All right. Good morning, everyone, and welcome today to our conference. My name is Stefan Guillaume. It is my pleasure to welcome Dr. Steven Quay, Chairman and CEO of Atossa Therapeutics, ticker ATOS. We will have a total of 30 minutes, including Q&A at the end of the presentation. With that, I'll turn it over to you, Dr. Quay.
Thank you, Stefan. It's great to be here this morning. This is the investor deck for Atossa Therapeutics. I'll remind you that I'll be making some forward-looking statements today, and so you should read all of our filings with EDGAR before making any investment decisions. So what is the unmet need in breast cancer? I think we all know it, but there are some numbers that are worth going through to articulate it better. 50% of all women have dense breasts, and those are the women in whom breast cancer is going to occur. One out of eight women will experience breast cancer during their life, and what that translates to is about 310,000 women diagnosed every year in the United States.
Now, 80% of those are positive, for which endoxifen is an effective treatment, and another 10% are positive for something called PKC beta, which is another cancer driver for which endoxifen is uniquely positioned to treat. So it's really a double agent, if you could call it that, both on the and the PKC beta side. Now, Atossa Therapeutics is positioned in all clinical stages of breast cancer. So in the prevention setting, we have two clinical trials, one looking at the reduction of mammographic breast density, which is a surrogate for increased risks in the future, and the other is ductal carcinoma in situ, or DCIS, which is also not cancer, but is the last stage before cancer occurs. And we're looking at the role of endoxifen in that setting to prevent future cancer.
The time between the diagnosis and then definitive surgery, radiation, and other treatments, if they're going to have them, is called the neoadjuvant time or window of opportunity. We have a number of trials in this area because (Z)-endoxifen uniquely, and for the first time in positive breast cancers, can work so quickly that you can see changes in the weeks or maybe a couple of months that occur in this neoadjuvant window. So these trials are also very effective in demonstrating efficacy and safety for big pharma partners or for other individuals because you have diagnostic tissue information at the time of diagnosis, and then when there's the definitive treatment, you can see, is the cancer completely killed and other aspects of it.
Then finally, in the adjuvant setting, we have done patients in compassionate use settings for treating up to five years with no recurrence of their cancers. So those are the three phases, and we are in all phases. Now, as I indicated earlier, endoxifen is a dual agent, both on the estrogen receptor in what's called a selective estrogen receptor modulator, or SERM, as well as PKC beta. So it is the most potent inhibitor of the estrogen receptor. So that's a great place to start with. And drugs in this space have been effective for decades with respect to breast cancer. So it's de-risked from a clinical point of view, and when you're best in class, I think it says a lot about it.
With respect to its activity at PKC beta, this is a newer finding, and we're just beginning to explore that with our high dose levels in the EVANGELINE trial, which I'll speak about a little bit later. There is a strong safety and tolerability profile. Over 400 patients have had (Z)-endoxifen at various stages in their treatment. And so we know very clearly that the side effects of this are surprisingly good compared to, again, other SERMs in the class. And we have a strong IP portfolio with patents in the area of the making of the drug and the drug itself and then the formulation of the drug. I've invented seven FDA-approved drugs, have over 90 U.S. patents in that space, have defended five litigations against people who tried to infringe my patent estate.
So here at Atossa, we have a very strong estate, which will provide a lot of benefit to potential partners and to our investors. We also have preclinical programs at Weill Cornell, and I'm here in sunny New York City, at least for the morning here, because I visited Weill Cornell yesterday for some all-day meetings on the great progress we're making at those. We're looking at two important unmet needs in breast cancer. One, triple-negative. Can endoxifen, through its mechanism of action in the PKC beta, have activity in triple-negative breast cancer, which is not well treated or treated harshly with chemotherapy? And the other is whether it can be synergistic with one of the most exciting classes of breast cancer drugs, ADCs. These drugs are getting a lot of attention because they are targeted for breast cancer.
