Miami, FL – July 26, 2018 ( NewsWire) —, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on Ampio Pharmaceuticals, Inc. (NASDAQ: AMPE)

Buyout Speculation Ignites Deeply Discounted Ampio Pharmaceuticals

  • $10.5 billion market by 2024
  • Robust Data well above endpoints translates to likely approval
  • BLA Filing – Short term catalyst
  • Extraordinary high short interest
  • Backed by industry leader PAREXEL Pharma in BLA filing

Ampio Pharmaceuticals (AMPE) is a well-known yet heavily shorted clinical stage biotech company with 2 successful phase 3 trials that is trending on social media.  In the past week alone 1000 more watchers have joined the $AMPE board on Stock Twits.  This attention attracted a lot of new retail buying. The share price movement was up ~8% in the past week and over 36% in the past month reflecting the spike in interest. Price action is been driven by the much-anticipated FDA meeting that purportedly took place July 19th to continue discussions about Ampio’s Biologics License Application (BLA) and a buyout rumor.

Setting the buyout chatter aside, there is a fundamental reason to own the stock at what amounts to a deeply discounted value proposition.  Their lead drug candidate Ampion is being considered as a first line therapy for osteoarthritis of the knee (OAK), a condition with limited treatment options that ultimately leads to costly Total Knee Replacement (TKR) surgery.  In a recent peer reviewed journal, Ampio has been labeled as having “disease modifying potential” which could make it a prime candidate to replace the existing standard of care which is a TKR surgery.  A green-light from the FDA for Ampio to submit the BLA could solidify the company as a strong buyout candidate as the market strength demonstrates.

Huge Market Potential

A Study of Cost Variations for Knee Replacement and Hip Replacement Surgeries in the U.S.” by Blue Cross Blue Shield Association found that knee replace surgery costs range from $11,317 to $73,987 depending on the state.

Anthem insurance company (ANTM) belongs to the same association and likely pays comparable prices. Other insurance giants such as Cigna Corp. (CI), Aetna Inc. (AET), and UnitedHealth Group Inc. (UNH) would also benefit from an effective  treatment option for OAK preventing or significantly delaying the necessity for costly knee-replacement surgery. Data from clinical and preclinical studies over two decades supports Ampion as a strong contender to fill the treatment void. If the disease modifying properties of the drug are applied to the drug label AMPE might not need a robust sales force.  AMPE is advocating the requirement of 5 injections of Ampion BEFORE TKR surgery.

About Ampion

Ampion is classified as a biologic, which means it comes from human DNA and is manufactured through a filtering process that takes human serum albumin (HSA) and filters out all but this small fractionate into a concentrated form.  HSA has an impeccable safety profile and since Ampion is derived from HSA it follows that Ampion too has that same impeccable safety profile.  HSA is an FDA approved biologic that is essentially blood plasma that has been sterilized to prevent the spread of pathogens.  Scientifically speaking, Ampion is a low molecular weight fraction of human serum albumin (HSA) designed to treat pain and inflammation associated with OAK. In other words, Ampion is a low weight protein found in human blood. The active compound in Ampion is a molecule called DA-DKP that has demonstrated in preclinical and clinical trials to play a pivotal role in regulating inflammation, a primary cause of cartilage and joint degradation in OAK.

The mechanism of action (MOA) of Ampion has the potential to treat many acute and chronic inflammatory conditions in addition to immune-mediated diseases. Ampio’s primary focus is to develop Ampion as an intra-articular injection (injection into joints) for treating OAK. AMPE completed two phase 3 trials and the pivotal trial was expanded to include an extension arm due to the successful outcome of the trial.  All the prerequisites of the BLA have been met and the company is in the process of collating the data for submission.  The rumors suggest the BLA has been filed.  Assuming that has happened there is a high likelihood that the Company could enter into a licensing agreement or sale of the company.  Another possibility is that they develop a sales team that can commercialize this revolutionary therapy.

