Atossa Therapeutics Announces Year End 2018 Financial Results and Provides Company Update

Regulatory Approval To Open Clinical Study of AT-H201 in Australia

 

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Atossa Therapeutics Announces Year End 2018 Financial Results and Provides Company Update

 

SEATTLE, March 28, 2019 (GLOBE NEWSWIRE) — Atossa Therapeutics Inc. (Nasdaq:ATOS), a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions, today announced year end 2018 financial results and provided an update on recent company developments.

Steven C. Quay, M.D., Ph.D., Atossa Therapeutics’ President and CEO commented, “The end of 2018 marked two important milestones for Atossa. We completed the enrollment of our Phase 2 trial for topical Endoxifen in women with mammographic dense breasts. In addition, we received our first allowance by the FDA to provide Endoxifen through the federal “Expanded Access” program for a breast cancer patient prior to her surgery. We received a second allowance in March 2019 for this patient to continue treatment post-surgery. In the meantime, we continue to make great progress with our clinical programs and look forward to completing the dosing in the topical Endoxifen MBD trial in April and announcing preliminary results in the second quarter 2019.”

Recent Corporate Developments

  • Atossa’s important recent developments include the following:
  • March 2019 – FDA approval of oral Endoxifen for “Expanded Access” as post-mastectomy treatment for a U.S. breast cancer patient
  • March 2019 – Atossa received $11.3 million from the exercise of warrants that were previously outstanding
  • February 2019 – Update from “Expanded Access” program for the U.S. breast cancer patient taking oral Endoxifen prior to surgery showing sizeable reduction in cancer cell biological activity with no safety or tolerability issues
  • February 2019 – Atossa provided breast cancer prevention recommendations to the United States Preventative Services Task Force
  • January 2019 – Successfully completed and provided final results from male Phase 1 study of topical Endoxifen; no clinically significant safety nor tolerability issues and acceptable pharmacokinetics
  • December 2018 – FDA approval of Endoxifen for “Expanded Access” as preoperative systemic endocrine therapy for a U.S. breast cancer patient
  • October 2018 – Completed enrollment in Phase 2 study of topical Endoxifen to treat mammographic breast density.

2018 Financial Results

For the year end December 31, 2018 and 2017, we had no revenue and no associated cost of revenue.

Total operating expenses were $11,434,000 for the year ended December 31, 2018, which is an increase of $3,785,000 or 49 percent, from the year ended December 31, 2017. Operating expenses for 2018 consisted of research and development (R&D) expenses of $4,210,000 and general and administrative (G&A) expenses of $7,224,000. Operating expenses for 2017 consisted of R&D expenses of $2,328,000, G&A expenses of $4,859,000 and impairment of our Acueity intangible assets of $462,000.

R&D expenses for the year ended December 31, 2018, were $4,210,000, an increase of $1,882,000 or 81 percent from total R&D expenses in 2017 of $2,328,000. The increase in R&D expense is attributed to manufacturing and clinical trials associated with our Endoxifen program, salaries, and stock-based compensation. Our R&D expenses have increased because we commenced two Phase 2 studies of our proprietary Endoxifen during the year ended December 31, 2018. There were no Phase 2 studies of Endoxifen in 2017. Stock-based compensation expense also increased approximately $627,000 in 2018 as compared to 2017. We expect our R&D expenses to increase throughout 2019 as we commence additional Phase 2 clinical studies of Endoxifen, continue the clinical trial of fulvestrant administered via our microcatheters and continue the development of other indications and therapeutics, including CAR-T and immunotherapies administered via our intraductal technology.

G&A expenses were $7,224,000 for the year ended December 31, 2018, an increase of $2,365,000, or 49 percent from the total G&A expenses for the year ended December 31, 2017, of $4,859,000. G&A expenses consist primarily of personnel and related benefit costs, facilities, professional services, insurance, and public company related expenses. The increase in G&A expenses for year ended December 31, 2018, is mainly attributed to an increase in stock-based compensation expense of approximately $1,049,000, payroll expenses resulting from salary increases, one-time bonus payments of $350,000 and increased legal and professional consulting expenses of approximately $600,000 over the prior year.

