Atossa Therapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total operating expenses were $5.9 million for the three months ended September 30, 2026, a decrease of $3.4 million (37%) from $9.3 million in the prior year period; for the nine months ended September 30, 2026, expenses were $24.5 million, a decrease of $1.2 million (5%) from $25.7 million in the prior year period.
• Research and Development (R&D) expenses were $3.4 million for the three months ended September 30, 2026 (down 37% from $5.4 million in 2025) and $13.1 million for the nine months ended September 30, 2026 (down 13% from $15.0 million in 2025).
• R&D clinical and non-clinical trial expenses decreased $1.8 million (42%) for the three months and $1.4 million (13%) for the nine months compared to 2025, primarily due to lower spend as enrollment for ongoing trials was largely completed in the first nine months of 2026.
• General and Administrative (G&A) expenses were $2.5 million for the three months ended September 30, 2026 (down 35% from $3.9 million in 2025) and $11.4 million for the nine months ended September 30, 2026 (up 7% from $10.7 million in 2025).
• G&A compensation expenses decreased $0.3 million (23%) for the three months and $0.8 million (18%) for the nine months compared to 2025, driven by a decrease in headcount.
• G&A professional fees and other decreased $1.0 million (42%) for the three months ended September 30, 2026, primarily due to lower legal fees following the resolution of patent litigation in the first half of 2026; however, these expenses increased $1.5 million (25%) for the nine-month period due to higher litigation spend earlier in the year and increased IP management costs.
• Net loss was $5.6 million ($0.56 per share) for the three months ended September 30, 2026, compared to $8.7 million ($1.01 per share) in the prior year period; for the nine months ended September 30, 2026, net loss was $23.7 million ($2.58 per share) compared to $23.8 million ($2.76 per share) in the prior year period.
• Interest income was $0.2 million for the three months and $0.7 million for the nine months ended September 30, 2026, decreases of $0.4 million and $1.2 million, respectively, from 2025, attributed to lower average cash balances.
• Cash and cash equivalents were $20.6 million as of September 30, 2026, down from $41.3 million as of December 31, 2025.
• Total stockholders' equity was $21.7 million as of September 30, 2026, down from $39.4 million as of December 31, 2025.
• Accumulated deficit was $270.3 million as of September 30, 2026, compared to $246.6 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company anticipates FDA clearance of Investigational New Drug (IND) applications for (Z)-endoxifen in Duchenne Muscular Dystrophy (DMD) and McCune-Albright Syndrome (MAS) by early 2027, with Phase 2 clinical trials expected to initiate in 2027.
• Topline data from the Phase 2 EVANGELINE study of (Z)-endoxifen plus goserelin in premenopausal women with ER+/HER2- breast cancer is anticipated in the second quarter of 2027; enrollment for this study was completed in the second quarter of 2026.
• The Company plans to present Karisma trial follow-up results and selected data from the ongoing I-SPY2 study at the San Antonio Breast Cancer Symposium (SABCS) in December 2026.

Business Segments and Product Lines:

• (Z)-endoxifen is the Company's only product candidate currently incurring R&D expenses, evaluated across oncology and rare disease indications.
• The Company has received Orphan Drug Designation from the FDA for (Z)-endoxifen for DMD and Rare Pediatric Disease (RPD) designation for both DMD and MAS.
• Enrollment in the (Z)-endoxifen plus elagolix and (Z)-endoxifen plus abemaciclib arms of the Phase 2 I-SPY2 study is complete.
• The Karisma trial was completed and results finalized in the clinical study report.

Market and Competitive Landscape:

• The Company noted that disclosed Priority Review Voucher (PRV) sales in the last 18–24 months have ranged from $100 million to $220 million.
• The Company maintains a growing global intellectual property portfolio, including multiple recently issued U.S. patents and numerous pending applications worldwide.

Risks and Challenges:

• There is no assurance that Atossa will receive or monetize a PRV, or that any payment will be made under the CVR Agreement.
• Risks include the potential for actual results to differ from forward-looking statements regarding clinical trial timing, regulatory approvals, PRV eligibility, and the ability to maintain compliance with Nasdaq listing requirements.
• The market value of a PRV is variable and subject to factors beyond the Company's control.

Management Commentary and Tone:

• Steven C. Quay, M.D., Ph.D., Chairman, President, and CEO, stated the Company took meaningful steps to enable shareholders to participate in potential future value from rare disease programs.
• Management highlighted the advancement of (Z)-endoxifen toward near-term milestones and continued engagement with the rare disease community through attendance at the Global Genes RARE Drug Development Symposium and the NORD Rare Diseases and Orphan Products Breakthrough Summit.

Other Key Points:

• On October 8, 2026, the Company entered into a Stapled Contingent Value Rights (CVR) Agreement, declaring a dividend of one CVR for each share of common stock outstanding as of October 19, 2026.
• CVR holders are entitled to 25% of the net proceeds, up to a maximum aggregate payment of $50 million, from the sale or monetization of the first qualifying FDA PRV awarded to Atossa.
• The CVRs remain attached to the underlying shares and will not trade separately unless the Board elects to detach them.
• The Company resolved patent litigation matters during the first half of 2026, contributing to reduced legal fees in the third quarter.