Extensive Clinical and Preclinical trials = Approvable Drug

Two decades of clinical and preclinical trials at high caliber hospital-based research centers has culminated in a late-stage biologic candidate that is ideal in treating inflammatory conditions like osteoarthritis. Discoveries from these trials are bolstered by Ampio’s deep patent portfolio with over 180 patents across the world and more pending. Furthermore, Ampio has published hundreds of peer-reviewed studies, abstracts, and presentations supporting Ampion’s efficacy and superb safety profile.

Ampion has a dual mechanism of action that was published in a clinical study in 2018. The active compound DA-DKP stimulates anti-inflammatory bacteria while at the same time inhibits the activity of pro-inflammatory bacteria. Ampio Pharma believes that Ampion will be recognized as a “reference product” following acceptance of the BLA by the FDA. This is likely underappreciated as the FDA grants reference products 12-year exclusive patent protection.

In June 2018 AMPE published a study demonstrating the safety and efficacy profile of Ampion as a treatment for patients afflicted by severe OAK. 71% of 168 patients treated with Ampion met the responder criteria, exceeding the 30% threshold and the results were very statistically significant (P<.001). The conclusion drawn was that Ampion provides relief from sever OAK and presents a promising treatment alternative to pain medication, especially opioids. Additionally, there were no serious adverse events.

A publication in May 2018 investigated the effect of Ampion on delaying TKR. Researchers saw an 87% response rate (39/45) patients and the incidence of TKR was significantly lower among patients treated with Ampion compared to the saline treatment group.

Ampion performed exceedingly well in the AP-003-C study , one of two phase 3  trials deemed acceptable by the FDA as pivotal trials. Ampion’s demolished its endpoints across the board averaging a 66.75 % response rates; much higher than the 30% threshold set by the FDA, and with a huge degree of statistical significance (p<.001).   This undoubtably makes a compelling argument for a strong safety and efficacy profile for Ampion; a crucial criterion for commercialization and BLA acceptance. In the second Pivitol Study AP-003  Ampion met its endpoint again by significantly reducing pain in OAK patients ranging from moderate to extreme pain.

WOMAC= A score calculated based on a patient’s pain, stiffness, and physical functioning.

The most remarkable thing about the AP-003-A Pivitol study was Ampion significantly decreased knee pain in every OAK severity group. The study met its primary endpoint to decrease pain in the knee in the combined patients group differing in pain severity and did so with extreme statistical significance (p=.0009). After a closer look at the response trends it’s obvious Ampion is most effective on moderate to severe pain profiles. Therefore, patients in extreme pain with no options except TKR stand to benefit the most. Ironically, these are patient’s insurance companies would be most eager to cover to avoid paying for TKR later.

In another arm of the AP-003-C Pivitol Trial, Ampio tested patient responses to Ampion according to the Osteoarthritis Research Society International (ORSI) criteria. Once again Ampion breezed through the study endpoints significantly reducing knee pain and improving knee function based on the WOMAC A pain and WOMAC C function scores.  Existing commercial therapies do not address the underlying problem and only mask the pain leading to more complications from overexertion. Ampion on the other hand showed potential to include “signs and symptoms” of OAK in its label (i.e. preventative care) because the data strongly suggests Ampion promotes tissue regeneration counteracting OAK pathology.

Ampion’s robust effects were further demonstrated in the AP-003-C trial when compared with historical saline controls. Patients given Ampion experienced drastic improvements in knee function, PGA, and decreases in pain. Whereas there was little to know change in saline groups. Moreover, the results were extremely statistically significant and taken with the previous studies makes a strong case for Ampion as a safe and efficacious drug that inhibits OAK progression. This represents a breakthrough in osteoarthritis treatment, especially OAK, given the lack of treatment options and bleak prognosis’s.


Flexion Therapeutics Inc. is a biotech company already with an FDA approved product for treating osteoarthritis. Zilretta is the first extended release joint injection therapy for patient’s with osteoarthritis-related knee pain. The drug was approved 2017 but only provides temporary pain relief. The product differs from Ampion in that is a synthetic drug compared to Ampion which is a biologic agent that has virtually no side effects while Zilretta has many.

Bioventus specializes in the treatment of pain associated with osteoarthritis. They have several commercialized products and only a few of them could be considered competition for Ampion. Supartzfx is a weekly injection of naturally occurring joint fluid in the knee aimed at relieving pain and increasing mobility. Essentially, the drug acts as a lubricant and cushion allowing the knee to move more freely. The treatment regime demands 5 weekly injections compared to 5 annual injections with Ampion. Bioventus’s other product for OAK is Durolane, a single injection of hyaluronic acid. Downfalls aside from requiring daily injections of Durolane include side effects such as nausea, backpain, dizziness, numbness, trouble walking, severe swelling in the knee, and swelling of limbs and extremities.

Unity Biotech’s lead product candidate UBX0101 is designed to treat musculosketal diseases, including osteoarthritis. For starters this indication is not the same as Ampio’s. While the two are related, Ampion is specifically for treating OAK. Their drug a small inhibitory molecule that removes unhealthy cells on the verge of death from joints and muscles. They plan to initiate phase 1 for UBX0101 in 2018, well behind Ampio which as already completed phase 3 trials and met all study endpoints.

AVM Biotech focuses on developing stem-cell technologies to regenerate tissues and treat cancers. Their lead molecule AVM073 promotes the regeneration of tissue and is being investigated in a phase 2 clinical trial as a therapy for osteoarthritis. AVM073 is taken orally and is meant to enhance the effects of stem cell treatments. Admittedly, technology like this is captivating and promising. But taking a practical look at things AVM is only just now initiating a phase 2 trial putting them far behind Ampion in the commercialization process.

Cytori Therapeutics is a specialty therapeutics company focused on using cell therapies and nanomedicines to meet unmet medical needs, such as osteoarthritis. ECCO-50 the company’s lead candidate for OAK is still in phase 2. Thus far the only clinical data generated was in the ACT-OA phase 2A trial testing the drugs safety and efficacy. Details from the study is available at

There are 3 companies pursuing Nerve Growth Inhibitors (NGI) as means of disrupting nerve signaling between the brain and knee joints to lessen pain from osteoarthritis. First up is Regeneron (REGN) who has had a successful phase 2 trial and moved onto phase 3 for knee and hip replacement. Johnson & Johnson (JNJ) has its lead product Fulranumab entering phase 3. And finally, pharma giant Pfizer (PFE) developed Tanezumab, which unfortunately was halted by the FDA due to safety concerns but is now back in the pipeline. All these treatment alternatives are heavily criticized because they simply function as pain blockers and do nothing to resolve the disease pathology. Some argue they make the condition worse because patients over exert themselves while on the medications.

The information in this chart is enough to destroy the short argument that Ampion will not get FDA approval. Look at the nine companies listed other than Ampion. What do you notice? Everyone one of their products is designed to treat mild to moderate OAK. Ampio is pursuing an unmet medical need, severe OAK. An argument to be made is that Ampion may emerge as a superior product whose label can include the entire spectrum of pain severity. Looking closer- the average number of trials (excluding Ampio) conducted is ~2 (1.66 to be exact). Out of all 9 products under development, only 4 had a single successful trial. Everyone of these products were approved by the FDA. Now let us look Ampion’s stats. They have had 4 clinical trials, 2 of which were successful and had the lowest occurrence of adverse events. The logical conclusion is Ampion exceeds the FDA criteria for approval, or at the very least BLA submission. 

Approved therapies do not address the core disease pathology of OAK. Rather they prevent the patient from feeling pain. That’s why they are not ideal treatment options because the disease progresses, and symptoms only worsen. As you can see in the above picture, Ampion is the only injection that both reduces pain in sever-OAK and improves knee functions. Its safety profile destroys the competition. In every clinical study Ampion has been safe and well tolerated. Other treatments have serious long-term consequences/side effects such as loss of treatment efficacy, loss of cartilage, addiction/dependence (especially opioids).

