Atossa Genetics Inc. (Nasdaq: ATOS), a clinical-stage
biopharmaceutical company developing novel therapeutics and
delivery methods to treat breast cancer and other breast
conditions, today announced financial results for the third quarter
ended September 30, 2019 and provides an update on recent
company developments.
Steven C. Quay, M.D., Ph.D., Atossa Genetics’ President and CEO
commented, “In the third quarter we made substantial headway in
advancing the development of our lead drug candidate - Endoxifen -
as we turn our concentration towards treating mammographic breast
density (MBD). We recently announced meeting all objectives in our
Phase 1 study of the modified-release tablet form of oral
Endoxifen, which paves the way toward advancing our
modified-release tablet into Phase 2 studies. The final analysis of
the results demonstrated that the modified-release tablet had no
treatment-related side effects that were rated as moderate or
severe in intensity, strongly supporting the continued development
of this proprietary formulation. We also initiated our Phase 2
clinical study of Atossa's intraductal technology for the
administration of fulvestrant in patients with early-stage breast
cancer with a major institution and supported by the Dr. Susan Love
Research Foundation. Many of the approximately 64,000 women with
ductal carcinoma in situ (DCIS) who opt for ‘watchful waiting’
rather than extensive surgery could benefit from a gentler,
intermediate treatment of DCIS with intraductal ablation with
fulverstrant.”
“Before the end of the year, we look forward to reporting
several significant milestones: contracting with a clinical
research organization for our Phase 2 study of oral Endoxifen to
treat MBD, completing additional pre-clinical work of our
cell-based therapy candidate and our intraductal technology, as
well as reporting additional results from our recently completed
clinical study of our modified-release form of Endoxifen tablets,”
concluded Dr. Quay.
Recent Corporate Developments
Recent developments include the following:
- October 2019 - Atossa received IRB approval for Phase 2 breast
cancer study using intraductal technology to administer fulvestrant
at a major institution.
- September 2019 - Atossa announced preliminary results from
Phase 1 study of new proprietary modified-release oral Endoxifen
tablet.
- September 2019 - Atossa announced completion of enrollment and
dosing in Phase 1 clinical trial of the new oral Endoxifen
tablet.
Q3 2019 Financial Results
For the three and nine months ended September 30, 2019 and
2018, Atossa has no source of sustainable revenue and no associated
cost of revenue.
Total operating expenses were approximately $3,298,000 and
$14,649,000 for the three and nine months ended September 30,
2019, respectively, consisting of research and development
(R&D) expenses of approximately $1,684,000 and $5,747,000
respectively, and general and administrative (G&A) expense
of approximately $1,614,000 and $8,901,000, respectively. Total
operating expenses were approximately $3,310,000
and $9,327,000 for the three and nine months ended
September 30, 2018, respectively, consisting of research and
development expenses of approximately $1,422,000 and $3,361,000,
respectively, and general and administrative expenses of
approximately $1,888,000 and $5,967,000, respectively. Total
operating expense for the three months ended September 30, 2019
were consistent with the same period in 2018. Total operating
expenses for the nine months ended September 30, 2019 as compared
to the same period in 2018 increased approximately $5,322,000 or
57%, of which approximately $1,742,000 is attributable to
non-cash compensation expenses resulting from cancellation of the
2018 Liability Options in the first quarter 2019 and an
increase of approximately $2,759,000 due to the grant of
options to executives. R&D expenses for
the three months ended September 30, 2019, were approximately
$1,684,000, an increase of approximately $262,000 or 18% from total
R&D expenses for the three months ended September 30, 2018 of
approximately $1,422,000. R&D expenses for the
nine months ended September 30, 2019, were approximately
$5,747,000, an increase of approximately $2,386,000 or 71% from
total R&D expenses for the nine months ended September 30,
2018 of approximately $3,361,000. The increase in R&D expense
is attributed to non-cash stock-based compensation, salaries
and clinical trial expenses associated with our Endoxifen program.
Stock-based compensation expense, which is a non-cash
charge, increased approximately $668,000 in the first
quarter of 2019 resulting from the cancellation of the 2018
Liability Options. There were no Liability Option
cancellations in the comparable period of 2018.
