Executive Summary

Q2 2025 delivered clinical and regulatory momentum (positive FDA feedback clearing the path to an IND for (Z)-endoxifen in ER+/HER2- metastatic breast cancer in Q4 2025) while expenses rose with trial activity; EPS was ($0.07), modestly below S&P consensus of ($0.057)* as R&D spend accelerated .
Balance sheet remained solid with $57.9M cash and equivalents at June 30, 2025; management reiterated its choice not to use the ATM at recent share prices, citing undervaluation .
The I‑SPY 2 low‑dose monotherapy readout reinforced biologic activity (rapid Ki‑67 suppression, substantial MRI tumor shrinkage) with favorable safety; FDA indicated no additional general toxicity or neurotoxicity studies are required, validating the development path .
Near‑term catalysts: IND filing (Q4 2025), disclosure of dose‑ranging trial design (including combination backbone), and continued Phase 2 readouts; subsequently, Atossa named PSI as CRO to operationalize the metastatic dose‑ranging study (post‑quarter) .

What Went Well and What Went Wrong

What Went Well

Positive FDA feedback de‑risked the path to IND: “no additional general toxicity or neurotoxicity studies are required” and cardiac safety monitoring for monotherapy deemed sufficient; IND targeted for Q4 2025 .
Biologic activity reinforced: In I‑SPY 2, median Ki‑67 fell from 10.5% to 5% by Week 3 (65% ≤10%); MRI functional tumor volume fell 77.7%, with favorable safety (mostly Grade 1 AEs) .
Capital discipline and signaling: “We… have deliberately chosen not to utilize our ATM facility at recent share price levels, which we believe significantly undervalue the true potential of our Company,” said CEO Dr. Steven Quay .

What Went Wrong

EPS missed consensus as clinical spend ramped: Q2 EPS ($0.07) vs S&P Global consensus ($0.057)*; operating expenses rose 27% YoY to $9.0M on higher clinical/non‑clinical trial costs and R&D headcount/consulting .
Interest income declined ($0.6M vs $1.1M YoY) on lower average money market balances, modestly reducing non‑operating offset to operating losses .
Patent challenges create overhang: two patents face post‑grant challenges, though management expects to defend; the majority of the portfolio (>200 claims across multiple U.S. patents) is unaffected .

Financial Results

Income statement snapshot (USD Millions, except per‑share)

Metric	Q2 2024	Q1 2025	Q2 2025
R&D Expense	$3.55	$4.16	$5.50
G&A Expense	$3.55	$3.26	$3.54
Total Operating Expenses	$7.11	$7.41	$9.04
Operating Loss	($7.11)	($7.41)	($9.04)
Interest Income	$1.07	$0.72	$0.65
Net Loss	($6.05)	($6.72)	($8.42)
Diluted EPS	($0.05)	($0.05)	($0.07)

Balance sheet (USD Millions)

Metric	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025
Cash & Cash Equivalents	$71.08	$65.12	$57.86
Total Assets	$76.44	$70.75	$64.52
Total Liabilities	$4.97	$5.43	$6.82
Stockholders’ Equity	$71.48	$65.32	$57.70

KPIs and clinical activity

KPI	Q2 2024	Q1 2025	Q2 2025
I‑SPY 2 (10 mg) median Ki‑67 at Week 3	—	—	5% (from 10.5% baseline)
I‑SPY 2 median MRI FTV reduction	—	—	77.7% to surgery
I‑SPY 2 combo arm (40 mg + abemaciclib) enrollment	—	—	41 pts initiated as of Jul 29, 2025

Estimates vs actuals (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual
EPS	($0.0567)*	($0.07)
Revenue	$0.00*	N/A (no commercial revenue reported)

*Values retrieved from S&P Global.

