Seattle biotechnology company Atossa Genetics pulled its only product from the market late Friday, triggering a 50 percent plunge in its stock in after-hours trading.
Atossa said it has begun “a voluntary recall” of its ForeCYTE Breast Health Test and the associated collection device, a pump that extracts fluid from the nipple of a nonlactating woman for “detection of precancerous changes that could lead to breast cancer.”
The move came seven months after the Food and Drug Administration issued Atossa a warning letter, and barely 11 months after the company completed its $4 million initial public stock offering.
“We are not aware of any adverse incidents or injuries resulting from the use of our devices,” Dr. Stephen Quay, the company’s founder and CEO, said in a statement filed with the Securities and Exchange Commission.
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Atossa said the FDA letter expressed concerns about the company’s instructions, certain promotional claims, and the need for regulatory approval of certain changes in the fluid-collection process.
Quay said that while the company had believed processing the fluid qualified as a laboratory-developed test that did not need premarket approval from the FDA, the agency took the opposite position.
Atossa now plans to submit a so-called 510(k) application covering the test, and meanwhile “we do not expect any meaningful revenues” from the device or tests, Quay said.
The company said it currently has “sufficient cash for the next 8-12 months of operations without raising additional capital,” though it cautioned that the cost of the recall and other associated expenses is not yet known.
Sales of the tests and device were just over $500,000 for the six months ended June 30. Atossa reported a $2.2 million loss for the period.
The company went public at $5 last November, selling just 800,000 shares. The stock closed Friday at $5.32 but lost $2.65 in after-hours trading after news of the recall.
Atossa is continuing to develop other diagnostic tests but “will be reassessing the regulatory status of these products … in light of our recent experience,” Quay’s statement said.