As of December 31, 2018, the company had cash, cash equivalents and restricted cash of $10.5 million and in March 2019 received $11.3 million in additional cash from the exercise of previously outstanding warrants.

About Atossa Therapeutics

Atossa Therapeutics Inc., is a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions. For more information, please visit www.atossaTherapeutics.com.

Forward-Looking Statements

Forward-looking statements in this press release, which Atossa undertakes no obligation to update, are subject to risks and uncertainties that may cause actual results to differ materially from the anticipated or estimated future results, including the risks and uncertainties associated with any variation between preliminary and final clinical results, actions and inactions by the FDA, the outcome or timing of regulatory approvals needed by Atossa including those needed to commence studies, lower than anticipated rate of patient enrollment, estimated market size of drugs under development, the safety and efficacy of Atossa’s products and services, performance of clinical research organizations and investigators, obstacles resulting from proprietary rights held by others with respect to fulvestrant, such as patent rights, potential market sizes for Atossa’s drugs under development and other risks detailed from time to time in Atossa’s filings with the Securities and Exchange Commission, including without limitation its periodic reports on Form10-K and 10-Q,each as amended and supplemented from time to time.

Atossa Therapeutics Company Contact:
Atossa Therapeutics Inc.
Kyle Guse CFO and General Counsel
Office: 866 893-4927
kyle.guse@atossaTherapeutics.com

Investor Relations Contact:
Scott Gordon
Core IR
377 Oak Street
Concourse 2
Garden City, NY 11530
Office:(516) 222-2560
scottg@corprominence.com

Source: Atossa Therapeutics Inc.

ATOSSA Therapeutics INC.

CONSOLIDATED BALANCE SHEETS

As of December 31,
Assets 2018 2017
Current assets
Cash and cash equivalents $ 10,380,493 $ 7,217,469
Restricted cash 110,000 55,000
Prepaid expenses 509,833 250,944
Research and development tax rebate receivable 518,098 358,277
Other current assets 30,942 16,344
Total current assets 11,549,366 7,898,034
Furniture and equipment, net 54,487 11,467
Intangible assets, net 99,375 75,686
Other assets 17,218 178,907
Total Assets $ 11,720,446 $ 8,164,094
Liabilities and Stockholders’ Equity            
Current liabilities
Accounts payable $ 353,328 $ 334,901
Accrued expenses 177,074 90,105
Payroll liabilities 935,070 784,867
Stock-based compensation liability 1,410,025
Other current liabilities 39,939 15,534
Total Current Liabilities 2,915,436 1,225,407
Commitments and contingencies
Stockholders’ equity
Preferred stock – $0.001 par value; 10,000,000 shares authorized, consisting of Series A convertible preferred stock- $0.001 par value; 4,000 shares authorized, and 0 shares outstanding as of December 31, 2018 and December 31, 2017; Series B convertible preferred stock- $0.001 par value; 25,000 and 0 shares authorized, and 2,379 and 0 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively 2
Additional paid-in capital – Series B convertible preferred stock 2,378,997
Common stock – $0.18 par value; 175,000,000 shares authorized, and 5,846,552 and 2,651,952 shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively 1,052,372 477,342
Additional paid-in capital 82,204,902 71,887,674
Accumulated deficit (76,831,263 ) (65,426,329 )
Total Stockholders’ Equity 8,805,010 6,938,687
Total Liabilities and Stockholders’ Equity $ 11,720,446 $ 8,164,094

ATOSSA Therapeutics INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31,
2018 2017
Operating Expenses
Research and development $ 4,209,981 $ 2,328,087
General and administrative 7,224,252 4,859,369
Impairment of intangible assets 461,715
Total operating expenses 11,434,233 7,649,171
Operating loss (11,434,233 ) (7,649,171 )
Change in fair value of common stock warrants (280,747 )
Warrant financing expense (192,817 )
Other income 29,299 154
Loss before income taxes (11,404,934 ) (8,122,581 )
Income taxes
Net loss $ (11,404,934 ) $ (8,122,581 )
Deemed dividend attributable to preferred stock (11,479,308 ) (2,568,132 )
Net loss applicable to common shareholders $ (22,884,242 ) $ (10,690,713 )
Loss per common share – basic and diluted $ (5.50 ) $ (10.97 )
Weighted average shares outstanding – basic and diluted 4,157,746 974,773

