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Ampio Pharmaceuticals (NASDAQ: AMPE) is a late stage pharmaceutical company that has been focusing on the clinical development of Ampion and Optina - two drugs that target very large indications. At time of writing, the company is trading at a $327 M valuation, with about $32 M in cash as of September 30th 2013. The company does have other pipeline components, but the two aforementioned programs seem to draw most of the interest.

In a previous article, we discussed the Phase III drug Ampion in detail. Data from the SPRING trial supported the efficacy and safety profile of the drug in osteoarthritis of the knee (NYSE:OAK), and generally showed that the drug may be as useful (if not more useful) than Synvic-One for OAK-related pain. Based on the WOMAC A scale, patients on Ampion saw a 40% reduction in pain versus a 37% reduction for patients on Synvic-One. The WOMAC C scale measurements taken during the trial also showed a statistically significant improvement in patient joint function in the Ampion arm.

This news seems to have driven AMPE shares higher in recent months. Investors should note that even after a recent pullback, the stock is up 118% YTD (at time of writing).

Going into 2014, we believe that those following Ampio should also be aware of the impact that Optina may have on the company's prospects after Phase III development.

Optina - An Orally Administered, Ultra-Low Dose of Danazol for DME

DME is Diabetic Macular Edema, and it is seen in about 14% of 19 million individuals in the United States. It is characterized by distortion of vision, caused by leaking and abnormal growth of blood vessels . The estimated size of the DME treatment market is about $1-1.5 billion currently, although sharp increases in average age and diabetes incidence should grow this figure to about $3 billion in 2020.

Ampio scientists unexpectedly created the concept for Optina out of the discovery (in preclinical experimentation) that extremely low doses of danazol will actually decrease the permeability of blood vessels. Interestingly enough, high doses of danazol will actually increase this permeability. For patients with diabetic macular edema, this is essential to slow vision loss and overall progression of the disease.

After Phase I development, the efficacy of Optina was more thoroughly tested in a randomized, placebo-controlled, double-blind Phase II study. This trial used reduction in retinal thickness as a measurement of efficacy, and showed the beneficial effects of low-dose danazol from a different angle.

This drug is being developed under a 505(b)(2) pathway, meaning that it can be FDA approved after completion of its current clinical trial. This is possible because of a FDA rule that would let Ampio use clinical trial data collected from other sources in its NDA, meaning that the company can utilize data supporting the use of danazol for other indications.

The 450 patient Phase III trial is nearing completion, and should produce data in 2014 that will be usable in a submission for FDA approval. Analysis of the data should be focused on efficacy - and more specifically on a statistically significant improvement in the low dose danazol arm versus the placebo arm as measured by patient visual acuity. The other specific details of this clinical trial can be found here (link).

The Takeaway

So overall, we believe that Optina could be a big driver of AMPE in 2014 along with Ampion due to the commercial prospects of this therapy. There are currently no orally-delivered treatments for DME, and we believe that Optina could be used successfully in conjunction with popular VEGF inhibitors like Avastin and Lucentis.

Another thing worth noting is that these VEGF inhibitors are quite expensive, at $1800-2000 per dose. Optina, which should be less expensive, may have an edge on other therapies from an economic standpoint. If/when the drug reaches the commercialization stage, this will be an important factor.

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.

Source: Ampio: Anticipating Data For Exciting DME Therapy Optina