Altimmune, Inc. (NASDAQ:ALT) Q3 2023 Earnings Call Transcript

Altimmune, Inc. (NASDAQ:ALT) Q3 2023 Earnings Call Transcript November 7, 2023

Altimmune, Inc. beats earnings expectations. Reported EPS is $-0.39, expectations were $-0.4.

Operator: Good day, ladies and gentlemen, and welcome to the Altimmune, Inc. Third 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, Olivia, and good morning, everyone. Thank you for participating in Altimmune’s third quarter 2023 financial results 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 third quarter 2023 financial results was issued this morning and could 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 would also direct you to read the forward-looking statement disclosure 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, Tuesday, November 7, 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, our Chief Executive Officer of Altimmune. Vipin?

Vipin Garg: Thank you, Rich, and good morning, everyone. We appreciate you joining us today for the discussion of our third quarter 2023 financial results and business update. We are excited about the continued advancement of our lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist, in development for both obesity and NASH. With the last dosing of the last subject completed this past September in our Phase 2 MOMENTUM trial of pemvidutide and subjects with obesity and over weight. We remain on target to announce top line 48-week results this quarter. Recall, the MOMENTUM interim data showed weight loss of 10.7% at the 2.4 milligram dose after only 24 weeks of treatment. These robust reductions in body weight, together with the effect of pemvidutide on serum lipids and blood pressure without arrhythmias or without clinically meaningful increases in heart rate or other cardiovascular signals suggest that, if approved, pemvidutide may be an important treatment option for patients with obesity, especially those with NAFLD or dyslipidemia.

It is important to point out that these two conditions are prevalent in approximately 70% of the obesity population. In our NASH program, we recently announced that the FDA has granted Fast Track Designation to continue for the treatment of NASH. Fast Track Designation is designed to facilitate the development and expedite the review of new drugs intended to treat serious conditions and address unmet medical needs. NASH is a growing public health concern, and there are currently two or two treatments. The FDA decision was informed in part by the results of Altimmune’s Phase 1b randomized placebo-controlled trials of pemvidutide in subjects with non-alcoholic fatty liver disease. The relative reductions in liver fat content of up to 76% combined with significant weight loss were achieved.

The efficacy and safety of pemvidutide in NASH is being evaluated in impact our Phase 2b randomized placebo-controlled biopsy-driven trial. Given the compelling trade data on our Phase 1b trials, we expect to achieve significant rates of NASH resolution and fibrosis improvement and data readout, which is anticipated in Q1 2025. As also announced, new clinical data the anti-inflammatory and anti-fibrotic effects of pemvidutide will be presented at a Late-Breaking abstract at AASLD. We refered to a prior press release posted at our website and the details of that and inflation. Finally, we expect to have a data readout from our Phase 2b clinical trial of HepTcell in chronic hepatitis B in the first quarter of 2024. Recall that this trial is designed to show evidence of antiviral effects against hepatitis B virus and establish the role of HepTcell in combination therapies for the treatment of this significant progress of pemvidutide pemphigoid and HepTcell 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 2024. Scott?

Scott Harris: Thank you, Vipin, and good morning, everyone. I will start off with our Phase 2 MOMENTUM trial of pemvidutide in obesity. The MOMENTUM trial enrolled 391 subjects with obesity or overweight with at least one comorbidity but without diabetes. Dr. Louis Aronne from Weill Cornell Medical School, a leading authority in obesity and obesity clinical trials, is serving as the principal investigators. 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 pre-specified interim analysis was performed when 160 subjects completed 24 weeks of treatment. Weight losses of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8 milligram dose were achieved compared to a 1.0 weight loss in subjects receiving placebo.

Approximately 50% of the subjects achieved at least 10% weight loss and approximately 20% of subjects achieved at least a 15% weight loss by week 24 at the 2.4 and 1.8 milligram doses. Significant improvements are positive trends in cardiometabolic risk factors were observed. Importantly, these effects were achieved without arrhythmias, clinically meaningful heart rate increases or other safety signals. These results are impactful in view of the data readouts from other compounds in the obesity space. In 24 weeks, the placebo-adjusted weight loss achieved by semaglutide in tirzepatide were approximately 8% and 12%, respectively, with pemvidutide occupying the middle of this range at approximately 10% weight loss. It should also be pointed out that at the 24-week time point, the magnitude of LDL cholesterol reduction on pemvidutide treatment with several fall better than that achieved by semaglutide or tirzepatide in a similar population at the conclusion of their trials, but at 68 and 72 weeks, respectively.

