ENGLEWOOD, Colo., Dec. 16, 2021 /PRNewswire/ -- Ampio
Pharmaceuticals (NYSE American: AMPE), a biopharmaceutical
company focused on the advancement of immunology-based therapies
for prevalent inflammatory conditions, today released the following
letter to stockholders from its Chief Executive Officer,
Mike Martino.
Dear Fellow Stockholder,
I strongly believe that ongoing communications with stockholders
is the responsibility of a public company. The purpose of this
letter is to reiterate our strategic path forward as well as to
clear up evident misunderstandings about our financial position and
recent offering.
I am pleased to report the successful completion of a
$22.5 million registered direct
offering. With this transaction, Ampio has never – and I repeat,
never – been better positioned financially to execute on its
initiatives. The offering provides Ampio with approximately
$21 million in net proceeds. Along
with the $13 million that we expect
to have on hand at year-end 2021, the total amount of approximately
$34 million translates into more than
a year and a half of cash at the company's current burn rate.
Additionally, Ampio has $13 million
in availability remaining on its ATM, and the potential to realize
up to $16 million from warrants
exercised over their five-year life. In summary, I believe Ampio
now has the financial resources to execute its operating plan and
to deliver on its commitment to build sustainable, long-term value
for stockholders. Let me be frank in stating that this financial
strength was not the case prior to the closing of the registered
direct offering, despite what many of our stockholders have
communicated to the company.
My view – and the view of the Board – is that Ampio needed to
break the cycle of missed expectations that were exacerbated by an
event-driven financing approach. We believe the proceeds from this
financing will give Ampio the ability not only to submit a BLA for
Ampion, but also to support that BLA all the way through its
lifecycle with the FDA. We have said that Ampio is considering a
partnership to complete the development and commercialization of
Ampion, and I am pleased at the significant level of
interest and activity to date with potential counterparties. At the
same time, my experience suggests that the best time to do a deal
is when the innovator/licensor is not obliged to do so: this
financing provides Ampio with that strategic optionality.
Some of our stockholders have undoubtedly picked up on my
comment about completing the development of Ampion and might
be wondering what I mean by that statement. I want to be clear:
Ampio believes that AP-003-A, together with AP-013, supports the
safety and efficacy of Ampion for an initial indication,
specifically the treatment of the most severe grade of
osteoarthritis of the knee (OAK). However, these focused trials do
not address the potential for Ampion to treat
osteoarthritis in other joints. These aspects are potentially
attractive opportunities that could expand the potential market for
Ampion and must be validated by additional trials in the
future.
The right collaboration would provide Ampio with the incremental
resources it needs to pursue these additional trials, in addition
to providing it with access to an effective infrastructure for
commercialization. It is also true that a partnership may offer
Ampio access to non-dilutive cash. Without this week's financing,
however, Ampio would have entered 2022 with nine months of cash and
would potentially have watched its negotiating leverage dwindle
along with its cash balance.
Now, some shareholders have suggested that we had previously
stated Ampio had sufficient cash to get through 2022 without a
dilutive financing. While I have no doubt that is what many people
wanted to hear, I will reiterate that that assertion was not made
nor would it be supported by a basic analysis of our published
financial statements. What we have consistently said is that Ampio
expects to end the year with $13
million in cash, which amount, when added to the potential
to raise an additional $13 million on
the ATM, would get the company through the 1st quarter
of 2023.
So, why didn't Ampio use the existing ATM? First, the maximum
amount that Ampio can raise using its existing ATM is $13 million, and we determined that this amount
would not support the strategic objectives outlined above. Second,
the ATM is exactly what it says – an "at-the-market," best efforts
attempt to sell common stock. There is absolutely no operational
nor contractual assurance that Ampio could have raised even that
$13 million amount at an acceptable
stock price. We were able to find the certainty that we were
looking for with our registered direct offering at $0.90/share. The small-microcap biotech sector
has lost more than 30% of its value in the last week, making
capital raising costly and uncertain. In fact, a Wall Street
Journal article on December 15
projects that these market pressures will continue into 2022, which
is consistent with the advice that management and the Board
received from various advisors prior to concluding the registered
direct offering.
