Atossa Therapeutics Inc

Atossa Therapeutics Inc (Nasdaq: ATOS) a clinical-stage biopharmaceutical entity focusing on unmet medical need for breast cancer and COVID-19.

Investment Highlights – EXPENSIVE at USD 8.62

• The Company has reported negative operating cash flows and incurred net losses since inception.
• The expected growth trajectory might not be achieved given the curtailed operations with Covid-19, macroeconomic uncertainties, and limited access to financial resources.
• It can face significant liquidity issues if it fails to raise additional capital timely on acceptable terms.
• From a technical standpoint, 14-day RSI (83.15) indicates an overbought stance at the current levels, share price retracement is expected in the short-term. Moreover, the stock price has surpassed even the upper standard deviation of the Bollinger Bands.

Key Risks

• The Covid-19 pandemic led restrictions have impacted the Company's clinical trial enrolment, supply chain, and ability to access capital markets.
• The Company does not have any revenue source and will continue to fund its losses from operation and capital funding through external sources.
• Volatility in the financial market could also impact the Company's ability to raise external funds.

Recent News

Clinical Study: On 14 May 2021, ATOS unveiled positive results of its open-label Phase 2 clinical study of oral Endoxifen, which shall accelerate the Endoxifen program in the United States.

Financial Highlights (for the quarterly period ended 31 March 2021, as on 14 May 2021)

 (Source: Company Website)

• During Q1 FY21, ATOS used US$4,409,000 of cash in operating activities and recorded a net loss of around US$3,538,000.
• As of 31 March 2021, cash and cash equivalents stood around US$137,574,000.
• The Company has not been able to establish an ongoing source of revenue to meet its operating costs.

Share Price Chart

 (Analysis done by Kalkine Group)

Conclusion

ATOS is an overstretched and overbought stock, while the Company has no sustainable source of revenue to fund its operations. Moreover, its ability to develop products depends upon the availability of external funds at acceptable terms. Also, the market acceptance of the potential products amid a challenging trading environment is quite uncertain. Furthermore, the clinical trials are exposed to delay with Covid-19 related restrictions and can lack efficacy to timely achieve regulatory approvals. The stock made a 52-week High and Low of USD 9.80 and USD 0.81, respectively.

Based on an aggravated net loss, uncertain outlook, macroeconomic instabilities, we have given an “EXPENSIVE” stance on Atossa Therapeutics Inc at the closing price of USD 8.62 (as on 25 June 2021), while we look forward to reviewing the upcoming clinical trials of the Company.  

Zomedica Corp

Zomedica Corp (NYSE: ZOM) is a veterinary health entity focusing on the unmet needs of clinical veterinarians.

Investment Rationale – WATCH at USD 0.8479

• As of 31 March 2021, the Company had an accumulated deficit of US$105.0 million. Moreover, it expects to incur losses for the foreseeable future.
• The commercialization of TRUFORMA®, brand and product development activities can increase the losses in the short-term.
• The first-quarter results (Q1 FY21) reflected limited sales activity pertinent to TRUFORMA® as the Company commenced commercialization on 15 March 2021.
• From a technical standpoint, the MACD line is trading below the centreline and forming a negative crossover with the signal line. Meanwhile, the stock sustained below the 50-day EMA (USD 0.96), indicating bearish momentum.

Risk Assessments

• The Company has negative cash flows since its inception in May 2015. The worsened losses and higher manufacturing costs can cause liquidity risk.
• There are significant delays in the clinical trials and supply chain disruption for raw materials due to the Covid-19 pandemic, impacting the Company's financial conditions and operating results.
• It relies on third parties to commercialize its products, which may not adequately perform its obligations. Recent News

Management Change: On 17 May 2021, ZOM appointed Greg Blair as a Vice President of Business Development for leading its licensing efforts and acquisitions.

Financial Highlights for the quarter ended 31 March 2021 (as on 12 May 2021)

 (Source: Company Website)

• During Q1 FY21, ZOM generated revenue of US$14,124, driven by the sale of TRUFORMA® products and associated warranties.
• However, the operating expenses also surged due to increased selling, general and administrative related expenses.
• Despite the reduced research and development expenses, the Company reported a net loss per share of US$0.04 in Q1 FY21, as compared to a net loss of US$0.02 per share in Q1 FY20.
• As of 31 March 2021, the Company had nearly US$276.6 million in cash and cash equivalents.

Share Price Chart

 (Analysis done by Kalkine Group)

Conclusion

Zomedica has recently commenced the commercialization of TRUFORMA®, and working with its technology partner, Qorvo Biotechnologies, to complete additional assays. It has a cash and cash equivalent of over US$276 million to fund its commercialization efforts and pursue corporate growth plans. However, the Company has a limited operating history and losses worsened in Q1 FY21. The stock has already rose over 265% in the past year, while it is giving a bearish signal from the technical standpoint. It is a penny stock that is exposed to volatile movement. It has been benefited from the rising trend of pet adoption during the pandemic. Notwithstanding, there is a significant mismatch in its market capitalization and current revenue-generating capacity. The stock made a 52 week High and Low of USD 2.91 and USD 0.0628, respectively.

Based on the weak fundamentals, overbought technical stance, economic instabilities, we have given a “WATCH” stance on Zomedica Corp at the closing price of USD 0.8479 (as on 25 June 2021) while we look forward to reviewing the market acceptance of TRUFORMA®.

*The reference data in this report has been partly sourced from REFINITIV.