Stock-based compensation expense also increased approximately
$1.0 million due to the grant of options to the CEO that were
75% vested. Clinical trial expense also increased approximately
$535,000 in the nine month period ended September 30, 2019
over the same period in 2018. We expect our R&D expenses to
increase throughout 2019 as we commence additional Phase 2 clinical
studies of oral Endoxifen, continue development and
manufacturing our tablet modified-release form of oral Endoxifen,
continue our clinical trial of fulvestrant administered via our
intraductal technology at a new institution and continue the
development of other indications and therapeutics, including CAR-T
and immunotherapies administered via our intraductal
technologies.
G&A expenses were approximately $1,614,000 for the three
months ended September 30, 2019, a decrease of approximately
$274,000, or 15% from the total G&A expenses for the three
months ended September 30, 2018, of approximately $1,888,000.
G&A expenses were approximately $8,901,000 for the
nine months ended September 30, 2019, an increase of
approximately $2,934,000, or 49% from the total G&A expenses
for the nine months ended September 30, 2018, of
approximately $5,967,000. G&A expenses consist primarily of
personnel and related benefit costs, facilities, professional
services, insurance, and public company related expenses. The
increase in G&A expenses for the nine
months ended September 30, 2019, is mainly
attributed to an increase in stock-based compensation expense,
which is a non-cash charge, due to the cancellation of the
2018 Liability Options of approximately $1,074,000 during the
first quarter of 2019. There were no Liability Option
cancellations in the comparable period of 2018. During
the nine months ended September 30, 2019, stock-based compensation
expense increased approximately $1.75 million due to the grant
of options to the CEO and CFO that were 75% vested.
Additionally, payroll expenses have increased resulting from
salary increases over the prior year.
As of September 30, 2019, the Company had approximately $15.3
million in cash and cash equivalents and working capital of
approximately $14.8 million.
About Atossa Genetics
Atossa Genetics Inc. is a clinical-stage biopharmaceutical
company developing novel therapeutics and delivery methods to treat
breast cancer and other breast conditions. For more information,
please visit www.atossagenetics.com.
Forward-Looking Statements
Forward-looking statements in this press release, which Atossa
undertakes no obligation to update, are subject to risks and
uncertainties that may cause actual results to differ materially
from the anticipated or estimated future results, including the
risks and uncertainties associated with any variation between
preliminary and final clinical results, actions and inactions by
the FDA, the outcome or timing of regulatory approvals needed by
Atossa including those needed to commence studies, lower than
anticipated rate of patient enrollment, estimated market size of
drugs under development, the safety and efficacy of Atossa's
products and services, performance of clinical research
organizations and investigators, obstacles resulting from
proprietary rights held by others with respect to fulvestrant, such
as patent rights, potential market sizes for Atossa's drugs under
development and other risks detailed from time to time in Atossa's
filings with the Securities and Exchange Commission, including
without limitation its periodic reports on Form10-K and 10-Q,each
as amended and supplemented from time to time.
Atossa Genetics Company Contact: Atossa Genetics Inc. Kyle Guse
CFO and General Counsel Office: 866 893-4927
kyle.guse@atossagenetics.comInvestor Relations Contact:
Scott Gordon Core IR377 Oak StreetConcourse 2Garden City, NY
11530Office:(516) 222-2560scottg@corprominence.com
Source: Atossa Genetics Inc.
