Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical stage
biopharmaceutical company developing innovative proprietary
medicines to address significant unmet needs in cancer, today
announced financial results for the fiscal quarter and fiscal year
ended December 31, 2022 and provided an update on recent company
developments.
Key developments from Q4 2022 and year to date include:
Initiation and First Patient Dosed in Phase 2 EVANGELINE
Study – EVANGELINE (Endoxifen Versus exemestANe
GosEreLIn), is our 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 six months, followed by surgery. Several FDA-approved
neoadjuvant therapies exist for ER- breast cancers, but few exist
for ER+ patients, which account for approximately 78% of breast
cancers. We expect to enroll approximately 175 patients at up to 25
sites across the United States.
Continued Enrollment in Phase 2 Karisma-Endoxifen
Study – The Karisma-Endoxifen study is our randomized,
double-blind, placebo-controlled trial of healthy, pre-menopausal
women with increased breast density. The treatment cohort receives
daily doses of (Z)-endoxifen for six months, over the course of
which mammograms will be conducted to measure reduction in
mammographic breast density (MBD). Patients will also be given a
mammogram at 24 months to assess the durability of the MBD changes.
MBD affects more than 10 million women in the United States and
many millions more worldwide. Increased MBD reduces the ability of
mammograms to detect cancer. Studies have also shown that women
with MBD have an increased risk of developing breast cancer and
that the higher the MBD, the higher the incidence of breast cancer.
We expect to fully enroll the study by the end of 2023.
Initiation of New Study Arm in the Ongoing Phase 2 I-SPY
2 Clinical Trial – (Z)-endoxifen is being evaluated in a
new study arm of the ongoing I-SPY 2 clinical trial. The I-SPY 2
trial evaluates neoadjuvant treatments for locally advanced breast
cancer and 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 endoxifen in the
stomach. This patent further reinforces Atossa’s broad Intellectual
Property portfolio related to (Z)-endoxifen.
Investment in Dynamic Cell Therapies, Inc.
(DCT) – DCT is a privately held, venture capital backed
developer of CAR-T therapies in the pre-clinical phase of
developing controllable CAR-T cells to address difficult-to-treat
cancers. Its platform technology of dynamic control of engineered
T-cells is designed to improve the safety, efficacy, and durability
of CAR-T cell therapies. Our investment totaled $4.7 million and
resulted in Atossa owning approximately 19% of the outstanding
capital stock of DCT.
“Our focus remains on both helping reduce the incidence of
breast cancer and changing the treatment paradigm for patients who
are not benefiting from, or are unable to tolerate, currently
approved therapies,” said Dr. Steven Quay, Atossa’s President and
Chief Executive Officer. “With a strong balance sheet and three
Phase 2 trials underway, we are well positioned to continue
accelerating the development of (Z)-endoxifen, which we feel has
the potential to address significant unmet needs across the
continuum of breast cancer.”
YEAR ENDED DECEMBER 31, 2022, FINANCIAL RESULTS (IN
THOUSANDS)
As of December 31, 2022, we had cash, cash equivalents and
restricted cash of $111,000.
Results of Operations
Comparison of Years Ended December 31,
2022 and 2021
Revenue and Cost of Revenue:
For the years ended December 31, 2022 and 2021, we have 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 years ended December 31,
2022 and 2021, together with the dollar change in those
categories:
|
|
|
2022 |
|
|
2021 |
|
|
Period-PeriodChange |
|
Research and Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical trials |
|
$ |
10,225 |
|
|
$ |
4,656 |
|
|
$ |
5,569 |
|
|
Compensation |
|
|
1,875 |
|
|
|
1,482 |
|
|
|
393 |
|
|
Stock-based compensation |
|
|
2,393 |
|
|
|
1,591 |
|
|
|
802 |
|
|
Professional fees |
|
|
1,242 |
|
|
|
454 |
|
|
|
788 |
|
|
Exclusivity agreements |
|
|
(700 |
) |
|
|
1,000 |
|
|
|
(1,700 |
) |
|
Other |
|
|
48 |
|
|
|
27 |
|
|
|
21 |
|
|
Research and
Development Total |
|
$ |
15,083 |
|
|
$ |
9,210 |
|
|
$ |
5,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
3,034 |
|
|
$ |
2,371 |
|
|
$ |
663 |
|
|
Stock-based compensation |
|
|
4,395 |
|
|
|
3,676 |
|
|
|
719 |
|
|
Professional fees |
|
|
1,625 |
|
|
|
2,317 |
|
|
|
(692 |
) |
|
Legal |
|
|
1,135 |
|
|
|
534 |
|
|
|
601 |
|
|
Insurance |
|
|
1,640 |
|
|
|
1,576 |
|
|
|
64 |
|
|
Other |
|
|
779 |
|
|
|
837 |
|
|
|
(58 |
) |
|
General and
Administrative Total |
|
$ |
12,608 |
|
|
$ |
11,311 |
|
|
$ |
1,297 |
|
Total operating expenses were $27,691 for the year ended
December 31, 2022, which was an increase of $7,170, or
35% from the year ended December 31, 2021. Operating expenses
for 2022 consisted of R&D expenses of
$15,083 and G&A expenses of $12,608. Operating
expenses for 2021 consisted of R&D expenses of
$9,210 and G&A expenses of $11,311. Factors contributing
to the increased operating expenses in the year ended
December 31, 2022 are explained below.