We believe that it is the action of the glucagon receptor agonism present in pemvidutide, but not in semaglutide or tirzepatide that leads to the improved effects on lipids and differentiates pemvidutide. The important reductions in lipid-based cardiovascular risk factors suggest that pemvidutide has the potential to achieve even greater reductions in cardiovascular risk than those observed in the recently completed select cardiovascular outcomes trial. Of important note, pemvidutide has not been associated with minimal heart rate increases in any of our trials to date. By contrast, other GLP-1-based multi agonist containing glucagon, have been associated with these increases and in one case, arrhythmias. This may prove to be an important differentiator as cardiac effects may be — may not be tolerated in a population with higher cardiovascular risk, such as elderly individuals or individuals with pre-existing cardiovascular disease.

We see the obesity marketplace is becoming highly segmented based on these different patient needs and profiles, with pemvidutide fulfilling the need for the large segment with elevated lipids or liver fat content, which we estimate to be approximately 70% of the obesity marketplace. Pemvidutide may also provide the opportunity to initiate or established therapy without dose titration, which we believe may be a highly attractive option to primary care physicians as the obesity market grows beyond specialty clinical settings. We believe pemvidutide’s profile may be an ideal treatment for many patients and physician segments and may ultimately capture a significant portion of the obesity market. We look forward to the top line 48-week results from the MOMENTUM trial later this quarter.

It should be noted that the placebo-adjusted weight loss achieved by semaglutide and tirzepatide at 48 weeks were approximately 12% and 17% respectively. And based on our analysis of the 24-week interim data, we believe that pemvidutide could achieve weight loss in the mid-teens at the 48-week time point. As discussed previously by Dr. Aronne, our lead investigator in the MOMENTUM trial, this represents an important benchmark for a reversal of most, if not all, of the key morbidities of obesity. Importantly, it should be pointed out that semaglutide and tirzepatide exhibited continued weight loss from week 48 through weeks 68 and 72, respectively, and that the weight loss curves generated in recent trials with glucagon-containing compounds suggests that the weight loss with pemvidutide may continue beyond the 48-week time point.

This gives us confidence that the weight loss beyond the — that weight loss beyond the mid-teens could be achieved, the subjects were to be treated for longer durations. We’re optimistic about the pending results and look forward to ongoing discussions with FDA about the design of our Phase 3 program, which we hope to commence with a partner in the second half of 2024. Now, let me talk about our IMPACT Phase 2b NASH trial. This biopsy-driven NASH trial is being conducted at approximately 60 sites in the US with Dr. Stephen Harrison, Medical Director of Pinnacle Research; and Adjunction Professor of Medicine, Oxford University serving as the principal investigator. We are planning for approximately 190 subjects both with and without diabetes to be enrolled.

Subjects were randomized pemvidutide 1.2 milligrams, pemvidutide 1.8 milligrams or placebo in a 1:2:2 ratio and will be stratified for fibrosis stage in the presence or absence of diabetes. Therefore, approximately 38 subjects are expected to receive pemvidutide 1.2 milligrams, 76 subjects pemvidutide 1.8 milligrams, and 76 subjects placebo. This trial will enroll subjects with a BMI of at least 27 kilograms per meter squared, a liver fat content of at least 10% — 8% as measured by MRI-PDFF and NAFLD score of at least 4 on a pretreatment biopsy in either F2 or F3 fibrosis with at least 50% of subjects required to have F3 fibrosis. The primary efficacy endpoints of the IMPACT trial will be the 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 achievement of both NASH resolution and fibrosis improvement, liver fat reduction by MRI-PDFF, corrected T1 response rate, serum lipids, and other noninvasive markers of disease. Importantly, weight loss will also be assessed as a key endpoint as we believe this will be an important differentiator with respect to the majority of NASH therapeutics in development. All efficacy endpoints will be evaluated 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. As a reminder, the 24-week data from our NAFLD trials suggests that greater than 75% relative reduction in liver fat at 24 weeks with over 50% of subjects achieving the high bar of normalization of liver fat at the 1.8-milligram dose.

We also achieved significant reduction in serum ALT in MRI-based corrected T1 imaging, both important markers of NASH improvement. As Vipin mentioned, new clinical data on the anti-inflammatory and antifibrotic effects of pemvidutide will be presented as a late-breaking abstract at AASLD. We believe that a robust reduction in NASH activity, combined with fibrosis improvement and leading meaningful weight loss will be essential for a competitive product in the NASH marketplace. Also, as we have 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 United States and worldwide and represents a significant commercial opportunity.

HepTcell is an immunotherapeutic designed to activate T cells to fight the hepatitis B virus infection. The HepTcell trial was designed to enroll 80 subjects with an active chronic hepatitis B and low hepatitis B surface antigen. The primary endpoint of this trial is one large reduction or clearance of the hepatitis B surface antigen. 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 general to believe that an effective therapy for chronic hepatitis B will require both direct-acting antivirals and immunotherapy and we believe that HepT cell is highly differentiated and may provide a functional cure of chronic hepatitis B infection when combined with novel direct-acting antivirals.