 

Mar 28, 2019

 

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Gregory L. Weaver

Chief Financial Officer

Mr. Weaver has more than 30 years of life sciences, financial and operations experience leading corporate finance for several innovative biotechs through IPO and accelerated growth stages. Most recently, he served as CFO of privately held BioIntelliSense, a commercial-stage med-tech company focused on remote patient monitoring.

Earlier in his career, Mr. Weaver served as CFO of rare disease focused Eloxx Pharmaceuticals where he led the reverse merger and Nasdaq IPO including raising $110 million. He also led the atai Life Sciences international corporate finance team and their 2021 Nasdaq IPO, raising over $500M, and managed their acquisition of multiple mental health therapeutics assets. He has been a core executive team member of three Nasdaq oncology businesses with multiple FDA approvals and commercial launches, pre-clinical and global clinical operations and has been responsible for M&A transactions totaling over $200 million. Mr. Weaver has also served as a board director for six life science companies since 2005 in the US and Europe. He began his career as a Certified Public Accountant with Arthur Andersen. Mr. Weaver earned a Master of Business Administration degree from Boston College, and an undergraduate degree in accounting from Trinity University.

Eric Van Zanten

VP, Investor & Public Relations

Mr. Van Zanten brings over 25 years of corporate communications experience working within the biopharmaceutical, finance and healthcare industries. He will oversee corporate, executive and digital communications, investor relations, thought leadership, and branding for the Company. Prior to joining Atossa, Mr. Van Zanten led corporate affairs at Faron Pharmaceuticals, a clinical stage biopharmaceutical company focused on tackling difficult-to-treat cancers via precision macrophage immunotherapy and Urogen Pharma, a commercial stage biotech delivering innovative solutions that treat specialty cancers. 

He was also formerly Head of Commercial and Medical Communications and Director of Oncology Communications at Bristol-Myers Squibb where he helped launch Opdivo, one of the most successful oncology brands ever. Earlier in his career he held communications leadership roles at Deloitte, Booz Allen & Hamilton, Children’s Hospital of Philadelphia and Unisys Corporation. Mr. Van Zanten is a graduate of Franklin and Marshall College, where he received his BA in Political Science and Government.

Heather Rees

Vice President, Finance and Accounting

Ms. Rees brings more than 25 years of experience in finance and accounting leadership roles within publicly traded, IPO startups and global organizations. Prior to her current role, Ms. Rees served as Atossa’s Controller from 2017 through early 2021. She previously spent ten years working as an independent financial consultant serving public and private companies including, Avalara, Getty Images, Fisher Communications, and Flow International. Heather began her career with Deloitte & Touche and worked nine years in the audit practice. Ms. Rees earned a Bachelor of Business Administration in accounting from Gonzaga University. She is a CPA in the state of Washington (inactive).

Delly Behen, PHR, SHRM-CP

VP, Administration & HR

Delly Behen, PHR, SHRM-CP has served as Atossa’s VP, Administration & Human Resources since July 2014. Delly brings over 20 years of human resources, administrative, and operational experience to the company. Her experience includes leading people, culture and administration at various biotech companies throughout the Puget Sound. Most recently, she served as Impel NeuroPharma’s HR Consultant, where she helped grow the company and implement HR policies and procedures. She also held positions with increasing responsibilities at CTI Biopharma. Delly received her B.A. degree from the University of Washington and her HR certification from Seattle Pacific University.

B. Heather Fraser, PHD

VP Clinical, Regulatory & CMC

Dr. Fraser brings over 20 years of extensive industry experience in the biotech industry to the Company, recently serving in a leadership role as VP Clinical Operations & Program Management at Cerecor, Inc. She held positions with increasing levels of responsibility at Anthera Pharmaceuticals and CV Therapeutics (acquired by Gilead Sciences) where the roles included preclinical and clinical sciences and regulatory affairs.

