Altimmune, Inc. 10-Q

Item 1. Financial Statements ALTIMMUNE, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 ​ 2021 ​ ​ (unaudited) ​ ​ ​ ASSETS ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 179,947 ​ $ 190,301 Restricted cash ​ 34 ​ 34 Total cash, cash equivalents and restricted cash ​ 179,981 ​ 190,335 Accounts receivable ​ 193 ​ 429 Income tax and R&D incentive receivables ​ 5,880 ​ 5,410 Prepaid expenses and other current assets ​ 5,039 ​ 7,952 Total current assets ​ 191,093 ​ 204,126 Property and equipment, net ​ 1,337 ​ 1,448 Intangible assets, net ​ 12,419 ​ 12,419 Other assets ​ 811 ​ 872 Total assets ​ $ 205,660 ​ $ 218,865 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 2,205 ​ $ 2,034 Contingent consideration ​ ​ 4,310 ​ ​ 6,090 Accrued expenses and other current liabilities ​ 12,609 ​ 10,152 Total current liabilities ​ 19,124 ​ 18,276 Other long-term liabilities ​ 1,668 ​ 1,454 Total liabilities ​ 20,792 ​ 19,730 Commitments and contingencies (Note 16) ​ ​ Stockholders’ equity: ​ ​ Common stock, $ 0.0001 par value; 200,000,000 shares authorized; 43,219,896 and 40,993,768 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively ​ ​ 4 ​ ​ 4 Additional paid-in capital ​ 502,505 ​ 497,342 Accumulated deficit ​ ( 312,601 ) ​ ( 293,171 ) Accumulated other comprehensive loss, net ​ ( 5,040 ) ​ ( 5,040 ) Total stockholders’ equity ​ 184,868 ​ 199,135 Total liabilities and stockholders’ equity ​ $ 205,660 ​ $ 218,865 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 1 Table of Contents ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2022 2021 Revenues ​ $ 32 ​ $ 838 Operating expenses: ​ ​ Research and development ​ 15,104 ​ 11,878 General and administrative ​ 4,427 ​ 3,821 Total operating expenses ​ 19,531 ​ 15,699 Loss from operations ​ ( 19,499 ) ​ ( 14,861 ) Other income (expense): ​ ​ Interest expense ​ ( 62 ) ​ ( 12 ) Interest income ​ 21 ​ 42 Other income (expense), net ​ 110 ​ ( 33 ) Total other income (expense), net ​ 69 ​ ( 3 ) Net loss ​ ( 19,430 ) ​ ( 14,864 ) Other comprehensive income — unrealized gain on short-term investments ​ — ​ 5 Comprehensive loss ​ $ ( 19,430 ) ​ $ ( 14,859 ) Net loss per share, basic and diluted ​ $ ( 0.44 ) ​ $ ( 0.38 ) Weighted-average common shares outstanding, basic and diluted ​ 43,969,481 ​ 38,914,990 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ ​ 2 Table of Contents ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited) (in thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Common Stock Paid-In Accumulated Comprehensive Stockholders’ ​ ​ Shares ​ Amount ​ Capital ​ Deficit ​ Loss ​ Equity Balance at December 31, 2021 ​ 40,993,768 ​ $ 4 ​ $ 497,342 ​ $ ( 293,171 ) ​ $ ( 5,040 ) ​ $ 199,135 Stock-based compensation — ​ — ​ 2,033 ​ — ​ — ​ 2,033 Exercise of stock options 95,771 ​ — ​ 197 ​ — ​ — ​ 197 Vesting of restricted stock awards including withholding, net ​ 17,568 ​ ​ — ​ ​ ( 170 ) ​ ​ — ​ ​ — ​ ​ ( 170 ) Issuance of common stock from Employee Stock Purchase Plan 16,450 ​ — ​ 113 ​ — ​ — ​ 113 Issuance of common stock in at-the-market offerings, net 335,485 ​ — ​ 2,990 ​ ​ — ​ ​ — ​ 2,990 Issuance of common stock upon exercise of warrants ​ 1,760,854 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 19,430 ) ​ ​ — ​ ​ ( 19,430 ) Balance at March 31, 2022 43,219,896 $ 4 $ 502,505 $ ( 312,601 ) $ ( 5,040 ) $ 184,868 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 3 Table of Contents ​ ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited) (in thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Common Stock Paid-In Accumulated Comprehensive Stockholders’ ​ ​ Shares ​ Amount ​ Capital ​ Deficit ​ Loss ​ Equity Balance at December 31, 2020 ​ 37,142,946 ​ $ 4 ​ $ 417,337 ​ $ ( 186,421 ) ​ $ ( 5,044 ) ​ $ 225,876 Stock-based compensation — ​ — ​ 1,218 ​ ​ — ​ ​ — ​ 1,218 Vesting of restricted stock awards including withholding, net ( 6,349 ) ​ — ​ ( 92 ) ​ ​ — ​ ​ — ​ ( 92 ) Issuance of common stock from Employee Stock Purchase Plan 8,733 ​ — ​ 106 ​ ​ — ​ ​ — ​ 106 Retirement of common stock in exchange for common stock warrant ( 1,000,000 ) ​ — ​ ( 7,540 ) ​ ​ ( 9,660 ) ​ ​ — ​ ( 17,200 ) Issuance of common stock warrant in exchange for retirement of common stock — ​ — ​ 17,200 ​ ​ — ​ ​ — ​ 17,200 Issuance of common stock in at-the-market offerings, net 2,110,800 ​ — ​ 34,178 ​ ​ — ​ ​ — ​ 34,178 Issuance of common stock upon cashless exercise of warrants ​ 1,050 ​ ​ — ​ ​ 10 ​ ​ — ​ ​ — ​ ​ 10 Unrealized gain on short-term investments ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5 ​ ​ 5 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 