Atossa Therapeutics, Inc. (Nasdaq: ATOS) (“Atossa” or the
“Company”), today announced financial results for the fourth
quarter and full year ended December 31, 2023, and provided an
update on recent Company developments. Atossa is a clinical stage
biopharmaceutical company developing proprietary innovative
medicines in areas of significant unmet medical need in oncology
with a focus on breast cancer and other breast conditions.
Key developments from Q4 2023 and the year to date
include:
- Full enrollment of Phase 2 Karisma-Endoxifen Clinical
Trial – the study is investigating (Z)-endoxifen in
premenopausal women with measurable breast density. Participants
receive daily doses of (Z)-endoxifen for six months, over the
course of which mammograms are conducted to measure reduction in
breast density. Full enrollment was achieved in November 2023 and
data is expected in the second half of 2024.
- Full enrollment of Phase 2 I-SPY 2 Clinical
Trial – (Z)-endoxifen is being evaluated as a neoadjuvant
treatment in a study arm of the ongoing I-SPY 2 clinical trial. The
study arm targets patients with newly diagnosed estrogen
receptor-positive breast cancer whose tumors are predicted to be
sensitive to endocrine therapy but for whom chemotherapy is
expected to provide little or no benefit. Full enrollment was
achieved in February 2024 and data is expected in the second half
of 2024.
- First patient dosed with (Z)-endoxifen in RECAST DCIS
study – the Re-Evaluating Conditions for Active
Surveillance Suitability as Treatment: Ductal Carcinoma In Situ
(RECAST DCIS) study is an ongoing Phase 2 platform study designed
to offer women diagnosed with DCIS six months of neoadjuvant
endocrine therapy with the intent of determining their suitability
for long-term active surveillance without surgery.
- Expanded access patient concluded five-years of
(Z)-endoxifen treatment – the pre-menopausal, Estrogen
Receptor positive (ER+) / Human Epidermal Growth Factor Receptor 2
negative (HER2-), breast cancer patient who received neoadjuvant
and adjuvant (Z)-endoxifen therapy under an FDA-approved "expanded
access" program completed five years of successful treatment.
- Data from ongoing EVANGELINE study scheduled to be
presented at the AACR Annual Meeting – safety and efficacy
data from the 40mg pharmacokinetic run-in cohort of the ongoing
Phase 2 EVANGELINE (Endoxifen Versus exemestANe GosEreLIn) study is
scheduled to be presented on April 9, 2024 at the American
Association for Cancer Research (AACR) Annual Meeting. The data is
scheduled to be presented by Dr. Matthew Goetz, deputy director of
translational research for the Mayo Clinic Comprehensive Cancer
Center and co-leader of the Mayo Clinic Women's Cancer Program. Dr.
Goetz is also the primary investigator of the EVANGELINE
study.
- Appointment of Tessa Cigler, M.D., M.P.H and Jonathan
Finn, CFA to Atossa’s Board of Directors – Dr. Cigler is a
medical oncologist and clinical investigator at the Weill Cornell
Breast Center in New York City. As a member of the Weill Cornell
Breast Center research team, she heads several clinical trials
designed to provide her patients with access to the new promising
options for therapy and supportive care. Mr. Finn has more than 25
years of experience in the financial industry with a focus on early
to mid-stage biotech and technology companies. He currently serves
as Executive Vice President and Chief Investment Officer at Vantage
Consulting Group, an investment advisory firm.
"I am very proud of the progress we made in Q4
2023 and the momentum we have continued to generate in 2024,” said
Steven Quay, M.D., Ph.D., Atossa’s President and Chief Executive
Officer. "With important data from our EVANGELINE study being
presented at AACR this month and primary data from two of our Phase
2 studies expected in the second half of this year, the remainder
of 2024 will be a critical period for our Company. Our focus
continues to be on accelerating our (Z)-endoxifen development
program and generating additional data to support the growing body
of evidence that (Z)-endoxifen has the potential to address
significant unmet needs that exist in both the breast cancer
prevention and treatment settings.”
Comparison of the Year Ended December
31, 2023 and 2022
Operating Expenses.Total operating expenses were
$31.4 million for the year ended December 31, 2023, which was an
increase of $3.7 million, from the year ended December 31, 2022 of
$27.7 million. Factors contributing to the increased operating
expenses in the year ended December 31, 2023 are explained
below.
