ATOS Atossa Therapeutics Inc

Atossa Therapeutics, Inc. (Nasdaq: ATOS) (“Atossa” or the “Company”), a clinical-stage biopharmaceutical company dedicated to the prevention and treatment of breast cancer, today announced that Steven Quay, M.D., Ph.D., Chairman and CEO, has issued a Letter to Shareholders providing an update on the Company’s clinical programs and recent events. The full text of the letter follows:

To our valued shareholders,

As we reflect on 2024, I am proud to share the remarkable progress Atossa Therapeutics has made in advancing our mission to address significant unmet needs in breast cancer prevention and treatment. Last year was vital for Atossa as we continued to demonstrate the broad utility of (Z)-endoxifen as an innovative therapy that has the potential to transform the breast cancer treatment landscape.

Key Milestones of 2024

Completion of the KARISMA-Endoxifen Phase 2 Study - One of the most significant milestones this year was the completion and announcement of results from our phase 2 KARISMA-Endoxifen Study. This study evaluated the ability of low doses of (Z)-endoxifen to reduce mammographic breast density (MBD), an independent risk factor for breast cancer that also complicates early tumor detection.

The study demonstrated significant reductions in MBD, with decreases of 17.3 percentage points in the 1 mg arm (p<0.01) and 23.5 percentage points in the 2 mg arm (p<0.01), compared to a negligible change in the placebo group. These reductions are comparable to those observed with tamoxifen, a commonly prescribed therapy, but were achieved at much lower doses of (Z)-endoxifen, offering improved tolerability. Both doses were well tolerated, with the 1 mg arm showing a safety profile similar to placebo.

Almost half of the women in the world over the age of 40 have dense breasts and this condition not only makes mammograms far less effective, but it also significantly increases the likelihood that a woman will develop breast cancer in her lifetime. This achievement highlights (Z)-endoxifen’s potential as a promising therapy for women with dense breast tissue, offering a safer, better tolerated alternative to tamoxifen. By reducing MBD, (Z)-endoxifen may play a vital role in lowering breast cancer risk while enabling earlier and more effective detection through imaging. These results underscore our commitment to delivering innovative therapies that not only address the challenges of cancer treatment but may also offer preventative solutions that align with women’s needs.

Advancements in the EVANGELINE Trial - Our EVANGELINE trial has also made substantial progress this year. This phase 2 non-inferiority study aims to evaluate (Z)-endoxifen as a neoadjuvant treatment for premenopausal women with estrogen receptor-positive (ER+)/ Human Epidermal Growth Factor Receptor 2 negative (HER2-) breast cancer.

The study includes a pharmacokinetic (PK) run-in phase, which has shown promising initial results. The primary endpoint was achieved in the run-in phase as 50 percent of patients (3/6) in the group receiving 80 mg of (Z)-endoxifen with goserelin met the target steady-state plasma concentrations (Css) of 500–1000 ng/mL. Approximately 38 percent of patients (3/8) in the 80 mg/day (Z)-endoxifen only group reached the target Css levels. The average plasma Css level for all patients receiving 80 mg/day of (Z)-endoxifen was 484 ng/mL. Tissue Css levels were also evaluated, in line with the updated trial protocol, and we were very excited about the results which showed that the 80 mg/day dose in both treatment arms achieved tissue Css levels more than double that of plasma levels, exceeding the 500 ng/g target in 90 percent of patients, a level sufficient to target PKCβ.

Importantly, significant tumor suppression was also observed across all dosing levels, with or without ovarian function suppression (OFS). The 4-week Ki-67 ≤10 percent response rate was consistently above 85 percent across dose levels, regardless of the presence of OFS. These findings suggest that (Z)-endoxifen monotherapy could be a more tolerable alternative to the current standard of care, which often results in significant side effects and poor compliance. As we move into the randomized portion of the trial, we remain focused on building the evidence to support (Z)-endoxifen as a more tolerable, effective option for this patient population.

