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

Hi, everyone. Good morning. I'm Ellie Merle, one of the biotech analysts here at UBS. Very happy to have Altimmune here with us today at the UBS Obesity Day. Joining us from Altimmune is Vipin Garg, Chief Executive Officer; and Scott Harris, Chief Medical Officer; and joining me from the UBS side is my colleague, Elliott Bosco. With that being said, thank you guys so much for joining us. And if any of you on the line would like us to ask any specific questions, feel free to shoot us an e-mail, and we will do our best to include it. With that being said, I'll turn it over to you, Vipin. Maybe just for the investors on the line that are newer to Altimmune, can you please sort of introduce the company and provide a brief background on your pipeline and programs?

Absolutely. Well, thank you for inviting us, Ellie. Pleasure to be here. So Altimmune is developing a GLP-1/glucagon dual receptor agonist for obesity and for MASH. We have completed a Phase II program in obesity and we'll talk more about the data that we have generated. We're also in the process of completing enrollment in a Phase Ib MASH trial, and we expect to have data from that in the first quarter of 2025. As you know, the obesity landscape is changing. It's evolving. It's developing. The first wave of drugs for obesity were all GLP-1s, GIPs, basically, the mechanism of action there is appetite suppression. By adding glucagon, what we're doing is adding another component to weight loss, which is energy expenditure. So not only appetite suppression, but combined with energy expenditure. In particular, we are also transitioning our increasing fat burn, that has many benefits, as we'll talk more about that. Glucagon receptors are found in the liver. Liver is the center for fat metabolism. So we think there's some significant benefits that glucagon brings. Many of the patients, in fact, only about 20% of the patients with obesity have diabetes. Up to 70% have dyslipidemia or lipid-related disorders, including MASH -- and MASH, that will be -- high liver fat content. And so it's really important to treat that directly in addition to people losing weight, and that's where we think glucagon can play an important role.

Absolutely. Before we jump into the specifics around obesity and NASH, maybe just high level from a competitive standpoint, how are you thinking about the other GLP-1 glucagon agonist being developed such as mazdutide and survodutide. How should investors compare and contrast your data to these programs?

Scott, do you want to take that?

Sure, Ellie. So the really differentiating feature of our molecule is the glucagon. As Vipin mentioned, it has great, great benefits in obesity, including greater fat burn, greater fat burn within the liver and also because essentially a shift to a ketogenic diet, a preservation of lean body mass. And we think that this all plays out over time, not only for acute weight loss, but more importantly, weight management and the long-term safety of weight management, particularly maintenance of body composition. Our molecules are differentiated by the amount of glucagon. The other molecules that you mentioned, Ellie, are biased towards GLP-1, particularly survodutide has an 8:1 ratio, we're 1:1. So believing in glucagon and its benefits, we have more glucagon in our molecule than the other compounds, and that differentiates in terms of the effects on all of the parameters that I mentioned before, the liver fat, the better effects on the lipids and the better effects and body composition. And also potentially, the ability to maintain weight over time. If you're actually changing the metabolic tone of the patient, the ability to sustain weight loss even after drug is stopped or there are drug holidays, could be better with glucagon than with compounds that don't have it. As we saw in our Phase II study, which I know that we'll discuss in a minute, we saw at the end of 48 weeks continued rapid weight loss, meaning that patients were continuing over the course of time to drop their body weight, and we think that this is a glucagon property.

Absolutely. And a common investor question that we got from the glucagon side is around safety and tolerability, particularly for some of the potential changes in heart rate and risk of arrhythmia. I guess, what is your view on the safety tolerability of the class and how your molecule compares to some of the other data sets that have been reported?

Sure. So with all of the other glucagon molecules, they are seeing increases in heart rate in the range of about 8 to 12 beats per minute before the next dose is given so this is trough increases, they're not actually reporting the heart rate increases that occur right after the dose. We know with one comp on particular, retatrutide, that when they gave a single dose of drug, the mean increase in heart rate was 30 beats per minute, and I stress, that's mean. So you could see the range is actually much higher. Now with that drug, they're seeing a 14% rate of arrhythmias. And they're not insignificant. They're seeing right bundle branch blockage, intraventricular conduction delay. They're seeing ventricular ectopy, and these are all of great concerns when you go into a vulnerable population with cardiac disease, which describes a large percentage of the obesity population, especially over the age of 50. Now with our compound, with or glucagon, we are not seeing those increases. We're reporting at the end of dosing, where the other companies are reporting 8 to 12 beat per minute increases, we're seeing 2 to 3 beats per minute. We're seeing a rate of arrhythmias that's less in the pemvidutide group than in the placebo group. And across the board, we've seen in all of our studies that we're maintaining the kind of heart rate increases, minimal increases that you see with drugs like tirzepatide and semaglutide in the range of 2 to 3 beats per minute. We believe this differentiation is pharmacokinetic. Our drug is designed to enter the bloodstream slowly. It avoids these surges in concentrations that are associated with these heart rate increases and other effects. Circle back to retatrutide, their peak concentration is achieved at about 14 hours, about 5x faster than our compound. And we think that with that surge of heart rate increase, that's accounting for the arrhythmias that are being seen in the trial. But we've been extremely pleased with the safety profile of our compound. Across multiple studies, no significant or clinically meaningful increases in heart rate, no arrhythmias, good control of blood sugar, no off-target effects.