Segment breakdown: Not applicable (pre‑revenue clinical‑stage company) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
(Z)-endoxifen IND (mBC) timing	2025	Management outlined 4–6 months of KOL/FDA work beginning Mar 25, 2025 (pre‑IND prep)	Targeting IND submission in Q4 2025	Established specific timeline
Dose‑ranging study design disclosure	2025	Not specified	Will disclose design incl. patient selection and combination backbone pre‑IND	Clarified next steps
Combination therapy path	2025	Not specified	FDA supports combo rationale (CDK4/6, PI3K, mTOR inhibitors, capecitabine)	Expanded optionality
Nonclinical requirements	2025	Not specified	No additional general toxicity or neurotoxicity studies required	De‑risked pre‑IND
Cardiac safety monitoring (monotherapy)	2025	Not specified	FDA confirmed protocol is sufficient	De‑risked safety plan
Capital strategy (ATM)	2025	ATM facility established in 2024	Intentionally not utilizing ATM at recent prices	Signaled discipline
CRO selection for dose‑ranging study	2025	“Announcement of CRO” forthcoming	PSI selected as CRO (Aug 20, 2025; post‑quarter)	Achieved post‑quarter

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 = Q4 2024 call; Q-1 = Q1 2025)	Current Period (Q2 2025)	Trend
Regulatory path/IND	Q4 call: focus on metastatic path; KOL consults then FDA over 4–6 months	FDA feedback positive; IND targeted Q4 2025	Improving visibility
Clinical efficacy/biomarkers	Q4 call: strong Ki‑67 responses in EVANGELINE; dose optimization to 40 mg cohorts	I‑SPY 2 (10 mg) showed rapid Ki‑67 suppression and 77.7% MRI FTV reduction; favorable safety	Reinforced biologic activity
Combination therapy strategy	Q4 call: positioned as backbone; potential to address resistance	FDA supports combination approach with SOC agents	De‑risked combinations
Global expansion	Q4 call: 2025 U.S. FDA‑focused; ex‑U.S. likely next year	Focus remains on U.S. IND and dose‑ranging study	Consistent
IP and legal	Q4 filings: robust estate; ongoing defenses	Two post‑grant challenges; majority IP unaffected; >200 claims across issued U.S. patents	Manageable overhang
Capital strategy	Q4 call: strong cash, disciplined spend	$57.9M cash; no ATM usage at recent prices	Conservative stance

Management Commentary

“With a strong balance sheet, we believe we are well‑positioned to execute on our planned upcoming IND submission and advance our metastatic clinical program toward key value‑creating milestones… we have deliberately chosen not to utilize our ATM facility at recent share price levels” — Dr. Steven Quay, CEO .
“The FDA agreed that existing clinical and nonclinical data are sufficient to initiate the monotherapy arm… and… combination therapy arms… No additional general toxicity or neurotoxicity studies are required… cardiac safety assessment monitoring… is sufficient for the monotherapy portion of the trial” .
“These results show that even at a low capsule strength (Z)‑endoxifen is bioactive, producing rapid Ki‑67 suppression and meaningful tumor shrinkage, while remaining highly tolerable” — Dr. Steven Quay on I‑SPY 2 .

Q&A Highlights

Metastatic study timing and phase: Management planned KOL input and FDA discussions over 4–6 months post‑Mar 25, 2025; specifics were premature at that time (indicative of a methodical path toward IND and study initiation) .
EVANGELINE updates and endpoints: Updates to be shared at upcoming meetings; 4‑week Ki‑67 endpoint used in combo arm to obtain early readouts; 24‑week Ki‑67 for monotherapy cohort .
Global approach: Focus first on U.S. FDA; ex‑U.S. engagement expected after U.S. trial design is finalized, likely the following year .
Note: No Q2 2025 earnings call transcript was available; highlights reflect the most recent call (Q4 2024) and Q1/Q2 press disclosures .

Estimates Context

Q2 2025 EPS was ($0.07) vs S&P Global consensus of ($0.0567)* — a modest miss driven by higher R&D activity (clinical and non‑clinical trials, headcount, consulting) and lower interest income on reduced money market balances .
Revenue consensus was $0.00*, consistent with Atossa’s pre‑revenue status; no commercial revenue reported in Q1, and Q2 reporting focused on operating expenses and losses .
Given Q2’s 55% YoY rise in R&D (trial costs and development) and an IND plus trial start‑up ahead, sell‑side EPS/loss assumptions may need to reflect elevated near‑term R&D run‑rate into 2H25 .