Altimmune Q1 2025 Earnings Report

Altimmune EPS Results

• Actual EPS: -$0.26
• Consensus EPS: -$0.35
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: -$0.34

Altimmune Revenue Results

• Actual Revenue: $0.01 million
• Expected Revenue: $0.00 million
• Beat/Miss: Beat by +$4.00 thousand
• YoY Revenue Growth: N/A

Altimmune Announcement Details

• Quarter: Q1 2025
• Date: 5/13/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 8:30AM ET

Altimmune (NASDAQ:ALT), a clinical stage biopharmaceutical company, focuses on developing treatments for obesity and liver diseases. The company's lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist that is in Phase 2 trial for the treatment of obesity and metabolic dysfunction-associated steatohepatitis. It is also developing HepTcell, an immunotherapeutic product candidate, which is in Phase 2 clinical trial for patients chronically infected with the hepatitis B virus. The company was formerly known as Vaxin Inc. and changed its name to Altimmune, Inc. in September 2015. Altimmune, Inc. was founded in 1997 is headquartered in Gaithersburg, Maryland.

Altimmune Q1 2025 Earnings Call Transcript

Key Takeaways

• Expecting IMPACT Phase 2b MATCH top-line data in Q2 with confidence that pemidutide will achieve both NASH efficacy and meaningful weight loss at 24 weeks, potentially distinguishing it as the first therapy to hit these endpoints early.
• Secured a $100 million credit facility with Hercules Capital, including $15 million at closing and flexible tranches through 2026, to extend the cash runway and support clinical development.
• Unveiled plans for Phase II trials of pemidutide in alcohol use disorder (AUD) and alcohol liver disease (ALD), targeting large unmet medical needs with potential to reduce alcohol consumption and liver fibrosis.
• Reported a net loss of $19.6 million in Q1 2025 (or $0.26 per share) driven by $15.8 million in R&D and $6 million in G&A expenses, reflecting ongoing investment in clinical programs.
• Ended Q1 2025 with $150 million in cash, cash equivalents and short-term investments, bolstered by $35 million raised from the ATM facility, positioning the company to fund trials into late 2026.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Altimmune First Quarter twenty twenty five Financial Results Conference Call. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again.

[Operator]

As a reminder, this call is being recorded. I'll now introduce your host for today's conference call, Lee Roth, President of Burns McClellan, Investor Relations Advisor to Altimmune. Lee, you may begin.

[Lee Roth, Investor Relations at Altimmune]

Thanks, Gigi, and good morning, everyone. Once again, thank you all for joining us for Altimmune's first quarter twenty twenty five financial results and business update conference call. On today's call, you'll hear from Doctor. Vipin Garg, our Chief Executive Officer Doctor. Scott Harris, Chief Medical Officer and Greg Weaver, our Chief Financial Officer.

[Lee Roth, Investor Relations at Altimmune]

Doctor. Scott Roberts, our Chief Scientific Officer and Ray Jorrt, our Chief Business Officer are with us for the Q and A session. Our first quarter twenty twenty five results and corporate update press release was issued earlier this morning and can be found on the Investor Relations section of the Altimmune website. Before we begin, I'd like to remind everyone that remarks made about future expectations, plans and prospects constitute forward looking statements for purposes of the 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.

[Lee Roth, Investor Relations at Altimmune]

For a full review of the risk factors that could affect the company's future results and operations, we refer you to the company's filings with the Securities and Exchange Commission. I'd also direct you to read the forward looking statement disclaimer in our press release issued this morning, which is now available on the website. Any statements made on this conference call speak only as of today's date, 05/13/2025, and the company does not undertake any obligation to update any of these forward looking statements to reflect events or circumstances that may occur on or after today. As a reminder, this call is being recorded and will be available for audio replay on the Altimmune website. With that said, it's now my pleasure to turn the call over to Doctor. Vipin Garg, President and Chief Executive Officer of Altimmune. Vipin?

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Thank you, Lee. Good morning, everyone, and thank you for joining us today for our first quarter financial results and corporate update.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

As you can imagine, we are very excited about the upcoming readout of our IMPACT Phase 2b MATCH trial, which we expect to announce this quarter. Based on the class leading liver fat reduction of pembidutide and the use of biopsy rereads to minimize placebo response, we are confident of achieving the trial's key efficacy and safety objectives. If successful, pemdidutide would become the only imprintin to achieve statistical significance on NASH endpoints at only twenty four weeks of treatment. Furthermore, it will be the first therapy of any kind to combine these effects with clinically meaningful weight loss at this early time point. If approved, we believe that pemidutide could provide a complete solution for the treatment of NASH.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

We announced today that we have entered into a credit facility with Hercules Capital for up to $100,000,000 This is strategically important as we build upon our balance sheet strength and provide flexibility to support our continued development of pemidutide. Greg will speak further on our financing later on the call. Our recent R and D Day event marked an important milestone in pursuing our vision of pemidutide becoming the treatment of choice in liver and cardiometabolic diseases. We unveiled our plans for phase II trials in alcohol use disorder, or AUD, and alcohol liver disease, or ALD. Both AUD and ALD are areas of significant unmet medical need with limited treatment options.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Pembodutide has the potential to disrupt the treatment paradigm in both these conditions if we are able to demonstrate a reduction in alcohol consumption in combination with an amelioration of fat reduced induced liver inflammation and fibrosis. This profile of clinical benefits was enthusiastically received by various physician groups and patients, which adds to our conviction for developing pemidutide in these indications. The expansion into these indications demonstrates our commitment to establish pembidutide as a potential foundational treatment across multiple fibrotic liver diseases and their primary causes.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

With that, I'll now turn the call over to Doctor. Scott Harris, our Chief Medical Officer, to provide a clinical development update. Scott?