They're having activities that have never been seen before, but they still need a boost from the activities that (Z)-endoxifen can provide. So in terms of our development pipeline, it is both deep and diverse. We have five phase II programs shown here: mammographic breast density and its reduction, the ductal carcinoma in situ study for prevention, those two for prevention, and three in treatment: the neoadjuvant positive breast cancers, neoadjuvant premenopausal positive breast cancers, and then the neoadjuvant combination with abemaciclib, Lilly's CDK4/6 inhibitor, a multi-billion dollar drug in breast cancer. What is mammographic breast density and what does it mean? So on this slide, I'm showing you the four levels of density that can be seen by mammography, from the lowest on the left called BI-RADS 1 to the highest density on the right, BI-RADS 4.
You see the major difference is in the whiteness of the background of the breast. Since cancers are also white, this presents a challenge for finding cancers in a high-density breast. So that's one of the things that we can address with endoxifen if we can lower that background density. But the other is the density itself is a signal that biologically this woman is at higher risk of getting breast cancer. So that's the biomarker, as it were, that we're using for the prevention trial. So the KARISMA endoxifen study is looking to see if we can reduce mammographic breast density, p hase II study. A ll women have been enrolled now. All women have had drug. The last woman has stopped taking her last dose of drug.
So we're in a process called the data lock phase, where the data is being scrubbed and looked at and qualified to go into what's called a data lock phase. When that happens, all the data from the clinical trial is in a database. The database can no longer be modified, and you begin to do the analysis. So over the next three months-six months, this is what we are going to be doing. We're working very hard on this and expect to report results in the very near future. Results will be, does endoxifen at 1 mg or 2 mg reduce density greater than placebo? And I have a lot of confidence in where this will come down, although I've obviously not seen any data yet.
Next trial I want to talk about is EVANGELINE, which is a neoadjuvant trial to test whether ovarian function suppression can be eliminated. Now, this is sort of down in the weeds on breast cancer treatment, but a premenopausal woman with breast cancer has functional ovaries. So if you try to knock out her estrogen receptor with some drug, her ovaries are going to sense a lack of estrogen effectively and are going to overproduce estrogen and defeat your treatment. So ovarian function suppression is what you have to do in these women in the past. This is a very harsh treatment with respect to quality of life. A lot of women would almost stop treatment rather than continue with ovarian function suppression.
So because (Z)-endoxifen is the best-in-class blocker of estrogen, we're testing the hypothesis, could (Z)-endoxifen be so good that even if the ovaries make additional estrogen in its presence, it can still suppress cancer growth? This would be very exciting for the women. Dr. Esserman, leading cancer doctor and one of our collaborators, says, you know, it would be a game changer if we could get rid of ovarian function suppression. So that's what the trial is. And again, we're going to be having readouts in the second half of this year. Now, in the EVANGELINE trial, we have what are called PK cohorts. So we want to find the dose that will get us the good inhibition of the PKC beta pathway. So we did a 40 mg PK group. We're now, and that's been completely enrolled and completely studied.
We're now doing an 80 mg, which is enrolling as we speak here. But the 40 mg cohort, which is a dose that clearly gets the estrogen receptor but really doesn't reach PKC beta levels, had remarkable activity. There was a 56% reduction in Ki-67 in just 28 days. And when you looked out six months, there was a 92% Ki-67 reduction. This is literally game changing. And the real question is, what will 80 mg show us? Will it get that last 8%? We're hopeful that it will. Now, with respect to tumor size, which is a clinical endpoint that clinicians watch very carefully, by MRI, there was a 37% reduction in tumor size, again, in this very short time frame. So the 40 mg cohort was better than expected, very exciting, and we're looking forward to the 80 mg cohort.
Now, the other trial that we're excited about is the combination with Lilly's abemaciclib. So there's a class of women who are premenopausal, typically. They have very high Ki-67s. They may have cancer even in their lymph nodes at the time of initial diagnosis. And these women are very challenging. In the past, we've sort of hit them with the elephant guns of chemotherapy. But the latest standard of care is an estrogen treatment plus what's called a CDK4/6 inhibitor. And we're very gratified that Lilly has been willing to provide their drug in this trial that's being co-sponsored, where we're combining endoxifen, best-in-class hormone treatment, with this drug, again, in a neoadjuvant setting. And the beauty here is that we'll have the tumor activity at baseline, and then we'll have it when it's removed.
