Altimmune, Inc. — Q1 2023 Form 10-Q
Business context and reporting period. Unaudited results for the three months ended March 31, 2023, compared with Q1 2022. Altimmune is a clinical-stage biopharmaceutical company developing pemvidutide for obesity and liver disease, and HepTcell for chronic hepatitis B. It has not generated product-sale revenue.
Financial performance and liquidity
Amounts below are in millions, except per-share data and percentages.
| Metric | Q1 2023 | Q1 2022 | Change |
|---|---|---|---|
| Revenue | $0.021 | $0.032 | Down 34% |
| Research and development expense | $17.249 | $15.104 | Up 14% |
| General and administrative expense | $4.531 | $4.427 | Up 2% |
| Total operating expenses | $21.780 | $19.531 | Up 12% |
| Operating loss | $(21.759) | $(19.499) | Loss increased 12% |
| Interest income | $1.668 | $0.021 | Up $1.647 |
| Net loss | $(20.074) | $(19.430) | Loss increased 3% |
| Net loss per share, basic and diluted | $(0.40) | $(0.44) | |
| Net cash used in operating activities | $(19.407) | $(13.526) | Cash use increased $5.881 |
Revenue consisted of indirect rate adjustments on a government contract being closed out, not product sales. Operating margins are not meaningful given the company’s negligible revenue and clinical-stage operations.
At March 31, 2023, cash, cash equivalents and restricted cash were $104.724 million, and short-term investments were $61.039 million, totaling $165.763 million. Current assets were $173.111 million versus current liabilities of $14.951 million. Total liabilities were $19.351 million; the filing reports no borrowings. Accumulated deficit was $397.958 million. Management said available resources, together with expected tax refunds and R&D incentive receipts, should fund operations for at least 12 months from issuance of the financial statements; additional capital may be needed longer term.
Material changes and operating cash flow
- R&D expense rose by $2.145 million. Higher non-project-specific personnel, contractor and facility costs were partly offset by lower NAFLD-trial and HepTcell costs; pemvidutide obesity-trial costs increased.
- Interest income increased by $1.647 million on cash equivalents and short-term investments, partly cushioning higher operating costs.
- Operating cash use increased year over year, which management attributed primarily to a $7.3 million adverse change in working-capital accounts, partly offset by non-cash-adjusted net-loss changes.
- Investing activities provided $13.302 million, mainly reflecting $34.565 million of investment maturities and sales less $21.212 million of purchases. Financing activities used $0.302 million; no shares were sold under the new ATM program during the quarter.
Outlook, developments and risks
- Pemvidutide: The company reported Week 24 interim results from 160 participants in its 48-week Phase 2 MOMENTUM obesity trial: mean weight loss was 7.3%, 9.4% and 10.7% for the 1.2 mg, 1.8 mg and 2.4 mg doses, respectively, versus 1.0% for placebo. Reported results also included improvements in waist circumference, serum lipids and blood pressure without significant heart-rate increases. These are interim trial results, not evidence of regulatory approval or commercial outcomes.
- Type 2 diabetes study: In a 12-week Phase 1b trial, reported mean weight loss was 4.4%, 6.1% and 7.7% across the same doses, versus a 0.8% mean weight gain for placebo.
- HepTcell: Enrollment in the Phase 2 chronic hepatitis B trial was reported complete on April 11, 2023, after quarter-end. The company planned a data readout in Q1 2024.
- Funding and dilution: A $150 million ATM offering program was established in February 2023; the full amount remained available at March 31. Use of the program could dilute shareholders. The company also cited potential need for future equity or debt financing, government funding, partnerships or asset monetization.
- Contingencies: Up to $80 million of sales-milestone payments may become payable under the Spitfire acquisition agreement if specified sales milestones are achieved following product approval. No contingent consideration liability was recorded at quarter-end. The Tang lawsuit against the company was dismissed with prejudice in March 2023; the plaintiff did not appeal by the deadline. Management said other ordinary-course claims were not reasonably possible or probable of material loss.
- The filing reported no material changes to the risk factors in the 2022 Form 10-K. Principal uncertainties include clinical-trial results and execution, regulatory and development risks, ongoing losses and the need for future financing. No specific financial guidance beyond the stated cash-runway expectation was provided.
Important facts for investors to verify
- Full MOMENTUM results, trial completion, safety and tolerability data, and whether interim efficacy findings persist through 48 weeks.
- HepTcell Phase 2 results and timing, including the planned Q1 2024 readout.
- Cash-burn trends and whether the stated runway assumptions remain valid as clinical programs advance, including timing of expected tax refunds and R&D incentives.
- Any ATM share sales, other financing, resulting dilution, and the company’s longer-term capital requirements.
- Potential future Spitfire sales-milestone obligations and any changes in legal or other contingencies.