Altimmune, Inc. — Q1 2021 Form 10-Q
Business context and reporting period. Altimmune is a clinical-stage biopharmaceutical company developing intranasal vaccines and therapies, including AdCOVID, T-COVID, NasoShield, NasoVAX, ALT-801 and HepTcell. This unaudited report covers the three months ended March 31, 2021; comparisons are with the three months ended March 31, 2020. The company has not generated product-sale revenue.
Financial performance and position
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Revenue | $0.84 million | $2.21 million, down 62% |
| Research and development expense | $11.88 million | $7.19 million, up 65% |
| General and administrative expense | $3.82 million | $2.33 million, up 64% |
| Operating loss | $14.86 million | $7.31 million |
| Net loss | $14.86 million; $0.38 per share | $3.89 million; $0.26 per share |
| Operating cash used | $19.57 million | $4.35 million |
| Cash, cash equivalents and restricted cash | $150.0 million at March 31 | $116.0 million at December 31, 2020 |
| Short-term investments | $76.6 million at March 31 | $100.0 million at December 31, 2020 |
| Total assets / total liabilities | $264.3 million / $17.8 million | At March 31, 2021 |
The combined cash, cash equivalents, restricted cash and short-term investments were approximately $226.5 million at March 31, 2021. The filing reports no conventional debt balance; liabilities include lease obligations, contingent consideration and other liabilities. Operating margin was negative, with operating losses reflecting the company’s development-stage operations. No meaningful positive profit margin was reported.
Material changes and financing
- Revenue fell by $1.4 million, mainly because BARDA revenue for NasoShield decreased about $2.0 million; MTEC revenue for T-COVID increased about $0.5 million.
- R&D expense rose $4.7 million, primarily due to $5.4 million of increased COVID-19 program development costs, partly offset by lower ALT-801-related costs and contingent-consideration remeasurement.
- G&A expense increased $1.5 million, primarily from stock-based compensation and other labor costs. The prior-year quarter included a $3.2 million tax benefit from a CARES Act net-operating-loss carryback; no income tax benefit was recorded in Q1 2021.
- Financing activities provided $34.4 million, principally from $34.2 million of net proceeds under a new at-the-market (ATM) program. The $125 million program had $89.7 million remaining available at quarter-end. Shares outstanding increased to 38.26 million from 37.14 million at year-end.
- Investing activities provided $19.2 million, mainly from net maturities and sales of short-term investments, partly offset by $4.2 million of property and equipment purchases.
Outlook, commitments and risks
- Management said available cash and investments, together with expected government-contract revenue and tax refunds, were sufficient to fund operations for at least 12 months from issuance of the March 31 financial statements. The company remains dependent on external financing, government funding, partnerships or asset monetization over the longer term.
- There is no product-sales guidance or assurance of future product revenue. Management did not anticipate a material COVID-19 impact on regulatory timelines based on information then available, but warned that pandemic-related disruptions could delay or complicate trials and supply and add costs.
- In March 2021, Altimmune committed approximately $23.0 million to Lonza for long-lead equipment and a dedicated AdCOVID manufacturing suite, expected to be completed in Q4 2021; $4.0 million was capitalized as construction in progress by quarter-end. It also committed approximately $6.7 million to Summit Biosciences for AdCOVID nasal-spray manufacturing, expected to be completed by year-end; $1.4 million was recorded as prepaid expense.
- The Spitfire acquisition includes up to $8.0 million of regulatory milestone payments and up to $80.0 million of sales milestones, subject to achievement of specified conditions. The regulatory-milestone liability was $6.27 million at March 31, up from $5.39 million at year-end, with the remeasurement recorded in R&D expense.
- A lawsuit filed in 2019 was dismissed on March 25, 2021 for lack of personal jurisdiction; no liability was accrued. The filing says other ordinary-course disputes and claims were not reasonably possible or probable of material loss. Management reported no material change to the risk factors in its 2020 Form 10-K.
Important facts for investors to verify
- Whether clinical, regulatory and manufacturing milestones for AdCOVID, T-COVID and other pipeline programs remain on schedule and within the disclosed commitments.
- The pace of operating cash use and whether the stated 12-month funding outlook remains adequate as trial and manufacturing spending progresses.
- Potential dilution from the remaining ATM capacity, outstanding warrants, stock options and equity-linked milestone payments.
- Timing and continuation of BARDA and MTEC funding, including BARDA option exercises and associated revenue.
- Changes in contingent consideration estimates, manufacturing commitments and other contractual obligations.