Advancements in I-SPY 2 Endocrine Optimization Pilot (EOP) - Atossa currently has two I-SPY 2 studies underway investigating (Z)-endoxifen neoadjuvant activity as a monotherapy and in combination with abemaciclib (VERZENIO®), a cyclin-dependent kinase (CDK) 4/6 inhibitor marketed by Eli Lilly and Company.

A preliminary data analysis from the monotherapy arm of this pilot, which included 20 women with ER+/HER2- breast cancer who received 10mg of (Z)-endoxifen orally once daily for six cycles (each cycle = 28 days), showed that (Z)-endoxifen met the primary endpoint with 95 percent (19/20 patients) receiving greater than 75 percent of planned treatment.

Impressively, the data also demonstrated (Z)-endoxifen activity in rapidly reducing key biomarkers such as Ki-67 by 69 percent from baseline and a 30.4 percent reduction in functional tumor volume (FTV) from baseline after only three weeks of treatment.

Once again, (Z)-endoxifen was found to be well tolerated in this study with the most common side effects being mild, including hot flushes, insomnia, and fatigue. No dose reductions or discontinuations due to treatment related adverse events were observed in this study. We look forward to sharing surgical Ki-67 values and 24-wk imaging when this data becomes available.

Last year, we also announced that we initiated a new combination therapy arm of the I-SPY 2 EOP evaluating (Z)-endoxifen in combination with abemaciclib, as a neoadjuvant treatment in high-risk women with newly diagnosed ER+/HER2- breast cancer. These patients have substantial risk for recurrence, often after five years, and need novel treatments that address the risk of recurrence and are more effective and tolerable than the current standard of care.

Data from this study, anticipated in 2026, is expected to further validate the growing body of evidence that (Z)-endoxifen is well-tolerated and highly efficacious in both premenopausal and postmenopausal breast cancer patients.

Expansion of Intellectual Property Portfolio - In addition to advancing our clinical programs, we have continued to strengthen our intellectual property portfolio, ensuring the long-term viability and protection of our therapies. This year, we secured two additional U.S. patents for (Z)-endoxifen, further solidifying our leadership in this field. These efforts not only validate the novelty of our approach but also enhance the value of our pipeline.

Financial Stability and Growth - Our strong cash position and disciplined financial planning have allowed us to efficiently fund our research and development efforts while maintaining operational stability. This financial prudence ensures we can continue driving our programs forward with confidence.

Key Learnings About the Broad Applicability of (Z)-Endoxifen in 2024 will drive registrational trial design in 2025 - 2024 provided valuable insights into the broad applicability of (Z)-endoxifen in the fight against breast cancer. Beyond its effectiveness in reducing mammographic breast density and serving as a promising neoadjuvant therapy, our research has revealed its potential across nearly all stages of breast cancer care. By demonstrating efficacy at lower doses, (Z)-endoxifen potentially opens the door for safer, more tolerable options that can enhance patient compliance through better tolerance. Its versatility suggests potential applications not only for women at high risk of breast cancer but also for those seeking alternatives to existing treatments.

Looking Ahead to 2025

As we enter 2025, we are excited to build on this momentum. Our focus remains on:

• Identifying key opportunities to advance (Z)-endoxifen into registrational clinical trials with the goal of advancing (Z)-endoxifen to the market in the quickest way possible. This is our company’s top priority, and we commit to communicating our progress on this goal in the first quarter of this year.
• Amplifying our ongoing business development efforts to ensure women globally have the opportunity to benefit from (Z)-endoxifen.
• Deepening collaborations with industry leaders and advocacy groups to broaden the impact of our work.
• Extending our track record of financial strength that will position us to support our long-term growth.

On behalf of everyone at Atossa, I want to express my deepest gratitude for your continued trust and support. Your partnership is invaluable as we work toward a future where more women can lead healthier, longer lives free from the burden of breast cancer. Together, we are driving meaningful change and advancing our shared mission to transform the landscape of breast cancer treatment and prevention.

