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With only a fraction of the total short interest having likely covered during the attack on shares of Ampio Pharmaceuticals (NYSEMKT:AMPE) early last week, another round of attacking from the short side was to be expected, and Thursday's trading day saw it unfold.

Shares dropped to as low as $3.60 as the negative pressure applied by the short sellers took control of trading, and another round of negative articles was released over popular stock investing websites. Again, only a fraction of shares short looked to have covered, judging by the trading volume totals, so it's likely that we have not yet seen the end of the negative attacks by the admitted short sellers.

As noted early last week, when the pipeline progress - which has all been positive this year - did not cooperate with the short argument on the stock, another means of applying downward pressure had to be used - so the 'get short crew' took to the presses and started printing away.

The main target of the short argument has been directed at company officials, but also at Ampio's most advanced product candidate, Zertane. Zertane is being developed and marketed as a treatment for premature ejaculation. A commercialization deal signed with Daewoong Pharmaceuticals Co. Ltd. earlier this year provides Daewoong with exclusive rights to market Zertane in South Korea for the treatment of PE, although that company will hold rights for a combination drug that combines Zertane with another erectile dysfunction drug to simultaneously treat premature ejaculation and erectile dysfunction (ED).

As noted in previous discussions regarding Ampio, the targeting of overseas distribution for Zertane is the strategic move forward for the company since the US FDA does not recognize PE as a medical condition, although the ladies of the house would most certainly disagree. The Daewoong deal fits right into that strategy.

Aside from Zertane, it's the other products in the Ampio pipeline that may hold the most value. Ampion, for example, is being positioned to become a major player in the future anti-inflammatory market. Some milestone trial news announced just over a month ago provided a demonstration of the potential effectiveness of the product in treating conditions where inflammation is present, and just weeks later another round of positive results hit the wires relating to Ampion's clinical success.

At a time when the medical community may be looking for an alternative to the standard anti-inflammatories and their side-effects, Ampion could find itself in the right place at an opportune time.

An ongoing clinical trial for another Ampio product, Optina, for the treatment of diabetic macular edema (DME), is due to conclude within months. Results from this trial may be released as soon as early 2012 and Optina, like Ampion and Zertane, may hold an accelerated path to approval, given that it already has an established safety profile in human use since it is a repositioned indication for the already-approved Danazol.

Yet deeper in Ampio's proprietary pipeline, the company has a some diagnostic technology also being developed. This technology is designed to measure a patient's total oxidative stress, which may prove to be a more beneficial snapshot of a patient's health than the standard vital signs that are taken at just about every visit to the doctor's office. Should these diagnostics make their way to market, they could quickly change the face of how a patient's vital signs are measured. Measuring a patient's oxidative stress, for instance, could be a more thorough measure of health for patients being seen for more serious indications such as heart attack and stroke.

Having more than just a 'one trick pony' on its hands - since Zertane is not the only trick in the bag - Ampio has positioned itself to achieve possible success on multiple fronts.

And let's not kid ourselves here, as Marketwatch would have us do, the drop in the AMPE share price is the result of a short attack that is set up by negative press, not because retail investors woke up one day and started doubting the pipeline. If investors actually bought and sold shares based on the tone of media reporting and website articles on any given day, then these guys would end up spending more on brokerage fees than could possibly be made on a rising stock, since the tone of the media trends differently by the minutes.

Additionally, most investors cannot sit by a computer all day waiting for a new article to be published so that they can place a trade based on the tone of the article.

Drops such as these are set up because the big-money-players need a stock to trade one way or another to meet their personal needs, and they make that happen. MSNBC's Jim Cramer can be found all over the Internet describing how they do it.

It shouldn't be so easy to make money these days, but unfortunately it is. Think of how much bank the big players made in the market drop of 2008. So even as the attack on AMPE continues, in the end it'll be the pipeline that talks.

With quite a few milestone trial events set to come due in 2012, that'll be the story to watch.

Disclosure: No position.

Source: Ampio's Pipeline Is The Story To Watch