Altimmune, Inc. ($ALT)

Good morning, and thanks for joining us here on the third day of the Goldman Sachs Global Healthcare Conference. Thrilled to be joined on stage today with the management team from Altimmune.

And Jerry, I wanted to start with this question because you joined the team in the -- like last year, what drew you to the assets pemvidutide into the company such that you wanted to kind of take on this?

Thanks for the question, Corinne. And more importantly, thanks for having us, glad to be here with you today. So it was pemvidutide the asset that really attracted me to Altimmune. Last year, I have been approached first to join the Board and having spent a long time in liver disease and in MASH specifically previously. For me, I looked at the opportunity, the potential. This was prior to us getting the Phase II data sets. And really, in the game of MASH as the market matures, it's going to be all about differentiation and ensuring that you're able to fill a need in the marketplace in some important segments, that's where value is going to come from and seeing a product like pemvidutide that had the potential to bring first 2 important elements of therapy impacting from the GLP side of the molecule, the metabolic factors, weight loss, et cetera, but also the direct action of the glucagon component of pemvidutide bringing direct activity on the liver. For me, it was a mechanism that was uniquely due for liver disease, which is why you see us really stepping towards liver disease as the primary focus. But importantly, when you look at the molecule, additionally, the proprietary U-port domain, which is impacting the tolerability is also going to be an important piece. So it was the molecule, the product that first excited me as I learned more, saw the potential and then -- the CEO role.

Great. And then maybe for both of you, you guys kind of both joined relatively recently, when you joined, what were the key priorities that you had strategically? And could you just provide like a report card or a mark-to-market on those.

Yes. So it's been a busy time, and I think a time with a lot of progress for me, importantly. First step was really about the foundation of the company, and I think that, that takes on several fronts importantly as we got to the end of Phase II and then look towards the potential for Phase III capabilities that is required for a biotech of this size, evolve and change. So getting the right kind of experience, talent, first in the management team and then ultimately in the rest of the organization that can support the kind of work that is really critical when you think about folks that have experience in late-stage development experience and preparing the commercial business case and ultimately, the commercial strategy, also folks that know how to assess and keep the company open on the right strategic options that are going to evolve. So you did see really a new management team evolve and then importantly, reinforcements under as you need folks that can drive a big execution requirement in a Phase III program. So importantly, the talent and the people and the capabilities was one component. Another element of the foundation was really about clarifying and fortifying the opportunity as we saw with pemvidutide. So you've seen us refine the way we digested and then discuss the data and importantly, clarify how we're going to translate those important elements of potential differentiation into the Phase III design. So kind of step 2 is really around solidifying the understanding of what the pemvi story could be and how we communicate that so people get a good understanding of where we're trying to go. And then third, and maybe Greg can jump in on this, obviously, a move to Phase III requires a lot of capital. We felt it was important that we were as financially sound as possible, giving us the strength and the optionality and the clarity as we move forward. So maybe you want to highlight a little bit the progress made on the financial side, which again was a really important element of this first step, which was about making sure we're as strong as possible from a foundational standpoint.

18 months into the CFO role. And it really is early days. I remember it was really about the financial situation. What it's going to take to get through that MESH Phase III, where we were and how we get there, what optionality we had. Investor engagement. And then third and importantly, it's been enhanced by Jerry first on the Board and now CEO is the clear messaging on where the company is going and the focus in MESH and liver disease. And then the financial side, yes, we -- you see that MESH trials cost in the range of $400 million. And so we've raised approaching $500 million over the 18 months. And so we're well positioned now with that Belson suspenders with some additional optionality going forward, if needed. But that's where we stand on the balance sheet. I think the investor engagement has been important too. I think getting the clear messaging about where our focus is and what the opportunity where the value is going to be enhanced going forward. Pretty excited about all that.

So a lot of progress and a lot of work to do ahead of us.

Yes, absolutely. Maybe taking a step back as you think about MASH, and you obviously, you alluded to this earlier, we have a long history in the space. How do you think about like the direction of travel for the MESH market or NASH market as we look to have multiple new mechanisms coming in over the next couple of years?