[M. Scott Harris, Chief Medical Officer at Altimmune]

Thank you, Vipin. We are approaching an important milestone in our NASH program.

[M. Scott Harris, Chief Medical Officer at Altimmune]

The top line data from the IMPACT Phase 2b trial, which are expected in the second quarter. We are pleased to report that the trial enrolled a total of two twelve participants with biopsy confirmed F2F3 NASH, which increased the study power over the original target. As a reminder, the dual primary endpoints are MAASH resolution or fibrosis improvement at twenty four weeks. We also plan to provide data on key secondary endpoints, including weight loss, noninvasive tests of fibrosis, such as FibroScan and e. F, liver fat reduction, and serum lipids.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We also look forward to reporting an adverse event profile that confirms the safety and tolerability of penvedutide. As Vipin mentioned, if successful, penvedutide would become the only incretin to achieve statistical significance on MATCH endpoints at only twenty four weeks of treatment. Further, it will be the first therapy of any kind to combine these effects with clinically meaningful weight loss at this early time point. While the top line efficacy data readout will be at twenty four weeks of treatment, we are continuing to treat patients for a total of forty eight weeks. This will allow us to estimate the effect of on NASH biopsy endpoints using noninvasive tests and determine the additional weight loss achieved by these patients at this time point.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We are now on the final stages of rereading the biopsies. The baseline patient demographics and characteristics, including age, sex, body weight, BMI, diabetes status, ratio of F2 to F3, liver fat content, noninvasive measures of fibrosis, and liver function are consistent with our expectations and closely approximate other studies in mesh. To maximize the integrity and robustness of our histology readout, both baseline and end of treatment biopsies for all subjects are being reread in a blinded fashion using independent reads from three pathologists and a modal approach to scoring, similar to recent successful studies in this indication. Precedent has shown that re re reading both the baseline and end of treatment biopsies significantly reduces the placebo response rate in MATCH trials, and implementing this procedure will add to the likelihood of trial success. Finally, the most compelling reason we are confident heading into the IMPACT readout is that our Phase Ib MAZZLE D study demonstrated a dose dependent liver fat reduction of up to 76.4%, which is greater than that associated with other successful trials and is class leading for NASH therapeutics.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Recall that liver fat reduction has been shown to be the principal driver of NASH resolution and fibrosis improvement in NASH clinical trials. Given our confidence in the upcoming data, we are preparing for the initiation of a Phase III trial in NASH and intend to hold the end of Phase II meeting with the FDA in the fourth quarter of this year for this indication. This timeline would allow us to initiate a registrational program in early twenty twenty six. Turning now to two additional indications that we unveiled at our March R and D Day event, alcohol use disorder, or AUD, and alcohol liver disease, or ALD, we are progressing towards Phase II trial initiations in these indications in Q2 and Q3, respectively. The Phase II trial in AUD will evaluate pempaglutide versus placebo in approximately one hundred patients over a twenty four week period.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Patients in the pembidutide arm will receive the two point four milligram dose titrated over eight weeks to maximize tolerability in this patient population. The primary efficacy endpoint is the patient reported change in heavy drinking days with the timeline follow back method as established by FDA guidance, with key secondary endpoints of changes in alcohol consumption by PEF and weight loss. Similar to our AUD trial, the Phase II ALD trial will evaluate pemphedutide versus placebo in approximately 100 patients, but over a forty eight week treatment period. We will employ a two point four milligram dose of pemvedutide with the same dose titration method as in AUD. The key endpoint, change in liver stiffness measurement by FibroScan, will be assessed at twenty four and forty eight weeks, along with key secondary endpoints of change in alcohol consumption and weight loss.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Both AUD and ALD are large patient populations with treatment options that either have proven ineffective in clinical practice in the case of AUD or don't exist in the case of ALD. Our market research suggests the drug with the target profile of pembidutide, one that reduces alcohol consumption, liver inflammation, and body weight would be well received by patients and physicians. Furthermore, obesity is recognized to be a key risk factor for poor outcomes in both AUD and ALD, and not unexpectedly, with these conditions have a high incidence of metabolic abnormalities, including hypertension and hyperlipidemia. If these efficacy trials are successful in AUD and ALD, we believe that pemadeutide has the potential to redefine the approach to the treatment of these serious conditions. NASH and ALD are the two most frequent conditions leading to liver transplantation in The United States.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So the long term potential benefits of pemphidutide, if positive, are significant. We are excited to initiate the trials and look forward to sharing our progress along the way. With that, I'll now turn it over to Greg Weaver, our Chief Financial Officer, to review our financial results for the first quarter. Greg?

