Altimmune, Inc. (NASDAQ:ALT) Q1 2023 Earnings Call Transcript May 11, 2023

Altimmune, Inc. beats earnings expectations. Reported EPS is $-0.4, expectations were $-0.48.

Operator: Good day, ladies and gentlemen, and welcome to the Altimmune, Inc. First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference call, Rich Eisenstadt, Chief Financial Officer of Altimmune. Rich, you may begin.

Rich Eisenstadt: Thank you, J.J., and good morning, everyone. Thank you for participating in Altimmune’s first quarter 2023 financial and business update conference call. Members of the Altimmune team joining me on the call today are Vipin Garg, our Chief Executive Officer; Scot Roberts, our Chief Scientific Officer; and Scott Harris, our Chief Medical Officer. Following the prepared remarks, we will hold a question-and-answer session. A press release with our first quarter 2023 financial results was issued this morning can be found on the Investor Relations section of the company’s website. Before we begin, I would 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 from operations, please see the risk factors and other cautionary statements contained in the company’s filings with the SEC. I would also direct you to read the forward-looking statement 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 11, 2023, 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 Garg: Thank you, Rich, and good morning, everyone. We appreciate you joining us today for a discussion of our first quarter 2023 financial results and business updates. We continue to advance our lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist in development for both obesity and NASH. Late last year, we announced compelling 24-week data from our trial in subjects with NAFLD, and we plan to initiate the IMPACT Phase IIb NASH trial midyear 2023. We believe that the effects of pemvidutide on liver fat are class leading. We also believe that pemvidutide is the only NASH candidate in development that combines robust reductions in both liver fats and body weight. This is extremely important because NASH patients suffer not only from the complications of liver disease, but also from the underlying problem of obesity, a principal driver of NASH.

Scott Harris will provide more details on the impact of trials shortly. With regards to obesity, we look forward to reporting top line 48-week weight loss data from our Phase 2 MOMENTUM obesity trial in the fourth quarter of this year. The MOMENTUM interim results of 160 subjects reported earlier this year showed weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8-milligram dose compared to 1% base loss in subjects receiving placebo after only 24 weeks. The robust reduction in body based together with the effect of pemvidutide on serum lipids and blood pressure suggests that pemvidutide has the potential to be an important treatment option for patients with obesity, especially individuals with NAFLD and dyslipidemia. Finally, enrollment in the Phase 2 clinical trial of HepTcell in chronic hepatitis disease now complete, and we expect to have a data readout in the first quarter of 2024.

Recall that, this trial is designed to show evidence of antiviral effect of against HBV and established its role in combination therapy for the treatment of this important disease. We are excited about the progress pemvidutide and the upcoming results of these ongoing trials. With that, I’ll now turn the call over to our Chief Medical Officer, Dr. Scott Harris to discuss our clinical plans. Scott?

Scott Harris: Thank you, Vipin, and good morning, everyone. First, let me start by reviewing the clinical plans for our IMPACT Phase 2b NASH trial. This biopsy-driven NASH trial will be conducted at approximately 60 sites in the US with Dr. Stephen Harrison, Medical Director of Pinnacle Research; and Adcock Professor of Medicine Oxford University serving as principal investigator. To be eligible for study participation, subjects will be required to have a BMI of at least 27 kilograms per meter squared, a liver fat content of at least 8% as measured by MRI-PDFF, and NAFLD activity score of at least four on a pretreatment biopsy and either F2 or F3 fibrosis. At least 50% of the subjects will be required to have F3 fibrosis. Subjects both with and without diabetes will be enrolled.

In our two earlier NAFLD trials, the 2.4 milligram dose did not materially improve liver fat reduction or CT1 response over the 1.8-milligram dose and the 2.4 milligram dose will not be evaluated in this trial. Subjects will consequently be treated with pemvidutide 1.2 milligrams, pemvidutide 1.8 milligrams or placebo. We are planning for approximately 190 subjects to be enrolled in the IMPACT trial in a 1 to 2 to 2 randomization scheme with subjects stratified for fibrosis stage in the presence or absence of diabetes. Therefore, approximately 36 subjects are expected to receive pemvidutide 1.2 milligrams. 76 subjects pemvidutide, 1.8 milligrams and 76 subjects, placebo. The primary endpoints of the NASH IMPACT trial will be dual endpoints of achieving either NASH resolution with no worsening of fibrosis or fibrosis improvement with no worsening of NASH, with the primary treatment comparison being the 1.8-milligram dose versus placebo.

Secondary endpoints will include weight loss, liver fat reduction by MRI-PDFF, cT1 response rate, serum lipids and noninvasive biomarkers of disease. All endpoints will be assessed at week 24 of treatment, and subjects will continue to be dosed and followed for an additional 24 weeks to a total of 48 weeks for safety and additional biomarker responses. Our algorithm for biopsy reading and adjudication leverages the experience of other recently completed NASH trials, which we anticipate may optimize the likelihood of pemvidutide achieving robust endpoint responses. A plan has been developed to correlate noninvasive tests with NASH resolution and fibrosis improvement biopsy endpoints and the commenced discussions with FDA about the use of these biomarkers as primary endpoints in Phase 3.

We remain on target for the trial to commence midyear and to report top line results in the first quarter of 2025. Dose reduction will be made available to subjects who experienced GI intolerance, though pemvidutide was well tolerated in our two previous trials in subjects with NAFLD. Now let me talk about the Phase 2 MOMENTUM trial of pemvidutide in obesity. The trial was designed to enroll approximately 320 subjects without diabetes but with obesity or overweight with at least one comorbidity. Dr. Louis Aronne from Wild Cornell Medical School, a leading authority in obesity and obesity clinical trials is serving as the principal investigator. Subjects were randomized 1:1:1:1 to 1.2 milligrams, 1.8 milligrams, 2.4 milligrams pemvidutide or placebo administered weekly for 48 weeks in conjunction with diet and exercise.

