Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as of December 31, 2022. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
Our management, including our principal executive and principal financial officer, has evaluated any changes in our internal control over financial reporting that occurred during the year ended December 31, 2022, and has concluded that there was no change that occurred during the year ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2022.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
We are a smaller reporting company, and therefore our independent registered public accounting firm has not issued a report on the effectiveness of internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Directors
Our directors are elected at each annual meeting of stockholders and hold office until the next annual meeting of stockholders and until their successors have been elected and qualified. Our Bylaws provide that the number of Directors constituting the entire Board shall be not less than one nor more than nine as determined by resolution of the Board. Our Board currently has eight Directors, each of whom was elected at the Company’s 2022 annual meeting of stockholders.
The names and ages of our directors as of February 28, 2023 are set forth below:
Name
Age
Position
Vipin K. Garg, Ph.D.
65
President, Chief Executive Officer, and Director
Mitchel Sayare, Ph.D.
75
Chairman of the Board
David J. Drutz, M.D.
84
Director
John M. Gill
71
Director
Philip L. Hodges
54
Director
Wayne Pisano
68
Director
Diane Jorkasky, M.D.
71
Director
Klaus O. Schafer, M.D., MPH
73
Director
Vipin K. Garg, Ph.D. currently serves as our President and Chief Executive Officer and is a member of the Board of Directors. Dr. Garg joined Altimmune in November 2018 with over three decades of experience in the biotechnology and pharmaceutical industries. He has a proven track record of building and managing both private and publicly traded companies. Before joining Altimmune, from October 2013 to June 2018, he served as President and Chief Executive Officer of Neos Therapeutics, Inc. (since acquired by Aytu BioPharma, Inc. (Nasdaq: AYTU)), where he built a NASDAQ-listed commercial-stage biopharmaceutical company, launching three branded therapeutic products including Adzenys XR-ODT TM and Cotempla XR-ODT TM , the first ever extended release, orally dissolving tablet medications for the treatment of ADHD. Prior to Neos, he served as president and Chief Executive Officer of Tranzyme, Inc. until its acquisition by Ocera Therapeutics, Inc. (subsequently becoming a subsidiary of Mallinckrodt Pharmaceuticals (NYSEAmerican: MNK)) where he progressed a discovery-stage, emerging biotech company to a Nasdaq-listed clinical-stage, drug development company. Prior to joining Tranzyme, Dr. Garg served as Chief Operating Officer of Apex Bioscience, Inc. (acquired by Curacyte AG of Munich, Germany), and held senior management positions at DNX Bio-Therapeutics, Inc. (until its acquisition by Baxter Healthcare Corporation), Sunovion Pharmaceuticals, Inc. (formerly known as Sepracor Inc., now a subsidiary of Sumitomo Dainippon Pharma), and Bio-Response Inc. (acquired by Baxter Healthcare Corporation). Dr. Garg received his Ph.D. in Biochemistry in 1982 from the University of Adelaide, Australia, and his M.S. from IARI Nuclear Research Laboratory, New Delhi, India in 1978. We believe that Dr. Garg’s extensive experience in the biotechnology and pharmaceutical industries makes him well qualified to serve as a member of our Board of Directors.
Mitchel Sayare, Ph.D. has been a member of the Board of Directors since April 2010. Dr. Sayare became Chairman of the Board in January 2018 and served as Executive Chairman from June 2018 to November 2018. Until 2010, Dr. Sayare served as the Chairman of the Board of public company ImmunoGen, Inc. (Nasdaq:IMGN) (a position he had held since 1989). In addition, he served as ImmunoGen’s Chief Executive Officer from 1986 to December 31, 2009, and as its President from 1986 to 1992, and from 1994 to July 2008. Prior to joining ImmunoGen, he served as Vice President of Development of Xenogen from 1982 to 1985. Prior to that he was Assistant Professor of Biophysics and Biochemistry at the University of Connecticut. Dr. Sayare earned a Ph.D. in biochemistry from Temple University School of Medicine. Dr. Sayare is a director of Boston IVF, Inc. and Advanced Aesthetic Technologies, Inc., both privately-held companies. We believe that Dr. Sayare’s substantial experience as a board member and executive officer of biotechnology companies makes him well qualified to serve as a member of our Board of Directors.
David J. Drutz, M.D. has served as a member of our Board of Directors since May 2017, when he was appointed to the Board in connection with the completion of the merger with PharmAthene, Inc. Dr. Drutz was first elected to pre-
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merger Altimmune’s Board of Directors in January 2010 and was elected Board Chairman in October 2011. Dr. Drutz is the President of Pacific Biopharma Associates, LLC, a biopharmaceutical consulting company that he founded in 1999. From 2008 to 2015, he held various positions at DARA BioSciences (Nasdaq: DARA), an oncology supportive care company which was acquired by Midatech Pharma plc, including Director, Chief Executive Officer, Executive Chairman and Chief Medical Officer. He also previously served as Chairman of Tranzyme, Inc. (Nasdaq:TZYM) from 2000 to 2010; and Director of MethylGene (TSX:MYG) from 2000 to 2010 and Gentris Corporation from 2007 to 2014. From 1999 to 2008 he was a general partner with Pacific Rim Ventures, a Tokyo-based venture capital firm. Dr. Drutz’s management experience includes tenures as VP Biological Sciences and VP Clinical Research at Smith Kline & French Laboratories; VP Clinical Development at Daiichi Pharmaceutical Corporation; and CEO of Inspire Pharmaceuticals (1995 – 1998) and Sennes Drug Innovations (1994 – 1995). Earlier, Dr. Drutz was Professor of Medicine, Chief of the Division of Infectious Diseases, and the founder of the NSF Center for Cell Regulation at the UT Health Science Center, San Antonio. Dr. Drutz received his M.D. from the University of Louisville School of Medicine and postgraduate training in internal medicine and infectious diseases at Vanderbilt University School of Medicine, serving subsequently as a research medical officer in the U.S. Navy (LCDR, USNR). We believe Dr. Drutz’s significant experience in biotechnology investment and as a physician make him well qualified to serve as a member of our Board of Directors.
John M. Gill has served as a member of our Board of Directors since August 2004. Mr. Gill served as President and Chief Executive Officer of PharmAthene, Inc. from March 2015 until the completion of the merger with Altimmune in May 2017. From 2003 to 2013, Mr. Gill served as the President, Chief Executive Officer, co-founder and a Director of TetraLogic Pharmaceuticals Corporation, a public biopharmaceutical company. Mr. Gill has previously held positions at 3-Dimensional Pharmaceuticals and SmithKline Beecham. After serving in the United States Marine Corps, Mr. Gill earned a B.A. in Accounting and Economics from Rutgers University. We believe Mr. Gill’s executive and board experience in the pharmaceutical industry and his substantial financial knowledge and expertise make him well qualified to serve as a member of our Board of Directors.
Philip L. Hodges has served as a member of our Board of Directors since May 2017, when he was appointed to the Board in connection with the completion of the merger with PharmAthene, Inc., and was first elected to pre-merger Altimmune’s board of directors in September 2003. Mr. Hodges is Managing Partner of Redmont Capital, a private equity firm located in Birmingham, Alabama, which he joined at its inception in 1997. Redmont Capital is a co-founder of pre-merger Altimmune. Mr. Hodges’ investment strategy is focused on high-growth small businesses within the health care, life science and technology sectors. He currently serves as a director for several of the firm’s portfolio companies. Mr. Hodges holds a Bachelor of Science in Business Administration from the Brock School of Business at Samford University. We believe Mr. Hodges experience as a life science investor makes him well qualified to serve as a member of our Board of Directors.
Wayne Pisano has served as a member of our Board of Directors since August 2018. Mr. Pisano also serves on the board of directors of Provention Bio, Inc. (Nasdaq: PRVB), a biopharmaceutical company, since April 2018; and Oncolytics Biotech Inc. (Nasdaq: ONCY), a biotechnology company, since May 2013. Mr. Pisano served on the board of directors of IMV INC. (Nasdaq: IMV) a bio pharmaceutical company from October 2011 until March 2021. Mr. Pisano served as president and Chief Executive Officer of VaxInnate Corporation, a biotechnology company, from January 2012 until November 2016. Mr. Pisano joined Sanofi Pasteur in 1997 and was promoted to President and Chief Executive Officer in 2007, the position he successfully held until his retirement in 2011. He has a Bachelor of Science in biology from St. John Fisher College, New York and an MBA from the University of Dayton, Ohio. We believe Mr. Pisano’s depth of experience across the spectrum of commercial operations, public immunization policies and pipeline development makes him well qualified to serve as a member of our Board of Directors.
Diane Jorkasky, M.D. has served as a member of our Board of Directors since May 2020. Dr. Jorkasky also has been serving on the board of APIE Therapeutics, a private biopharmaceutical company, since January 2021. Dr. Jorkasky has served as a Science and Advisory Board Member and a Board Member of Alzheon, Inc., a private biopharmaceutical company, since 2016 and also served on the board of directors of Q Therapeutics, Inc. from September 2013 until August 2016. From June 2014 to August 2019, she served as Executive Vice President, Chief Medical Officer and Head of Development at Complexa Inc., a clinical stated biopharmaceutical company. Dr. Jorkasky received her M.D. in 1977 from the University of Pennsylvania School of Medicine and is board certified in internal medicine, nephrology and clinical pharmacology. She is a member of the Connecticut Academy of Science and Technology. Dr. Jorkasky is on the faculties of University of California, San Francisco, and Uniformed Service of Health Sciences Medical Schools, with
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previous faculty appointments at Yale University and the University of Pennsylvania Schools of Medicine. We believe Dr. Jorkasky’s executive and board experience in the pharmaceutical industry and as a physician make her well qualified to serve as a member of our Board of Directors.
