8-K: Atossa Therapeutics Announces Full Year 2024 Financial Results and Provides Corporate Update

Atossa Therapeutics reported its full year 2024 financial results, highlighting a strategic shift to focus on metastatic breast cancer and ending the year with $71.1 million in cash and cash equivalents.

Summary

• Atossa Therapeutics announced its full year 2024 financial results and provided a corporate update.
• The company ended 2024 with $71.1 million in cash and cash equivalents and no debt.
• Atossa is strategically focusing on advancing (Z)-endoxifen to target metastatic breast cancer, believing it offers a more streamlined regulatory pathway.
• The company presented data from the Phase 2 EVANGELINE trial at the San Antonio Breast Cancer Symposium (SABCS), showing substantial tumor suppression across all dosing levels of (Z)-endoxifen.
• The 4-week Ki-67 response rate was generally above 85 percent across dose levels in the EVANGELINE trial.
• (Z)-endoxifen was well tolerated in the EVANGELINE trial, with target tissue steady state concentration (Css) levels achieved without significant Grade 3 or 4 toxicities.
• The EVANGELINE trial is expected to continue under an amended protocol comparing (Z)-endoxifen 40 mg per day with OFS to exemestane plus OFS, using the 4-week Ki-67 reduction as the primary endpoint.
• Data from the Phase 2 KARISMA-Endoxifen study showed that low-dose (Z)-endoxifen significantly reduced mammographic breast density (MBD).
• A 1 mg dose reduced MBD by 17.3 percentage points (p<0.01), while a 2 mg dose achieved a 23.5 percentage-point reduction (p<0.01) in the KARISMA-Endoxifen study.
• Total operating expenses for the year ended December 31, 2024, were $27.6 million, a decrease of $3.8 million from the previous year.
• Research and Development (R&D) expenses totaled $14.1 million for 2024, a decrease of $3.2 million compared to 2023.
• General and Administrative (G&A) expenses totaled $13.5 million for 2024, a decrease of $0.5 million compared to 2023.
• The company reported a net loss of $25.5 million, or $0.20 per share, for the year ended December 31, 2024.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the strong cash position, strategic focus on metastatic breast cancer, and promising clinical trial data. However, the net loss and risks associated with drug development temper the overall outlook.

Positives

• Atossa has a strong cash position of $71.1 million with no debt.
• The strategic decision to focus on metastatic breast cancer may offer a faster regulatory pathway for (Z)-endoxifen.
• Clinical trial data for (Z)-endoxifen shows promising anti-estrogenic and anti-tumor effects.
• The company is actively engaging with the FDA to advance additional indications for (Z)-endoxifen.
• Operating expenses have decreased, indicating improved cost management.

Negatives

• The company reported a net loss of $25.5 million for the year ended December 31, 2024.
• Interest income decreased by $0.2 million compared to the prior year due to a decrease in funds invested in the money market account.
• The company wrote down its investment in equity securities by $1.7 million due to impairment of its investment in Dynamic Cell Therapies, Inc.

Risks

• The company's forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.
• These risks include the ability to obtain patent coverage, macroeconomic conditions, regulatory actions, and the success of clinical trials.
• The company's ability to regain or maintain compliance with Nasdaq listing requirements is also a risk factor.
• The company faces risks related to litigation and intellectual property rights.

Future Outlook

Atossa is focused on advancing (Z)-endoxifen for metastatic breast cancer and continuing engagement with the FDA for additional indications, including breast cancer prevention and neoadjuvant therapy.

Management Comments

• Steven Quay, M.D., Ph.D., President and Chief Executive Officer of Atossa, stated that metastatic breast cancer remains an area of critical unmet need.
• Management believes that pursuing an initial approval in metastatic breast cancer could offer a more efficient regulatory pathway.
• Management also believes this strategy further supports their ability to expand the broader potential of (Z)-endoxifen to address multiple stages of breast cancer.

Industry Context

Atossa's focus on metastatic breast cancer aligns with the industry's ongoing efforts to develop more effective treatments for this challenging disease, where current options often provide limited durability and have substantial side effects. The company is positioning (Z)-endoxifen as a potential next-generation therapy in this space.

Comparison to Industry Standards

• The Ki-67 response rates above 85% observed in the EVANGELINE trial are competitive with other neoadjuvant endocrine therapies used in ER+/HER2breast cancer.
• Companies like Radius Health (elacestrant) and Menarini Group are also developing SERMs for breast cancer, but Atossa's (Z)-endoxifen has a unique formulation and target profile.
• The mammographic breast density (MBD) reductions achieved with low-dose (Z)-endoxifen in the KARISMA-Endoxifen study are notable compared to other breast cancer prevention strategies.

Legal Proceedings

• The company incurred legal costs for the PGR litigation and patent defense in 2024.

Stakeholder Impact

• Shareholders may be impacted by the company's strategic shift and financial performance.
• Patients with metastatic breast cancer could benefit from the development of (Z)-endoxifen.
• Employees are affected by changes in compensation and staffing levels.

Next Steps

• Advance (Z)-endoxifen to target metastatic breast cancer.
• Continue engagement with the FDA to advance additional indications.
• Continue the EVANGELINE trial under an amended protocol.
• Release data and related publications.

Key Dates

Keywords

Atossa Therapeutics, (Z)-endoxifen, Metastatic Breast Cancer, Breast Cancer, Financial Results, Clinical Trials, SERM, EVANGELINE, KARISMA-Endoxifen, MBD, Ki-67