Altimmune, Inc.
Q1 2018 Earnings Call Transcript

Published: 16 May 2018

[Operator:]

Good day and welcome to the Altimmune First Quarter 2018 Earnings Conference Call. Today’s conference is being recorded, and at this time, I would like to turn it over to (inaudible). Please go ahead.

[Unidentified Company Representative:]

Thank you, operator and thank you everyone for participating in today’s first quarter 2018 earnings conference call. Leading the call today will be Bill Enright, Chief Executive Officer of Altimmune. Also participating on the call today are Will Brown, Altimmune’s Acting Chief Financial Officer. A press release with the company’s 2017 financial results was issued yesterday after the market closed and can be found on the Investors page of the company’s website. Before we begin, I would like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. For a discussion of some of these risks and factors that could affect the company’s future results, please see the risk factors and other cautionary statements contained in the company’s filings with the Securities and Exchange Commission. I would also direct you to reading the forward-looking statement disclaimer in our quarterly earnings release, which was issued last night and is now available on our website. Any forward-looking statements made on this conference call speak only as of today’s date, Wednesday, May 16, 2018 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 rebroadcast on Altimmune’s website, www.altimmune.com. As the operator mentioned, all participants are currently in a listen-only mode and there will be a brief Q&A session following the company’s prepared remarks. With that, I will now turn the call over to Bill Enright, Chief Executive Officer of Altimmune. Bill, please go ahead.

[Bill Enright:]

Thank you (inaudible), and good morning everyone. We are pleased to be here today to provide you with an update on our progress during the first quarter. Joining me on the call today is our Acting Chief Financial Officer, Will Brown, who will review our first quarter 2018 financials. This quarter has been significant with announcements in our key development program including positive NasoVAX stage 2A initial results, HepTcell, phase 1 result and positive preclinical results in our phase 2 SparVax-L program. While we have discussed the data in depth on our last call, I’d like to take some time today to talk about what we have learned since then and outline our development plans for NasoVAX, NasoShield, SparVax-L and the HepTcell program. In NasoVAX program, we anticipate moving the program forward clinically in the first half of next year. We will be looking to evaluate the two best doses from our ongoing phase 2A study in a quadrivalent formulation phase 2B trial that will include a wider age range including healthy, elderly adults and then a dosage confirmation trial time to overlap the 2019 and 2020 influenza season. Prior to that though, we are expecting to announce additional data from the ongoing clinical study later in this summer that will include durability of the immune response six months after vaccination, mucosal antibody levels that primarily reside in the nose as well as additional data characterizing the potentially important cellular immune response previously observed all compared to Sanofi’s license injectable vaccine, Fluzone. We are very excited about the data which has been shown so far that demonstrates NasoVAX excellent tolerability and immune responses that were unprecedented for an easy-to-administer intranasal flu vaccine. We expect these additional data points to confirm NasoVAX potential as a transformative influenza vaccine. With the current fleet of licensed flu vaccine, it’s not working well season after season, the medical community is really looking for novel approaches. The potential market opportunity for a more effective intranasal vaccine is significant. The current global market for flu vaccine in 2018 was estimated at $3.3 billion with roughly half of those sales in the US, of which FluMist, the intranasal flu vaccine currently on the market accounted for only a small fraction of that total. We believe our vaccines excellent tolerability, robust immune responses and ease of administration will make it potentially more affective that traditional flu vaccine and likely to capture a significant percentage of the overall flu vaccine market Additionally, NasoVAX has manufacturing advantages over traditional vaccines. NasoVAX has manufactured and cell culture instead of chicken egg. This allows us to manufacture NasoVAX more quickly, but also prevents some changes that can occur in the traditional manufacturing processes. The CDC has reported that flu vaccines manufactured in cell culture were 20% more effective that those manufactured in chicken eggs over the last flu season. We are confident that NasoVAX can be an exciting vaccine and it provides a clear benefit over current vaccines. Now moving on to our NasoShield and SparVax-L anthrax vaccine candidates. We were also very proud to announce positive news from both of these programs this past quarter. Our NasoShield phase 1 safety study is progressing well after a successful investigational new drug submission to the FDA last December. The study which has a similar trial design at the NasoVAX influenza vaccine trial is evaluating the safety and immunogenicity of a single intranasal dose of NasoShield in four escalating dose cohort, and will also test a two-dose schedule of the highest dose. The study includes a blinded placebo and open label comparator to injected BioThrax, the only licensed anthrax vaccine in the United States. Enrollment of the 145 patients is proceeding as planned and we continue to anticipate sharing data about the single dose cohorts later this summer. NasoShield is funded through a contract with the Biomedical Advanced Research and Development Authority or BARDA, which will provide funding through the end of phase 2 if contract options are exercised. The two year base period of the contract with modifications was for approximately $22 million and included work through phase 1 clinical results. The full value of this five year contract includes an additional $105 million in options if fully executed. We anticipate that a portion of these options will be exercised later this year provided we have some positive phase 1 data. We are working closely with BARDA to identify and fund the appropriate next stages of the development of this important program. With our SparVax-L vaccine, we announced positive pre-clinical data comparing to SparVax-L and BioThrax against anthrax infection. Like our NasoShield program, this program is also funded by a government contract. This program is currently being developed through funding from the National Institute of Allergy and Infectious Disease or NIAID. Work on this contract ends later this year and Altimmune is seeking additional government funding to further advance this program. Now let’s turn to our HepTcell program, our immunotherapy for chronic hepatitis B. As we announced last quarter, we are continuing to evaluate the data that we obtained from this program and are continuing to monitor the later time points as per the clinical protocol. As a reminder, the safety and tolerability end points of this study were met interpreting the Tcell responses was made difficult to lever because of unanticipated signal in the placebo groups. We are looking at immune responses to the specific hepatitis B antigen sequences that were part of the HepTcell peptide. Clearly, the [linked] placebo did not receive HepTcell and yet they showed a vaccine like response profile. A potential source of this problem is the culture [dose] spot assay that we use where we attempt to amplify the signal. We are back to these clinical samples and retesting them with an alternative assay considered to be more direct and sensitive to see whether we can the HepTcell specific signal through the noise. We are also looking at the quantitative surface antigen levels for all of the time points. We will report these data as they are available later this year. The results of these data will determine whether we continue to advance this program or not. As a whole, we remain very optimistic about our programs and development. We are pleased to have announced positive data in two phase 2 clinical programs both the NasoVAX and SparVAX-L program and look forward to announcing additional data over the balance of the year. With that I’d like to introduce Will Brown, who will provide an update on our first quarter financials. We announced last week that Elizabeth Czerepak had resigned to seek other opportunities. We thank her for helping us to navigate becoming a publicly traded company and have initiated the search process for a new CFO to help lead us in to the future. Will has been working with the company as a consultant over the past few months and is stepping up to fill the CFO role until a full-time replacement is found. Will?