Brigadier General (ret.), Klaus O. Schafer, M.D., MPH has served as a member of our Board of Directors since May 2017, upon completion of the merger with PharmAthene, Inc. Dr. Schafer was first elected to pre-merger Altimmune’s Board of Directors in 2012. Dr. Schafer has over 35 years of healthcare leadership experience, having held senior positions in government and industry. As former, Acting Deputy Assistant to the Secretary of Defense for chemical and biological defense, he oversaw the Department’s $1.0 billion program for vaccine, therapeutics, medical device and sensor development against biological threats and was instrumental in advancing research in human immune response. He retired from the U.S. Air Force in the role of Assistant Surgeon General for medical readiness, science and technology. He has managed all aspects of large integrated health care delivery systems, from clinical care, managing clinics and hospitals, and oversaw large S&T portfolios, including clinical trials. He was CEO and co-founder of TessArae LLC, a biotech medical sequencing device company. Most recently he held the position of Chief Medical Officer and client executive for health at CACI International. He has been an independent consultant since 2002 serving a number of biotech and health related company advisory boards and Tadpole Ventures, a private venture capital firm. Dr. Schafer earned his M.D. degree at the University of Iowa, medical boards in family practice and aerospace medicine in the Air Force, Master of Public Health at the University of Texas, and a Master of Science at the Dwight D. Eisenhower School of National Security and Resource Strategy. Dr. Schafer recently became CERT certified in Cybersecurity Oversight from the Carnegie Mellon University Software Engineering Institute. We believe Dr. Schafer’s broad experience base relevant to Altimmune’s core technology and experience in cybersecurity makes him well qualified to serve as a member of our Board of Directors.
Executive Officers
The names and ages of our executive officers as of February 28, 2023 are set forth below:
Name
Age
Position
Vipin K. Garg, Ph.D.
65
President, Chief Executive Officer, and Director
Richard Eisenstadt, M.B.A.
64
Chief Financial Officer
M. Scot Roberts, Ph.D.
64
Chief Scientific Officer
M. Scott Harris, M.D.
69
Chief Medical Officer
Raymond M. Jordt
50
Chief Business Officer (effective 1/1/2023)
Vipin K. Garg, Ph.D. is our President, Chief Executive Officer and a Director. See Item 10 - “Directors” for a discussion of Dr. Garg’s business experience.
Richard Eisenstadt, M.B.A. currently serves as our Chief Financial Officer. Mr. Eisenstadt has served as Chief Financial Officer of Altimmune since December 2021. He has served in senior financial leadership roles for over twenty-five years. Prior to joining Altimmune, he served as Chief Financial Officer at Aytu BioPharma, Inc. (Nasdaq: AYTU) following its merger with Neos Therapeutics, Inc. (Nasdaq: NEOS) in March 2021. While Chief Financial Officer at Neos, he raised over $340 million in private and public equity and debt financings and supported the transition of the company from clinical stage to commercial operations. Prior to Neos, Mr. Eisenstadt served as Chief Financial Officer at Arborgen, Inc., a privately-held agriculture biotech company, and prior to that, Chief Financial Officer at Tranzyme, Inc. (since acquired by Ocera Therapeutics, Inc and now a subsidiary of Mallinckrodt Pharmaceuticals (NYSEAmerican: MNK)), where he was instrumental in its initial public offering, negotiating several licensing agreements, and financing the company through late-stage clinical development. Mr. Eisenstadt received an M.B.A. from James Madison University and a B.A. in Economics from the University of North Carolina at Chapel Hill .
M. Scot Roberts, Ph.D. currently serves as Chief Scientific Officer of the Company. Dr. Roberts joined Altimmune in December 2012 and has over 20 years of biologics development experience, most recently at ImQuest BioSciences, Inc., where as Chief Scientific Officer from November 2010 until November 2012, he was responsible for managing scientific operations. Dr. Roberts held key positions at Wellstat Biologics Corporation from August 1996 until October 2010, including Director of Research and Development where he was responsible for development of a portfolio of biologic candidates in oncology including a clinical stage oncolytic virus asset. He is an inventor on twelve patent and patent application families, and author of numerous publications in peer-reviewed journals. Dr. Roberts has been an invited
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speaker at international conferences where he chaired a variety of scientific sessions. Dr. Roberts received an M.S. in Chemistry from Illinois State University and a Ph.D. from the Johns Hopkins School of Medicine, Department of Pharmacology and Molecular Sciences.
M. Scott Harris, M.D. currently serves as Chief Medical Officer of the Company. Dr. Harris joined Altimmune in July 2019, a seasoned medical professional with extensive experience in hepatology and gastroenterology and broad expertise in managing clinical trials from early-stage development through successful Phase 3 trials. He has led multidisciplinary forums on drug development and clinical trial design at national and international scientific meetings, and fostered collaborations between professional medical societies and the FDA. Previously, he was co-founder and chief medical officer of Lyric Pharmaceuticals, helping raise a $21 million Series A round in 2014. He has also served as chief medical officer of Avaxia Biologics, interim chief medical officer of Tranzyme, Inc. and chief medical officer of Ocera Therapeutics. Dr. Harris was also chief medical officer and vice president of Clinical Affairs at Napo Pharmaceuticals where he authored the pivotal clinical study that led to the approval of crofelemer (Mytesi ® ), the first Phase 2/3 adaptive trial design resulting in a drug approval. Earlier in his career he held senior roles in global clinical development and medical affairs at Otsuka Pharmaceuticals and Abbott. He sits on the faculty of Georgetown University School of Medicine as an Adjunct Professor, where he directs a course on drug development under a grant from the NIH. Dr. Harris has been a consultant on third-world drug development for the Bill and Melinda Gates Foundation and a speaker at national and international forums on drug development. Dr. Harris has an M.D. from Harvard Medical School and an MS in Administrative Medicine and Population Health from the University of Wisconsin Medical School. His post-graduate training includes residencies at John Hopkins Hospital and the University of Pennsylvania, and a Gastroenterology and Hepatology Fellowship at the Yale University School of Medicine.
Raymond M Jordt, M.B.A. has served as Chief Business Officer of the Company since January 2023. Mr. Jordt is an accomplished executive with over twenty-five years of experience in the pharmaceutical industry. Prior to joining Altimmune, he spent nearly two decades in various corporate and business development roles, most recently as Head of Transactions at Eli Lilly and Company. During his tenure at Lilly, he led acquisitions, in/out-licensing, divestitures, collaborations, options and equity investments with biotech and pharma at all stages of development. He has worked across multiple therapeutic areas, including obesity, diabetes, CNS, immunology, dermatology and pain. His efforts led to four approved products and reshaped the portfolios of key business units. Mr. Jordt received an M.B.A. from Indiana University, an M.S. in Biomedical Engineering at the University of Memphis and a B.S. in Biomedical Engineering from Arizona State University.
How nominees to our Board are selected
Candidates for election to our Board of Directors are nominated by our Nominating and Corporate Governance Committee and ratified by our full Board of Directors for nomination to the stockholders. The Nominating and Corporate Governance Committee operates under a charter, which is available on our corporate website at www . altimmune . com
The Nominating and Corporate Governance Committee will give due consideration to candidates recommended by stockholders. Stockholders may recommend candidates for the Nominating and Corporate Governance Committee’s consideration by submitting such recommendations directly to the Nominating and Corporate Governance Committee as described below under Communicating with our Board members. However, just because a recommended individual meets the minimum qualification standards does not imply that the Nominating and Corporate Governance Committee will necessarily nominate the person so recommended by a stockholder. The Nominating and Corporate Governance Committee may also engage outside search firms to assist in identifying or evaluating potential nominees.
There are no family relationships among any of our directors and executive officers.
Board leadership structure
Currently, Dr. Sayare serves as the Chairman of the Board and Dr. Garg is the Company’s President and Chief Executive Officer. The Board believes that having different individuals serving in the separate roles of Chairman of the Board and Chief Executive Officer is in the best interest of stockholders in the Company’s current circumstances because it reflects the Chief Executive Officer’s responsibility over management of the Company’s operations and the Chairman’s oversight of board functions, strategic development and financial stability.
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Board committees
The Audit Committee of our Board reviews, acts on and reports to our Board with respect to various auditing and accounting matters, including the recommendation of our independent registered public accounting firm, the scope of the annual audits, the fees to be paid to the independent registered public accounting firm, the performance of the independent registered public accounting firm and our accounting practices. The Audit Committee currently consists of Messrs. Hodges (Chair), Gill and Pisano and Dr. Schafer. The Board has determined that each member of the Audit Committee is an independent director in accordance with Nasdaq listing standards and that each of Messrs. Hodges and Gill is an Audit Committee financial expert, as defined by SEC guidelines and as required by the applicable NASDAQ listing standards.
The Compensation Committee of the Board recommends, reviews and oversees the salaries, benefits and equity incentive plans for our employees, consultants, directors (other than non-employee directors) and other individuals whom we compensate. The Compensation Committee also administers our compensation plans. The Compensation Committee currently consists of Drs. Drutz (Chair), Jorkasky and Schafer and Mr. Hodges. The Board has determined that each member of the Compensation Committee is an “independent director” in accordance with NASDAQ listing standards, a “non-employee director” under the applicable SEC rules and regulations and an “outside director” under the applicable tax rules. The Compensation Committee may form subcommittees and delegate authority to such subcommittees or individuals as it deems appropriate.
The Nominating and Corporate Governance Committee of the Board selects nominees for director positions to be recommended by our Board for election as directors and for any vacancies in such positions, develops and recommends for our Board the Corporate Governance Guidelines of the Company and oversees the annual review of the performance of the Board, each director and each committee. The Nominating and Corporate Governance Committee currently consists of Messrs. Pisano (Chair) and Gill and Dr. Drutz. The Board has determined that each member of the Nominating and Corporate Governance Committee is an independent director in accordance with NASDAQ listing standards.
