Altimmune, Inc. ($ALT)

Hi. Good morning, everyone. I'm Ellie Merle, one of the biotech analysts here at Barclays. Very happy to have Altimmune here with us for a fireside chat. Joining us from Altimmune, we have Jerry Durso, Chief Executive Officer; Christophe Arbet-Engels, sorry, if I butchered your name, Chief Medical Officer; and Greg Weaver, Chief Financial Officer. Thank you all so much for joining us.

Happy to be here.

To begin, maybe if we could start with a brief overview of the key highlights of Altimmune's progress over 2025 and into the first quarter of '26, including on the financial front as well.

Sure. So we've been busy as a company and a lot going on and really an exciting year ahead of us in 2026. Last year, significant progress on the clinical side. The Phase II MASH trial read out in 2 different time periods. We had the 24 data -- 24-week data that came out in June and then right at the end of the year in December, the 48-week data set. I think we got a really good view of the potential target product profile on pemvidutide in MASH. I think the 48-week data really reinforces what we may expect to see in the same time frame that we're designing the Phase III trial. I know we'll go into some details on that, but really starting to see the potential of pemvi as a significantly differentiated product in the MASH space. I think the dual mechanism, the balance glucagon and GLP ratio that we bring, which is unique to some of the other combos coming along. And again, I think the 48-week data gives us a good sense of what we have and then how best to position some of the evolution in the Phase III design. Progress on the financial front has been an important part of the last several quarters, and maybe Greg can kind of touch on some of the highlights as we continue to progress towards initiation of our Phase III this year.

Yes. Thanks, Jerry. Ellie, we've taken the progress on building out the balance sheet very seriously. It's the highest priority, made some progress -- significant progress over the last year and using the various tools available to us, a combination of debt, equity and active and open to speaking with strategics as well. Just really want to be in a position here as we move into the start of the Phase III trial to have that capital allocation necessary to drive that trial to fruition. And so excited about the path forward.

And then in addition to MASH, progress on our other 2 Phase IIs. So in AUD first alcohol use disorder, where we enrolled in the latter part of 2025, actually ahead of schedule and are now guiding to a quarter 3 readout of that top line data set. Again, another really interesting opportunity that we think pemvidutide might be well suited for. And then our second ongoing Phase II is an alcohol-associated liver disease, where we're in the process of -- we launched a trial last year. We're in the process of enrolling and we anticipate enrollment completing this year. So lots of activity, lots of progress. And then the last piece of that is an evolution as we moved towards the end of Phase II, looking at how best to position the capabilities of the organization to deliver in Phase III as a late-stage company, a significant evolution of the leadership team. I had joined the Board last year and then transitioned into the CEO role at the beginning of this year. Several other members of the leadership team, Christophe, Linda, Robin, who's our new Chief Legal Officer, came on board again, as we get ready. Greg had joined about a year prior. So ensuring that we have the capabilities, the means and the team to deliver in the next phase. So lots of progress, lots of work to do, and we think some exciting catalysts to come in '26.

Great. So let's talk about the MASH space. You have Rezdiffra approved. You have other drugs in late-stage development across PPARs, FGF21 and other incretins as well. Where do you see pemvidutide as being differentiated in MASH and the opportunity?

So maybe, Christophe, you can pick up from there.

Yes. So pemvidutide is a unique 1:1 ratio of glucagon. And GLP-1, why it is important? Because the glucagon has the direct effect on the liver and the GLP-1 treats the metabolic context that this liver disease is happening. We have data that have shown that pemvidutide is now clearly having a great effect on fibrosis on MASH resolution, very early MASH resolution at 24 weeks. And we also have the tolerability. In my mind, the tolerability is a really important aspect because we were able to demonstrate that our patients in the Phase II were staying on treatment, much more patients were staying on treatment at our active doses than in the placebo, the discontinuation rate was lower than placebo. And in the current context compared to many other -- like the survodutide that has a 7 to 1 and demonstrated the discontinuation rate that's close to 23%, 25% or the GLP-1s, this will be a very big differentiator. We also have the lean mass preservations in the -- that's associated to our weight loss that is different than what you can see with other compounds. And as we're moving in the MASH, it's important even in combination therapy to not have the bone loss and the lean mass loss and trying to address those things. So there is different opportunities like this that are really differentiating pemvidutide in that area.

