms, if at all. If adequate funds are not available, the Company may be required to delay, reduce the scope of or eliminate the Companys research and development programs, reduce the Companys planned clinical trials and delay or abandon potential commercialization efforts of the Companys lead or other product candidates. The Company has reported losses since inception in June 2004 through March 31, 2016 of $92.0 million. Management believes that the Company will continue to incur net losses and negative net cash flows from operating activities to fund its research and development, commercial programs and meet its obligations on a timely basis through the foreseeable future. ADMAs long-term liquidity will be dependent upon on its ability to obtain FDA approval for RI-002, generate sales of RI-002 and potentially raise additional capital, to fund its research and development and commercial programs and meet to its obligations on a timely basis, if at all.
There can be no assurance that the Companys research and development will be successfully completed or that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements and third-party manufacturers, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements.
The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
No definition available.