And if we show in these very high-risk women, you know, complete killing of the tumor, that would be sort of an unprecedented finding. So the near-term catalysts that we have are quite substantial. They include the mammographic breast density readout, the I-SPY 10 mg cohort readout, EVANGELINE 80 mg fully enrolled in the treatment arm initiated following that. DCIS enrollment will continue over the fall, and the combination therapy should begin enrollment. Some key metrics that we have that are really important. So as of March 31st, we had $84 million on our balance sheet, which represents $3 million of, excuse me, which represents three years of working capital for all of these great programs that we're talking about. And so we have no intention to sell equity at these current price levels. We think the stock is greatly undervalued.
This is an important message I want to give to our shareholders. We, of course, have zero debt. We think debt is not appropriate for a company of our size. As of June 1st, we had a stock price of $1.32, a $165 million market cap valuation on Nasdaq. With that, I'll ask if there are any questions for me.
Thank you, Dr. Quay. We do have a few questions. First question is, one of the proposals in your proxy is to increase the number of authorized shares. Can you please provide additional color around this request and what do you plan to do with the shares?
Yeah, very good question. As I've already mentioned, we have a strong balance sheet. Reminder, it's $84 million as of March 31st, which represents about three years of cash.
We have a very detailed process, and we have been doing this for a few decades with our board, where we have detailed budgets for one year and then projections out three years. I can say with high confidence, our current balance sheet will take us out three years. There won't be much left on the balance sheet at three years, but we certainly have a lot of cash for this year and into next year. We have no intention of raising cash at these levels. On the other hand, we have not added shares to our treasury since 2018 or over six years. The purpose of treasury shares is multiple, and it's not just selling stock to investors for additional treasury cash.
For example, if we wanted to do a deal with a big pharma and they wanted to make an investment in Atossa, a minority investment in Atossa, we would have to sell them shares, usually at a premium to the market price, to do that. If I saw something out there that I thought was complementary to what we're doing and was an asset that we wanted to acquire, very often the best way to do that is to give the acquiring entity, whether it's a university or a smaller company, to give them equity in exchange for ownership position in their asset. So these are two non-dilutive reasons why, or non-equity raising reasons why we need to have shares in our treasury. And I can only say it so many times, but we have a great balance sheet. It has three years of cash.
We are not going to raise money at these levels. Are there any other questions, Stefan? You're on mute.
My apologies. Another question that I have is, you recently announced a supportive study in Sweden called the SMART study. How does this trial fit in with Atossa's development plans?
Yeah, thank you. This is perhaps one of the most exciting trials I've ever been involved with, and I'm really pleased to be involved with it. It's the largest prospective study of women to see if we can identify what are called interval cancers, cancers between two mammograms, which are typically two years apart, whether we can identify women who will get interval cancers and whether we can then intervene by giving them endoxifen and preventing a cancer at that next mammogram.
So the first phase of this study is to validate the artificial intelligence-based algorithm that was designed to predict this. So basically, what was done was 70,000 women's mammograms were looked at by an artificial intelligence algorithm computer. And of those 70,000, there were 63,000 who did not have a cancer occurring at the next two-year mammogram. And then about 6,500-7,000 who did have a cancer. And basically, the ChatGPT version of this, it's not that, but I mean, the artificial intelligence was asked, what do you see in the mammograms that differentiates these two? And radiologists are pretty good, but unfortunately, artificial intelligence in this case was even better.
The specificity and sensitivity around this were quite high in the areas of 0.85 ROC, the fancy words for area under the curve, which is on the order of sort of some of the most predictive tests, screening tests in all of medicine. So the validation process is to repeat this teaching exercise in a study of 70,000 women over two years. Now, finding the women who are going to have cancer in the next two years is the step one of then, can we give those women endoxifen for six months, a year, or two years? That hasn't been determined yet in a second phase and prevent that cancer at two years. That is, we believe, a regulatory approvable endpoint. So down the road, my aspiration would be to have endoxifen be available for women. So they don't think about their breast health. They're 40 years old.
