Atossa to issue stapled CVRs for 25% of rare pediatric voucher proceeds

Atossa Therapeutics, Inc. has approved a plan to issue one contingent value right per share of common stock, entitling holders to 25% of the net proceeds from the monetization of the company's first qualifying rare pediatric disease priority review voucher. The arrangement is subject to a maximum aggregate payment cap of $50 million. The company stated that no product candidate has been approved and no voucher has been awarded to date, meaning no payment is assured.

The CVRs are tied to (Z)-endoxifen, Atossa's lead product candidate, which holds FDA rare pediatric disease designations for Duchenne muscular dystrophy and McCune-Albright syndrome. If a qualifying marketing application is approved within the requirements of the applicable voucher program, the company may be awarded a priority review voucher. Steven C. Quay, M.D., Ph.D., Chairman, President and Chief Executive Officer of Atossa, said the CVR links a share of potential voucher proceeds to shareholders while allowing the company to continue pursuing development opportunities for (Z)-endoxifen.

Under the proposed agreement, shareholders of record on a date to be determined by the board will receive one CVR for each ATOS share held. Shares issued after that record date will also carry one CVR per share. The rights will not trade separately and will not have their own CUSIP; they will transfer with the underlying stock unless detached by the board or upon expiration. The CVRs do not represent an ownership interest in a voucher and carry no separate voting or dividend rights.

If Atossa receives and monetizes its first qualifying voucher, the aggregate payment to CVR holders will equal 25% of net proceeds after permitted deductions, up to the $50 million cap. Atossa noted that disclosed priority review voucher sales in the preceding 18 to 24 months ranged from $100 million to $220 million, though past sales do not establish the value of any future voucher. The CVRs relate only to the first qualifying voucher specified in the agreement and will expire if no qualifying voucher is awarded by December 31, 2036, unless the board extends that date. The company expects to file the CVR agreement with the Securities and Exchange Commission once executed.