What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-13 compared with 2024-11-12 · 82 added, 106 removed, 59 unchanged (76% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K, which was filed with the SEC on March 27, 2024.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes for the year ended December 31, 2024 included in our Annual Report on Form 10-K, which was filed with the SEC on February 27, 2025.

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties.

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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 novel, investigational, peptide-based GLP-1/glucagon dual receptor agonist in development for the treatment of obesity and metabolic dysfunction-associated steatohepatitis (“MASH”), previously termed non-alcoholic steatohepatitis (“NASH”).

is a late clinical stage biopharmaceutical company focused on developing novel peptide-based therapeutics for liver and cardiometabolic diseases.

Our lead program is pemvidutide (formerly known as ALT-801), a GLP-1/glucagon dual receptor agonist for the treatment of MASH, obesity, AUD and ALD.

We may also pursue additional indications for pemvidutide that leverage our differentiated clinical profile.

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

Recent Business Update

On November 7, 2024, we announced the successful completion of its 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.

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

On September 10, 2024, we presented 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.

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, 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.

The body composition analysis showed that 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 on November 30, 2023, the trial enrolled 391 subjects with obesity or overweight with at least one co-morbidity 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.

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.

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, any further development related to HepTcell has been stopped.

On March 13, 2025, we announced that we are pursuing two additional indications for our lead product candidate, pemvidutide.

The new indications are Alcohol Use Disorder (“AUD”) and Alcohol-Associated Liver Disease (“ALD”), also known as Alcohol Liver Disease and Alcohol-Related Liver Disease.

AUD is a chronic disease characterized by uncontrolled drinking.

In addition to the underlying alcohol misuse by AUD patients, AUD patients have comorbidities that pose significant treatment and management challenges (including steatosis, obesity, hypertension and hyperlipidemia).

We expect to begin a Phase 2 AUD trial for pemvidutide in the second quarter of 2025.

The planned trial will be a randomized, double-blind, placebo-controlled trial of approximately 100 subjects with moderate to severe AUD over a 24-week period.

Endpoints will include change in heavy drinking days, change in biomarkers of alcohol consumption and weight loss.

ALD is a condition that damages the liver due to excessive, chronic alcohol use.

ALD progression (like metabolic dysfunction-associated steatohepatitis (“MASH”) progression), begins with liver steatosis, which may lead to fibrosis, and ultimately to cirrhosis.

We expect to begin a Phase 2 ALD trial for pemvidutide in the third quarter of 2025.

The planned trial will be a randomized, double-blind, placebo-controlled trial of approximately 100 subjects with obesity and ALD

over a 48-week period.

Endpoints will include change in liver stiffness, change in alcohol consumption, and biomarkers of steatosis and liver fibrosis and inflammation.

Recent Global Events

The United States recently imposed reciprocal and additional tariffs on many countries around the world.

Such tariffs and counter tariffs by other countries against the U.S.

have been causing uncertainties in the global markets.

If the tariffs and counter tariffs continue or escalate, they could have a significant negative effect on the global economy or on our operations, including continued inflationary pressures on raw materials, supply chain and logistics disruptions, and volatility in the capital markets, foreign exchange rates and interest rates.

Results of Operations

Comparison of the three months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

Increase (Decrease)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Interest income

Other income (expense), net

Total other income (expense), net

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

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 three months ended September 30, 2023 was primarily from the final indirect rate adjustments.

Research and development expenses

Research and development expenses consisted primarily of expenses related to product candidate development.

Research and development expenses for the three months ended September 30, 2024 and 2023 are summarized as follows:

Three Months Ended September 30,

Product candidates

Increase (Decrease)

Non-project costs

Total research and development expenses

The increase in research and development expenses for pemvidutide was primarily due to a $5.9 million increase related to the ramp up of the IMPACT Phase 2b trial in MASH and a $0.7 million increase for other nonclinical studies.

These increases were partially offset by a $2.7 million reduction in expense associated with the MOMENTUM Phase 2 trial in obesity, which was ongoing during the three months ended September 30, 2023 and wound down in the year ended December 31, 2023, and a $2.0 million decrease in net manufacturing expenses for production of Good Manufacturing Practice drug substance materials.

