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According to a recent 8-K filed by Atossa Therapeutics (ATOS), the biotech has signed a letter agreement with a private, venture-backed American company. One which is creating CAR-T medicines which have been licensed from a prominent U.S. adult and pediatric cancer treatment facility.
Atossa has paid $3 million for the sole rights to negotiate an acquisition, valid until November 1, 2022. It will need pay an extra $2 million for 19.99% preferred equity interest in the CAR-T firm, should a definitive agreement not be reached. Other details, including the company’s identity, have yet to be disclosed.
Considering Atossa’s current interest in oncology is limited to the development of endoxifen in breast cancer, Maxim analyst Jason McCarthy considers the agreement as a “smart, strategic move by Atossa to diversify its oncology footprint.”
The pivot toward cell-based therapies – which include CAR-T therapies – is particularly wise, given McCarthy’s belief that they are “continuing to evolve well beyond what could be described as the 'first-gen' therapies targeting CD19 and BCMA.” Aside from CAR-T therapies, money is also flowing into the research of other 'next-gen' cell therapies, targeting engineered stem cells, NK cells, and gamma-delta CARs and TCRs, both auto and allo.
While the acquisition target’s programs are still at the early, preclinical stage, given Atossa’s “strong” balance sheet boasting cash reserves of ~$130 million, the company is well-equipped to advance the programs towards the clinic.
“We have to wait and see what the CAR-T company brings to the table, assuming the acquisition is completed,” the analyst summed up. “That said, as the next phase of cell-based therapies gains traction and the biotech space as a whole looks to rebound from a valuation perspective, the timing for Atossa to move in the cell therapy direction may be ideal.”
McCarthy is evidently bullish regrading ATOS’ potential. Along with a Buy rating, the analyst’s $4 price target suggests shares will surge ~281% higher in the year ahead. (To watch McCarthy’s track record, click here)
This small-cap firm has slipped under the radar a bit, and only has 2 recent analyst reviews. They both agree, however, that it’s a stock to buy, making the Moderate Buy analyst consensus unanimous. The shares are selling for $1.05 and their $5.75 average target indicates room for a huge 448% upside over the next 12 months. (See Atossa stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.