Item 2. Management’s Discussion and Analysis
Item 2. 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, 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. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “may,” “will,” “should,” “could,” “target,” “strategy,” “intend,” “project,” “guidance,” “likely,” “usually,” “potential,” or the negative of these words or variations of such words, similar expressions, or comparable terminology are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. A further list and description of risks, uncertainties and other factors that could cause actual results or events to differ materially from the forward-looking statements that we make is included in the cautionary statements herein and in our other filings with the SEC, including those set forth under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.
We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements, other than as required by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we, in the future, may file with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Overview
Altimmune, Inc. 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, AUD, ALD and obesity. 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
MASH
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).
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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.
AUD and ALD
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.
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
Tariffs
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.
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Results of Operations
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,
2025
2024
Increase (Decrease)
Revenues
$
5
$
5
$
—
—
%
Operating expenses:
Research and development
17,236
21,155
(3,919)
(19)
%
General and administrative
5,691
5,595
96
2
%
Total operating expenses
22,927
26,750
(3,823)
(14)
%
Loss from operations
(22,922)
(26,745)
(3,823)
(14)
%
Other income (expense):
Interest expense
(264)
(1)
263
Interest income
1,132
2,182
(1,050)
(48)
%
Other income (expense), net
(92)
(76)
(16)
21
%
Total other income (expense), net
776
2,105
(1,329)
(63)
%
Net loss
$
(22,146)
$
(24,640)
$
(2,494)
(10)
%
Revenues
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,
2025
2024
Increase (Decrease)
Pemvidutide
MASH
$
6,469
$
10,175
$
(3,706)
(36)
%
Alcohol-Associated Liver Disease
1,538
—
1,538
100
%
Alcohol Use Disorder
1,096
—
1,096
100
%
Other pemvidutide expenses
2,058
3,587
(1,529)
(43)
%
Total pemvidutide expenses
11,161
13,762
(2,601)
(19)
%
HepTcell
—
1,000
(1,000)
100
%
Non-project costs
6,075
6,393
(318)
(5)
%
Total research and development expenses
$
17,236
$
21,155
$
(3,919)
(19)
%
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.
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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,
2025
2024
Increase (Decrease)
Revenues
$
10
$
10
$
—
—
%
Operating expenses:
Research and development
33,063
42,642
(9,579)
(22)
%
General and administrative
11,684
10,907
777
7
%
Total operating expenses
44,747
53,549
(8,802)
(16)
%
Loss from operations
(44,737)
(53,539)
(8,802)
(16)
%
Other income (expense):
Interest expense
(265)
(2)
263
Interest income
2,677
4,595
(1,918)
(42)
%
Other income (expense), net
(77)
(88)
11
(13)
%
Total other income (expense), net
2,335
4,505
(2,170)
(48)
%
Net loss before income taxes
(42,402)
(49,034)
6,632
(14)
%
Income tax expense (benefit)
(681)
—
(681)
100
%
Net loss
$
(41,721)
$
(49,034)
$
(7,313)
(15)
%
Revenues
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.
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Research and development expenses
Research and development expenses consisted primarily of expenses related to product candidate development. 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,
2025
2024
Increase (Decrease)
Pemvidutide
MASH
$
12,786
$
18,912
$
(6,126)
(32)
%
Alcohol-Associated Liver Disease
1,596
—
1,596
100
%
Alcohol Use Disorder
1,412
—
1,412
100
%
Other pemvidutide expenses
4,598
8,377
(3,779)
(45)
%
Total pemvidutide expenses
20,392
27,289
(6,897)
(25)
%
HepTcell
—
2,025
(2,025)
(100)
%
Non-project costs
12,671
13,328
(657)
(5)
%
Total research and development expenses
$
33,063
$
42,642
$
(9,579)
(22)
%
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 $0.8 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 $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 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
Overview
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
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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 June 30, 2025, we had an accumulated deficit of $603.1 million. In addition, we have not generated positive cash flows from operations. We have had to rely on a variety of financing sources, including the issuance of debt and equity securities. 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, 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 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 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 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
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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 June 30, 2025, there were no remaining shares available under the 2023 Agreement as the 2023 Agreement was terminated.
Cash Flows
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)
2025
2024
Increase (Decrease)
Net cash (used in) provided by:
Operating activities
$
(36,190)
$
(34,465)
$
1,725
Investing activities
96,006
(43,217)
139,223
Financing activities
86,363
(307)
86,670
Net increase (decrease) in cash and cash equivalents and restricted cash
$
146,179
$
(77,989)
$
224,168
Operating Activities
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 $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 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 $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.
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Current Resources
We have financed our operations to date principally through our equity offerings and proceeds from issuances of our common stock. 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.
Critical Accounting Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our unaudited consolidated financial statements, which have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial reporting. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent liabilities in our consolidated financial statements. We base our estimates and judgments on historical experience, knowledge of current conditions, and expectations of what could occur in the future given available information.
There have been no changes in our critical accounting policies and significant judgment and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this Item.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.