Atossa Genetics Inc. (NASDAQ: ATOS) is a clinical-stage pharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions.
The Company recently announced successful preliminary results from its Phase 1 dose escalation study of its proprietary topical Endoxifen. The Phase 1 study was a double blind, placebo-controlled, repeat dose study of 48 healthy female subjects. Atossa assessed safety, tolerability and the pharmacokinetics of proprietary formulations of both topical and oral Endoxifen dosage forms in varying dose levels over 28 days. The study was conducted in two parts based on route of administration.
As per management, these data demonstrate the suitability of topical endoxifen for further clinical development.
With endoxifen, Atossa has taken tamoxifen, broken it into a metabolite outside the body and turned the metabolites into a topical administration formula. This type of administration can subside the adverse side effects linked with standard of care administration and that in turn can both improve the patient experience and reduce the overall cost associated with delivery.
Upcoming near-term Catalysts: Based on these positive preliminary results, Atossa is advancing its topical Endoxifen into Phase 2 studies.
Apart from topical administration, ATOS has also created an oral administration pill that is rooted in the same sort of process. i.e. break down the drug externally into metabolites and administer the metabolites, removing the necessity for a liver pass.
Atossa also expects to announce results from the oral arm of the Phase 1 study in the near future. The trial investigating said formulation ran in parallel to the topical administration version but is between one and two months behind its counterpart. Management expects to put out the oral formulation data between 30 and 60 days from now. If the data is positive it will be a strong support for this formulation and will drive the business risk profile of ATOS to the next level.
During August 2017, Atossa also announced financial results for second Quarter 2017. The company is in the research and development phase and did not generate revenue for the three and six months ended June 30, 2017. Total operating expenses were approximately $1.9 million.
Atossa’s other recent developments includes:
- Completed capital raise of approximately $4.4 million gross proceeds.
- Eliminated warrants to purchase approximately 3 million shares of common stock through cashless warrant exercises on June 30 and subsequent to that eliminated warrants to purchase approximately an additional 1.6 million shares of common stock through cash exercises.
- Received multiple positive interim safety assessments from the safety committee on its proprietary Endoxifen Phase 1 dose escalation study.
- Completed the transfer of the Fulvestrant Microcatheter Phase 2 study to Montefiore Medical Center
The risks involved with Atossa are like any investment in a trial stage biotech firm. However, the company’s business risk profile is on a rapid growth trajectory and is well positioned for a planned momentum. Atossa just put out data from the trial, which looks incredibly strong and if the outcome of the upcoming milestones is also positive, it would turn Atossa into a promising biotechnology stock in a potentially billion-dollar industry.
In fact, due to recent developments, analysts have already revised their outlook on the stock. The stock currently has an average rating of “Buy” and a consensus price target of $2.30. Considering present valuation, the company is at a favorable risk reward position.
Description & about the Company:
Atossa Genetics Inc. (NASDAQ: ATOS), a clinical-stage pharmaceutical company developing novel therapeutics and delivery methods for breast cancer and other breast conditions.
Atossa’s Proprietary Endoxifen: Endoxifen is an active metabolite of tamoxifen. Tamoxifen is an FDA-approved drug to prevent new breast cancer as well as recurrent breast cancer in breast cancer patients. Tamoxifen itself must be broken down by the liver into active compounds (metabolites), of which Endoxifen is the most active.
- 9 million high risk patients won’t take oral tamoxifen because of actual or the risk of systemic side effects
- 500,000 breast cancer patients don’t benefit from tamoxifen because of metabolism problems.
Endoxifen address unmet medical needs for: –
- Providing a topical alternative to oral tamoxifen for reducing breast density
- Enhancing the chemoprevention properties of tamoxifen in those patients who are refractory
- Extensive characterization of tamoxifen, the parent drug
Q2 2017 Financial Results:
ATOS is in the research and development phase and did not generate revenue for the three and six months ended June 30, 2017.
Total operating expenses were approximately $1.9 million and $3.6 million for the three and six months ended June 30, 2017, respectively, consisting of general and administrative (G&A) expenses of approximately $1.1 million and $2.2 million, respectively, and research and development (R&D) expenses of approximately $0.8 million and $1.4 million, respectively. Total operating expenses were approximately $1.7 million and $4.0 million for the three and six months ended June 30, 2016, respectively, consisting of G&A expense of approximately $1.6 million and $3.7 million, respectively, and R&D expenses of $0.2 million and $0.3 million, respectively.
Key Stock Influences:
Successful completion of the upcoming milestones would lead future direction for the company. Any adversities related to these upcoming milestones might adversely impact the overall investor sentiments.
Also, significant product concentration continues to impinge the business risk profile of the company. ATOS’s prospects largely depend on the positive outcome of clinical and commercial success of Endoxifen. This dependence on a single product exposes it to a high degree of product & business concentration risks.
ATOS is still at a pre-commercialization stage and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it.
ATOS has a history of operating losses. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
Dilution is also a possibility if the company cannot attain more capital through debt. However, if the company successfully completes its phase 2 trials, dilution will not be materially felt anyway.
On Friday, September 15th, 2017, ATOS closed at $0.567 (down by 8.56%) on an above average volume of 1.63 million shares exchanging hands. Market capitalization is $6.63 million. The current RSI is 56.70
In the past 52 weeks, shares of ATOS have traded as low as $0.32 and as high as $2.60
At $0.567, shares of ATOS are trading above its 50-day moving average (MA) at $0.43 and below its 200-day MA at $0.91
The present support and resistance levels for the stock are at $0.51 & $0.64 respectively.
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