[Greg Weaver, CFO at Altimmune]

Thank you, Scott, and good morning, everyone. Let me begin with adding some color around our cash position, our recent use of the ATM and today's announcement of the credit facility with Hercules Capital. I'm quite happy with the progress we've made over the recent months in building the cash runway required to support the pembidutide clinical development program in NASH, ALD, and AUD. I'm confident that the cash position we construct will support the needs of the pembidutide program over time. Briefly about the ATM facility.

[Greg Weaver, CFO at Altimmune]

This is one of several financing tools available to us. We've raised $35,000,000 net off the facility in the first quarter twenty twenty five, an additional $16,000,000 since April 1. The $100,000,000 credit facility announced this morning is another important piece of the financing strategy, and Hercules is a high quality partner. The facility provides tranche funding that is optional, flexible, and significantly extends our cash runway. There's a $15,000,000 funding at closing upfront and an additional $25,000,000 available in 2025, subject to milestones that align with our business plans.

[Greg Weaver, CFO at Altimmune]

The remaining $60,000,000 on the facility is available beginning in 2026 and subject to milestones and conditions. Terms of the facility include interest only for twenty four months, which can be extended up to forty two months. The duration of the facility is forty eight months. Terms are at market rates, and no warrants are included in the facility. We view Hercules as a long term partner with the ability to grow alongside us as we continue to advance pempidutide.

[Greg Weaver, CFO at Altimmune]

Now to briefly comment on the Q1 financial results. We ended the first quarter of twenty twenty five with $150,000,000 in cash, cash equivalents, and short term investments as compared to $132,000,000 at year end 2024. The increase in our cash balance is related to equity sales off the ATM facility totaling to $35,000,000 during the first quarter. R and D expenses were $15,800,000 for the three months ended March '5, compared to $21,500,000 in the same period of 2024. R and D expenses in the first quarter included $9,200,000 of direct costs related to the development of pemidutide, specifically to upfront CRO costs for the IMPACT trial.

[Greg Weaver, CFO at Altimmune]

G and A expenses were $6,000,000 for the quarter ended 03/31/2025, compared to $5,300,000 in the same period of 2024. The increase was primarily related to a $500,000 increase in non cash stock comp and other labor related expense. Net loss for the first quarter of twenty five was $19600000.0.00 $26 a share compared to a net loss of 24,400,000.0 or $0.34 a share for the first quarter of the prior year 2024. And with that, I'll now turn the call back to Vipin for closing remarks. Vipin?

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Thank you, Greg. We are entering a truly exciting time for Altimmune with the upcoming MATCH data and the initiation of our AED and ALD Phase II trials. We expect 2025 to be a transformative year for the company. This concludes our formal remarks, and we would now like to open the line to take questions. Operator?

[Operator]

Our first question comes from the line of Yasmeen Rahimi from Piper Sandler.

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

Good morning, team. Thank you so much for all the great updates and very much looking forward to the impact study reading out here in 2Q. Few questions. The first one is, Scott, you mentioned that you guys are analyzing the baseline biopsies again. Have you had a chance to maybe provide some commentary around what the distribution F2 and F3 are and sort of how representative this Phase 2b population baseline characteristics are versus maybe some of the other Phase 2b successful Phase 2b that we have seen?

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

That's question one. Question two is directed to VPN. I think speaking with investors, always find that they're excited about pavilumab but may need help to think about post impact, what is the ideal population within mass obese that would be ideal for PEMV? If you could provide color there, that would be really helpful. And then the third one is obviously upon positive data from the IMPACT study, you do have the opportunity to think about partnering this asset.

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

If you could provide also, Wiebet and team, some commentary around how you're thinking about partnership opportunities. So appreciate if you could tackle these three part questions. And I'll jump back in the queue.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Absolutely. Thanks for your questions, Yas. Scott, do you want to take the first question?

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah. Well, Yas, we're in the absolute final stages of rereading the biopsies and what we're going to present are the demographics of that final qualifying population. Based on that, we can't give you precise numbers. We would say in confidence, if you look at the other studies in terms of the age of the patients, the average proportion of women, the F2, F3 distribution, the distribution of diabetics, the FibroSkin scores, the ELF, the liver fat at baseline, the ALT levels. If you look at what we're seeing in the population that will be evaluated as that data comes to us, it looks very, very similar to other studies.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So I think that investors can look at this and say that this will be very meaningful in terms of its comparability to other studies.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

In terms of your question about the patient population, yes, what we are doing is we're really leveraging the unique features of pemidutide, which really combines direct effect in the liver with weight loss. So really, the way we look at NASH is it's NASH with obesity. As you know, eighty percent of the patients, eighty to ninety percent of patients with the MAH have obesity. So we're treating both the root cause of MAH, which is obesity, as well as the serious condition that results from obesity, which is liver fibrosis. So by combining these two effects, we're really bringing these two features to the table, and really we believe that's added value proposition for NASH, and even the other indications that we are pursuing.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

So everything we are doing has a common element here, where we are looking at obesity as its important secondary endpoint. So we think that really gives us an advantage in terms of identifying the patient population that would be most benefited from pemidutide. With regards to your second question, as far as partnering is concerned, as we've stated, our goal is to move forward into Phase III development of bemlidutide as quickly as possible. We are putting all of the pieces in place to make that happen. Along the way, we are open to discussions, and if a compelling partnership comes together, we'll certainly look at it.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

But that's not going to be the gating factor in terms of our ability to move forward with phase three in NASH as well as in AUD and ALD.