So I think importantly, it's been really great to see the maturing of the treatment space, having the first approved options for patients is really important. It's been said from the beginning when we were first starting to execute the first Phase III in MESH that this is probably a disease because of the complexity, because of the diversity of patient situations that's going to require multiple mechanisms, combination therapy, so to speak. And I think that all of the conversation continues to go in that direction. I think again, to bridge back to your earlier question, Corinne, that was, again, 1 of the points of attraction of pemvidutide because you do have combination therapy with 1 molecule because you're bringing the benefits of a direct acting mechanism on the liver with the glucagon side and the GLP side bringing the metabolic approach. And I think you're going to continue to see that. I think importantly, more entrants into the space, and this is already occurring with the 2 that have been approved. You're seeing diagnosis increase. You're seeing more patients, appropriate patients, get the opportunity to seek treatment. And I think from all the analogs you can look at from any big, large chronic treatment condition, which MESH will ultimately become, I think, another large chronic class where it takes multiple mechanisms where you have to be clear on which segments of patients might be the best choice for certain therapies. And I think you're going to see all of those dynamics evolve. So I think when we all of our thinking about pemvi is about the market we will enter, not so much the market as it exists today, although, of course, you're monitoring as things go on. So I think you will anticipate more treatment options, more patients treated. And again, I think you're going to see some classic segmentation evolve, and that's the way that we think about the market as always which are the segments where the unique benefits of pemvi, one to one, glucagon GLP, that's bringing strong efficacy with tolerability that allows patients to stay on therapy for chronic treatment, which is critically important. There will be segments that we feel that this profile will be uniquely positioned for, and that's how we think about the preparation that we're doing now.

That's a great point. But as you think about maybe you could be a little bit more specific, Look, what are the kind of key metrics or parameters you think will stratify patients or features of the patient population? And which are the groups that you think are best suited for a drug like pemvidutide?

Yes. So I think you're going to have a general approach around severity of disease and then some of the other patient characteristics. So what do we mean? So I think you're going to continue to see potentially GLP monotherapy be a kind of an early choice. Physicians are experienced with those drugs, although we know from -- even from the data, the real-world data that's evolving. Patients have a difficult time staying on those options for a long period of time. You also might have some mechanisms, if you think about FGF21, that seemed to be well positioned for the later-stage patients. They've shown some efficacy in the F4 population. We think that middle of the road are the segments that pemvi will be well positioned for. I think that you're going to have patients that have difficult times tolerating some of the other options that will be, I think, a really good segment. We know there are patients that are naive, the therapy haven't been on anything, but maybe at a high risk of sarcopenia, which might be, again, another interesting segment for a drug that potentially not only delivers liver efficacy, but strong weight loss, high-quality weight loss, sparing lean muscle mass. Again, I think you also have a potential with pemvidutide a very simple titration. You don't have to go through a long number of steps that some of the other injectables require. So patients that generally have a difficult time complying with therapy might also be an important segment. And then another area that we think in this context of combination therapy, which we know is of high interest. When you have a drug profile like we believe pemvi will show in Phase III with a good safety profile with excellent tolerability with a simple titration. It also makes it an ideal partner if physicians want to combine 2 drugs because you don't have some of the complexity that might be there with some of the others. So we'll continue to do all the deep work on understanding exactly the segments and where we will go. I'm sure we'll talk a lot about this as we continue to do the required deep market research here, but we feel good about the potential differentiation. And then importantly, we always look at it in the context of how things are going to evolve in the future. And we believe that importantly, there will be more options, and there's a positive benefit of there being more options because it will help accelerate the overall growth of the number of potential patients being treated, which is important.

Yes. One of the things you mentioned early on was kind of the differentiating features of pemvidutide, one of which is this balanced agonism between GLP-1 and glucagon, how do you anticipate that could translate to the clinic? And perhaps you could couch that against also the servadutide programs in NASH?

