Atossa Therapeutics President and CEO Dr. Steven C. Quay Issues Annual Letter to Stockholders Highlighting Key Recent Accomplishments and Strategy for 2022

SEATTLE, Jan. 27, 2022 (GLOBE NEWSWIRE) — Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical stage biopharmaceutical company seeking to develop innovative medicines in areas of significant unmet medical need in oncology and infectious diseases with a current focus on breast cancer and COVID-19, today issued the following letter from President and CEO Dr. Steven C. Quay to Atossa stockholders:

To Our Valued Stockholders:

The last two years have changed the face of public health and uncovered the urgency to develop products not only to prevent widely spread infectious diseases, but to treat them with the same level of focus and dedication applied to prevention. Despite the launch of highly efficacious vaccines during 2021, the toll that COVID-19 was taking on public health was not reduced. The rise of the Omicron variant toward the end of the year, and emerging long-term impact of long COVID, remain an important public health priority, and one that Atossa is dedicated to addressing. A key feature of the original SARS-CoV-2 virus, and that is retained in both the Delta and Omicron variants, is the furin cleavage site found on the Spike protein which facilitates viral infection. Our COVID-19 programs under development are designed to interact with this cleavage site so they are expected to be effective against both current and future COVID-19 variants that continue to contain a furin cleavage site.

In the meantime, we are also very excited about the ongoing development of our breast health programs with our proprietary drug Endoxifen, with one Phase 2 study underway and another expected to commence in the next quarter. We raised over $110 million in capital in 2021 and we are well positioned to execute on our programs in 2022.

For all of our programs, our longer-term development strategy is to complete clinical studies as rapidly as possible and then to partner with leading research institutions or pharmaceutical companies for later-stage development and commercialization. We are also actively evaluating potential acquisition/in-licensing opportunities of new programs to further drive stockholder value.

We are pleased to report the following highlights of our recent progress:

Endoxifen to Treat Breast Cancer in the Neoadjuvant Setting (the Window Between Diagnosis and Surgery).

In 2021, we reported final results from our Endoxifen Phase 2 clinical study in Australia showing the primary endpoint was met, a significant reduction in Ki-67, a common measure of breast cancer tumor cell activity, which was reduced from an average of 25.6% at screening to 6% on the day of surgery, a 65.1% reduction. All adverse events were mild and considered related to the study drug, and, based on these results, Endoxifen was considered safe and well tolerated in this study.

In December 2021, we completed a pre-investigational new drug (PIND) meeting with the FDA. The purpose of the meeting was to obtain input from the FDA on pre-clinical, clinical, manufacturing and regulatory matters in the U.S. for our proprietary Endoxifen to treat breast cancer. Based on part on the feedback from the FDA, we plan to open an IND for a multi-center Phase 2 study to further advance our Endoxifen in the neoadjuvant setting. We plan to focus our development on pre-menopausal women with estrogen receptor positive (ER+), human epidermal growth factor receptor 2 negative (HER2-) breast cancer for whom the current treatment options typically include drugs that suppress ovarian function and essentially force the patient into menopause.

During 2021 we continued to provide Endoxifen to a breast cancer patient in an FDA-approved, expanded access (or “compassionate use”) study. She has now received our oral Endoxifen for over three years without recurrence of breast cancer or significant side effects.

According to the American Cancer Society, 287,850 women are expected to be diagnosed with breast cancer in the U.S. in 2022, 47,550 of which will be under the age of 50. Approximately 80% of breast cancers are ER+.

Oral Endoxifen in Women with Mammographic Breast Density (MBD).

In December 2021, we began to enroll participants in a Phase 2 clinical study of oral Endoxifen in women with increased mammographic breast density (MBD). MBD is an emerging public health issue affecting more than 10 million women in the United States and many more worldwide. Studies conducted by others have shown that increased MBD reduces the ability of mammograms to detect cancer and increases the risk of developing breast cancer. Additional studies show a correlation between MBD and the incidence of breast cancer (the higher the MBD, the higher the incidence of breast cancer) and that reducing MBD can lead to a reduction in the incidence of breast cancer.

The study, known as the Karisma-Endoxifen study, is a Phase 2, randomized, double-blind, placebo-controlled, dose-response study of our proprietary Endoxifen in healthy pre-menopausal women with increased breast density. The primary objective of the study is to determine the dose-response relationship of daily oral Endoxifen on MBD reduction, with secondary endpoints to assess safety and tolerability, and an exploratory endpoint to assess durability of the MBD changes after the study drug has been discontinued. It is being conducted by South General Hospital in Stockholm and includes approximately 240 participants who will receive daily doses of oral Endoxifen or placebo for six months. The study is being led by principal investigator Per Hall, M.D., Ph.D., Head of the Department of Medical Epidemiology and Biostatistics at Karolinska Institutet.

AT-301 Nasal Spray for the Treatment of COVID-19.

AT-301 is a nasal spray we are developing for at-home treatment of patients diagnosed with COVID-19 who do not require hospitalization. During 2021, we completed our Phase 1 clinical study demonstrating safety and tolerability in 32 study participants. AT-301 was considered to be safe and well tolerated in healthy male and female participants in this study at two different dose levels over 14 days.

