Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical stage
biopharmaceutical company developing innovative proprietary
medicines to address significant unmet needs in oncology with a
current focus on breast cancer, today announces financial results
for the fiscal quarter ended March 31, 2023, and provides an update
on recent company developments.
Key developments from Q1 2023 and year to date include:
- Initiation of and First Patient Dosed in Phase 2
EVANGELINE Study – EVANGELINE (Endoxifen Versus exemestANe
GosEreLIn), is a Phase 2 randomized non-inferiority study of
(Z)-endoxifen compared to exemestane plus goserelin as a
neoadjuvant treatment for premenopausal women with Grade 1 or 2 ER+
/ HER2- breast cancer. Participants receive neoadjuvant treatment
for up to 24 weeks, followed by surgery.
- Initiation of New Study Arm in the Ongoing Phase 2
I-SPY 2 Clinical Trial – I-SPY 2 is a collaborative effort
among academic investigators from major cancer research centers
across the United States, Quantum Leap Healthcare Collaborative,
the U.S. Food and Drug Administration, and the Foundation for the
National Institutes of Health (FNIH) Cancer Biomarkers Consortium.
Approximately 20 patients will be treated with (Z)-endoxifen for up
to 24 weeks prior to surgery.
- Additional Intellectual Property Protection for
(Z)-endoxifen – The United States Patent and Trademark
Office granted a new patent (No. 11,572,334) directed to
(Z)-endoxifen encapsulated in an enteric capsule. Enteric capsules
have an acid resistant coating to prevent them from dissolving when
they pass through the stomach. Enteric capsules are dissolved when
they pass through an alkaline environment, which is usually when
they reach the small intestine. Delivering oral (Z)-endoxifen via
an enteric capsule prevents breakdown of the (Z)-endoxifen in the
stomach.
- Poster Presentation at 2023 American Society of
Clinical Oncology (ASCO) Annual Meeting – A Trial in
Progress poster for the Phase 2 clinical study of (Z)-endoxifen in
premenopausal women with early stage ER+ / HER2- breast cancer will
be presented at the 2023 ASCO Annual Meeting, taking place June
2-6, 2023 in Chicago.
“I am proud of the progress we’ve made to date in 2023 and look
forward to further accelerating our (Z)-endoxifen development
programs over the coming months,” said Dr. Steven Quay, Atossa’s
President and Chief Executive Officer. “With three ongoing Phase 2
studies investigating (Z)-endoxifen, $103.9 million of cash and
cash equivalents on our balance sheet, broad patent protection and
a talented team in place, we are well positioned to change the
treatment paradigm for women with dense breast tissue and those
diagnosed with estrogen receptor positive breast cancer."
Comparison of the
three months ended March 31, 2023 and
2022 (dollar amounts in thousands unless otherwise
noted)
Revenue and Cost of Revenue: For the three months ended
March 31, 2023 and 2022, we had no source of sustainable revenue
and no associated cost of revenue.
Operating Expenses:The following table provides a breakdown of
major categories within Research and Development (R&D) and
General and Administrative (G&A) expenses for the three months
ended March 31, 2023 and 2022, together with the dollar and
percentage change in those categories:
|
March 31, 2023 |
|
|
March 31, 2022 |
|
|
Change |
|
|
% Change |
|
Research and Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical trials |
$ |
2,336 |
|
|
$ |
1,288 |
|
|
$ |
1,048 |
|
|
|
81 |
% |
Compensation |
|
1,034 |
|
|
|
1,094 |
|
|
|
(60 |
) |
|
|
-5 |
% |
Professional fees |
|
101 |
|
|
|
115 |
|
|
|
(14 |
) |
|
|
-12 |
% |
Exclusivity agreements |
|
- |
|
|
|
(1,000 |
) |
|
|
1,000 |
|
|
|
-100 |
% |
Other |
|
37 |
|
|
|
2 |
|
|
|
35 |
|
|
|
* |
|
Research and
Development Total |
$ |
3,508 |
|
|
$ |
1,499 |
|
|
$ |
2,009 |
|
|
|
134 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
Administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
$ |
2,084 |
|
|
$ |
2,005 |
|
|
$ |
79 |
|
|
|
4 |
% |
Legal and professional
fees |
|
926 |
|
|
|
669 |
|
|
|
257 |
|
|
|
38 |
% |
Insurance and other |
|
580 |
|
|
|
574 |
|
|
|
6 |
|
|
|
1 |
% |
General and
Administrative Total |
$ |
3,590 |
|
|
$ |
3,248 |
|
|
$ |
342 |
|
|
|
11 |
% |
*Percentage is not meaningful
Total operating expenses were $7,098 for the three months ended
March 31, 2023, which was an increase of $2,351, or 50%, from
the three months ended March 31, 2022. Operating expenses for the
three months ended March 31, 2023 consisted of
R&D expenses of $3,508 and G&A expenses of
$3,590.
