BOSTON (TheStreet) -- I want to circle back to Tuesday's Ampio Pharmaceuticals (AMPE) - Get Reportannouncement of Ampion phase III study data and share a simple mathematical analysis which demonstrates quite convincingly that the experimental knee arthritis drug is no more effective than a placebo. 

Ampio insists the "temperature excursion" problem with the Ampion drug supply discovered in the "STEP" study is only a temporary setback which will be rectified with results from another, ongoing clinical study. A planned FDA approval filing for Ampion as a treatment for osteoarthritis of the knee is delayed but will still get done by the end of the first quarter 2015, Ampio claims.

I have no doubt Ampio will dump Ampion into the lap of the FDA and pray for a positive review, mainly because the company has no other choice. Giving up on Ampion voluntarily would destroy the company's stock price because nothing else in the pipeline has any potential value. But as I'll show you below, Ampion isn't an effective osteoarthritis drug either, so Ampio's future is bleak regardless of which path it chooses to take. 

The chart below summarizes the Ampion data from the STEP study announced Tuesday does some math the company would rather not share publicly:

Image placeholder title

The first two blocks of data (in black) come directly from Ampio's press release. Of the 538 patients enrolled in the study, 185 patients had severe osteoarthritis of the knee (classified as KL-4.) There was a 0.2 point difference in the WOMAC A pain score favoring Ampion over saline from baseline to 20 weeks of treatment. The difference was not statistically significant.

Ampio claims the STEP study results were fouled because vials of Ampion were shipped and stored at temperatures which reduced the drug's potency. Similarly, saline used in the study was also stored at the wrong temperature (although the company has never explained why temperature differences would negatively affect salt water.) In total, Ampio says 72% of patients in the STEP study received Ampion or saline adversely affected by a "temperature excursion."

The second block of data in the chart above summarizes results from the 134 KL-4 patients (out of the 185 KL-4 patients in the study) who were treated with altered Ampion or saline. Here, the difference in WOMAC A pain score was .27 points, again favoring Ampion but this time reaching statistical significance! 

Strange finding. Comparing the first two blocks of data, you'll notice the pain reduction score for Ampion is basically the same: -0.86 and -0.85. The difference in pain response comes from the relative underperformance of altered saline. Apparently, Ampio has made an important and novel scientific discovery about the performance of saline tied to the shipping temperature. 

Now, let's do a bit of math. The last block of data (in blue) in the chart above represents the remaining KL-4 patients in the study who were treated with Ampion or saline unaffected by the temperature excursion. Ampio did not provide these data Tuesday, but the numbers are simply calculated using the information disclosed by the company. 

Comparing Ampion to saline unaffected by temperature storage issues is the most important analysis because it represents the outcome of the STEP study had nothing gone wrong. Ampio chose not to share these data publicly, and you can see why very clearly.

The pain response score for Ampion and saline was -0.89 and -0.87, respectively. The difference is meaningless. Remove the dubious excuses about temperature storage problems and Ampion is saline. Similarly, Ampion fails against saline using the WOMAC C knee function endpoint. 

The FDA does not approve saline to treat osteoarthritis of the knee. 

A couple other points to make:

Ampio burnt out the motor on the fog machine with Tuesday's release by disclosing data on only the one-third of enrolled patients with KL-4 (severe) osteoarthritis. You can be sure that if there was something positive to say about the other 353 enrolled patients, Ampio would have said it. The silence speaks volumes, and not in a good way. 

Ampio chose to disclose a pain response analysis following 20 weeks of treatment. The STEP study was designed to analyze the results following 12 weeks of treatment. Tricky! 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

click here

to send him an email.