Meetings and attendance
During the fiscal year ended December 31, 2022, the Board held 8 meetings and the Board Committees held a total of 12 meetings. Each director attended 75% or more of the total number of meetings of the Board and the Board Committees of which he was a member during the period he served as a director in fiscal year 2022. The Company has no specific policy regarding director attendance at our annual meeting of stockholders. Generally, however, a Board meeting is held on the same date as the annual meeting, with directors attending the annual meeting. Our 2022 annual meeting of stockholders was attended by all of the directors recommended for election.
Board involvement in risk oversight
The Company’s management is responsible for defining the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures on a day-to-day basis. The Board’s responsibility is to monitor the Company’s risk management processes by informing itself of the Company’s material risks and evaluating whether management has reasonable controls in place to address the material risks. The Board is not responsible, however, for defining or managing the Company’s various risks.
The Board of Directors monitors management’s responsibility for risk oversight through regular reports from management to the Audit Committee and the full Board. Furthermore, the Audit Committee reports on the matters discussed at the committee level to the full Board. The Audit Committee and the full Board focus on the material risks facing the Company, including strategic, operational, legal and regulatory risks, to assess whether management has reasonable controls in place to address these risks. In addition, the Compensation Committee is charged with reviewing and discussing with management whether the Company’s compensation arrangements are consistent with effective controls and sound risk management. Finally, risk management is a factor that the Board and the Nominating and Corporate Governance Committee consider when determining who to nominate for election as a director of the Company and which directors serve on the Audit Committee. The Board believes this division of responsibilities provides an effective and efficient approach for addressing risk management.
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Code of Business Conduct and Ethics and other governance documents
We have adopted a written Code of Business Conduct and Ethics that applies to our Board of Directors and all of our employees, including our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions. A copy of our code of conduct can be found on our website, http://www.altimmune.com. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K and under the applicable the NASDAQ Global Select Market rules by posting such information on our website in accordance with such requirements.
You may also obtain a copy of these documents by writing to Altimmune, Inc., 910 Clopper Road, Suite 201S, Gaithersburg, Maryland 20878, Attention: Investor Relations.
Copies of the charters of our Board’s Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as well as a copy of the Company’s Corporate Governance Guidelines, can be accessed in the Investor Relations — Corporate Governance section of our website. The information on, or that can be accessed through our website is not part of this Annual Report and is not incorporated by reference herein.
Communicating with our Board members
Although our Board of Directors has not adopted a formal process for stockholder communications with the Board, we make every effort to ensure that the views of stockholders are heard by the Board or by individual directors, as applicable, and we believe that this has been an effective process to date. Stockholders may communicate with the Board by sending a letter to the Altimmune, Inc. Board of Directors, c/o Corporate Secretary, 910 Clopper Road, Suite 201S, Gaithersburg, Maryland 20878. The Corporate Secretary will receive the correspondence and forward it to the Chairman of the Board, or to any individual director or directors to whom the communication is directed, as appropriate. Notwithstanding the above, the General Counsel has the authority to discard or disregard any communication that is unduly hostile, threatening, illegal or otherwise inappropriate or to take any other appropriate actions with respect to such communications.
In addition, any person, whether or not an employee, who has a concern regarding the conduct of the Company or our employees, including with respect to our accounting, internal accounting controls or auditing issues, may, in a confidential or anonymous manner, communicate that concern in writing by addressing a letter to the Chairman of the Audit Committee, c/o Corporate Secretary, at our corporate headquarters address, which is 910 Clopper Road, Suite 201S, Gaithersburg, Maryland 20878.
Section 16(a) beneficial ownership reporting compliance and Delinquent Section 16(a) Reports
The members of our Board of Directors, our executive officers and persons who hold more than 10% of our outstanding Common Stock are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, which requires them to file reports with respect to their ownership of our Common Stock and their transactions in such Common Stock. Based solely upon a review of the copies of Section 16(a) reports that the Company has received from such persons for transactions in our Common Stock and their Common Stock holdings for the 2022 fiscal year, the Company believes that all reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by its directors, executive officers and beneficial owners of more than 10% of its Common Stock.
Report of the Audit Committee of the Board of Directors
Our Audit Committee has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 2022 with our management. Our Audit Committee has discussed with our independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). Our Audit Committee has also received the written disclosures and the letter from our independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with our Audit Committee concerning independence, and has discussed with our independent registered public accounting firm the
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accounting firm’s independence. Based on the foregoing, our Audit Committee has recommended to our Board that our audited financial statements be included in this Annual Report.
Submitted by the Audit Committee of the
Board of Directors:
Philip L. Hodges (Chair)
John M. Gill
Wayne Pisano
Klaus O. Schafer, M.D., MPH
Item 11. Executive Compensation
Our named executive officers (“Named Executive Officers”) for the year ended December 31, 2022 are:
● Vipin K. Garg, Ph.D., our Chief Executive Officer;
● Richard Eisenstadt, MBA, our Chief Financial Officer;
● M. Scot Roberts, Ph.D., our Chief Scientific Officer; and
● M. Scott Harris, M.D., our Chief Medical Officer.
Elements of Compensation
The compensation arrangement for each Named Executive Officer is intended to encourage performance and to align the Named Executive Officers’ interests with those of our stockholders. In setting compensation for our Named Executive Officers, the Compensation Committee and the Board takes into account the relative amount of compensation that is delivered on a current and long-term basis and in the form of cash and equity. The combination of performance measures for annual bonuses and the equity compensation programs for executive officers, as well as the multi-year vesting schedules for equity awards encourage employees to maintain both a short-term and a long-term view with respect to Company performance.
The Company’s executive compensation program consists of the following elements:
● base salary;
● annual cash bonuses;
● equity awards;
● health and HSA match; and
● 401(k) plan
Base Salary
The Named Executive Officers receive a base salary to compensate them for services rendered to our Company. The base salary payable to each Named Executive Officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, roles and responsibilities.
Annual Performance-Based Bonus
The Named Executive Officers are entitled to receive annual performance-based cash bonuses, the amount of which is based on satisfaction of corporate and personal objectives that are established by the Board of Directors or the
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Compensation Committee. The annual bonuses are intended to encourage the Named Executive Officers to promote the growth of the Company’s business.
At the beginning of the year, the Compensation Committee, after reviewing management’s self-assessment, evaluates specific achievements and our overall success in the prior year. The Compensation Committee considers our CEO’s recommendations, and independently reviews and recommends the total percentage achievement level for each of the executive officers to the Board of Directors for approval.
For the year ended December 31, 2022, upon recommendation of the Compensation Committee, our Board of Directors set broad-based corporate objectives that established the criteria for the funding of our annual bonus plan and focused on the following key objectives:
● Advance candidate pipeline through generation of human clinical data and CMC development (70% weighting);
● Form strategic relationships, including with contract manufacturers and CROs, to further advance candidate pipeline and maximize program value (20% weighting); and
● Manage operations to maximize resources and minimize risk (10% weighting).
For each of these corporate objectives, the Compensation Committee also established criteria for assessing performance in terms of what achievements would be below expectations, meet expectations or exceed expectations, with weighting assigned to each of these objectives as described above. Below expectations achievement of an objective results in payment between 0-80% of the weighting, meets expectations achievement of an objective results in payment between 80-120% of the weighting and exceeds expectations results in payment between 120-150% of the weighting. In January 2023, our Board of Directors, upon the recommendation of the Compensation Committee, completed its assessment of management’s achievement of these corporate objectives for 2022, and concluded that for these core corporate objectives, the management team met expectations and determined achievement at 100% of the target annual performance-based cash bonuses for our Named Executive Officers. This level was determined based upon, among other things, successful financing of our clinical programs, advancing one Phase 2 metabolic development program (obesity) and generating data to support developing a second Phase 2 metabolic development program (NASH) and advancing our strategic relationships.
Equity Awards
The Named Executive Officers are eligible to receive equity awards under the Altimmune, Inc. 2017 Omnibus Incentive Plan (as amended, the “ 2017 Plan ”). Awards under the 2017 Plan are intended to align the interests of the Named Executive Officers with those of our stockholders and to create a link between executive pay and the long-term performance of our Common Stock. During the year ended December 31, 2022, we granted Drs. Garg, Roberts and Harris stock options and restricted stock units (“RSUs”), as described in more detail in the Outstanding Equity Awards at Fiscal Year-End table below.
Employee Benefits
The Named Executive Officers, like our other employees, participate in health and welfare benefit plans, subject to satisfying eligibility requirements.
401(k) Plan
The Company maintains a tax-qualified retirement plan (the “ 401(k) Plan ”) that provides eligible employees (including the Named Executive Officers) with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees are able to participate in the 401(k) Plan as of the first day of the month following the date they meet the 401(k) Plan’s eligibility requirements, and participants are able to defer up to 100% of their eligible compensation subject to applicable annual limits under the Internal Revenue Code of 1986, as amended (the “Code”). All participants’ interests in their deferrals are 100% vested when contributed. The 401(k) Plan permits Altimmune to make matching contributions
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and profit sharing contributions to eligible participants. Altimmune matches contributions 100% on the first 4% of contributions made by participants.
We believe the benefits described above are necessary and appropriate to provide a competitive compensation package to our Named Executive Officers.
Summary Compensation Table
The following table sets forth the total compensation that was paid to or earned by the Named Executive Officers for the 2022 and 2021 fiscal years.
Non-Equity
Stock
Option
Incentive Plan
All Other
Salary
Bonus
Awards
Awards
Compensation
Compensation
Total
Name and Principal Position
Year
($)
($)
($)(1)
($)(1)
($)
($) (2)
($)
Vipin K. Garg, Ph.D.