Operating expenses for the three months ended March 31,
2022 consisted of R&D expenses of $1,499 and G&A
expenses of $3,248. Factors contributing to the
increased operating expenses for the three months ended March
31, 2023 are explained below.
Research and Development Expenses: R&D expenses for the
three months ended March 31, 2023, were $3,508, an increase of
$2,009, from total R&D expenses for the three months ended
March 31, 2022 of $1,499. Key changes were as
follows:
- The increase in R&D expense was attributed
primarily to increased spending on clinical and non-clinical
trials of $1,048 compared to the prior year period due to
(Z)-endoxifen trial costs and increased spending on active
pharmaceutical ingredients (API) and drug product formulation and
development.
- The decrease in R&D compensation expense for the three
months ended March 31, 2023 compared to the prior year quarter,
was in part attributable to the increase in
compensation expense of $43, or 9%, compared to the prior year
period due to an increase in
headcount, salaries and bonus
accruals partially offset by a decrease in non-cash
stock-based compensation. Non-cash stock-based compensation
decreased by $103, or 17%, compared to the prior year
quarter due to the weighted average fair value of
options amortizing in 2023 being lower quarter over
quarter.
- In the first quarter of 2022, the Company received a
refund of $1,000 from the research institution with
which the Company had an exclusive right to negotiate for
the acquisition of the worldwide rights to two oncology R&D
programs. No exclusivity payments were made or refunded during the
three months ended March 31, 2023.
G&A Expenses: G&A expenses for the three months ended
March 31, 2023, were $3,590, an increase of $342, from total
G&A expenses for quarter ended March 31, 2022 of
$3,248. Key changes were as follows:
- The increase in G&A compensation expense for the three
months ended March 31, 2023 compared to the prior year quarter,
was in part attributable to the increase in
compensation expense of $209, or 26%, compared to the prior
year quarter due to an increase in
headcount, salaries and bonus accruals that
was partially offset by a decrease in non-cash
stock-based compensation. Non-cash stock-based compensation
decreased by $130, or 11%, compared to the prior year period as
the weighted average fair value of options amortizing in
2023 was lower quarter over quarter.
- Legal and professional fees increased by $257 for the three
months ended March 31, 2023, compared to the prior year period due
primarily to higher patent activity for (Z)-endoxifen and our
immunotherapy research.
Interest Income: Interest income was $850 for the
three months ended March 31, 2023 an increase of $849, from
interest income of $1 for the three months ended March 31, 2022.
The increase was due to the higher average balance of invested cash
in a money market account and higher average interest rates
for the three months ended March 31, 2023 compared to the prior
year period.
About (Z)-Endoxifen(Z)-endoxifen is the most
active metabolite of the FDA approved Selective Estrogen Receptor
Modulator (SERM), tamoxifen. Studies by others have demonstrated
that the anti-estrogenic effects of tamoxifen are driven in a
concentration-dependent manner by (Z)-endoxifen. In addition to its
potent anti-estrogen effects, (Z)-endoxifen at higher
concentrations has been shown to target PKCβ1, a known oncogenic
protein.
Atossa is developing a proprietary oral formulation of
(Z)-endoxifen that does not require liver metabolism to achieve
therapeutic concentrations and is encapsulated to bypass the
stomach as acidic conditions in the stomach convert a greater
proportion of (Z)-endoxifen to the inactive (E)-endoxifen. Atossa’s
(Z)-endoxifen has been shown to be well tolerated in Phase 1
studies and in a small Phase 2 study of women with breast cancer.
We are currently studying our (Z)-endoxifen in healthy women with
measurable breast density and women with ER+/HER2- breast cancer.