If the FDA greenlights Ampio to submit their BLA, that will put the company in a very advantageous position. 1st The FDA is acknowledging the collection of preclinical, clinical, and extension study data is compelling and sufficiently demonstrates safety and efficacy. 2nd the BLA grants Ampio 12 years of biologic exclusivity further strengthening their arsenal of patents that exceeds 180 protected in over 19 countries including China, Canada, Japan, and Israel. With the BLA being the big unknown it’s safe to say its submission will greatly increases the probability of a buyout or license agreement.

Ampion’s performance also suggests it has additional therapeutic effects for joint conditions, which could generate much more revenue than OAK. Ampions mechanism of action to reduce inflammation could be applied to treating joint/sport injuries, systemic inflammatory conditions, and even breathing disorders.


Ampio Pharmaceuticals has been around a long time but only recently reached an inflection point where the hard work by executives and scientists materialized as a safe and effective biologic product, steps away from commercialization. Chief Executive Officer Michael Macaluso noted in the company’s last conference call that the Phase 3 extension trial is well underway. Despite unequivocal achievement of Ampion’s phase 3 study endpoints, the company decided to conduct an extension study to increase confidence in Ampion’s treatment effect and strengthen their BLA petition. The thesis is 5 injections of Ampion over 12 months promotes tissue and cartilage regeneration in tandem with pain management. No other OAK treatment can even compare positioning Ampio to dominate the OAK market pending BLA acceptance.

CEO Michael Macaluso informed shareholders that the company has about $10 million in cash in addition to $25 million credit line. He is very confident that the company has ample capital to complete current rounds of negotiations with potential partners. Cash burn has increased over the past quarter as Ampio prepares for commercial production of Ampion. The company’s goal is to find a buyer or partner who will develop Ampion for additional indications. Taking these statements into consideration, it is obvious the CEO and management strongly believe in the efficacy and versatility of Ampion as anti-inflammatory therapy.

Lastly, but surely not least, Ampion hired industry leader PAREXEL Pharmaceuticals to help them with clinical trial and navigate the BLA submission process. This was phenomenal strategic decision and greatly increases the chances of getting their BLA accepted by the FDA.

Short Term Catalysts

Buyout talks are taking the center stage but the company has much to do assuming the BLA has been filed.  The next step is the FDA acceptance letter that will tell them what claims they can make on their label.  The reason this is so important is because is sets the trajectory of the company into a massive sales-based organization or a small fulfillment organization.  If Ampion becomes the new standard of care for KL-4 patients, then doctors will have to prescribe this for their worst patients and once they see the results they may suggest it for early stage disease.  Once the BLA is accepted by the FDA AMPE will need to do a round of debt financing to solidify their manufacturing capacity.

Short argument

Size of short position – short reports percentage of float etc. Betting on another round of financing and using the 7.5 mil warrants to short against.  A move higher may finally cause a cover and bring additional funds into the company.

Investment Thesis

AMPE is clearly bidding up in anticipation of a buyout.  The prudent investor will know what the company  is worth and not get caught up in the hype.  The sizeable short position was betting on them not finding a drug partner and having to pursue another round of dilutive financing.  Any news of a BLA approval or hint of a licensing deal will lead to a short covering rally.  The true value is in the power of the label which will address pain, function and global assessment.  So many indications fit into these categories the off-label use could reach as far as simple aches and pains as people realize the power of AMPE.

Out of all the patients with OAK 640,000 of them identified as hating pain. Market penetration would easily be 100% and each person treated translates to $1000 dollars profit generating $64 million in annual revenue. That is not even considering the other 1.28 million patients with greater pain tolerance but would still bring in $1.28 billion every year. Add on top of that other indications like treating joints/sport injuries, inflammatory conditions, and breathing disorders and you easily have a multibillion dollar company, currently undervalued at $3/share.

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