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Item 7. Management’s Discussion and Analysis

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Altimmune, Inc.

is a clinical stage biopharmaceutical company focused on developing treatments for obesity and liver diseases.

Our lead product candidate, pemvidutide (formerly known as ALT-801), is a GLP-1/glucagon dual receptor agonist that is being developed for the treatment of obesity and metabolic dysfunction-associated steatohepatitis (“MASH”), previously termed non-alcoholic steatohepatitis (“NASH”).

is a clinical stage biopharmaceutical company focused on developing treatments for obesity, metabolic and liver diseases.

Our lead product candidate, pemvidutide (formerly known as ALT-801), is a novel, investigational, peptide-based GLP-1/glucagon dual receptor agonist.

Pemvidutide is currently in clinical development for obesity and metabolic associated steatohepatitis (MASH).

We also expect to pursue additional indications for pemvidutide that leverage the differentiated clinical profile of pemvidutide.

Except where the context indicates otherwise, references to “we,” “us,” “our,” “Altimmune”, or the “Company” refer to the company and its subsidiaries.

Fiscal Year 2024 Business Update

On October 24, 2023, the U.S.

Food and Drug Administration (“FDA”) granted fast track designation pemvidutide for the treatment of MASH.

End-of-Phase 2 Meeting

On November 7, 2024, we announced the successful completion of our End-of-Phase 2 Meeting with the U.S.

Food and Drug Administration (the “FDA”) and agreement on the design of a Phase 3 registrational program for its product candidate, pemvidutide, in the treatment of obesity.

The interaction with the FDA included an extensive review of the preclinical and clinical data generated to date, including data from six completed clinical trials of pemvidutide.

The planned registrational program will include four Phase 3, randomized, double-blind, placebo-controlled, parallel-group trials, each evaluating treatment with pemvidutide over a 60-week period.

The Phase 3 program is expected to enroll approximately 5,000 subjects across the four trials.

The safety and efficacy of pemvidutide doses of 1.2 mg, 1.8 mg, and 2.4 mg will be evaluated with the intention of obtaining approval for all three doses.

The Phase 3 program is designed to leverage the key attributes of pemvidutide, including the effects of balanced GLP-1/glucagon dual agonism in subjects with overweight and obesity.

Pemvidutide – 12-Week Phase 1b trial

On November 15, 2024, we presented new data derived from an analysis of plasma samples from subjects who completed a randomized placebo-controlled Phase 1b trial of pemvidutide in subjects with overweight or obesity and MASLD.

In the Phase 1b clinical trial, 94 subjects with obesity or overweight and liver fat content (LFC) ≥10% were dosed 1:1:1:1 to pemvidutide (1.2mg, 1.8mg and 2.4mg) or placebo administered once-weekly subcutaneously for 12 weeks.

In this study, pemvidutide reduced LFC relative to baseline by up to 68.5% and decreased total cholesterol and triglycerides by up to 12.2% and 44.6%, respectively, after 12 weeks of treatment.

Pemvidutide – IMPACT trial

On August 1, 2023 we announced that we enrolled the first subject in the Phase 2b trial, IMPACT, to evaluate the safety and efficacy of pemvidutide in subjects with MASH.

The biopsy-driven trial is expected to enroll approximately 190 subjects with and without diabetes randomized 1:2:2 to receive 1.2 mg, 1.8 mg pemvidutide or placebo weekly for 48 weeks.

The key efficacy endpoints are MASH resolution and fibrosis improvement after 24 weeks of treatment, with subjects to be followed for an additional 24 weeks to a total of 48 weeks for assessment of safety and additional biomarker responses.

Top-line 24-week results from this trial are expected in the first quarter of 2025.

On September 30, 2024, we announced the completion of patient enrollment in IMPACT, our Phase 2b biopsy-driven trial evaluating Pemvidutide in MASH, and we expect top-line data in the second quarter of 2025.

Pemvidutide – MOMENTUM trial

48-Week Analysis

On November 30, 2023, we announced topline results from our 48-week MOMENTUM Phase 2 obesity trial of pemvidutide.

The trial enrolled 391 subjects with obesity or overweight with at least one co-morbidity and without diabetes.