Dr. Fraser has experience in drug development across diverse therapeutic areas including psychiatry, central nervous system disorders, cardiovascular disorders, and rare diseases; and she has been involved in all stages of drug development from pre-clinical through Phase 4. Dr. Fraser received her BS in Zoology from the University of British Columbia, her MS in Pharmaceutical Sciences from the University of Montana and her PhD in Pharmacology from the University of Alberta. She also completed a post-doctoral fellowship at Johns Hopkins University School of Medicine.

Kyle Guse, ESQ, CPA

Chief Financial Officer, General Counsel and Secretary

Mr. Guse has served as Chief Financial Officer, General Counsel and Secretary since January 2013. His experience includes more than 20 years of counseling life sciences and other rapid growth companies through all aspects of finance, corporate governance, securities laws and commercialization.

Mr. Guse has practiced law at several of the largest international law firms, including from January 2012 through January 2013 as a partner at Baker Botts LLP and, prior to that, from October 2007 to January 2012, as a partner at McDermott Will & Emery LLP. Before working at McDermott Will & Emery, Mr. Guse previously served as a partner at Heller Ehrman LLP. Mr. Guse began his career as an accountant at Deloitte & Touche and he is a licensed Certified Public Accountant in the state of California. Mr. Guse earned a B.S. in Business Administration and an M.B.A. from California State University, Sacramento, and a J.D. from Santa Clara University School of Law.

Steven C. Quay, MD, PHD

Chairman of the Board and Chief Executive Officer

Dr. Quay has served as Chief Executive Officer, President and Chairman of the Board of Directors of the Company since the Company was incorporated in April 2009. Dr. Quay is certified in Anatomic Pathology with the American Board of Pathology, completed both an internship and residency in anatomic pathology at Massachusetts General Hospital, a Harvard Medical School teaching hospital, and is a former faculty member of the Department of Pathology, Stanford University School of Medicine.

Dr. Quay is a named inventor on 87 U.S. patents, 130 pending U.S. patent applications, and is named inventor on patents covering five pharmaceutical products that have been approved by the U.S. Food and Drug Administration. Dr. Quay received an M.D. in 1977 and a Ph.D. in 1975 from the University of Michigan. He received his B.A. degree in biology, chemistry and mathematics from Western Michigan University in 1971. He was selected to serve on the Company’s Board of Directors because of his role as a founder of the Company, as well as his qualifications as a physician and the principal researcher overseeing the clinical and regulatory development of the Company’s pharmaceutical programs.

Shu-Chih Chen, PHD

Director

Dr. Chen has served as founder and director since April 2009. She served as Chief Scientific Officer of the Company since it was incorporated in April 2009 through August 2014. She was an Associate Professor at National Yang Ming University, Taipei, Taiwan, and served as the principal investigator of an NIH RO1 grant studying tumor suppression by gap junction protein connexin 43 at the Department of Molecular Medicine at Northwest Hospital, Seattle, WA.

She has two issued U.S. patents and 20 pending U.S. patent applications related to cancer therapeutics. Dr. Chen received her Ph.D. degree in microbiology and public health from Michigan State University in 1992 and has published extensively on molecular oncology. She received her B.S. degree in medical technology from National Yang Ming University, Taipei, Taiwan in 1984. Dr. Chen was selected to serve on the Company’s Board of Directors because of her role as a founder of the Company and her qualifications in medical technology and as a professor and researcher in the field of cancer therapeutics.

Stephen J. Galli, MD

Director

Dr. Galli has served as a director of the Company since July 2011. Dr. Galli has been a Professor of Pathology and of Microbiology & Immunology and the Mary Hewitt Loveless, M.D., Professor, Stanford University School of Medicine, Stanford, California since February 1999. He served as Chair of the Department of Pathology at Stanford University School of Medicine from 1999 to 2016. Before joining Stanford, he was on the faculty of Harvard Medical School. He holds 14 U.S. patents and has over 400 publications.

