Altimmune, Inc.
Q2 2018 Earnings Call Transcript

Published: 15 Aug 2018

[Operator:]

Good morning everyone and welcome to the Altimmune Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will open the call for your questions. As a reminder, the audio of this call is being recorded and is being webcast live. I would now like to turn the conference over to [Indiscernible]. Please go ahead.

[Unidentified Company Representative:]

Thank you, Andrea [ph] and thank you everyone for participating in today’s second quarter 2018 earnings conference call. Leading the call today will be Bill Enright, Chief Executive Officer of Altimmune. Also participating on the call today is Will Brown, Altimmune’s Acting Chief Financial Officer. After the prepared remarks, we will open the call for a question-and-answer session. A press release with the company’s second quarter 2018 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 the 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, issued last night and is now available on our website. Any statements made on this conference call speak only as of today’s date, Wednesday, August 15, 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. With that, I would like to now turn the call over to Bill Enright, CEO of Altimmune. Bill, please go ahead.

[Bill Enright:]

Thank you Moni [ph] and good morning everyone. We are pleased to be here today to provide you with the second quarter financial and corporate update. Joining me on the call today is our Acting Chief Financial Officer, Will Brown, who will review our second quarter 2018 financials after which we will open the call for Q&A. This quarter has been very active on a number of fronts. First, we diligently improved our capital structure by restructuring our agreements with investors in our Series B financing. Second, we adjusted our organization to reflect our operating realities with changes to both the board and management team. Finally, we continue to move our clinical development programs forward. Let me go into a bit more detail. On the capital restructuring front, we renegotiated our agreements with the investors in our Series B financing round to issue shares of common stock to these investors as repayment of the final installment of the Series B preferred stock and to terminate essentially all outstanding warrants held by them. As a result, our capital structure is much cleaner and better positions us to pursue additional financing, which Will is going to discuss in more detail. Our organizational changes also reflect our nimble adjustment in operations. Of note, we welcomed a new Chief Business Officer, José Ochoa in July. José brings with him over 25 years of experience in structuring, negotiating and completing complex and accretive transactions including joint ventures, partnerships, mergers, acquisitions, debt financings, licensing and restructurings. We will rely heavily on his insights as we weigh all of our options on all fronts moving forward. Also, we congratulated Mitchel Sayare as he was appointed as Executive Chairman of the Board. Mitchel joined our board in April of 2010 and was appointed Chairman earlier in 2018. As the former Chairman and CEO of ImmunoGen, a publicly traded biotech company, Mitch is very experienced in all aspects of running a development stage company. On the financial front, we are actively searching for a new CFO, but are quite pleased to have Will Brown stepping in in that role and we haven’t missed a beat [ph]. Will has been a consultant to several private and public companies in a variety of accounting and tax matters and prior to that, he was an audit manager at PWC. Will is well respected, extremely capable finance specialist and we are pleased to have him on our team. Finally, and most importantly, we haven’t taken our eye off that development pipeline. We remain on track to announce data this quarter for both NasoVAX and NasoShield. In our NasoVAX program, clinical evidence on NasoVAX’s efficacy and durability continues to build. We expect to announce additional data on the mucosal antibody levels present right at the site of infection in the nose very soon. Additionally, we will test the immune response at later time point’s upto six months after vaccination. This is an important differentiator from the existing vaccines in the market place right now. We anticipate using these data and information as we move forward in the design of additional Phase 2 clinical trials. In our NasoShield program we remain on track to announce safety and immunogenicity data later in the third quarter on part A the single dose, dose escalating cohorts. We expect to announce data from Part B, the two dose cohort in the fourth quarter of this year. As a reminder, this program is funded through a $127.5 million 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. We are pleased with the progress that we are making both on our clinical programs and organizationally and look forward to announcing additional data over the balance of the year. With that, it is my pleasure to turn the call over to Will for an update on our financials. Will?

[Will Brown:]

Thanks Bill and good morning everyone. For today’s call I will provide an update regarding our second quarter 2018 financial results and also discuss our financing strategy. Altimmune revenues for the second quarter of 2018 were 2.4 million consisting of research, grants and contracts from both BARDA and NIAID for our anthrax vaccine product candidates. Revenues decreased by 600,000 when compared to Q2, 2017 due primarily to a decrease in research and development cost related to our BARDA program. The decrease was driven by lower manufacturing cost related solely to the timing of the program development activities. Research and development expenses were 4.9 million for the second quarter, compared to 5.3 million in the same period of 2017. The decrease is due to the aforementioned reduction in BARDA expenditures plus spending for remaining programs increased slightly when comparing Q2, 2018 to Q2, 2017. General and Administrative expenses were 2.9 million for the second quarter compared to 1.8 million for the same period in 2017, the increase was primarily the result of an increase in professional services, legal fees and labor costs. Net loss attributable to common stockholders for the three months ended June 30, 2018 was 9.8 million compared with 3.2 million in the same period of 2017. The loss represents a $0.34 loss per share. Net loss increased primarily due to a $5.2 million change in the fair value of warrant liability including loss on exchange. The warrant exchange is part of our three point strategy to finance the company going forward. Part 1 was retiring the outstanding warrant issued with our 2017 Series B financing. Due to the sustained decline in our share price, the anti-dilution features of those warrants impaired our ability to raise additional funds through equity offerings. In the past months, we successfully reached agreements with investors to retire 97% of these warrants using a mix of cash, debt and common shares, part of which is subject to a shareholder vote which we are seeking at our annual meeting on August the 30th. This shareholder meeting is Part two of our strategy as we must increase the number of authorized shares to have sufficient quantities available for an equity round and also other corporate uses. Additionally, we are seeking advanced approval for a reverse stock split should we need it to maintain NASDAQ listing requirements. Finally, Part three of our strategy is to close on the unit offering in late Q3 of Q4 which we expect will provide funds to advance our programs to the next milestones. We publicly filed a registration statement on July 30 in preparation for this offering. As of June 30, 2018 we had approximately 4.8 million in cash and cash equivalents. We believe that this amount together with committed funding and expected revenue and tax refunds is sufficient to support our operations through the fourth quarter of 2018. Subsequent to June 30, we received our United Kingdom R&D tax credit of approximately 1.1 million. For further details on our financial statements, including the financial results for the three and six months period ended June 30, 2018 and 2017 please refer to our Form 10-Q filed with the SEC yesterday. And now, I’d like to turn the call back over to Bill. Bill?

[Bill Enright:]

Thank you, Will. We’d had a busy couple of months and look forward to continuing to move our promising clinical programs forward. We are expecting several near term milestones including additional immunogenicity and duration of immune response data from our Phase 2 NasoVAX study later in this quarter. Data readouts on the single dose cohorts later in the third quarter for BARDA funded NasoShield Phase 1 study, additional phase 1 NasoShield data on the 2 dose response in the fourth quarter and final data from our phase 1 HepTcell study in the early fourth quarter. With that, I would like to open the call for Q&A. Operator?

[Bill Enright:]

Thank you. And thanks everyone for listening today. We look forward to continuing to update you on a regular basis on our next earnings call.

[Operator:]

And that does conclude today’s conference again. Thank you for your participation.