So lots of potential for differentiation, and we think lots of opportunity to make that even clearer with the way we're thinking about the Phase III design.

Yes. Certainly, the ability to have the strong liver targeting as well as weight loss, I think, is an interesting approach in MASH. Can we talk about some of the data that you've seen so far, both the 24-week data as well as 48-week NIT data? And I guess what are the key parts of the data set so far that give you confidence in the profile?

So as a reminder, we read out at 24 weeks, which was the primary endpoint of the study where we captured the histology. The 48-week result that we read in December and presented, we captured all the NITs again and safety and whatnot. I think one -- a couple of points of reflection. One, we saw good early activity in the 24-week result, which Christophe can describe. We hit on the MASH resolution, did not reach statistical significance on the fibrosis endpoint. Was an aggressive and optimistic time frame, frankly, to read out with this particular mechanism. And I think we get some indication in the 48 weeks that the process you would expect to occur with this mechanism took a little bit longer to play out, and we like the signals that we get in the 48-week data.

Yes. Just to add to what Jerry just mentioned is that at 24-week data, so we were able to show that very strong MASH resolution. The biopsy readout was a little confusing because the placebo was very elevated. The numbers were good by themselves. But what is important is to see also all the other elements, and they're all pointing to the same direction from the AI, the Liver Explore that we used that was statistically significant on fibrosis to all the needs that were also statistically significant all the way to our molecular levels where we had a very antifibrotic impact on this lever. And looking at all this picture, we were able to go to the FDA and having a very positive end of Phase II meeting with the FDA because we felt we had strong data. So the 48-week results were not a surprise. They just demonstrated added value, a clear dose response and clearly a very strong antifibrotic effect.

And how should we expect the NIT results at 48 weeks to translate to histology as we think towards the Phase III?

So the NITs are different tests than the biopsies. So the way we've designed our Phase III, we're going to be designing it for a readout first at week 52. That's one step. So we should be able to see this. We've done modeling. We've done also other things, but we powered our study taking into account the biopsy read from the pathologist, the histological read, so -- because we understand there is more variability. What is an upside for us is we're going to do this with AIM-MASH Assist. And that's the first study, pivotal study, Phase III that we will use that. It is supposed to help decrease the variability, streamline the process, accelerate how the pathologists by prompting them where to look at exactly. And so hopefully, will help us 2 things. The duration now will help us having a clear dose response and also decrease this variability and the potential placebo effect. Second, with the AIM-MASH, same thing, decrease that variability. So we consider that as several upside for us in that direction.

Yes, let's talk more about the Phase III design. You recently announced the Phase III initiating this year and details of the design. Can you go over the Phase III design and any areas where it differs from some of the trial design we've seen in the MASH space in the past?

So our design is fairly standard in general. What is we have 3 arms. We have our placebo. We have a 1.8 milligram dose, and we're going to also look at the 2.4 milligram dose. What allowing us to do this is the good tolerability that we've seen in the Phase II. And with this good tolerability and adding the upside of a very simple 1-step or 2-step titration, we should be able to see added benefits on the 2.4 milligram. Having said that, we're not powering based on the 2.4 milligram. We are powering based on the 1.8 milligram dose. There is 2 cohorts. They will be the cohorts for the F2/F3 proven biopsies. That first cohort will support the subpart H efficacy. And then we have the NIT F2/F3, Assist F2/F3 that we'll be able to complement for the safety assessment as a subpart H, both cohorts continue and go all the way for the long-term clinical outcome and the final approval. The good things about this setting and the way we've looked at this is the fact that now we have the -- for sites, we understand that they're interested to given the screen failures on the biopsy that they have different options for the patients, and there is actually some good feedback on the way we've designed the trial. And obviously, on top of this, we have the AIM-MASH Assist that is part of how we are going to read that. So we have designed -- that's the big picture of what we designed for the Phase III.

Can you elaborate on sort of the AIM-MASH Assist? I mean that's pretty novel. And I mean, certainly, like, look, there's human error involved in the histology in all the MASH trials, but can you elaborate on some of the implications and how this could improve?

