Atossa Therapeutics, Inc. (ATOS) is a clinical-stage biopharmaceutical company dedicated to developing innovative medicines in areas of significant unmet medical need, with a primary focus on breast cancer. The company's journey has been marked by a steadfast commitment to advancing its proprietary therapies, navigating regulatory landscapes, and forging strategic partnerships to drive progress in this critical field of oncology.
Business Overview and History Atossa Therapeutics was incorporated on April 30, 2009 in the state of Delaware, with the initial goal of developing and marketing medical devices, laboratory tests, and therapeutics to address breast health conditions. Over the years, the company has evolved its focus to concentrate solely on the development of proprietary innovative medicines, particularly in the areas of oncology and breast cancer.
In 2015, Atossa's business strategy shifted to focus exclusively on the development of novel therapeutics for the treatment of breast cancer and other breast conditions. This strategic pivot allowed the company to concentrate its resources on advancing its proprietary drug candidates.
Since its inception, Atossa has made significant progress in its clinical development programs. The company has completed four Phase 1 clinical studies, including a study in men, and two Phase 2 clinical studies with its proprietary Z-endoxifen, which included both oral and topical formulations. These studies have been crucial in establishing the safety and potential efficacy of Z-endoxifen across different applications and patient populations.
In addition to its clinical work, Atossa has also made substantial advancements in pre-clinical development and has established clinical manufacturing capabilities through qualified third parties. This comprehensive approach to drug development has enabled the company to progress its pipeline efficiently and effectively.
However, Atossa has faced some challenges along the way. In 2023, the company received a notification from Nasdaq that its common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days, putting it out of compliance with Nasdaq's listing rules. Demonstrating its resilience, Atossa was able to regain compliance in early 2024 by maintaining the minimum closing bid price for the required period.
Another challenge emerged on August 18, 2023, when Intas Pharmaceuticals LTD. filed a Petition for Post Grant Review (PGR) with the U.S. Patent and Trademark Office, seeking to invalidate one of Atossa's issued patents U.S. Patent No. 11,572,334 titled "Methods for Making and Using Endoxifen". The company is actively contesting the PGR Petition, believing that the patent was properly granted and is valid and enforceable. This situation highlights the competitive nature of the pharmaceutical industry and the importance of protecting intellectual property.
Product Pipeline and Clinical Development The company's lead drug candidate, (Z)-endoxifen, is a proprietary form of an active metabolite of tamoxifen, a widely used FDA-approved drug for the treatment and prevention of breast cancer. Atossa has completed several Phase 1 and Phase 2 clinical studies, including studies in men and topical formulations, to evaluate the safety and efficacy of (Z)-endoxifen.
Atossa has been granted multiple U.S. and international patents covering its proprietary Z-endoxifen, with numerous applications pending in the U.S. and other major countries. The company has patent protection covering its proprietary Z-endoxifen through at least November 17, 2038.
In December 2021, Atossa commenced a Phase 2 study of its proprietary oral (Z)-endoxifen, known as the KARISMA-Endoxifen study. This randomized, double-blind, placebo-controlled, dose-response study was conducted at the Karolinska Institute in Stockholm, Sweden, and aimed to determine the dose-response relationship of daily (Z)-endoxifen on breast density reduction in healthy premenopausal women. In November 2024, Atossa reported positive topline data from this study, demonstrating that low doses of (Z)-endoxifen significantly reduced mammographic breast density (MBD) and were generally well tolerated.
Mammographic breast density is an emerging public health issue affecting over 20 million women in the U.S. alone. Dense breast tissue makes mammography less effective, and when women with MBD are diagnosed with breast cancer, it is often at a later stage, which makes treatment outcomes suboptimal.
In October 2023, Atossa announced the initiation of a Phase 2 study, DCIS RECAST, investigating (Z)-endoxifen as part of a platform trial offered by Quantum Leap Healthcare Collaborative. This study aims to determine the suitability of women with ductal carcinoma in situ (DCIS) for long-term active surveillance without surgery. DCIS is a pre-cancerous lesion of the breast, with approximately 60,000 new cases diagnosed in the U.S. each year.
Additionally, in October 2022, Atossa received authorization from the U.S. FDA for its Investigational New Drug (IND) application for oral (Z)-endoxifen. This paved the way for the initiation of the EVANGELINE study, a randomized Phase 2 non-inferiority trial evaluating (Z)-endoxifen as a neoadjuvant treatment for premenopausal women with estrogen receptor-positive (ER+), human epidermal growth factor receptor 2-negative (HER2-) breast cancer.