They get their first mammogram. Doctor says, the good news is you do not have cancer. The kind of not-so-good news is you have very high density, and that's going to be 10 million women a year in the U.S. You have very high density, but there's this recently approved FDA drug in the future that can lower your density and was shown to prevent cancers between now and your next mammogram two years from now. So let's try this drug. The side effect profile, what we've seen so far in the trials that we've done is the side effect profile is very close to placebo. We'll unblind that data in the future, but that is the aspiration of this, is to really be able to prevent that cancer at the next mammogram. And you just roll that forward and you've prevented cancer for the lifetime of the woman.
So this is about, I've invented seven drugs that have helped 80 million people, but this could be the most important thing I've done in my career in biotech pharma.
Thank you. And can you please provide a bit of additional background on the Ins ilico work you did to assess if endoxifen might work in other tumors and in combinations?
Yeah. So this is really important. So to really understand what the challenge is for cancer doctors to discover new drugs is the cell is controlled by about a 15,000-20,000 protein network that are being made and degraded on millisecond timeframe. So when you drop a drug into that 20,000 protein network, it has effects on, let's say, the target, like the estrogen receptor, and then it has a ripple effect into that network that is very complex, obviously.
It's complex in both number, 20,000 transcripts, and time. So it has always been beyond the computational power of the human brain or a collection of the human brains. So what artificial intelligence can do is can take and simultaneously look at the effect of a drug or a combination of drug on these 20,000 networks, and then you can see where it's having an effect, and then you can identify, well, what pathway is that? And so what is that telling me about what the cell is going to do in response to that drug or that combination of drug? So we started this about six months ago with a company called Insilico Medicine. They are the number one artificial intelligence company in the world.
The first remarkable discovery was that in monotherapy, endoxifen in breast cancer, so breast cancer is not the most affected cancer by endoxifen in this Ins ilico modeling. It's number 4. So what that means is that there are three cancers for which endoxifen is predicted to have activity, which are predicted to be at a higher activity than for breast cancer. So what you do with that information is you do, as quickly as possible, you do validating studies in cell lines or in animals to tease that out so that I can go to the FDA or a regulatory authority and I can say, "Look, the computers predict endoxifen is going to work in cancer XYZ." The animal studies and the tissue culture studies support that. And we would like to now go into a clinical trial in these new cancers as monotherapy.
So that's exciting outcomes number one. Exciting outcome number two was the prediction of combinations of endoxifen with other drugs in cancer. And this is where the synergistic effect with Lilly's abemaciclib came flying out, like flashing lights for us, saying that, "Look, both of these drugs are really good independently, but when you drop them on the network together, they independently and synergistically," synergy means 1 + 1 equals three, four , five, six. "They synergistically inhibit the cell, causing the cell to undergo what's called programmed cell death." So our cells are designed not just to die, just fall over like in the movies, but to undergo a programmed cell death process so that they can shut down things. They don't cause problems for inflammation in the neighborhood, those kinds of activities.
So the two findings from Insilico was monotherapy with endoxifen with other cancers and breast cancers that seem to be more predictive, even better, in combinations with drugs like ADCs, like the CDK4/6 inhibitors that are hugely promising. And so to be fully disclosed, there's like a third dimension, which is actually there are conditions outside of cancer for which endoxifen is highly suggestive to be effective. So this three-dimensional concept for endoxifen of monotherapy in breast cancer, monotherapy in other cancers, and combination in breast cancer and perhaps other cancers is extremely exciting. And then the third dimension, treatments outside of cancer. And we're going to be doing, I want to be very deliberate, and I don't want to be very hyping around this.
