Ampio Pharmaceuticals Reports Full-Year 2011 Financial Results and Milestone Highlights for 2011

Financings

• December 21, 2011.  Sold 2,220,255 of shares of common stock at $4.25 per share in a registered direct offering from which Ampio received gross proceeds of approximately $9.436 million, before deducting placement agents' fees and estimated offering expenses.  There were no investor warrants or convertible securities associated with this financing.

• March and April 2011.  Sold 5,092,880 shares of common stock at a price of $2.50 per share in a private placement from which Ampio received gross proceeds of $12.732 million, before deducting placement's agents' fees and estimated offering expenses.  There were no investor warrants or convertible securities associated with this financing.

Corporate Achievements

• June 16, 2011.  Announced Ampio was being included in the U.S. broad-market Russell 3000 index on June 24.

• May 20, 2011. Announced Ampio common stock was now trading on the NASDAQ Capital Market under the ticker symbol "AMPE".

• March 23, 2011. Ampio acquired all of the outstanding stock of DMI BioSciences, Inc. whose principal asset consisted of the worldwide rights to Zertane™, including 32 issued patents and 31 pending applications.

Clinical Trials

• October 26, 2011.  Announced Ampion™ would be tested as a stand-alone therapy, which was not previously permitted by the regulators.  This trial was in progress at December 31, 2011.

The progression to the second part of the Phase 2 study was based upon positive results from the first dosing cohort in the Phase 2 Ampion™-In-Knee (AIK) clinical trial.  The results were generated from 40 patients randomized equally into two separate study arms.  Enrolled patients with moderately severe osteoarthritis of the knee were assessed for the difference in pain relief from their own established baseline.  At each study time point (6 hours, 24 hours, 72 hours), the reduction in pain scores was greater in the 20 patients receiving Ampion™, steroids and lidocaine than the 20 patients treated with steroids and lidocaine.  The group receiving Ampion achieved a 37% improvement at 72 hours for the Ampion™ group.  This trend toward efficacy was more pronounced over time.

• October 18, 2011.  Announced a randomized, vehicle-controlled, double-blinded study conducted at Centers for Allergy and Asthma in Denver, Colorado which indicates intranasal danazol has an impact on allergic rhinitis, a clinical condition in which increases in vascular permeability and edema are hallmark signs.

• September 26, 2011.  Announced positive results from a 12-week open-label extension study, which was performed at the conclusion of the Phase 3 trials for Zertane™ in patients with premature ejaculation. No treatment-related serious adverse events and very few adverse events were recorded during the open-label extension period, when all subjects received active treatment, even though the mean extent of exposure (approximately 0.26 to 0.31 tablets per day) appeared to increase modestly compared to the double-blind treatment period (approximately 0.24 to 0.26 tablets per day). The average use by patients during this 12-week period remained less than 3 pills per week. Six subjects experienced an adverse event (5.9%) with only one treatment-related adverse event (anxiety/erectile dysfunction), demonstrating that even the higher dose of Zertane™ is safe with longer-term dosing. There were no reports of dependency or tolerability issues.

• June 27, 2011.  Announced positive results from its Phase 3, randomized, double-blind, placebo-controlled, multicenter study to evaluate the efficacy and safety of two doses of Zertane™ for the treatment of premature ejaculation (PE). The study was conducted in 61 sites in 11 countries in Eastern and Western Europe and included 604 intent-to-treat patients.

Licensing of Distribution

• September 8, 2011.  Licensed exclusive rights to market Zertane™ to Daewoong Co., Ltd. of South Korea for the treatment of premature ejaculation (PE) and for a combination drug, utilizing Zertane™ and another erectile dysfunction drug (PDE5 inhibitors and others), to simultaneously treat premature ejaculation and erectile dysfunction (ED).

New Intellectual Property

• December 22, 2011.  Received notification of the granting of a Canadian patent with broad claims directed to compositions containing either DA-DKP, a cyclic dipeptide diketopiperazine, which is the active ingredient of Ampion™, but also extends to many other diketopiperazines.

• December 7, 2011.  Received notification of the granting of a European patent with broad claims directed to "METHOD OF USING DIKETOPIPERAZINES AND COMPOSITION CONTAINING THEM".  The protected compositions containing DA-DKP, a cyclic dipeptide diketopiperazine, which is the active ingredient of Ampion ™. The patent also includes claims for these compositions that target clinical treatments for inflammation and inflammatory diseases and conditions, such as arthritis and allergies.

• December 5, 2011.  Purchased, for $2 million, certain worldwide rights relating to a patented orally disintegrating tablet (ODT) drug delivery technology.  Ampio intends to utilize this technology to elevate the market acceptance of Zertane™ for premature ejaculation.  This acquisition provides additional intellectual property to protect Zertane™ ODT's unique formulation, over and above the many method of use claims for Zertane™ contained in patents Ampio already owns. The Company indicated it expects this technology will facilitate Ampio's filing of marketing authorization applications for Zertane™.

• November 16, 2011.  Received PTO notification of the allowance of two important U.S. patents.  The first patent is directed to a unique class of compounds that combine elements of diketopiperazines (same class as Ampion™) and methylphenidate derivatives.  The second patent is directed to novel derivatives of methylphenidate (Ritalin). Both patents contain not only use claims for these novel compounds, and pharmaceutical compositions containing them, but also composition of matter claims.

• September 28, 2011.  Received notification of allowance of its two patent applications on Zertane™ combinations with erectile dysfunction (ED) drugs in Canada.  This allowances includes claims directed to the use of Zertane™ with a class of drugs called phosphodiesterase type 5 (PDE5) inhibitors commonly used for the treatment of ED to address concurrent  premature ejaculation (PE) and ED.  The allowed claims also include composition of matter claims, such as claims directed to a pharmaceutical composition or a kit containing Zertane™ and a PDE5 inhibitor.

AMPIO PHARMACEUTICALS, INC., AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

Twelve Months Ended

December 31,

2011     

2010     

License revenue

$         18,750

$               --

Expenses:

 Research and development

6,614,384

1,883,150

 Research and development – related party

34,013

88,984

 General and administrative

4,504,494

4,732,271

    Total operating expenses

11,152,891

6,704,405

Other (expense) income

 Interest income

6,684

815

 Interest expense

(8,358)

(19,545)

 Unrealized loss on fair value of debt instruments

(5,585,422)

37,511

 Derivative expense

(1,555,497)

(1,367,771)

   Total other expense

(7,142,593)

(1,348,990)

Net loss, before income tax

(18,276,734)

(8,053,395)

   Foreign tax expense

82,500

--

Net loss

$ (18,359,234)

$ (8,053,395)

Weighted-average number of common shares outstanding

26,013,838

16,288,468

Basic and diluted net loss per common share

$          (0.71)

$        (0.49)

AMPIO PHARMACEUTICALS, INC., AND SUBSIDIARIES

(A Development Stage Company)

SELECTED CONSOLIDATED BALANCE SHEET DATA

December 31,

December 31,

2011

2010

Cash and cash equivalents

$  11,362,325

$    671,279

Total assets

19,482,599

737,524

Total current liabilities

1,291,533

4,745,960

Deficit accumulated in the development stage

(28,177,552)

(9,818,318)

Total stockholders' equity (deficit)

17,759,816

(4,008,436)

Total liabilities and stockholders' equity

$  19,482,599

$     737,524