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TheStreet Open House

Biotech Stock Mailbag: Ampio, Cel-Sci and Ziopharm

BOSTON ( TheStreet) -- This week's Biotech Stock Mailbag is open.

Larry P. asks, "What do you think about Ampio Pharmaceuticals (AMPE - Get Report) and its Australian approval filing for Zertane to treat premature ejaculation."

I always find it a bit bizarre and worrisome when U.S.-based companies like Ampio travel to far-flung corners of the globe seeking drug approvals. If you have a viable and commercially lucrative therapy, why not seek approval first in the big markets of the U.S. or Europe? I suspect the answer is that small, inconsequential drug makers like Ampio venture to Australia more for stock promotion back home than real business interest. The all-time best example of this scheme was Canadian-based Generex Biotechnology seeking approval for its insulin spray in Iraq, Kenya, Bangladesh, Sudan and Yemen -- I kid you not.

Zertane is not unique. It's a new use for the old and generic (i.e. cheap and widely available) painkiller tramadol, formulated into a mint-flavored tablet that dissolves quickly in the mouth. Ampio claims the safest and most efficacious dosages of Zertane for premature ejaculation are 62 mg and 89 mg. Rather random-sounding dosing, except when you understand that standard tramadol can be easily prescribed at a 50 mg dose. Few doctors are going to prescribe Zertane at a higher cost when regular tramadol is already available and much cheaper.

Not only is Zertane nothing special, it's also been previously discarded. Biovail (now owned by Valeant Pharmaceuticals) abandoned phase III clinical trials due to slow patient enrollment and lack of commercial interest in the product, according to regulatory filings. This is how Ampio came to own the rights to Zertane.

Ampio misleads investors when it claims to have conducted a successful phase III study of Zertane involving 604 patients with premature ejaculation. The truth is that Ampio bought rights to the phase III trials run by Biovail, which were terminated well before the planned 2,000-plus patients were enrolled. Ampio combined the two trials together and analyzed results from data available on 604 patients, reaching the conclusion that Zertane significantly delayed ejaculation compared to a placebo.

Ampio's Zertane "study" data were published in August 2011 by European Urology, the medical journal of the European Association of Urology. Three of the four authors of the study work for Ampio, however.

More relevant to the debate over Zertane's ability to receive regulatory approval in Australia or anywhere else is the editorial published in the same issue of European Urology.

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