Ampio Pharmaceuticals, Inc. Could Have A Blockbuster Fourth Quarter, Says Citi

Published: Oct 29, 2014

Ampio Could Have A Blockbuster Fourth Quarter, Says Citi

October 29, 2014

By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Beleagured biotech Ampio Pharmaceuticals, Inc. is primed for a comeback in the fourth quarter with multiple events scheduled that could pull the company’s stock out a nosedive soon, Citigroup analyst Jonathan Eckard said this week.

“We remain positive on Ampio, following a recent headquarter visit and management review of recent and upcoming events,” wrote Eckard in a note to investors late Tuesday.

Ampio's share price took a nosedive to a 52-week low in September, a day after the firm said its osteoarthritis drug Ampion had seen major setbacks in a clinical study.

Ampio’s STEP trial was hoped to be a way for the company to duplicate the results of a 2013 test of the drug that reducing pain in patients with osteoarthritis of the knee by more than 40 percent, in a patient pool of 329.

But Ampio had to scrap those results after discovering that the company it had hired to ship the drug had exposed multiple lots it to temperatures colder than 15 degrees Celsius--halting any chances of scientific conclusion of efficacy.

“While shares continue to suffer from the Phase 3 STEP trial hiccup, we see three important catalysts before YE that should not be dismissed,” said Eckard. “The Street appears to have lost conviction in AMPE leaving a modest valuation of about $200 million in market capitalization and large short interest. We believe positive data from any one of these events could present meaningful upside to APME shares.”

Eckard said Ampio may soon be looking at that value loss in the rear view mirror soon as it preps for new data releases and starts using its “real deal” manufacturing suite.

“We toured the Ampion manufacturing suite that incorporated multiple modern technologies and the design appears to leave no stone unturned fitting both U.S. and EU standards,” said Eckard. The suite is soon to be expanded to include its own vial sterilization and labelling equipment that could cut “the already impressive” about $10 cost of goods per dose by up to 50 percent.

More importantly, he said, are three key data releases expected before year end, each offering potential value catalysts for the company. The first is an open-label cartilage MRI analysis of multiple injection Ampion (due any day). The second, a Phase 3 OptimEyes data for Optina in diabetic vision loss (slated for next month), and the third, pain and MRI data from randomized multiple injection Ampion trial.

“Of these events, we view the randomized pain/MRI data for Ampion to be the most important,” concluded Eckard. “However, because cartilage repair (especially by 12 weeks) is basically unheard of, even the open-label MRI data should still be important The Optina data is likely the most risky with an all-comer population and short duration of treatment.”

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