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

Thank you so much.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Lisa Bayko from Evercore.

[Liisa Bayko, Managing Director at Evercore ISI]

Hi there. Thanks for taking my questions and congratulations on the progress. Can you talk a little bit about what you're seeing in terms of study in terms of discontinuations, how you're handling the discontinuations in terms of the data and how should we think about any loss from the rereads and things like that? Curious, thanks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, Lisa, let me answer that question. I can't give you absolute numbers on study discontinuations. But what I can say is looking across the trial, the discontinuations that we're seeing and also those due to adverse events, we're very, very happy with the data that we're seeing so far. The trial has been going very well, especially with regards to discontinuations. Obviously, we'll have that data at the time of the readout.

[M. Scott Harris, Chief Medical Officer at Altimmune]

The discontinuations are handled in different ways. In trials, as you know, some compounds have looked at completer analyses. Others have done what's called the full intention to treat, where all discontinuations are treating as non responders. And then there's the midway, which is an imputation method which has been used in other trials as well. Our goal is to have all that information available at the time of the readout.

[M. Scott Harris, Chief Medical Officer at Altimmune]

I can't give you find out information on the rereads at this point, but what we're seeing is in line with what we had projected for patients who qualify.

[Liisa Bayko, Managing Director at Evercore ISI]

Okay, great. And then just one more question. I've been getting some questions on the importance of weight loss in this study, because it really is obviously a match first study and weight loss is sort of secondary. So, I guess how do you see the importance and how do we think about benchmarking weight loss in this study? I know you said to expect something like semaglutide, but what does that actually really mean?

[Liisa Bayko, Managing Director at Evercore ISI]

And I know this study will have, you know, a combination of patients with mash, diabetics. They won't be encouraged necessarily on lifestyle and other factors. So, taking that all together, how should we think about how much weight loss to expect in a study like this? Thank you.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, great question, Lisa. Weight loss is extremely important. If you look at the patient population up through F3, they predominantly of the comorbidities of obesity and the cardiovascular risk. And if you don't achieve meaningful weight loss in the treatment of NASH patients, you're really pigeonholing the product into a late F3, F4 type population to treat fibrosis. And the goal is to be holistic and treat all the patients from the least severe to the most severe and we think we have that in our product.

[M. Scott Harris, Chief Medical Officer at Altimmune]

As Vipin mentioned before in his comments and I repeated that, first of all, we'll be the only incretin reading out at twenty four weeks. And that will differentiate us from the other compound because speed is effectiveness. And when you're treating people with F3, they may not have a lot of time before they get into F4. Once again, at F3 they start progressing very quickly, as little as two years. You really wonder if you wanna have a slow acting drug, one that works indirectly by weight loss as being your factor.

[M. Scott Harris, Chief Medical Officer at Altimmune]

You need to have direct action within the liver and our ability to read out at twenty four weeks is really going to differentiate us from the incretins because we'll have both the weight loss and the direct acting effects. And compared to the other compounds reading out at twenty four weeks, particularly the FGF21s, we'll have meaningful weight loss. So we will be a complete solution for NASH. We think that with successful readout both in the NASH endpoints and the weight loss, we will be highly differentiated not only against the incretins, but all compounds. Now, your question about the weight loss that we expect, as you know, in the semaglutide trial, they had a weight loss of about 10% at seventy two weeks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

That has to be scaled back to what you would expect at twenty four weeks, going one third of the amount of time. So our position is that any clinically significant, clinically meaningful weight loss that we see will be highly differentiating. But I think that we can roughly project that it would be very similar to semaglutide. As you mentioned, lifestyle interventions like diet and exercise are not used in MATCH trials. That compares against weight loss trials where it is, so you tend to have lower placebo response rates.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So all in all, I think that comparing this to the semaglutide trial at twenty four weeks, something that's meaningful and clinically significant will be very similar to semaglutide in its weight loss, but then clearly differentiate from the FGF21s by providing significant weight loss, which these compounds don't have. Now, one other point is, as I mentioned in my comments, although we're reading out now this quarter at twenty four weeks, we're also reading out by the end of the year at forty eight weeks. So that we will have a lot of information, another catalyst in the second half of the year, we're gonna have 48 weight loss. We're also going to have noninvasive testing that will allow us to predict what the biopsy results would have been at week forty eight had we done a biopsy at that point. As you know, from other studies, the biopsy response grows with time.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So anything we see at twenty four weeks will be magnified and even greater in the forty eight week readout.