On September 10, 2024, we presented additional results of MRI-based body composition sub-study from our 48-week MOMENTUM Phase 2 obesity trial of pemvidutide in subjects with overweight and obesity at the 60 th annual meeting of the European Association for the Study of Diabetes.

The lean loss ratio, defined as the change in lean mass compared to the change in total mass, was 21.9%.

Lean mass preservation was greater in subjects aged 60 years and older, in whom the lean loss ratio was only 19.9%.

In addition to lean mass preservation, there was a preferential reduction of

visceral adipose tissue (VAT), the adipose tissue associated with cardiovascular risk.

At the 2.4mg dose of pemvidutide, VAT was reduced by 28.3% at week 48 compared to a 19.5% loss in subcutaneous adipose tissue.

On June 23, 2024, we presented the full results of the body composition analysis from our 48-week MOMENTUM Phase 2 obesity trial of pemvidutide at the American Diabetes Association’s 84 th Annual Scientific Sessions.

In an MRI sub-study of 67 subjects from the MOMENTUM Phase 2 obesity trial, 50 of whom were treated with pemvidutide for 48 weeks, 78.1% of weight loss was derived from adipose tissue and only 21.9% from lean mass.

Historically, lean mass loss has been shown to be approximately 25% from diet and exercise programs.

As announced in November 2023, the trial enrolled 391 subjects with obesity or overweight with at least one comorbidity and without diabetes.

Subjects were randomized 1:1:1:1 to 1.2 mg, 1.8 mg, 2.4 mg pemvidutide or placebo administered weekly for 48 weeks in conjunction with diet and exercise.

The 1.2 mg and 1.8 mg doses were administered without dose titration, while a short 4-week titration period was employed for the 2.4 mg dose.

Unlike other obesity studies with GLP-1 based agents, dose-reduction was not allowed.

At baseline, subjects had a mean age of approximately 50 years, mean body mass index (BMI) of approximately 37 kg/m 2 , and mean body weight of approximately 104 kg.

Approximately 75% of subjects were female.

Business of this Annual Report for detailed discussion of the data readout.

12-Week Type 2 Diabetes Safety Trial

In March 2023, we announced the topline results from a 12-week Phase 1b safety trial of pemvidutide, which was conducted to evaluate the safety profile of pemvidutide in subjects with overweight or obesity and type 2 diabetes.

The trial was comprised of 54 subjects randomized 1:1:1:1 to 1.2 mg, 1.8 mg, 2.4 mg pemvidutide or placebo administered weekly for 12 weeks.

Business of this Annual Report for detailed discussion of the data readout.

On April 11, 2023, we announced the completion of enrollment in our Phase 2 clinical trial of HepTcell, an immunotherapeutic for the treatment of chronic hepatitis B (“CHB”).

The multicenter clinical trial, which is being conducted at 26 sites in North America, Europe and Southeast Asia, enrolled approximately 80 subjects with inactive CHB and low levels of hepatitis B surface antigen (“HBsAg”).

Subjects were randomized 1:1 to HepTcell or placebo.

The primary endpoint of the trial is clinical response, defined as a 1-log or greater reduction or clearance in HBsAg.

Secondary endpoints include changes in the levels of hepatitis B virus (“HBV”) DNA, pre-genomic RNA and other markers of virologic response.

On March 27, 2024, we announced that the overall response in the Phase 2 trial was deemed to be insufficient to warrant further advancement in clinical trials.

As a result, we have stopped any further development related to HepTcell.

As a result, any further development related to HepTcell has been stopped.

Financial Operations Overview

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We have not generated any revenue from the sale of any products to date.

Our revenue has historically consisted primarily of government and foundation grants and contracts that supported our efforts on specific research projects.

Our revenues in previous years consisted primarily of government and foundation grants and contracts that supported our efforts on specific research projects.

These grants and contracts generally provided for reimbursement of approved costs as those costs were incurred by us.

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Payments received in advance of services being provided were recorded as deferred revenue.

We are closing out one such contract and any revenue reported during the year ended December 31, 2023 was for indirect rate adjustments.

We recently closed out one of the remaining such contracts, and the revenue reported during the year ended December 31, 2023 was primarily from the final indirect rate adjustments.

Research and development expenses

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● conduct of clinical trials and nonclinical safety studies for pemvidutide;

● completion of a Phase 2 clinical trial for HepTcell;

● conduct of additional research and discovery projects;

● manufacture of clinical trial materials in support of our clinical trials.