R&D Expenses: R&D
expenses for the year ended December 31, 2022, were $15,083, an
increase of $5,873 or 64% from total R&D expenses for the
year ended December 31, 2021 of $9,210. Key changes were
as follows:
- The increase in R&D expense was attributed
primarily to increased spending on clinical and non-clinical
trials of $5,569 compared to the prior year period due to
additional pre-clinical toxicology studies in our
(Z)-endoxifen and AT-H201 programs as well as increased trial
costs and manufacturing expenses for (Z)-endoxifen.
- R&D compensation increased $393 in 2022 compared to
the prior year period due to increased headcount, salary, bonuses
and benefits during 2022.
- Stock-based compensation, which is a non-cash
charge, increased $802 due to the increased number of
options being expensed as well as the weighted average
fair value of options amortizing in 2022 was higher compared
to the prior year period.
- Professional fees increased $788 compared to the prior year
period, due primarily to a CAR-T technology market analysis
performed during 2022.
- In 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. In 2021,
R&D expenses included $1,000 attributable to the same
one-time exclusivity fee. Finally, in 2022, we paid
$300 for the exclusive right to negotiate with
another CAR-T Company. Net, the exclusivity
agreements caused a decrease in expenses of $1,700 compared to the
prior year period.G&A Expenses: G&A expenses were
$12,608 for the year ended December 31, 2022, an increase of
$1,297, or 11% from total G&A expenses for the year ended
December 31, 2021 of $11,311. Key changes were as
follows:
- The increase in G&A expense for the year ended December 31,
2022 compared to the prior year period,
was in part attributable to the increase in
compensation expense of $663 in 2022 due to an increase in
headcount, hourly wages, salaries and bonus
accruals.
- Non-cash stock-based compensation expense also increased
by $719 due to the increased number of options being
expensed as well as the weighted average fair value
of options amortizing in 2022 was higher compared to the prior year
period.
- Professional fees decreased by $692 in 2022 compared to
the prior year period, due primarily to a decrease in proxy
costs for investor outreach.
- Legal fees increased $601 in 2022 compared to the prior
year period, due to higher patent activity in 2022 for
(Z)-endoxifen and our immunotherapy research.Interest
Income: Interest income was $877 for the year ended
December 31, 2022 compared to the prior year period of $6. The
increase is due to the investment of an additional
$50,000 in a money market account during 2022 and higher
average interest rates for the year ended December 31, 2022
compared to 2021.
ATOSSA THERAPEUTICS, INC. |
CONSOLIDATED BALANCE SHEETS |
(amounts in thousands, except for par value) |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
2022 |
|
|
2021 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
110,890 |
|
|
$ |
136,377 |
|
Restricted cash |
|
|
110 |
|
|
|
110 |
|
Prepaid expenses |
|
|
4,031 |
|
|
|
2,488 |
|
Research and development tax rebate receivable |
|
|
743 |
|
|
|
1,072 |
|
Other current assets |
|
|
2,423 |
|
|
|
1,193 |
|
Total current assets |
|
|
118,197 |
|
|
|
141,240 |
|
|
|
|
|
|
|
|
|
|
Investment in equity securities |
|
|
4,700 |
|
|
|
- |
|
Other assets |
|
|
635 |
|
|
|
22 |
|
Total Assets |
|
$ |
123,532 |
|
|
$ |
141,262 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,965 |
|
|
$ |
1,717 |
|
Accrued expenses |
|
|
1,059 |
|
|
|
204 |
|
Payroll liabilities |
|
|
1,525 |
|
|
|
1,184 |
|
Other current liabilities |
|
|
19 |
|
|
|
21 |
|
Total current liabilities |
|
|
5,568 |
|
|
|
3,126 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
5,568 |
|
|
|
3,126 |
|
|
|
|
|
|
|
|
|
|
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 December
31, 2022 and December 31, 2021 |
|
|
- |
|
|
|
- |
|
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 December 31, 2022 and December
31, 2021 |
|
|
22,792 |
|
|
|
22,792 |
|
Additional paid-in capital - common stock |
|
|
250,784 |
|
|
|
243,996 |
|
Accumulated deficit |
|
|
(156,194 |
) |
|
|
(129,234 |
) |
Total Stockholders' Equity |
|
|
117,964 |
|
|
|
138,136 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
123,532 |
|
|
$ |
141,262 |
|
ATOSSA THERAPEUTICS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(amounts in thousands, except for per share
amounts) |
|
|
For the Year Ended |
|
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
15,083 |
|
|
$ |
9,210 |
|
General and
administrative |
|
|
12,608 |
|
|
|
11,311 |
|
Total operating expenses |
|
|
27,691 |
|
|
|
20,521 |
|
Operating loss |
|
|
(27,691 |
) |
|
|
(20,521 |
) |
Interest income |
|
|
877 |
|
|
|
6 |
|
Other expense, net |
|
|
(146 |
) |
|
|
(91 |
) |
Loss before income taxes |
|
|
(26,960 |
) |
|
|
(20,606 |
) |
Income taxes |
|
|
- |
|
|
|
- |
|
Net loss |
|
|
(26,960 |
) |
|
|
(20,606 |
) |
Loss per share of common stock
- basic and diluted |
|
$ |
(0.21 |
) |
|
$ |
(0.18 |
) |
Weighted average shares
outstanding - basic and diluted |
|
|
126,624 |
|
|
|
116,950 |
|
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.
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