[Liisa Bayko, Managing Director at Evercore ISI]

Very helpful, thank you. And then just final question from me, as you think about Phase three and I know you'll be pending all this data meeting with FDA towards the end of the year, is taking the higher dose into Phase three a consideration and also I know you're really focused on kind of a repeat, like how rapid the responses and how are you thinking about potentially earlier six month endpoint? Thank you.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Well, those are great questions, Lisa. So, we're strongly considering taking the two point four milligram dose into Phase three. And it's not because we expect better mash effects, it's that we expect to get better weight loss. Reminding you that the one point eight milligram dose that we have in this trial is not the optimal dose for achieving weight loss pertinent to your prior question. That has to be understood in looking at the data that we will get higher weight loss if we employ the two point four milligram dose in Phase three as we intend.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Now, regarding the more rapid response, the FDA and their guidance does not provide a time course for these trials. One possibility here, as you mentioned, would be to do readouts at not only the end of a year, forty eight or fifty two weeks, but also at six months. That's something we're strongly considering for two reasons. The first is that it would then also put a stake in the ground for earlier, more rapid mash effects. But second, it would also allow us to read out the trial results six months earlier.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So both of those elements, adding the two point four milligram dose and doing an earlier read are something that's strongly being considered. We are writing that program as we speak. We are well ahead of our timeline for having an end of phase two meeting with the FDA in the fourth quarter. And these are things that we'll discuss with them. And I think they'll be very open to that discussion.

[Liisa Bayko, Managing Director at Evercore ISI]

Thank you so much for answering all my questions.

[Operator]

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

[Roger Song, Senior Equity Research Analyst at Jefferies]

Excellent. Thanks, team, for the update and then taking our question. I have a couple of questions related to the IMPACT study as well. The first one is understanding the trial is well overpowered for both endpoint, but just curious how you think about which endpoints are a bit harder to hit based on all the historical data. And then that's number one.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Number two is your recent ESOL data regarding this NASH resolution index, the translation to the mesh biopsy. So how do think about that index will correlate with the fibrosis improvement as well? Thank you.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, Roger. Well, as you mentioned, the trial is extremely well powered and by enrolling additional patients, we've even added to the likelihood of trial success. Historically, the fibrosis improvement endpoint has been harder to hit than the mass resolution endpoint. I think that's a well established fact. In our trial, we have dual endpoints, which mean that we can hit either mass resolution or fibrosis improvement to be successful.

[M. Scott Harris, Chief Medical Officer at Altimmune]

But that being the case, we believe that we'll be successful in hitting both endpoints based on all the factors that were mentioned. In terms of what was presented at EASL, that was a new index developed by Rohit Lumba at UCSD, who also developed the concept of a 30% decrease. Liver fat content was also associated with NASH resolution. He's continued to evolve this to getting an index that's even more sensitive and specific than that. And this match resolution index combines liver fat reduction, the change in ALT level, and baseline AST level.

[M. Scott Harris, Chief Medical Officer at Altimmune]

And it has an area under the curve in an ROC analysis approaching 0.9, which is very, very predictive with high sensitivity and specificity based on that index, applying it to our original data in the one point eight milligram dose group, our highest dose group over 90 of patients will be hitting mass resolution. That's extremely important. What it comes down to, Roger, is basically this. Liver fat reduction continues to be the greatest driver of NASH resolution of fibrosis improvement shown consistently in all trials and pretty much accepted by experts as being the primary driving force for hitting mass resolution and also fibrosis improvement. And we also have the highest liver fat content reduction of any compound that's right now in active development for MAH.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So based on all those factors, the power of the study, the readouts that we keep having by applying indices like the mass resolution index or liver fat reduction, what we know about the science, we are very, very confident about the trial success. I would also add to that, as I did before in my comments, that controlling the placebo response is key to obtaining statistical significance. And the best way to do that is to use a method of taking all the biopsies at the end of the trial, scrambling them so the pathologist is blind as to when the biopsy actually was done, and then rereading them on a blinded basis. We know that biopsy results are upgraded in severity early in the trial and downgraded later in the trial. For a variety of reasons, it's been shown consistently.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Based on that, a placebo patient who biologically has no change will have a response simply based on the sequence of the biopsy reads. So scrambling all the biopsies so the pathologist is unaware of the timing and sequence has been shown in clinical trials to reduce the placebo response rate. So we think that three important factors. First, our magnitude of liver fat reduction. Second, the sample size that we're using going into the readout.

[M. Scott Harris, Chief Medical Officer at Altimmune]

And third, the rereading of the biopsies all move us towards trial success.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Excellent. Thank you. Thank you, Scott.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Annabel Samimy from Stifel.

[Annabel Samimy, Managing Director at Stifel Financial Corp]

Hi, thanks for taking my questions. I just wanted to follow on the comments about the phase three program. We all know that one of the issues that plagues Mass development is the long development pathway. So, if you're successful here in achieving the fibrosis response in six months, and realize that you're gonna design the phase three program with a six month program, but do you see any avenue to tighten the development timelines, or will FDA be sticking with its typical years long pathway? And how do you see this evolving over time, especially as we see additional movement on these biomarkers at the recent conferences?

