Altimmune Stock: Several Catalysts In 2 Market Indications (NASDAQ:ALT)

Altimmune, Inc. (NASDAQ:ALT) is a great speculative biotech play to look into. That’s because there are 3 data readouts expected in the 2nd half of 2022. The two more notable ones would be from a phase 1b study, which is using pemvidutide for the treatment of patients with non-alcoholic fatty liver disease (NAFLD).

The first set of results to be released Q3 of 2022 is to determine liver fat reduction and weight loss at 12 weeks. After that, in Q4 of 2022, there will be an additional readout at 24 weeks from this very same phase 1b study to determine weight loss.

Separately, the biotech is also running the phase 2 MOMENTUM study, which is using pemvidutide for patients with obesity. Results from this particular study are expected in Q4 of 2022. The premise here is that there are two opportunities to see if this drug has the ability to help patients with weight loss. If it also succeeds in NAFLD, then that would be a huge bonus. Based on the potential of this speculative biotech with several catalysts expected in the coming months, these are why I believe it offers itself as a great speculative biotech to look into.

Pemvidutide For The Treatment Of Patients With Non-Alcoholic Fatty Liver Disease

The first program to go over involves the use of pemvidutide, which is being developed for the treatment of patients with non-alcoholic fatty liver disease (NAFLD). NAFLD is something that needs to be taken care of. Patients with NAFLD have fat in the liver but there is no present damage yet. However, if this disorder persists for an extended period of time, then it can turn to non-alcoholic steatohepatitis (NASH).

NASH then does cause liver damage and inflammation. The key here is for pemvidutide to have an ability to reduce liver fat before it starts to cause severe damage to the liver. NASH stands for non-alcoholic steatohepatitis and is a liver disease. In essence, patients with NASH experience a fatty liver. The fat in essence overwhelms the liver, eventually causing inflammation and damage to it. For the time being, there is no cure for this disease. However, it is not even known what exactly causes it. On the other hand, there are several factors that may contribute to it such as:

• Obesity
• High Cholesterol
• Type 2 Diabetes (T2D).

Some people with a minimal amount experience no symptoms. Then there are others who have severe symptoms as follows:

• Fatigue
• Pain
• Weight loss.

The disease affects about 16 million people in the United States alone, therefore, it is a large market opportunity. Truth be told, there are many figures out there in terms of market opportunity. It is estimated that the global NASH market could be worth $20 billion by 2027. This is a big market opportunity for sure and hopefully pemvidutide shows an effect on reducing fat content in a patient’s liver.

A key to stopping NASH in the first place is to eliminate obesity itself. Here are two key facts that prove this first statement to be the case. Non-alcoholic fatty liver disease (NAFLD) is seen in up to 90% of patients who are obese. About 20% of those who have NAFLD will move on to progress in disease to non-alcoholic steatohepatitis (NASH). As you can see, obesity is a major cause of patients eventually having NASH.

Having said that, there is a phase 1b study ongoing, which is testing out the use of pemvidutide over a 12-week period. Patients are being randomized in this study 1:1:1:1 to receive the following doses over this period of time:

• 1.2 mg pemvidutide
• 1.8 mg pemvidutide
• 2.4 mg pemvidutide
• Placebo

Again, the goal of this phase 1b study is to assess what effect pemvidutide ends up having on reducing liver fat measured by MRI-PDFF and weight loss. The reason for advancing this drug into NAFLD is because it makes sense based on what was observed in a prior 12-week study. It was noted that 1.8 mg of pemvidutide given over a 12-week period allowed patients to achieve 10.3% weight loss.

The notion is that such a decrease in weight loss observed in that study may contribute to a big reduction in fat in the liver as well. This is what this study is hoping to reinforce once trial results are readout in Q3 of 2022. Plus, there will also be another look at possible weight loss with the use of pemvidutide as well. Speaking of which, patients who complete this 12 week phase 1b treatment period with this drug are allowed to enter an extension study to complete an additional 12 weeks. In total, Altimmune will be able to provide weight loss for the entire 24 week period as well. This data is expected later on in Q4 of 2022.

Pemvidutide For The Treatment Of Patients With Obesity

The other program with multi-billion dollar potential would be the use of pemvidutide for the treatment of patients with obesity. Obesity is a very complicated type of a disease. Why is that? That’s because the excessive amount of body fat on a patient is only one major cause for concern. Having a substantial amount of body fat can possibly cause other diseases and health issues such as:

• High blood pressure
• Heart disease
• Diabetes
• Some types of cancers
• Non-alcoholic steatohepatitis (NASH)
• Non-alcoholic fatty liver disease.