I will 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 third 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. Autoimmune ended the third quarter of 2023 with approximately $140.8 million of cash, cash equivalents and short-term investments compared to $184.9 million at the end of 2022. Research and development expenses were $18.4 million in the third quarter of 2023 compared to $20.3 million in the same period in 2022. Approximately $12 million of this total for the third quarter of 2023 were direct expenses for the conduct of our clinical programs, including $10.4 million in direct costs related to development activities for Pemvidutide and $1.6 million in direct costs related to development activities for HepTcell.

We anticipate — we anticipated a brief and small increase in research and development expenses during the ramp-up of our IMPACT trial as we completed the in-life portion of our MOMENTUM trial. Looking ahead, we expect the increase in expenses related to IMPACT trial will be offset in part by reductions in expenses as the MOMENTUM trial winds down. General and administrative expense were consistent period-over-period at $4.5 million for the three months ended September 30, 2023 and 2022. Approximately $2.9 million for our quarterly operating expense is non-cash expense, primarily stock compensation. Interest income was $1.9 million in the third quarter of 2023 and compared to $1.1 million in the same period in 2022. Net loss for the three months ended September 30, 2023, was $20.7 million or $0.39 net loss per share compared to a net loss of $23.5 million or $0.48 net loss per share for the third 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. 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?

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Q&A Session

Operator: Certainly. [Operator Instructions] And our first question coming from the line of Yasmeen Rahimi from Piper Sandler. Your line is open.

Yasmeen Rahimi: Good morning team and thank you so much for all the great updates. To the extent you can comment on and for the MOMENTUM data, like I know it’s set for this quarter, enrollment finished in September. Any chance this is going to potentially come around this month or next month. So to the extent you could provide a little bit color on when in this quarter, we should be expecting it? I know in the past — second question is, in the past, you guys have spoken about also at the top line to provide some modeling analysis to be able to look at the curve of weight loss. I just wanted to make sure that’s still occurring as we head into the top line data. And then maybe the third question is just some cadence on given that impact has a weight loss in a really desirable product profile, what is the enthusiasm among sites and patients as they have eligibility to be part of the study.

So I appreciate if you could tackle those three for me, and I’ll jump back into the queue.

Vipin Garg: Thanks Yasmeen. Thank you for the questions. Scott — Scott Harris, you want to take please?

Scott Harris: Yes, I can take those. So Yasmeen, the guidance that we can provide at the current time is that we finish enrollment. We finished dosing in September. There’s obviously a safety follow-up period after that of approximately four weeks. There’s time for data clearing — data cleaning. So as we said, we’re really headed towards readout this quarter. And at this time, that’s about as much information as I can provide. But I think the arithmetic is there. And you can do the calculation based on the information in the public domain. Regarding the modeling analysis, yes. As I said, weight loss is expected to continue beyond 48 weeks based on the shape of the curve of other compounds, particularly glucagon containing compounds, and we will model that and try to provide what weight will us would look like had patients been followed for the 68 to 72 weeks of other compounds.

I would emphasize there’s been a great deal of enthusiasm from not only patients, but also sites and in particular, Dr. Louis Aronne who is the principal investigator in the trial. As he echoed during the reading of our 24-week weight loss, he thinks that this is an extremely important drug based on its differentiated profile, the fact that the marketplace will be segmented with different needs for weight loss, serum lipids, lipid fat reduction. These particularly interested in an absence of the need to dose titrate, because he feels very strongly that the great majority of this marketplace will move to primary care in the absence of really the need to achieve bariatric surgery type weight loss in patients. We think this sights feel and patients feel as well based on the reactions that this is going to be a very successful product.

Vipin Garg: Yes, Scott, there was also a question about the enrollment of the IMPACT trial based on the weight loss properties. Could you elaborate on that as well?

Scott Harris: Yeah, sure. So we’re seeing very brisk enrollment in IMPACT. We’re very pleased with it and the comments reading from patients and investigators is that you’ve got the drug out there. In NASH trials, that’s not only treating NASH, which for most patients is invisible. They have a condition in the liver, what they’re really coming to the trial for is the weight loss. And we think that their reaction in the IMPACT trial will reflect the uptake of pemvidutide in the marketplace when it finally gets approved.

Yasmeen Rahimi: Okay. Thank you so much. I’ll jump back in the queue.

Operator: Thank you. And our next question coming from the line of Corinne Jenkins with Goldman Sachs. Your line is open.

Unidentified Analyst: Hi. This is Omari Art [ph] for Corrine. So our first question is, what do you view as a successful outcome for the 48-week momentum readout with respect to weight loss? And then what can you contextualize for us how that position is kind of due type given both the safety and efficacy considerations?