Altimmune (NASDAQ:ALT) witnessed a notable uptick in its stock price during premarket trading on Tuesday, climbing approximately 10% after the close at $2.96 the prior session. The catalyst was the release of positive topline data from the company's Phase 2 RECLAIM study evaluating pemvidutide for alcohol-use disorder (AUD).
The study met its primary endpoint, demonstrating a statistically significant reduction in heavy drinking days. Patients receiving pemvidutide experienced a decrease of 1.45 heavy-drinking days per week compared to the placebo group. This outcome surpassed analyst expectations, which had anticipated a treatment effect between 0.9 and 1.1 days.
The share price movement carried significant financial implications. In April, Altimmune issued 75 million warrants exercisable at $3 per share. With the stock trading above this threshold, all warrants are now in the money. A full cash exercise could generate up to $225 million in gross proceeds, representing 42% of the company's cash and short-term investments as of April 30. These funds would be instrumental in supporting the anticipated Phase 3 trial for metabolic dysfunction-associated steatohepatitis (MASH).
However, warrant exercise would dilute existing shareholders. The warrant shares represent 38.6% of Altimmune's basic share count as of May 8, excluding pre-funded warrants and employee equity awards. Notably, exercise is not mandatory, and investors will monitor whether the stock sustains its gains during regular trading to increase the appeal of warrant conversion.
Beyond the primary endpoint, the RECLAIM study delivered robust secondary outcomes. Approximately two-thirds of patients achieved a two-level reduction in World Health Organization risk scores, compared to 34.8% on placebo. The proportion of patients with no heavy drinking days reached 42.2% versus 17.4% for placebo. Additionally, pemvidutide produced a 9.1% weight loss relative to placebo.
Safety data showed a higher incidence of gastrointestinal side effects. Nausea occurred in 44% of pemvidutide patients versus 24% on placebo, while constipation rates were 26% and 6%, respectively. Five patients discontinued due to drug-related side effects, and one serious case of low blood sodium was considered possibly treatment-related. Overall discontinuation rates were 20% for pemvidutide and 22% for placebo.
Altimmune plans to hold an End-of-Phase 2 meeting with the U.S. Food and Drug Administration to outline the registrational pathway. The findings remain topline and have not yet been peer-reviewed. Analysts at Leerink Partners described the initial efficacy data as encouraging but cautioned that comparisons with Novo Nordisk's semaglutide remain challenging.
Risks persist. The RECLAIM trial was small, limited to participants with BMI over 25, and the placebo group showed significant improvements. Larger studies could reveal reduced efficacy or new safety concerns. The potential dilution from warrant exercises adds another layer of risk for current shareholders. Market participants will closely watch whether Altimmune can maintain its momentum above the $3 mark in regular trading, which could accelerate warrant exercises and provide crucial funding for the upcoming Phase 3 program.