14,864 ) ​ ​ — ​ ​ ( 14,864 ) Balance at March 31, 2021 38,257,180 $ 4 $ 462,417 $ ( 210,945 ) $ ( 5,039 ) $ 246,437 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 4 Table of Contents ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ Net loss ​ $ ( 19,430 ) ​ $ ( 14,864 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ Change in fair value of contingent consideration liability ​ ( 1,780 ) ​ 880 Stock-based compensation expense ​ 2,033 ​ 1,218 Depreciation and amortization ​ 119 ​ 74 Unrealized (gains) losses on foreign currency exchange ​ ( 110 ) ​ 33 Changes in operating assets and liabilities: ​ ​ ​ ​ Accounts receivable ​ 236 ​ ( 191 ) Prepaid expenses and other current assets ​ 3,046 ​ ( 4,201 ) Accounts payable ​ 171 ​ ( 194 ) Accrued expenses and other liabilities ​ 2,659 ​ ( 2,189 ) Income tax and R&D incentive receivables ​ ( 470 ) ​ ( 135 ) Net cash used in operating activities ​ ( 13,526 ) ​ ( 19,569 ) CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ Proceeds from sales and maturities of short-term investments ​ — ​ 30,912 Purchases of short-term investments ​ — ​ ( 7,476 ) Purchases of property and equipment, net ​ ( 9 ) ​ ( 4,209 ) Cash paid for internally developed patents ​ — ​ ( 62 ) Net cash (used in) provided by investing activities ​ ( 9 ) ​ 19,165 CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ Payments of deferred offering costs ​ ​ ( 119 ) ​ ​ 135 Proceeds from issuance of common stock in at-the-market offerings, net ​ 2,990 ​ 34,178 Proceeds from issuance of common stock from Employee Stock Purchase Plan ​ 113 ​ 106 Proceeds from exercises of stock options ​ 197 ​ — Net cash provided by financing activities ​ 3,181 ​ 34,419 Net (decrease) increase in cash and cash equivalents and restricted cash ​ ( 10,354 ) ​ 34,015 Cash, cash equivalents and restricted cash at beginning of period ​ 190,335 ​ 115,952 Cash, cash equivalents and restricted cash at end of period ​ $ 179,981 ​ $ 149,967 ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH ACTIVITIES: ​ ​ ​ ​ Fair value of common stock retired in exchange for issuance of common stock warrant ​ $ — ​ $ 17,200 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 5 Table of Contents ALTIMMUNE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Nature of Business and Basis of Presentation Nature of Business Altimmune, Inc., headquartered in Gaithersburg, Maryland, United States, together with its subsidiaries (collectively, the “Company” or “Altimmune”) is a clinical stage biopharmaceutical company incorporated under the laws of the State of Delaware. The Company is focused on developing treatments for obesity and liver diseases. The Company’s pipeline includes next generation peptide therapeutics for obesity and non-alcoholic steatohepatitis (“NASH”) (for both, pemvidutide [proposed INN], formerly known as ALT-801), and for chronic hepatitis B (HepTcell). Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff and raising capital, and has financed its operations through the issuance of common and preferred stock, long-term debt and proceeds from research grants and government contracts. The Company has not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales. Basis of Presentation The accompanying unaudited consolidated financial statements are prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021 included in the Annual Report on Form 10-K which was filed with the SEC on March 15, 2022. In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on the same basis as the audited consolidated financial statements, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2022 or any future years or periods. The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should we be unable to continue as a going concern. ​ 2. Summary of Significant Accounting Policies During the three months ended March 31, 2022, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC. Use of Estimates The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The extent to which the COVID-19 pandemic, including any resurgences or the emergence of new variants, may directly or indirectly 6 Table of Contents impact the Company’s business, financial condition, and results of operations is highly uncertain and subject to change. The Company considered the potential impact of the COVID-19 pandemic on the Company’s estimates and assumptions and determined that there was not a material impact to the Company’s unaudited consolidated financial statements as of and for the three months ended March 31, 2022. However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods. 3. Fair Value Measurements The Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2022 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at March 31, 2022 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 65,641 ​ $ 65,641 ​ $ — ​ $ — Total ​ ​ 65,641 ​ ​ 65,641 ​ ​ — ​ ​ — Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration liability (see Note 8) ​ 4,310 ​ — ​ — ​ 4,310 Total ​ $ 4,310 ​ $ — ​ $ — ​ $ 4,310 ​ The Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2021 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at December 31, 2021 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 65,634 $ 65,634 $ — $ — Total ​ ​ 65,634 ​ ​ 65,634 ​ ​ — ​ ​ — Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration liability (see Note 8) ​ 6,090 ​ — ​ — ​ 6,090 Total ​ $ 6,090 ​ $ — ​ $ — ​ $ 6,090 ​ ​ The fair value of contingent payments classified as a liability is based on the regulatory milestones described in Note 8 and estimated using the Monte Carlo simulation valuation model with Level 3 inputs. The assumptions used to estimate the fair value of contingent payments that are classified as a liability at March 31, 2022 include the following significant unobservable inputs: ​ ​ ​ ​ ​ Unobservable input ​ Value or Range Weighted-Average Expected volatility 84.4 % ​ 84.4 % Risk-free interest rate 0.90 % ​ 0.90 % Cost of capital 30 % ​ 30 % Discount for lack of marketability 10 %‑ 13 % ​ 12 % Probability of payment 94 % ​ 94 % Projected year of payment 2022 2022 ​ If applicable, the Company will recognize transfers into and out of Level 3 within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. There were no transfers into or out of Level 3 of the fair value hierarchy as of March 31, 2022 and December 31, 2021. Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired. During the three months ended March 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring 7 Table of Contents basis. During the year ended December 31, 2021, the Company recorded non-cash impairment charges to property and equipment, net on a non-recurring basis (see below). Lonza Manufacturing Agreement ​ In March 2021, the Company expanded its manufacturing collaboration with Lonza Houston, Inc. (“Lonza”) for the manufacture of AdCOVID or other adenovirus-based vaccines. Under the expanded agreement, the Company had committed approximately $ 23.0 million to Lonza to procure long-lead equipment and construct a dedicated manufacturing suite for clinical and commercial production of adenovirus-based vaccines. This work was completed during the fourth quarter of 2021. The Company capitalized a total of $ 4.0 million as construction-in-progress (“CIP”) during the three months ended March 31, 2021 under this expanded agreement. The Company subsequently terminated the agreement and impaired the amount during the year ended December 31, 2021. 4. Property and Equipment, Net Property and equipment, net consists of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ December 31, 2021 Furniture, fixtures and equipment $ 163 $ 222 Laboratory equipment ​ 243 ​ 1,040 Computers and telecommunications ​ 179 ​ 291 Software ​ 128 ​ 148 Leasehold improvements ​ 1,749 ​ 1,794 Property and equipment, at cost ​ 2,462 ​ 3,495 Less: accumulated depreciation and amortization ​ ( 1,125 ) ​ ( 2,047 ) Property and equipment, net ​ $ 1,337 ​ $ 1,448 ​ Depreciation expense related to property and equipment was approximately $ 0.1 million for both the three months ended March 31, 2022 and 2021. 5. Intangible Assets The Company’s intangible assets consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated ​ Carrying ​ Accumulated ​ ​ ​ ​ Net Book ​ ​ Useful Lives ​ Value ​ Amortization ​ Impairment ​ Value IPR&D assets Indefinite ​ $ 12,419 ​ $ — ​ $ — ​ $ 12,419 Total ​ $ 12,419 ​ $ — ​ $ — ​ $ 12,419 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated ​ Carrying ​ Accumulated ​ ​ ​ ​ Net Book ​ Useful Lives Value Amortization Impairment Value Internally developed patents 6 – 20 years ​ $ 1,079 ​ $ ( 500 ) ​ $ ( 579 ) ​ $ — Acquired licenses 16 – 20 years ​ 285 ​ ( 285 ) ​ — ​ — Total intangible assets subject to amortization ​ 1,364 ​ ( 785 ) ​ ( 579 ) ​ — IPR&D assets Indefinite ​ 12,419 ​ — ​ — ​ 12,419 Total ​ $ 13,783 ​ $ ( 785 ) ​ $ ( 579 ) ​ $ 12,419 ​ There was no amortization expense of intangible assets subject to amortization for the three months ended March 31, 2022. Amortization expense of intangible assets subject to amortization totalled $ 6,640 for the three months ended March 31, 2021. Amortization expense was classified as research and development expenses in the consolidated statements 8 Table of Contents of operations and comprehensive loss. There was no in-process research and development (“IPR&D”) impairment loss during the three months ended March 31, 2022 and the year ended December 31, 2021. 