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ATOS: Endoxifen to enter Phase II

11/14/2017
By Grant Zeng, CFA

NASDAQ:ATOS

New Financing Boosts Balance Sheet   
  
 
ATOS (NASDAQ:ATOS) did not generate revenue for the third quarter ended September 30, 2017.

R&D expenses for the third quarter of 2017 were approximately $0.7 million, compared to $0.15 million for the third quarter of 2016.  

G&A expenses for the third quarter of 2017 were approximately $1.3 million, compared to $1.5 million in the third quarter of 2016. 

Total operating expenses were approximately $2.1 million for the three months ended September 30, 2017, compared to $1.6 million in the third quarter of 2016. 

Adjusted net loss for 3Q17 was $2.2 million ($0.18/share), as compared to a net loss of $1.6 million ($0.56/share) for the three months ended September 30, 2016.

As of September 30, 2017, Atossa had $2.7 million in cash. 

In October 2017, Atossa closed an underwritten public offering of 11,500,000 shares of common stock at a public offering price of $0.44 per share, as well as a concurrent closing of 1,000,000 additional shares of common stock pursuant to the exercise in full of the over-allotment option granted to the underwriters. Gross proceeds were approximately $5.5 million. 

Update on Phase I Study of Endoxifen 

In June 2016, Atossa initiated a new drug development program with oral endoxifen. Endoxifen is an active metabolite of tamoxifen, an FDA approved drug for breast cancer patients to prevent recurrence as well as new breast cancer.

Tamoxifen is a hormone therapy that has been used for more than 40 years to reduce the risk of breast cancer and to prevent recurrence. However, research has demonstrated that patients with very low levels of a critical enzyme called CYP2D6 and those with low endoxifen levels have a higher risk of recurrence or progression when treated with tamoxifen. It is estimated that over one million people take tamoxifen annually in the United States and that up to 50% of those patients are refractory. 

Atossa has filed patent applications for endoxifen and contracted for the initial drug supply. The company has identified its initial indication -- breast cancer patients who are refractory to tamoxifen thereby getting little or no benefit from the drug. 

In March 2017, Atossa opened enrollment of a Phase I study of endoxifen. The objectives of this placebo-controlled, repeat dose study of 48 healthy female volunteers is to assess the pharmacokinetics of proprietary formulations of both oral and topical endoxifen dosage forms over 28 days, as well as to assess safety and tolerability.

The study is being conducted on behalf of Atossa by CPR Pharma Services Pty Ltd., Thebarton, SA, Australia.

In September 2017, Atossa reported preliminary results from its Phase I dose escalation study of its proprietary topical Endoxifen. 

For the topical arm, all objectives were successfully met:
• Safety: There were no clinically significant safety signals and no clinically significant adverse events in participants receiving topical Endoxifen. 
• Tolerability: Topical Endoxifen was well tolerated at each dose level and for the dosing duration utilized in the study. 
• Pharmacokinetics: Topical Endoxifen crossed the skin barrier when applied daily to the breast, as demonstrated by low but measurable Endoxifen blood levels detected in a dose-dependent fashion.  

In late October 2017, Atossa reported preliminary results from the Phase I study of its proprietary oral Endoxifen. 

All objectives were successfully met:

• Safety: There were no clinically significant safety signals and no clinically significant adverse events in participants receiving oral Endoxifen.
• Tolerability: Oral Endoxifen was well tolerated at each dose level and for the dosing duration utilized in the study. 
• Pharmacokinetics: Oral Endoxifen demonstrated blood levels that have been associated with a therapeutic effect in the adjuvant setting in women with breast cancer.

The Upcoming Phase II Study

In September 2017, Atossa contracted with Stockholm South General Hospital in Sweden to conduct a Phase II study of its proprietary topical Endoxifen for the treatment of women with mammographic breast density (MBD). The reason to choose MBD as the indication is that studies have shown that a reduction in MBD reduces the risk of developing breast cancer. 

The planned Phase II trial will be a placebo-controlled, double-blinded study, and is expected to enroll up to 480 subjects. The primary endpoint is MBD reduction, which will be measured after six and twelve months of dosing, as well as safety and tolerability.

Atossa Enters Chimeric Antigen Receptor Therapy (CAR-T) Program in Breast Cancer

In early October 2017, Atossa announced a new program using Chimeric Antigen Receptor Therapy (CAR-T). Atossa plans to use its proprietary intraductal microcatheter technology to deliver CAR-T cells into the ducts of the breast for the potential targeted treatment of breast cancer.

Atossa’s novel approach uses its proprietary intraductal microcatheter technology for the potential transpapillary (TRAP) delivery of T-cells that have been genetically modified to attack breast cancer cells. We believe Atossa’s method has several potential advantages: 
• reduces toxicity by limiting systemic exposure of the T-cells; 
• improves efficacy by placing the T-cells in direct contact with the target ductal epithelial cells that are undergoing malignant transformation; and, lymphatic migration of the CAR-T cells along the same path taken by migrating cancer cells, potentially extending their cytotoxic actions into the regional lymph system, which could limit tumor cell dissemination. 

Atossa has developed a foundational intellectual property position with respect to TRAP CAR-T, and intends to continue research and development through partnership with leading investigators, institutions, and organizations around the world. This could monetize this technology and provides non-dilutive financing for the company down the road. 

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