[Will Brown:]

Thank you Bill, and good morning everyone. For today’s call I’m going to provide an update regarding our first quarter 2018 financial results. Our revenues for the first quarter 2018 were 2.7 million compared to 300,000 for the comparable period last year. Revenues increased by 1.6 million from the BARDA contract and 800,000 from a contract with NIAID. Our research and development expenses were 5.7 million during the first quarter, compared to 2.8 million last year. The change was due to an increase in spending on our development programs including NasoShield, NasoVAX, HepTcell and SparVax-L cell. General and Administrative expenses were 2.4 million during the quarter compared to 2 million last year. The change was due to an increase in public company cost, salaries and benefits, offset by decrease in merger related cost compared to the same period last year. Goodwill impairment charges of 500,000 reported during the first quarter represented a measurement period adjustment to reduce tax refund receivables acquired in connection with the PharmAthene mergers. The adjustment results did a corresponding increase in goodwill which was determined to be full impaired during the previous year and accordingly was written off as impairment in Q1. This non-cash charge has no effect on our current cash balance or operating cash flows. Net loss attributed to common stockholders for the first quarter was 5.1 million as compared to 4.7 million in the same period last year. Excluding the non-cash goodwill impairment charge, net loss attributed to common stockholders for the first quarter would have been 4.6 million. Net loss per share attributed to common stockholders for the first quarter was $0.25 compared with $0.68 in the same period for 2017. As of March 31, 2018, the company has cash and cash equivalent of 8.1 million. And now I’d like to turn the call back over to Bill. Bill?

[Bill Enright:]

Thank you, Will. We’ve had a very busy couple of months and look forward to moving our exciting programs forward. We had several near-term milestones including data read-outs expected this summer for a BARTA funded NasoShield phase 1 study, additional immunogenicity and durability of response data from our phase 2 NasoVAX study in the third quarter and additional immunogenicity and quantitative surface antigen data from our phase 1 HepTcell study in early fourth quarter. With that I’d like to open the call now for questions and answers. Operator?

[Operator:]

[Operator Instructions] And our first question comes from David Sherman with LifeSci Capital.

[David Sherman:]

I was just wondering if you could remind us of the development plan for NasoVAX going forward, and what do you see as kind of next step, next trial that will be needed down the road?

[Bill Enright:]

The NasoVAX study, as I mentioned we are continuing to get data from phase 2A study that’s ongoing right now and we’ll have that a little later this year. But next step is really to move in to a phase 2B where we’re looking at a quadrivalent study, looking at a dose escalation study. So remember that the current ongoing study is a single strain of flu, where the next study we’ll be looking at four different strains mixed together. That’s kind of consistent with the way the licensed influenza vaccines that are available right now, that are either trivalent or quadrivalent vaccines. So we need to get those data and then we’ll go from there in to a dose confirmation study. So this will allow us to look at again a number of different strains, the appropriate doses for the quadrivalent vaccine and we’ll also start getting in to some of the key age ranges that are important to people, because obviously there’s a key unmet medical need here in flu. You see in the young, kids that are less than two years old and the people that are over 65, that’s where the majority of illness occurs and the majority of deaths occur in the flu space.

[David Sherman:]

And then maybe, could just talk about cash burn expectations for the rest of the year?

[Bill Enright:]

So we continued to have cash in to 2019 and we’re sticking to the plan that we’ve put up there.

[Operator:]

[Operator Instructions] As there are no other questions at this time, I’d like to hand the call back to management.

[Bill Enright:]

Thank you very much operator. I want to thank everyone for participating this morning and listening in. We look forward to updating you again on our next earnings call. Thanks very much.

[Operator:]

Thank you. This will conclude today’s conference call. Thank you for your participation ladies and gentlemen. You may now disconnect.