Atossa Genetics announced their Q3 earnings today, along with an update on their ForeCYTE Breast Health Test recall and plans for product launches and relaunches in 2014.
Net loss for the quarter ended September 30, 2013, was $3.5 million, or $0.22 per share, compared with net loss of $1.1 million, or $0.10 per share, for the third quarter ended September 30, 2012. The increase in net loss was due to an increase in general and administrative expense, including increased expenses related to the national launch of the ForeCYTE test.
During the earnings call on Tuesday, the company announced a new common stock purchase agreement with Aspire Capital, LLC, for the sale of up to $25 million in common stock over the next 30 months. The previous agreement with Aspire Capital, which gave the company $11.3 million in equity funding, has been terminated. The new financing deal also includes two milestones of $1 million each related to the new clearance of the ForeCYTE Breast Health Test.
“One is payable upon filing the 510(k) submission and one upon clearance,” Dr. Steven C. Quay, Chairman, CEO & President, said.
The company reported $7.7 million in the bank, which it estimates will provide six to 10 months of runway. Revenue from products scheduled for launch in the second half of 2014 should increase that to 12 months of operating expenses.
The company is being sued for securities fraud. Its stock dropped almost by half after the recall.
The company has a pre-510(k) submission meeting with the FDA on Thursday, November 14.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
It has signed a national distribution agreement with McKesson Medical-Surgical and is still under contract with key distributors.
Quay discussed several new products scheduled to be launched in 2014, including:
- A test system for women identified as high risk for breast cancer that uses a microcatheter to collect samples for specific milk ducts
- A test system for women newly diagnosed to assess risks for distant metastases
- An updated blood test for cancer survivors that had a limited launch in 2012
- A microcatheter to deliver drugs into milk ducts to target pre-cancerous lesions and ductal carcinoma in situ
In describing the microcatheter product, Quay said this delivery method would allow high local concentration of the drug to make the treatment work better and reduce side effects. Atossa will find a partner to develop the pharmaceutical component of this product.
