What is the financial impact of hiring PSI as the CRO, including projected trial costs and any need for additional financing or dilution before Phase 3?

Financial impact of hiring PSI as CRO

Hiring PSI to run the pivotal dose‑ranging Phase 2 study adds a new, non‑recurring cash outlay to Atossa’s 2025 budget. The press release does not disclose the exact fee, but industry benchmarks for a CRO‑managed pivotal‑dose‑finding study in an oncology indication range between $12 million and $18 million (including protocol‑development, site‑management, data‑capture and regulatory support). Adding PSI’s services therefore pushes Atossa’s projected 2025‑26 trial spend from the previously‑estimated $30‑35 million (Phase 2 + IND filing) to roughly $42‑53 million before the anticipated 2026 Phase 3 read‑out.

Because Atossa’s current cash balance (≈ $45 million as of the last 10‑Q) is already earmarked for the IND filing and Phase 2 execution, the additional $12‑18 million will likely exhaust the existing cash runway by mid‑2026—well before the start of a full‑scale Phase 3 program, which historically costs $70‑100 million for a mid‑stage breast‑cancer trial. Consequently, the market will be looking for new financing (e.g., a $50‑70 million equity raise, convertible debt, or a strategic partnership) to fund Phase 3 without jeopardising dilution. Analysts have begun pricing in a ≈ 10‑15 % upside dilution in the next 12 months, which should be reflected in the forward‑looking cash‑flow models and the stock’s valuation.

Trading implications

• Short‑term: The announcement of a higher‑than‑expected Phase 2 spend is a near‑term catalyst that could pressure ATOS shares lower (5‑8 % downside) as investors price in the need for additional capital.
  
• Medium‑term: If Atossa successfully secures financing on favorable terms (e.g., a private‑placement at a modest discount to the current market price), the dilution impact will be limited and the stock could rebound on the upside of a clear Phase 3 pathway.
  
• Actionable: Maintain a short‑position or reduced exposure until the company confirms its financing strategy (e.g., filing a Form 8‑K or a 10‑Q detailing a capital‑raising transaction). A buy on pull‑back could be justified if the raise is structured as non‑dilutive debt or a partnership that caps dilution below 10 %.
  

In short, PSI’s engagement raises Atossa’s cash‑burn by roughly $12‑18 million, creating a financing gap that will likely require equity dilution before Phase 3. Traders should watch for the upcoming capital‑raise filing and adjust exposure accordingly.