Noninvasive Testing And MASH Breakthroughs Will Unlock Major Long Term upside

Catalysts

About Altimmune

Altimmune is a clinical stage biopharmaceutical company developing pemvidutide, a dual GLP-1 and glucagon agonist targeting MASH, alcohol use disorder and alcohol-associated liver disease.

What are the underlying business or industry changes driving this perspective?

• Imminent 48 week IMPACT data and a granted in person end of Phase II FDA meeting position pemvidutide to move rapidly into a flexible Phase III program, with the goal of accelerating time to pivotal data and potential future revenue.
• Compelling early efficacy in MASH, including rapid resolution and strong antifibrotic and anti inflammatory signals at 24 weeks, supports a potential best in class profile that may enable premium pricing and higher peak sales.
• Growing regulatory and clinical adoption of noninvasive tests and AI based biopsy assessment directly aligns with Altimmune trial design, which may streamline approval pathways, reduce development risk and improve returns on R&D spend.
• Expansion of pemvidutide into AUD and ALD, both large unmet need markets with no approved ALD therapies, creates meaningful optionality for label breadth and volume driven revenue growth beyond the core MASH indication.
• Strengthened balance sheet, diversified financing tools and experienced commercial and medical leadership provide resources and execution capability to advance multiple late stage programs simultaneously, with the potential to support future earnings leverage and margin expansion as trials transition to commercialization.

Assumptions

This narrative explores a more optimistic perspective on Altimmune compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Altimmune's revenue will grow by 2126.0% annually over the next 3 years.
• The bullish analysts are not forecasting that Altimmune will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Altimmune's profit margin will increase from -419575.0% to the average US Biotechs industry of 16.2% in 3 years.
• If Altimmune's profit margin were to converge on the industry average, you could expect earnings to reach $35.8 million (and earnings per share of $0.28) by about December 2028, up from $-83.9 million today.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 122.5x on those 2028 earnings, up from -4.8x today. This future PE is greater than the current PE for the US Biotechs industry at 20.7x.
• The bullish analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.06%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• If the pivotal 48 week IMPACT data or subsequent Phase III results fail to replicate the early efficacy and antifibrotic signals seen at 24 weeks, pemvidutide could lose its perceived best in class profile in MASH, reducing the probability of approval and materially constraining long term revenue growth.
• Regulatory momentum toward noninvasive tests and AI based biopsy assessment may stall, diverge between the FDA and EMA, or favor different NITs and AI platforms than those embedded in Altimmune trial designs. This could force protocol redesigns, delay approvals and increase development costs, thereby pressuring earnings and net margins.
• Rapidly intensifying competition from GLP 1s, dual and triple agonists, and emerging combinations in obesity and MASH could erode Altimmune pricing power and formulary access despite a differentiated profile. This could lead to lower than expected net pricing, slower uptake and structurally weaker operating margins.
• The expansion into AUD and ALD assumes that dual glucagon and GLP 1 agonism will translate into meaningful reductions in heavy drinking days and liver outcomes. However, if RECLAIM and RESTORE fail to show clinically compelling or durable benefits, the multi indication strategy could unravel, eliminating anticipated diversification of revenue and limiting future earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Altimmune is $28.0, which represents up to two standard deviations above the consensus price target of $17.75. This valuation is based on what can be assumed as the expectations of Altimmune's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $28.0, and the most bearish reporting a price target of just $1.0.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2028, revenues will be $220.6 million, earnings will come to $35.8 million, and it would be trading on a PE ratio of 122.5x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of $3.9, the analyst price target of $28.0 is 86.1% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.