What’s going on Bros Nation. I’m back again with another episode of Money Talkz. Today’s episode is by viewer request. We’re going to talk Atossa Therapeutics. Before we get into it you know the drill, show some love with that like share and subscribe. Click the link in the description box to support the channel. Let’s grow this channel and this community of marathoners and let’s get to it.
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Atossa Therapeutics, ticket symbol ATOS. I have shares of this stock. I started investing in this stock back on the first of June when it was 3.64. It is currently at 3.225 so I’m down just a tad…. But what is the outlook for this stock? What’s going on in the world with this stock? Who is Atossa Therapeutics?
Let’s tackle the who first. ATOS is a clinical-stage biotech company whose surge in 2021 soon proved to be unsustainable. It underwent a meteoric rise from $1.52 in April to a 52-week high of $9.80 in June. But now it’s back down to the $3.20 area.
According to Yahoo! Finance “Atossa Therapeutic … discovers and develops medicines in the areas of oncology and infectious diseases. The company’s lead program is Endoxifen, an active metabolite of tamoxifen, which is in Phase II clinical trials to treat and prevent breast cancer. It is also developing AT-301, a proprietary drug candidate for nasal administration in patients diagnosed with COVID-19; AT-H201, a drug candidate to improve lung function in COVID-19 patients; and immunotherapy/chimeric antigen receptor therapy programs for the treatment of breast cancer.”
This all sounds good and all but what is going on with the company? Good intentions aside is this a stock worth investing in?
Well, let’s take a look at a few factors.
ATOS is down 20% in a month. The company announced its Q2 2021 financial results and offered corporate updates on recent development.
In Q2, the company received final findings from the open-label Phase II clinical study of oral Endoxifen during the “window of opportunity” between breast cancer diagnosis and surgery. Endoxifen achieved the primary endpoint in the study with a 65.1% reduction of Ki-67, which is a common tumor cell activity measure. Also, Swedish regulators gave the company authorization to commence Phase 2 clinical trial of Endoxifen in mammographic breast density reduction.
In addition, Australian regulators approved the commencement of the AT-H201 clinical study being developed for COVID-19 treatment. Atossa released final data from the Phase 1 randomized, double-blinded, sham-controlled study using its novel drug candidate AT-301, developed as a nasal spray for home use for patients diagnosed with COVID-19. The company is witnessing progress in its COVID-19 and MD programs. So, with the progress, ATOS is worth watching in the coming months.
Also, the company joined the Russell 2000 and Russell 3000 Indexes fueling June’s price jump. Institutional investors and index funds had to buy the stock due to its inclusion in these major stock indexes.
But!
ATOS has had ZERO revenue. Nada. Zilch. So to continue operations ATOS is going to need to raise some cash. The most plausible option at this point would be for the company to issue more shares leading to stock dilution. And that just might be the case with the upcoming special meeting. This meeting is going to address the cash flow problem by voting on whether the total number of common shares of stock will be raised by 100 million. It would help fund the company’s growth but at the same time a stock dilution will hurt current investors. The company’s current cash flow stands at a $12.75 million loss. What is problematic about the stock is that the company is burning cash like a fire sale. In 2019 the free cash flow was -9.14 million. In 2020 it increased to -11.58 million. This year so far its at -12.75 million.
It’s not looking to good.