[Annabel Samimy, Managing Director at Stifel Financial Corp]

Do you see greater acceptance from the FDA from that? And I guess I have to ask a follow-up question to that. Just generally speaking, how have your interactions with FDA changed with all the movement there? Anything to the positive or negative that you're seeing? Thanks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Hey, thanks, Inabelle. Let me handle those questions. We believe we have the opportunity here to shorten that development path. For one, we could have a read out at six months. We may combine that by the way, with having two readouts, one at six months and one at twelve months in different patient populations so that patients only have to go through two biopsies, one at baseline and one at either six months or a separate cohort in twelve months.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Again, we have not made final decisions about that. I think Lisa in her prior comments was absolutely correct. There's an opportunity that has to be looked at. But again, we have to look at it with the FDA. We can't make any firm announcements about that, only the fact that we're looking at that.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We're very encouraged by the enrollment rate that we had in the IMPACT trial. We've been told it's the fastest enrolling trial to date. It shows that patients like the drug and then investigators enjoyed putting their patients in the trial. And one of the big motivating factors was the fact that people could lose weight, but they also like the tolerability of the drug. We think that will play out in the final results of the trial, the tolerability and adverse events.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So we think that combining a faster enrollment ramp, we could also accelerate the timeline. You're absolutely correct that there's a great deal of interest in biomarkers. I think that there's greater and greater acceptance over the course of time. It has to meet the FDA's legal standards. Ultimately, FDA is a body governed by laws and regulations in terms of what they consider to be proof.

[M. Scott Harris, Chief Medical Officer at Altimmune]

There's every evidence that they want to move away from the biopsy endpoints, but whether they've met that standard is yet to be seen. We think that going into our program that we're probably going to need biopsy endpoints for efficacy, but those non invasive tests are very important because holistically showing the entire response, both the biopsy response and the non invasive test is shown to be important. Now going back to our impact program, as you're aware, we have a biopsy readout at twenty four weeks. We don't have it at week forty eight weeks. We didn't want to subject the patients to another biopsy.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We didn't think that they would accept that going into a trial. But nonetheless, in getting to your point here, we have the biomarkers both at week twenty four and week forty eight. We could use that to model the response. We saw that in the recent data with Resmitteram where they were able to give a forecast of the response in cirrhotics with their FibroScan results in their open label study at one and two years. We believe that using that biomarker data before weeks creates a very important catalyst for us also at the end of the year.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Regarding your last question about FDA interactions, we haven't noticed any difference. We're not aware that there's been any meaningful changes in any of the FDA divisions with which we interact with mesh. That would be liver and nutrition. We've not seen any changes. We've not had any formal interactions with the agency since our last meeting with them.

[M. Scott Harris, Chief Medical Officer at Altimmune]

But we will be meeting with them in the fourth quarter of this year, and we don't anticipate there will be any difference from our interactions in the past.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Hey, Annabel, I just wanted to add one more point to the trial size and the efficiency of trial. One thing to keep in mind that we have a very large safety database on pemidutide, unlike other NASH programs, because of our database in obesity, as well as a very successful end of II meeting we've already had with the FDA from a safety perspective, safety and tolerability perspective. So that should give us additional reason, you know, in terms of designing the trial for Phase III for NASH, where we might be able to get more efficiency. In other words, we may not need as many patients exposed to drug, because we already have a very sizable safety database.

[Annabel Samimy, Managing Director at Stifel Financial Corp]

Fantastic, thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Ellie Merle from UBS.

[Jasmine Fels, Associate Analyst at UBS Group]

Hey, this is Jasmine on for Ellie. Thanks so much for taking our question. So, when you meet with the FDA for your end of Phase two after impact, do you expect to discuss NASH F4 cirrhosis with them at that time? And just what can you say about your latest plans and timelines there? And then second question, can you just confirm for us your cash running at the Hercules facility?

[Jasmine Fels, Associate Analyst at UBS Group]

And are there any specifics that you can share on what that runway includes? Thanks.

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Pat, you wanna take the first question?

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, yeah, Jasmine, I'll take the first question, then I'll hand it over to Greg for the second. So we are extremely interested in F4. We believe that we will be successful in F4. If you look at the populations of F4 that have enrolled in trials to date, it's been an early F4. Patients who are considered child A child by the child's puturcot classification.

[M. Scott Harris, Chief Medical Officer at Altimmune]

These are people who have good liver synthetic functions who haven't developed the complications of cirrhosis. And they also have high liver fat. So consequently, although they're technically F4, they're behaving like they're F3. And we think we're going to be extremely successful in F3 and I think that forecast we're going to be extremely successful in F4. So yes, we have drawn out an F4 trial.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Now, we can't give you details on that until we get confirmation with the agency, but to your question, we intend to discuss F4 with the FDA. I would imagine that we would have a fibrosis improvement trial that we would use for accelerated approval in F4, as well as follow these people to outcome to full approval. So you're absolutely right, we're very interested. This is going to be a big part of our meeting and I think we're gonna have a high probability of success in F4. I wanna also remind everyone that our drug has both metabolic and direct effects on mash, right?

[M. Scott Harris, Chief Medical Officer at Altimmune]

So back to my original point and Lisa's point about the importance of weight loss, we will clearly be able to treat the metabolic abnormalities of F0, F1, F2, and even F3. We have the direct effects that are gonna be potent for F3 and F4. So unlike some other drugs that might be restricted to certain points of mesh development, say the FGF21s to F3, F4, the other incretins F0, F1 and F2, we have the opportunity to treat all of mesh. In other words, we can be a complete solution for the disease both from F0 to F4. Greg?

[Greg Weaver, CFO at Altimmune]

Thanks, Scott and Jasmine. Good question. Let me add a little color around our Hercules facility that we announced this morning and the effect on the runway, positive effect on our runway. The facility is broken into four tranches. The first was will be funded this week upon closing.