The following table provides a breakdown of major
categories within R&D expense for the years ended December 31,
2023 and 2022, together with the dollar change in those categories
(in thousands):
|
|
Year EndedDecember 31,2023 |
|
Year EndedDecember 31,2022 |
|
Increase(decrease) |
|
Research and Development Expense |
|
|
|
|
|
|
|
|
Clinical and non-clinical trials |
$ |
12,722 |
|
$ |
10,225 |
|
$ |
2,497 |
|
|
Compensation |
$ |
3,474 |
|
|
4,268 |
|
|
(794 |
) |
|
Professional fees and other |
$ |
1,138 |
|
|
590 |
|
|
548 |
|
|
Research and Development Expense Total |
$ |
17,334 |
|
$ |
15,083 |
|
$ |
2,251 |
|
R&D Expenses. R&D expenses for the year
ended December 31, 2023, were $17.3 million, an increase of $2.3
million from total R&D expenses for the year ended December 31,
2022 of $15.1 million. Key changes were as follows:
- The increase in R&D expense was in part due to increased
spending on clinical and non-clinical trials of $1.1 million
compared to the prior year due to increased spending
on (Z)-endoxifen trials, including drug development
costs. The additional increase of $1.4 million was due to a
change in estimate of the amount that no longer met the reasonably
assured threshold to be sustained under a potential ATO audit
related to R&D expenditures under the Australian R&D tax
incentive program as a result of recent Australian Taxation Office
guidance.
- The decrease in R&D compensation expense for the year ended
December 31, 2023 compared to the prior
year was primarily due to a decrease in non-cash
stock-based compensation of $0.8 million. Non-cash stock-based
compensation decreased compared to the prior year due to
the weighted average fair value of options amortizing in the year
ended December 31, 2023 being lower year over year.
- The increase in R&D professional fees and other was due in
part to the refund in the prior year of $1.0 million from
a research institution with which we had an exclusive right to
negotiate for the acquisition of worldwide rights of two oncology
programs. No exclusivity payments were made or refunded
during the year ended December 31, 2023.
The following table provides a breakdown of major
categories within General and Administrative (G&A) expenses for
the years ended December 31, 2023 and 2022, together with the
dollar change in those categories (in thousands):
|
|
Year EndedDecember 31,2023 |
|
Year EndedDecember 31,2022 |
|
Increase(decrease) |
|
General and Administrative Expense |
|
|
|
|
|
|
|
|
Compensation |
$ |
7,388 |
|
$ |
7,429 |
|
$ |
(41 |
) |
|
Professional fees and other |
$ |
5,367 |
|
|
3,539 |
|
|
1,828 |
|
|
Insurance |
$ |
1,288 |
|
|
1,640 |
|
|
(352 |
) |
|
General and Administrative Expense Total |
$ |
14,043 |
|
$ |
12,608 |
|
$ |
1,435 |
|
G&A Expenses. G&A expenses for the year
ended December 31, 2023 were $14.0 million an increase of $1.4
million from total G&A expenses for year ended December
31, 2022 of $12.6 million. Key changes were as
follows:
- The decrease in G&A compensation expense of $41
thousand for the year ended December 31, 2023 compared to
the prior year was partially due to an increase in cash
compensation expense of $1.3 million, offset by a decrease in
non-cash stock-based compensation of $1.4 million. The increase in
cash compensation expense compared to the prior year was primarily
driven by salary and bonus severance costs for former
executives of $0.6 million, an increase of $0.4 million due to
compensation for new employees as well as an overall increase in
salaries, bonuses and benefits of $0.3 million. Non-cash
stock-based compensation decreased by $1.4 million due
to the weighted average fair value of options amortizing in
2023 being lower year over year.
- The increase in G&A professional fees of $1.8
million for the year ended December 31, 2023 compared to
the prior year was primarily due to an increase in legal fees for
higher patent-related activity of $0.7 million and an increase
in professional fees of $0.8 million primarily due to
higher investor relations costs and accounting fees. The
additional increase of $0.4 million was due to a change in estimate
related to the Australian R&D tax incentive program.
- The decrease in G&A insurance expense of $0.4 million for
the year ended December 31, 2023 compared to the prior year was due
to lower negotiated insurance premiums for the same or better
coverage year over year.
Impairment Charge on Investment in Equity
Securities. For the year ended December 31, 2023, we wrote down our
investment in DCT by $3.0 million due to an impairment charge. For
the year ended December 31, 2022 there were no impairment
charges related to our equity securities.
Interest Income. Interest income was $4.3 million
for the year ended December 31, 2023, an increase of $3.5 million
from interest income of $0.9 million for the year ended December
31, 2022. The increase was due to the higher average balance
invested in money market funds of $26.5 million and higher
average interest rates for the year ended December 31, 2023
compared to the prior year.