6. Operating Leases The Company rents office and laboratory space in the United States. The Company also leases office equipment under non-cancellable equipment leases through June 2026 . Rent expense during the three months ended March 31, 2022 and 2021 under all of the Company’s operating leases was $ 0.1 million and $ 0.1 million, respectively. Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases. The office space leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The office space lease also includes an option to renew the lease as of the end of the term. The Company has determined that the lease renewal option is not reasonably certain of being exercised. The cash paid for operating lease liabilities for both the three months ended March 31, 2022 and 2021 was $ 0.1 million. Supplemental other information related to the operating leases balance sheet information is as follows (in thousands, except lease term and discount rate): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ December 31, 2021 Operating lease obligations (see Note 7 and 9) $ 1,437 $ 1,535 ​ Operating lease right-of-use assets (included in "Other assets" in Balance Sheet) ​ $ 750 ​ $ 798 ​ Weighted-average remaining lease term (years) ​ 3.1 ​ 3.3 ​ Weighted-average discount rate ​ 7.2 % 7.2 % ​ ​ 7. Accrued Expenses Accrued expenses and other current liabilities consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ December 31, 2021 Accrued professional services $ 642 $ 396 Accrued payroll and employee benefits ​ 1,117 ​ 2,313 Accrued research and development ​ 10,382 ​ 6,988 Lease obligation, current portion (see Note 6) ​ 421 ​ 411 Accrued interest and other ​ 47 ​ 44 Total accrued expenses and other current liabilities ​ $ 12,609 ​ $ 10,152 ​ ​ 8. Contingent Consideration The Company entered into an Agreement and Plan of Merger and Reorganization, dated July 8, 2019 , by and among the Company, Springfield Merger Sub, Inc., Springfield Merger Sub, LLC, Spitfire Pharma, Inc. and David Collier, as the Stockholder Representative (the “Spitfire Merger Agreement”) to acquire all of the equity interests of Spitfire Pharma, Inc. (“Spitfire”). Spitfire was a privately held, preclinical pharmaceutical company developing a novel dual GLP-1/glucagon receptor agonist for the treatment of non-alcoholic steatohepatitis. The transaction closed on July 12, 2019. The Company issued 1,887,250 unregistered shares of its common stock as upfront consideration to certain former securityholders of Spitfire (collectively, the “Spitfire Equityholders”), representing an amount equal to $ 5.0 million less working capital and transaction expense adjustment amounts as defined in the agreement. 9 Table of Contents The acquisition of Spitfire was accounted for as an asset acquisition instead of a business combination because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets, and therefore, the asset was not considered a business. The Company expensed the acquired intellectual property as of the acquisition date as in-process research and development with no alternative future uses. The Spitfire Merger Agreement also includes future contingent payments up to $ 88.0 million in cash and shares of the Company’s common stock as follows (each, a “Milestone Event”): ● a one-time payment of $ 5.0 million (the “IND Milestone Consideration Amount”) within sixty days of the submission of an Investigational New Drug Application (“IND”) to the United States Food and Drug Administration (the “FDA”) or other applicable governmental authority in a foreign jurisdiction, which IND has not been rejected or placed on clinical hold by the FDA or such applicable foreign governmental authority within time specified in the Merger Agreement; ● a one-time payment of $ 3.0 million (the “Phase 2 Milestone Consideration Amount” and together with the IND Milestone Consideration Amount, the “Regulatory Milestones”) within sixty days of the initiation (first patient, first dosing) of a Phase 2 clinical trial of a product candidate anywhere in the world; and ● payments of up to $ 80.0 million upon the achievement of specified worldwide net sales (the “Sales Milestones”) of all products developed using the technology acquired in the License Agreement within ten years following the approval of a new drug application filed with the FDA. The Regulatory Milestones will be payable in shares of the Company’s Common Stock, with