ENGLEWOOD, Colo., Aug. 3, 2022
/PRNewswire/ -- Ampio Pharmaceuticals, Inc. (NYSE American:
AMPE), today released the following letter to stockholders from its
Chairman, Kevin Buchi and Chief
Executive Officer, Mike Martino.
Dear Fellow Stockholders,
On behalf of the Board and management team, we are writing to
provide an update on the previously announced internal
investigations, the clinical development of Ampion and how this
impacts our strategic alternatives process, and near-term strategic
business alternatives. Finally, we would like to take this
opportunity to address the importance of your vote at the 2022
Annual Meeting of Stockholders to be held on Wednesday, August 10, 2022, at 11 am MT.
As we announced on May 16, 2022,
an independent special committee of the Ampio Board of Directors
(the "Special Committee") has been conducting internal
investigations focused primarily on (1) the statistical analysis of
Ampio's AP-013 clinical trial and (2) unauthorized provision of
Ampion, an investigational drug that is not approved by the Food
and Drug Administration ("FDA"), for use by individuals not
participating in clinical trials ("unauthorized use"). These
investigations are now completed and the investigations are
summarized below.
Through outside counsel, the Special Committee has engaged in
extensive fact finding, including interviewing numerous individuals
and reviewing documents and emails relating to the AP-013 clinical
trial. In connection with the unauthorized use investigation, the
Special Committee also reviewed documents, conducted interviews,
and reviewed other information regarding the provision and
unauthorized use of Ampion. The Special Committee committed
significant resources to these endeavors and did not impose
material limitations on the investigations' scope, timing, or
access to information.
As it relates to the AP-013 clinical trial, the Special
Committee's primary findings include that certain former Ampio
executive officers and senior staff were aware, at the time of the
per-protocol interim analysis in March
2020, that the AP-013 trial did not demonstrate efficacy for
Ampion on its co-primary endpoints of pain and function; and that
these former Ampio executive officers and senior staff did not
fully report the results of the AP-013 trial and the timing of
unblinding of data from the AP-013 trial. The Special Committee has
determined that the Company's current executive officers were not
made aware of the unblinding events in March 2020. Through
counsel, the Company and the Special Committee have informed the
Securities and Exchange Commission of the investigations. The
Company and the Special Committee also have contacted the FDA
regarding this investigation.
As it relates to the unauthorized use of Ampion, the Special
Committee's primary finding is that certain Ampio personnel,
including a former executive officer and certain former directors,
facilitated the provision of Ampion for unauthorized use.
Ampio has worked to resolve this issue, including through the
conduct of safety surveillance activities relating to the provision
of Ampion for unauthorized use, implementation of appropriate
mitigation measures (described below), and self-reporting to FDA.
The results of the safety surveillance activities have not changed
the Company's view of the safety profile of Ampion. The Special
Committee has determined that the Company's current executive
officers were not involved in the provision of Ampion for
unauthorized use.
The Company has taken the following actions based in part upon
the investigations and the findings of the Special Committee:
- Terminated the employment of two executive officers;
- Restructured the Board of Directors through resignation of
certain directors;
- Separated the role of Chair of the Board and Chief Executive
Officer;
- Re-constituted the Company's Disclosure Committee with
additional subject-matter experts;
- Enhanced Company policies and procedures including those
related to inventory management and distribution; and
- Conducted company-wide training regarding appropriate use of
Ampion while in the clinical trial stage.
- When we launched the strategic alternatives process in
May 2022, one of our first areas of
focus was the viability of continued dev elopment and advancement
of Ampion in order to generate value for the Ampio
stockholders.
Regarding the status of Ampion™ development, in total, we have
conducted seven Phase 2/3 trials, comprising more than 1,500
Ampion-treated patients and more than 1,400 saline-treated
patients. Ampion has consistently demonstrated a 30 percent
reduction in pain and a 30 percent improvement in function across
these trials. Unfortunately, so has the control element, saline.
The saline response in our trials is consistent with the response
in other published materials on osteoarthritis of the knee ("OAK")
trials. As illustrated in the graphs below, Ampion has simply not
demonstrated a sufficient therapeutic benefit versus saline to
support another superiority trial and a noninferiority trial versus
saline would not be commercially competitive.
Over the past several months we have undertaken an extensive
meta-analysis of a merged database containing all clinical,
laboratory and outcome data from all Ampion trials. This analysis
has not identified either a sub-population of patients or
combination of inclusion/exclusion factors that predicts a trial
design where there would be a reasonable expectation for Ampion to
outperform saline control.
Additionally, we evaluated trial designs, techniques, and tools
that might provide an opportunity to highlight the differential
benefits of Ampion vs a saline control given our current knowledge,
including the following:
- Using a centralized reading of images/data to include/exclude
patients from the trial;
- Education of investigators and the use of pain and function
evaluation tools to reduce placebo effect; and
- Using joint imaging as a primary endpoint.
In addition, we evaluated the data from AP-008 (n = 342), in
which patients were dosed with Ampion every two weeks for up to
three doses versus a single dose of saline and confirmed this trial
did not yield statistically significant results.