2022
580,000
—
570,774
1,393,493
319,000
17,157
2,880,424
Chief Executive Officer
2021
565,673
—
436,133
1,326,049
289,988
13,796
2,631,639
Richard Eisenstadt, M.B.A. (3)
2022
426,635
—
—
—
170,000
23,059
619,694
Chief Financial Officer
2021
—
—
458,000
1,137,450
120,000
—
1,715,450
M. Scot Roberts, Ph.D.
2022
425,000
—
234,183
572,395
170,000
4,255
1,405,833
Chief Scientific Officer
2021
406,000
—
412,135
1,237,015
154,280
4,594
2,214,024
M. Scott Harris, M.D
2022
456,000
—
234,183
572,395
182,400
4,640
1,449,618
Chief Medical Officer
2021
444,385
—
412,135
1,237,015
165,680
4,045
2,263,260
(1) Amounts in this column reflect the aggregate grant date fair value of stock awards and/or stock options granted during the covered year computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the amounts for fiscal years 2022 and 2021 are discussed in Item 8, Financial Statements and Supplementary Data.
(2) All other compensations are consisted of the following:
401(k)
HSA
Commuting
All Other
Match
Benefits
Match
Expense
Compensation
Name and Principal Position
Year
($)
($)
($)
($)
($)
Vipin K. Garg, Ph.D.
2022
1,850
8,967
2,400
3,940
17,157
Chief Executive Officer
2021
1,717
8,967
—
3,112
13,796
Richard Eisenstadt, M.B.A.(3)
2022
7,083
—
2,400
13,576
23,059
Chief Financial Officer
2021
—
—
—
—
—
M. Scot Roberts, Ph.D.
2022
4,255
—
—
—
4,255
Chief Scientific Officer
2021
4,594
—
—
—
4,594
M. Scott Harris, M.D
2022
3,040
—
1,600
—
4,640
Chief Medical Officer
2021
4,045
—
—
—
4,045
(3) Mr. Eisenstadt commenced employment as our Chief Financial Officer on December 31, 2021.
Narrative to Summary Compensation Table
Agreements with Named Executive Officers
We have entered into employment agreements with each of Dr. Garg, Mr. Eisenstadt, Dr. Roberts and Dr. Harris. The material terms of such agreements are summarized below.
Employment Agreement with Vipin K. Garg, Ph.D.
On November 16, 2018, the Company entered into an employment agreement with Dr. Garg in connection with his employment as the President and Chief Executive Officer of the Company (the “ Employment Agreement ”). Pursuant to the Employment Agreement, Dr. Garg commenced employment with the Company on November 30, 2018.
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Under the Employment Agreement, Dr. Garg initially received a base salary of $500,000 and is eligible to receive an annual discretionary incentive bonus of up to 55% of his base salary based on achievement of performance goals established by the Compensation Committee.
Dr. Garg is eligible to participate in the Company’s employee benefit plans made available to its similarly situated senior executives. In addition, the Company pays the premium costs for a term life insurance policy for Dr. Garg with a benefit equal to Dr. Garg’s base salary and for short- and long-term disability plans that provide for an annual benefit of at least 60% of Dr. Garg’s base salary for as long as the disability continues. In addition, during the term of Dr. Garg’s employment, so long as Dr. Garg’s primary residence is located within 50 miles of his current residence in North Carolina, the Company will reimburse Dr. Garg an amount not to exceed $36,000 during any 12-month period to cover Dr. Garg’s commuting expenses, which amount will be grossed up for taxes. During the term of Dr. Garg’s employment, and subject to applicable securities laws or listing standards, the Company will use its best efforts to cause Dr. Garg to be nominated for election as a member of the Company’s board of directors at each annual meeting of stockholders at which Dr. Garg is up for election.
In the event of an employment termination, the Company will pay Dr. Garg his earned but unpaid base salary through the date of termination, accrued but unused vacation pay, unreimbursed business expenses and such employee benefits as may be due to Dr. Garg under the terms of the applicable benefit plans (the “ Accrued Benefits ”). In addition, if the Company terminates Dr. Garg’s employment for “cause” (as defined below), Dr. Garg will be entitled to payment of any unpaid prior year’s annual bonus.
If the Company terminates Dr. Garg’s employment without cause or Dr. Garg resigns his employment for “good reason” (as defined below), in addition to the Accrued Benefits, Dr. Garg will be entitled to receive 12 months of base salary continuation payments, 12 months of continued coverage under the health insurance plans in which Dr. Garg participates at the time of the termination and payment of any unpaid prior year’s annual bonus. If such employment termination or resignation occurs within one year following a “change in control” (as defined in the Employment Agreement), Dr. Garg is entitled to receive an amount equal to the sum of 18 months of his base salary plus his target annual discretionary incentive bonus for the year of termination, 18 months of continued coverage under the health insurance plans in which Dr. Garg participates at the time of the termination, payment of any unpaid prior year’s annual bonus and, if such termination occurs within the one-year period following a change in control, all of Dr. Garg’s outstanding unvested equity awards will become vested. If any payments, whether under Dr. Garg’s employment agreement or otherwise, would be subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code (the “ Code ”), such payments will be reduced to the extent necessary to avoid the excise tax if doing so would result in a greater net after tax payment to Dr. Garg. Dr. Garg is required to execute and not revoke a release of claims in order to be eligible to receive severance payments or benefits, other than the Accrued Benefits.
Under the Employment Agreement, “cause” generally means Dr. Garg’s (i) material breach of his fiduciary duties, (ii) material breach of his Employment Agreement, (iii) willful failure or refusal to follow written policies, (iv) conviction of, or plea of guilty or nolo contendere to, a felony, or (v) continuing and willful refusal to act as directed by the Board. Under the Employment Agreement, “good reason” generally means (i) a reduction in Dr. Garg’s base salary or target annual bonus opportunity, (ii) a material diminution in Dr. Garg’s authorities, duties or responsibilities, or (iii) a relocation of Dr. Garg’s principal place of employment more than 50 miles from Gaithersburg, Maryland.
Dr. Garg is subject to restrictive covenants during the term of his employment and for a period of one year following the termination of his employment. In particular, Dr. Garg will be prohibited from soliciting the Company’s customers, clients and employees and from engaging in sales, marketing or related activities on behalf of himself or another entity that directly competes with the Company and does business in the same geographical areas in which the Company does business.
Employment Agreement with Richard Eisenstadt, M.B.A.
On December 10, 2021, the Company entered into an employment agreement with Richard I. Eisenstadt, the Chief Financial Officer. The agreement provided that Mr. Eisenstadt would be employed so long as mutually agreeable to Mr. Eisenstadt and the Company.
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The agreement provided Mr. Eisenstadt with an initial base salary of $425,000. In addition, Mr. Eisenstadt was paid a signing bonus of $120,000, and is eligible to receive an annual discretionary incentive bonus of up to 40% of base salary based as determined by the Compensation Committee. In addition, Mr. Eisenstadt would be granted incentive stock options to purchase 150,000 shares of the Company’s common stock and 50,000 RSUs. Mr. Eisenstadt is eligible to participate in the Company’s employee benefit plans made available to its similarly situated senior executives. In addition, during the term of Mr. Eisenstadt’s employment, so long as Mr. Eisenstadt’s primary residence is located within 50 miles of his current residence in Keller, Texas, the Company will reimburse Mr. Eisenstadt an amount not to exceed $25,000 during any 12-month period to cover Mr. Eisenstadt’s commuting expenses, which amount will be grossed up for taxes.
If, prior to a “change in control” (as defined in the employment agreement), the Company terminates the employment of Mr. Eisenstadt without “cause” or if he resigns for “good reason” (as defined below), in addition to accrued benefits (to which he is entitled on any termination of employment), Mr. Eisenstadt will be entitled to receive severance equal to 12 months of base salary continuation payments, 12 months of continued coverage under the health insurance plans in which the executive participated at the time of the termination and payment of any unpaid prior year’s annual bonus. If such employment termination or resignation occurs within the one-year period following a change in control, he would be entitled to receive a severance amount equal to the sum of 12 months of his base salary plus his target annual discretionary incentive bonus for the year of termination, 12 months of continued coverage under the health insurance plans in which he participates at the time of termination, payment of any unpaid prior year’s annual bonus and, all of his outstanding unvested equity awards will become vested. The agreement also provides that if any payments, whether under the agreement or otherwise, payable to him would be subject to the golden parachute excise tax under Section 4999 of the Code, such payments will be reduced to the extent necessary to avoid the excise tax if doing so would result in a greater net after tax payment to him. Mr. Eisenstadt is required to execute and not revoke a release of claims in Altimmune’s favor in order to be eligible to receive the severance payments and benefits.
Under the agreement with Mr. Eisenstadt, “cause” generally means his (i) material breach of his fiduciary duties, (ii) material breach of the agreement, (iii) willful failure or refusal to follow Altimmune’s written policies, (iv) conviction of, or plea of guilty or nolo contendere to, a felony or (v) continuing and willful failure to act as directed by Altimmune’s board of directors or its chief executive officer. Under the agreement, “good reason” generally means (i) a reduction in Mr. Eisenstadt’s base salary or target annual bonus opportunity, (ii) a material diminution in authority, duties or responsibilities or (iii) a relocation of his principal place of employment more than 50 miles from Keller, Texas.
Under the agreement, Mr. Eisenstadt is subject to restrictive covenants during the term of his employment and for a period of six months following termination of employment. In particular, he is prohibited from soliciting the Company’s customers, clients and employees and from engaging in sales, marketing or related activities on the executive’s behalf or another entity that directly competes with the Company.
Employment Agreement with M. Scot Roberts, Ph.D.
On December 7, 2015, the Company entered into an employment agreement with M. Scot Roberts, M.D., the Chief Scientific Officer. The agreement provided that Dr. Roberts would be employed so long as mutually agreeable to Dr. Roberts and the Company.
The agreement provided Dr. Roberts with an initial base salary of $220,000. In addition, Dr. Roberts is eligible to receive an annual discretionary incentive bonus, initially set at up to 30% of base salary based as determined by the Compensation Committee. Dr. Roberts is eligible to participate in the Company’s employee benefit plans made available to its similarly situated senior executives.