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Total other income (expense), net

Net loss before income taxes

Income tax expense (benefit)

We have not generated any revenues from the sale of any products to date.

Our revenue has historically consisted primarily of government and foundation grants and contracts that supported our efforts on specific research projects.

We are closing out one such contract and any revenue reported during the years ended December 31, 2023 and 2022 were for indirect rate adjustments.

Our revenues in previous years consisted primarily of government and foundation grants and contracts that supported our efforts on specific research projects.

We recently closed out one of the remaining such contracts, and the revenue reported during the year ended December 31, 2023 was primarily from the final indirect rate adjustments.

Research and development expenses

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Total research and development expenses

The decrease in research and development expenses for pemvidutide was primarily due to a $13.7 million reduction in expenses associated with the metabolic dysfunction-associated steatotic liver disease (“MASLD”), previously termed non-alcoholic fatty liver disease (“NAFLD”), trials, a $6.8 million reduction in expenses associated with Phase 1 safety trials, all of which were ongoing during the year ended December 31, 2022, and which were substantially completed by March 31, 2023 and a $1.7 million reduction in expense associated with the MOMENTUM Phase 2 trial in obesity, which had commenced and was fully enrolled in the year ended December 31, 2022, but completed its in-life portion by September 30, 2023 and wound down in the year ended December 31, 2023.

The decrease in these research and development expenses were partially offset by an $8.3 million increase related to the ramp up of the IMPACT Phase 2b

trial in MASH, and a $2.8 million increase in net manufacturing expenses for production of Good Manufacturing Practice (“GMP”) drug substance materials.

The increase in research and development expenses for pemvidutide was primarily due to a $27.4 million increase related to the ramp up of the IMPACT Phase 2b trial in MASH, a $1.5 million increase for other clinical analysis, and a $2.2 million increase in nonclinical studies.

These increases were partially offset by a $10.8 million reduction in expense associated with the MOMENTUM Phase 2 trial in obesity, which was ongoing during most of 2023 and wound down in the year ended December 31, 2023, and a $2.8 million reduction in expenses associated with the Phase 1 safety trial, which was substantially completed in 2023.

The decrease in research and development expenses for HepTcell was primarily due to the winddown and completion of the in-life portion of the Phase 2 trial in 2023.

The increase in other non-project specific research and development expenses was primarily due to $3.3 million for labor related costs, $1.9 million in stock compensation, $1.0 million for electronic document management system (“EDMS”) implementation and service costs and $0.3 million for consultants.

The research and development expenses for the year ended December 31, 2024 were due to program winddown activities.

In the coming months, we expect to have some additional wrap up costs as we finalize these activities.

The increase in other non-project specific research and development expenses was primarily due to a $1.6 million increase in stock compensation expense and a $1.3 million initial cost for additional research and discovery projects.

General and administrative expenses

General and administrative expenses increased by $1.0 million, or 6%, during the year ended December 31, 2023 as compared to the year ended December 31, 2022.

The increased expense is primarily due to a $0.6 million increase in stock compensation and $0.3 million increase in other labor-related expenses.

General and administrative expenses increased by $2.8 million, or 16%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to a $2.7 million increase in stock compensation and other labor-related expenses, including the $1.0 million incremental stock-based compensation expense because of modifications of stock awards (see Note 9).

Impairment loss on intangible asset

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Summary of Significant Accounting Policies ).

There were no impairment charges reported during the year ended December 31, 2022.

There was no impairment charge reported during the year ended December 31, 2024.

Total other income (expense), net

Total other income (expense), net increased by $4.7 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to a $4.5 million increase in interest income earned on our cash equivalents and short-term investments and $0.2 million increase in gain from foreign currency exchange.

Income tax benefit

We recorded an income tax benefit of $0.2 million related to interest received and receivable on income tax refunds during the year ended December 31, 2022.

Other than the income tax benefit related to interest, we did not record an income tax benefit in the years ended December 31, 2023 and 2022 due to a full valuation allowance.

Total other income (expense), net increased by $0.6 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to a $0.7 million increase in interest income earned on our cash equivalents and short-term investments.

Liquidity and Capital Resources

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Our cash, cash equivalents, restricted cash and short-term investments were $131.9 million as of December 31, 2024.

