Atossa Genetics Inc (NASDAQ:ATOS) is a company that we’ve covered a few times here at Insider Financial.
The company is a biotechnology stock that we have suggested has long been undervalued and that we have highlighted in the past as potentially being due a revaluation on a couple of key catalysts.
When we last covered Atossa, back in September, the company was trading for a little over $0.52 a share. At close of play on Tuesday, the company’s share price had risen to $1.22. Premarket activity on Wednesday has brought this to $1.25.
That is a 140% increase in just a few weeks.
It’s a nice return, but we think there’s probably more to come. This is a company that, as mentioned, has a whole host of near-term catalysts slated for release of the next 6 to 12 months and if these catalysts hit press as positive, the implications of each should compound the current upside momentum and push the stock higher.
So what are we looking for specifically?
Before getting into the catalysts, let’s quickly introduce the company for anybody new to Atossa. It’s a biotechnology stock, as mentioned, and its lead development asset is a drug called endoxifen. The latter is what’s called an active metabolite of an already established and approved (in the US) drug called tamoxifen, which is commonly used to treat breast cancer. In its current format, however, the drug needs to be taken orally and has to undergo what’s called a “liver pass” in order to be broken down into its active metabolites, which are the parts of the drug that underpin the mechanism of action associated with use.
With endoxifen, Atossa has taken tamoxifen and broken it down outside of the body into its active metabolite, meaning the liver pass discussed above is necessary. This has two implications. First, the drug can be administered differently (in this instance, topically) and second, that it can work much faster than its legacy version.
Additionally, it doesn’t bring about the side effects commonly associated with administration of the drug in its current format.
So, Atossa has spent the last 12 to 18 months trailing a topical version of the drug and, earlier this year, we got both interim data from a mid-stage study and some phase I data, both of which pointed to a strong degree of efficacy and a relatively clean safety profile, in line with expectations.
This morning, management is going to host a conference call that will serve as a platform from which to present data from a phase 1 trial of an oral formulation of endoxifen and it is this presentation (or, more accurately, the anticipation of this presentation) that is driving the action we are seeing right now.
So what we looking for from the conference call as potentially compounding the upside run?
Well, it’s pretty simple – we want to see the data reinforce the already established efficacy thesis and point towards this formulation being an effective alternative to current standard of care. The trial also involves a follow-on treatment with topical endoxifen, so we would also look to see this following treatment compound the efficacy brought about by the oral formulation, pointing towards value in a combination type treatment for these two assets.
If we get this, two dollars a share is very much on cards heading into the close of the week.
Keep in mind that this is a binary event and negative data would likely pare some of the gains we have seen this week so far. Given the data that’s already in place, however, positive data seems far more likely.
We will sit in on the call and update as appropriate.
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Image courtesy of University of Michigan School for Environment and Sustainability via Flickr
Disclosure: We have no position in ATOS and have not been compensated for this article.