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 research and development expenses for the three months ended September 30, 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 $0.8 million initial cost for additional research and discovery projects.

General and administrative expenses

General and administrative expenses increased by $0.5 million, or 10%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to a $0.4 million increase in professional fees.

Total other income (expense), net

Total other income (expense), net increased by $0.1 million, or 3%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

The net increase is primarily due to a $0.1 million increase in interest income earned on our cash equivalents and short-term investments.

Comparison of the nine months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Increase (Decrease)

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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 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 nine months ended September 30, 2023 was primarily from the final indirect rate adjustments.

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

Research and development expenses

Research and development expenses consisted primarily of expenses related to product candidate development.

Research and development expenses for the nine months ended September 30, 2024 and 2023 are summarized as follows:

Nine Months Ended September 30,

Product candidates

Increase (Decrease)

Non-project costs

Total research and development expenses

The increase in research and development expenses for pemvidutide was primarily due to a $22.7 million increase related to the ramp up of the IMPACT Phase 2b trial in MASH, a $1.3 million increase for other clinical analysis, and a $1.9 million increase in nonclinical studies.

These increases were partially offset by a $9.0 million reduction in expense associated with the MOMENTUM Phase 2 trial in obesity, which was ongoing during the nine months ended September 30, 2023 and wound down in the year ended December 31, 2023, and a $2.7 million reduction in expenses associated with Phase 1 safety trials, 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 research and development expenses for the nine months ended September 30, 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 $1.2 million increase in stock compensation expense and a $1.3 million initial cost for additional research and discovery projects.

Research and development expenses decreased by $5.7 million, or 26%, for the three months ended March 31, 2025, as compared to the same period the three months ended March 31, 2024.

The $4.3 million decrease in research and development expenses for pemvidutide was primarily due to a $2.4 million reduction related to IMPACT Phase 2b trial in MASH, a $0.6 million reduction related to other clinical activities, a $0.4 million reduction in expense associated with the winddown of MOMENTUM Phase 2 trial in obesity and a $1.6 million decrease in manufacturing expenses for production of Good Manufacturing Practice drug substance materials.

These decreases were partially offset by a $0.2 million increase in expense related to other nonclinical activities and a $0.4 million increase in expense associated the start of AUD and ALD trials.

The $1.0 million decrease in research and development expenses was related to the winddown and completion of the in-life portion of the Phase 2 trial in 2023, and subsequent termination of HepTcell in March 2024.

General and administrative expenses

General and administrative expenses increased by $2.1 million, or 15%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to a $2.1 million increase in stock compensation and other labor-related expense, including the $1.0 million incremental stock-based compensation expense because of modifications of stock awards (see Note 8).

General and administrative expenses increased by $0.7 million, or 13%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

The increase is due primarily to a $0.5 million increase in stock compensation and other labor related expense and a $0.2 million increase in professional fees.

Total other income (expense), net

Total other income (expense), net increased by $0.9 million, or 17%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

The net increase is primarily due to a $1.1 million increase in interest income earned on our cash equivalents and short-term investments, partially offset by a $0.2 million increase in foreign currency exchange losses.

Total other income (expense), net decreased by $0.8 million, or 35%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

The net decrease is primarily due to a $0.9 million decrease in interest income earned on our cash equivalents and short-term investments.

Income tax expense (benefit)

During the three months ended March 31, 2025, we have recorded a discrete tax benefit of approximately $0.7 million related to a portion of carryback claims with the State of Maryland of which we previously held an uncertain tax position against.

Other then the discrete tax benefit discussed above, due to a full valuation allowance, the Company did not record an income tax expense (benefit) for either of the three months ended March 31, 2025 and 2024.

Liquidity and Capital Resources

Our primary sources of cash during the nine months ended September 30, 2024 were from equity transactions, interest and dividends from our money market funds and short-term investments, and proceeds from maturities of our short-term investments.

Our cash, cash equivalents, restricted cash, and short-term investments were $139.4 million as of September 30, 2024.

We believe, based on the operating cash requirements and capital expenditures expected for 2024 and 2025, our cash on hand as of September 30, 2024, together with expected cash receipts from our R&D incentives, is sufficient to fund operations for at least a twelve-month period from the issuance date of our September 30, 2024 consolidated financial statements.