the number of shares of the Company’s Common Stock to be issued in connection with each milestone amount, if any, are dependent on the share price at the time of achievement. The number of any shares issued in consideration for the IND Milestone Consideration Amount will be determined based on lower of (A) the average of the closing prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days prior to the IND Reference Date or (B) $ 2.95 . The value of any shares issued in consideration for the Phase 2 Milestone Consideration Amount shall be determined based the lower of (A) on the average of the closing trading prices of our Common Stock as reported on the Nasdaq Global Market for the twenty (20) consecutive trading days immediately preceding the date of the occurrence of the Phase 2 Milestone Event or (B) $ 3.54 . The future contingent payments related to the Regulatory Milestones are stock-based payments accounted for under FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities From Equity (“ASC 480”). Such stock-based payments are subject to a lock-up whereby 50 % of the shares are released at 3 months and 50 % are released at 6 months. The future contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies . Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount is reasonably estimated. On November 3, 2020, the Company received acknowledgement from the Australian Government Department of Health on the Company’s submitted clinical trial notification (“CTN”) which triggered the obligation to settle the IND Milestone payment to the former owners. As a result, on November 19, 2020, the Company issued 1,694,906 shares of its Common Stock valued at $ 9.57 per share for the amount value of $ 13.6 million to the former Spitfire stockholders. Pursuant to the Spitfire Merger Agreement, the Company issued the shares within sixty days of the submission of the CTN, which was October 29, 2020 . From September 30, 2020 through November 19, 2020, the date of issuance, the Company recognized a decrease in the fair value of the IND Milestone payment of $ 5.4 million to research and development expense and reclassified the balance in the contingent consideration liability associated with the fair value of the IND Milestone payment to equity in the Company’s consolidated balance sheet. No Regulatory Milestones were achieved during the three months ended March 31, 2022. The Phase 2 Milestone was met on April 26, 2022. See Note 17 for further details. The Company estimates the future contingent consideration for the Regulatory Milestones based upon a Monte Carlo simulation valuation model that is risk adjusted based on the probability of achieving the milestones and a discount for lack of marketability. The Company remeasures the fair value of the contingent consideration at each reporting period. 10 Table of Contents During the fourth quarter of 2020, the Company achieved the IND Milestone and paid the obligation in shares according to the calculation above. Below is a summary of the contingent consideration activity (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 Beginning balance $ 6,090 $ 5,390 Change in fair value ​ ( 1,780 ) ​ 880 Ending balance ​ $ 4,310 ​ $ 6,270 ​ As of March 31, 2022, the decrease in fair value was primarily attributable to a decrease in the closing share price of the Company’s common stock, partially offset by an increase in the probability of milestone achievement. As of March 31, 2021, the increase in fair value was primarily attributable to an increase in the closing share price of the Company’s common stock and in the probability of milestone achievement. Any changes in fair value have been recorded within research and development expense during the respective periods presented. ​ 9. Other Long-Term Liabilities The Company’s other long-term liabilities are summarized as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ December 31, 2021 Lease obligation, long-term portion (see Note 6) $ 1,016 $ 1,124 Conditional economic incentive grants ​ 250 ​ 250 Other ​ 402 ​ 80 Total other long-term liabilities ​ $ 1,668 ​ $ 1,454 ​ ​ 10. Common Stock Public Offering On July 16, 2020, the Company offered and sold (i) 3,369,564 shares of common stock, at a price to the public of $ 23.00 per share, and (ii) pre-funded warrants of the Company to purchase 1,630,436 shares of common stock at an exercise price equal to $ 0.0001 per share (the “Pre-Funded Warrants”), at a price to the public of $ 22.9999 per share of common stock underlying the Pre-Funded Warrants (equal to the public offering price per share of Common Stock, minus the exercise