Altimmune, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022; filed August 11, 2022. Altimmune is a clinical-stage biopharmaceutical company developing treatments for obesity and liver diseases. Its lead candidate, pemvidutide, is being developed for obesity and non-alcoholic steatohepatitis (NASH); HepTcell is being developed for chronic hepatitis B. The company has not generated product-sales revenue.
Financial results and liquidity
Amounts below are in U.S. dollars; financial statement figures are converted from thousands to millions.
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0.008M | $0.137M | $0.040M | $0.975M |
| Research and development expense | $15.993M | $13.272M | $31.097M | $25.150M |
| General and administrative expense | $4.410M | $3.659M | $8.837M | $7.480M |
| Operating loss | $(20.395)M | $(24.864)M | $(39.894)M | $(39.725)M |
| Net loss | $(20.107)M | $(24.827)M | $(39.537)M | $(39.691)M |
| Basic and diluted net loss per share | $(0.42) | $(0.60) | $(0.90) | $(0.99) |
- At June 30, 2022, cash, cash equivalents and restricted cash were $135.9M, with $48.9M of short-term investments: total liquidity of approximately $184.8M. Total current assets were $195.5M and current liabilities $13.8M.
- Six-month operating cash use was $30.2M, investing cash use $49.0M, and financing cash provided $24.8M. Cash and restricted cash declined $54.4M during the period.
- Total liabilities were $15.4M; the balance sheet reports no borrowing balance. Lease obligations were $1.3M, including current and long-term portions. Accumulated deficit was $332.7M.
- Operating margins and gross margins are not meaningful indicators here: revenue was minimal and there were no product sales. No clear product-level margin is provided.
Changes versus the prior comparable periods
- Q2 revenue fell 94% and first-half revenue fell 96%, mainly because T-COVID and NasoShield development programs were discontinued and related grant revenue wound down.
- R&D expense rose 21% in Q2 and 24% in the first half, primarily reflecting pemvidutide development, including ongoing NAFLD trials and initiation of the MOMENTUM Phase 2 obesity trial, and HepTcell activity. These increases were partly offset by lower COVID-program spending.
- Q2 net loss narrowed from $24.8M to $20.1M, principally because the prior-year quarter included an $8.1M noncash impairment charge for construction-in-progress related to the discontinued AdCOVID program. First-half net loss was essentially unchanged year over year.
- Interest income increased with higher interest-bearing balances. The company invested $48.9M in short-term investments during the first half.
Outlook, risks and unusual items
- Management said cash and investments, together with expected income-tax refunds and R&D incentive receipts, were sufficient to fund planned operations for at least 12 months from issuance of the financial statements. The filing provides no specific revenue, earnings, or clinical-development financial guidance. Management noted that longer-term needs may require additional financing, government funding, partnerships, or asset monetization.
- The company sold 2.49 million shares through its at-the-market program in the first half, generating $24.3M net proceeds. At June 30, $32.9M remained under that program and approximately $157.9M remained available under the broader shelf registration. Further equity issuance may dilute shareholders.
- On June 10, 2022, Altimmune settled the Spitfire acquisition’s Phase 2 milestone by issuing 847,444 shares valued at $7.2M, following first dosing in the MOMENTUM trial. No contingent consideration liability remained at quarter-end. Up to $80M of sales-based milestone payments may still be payable if specified future sales milestones are achieved.
- Clinical, regulatory, financing, and execution risks remain significant for a clinical-stage company without product revenue. Management reported no material COVID-19 impact to date but noted possible trial, supply, and cost disruptions. It reported no direct Russia-Ukraine exposure and did not then expect a material operating impact, while identifying potential broader economic and operational effects if the conflict escalates.
- A lawsuit brought by a former employee was refiled in Maryland; the company said it considers the allegations without merit and intends to defend itself. The filing identifies no other ordinary-course claims considered reasonably possible or probable to result in material loss. No material changes to the risk factors in the 2021 Form 10-K were reported.
- Management concluded disclosure controls were effective as of June 30, 2022, with no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Progress, enrollment, and timing for pemvidutide obesity and NAFLD trials, and development plans for HepTcell.
- Cash burn and the assumptions supporting management’s stated minimum 12-month runway, including timing and collection of tax refunds and R&D incentives.
- Potential dilution from the ATM program, remaining shelf capacity, stock compensation, and outstanding warrants and options.
- Status and potential outcome of the Maryland litigation and any changes to the company’s assessment of the matter.
- Potential future sales-milestone obligations tied to the Spitfire acquisition and any future contingent payments.