Yesterday afternoon, Adamis (ADMP) announced FDA approval of its lower dose version (0.15mg) of Symjepi for treatment of anaphylaxis in pediatric patients. The news is certainly positive, though not unexpected given that the 0.3mg dose was already approved.

That said, investors are scratching their heads as to why the stock is falling 16% following the positive news. You see, according to the principle of “buy the rumor, sell the news,” the major catalyst for Adamis stock to rise has now been removed, and traders who were awaiting the FDA decision have now reaped all the gains they’re going to get from that particular catalyst. Hence, they’re selling the stock today, and a large fraction of the gains that the stock enjoyed this month are now evaporating.

However, Maxim analyst Jason McCarthy remains bullish, reiterating a Buy rating on ADMP with a price target of $13.00, which represents a potential upside of 274% from where the stock is currently trading. (To watch McCarthy’s track record, click here)

McCarthy commented, “Following FDA approval of the low dose Symjepi, ADMP shares should be up, not down, in our view. With both doses approved, Sandoz is now in position to initiate the launch and as discussed above, we believe there is a substantial opportunity in the epinephrine space. The next catalyst is the Symjepi launch and don’t forget about the pipeline, including naloxone (same injector as Symjepi) for which an NDA is expected to be filed this year.”

McCarthy believes there is still a major market opportunity for Symjepi due:

Favorable pricing – EpiPen pricing has been a controversial subject which has pushed regulators to publicly emphasize the need for affordable alternatives.

EpiPen shortages – Recall that over the summer, there was news suggesting EpiPen shortages as schools were “stocking up” for the 2018/19 year.

Advantages of PFS – Symjepi is differentiated from EpiPen (Mylan or Teva’s). The injector’s smaller size increases portability, allowing it to be carried in a pocket or purse. Additionally, the mechanism doesn’t rely on auto-injection which has caused issues with EpiPen administration.

How does McCarthy’s bullish stance measure up against the word of the Street? Quite on point, it seems, considering TipRanks analytics exhibit ADMP as a Strong Buy. Out of 4 analysts polled in the last 3 months, all 4 are bullish on Adamis stock. With a return potential of nearly 169%, the stock’s consensus target price stands at $9.00. (See ADMP’s price targets and analyst ratings on TipRanks)