Can Atossa Therapeutics Stock Keep Climbing?

Atossa Therapeutics (NASDAQ: ATOS) is a best-performing biotech stock, up more than this year. Successful results from a mid-stage clinical trial of a potential new breast cancer treatment propelled stocks 61% last week, and investors want to know if they can go any higher.

To find out if this company’s best days in clinical stage are in the past, present, or future, we need to look at its key asset, endoxifene. Here’s what you need to know about this company and its potential new breast cancer drug.

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Oral endoxifen

Atossa Therapeutics is doing pretty much everything right now to create a new and improved version of a very old breast cancer treatment. The company’s lead candidate, endoxifen, is a more potent metabolite of tamoxifen. Tamoxifen has been widely used for decades to reduce the risk of recurrence in women with estrogen receptor (ER) positive breast cancer. Atossa’s previous attempts to do the same with a topical lotion containing endoxifen came to an impasse years ago, but it looks like oral endoxifen could help newly diagnosed patients in the preoperative setting.

On June 9, Atossa reported the final results of the Phase 2 clinical trial from a study of endoxifen- and ER-positive breast cancer patients who were between their initial diagnosis and a mastectomy. Average readings from Ki-67, a protein that appears only when cells multiply, decreased 65.1% when patients were admitted for surgery.

The researchers were particularly encouraged by a reduction of 25% or more that was measured for each patient in the study. This strongly suggests that oral administration of endoxifen to patients may prevent breast cancer from progressing.

Ideal conditions?

Many institutional investors are currently betting against Atossa Therapeutics. Until recently, however, there wasn’t much trading activity related to the stock.

Many stocks shorted under the radar for a biotech stock seem ideal conditions for a short squeeze. Before you expose yourself to this particular stock, however, you really should look under the hood.

Image source: Getty Images.

Why short sellers pile up

Rapidly advancing potential new cancer drugs through clinical trials is really expensive. However, raising enough capital to develop potential blockbusters at top speed is rarely a challenge.

As a treatment to be prescribed after an initial diagnosis of breast cancer, endoxifen could peak in annual sales of billions. Despite the obvious potential, Atossa Therapeutics has dragged endoxifene at a snail’s pace on the road to FDA approval.

Atossa Therapeutics completed a phase 2 study with 90 patients with a topical version of endoxifen back in 2019. However, the company has still not started testing an oral version of the drug in the United States.

The successful Phase 2 trial results, which are now propelling the stock, have only enrolled seven patients in Australia, and it doesn’t look like Atossa Therapeutics is in any rush to confirm initial success. The company has not yet begun the relatively simple toxicology studies required by the FDA before filing for clinical trials of oral endoxifen to begin in the United States.

Instead of pushing the advances in oral endoxifen over the past year, Atossa Therapeutics has launched a potential COVID-19 treatment called AT-301. The company announced the successful results of a safety study in 32 healthy patients last November and has made no progress since then.

A question of time

Several years ago, the National Cancer Institute tested oral endoxifen against cheap generic tamoxifen as a potential treatment for breast cancer patients who had relapsed after standard treatment. While there was a trend towards a progression-free survival advantage with endoxifen over the widely used tamoxifen, the difference was not large enough to be considered statistically significant.

It will take years to find out, but it doesn’t look like Atossa Therapeutics’ cancer drug candidate can offer any significant survival benefit when compared to relatively cheap generic tamoxifen. Meanwhile, Atossa Therapeutics’ market cap has grown as high as $ 1.0 billion at current prices. That’s just way too much for a company with no compelling assets.

Individual investors following their social media feeds could push this unworthy stock higher in the short term. At some point, however, Atossa Therapeutics will obtain a meaningful assessment.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.

source https://dailyhealthynews.ca/can-atossa-therapeutics-stock-keep-climbing/