ATOSSA GENETICS
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
Assets |
As of September 30,
2019(Unaudited) |
|
As of December 31, 2018 |
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
15,289,543 |
|
|
$ |
10,380,493 |
|
Restricted cash |
|
110,000 |
|
|
|
110,000 |
|
Prepaid expenses |
|
430,042 |
|
|
|
509,833 |
|
Research and development tax
rebate receivable |
|
568,980 |
|
|
|
518,098 |
|
Other current assets |
|
2,064 |
|
|
|
30,942 |
|
Total current assets |
|
16,400,629 |
|
|
|
11,549,366 |
|
|
|
|
|
|
|
Furniture and equipment,
net |
|
39,142 |
|
|
|
54,487 |
|
Intangible assets, net |
|
76,250 |
|
|
|
99,375 |
|
Right-of-use asset |
|
63,284 |
|
|
|
- |
|
Other assets |
|
17,218 |
|
|
|
17,218 |
|
Total Assets |
$ |
16,596,523 |
|
|
$ |
11,720,446 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
501,430 |
|
|
$ |
353,328 |
|
Accrued expenses |
|
225,472 |
|
|
|
177,074 |
|
Payroll liabilities |
|
769,727 |
|
|
|
935,070 |
|
Stock-based compensation
liability |
|
- |
|
|
|
1,410,025 |
|
Lease liability |
|
49,266 |
|
|
|
- |
|
Other current liabilities |
|
18,415 |
|
|
|
39,939 |
|
Total current liabilities |
|
1,564,310 |
|
|
|
2,915,436 |
|
Long term liabilities |
|
|
|
|
|
Lease liability long term |
|
14,018 |
|
|
|
- |
|
Total Liabilities |
|
1,578,328 |
|
|
|
2,915,436 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
Preferred stock - $0.001 par
value; 10,000,000 shares authorized; 671 and 2,379 shares issued
and outstanding as of September 30, 2019 and December 31, 2018,
respectively |
|
1 |
|
|
|
2 |
|
Additional paid-in capital-
Series B convertible preferred stock |
|
670,999 |
|
|
|
2,378,997 |
|
Common stock - $0.18 par
value; 175,000,000 shares authorized, and 9,130,984 and 5,846,552
shares issued and outstanding, as of September 30, 2019 and
December 31, 2018, respectively |
|
1,643,565 |
|
|
|
1,052,372 |
|
Additional paid-in
capital |
|
104,156,643 |
|
|
|
82,204,902 |
|
Accumulated deficit |
|
(91,453,013 |
) |
|
|
(76,831,263 |
) |
Total Stockholders'
Equity |
|
15,018,195 |
|
|
|
8,805,010 |
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
$ |
16,596,523 |
|
|
$ |
11,720,446 |
|
ATOSSA GENETICS
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
For the Three Months EndedSeptember
30, |
|
For the Nine Months EndedSeptember
30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
$ |
1,684,215 |
|
|
$ |
1,421,851 |
|
|
$ |
5,747,399 |
|
|
$ |
3,360,563 |
|
General and
administrative |
|
1,613,983 |
|
|
|
1,888,119 |
|
|
|
8,901,197 |
|
|
|
5,966,504 |
|
Total operating expenses |
|
3,298,198 |
|
|
|
3,309,970 |
|
|
|
14,648,596 |
|
|
|
9,327,067 |
|
Operating loss |
|
(3,298,198 |
) |
|
|
(3,309,970 |
) |
|
|
(14,648,596 |
) |
|
|
(9,327,067 |
) |
Other income |
|
12,284 |
|
|
|
104 |
|
|
|
26,846 |
|
|
|
242 |
|
Loss before income taxes |
|
(3,285,914 |
) |
|
|
(3,309,866 |
) |
|
|
(14,621,750 |
) |
|
|
(9,326,825 |
) |
Income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net loss |
$ |
(3,285,914 |
) |
|
$ |
(3,309,866 |
) |
|
$ |
(14,621,750 |
) |
|
$ |
(9,326,825 |
) |
Deemed dividends attributable
to preferred stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(11,479,308 |
) |
Net loss applicable to common
shareholders |
$ |
(3,285,914 |
) |
|
$ |
(3,309,866 |
) |
|
$ |
(14,621,750 |
) |
|
$ |
(20,806,133 |
) |
Loss per common share - basic
and diluted |
$ |
(0.36 |
) |
|
$ |
(0.64 |
) |
|
$ |
(1.77 |
) |
|
$ |
(5.71 |
) |
Weighted average shares
outstanding - basic and diluted |
|
9,130,057 |
|
|
|
5,183,492 |
|
|
|
8,283,302 |
|
|
|
3,645,682 |
|
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