Yes. So we do talk about the balance of 1:1 ratio of glucagon and GLP agonism. And again, for us, the concept is this -- the ratio we think is important. That's one component. So you take a drug like pemvi, that's 1:1. Servo is about at 7:8:1. So much more weighted on the GLP side. And that may be one of the explanations why you do see if you compare the data sets of difference in patients' ability in the Phase II MASH trials to stay on the drug through the 48-week course of treatment. As a reminder, for pemvidutide in our 48-week data. You had an extremely low discontinuation rate. You had actually more patients stay on the 1.8-milligram dose than stayed on placebo. And you compare that to the Phase II data -- MASH with Servadutide where you had over 20% discontinuation rate on that. So again, we think the ratio is important. The molecule is important -- and we do have, as I mentioned before, the port domain, which is one of the elements connecting. That's part of the molecule that we also think is impacting the tolerability. So the mechanism, all -- and this is one of the themes at the recent EASL meeting that we saw in some of the discussions that the mechanism of action is important, but all glucagon GLP combos are not the same. And I think this ratio and the molecules themselves are you're going to see more and more discussion around that as the data set emerges. So when we talk about the differentiation with pemvi, we think out both within the class and on a broader basis against some of the other options that are out there.

So speaking to the data that you've shared over the past 1.5 years or 1.5 years, I guess, at this point, in NASH. I guess could you just remind us some of the highlights of that data? And particularly, what did you guys kind of share at the recent EASL meeting? And what it highlights you want investors to take away from that?

Yes. So we read out the Phase II data set in MASH last year with 2 readouts, one at 24 weeks, one at 48 weeks. I think at 24 weeks, we saw the drug starts to take effect quickly hit strongly on the match resolution endpoint. So you're seeing good efficacy quickly. Although there are a lot of indicators of the antifibrotic could benefit at 24 weeks, did not hit the statistical significance. But so again, on the noninvasives that just 24 weeks, good activity was occurring already. I think importantly, was probably an aggressive assumption to think you're going to hit a biopsy on this mechanism at 24 weeks. Fast forward at 48 weeks, we saw a real improvement at 48 versus 24 weeks on all the noninvasive NITs. Importantly, there was in a biopsy at 48 weeks but we saw on fiber scan, on ALF, real strong improvements in the antifibrotic effect, which is why we've positioned the Phase III at 52 weeks on the biopsy read. We think that's the right point in time to read out on biopsy for fibrosis. We'll also read, obviously, on the second endpoint in MESH resolution at 52 weeks, but we did hit that quickly at 48 weeks. So what we think we have at a year of treatment is a drug that patients stayed on as I mentioned. Importantly, the weight loss was good, and it was not yet plateauing on the 1.8 milligram dose. We saw good, strong anti-fibrotic activity that makes us importantly believe that 52 weeks is the right time to read that biopsy. We reinforced some of that data set at EASL showing at 48 weeks, some broader benefits on some vascular elements around lipids, waste or conference, had some depth of the weight. So again, good solid understanding of what this drug might be doing at a year, which makes us really encouraged when we designed the Phase III to readout at 52 weeks.

Great. That's an excellent segue to the Phase III program, which you guys have recently disclosed more detail. And maybe you could step through the key parameters of that study and why some of those design decisions were made?

Yes, I think what we tried to do, as you would expect, is we took all of the insights from our Phase II program, had a real active discussion with at our end of Phase II meeting and landed on a Phase III that we think puts us in the best position to not only succeed on important clinical questions but also to reinforce some of this differentiation that we talked about. So first, as I mentioned before, the primary endpoints on the histology phase of the study is 52 weeks. Now this study is set up to read out on confirmatory outcomes eventually, the 52-week is the interim look kind of the classical data set that would support and accelerated approval filing. We're taking 2 doses in the 1.8 milligram, which I mentioned was kind of the -- it was the higher dose than our Phase II, but a dose that we're really felt good about the totality of the data. We also believe that there is an upside because of what we saw in terms of tolerability, weight loss, et cetera, to also as an upside, put the 2.4 milligram dose. Now as a reminder, we did test 2.4 milligrams in an obesity population previously. And we think there's an upside both on efficacy and potentially for some subpopulations. So we thought it was a good approach to add in the 2.4%. Again, we look at that as an upside. The powering of the study is around what we're expecting in the 1.8%. We did put a simple 1- or 2-step titration into this study. We did not titrate pemvidutide in Phase II. Nonetheless, we saw the kind of tolerability and adherence that I mentioned before where more patients stayed on the 1.8 dose than stayed on placebo. But we think that a simple 1- or 2-step 4- or 8-week titration phase depending on the dose probably has the ability to mitigate even more some of the GI side effects that you tend to see mechanistically with GLP. And again, it's simple and is very different from some of the 6 or 8 or 10 step titration phases that you see with some of the other options. We also -- it's the first Phase III program, utilizing the AIM MASH assist tool. So as everyone knows, 1 of the components today for Phase III program in MASH that the agency has asked for is a histology read consensus read from pathologists. And this is an AI tool that assists that pathology read. It's meant to reduce the variability, help with the speed of reading and some other elements. So we're also encouraged to be the first program to be able to incorporate that into the Phase III.