[Greg Weaver, CFO at Altimmune]

We disclosed that as $15,000,000 The second tranche available later this year and then the balance across 2026. I'll break down the runway answer in two steps. First on today's cash position gives us runway in Q3 of twenty twenty six. And if you layer on top the optional draws, if we were to draw all of them, it could extend the runway for as much as another year. Now that's more details to be disclosed in the 10 Q to file later today.

[Jasmine Fels, Associate Analyst at UBS Group]

Thanks. Super helpful. Thanks so much.

[Operator]

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

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Good morning, team. Thanks for taking our questions, and congrats on the recent progress. Scott, I don't know if I heard from you, could you comment on the range of placebo responses you're expecting on fibrosis and NASH resolution endpoints? As you mentioned, you've seen a relatively broad range in prior trials if you're able to comment at all, sorry to push you here on the female to male ratio and what baseline weight is relative to your prior phase 1b MAPFEL study, if you could maybe comment on that. And then I have a follow-up.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Mayank, I'm sorry, didn't hear the second part of the question. I heard the first part about the range of placebo response. Could you repeat the second and then I'll address what I think.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Sorry, yeah, the female to male ratio and then the baseline weight relative to your prior Phase 1b MAPFIL study? So both baseline demographics questions.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, the first question is the range of placebo response has been wide in these trials. In the semaglutide phase two trial, it was thirty two percent. And we've seen other readouts in twenty percent. We've even seen readouts in single digits. We think that the unifying factor here is how you handle the placebo response.

[M. Scott Harris, Chief Medical Officer at Altimmune]

In the trials that have reread their biopsies by scrambling them, we're seeing placebo responses for fibrosis improvement between about seven percent and thirteen percent. So we can't be absolute about what our placebo response is. We think that our trial is very well powered because we have a better treatment effect and a larger sample size than those trials that read out successfully. But we would hope that we would drive down the placebo response to those ranges. Regarding the baseline characteristics, as I mentioned before, we're in the final stages of rereading the biopsies.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So the exact numbers are not available to us, but we think we're very close. And rather than getting into numbers that we're just gonna have to reannounce, which could be confusing to people, we think it's better to say that the range of females to males, things like the baseline weight, will be very similar not only to other trials in the space if you line them up and we've done that, but also as what our targets were. So I think you're gonna be very happy when you see that, but until we have the final numbers, we're a little reluctant put them out there because it could create confusion.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Understood, thank you. And which secondary endpoints you may include as part of your top line release next month? And obviously, want to understand which NIT should we focus on at this twenty four week time point versus maybe the forty eight week because, you know, the forty eight week could be important as you also think about powering the long term outcomes trial as part of your end of phase two FDA discussion. So if you could maybe segment that, that would be helpful.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Right, I wanna first start by saying that we don't believe that we need the forty eight week data to meet with the FDA, their sponsors that met with 24 data. It will be helpful in the discussions and we can certainly add it in. But you're correct, those non invasive tests are gonna be extremely helpful for us to predict and model the changes in the liver biopsy results that would have occurred had we done the biopsy week 48. So the primary endpoints that we'll read out will be matched resolution of fibrosis improvement by the FDA guideline definitions. The key secondary endpoints will be things such as weight loss, liver fat reduction, changes in non invasive tests such as FibroScan and e.

[M. Scott Harris, Chief Medical Officer at Altimmune]

F. We'll also have liver fat reduction by MRI PDFF and we'll have adverse events, discontinuations and study demographics. I believe that would be a comprehensive view of what we'll have and probably what we'll also have at week 48 as well.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Understood. And lastly, could you touch on the impact you believe based on Pembina's mechanism would be on bone and muscle health and or muscle health? Thanks for taking the question.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Well, bone health is extremely important. You're seeing accelerated bone loss with other compounds. There was a recent readout at ASLD and it was also published of a five percent bone mineral density loss versus placebo in cirrhotic patients. You have to also recognize that in a cirrhotic population, placebos are losing bone density. And it could be as much as 5% over the trial duration of ninety six weeks based on what we know from other databases.

[M. Scott Harris, Chief Medical Officer at Altimmune]

So adding in the natural five percent with the five percent that you lose with FGF21s, that's significant, that's ten percent. And that has to be looked at very carefully. That's not something that we're seeing with pemvedutide, we're not seeing it with the GLP-1s. As you're aware, lean mass preservation is extremely important in this population. We know that in the semaglutide data where in two trials, lost approximately 40% of their body weight as lean mass.

[M. Scott Harris, Chief Medical Officer at Altimmune]

They had a four to seven fold higher rate of pelvic and hip fractures. And this was seen as susceptible populations. That's the key that you see it in the elderly and you see it in post menopausal women, which is not an insignificant number or proportion of the patients that are being treated with these drugs. So consequently, these are extremely important features of drugs. As you're saying here, Mayak, it's important not just to look at the mass effects and the weight loss, but holistically at the whole patient.

