What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 105 added, 48 removed, 93 unchanged (62% of the section changed)

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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.

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

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

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Recent Business Update

On June 26, 2025, we released topline results from IMPACT, a Phase 2b trial in MASH.

The Phase 2b trial enrolled 212 subjects with biopsy-confirmed MASH and fibrosis stages F2/F3 with and without diabetes randomized 1:2:2 to receive either weekly subcutaneous pemvidutide at 1.2 mg or 1.8 mg doses or placebo for 24 weeks.

In a rigorous intent-to-treat (“ITT”) analysis, in which subjects with missing biopsies were considered non-responders, the proportions of subjects achieving MASH resolution without worsening of fibrosis at 24 weeks were 59.1% and 52.1%, for pemvidutide 1.2 mg and 1.8 mg, respectively versus 19.1% for placebo (p< 0.0001 both doses).

The effects on fibrosis improvement without worsening of MASH in an ITT analysis were 31.8% and 34.5% for pemvidutide 1.2 mg and 1.8 mg, respectively compared with 25.9% for placebo (differences not statistically significant).

A supplemental AI-based analysis demonstrated statistically significant reductions in fibrosis, including 30.6% of subjects receiving pemvidutide 1.8 mg achieving a 60% or more reduction in fibrosis compared to 8.2% receiving placebo (p< 0.001).

Statistically significant changes in well-established non-invasive tests of fibrosis, including ELF score and VCTE were also observed compared with placebo at both doses.

Together, this data suggests strong evidence of anti-fibrotic activity of pemvidutide in the MASH population.

At 24 weeks, mean weight loss in pemvidutide-treated subjects was 5.0% and 6.2% at the 1.2 mg and 1.8 mg doses, respectively, versus 1.0% in the placebo arm (p< 0.001, both doses).

Pemvidutide also demonstrated favorable safety and tolerability, with a low overall treatment discontinuation rates and rates of discontinuations due to adverse events were also low at 0.0% and 1.2% in the pemvidutide 1.2 mg and 1.8 mg groups versus 2.4% in the placebo group, an important finding given that no dose titration was used in the trial.

There were no serious adverse events related to study medication.

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.

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

AUD is a chronic disease characterized by excessive drinking.

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

On May 19, 2025, we announced the enrollment of the first subject in the RECLAIM Phase 2 trial evaluating the efficacy and safety of pemvidutide in subjects with AUD.

RECLAIM is a randomized, placebo-controlled trial conducted across approximately 15 sites in the United States, targeting enrollment of approximately 100 subjects.

Subjects will be randomized 1:1 to receive either 2.4 mg pemvidutide or placebo weekly for 24 weeks.

The trial’s primary endpoint is a change in alcohol consumption, measured by the change from baseline in the average number of heavy drinking days per week at Week 24, with the key secondary endpoints including the proportion of subjects achieving a 2-level reduction in World Health Organization (“WHO”) risk drinking level and the absolute change from baseline in average levels of phosphatidylethanol (“PEth”), a serum biomarker of alcohol intake.

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

ALD progression (like MASH progression) begins with liver steatosis, which may lead to inflammation, fibrosis and, ultimately, to cirrhosis.

On July 9, 2025, we announced the enrollment of the first patient in the RESTORE Phase 2 trial evaluating the efficacy and safety of pemvidutide in subjects with ALD.

RESTORE is a randomized, placebo-controlled trial enrolling approximately 100 patients across 34 sites in the United States.

Subjects will be randomized 1:1 to receive either 2.4mg pemvidutide or placebo weekly for 48 weeks.

The trial’s primary endpoint is the change from baseline in liver stiffness measurement (“LSM”) by Vibration Controlled Transient Elastography (“VCTE”) at Week 24.

Key secondary endpoints include the change from baseline in LSM by VCTE at Week 48, changes in Enhanced Liver Fibrosis (“ELF”) score at Weeks 24 and 48, and changes in alcohol consumption and body weight at the same time points.

Recent Global Events

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Results of Operations

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

Three Months Ended March 31,

Comparison of the three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Increase (Decrease)

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Total other income (expense), net

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

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 decreased by $3.9 million, or 19%, for the three months ended June 30, 2025, as compared to the same period ended June 30, 2024:

Three Months Ended June 30,

Increase (Decrease)

Alcohol-Associated Liver Disease

Alcohol Use Disorder

Other pemvidutide expenses

Total pemvidutide expenses

Non-project costs

Total research and development expenses

The decrease in research and development expenses for MASH was primarily due to ongoing enrollment for the IMPACT Phase 2b trial in MASH during the first half of 2024.

