ADIL Stock Price Increases Over 30% Pre-Market: Why It Happened

By Amit Chowdhry ● June 22, 2021
  • The stock price of Adial Pharmaceuticals Inc (NASDAQ: ADIL) increased by over 30% pre-market. This is why it happened.

The stock price of Adial Pharmaceuticals Inc (NASDAQ: ADIL) increased by over 30% pre-market. Investors appear to be responding positively to a bullish report from Seeking Alpha.

Seeking Alpha had cited Adial’s continued focus on developing medicines for treating forms of addiction and that its current only clinical-stage product AD04 (indicated for Alcohol Use Disorder or AUD) is a micro-dose formulation of Ondansetron — which is a treatment for nausea and vomiting used by patients who are undergoing chemotherapy, radiotherapy, or surgery. And as part of a 283-patient Phase 2b trial, AD04 reduced the Severity of Drinking and Frequency of Drinking significantly in a subset of patients with at least 1 of 4 specific genotypes that mark them out as potential high responders to therapy with AD04.

The patients with these genotypes account for about 33% of patients with AUD and testing for these patients prior to treatment helps convey a unique Intellectual Property (IP) protection on AD04, thus preventing potential competitors from entering the market with similar products without conducting lengthy clinical trials first.

Adial now has a Phase 3 trial of AD04 set up in Scandinavia and Eastern Europe where the prevalence of AUD is high. That trial is expected to enroll about 294 patients and a second Phase 3 with the same number of patients would also sufficiently power the overall Phase 3 study for the US required endpoint — which is the percentage of subjects without heavy drinking days during the efficacy observation period. And the endpoint for approval in Europe is based on the reduction from baseline in heavy drinking days along with the average alcohol consumed per day.

There have been some delays in its European trial due to the pandemic and now the company is expecting data from the first Phase 3 in Q1 of 2022 and data from the second in 2023. If those trials are successful, then the company will be targeting a market launch in 2024.

Based on discount factors using a calculated weighted average cost of capital, Seeking Alpha established a share price target of about $29 for the company. That price target represents over a 910% upside to the closing stock price as of yesterday. 

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