Altimmune(ALT) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Altimmune, Inc.'s unaudited consolidated financial statements for Q1 2025 and 2024, covering balance sheets, operations, equity changes, cash flows, and detailed notes on business and accounting policies Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Item | March 31, 2025 | December 31, 2024 | Change (QoQ) | | :-------------------------------- | :------------- | :---------------- | :------------- | | Total current assets | $155,262 | $137,254 | +$18,008 | | Total assets | $157,263 | $139,306 | +$17,957 | | Total current liabilities | $9,798 | $10,468 | -$670 | | Total liabilities | $15,101 | $15,798 | -$697 | | Total stockholders' equity | $142,162 | $123,508 | +$18,654 | - Total assets increased by $17.96 million, primarily driven by an increase in cash and cash equivalents and short-term investments[8] - Total stockholders' equity increased by $18.65 million, mainly due to additional paid-in capital from at-the-market offerings[8] Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Operations and Comprehensive Loss Highlights (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------- | | Revenues | $5 | $5 | $0 | | Research and development expenses | $15,827 | $21,487 | -$5,660 | | General and administrative expenses | $5,993 | $5,312 | +$681 | | Total operating expenses | $21,820 | $26,799 | -$4,979 | | Loss from operations | $(21,815) | $(26,794) | +$4,979 | | Interest income | $1,545 | $2,413 | -$868 | | Net loss | $(19,575) | $(24,394) | +$4,819 | | Net loss per share, basic and diluted | $(0.26) | $(0.34) | +$0.08 | | Weighted-average common shares outstanding | 75,547,746 | 70,801,713 | +4,746,033 | - Net loss decreased by $4.8 million (20%) year-over-year, primarily due to a $5.7 million reduction in research and development expenses[10] - Research and development expenses decreased by 26% due to reductions in the IMPACT Phase 2b trial for MASH, other clinical activities, and manufacturing expenses, partially offset by increased expenses for new AUD and ALD trials[10][67][68] Consolidated Statements of Changes in Stockholders' Equity Changes in Stockholders' Equity (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Balance at December 31 | $123,508 | $194,099 | | Stock-based compensation | $4,015 | $3,650 | | Issuance of common stock in at-the-market offerings, net | $34,747 | $0 | | Net loss | $(19,575) | $(24,394) | | Balance at March 31 | $142,162 | $172,937 | - Total stockholders' equity increased from $123.5 million at December 31, 2024, to $142.2 million at March 31, 2025, primarily driven by $34.7 million in net proceeds from at-the-market offerings[12] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------- | | Net cash used in operating activities | $(16,840) | $(16,357) | $(483) | | Net cash used in investing activities | $(5,101) | $(39,521) | +$34,420 | | Net cash provided by (used in) financing activities | $34,119 | $(261) | +$34,380 | | Net increase (decrease) in cash and cash equivalents and restricted cash | $12,178 | $(56,139) | +$68,317 | | Cash, cash equivalents and restricted cash at end of period | $49,146 | $79,019 | -$29,873 | - Net cash provided by financing activities significantly increased to $34.1 million in Q1 2025 from a net use of $0.3 million in Q1 2024, primarily due to $34.7 million in net proceeds from at-the-market offerings[16][87] - Net cash used in investing activities decreased substantially from $39.5 million in Q1 2024 to $5.1 million in Q1 2025, driven by a smaller net purchase of short-term investments[16][86] Notes to Consolidated Financial Statements 1. Nature of Business and Basis of Presentation - Altimmune, Inc. is a late clinical-stage biopharmaceutical company focused on developing novel peptide-based therapeutics for liver and cardiometabolic diseases[17][18] - The Company's lead program is pemvidutide (formerly ALT-801), a GLP-1/glucagon dual receptor agonist, targeting metabolic dysfunction-associated steatohepatitis (MASH), obesity, Alcohol Use Disorder (AUD), and Alcohol Liver Disease (ALD)[18] - The Company has not generated any revenues from product sales to date and has financed operations through equity, debt, research grants, and government contracts[18] 2. Summary of Significant Accounting Policies - No significant changes to accounting policies occurred during the three months ended March 31, 2025, compared to the Annual Report on Form 10-K for December 31, 2024[22] - The Company recorded a discrete tax benefit of approximately $0.7 million in Q1 2025 related to Maryland carryback claims, but otherwise did not record income tax expense/benefit due to a full valuation allowance[24] 3. Fair Value Measurements Fair Value Measurements of Assets (in thousands) | Asset Type | March 31, 2025 (Total) | December 31, 2024 (Total) | | :-------------------------------- | :----------------------- | :------------------------ | | Cash equivalents - money market funds | $22,880 | $27,279 | | Short-term investments | $100,722 | $94,965 | | Total | $123,602 | $122,244 | - Short-term investments are valued using Level 2 inputs, utilizing third-party