That's helpful context. In terms of us assessing the potential for differentiation based on the safety and less decrease -- or less of an increase in the heart rate relative to some of the other glucagon-containing compounds. How should we think about the threshold, which an increase in heart rate is too much when we're assessing the competitive landscape?

It's a difficult one. We know that with some of the earlier GLP-1s that were approved, the daily dose compounds like liraglutide, exenatide, they are seeing increases, mean increases of about 7 beats per minute. So is there a number where the FDA pushes back and say, that's it? Well, we don't know. We haven't had that discussion with the agency. We don't expect to because we don't think that characterizes our drug and we're not aware of what discussions may or may not have taken place with other sponsors. I think what you really look at are the clinical manifestations have been -- when you start seeing arrhythmias, you're really concerned that the drug is being dosed in the no-fly zone. So you might be very impressed with the weight loss, but would you give it to somebody who's 50 years old with a cardiac disease. It makes that kind of drug more of a niche product for younger people who have a low risk of arrhythmias and poor outcomes. Now our drug is oriented towards successful weight loss and weight management, particularly in vulnerable populations. As you can see, we have a superb potential to impact cardiac events, lowering of serum lipids. We saw a 21% reduction in LDL cholesterol in individuals who came into the study with elevated levels. We're seeing class-leading effects on liver fat and those are known to be association with heart disease as well. And as we'll present at the ADA meeting coming up, we have a very impactful effect in a series of lipids through lipidomic profiling and are known to be inflammatory to the heart. Ceramides, diacylglycerides that are associated with increased cardiac risk. So painting the picture of a drug for management and maintenance of weight loss as well as the induction of weight loss, you look at the -- really the population in need, which is the obese patient who has risk, which characterizes what insurance companies really want to pay for. We're sitting in a great position in terms of meaningfully impacting that population, especially when we're going to conduct cardiac outcome trials.

Absolutely. And maybe let's talk about some of your data. Can you talk about the Phase II MOMENTUM study and the 48-week data that you've shared to date.

Sure. So MOMENTUM was a study of 390 subjects. We looked at 3 doses of pemvidutide and placebo, and we treated people through for 48 weeks. And at the 2.4 milligram dose, at the end of 48-week dosing, we saw a 15.6% weight loss. But more important, there was every evidence that weight loss was continuing in a very fast fashion going forward, such that we conducted the trial after 72 weeks, which was the tirzepatide time point, we would have had comparable levels of weight loss. That's very potent weight loss. Interestingly, at a dose that we did not titrate at all, which is the 1.2 milligram dose, we still saw a 10% weight loss. Again, no dose titration, a safety profile very similar to placebo, meaning in primary care that medication could be dosed straight up, no titration, no call back to the patients for reapproval for titration to higher doses. We saw some people in that cohort losing 25% body weight, and we think that's really a superb option for primary care going forward. Now in addition to that, we saw the great effects on lipids. We saw nice effects on liver fat that we talked about before. And an extremely important attribute that we demonstrated in our trial is pemvidutide appears to prevent the loss of lean mass that we've seen with other GLP-1 agents. So just to review that very quickly with semaglutide, in at least 2 trials, they've seen a loss of lean mass relative to total weight loss of 40%. That's a lot higher than you get with natural diet and exercise where you're typically in the range of about 25%. And that's been the goal, is to be at least in that range over time, particularly in elderly people who come into the study already with sarcopenia, and there are many obese people who have something called sarcopenic obesity, meaning because of their obesity and their insulin resistance, they don't have enough insulin response to maintain their muscle mass. And despite being overweight, for their body weight, they have much lower lean mass than they should. So consequently, it's really important in that vulnerable population to preserve lean mass. We believe that the mechanism represents what I talked about before, which is essentially giving patients a ketogenic diet. As you know, it's used by athletes to increase athletic performance. We think that glucagon causes a fundamental shift away from burning carbohydrate and the substrate for carbohydrate is amino acids in fasting. They come to the liver and they're manufactured into glucose and carbohydrates, the shift from that access to burning from fat. And we think that's the basic mechanism of preserving lean mass. It's extremely important because in several studies, including the prescribing information from semaglutide which, as I mentioned before, had an exacerbated lean loss, they're seeing a higher rate of bone fractures, especially pelvic fractures in the elderly and in women. So this is extremely important for time. Right now, it's been kind of like how much weight loss you have in a year. Well, that's really good. But recognize that in the future, the primary market for using obesity drugs is going to be long-term treatment. It's going to be maintenance. And the shift we believe over the course of time is going to occur from this focus, intense focus on how much weight do you have over a year to how much weight loss do you manage and maintain over the course of several years? And do you maintain it safely without the side effects of that weight loss? And we think, regarding that and our cardiac profile, that we're really in a superb position.

