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Ampio Pharmaceuticals, Inc. (AMPE)

Ampio Pharmaceuticals, Inc. (NYSE MKT: AMPE) is a development stage biopharmaceutical company focused on the discovery and development of novel therapies aimed at treating common inflammatory conditions for which there are limited treatment options. The company's development pipeline currently features two product candidates advancing through late-stage clinical trials in the United States, including Ampion™ for the treatment of osteoarthritis of the knee (OAK) and Optina™ for the treatment of diabetic macular edema (DME).

Osteoarthritis, the most common form of arthritis, currently affects more than 100 million people in the United States alone, with over 48 million suffering from OAK. Meanwhile, the prevalence of DME is estimated at about 30 percent of patients inflicted by type I or type II diabetes mellitus for 20 years or more. For reference, roughly 11.3 percent of the U.S. population over the age of 20 lives with some form of diabetes.

Recently, Ampio issued a news release updating its shareholders on the status its clinical development programs. The company is in ongoing discussions with the FDA's Center for Biologics Evaluation and Research regarding the best path forward to obtain a Biological License for Ampion™ for the treatment of OAK. According to Michael Macaluso, chief executive officer of Ampio, the FDA has provided a "number of fair and reasonable paths forward to a Biological License" and Ampio hopes to "have a final decision on the path we will follow by year-end."

In addition to its late-stage Ampion™ development program for the treatment of OAK, Ampio also recently completed a pilot study designed to examine the safety and efficacy of the candidate as a treatment for patients with osteoarthritis of the hand (OAH). Macaluso described the trial as "a small pilot study designed to examine the safety of a single injection of Ampion™ into the basal thumb joint of patients with hand OA, which is common, troublesome, and has limited treatment options." After four weeks, 66.7 percent of patients treated with Ampion™ demonstrated an improvement in pain, while just 33 percent of patients in the control group noticed an improvement.

"These preliminary results were not unexpected as they are consistent with the results from over 1800 patients in our OA of the knee studies," Macaluso added in a news release.

A recent update regarding the development program for Optina™ notes that a manuscript, titled 'Potential Beneficial Effect of Low Dose Danazol in Combination With Renin Angiotensin Inhibitors in Diabetic Macular Edema', was accepted for publication in Acta Ophthalmologica, an international peer-reviewed journal in the field of ophthalmology. The article reports on the clinical benefits of Optina™, as observed from a 12-week multi-center, placebo-controlled, double-masked randomized trial. The findings were also presented at the 2016 annual meeting of the Retina Society in San Diego, California.

 

 

Axsome Therapeutics, Inc. (AXSM)

New York-based Axsome Therapeutics, Inc. (NASDAQ: AXSM) is tending to a major and thriving market where current treatment options are insufficient. This young company (founded in 2012) is striving to establish a fully-integrated biopharmaceutical business that will develop and bring to the healthcare marketplace therapies for the management and treatment of central nervous system (CNS) disorders.

Axsome Therapeutics has a laser-like focus on differentiated therapies, in particular. To improve the lives of patients living with pain and various CNS disorders, Axsome has set its sights on working with both internally-derived drug candidates and in-licensed drug candidates in order to create a path to development and commercialization that will, ultimately, expand the treatment alternatives available to caregivers.

Axsome Therapeutics has moved into the clinical stage at this time. It holds a product candidate portfolio that includes two late-stage candidates, AXS-02 and AXS-05, which it is developing for multiple indications, as well as AXS-06.

  • AXS-02, a non-opiod therapeutic in development for chronic pain, is Axsome's leading product candidate. It is currently being evaluated in phase III trials for the treatment of complex regional pain syndrome, knee osteoarthritis with bone marrow lesions (BMLs) and chronic low back pain with modic changes.
  • AXS-05 is a fixed-dose combination of dextromethorphan and bupropion, both of which have shown to be effective in activating central nervous system receptors. AXS-05 is currently in a phase III trial indicated for treatment resistant depression and agitation in patients with Alzheimer's disease.
  • The company is also developing AXS-06 for the treatment of chronic pain disorders.

