Full Press Release Details
SUPPLEMENTAL DISCLOSURES RELATING TO ALTIMMUNE, INC.
Delaware corporation ( we, us, our, Altimmune or the Company ) is a clinical stage immunotherapeutics company focused on the development of products to stimulate robust and durable immune
responses for the prevention and treatment of diseases. We have two proprietary platform technologies, RespirVec and Densigen, each of which has been shown, in preclinical studies and early clinical trials, to activate the immune system in
distinctly different ways than traditional vaccine methods. Using these technologies, we have generated clinical product candidates which potentially represent an entirely new approach to harnessing the immune system. Our most advanced product
candidate, NasoVAX, an intranasally administered recombinant influenza vaccine, uses an adenovector to achieve expression of the influenza antigen in the target cell, thereby potentially stimulating a broader and more rapid immune response than
traditional influenza vaccines. Our planned Phase 2 program for NasoVAX is expected to start in third quarter 2017, with initial data anticipated approximately six months following the start of enrollment. Our second most advanced product candidate,
HepTcell, is being tested as an immunotherapy for patients chronically infected with the hepatitis B virus ( HBV ), and has the potential to provide a functional cure, something that is not achievable with current treatments.
HepTcell is currently in a Phase 1 trial in the United Kingdom and South Korea in patients with chronic HBV. Initial results from this trial are expected by the end of 2017. With the support of the U.S. Biomedical Advanced Research and Development
Authority ( BARDA ), we are developing a third product candidate, NasoShield, an anthrax vaccine designed to provide rapid, stable protection after one intranasal administration. Subject to continued financial and other support
from BARDA, we anticipate launching a Phase 1 trial for NasoShield in the first quarter of 2018. With the support of the National Institute of Allergy and Infectious Disease ( NIAID ), we are developing a fourth product candidate,
SparVax-L, a recombinant protein based anthrax vaccine designed to require fewer doses and have a longer shelf-life than the only currently licensed anthrax vaccine.
PharmAthene, Inc. ( PharmAthene ), now named Altimmune, Inc. ( Altimmune or the Company ), completed its business combination (the Merger ) with Altimmune, Inc. ( Private Altimmune ), in
accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of January 18, 2017 (as amended on March 29, 2017, the Merger Agreement ). Upon the completion of the Merger, the combined company was
renamed Altimmune, Inc. The combined company is a fully integrated and diversified immunotherapeutics company with one preclinical-stage and four clinical-stage drug-development programs. Additionally, the company announced that immediately prior to
the Merger, it effectuated a 1-for-10 reverse stock split of outstanding shares of its Common Stock. As a result of the reverse stock split, each 10 shares of common stock outstanding immediately prior to the Merger were converted into one share of
common stock. For more information with respect to the Merger and the reverse stock split, refer to our Current Report on Form 8-K filed with the Securities Exchange Commission on May 8, 2017.
Corporate information
incorporated in Delaware in April 2005 and subsequently changed its name to Altimmune, Inc. in May 2017 upon the completion of the Merger. Altimmune s principal executive offices are located at 19 Firstfield Road, Suite 200, Gaithersburg,
Maryland 20878, and its telephone number is (240) 654-1450. Altimmune s Internet website is www.altimmune.com. The information on, or that can be accessed through, Altimmune s website is not part of this report.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the
Securities Act, and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this report are forward-looking statements. These statements relate to future events or to our future operating or
financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or
implied by the forward-looking statements. Forward-looking statements may include, but are not limited to statements about:
cases, you can identify forward-looking statements by terms such anticipate, believe, estimate, expect, forecast, intend, may, plan, project,
target, will and other words and terms of similar meaning. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in greater detail under the heading Risk Factors in this report and in our SEC filings.
We qualify all of the forward-looking statements in this report by these cautionary statements.
You should not place undue reliance on these statements. Forward-looking statements speak only as of the date of the document containing the applicable statement. We do not undertake any obligation to publicly update any forward-looking statements.
In addition to the other information included in this report, the following risk factors should be carefully considered when evaluating an
investment in us. These risk factors and other uncertainties may cause our actual future results or performance to differ materially from any future results or performance expressed or implied in the forward-looking statements contained in this
report and in other public statements we make. In addition, because of these risks and uncertainties, as well as other variables affecting our operating results, our past financial performance is not necessarily indicative of future performance.
Risks related to our recently completed business combination
Future conditions might require us to make substantial write-downs in our assets, which would adversely affect our balance sheet and results of
We review our long-lived tangible and intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. We also test our goodwill and indefinite-lived intangible assets for impairment at least annually in the fourth quarter, or when events or changes in the business environment
indicate that the carrying value of the reporting unit may exceed its fair value. As of June 30, 2017, as a result of our declining share price, we tested our goodwill and indefinite-lived intangible assets for impairment. Based on the result
of the test, we have determined that no asset write-downs were required as of June 30, 2017. However, if our stock price continues to remain low or decline, we may determine that certain of our assets, including goodwill, were impaired and we
may be required to write-down the carrying value for such assets. Any such significant write-downs could adversely affect our balance sheet and results of operations.
Our acquisitions may expose us to unknown liabilities.
Because we have acquired all the outstanding shares of most of our acquired companies, our investment in those companies are or will be subject
to all of their liabilities other than their respective debts which we paid or will pay at the time of the acquisitions. If there are unknown liabilities or other obligations, our business could be materially affected. We may also experience issues
relating to internal controls over financial reporting, issues that could affect our ability to comply with the Sarbanes-Oxley Act, or issues that could affect our ability to comply with other applicable laws.
The concentration of the ownership of our common stock may limit the ability of other stockholders of the Company to influence corporate matters.