And finally, why didn't Ampio wait until after the start of 2022
when it could hope for a market rebound and some positive company
news? I am here to run a business, not predict the market,
especially when the survival of Ampio could be at stake. The first
two major value inflection points achievable in 2022 are (1)
obtaining agreement with the FDA that our definition of the
modified intent to treat (mITT) population in AP-013 will be a
review issue and (2) securing a corporate partnership. I do not
expect to achieve either of these goals until the middle of 2022.
Hope is not a strategy for Ampio, but with focused management and
feasible objectives, I believe we have a clear path ahead.
In the AP-003-A trial we believe that Ampio has demonstrated
unparalleled reduction in pain and steady/improved function for
severe OAK patients [and whose remaining treatment choice is Total
Knee Replacement in a costly, complex surgical procedure]. Ampio
believes that, if the FDA agrees with the mITT presentation for
AP-013, then the company has substantially confirmed these benefits
for those severe OAK patients. We also believe that
early, emerging data from clinical and preclinical studies suggest
that another distinctive benefit of Ampion could be its
regeneration of cartilage in osteoarthritic knees.
My intent as CEO is to move Ampio forward today and position its
opportunities for the best chance of success. We will update you
when we have information to report in line with traditional public
company operating practices. But please note that we will not
communicate every incremental step along the way. Our focus is on
execution that will benefit, ultimately, all stakeholders in our
company.
Sincerely,
Mike Martino
CEO, Ampio Pharmaceuticals
About Ampio Pharmaceuticals
Ampio Pharmaceuticals, Inc. is a biopharmaceutical company
primarily focused on the advancement of immunology-based therapies
to treat prevalent inflammatory conditions for which there are
limited treatment options. Ampio's lead drug, Ampion™, is
backed by an extensive patent portfolio with intellectual property
protection extending through 2037 and may be eligible for 12-year
FDA market exclusivity upon approval as a novel biologic under the
Biologics Price Competition and Innovation Act (BPCIA).
Forward Looking Statements
Ampio's statements in this press release that are not historical
fact, and that relate to future plans or events, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the use of words such as "believe,"
"expect," "plan," "anticipate," and similar expressions. These
forward-looking statements include statements regarding Ampio's
expectations with respect to its use of the net proceeds from the
registered direct offering and its potential to realize future
proceeds from the exercise of warrants, Ampio's expectations with
respect to Ampion and its classification, the significance
of the top-line results from its clinical studies, including the
AP-013 study, the FDA's acceptance of the company's analysis and or
interpretation of the results of its clinical trials, Ampio's cash
runway and ability to sustain operations for any given period of
time, the strength and enforceability of Ampio's patent portfolio
and its eligibility for FDA market exclusivity, the ability of
Ampio to enter into partnering arrangements, the potential market
for Ampion, the timing and likelihood of success of a BLA
for Ampion and other statements that are not purely
statements of historical fact. These forward-looking statements are
made on the basis of the current beliefs, expectations, and
assumptions of Ampio's management and are subject to significant
risks and uncertainties that could cause actual results to differ
materially from what may be expressed or implied in these
forward-looking statements. The risks and uncertainties involved
include those detailed from time to time in Ampio's filings with
the Securities and Exchange Commission, including without
limitation, under Ampio's Annual Report on Form 10-K and other
documents filed with the Securities and Exchange Commission. In
addition, as stated in the Company's filings with the Securities
and Exchange Commission, the FDA may determine that the COVID-19
pandemic may have impacted its ability to interpret the Company's
study results and may or may not require additional studies in
support of an Ampion BLA. Ampio undertakes no obligation to
revise or update these forward-looking statements, whether, as a
result of new information, future events or otherwise.
Investor and Media Contacts:
Tony Russo or Nic
Johnson
Russo Partners
info@ampiopharma.com
tony.russo@russopartnersllc.com
nic.johnson@russopartnersllc.com
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SOURCE Ampio Pharmaceuticals, Inc.