Analysts have pointed to the value in Axsome's focus on complex regional pain syndrome, treatment resistant depression and agitation in patients with Alzheimer's disease, indicating that these disorders possess lower-than-average research and development risks and a tested business model that leans toward a faster commercialization timeline.

 

 

Inovio Pharmaceuticals, Inc. (INO)

Over 2,000 years ago, Plato, in his immortal Socratic dialogue, had the great philosopher express his astonishment at the new diseases plaguing Athenian society and their bizarre and horrible names. Our position today is very similar. Strange, horrible afflictions with bizarre, frightening names like cancer, Ebola and Zika, unknown or unrecognized until modern times, threaten us with epidemics and pandemics. For a hundred years or so, we've fought them off with traditional vaccines and pharmaceuticals. Now, a new battlefront is set to open with the advent of DNA vaccines from companies like Inovio Pharmaceuticals, Inc. (NASDAQ: INO).

Traditional vaccines stimulate the immune system to respond to threats from antigens in the lymph and blood. The lymph is a colorless fluid containing white blood cells that bathes the tissues. These traditional vaccines are said to stimulate humoral immunity. (Humor is a medieval term for body fluid.) The most famous of them, perhaps, and certainly the first was Edward Jenner's smallpox vaccine in 1796. Traditional vaccines have been developed against numerous bacterial and viral pathogens, but their development against many life-threatening viruses has been elusive.

DNA vaccines, by contrast, stimulate cell-mediated immunity, which is good, since most of the scientific community believes that it is cell-mediated immunity, rather than humoral immunity, that has the dominant role in fighting viral infections. The problem is that viruses live and replicate inside cells. They seize the synthetic machinery of the host and, therefore, are sheltered from antibody surveillance. Cell-mediated immunity, however, can detect and destroy these infected cells.

Inovio Pharmaceuticals is revolutionizing the fight against cancers and other infectious diseases with a range of these DNA immunotherapies (vaccines). Its technology platform is applicable to cancers and infectious diseases and the company has developed antigen-targeting immunotherapy and vaccine product candidates for HPV-caused pre-cancers and cancers of the breast, lung, pancreas, and prostate, as well as hepatitis, HIV, influenza, and Ebola. Its lead program targets cervical dysplasia and has just completed a phase II clinical study.

In March, the company announced that this immunotherapy to treat cervical dysplasia (VGX-3100) had earned recognition as the "Best Therapeutic Vaccine" by the World Vaccine Congress held that month in Washington, D.C. The Vaccine Industry Excellence (ViE) Awards honor outstanding vaccine advancements and achievements of therapeutic and preventive vaccine developers across the global industry, as judged by a panel of global biotech industry stakeholders.

 

 

MiMedx Group, Inc. (MDXG)

To paraphrase the renowned German playwright, Bertolt Brecht, nature does not remember kisses on the cheek. Wounds, on the other hand, perversely leave scars. Perhaps fortunately, kisses leave no mark, but injuries to the body do. And the scars of such damage not only disfigure appearances but result in adhesion, which occurs when scars bind with surrounding tissue.

Luckily, however, advances in the field of regenerative medicine may soon relegate scar tissue to the indecipherable lyrics of a Red Hot Chili Peppers ballad. MiMedx Group, Inc. (NASDAQ: MDXG) is now bringing comfort to the wounded with its groundbreaking amniotic tissue allografts that promote tissue regeneration.

In Q3 2016, Lucas Energy achieved what CEO Anthony Schnur, who joined the company in 2012, calls "transformational." In the company's Q3 earnings release, Schnur said the company has found ways to navigate the challenging commodity environment and identify growth opportunities through strategic acquisition. In accordance with this strategy, Schnur also referenced the company's Segundo Resources asset purchase.

Scar tissue, however, is not the only issue that MiMedx is addressing. Its regenerative therapies based on amniotic tissue not only reduce scarring but modulate inflammation and enhance the healing process. This trifecta of winning outcomes has driven MiMedx to the top. In the span of eight years, the company has risen to become the world's premier processor and supplier of human amniotic tissue and has, to date, distributed over 700,000 amniotic tissue grafts worldwide. Successful clinical outcomes have been achieved in a variety of therapeutic settings, including ophthalmology, spinal, chronic wounds, dental, orthopedic surgery, sports medicine, and urology.