Based on information filed with the SEC, the executive officers, directors, five percent or greater stockholders, and their
respective affiliated entities beneficially own, in the aggregate, approximately 43% of the our outstanding common stock. As a result, these stockholders, acting together, have may have control over matters that require approval by our stockholders,
including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a
corporate transaction that other stockholders may view as beneficial.
Risks Related to Our Business, Product Development and Clinical Trials
We have incurred significant losses since our founding and anticipate that we will continue to incur significant losses for the foreseeable future and
may never achieve or maintain profitability.
We are a clinical-stage biotechnology company and have not yet generated revenues
from product sales. To date, substantially all of our revenues have been derived from grants and contracts with governmental agencies, primarily our BARDA contract for our anthrax vaccine product candidate. We have incurred net losses in most
periods since our inception, including a net loss of $11.1 million for the year ended December 31, 2016 and a net loss of $7.7 million for the six months ended June 30, 2017. As of June 30, 2017, we have an accumulated deficit of
$38.9 million. To date, we have not received regulatory approvals for any products or generated any revenues from the sale of products, and we do not expect to generate any product revenues in the foreseeable future. We do not know whether or
when we will generate product revenues or become profitable.
We have devoted most of our financial resources to research and development, including
preclinical and clinical development of product candidates. We have not completed pivotal clinical trials for any product candidate. Our leading product candidates remain in early stage clinical development, and it will be several years, if ever,
before we have a product candidate ready for commercialization. Even if we obtain regulatory approval to market a product candidate, our future revenues will depend upon the size of any markets in which our product candidates have received approval,
our ability to achieve sufficient market acceptance, reimbursement from third-party payers and other factors.
The net losses we incur may
fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. In any particular quarter or quarters, our operating
results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.
depends on our ability to develop and commercialize our current and future product candidates.
To become and remain profitable, we
must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our
product candidates, discovering additional product candidates, obtaining regulatory approval for these product candidates, forming strategic partnerships and alliances with third parties and manufacturing, marketing and selling any products for
which we may obtain regulatory approval. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, we may never generate revenues that are significant enough to achieve
profitability. If some or all of our product candidates do not prove to be safe, pure and efficacious, then we may have to abandon those product candidates altogether and we will be unable to generate revenues from sales of such products.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our
expenses will increase significantly if and as we:
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the
timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the United States Food and Drug Administration ( FDA ) or other regulatory authorities to perform studies in addition to
those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates, our expenses could increase.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to
become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or even continue our operations.
Because our product candidates are in an early stage of development, there is a high risk of failure, and
we may never succeed in developing marketable products or generating product revenue.
Our preclinical and clinical results are not
necessarily predictive of the final results of our ongoing or future clinical trials. We have completed early, small, proof-of-concept clinical trials with our NasoVAX influenza vaccine, and we are in Phase 1 clinical development with HepTcell and
late-stage preclinical development with our NasoShield program. Success in preclinical studies may not be predictive of similar results in humans during clinical trials, and successful results from early or small clinical trials of a vaccine
candidate may not be replicated in later and larger clinical trials. Clinical trials are expensive, time consuming and uncertain as to outcome, and we cannot guarantee that any of these activities will be successful. If the results of our ongoing or
future clinical trials are inconclusive with respect to the efficacy of our product candidates, if we do not meet our clinical endpoints with statistical significance or if there are safety concerns or adverse events associated with our product
candidates, we may be prevented or delayed in obtaining marketing approval for our product candidates, or we may determine to suspend development of or abandon specific product candidates. For example, we suspended the development of a Densigen
platform-based product candidate, Flunisyn, which was being developed as a T cell vaccine for the treatment of influenza, in favor of NasoVAX. Clinical trials with this product candidate showed that it was well tolerated and able to induce robust T
cell responses against the viral sequences represented, but a comparison of the entire study population in later-stage clinical trials showed no statistical differences between the vaccinated and placebo groups for several measures of protection.
In addition, we can offer no assurances that we have correctly estimated the resources or personnel necessary to seek partners,
co-developers or acquirers for our biodefense programs or execute under our NIAID contract acquired and assumed in connection with the Mergers. If a larger workforce or one with a different skillset is ultimately required to maintain these
operations, we may be unable to maximize our existing anthrax vaccine program.
Our product candidates, all of which are biological drug
candidates, are subject to extensive governmental regulations relating to, among other things, research, clinical trials, manufacturing, import, export and commercialization. Furthermore, the timing of the marketing approval for our NasoShield
product candidate is subject to obtaining continued funding and consent from BARDA, which is uncertain. In order to obtain regulatory approval for the commercial sale of any product candidate, Altimmune must demonstrate through extensive preclinical
studies and clinical trials that the product candidate is safe and effective for use in each target indication. Even if we obtain regulatory approval, that approval may be for indications or patient populations that are not as broad as intended or
desired or may require labeling that includes significant use or distribution restrictions or safety warnings. Also, we may gain regulatory approval for our leading product candidates or our other preclinical product candidates in some but not all
of the jurisdictions we seek to obtain regulatory approval. For example, failure to obtain regulatory approval of our products in any of the U.S., European or Japanese markets would materially adversely affect the Company. Failure to obtain
regulatory approval of some but not all of the target indications may result in limited commercial opportunity for the approved product. We may never obtain regulatory approval for these product candidates in any jurisdiction. We also may be
required to perform additional or unanticipated clinical trials to obtain approval or be subject to additional post-marketing testing requirements to maintain regulatory approval. In addition, regulatory authorities may withdraw their approval of
the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy.
We are heavily dependent
on the success of our leading product candidates, NasoVAX, HepTcell and NasoShield, as well as SparVax and SparVax-L acquired in connection with the Mergers. If we ultimately are unable to