Atossa’s (Z)-endoxifen is protected by two issued U.S. patents and
numerous pending patent applications.
About Atossa TherapeuticsAtossa Therapeutics,
Inc. is a clinical-stage biopharmaceutical company developing
innovative medicines in areas of significant unmet medical need in
oncology with a current focus on breast cancer. For more
information, please visit www.atossatherapeutics.com
CONTACTS:Kyle GuseGeneral Counsel and Chief
Financial Officerkyle.guse@atossainc.com
Eric Van ZantenVP, Investor and Public
Relations610-529-6219eric.vanzanten@atossainc.com
FORWARD LOOKING STATEMENTSForward-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 interim 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 of (Z)-endoxifen, lower than anticipated rate of
patient enrollment, estimated market size of drugs under
development, the safety and efficacy of Atossa’s products,
performance of clinical research organizations and investigators,
obstacles resulting from proprietary rights held by others such as
patent rights, whether reduction in breast density or in Ki-67 or
any other result from a neoadjuvant study is an approvable endpoint
for (Z)-endoxifen, whether Atossa can complete acquisitions, 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 Form 10-K and 10-Q, each as amended and
supplemented from time to time.
ATOSSA THERAPEUTICS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(amounts in thousands, except for par
value)
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2023(unaudited) |
|
|
As of December 31, 2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
103,868 |
|
|
$ |
110,890 |
|
Restricted cash |
|
|
110 |
|
|
|
110 |
|
Prepaid expenses |
|
|
5,295 |
|
|
|
4,031 |
|
Research and development tax rebate receivable |
|
|
738 |
|
|
|
743 |
|
Other current assets |
|
|
858 |
|
|
|
2,423 |
|
Total current assets |
|
|
110,869 |
|
|
|
118,197 |
|
|
|
|
|
|
|
|
|
|
Investment in equity securities |
|
|
4,700 |
|
|
|
4,700 |
|
Other assets |
|
|
631 |
|
|
|
635 |
|
Total assets |
|
$ |
116,200 |
|
|
$ |
123,532 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,444 |
|
|
$ |
2,965 |
|
Accrued expenses |
|
|
613 |
|
|
|
1,059 |
|
Payroll liabilities |
|
|
822 |
|
|
|
1,525 |
|
Other current liabilities |
|
|
65 |
|
|
|
19 |
|
Total current liabilities |
|
|
2,944 |
|
|
|
5,568 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,944 |
|
|
|
5,568 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Series B convertible preferred stock - $0.001 par value; 10,000
shares authorized; 1 shares issued and outstanding as of March 31,
2023 and December 31, 2022 |
|
|
- |
|
|
|
- |
|
Additional paid-in capital - Series B convertible preferred
stock |
|
|
582 |
|
|
|
582 |
|
Common stock - $0.18 par value; 175,000 shares authorized; 126,624
shares issued and outstanding as of March 31, 2023 and December 31,
2022 |
|
|
22,792 |
|
|
|
22,792 |
|
Additional paid-in capital - common stock |
|
|
252,357 |
|
|
|
250,784 |
|
Accumulated deficit |
|
|
(162,475 |
) |
|
|
(156,194 |
) |
Total stockholders'
equity |
|
|
113,256 |
|
|
|
117,964 |
|
Total liabilities and
stockholders' equity |
|
$ |
116,200 |
|
|
$ |
123,532 |
|
ATOSSA THERAPEUTICS,
INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(amounts
in thousands, except for per share amounts)
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Research and development |
$ |
3,508 |
|
|
$ |
1,499 |
|
General and administrative |
|
3,590 |
|
|
|
3,248 |
|
Total operating expenses |
|
7,098 |
|
|
|
4,747 |
|
Operating loss |
|
(7,098 |
) |
|
|
(4,747 |
) |
Interest income |
|
850 |
|
|
|
1 |
|
Other expense, net |
|
(33 |
) |
|
|
(40 |
) |
Loss before income taxes |
|
(6,281 |
) |
|
|
(4,786 |
) |
Income taxes |
|
- |
|
|
|
- |
|
Net loss |
|
(6,281 |
) |
|
|
(4,786 |
) |
Loss per share of common stock
- basic and diluted |
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
Weighted average shares
outstanding - basic and diluted |
|
126,624 |
|
|
|
126,624 |
|
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