The decrease in other pemvidutide expenses was primarily due to a $1.6 million decrease in manufacturing expenses.

These decreases were partially offset by the increase in expense associated with the start of the AUD and ALD trials.

The decrease in research and development expenses for HepTcell was due to the termination of HepTcell in March 2024.

General and administrative expenses

General and administrative expenses increased by $0.1 million, or 2%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Total other income (expense), net

Total other income (expense), net decreased by $1.3 million, or 63%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

The net decrease was primarily due to a $1.0 million decrease in interest income earned on our cash equivalents and short-term investments and a $0.3 million increase in interest expense related to the Term Loan.

Comparison of the six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 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

Net loss before income taxes

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

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.

Research and development expenses decreased by $9.6 million, or 22%, for the six months ended June 30, 2025, as compared to the same period ended June 30, 2024:

Six Months Ended June 30,

Increase (Decrease)

Alcohol-Associated Liver Disease

Alcohol Use Disorder

Other pemvidutide expenses

Total pemvidutide expenses

Non-project costs

Total research and development expenses

The decrease in research and development expenses for MASH was primarily due to ongoing enrollment for the IMPACT Phase 2b trial in MASH during the first half of 2024.

The decrease in other pemvidutide expenses was primarily due to a $3.3 million decrease in manufacturing expenses.

These decreases were partially offset by the increase in expense associated with the start of the AUD and ALD trials.

The decrease in research and development expenses for HepTcell was due to the termination of HepTcell in March 2024.

General and administrative expenses

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.

General and administrative expenses increased by $0.8 million, or 7%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to a $0.8 million increase in expenses for professional services.

Total other income (expense), net

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.

Total other income (expense), net decreased by $2.2 million, or 48%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

The net decrease was primarily due to a $1.9 million decrease in interest income earned on our cash equivalents and short-term investments and a $0.3 million increase in interest expense related to our Term Loan.

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.

During the six months ended June 30, 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 than 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 six months ended June 30, 2025 and 2024.

Liquidity and Capital Resources

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.

Our primary sources of cash during the six months ended June 30, 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, and restricted cash were $183.1 million as of June 30, 2025.

We believe, based on the operating

cash requirements and capital expenditures expected for 2025 and 2026, our cash on hand as of June 30, 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 June 30, 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 March 31, 2025, we had an accumulated deficit of $581.0 million.

As of June 30, 2025, we had an accumulated deficit of $603.1 million.

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

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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.

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”).

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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.

During the six months ended June 30, 2025, we have sold 8,052,064 shares of common stock under the 2025 Agreement resulting in approximately $42.4 million in net proceeds, and as of June 30, 2025, $106.2 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.

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 six months ended June 30, 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,

As of June 30, 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 six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

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Operating Activities

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.

Net cash used in operating activities was $36.2 million for the six months ended June 30, 2025 compared to $34.5 million during the six months ended June 30, 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 $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.

The increase in cash used in operations of $1.7 million year over year is due to changes in working capital accounts of $8.8 million, partially offset by an increase in net loss as adjusted for non-cash items of $7.1 million.

Investing Activities

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.

Net cash provided by investing activities was $96.0 million for the six months ended June 30, 2025 compared to $43.2 million net cash used in investing activities during the six months ended June 30, 2024.

The net cash provided by investing activities during the six months ended June 30, 2025 was primarily due to a $143.6 million in proceeds from sale and maturities of short-term investments, partially offset by the purchases of $47.6 million of short-term investments.

The net cash used in investing activities during the six months ended June 30, 2024 was primarily due to a $76.7 million purchase of short-term investments, partially offset by a $33.5 million in proceeds from sale and maturities of short-term investments.

Financing Activities

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.

Net cash provided by financing activities was $86.4 million during the six months ended June 30, 2025 compared to $0.3 million cash used in financing activities during the six months ended June 30, 2024.

The net cash provided by financing activities during the six months ended June 30, 2025 was primarily the result of the receipt of $72.3 million in net proceeds from the issuance of common stock from our at-the-market offerings program, $14.6 million in net proceeds from the term loan, and $0.2 million in proceeds from the ESPP, partially offset by $0.7 million net payments for tax withholding obligations related to share-based compensation.

The net cash used in financing activities during the six months ended June 30, 2024 was primarily due to $0.8 million net payments 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 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.

As of June 30, 2025, we had $183.1 million of cash, cash equivalents, and restricted cash.

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 June 30, 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.

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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