Adamas Pharmaceuticals Inc (NASDAQ:ADMS) is up close to 15% on its 2017 open, on the back of a couple of positive developments out of its Parkinson’s disease pipeline. The company had a pretty rocky 2016, with volatile trading the order of the day, but now sits at the top end of its 52-week range, and looks as though it might be in for a much smoother 2017. Here’s what’s behind the latest run, and what it means for Adamas and its shareholders going forward.

For those new to Adamas, the company is a development stage biotechnology entity, based out of California, and working on a range of central nervous system (CNS) therapeutics. Its lead therapy, and the one that will form the basis of this discussion, is a drug called ADS-5102. The drug is targeting the treatment of a condition called levodopa-induced dyskinesia (LID), which is a common condition that comes secondary to Parkinson’s disease. We’ve talked about LID on a number of occasions in the past, but here’s a brief overview. When people have Parkinson’s disease, they lose what are called dopaminergic neurons. This loss translates to a lack of dopamine, and this lack – in turn – translates to the classic symptoms of the condition: bradykinesia (slowness of movement), rigidity, impaired walking, tremor and postural instability. The current standard of care (SOC) treatment for Parkinson’s patients is a dopamine replacement therapy called levodopa (or more commonly known as L-Dopa).

L-Dopa works to counter the impact of Parkinson’s, but over time, it results in the condition we’re discussing here – LID. Pretty much every Parkinson’s disease patient that takes regular L-Dopa (and nearly all do) will develop LID at some point or another, and this makes the market for a treatment that specifically targets LID very large. To quote directly from the statistics, In the U.S., approximately 150,000 to 200,000 Parkinson’s patients suffer from LID at any given time, and over time, 90% of patients on levodopa therapy will develop it.

So, Adamas’ treatment, 5102, is targeting this category. The drug is what’s called a chrono-synchronous amantadine therapy. Patients take it once a day, just before bed, and this ensures it becomes active just as the patient wakes up (coinciding with the period that LID symptoms are at their most severe). Amantadine is a pretty widely used antiviral, and it’s also approved as an antiparkinsonian, though it’s nowhere near as widely used as L-Dopa. The thinking is, L-Dopa treats the primary condition, then when L-Dopa is not effective (in the morning, primarily) and the patient needs something to counter the side effects of the L-Dopa therapy (read: LID), the 5102 kicks in.

Anyway, it’s this drug that has caused the run up we’ve seen in Adamas’ market capitalization. The company submitted an NDA for the drug back in October 2016, and now, the FDA has accepted the application for review. That doesn’t mean the drug is approved, of course, it just means that the agency considers the filling complete, and that this completion warrants an agency review. Alongside the acceptance, the FDA has set a PDUFA date for the drug of August 24, 2017.

So what are the chances of approval?

Well, the drug has performed very well to date. Across two phase III trials, and a host of early stage data, 5102 demonstrated some excellent results. The data that underpins the application demonstrate a primary reduction of LID and a secondary reduction in OFF time in Parkinson’s disease patients, with a manageable safety and tolerability profile. OFF time is the period within which the patient experiences their most severe symptoms, and if this one can counter OFF time as well as reduce LID symptoms, there’s a real kicker for FDA approval when the time comes.

So what’s next?

As yet, we don’t know whether the FDA is going to set up an advisory panel review for the drug – it’s looking like it isn’t as things stand, based on the fact that the agency will normally announce these meetings as and when it announces the PDUFA. This leaves us with the PDFUA as the next major catalyst, therefore.

Between now and then, we’re looking for the advancement of the companies secondary pipeline to bring data and – in turn – catalysts, as a gap bridge.