Altimmune: Determining If Pipeline Programs Are Distractions Or Directions

Dec. 16, 2019 11:35 AM ETAltimmune, Inc. (ALT)3 Comments


  • Altimmune is starting to transition away from its legacy pipeline of vaccines. Now, the company is moving towards expanding the pipeline with liver and oncology programs.
  • I discuss why I am concerned about these new pipeline programs and why the company is looking to broaden its pipeline rather than move forward.
  • Despite my concern, I still see ALT to be worthy of a speculative buy. I reveal my plans for my ALT position and why I am waiting for a partnership.

Altimmune (ALT) has made some significant progress in building a diversified product pipeline. The company now has several candidates at different stages of development that are ready to enter a new round of clinical trials in 2020. Altimmune has moved away from being a vaccine-dependent company and is now diversified into a metabolic and immune-oncology company. Now, the company has multiple shots on goal which should increase the chances of developing an approved product. Unfortunately, the company is broadening its efforts without pushing forward with its lead candidate, NasoVAX. This has me debating on how I will manage my ALT position in 2020 and if I should buy, sell, or hold.

Altimmune’s Pipeline (Source: ALT)

I intend to review the current pipeline programs and provide my thoughts on the current pipeline. In addition, I discuss my plan of action for my ALT position in 2020.


Early this year, Altimmune acquired Spitfire Pharma and ALT-801, and the company has been preparing an IND filing in 2020 for NASH. According to their Q3 earnings call, the company is working on toxicology and GLP manufacturing for the product used in the trial.

Figure 1: ALT-801 Overview (Source: ALT)

ALT-801 is a dual agonist that is designed to treat the underlying causes of NASH and could thwart disease progression (Figure 1). If approved, ALT-801 could be a leading NASH therapy that will promote weight loss, as well as a reduction in liver fat. At this time, ALT-801 has yet to be tested in humans, but a positive result in a Phase I trial should catapult Altimmune into the biotech spotlight, and the share price should follow suit.

Figure 2: ALT-801 Vs. Competition (Source: ALT)

At the moment, NASH is one of the high-interest indications for biotech investors, and several companies are racing to be the first product on the market (Figure 2).

If ALT-801 is able to show a positive impact on NASH, investors should expect an increase in attention from the market. What is more, I would expect the company to quickly move ALT-801 into other related indications such as obesity and diabetes.


The company has decided to ditch its SparVax-L anthrax vaccine and has decided to focus on their NasoShield program, which is the only BARDA-funded single-dose anthrax program in development. NasoShield will be the first program to hit the clinic in 2020 and should report top-line data from the Phase Ib trial in the second half of 2020.

If the trial is successful, the market should begin to recognize NasoShield’s prospects and ability to outperform Emergent BioSolutions’ (EBS) anthrax vaccine BioThrax.

Figure 3: NasoShield Vs Competition (Source: ALT)

Looking at figure 3, we can see how NasoShield outperforms EBS’ BioThrax and NuThrax in a number of doses and administration routes. NasoShield is a single-dose intranasal spray that does not require a cold-chain for storage. These characteristics are extremely beneficial in case of a regional or national emergency.

If approved, NasoShield should become the go-to vaccine for the U.S. government, which would call for large orders to fill the government emergency stockpile.


Altimmune’s chronic hepatitis B immunotherapy program, HepTcell, is ready for a Phase II trial. The company worked with a scientific advisory board to help design HepTcell’s impending trial. Altimmune plans to begin a Phase II trial at some point in 2020.

Figure 5: HepTcell (Source: ALT)

If approved, HepTcell will have exposure to roughly a 2.2M U.S. patient population (Figure 4). Similar to NASH, a chronic HBV infection has very few options for treatment. HepTcell is one of several product candidates that are in development, but very few have a safety profile similar to HepTcell. I believe HepTcell’s amiable safety profile will entice a potential development partner to try one of their antivirals in combination with HepTcell. Indeed, I am just speculating on a potential partnership, but I suspect Altimmune will need an antiviral to make it into the treatment paradigm, and an antiviral will need HepTcell to remain relevant if the RNAi products make it through the FDA.

So, I believe there is an opportunity for HepTcell, but the company is going to have to execute a deal or two to exploit its full potential.


ALT-702 is Altimmune’s TLR7/8 agonist immunostimulant program that is still in preclinical development. ALT-702 employs Altimmune’s synthetic peptide technology that will help the body's immune system to fight cancer. The TLR7/8 agonist will be injected into the solid tumor and will work to reverse immunosuppression and allow it to see cancer.

ALT-702 is going to be an interesting program that could have a massive potential both clinically and commercially. The company expects ALT-702 to be a “depot” and will be used in conjugate with several different immune stimulants, including STING, TLR4, NKT agonist and others (Figure 6). Again, it is in preclinical development, but the company expects to update investors with its progress in the near future.