pricing services and market observable data[25] - As of March 31, 2025, short-term investments primarily consisted of United States treasury securities ($32.2 million), commercial paper and corporate debt securities ($59.5 million), asset-backed securities ($3.0 million), and agency debt securities ($6.0 million)[26] 4. Accrued Expenses Accrued Expenses and Other Current Liabilities (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Accrued professional services | $451 | $401 | | Accrued payroll and employee benefits | $1,004 | $3,079 | | Accrued research and development | $6,965 | $6,443 | | Total accrued expenses and other current liabilities | $8,721 | $10,257 | - Total accrued expenses and other current liabilities decreased by $1.5 million, primarily due to a $2.0 million decrease in accrued payroll and employee benefits, partially offset by a $0.5 million increase in accrued research and development[30] 5. Noncurrent Liabilities Noncurrent Liabilities (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Research and development incentive credit | $3,785 | $3,746 | | Lease obligation, long-term portion | $1,342 | $1,402 | | Conditional economic incentive grants | $160 | $160 | | Total noncurrent liabilities | $5,303 | $5,330 | - Noncurrent liabilities remained relatively stable, with a slight decrease of $27 thousand from December 31, 2024, to March 31, 2025[31] 6. Stockholders' Equity - As of March 31, 2025, Altimmune had 77,825,450 shares of common stock issued and outstanding, with 200,000,000 shares authorized[32] - The Company initiated a new at-the-market (ATM) offering program on February 27, 2025, for up to $150.0 million, selling 805,502 shares for $4.6 million net proceeds by March 31, 2025[34] - The previous $150.0 million ATM program (2023 Agreement) was terminated in February 2025, having sold 4,467,866 shares for $30.2 million net proceeds during Q1 2025, bringing total net proceeds from that program to $126.8 million[35] 7. Stock-Based Compensation - On January 1, 2025, the shares available under the Omnibus Incentive Plan increased by 3,193,659 shares[36] - During Q1 2025, the Company granted 1,842,450 stock options with a weighted-average exercise price of $6.71 and 466,700 Restricted Stock Units (RSUs) with a weighted-average grant date fair value of $6.88[37][39] Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,776 | $1,675 | | General and administrative | $2,239 | $1,975 | | Total | $4,015 | $3,650 | 8. Net Loss Per Share - Basic and diluted net loss per share are the same for Q1 2025 and Q1 2024 due to net losses, making all unvested RSUs and stock options anti-dilutive[42][43] Anti-Dilutive Potential Common Shares (as of March 31) | Item | 2025 | 2024 | | :-------------------- | :--------- | :--------- | | Common stock options | 8,460,569 | 6,589,116 | | Restricted stock units | 1,053,337 | 902,952 | 9. Commitments and Contingencies - The Company has a contingent payment obligation of up to $80.0 million related to the 2019 Spitfire acquisition, payable upon achievement of specified worldwide net sales milestones for products developed using the acquired technology[45] - A shareholder derivative lawsuit filed in June 2024, consolidated in July 2024, was dismissed without prejudice on February 3, 2025[47][49] 10. Segment Information - Altimmune operates as a single segment, focusing on developing peptide-based therapeutics for liver and cardiometabolic diseases, with performance assessed based on net loss/income[51][52] 11. Subsequent Events - In April 2025, the Company raised an additional $16.3 million in net proceeds by issuing 3,278,902 shares of common stock through its 2025 at-the-market offering[53] - On May 13, 2025, Altimmune entered into a Loan and Security Agreement with Hercules Capital, Inc. for up to $100.0 million in term loans, with the first $15.0 million tranche funded on the closing date[54] - The Term Loan matures on June 1, 2029, bears interest at prime rate plus 2.45% (or 9.95% until Dec 31, 2025, then 9.45%), and allows for an initial interest-only payment period of up to 24 months, extendable to 42 months[54] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Altimmune's financial condition and operational results for Q1 2025 and 2024, covering business updates, performance, liquidity, capital resources, and critical accounting estimates Overview - Altimmune is a late clinical-stage biopharmaceutical company developing peptide-based therapeutics for liver and cardiometabolic diseases[59] - The lead product candidate, pemvidutide, is a GLP-1/glucagon dual receptor agonist for MASH, obesity, AUD, and ALD[59] Recent Business Update - On March 13, 2025, Altimmune announced pursuing two new indications for pemvidutide: Alcohol Use Disorder (AUD) and Alcohol-Associated Liver Disease (ALD)[60] - A Phase 2 AUD trial for pemvidutide is expected to begin in Q2 2025, enrolling approximately 100 subjects with moderate to severe AUD over 24 weeks, with endpoints including changes in heavy drinking days, alcohol consumption biomarkers, and weight loss[61] - A Phase 2 ALD trial for pemvidutide is expected to begin in Q3 2025, enrolling approximately 