Atossa Genetics

Kurta Law is investigating brokers who made unsuitable recommendations of shares of Atossa Genetics to their clients. Under FINRA Rule 2111 and Regulation Best Interest, brokers must recommend investments tailored to an investor’s risk profile.

If you lost money on your investment in Atossa Genetics, reach out to a securities attorney. Investors may be required to seek resolution through FINRA arbitration rather than civil court, and a securities attorney can guide you through the process. Contact (877) 600-0098 or email info@kurtalawfirm.com today to speak to one of our attorneys at no cost.

What is Atossa Genetics?

According to the prospectus, Atossa Genetics (ATOS) is a clinical-stage pharmaceutical company that develops “novel therapeutics and delivery methods for the treatment of breast cancer” and other breast tissue conditions. Their primary project involves the use of intraductal microcatheters that deliver pharmaceuticals through the breast ducts.

Their secondary project is the development of oral endoxifen for patients who do not respond to the breast cancer treatment tamoxifen.

The company also owns, but does not currently market, medical devices for collecting and analyzing nipple aspirate fluid samples. These include their ForeCYTE Breast Aspirator, Mammary Aspiration Specimen Cytology Test (MASCT), and ForeCYTE Test.

Afimoxifene Topical Gel Lawsuit

Atossa Genetics also previously held an intellectual property license agreement with Besins Healthcare Luxembourg SARL for the worldwide exclusive rights to manufacture and sell Afimoxifene Topical Gel (AfTG) for the potential prevention and treatment of hyperplasia of the breast, a potential sign of cancer.

In a complaint filed in 2016, Atossa Genetics alleged that Besins Healthcare breached its contract as well as breached the implied covenant of good faith and fair dealing. Besins Healthcare made counterclaims asserting breach of contract, fraud, and negligent misrepresentation.

A settlement agreement required Atossa Genetics to relinquish all the rights granted by their license agreement and for Besins Healthcare to pay a “termination payment” of over $1.76 million.

Class Action Lawsuit

In 2017, Atossa Genetics was subject to a class action lawsuit alleging that they made materially false and misleading statements that their MASCT system and ForeCYTE Test had received FDA clearance. Atossa Genetics agreed to pay a settlement of $3.5 million.

What are the Risks Associated with Atossa Genetics?

As a pharmaceutical company still in the clinical stage, Atossa Genetics is a high-risk investment. The prospectus states that it has “accrued net losses annually since inception” and must still complete required studies of its products and receive FDA approval for their use.

Notably, every drug administered via the company’s flagship product, intraductal microcatheters, must individually receive FDA approval, which the prospectus notes will be “expensive” and “time-consuming.”

Competition

Atossa Genetics faces competition from other manufacturers of microcatheter devices, whose products may be more quickly adopted by practitioners, and with existing oral and intramuscular drug delivery methods.

Use of Proceeds

Atossa Genetics states that it may use the proceeds from its stock offering for “corporate purposes that may not increase our market value” and for purposes not considered at the time of writing.

Dilution and Loss of Stock Value

Due to the “substantially higher” value of this stock’s offering price versus its net tangible book value, investors in Atossa Genetics will suffer “immediate and substantial dilution” in the value of their shares upon purchase.

Significant sales of stock may also cause a decline in their share price. In 2016, Atossa Genetics entered into an agreement with Aspire Capital Fund to sell the fund up to $10 million in shares. This sale could happen as early as 45 days after the closing of the stock offering.

Aegis Capital Corp. Underwriting

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Do You Have Concerns About Your Shares of Atossa Genetics?

If you believe Atossa Genetics was too risky for your profile, consider contacting a Kurta Law securities attorney for a consultation. Our attorneys have 5-star reviews on Google and experience in getting fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.