Maybe can you elaborate a little bit more on the mechanism behind why you think you have a favorable profile in terms of preserving lean body mass and maybe a little bit more in terms of how you think this compares with some of the other novel incretins in development.

Right. So again, we believe that the preservation of lean mass here is basically cutting the cord on the dependency of muscle to provide carbohydrate a substrate for the manufacture of glucose and carbohydrate for energy burn and shifting that to the burn and the extraction from lipids to burn. We saw in prior studies that we have a higher rate of ketone body production, which is what you would see in a ketogenic diet, about a sixfold increase and also a shutdown of the de novo glucogenesis in the liver. This is a fundamental property of glucagon that you don't see with other incretins. Compounds such as semaglutide, which is GLP-1 monotherapy, and tirzepatide, which combined GLP-1 with GIP and even amylin, work by suppressing appetite. So they cut the flow of amino -- of lipids to the liver. They have no direct effects in the liver and they have no direct effects on metabolism per se. With glucagon, it fundamentally changes that. So in terms of what's really meaningfully impacting the obese patient, is it simply dieting or is it shifting the metabolism to a state that will sustain them much better for healthy weight loss.

And just one more, I guess, to piggyback on the topic of lean mass. Beyond some of the novel incretins, how are you thinking about lean mass preserving agents like the -- anti-myostatin agents that are in development, and how might that be compatible with pemvidutide in the future?

Well, Elliott, it's just really a faceting area. And we just don't have the information on the synergy between these compounds. We think that with a compound like semaglutide, you just cannot treat and sustain that lean loss, and that you really feel obliged to combine with one of these anti-myostatin or other mechanism agents to preserve lean mass. We've always argued that pemvidutide as combination therapy within the molecule, right? It gives you GLP-1 plus glucagon within the molecule, it also gives you lean mass preservation. So in terms of treating with one new chemical entity, one premium priced molecule versus 2. And combining agents is always complicated from a regulatory point of view, from a reimbursement point of view, we think that we can hit it with one agent alone.

You've said that you're expecting to have your end of Phase II meeting with the FDA in the third quarter. What are you hoping to come away from this meeting with?

Well, thanks, Ellie. It's going to be tremendously value enhancing for the company because we're going to have confirmation from the agency on the value that we bring to the table. So we plan to come in with studies that bring out the properties that we've talked about. The lipid reductions in patients with hyperlipidemia, the reduction in lean fast -- lean liver fat in patients who have high liver fat and baseline preserving body composition, particularly in a vulnerable population like the elderly. So what we want our program to do is really stand out in terms of what glucagon can do and it will be designed specifically to bring up those attributes, and we're really looking forward to getting in front of the agency and getting confirmation on those plans going forward. Because we think this will be tremendously value enhancing to get that confirmation from the agency. As we mentioned before, in previous press releases and calls, we plan to have that meeting late in the third quarter of this year. And we're on time -- track to do that. So we're really looking forward to having that meeting and getting the agency's feedback. We really think it's going to be a tremendous value enhancer and stake in the ground for the compound.

Yes. I just wanted to add that, as you know, most of the obesity programs require fairly large patient enrollment mainly from a safety perspective. So it really gives us the opportunity to further subdivide that. So we'll have that patient population for safety anyway, we may as well enhance some of the features of the molecule and hopefully try to get them on the label. And as you can see here, because of the glucagon, it gives us a unique opportunity to perhaps study patient population that have not been studied up to this point and really enhance and get those on the label.

Like what specific populations or how will this differ from maybe the standard overweight or obese population enrolled in the obesity studies?

Sure. So we've talked a lot about -- yes, Scott, why don't you go through that?