Sincerely,Steven Quay, M.D., Ph.D., Chairman and Chief Executive OfficerAtossa Therapeutics, Inc.

About (Z)-Endoxifen(Z)-endoxifen is one of the most potent Selective Estrogen Receptor Modulator (SERM) for estrogen receptor inhibition and may cause estrogen receptor degradation. It has also been shown to have efficacy in the setting of patients with tumor resistance to other hormonal treatments. In addition to its potent anti-estrogen effects, (Z)-endoxifen has been shown to target PKCβ1, a known oncogenic protein, at clinically attainable blood concentrations. Finally, (Z)-endoxifen appears to deliver similar or even greater bone agonistic effects while resulting in little or no endometrial proliferative effects compared with standard treatments, like tamoxifen.

Atossa is developing a proprietary oral formulation of (Z)-endoxifen that is encapsulated to bypass the stomach, as acidic conditions in the stomach convert a significant 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. (Z)-endoxifen is currently being studied in five Phase 2 trials: one in healthy women with measurable breast density, one in women diagnosed with ductal carcinoma in situ, and three other studies including the EVANGELINE study and two I-SPY studies in women with ER+/HER2- breast cancer. Atossa’s (Z)-endoxifen is protected by four 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 focus on using (Z)-endoxifen to prevent and treat breast cancer. For more information, please visit www.atossatherapeutics.com.

FORWARD LOOKING STATEMENTS        This press release contains certain information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We may identify these forward-looking statements by the use of words such as “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “would,” “seek,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “design,” “predict,” “future,” or other comparable words. All statements made in this press release that are not statements of historical fact, including statements regarding data related to the (Z)-endoxifen program, the safety, tolerability and efficacy of (Z)-endoxifen, the potential of (Z)-endoxifen as a breast cancer prevention and treatment agent, the expected design and enrollment of trials and timing of data and related publications, and the potential milestones and growth opportunities for the Company, are forward-looking statements. Forward-looking statements in this press release are subject to risks and uncertainties that may cause actual results, outcomes, or the timing of actual results or outcomes, to differ materially from those projected or anticipated, including risks and uncertainties associated with: macroeconomic conditions and increasing geopolitical instability; the expected timing of releasing data; any variation between interim or preliminary and final clinical results or analysis; actions and inactions by the FDA and foreign regulatory bodies; the outcome or timing of regulatory approvals needed by Atossa, including those needed to continue our planned (Z)-endoxifen trials; our ability to satisfy regulatory requirements; our ability to remain compliant with the continued listing requirements of the Nasdaq Stock Market; our ability to successfully develop and commercialize new therapeutics; the success, costs and timing of our development activities, including our ability to successfully initiate or complete our clinical trials, including our (Z)-endoxifen trials; our anticipated rate of patient enrollment; our ability to contract with third-parties and their ability to perform adequately; our estimates on the size and characteristics of our potential markets; our ability to successfully defend litigation and other similar complaints and to establish and maintain intellectual property rights covering our products; whether we can successfully complete our clinical trial of oral (Z)-endoxifen in women with mammographic breast density and our trials of (Z)-endoxifen in women with breast cancer, and whether the studies will meet their objectives; our expectations as to future financial performance, expense levels and capital sources, including our ability to raise capital; our ability to attract and retain key personnel; our anticipated working capital needs and expectations around the sufficiency of our cash reserves; and other risks and uncertainties detailed from time to time in Atossa’s filings with the Securities and Exchange Commission, including without limitation its Annual Reports on Form 10-K and Quarterly Reports on 10-Q. Forward-looking statements are presented as of the date of this press release. Except as required by law, we do not intend to update any forward-looking statements, whether as a result of new information, future events or circumstances or otherwise.

Contact:

Michael Parks VP, Investor and Public Relations484-356-7105michael.parks@atossainc.com