100 subjects with obesity and ALD over 48 weeks, with endpoints including changes in liver stiffness, alcohol consumption, and biomarkers of steatosis, fibrosis, and inflammation[62][63] Recent Global Events - Ongoing tariffs and counter-tariffs, along with global economic uncertainties, could negatively impact Altimmune's operations through inflationary pressures, supply chain disruptions, and capital market volatility[64] Results of Operations Results of Operations (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase (Decrease) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------ | | Revenues | $5 | $5 | $0 | | Research and development | $15,827 | $21,487 | $(5,660) (26%) | | General and administrative | $5,993 | $5,312 | $681 (13%) | | Total operating expenses | $21,820 | $26,799 | $(4,979) (19%) | | Loss from operations | $(21,815) | $(26,794) | $4,979 (19%) | | Interest income | $1,545 | $2,413 | $(868) (36%) | | Net loss before income taxes | $(20,256) | $(24,394) | $4,138 (17%) | | Income tax expense (benefit) | $(681) | $0 | $(681) (100%) | | Net loss | $(19,575) | $(24,394) | $(4,819) (20%) | Revenue - Altimmune has not generated any revenue from product sales to date, with past revenues primarily from government and foundation grants[66] Research and development expenses - Research and development expenses decreased by $5.7 million (26%) to $15.8 million for Q1 2025 compared to Q1 2024[67] - The decrease was mainly due to a $4.3 million reduction in pemvidutide-related expenses (IMPACT Phase 2b trial, other clinical activities, MOMENTUM Phase 2 winddown, manufacturing) and a $1.0 million decrease related to the winddown and termination of HepTcell[68][69] - These decreases were partially offset by a $0.4 million increase in expenses associated with the start of new AUD and ALD trials[68] General and administrative expenses - General and administrative expenses increased by $0.7 million (13%) to $6.0 million for Q1 2025 compared to Q1 2024[70] - The increase was primarily driven by a $0.5 million rise in stock compensation and other labor-related expenses, and a $0.2 million increase in professional fees[70] Total other income (expense), net - Total other income (expense), net decreased by $0.8 million (35%) for Q1 2025 compared to Q1 2024, mainly due to a $0.9 million decrease in interest income[71] Income tax expense (benefit) - Altimmune recorded a discrete tax benefit of approximately $0.7 million in Q1 2025 related to Maryland carryback claims, but no income tax expense/benefit was recorded in Q1 2024 due to a full valuation allowance[72] Liquidity and Capital Resources Overview - As of March 31, 2025, Altimmune had $149.9 million in cash, cash equivalents, restricted cash, and short-term investments[73] - The Company believes its current cash resources are sufficient to fund operations for at least 12 months from the issuance date of the Q1 2025 financial statements[73] - Altimmune has an accumulated deficit of $581.0 million as of March 31, 2025, and continues to rely on equity or debt financing and potential partnership arrangements to fund its research and development activities[74] Sources of Liquidity Loan Financing - On May 13, 2025, Altimmune secured a Loan and Security Agreement with Hercules Capital, Inc. for up to $100.0 million in term loans, with $15.0 million funded initially[75] - Additional tranches of $25.0 million and $15.0 million are available upon achieving certain milestones, and a fourth tranche of $45.0 million is subject to lender approval[75] - The loan matures on June 1, 2029, with interest-only payments for an initial period of up to 24 months, extendable to 42 months[76][77] Shelf Registrations - A new shelf registration statement (Form S-3) was filed on February 27, 2025, allowing the Company to offer and sell up to $400.0 million in various securities over three years[78] - The previous 2023 Shelf registration, which allowed for unlimited offerings, expired on February 27, 2025[79] At-the-Market Offerings - Under the new 2025 ATM program, Altimmune sold 805,502 shares for approximately $4.6 million in net proceeds during Q1 2025, with $145.3 million remaining available[80] - The 2023 ATM program, which expired in February 2025, generated approximately $30.2 million in net proceeds from 4,467,866 shares sold during Q1 2025, bringing its total net proceeds to $126.8 million[81] Cash Flows Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase (Decrease) | | :------------------------ | :-------------------------------- | :-------------------------------- | :------------------ | | Operating activities | $(16,840) | $(16,357) | $(483) | | Investing activities | $(5,101) | $(39,521) | $34,420 | | Financing activities | $34,119 | $(261) | $34,380 | | Net increase (decrease) in cash | $12,178 | $(56,139) | $68,317 | Operating Activities - Net cash used in operating activities increased slightly to $16.8 million in Q1 2025 from $16.4 million in Q1 2024, primarily due to changes in working capital accounts[83][85] Investing Activities - Net cash used in investing activities significantly decreased to $5.1 million in Q1 2025 from $39.5 