Altimmune, Inc. (ALT) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to Altimmune inc. First Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Rich Eisenstadt, Chief Financial Officer of Altimmune. Rich, you may begin.

Thank you, Gigi, and good morning, everyone. Thank you for participating in Altimmune's first quarter 2024 financial results and business update conference call. Members of Altimmune's team joining me on the call today are Vipin Garg, our Chief Executive Officer; Scott Harris, our Chief Scientific Officer -- or Scot Roberts, our Chief Scientific Officer; and Scott Harris, our Chief Medical Officer. Following the prepared remarks from Vipin, Scott Harris and myself, we will hold a question-and-answer session. A press release with our first quarter 2024 financial results was issued this morning and can be found on the Investor Relations section of the company's website. Before we begin, I'd like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. For a discussion of some of the risks and factors that could affect the company's future results and operations, please see the risk factors and other cautionary statements contained in the company's filings with the SEC. I will also direct you to read the forward-looking statements disclaimer in our press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Thursday, May 9, 2024, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded, and will be available for audio replay on Altimmune's website. With that, I will now turn the call over to Dr. Vipin Garg, Chief Executive Officer of Altimmune. Vipin?

Thanks, Rich. Good morning, everyone, and once again, thank you for joining us for our first quarter corporate update. On our last call, I shared our excitement about our accomplishments in 2023 with respect to the advancement of pemvidutide in the obesity and MASH indications that we are currently pursuing. We remain optimistic about the potential of our differentiated GLP-1 glucagon dual receptor agonist to contribute to the treatment of these 2 important diseases as we continue working towards our next milestones in each of these programs. Looking first at obesity. The body composition data from the Phase II MOMENTUM trial we reported at the end of March demonstrated that 74.5% of weight loss came from body fat and only 25.5% of weight loss came from lean mass in patients taking pemvidutide. This is comparable to effects associated with diet and exercise based on historical data. This degree of lean mass preservation, together with the significant overall weight loss and robust reductions in liver fat and serum lipids observed in each of our prior clinical trials, could position pemvidutide as the best-in-class therapy for individuals with obesity and dyslipidemia or excess liver fat. These impressive results will be part of a comprehensive package of clinical and preclinical data that we plan to present to the FDA at our end of Phase II meeting, which we expect will be held late in the third quarter of 2024. We look forward to this meeting with the -- which will help guide the design and conduct of our Phase III registrational program for pemvidutide in obesity. Turning to MASH. We are continuing to enroll patients in the IMPACT study, a Phase IIb biopsy-driven trial evaluating 2 dosage of pemvidutide against placebo in approximately 190 subjects. Top line results expected in the first quarter of 2025. Pemvidutide is poised to be the first incretin-based therapeutic candidate to read out on a biopsy-based endpoint in MASH after just 24 weeks of treatment. As a reflection of our confidence in the ability of pemvidutide to treat the liver inflammation and fibrosis that characterizes MASH. We believe that these data, if positive, could give pemvidutide a meaningful advantage over other incretin-based candidates being studied in MASH and further strengthen our competitive position as we enter late-stage development. As you are all aware, our long-term goal remains to partner pemvidutide, and we are firmly committed to finding a partner with the ability to maximize the near- and long-term value of the program for Altimmune and our shareholders, and who recognizes the significant potential of our candidate in obesity and MASH as well as other potential indications. In parallel with these ongoing partnering efforts and the continued advancement of pemvidutide for MASH, we are taking additional steps to further leverage the pipeline and the drug potential pemvidutide. We are not yet in a position to share specific details around additional indications or development plans beyond the 2 currently being studied, but we believe this is a valuable initiative. These efforts are underway, and I look forward to providing additional information as our plans take shape. With that, I'll now turn the call over to our Chief Medical Officer, Dr. Scott Harris, to discuss our plans. Scott?