Great. There are 2 parts embedded within the study. One measures the biopsy histology endpoint, another is kind of noninvasive test. How did you arrive at the sample size required for statistical significance on that histology endpoint given you don't technically have 1-year fibrosis data based on histology.

Yes. So the study design, it's a few components that contribute. Again, the primary endpoint of the study is those long-term outcomes. So you have to figure that into the equation of how many patients you need overall. The histology cohort, 1 study, as you mentioned, 2 cohorts, one are patients with biopsy-proven F2 and F3 MASH. I think that we continue to frame our powering as conservative. We looked at the NITs. We looked at what other programs have delivered and we tended to take a conservative approach in terms of the sizing of that biopsy cohort at 52 weeks. We had the second cohort, which are patients with NIT screened F2 and F3. That group is contributing to both the long-term outcomes, so that will contribute to the long-term outcomes phase as well as to the 52-week safety database that the FDA guided us towards in terms of the right number of patients to support an accelerated approval while you have the biopsy cohort as the efficacy portion of that -- the 2 groups together will be the safety cohort.

Okay. NASH has been somewhat of a tough indication from a trial conduct execution perspective. You already mentioned the AI tool. Anything else you'd flag in terms of practices embedded in the Phase III to ensure its success?

So I think as you mentioned, we have these 2 cohorts, which is interesting from a site standpoint because you're giving them options. We are definitely prioritizing the enrollment in the biopsy portion of the study because we know that those are were challenging to enroll. However, we feel good about the initial -- all of the initial feedback on the study. We're taking all the learnings. I think that many have learned along the way, as you mentioned, as the CROs have become more experienced as the sites themselves have become more experienced in how to find and screen the right patients. The profile of the drug is attractive. We do know from experience that the weight loss component is another dimension and that sometimes helps attract both sites and individual patients. And again, we feel good about the progress we're making. We are continuing to move through the start-up work of the study and continuing to guide to patient enrollment in the second half of the year.

Okay. You mentioned some of the things you can do to help enrollment. I guess what are you anticipating in terms of time lines for site initiation and enrollment?

Yes. So all of that work is ongoing now with the sites, the deep work that's the start-up phase in terms of the site of verification. It's a global study. We're working across all the continents that are appropriate and that you would expect. And then you've seen from some of the other global trials. These trials do take typically 18 to 24 months of enrollment. We are targeting the lower portion of that based on some of the elements that I mentioned, and we continue to guide that we'll begin enrolling patients in the second half of the year and that the readout is anticipated in 2029. Obviously, as we get deeper into the picture over the coming quarters, we'll have a lot of discussion around those elements and enrollment and progress on the study as is typical.

Yes. You mentioned already, but you did embed the outcomes piece of this into the Phase III program. How long do you anticipate it will take to accrue sufficient events in an F2, F3 patient population to see a benefit on outcomes?

Yes. So as always, you do the modeling, I think the 60 months is the estimate on that. We'll see how things progress -- and again, I think we feel good about our ability to enroll the right patients along the way to be able to get us to the outcomes portion. It's a requirement of the approval pathway, which is typical for MASH. And again, we're setting up the study to -- with that always as part of the right consideration, keeping the right patients in the study for the long term. So while we'll talk a lot about the 52-week endpoint because that's the first milestone. We're always managing in the context of delivering the full study and the important outcomes.

I think a lot of companies use an F4 patient population to think about outcomes. Why did you feel like this was a better approach for the molecule or for the team?

Yes. I think for us, we're basing it on what we know about the molecule to date. Obviously, the F4 population is an important population. We've seen over time, different products take different approaches. We'll -- we have a clear prioritization on the F2, F3 population at this point, and we'll continue to assess the opportunity as we move forward.

