AMPE - Ampio stock jumps ~20% after CEO letter on drug program reorganization

2023-04-18 12:38:08 ET

Ampio Pharmaceuticals ( NYSE: AMPE ) stock rose ~21% on Tuesday following a letter from Chairman Kevin Buchi and CEO Mike Martino to the company's to stockholders updating about about potential osteoarthritis (OA) drug AR-300 and reorganization efforts, including workforce reduction.

The company said that in Q1 it focused on testing different formulations of active pharmaceutical ingredients (APIs) at a  research organization, using two rodent models of OA.

The company added that Cartilage protection in the MMT model with multiple combinations of the prospective APIs was seen, with one formulation showing "especially encouraging results."

In addition, in the MIA model, several alternative formulations have shown immediate and early pain reduction in the inflammatory pain phase of the model, according to the company.

Ampio noted that in Q3 2023, it plans to select one of these optimized formulations to move in clinical development.

As the formulations are unique, proprietary, and are neither Ampion nor AR-300 (or derivatives thereof), the company will now call development of these new formulations as OA-20X program, Ampio noted.

Reorganization :

In the letter, Buchi and Martino said that the company ws progressing in implementing a hybrid, virtual organizational model.

"We communicated, and began implementing, this organizational strategy at the end of 2022 with a planned reduction in force, which continued into the first quarter 2023. In addition, we entered into a sublease agreement effective March 1, 2023, whereby we have subleased the entire Ampio facility in Colorado," said the letter.

The company added that it now has five full-time employees, certain engaged consultants with expertise in OA drug development and independent labs and contract manufacturing partners.

The letter noted that the company estimates that this strategy will lead to annualized cost savings of about $4.6M, allowing to focus cash investment on OA-20x development for 2023, in addition to ongoing governance and reporting obligations as a publicly traded company and other necessary expenses.

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