million in Q1 2024[86] - This change was driven by $38.0 million in proceeds from sales and maturities of short-term investments, partially offsetting $43.1 million in purchases of short-term investments in Q1 2025[86] Financing Activities - Net cash provided by financing activities was $34.1 million in Q1 2025, a substantial increase from $0.3 million net cash used in Q1 2024[87] - This was primarily due to $34.6 million in net proceeds from at-the-market offerings in Q1 2025[87] Current Resources - As of March 31, 2025, Altimmune held $49.2 million in cash, cash equivalents, and restricted cash, plus $100.7 million in short-term investments[88] - Management believes these resources are sufficient to fund operations for at least 12 months, but additional capital may be required for long-term needs and planned clinical trials[88] Critical Accounting Estimates - There have been no changes to Altimmune's critical accounting policies, significant judgments, and estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[90] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Altimmune, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this quarterly report - Altimmune, Inc. is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a 'smaller reporting company' under SEC regulations[91] Item 4. Controls and Procedures This section details the evaluation of Altimmune's disclosure controls and procedures, confirming their effectiveness and reporting no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management, including the principal executive and financial officers, concluded that Altimmune's disclosure controls and procedures were effective as of March 31, 2025[93][94] - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[94] Changes in Internal Control Over Financial Reporting - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, Altimmune's internal control during the quarter ended March 31, 2025[95] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section discloses legal proceedings involving Altimmune, specifically a shareholder derivative complaint that was dismissed in February 2025 - A shareholder derivative complaint, filed in June 2024 and consolidated in July 2024, was dismissed without prejudice on February 3, 2025[96] - The complaint alleged breaches of fiduciary duty, unjust enrichment, and waste of corporate assets by executive officers and board members[96] - The Company is involved in various contracts and disputes in the ordinary course of business, none of which are currently reasonably possible or probable of material loss[50] Item 1A. Risk Factors This section updates risk factors, highlighting new risks related to economic uncertainty, geopolitical instability, and the impact of a new U.S. presidential administration on regulatory agencies, plus new term loan obligations - New risk factors include economic uncertainty, capital markets disruption, ongoing military conflicts, geopolitical instability, inflation, and interest rates, which could impact operations and supply chains[99] - Disruptions at government agencies like the FDA and SEC due to funding shortages, global health concerns, or changes under a new U.S. presidential administration could hinder product development and regulatory approvals[100][103][105] - The new $100.0 million term loan agreement with Hercules Capital, Inc. imposes restrictive covenants on Altimmune's operating activities and includes provisions for accelerated repayment upon an event of default, which could materially adversely affect the business[106][107] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report for the period[110] Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[111] Item 4. Mine Safety Disclosures This item is not applicable to Altimmune, Inc. - This item is not applicable to Altimmune, Inc[112] Item 5. Other Information This section discloses a Rule 10b5-1 trading plan adopted by Dr. Vipin Garg, the President and CEO, for the sale of up to 80,000 shares of common stock - Dr. Vipin Garg, President and CEO, adopted a Rule 10b5-1 trading plan on March 26, 2025, to sell up to 80,000 shares of common stock[113] - The plan commences on the later of June 24, 2025, or two business days after the Q1 2025 10-Q filing, and expires on June 24, 2026[113] - No other officers or directors adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[114] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, equity distribution agreements, a new loan and security agreement, and certifications - Key exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, Equity Distribution Agreements (2025), a Consulting Agreement, and the new Loan and Security Agreement with Hercules Capital, Inc[117] - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to SEC rules are also included[117] Signatures This section contains the required signatures of Altimmune, Inc.'s authorized officers, including the President and Chief Executive Officer and the Chief Financial Officer, certifying the filing of the report - The report is signed by Vipin K. Garg, President and Chief Executive Officer, and Gregory Weaver, Chief Financial Officer, on May 13, 2025[124]