The Citi analyst covering AMPE published an update entitled "Maturing Pipeline:If you Dismiss It You Miss It" and it was released today to Citi's institutional clients.
The introduction is as follows:
Maturing Pipeline: If You Dismiss It You Miss It
Conclusion(s) — We believe AMPE’s valuation meaningfully discounts both the
late-stage and large commercial potential of the company's two Ph 3 assets. Data
from Ampion's second P3 trial in osteoarthritis and Optina’s P3 for diabetic
blindness readout in 3Q and 4Q, respectively. We continue to view the unusual
level of positive regulatory feedback on Ampion and lower risk bioequivalence US
regulatory path approach for Optina are broadly overlooked by the Street. With two
shots on goal and near-term catalysts we believe AMPE should not be dismissed.
Ampion Trial Exploring Potential Breakthrough Cartilage— AMPE recently
initiated a trial for Ampion to explore prior early signals from the Ph 3 SPRING trial
of the drug’s potential to stimulate regeneration of cartilage in osteoarthritis patients.
We found literature to support the biologic rationale of human albumin’s role in this
process and even early supportive data of cartilage formation would be a major
breakthrough with potential to multiply this already multi-billion dollar WW market.
Next up; confirmatory P3 STEP trial data on osteoarthritis of the knee during 3Q:14.
Optina’s Ph3 Strategy on DME Risky: But Modest Credit in the Stock— Last
week AMPE decided to end enrollment early for its Ph3 trial of diabetic macular
edema (DME) agent Optina, with data ~YE. Signs of patients benefits/declines
when starting/stopping therapy in an un-blinded treatment extension is risky in
making broad assumptions of the blinded potion of the trial. However, given a
majority of patients had failed currently approved agents, we believe even these
efficacy observations cannot be completely dismissed. What also appears
overlooked is that the base drug in Optina has been approved
Thanks. This analyst is both reasonable and informed, balancing risks with potential. The 505b(2) status of Optina isn't understood. Of course, efficacy is what counts, and they had problems fulfilling enrollment (he skipped that part).
When was this released? No impact to price today.
Too soon for Jefferies to raise their target, but post-STEP I'd expect both to get raised if results repeat.
Institutions are notoriously slow to move unless they are in a panic to buy or sell.
It may take a few days and then a big price move up to get them to understand what is right under their noses.
This is not rocket science and the Citicorp report is very straightforward and easy to read. The message is simple . . . STRONG BUY because shares are within days of exploding.
My guess is that most of them will miss the boat and will be panicking to pay much higher prices in just a few days.
Here is where the truly smart buyers make out much better than the slow institutions.
Sentiment: Strong Buy
A lot of institutions actually perform their own due diligence that might involve visiting the company. This takes time. (Not saying all do - some can pull the trigger pretty fast.) Also, since we are now only a few weeks away from a rather critical data release some are probably awaiting this, even though they would have to pay up if the data is good. All of us who are long are assuming the results will be good, but there is always the fickle finger of fate out there.
for decades at much
higher doses reducing safety concerns for the drug and creating an expedited
approval path for the drug.
Still Undiscovered —As noted in our May 8th initiation report, we believe AMPE remains off the radar
for many institutional investors. However, AMPE provides a potential unique opportunity in SMID-biotech where picking underappreciated and near-term stories remains a focus for many.
The report reiterates the price target of 21 and in the valuation section states:
Overall we view AMPE's current market cap heavily discounting many of the unique aspects of this story. We expect these attributes not to go unnoticed much longer, and therefore the time to look at AMPE is now.