Seven months after Ampio Pharmaceuticals $AMPE gave its long-suffering investors something to cheer about with their report that a third try at a pivotal study for their osteoarthritis drug had rung up positive, clearing the way to an FDA application, it’s time for another cruel setback.
The little Englewood, CO-based biotech reported in an SEC filing that regulators didn’t exactly agree that it had two well-controlled studies to rely on for its application, and sent the executive team packing with instructions to do yet another Phase III if they expect to ever win approval.
That news triggered an ugly rout of the stock — which collapsed to the tune of a 78% drop on Wednesday, falling well into penny stock territory. And the slide continued in pre-market trading Thursday, with shares down another 26%. Just ahead of the rout, shares were trading at $2.86.
Here’s the full explanation of what happened:
In the letter, the FDA stated that it considers the AP-003-A trial to be an adequate and well-controlled clinical trial that provides evidence of effectiveness of Ampion and can contribute to the substantial evidence of effectiveness necessary for approval of a Biologics License Application, or BLA, but that as a single trial the AP-003-A study alone does not appear to provide sufficient evidence of effectiveness to support a BLA. Despite our belief that the APC-003-C trial design was based on FDA guidance and feedback and consistent with FDA precedent for similar products (in intended use, in origin, and in regulatory pathway), which we reiterated with the FDA multiple times, the FDA does not consider the AP-003-C trial to be an adequate and well-controlled clinical trial. The FDA recommended that we perform an additional randomized trial with a concurrent control group and that we request a Special Protocol Assessment to obtain FDA concurrence of the trial design before beginning the study. We plan to continue to discuss with the FDA the necessity of conducting this additional trial, as we believe the current body of data is sufficient to submit the BLA.
Coming after twin Phase III failures, the regulatory slap-down will be hard to weather.
Right after the stock crashed, the company sold 20 million shares at a discount price of 40 cents. They raised $8 million. The stock is down another 39% this morning.
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