Our primary sources of cash during the three months ended March 31, 2025, were from equity transactions, interest from our money market funds and short-term investments, and proceeds from maturity of our short-term investments.

Our cash, cash equivalents, restricted cash, and short-term investments were $149.9 million as of March 31, 2025.

We believe, based on the operating cash requirements and capital expenditures expected for 2025 and 2026, our cash on hand as of March 31, 2025, together with expected cash receipts from our R&D incentives, are sufficient to fund operations for at least a twelve-month period from the issuance date of our March 31, 2025 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.

We have incurred significant losses since we commenced operations.

As of September 30, 2024, we had an accumulated deficit of $538.2 million.

As of March 31, 2025, we had an accumulated deficit of $581.0 million.

In addition, we have not generated positive cash flows from operations.

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As capital resources are consumed to fund our research and development activities, we may require additional capital beyond our currently anticipated amounts.

In order to address our capital needs, 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.

In order to address our capital needs, including our planned clinical trials, we must continue to actively pursue additional equity or debt financing, and monetization of our existing programs through partnership arrangements or sales to third parties.

Sources of Liquidity

Loan Financing

On May 13, 2025 (“Closing Date”), we entered into a Loan and Security Agreement (“Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) and the lenders party thereto, pursuant to which the lenders will make available up to four tranches of term loans in an aggregate principal amount of $100.0 million (the “Term Loan”), subject to certain terms and conditions.

The first Term Loan tranche was made on the Closing Date in an aggregate principal amount of $15.0 million.

Upon the achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement, (i) the second Term Loan tranche will be made available in an aggregate principal amount of up to $25.0 million and (ii) the third Term Loan tranche will be made available in an aggregate principal amount of up to $15.0 million.

The fourth Term Loan tranche will be made available in an aggregate principal amount of up to $45.0 million subject to the approval of the lenders.

The Term Loan will mature on June 1, 2029 (the “Maturity Date”).

The Term Loan bears interest equal to the greater of (a) the prime rate as reported in The Wall Street Journal plus 2.45% and (b) (i) 9.95% until

December 31, 2025, and (ii) 9.45% thereafter.

We may make interest-only payments for an initial period of up to 24 months from the Closing Date, which may be extended up to 42 months upon achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement (the “Interest-Only Period”).

After the Interest-Only Period, we will be required to repay in equal monthly installments the principal and interest until the Maturity Date.

Shelf Registrations

On February 27, 2025, we filed a shelf registration statement on Form S-3, which was declared effective on March 13, 2025.

This shelf registration allows us to offer and sell up to $400.0 million of our common stock, preferred stock, debt securities, warrants, rights and units (the “2025 Shelf”) for a period of 3 years from effectiveness.

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 3 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”).

The 2023 Shelf expired on February 27, 2025.

At-the-Market Offerings

On February 28, 2023, we entered into the 2023 Agreement with 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, the Shares through the Sales Agents from the 2023 Shelf.

Since inception through September 30, 2024, we have sold 20,454,516 shares of common stock under the 2023 Agreement, resulting in approximately $86.6 million in net proceeds.

During the nine months ended September 30, 2024, we did not sell any shares of common stock under the 2023 Agreement, and as of September 30, 2024, $60.6 million remained available to be sold under the 2023 Shelf.

The following table provides information regarding our cash flows for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

On February 27, 2025, we entered an Equity Distribution Agreement (the “2025 Agreement”) with Leerink Partners LLC, Piper Sandler & Co.

and Stifel, Nicolaus & Company, Incorporated, 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 2025 Shelf.

During the three months ended March 31, 2025, we have sold 805,502 shares of common stock under the 2025 Agreement resulting in approximately $4.6 million in net proceeds, and as of March 31, 2025, $145.3 million remained available to be sold under the 2025 Agreement.

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 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.

During the three months ended March 31, 2025, we have sold 4,467,866 shares of common stock under the 2023 Agreement, resulting in approximately $30.2 million in net proceeds.

Since inception through the expiration of the 2023 Agreement in February 2025, we raised approximately $126.8 million in net proceeds through the issuance of 26,129,903 shares of our common stock.