Okay. Maybe pivoting a little bit, pemvi is also in development for alcohol use disorder and alcohol liver disease. Maybe talk to us about why those made sense in the context of this particular agent and its properties.

Yes. So Corinne, that comes back to what we believe is the value of bringing both the direct acting liver impact of the glucagon side of pemvidutide and the metabolic effects I think if we think about both of those patient populations, the drinking is an issue, we know that it leads to implications on the liver over time. So we're approaching it with the potential to be able to address both sides of that. So the emergence of the understanding of the role that GLP can play on the craving mechanism and on the impact of the drinking. We think is only part of the equation even for the AUD population, which tends to be -- although this is a continuum, there are ALD patients who are obviously also suffering from AUD. There has been a perception that the AUD patients weren't always suffering liver complications yet. And I think there's an emergence of thinking progress, you have to be thinking about the liver, maybe even earlier than anticipated. And so while the Phase II data is primary is the data set that we'll read out next quarter in AUD is primarily focused on the impact on drinking. We see the opportunity over time to really bring the benefit of both an impact on the liver and hopefully, a positive impact on the level of drinking to the equation. We don't look at this as only solving 1 part equation. We think because of pemvi's broad benefit on both sides that could be being different than some of the other options that might be approached.

How should we think about the market opportunity in each of those indications and the unmet need in terms of patients that might be candidates for therapeutic intervention.

Yes. So the unmet need is high. We know that if you look at some of the data, they are large populations, 12 million or so with AUD might be half of that or so with ALD, no approved drugs in ALD, the few older options with AUD, but we know a high level of unmet need. So I think importantly, again, it's going to be about defining what the therapeutic impact you can deliver. It is a market development need. You have to understand how to find the right segments of patients to be able to bring on board. Large unmet need. We think we can deliver if the data supports it, something unique there. And if that's the case, then it's going to be about understanding the right business case and how best to pursue. But we're encouraged by the level -- the potential of the mechanism the unmet need is high and it's kind of indications that we feel a company like Altimmune should be exploring.

To that point, what do you need to see from these Phase -- programs.

Yes. So we'll see the AUD study -- obviously, we set up that study, as I mentioned, primarily around impact on drinking, although we'll capture the full liver enzymes, et cetera, we will look at weight. We want to see the impact on drinking. The decrease in the number of heavy drinking days is the primary endpoint of that study. We have some of the potential regulatory endpoints as a secondary impact on the WHO classification, for example. We'll look at the totality of the data. see what we're seeing have a discussion with the FDA, make a determination what we think the potential is and then come back and an update on what the options and the plan will be. We have talked about it if we're in that positive scenario where we believe there's value there. Maybe, Greg, you want to mention how we think about the financial element on that because, of course, we have some milestones to get through in terms of understanding the data and the regulatory endpoint. But of course, we're always thinking and working about the what ifs along the way.

Well, a Phase III thinking as we go forward in these 2 new indications is important. And the framework of existing balance sheet and MASH imperatives as a foundation but yes, we are beginning to do the work. I think as we turn over the card in AUD, get the regulatory feedback we'll in parallel be looking at optionality on how we might position that Phase III funding and take that forward. I mean if the value is there, we'll get it done. I think the likely preference is going to be nondilutive, could be a partner, it could be strategic, it could be regional, it could be some other flavor and not a default to new equity issues. But we're excited about it. This is a very exciting time for the company between kicking off the MASH trial, the AUD reading out, ALD moving forward and just all the detailed work that's going on to on the financial side, create a little more decision around the forecasting a little more certainty around what that use of cash and burn rate could look like going forward. .

Great. So maybe just to clarify, I guess we'll have the data next quarter. When do you expect we'll get kind of a broader update on the program and -- there?

Yes, we'll guide to that when we think it's appropriate. Again, I think we want to make sure we're digesting the data. We've got a lot of important focus on MASH execution. We'll digest the data, can't always predict exactly how long it's going to take us to have the right discussion with the FDA, but we'll be working on all of that with a lot of focus, and then we'll come back and give some more clarity. And again, really encouraged and looking forward to releasing the data when we have it.

Awesome. Well, that brings me basically to the end of my questions. I thought this was a super productive conversation. I appreciate the time this morning. and thanks to everyone who joined us here in online.

Thanks, Corinne. Appreciate it.

Thank you.