We believe, based on the operating cash requirements and capital expenditures expected for 2024 and 2025, our cash on hand as of December 31, 2023, together with expected cash receipts from our income tax refunds and research and development incentives, are sufficient to fund operations for at least a twelve-month period from the issuance date of our December 31, 2023 consolidated financial statements.

We believe, based on the operating cash requirements and capital expenditures expected for 2025 and 2026, our cash on hand as of December 31, 2024, together with expected cash receipts from our equity transactions and research and development incentives, are sufficient to fund operations for at least a twelve-month period from the issuance date of our December 31, 2024 consolidated financial statements.

We have not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales.

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On February 28, 2023, we filed a shelf registration statement on Form S-3ASR, which was declared effective immediately.

This shelf registration allows us to offer and sell any amount of our common stock, preferred stock, debt securities, warrants, rights and units (the “2023 Shelf”) for a period of three years from effectiveness or until such determination that we no longer qualify as a well-known seasoned issuer.

This shelf registration allowed us to offer and sell any amount of our common stock, preferred stock, debt securities, warrants, rights and units (the “2023 Shelf”).

At-the-Market Offerings

On February 28, 2023, we entered an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B.

Riley Securities, Inc., serving as sales agents, with respect to an at-the-market offerings program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $150.0 million.

During the year ended December 31, 2023, we sold 20,454,516 shares of common stock under the 2023 Agreement resulting in approximately $86.6 million in net proceeds, and as of December 31, 2023, $60.6 million remained available to be sold under the 2023 Shelf.

Riley Securities, Inc., serving as sales agents, with respect to an at-the-market offerings program under which we offered and sold shares of our common stock having an aggregate offering price of up to $150.0 million through the Sale Agents from the 2023 Shelf.

Since inception through December 31, 2024, we raised approximately $96.6 million in net proceeds.

The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023:

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Increase (Decrease)

Net cash provided by (used in):

Net cash (used in) provided by:

Operating activities

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Financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net decrease (increase) in cash and cash equivalents and restricted cash

Operating Activities

Net cash used in operating activities was $79.8 million for the year ended December 31, 2024 compared to $75.8 million during the year ended December 31, 2023.

Our sources of cash provided by operations during the year ended December 31, 2023 was primarily cash receipts of research and development incentive credits.

Our sources of cash provided by operations during the year ended December 31, 2024 were primarily cash receipts of research and development incentive credits.

The primary uses of cash from our operating activities include payments for labor and labor-related costs, professional fees, research and development costs associated with our clinical trials and other general corporate expenditures.

The increase in cash used in operating activities of $13.2 million was due to a $22.4 million change in working capital accounts, partially offset by a $9.2 million decrease in net loss as adjusted for noncash items.

The increase in cash used in operating activities of $4.0 million was due to a $16.8 million increase in net loss as adjusted for noncash items, partially offset by a $12.8 million change in working capital accounts.

Investing Activities

Net cash provided by investing activities was $13.7 million for the year ended December 31, 2023 compared to $73.4 million net cash used during the year ended December 31, 2022.

Net cash used in investing activities was $28.4 million for the year ended December 31, 2024 compared to $13.7 million net cash provided by investing activities during the year ended December 31, 2023.

The net cash used in investing activities during the year ended December 31, 2024 was primarily due to $115.7 million purchase of short-term investments, partially offset by $87.3 million proceeds from sale and maturities of short-term investments.

The net cash provided by investing activities during the year ended December 31, 2023 was primarily due to $102.4 million proceeds from sale and maturities of short-term investments, partially offset by $88.6 million purchase of short-term investments.

The net cash used in investing activities during the year ended December 31, 2022 was primarily due to $73.3 million purchase of short-term investments.

Financing Activities

Net cash provided by financing activities was $10.0 million for the year ended December 31, 2024 compared to $86.1 million during the year ended December 31, 2023.

The net cash provided by financing activities during the year ended December 31, 2023 was primarily the result of the receipt of $86.6 million in net proceeds from the issuance of common stock from our at-the-market offerings program and $0.2 million in proceeds from our employee stock purchase

plan, partially offset by a $0.5 million payment for tax withholding obligations related to share-based compensation.

