-$0.25
$0.87
bear -$0.25
base $0.49
bull $0.87
margin of safety $0.30
market price* $2.20
Business condition attached to the margin of safety
The company discloses the enrolled size and budget of its pivotal 52-week Phase 3 MASH trial and shows the trial can be completed from cash on hand without further share issuance.
Altimmune is a clinical-stage drug developer built around one product candidate: pemvidutide, a once-weekly injection that activates the glucagon and GLP-1 receptors in equal measure, which the company obtained when it acquired Spitfire Pharma in July 2019. It is being developed for MASH (a fatty-liver disease that scars the liver), for alcohol use disorder (the RECLAIM Phase 2 trial, fully enrolled in November 2025, with FDA Fast Track designation) and for alcohol-associated liver disease (the RESTORE Phase 2 trial, about 100 patients). The company sells nothing. Its revenue in 2025 was about $41,000. The clinical record is real but mixed. In the 212-patient IMPACT Phase 2b trial, 58.2% and 52.1% of patients on the two doses had their MASH resolve at 24 weeks, against 19.9% on placebo. But improvement in liver scarring on biopsy (32.6% and 35.7% against 27.9%) was not statistically significant. A supplemental AI-based reading of the biopsies, and non-invasive scarring tests at 48 weeks, did show significant effects. The FDA has granted Breakthrough Therapy designation in MASH. After an End-of-Phase 2 meeting in December 2025, the company plans a 52-week pivotal Phase 3 trial starting in 2026 and aimed at accelerated approval. Core patents run to at least May 2032 and possibly May 2035, and later applications are pending. What the business costs to run. Owner earnings means operating cash flow with working-capital swings removed, stock-based pay charged as a cost and capital spending deducted. It was negative in every year from 2022 to 2025, the years the company was organised around pemvidutide's Phase 2 program: -$81.9 million, -$79.6 million, -$97.6 million and -$87.6 million, a median of about -$85 million. The first half of 2026 came in at -$44.6 million, helped by $7.4 million of interest income. Without that interest, the program costs roughly $104 million a year. Research spending had not yet stepped up for Phase 3 by June 30, 2026. What it owns. The company raised about $290 million in the first half of 2026 through a January direct offering, at-the-market sales and a larger second-quarter offering that included warrants. At June 30, 2026 it held $518.5 million of cash and marketable securities. Against that it had $53 million of liabilities, including a $35 million Hercules term loan that charges at least 9.70% interest and requires no principal payments until December 2027. Net cash was about $465 million, or $2.39 a share on 194.5 million shares. How we valued it. There is no approved product, no partner, no price and no sales record, so we cannot put an evidenced number on what pemvidutide would earn if approved. None of the three cases counts it. Instead, each case asks how much of today's net cash will be left for shareholders once the company has paid for the program it has announced, discounted at 6%. This is a business that consumes cash rather than producing it, so the loan principal is set against the cash. The 85.75 million warrants (exercise price $2.62) and the stock options are left out. They would bring in cash only if exercised. Base case, 49 cents a share. The Phase 3 trial starts in 2026 and reads out by the end of 2029. Running costs rise from about $104 million to about $110 million a year as the larger trial enrolls, and interest on the shrinking cash balance offsets part of that. About $117 million is left at the end of 2029, worth 49 cents a share today. Bear case, minus 25 cents a share. The company's own filing describes Phase 3 trials as enrolling several hundred to several thousand patients, against 212 in IMPACT. In this case the pivotal trial runs at about $125 million a year and results slip to the end of 2030. The program then costs more than the company has, and the company would have to issue more shares or draw more of its Hercules facility (up to $125 million in total) to finish. The company would effectively owe more than it is worth, by roughly $49 million in today's money, or about 25 cents a share. Bull case, 87 cents a share. Costs stay near the recent pace of about $100 million a year and the readout arrives by mid-2029. That leaves about $201 million, worth 87 cents a share today. What could make this wrong. The big upside we do not count is the drug itself. A successful Phase 3 could make pemvidutide worth far more than any of these cases. Approval would also start the clock on up to $80 million of sales-based payments owed under the Spitfire acquisition agreement. The main downside is a trial larger or slower than assumed, paid for with more new shares: shares outstanding rose from 72.4 million at the end of 2024 to 194.5 million at mid-2026. A shareholder derivative suit filed in September 2025 is still pending. The related securities class action was voluntarily dismissed in November 2025. Margin-of-safety price, 30 cents a share. This price applies only once the company discloses the size and budget of the pivotal trial and shows it can finish that trial with the cash it already has. From that price, the base case's cash of about 60 cents a share left at the end of 2029 implies roughly 20% a year, with no value given to pemvidutide itself.