Shares of development-stage pharma Ampio Pharmaceuticals (NYSEMKT:AMPE) fell nearly 19% today without any news. However, considering the stock rose over 20% earlier in the week -- once again, without any news -- today's move is likely just a simple correction. Even with the precipitous drop factored in, the stock is up 210% in the last year, although the company's market cap is just $190 million.
As of 2:55 p.m. EST, the stock had settled to a 17.9% loss.
Investors have been cheering on Ampio Pharmaceuticals for seemingly rosy data on its lead drug candidate Ampion, which is a potential treatment for severe osteoporosis of the knee. The company released and explained phase 3 results for the drug candidate at the end of 2017. But marketing approval may not be coming.
Why not? As explained by prominent biopharma analyst Adam Feuerstein over at STAT, the phase 3 trial wasn't accompanied by the most robust design. Turns out, Ampion has performed no better than saline solution for treating osteoporosis.
Ampio Pharmaceuticals doesn't have a great reputation, has never generated revenue, and has worked hard to spin mediocre trial data as something more positive. I think the market had the company more fairly valued in the second half of 2017 when it was a penny stock with little going for it. In other words, today's big drop probably won't be the last.