The net cash provided by financing activities during the year ended December 31, 2022 was primarily the result of the receipt of $56.2 million in proceeds from the issuance of common stock from our at-the-market offerings program, $0.9 million in proceeds from exercise of stock options and $0.2 million in proceeds from employee stock purchase plan, partially offset by $0.5 million payment for tax withholding obligations related to share-based compensation.

The net cash provided by financing activities during the year ended December 31, 2024 was primarily the result of the receipt of $10.0 million in net proceeds from the issuance of common stock from our at-the-market offerings program, $0.4 million in proceeds from exercise of stock options, $0.3 million in proceeds from our employee stock purchase plan and $0.2 million proceeds from exercises of stock warrants, partially offset by a $0.9 million payment for tax withholding obligations related to share-based compensation.

The net cash provided by financing activities during the year ended December 31, 2023 was primarily the result of the receipt of $86.4 million in net proceeds from the issuance of common stock from our at-the-market offerings program, $0.1 million in proceeds from exercise of stock options and $0.2 million in proceeds from employee stock purchase plan, partially offset by $0.5 million payment for tax withholding obligations related to share-based compensation.

Capital Resources

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Accordingly, management believes that we have sufficient capital to fund our plan of operations for at least a twelve-month period from the issuance date of our December 31, 2024 consolidated financial statements.

However, in order to address our capital needs in the long-term, including our planned clinical trials, we must continue to actively pursue additional equity or debt financing, government funding and monetization of our existing programs through partnership arrangements or sales to third parties.

However, in order to address our capital needs in the long-term, including our planned

clinical trials, we must continue to actively pursue additional equity or debt financing, government funding and monetization of our existing programs through partnership arrangements or sales to third parties.

Critical Accounting Estimates

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While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates.

Impairment of Indefinite-lived Intangible Assets

We evaluate our indefinite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable in accordance with the guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 350, Intangibles—Goodwill and Other (“ASC 350”).

We had one IPR&D asset, HepTcell, that we acquired in 2015.

This candidate was a viral pathogen immunotherapy product for the treatment of chronic HBV.

Since 2020, we have been conducting a Phase 2 clinical trial.

However, the preliminary data from this trial that management analyzed in December 2023, indicates that the results are not sufficient to warrant moving forward with this product candidate.

As a result, we expect to stop all further development related to HepTcell and do not anticipate that there would be any third-party interest in the asset.

This decision rendered the probability of success, which is one of the key inputs in the fair value measurement of this asset, to be effectively zero or close to zero.

With no alternative use nor any anticipated interest from third parties for this asset, management determined that the fair value of the IPR&D asset was deemed di minimis as of December 31, 2023.

Accordingly, we recorded a non-cash impairment charge of $12.4 million, which was the carrying value of the IPR&D asset, in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2023 under the caption “Impairment loss on intangible asset”.

As of December 31, 2023, we had no indefinite-lived intangible assets.

Research and Development

Research and development costs are expensed as incurred.

Research and development costs consist of payroll and personnel expense, consulting costs, external contract research and development expenses, which includes fees paid

to other entities that conduct certain research and development activities on our behalf, such as clinical research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), raw materials, drug product manufacturing costs, laboratory supplies and allocated overhead, including depreciation and amortization, rent and utilities.

Research and development costs consist of payroll and personnel expense, consulting costs, external contract research and development expenses, which includes fees paid to other entities that conduct certain research and development activities on our behalf, such as clinical research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), raw materials, drug product manufacturing costs, laboratory supplies and allocated overhead, including depreciation and amortization, rent and utilities.

Material research and development costs that are paid in advance of performance are capitalized as a prepaid expense and amortized over the service period as the services are provided.

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When evaluating the adequacy of the accrued expenses, we analyze progress of the studies, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period.

Significant judgments and estimates may be made in determining the prepaid and accrued balances at the end of any reporting period.

Stock-based Compensation

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Therefore, the expected dividend rate is assumed to be 0%.

Modification of stock awards are evaluated and recorded based on the fair value of the award on the modification date.

Depending on the type of modifications, we estimate the fair value of modified stock options using the Black Scholes option pricing model.

The fair value of modified restricted stock units is determined based on our stock price at the modification date.

There is a high degree of subjectivity involved when using option pricing models to estimate stock-based compensation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis