History has repeatedly shown that small cap pharma stocks soar in value in the months when pivotal clinical trials occur preceding an FDA approval. Earlier this year, Arena Pharmaceuticals (NASDAQ:ARNA) went from $2 to $13 in only four months just before gaining an FDA approval on June 28th for their weight loss drug Belviq. Vivus (NASDAQ:VVUS) rocketed from $10 to $30 in just a bit over 4 months with their approval on September 18th for Qsymia, another weight loss drug. And Amarin Corp (NASDAQ:AMRN) traded from $6 to over $15 in six months before receiving clearance from the FDA for Vascepa on July 26th.
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Recent and repeated history strongly suggests a repeat performance for small cap pharma companies in similar situations and time frames as Arena, Vivus and Amarin were in recently.
Pages 18 and 19 in a recent Ampio Pharmaceuticals (NYSEMKT:AMPE) 10Q filing and a recent press release, "Ampio Provides Progress Report on Clinical Programs in Preparation for Annual Shareholders Meeting" confirm that Ampio is in the same Red Zone that Arena, Viivus, Amarin and the several others were in just before they soared in value. Ampio appears to be poised to increase in value with not only one drug being considered, but three - and a major diagnostic. And they are all potential blockbusters.
One very important point to make is that the duration of Ampio's clinical trials is expected to be far shorter than Belviq, Qsymia and Vascepa because they are all either repurposed drugs that have already been approved for a different purpose or a biologic that has a proven record of an excellent safety profile. And they have already demonstrated efficacy and safety in earlier trials.
Ampion's Phase II trial with 100 patients was completed in 90 days and the upcoming Phase III trial with 1,500 patients will probably take twice as long but that is still very fast compared to Belviq, Qsymia and Vascepa.
Ampio's June press release on Zertane's upcoming Phase III trial indicates a length of only 15 weeks.
Optina's Phase IIB trial may include kidney patients with diabetic nephropathy and may take a bit longer, but is still expected to conclude within 6 months.
A few highlights from the press release, Ampio Provides Progress Report on Clinical Programs in Preparation for Annual Shareholders Meeting, are:
"Ampio has recently met with the CBER division of the FDA and received guidance for the conduct of pivotal trials for approval in the USA. Both open label and placebo controlled trials will be conducted over the next year (the last 10Q and recent statements indicate the trials are about to start and will probably not require a full year) to provide the full 1,500 patient exposure for safety and clinical efficacy data. The recent FDA discussions have indicated that if the results of these trials mirror the successful outcomes seen in the Australian trials it will be sufficient for registration as a chronic use therapy and an IND is being prepared."
"A phase 2a clinical trial conducted in Canada demonstrated encouraging results.
Scientific, peer-reviewed manuscripts, on the mechanism of action of the Optina™ were recently published in BBRC (Biochem Biophys Res Commun. 2012 May 18;421(4):707-12) and as a cover story was published in Retina Today (October 2012 issue)
Ampio entered into a contractual agreement for the formulation of Optina™ with Green Mountain (Denver, Colorado) to produce the ultra-low doses of Optina™, which will be used in the forthcoming phase 2b clinical trials in the USA and elsewhere. The trials will be conducted under a 505(b)2 pathway in adherence to guidance provided by the FDA at a pre-IND meeting and an IND application is being prepared.
Ampio will conduct pivotal trials in Europe (sites identified) for this indication.
Ampio was recently awarded multiple patents both in the USA and worldwide for Optina™.
Ampio is engaged in discussions with potential partners for Optina™."
"This program includes Zertane™, for the treatment of premature ejaculation (NYSE:PE), and Zertane ED™, for the treatment of comorbid premature ejaculation and erectile dysfunction ED.
Ampio has completed two phase 3 clinical trials in Europe on Zertane™.
Ampio is poised to file an IND for pivotal trials under the 505(b)2 pathway in the USA adhering to the guidance provided by the FDA during our Pre-IND meeting.
Ampio has identified sites to conduct its pivotal trials in the USA.
Ampio will be filing for approval of Zertane™, based on the European trials results, in Australia (NASDAQ:TGA). Approval in Australia will facilitate approval in many countries in Latin America and the Pacific Rim where we have already licensed Zertane™.
Oxidation-reduction potential (ORP)
"ORP is a point of care diagnostic platform developed by Ampio for multiple indications. The platform technology includes a specifically designed, battery operated, instrument-reader and of disposable electrodes/ strips- a concept analogous to a glucometer and its disposable strips. ORP is a homeostatic parameter reflecting the balance between pro and anti-oxidants in a system (it is a measure of electron transfer). An elevated blood ORP indicates increased oxidative stress.
Ampio has just been awarded two USA patents for the disposable electrodes and multiple additional patents are pending worldwide on various aspects of the program including use patents and others. Other patented measured and calculated parameters indicate reductive reserves, meaning how much anti-oxidant reserve does a patient have before oxidative stress starts damaging important biological structures and molecules.
Ampio entered into a manufacturing contract with UHV (San Jose, CA) for the manufacture of the single-use disposable electrodes and the instrument/reader is in its final stages of development/assembly.
Multiple clinical studies have been completed (thousands of patients) encompassing the many potential indications for this platform technology and are awaiting final analysis and publication of results. Ampio will focus the initial clinical indication to the best obtained results from these extensive clinical studies.
Ampio believes the ORP device will be cleared by the FDA under a 510(k).
Ampio anticipates spinning-off this program into a separately financed entity.
With three drugs going into pivotal trials in the next 30 to 60 days where all of the trials are expected to be short in duration, and with only one of them being successful (imagine what would happen if all three hit . . . and they might) Ampio could be poised to rocket just like its predecessors Arena, Vivus and Amarin. And consider that Ampio just raised adequate capital to take it through mid 2014 and according to their latest 10Q filing still has over $20 million in cash.
Ampio has recently fallen to $3.20 per share, very close to its lows for the year and was under selling pressure from what appears to be margin calls. Now that shares are back closer to their lows, the sizes of the bids are increasing and it looks like traders are watching Ampio closely now. This appears to be an excellent entry point for a hold through at least the Red Zone in anticipation of several points being made.
Arena, Vivus and Amarin have also pulled back substantially from their highs and merit a closer look.
While the trials all appear to be low risk as opposed to typical high-risk trials, there is still risk that they may fail or that the company may run out of cash and not be able to raise money in the marketplace or perhaps even just the risk of the unknown. But if the trials are successful, Ampio could be a steal at these prices and the timing might be perfect!