Tissue derived from the amniotic membrane, which is the innermost layer of the placenta, is the building block of the MiMedx regenerative therapies. Normally, a mother's placenta, or afterbirth, along with the amniotic membrane, is discarded as medical waste. However, through its Placenta Donation Program, MiMedx allows mothers, delivering healthy babies by planned Caesarean section, to donate their placentas. The amniotic membrane is then separated from the rest of the placenta and subjected to MiMedx's proprietary Purion® technology, which is the foundation of its two lead products: AmnioFix® and EpiFix®.

The AmnioFix® and EpiFix® allograft solutions are MiMedx's chief wound care (and company) products. Both allografts have an advantage over competitive products in that they can be stored at room temperature for five years without the need for refrigeration or freezing. As a result, they can be used right out of the package without a complicated thawing process. These critical qualities of the MiMedx® allografts allow hospitals, clinics, and surgeons to quickly provide the appropriate treatment while effectively managing their inventory of allografts.

The care of wounds is an undeveloped market. In a report issued earlier this month, Aegis Capital estimated that MiMedx commanded a 60 percent share of the amniotic tissue market, a market that is, at present, growing by roughly 15 percent annually. MiMedx derives about three-quarters of its revenues from its amniotic tissue business. Together with its Surgical, Sports Medicine, and Other (SSO) business lines, Aegis expects that by 2020, the company will triple revenues to $560 million and earn one dollar in EPS (earnings per share). There are numerous caveats, however. Gross margin must stay in the low 80 percent range; operating margin must hover around 30 percent; and sales, general and administration (SG&A) expenses must not exceed half of sales.

Management is certainly expecting growth. The company has been engaged in an aggressive $60 million share buyback program, which could be signaling undervaluation. The Aegis analysts certainly think so. They have put a 'Buy' rating and price target of $12.00 on MiMedx.

 

 

Nektar Therapeutics (NKTR)

Nektar Therapeutics (NASDAQ: NKTR), a biopharmaceutical company in the business of developing new medicines for people living with life changing conditions, now helps more than nine million patients worldwide. Nektar also offers a proprietary pipeline made up of drug candidates for oncology, pain, anti-infectives, and immunology. The company has 12 approved products, including Movantik, Adynovate, and Onzeald.

Movantik, which is used for the treatment of opioid induced constipation, was approved for sale in both the U.S. and Europe in 2014, allowing Nektar to see a significant increase in sales and royalty payments. Adynovate, used in the treatment of hemophilia A in patients aged 12 and above, was approved for sale in the U.S. in 2015. The company also partnered with Shire, giving Nektar an extra $55,000 in sales.

Onzeald is used in the treatment of metastatic breast cancer with brain metastases. The company partnered with Daiichi Sankyo on June 1, 2016, giving Daiichi exclusive commercialization rights in the European Economic Area, Switzerland, and Turkey. This partnership could potentially give Nektar a total of $60 million in commercial and regulatory milestones.

In addition, Nektar Therapeutics recently presented new clinical data from its ongoing phase I dose-escalation study of NKTR-214 at the Society for Immunotherapy of Cancer (SITC) 2016 Annual Meeting. The candidate is an investigatory immunostimulatory therapy that expands specific cancer fighting T-cells and natural killer cell abundance in the tumor's microenvironment.

According to Dr. Ivan Gergel, Senior Vice President, Drug Development & Chief Medical Officer of Nektar, "NKTR-214 resulted in robust activation of the immune system and encouraging anti-tumor activity, including a partial response observed in a patient who continues to be treated with NKTR-214″. There has been evidence that seven out of the 18 patients so far have had radiographic reductions in tumor size per RECIST 1.1 on NKTR-214.

With this in mind, Aegis Capital Corp. initiated coverage on Nektar Therapeutics, offering the company a 'Buy' rating with a target price of $21. Areas covered in the report include the sources of revenue, details of the partnerships put in place, and an oncology clinical collaboration with BMS for evaluating the combination of Opdivo and NKTR-214. The target price was based on an EV/Sales multiple of eight, which was applied to the expected sales of $378 million by 2020.

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