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 developing novel peptide-based therapeutics for liver and cardiometabolic diseases. Our lead program is pemvidutide (formerly known as ALT-801), a balanced 1:1 glucagon/GLP-1 dual receptor agonist for the treatment of MASH, 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
MASH
On June 26, 2025, we released planned, 24-week topline efficacy 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 48 weeks.
In an 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 58% and 52%, for pemvidutide 1.2 mg and 1.8 mg, respectively versus 20% for placebo (p< 0.0001 both doses). The effects on fibrosis improvement without worsening of MASH in an ITT analysis were 33% and 36% for pemvidutide 1.2 mg and 1.8 mg, respectively compared with 28% for placebo (differences not statistically significant). A supplemental AI-based analysis demonstrated statistically significant reductions in fibrosis, including 31% of subjects receiving pemvidutide 1.8 mg achieving a 60% or more reduction in fibrosis compared to 8% 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
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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 4.8% and 5.8% at the 1.2 mg and 1.8 mg doses, respectively, versus 0.5% in the placebo arm (p< 0.001, both doses). The numerical values here are slightly different than originally announced as part of the topline data, but do not impact statistical significance across any of the results.
Pemvidutide also demonstrated favorable safety and tolerability, with low overall treatment discontinuation rates due to adverse events of less than 1% 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.
On August 19, 2025, we announced that the U.S. Food and Drug Administration has granted Fast Track designation to pemvidutide for the treatment of AUD. Fast Track designation is intended to accelerate the development and review of new drugs that target serious conditions and address unmet medical needs.
On November 3, 2025, we announced the completion of enrollment in the RECLAIM. Enrollment completed ahead of schedule, underscoring strong interest from patient community in a new therapeutic option for AUD. We noted that we are on track to complete the 24-week treatment period and announce topline results in 2026.
ALD is a disease characterized by damage to 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 and supply chain. If the tariffs and counter tariffs continue or escalate, they could have a significant negative effect on the
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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.
U.S. Government Shutdown
On October 1, 2025, the U.S. federal government entered a shutdown suspending services deemed non-essential as a result of the failure by Congress to enact regular appropriations for the 2026 fiscal year. If the shutdown continues for a prolonged period of time, it could result in significant delays in the SEC’s and FDA's ability to timely review and process any submissions we have filed or may file or cause other regulatory delays, which could have a material adverse effect on our business.
Results of Operations
Comparison of the three months ended September 30, 2025 and 2024
The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended September 30,
2025
2024
Increase (Decrease)
Revenues
$
5
$
5
$
—
—
%
Operating expenses:
Research and development
14,960
19,803
(4,843)
(24)
%
General and administrative
5,904
4,969
935
19
%
Total operating expenses
20,864
24,772
(3,908)
(16)
%
Loss from operations
(20,859)
(24,767)
(3,908)
(16)
%
Other income (expense):
Interest expense
(495)
(6)
489
Interest income
2,426
1,910
516
27
%
Other income (expense), net
(86)
18
(104)
(578)
%
Total other income (expense), net
1,845
1,922
(77)
(4)
%
Net loss
$
(19,014)
$
(22,845)
$
(3,831)
(17)
%
Revenues
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.
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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 $4.8 million, or 24%, for the three months ended September 30, 2025, as compared to the same period ended September 30, 2024:
Three Months Ended September 30,
(in thousands)
2025
2024
Increase (Decrease)
Pemvidutide
MASH
$
4,327
$
8,380
$
(4,053)
(48)
%
ALD
1,481
—
1,481
100
%
AUD
1,874
—
1,874
100
%
Other pemvidutide expenses
1,514
3,996
(2,482)
(62)
%
Total pemvidutide expenses
9,196
12,376
(3,180)
(26)
%
HepTcell
—
334
(334)
100
%
Non-project costs
5,764
7,093
(1,329)
(19)
%
Total research and development expenses
$
14,960
$
19,803
$
(4,843)
(24)
%
The decrease in research and development expenses for MASH was primarily due to ongoing enrollment for the IMPACT Phase 2b trial in MASH during 2024. The decrease in other pemvidutide expenses was primarily due to a $1.2 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.
The decrease in non-project costs were primarily due to a $0.8 million initial cost for additional research and discovery projects during 2024 which were not pursued in 2025 and a $0.3 million reduction in overhead costs.
General and administrative expenses
General and administrative expenses increased by $0.9 million, or 19%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a $0.7 million increase in stock compensation and other labor-related expenses and a $0.4 million increase in expenses for professional services.
Total other income (expense), net
Total other income (expense), net decreased by $0.1 million, or 4%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.
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Comparison of the nine months ended September 30, 2025 and 2024
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):
Nine Months Ended September 30,
2025
2024
Increase (Decrease)
Revenues
$
15
$
15
$
—
—
%
Operating expenses:
Research and development
48,023
62,445
(14,422)
(23)
%
General and administrative
17,588
15,876
1,712
11
%
Total operating expenses
65,611
78,321
(12,710)
(16)
%
Loss from operations
(65,596)
(78,306)
(12,710)
(16)
%
Other income (expense):
Interest expense
(760)
(8)
752
Interest income
5,103
6,505
(1,402)
(22)
%
Other income (expense), net
(163)
(70)
(93)
133
%
Total other income (expense), net
4,180
6,427
(2,247)
(35)
%
Net loss before income taxes
(61,416)
(71,879)
10,463
(15)
%
Income tax expense (benefit)
(681)
—
(681)
100
%
Net loss
$
(60,735)
$
(71,879)
$
(11,144)
(16)
%
Revenues
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.