As of March 31, 2025, there were no remaining shares available under the 2023 Agreement as the 2023 Agreement was terminated.

The following table provides information regarding our cash flows for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

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Financing activities

Net decrease in cash and cash equivalents and restricted cash

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

Operating Activities

Net cash used in operating activities was $61.6 million for the nine months ended September 30, 2024 compared to $59.3 million during the nine months ended September 30, 2023.

Net cash used in operating activities was $16.8 million for the three months ended March 31, 2025, compared to $16.4 million during the three months ended March 31, 2024.

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 operations of $2.3 million year over year is due to changes in working capital accounts of $11.1 million, offset by an increase in net loss as adjusted for non-cash items of $13.4 million.

The increase in cash used in operations of $0.4 million year

over year is due to changes in working capital accounts of $5.1 million, partially offset by a decrease in net loss as adjusted for non-cash items of $4.7 million.

Investing Activities

Net cash used in investing activities was $42.0 million for the nine months ended September 30, 2024 compared to $21.7 million net cash provided by during the nine months ended September 30, 2023.

The net cash used in investing activities during the nine months ended September 30, 2024 was primarily due to purchases of $102.5 million of short-term investments, partially offset by $60.5 million proceeds from sales and maturities of short-term investments.

The net cash provided by investing activities during the nine months ended September 30, 2023 was primarily due to $76.5 million proceeds from sales and maturities of short-term investments, partially offset by $54.8 million purchases of short-term investments.

Net cash used in investing activities was $5.1 million, for the three months ended March 31, 2025 compared to $39.5 million net cash used in during the three months ended March 31, 2024.

The cash used in investing activities during the three months ended March 31, 2025, was primarily due to the purchase of $43.1 million of short-term investments, partially offset by $38.0 million in proceeds from sale and maturities of short-term investments.

The cash used in investing activities during the three months ended March 31, 2024, was primarily due to a $53.5 million purchase of short-term investments, partially offset by $14.0 million in proceeds from sale and maturities of short-term investments.

Financing Activities

Net cash used in financing activities during the nine months ended September 30, 2024 was negligible compared to $13.4 million cash provided by financing activities during the nine months ended September 30, 2023.

The net cash used in financing activities during the nine months ended September 30, 2024 was primarily due to $0.8 million net payments for tax withholding obligations related to share-based compensation, partially offset by $0.3 million in proceeds from the employee stock purchase plan, $0.3 million proceeds from exercises of stock options, and $0.2 million proceeds from exercises of stock warrants.

The net cash provided by financing activities during the nine months ended September 30, 2023 was primarily the result of the receipt of $13.7 million in net proceeds from the issuance of common stock from our at-the-market offerings program, partially offset by $0.5 million net payments for tax withholding obligations related to share-based compensation.

Net cash provided by financing activities was $34.1 million during the three months ended March 31, 2025, compared to $0.3 million net cash used in financing activities during the three months ended March 31, 2024.

The net cash provided by financing activities during the three months ended March 31, 2025, was primarily the result of the receipt of $34.6 million in net proceeds from the issuance of common stock from our at-the-market offerings program, $0.2 million in proceeds from proceeds from the ESPP, partially offset by $0.7 million net payment for tax withholding obligations related to share-based compensation.

The net cash used by financing activities during the three months ended March 31, 2024, was primarily due to $0.6 million payment for tax withholding obligations related to share-based compensation, partially offset by $0.2 million in proceeds from proceeds from the ESPP and $0.2 million in proceeds from exercise of stock warrants.

Current Resources

We have financed our operations to date principally through our equity offerings and proceeds from issuances of our preferred stock, common stock, and warrants.

As of September 30, 2024, we had $31.5 million of cash, cash equivalents, and restricted cash, and $107.9 million of short-term investments.

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 September 30, 2024 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.

We have financed our operations to date principally through our equity offerings and proceeds from issuances of our common stock.

As of March 31, 2025, we had $49.2 million of cash, cash equivalents and restricted cash and $100.7 million of short-term investments.

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 March 31, 2025 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 and monetization of our existing programs through partnership arrangements or sales to third parties.

Critical Accounting Estimates

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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-Q

Item 2. Management’s Discussion and Analysis