About (Z)-Endoxifen (Z)-endoxifen
is the most potent Selective Estrogen Receptor Modulator (SERM) for
estrogen receptor inhibition and also causes 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 does not require liver metabolism
to achieve therapeutic concentrations and 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
four Phase 2 trials: one in healthy women with measurable breast
density, one in women diagnosed with ductal carcinoma in situ, and
two other studies including the EVANGELINE study in women with
ER+/HER2- breast cancer. Atossa’s (Z)-endoxifen is protected by
three issued U.S. patents and numerous pending patent
applications.
About Atossa Therapeutics Atossa
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.
Contact Eric Van Zanten VP,
Investor and Public Relations 610-529-6219
eric.vanzanten@atossainc.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,”
“future,” or other comparable words. 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, such as data related to the (Z)-endoxifen program and the
potential of (Z)-endoxifen as a breast cancer prevention and
treatment agent, 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 and final clinical results; 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.
|
ATOSSA THERAPEUTICS, INC. CONSOLIDATED
BALANCE SHEETS (amounts in thousands, except share
and per share data) |
|
|
As of December 31, |
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
88,460 |
|
|
$ |
110,890 |
|
Restricted cash |
|
110 |
|
|
|
110 |
|
Prepaid materials |
|
1,487 |
|
|
|
5,247 |
|
Prepaid expenses and other current assets |
|
2,162 |
|
|
|
1,207 |
|
Research and development tax rebate receivable |
|
— |
|
|
|
743 |
|
Total current assets |
|
92,219 |
|
|
|
118,197 |
|
|
|
|
|
|
|
Investment in equity securities |
|
1,710 |
|
|
|
4,700 |
|
Other assets |
|
2,323 |
|
|
|
635 |
|
Total assets |
$ |
96,252 |
|
|
$ |
123,532 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
806 |
|
|
$ |
2,965 |
|
Accrued expenses |
|
973 |
|
|
|
1,059 |
|
Payroll liabilities |
|
1,654 |
|
|
|
1,525 |
|
Other current liabilities |
|
1,803 |
|
|
|
19 |
|
Total current liabilities |
|
5,236 |
|
|
|
5,568 |
|
Total liabilities |
|
5,236 |
|
|
|
5,568 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
Convertible preferred stock - $0.001 par value; 10,000,000 shares
authorized; 582 shares issued and outstanding as of December 31,
2023 and 2022 |
|
— |
|
|
|
— |
|
Common stock - $0.18 par value; 175,000,000 shares authorized;
125,304,064 and 126,624,110 shares issued and outstanding as of
December 31, 2023 and 2022, respectively |
|
22,792 |
|
|
|
22,792 |
|
Additional paid-in capital |
|
255,987 |
|
|
|
251,366 |
|
Treasury stock, at cost; 1,320,046 and 0 shares
of common stock at December 31, 2023 and 2022, respectively |
|
(1,475 |
) |
|
|
— |
|
Accumulated deficit |
|
(186,288 |
) |
|
|
(156,194 |
) |
Total stockholders' equity |
|
91,016 |
|
|
|
117,964 |
|
Total liabilities and stockholders' equity |
$ |
96,252 |
|
|
$ |
123,532 |
|
|
ATOSSA THERAPEUTICS, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (amounts in thousands,
except share and per share data) |
|
|
For the Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Operating expenses |
|
|
|
|
|
Research and development |
$ |
17,334 |
|
|
$ |
15,083 |
|
General and administrative |
|
14,043 |
|
|
|
12,608 |
|
Total operating expenses |
|
31,377 |
|
|
|
27,691 |
|
Operating loss |
|
(31,377 |
) |
|
|
(27,691 |
) |
Impairment charge on investment in equity securities |
|
(2,990 |
) |
|
|
— |
|
Interest income |
|
|
|
|
877 |
|
Other expense, net |
|
(70 |
) |
|
|
(146 |
) |
Loss before income taxes |
|
(34,437 |
) |
|
|
(26,960 |
) |
Income tax benefit |
|
— |
|
|
|
— |
|
Net loss |
|
(34,437 |
) |
|
|
(26,960 |
) |
Net loss per share of common stock - basic and diluted |
$ |
(0.24 |
) |
|
$ |
(0.21 |
) |
Weighted average shares outstanding used to compute net loss per
share - basic and diluted |
|
126,081,602 |
|
|
|
126,624,110 |
|
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