Figure 6: ALT-702 Overview (Source: ALT)

Personally, I am always skeptical of immunostimulants and immune-oncology agents. The world’s top-selling drugs like Merck’s (MRK) KEYTRUDA and Bristol-Myers Squibb’s (BMY) OPDIVO have created some hype around immune-oncology and have forced oncology companies to jump into this arena. I like to see some strong preclinical data and details about the mechanism of action before becoming bullish about the prospects of these product candidates. At this time, I only have a few slides on a company presentation to go on, but the fact that ALT-702 is able to increase T-Cell activation by 450% with no systemic cytokines has me intrigued to how the company plans to get it into the clinic (Figure 7).

Figure 7: ALT-702 Highlights (Source: ALT)


NasoVAX is Altimmune’s intranasal influenza vaccine candidate that has an impressive run in the clinic that revealed strong safety and efficacy data (Figure 8). Altimmune has decided to stay out of this year’s prime flu season and is looking to find a partner to get the product through the FDA and on the market.

Figure 8: NasoVAX Highlights (Source: ALT)

Unfortunately, the prolonged wait for a commercial partnership has weighed down the stock and investor sentiment. Although the company has not stated this, it is apparent NasoVAX won’t be in the clinic for this year’s flu season, so I am not expecting a NasoVAX partnership anytime soon.

My Thoughts

Although I haven’t been a longstanding ALT investor, I am having some difficulty embracing the company’s new pipeline candidates. Admittedly, ALT-702 and ALT-802 appear to have some impressive preclinical data that could transfer into the clinic. However, I am concerned about how the company appears to be drifting away from their legacy products both in terms of development and corporate activity. A year ago, I would say Altimmune is a vaccine-centric company. Now, I would classify it as a liver and immune-focused company. The company is now working on NASH, HBV, Oncology, Flu, and Anthrax projects, which is cool, but is this diversity a good thing? Does the company have the expertise to get all these programs through the clinic? What happens if all these products candidates get approved and hit the market? What’s the commercial plan?

The company ended the third quarter with $39.9M in cash and short-term investments, which is probably not going to survive through 2020 once the company starts their three clinical trials. Perhaps, the company is able to close a NasoVAX partnership that will provide a healthy upfront payment and milestones, but ALT-702 and ALT-801 are going to require a copious amount of funds before they make it through the FDA.

What’s My Point? I believe the company is trying to create some hype around their new NASH and oncology projects and is slowly starting to distance themselves from their vaccine legacy. This might be the right decision for the long-term prospects for the company, but the management just signed investors up for an increase in expenses and moved the goalposts back several years. I don’t expect the company to take on debt this early in development, so I expect secondary offerings to help fund the new NASH and oncology endeavors. Remember, NASH and immuno-oncology are hot topics in biotech, so I expect the company to promote these programs and results to justify subsequent offerings. I am starting to think the company picked NASH and immuno-oncology because they can generate the hype needed to raise funds.

The company is broadening out without moving closer to collecting a paycheck. I feel as if I am watching a talented running back who is juking the defense and running sideline to sideline but is barely making any headway towards the goal line. It’s fun and exciting to watch, but points are being scored, and time is running out. I would like to see Altimmune focus on getting a product closer to the goal line (FDA approval) and less sideline movement (new programs and distractions).

Of course, the company could be close to signing a partnership deal for NasoVAX, and the new pipeline programs could be blockbusters in the making, but I would suggest investors wait for some forward progress before buying into the company’s new endeavors.

Is ALT a Buy?

After reading the section above, one would think I am ready to sell my ALT position and never look back, but I am still bullish on ALT for a few reasons. Primarily, ALT’s valuation with a market cap of around $28M and a cash per share of $2.61 (Figure 9).

Figure 9: ALT Valuation (Source: Seeking Alpha)

The stock is currently trading less than its cash on hand, which will admittedly decrease over time. Still, the market has discounted any potential partnership deal or any significant breakthrough in the pipeline. The long-term financials from a NasoVAX partnership should justify a higher market cap than $28M. Throw on a NasoShield contract from the U.S. government, plus, some positive results from the rest of the pipeline and ALT drastically undervalued. Indeed, the company is going to require more cash, which will most likely come from dilution, but that is expected in these speculative biotech plays. Considering these points, I still see ALT to be worth a speculative buy.

Personally, I am going to hold off on adding to my speculative position and will wait to see if the company can close a NasoVAX partnership in the coming months. The company might be trying to generate some hype around their projects, but I am not going to contribute any additional funds to a pipeline that will be a cash incinerator. Again, I need to see the company's leading product candidate moving closer to a commercial launch before I commit to a longer stay in ALT. If the company fails to close a partnership deal by the end of Q1, I will liquidate my position and will revisit the ticker at the end of 2020.

This article was written by

Biologics profile picture
Diagnosing the market to compound capital in the healthcare sector.

After years of working in the medical field, I have developed a passion for biotech and lifesaving therapies. Now, I am a full-time healthcare investor who is in search of the next breakthrough therapy, device, or pharmaceutical. My trade focus is around catalysts and potential acquisitions. In addition, I provide a marketplace service, Compounding Healthcare through Seeking Alpha.

Disclosure: I am/we are long ALT, BMY, MRK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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