price of each Pre-Funded Warrant). The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of the Company’s common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99 % of the total number of shares of the Company’s common stock then issued and outstanding, which percentage may change at the holders’ election to any other number less than or equal to 19.99 % upon 61 days ’ notice to the Company. The gross proceeds of this offering were approximately $ 132.2 million, which includes the exercise in full of the underwriters’ option to purchase an additional 750,000 shares of common stock, before deducting underwriting discounts and commissions and offering expenses during the third quarter of 2020. The net proceeds of this offering were approximately $ 124.0 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The Company has assessed the Pre-Funded Warrants for appropriate equity or liability classification and determined that the Pre-Funded Warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to FASB Accounting Standards Codification Topic 815, Derivatives and Hedging (“ASC 815”). The Pre-Funded Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the Pre-Funded Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. As of March 31, 2022, 760,870 of the Pre-Funded Warrants were exercised, leaving 869,566 remaining Pre-Funded Warrants unexercised. 11 Table of Contents At-the-Market Offerings On February 25, 2021, the Company entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C. and B. Riley Securities, Inc., serving as sales agents (the “Sales Agents”) with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $ 125.0 million (the “Shares”) through the Sale Agents (the “2021 Offering”). Any Shares offered and sold in the 2021 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on December 31, 2020, which was declared effective on January 11, 2021, the prospectus supplement relating to the 2021 Offering filed with the SEC on February 25, 2021 and any applicable additional prospectus supplements related to the 2021 Offering that form a part of the Registration Statement. During the three months ended March 31, 2022, the Company sold 335,485 shares of Common Stock under the 2021 Agreement resulting in approximately $ 3.0 million in net proceeds. As of March 31, 2022, the Company has sold in aggregate 5,135,939 shares of Common Stock under the 2021 Agreement resulting in approximately $ 67.8 million in net proceeds, with $ 55.0 million remaining available to be sold under the 2021 Agreement. As of March 31, 2022, the Company recorded approximately $ 0.1 million of offering costs which offset the proceeds received from the shares sold through March 31, 2022. The Company capitalized approximately $ 0.1 million of deferred offering costs which will offset future proceeds received under the 2021 Agreement. Exchange Agreement On February 25, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $ 0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share. The Exchange Warrants did not have an expiration date and were exercisable at any time except that the Exchange Warrants could not be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions. In accordance with FASB Accounting Standards Codification Topic 505, Equity , the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and a corresponding debit to additional paid-in-capital and accumulated deficit at the fair value of the Exchange Warrants on the issuance date. The Exchange Warrants were classified as equity in accordance with ASC 480 and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in-capital and is not subject to remeasurement. The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants. As of March 31, 2022, the Exchange Warrants to purchase 1,000,000 shares were net exercised, resulting in the issuance of 999,984 shares of common stock. All of the Exchange Warrants were exercised in full. 11. Warrants A summary of warrant activity during the three months ended March 31, 2022 is as follows: ​ ​ ​ Warrants outstanding, December 31, 2021 2,776,191 Exercises (see Note 10) ( 1,760,870 ) Warrants outstanding, March 31, 2022 1,015,321 ​ 12. Stock-Based Compensation Stock Options The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years . At March 31, 2022, there was $ 14.0 million of unrecognized compensation cost related to stock options, which is 12 Table of Contents expected to be recognized over a weighted-average period of 3.1 years. During the three months ended March 31, 2022, the Company granted 1,020,427 stock options with a weighted average exercise price of $ 6.91 and per share weighted