If, prior to a “change in control” (as defined in the employment agreement), the Company terminates the employment of Dr. Roberts without “cause” or if he resigns for “good reason” (as defined below), in addition to accrued benefits (to which he is entitled on any termination of employment), Dr. Roberts will be entitled to receive severance equal to six months of base salary continuation payments, six months of continued coverage under the health insurance plans in which the executive participated at the time of the termination and payment of any unpaid prior year’s annual bonus. If such employment termination or resignation occurs within the one-year period following a change in control, he would be entitled to receive a severance amount equal to the sum of 12 months of his base salary plus his target annual discretionary incentive bonus for the year of termination, six months of continued coverage under the health insurance plans in which
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he participates at the time of termination, payment of any unpaid prior year’s annual bonus and, all of his outstanding unvested equity awards will become vested. The agreement also provides that if any payments, whether under the agreement or otherwise, payable to him would be subject to the golden parachute excise tax under Section 4999 of the Code, such payments will be reduced to the extent necessary to avoid the excise tax if doing so would result in a greater net after tax payment to him. Dr. Roberts is required to execute and not revoke a release of claims in Altimmune’s favor in order to be eligible to receive the severance payments and benefits.
Under the agreement with Dr. Roberts, “cause” generally means his (i) material breach of his fiduciary duties, (ii) material breach of the agreement, (iii) willful failure or refusal to follow Altimmune’s written policies, (iv) conviction of, or plea of guilty or nolo contendere to, a felony or (v) continuing and willful failure to act as directed by Altimmune’s board of directors or its chief executive officer. Under the agreement, “good reason” generally means (i) a reduction in the Dr. Roberts’ base salary or target annual bonus opportunity, (ii) a material diminution in authority, duties or responsibilities or (iii) a relocation of his principal place of employment more than 50 miles from Gaithersburg, Maryland.
Under the agreement, Dr. Roberts is subject to restrictive covenants during the term of his employment and for a period of six months following termination of employment. In particular, he is prohibited from soliciting the Company’s customers, clients and employees and from engaging in sales, marketing or related activities on the executive’s behalf or another entity that directly competes with the Company.
Employment Agreement with M. Scott Harris, M.D.
On September 9, 2019, the Company entered into an employment agreement with M. Scott Harris, M.D., the Chief Medical Officer. The agreement provided that Dr. Harris would be employed so long as mutually agreeable to Dr. Harris and the Company.
The agreement provided Dr. Harris with an initial base salary of $370,000. In addition, Dr. Harris is eligible to receive an annual discretionary incentive bonus, initially set at up to 30% of base salary based as determined by the Compensation Committee. In addition, Dr. Harris would be granted incentive stock options to purchase 107,000 shares of the Company’s common stock, Dr. Harris is eligible to participate in the Company’s employee benefit plans made available to its similarly situated senior executives.
If, prior to a “change in control” (as defined in the employment agreement), the Company terminates the employment of Dr. Harris without “cause” or if he resigns for “good reason” (as defined below), in addition to accrued benefits (to which he is entitled on any termination of employment), Dr. Harris will be entitled to receive severance equal to six months of base salary continuation payments, six months of continued coverage under the health insurance plans in which the executive participated at the time of the termination and payment of any unpaid prior year’s annual bonus. If such employment termination or resignation occurs within the one-year period following a change in control, he would be entitled to receive a severance amount equal to the sum of 12 months of his base salary plus his target annual discretionary incentive bonus for the year of termination, six months of continued coverage under the health insurance plans in which he participates at the time of termination, payment of any unpaid prior year’s annual bonus and, all of his outstanding unvested equity awards will become vested. The agreement also provides that if any payments, whether under the agreement or otherwise, payable to him would be subject to the golden parachute excise tax under Section 4999 of the Code, such payments will be reduced to the extent necessary to avoid the excise tax if doing so would result in a greater net after tax payment to the him. Dr. Harris is required to execute and not revoke a release of claims in Altimmune’s favor in order to be eligible to receive the severance payments and benefits.
Under the agreement with Dr. Harris, “cause” generally means his (i) material breach of his fiduciary duties, (ii) material breach of the agreement, (iii) willful failure or refusal to follow Altimmune’s written policies, (iv) conviction of, or plea of guilty or nolo contendere to, a felony or (v) continuing and willful failure to act as directed by Altimmune’s board of directors or its chief executive officer. Under the agreement, “good reason” generally means (i) a reduction in the Dr. Harris’ base salary or target annual bonus opportunity, (ii) a material diminution in authority, duties or responsibilities or (iii) a relocation of his principal place of employment more than 50 miles from Gaithersburg, Maryland.
Under the agreement, Dr. Harris is subject to restrictive covenants during the term of his employment and for a period of six months following termination of employment. In particular, he is prohibited from soliciting the Company’s
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customers, clients and employees and from engaging in sales, marketing or related activities on the executive’s behalf or another entity that directly competes with the Company.
Outstanding Equity Awards at 2022 Fiscal Year-End
The following table sets forth certain information with respect to outstanding equity awards of our Named Executive Officers as of December 31, 2022.
Option Awards
Stock Awards
Number of
Number of
Number of
Securities
Securities
Securities
Number of
Market Value
Underlying
Underlying
Underlying
Shares or
of Shares or
Unexercised
Unexercised
Unexercised
Option
Option
Units of Stock
Units of Stock
Options (#)
Options (#)
Unearned
Exercise
Expiration
That Have Not
That Have
Name
Grant Date
Exercisable
Unexercisable
Options (#)
Price ($)
Date
Vested (#)
Not Vested ($)
Vipin K. Garg, Ph.D.
11/30/2018
322,907
—
(1)
—
3.59
11/30/2028
—
—
1/2/2020
109,010
40,490
(2)
—
1.92
1/2/2030
—
—
2/1/2021
110,688
130,812
(3)
—
16.71
2/1/2031
—
—
2/1/2021
—
—
(4)
—
—
—
49,636
816,512
2/2/2022
—
223,000
(5)
—
7.53
2/2/2032
—
—
2/2/2022
—
—
(6)
—
—
—
75,800
1,246,910
Richard Eisenstadt, M.B.A.
12/31/2021
37,500
112,500
(7)
—
9.16
12/31/2031
—
—
12/31/2021
—
—
(8)
—
—
—
37,500
616,875
M. Scot Roberts, Ph.D.
4/8/2016
375
—
(9)
—
401.10
4/8/2026
—
—
12/4/2014
299
—
(9)
—
77.40
12/4/2024
—
—
12/5/2013
299
—
(9)
—
17.40
12/5/2023
—
—
9/22/2017
1,667
—
(10)
—
74.40
9/22/2027
—
—
5/21/2018
1,667
—
(11)
—
13.35
5/21/2028
—
—
1/2/2019
8,750
—
(12)
—
2.60
1/2/2029
—
—
3/26/2019
11,875
2,375
(13)
—
2.95
3/26/2029
—
—
1/2/2020
19,188
16,629
(2)
—
1.92
1/2/2030
—
—
2/1/2021
41,250
48,750
(3)
—
16.71
2/1/2031
—
—
2/1/2021
—
—
(4)
—
—
—
18,498
304,292
2/2/2022
—
91,600
(5)
—
7.53
2/2/2032
—
—
2/2/2022
—
—
(6)
—
—
—
31,100
511,595
M. Scott Harris, M.D.
9/9/2019
86,938
20,062
(14)
—
2.13
9/9/2029
—
—
1/2/2020
14,771
16,629
(2)
—
1.92
1/2/2030
—
—
2/1/2021
41,250
48,750
(3)
—
16.71
2/1/2031
—
—
2/1/2021
—
—
(4)
—
—
—
18,498
304,292
2/2/2022
—
91,600
(5)
—
7.53
2/2/2032
—
—
2/2/2022
—
—
(6)
—
—
—
31,100
511,595
(1) This option was granted on November 30, 2018 and 25% became vested and exercisable on the first anniversary of the grant date. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on January 1, 2020.
(2) On January 2, 2020, Dr. Garg, Dr. Roberts and Dr. Harris were granted an option to purchase 149,500, 61,400 and 61,400, respectively, shares of Common Stock of the Company at an exercise price of $1.92 per share. 25% of the option vests and becomes exercisable on the first anniversary of the grant date and the aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on February 2, 2021.
(3) On February 1, 2021, Dr. Garg, Dr. Roberts and Dr. Harris were granted an option to purchase 241,500, 90,000 and 90,000, respectively, shares of Common Stock of the Company at an exercise price of $16.71 per share. 25% of the option vests and becomes exercisable on the first anniversary of the grant date and the aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on March 1, 2022.
(4) On February 1, 2021, Dr. Garg, Dr. Roberts and Dr. Harris were granted 66,181, 24,664 and 24,664 RSUs, respectively. The RSUs vest equally over a four-year period commencing on February 1, 2022.
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(5) On February 2, 2022, Dr. Garg, Dr. Roberts and Dr. Harris were granted an option to purchase 223,000, 91,600 and 91,600, respectively, shares of Common Stock of the Company at an exercise price of $7.53 per share. 25% of the option vests and becomes exercisable on the first anniversary of the grant date and the aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on February 2, 2023.
(6) On February 2, 2022, Dr. Garg, Dr. Roberts and Dr. Harris were granted 75,800, 31,100 and 31,100 RSUs, respectively. The RSUs vest equally over a four-year period commencing on February 2, 2023.
(7) On December 31, 2021, Mr. Eisenstadt was granted an option to purchase 150,000 shares of Common Stock of the Company at an exercise price of $9.16 per share. 25% of the option vests and becomes exercisable on the first anniversary of the grant date and the aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on January 31, 2023.
(8) On December 31, 2021, Mr. Eisenstadt was granted 50,000 RSUs. The RSUs vest equally over a four-year period commencing on December 31, 2022.
(9) These options were acquired pursuant to the Merger Agreement on May 4, 2017. These options are fully vested.
(10) This option was granted on September 22, 2017, and 25% became vested and exercisable on the first anniversary of the grant date. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on September 22, 2018. This option was fully vested.
(11) This option was granted on May 21, 2018, and 25% became vested and exercisable on March 1, 2019. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on April 1, 2019.
(12) This option was granted on January 2, 2019, and 25% became vested and exercisable on the first anniversary of the grant date. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on January 2, 2020.
(13) This option was granted on March 26, 2019, and 25% became vested and exercisable on the first anniversary of the grant date. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on March 26, 2020.
(14) This option was granted on September 9, 2019, and 25% became vested and exercisable on the first anniversary of the grant date. The aggregate remaining unvested portion will vest and become exercisable in equal monthly installments over the 36-month period commencing on September 9, 2020.
Director Compensation
In September 2022, the Company’s Board approved updates to our existing non-employee director compensation policy, which were effective as of January 1, 2023. Accordingly, the Board increased the cash compensation for Audit Committee Member from $7,500 in 2022 to $9,000 in 2023 and Compensation Committee Chairperson from $12,000 in 2022 to $15,000 in 2023. Under the program, non-employee directors that qualify under the program receive the cash compensation set forth below, and an additional annual payment of an option to purchase a number of shares of the Company’s Common Stock equal to 62 ½ percentile of the Company’s peer group based on percentage ownership (the “Annual Director Option Grant Amount”), which will be granted immediately following the date of the of each annual meeting of stockholders. Any such option will vest in substantially equal monthly installments for 11 months after the date of grant, with the remaining one-twelfth vesting on the earlier of the one-year anniversary of the date of the grant or the date of the next annual meeting of the Company’s stockholders. In addition, new non-employee directors that qualify under the program receive an initial award in the form of an option to purchase shares of the Company’s Common Stock equal to two times the Annual Director Option Grant Amount upon their election to the board. Any such option shall vest in equal monthly installments during the 36 months following the date upon which the director is first elected to the Board. The vesting of any option grants to our non-employee directors under our non-employee director compensation policy is subject to such non-employee director’s continued service as a director and will accelerate in full upon a change in control of our company.
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We also have a policy of reimbursing our directors for their reasonable out-of-pocket expenses incurred in attending board of directors and committee meetings.
Under our non-employee director compensation program, each non-employee director that qualifies under the program is eligible to receive compensation for his or her service on our board of directors or committees thereof consisting of annual cash retainers paid quarterly in arrears, as follows:
Position
Retainer
Board Member
$
40,000
Chairperson of the Board
$
30,000
Audit Committee Chairperson
$
20,000
Audit Committee Member
$
9,000
Compensation Committee Chairperson
$
15,000
Compensation Committee Member
$
6,000
Nominating and Corporate Governance Committee Chairperson
$
10,000
Nominating and Corporate Governance Committee Member
$
5,000
The table below sets forth the compensation received by each of the individuals who served as a non-employee director during the fiscal year ended December 31, 2022.
Nonqualified
Non-Equity
Deferred
Fees earned
Stock
Option
Incentive Plan
Compensation
All Other
or paid in
Awards
Awards
Compensation
Earnings
Compensation
Total
Name
cash ($)
($)
($)(1)
($)
($)
($)
($)
Mitchel Sayare, Ph.D. (2)
70,000
—
241,086
—
—
—
311,086
David J. Drutz, M.D. (3)
57,000
—
241,086
—
—
—
298,086
John M Gill (4)
52,500
—
241,086
—
—
—
293,586
Philip L. Hodges (5)
66,000
—
241,086
—
—
—
307,086
Wayne Pisano (6)
57,500
—
241,086
—
—
—
298,586
Diane K. Jorkasky, M.D. (7)
46,000
—
241,086
—
—
—
287,086
Klaus O. Schafer, M.D., MPH (8)
53,500
—
241,086
—
—
—
294,586
(1) Amounts reflect the aggregate grant date fair value of stock options granted during the covered year computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the amounts for fiscal years 2022 are discussed in Item 13, Financial Statements and Supplementary Data.
(2) As of December 31, 2022, Dr. Sayare held unexercised options to purchase an aggregate of 105,001 shares of the Common Stock of the Company.
(3) As of December 31, 2022, Dr. Drutz held unexercised options to purchase an aggregate of 93,906 shares of the Common Stock of the Company.
(4) As of December 31, 2022, Mr. Gill held unexercised options to purchase an aggregate of 93,834 shares of the Common Stock of the Company.
(5) As of December 31, 2022, Mr. Hodges held unexercised options to purchase an aggregate of 93,767 shares of the Common Stock of the Company.
(6) As of December 31, 2022, Mr. Pisano held unexercised options to purchase an aggregate of 73,100 shares of the Common Stock of the Company.
(7) As of December 31, 2022, Dr. Jorkasky held unexercised options to purchase an aggregate of 79,490 shares of the Common Stock of the Company.
(8) As of December 31, 2022, Dr. Schafer held unexercised options to purchase an aggregate of 93,827 shares of the Common Stock of the Company.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of February 24, 2023 by (i) each person or group of persons known by us to beneficially own more than five percent of our Common Stock, (ii) each of our named executive officers, (iii) each of our directors and nominees for director and (iv) all of our directors and executive officers as a group.
The following table gives effect to the shares of Common Stock issuable within 60 days of February 24, 2023 upon the exercise of all options and other rights beneficially owned by the indicated stockholders on that date. Beneficial ownership is determined in accordance with Rule 13d-3 promulgated under Section 13 of the Securities Exchange Act of 1934, as amended, and includes voting and investment power with respect to shares. Percentage of beneficial ownership is based on 49,278,861 shares of Common Stock outstanding at the close of business on February 24, 2023. Except as otherwise noted below, each person or entity named in the following table has sole voting and investment power with respect to all shares of our Common Stock that he, she or it beneficially owns.
Unless otherwise indicated, the address of each beneficial owner listed below is c/o Altimmune, Inc., 910 Clopper Road, Suite 201S, Gaithersburg, Maryland 20878.
Number of
Percentage of
Shares
Shares
Beneficially
Beneficially
Name of Beneficial Owner
Owned
Owned
5% or Greater Stockholders:
State Street Corporation (1)
5,914,588
12.0
%
Avidity Partners Management LP (2)
3,990,000
8.1
Janus Henderson Group PLC (3)
3,833,579
7.8
TIAA-CREF Investment Management LLC (4)
3,265,963
6.6
Tang Capital Partners, LP (5)
2,700,450
5.5
Cormorant Global Healthcare Master Fund, LP (6)
2,600,000
5.3
The Vanguard Group (7)
2,532,420
5.1
Directors and Named Executive Officers:
Vipin K. Garg (8)
889,358
1.8
%
Richard Eisenstadt (9)
58,885
*
M. Scot Roberts (10)
146,949
*
M. Scott Harris (11)
214,519
*
Mitchel Sayare, Ph.D. (12)
119,547
*
David J. Drutz, M.D. (13)
102,640
*
John M. Gill (14)
87,502
*
Philip L. Hodges (15)
108,596
*
Klaus O. Schafer, M.D., MPH (16)
91,256
*
Wayne Pisano (17)
69,848
*
Diane K. Jorkasky, M.D. (18)
66,629
*
All Executive Officers and Directors as a Group (11 persons) (19)
1,955,729
3.9
%
*
Represents beneficial ownership of less than one percent of Altimmune’s outstanding Common Stock.
(1) This information is based solely on information reported on a Schedule 13G/A filed with the SEC on January 10, 2023 on behalf of State Street Corporation and SSGA Fund Management, Inc., a subsidiary of State Street Corporation. According to the report, State Street Corporation has shared voting power with respect to 5,906,988 shares of Common Stock of the Company and shared dispositive power with respect to 5,914,588 shares of the Common Stock of the Company, and SSGA Fund Management has shared voting and dispositive power with respect to 5,734,424 shares of Common Stock of the Company. The principal business address of State Street Corporation is One Lincoln Street, Boston, MA 02111.
(2) This information is based solely on information reported on a Schedule 13G/A filed with the SEC on February 14, 2023 on behalf of Avidity Partners Management LP., Avidity Partners Management (GP) LLC, the general partner of
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Avidity Partners Management LP, Avidity Capital Partners Fund (GP) LP, the general partner of Avidity Master Fund LP, Avidity Capital Partners (GP) LLC, the general partner of Avidity Capital Partners Fund (GP) LP, Avidity Master Fund LP, David Witzke, for himself and as the Managing Member of Avidity Partners Management (GP) LLC and Avidity Capital Partners (GP) LLC, and Michael Gregory, for himself and as the Managing Member of Avidity Partners Management (GP) LLC and Avidity Capital Partners (GP) LLC (collectively, “Avidity”). According to the report, Avidity has shared voting and dispositive power with respect to 3,990,000 shares of the Common Stock of the Company. The principal business address of Avidity is 2828 N Harwood Street, Suite 1220, Dallas, TX 75201.
(3) This information is based solely on information reported on a Schedule 13G filed with the SEC on February 13, 2023 on behalf of Janus Henderson Group plc. According to the report, Janus Henderson Group PLC has shared voting and dispositive power with respect to 3,833,579 shares of the Common Stock of the Company. Janus Henderson Group PLC has a 100% ownership stake in Janus Henderson Investors U.S. LLC (“JHIUS”), Janus Henderson Investors UK Limited, and Janus Henderson Investors Australia Institutional Funds Management Limited, (each an “Asset Manager’ and collectively as the “Asset Managers”). Due to the above ownership structure, holdings for the Asset Managers are aggregated for purposes of this filing. Each Asset Manager is an investment adviser registered or authorized in its relevant jurisdiction and each furnishing investment advice to various fund, individual and/or institutional clients (collectively referred to herein as “Managed Portfolios”). As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, JHIUS may be deemed to be the beneficial owner of 3,821,679 shares or 7.8% of the shares of Common Stock of the Company held by such Managed Portfolios. However, JHIUS does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. The principal business address of Janus Henderson Group PLC is 201 Bishopsgate EC2M 3AE, United Kingdom.
