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Recently presented data from a 329 patient Phase III trial for its lead candidate Ampion sent shares of Ampio Pharmaceuticals (NASDAQ: AMPE) sharply higher. As investors continue to digest the data and prospects for Ampion in the treatment of osteoarthritis of the knee (OAK), the stock moves closer to the recently established 52-week high of $7.17/share. Anticipation is also building for the next phase III trial - a pivotal trial - which could lead to FDA approval for Ampion if the primary endpoints are met successfully.

These are the same results from the previous note on Ampio (link), which predicted a data release for the first Phase III trial in Q3. Since the last note, AMPE is up by over 32%.

As mentioned on the April 25th press release, the company enrolled in excess of the 300 patients who were originally intended for the study and that treatment was issued to all of them. These patients will be monitored for a 12 week post-treatment period, which would pave the way for a data release (likely in Q3 2013) and initiation of the final pivotal trial before the end of the year or in Q1 2014. This would result in data in the second half of 2014, along with a BLA submission.

Due to the recent emphasis on Ampion we will focus on just the SPRING trial, the drug and the indication in this note.

Phase III Trial - The SPRING Study

Currently, we don't have the full data from the trial although the company released some of the data in a press release earlier this month (link).

The primary endpoint of the trial was based on WOMAC (Western Ontario and McMaster Universities Osteoarthritis Index) which is specifically designed to asses pain, stiffness and function in patients with either hip or knee osteoarthritis. It is relatively complicated, and consists of 24 different items that are assessed for each patient and added up into a score. A higher score on WOMAC indicates more pain, stiffness and less function in patients' hips or knees.

The secondary efficacy endpoint was based on the 11-item Osteoarthritis Research Society International scale (OMERACT-OARSI), although these data have yet to be discussed. Safety endpoints were not discussed in detail, although previous clinical data have already established the safety profile of the drug.

The SPRING study was designed to evaluate injections of a human-based NSAID (Non-steroidal anti-inflammatory drug) - Ampion. The study was a randomized (1:1:1:1) study, which split patients into two placebo (saline injection) cohorts and two Ampion cohorts. The low dose Ampion and placebo cohorts received 4 mL doses, while the high dose Ampion and placebo cohorts received 10 mL doses. The WOMAC primary endpoint was based on changes in the score after 12 weeks of treatment.

Based on the WOMAC data, Ampion was able to show rapid, statistically significant reduction in pain relief versus placebo (p = .0038). The reduction in patient pain scores was quite significant - on average 40% lower than baseline pain scores. It was also fairly quick, as patients saw statistically significant pain reductions one-third of the way through the trial.

Data measuring patient's function didn't seem as strong (p = .044), but full WOMAC data will show the drug's impact on knee function (as well as stiffness) much more clearly.

Details on Ampion

From the previous note:

Ampion (also referred to as DMI 9523 in some of the literature) is a small-molecule made up of two amino acids that are derived from albumin, which is the main constituent of plasma in humans. Ampion has been shown to be effective in causing a reduction of pro-inflammatory molecules, as well as inhibition of transcription factors involved in inflammation. The overall profile of the biologic is unique, and distinguished in comparison to other NSAIDs. Since the safety profile has been well established in previous studies, it's especially important that the finalized version of the trial establishes its efficacy and clinical utility ahead of the FDA's final review. (link)

Ampion is a NSAID as described earlier, and is derived from the body. It is also known as DA-DKP (or Aspartyl-alanyl-diketopiperazine). Recent research has found an inverse correlation between the presence of this molecule and pro-inflammatory cytokine secretions by activated T-cells - like interferon- γ, interleukin-17, interleukin-23, TNFα, and others. It may also inhibit early activation of memory T-cells. Introduction of Ampion is basically meant to control inflammation through a variety of pathways that are already built for the naturally-occurring molecule.

Ampion is a new molecular entity, and Ampio holds a patent for composition of matter.

Osteoarthritis of the Knee

OAK is the most common type of arthritis, and is extremely common in the United States - with >27 M patients. It is caused by the wearing-away of cartilage, which causes bones to rub closely together. It can be especially painful and debilitating due to resulting inflammation.

It tends to get worse over time, and surgery is generally reserved for patients when non-surgical therapy fails. If things get bad enough, an artificial joint can be installed in patients who are healthy enough for the surgery. For others, pain management is a top priority.

Over-the-counter pain relievers can be used for initial pain management, and prescriptions for drugs like Celebrex but more specific therapies have been developed for patients that still experience pain. Doctors can use corticosteroid injections, as well as lubricating hyaluronic acid injections like Synvisc. These have sold very well:

The biggest player in the HA market is Sanofi's (NYSE: SNY) Synvisc/Synvisc-One, with $473 million in sales last year according to company reports. (link)

Since Synvisc costs about $1,000 per injection, it is implied that roughly 470,000 patients use it every year. Great insurance coverage for Synvisc has also helped its widespread use.

Given FDA approval, Ampion could have the commercial potential of Synvisc. It has demonstrated comparable efficacy in WOMAC scale pain reduction during its most recent clinical trial, and should not have problems with its safety profile due to the fact that Ampion is naturally occurring.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.