Pharmaceutical drugs are big business, and Big Pharma is always on the hunt for new drugs to fill their pipeline of inventory expiring from patent protection. Developing new drugs is a huge gambl,e costing anywhere from $500 million to $2 billion just for one drug; the time is lengthy and the risk of failure is high. A much-preferred solution for big pharma is to either license new drugs from the developers/owners, or even better, simply buy out the companies when they gain FDA and/or other government approvals.
Ampio Pharmaceutical (NYSEMKT:AMPE) owns 3 drug candidates in their portfolio that big pharmaceutical companies would kill to own, because their foundational drugs are losing patent protection and heading to generics, and the time and cost to develop new drugs is almost prohibitive. With their high potential to become blockbusters and low risk of failure, Ampio's three stars will be highly coveted. It is not a question of "if", it is a matter of "when". The big pharmaceutical players are there right now, quietly watching for that first signal that they need to pounce and beat out their competition to buy out Ampio Pharmaceutical lock, stock and barrel.
Because all three of these repurposed drugs have well understood, low level side effects, that signal comes in the form of FDA agreement on a reasonable pivotal trial design to determine efficacy. For drugs of this potential market size, anything less than 5,000 patients would be reasonable. Should this happen quickly? Read on and judge for yourself.
Throughout the world, government agencies tasked with drug regulation focus primarily on safety. If all drugs were safe, governments would let the marketplace determine how well they worked -- if they weren't picking up the tab. But since governments are the largest purchasers of drugs, they also want to understand the clinical and economic efficacy of a given drug. The perfect storm for regulatory approval would therefore be: (1) safety and lack of side effects is commandingly demonstrated; 2) clinical trials prove a drug is highly effective; (3) the disease significantly impacts a large percentage of the population; and 4) the drug saves the government a great deal of money by reducing treatment costs and improves the productivity and quality of life of its citizens.
Remarkably, Ampio's three top drug candidates meet all the above criteria. It is difficult for the marketplace to believe any company, especially a small one, could have even one drug that accomplishes all these criteria, let alone all three drugs. It is like a racehorse owner winning the Triple Crown.
Since the above is a mighty strong statement, let's explore the facts concerning Ampio's pipeline on a drug by drug basis that lead to that conclusion.
Ampio has been shown to be a powerful anti-inflammatory. The video below recently appeared on local news in Adelaide, Australia, where the clinical trial was performed:
This video that shows the miraculous power of Ampion is in the early stages of going viral to the mainstream public. Soon, it will be seen by millions who will for the first time have a glimpse at the potential of Ampio's pipeline. With today's high speed social media, millions of people will soon discover Ampion - including the Big Pharma companies that may have been snoozing -- and it is sure to light a fire under those who have been watching and playing coy.
Ampion's discovery story is fascinating and speaks to the genius of Dr. David Bar-Or, Ampio's chief scientist. Recognizing that the body shuts down the inflammatory response in the brain with patients suffering from head trauma (good thing, since continued brain swelling within a rigid skull would be very bad), Dr. Bar-Or worked for years to isolate Ampion, the molecule responsible.
Ampion is a biologic, meaning it is found naturally in the body - a fact that suggests inherent safety. Ampion is simply two amino acids present in human serum albumin (NYSE:HSA), and HSA has been given to people for decades. When heated for commercial preparation, a number of these amino acids break off of the HSA molecule and form the Ampion molecule.
Virtually every 600 mL preparation of HSA given to patients over the years contains a quantity of Ampion similar to the quantity given to the patients in the clinical trials, but in these trials, the Ampion is concentrated into a single injection into the site of knee pain, rather than diluted throughout the entire body as it is with the intravenous use of HSA. The literature is replete with references to the anti inflammatory properties of HSA, which is surely due to the sole action of Ampion (as HSA is an extremely large molecule, it can be used therapeutically for only a very small number of applications).
Ampio has announced that it will be meeting shortly with the FDA on guidance for market approval for this drug. The FDA has come under great criticism over the years, but they have a heavy burden. They take their responsibility to protect very seriously. Though often bureaucratic, the FDA people are fully human and have no desire to block products that are clearly safe and effective in addressing major disease states.
