Please ensure Javascript is enabled for purposes of website accessibility

Why Atossa Therapeutics Stock Is Jumping Today

By Keith Speights - Jun 22, 2021 at 1:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are two likely drivers behind the biotech's share price surge.

What happened

Shares of Atossa Therapeutics (ATOS 0.95%) were trading more than 22% higher as of 1:06 p.m. EDT Tuesday. Two factors could be behind its sharp stock price gain.

First, fund managers are likely buying shares ahead of Atossa's pending inclusion into the Russell 2000 and Russell 3000 indexes. Second, investors (especially those in the Reddit community) could be attempting to set off a gamma squeeze -- buying lots of short-dated call options in a way that pressures market makers to buy more shares, causing the underlying stock price to skyrocket.

Scientist looking through a microscope.

Image source: Getty Images.

So what

Probably the most important thing to understand is that any gains that derive from Atossa's addition to the Russell 2000 and Russell 3000 indexes or from a potential gamma squeeze will only be temporary. The biotech company's underlying business prospects will remain the key driver of its stock price over the long run.

Atossa's pipeline currently includes two clinical-stage programs. The company recently reported results from a phase 2 study of  lead candidate endoxifen in treating breast cancer, and it has plans to advance its experimental COVID-19 treatment ATO-301 into a phase 2 trial.

Now what

Atossa will be part of the Russell 2000 and Russell 3000 after the U.S. stock market opens on June 28. The company has started its non-clinical toxicology program for endoxifen -- results of which will be a prerequisite for U.S. regulatory approval of the treatment. It intends to request Food and Drug Administration approval to initiate a clinical study of the drug in the U.S. "as soon as possible."

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Atossa Genetics Inc. Stock Quote
Atossa Genetics Inc.
ATOS
$1.06 (0.95%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.