A prespecified interim analysis was performed when 160 subjects completed 24 weeks of treatment. Weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8-milligram dose was achieved compared to 1% weight loss in subjects receiving placebo. Approximately 50% of subjects achieved at least 10% weight loss and approximately 20% of subjects achieved at least 15% weight loss by week 24 at the 2.4 and 1.8 milligram doses. The adverse event discontinuation rate at the 2.4 milligram dose was higher than observed in our 4 prior trials with pemvidutide, but similar to the adverse event discontinue rates in similar Phase 2 trials of other incretin-based agents. We believe that the GI adverse discontinuation rate can be mitigated to low levels in future trials to pemvidutide through the use of dose reduction.

We look forward to our top line results from our MOMENTUM trial in the fourth quarter of this year. We expect to see continued weight loss beyond the double-digit levels noted at our 24-week interim analysis. Other top line readout parameters will include adverse events, vital signs, serum lipids, glucose control and study discontinuations Also, as we previously announced, we have completed the enrollment in our Phase 2 multicenter clinical trial of HepTcell in patients with chronic hepatitis B. Chronic hepatitis B continues to represent a serious unmet need in the US and worldwide and represents a significant commercial opportunity. The HepTcell trial was designed to enroll approximately 80 subjects with an active chronic hepatitis B and low hepatitis B surface antigen or HBsAg and to evaluate the efficacy of HepTcell monotherapy as measured by a reduction in HBsAg and other virological markers of infection.

We expect to announce the results of this trial in the first quarter of 2024 once all subjects complete the six-month treatment period. It is generally believed that in an effective therapy for chronic hepatitis B, we require both direct-acting antivirals and immunotherapy, and we believe that HepTcell could be combined with novel direct-acting antivirals in this treatment strategy. I’ll now hand the call over to Rich Eisenstadt to give an update on our third quarter financial results. Rich?

Rich Eisenstadt: Thank you, Scott, and good morning, again. For today’s call, I will be providing a brief update on Altimmune’s first quarter 2023 financial and operating results. More comprehensive information will be available in our Form 10-Q to be filed with the SEC later today. Altimmune ended the first quarter of 2023 with approximately $165.8 million of cash, cash equivalents and short-term investments compared to $184.9 million at the end of 2022. Research and development expenses were $17.2 million in the first quarter of 2023 and compared to $15.1 million in the same period in 2022. Approximately, $10.8 million of this total for the first quarter of 2023, where direct expenses for the conduct of our clinical programs, including $8.7 million in direct cost related to development activities for pemvidutide and $2.1 million in direct cost related to development activities for HepTcell.

General and administrative expenses were consistent period-over-period at $4.5 million and $4.4 million for the three months ended March 31, 2023, at March 31, 2022, respectively. Interest income was $1.7 million for the three months ended March 31, 2023, and was negligible in the three months ended March 31, 2022. Net loss for the three months ended March 31, 2023, was $20.1 million or $0.40 net loss per share compared to a net loss of $19.4 million or $0.44 net loss per share for the first quarter of 2022. We estimate that our existing cash funds us through the 24-week biopsy results from our IMPACT Phase 2b NASH trial expected in the first quarter of 2025. Our financing also funds completion of the 48-week MOMENTUM trial and the HepTcell trial.

Our current cash projection includes no funding for the initiation of a Phase 3 obesity campaign, which would only commence with a partner. I will now turn it back over to Vipin for his closing remarks. Vipin?

Vipin Garg: Operator, that concludes our formal remarks, and we would like to open the lines to take questions. Could you please instruct the audience on the Q&A procedure?

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Seamus Fernandez from Guggenheim Securities.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Corinne Jenkins from Goldman Sachs.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Roger Song from Jefferies.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Liisa Bayko from Evercore ISI.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Mayank Mamtani from B. Riley.

A – Vipin Garg: Got it. And that we also — we also plan to engage in Europe because, again, moving into Phase III program for obesity that’s going to be important. So even interactions with EMA will also become will also be occurring between now and the middle of next year.

Q – Mayank Mamtani: Understood. Thanks for taking my questions.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Jonathan Wolleben from JMP.

A – Scott Harris: Yes. Thanks for the question, Jonathan. They were very similar. So we don’t anticipate that the amount or ratio of diabetics to non-diabetics that will be enrolled will materially impact those results.

A – Scott Harris: Well, because of mainly on the safety side, diabetics and non-diabetics. Glucose control, for example, there’s differences in adverse event rates. So mainly on the safety side rather than the efficacy side.

A – Vipin Garg: Yes. I would say that it’s really — we have so much data already in NASH in terms of liver fat reduction and other inflammatory biomarkers that the story kind of makes sense that we have a very compelling story in NASH combined with obesity. So we think we have — we’ll have enough information by the time we have 48-week data. And even there, some partners may want to wait for 48-week data, some may be willing to enter into a partnership ahead of that. So we just have to see what kind of value we are able to get before the 48-week data, we’ll have to evaluate that at that time. But — so as you can imagine, there are various scenarios here that are that are at-play. Some partners are potentially more interested in obesity indications followed by NASH. In some cases, they may be more in NASH, and then obesity upside. So we have to play both sides of the equation here and figure out what makes more sense.

Operator: Thank you. One moment for our next question. Our next question is from the line of Patrick Trucchio with H.C. Wainwright & Company.

Operator: Thank you. At this time, I would now like to turn the conference back over to Vipin Garg for closing remarks.

Vipin Garg: Thank you, everyone, for participating today. We appreciate this opportunity to share our results and outlook with you. Thank you for your continued interest. Have a nice day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.