Ampio Pharma Shares Plunge 71% After Bad News from FDA


The U.S. Food and Drug Administration (FDA) rejected Englewood, Colorado-based Ampio PharmaceuticalsBiologics License Application (BLA) for its drug for osteoarthritis of the knee, Ampion. The agency said that the data from the Phase III clinical trial used in support of the submission was not “adequate and well controlled.” The FDA further recommended that Ampio “perform an additional randomized trial with a concurrent control group.”

In a statement filed with the U.S. Securities and Exchange Commission (SEC), the company said, “We have been and expect to continue to be engaged in meetings and correspondence with the FDA about the product, its manufacturing, and the preclinical and clinical testing necessary to support Ampion’s safety and efficacy. We met with the FDA in July 2018 and have received a letter in response thereto. In the letter, the FDA stated that it considered the AP-003-C trial to be an adequate and well-controlled clinical trial that provides evidence of effectiveness of Ampion and can contribute to the substantial evidence of effectiveness necessary for approval of a BLA, but that as a single trial the AP-003-A study alone does not appear to provide sufficient evidence of effectiveness to support a BLA.”

Ampio went on to say, “Despite our belief that the APC-003-C trial design was based on FDA guidance and feedback and consistent with FDA precedent for similar products (in intended use, in origin, and in regulatory pathway), which we reiterated with the FDA multiple times, the FDA does not consider the AP-003-C trial to be an adequate and well-controlled clinical trial.”

The agency suggested the company request a Special Protocol Assessment before beginning the additional study. The company argues that it plans to have meetings with the FDA over the necessity of conducting the additional trial, because it believes “the current body of data is sufficient to submit the BLA.”

It shouldn’t be a complete surprise to investors. In January, STAT columnist and analyst Adam Feuerstein warned of the same issues brought up in the FDA letter. Primarily, the issues were that the clinical trials didn’t compare Ampion to a control group. Maxx Chatsko, writing for The Motley Fool, says, “Instead, Ampio Pharmaceuticals reported how patients felt before and after taking the experimental therapy. Feuerstein stated that this very likely wouldn’t be enough to gain marketing approval. Turns out, he was right.”

Meanwhile, Ampio stock is currently trading at $0.36 per share. On the one hand, investors could view it as a bargain and invest in the company in the belief that the drug will eventually be approved. On the other hand, although the drug may be a good candidate for approval, it’s not at all clear if the company has enough cash to continue. It had $7.5 million in cash and cash equivalents and shareholders’ equity of negative $8.8 million at the end of March. More clinical trials would be expensive, although the company’s SEC filing hints that they might be willing to gamble on their current data, assuming the FDA lets them submit as is.

Chatsko writes, “Running additional clinical trials for Ampion will take time and will be costly, so until more certainty is provided about the path forward (and likely even after that, given this company’s history of not delivering success), investors should stay away from this penny stock.”

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