Research and development expenses
Research and development expenses consisted primarily of expenses related to product candidate development. Research and development expenses decreased by $14.4 million, or 23%, for the nine months ended September 30, 2025, as compared to the same period ended September 30, 2024:
Nine Months Ended September 30,
(in thousands)
2025
2024
Increase (Decrease)
Pemvidutide
MASH
$
17,113
$
27,292
$
(10,179)
(37)
%
ALD
3,077
—
3,077
100
%
AUD
3,286
—
3,286
100
%
Other pemvidutide expenses
6,112
12,373
(6,261)
(51)
%
Total pemvidutide expenses
29,588
39,665
(10,077)
(25)
%
HepTcell
—
2,359
(2,359)
(100)
%
Non-project costs
18,435
20,421
(1,986)
(10)
%
Total research and development expenses
$
48,023
$
62,445
$
(14,422)
(23)
%
The decrease in research and development expenses for MASH was primarily due to ongoing enrollment for the IMPACT Phase 2b trial in MASH during 2024. The decrease in other pemvidutide expenses was primarily due to a $4.5 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.
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The decrease in research and development expenses for HepTcell was due to the termination of HepTcell in March 2024.
The decrease in non-project costs were primarily due to a $1.3 million initial cost for additional research and discovery projects during 2024 which were not pursued in 2025 and a $0.3 million reduction in overhead costs.
General and administrative expenses
General and administrative expenses increased by $1.7 million, or 11%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to a $1.2 million increase in expenses for professional services and $0.7 million increase in stock compensation and other labor-related expenses.
Total other income (expense), net
Total other income (expense), net decreased by $2.2 million, or 35%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The net decrease was primarily due to a $1.4 million decrease in interest income earned on our cash equivalents and short-term investments and a $0.8 million increase in interest expense related to our Term Loan.
Income tax expense (benefit)
During the nine months ended September 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 nine months ended September 30, 2025 and 2024.
Liquidity and Capital Resources
Overview
Our primary sources of cash during the nine months ended September 30, 2025 were from equity transactions, debt, 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 $210.8 million as of September 30, 2025. We believe, based on the operating cash requirements and capital expenditures expected for 2025 and 2026, our cash on hand as of September 30, 2025, together with expected cash receipts from equity transactions, are sufficient to fund operations for at least a twelve-month period from the issuance date of our September 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 September 30, 2025, we had an accumulated deficit of $622.1 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
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and conditions. The first Term Loan tranche was drawn down on the Closing Date in an aggregate principal amount of $15.0 million.
On November 5, 2025, (the “Amendment Closing”), we entered into an amendment to the Loan Agreement with Hercules and the lenders party thereto, pursuant to which the lenders will, subject to certain terms and conditions, increase the availability under the Term Loan from an aggregate principal amount of $100.0 million to $125.0 million. The Term Loan, as amended, is structured in four tranches. As disclosed above, the first Term Loan tranche was drawn down on the Closing Date in an aggregate principal amount of $15.0 million. The second Term Loan tranche was drawn down on the Amendment Closing in an aggregate principal amount of $20.0 million. Upon the achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement, as amended, the third Term Loan tranche will be made available in an aggregate principal amount of up to $10.0 million. The fourth Term Loan tranche will be made available in an aggregate principal amount of up to $80.0 million subject to the approval of the lenders. The Term Loan, as amended, bears interest equal to the greater of (a) 9.70% per annum and (b) the prime rate as reported in The Wall Street Journal plus 2.45% per annum. The interest-only period has been extended to 30 months from May 13, 2025.
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 nine months ended September 30, 2025, we have sold 18,524,709 shares of common stock under the 2025 Agreement resulting in approximately $81.9 million in net proceeds, and as of September 30, 2025, $65.4 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 nine months ended September 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 September 30, 2025, there were no remaining shares available under the 2023 Agreement as the 2023 Agreement was terminated.
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Cash Flows
The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024:
Nine Months Ended September 30,
(in thousands)
2025
2024
Increase (Decrease)
Net cash (used in) provided by:
Operating activities
$
(48,087)
$
(61,583)
$
(13,496)
Investing activities
(53,315)
(42,018)
(11,297)
Financing activities
125,712
(41)
125,753
Net increase (decrease) in cash and cash equivalents and restricted cash
$
24,310
$
(103,642)
$
127,952
Operating Activities
Net cash used in operating activities was $48.1 million for the nine months ended September 30, 2025 compared to $61.6 million during the nine months ended September 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 decrease in cash used in operations of $13.5 million year over year is due to changes in working capital accounts of $1.1 million and a decrease in net loss as adjusted for non-cash items of $12.4 million.
Investing Activities
Net cash used in investing activities was $53.3 million for the nine months ended September 30, 2025 compared to $42.0 million net cash used in investing activities during the nine months ended September 30, 2024. The net cash used in investing activities during the nine months ended September 30, 2025 was primarily due to a $196.9 million purchase of short-term investments, partially offset by a $143.6 million in proceeds from sale and maturities of short-term investments. The net cash used in investing activities during the nine months ended September 30, 2024 was primarily due to a $102.5 million purchase of short-term investments, partially offset by a $60.5 million in proceeds from sale and maturities of short-term investments.
Financing Activities
Net cash provided by financing activities was $125.7 million during the nine months ended September 30, 2025 compared to a negligible amount of cash used in financing activities during the nine months ended September 30, 2024. The net cash provided by financing activities during the nine months ended September 30, 2025 was primarily the result of the receipt of $111.8 million in net proceeds from the issuance of common stock from our at-the-market offerings program, $14.3 million in net proceeds from the term loan, and $0.3 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 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 ESPP, $0.3 million in proceeds from exercise of stock options 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 September 30, 2025, we had $210.8 million of cash, cash equivalents, restricted cash and 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, 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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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.