H. Lawrence Remmel, ESQ.

Director

Mr. Remmel has served as a director of the Company since February 2012. He is currently a partner of the law firm Pryor Cashman LLP, located in New York City, where he chairs the Banking and Finance practice group. Mr. Remmel joined Pryor Cashman in 1988. His practice includes corporate and banking financings, issues relating to the Investment Company Act of 1940, and intellectual property and licensing issues, in particular in the biotechnology and biocosmeceutical areas.

Gregory L. Weaver

Chief Financial Officer

Mr. Weaver has served as a director of Atossa Therapeutics since October 2013 and the Company’s Chief Financial Officer since 2023. Prior to joining Atossa as CFO, Mr. Weaver spent over 30 years in the life sciences industry in a variety of financial and operations leadership roles, having led corporate finance for several innovative biotech’s through IPO and accelerated growth stages. Most recently, he served as CFO of privately held BioIntelliSense, a commercial stage med-tech company focused on remote patient monitoring.. Mr. Weaver has also served as a board director for six life science companies since 2005 in the US and Europe. He began his career as a Certified Public Accountant with Arthur Andersen.

Richard I. Steinhart

Director

Mr. Steinhart has served as a director of the Company since March 2014. Mr. Steinhart is currently the Vice President and Chief Financial Officer of BioXcel Therapeutics, Inc. From October 2015 to June 2017 he was Vice President and Chief Financial Officer of Remedy Pharmaceuticals, Inc. a privately held pharmaceuticals company. From January 2014 until he joined Remedy Pharmaceuticals, Mr. Steinhart acted as an independent financial consultant to the Biotechnology and Medical Device Industries.

From April 2006 to December 2013, Mr. Steinhart was an executive at MELA Sciences, Inc., most recently serving as its Senior Vice President, Chief Financial Officer, Treasurer and Secretary. From 1992 to 2006, Mr. Steinhart was Managing Director at Forest St. Capital/SAE Ventures. Earlier, he served as Vice President and Chief Financial Officer at Emisphere Technologies from 1991 to 1992 and as General Partner and Chief Financial Officer of CW Group Inc. Mr. Steinhart is a Member of the Board of Directors of Actinium Pharmaceuticals where he is Chairman of the Audit Committee and a member of the Compensation Committee. From 2004 to 2012, Mr. Steinhart was a Member of the Board of Directors of Manhattan Pharmaceuticals and was Chairman of the Audit Committee. Mr. Steinhart received his B.B.A. and M.B.A. degrees from Pace University. Mr. Steinhart has been selected to serve on the Company’s Board of Directors because of his qualifications as a business executive and audit committee financial expert, and his prior experience as a Chief Financial Officer, director and committee member of public companies.

Dr. Carl Novina

MD, PHD

Dr. Novina is one of the leading researchers in the field of RNAi therapeutics. He is an Associate Professor of Medicine at the Dana-Farber Cancer Institute and Harvard Medical School and an Associate Member of the Broad Institute of Harvard and MIT. He is currently the Principal Investigator of the Novina Lab at the Dana-Farber Cancer Institute. His laboratory has made several important discoveries into the biology of noncoding RNAs, their dysregulation in cancers, and their development as biomedical tools.

Dr. Novina received his M.D. from Columbia University, College of Physicians and Surgeons in 2000 and his Ph.D. from Tufts University, Sackler School of Graduate Biomedical Sciences in 1998. His graduate work has resulted in 10 publications examining transcriptional regulation of TATA-less promoters. In 2014 he received the coveted National Institutes of Health Pioneer Award, which funds bold and innovative research proposals to attack challenging biomedical problems. Dr. Novina has established many collaborations between industry partners and physicians to facilitate his goal of bringing biomedical innovations from bench to bedside.