Sure. So I'm going to go through actually the physical parts of how it goes. So you get -- you take the biopsy. You put it in the slide, you stain them. And in the past, now the pathologist was looking at those slides. And the slides are fairly big when you look at those, and you can see different things in different corner, but you can miss things or you cannot always look at the same -- as the same things. That's why there were some disagreement between pathologists. The AIM-MASH, we'll take those slides, digitalize the slides, put the slides on the computer and prompt the pathologists to the features. And it will help them score the NAS score or the F2/F3 type of scoring or any differences in fibrosis. So it will clearly help them look at the same thing from one pathologist to the next. Having said that, it's still a consensus process where at the end, they are responsible to agree or not with what the computer says and they will -- if there's 2 pathologists that disagree, there's a third one that comes into play. But that process should help decrease the variability by pointing every single pathologist to the same features and then also streamline because it's faster to go through those areas that are already identified by the computer.

What do you think it will do to the placebo response?

What the placebo response will be on this?

Yes. I mean the effect of using this AI assist?

So I think this could decrease the placebo response because we're -- it should be a bit more objective. And then we believe we're working through those things now. We will see the training of the pathologists. These are things that are really important. So we are putting in place the right process now to identify the appropriate pathologists to make sure they have the right training and to incorporate that AIM-MASH. So we're hoping that this will have an impact on decreasing that placebo response and decrease that variability that we have seen in some trials.

So several opportunities, hopefully, all working together to do whatever we can to limit the placebo response. But as Christophe mentioned, we powered the study not assuming any impact of those measures. So we're trying to be conservative with the powering and also to bring these other elements forward. And again, for us, a good opportunity to be the first sponsor to utilize this recently cleared tool.

And there's been conversation in the MASH field for some time around the potential for NITs to be used. I mean, if that were to happen, that would be a huge positive for you and other companies that still have trials underway or just beginning. How should we think about this? You just met with the FDA, I assume this came up.

So we asked that specific question. As you know, that process that the agency signaled occurring last year is ongoing. The FDA told us it was premature to consider noninvasives at this time as endpoints. We are capturing all of the data, as Christophe outlined on the noninvasive side, should that evolve on the FDA front, we have the information, and we think we'd be in a good position to discuss with them a potential pivot. But at this point, we haven't gotten the clearance to move in that direction. That process continues. We have some opportunity as part of that formal process to have a separate discussion with them on that topic, and we'll take that on at the right time.

Interesting. Yes, that certainly could accelerate development. And there's -- I mean, in my opinion, a lot of data that suggest that ITs are perhaps more reliable but...

And we were encouraged that the first step towards trying to help manage the variability was the clearance of the AIM-MASH Assist tool. And again, we'll incorporate that into the program as is planned.

Interesting. How should we think about enrollment time lines?

The time lines for the enrollment. So what we -- biopsy trial usually are between 18 months to 24 months. We're aiming at the lower end of this because we have, like I said, the setup of the cohorts. We also have great learning and engagement from our Phase II trials. So we have those relationships with the sites. And so these pieces together, the tolerability is a big attractiveness. We've seen in our AUD people were enrolled really rapidly as well. So we believe that those pieces altogether will help us going towards rather the low end of this 18 to 24 months.

Great. And AUD and ALD, I think there are some interesting opportunities. I think there's like pretty clear biology, at least from what we've seen from the GLP-1s and some of the like case studies there around the motivational impact it has on people. So as we head into the AUD data in the third quarter, I think this is a newer indication from a data standpoint to a lot of investors. So like help us think about like what's clinically meaningful in terms of like reduction in number of heavy drinking days or alcohol being consumed?

So the drug that has been approved has been approved on 0 drinking days, heavy drinking days. And heavy drinking days, it's 5 drinks for males, 4 drinks for female. Our study captures this, capture also the new endpoint that the FDA is considering around the WHO risk levels. And we are capturing as our primary endpoint actually the weekly average of those heavy drinking days. So we'll have all this information. We have to consider that these are patient-reported outcome. And so we have been taking the study is 90% powered for showing a difference, but we've taken a sort of a conservative approach with an assumption that there will be some impact of just being in the study for a patient, and they will see some drinking decreases there. We also have more objective ways of looking at this. We have that phosphatidylethanol, which is a blood test that looked at the impregnation -- the alcohol impregnation of patients over 4 to 6 weeks or 2 to 4 weeks, I think, something -- it's a little bit like the HbA1c that you could see for glucose that helps understand what is the level of glucose that those patients had over the past and we're looking at 4 weeks at baseline and 4 weeks at the end of the study after 6 months. So we'll have a good information to move forward and potentially based on the data, we'll be looking at having discussions with the FDA. The good news is the FDA just said that one trial might be sufficient given the safety database we will have between the MASH and our previous study, this is an approach that could help us move into that direction.

