Shares of Ampio Pharmaceuticals ($AMPE) were crushed this morning after the biotech acknowledged that its lead drug flunked a Phase III test for osteoarthritis. And the news comes just days after one of its drug subsidiaries was absorbed into a new biotech that will be called Aytu.
Englewood, CO-based Ampio tried to defend itself early Monday in a release saying that its OA drug was done in by a steep and unexpected placebo response. The biotech claimed that there was plenty of data to support the efficacy of the drug, dubbed Ampion, but startled investors never hesitated, driving down shares by more than 60%.
Patients in the study were treated with three 4-ml intra-articular injections of Ampion on three occasions over 4 weeks compared to a control arm getting a saline solution. The company says that the saline arm posted a strong response on a standard questionnaire used to assess OA patients in drug studies.
According to Ampio, a saline solution is a partial therapy for OA that has been accepted as a standard control in drug studies. "Historically, in larger studies," the company stated, "the response to saline has been reported to be in a range of 30-35 percent." In their study, the responses ranged from 12% to 60% from site to site.
"There is ample evidence from our multiple clinical trials that Ampion provides significant clinical benefit to a large number of patients with osteoarthritis of the knee," said CEO Michael Macaluso in a statement. "We are confident that Ampion will significantly improve the quality of life of patients suffering from OA."
Shoved into a corner by the Phase III flop, Ampio also noted that it has enough cash on hand to get through next year, running more studies if necessary to move the therapy to the market.
This is the latest of several setbacks for Ampio recently. Last November the biotech postponed an effort to spin out a subsidiary, Vyrix, which is pursuing sexual dysfunction drugs, into the public market. Just a few days ago, though, an OTC company called Rosewind completed a reverse merger and incorporated the assets at Vyrix and Luoxis Diagnostics into a new company called Aytu BioScience, which will now become the name of the combined entity.
- here's a release on the reverse merger