Altimmune, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023; filed August 10, 2023. Altimmune is a clinical-stage biopharmaceutical company developing pemvidutide for obesity and liver diseases and HepTcell for chronic hepatitis B. It has not generated product-sales revenue.
Financial results and position
- Revenue: Q2 revenue was $6,000, versus $8,000 a year earlier; first-half revenue was $27,000, versus $40,000. Revenue was primarily from remaining grant/contract adjustments.
- Loss and expenses: Q2 operating expenses were $18.0 million, including $13.3 million R&D and $4.8 million G&A; net loss was $16.1 million, or $0.32 per share, versus $20.1 million, or $0.42 per share. First-half operating expenses were $39.8 million and net loss was $36.1 million, or $0.72 per share.
- Margins: Not meaningful given negligible grant-related revenue and the company’s development-stage operations.
- Cash flow: First-half operating cash use was $38.8 million, compared with $30.2 million in 2022. Investing activities provided $17.3 million, largely reflecting maturities and sales of investments; financing provided $12.8 million, primarily from ATM stock sales. Cash and restricted cash declined $8.7 million.
- Liquidity: At June 30, cash, cash equivalents and restricted cash totaled $102.4 million, with $57.6 million of short-term investments, or about $160.0 million combined. Management said these resources, together with expected tax refunds and R&D incentive receipts, were expected to fund operations for at least 12 months from issuance of the financial statements. The company also stated it may need additional capital for longer-term needs.
- Debt and liabilities: The balance sheet reported $15.6 million in total liabilities, including $0.9 million of operating lease obligations; no significant borrowing balance is reported. Equity was $167.7 million and accumulated deficit was $414.0 million.
Changes versus prior-year period
- Q2 net loss improved by $4.0 million year over year, while first-half net loss improved by $3.4 million. Higher interest income—$1.8 million in Q2 and $3.5 million for the first half—partly offset operating losses.
- Q2 R&D expense fell 17% to $13.3 million, mainly as earlier NAFLD trial activity wound down, partly offset by IMPACT NASH trial startup and higher non-project costs. First-half R&D decreased 2% to $30.5 million. G&A increased 8% in Q2 and 5% for the first half, mainly due to compensation and stock-based compensation.
- First-half operating cash use increased $8.6 million, which management attributed primarily to working-capital changes.
- The company sold 3.36 million shares under its 2023 at-the-market program in the first half, raising approximately $13.4 million net. Shares outstanding rose from 49.2 million at year-end 2022 to 52.7 million at June 30, 2023. A further $136.2 million remained available under the $150 million program.
Programs, outlook and risks
- Pemvidutide: The first subject entered the Phase 2b IMPACT NASH trial on August 1, 2023. The planned study enrolls approximately 190 subjects; topline results were expected in Q1 2025. The filing also reports previously announced Week 24 interim MOMENTUM obesity-trial weight losses of 7.3%, 9.4% and 10.7% at the 1.2 mg, 1.8 mg and 2.4 mg doses, respectively, versus 1.0% for placebo.
- HepTcell: Phase 2 enrollment was completed in April 2023; data readout was planned for Q1 2024.
- Funding and contingencies: Altimmune relies on equity financing and other potential funding or partnering sources and has incurred significant losses without positive operating cash flow. A Spitfire acquisition agreement provides for up to $80 million of sales-milestone payments if specified conditions are met after product approval; the filing does not report these payments as currently probable. Management said ordinary-course disputes and litigation were not reasonably possible or probable to result in material loss.
- The company reported no material changes to the risk factors in its 2022 Form 10-K. It cautioned that forward-looking plans and expected milestones involve substantial risks and uncertainties.
Important facts for investors to verify
- Whether the stated liquidity runway remains adequate as clinical-trial spending and working-capital needs evolve, and whether additional financing will be required.
- Progress, enrollment and data timing for the IMPACT, MOMENTUM and HepTcell trials, including whether anticipated milestones are achieved.
- The effect of continued ATM issuance or other equity financing on share count and dilution.
- Potential future Spitfire sales-milestone obligations and the timing or amount of any payments if their conditions are met.