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Atossa Genetics Inc (NASDAQ:ATOS) Could Be About To Step Into The Spotlight

Atossa Genetics Inc (NASDAQ:ATOS) Could Be About To Step Into The Spotlight
Written by
Chris Sandburg
Published on
May 24, 2017
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Atossa Genetics Inc (NASDAQ:ATOS) hasn't had a good 2017 so far. The company is currently trading for around $0.50 a share, down 65% on its 2017 open price. Over the last couple of days, however, Atossa has picked up a little bit of strength, with the strength rooted in an update as to the progress of one of its lead development assets. The update highlighted a major potential catalyst for the second half of 2017, so there is a chance that the current action represents a turnaround point for the company longer-term and that the aforementioned catalyst might compound any upside action we see between now and it hitting press.Here is a look at what the update means for the company and what we are looking at going forward.The drug in development is called Endoxifen and Atossa is attempting to get it approved in a breast-cancer indication. Specifically, it's trying to target a market currently dominated by a group called tamoxifen, which is used to treat breast cancer for breast cancer prevention in high risk patients.The trial to which the most recent update refers is a phase 1 study in healthy volunteers designed to assess the pharmacokinetics of the drug. These sorts of healthy volunteer studies generally preclude clinical advance into an active treatment population, especially in oncologic indications, because it is important to establish some degree of in vivo, and preferably human, activity before presenting it as a potential therapy for patients in high-risk populations.Anyway, back to the point, this study is looking at two different administration types – one topical and one oral. Both types will enroll 24 patients each and all patients will receive repeat doses over a 28-day period. The latest update details the completion of enrollment in the first arm of the trial, the topical arm.So why is it important?Well, it means the study is on track (if not a little ahead of schedule) and that – as a result – it should complete as targeted during the third quarter of this year. This trial in and of itself is probably not going to induce too much upside momentum if the data comes out as positive, but what it will do is pave the way for a phase 2 study in an active population. Said phase 2 study should kickoff during the second half of this year, assuming all runs smoothly, meaning we could see major catalysts line up for the fourth quarter and beyond.The key point here is that this company is at an inflection point – one that could see it go from a company with just one development asset in the clinic (its fulvestrant asset) to a company with multiple shots on goal in a large and very underserved oncologic indication.As it pivots from one to the other, we should see markets stand up and take notice, and the company come out from under the radar. In turn, we should see speculative capital flow into Atossa, and its value appreciate on the back of this inflow. Of course, accompanying this position is the risk of a young biotech play. Primarily, this risk is rooted in dilution. The company had a little over $1.1 million cash on hand at March 31, down from $3 million at the end of last year. At the beginning of April, Atossa closed a public offering that saw it net around $4.3 million, so there's probably a little less than that on hand right now based on current burn.In other words, we're probably in line for another raise ahead of the above-discussed phase II initiation. Of course, the hope is that the programs will demonstrate clinical benefit and that any dilution will be mitigated.We will be updating our subscribers as soon as we know more. For the latest updates on ATOS, sign up below!Disclosure: We have no position in ATOS and have not been compensated for this article.

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