Altimmune, Inc. — Q1 2019 Form 10-Q
Reporting period: Three months ended March 31, 2019. Altimmune is a clinical-stage biopharmaceutical company developing immunotherapies and vaccines. It had no product sales; reported revenue primarily came from government research contracts and grants.
Financial highlights
| Metric | Q1 2019 | Q1 2018 |
|---|---|---|
| Revenue | $2.96 million | $2.69 million |
| Research and development expense | $3.22 million | $5.75 million |
| General and administrative expense | $2.07 million | $2.45 million |
| Operating loss | $2.33 million | $5.99 million |
| Net loss | $2.10 million | $3.17 million |
| Net loss per common share | $0.27 | $7.49 |
| Operating cash used | $2.11 million | $3.56 million |
Gross margin was not separately presented; revenue was primarily cost-reimbursement contract revenue. At March 31, cash and cash equivalents were $44.30 million, plus $0.63 million of restricted cash. Current assets were $49.41 million and current liabilities were $3.68 million. Total liabilities were $6.05 million, including $0.56 million of BPI France notes and $1.92 million of operating lease obligations. Accumulated deficit was $118.95 million.
Changes and notable items
- Revenue rose 9.8% year over year, reflecting $0.9 million more BARDA revenue for NasoShield, partly offset by $0.6 million less NIAID revenue as SparVax-L activities approached completion.
- R&D expense fell 44%, mainly due to timing of NasoVAX and HepTcell trial and manufacturing activities, lower non-project costs, and reduced SparVax-L spending; increased NasoShield activity partly offset the declines.
- Net loss narrowed, but comparisons also reflect the absence of 2018 items: a $1.55 million gain from warrant fair-value changes, a $0.99 million income-tax benefit, and a $0.49 million goodwill impairment charge.
- A March registered direct offering generated approximately $12.67 million net proceeds. It included common shares and warrants; pre-funded warrants were exercised before quarter-end. The offering triggered a reduction in the exercise price of certain October 2018 warrants and a $452,925 deemed dividend, reducing income attributable to common shareholders.
- Altimmune adopted the new lease accounting standard, recording a $0.76 million increase in assets and liabilities at adoption. Management said adoption did not materially affect operating results or cash flows.
Outlook, liquidity and risks
Management believed cash on hand at March 31, together with expected operating requirements and government-contract revenue, would fund operations for at least 12 months from issuance of the financial statements. The company nevertheless reported continuing operating losses and negative operating cash flow, and said longer-term needs—including planned clinical trials—would require additional financing, government funding, or partnership or asset-monetization arrangements.
The BARDA contract has a maximum value of up to $130.0 million, with an initial base period through November 2019 and additional options that BARDA may elect. Approximately $17.7 million had been received through March 31. SparVax-L activities under the NIAID contract were substantially complete; no additional funding had been identified, and the contract’s performance period extended through September 2019. In April, BPI France notified the company that €102,951 exceeded allowable funding and demanded repayment; the filing classified $227,117 of the notes as current at March 31.
The filing reported no legal proceedings and no significant changes to the risks described in the 2018 Form 10-K. Management concluded disclosure controls were effective and reported no material changes in internal control over financial reporting. No specific product-development guidance or forecast was provided.
Investor facts to verify
- Cash runway assumptions and the timing and availability of future financing or government-contract receipts.
- BARDA option decisions and NasoShield funding beyond the initial contract period.
- Plans and funding for SparVax-L after the NIAID contract concludes.
- Repayment status and final treatment of the BPI France excess-funding demand.
- Potential dilution from the substantial outstanding warrant balance and future equity compensation.