Low Float, Strong Pipeline Make Ampio Attractive Print E-mail
By Brian Wilson   
Wednesday, 07 September 2011 03:25
fda calendarBased in Colorado, Ampio Pharmaceuticals Inc. (Nasdaq:AMPE) is the result of a merger between Chay Enterprises and DMI Life Sciences. It is a relatively new and undiscovered company with immense potential given the medications in their pipeline.

Ampio Pharmaceuticals Investor Presentation

Despite its small size and relative obscurity, Ampio is led by a smart and experienced management team. Ampio’s founder and chairman Michael Macaluso has a long history of building companies stretching back to 1989 with the creation of International Printing and Publishing, which was ultimately sold to a private equity firm. Donald Wingerter is the CEO and Director of Ampio, and has held many past executive positions including being the CEO of DMI Life Sciences, Sound Surgical Technologies LLC, ClearVision Laser Centers, and executive of the General Electric medical systems branch for 13 years.

Leading the research of Ampio Pharmaceuticals through his position as Chief Scientific Officer is Dr. David Bar-Or. Having received his MD from Hebrew University, and having over 35 years of research experience and 23 years of clinical experience; on top of his long history of creative scientific development (He holds over 52 patents in the United States and abroad), Dr. Bar-Or is an irreplaceable factor in driving Ampio Pharmaceuticals’ pipeline into completion.

Ampio has emphasized the progress of its primary portfolio of drugs, which includes Ampion, Zertane, Optina and Vasaloc. Diagnostic products using the chemistry behind Oxidation Reduction Potential are also in the works. The costs of continuing the pipeline are minimal, as Ampio Pharmaceuticals stresses low overhead costs and with only a handful of employees (eleven) the operating expenses are incredibly low. Ampio Pharmaceuticals holds no debt, and estimates that it currently has enough capital to continue operations until Q4 2012. There are currently 33 million shares of the company including warrants, 9 million public shares being offered, about 2 million in ETFs and other funds, and there are only an estimated 7 million shares being traded actively.

Looking at Ampio’s pipeline, there are a fairly wide number of drugs being developed considering the company’s size. Ampio will be releasing new information regarding all 7 of its products undergoing clinical trials near the end of the third quarter of 2011, including anticipated business outlook and licensing agreements for Zertane in the EU and Asia. This could very well spark investor interest.

The drugs in Ampio’s portfolio target huge markets. Ampion is one of them, having both complete patent protection and the potential to take market share in the extremely large drug market for anti-inflammatory agents. Ampion is a biomolecule derived from Albumen (a naturally made molecule in the human body) that has functions as both an anti-inflammatory agent and an analgesic/painkiller. Mainstream anti-inflammatory agents generate billions of dollars for major pharmaceutical companies out of an overall market that is estimated to be as large as 80-100 billion dollars in revenue. Ampion would need only a small fraction of the total market share to secure tremendous profits. In addition, its status as a biomolecule will make it a safer option to other anti-inflammatory agents which can have unwanted side-effects and its analgesic qualities can make it replace other drugs which are used in conjunction with rival anti-inflammatories.

Another incredible opportunity for Ampio exists with Zertane, which targets premature ejaculation. This sexual dysfunction is estimated to be extremely common, being the most common in men under 40. This drug has moved further than the others and could hit the market next year. While the FDA has not classified premature ejaculation as a disease, there has been some action from pharmaceutical companies on the matter. Johnson & Johnson received approval for use of one of its SSRI/Antidepressants (Priligy) as a treatment for premature ejaculation. Nonetheless there are still unwanted side effects that haven’t been dealt with. Zertane is a safer alternative to this problem which has shown favorable results in clinical trials. It is now completing the final rounds of clinical trials (stage 3) and may very soon be approved outside the US, potentially becoming a better alternative of Johnson & Johnson’s existing SSRI treatment.

Treatment for diabetic symptoms is another huge market which Ampio could be well-positioned in given FDA approval. Optina, an oral drug being developed for diabetic retinopathy and macular edema is undergoing phase 2 clinical trials now. It uses the danazol compound in a specified dose to prevent blindness in patients with diabetes. Existing drugs are problematic, like Lucentis which has to be injected directly into the eye by a doctor.
Vasaloc contains the danazol compound in another dose, and will be Ampio’s treatment for diabetic nephropathy (a progression of diabetes that ultimately destroys the kidneys, resulting in dialysis or kidney transplantation). This is another potentially massive market, as about 21 million individuals in the United States alone have diabetes, and the number is increasing as our population ages. It’s estimated that the non-insulin drug market for diabetes is as large as 8.4 billion, so again Ampio Pharmaceuticals needs a relatively small market share to benefit tremendously.

Ultimately Ampio Pharmaceuticals is potentially in a strong position with their pipeline, targeting huge drug markets while maintaining minimal costs. There are a small number of shares available, and the potential for explosive growth in the company’s valuation is existent. We anticipate a large outflow of news and information at the end of Q3 2011, which may draw investors to the company. To beat the market to this undiscovered company, investors must likely act soon.

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