Over the past few months Ampio Pharmaceuticals (NYSEMKT:AMPE) has issued positive updates regarding all of its pipeline fronts, and as a result shares temporarily returned to the four dollar mark before subsiding back to the south of $3.50.
The most recent news update came last week when it was announced that Ampio would move forward with plans to seek an approval for Zertane in Australia. Zertane is a treatment for premature ejaculation for which the company is seeking regional partners globally to bring the product to market. One such deal was announced last year. Newly-signed commercial partner Daewoong Pharmaceuticals Co. Ltd will market the product in South Korea - and seek to combine it with another sexual dysfunction drug - while an update from Brazil last month revealed that FBM Industria Farmaceutica Ltda will look to bring Zertane to market in that country.
Last week questions were raised as to why Ampio is seeking the overseas commercialization of Zertane. Insinuations were also prevalent that the product had no chance of a US approval because of the weak data supporting Phase III trials, which were published in Europe last year.
While it's not uncommon for writers and investors to each come to their own differing conclusions regarding companies and their respective pipelines, it's worth noting that the reason why Ampio is not seeking a US approval for Zertane in the treatment of PE is quite simple - the FDA does not recognize the condition as a medical need.
That fact has been discussed on numerous occasions by the company and other websites who follow the company. Investors should not, in my opinion, base an investment in Ampio on the hopes that Zertane is going to be approved in the United States, because unless the FDA changes its view on PR, that's not going to happen - hence the regional partnerships around the world that the company seeks.
That said, Ampio does have plans to bring the remainder of its pipeline before the FDA in hopes of approval.
Just last month it was announced that results from a trial testing Ampio's Optina as a treatment for Diabetic Macular Edema (DME) were strong enough to justify halting the trial early in order to move forward with plans and preparations to meet the FDA's regulatory process requirements.
Other updates from the Ampio pipeline front have also been encouraging enough to justify preparations to initiate trials that would be used to support a potential FDA approval. Ampion is being positioned as an anti-inflammatory, and holds significant market potential should it muster an approval, given the harsh side effects of some of today's common anti-inflammatories.
There is little doubt that when it comes to making money in the pharmaceutical and health care industries, the US market is the place to be. Companies know that and investors thrive on making money based on that fact. That said, contrary to the belief of some, there is a whole wide world out there other than the United States, and in many cases it is cheaper to do business and conduct trials overseas than it is back home.
Subjects related to those monetary facts are being debated in today's political arena.
The more cautious investor may shy away from investing in a company that looks to see if a product works overseas first before then concentrating on the FDA in an effort to save a few dollars, but others may be attracted to a business model that might not leave a company as exposed to the loan shark financing deals that are prevalent in the US to keep the early stages of the pipeline going.
In the case of Zertane, however, you need the FDA to recognize a medical need before you could compel the agency to approve a treatment for it. The FDA has not yet recognized PE as a such, therefore the company is going to seek approvals elsewhere. That fact was lost in last week's public debates surrounding Zertane's potential success.
Shares of AMPE dropped five percent on light volume during last Thursday's trading session, placing shares back into the lower end of its recent trading range.
Last year shares spiked to nearly ten dollars as investors became aware of this company's pipeline and its relatively money-saving methods of bringing new treatments to market by repositioning already-approved drugs.
The late-week debate last week is another prime example of why investors need to use websites and opinion blogs as a starting point for DD, because the goals of some is to create controversy, not necessarily let all the facts be known.
Those following the Ampio story for a while have known that Zertane was being targeted overseas until the FDA recognized PE, no surprises there.
Disclosure: Long AMPE, CTSO.