Altimmune, Inc. — FY2022 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2022. Altimmune is a clinical-stage biopharmaceutical company with no product sales. Its lead candidate, pemvidutide, is in development for obesity and liver disease; HepTcell is being developed for chronic hepatitis B. The company’s prior government-funded vaccine programs were largely discontinued, shifting resources toward pemvidutide and HepTcell.
Key financial metrics
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $(0.1) million | $4.4 million |
| Research and development expense | $70.5 million | $74.5 million |
| General and administrative expense | $17.1 million | $15.4 million |
| Operating loss | $(87.7) million | $(96.9) million |
| Net loss | $(84.7) million | $(97.1) million |
| Net loss per share | $(1.81) | $(2.35) |
| Net cash used in operating activities | $(62.6) million | $(78.2) million |
| Cash, cash equivalents, restricted cash and short-term investments | $184.9 million | $190.3 million |
| Total assets / total liabilities | $206.9 million / $21.6 million | $218.9 million / $19.7 million |
FY2022 interest income was $2.9 million, helping reduce the net loss. The balance sheet shows no conventional debt balance; liabilities include accrued expenses, accounts payable, lease obligations and other items. No product-sales margin is available because the company has not generated product revenue.
Material changes versus FY2021
- Revenue declined by $4.5 million, principally because the T-COVID and NasoShield programs ended and BARDA did not renew its contract after 2021. FY2022 revenue was a small negative adjustment to prior-year cost reimbursements.
- R&D expense fell 5% overall as spending on discontinued COVID-19 programs declined, partly offset by higher pemvidutide and HepTcell development costs. G&A expense increased 11%.
- Net loss narrowed by $12.4 million. Lower operating expenses, the absence of the $11.4 million 2021 construction-in-progress impairment, and higher interest income contributed to the improvement.
- Operating cash use decreased by $15.7 million, while financing provided $56.8 million, mainly from at-the-market stock sales. The company sold about 5.2 million shares for net proceeds of $56.2 million during 2022.
- Cash and cash equivalents declined, while short-term investments rose to $73.8 million. Year-end common shares outstanding increased to 49.2 million from 41.0 million.
Outlook, clinical progress and risks
- Pemvidutide: The 12-week Phase 1b NAFLD study met its liver-fat and weight-loss endpoints. At 1.8 mg, mean relative liver-fat reduction was 68.5%; mean weight loss across all subjects was 4.3%. In the 24-week extension, relative liver-fat reductions were 75.2% at 1.8 mg and 76.4% at 2.4 mg; all-subject weight loss at 1.8 mg was 6.2%. These were early-stage, relatively small studies and do not establish clinical benefit or approval.
- The 48-week Phase 2 MOMENTUM obesity trial enrolled approximately 320 non-diabetic subjects. At filing, management expected a roughly 160-subject interim analysis in Q1 2023. The company planned to initiate a biopsy-driven Phase 2 NASH trial in 2023; design details were still subject to change.
- HepTcell’s Phase 2 trial was ongoing, with data expected in the first half of 2024. The company had no active U.S. government-funded research programs and was closing out its remaining BARDA contract.
- Management stated that year-end cash and investments, 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. Management also cautioned that these resources would not fund completion of the clinical trials needed for marketing approval or commercialization; additional capital or partnerships will be needed over the longer term.
- Principal risks include clinical failure or delay, safety and tolerability, reliance on third-party manufacturers and trial providers, competition in obesity and NASH, regulatory uncertainty, and the need for additional financing. Equity financing may dilute shareholders. Clinical study results reported as topline or interim data may change with further review.
- Three serious or severe adverse events were reported in the 24-week NAFLD extension, each stated to be unrelated to study drug. Gastrointestinal effects were common, and some participants discontinued treatment due to adverse events.
- A former employee’s lawsuit alleging breach of settlement and use of proprietary technology remained pending; the company said it believed the claims were without merit. The Spitfire acquisition agreement also provides for up to $80 million of sales-based milestone payments if specified conditions are achieved.
Important facts for investors to verify
- Whether the MOMENTUM interim and final results support the planned obesity development program, and how efficacy, tolerability and discontinuations compare across doses.
- Whether pemvidutide’s liver-fat and inflammation findings translate into clinically meaningful NASH outcomes in larger, biopsy-driven trials.
- Cash runway assumptions, actual subsequent cash burn, expected tax and R&D incentive receipts, and timing and terms of any further financing.
- Share dilution from future equity issuance and outstanding warrants, options and other equity awards.
- Manufacturing and trial-supply capacity, as well as the status and potential outcome of the pending litigation and any contractual milestone obligations.
Audit note: Ernst & Young issued an unqualified opinion on the financial statements. The audit identified accrued R&D expenses of $7.3 million as a critical audit matter because estimating services incurred but not yet invoiced required significant judgment. Management reported effective disclosure controls and internal control over financial reporting; the auditor did not provide an internal-control opinion.