Thank you, Vipin. As we discussed in March, the MOMENTUM data generated to date are extremely encouraging. Not only did we achieve impressive overall weight loss at 48 weeks, but the trajectory of the weight loss suggested a potential for even greater weight loss with continued treatment. Importantly, the body composition analysis showed a class-leading preservation of lean mass, with nearly 75% of the weight loss coming from fat, comparable to what is seen following dine and exercise based on historical data. Moreover, the preferential loss of visceral fat over subcutaneous fat that was observed in MOMENTUM may further differentiate pemvidutide as it is well-established that visceral fat, that is fat associated with organs like the liver, heart and kidney, is linked to a greater risk for cardiovascular disease than subcutaneous fat. We plan to present the full data set from the body composition analysis as well as other new data for MOMENTUM at key medical congresses later this year. Looking at the MASH program. Enrollment in the Phase IIb IMPACT study continues to progress well. Despite a recent FDA approval in this indication, we believe there remains a major unmet need for a drug that not only reduces MASH fibrosis, but leads to clinically meaningful weight loss. We believe that weight loss is a critical component in the treatment of MASH as excess body fat not only drives the pathophysiology of MASH but its comorbidities. We also believe that the weight loss, alongside the treatment of the liver condition, will be an important consideration for patients and physicians. We look forward to the top line data readout from this trial, which we continue to expect in the first quarter of 2025. Looking more broadly at the pemvidutide story and the value proposition, Altimmune has long recognized an optionality and choice for patients will be important differentiators in the treatment of the metabolic diseases that we are pursuing. To that end, we are continuing to make progress towards our previously stated objective of developing an orally administered formulation of pemvidutide. If successful, these efforts can not only provide patients with a choice in how pemvidutide is taken, but it also could support future life cycle management should pemvidutide ultimately be approved. We will be presenting in important medical conferences later this year, and we will be highlighting, among other things, the robust and potentially beneficial effects that pemvidutide has on serum lipids, including triglycerides, total cholesterol and LDL cholesterol. Recall that we recently reported on a preclinical study demonstrating that pemvidutide treatment improved cholesterol elimination through an important natural process called reverse cholesterol transport. Those data, and the clinical data that we were reporting -- we will be reporting over the next several months, describe changes in lipid metabolism that may ultimately be associated with decreased cardiovascular risk. We believe the type and magnitude of these lipid effects are best explained by the action of glucagon receptor agonism in pemvidutide. With that, I will now turn the call over to our Chief Financial Officer, Rich Eisenstadt, to review our financial results for the first quarter. Rich?

Thank you, Scott, and good morning again, everyone. For today's call, I will be providing a brief update on Altimmune's first quarter 2024 financial and operating results. More comprehensive information will be available on our Form 10-Q to be filed with the SEC later today. Altimmune ended the first quarter of 2024 with approximately $182.1 million of cash, cash equivalents and short-term investments, compared to $198 million at the end of 2023. We project that our existing cash funds us into the first half of 2026, which fully funds our IMPACT trial in MASH. Turning to the income statement. Revenue was negligible in the first quarter of 2024 and 2023. Any revenue report during such periods was for indirect rate adjustments on a government contract that we are closing out. Research and development expenses were $21.5 million in the first quarter of 2024, compared to $17.2 million in the same period in 2023. Approximately $14.5 million of this total for the first quarter of 2024 were direct expenses for the conduct of our clinical programs, including $13.5 million in direct costs related to development activities for pemvidutide and $1 million in direct costs related to wind-down and closing of HepTcell as announced on March 27, 2024. R&D expenses in the first quarter of 2023 (sic) [ 2024 ] included $8.9 million in direct expenses associated with the development of pemvidutide and $2.1 million in direct expenses related to HepTcell development activities. General and administrative expenses were $5.3 million in the first quarter of 2024, versus $4.5 million in the first quarter of 2023. The $800,000 increase is due primarily to an increase in stock compensation and other labor-related expenses. Our quarterly noncash operating expenses for the first quarter 2024 was $3.8 million, all of which are recurring expenses. Net loss for the 3 months ended March 31, 2024 was $24.4 million or $0.34 net loss per share, compared to a net loss of $20.1 million or $0.40 net loss per share for the first quarter of 2023. The increase in net loss in the quarter is primarily attributable to the $4.2 million higher research and development expenses as we ramped up the IMPACT Phase IIb trial in MASH. I will now turn it back over to Vipin for his closing remarks. Vipin?

Thank you, Rich. We remain excited for what the future holds. With several important milestones in the coming months, we believe that Altimmune is well positioned for long-term value creation as we continue advancing the development of pemvidutide. Operator, that concludes our formal remarks, and we would like to open the line to take questions.

[Operator Instructions] Our first question comes from the line of Roger Song from Jefferies.

Great. A couple from us. The first one is related to your upcoming end of Phase II meeting with the FDA for your obesity program. Given pemvidutide has [indiscernible] effect in many different ways to differentiate, just curious how -- what kind of endpoints you will plan to incorporate into your program to really capitalize those differentiations in the potential label? And then I have a follow-up question related to your new development.

Thanks, Roger. Scott, do you want to take that?

Yes, Roger. Well, thanks for the question. We're greatly looking forward to the end of Phase II meeting. We think it's going to be greatly value enhancing to really set forward our program and to really maximize the value proposition. And I think you've hit the nail on the head with what the objective of the meeting will be. I mean, just as an oversight, we expect the program to have about 5,000 patients. We're making -- we're taking a good look as to whether we want to conduct, say, 3 or 4 pivotal trials across those 5,000 patients. But I think the key thing will be to choose the best population that will most meaningfully bring out the effects of pemvidutide: the effects on the lipids, the effects on the body composition, the effects on the liver fat. So that -- a lot of the discussion will center around choosing the population for the studies. I think some other important points here will be selecting the optimal treatment duration. We got great results at 48 weeks, but is there a potential for getting even better results in weight loss and even better body composition at a longer time point? That's a decision we're really looking forward to making with the FDA. As you know, we had 25% loss of lean mass, 75% loss of fat mass at 48 weeks, but that ratio of lean to fat goes down over time. So we'll follow it out over a longer period of time, that ratio should drop even further and put pemvidutide at the top of its class in terms of its preservation of lean mass. So the number of trials, the selection of the population to maximize the value proposition, particularly the lipids, liver fat, the body composition, and the duration of treatment, are all things that we aim to get agreement with the agency when we meet with them.