In March 2023, Atossa also initiated a second Phase 2 trial investigating oral (Z)-endoxifen as a neoadjuvant treatment for women diagnosed with locally advanced ER+ breast cancer. This trial is a study arm in the ongoing I-SPY 2 Endocrine Optimization Pilot (I-SPY 2 EOP) trial. A preliminary data analysis from this study showed that Z-endoxifen met the primary endpoint, with 95% of patients receiving 75% of planned treatment, and demonstrated activity in rapidly reducing key biomarkers.
Atossa's dedication to advancing its pipeline of breast cancer therapies is evident in the company's robust clinical development program and the multiple indications it is pursuing, ranging from breast cancer prevention to neoadjuvant treatment.
Financial Overview Atossa Therapeutics, being a clinical-stage biopharmaceutical company, has not yet established a consistent source of revenue to cover its operating expenses. As a result, the company has incurred net losses in each year since its inception.
Financials For the fiscal year ended December 31, 2023, Atossa reported a net loss of $19.16 million, compared to a net loss of $22.34 million in the previous fiscal year. The company's research and development expenses for the year 2023 amounted to $10.71 million, while general and administrative expenses were $9.76 million.
For the three months ended September 30, 2024, Atossa reported a net loss of approximately $7.23 million. For the nine months ended September 30, 2024, the net loss was approximately $19.2 million.
Atossa has not yet generated any revenue, as it is still in the clinical development stage of its drug candidates. The company's future success will depend on its ability to obtain regulatory approvals, successfully commercialize its products, and establish a consistent revenue stream to support its ongoing operations.
Liquidity As of September 30, 2024, Atossa had $74.8 million in cash and cash equivalents, providing the company with sufficient runway to continue its clinical development efforts. The company's working capital as of the same date stood at $71.3 million. Additionally, Atossa had $110,000 in restricted cash.
The company's debt-to-equity ratio is 0, indicating that Atossa has no long-term debt on its balance sheet. The current ratio and quick ratio are both 13.3, suggesting strong short-term liquidity.
Atossa believes its currently available cash and cash equivalents will be sufficient to finance its operations for at least one year from the date the Condensed Consolidated Financial Statements were issued. The company plans to continue funding its losses from operations and capital funding needs through a combination of public or private equity offerings, debt financings, or other sources, including potential corporate collaborations, licenses, and other similar arrangements.
Risks and Challenges As a clinical-stage biopharmaceutical company, Atossa faces several risks and challenges inherent to the industry. These include the uncertainty of obtaining regulatory approvals, the potential for delays or failures in clinical trials, the ability to secure adequate funding for continued operations, and the competition from larger pharmaceutical and biotechnology companies.
The company's reliance on third-party service providers for manufacturing, testing, and clinical trial activities also introduces operational risks that could impact the timely development and commercialization of its drug candidates. Furthermore, the highly competitive nature of the pharmaceutical industry, with numerous companies vying for market share, poses a constant challenge for Atossa to differentiate its products and maintain a competitive edge.
The ongoing patent dispute with Intas Pharmaceuticals LTD. regarding the Post Grant Review Petition filed against one of Atossa's key patents represents a significant challenge. While the company is actively contesting the petition, the outcome remains uncertain and could potentially impact Atossa's intellectual property position.
Outlook and Conclusion Atossa Therapeutics has made significant strides in advancing its pipeline of breast cancer therapies, with a particular focus on its lead candidate, (Z)-endoxifen. The positive topline data from the KARISMA-Endoxifen Phase 2 study, demonstrating the potential of low-dose (Z)-endoxifen to significantly reduce mammographic breast density, a key risk factor for breast cancer, has generated considerable optimism for the company's future.
Additionally, the ongoing EVANGELINE and I-SPY 2 EOP trials evaluating (Z)-endoxifen in the neoadjuvant setting for the treatment of estrogen receptor-positive breast cancer further showcase Atossa's commitment to addressing unmet needs in various breast cancer indications.
The company's focus on multiple applications of (Z)-endoxifen, including for women with mammographic breast density, ductal carcinoma in situ, and as a neoadjuvant treatment for breast cancer, demonstrates a comprehensive approach to addressing various aspects of breast cancer prevention and treatment.
Atossa's strong financial position, with $74.8 million in cash and cash equivalents as of September 30, 2024, provides a solid foundation for continued clinical development and operational activities. The absence of long-term debt and healthy liquidity ratios further strengthen the company's financial stability.
As Atossa Therapeutics continues to navigate the regulatory landscape and execute its clinical development strategy, investors will closely monitor the company's ability to achieve key milestones, secure necessary funding, and ultimately bring its innovative breast cancer therapies to market. The company's dedication to innovation and its focus on addressing critical unmet medical needs in oncology position it as a promising player in the biopharmaceutical industry, particularly in the field of women's breast health.