Ampio Pharmaceuticals, Inc. (AMPE) Stock Spiraling Downward, Here’s why?

Ampio Pharmaceuticals, Inc. (AMPE) is a biotherapeutics company engaged in immunomodulatory therapeutics development for treating pain due to osteoarthritis in the knee and other articular joints. Its lead product is Ampion. AMPE is ranked the number 106 out of a total of 253 pharmaceutical companies (in the top 42%). According to the reputed research firms, the revenue of the pharmaceutical market will reach approximately $1120 billion in 2022 with an annual growth rate of 5.70% by 2026, which will result in a market volume of $1,398 billion in the next four years.

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AMPE: Recent Announcement

AMPE announced that it received a written response from the FDA on April 20, requesting a Type C meeting submitted earlier in the year regarding its AP-013 studies outcomes. FDA’s response regarding the proposed changes was the non-agreement with its change from the ITT population to the mITT population for the prime endpoint analysis. This news resulted in a drastic down gradation of the company’s stock in Wednesday’s aftermarket trading by 36%.

AMPE: Earnings

As observed in the graph, the company did not record any revenues over the past four

Source: Yahoo Finance

years, while its earnings declined drastically year-over-year to -$17 million. The company’s net loss for the fourth quarter of 2021 was -$6.2 million as compared to -$4.6 million for the corresponding 2020 quarter. As long as the financial forecast for the fiscal years 2022 and 2023 is concerned, the company expects its earnings per share to remain at -$0.09.

AMPE: Comparison with Peers

While comparing the company’s long-term or yearly performance with its peers (including SCTL, LBPH, AQST, LPCN, and HEPA) it becomes clear that during the last year, AMPE’s performance was the worst with a down performance of -77% among its peers. Although all the other stocks did not perform according to the expectations, still they managed to perform well in contrast to AMPE’s stock.

Source: Seeking Alpha

AMPE: Insider Transaction, Valuation, and, Analyst Ratings

It was observed that approximately 6.72% of the outstanding shares of the company are owned by insiders, while 26.2% of shares are held by institutional investors. The total number of outstanding shares of AMPE is recorded to be 227.1 million. The consensus estimate of the analysts regarding AMPE stock is Buy as Alliance Global Partners initiated the coverage on AMPE stock. While Zacks ranked the company’s stock as a strong sell as the company’s stock is bearish for the past few days. The Valuation metrics of the company showed that it may be overvalued, as indicated by the value score of F given to it. So, the stock is a bad pick for the investors.

Risk Factors

AMPE stock’s volatility is above average these days and also it is a penny stock, so the investors should examine the stock before buying. As some penny stocks have a speculative nature and are subject to the faux price hike, it’s better to take into consideration the risk factors as the penny stocks are unable to maintain their increased share prices for a longer time duration and will revert.

Bottom line

As there is confusion surrounding AMPE stock, so it is suggested that the investors should place buying the AMPE stock on hold. Most recently, the stock price was catalyzed by the regulatory updates provided by the company and it plunged deep.