average grant date fair value of $ 6.06 . Information related to stock options outstanding at March 31, 2022 is as follows (in thousands, except share, exercise price and contractual term): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ ​ Number of ​ Average ​ Contractual Term ​ Aggregate Intrinsic ​ ​ Stock Options ​ Exercise Price ​ (Years) ​ Value Outstanding 3,464,793 ​ $ 8.41 6.0 ​ $ 4,045 Exercisable 1,271,282 ​ $ 7.45 5.8 ​ $ 2,759 Unvested 2,193,511 ​ $ 8.96 6.0 ​ $ 1,286 ​ Restricted Stock At March 31, 2022, the Company had unvested restricted stock of 53,818 shares with total unrecognized compensation expense of $ 0.2 million, which the Company expects to recognize over a weighted average period of approximately 0.7 years. During the three months ended March 31, 2022, the Company released 20,182 shares of unrestricted common stock as a result of the vesting of restricted stock. Restricted Stock Units During the three months ended March 31, 2022, the Company granted 255,000 shares of restricted stock units which vest over four years . At March 31, 2022, the Company had unvested restricted stock units of 446,837 shares with total unrecognized compensation expense of $ 3.9 million, which the Company expects to recognize over a weighted average period of approximately 3.5 years. During the three months ended March 31, 2022, the Company released 40,091 shares of unrestricted common stock as a result of the vesting of restricted stock units. 2019 Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, employees purchased 16,450 shares for $ 0.1 million during the three months ended March 31, 2022. During the three months ended March 31, 2022, the Company recognized compensation expense of $ 0.1 million. Stock-based Compensation Expense Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021 as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2022 2021 Research and development ​ $ 618 ​ $ 321 General and administrative ​ 1,415 ​ 897 Total ​ $ 2,033 ​ $ 1,218 ​ ​ ​ 13. U.S. Government Contracts and Grants In June 2020, the Company was awarded $ 4.7 million from the U.S. Army Medical Research & Development Command (“USAMRDC”) to fund its Phase 1/2 clinical trial of T-COVID. The competitive award was granted by USAMRDC in collaboration with the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense (“DoD”). Under the contract, MTEC paid the Company a firm fixed fee based upon the achievement of certain milestones for conduct and completion of a Phase 13 Table of Contents 1/2 study and research and development work on the replication-deficient adenovirus 5 (“RD-Ad5”) vector vaccine platform. For the three months ended March 31, 2021, the Company recognized approximately $ 0.5 million of grant revenue under the contract, which completed the full recognition of this award. No revenue was recognized for this contract for the three months ended March 31, 2022. In July 2016, the Company signed a five-year contract with Biomedical Advanced Research and Development Authority (“BARDA”). The contract, as amended, had a total value of up to $ 136.8 million to be used to fund clinical development of NasoShield. Under the contract, BARDA paid the Company a fixed fee and reimbursed certain costs for the research and development of an Ad5-vectored, protective antigen-based intranasal anthrax vaccine through cGMP manufacture and conduct of a Phase 1 clinical trial dose ranging assessment of safety and immunogenicity. The contract consisted of an initial base performance period providing approximately $ 30.9 million in funding for the period July 2016 through December 2021. BARDA had seven options to extend the contract to fund certain continued development and manufacturing activities for the anthrax vaccine, including Phase 2 clinical studies. Each option, if exercised by BARDA, would have provided additional funding ranging from approximately $ 1.1 million to $ 34.4 million for a three-year period beginning in 2021. For the three months ended March 31, 2021, the Company recognized approximately $ 0.2 million of grant revenue under the BARDA contract. For the three months ended March 31, 2022, the Company has recognized de minimis grant revenue related to the close-out of the BARDA contract. BARDA did not extend the contract beyond the end of December 2021. ​ 14. Income Taxes Due to a full valuation allowance, the Company did not record an income tax benefit for both the three months ended March 31, 2022 and 2021. 15. Net Loss Per Share Because the Company has reported a net loss attributable to common stockholders for all periods presented, basic and diluted net loss per share attributable to common stockholders are the same for all periods presented. