Shares of Altimmune (NASDAQ:ALT), a clinical-stage biopharmaceutical company, are on the move following a positive clinical readout. Investors excited about the company's potential new weight loss drug drove the stock 23% higher as of 12:34 p.m. on Wednesday.
Altimmune's weight loss drug candidate, ALT-801, is a GLP-1 receptor agonist that also activates glucagon receptors. There are other GLP-1 drugs out there that promote weight loss by regulating appetites. Boosting energy expenditure by acting on glucagon receptors, though, could give ALT-801 a unique advantage over Saxenda and Wegovy from Novo Nordisk (NYSE:NVO).
Selling anti-obesity drugs has been a lucrative business for Novo Nordisk. Saxenda's a daily injection that produces around $1.0 billion in sales and is categorized as a weight loss drug even though its main ingredient is the same as that of the company's popular diabetes drug, Victoza. It's still early, but it looks as if Altimmune's candidate could challenge Novo Nordisk's dominance in this space.
During the first part of a two-part phase 1 study that should enroll more than 80 volunteers, a 1.8 mg weekly injection of ALT-801 each week lowered volunteers' body weight by 5.4% after six weeks. Body weights among patients randomized to receive placebos increased by 0.9% on average.
Before getting too excited about Altimmune's results, you should know that weekly injections with Wegovy led to long-term weight reductions that were more dramatic than the six-week interim results Altimmune shared today. In other words, investors should probably wait and see if the weight reductions measured after six weeks are still happening when the company reports 12-week data in the third quarter.
Altimmune finished March with $226.5 million in cash after burning through $14.9 million in the first quarter. The company's cash burn rate will probably rise a great deal in 2021 as more clinical trials with ALT-801 as a treatment for different patient groups begin.
Altimmune is also running phase 2 clinical trials with AdCOVID, a potential COVID-19 vaccine booster. If ALT-801 doesn't keep delivering impressive results in larger trials, raising enough capital to fund all this activity could get extremely difficult.