Rodman & Renshaw initiated coverage of Atossa Therapeutics (NASDAQ: ATOS) with a “buy” rating and price target of $12.00. The stock closed at $2.28 on July 6.
Atossa, a clinical-stage biopharmaceutical company developing novel therapies in oncology and other areas of high unmet clinical need, is built around a single, proprietary molecule: oral (Z)-endoxifen, the most potent active metabolite of tamoxifen. The compound operates as a dual‑mechanism selective estrogen receptor modulator and degrader (SERM/SERD), delivering substantially greater estrogen receptor antagonism than tamoxifen and acting independently of CYP2D6 metabolic activation, which drives variable tamoxifen exposure in poor and intermediate metabolizers. This pharmacologic profile has shown early clinical relevance in the I-SPY 2 Endocrine Optimization Pilot (I-SPY 2 EOP), where low-dose monotherapy was associated with a median MRI functional tumor volume reduction of approximately 72% from baseline to surgery, with 95% of patients completing at least 75% of planned dosing at the 10 mg monotherapy dose.
The research initiation was, “based on the company’s ownership of a uniquely versatile, next-generation estrogen receptor modulator/degrader with validated clinical activity across breast cancer, and emerging preclinical and class-based proof-of-concept in two high-value rare disease indications that carry significant regulatory incentives,” writes Rodman & Renshaw analyst Michael G. King, Jr.
“We derive our price target through a discounted cash flow (DCF) analysis, anchoring risk-adjusted net present values across three core programs: Z-Endoxifen in Breast Cancer, McCune-Albright Syndrome (MAS), and Duchenne Muscular Dystrophy (DMD). All programs are discounted at a 15% WACC over a 15-year NPV horizon, with a 0.5% perpetual growth rate applied to terminal value calculations. Free cash flows are built from consolidated product revenues (including one PRV monetization), less cost of goods, research and development, general and administrative expenses, taxes, modest capital expenditures, and incremental working capital. The explicit forecast period generates an NPV of approximately $40 million, and the terminal value contributes a further $82 million, which together yield a pre-haircut enterprise value of roughly $122 million. Applying a 25% execution haircut at the enterprise level results in a DCF-implied firm value of approximately $91 million, which, after adding an estimated $32 million of cash and investments and no financial debt, equates to an implied equity value of ~$123 million or ~$12 per fully diluted share (10 million shares).”