(4) This information is based solely on information reported on a Schedule 13G/A filed with the SEC on February 14, 2023 on behalf of TIAA-CREF Investment Management, LLC and Teachers Advisors, LLC. According to the report, TIAA-CREF Investment Management, LLC has sole voting and dispositive power with respect to 3,265,963 shares of the Common Stock of the Company. TIAA-CREF Investment Management, LLC is the investment adviser to the College Retirement Equities Fund (“CREF”), a registered investment company, and may be deemed to be a beneficial owner of 3,265,963 shares of Common Stock of the Company owned by CREF. Teachers Advisors, LLC (“TAL”) is the investment adviser to three registered investment companies, TIAA-CREF Funds (“Funds”), TIAA-CREF Life Funds (“Life Funds”), and TIAA Separate Account VA-1 (“VA-1”), as well as one or more separately managed accounts of Advisors (collectively, the “Separate Accounts”), and may be deemed to be a beneficial owner of 0 shares of Common Stock of the Company owned separately by Funds, Life Funds, VA-1, and/or the Separate Accounts. The principal business address of TIAA-CREF Investment Management, LLC is 730 Third Avenue New York, NY 10017-3206.
(5) This information is based solely on information reported on a Schedule 13G/A filed with the SEC on February 14, 2023 on behalf of Tang Capital Partners, L.P., Tang Capital Management, LLC, the general partner of Tang Capital Partners, L.P., and Kevin Tang, the manager of Tang Capital Management, LLC (collectively, “Tang”). According to the report, Tang has shared voting and dispositive power with respect to 2,700,450 shares of Common Stock of the Company. The principal business address of Tang is 4747 Executive Drive, Suite 210, San Diego, CA 92121.
(6) This information is based solely on information reported on a Schedule 13G/A filed with the SEC on February 14, 2023 on behalf of Cormorant Global Healthcare Master Fund, LP, Cormorant Global Healthcare GP, LLC, the general partner of Cormorant Global Healthcare Master Fund, LP, Cormorant Asset Management, LP, the investment manager to Cormorant Global Healthcare Master Fund, LP, and Bihua Chen, the managing member of Cormorant Global Healthcare GP, LLC and the general partner of Cormorant Asset Management, LP (collectively, “Cormorant”). According to the report, Cormorant has shared voting and dispositive power with respect to 2,600,000 shares of the Common Stock of the Company. The principal business address of Cormorant is 200 Clarendon Street, 52nd Floor Boston, MA 02116.
(7) This information is based solely on information reported on a Schedule 13G filed with the SEC on February 9, 2023 on behalf of The Vanguard Group - 23-1945930. According to the report, The Vanguard Group - 23-1945930 has shared voting power with respect to 12,608 shares of Common Stock of the Company, sole dispositive power with respect to 2,481,192 shares of Common Stock of the Company, and shared dispositive power with respect to 51,228 shares of Common Stock of the Company. The principal business address of The Vanguard Group - 23-1945930 is 100 Vanguard Blvd. Malvern, PA 19355.
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(8) Consists of 249,129 shares of Common Stock, and 640,229 shares of Common Stock which can be acquired upon exercise of outstanding options or vesting of restricted stock within 60 days of February 24, 2023.
(9) Consists of 12,010 shares of Common Stock, and 46,875 shares of Common Stock which can be acquired upon exercise of outstanding options or vesting of restricted stock within 60 days of February 24, 2023.
(10) Consists of 19,856 shares of Common Stock, 15 shares of Common stock owned by his spouse and 127,078 shares of Common Stock which can be acquired upon exercise of outstanding options or vesting of restricted stock within 60 days of February 24, 2023.
(11) Consists of 23,311 shares of Common Stock and 191,208 shares of Common Stock which can be acquired upon exercise of outstanding options or vesting of restricted stock within 60 days of February 24, 2023.
(12) Consists of 26,363 shares of Common Stock and 93,184 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(13) Consists of 20,484 shares of Common Stock held by Pacific Biopharma Associates, LLC, of which Mr. Drutz is the President and 82,156 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(14) Consists of 2,771 shares of Common Stock, 2,714 shares of Common stock owned by his son who lives with Mr. Gill and 82,017 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(15) Consists of 8,731 shares of Common Stock, 17,848 shares of Common Stock held by Paradigm Venture Partners, L.P., of which Mr. Hodges is deemed to be the beneficial owner of these securities and 82,017 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(16) Consists of 9,179 shares of Common Stock and 82,077 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(17) Consists of 8,498 shares of Common Stock and 61,350 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(18) Consists of 66,629 shares of Common Stock that can be acquired upon the exercise of outstanding options within 60 days of February 24, 2023.
(19) Includes 400,909 shares of Common Stock held by the Company’s current directors and executive officers and 1,554,820 shares of Common Stock that can be acquired by the Company’s current directors and executive officers upon the exercise of outstanding options or vesting of restricted stock within 60 days of February 24, 2023.
Equity Compensation Plan Information
The following table provides information regarding the number of securities to be issued under our equity plans, the weighted-average exercise price of options issued under our equity plans and the number of securities remaining available for future issuance under our equity plans, in each case as of December 31, 2022:
Number of
Number of
securities to be
Weighted
securities
issued upon
average
remaining
exercise
exercise price of
available
of outstanding
outstanding options,
for future
options,
warrants and
issuance under equity
warrants
rights
compensation
Plan category
and rights
($)
plans
Equity compensation plans approved by security holders
3,443,104
8.53
1,368,689
Equity compensation plans not approved by security holders
355,318
4.88
1,309,275
Total
3,798,422
8.19
2,677,964
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Item 13. Certain Relationships and Related Transactions, and Director Independence
Director independence
The Board of Directors has determined that each of our current directors, other than Dr. Garg, currently meet the independence requirements contained in the NASDAQ listing standards and applicable tax and securities rules and regulations. None of our non-employee directors has or had a relationship with the Company or its subsidiaries that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In compliance with the NASDAQ listing standards, we have a Board of Directors comprised of a majority of independent directors. The NASDAQ listing standards have both objective tests and a subjective test for determining who is an “independent director.” The objective tests state, for example, that a director is not considered independent if he is an employee of the Company or is a partner in or controlling stockholder or executive officer of an entity to which the Company made, or from which the Company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
None of the non-employee directors were disqualified from “independent” status under the objective tests. In assessing independence under the subjective test, the Board took into account the standards in the objective tests, and reviewed and discussed additional information provided by the directors with regard to each director’s business and personal activities as they may relate to Altimmune’s management. Based on all of the foregoing, as required by the NASDAQ listing standards, the Board made a substantive determination as to each of the non-employee directors that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The Board has not established categorical standards or guidelines to make these subjective determinations, but considers all relevant facts and circumstances.
In addition to Board-level standards for director independence, except as described above under “Item 10 – Board committees,” the directors who serve on the Audit Committee and the Compensation Committee each satisfy standards established by the SEC and the NASDAQ listing rules providing that to qualify as “independent” for purposes of membership on the Audit Committee or the Compensation Committee, members of such committees may not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company other than their director compensation. Also, each of the directors who serve on the Compensation Committee has been determined to be a “non-employee director” for purposes of the applicable SEC rules and regulations and an “outside director” for purposes of the applicable tax rules.
In making its independence determinations, the Board considered transactions occurring since the beginning of 2018 between the Company and entities associated with the independent directors or members of their immediate family. In each case, the Board determined that, because of the nature of the director’s relationship with the entity and/or the amount involved, the relationship did not impair the director’s independence.
The Company does not have a director tenure requirement, as it believes its efforts to regularly refresh the Board with new directors, as well as natural turnover, has achieved the appropriate balance between maintaining longer-term directors with deep institutional knowledge and new directors who bring new perspectives and diversity to the Board. Notwithstanding this belief and the fact that the Company’s corporate governance guidelines and NASDAQ Global Market rules do not deem long-tenured directors to be non-independent, the Board reviews director tenure in connection with its director independence determinations.
Review and approval of related party transactions
Our related parties include our directors, director nominees, executive officers, holders of more than five percent of the outstanding shares of our Common Stock the foregoing persons’ immediate family members. We review relationships and transactions in which the Company and our related parties are participants to determine whether such related persons have a direct or indirect material interest. As required under SEC rules, transactions since January 1, 2022
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that are determined to be directly or indirectly material to a related party are disclosed in this Proxy Statement. In addition, the Audit Committee reviews and approves any related party transaction that is required to be disclosed.
Since January 1, 2022, there have been no related party transactions.
Indemnification agreements
We have entered into an indemnification agreement with each of our officers and outside directors. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.
Item 14. Principal Accountant Fees and Services
The following table sets forth the aggregate fees billed to the Company for services during the fiscal years ended December 31, 2022 and 2021 by our independent registered public accounting firm, Ernst & Young LLP (“E&Y”):
Fee Category
2022
2021
Audit Fees (1)
$
776,352
$
954,713
Tax Fees (2)
54,570
—
Total
$
830,922
$
954,713
(1) Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements included in the Company’s Annual Report and review of the interim consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and services that are normally provided by independent registered public accountants in connection with statutory and regulatory filings or engagements.
(2) Tax Fees were billed for services including assistance with tax compliance and the preparation of tax returns, tax consultation services, assistance in connection with tax audits and tax advice.
Pre-Approval Policies
The Audit Committee, or a designated member thereof, pre-approves 100% of all audit, audit-related, tax and other services rendered by the independent registered public accounting firm to the Company or its subsidiaries.
Immediately following the completion of each fiscal year, the Company’s independent registered public accounting firm shall submit to the Audit Committee (and the Audit Committee shall request from the independent registered public accounting firm), as soon as possible, a formal written statement describing: (i) the independent registered public accounting firm’s internal quality-control procedures; and (ii) all relationships between the independent registered public accounting firm and the Company, including at least the matters set forth in Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees), in order to assess the independent registered public accounting firm’s independence.
