It has taken a little longer than we initially expected, but Atossa Genetics Inc (NASDAQ:ATOS) is finally making a comeback in the biotechnology space.
We last covered the stock back at the end of May when it was trading for around $0.45 a share. At the time, we suggested that the company may be about to step out from under the radar based on the fact that it had just completed enrollment in a key early-stage investigation.
This normally wouldn’t be a big deal, but it told is that the trial in question was on track to readout during the third quarter of this year and, if the readout was positive, it would turn Atossa into a biotechnology stock with multiple shots on goal in a potentially billion-dollar industry.
During the months subsequent to our initial coverage, share price depreciated slightly, reaching a bottom in and around mid to late August.
This week, however, our thesis has been validated.
Atossa just put out data from the trial we told her we just keep an eye on and, as it turns out, said data looks incredibly strong.
The dug in question is a breast cancer drug called endoxifen and it is what’s called an ‘active metabolite’ of tamoxifen. Tamoxifen is the standard of care drug in this space right now but with current administration method, it needs to pass through the liver in order to be broken down into its active form. This active form is called a metabolite. So, with endoxifen, Atossa has taken tamoxifen, broken it into a metabolite outside the body and turned the metabolites into a topical administration formula.
The idea is that this type of administration can overcome the side effects associated with standard of care administration and that in turn – can both improve the patient experience and reduce the cost associated with delivery.
Outside of the topical administration formulation, the company has also created an oral administration pill that is rooted in the same sort of process – break down the drug externally into metabolites and administer the metabolites, removing the necessity for a liver pass.
So, the latest data comes from a phase 1 study of the topical administration formulation. With these sort of studies, there are two things you want to see. The first, and as is generally the primary endpoint, is safety. As per the latest news, there were no safety signals reported as part of the study, meaning the primary endpoint was hit. The second is rooted in efficacy. You want to see some degree of clinical benefit or implied clinical benefit and – as a bonus – you want to see this benefit being dose-dependent.
Again, the company got what he was looking for. Endoxifen crossed the skin barrier when applied daily to the breast and it did so in a dose-dependent fashion.
The assumption now, then, is that this topical formulation will advance into a phase 2 investigation, meaning this initiation serves as a nice upside catalyst near term.
There is also a major catalyst associated with the oral formulation set to hit press before the end of the year. The trial investigating said formulation ran in parallel to the topical administration version but is between one and two months behind its counterpart. As such, and as announced in the release that detailed the topical administration data, management expects to put out he oral formulation data between 30 and 60 days from now.
It goes without saying that if the data is positive it will be a strong validation of this metabolite-first approach and will – in turn – drive the company to the upside heading into the close of 2017 and beyond.
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Image courtesy of Caroline Davis2010 via Flickr
Disclosure: We have no position in ATOS and have not been compensated for this article.