The FDA Letter Won’t Impact Atossa’s Business Much
By Grant Zeng, CFA
On Feb 25, 2013, Atossa Genetics, Inc. (ATOS) received a Warning Letter from the FDA regarding its Mammary Aspirate Specimen Cytology Test (:MASCT) System and MASCT System Collection Test.
The Letter arises from certain FDA findings during a July 2012 inspection, to which the Company responded in August 2012, explaining why the Company believed it was in compliance with applicable regulations and/or was implementing changes responsive to the findings of the FDA inspection. The FDA alleges in the Letter that following 510(k) clearance the Company changed the System in a manner that requires submission of an additional 510(k) notification to the FDA. Specifically, the FDA observes that the Instructions For Use (:IFU) in the original 510(k) submission stated that the user must “Wash the collection membrane with fixative solution into the collection vial…” and the current IFU states “…apply one spray of Saccomanno’s Fixative to the collection membrane…” and that “this change fixes the NAF specimen to the filter paper rather than washing it into a collection vial.” At the time that the changes were made the Company determined that a new 510(k) was not required in accordance with the FDA’s guidance document entitled “Deciding When to Submit a 510(k) for a Change to an Existing Device.”
The Company is working with the FDA to resolve these issues in the best interests of patients and their doctors. The Company has until March 14, 2013 to respond to the Letter and is currently working to prepare that response. Among other things, the Company currently expects that the response will explain why the Company believes that the System in its current form has been and continues to be appropriately marketed under a cleared 510(k) premarket notification, and why it is in substantial compliance with applicable regulations, including cGMP.
We think the FDA letter won’t impact Atossa’s major business much based on our following analysis.
First, based on our conversation with the Company, we have reasons to believe that the new version of MASCAT System is in compliance with the FDA regulations and not required for 510(K) clearance. In such a best scenario, the MASCAT System and The ForeCYTE Test will continue to operate as usual.
Second, if the FDA does not agree with the Company’s position concerning clearance of the new version of the MASCAT System, Atossa may be required to submit and receive clearance of a new 510(k) notice for the current form of the System. Even in such a case, we think the business of ForeCYTE Test and the MASCAT System itself won’t be much impact. Below are the reasons: