Altimmune, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021; filed November 9, 2021. Altimmune is a clinical-stage biopharmaceutical company developing treatments for obesity and liver diseases, including pemvidutide and HepTcell, as well as vaccine candidates. It has not generated product-sale revenue; reported revenue primarily reflects government research contracts and grants.
Financial results and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0.16 million | $2.94 million | $1.13 million | $5.87 million |
| Research and development expense | $29.21 million | $17.04 million | $54.36 million | $40.82 million |
| General and administrative expense | $4.16 million | $4.22 million | $11.64 million | $9.10 million |
| Operating loss | $33.20 million | $18.32 million | $72.93 million | $44.05 million |
| Net loss | $33.51 million | $17.77 million | $73.20 million | $38.42 million |
| Basic and diluted loss per share | $0.81 | $0.54 | $1.79 | $1.74 |
For the nine months, operating cash use was $56.27 million, investing cash provided was $62.65 million, and financing cash provided was $52.56 million. Cash, cash equivalents and restricted cash totaled $174.90 million at September 30, with $25.02 million of short-term investments, or approximately $199.9 million combined. Current assets were $218.26 million and current liabilities $19.13 million. The filing reports no outstanding notes payable at period-end; liabilities include lease obligations and contingent consideration. Stockholders’ equity was $209.26 million.
Management said cash and short-term investments, together with expected government-contract collections and tax refunds, were sufficient to fund operations for at least 12 months from the financial-statement issuance date. The filing does not provide a specific cash runway beyond that estimate. No product gross margin is reported; revenue is grant and contract-based, so a product-margin comparison is not meaningful.
Material changes and unusual items
- Revenue fell 95% year over year in Q3 and 81% for the nine-month period, mainly because of the timing of MTEC/T-COVID and BARDA/NasoShield work and related indirect-rate settlements.
- Nine-month R&D expense rose 33%. The company attributed the increase largely to COVID-19 program development, including AdCOVID, along with other research costs; lower pemvidutide-related contingent consideration expense partly offset the increase.
- Altimmune discontinued AdCOVID development in June 2021 after Phase 1 results showed lower-than-expected immune responses, despite the candidate being generally well tolerated. The company recorded an $8.07 million noncash impairment on construction-in-progress associated with the related Lonza manufacturing suite; $3.3 million remained capitalized as expected contract recoveries. Construction continued while the company assessed strategic options for the suite.
- ATM equity sales generated approximately $52.4 million net proceeds during the first nine months, with $70.9 million remaining available under the program. Shares issued and outstanding increased to 39.70 million from 37.14 million at year-end 2020.
- There is up to $88 million of potential Spitfire acquisition consideration, including regulatory milestones and up to $80 million tied to future sales. The regulatory contingent consideration liability was $6.95 million at September 30.
Outlook, commentary and risks
Management plans continued investment in clinical development and said longer-term capital needs may require additional equity or debt financing, government funding, partnerships, or asset monetization. BARDA’s NasoShield base funding period was scheduled through December 2021; further funding depends on BARDA exercising contract options. The company stated it did not then expect COVID-19 to materially affect regulatory timelines for ongoing trials, but warned that pandemic disruptions could delay trials or supply and increase costs. It reported no material change to the risk factors in its 2020 Form 10-K and no litigation matter reasonably likely or probable to cause a material loss.
Other notable obligations include approximately $23 million committed to Lonza, with $2.0 million remaining at quarter-end. The filing says the manufacturing suite’s future use was under assessment following AdCOVID’s discontinuation. Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Whether the stated 12-month funding assessment remains adequate as clinical spending, capital expenditures, and grant collections evolve.
- Progress and costs for pemvidutide, HepTcell, and other continuing programs, and the timing and amount of any future BARDA or MTEC funding.
- Recoverability and ultimate use or disposition of the Lonza suite, including the remaining contractual commitment and the $3.3 million capitalized recovery estimate.
- Potential dilution from further ATM sales, outstanding warrants and equity awards, and contingent regulatory milestone shares.
- Whether future Spitfire sales milestones or other contingent payments become payable; the filing does not quantify when or whether the sales thresholds will be reached.