Dr. Per Hall

MD, PHD

Dr. Hall is widely regarded as a leading researcher in the field of breast cancer and prevention. He is the Head of the Department of Medical Epidemiology and Biostatistics at Karolinska Institutet. Dr. Hall is leading the unique KARMA (Karolinska Mammography Project for Risk Prediction of Breast Cancer) Cohort, including over 70,000 women, which is regarded as the best characterized breast cancer cohort in the world and serves as a resource for studies about breast cancer risk assessment and prevention, and the Karisma Intervention Study, which is studying the change in MBD in women taking various doses of oral tamoxifen.

Dr. Makarand (Mak) Jawadekar

PHD

Dr. Mak Jawadekar is currently an independent Pharma Professional. He worked at Pfizer, Inc. based in Groton-New London Connecticut for 28 consecutive years. In 2010, he was a Director, Portfolio Management at Pfizer Inc. During his career at Pfizer, he was responsible for Drug Delivery Technology Assessment function involving external ‘Drug Delivery’ technologies. He has extensive experience in creating and cultivating external partnerships and alliances for Drug Delivery Technologies. He began his professional career at Pfizer Central Research in early 1982, after having completed his Ph.D. in Pharmaceutics, under Prof. Ed Rippie at the University of Minnesota.

His 28+ years of experience with Pfizer Global R&D specifically includes Solids R&D, Drug Product formulation/ Dosage Form/ Drug Delivery development, Clinical Trials Supply Manufacturing, Scale-up and Technology Transfer & Research Pharmacy functions. He helped create various Pharma R&D Partnerships, JVs, and Collaborations. He managed several functions/groups within R&D for many years. As a bench Scientist, he worked on many challenging commercial formulations which became multibillion-dollar products for many years for Pfizer Inc. These R & D formulations & Product
development programs included ZOLOFT, ZITHROMAX, VIAGRA faster onset, DIFLUCAN ODT and EXUBERA pulmonary delivery system. He also worked on many “Life Cycle Management “projects for Pfizer’s existing products.

Post Pfizer career, he worked with KKR, a Private Equity group in New York, for acquisition of Capsugel division from Pfizer which Pfizer divested later in 2011. Mak has presented at many professional meetings and has participated in various Panel Discussions/Round Tables around the globe. During February 2018, he worked with Mr. Tonino Lamborghini, Chairman, Tonino Lamborghini S.p.A. from Italy in creating Strategic Collaborations in India, working through India’s Prime Minister Narendra Modi and the Chief Minister, D. Phadanavis.

Currently, he serves on various company Strategic & Scientific Advisory Boards around the globe. Some of the list includes:

  • Actinium Pharma, New York city
  • Applied DNA Technologies, Stony Brook, NY
  • Applied Materials Inc., Santa Clara, California
  • Tonino Lamborghini SpA, Italy.
  • NMBT, Albert Einstein College of Medicine, New York
  • Sonnet Bio Therapeutics Inc., Cranbury, NJ
  • Saama Technologies Inc., Campbell, California

Serving on the Board of Directors: (Public Companies)

  • Preveceutical Medical Inc., Vancouver, Canada
  • Cardax Pharma, Honolulu, Hawaii
  • Nanoviricides Inc. Shelton, Connecticut

Member of the Board of Directors at a NY based, Non-Profit organization,

  • Abilities Inc.

Dr. Paul Wabnitz

BSC (HONS), MD, PHD, MBA, FRACP

Dr. Wabnitz has extensive experience in clinical development with a unique combination of clinical medicine, pharmacology, toxicology, and industry drug development experience. He has acted as an investigator and Medical Monitor on over 50 first in human Phase I/II clinical trials over the last two years, including several Phase I/II first in human oncology studies, as well as previously being the Executive Medical Director of a leading Australian Phase I clinical unit. 

His scientific background includes a Ph.D. in Organic Chemistry, a Post Doc at Parke-Davis (Ann Arbor, MI), 6.5 years of drug development industry experience (Pfizer/Esperion), an M.B.A. from the Stephen Ross School of Business (University of Ann Arbor, MI), and a Drug Development certificate in Regulatory Affairs from Temple University (Philadelphia, PA). His clinical background includes a Doctor of Medicine (M.D.), and he is a qualified Specialist Physician and Clinical Pharmacologist (Fellow of the Royal Australasian College of Physician, Australia).