Shares of Ampio Pharmaceuticals Inc. (AMPE) are not having their best trading after analysts at Aegis set a “buy” rating and a $11.00 price target on the stock. Having seen $8.50 well back in October of last year, AMPE stock is not having the rally a biopharmaceutical company should have after being upgraded and agreeing with a supplier for their clinical study drug Zertane. With the share price below $4, it would only seem logical to have a closer look at them.
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AMPE Stock Chart
Market Cap: 144.62M
Last: 3.94, down -0.20 (-4.83%)
Average Trade Size: 414
Issued and Outstanding: 36,987,654
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First thing we noticed when looking at the 10-Q for the three months ended June 30, 2012 is that Ampio has ample cash available to get itself through the next 6 months based on the current expenses incurred for the first 6 months. That’s as good of a sign as seeing that shares outstanding increased by less than 6 million since the beginning of the year.
The share increase was caused not from a note payable conversion, but by an underwritten public offering for the sale of 5,203,860 shares of AMPE stock at $3.25 per share which funneled the Company net proceeds estimated to be approximately $15.20 million after underwriter fees and cash offering expenses. This not only allows them to be able to cover estimated expenses based on the previous 6 months, but to expand which is what they did with approximately $1.2 million of that money.
On September 10th, Ampio Pharmaceuticals entered into a Clinical Batch Manufacturing Agreement with Ethypharm S.A., a society anonyme organized under the laws of France. The deal calls for the manufacture and documentation by Ethypharm of the clinical study drug and validation batches of the oral disintegrating tablet (ODT) formulation of Zertane for use by Ampio in its on-going clinical trials.
Ethypharm is scheduled to manufacture the batches of Zertane ODT under patented processes in specified dosages that Ampio has already developed. Delivery is scheduled for late December 2012.
On September 10th, Ampio also entered into a Manufacturing and Supply Agreement with Ethypharm whereby Ampio agreed to purchase all of its requirements of Zertane ODT exclusively from Ethypharm during the term of the Supply Agreement. Ethypharm and Ampio have agreed on fixed bulk pricing for the Zertane ODT product manufactured and supplied by Ethypharm for a term of ten years from the effective date, automatically renewing for three year periods unless terminated.
So things are falling into place for Ampio and shareholders should begin to soon fall into line for a possible breakout play with AMPE. With a $11 price target issued, the upside is 179% from its current price. Considering the run it had after the announcement with Ethypharm on the 10th, investors might get a chance to steal shares at $3 if it can pull back that far.
About AMPE Stock
Ampio Pharmaceuticals, Inc. , formerly known as Chay Enterprises, Inc., and its wholly-owned subsidiaries, DMI Life Sciences, Inc., DMI Acquisition Corp. and DMI BioSciences, Inc., is engaged in developing innovative, proprietary pharmaceutical drugs and diagnostic products to identify, treat and prevent a broad range of human diseases including metabolic disorders, eye disease, kidney disease, acute and chronic inflammation diseases and male sexual dysfunction.
Click here to view the SEC filings for AMPE.
Bottom Line: Biopharmaceutical penny stocks rock and AMPE should be looked at no differently as you add it to the list of penny stocks to watch immediately. Sure it isn’t trading under $1, but with AMPE stock liquid, both cash wise and in trading activity, you would have t be foolish to overlook their total liabilities of $1,501,550, one tenth their total current assets as of June 30 and nearly half the cash they had at that time.
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