Ampio’s Conference Call Highlights Major Catalysts

Submitted by David Gould through our contributor tool

In earlier articles published here and here, Ampio Pharmaceuticals (AMPE) and Pfizer’s (PFE) defensive upside profiles were highlighted. Since the first piece was written, the stock of the latter has risen by 7% and beat the S&P 500 by more than 260 basis points. Consensus estimates for Pfizer’s EPS forecast that it will be roughly flat – growing by only 6.3% to $2.37 in 2013. On the other hand, Ampio irrationally declined in value without regard to the firm’s attractive pipeline. Investors have the opportunity now to not only profit from the market correction, but to also gain even more from the firm’s high-growth prospects.

Ampio, a developer of proprietary drugs backed by strong scientific research, recently hosted its conference call. The 2012 outlook once again strengthened my confidence in the intellectual capital of the team, efficacy of the products, and commercial potential. Below are a few highlights taken from the call that detail the firm’s five major catalysts, underscoring Ampio’s favorable risk/reward.

Intellectual Capital: In stating what makes Ampio stand apart from the competition, the CEO, Michael Macaluso, stated: “It’s simple for me. It’s Dr. David Bar-Or. His positions… at two of the three level 1 trauma centers… allow [him] to conduct research in an almost perfect environment”. Bar-Or, Ampio’s Chief Scientific Officer, has been able to benefit Ampio through patents on his major discoveries at medical centers that highly demand his well-published experience. As a result of his work, over 200 patents have been issued and pending. With Ampio choosing the very best of these top discoveries (eg. in terms of revenue potential and convenient pathway to commercialization), the biotech firm is well positioned for growth moving into 2012.

Ampion: Ampion is a small molecule that is biologically derived from two amino acids. Critics frequently fail to consider that the whole is greater than the sum of its parts. That is to say, the compound is much more than these two amino acids combined – it has a net creation of additional value. Ampion prevented activation of memory T-cells and has shown to have a plethora of anti-inflammatory properties. When administrated orally through an animal model with multiple sclerosis, a classic T-cell-mediated disease, the initial manifestation of the condition was abolished. For around half a century, the derivatives have been present in commercially available therapeutic concentrations for intranasal administration. Consequentially, Ampion has less regulatory headwinds and will be highly demanded by other healthcare firms. Not surprisingly, Ampio is in talks with potential pharmaceutical partners for various indications of the NME – of which there are many.

Optina: Optina addresses diabetic macular edema and diabetic retinopathy. Retinopathy is developed by more than 60% of those suffering from type-2 diabetes and nearly all of those suffering from type-1 diabetes. It is very low dose of dinazol repurposed to prevent vascular leakage. Studies have found that a low dose has an unexpected effect that does not exist with higher doses that are commercially available. Preliminary results in an animal study involving oral administration found a strong effect with an excellent safety profile. Ampio is conducting a Phase II trial and results concerning Optina should be released by the end of 2Q12.

Zertane: Zertane is a repurposed drug that treats premature ejaculation (PE). Unlike other treatments, it does not require preconditioning to exert benefits – Zertane’s effect becomes apparent in the first dose. With 3-23% of the global male population suffering from PE, the market size is substantial. Two Phase III studies in randomized double-blind studies have shown great safety with no serious report of adverse events. Efficacy was statistically significant, improving the satisfaction of both partners surveyed.

Oxidation Reduction Potential: ORP is a cutting-edge diagnostic technology that measures the oxidation reduction potential of biological fluids. The product has broad applications for measuring oxidative stress frequently measured in medical practice: temperature, respiratory rate, heart rate, blood pressure, and pulse-oximetry. While many scientific studies have suggested the clinical value of oxidative stress measurements, no current practical method exists. Ampio’s ORP technology provides the answer.

Disclosure: The distributor of this research report is not a licensed investment adviser or broker dealer. Investors are cautioned to perform their own due diligence. We seek business relationships with all of the firms in our coverage, but research covered in this note is independent and prospectively commissioned. Always discuss investments with a licensed professional before making any financial decision. Statements made within this report may include “forward-looking statements” as stipulated under Section 27A of the Securities Act of 1933, Section 21E of the Securities Act of 1934, and the Private Securities Litigation Reform Act of 1995. Since these statements are uncertain, actual results may be materially different from those expected.

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