Breast cancer drug clinical trial milestones and mergers and acquisitions (M&A) in 2023 should be catalysts for Atossa Therapeutics Inc (NASDAQ:ATOS)’ stock, according to analysts at Ascendiant Capital Markets.
“Atossa anticipates finishing or making significant milestones on its various clinical trials over the next year,” the analysts wrote in a note to clients published following the company’s first-quarter results, which they noted were in line with expectations.
They highlighted that the company has three clinical trials in progress: in December 2022, Atossa began to enroll patients in its clinical study of its proprietary form of the breast cancer drug Endoxifen; in February 2023, the first patient was dosed in its Phase 2 EVANGELINE (Endoxifen Versus exemestANe GosEreLIn) study; and in March 2023, Atossa announced that Endoxifen will be evaluated in a new study arm of the ongoing I-SPY 2 clinical trial.
On the M&A front, the analysts wrote that in July 2022, the company entered into an agreement to negotiate to acquire private pre-clinical company Dynamic Cell Therapies, which is developing novel Chimeric Antigen Receptor (CAR)-T cell therapies.
“We believe achieving key clinical milestones and data and the pending acquisition will likely be catalysts for the stock,” they wrote.
They described the stock as having “positive high risks versus high rewards.”
“Atossa’s drugs still have long development roads left and the high risks of clinical trials failures, but we believe the ~billion dollars market potential presents high rewards for the risks,” they wrote.
As such, the analysts wrote they were maintaining their ‘Buy’ rating on the stock.
They lowered their price target to $5.25 from $5.50 based on a net present value analysis, which continues to represent a significant upside on Atossa’s current share price of $0.85.
“We believe this valuation appropriately balances out the company’s high risks with the company’s high growth prospects and large upside opportunities,” they concluded.
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