Great. And turning to ALD, how is the enrollment in that trial going?

The enrollment is going as planned. We're going to finish the enrollment this year, and the study has 2 main readouts at 24 weeks and a week 48. It's a longer study than the AUD. So this will be coming after the enrollment clearly.

Okay. So we look forward to that data potentially next year. So AUD, okay, to say we see statistical significance, reducing the number of heavy drinking days, you see a difference versus placebo. What are the next steps from there look like?

For AUD? So for AUD, we're going to be -- the next step is to define the endpoint, having the discussion with the FDA. Based on the data, again, it depends what we're going to see with this data. We're going to be looking at this. I think there will be -- we are learning now that pemvidutide could be actually very well suited for AUD patients because they do have already early -- they have the fatty liver, but they also have early fibrosis. And having that direct impact on the liver in these early stages of fibrosis could be a huge benefit. And we know that physicians think that this is a really attractive mechanism of action for this. So we're going to build around that. We're going to build around the potential benefit on the cravings on the liver and defining the endpoints in align with the FDA. Hopefully, we can do this with one single Phase III trial and move forward, and then we could and then we'll see. But our data will drive all those discussions.

And the quality weight loss and the lean muscle sparing might be another important element. We know many of these patients are at risk and can't necessarily afford to lose lean muscle. So that's another dimension. Again, we'll see what the data looks like as we consider next steps. But there's clearly a large unmet need in the AUD population. Again, we think that the mechanism might be well suited. And it's good that we're going to have data on hand by the third quarter of this year. So we look forward to that.

Yes, certainly an exciting readout. So how should we think about the size of the population for AUD, I guess, the addressable patient population relative to MASH and how you think about the relative sizes of these potential opportunities?

So the AUD population is large. If you look at some of the data, some of the estimates, 12 million or so that fall into some of the categories. I think it's going to be -- and we know that very, very few of those patients get any sort of drug therapy now. There are several older drugs available. We know there are some challenges with that. So we're in the process of looking at the market now. We know the total patients out there that are "eligible" according to the strict definition. We'll continue to do the work on defining the market in a robust way and looking at where these patients are, how many are seeking treatment. It will be for new entrants into AUD, a therapeutic area and a market that needs to be built. And I think the interesting opportunity for us is that we have the potential to bring a broader solution in that we hope will impact the drinking and then some of these other benefits, particularly on the liver, might allow us to talk about what we can bring in, in a more medical way that, yes, the drinking reduction is important, but we think, again, the dual action of the mechanism can also be impacting the liver disease that we're finding more and more is developing even for these patients that are considered "earlier" in their journey.

Okay. And when you think about kind of the development pathway, how do you see the evolution of price in the MASH space relative to, say, AUD?

Yes. Again, I think that there is a different dimension that occurs in each. I think that we're seeing as MASH therapies get approved that there are -- there's value in the market. I think there's also going to be some segmentation of different options at different points in the treatment cascade. You might see GLP monotherapy be an earlier choice in treatment, maybe at a different price point than other drugs. Again, we think that pemvidutide is going to bring a broader benefit than GLP monotherapy, and we think about potential future pricing in that context. AUD is a more open space in terms of the drugs that are out there, again, aren't used very often, are low priced, not utilized, bringing a limited amount of benefit there. So we'll, of course, over time, think about potential pricing in a franchise basis, but we're developing our program and ultimately, our data sets and ultimately our commercial offering with value in mind, and that's -- we'll have a lot of conversations in the coming time about pricing because it will always be something that's a work in progress as data evolves and the competition evolves, and we clearly look at both. But in the middle of the pricing and value discussion is always differentiation, which is why the profile for us is so exciting.

Great. Well, thank you all for joining us. Exciting year ahead. So I appreciate you making the time.

Thanks, Ellie. Appreciate it.

Thank you very much. Thank you.