[M. Scott Harris, Chief Medical Officer at Altimmune]

And we believe the fact that we have class leading effects on lean mass preservation, we lose only 21.9% of our body weight loss as lean mass over forty eight weeks. Glucagon appears to preserve muscle and lean mass. And that's going to be extremely important in all populations that are obese and overweight, not just in obesity population, but a mass population with obesity as well.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Thank you. Look forward to the data update.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of John Woolaban from Citizens.

[Catherine Okoukoni, Analyst at Citizens JMP]

Hi. This is Katherine on for John. I just have kind of a quick question about the speed that you expect, kind of liver fat, as well as histologic change with the GLP glucagon agonist. Whether you expect any differentiation from some of the others that we've seen, I guess, cervidutide. Is any reason to believe that tembidutide should be faster?

[Catherine Okoukoni, Analyst at Citizens JMP]

And also in terms of biomarkers, are there any that you expect to change from the 24 readout to the forty eight week readout in particular? Or is it more of your frequency sustained improvements both at the later time point? Thank you.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Yeah, great question, Catherine. So speed is important. Speed, first of all, implies efficacy. The faster you work, more efficacious you are. And speed is important.

[M. Scott Harris, Chief Medical Officer at Altimmune]

F3 patients can press cirrhosis and complications within two years. We know that from the data. And the change in liver fat content predicts the histological change at twenty four weeks. So speed of liver fat content reduction, speed of histologic changes. Now, the 76.4 is at twenty four weeks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We also have very similar effects at twelve weeks. That data has been published in J hepatology. And in fact, in our own internal data, we're even seeing these effects as early as six weeks. So we believe that we not only have the most potent drug, but also the fast acting drug. Now, regarding cervidutide, that molecule has a ratio of GLP-one to glucagon of eight:one.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We are one:one. We have a much greater amount of glucagon in our molecule and it's the glucagon that's driving the change in liver fat reduction. That's what it is. So we believe that what we're seeing at twenty four weeks would not be achievable by a compound with lower glucagon content. We believe that it's contributing some to cervidutide, but if you look at their liver fat reduction, it's lower.

[M. Scott Harris, Chief Medical Officer at Altimmune]

It's in the range of 58% to 62%. So we believe that we have a molecule with more glucagon, more liver fat reduction, faster liver fat reduction, faster histological change, and that we are an agent that can read out at twenty four weeks in contrast to cerdulutide. We don't think that they could do it. So we believe that we'll be differentiated against all of the prior incretins that have read out, not only tirzepatide and semaglutide, but also cerdulutide as well. So regarding your second question, we believe the biomarker response will grow between twenty four and forty eight weeks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

There's been a lot of talk in this conference call regarding NITs and the fact that they're becoming more and more reliable and predictive of what's going on. We saw a lot of attention being placed on the change in the FibroScan data and the cirrhotic cohorts in the ResMedoron trials. So biomarkers are getting there. They're there, in fact. And we think that what we see at twenty four weeks, and we'll report out on that, will grow over forty eight weeks.

[M. Scott Harris, Chief Medical Officer at Altimmune]

We think there'll be all of them. They all move in tandem. Elf and FibroScan are felt to be at this point the best noninvasive tests. And in fact, there's even talk now of combining the two for prognosis, a combined score of Elf and FibroScan. We think we're gonna have meaningful results in both and we think those results at twenty four weeks will be even better at forty eight weeks and will be an indicator of how we would have done it forty eight weeks with a biopsy at that time point, and that will be in the fourth quarter of this year.

[Catherine Okoukoni, Analyst at Citizens JMP]

Thank you so much.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Andy Hsieh from William Blair.

[Andy Hsieh, Research Analyst at William Blair]

Great. Thanks for taking our question. Just one quick one for us. We're just wondering about the overlap between clinical sites that you use for obesity and mass compared to potential sites for AUD and ALD that you look to activate in the coming quarters. Thank you.

[M. Scott Harris, Chief Medical Officer at Altimmune]

Hi, Andy. Thanks for the question. There is some overlap. I don't have the data in front of me right now. I can't give you percentages, but the underlying unifying feature of all these patients is obesity.

[M. Scott Harris, Chief Medical Officer at Altimmune]

And many sites specialize in this area, as well as they would obesity and liver disease or MASH. So there's obviously going to be some overlap. But offhand, I don't have those numbers in front of me right now. Yeah, so the sites that we pick for AUD and ALD will also have some overlap with the mass and obesity populations as well. But again, I don't have that number in front of me to provide for you on this call.

[Operator]

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

[Vipin K. Garg, President and Chief Executive Officer at Altimmune]

Thank you, everybody, for joining our call today. As always, we appreciate your continued support and look forward to keeping you updated in the months ahead. Have a wonderful rest of your day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Lee Roth, Investor Relations
• Vipin K. Garg, President and Chief Executive Officer
• M. Scott Harris, Chief Medical Officer
• Greg Weaver, CFO

Analysts

• Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies
• Liisa Bayko, Managing Director at Evercore ISI
• Roger Song, Senior Equity Research Analyst at Jefferies
• Annabel Samimy, Managing Director at Stifel Financial Corp
• Jasmine Fels, Associate Analyst at UBS Group
• Mayank Mamtani, Senior Managing Director at B. Riley Securities
• Catherine Okoukoni, Analyst at Citizens JMP
• Andy Hsieh, Research Analyst at William Blair