So I'm going to use this Ins ilico data to get real data in cells or animals and then use that to go to regulators and use that to tell my shareholders, "Here is why we're going into this new space. Here is the data from computers. Here's the data from tissue culture. Here's the data from animals testing that supports why this will work." And by the way, of course, this will be cleared by the FDA for clinical trials and those sorts of things. So cancer is a 24/7, seven-days-a-week process. Atossa Therapeutics has investigators in basically the entire world. So from Asia to Europe to the U.S., we are working 24/7 to prevent and treat breast cancer, to prevent and treat other cancers, to prevent and treat other diseases for which endoxifen is indicated. We've got a strong balance sheet, three years of cash.
We really appreciate you participating with this. Atossa Therapeutics, its investors, its employees, we're going to be able to tell our grandchildren about the fact that this was a company that was able to change the face of breast cancer and other diseases, and I was part of it. So really appreciate your time. Are there any other questions, Stefan? I think we actually do have a few more minutes.
Sure. One of the questions that we have is, will you need to conduct a phase III trial? How many patients do you think will be required, and how long will it take?
So that's an excellent question, but it's also a very complicated question because if you have trials in prevention, if you have trials in neoadjuvant, if you have trials in the adjuvant setting, if you have combinations, metastatic, the question is, which of those trials is going to be your first registrational trial to get you to the market quickest? We are in a deep evaluation with some world's expert consultants on basically, we asked them, the question is, "Here's what endoxifen can do, what you've seen you can do. What trial is the fastest that could get us an approval, get us on the market?" Because one of the remarkable things about oncologists and oncology is that they will take a marketed drug for a particular indication, and they will be willing, with their expertise and with other clinical trials, expand off-label use in oncology fairly rapidly.
And the FDA supports that because, of course, cancer is an unmet need because so many people still continue to die from it. So it's a complex question, but you should know from when I put my business hat and take my medical hat off, I am looking at what is the fastest route to approval for endoxifen to get it on the market, gives us revenue, gives us access to the oncologist to use it off-label. And then we'll continue to develop regulated FDA-approved trials, but being a company that's on the market with a drug and having revenue is a whole different class for Atossa, and that's our immediate aspiration.
Thank you. And another question that we have is, are you looking to partner in the future, and what would be the timeline?
So in cancer treatment and maybe even neoadjuvant treatment, one of the interesting things for small companies in oncology is you can market your drugs themselves. You can mount a small salesforce. You're dealing with some of the most sophisticated physicians, oncologists. So you give them the data, and they can run with it. When you get into the space of preventing breast cancer, either by treating breast density or DCIS, you're talking about, well, I've already given the number, 10 million women have high density and therefore are at risk of getting breast cancer. Numbers like that, where you want to treat a woman to lower her density by mammography to prevent cancer before the next mammogram, those are numbers that require a big pharma partner.
And so we would be foolish, and we would not be doing our shareholders' best if we tried to get into those markets ourselves. So it kind of bifurcates along in time, but we are always open to partnering conversations, of course. We're not on a mission to market this ourselves. We're on a mission to get this into the hands of doctors and patients as quickly as possible. And if a combination drug, such as endoxifen plus a CDK4/6, you make a combination pill, you get a new patent on that, if that's the best path forward, that's the one we'll take.
I think we have time for one more question, if you don't mind.
I don't.
Okay. What is the typical reimbursement for these types of drugs?
Yeah.
So oral medications in breast cancer and other cancers typically are running from $10,000 a month, maybe to even $100,000 a month, depending on the drug and the space they're in. We're very premature to be setting any sort of pricing guidance, excuse me, around our drug. But that's what you'll see for the CDK4/6 inhibitors, for example, or for the ADCs are in that kind of price range of $10,000-$100,000 a month per patient, of course.
All right. Thank you. We are at the end of a lot of time. So if you have any closing remarks before we end?
Again, I just want to reiterate, I thank you for your support of Atossa Therapeutics. I thank you for going along this journey with us. This is the most exciting time for Atossa the next six months, the next year or so.
We don't need to raise cash. We've got a strong balance sheet. So I really thank you for your support.
All right. Thank you so much, Dr. Quay, for joining us. And thank you, everybody, for watching and for your questions. Guys, have a great day.