Okay, sure. And, Vipin, you can supplement. So without giving specific details about the program which we can't share right now, we can paint a picture of where we think we're going to take the compound in terms of the populations. So a hyperlipidemic population with obesity, that's not been studied yet by other companies. Program with high liver fat, that's going to be extremely differentiating. And also to focus on elderly people who have -- who are at greater risk of sarcopenia and lean loss. So you can see how we can enrich our program to really bring out those attributes which are going to really highlight what glucagon can do for those populations. Now, not specifically, enriched within that Phase III program but in an outcomes trial, you can see that with the lipid reduction that we have, especially the reduction in liver fat and as we'll present at ADA, the reductions in inflammatory lipids, the diacylglycerides, the ceramides, sphingolipids, a variety of lipids that are known aside from LDL-cholesterol to be associated with cardiovascular morbidity, you can see we're really in a superb position here to have a successful outcomes trial. So we're trying to mold this compound into not only reduction of lipids, reduction in liver fat, obviously, we have our MASH program as well, preservation of lean mass, but really a great, if not ideal compound for the people with cardiac risk and that would come out in an outcomes trial.

Absolutely. And how are you thinking about the potential dose selection and also the potential titration regimen and how this may differ versus some of the other titration regimens that have been studied in the space?

Right. So as we mentioned before, that 1.2 milligram dose stands out among all of the GLP-1 agents as a dose you can give without titrating to it. All the other doses, you have to have a dose before to get up there. And that's a potent dose that can be used in primary care. Now in terms of the other regimens, we're taking a look at that right now. We're very happy with what we've seen before. We've been very aggressive with the compound in terms of dosing. We did not allow dose reduction in our trial that are compounds did. We are allowing that going forward, and that's going to have a major impact. Whether we extend a titration, that's a discussion we'll have with the agency. I want to emphasize that we're very happy with what we have right now.

Yes. I would just add that our plan is to actually have all 3 doses moving forward into Phase III and get them approved separately. So if you think of a scenario where a patient comes to a doctor, they can easily start the patient at 1.2 milligram dose, see how the patient does, increase that to 1.8. If they need more weight loss, then they go all the way to 2.4. So if you think about it, if you've got all 3 of these dosage approved, you really have a natural titration built in there for the doctor if they want to do that. They can start pretty much every patient at 1.2 milligram, which is an active dose -- effective dose, and many patients may not need a higher dose. And then you go to the higher dose that automatically feels like titration go to 1.8 and then eventually to 2.4.

So just going back to ADA, you had mentioned some of the cardiometabolic data that you'd share. Anything else new that we should be expecting or looking for with your presentation?

Well, I can't get into specific details because of embargo. But we're going to be presenting our MOMENTUM data. Dr. Louis Aronne, who is the lead investigator, will be presenting that. That will be a podium presentation. And then we have the lipidomics presentation, which was selected as 1 of the 7 presidential plenary abstract. So we're going to be on stage and very, very visible with very prestigious presentations, confirmation at our meeting. We'll also have, as you know, presentations at the upcoming EASL meeting, and we've submitted our body composition data to a meeting later in the year. And we suspect that we'll be able to discuss [ that ] information in greater detail at that time.

Great. And just we were talking about the different dose titration schemes. You've also, I think, in the past, mentioned developing an oral formulation. And so can you talk more about how that sits as a priority for you, given where you're at?

Yes. I mean, obviously, that's an important milestone and having an oral option is very important down the line. So we -- that is a priority. We are making good progress on that. And will share more details as they become available in the second half of this year. But our goal is to continue with developing an oral formulation of pemvidutide. This is not a small molecule. As you know, we're working with the dual agonist, it's virtually impossible to come up with a small molecule substitute that can do the same thing. But you can do formulations of the existing peptide and get enough bioavailability to use them orally. We don't believe oral is, at least in terms of the peptide therapeutics, we don't believe oral is going to substitute for injectables, but it really gives an additional option to patients and really expands the market for those who simply would not take an injectable. As we have already seen with Ozempic versus Rybelsus. When Rybelsus came on the market, it really didn't replace Ozempic, but it expanded or actually increased the market size.

Yes, that's a good point. And I guess you brought up the point about peptide versus small molecule. So how are you thinking about manufacturing going forward? You've seen peers invest heavily in manufacturing. And so just what are your thoughts on that?

So we are working -- at the moment, we are working with a world-class manufacturer of peptides that's actually making peptides for others that are on the market. So really, it's a multinational company. We've not disclosed the name. They have plenty of capacity to provide us material for Phase III and initial launch of the drug. But what's happening in this space is that the market is changing, there's being -- people are making significant investment in manufacturing capacity. So we think it's going to be there in the next few years by the time we are ready to hit the market. So from that perspective, the timing is going to be very good for us. So we're working with multiple vendors and establishing those relationships. So we believe there would be capacity as we need it. We -- hopefully, we'll have a partner by that time, who is also willing to make an investment in manufacturing capacity. But again, we have time to get to that step.

I guess...