Immediately following the completion of each fiscal year, the independent registered public accounting firm also shall submit to the Audit Committee (and the Audit Committee shall request from the independent registered public accounting firm), a formal written statement of the fees billed by the independent registered public accounting firm to the Company in each of the last two fiscal years for each of the following categories of services rendered by the independent registered public accounting firm: (i) the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q or services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements; (ii) assurance and related services not included in clause (i) that are reasonably related to the performance of the audit or review of the Company’s financial statements, in the aggregate and by each service; (iii) tax compliance, tax advice and tax planning services, in the aggregate and by each service; and (iv) all other products and services rendered by the independent registered public accounting firm, in the aggregate and by each service.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Financial Statements
Reference is made to the Index to the Consolidated Financial Statements included in Item 8 of this report.
Financial Statement Schedules
Required information is included in the notes to the consolidated financial statements.
Exhibit Index
Exhibit
No.
Description
2.1
Agreement and Plan of Merger and Reorganization, dated July 8, 2019, by and among Altimmune, Inc., Springfield Merger Sub, Inc., Springfield Merger Sub, LLC, Spitfire Pharma, Inc. and David Collier, as the Stockholder Representative (incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K filed on July 9, 2019)
3.1
Amended and Restated Certificate of Incorporation, dated October 17, 2017 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on October 18, 2017)
3.2
Certificate of Amendment to Amended and Restated Certificate of Incorporation regarding a reverse stock split (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on September 13, 2018)
3.3
Certificate of Amendment to Amended and Restated Certificate of Incorporation regarding an increase in authorized shares (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filed on September 13, 2018)
3.4
Amended and Restated Bylaws of Altimmune, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filed on October 18, 2017)
3.5
Certificate of Designations of the Series B Convertible Preferred Stock, dated August 21, 2017 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on August 21, 2017)
4.1
Form of Warrant in connection with Loan and Security Agreement, dated March 30, 2012 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on April 3, 2012)
4.2
Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on August 17, 2017)
4.3
Form of Exchange Note (incorporated by reference to Exhibit A to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 25, 2018)
4.4
Form of Exchange Note (incorporated by reference to Exhibit A to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 25, 2018)
4.5
Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.5 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 filed on September 26, 2018)
4.6
Form of Pre-funded Warrant (incorporated by reference to Exhibit 4.3 to the Registrant’s Post-Effective Amendment on Form S-1 filed on September 28, 2018)
4.7
Form of Warrant (incorporated by reference to Exhibit 4.4 to the Registrant’s Post-Effective Amendment on Form S-1 filed on September 28, 2018)
4.8
Form of Pre-funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on October 9, 2018)
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Exhibit
No.
Description
4.9
Form of Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K filed on October 9, 2018)
4.10*
Description of Registrant’s Securities
10.1†
Altimmune, Inc. 2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on May 8, 2017)
10.2†
Amendment No. 1 to the Altimmune, Inc. 2017 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Registrant’s definitive proxy statement on Schedule 14A filed on July 26, 2018)
10.3†
Altimmune, Inc. 2001 Employee Stock Option Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Form S-8 filed on May 10, 2017)
10.4†
Altimmune, Inc. 2001 Non-Employee Stock Option Plan (incorporated by reference to Exhibit 99.2 to the Registrant’s Form S-8 filed on May 10, 2017)
10.5†
Altimmune, Inc. 2018 Inducement Grant Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on December 3, 2018)
10.6†
Altimmune, Inc. 2019 Employee Stock Purchase Plan (incorporated herein by reference to Appendix A to the Registrant’s Definitive Proxy Statement, filed on August 22, 2019)
10.7*†
Altimmune, Inc. Non-Employee Director Compensation Policy
10.8§
Second Restated License Agreement, effective as of October 4, 2005, between Crucell Holland B.V. and Vaxin Inc. (incorporated by reference to Exhibit 10.10 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.9§
Amendment No. 1 to Second Restated License Agreement, effective as of September 25, 2015, between Crucell Holland B.V. and Altimmune, Inc. (incorporated by reference to Exhibit 10.11 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.10§
Amendment No. 2 to Second Restated License Agreement, effective as of September 20, 2016, between Janssen Vaccines & Prevention B.V. (formerly Crucell Holland B.V.) and Altimmune, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on August 11, 2020)
10.11§
Amendment No. 3 to Second Restated License Agreement, effective as of April 2, 2020, between Janssen Vaccines & Prevention B.V. (formerly Crucell Holland B.V.) and Altimmune, Inc. (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed on August 11, 2020)
10.12§
Amendment No. 4 to Second Restated License Agreement, effective as of July 28, 2020, between Janssen Vaccines & Prevention B.V. (formerly Crucell Holland B.V.) and Altimmune, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on November 9, 2020)
10.13
Amendment No. 5 to Second Restated License Agreement, effective as of October 22, 2020, between Janssen Vaccines & Prevention B.V. (formerly Crucell Holland B.V.) and Altimmune, Inc. (incorporated by reference to Exhibit 10.15 to the Registrant’s Form 10-K filed on February 25, 2021)
10.14
Amendment No. 6 to Second Restated License Agreement, effective as of January 22, 2021, between Janssen Vaccines & Prevention B.V. (formerly Crucell Holland B.V.) and Altimmune, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on May 17, 2021)
10.15§
Amended and Restated Exclusive License Agreement, dated as of June 2, 2014, between the UAB Research Foundation and Vaxin Inc. (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-Q filed on August 14, 2017)
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Exhibit
No.
Description
10.16§
First Amendment to Amended and Restated Exclusive License Agreement, effective as of October 16, 2015, between UAB Research Foundation and Altimmune, Inc. (f/k/a Vaxin Inc.) (incorporated by reference to Exhibit 10.9 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.17§
Contract with the National Institute of Allergy and Infectious Diseases of the National Institutes of Health for the Development of Vaccine Formulations Effective Against NIAID Priority Pathogens, dated September 9, 2014 (Contract No. HHSN272201400040C) (incorporated by reference to Exhibit 10.61 to the Registrant’s Form 10-Q filed on November 6, 2014)
10.18§
Contract Award issued by Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated July 27, 2016 (incorporated by reference to Exhibit 10.6 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.19
Amendment No. 4 to Contract Award issued by the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated September 20, 2018 (incorporated by reference to Exhibit 10.8 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 filed on September 26, 2018)
10.20§
Amendment No. 5 to Contract Award issued by Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated August 20, 2019 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q filed on November 13, 2019)
10.21§
Amendment No. 6 to Contract Award issued by the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated December 23, 2020 (incorporated by reference to Exhibit 10.22 to the Registrant’s Form 10-K filed on February 25, 2021)
10.22§
Amendment No. 7 to Contract Award issued by the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated June 29, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on August 10, 2021)
10.23§
Amendment No. 8 to Contract Award issued by the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services, dated September 17, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on November 9, 2021)
10.24§
Amended and Restated License Agreement, dated July 12, 2019, by and between Mederis Diabetes, LLC and Spitfire Pharma, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on November 13, 2019)
10.25
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.12 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.26†
Employment Agreement, dated December 7, 2015, between M. Scot Roberts and Altimmune, Inc. (incorporated by reference to Exhibit 10.17 to the Registrant’s Form 10-Q filed on August 14, 2017)
10.27†
Employment Agreement, dated November 16, 2018 between Dr. Vipin K. Garg and Altimmune, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on November 27, 2018)
10.28†
Employment Agreement, dated September 3, 2019, by and between Altimmune, Inc. and M. Scott Harris (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed on November 13, 2019)
10.29†
Employment Agreement, dated December 10, 2021, by and between Altimmune, Inc. and Richard Eisenstadt (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 13, 2021)
10.30*†
Employment Agreement, dated January 1, 2023, by and between Altimmune, Inc. and Raymond M. Jordt.
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Exhibit
No.
Description
10.31
Equity Distribution Agreement, dated February 25, 2021, by and among Altimmune, Inc. and Piper Sandler & Co., Evercore Group L.L.C. and B. Riley Securities, Inc. (incorporated by reference to Exhibit 1.1 to the Registrant’s Form 8-K filed on February 25, 2021)
21*
Subsidiaries
23.1*
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
31.1*
Certification of Principal Executive Officer Pursuant to SEC Rule 13a-14(a)
31.2*
Certification of Principal Financial Officer Pursuant to SEC Rule 13a-14(a)
32.1*
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2*
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Filed herewith.
†
Management contract or compensatory plan or arrangement.
§
Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment.
Financial Statements and Schedules of Subsidiaries and Affiliates
None.
Item 16. Form 10-K Summary
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the city of Gaithersburg, State of Maryland, on the 28 th day of February 2023.
ALTIMMUNE, INC.
By:
/s/ Vipin K. Garg
Vipin K. Garg
Chief Executive Officer
POWER OF ATTORNEY
BY THESE PRESENTS, each person whose signature appears below constitutes and appoints Vipin K. Garg and Richard Eisenstadt his true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Vipin K. Garg
Vipin K. Garg
President, Chief Executive Officer and Director (Principal Executive Officer)
February 28, 2023
/s/ Richard Eisenstadt
Richard Eisenstadt
Chief Financial Officer, (Principal Financial Officer and Principal Accounting Officer)
February 28, 2023
/s/ Mitchel Sayare, Ph.D.
Mitchel Sayare, Ph.D.
Chairman of the Board
February 28, 2023
/s/ John Gill
John Gill
Director
February 28, 2023
/s/ Philip Hodges
Philip Hodges
Director
February 28, 2023
/s/ David Drutz, M.D.
David Drutz, M.D.
Director
February 28, 2023
/s/ Klaus O. Schafer, M.D.
Klaus O. Schafer, M.D.
Director
February 28, 2023
/s/ Wayne Pisano
Wayne Pisano
Director
February 28, 2023
/s/ Diane Jorkasky, M.D.
Diane Jorkasky, M.D.
Director
February 28, 2023
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