ATOS Atossa genetics is a biotech medical device company. Their product is a device that tests for early signs of cancer in women and they are trying to create a new paradigm of testing that replaces the current standard 38 million mammograms done each year. From what I have learned so far mammograms are less than an ideal solution for detecting b-cancer in women.
Atossa wants their ForeCyte test to be done earlier on women so that a plan of care can be implemented and actually reduce b-cancer rates and increase survival rates. The company claims that its ForeCyte test can detect early signs of b-cancer with only 10 abnormal cells whereas a mammogram needs already 100,000,000 cancerous cells before it shows up on the radar screen.
I am still doing due diligence on ATOS but so far I like what I am seeing. I am trying to determine if ATOS is suitable as a long term position trade (6 months to 3 years).
There are several reasons why I see ATOS as generally favorable:
- It is trading pretty close to what the original IPO price was 8 months ago.
- It is hidden from the radar screen of big institutional investors (until now)
- They have a 15 million funding agreement with Aspire Capital for near term capital needs.
- They have 2 new tests that should be coming out during the second half of this year.
- The addressable market size and potential is over 100 Billion Dollars (in America). There appears to be huge growth potential.
- Since they are a medical device company and not a biotech drug company, no need to go through Phase I, II and III drug trials.
- Their ForeCyte test is FDA approved.
- They have a large protected patent portfolio
- ‘Paradigm shift’ stocks tend to make huge long term price runs if their products gain traction and widespread awareness.
And here are the technical reasons why I see ATOS as favorable right now:
- ATOS appears to be have formed over the last 4 to 7 weeks an inverse head and shoulders bottom formation.
- ATOS lockup expiration in May 2013 is water under the bridge at this point and I think has been mostly absorbed.
- ATOS has a nice wide definable trading range.
- ATOS is showing two bullish butterfly patterns ( one large and one small, green and pink respectively in chart below) both of which show Fib support zone of 4.50 to 5.00
- Biotech stocks in general have a tendency to trade independently of the ‘market’. Even if we are about to go into a heavy bearish trend in the sp500, I still think ATOS could buck the trend and trade northward over time showing relative strength.
- ATOS has already had a decline of 60+% from the high of 12.50 some months ago. I think the selling is overdone and even if the market indices go down from here, I think ATOS will show relative strength.
- On the recent sp500 drop ATOS has help up quite well.
To change B-cancer rates and survival rates obviously is not going to happen overnight. If ATOS is going to be successful it is going to take a long time. As I said earlier I am still doing due diligence on ATOS, but so far I like what I see.
A key trading level for ATOS to overcome is the 5.60 zone. If ATOS can successfully trade above 5.60 it would be a near term very positive sign.
Some PDF Research:
Here are a couple PDFs regarding ATOS that are good to read.
Grant Zeng from Zacks Research
So in summary, keep ATOS on the radar screen. In a continued bull market I think ATOS has some good upside into end of year and even in a new bear market ( in the indices ) I think ATOS has a shot at being a diamond in the rough.