Is Atossa Genetics a Winner in the Pharmaceuticals Industry?
June 11, 2021 5 min read  This story originally appeared on StockNews    Atossa Genetics Inc. (ATOS) is a clinical-stage biopharmaceutical company that discovers and develops innovative medicines in the areas of oncology and infectious diseases. The company is currently trying to expand its pipeline with the development of AT-301, a proprietary drug candidate administered by nasal spray for patients diagnosed with COVID-19, and AT-H201, a therapy to improve lung function in COVID-19 patients. ATOS shares have surged 28% over the past year due to its continued progress in key drug development programs. However, the stock is currently trading 40.3% below its all-time high of $6.82. And although the company has released final data from its Phase 2 clinical study of breast cancer oral drug candidate Endoxifen, there is little clarity about when the company will apply for FDA approval to commence clinical testing in the United States. And while its drug candidates look promising, increased competition in the COVID-19 drug development field could make it difficult for the company to gain significantly from the commercialization of its drugs. Click here to checkout our Healthcare Sector Report for 2021  So. here is what we think could influence ATOS performance in the near term:  Uncertain Growth Prospects  ATOS recently delivered the final data from its Phase 2 clinical study of oral Endoxifen for breast cancer. The company has initiated the formal non-clinical toxicology program needed to market the therapy, and it plans to seek FDA approval to conduct a clinical study. However, currently, there are several FDA-approved drugs for treating breast cancer. Since the market is already crowded with competitors, ATOS, as a clinical-stage company could face a wave of competition even after it receives FDA approval. Also, the companys COVID-19 drug candidatesAT-H201 and AT-301are still in their Phase 1 studies. This suggests that it will be some time before the candidates receive FDA approval and generate revenues for ATOS. Lackluster Financials  In the first quarter, ended March 31, 2021, ATOS total operating expenses increased 20.2% year-over-year to $3.53 million. Its net loss came in at $3.54 million for the quarter, compared to a $2.95 million net loss in the first quarter of 2020. Also, it reported a $0.04 loss per share. ATOS does not have any products that have been approved for commercial sale, and hence it does not generate any revenues. The companys trailing-12-month ROE, ROTC and ROA came in at a negative 30.7%, 12.6% and 13.1%, respectively. Moreover, its trailing-12-month cash from operations came in at negative $12.75 million. Mixed Analyst Estimates  The consensus EPS estimate for the current quarter, ending June 2021, indicates a 93% rise year-over-year. However, the companys EPS is expected to decline 7.1% from its year-ago value in 2022. In this regard, ATOS does not have an impressive earnings surprise history. The stock failed to beat consensus EPS estimates three of the trailing four quarters. Consensus Price Target Indicates Potential Upside  Two Wall Street analysts have provided ratings for the stock, and both have rated it Buy. Currently trading at $4.07, analysts expect the stock to hit $6.5 in the near term, indicating a 59.7% potential upside. POWR Ratings Indicate Uncertain Prospects  ATOS has an overall C rating, which translates to Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. Our proprietary rating system also evaluates each stock based on eight different categories. ATOS has a C grade for Quality. This justifies the stocks mixed profitability. It also has a C grade for Sentiment. The company has a D Stability grade, indicating that it is more volatile than its peers. Beyond the grades that weve highlighted, one can check out additional ATOS ratings for Momentum, Growth and Value here. ATOS is ranked #204 of 487 stocks in the F-rated Biotech industry. Click here to view the top-rated stocks in the Biotech industry. Bottom Line  ATOS has gained 28% over the past year. While the companys innovative drug development programs have driven its stock price so far this year, given that the global pharmaceutical market is highly competitive, ATOS could face uncertainties in its growth path. Furthermore, it could be quite some time before its COVID-19 and breast cancer drug candidates prove sufficiently safe and effective to secure FDA approval, which it will need before it can commercialize the drugs and generate revenues. So, we think investors should wait for better entry points before investing in the stock. Click here to checkout our Healthcare Sector Report for 2021  ATOS shares rose $0.08 (+1.97%) in premarket trading Friday. Year-to-date, ATOS has gained 333.68%, versus a 13.80% rise in the benchmark S&P 500 index during the same period. About the Author: Imon Ghosh  Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More... The postappeared first on