Finally, we evaluated conducting trials with alternative
controls, such as hyaluronic acid and corticosteroids and concluded
that these trials are not feasible or advisable for several
reasons. This includes the diminishing use of hyaluronic acid in
clinical practice and the magnitude of the corticosteroid efficacy
signal.
In addition to evaluating the continued development of Ampion,
we have also been developing a new and improved formulation of
Ampion. While the in vitro and preclinical data are encouraging, we
do not believe that redefining Ampio as a preclinical company is in
the best interests of stockholders.
Based on this extensive analysis, we do not believe that
conducting an eighth, and likely a confirmatory ninth, pivotal
trial for Ampion is a good use of the Company's cash and
resources.
With this context in mind, we have been pursuing other strategic
alternatives for Ampio with the goal of maximizing value for Ampio
stockholders. This exercise includes the potential for Ampio to
acquire a product/pipeline and/or execute a reverse merger with a
company that is seeking an NYSE American listing and has a
development candidate and/or pipeline that we believe would
represent a better value proposition for Ampio stockholders.
With the assistance of a financial advisor, we have identified
several potential acquisition and reverse merger candidates, as
well as received inbound interest from potential counterparties for
several transformative transactions. We are diligently evaluating
all opportunities in terms of value returned to the Ampio
stockholders, but this selection process takes time.
With that fact in mind, we wish to emphasize the importance of
the upcoming vote at the 2022 Annual Meeting of Stockholders and,
specifically Proposal No. 3 regarding the reverse stock split. Our
goal is to maximize stockholder value through the process we have
just outlined. A key component of maximizing stockholder value is
maintaining the listing of our stock on the NYSE American.
De-listing would likely result in one or more of the following:
- Negatively impact Ampio's attractiveness as a counterparty for
a strategic transaction since listed companies would be at a
competitive advantage in stock-based transactions and for future
capital raising.
- Eliminate potential transactions that may otherwise be high
value for Ampio stockholders. For example, Ampio would not be a
viable counterparty for a private company's go-public reverse
merger transaction as the stock exchange listing would be one of
the key assets that the private company is seeking to acquire.
- Decrease the prospect of additional institutional ownership and
likely result in reduced ownership by existing institutional
shareholders.
- Produce lower trading volume, higher proportionate transaction
costs and wider bid-ask spreads for investors. Ultimately,
liquidity in the stock would be limited.
We believe it is important to position Ampio for maximum
attractiveness as a counterparty and to permit maximum flexibility
in the structure of a transaction that we believe will provide
maximum value to stockholders.
As we reported, Ampio is not currently in compliance with NYSE
American listing requirements due to its low stock price.
NYSE American requires Ampio to regain compliance with their
listing requirements relating to share price by December 23, 2022. A reverse stock split is a
means to regain compliance with the NYSE American listing
requirements.
We want to be clear, stockholder approval of Proposal No. 3 only
permits but does not require the Ampio Board to effect a reverse
stock split. This proposal gives us the ability to act in a timely
manner to regain compliance with the NYSE American requirements, if
need be. Stockholder approval at the 2022 annual meeting on
August 10, 2022, will give the Board
the ability to eliminate the uncertainty regarding future delisting
action and help preserve value for the Ampio stockholders in the
stock exchange listing.
We urge Ampio stockholders to approve Proposal No. 3.
Sincerely,
J. Kevin Buchi
Chairman of the Board
Michael A. Martino
Chief Executive Officer
Forward-Looking Statements
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Any statements contained
in this press release that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," or "estimate" or comparable terminology are intended
to identify forward-looking statements. Such forward-looking
statements include, for example, statements about the potential
outcomes or timing of the strategic alternatives process being led
by the Ampio board of directors.
Forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such statements including, among
others:
- the risk that the stockholders will not approve the reverse
stock split proposal and that Ampio's stock will be delisted from
the NYSE American, limiting the prospects for a successful
strategic alternatives process;
- the challenges in identifying one or more attractive, strategic
businesses to transform Ampio through one or more strategic
transactions and the risk that no strategic transaction will be
considered by the Ampio board to be in the best interests of its
stockholders;
- the strategic alternatives process will consume our cash
resources and reduce cash available to be used in a strategic
transaction or cash available for the post-closing business;
- the strategic alternatives process and any strategic
transaction may involve unexpected costs, liabilities or
delays;
- the expense and risk associated with any strategic transaction,
including the risk that the expected benefits of the transaction
may not be realized in the time frames expected or at all;
- Ampio's stock price may suffer as a result of uncertainty
surrounding the strategic alternatives process and any resulting
strategic transaction; and
- the risk factors described in the Ampio's Annual Report on Form
10-K for the year ended December 31,
2021, and other factors set forth in Ampio's filings with
the Securities and Exchange Commission, including Ampio's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2022.
The forward-looking statements in this press release speak only
as of the date of this press release. Except as required by law,
Ampio assumes no obligation to update or revise these
forward-looking statements for any reason, except as required by
law.
Media Contact:
Nic Johnson,
nic.johnson@russopartnersllc.com
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SOURCE Ampio Pharmaceuticals, Inc.