With all this in mind, it is reasonable to assume that the pathway to approval will be relatively fast and uncomplicated, with a favorable outcome highly likely. It is hard to imagine a market larger than the anti inflammation market (think arthritis, rhinitis, Crohn's disease, Lupis, routine analgesics, etc. Think aspirin, bufferin, Tylenol, ibuprofen). Furthermore, with the recognition of the full safety of Ampion and its efficacy as the body's natural anti inflammatory, it follows that we should see Ampion available not just as an injectable, but in over the counter formulations such as eye drops and nasal sprays for allergies and oral tablets for pain without the significant side effects of all current anti-inflammatories, pain relievers and steroids.
Optina is a reformulation of a drug called danazol, which has been used world wide for the treatment of endometriosis in women for nearly forty years. As such, the safety/side effects profile of the drug is well known and documented at typical dosages of 400 to 800 milligrams. Dr. Bar-Or made another remarkable discovery recognizing that danazol inhibited fluid leakage from the vessels into the tissues, but only at very low dosages of approximately 20 milligrams, or 1/20th to 1/40th of the dosages typically prescribed for danazol. This highly counterintuitive finding (increased effectiveness at decreased dose) served to give Ampio a very strong patent position just confirmed in their April 27th press release to remain in force until the year 2030.
In diabetes, the vessels become hyper permeable, and any tissues susceptible to fluid buildup (like eyes and kidneys) are likely to incur damage. In the eyes of diabetics, the fluid that builds up behind the retina can cause detachment leading to blindness - a malady that affects countless people annually.
Ampio announced in a March 19th press release that it was terminating its clinical trial in Toronto, Canada, at St. Michael's Hospital, due to favorable results in order to present the data (soon to be released by the independent Clinical Research Organization) to the FDA. It appears then that the FDA will soon see favorable data on a drug that is ultra-safe, likely to be inexpensive, and effective for a disease that is responsible for millions of cases of blindness each year - a disease that currently has no real recognized and cost-effective treatment.
Lastly, Ampio has stated that it's selection criteria for patients in the Optina trial favored patients that had protein in their urine - an indication that the patient has some degree of diabetic nephropathy, a severe kidney complication resulting in millions of diabetics requiring costly and drastic dialysis. It will be interesting to see if Optina also reduces the passage of protein into the urine of patients presenting with that complication.
Speculation has it that the market for premature ejaculation (NYSE:PE) is four times bigger than the market for erectile dysfunction (NYSE:ED). Ampio's Zertane demonstrated in their Phase III clinical trial results studying over 600 patients an average increase in male staying power of four times (two times longer than placebo) with no significant adverse events. This remarkable outcome was published in the peer reviewed prestigious European Journal of Urology.
Ampio has stated that they will be presenting Zertane to the FDA in the very near future. Again, with a plethora of data supporting the safety and efficacy of the drug, it is reasonable to conclude that the path to approval by the FDA for Zertane will be relatively straightforward.
Ampio will also be seeking guidance from the FDA on the suggested path for approval for their patented compound of Zertane plus the compounds for ED (vaso-dilating compounds called PDE-5 inhibitors like Viagra - which reportedly goes off patent in 2014). This combination compound would in essence be a "super Zertane" offering the benefits of ED and PE enhancement. As both Zertane and the PDE-5 inhibitors have significant proof of safety and efficacy separately, it stands to reason that regulatory approval will be contingent on demonstrating that the composite drug is safe in combination. Again, a task that is considerably less arduous than the approval process of a new drug.
The company has announced that it has already secured license agreements with two major pharmaceutical companies for the distribution of Zertane, and is in negotiations with several others. It is reasonable to assume that upon approval of Zertane by the FDA that the value of and demand for those license agreements will appreciate dramatically.
In summary, Ampio has arguably achieved the unparalleled task of developing three highly significant and uber-safe drugs to address major disease states that have few, if any, effective remedies (and certainly no remedies without significant side effects). Due to the inherent safety of these drugs and the existing proof of clinical and economic efficacy, validation of these claims by the FDA as well the regulatory agencies of other countries is expected to be relatively swift and, by the above analysis, nearly certain.
The conclusion is that AMPE is an attractive, ripe and relatively easy takeover target for giant pharmaceutical companies with bottomless checkbooks. As with anything, there is always risk of the unknown but with 3 incredible drug candidates so close to fruition, Big Pharma could easily and unexpectedly spark the shares of AMPE at any time sending them soaring into the stratosphere.
I have no position in AMPE and have had no compensation from any source, and therefore I am not biased by financial self-interests. I have been following the company for two years and do have a personal interest in seeing Ampion products reach the market as quickly as possible for those friends and family of mine who need them. They are truly wonder drugs.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.