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period. Basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. As such, all unvested restricted stock, restricted stock units, common stock warrants, and stock options have been excluded from the computation of diluted weighted average shares outstanding because such securities would have an anti-dilutive impact for all periods presented. Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, restricted stock units, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows: ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2022 ​ 2021 Common stock warrants 145,755 145,755 Common stock options 3,479,992 2,307,264 Restricted stock units 446,837 196,279 Restricted stock 53,818 134,545 ​ ​ ​ 14 Table of Contents 16. Commitments and Contingencies Spitfire Acquisition As disclosed in Note 8, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc. within ten years following the approval of a new drug application filed with the FDA. Litigation In December 2019, a complaint was filed by Dr. De-Chu Christopher Tang (“Plaintiff”) against the Company, which was removed to the United States District Court for the Eastern District of Texas. The Plaintiff amended the complaint in February 2020 to include Vipin K. Garg and David J. Drutz as defendants, in addition to the Company (Dr. Garg, Dr. Drutz, and the Company are collectively referred to as “Defendants”). In March 2020 the Defendants filed a motion to dismiss the complaint. The Court denied the motion without prejudice and allowed Plaintiff an opportunity to file an amended complaint. Plaintiff’s second amended complaint was filed on April 17, 2020, and Defendants filed a motion to dismiss that complaint on May 1, 2020. A hearing on Defendants’ motion to dismiss was held on May 20, 2020. Plaintiff, who is representing himself, alleges five causes of action as follows: (1) Defendants’ alleged retention of Plaintiff’s lab notebooks after the termination of his employment in 2012; (2) alleged plagiarism based on publishing an article without naming Plaintiff as an author; (3) use of the Adhigh System, which Plaintiff alleges he developed; (4) allegations that Defendants manipulated our stock and caused a decrease in value; and (5) allegations that the Defendants “wast[ed] government grant money and poison[ed] science by leaving data to rot.” On September 30, 2020, Plaintiff filed a motion titled “Motion to Proscribe Defendants’ Allegedly Illegal Use of Plaintiff’s AdHigh System in Altimmune’s Human Clinical Trials,” to which Defendants filed an opposition on October 13, 2020. The court has not yet ruled on that motion, which also remains pending. On November 6, 2020, Defendants filed a motion for summary judgment on the basis of lack of personal jurisdiction, insufficient service of process, and failure to state a claim. The court ruled on that motion on March 25, 2021, which dismissed the case on the basis of lack of personal jurisdiction. On December 1, 2020, the magistrate judge assigned to the case issued a report and recommendation that Defendants’ motion to dismiss of May 1, 2020 be granted and that this action be dismissed for lack of personal jurisdiction. Plaintiff filed objections to the report and recommendation on December 14, 2020, and the resolution of those objections by the district court remains pending. In December 2021, the Plaintiff refiled the complaint in the United States District Court for the District of Maryland. On February 24, 2022, Defendants filed a memorandum containing a brief description of the planned motion and a concise summary of the factual and legal support for it. On the basis of that memorandum, the Court granted Defendants’ request to file a motion to dismiss and allowed Plaintiff an opportunity to file an amended complaint. Plaintiff’s amended complaint was filed on March 3, 2022, and Defendants filed a motion to dismiss that complaint on April 4, 2022. The Company believes the allegations in the complaint are without merit and intends to vigorously defend the litigation. The Company is a party in various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business, none of which are currently reasonably possible or probable of material loss. 17. Subsequent Events Contingent Consideration On April 26, 2022, the Company dosed the first patient in the Phase 2 MOMENTUM trial of pemvidutide in obesity, which triggered the obligation to pay the Phase 2 Milestone Consideration Amount to the Spitfire Equityholders. ​ 15 Table of Contents