As I noted above, a good way to help with NAFLD is to help someone lose weight. That is, reducing body fat with the use of a treatment like pemvidutide will prevent someone from progressing further to NASH. The main thing to consider is that there is a belief a weight loss drug should perform either equal to or better than bariatric surgery. There are many types but the main thing is that they are procedures done to reduce how much one eats in a given day. In addition, for patients who can’t lose weight through exercise. It is said that the global obesity treatment market will reach $15.6 billion by 2024. Gastric bypass procedures are starting to become popular, but if someone can avoid surgery by taking a drug like pemvidutide, then I believe it may be more suitable to go this route instead.

Altimmune had already initiated a 48-week phase 2 trial named MOMENTUM back in April of 2022. This study is expected to enroll up to a total of 320 non-diabetic patients with obesity or those who are overweight. Patients in this study will also be given 4 different doses as the other NAFLD study noted above. The doses to be given are as follows:

• 1.2 mg pemvidutide
• 1.8 mg pemvidutide
• 2.4 mg pemvidutide
• Placebo

The patients in this study, though, are to be treated over a 48-week period in total. However, the company is not going to wait until the end of the 48-week period to report results. It intends to report interim data of the patients recruited to date in Q4 of 2022. This means that traders/investors will get an interim look to see if pemvidutide is helping patients achieve weight loss. Thus, the primary endpoint is the relative change in body weight as a percentage compared to baseline over a 48-week period. Again, the interim data to be released Q4 of 2022 will only look at patients treated over a 24-week period.

Financials

According to the 10-Q SEC Filing, Altimmune had cash, cash equivalents and restricted cash of $180 million as of March 31, 2022. The reason for the large influx of cash is because it enacted an offering in which it sold a total of 3,369,564 shares of common stock at a price of $23 per share. In addition, it also offered pre-funded warrants of the company to purchase 1,630,436 shares of common stock an exercise price equal to $0.0001 per share at price of $22.9999 per share. The net proceeds from this offering were around $124 million after deducting expenses and discounts.

The thing is that it still has 869,566 remaining Pre-Funded warrants which have not yet been exercised as of March 31, 2022. As you can see, it can still raise cash that it needs by other means. Speaking of which, it even still has an at-the-market offering programs which Altimmune can sell shares of common stock from time to time. This was an Equity Distribution Agreement with Piper Sandler & Co., Evercore Group L.L.C. and B. Riley Securities, Inc as sales agents. As of March 31, 2022 there still is about $55 million that can be sold under this 2021 Agreement.

Based on the current cash on hand, the company believes it has enough to fund its operations for at least 12 months from the issuance of its March 31, 2022 consolidated financial statements. My estimate is that it may need to raise cash at least once before the end of 2022. More than likely, if it has a positive readout of clinical data, then it will choose to raise cash immediately.

Risks To Business

There are several risks that investors should be aware of. The first risk involves the upcoming readouts relating to the ongoing phase 1b NAFLD study using pemvidutide. While this drug has done well to show the ability to reduce weight of 10.3% with the 1.8 mg dose, there is no guarantee it will succeed in reducing liver fat.

The second risk involves the interim weight loss phase 2 MOMENTUM study data to be released in Q4 of 2022. While the drug did achieve substantial weight loss as highlighted above, there is no guarantee that the 1.8 mg dose of pemvidutide will achieve similar or superior weight loss. The hope is that it does, or that the higher dose of 2.4 mg performs better than anticipated.

The final risk relates to the possible need to raise additional cash. As noted above, the company believes it has enough cash to fund its operations for at least the next 12 months. I would think that it may be able to raise cash through the pre-funded warrants or with the ATM agreement made. Keep in mind that it doesn’t stop Altimmune from seeking another way to raise cash if it chooses to do so. For instance, by just selling common stock of shares on the open market instead.

Conclusion

The final conclusion is that Altimmune is a great speculative biotech to look into. It has established proof of concept in reducing weight by 10.3% using 1.8 mg of pemvidutide. The hope is that this percentage can be similar or higher upon release of the interim results from the phase 2 MOMENTUM study expected in Q4 of 2022. In addition, it would be nice to see if pemvidutide not only causes weight loss for NAFLD patients, but that it also allows achieves liver fat reduction for them as well.

With 3 catalysts expected in the 2nd half of 2022, plus proof of concept being established for pemvidutide for obesity, these are the reasons why I believe Altimmune is a great speculative biotech play to look into.