There is a reasonable chance that Atossa Therapeutics (NASDAQ:ATOS) stock will rise. The company is a clinical-stage pharmaceutical company that focuses on breast cancer, and more recently, Covid-19. But any investment into Atossa Therapeutics is clearly a risky one as well.
The company has made progress in its focus on treating breast cancer — its Endoxifen treatment sits at the Phase 2 stage. However, stock prices are much more likely to move based on the company’s two Covid-19 products, as they are top of mind at present.
So let’s begin by sifting through those two products, AT-301 and AT-H201, and what they purport to do.
Products and Programs
AT-H201 is part of a program called Covid-19 HOPE. AT-H201 is a novel combination of two drugs with prior FDA approval for other diseases. The aim of the therapy is to reduce the amount of time that patients are on ventilators.
If AT-H201 works as its designers intend then it should act as vaccine antibodies do. That means the drug combination will block the virus from entering the target cells. AT-H201 blocks the five steps that the coronavirus undergoes to signal the body’s cells to open and allow the virus in. This action is similar to that of vaccine antibodies which effectively block the coronavirus from entering the cells, thus preventing Covid-19.
Atossa’s other product is a nasal spray, AT-301, used immediately following a Covid-19 diagnosis. The idea is that it will provide utility in patients whose symptoms do not yet require hospitalization and slow the infection rate. The company is also studying whether its AT-301 nasal spray can be used to prevent SARS-CoV-2, the virus that causes Covid-19.
Atossa Therapeutics began its Covid-19 programs in April of 2020. Prior to that it was solely focused on the use of an ingredient in an FDA approved drug for application against breast cancer. That particular program gives ATOS stock clear potential, but investors are interested in shares due to the company’s Covid-19 applicability.
However, that potential isn’t the only reason share prices could move upward quickly.
Short Squeeze Play
It is no secret that traders are looking for short squeeze targets in the current frenzied investment market. Most investors are likely aware of the movement that has occurred in relation to GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) as short squeeze plays.
It looks like similar action is happening in relation to ATOS stock as well. According to MarketBeat, short interest in Atossa Therapeutics sat at 11.4% in late May. That figure increased to 17% by the last day of June. The figure seems to be holding there over the prevailing three weeks, putting it near the 20% level. That particular level is important because it denotes a quantity of short interest which traditionally can trigger a short squeeze.
Atossa Therapeutics shares have recently shown their ability to move rapidly. Investors looking to profitability establish a position in the company will be entering a volatile equity.
An investor who bought Atossa Therapeutics shares in early January would have seen prices more than quadruple within 5 weeks. But that price point, $4.33, is almost exactly where ATOS shares sit in late July.
Investors who purchased shares during two distinct price peaks in early and late June could be significantly down. Prices were above $6 and $8 at those times, respectively.
That should give potential investors an idea of how volatile ATOS stock is. It’s fair to characterize an investment into Atossa Therapeutics as very risky. Its Covid-19 programs may never end up being commercialized. Yet, the company released positive breast cancer updates for Endoxifen in June. However, Endoxifen too may never end up being commercialized.
Financially, there’s not much to note regarding Atossa Therapeutics. The company recorded a net loss of $2.947 million in the first quarter of 2020. That figure increased modestly, to $3.538 million during the first quarter of 2021.
Bottom Line On ATOS Stock
The company raised $102.43 million in Q1 ‘21 through the issuance of common stock and the exercise of warrants. As a result it has a much stronger cash position. There are pros and cons to that, but the overall thrust is that an investment is a risky proposition.
Maybe it rises again on positive news regarding its two newest programs. Maybe a short squeeze is enacted. But the opposite is also true, and prices could fall as easily.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.