Atossa board adopts 'poison pill' remedy in wake of FDA crackdown

Atossa Genetics recalled its ForeCYTE breast health diagnostic last year.--Courtesy of Atossa Genetics

Atossa Genetics ($ATOS), which has been struggling since the FDA cracked down on the company last year for allegedly making misleading claims to patients about its breast cancer test, has adopted a poison pill to fend off any unwanted suitors.

The Seattle, WA-based company approved a stockholders rights agreement Thursday, which is designed to thwart any coercive tactics typical of hostile takeovers and force direct negotiations with the board of directors. The agreement kicks in when 15% or more of the company's common shares are acquired by a single person or entity.

Atossa's stock traded as high as $6 before it began a voluntary recall of its breast cancer test in October following an FDA warning issued in February 2013, and tumbled to a low of $1.20 in mid-April this year. In its first-quarter earnings report, the company said that as a result of the recall of its ForeCYTE test, "We have recognized virtually no revenue and no cost of revenue during the three months ended March 31, 2014." Gross profit for the first quarter was $24,124 compared to $116,206 for the same period the year before.

The FDA's warning letter slammed Atossa over its instructions for use and marketing claims for its ForeCYTE product, Mammary Aspiration Specimen Cytology Test (MASCT) device, and the MASCT System Kit and Patient Sample Kit. The regulatory agency also said Atossa hadn't obtained appropriate clearances for changes made to its nipple aspirate fluid specimen collection process for the MASCT breast pump. The company is currently seeking those approvals from the FDA.

- read the shareholder agreement release (PDF)
- see the earnings report (PDF)

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