We received written feedback from the FDA and based in part on that feedback we have been conducting additional pre-clinical development before advancing to a Phase 2 study.

In addition to developing AT-301 nasal spray for COVID-19 patients recently diagnosed with the disease, we believe a significant opportunity exists for the nasal spray to potentially prevent COVID-19 in high-risk environments, such as people living with an infected patient, people living and working in healthcare facilities, emergency responders or teachers.

While the traditional vaccines have reduced the spread of COVID-19 infections, it is also clear to us that therapies such as AT-301 nasal spray will also play an important role, particularly as the COVID-19 virus variants have necessitated booster vaccines and potentially the development of vaccines that are variant-specific. Deadlier and/or more transmissible variants of COVID-19 continue to develop and reach the U.S. and in many other countries and questions continue to remain regarding how effective current and future vaccine’s may be against these and future variants. Additionally, none of the currently available vaccines are 100% effective, they may have side effects in selected populations and effectiveness is expected to diminish over time. For these reasons, we believe therapies like ours will provide valuable protection even as vaccines continue to be developed and deployed.

AT-H201 Inhalation Therapy for COVID-19. AT-H201 is a proprietary combination of two drugs previously approved by the FDA to treat other diseases. It is intended to improve compromised lung function for moderate to severely ill, hospitalized COVID-19 patients by inhalation. In May 2020, we completed in vitro testing of AT-H201 that showed that the components of AT-H201 inhibit SARS-CoV-2 infectivity of VERO cells, which is a standard cell type being used to study infectivity of the coronavirus. The AT-H201 components were found to be at least four times more potent than remdesivir and at least 20 times more potent than hydroxychloroquine.

In 2021 we initiated a Phase 1/2a placebo-controlled study in Australia that will enroll a total of 60 healthy participants and moderately-ill hospitalized COVID-19 patients. The study has 4 parts: a single ascending dose part which has now been completed, a multiple ascending dose part, a combination part in healthy individuals and a combination in COVID-19 infected patients. The study is being conducted with Avance Clinical Pty Ltd., a leading Australian clinical research organization.

Moving forward in 2022, we will continue to pursue our mission with vigor and dedication and we have set the following goals and milestones:

Endoxifen to Treat Breast Cancer in the Neoadjuvant Setting. Our current plan is to continue developing our proprietary Endoxifen for the treatment of pre-menopausal women with ER+/HER2- breast cancer in the neoadjuvant setting. Atossa plans to apply to the FDA for an IND to conduct a Phase 2 study in the U.S. to compare Endoxifen to standard of care. Atossa also plans to conduct a pharmacokinetic run-in study as a part of the Phase 2 study to further define potential dose levels. We plan to retain a leading U.S. research institution and CRO to work with us on the study. We look forward to opening an IND in the second quarter of 2022. We will then promptly commence a Phase 2 study in this neoadjuvant setting.

Endoxifen for Women with Increased Mammographic Breast Density. We will continue to enroll participants in our Endoxifen Phase 2 clinical study in Stockholm.

COVID-19 Therapies. We plan to complete enrollment in the second part of our ongoing AT-H201 Phase 1/2a clinical study by the end of the second quarter 2022. In 2022, we plan to continue the additional pre-clinical testing we are conducting on our nasal spray AT-301 and then to further characterize the API in AT-301 starting in the third quarter 2022.

On behalf of the board of directors, management and employees of Atossa Therapeutics, we thank you for your investment and continued support. The next period of Atossa’s history is just beginning and I cannot wait to report Atossa’s successes as we move forward.

Sincerely,

Steven C. Quay, MD, Ph.D.
President and Chief Executive Officer

About Atossa Therapeutics

Atossa Therapeutics, Inc. is a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in areas of significant unmet medical need in oncology and infectious diseases, with a current focus on breast cancer and COVID-19. For more information, please visit www.atossatherapeutics.com.

Forward-Looking Statements Disclaimer Statement

Forward-looking statements in this press release, which Atossa undertakes no obligation to update, are subject to risks and uncertainties that may cause actual results to differ materially from the anticipated or estimated future results, including, without limitation, statements regarding the satisfaction of closing conditions relating to the offering and the anticipated use of proceeds from the offering, the risks and uncertainties associated with any variation between interim and final clinical results, actions and inactions by the FDA, the outcome or timing of regulatory approvals needed by Atossa including those needed to commence studies of AT-H201, AT-301 and Endoxifen, lower than anticipated rate of patient enrollment, estimated market size of drugs under development, the safety and efficacy of Atossa’s products, performance of clinical research organizations and investigators, obstacles resulting from proprietary rights held by others such as patent rights, whether reduction in Ki-67 or any other result from a neoadjuvant study is an approvable endpoint for oral Endoxifen, and other risks detailed from time to time in Atossa’s filings with the Securities and Exchange Commission, including without limitation its periodic reports on Form 10-K and 10-Q, each as amended and supplemented from time to time.

Company Contact:
Atossa Therapeutics, Inc.
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Office: 866 893-4927
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