Got it. Maybe quickly on your potential new development on 2 ends, one is the new indication for pemvidutide. Just curious, I understand you're not disclosed yet, but just curious in that kind of comorbidity with obesity, MASH or something pretty [indiscernible] to the current obesity and MASH population. And in terms of your oral pemvidutide development, just curious what will be the formulation? And how do you think about the scalability for your oral pemvidutide?

Well, thanks for the question, Roger. I'll answer the question about the emerging development program, and I'll then turn it over to Scot Roberts to specifically answer the question about the oral formulation. So as you know, companies are pursuing new indications surrounding obesity in order to maximize their value proposition. With regards to Altimmune, we are specifically, as you pointed out, looking for indications that reflect the value proposition of glucagon, which is very differentiating. So the effects of glucagon on serum lipids, for example, the effects on body composition, and also diseases of the liver that are associated with fatty liver or even obesity. So we believe that the indications will reflect specifically what glucagon brings to the table. And we're very hopeful to make a decision about new programs in the near future. But now I'm going to turn it over to Scot Roberts to answer the question about the oral formulation. Scot?

Roger, so as we've indicated in the past, we're pursuing a number of different approaches, different types of formulations, different matrices to obtain an oral formulation for pemvidutide. Those studies are ongoing. The work is incremental. You find a formulation that has some merit and is looking good and it's optimized and then retested. So it's a reiterative process, and we're in the middle of that with a number of different approaches. We are expecting and hoping to still nominate a candidate for development by the end of the year. As far as the scalability question, one of the criteria that we set for a successful oral formulation is a specific level of bioavailability to ensure that the amount of drug substance required for that would be appropriate and attainable and useful. So the scalability, if we have a successful formulation, will not be an issue, and that we'll continue to make progress on all fronts.

Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

This is Tim on for Yasmeen. First, could you comment in regards to finding the right partner? Is this continuing the NASH IMPACT results? And secondly, with upcoming the EASL conference, what do you hope to gain from competitor presentations to shed light in your own program and increase the probability of success?

Scott, do you want to take the second question first?

Yes. So I think if I heard correctly, and I apologize if I did not, you're asking about the upcoming liver meetings in Europe, the EASL meetings, is that correct? .

Yes, that's correct.

Right. Let me start by saying that we have a variety of presentations that are planned for meetings across the entire year. So we will be represented at EASL. We have 3 presentations at EASL. Those have been posted on the EASL website. Those will address specific aspects of the effects of pemvidutide in MASH and its metabolism -- its effects on metabolism. And we think that that will continue to be differentiating. But the impact on the science, the impact on the differentiation, the value proposition, the body composition data, the effects on lipids, the effects on other aspects of lipids that have not really gotten as much attention. These things will all come out of key scientific congresses over the course of the year.

And do you want to comment on what we expect to learn from other presentations?

Well, there are -- will be some presentations on other compounds, for example. We anticipate that the survodutide data will be presented at EASL, and there'll also be some presentations on tirzepatide. As you know, they've had top line readouts on their results, at least in press releases. We're looking forward to that. As you know, the tirzepatide data did not hit the fibrosis endpoint, which is something we would have expected, by a mechanism that didn't have glucagon. And survodutide does have glucagon and they've announced that they've reached -- they achieved a statistical significance in the fibrosis endpoint, and we look forward to hearing that. But we would emphasize that that's due to the presence of glucagon in the molecule, and we have a much greater amount of glucagon. So we feel that any success that they build, we can beat in our readout that's coming up in the first quarter of next year.

Yes, in terms of your question about the right kind of partner, we've always maintained that the compound that we are developing, pemvidutide, has very compelling data both in obesity as well as in MASH. And if you think about it, MASH and obesity really intersect each other, it's going to be hard to differentiate in these patient populations down the line because most people with MASH also need to lose weight. So we think we bring a perfect combination of these 2 things. So our focus has been, in terms of the right partner, has been on partners that value both of these indications. And our goal is to find a partner that would help us develop both of these indications in parallel.

Our next question comes from the line of Corinne Johnson from Goldman Sachs.

This is Omari on for Corinne. So a couple of questions from us. Could you provide an update on how the partnership discussions are progressing? And do you plan to bring in a partner for the new indication you want to pursue with pemvidutide?