Altimmune (ALT) Stock Rises On Acquisition News

Altimmune ALT Stock News

Altimmune Inc (NASDAQ: ALT) is having an incredibly strong start to the trading session this morning with early gains of more than 10%. The gains come after the company announced that it acquired an asset that brings with it a new NASH candidate. Here’s what’s happening:

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ALT Stock Climbs On Asset Acquisition

In an early morning press release, Altimmune said that it has acquired Spitfire Pharma, Inc. The key value point in this acquisition is a product candidate previously known as SP-1373, a candidate that the company has renamed ALT-801.

ALT-801 is a potent GLP-1/Glucagon receptor co-agonist that is currently being developed for the treatment of non-alcoholic steatohepatitis (NASH).

In the release, ALT said that it expects for the transaction to close in July of 2019. Of course, the transaction is subject to customary closing conditions.

Agreement Terms

Under the terms of the agreement, Spitfire shareholders will receive an upfront payment of $5 million in ALT common stock. The shareholders will also be eligible to receive an additional $8 million in future regulatory and clinical milestone payments. These milestones may be paid in either cash or common stock.

Altimmune also said that Spitfire shareholders are eligible to receive up to $80 million in sales-based milestones. Of course, the issuance of shares to cover the milestone payments will be subject to shareholder and NASDAQ approval.

Management Commentary

In a statement, Dr. Vipin K. Garg, Ph.D., President and CEO at ALT, had the following to offer:

NASH is a significant unmet need. There are no approved treatments available, and prevalence is growing worldwide as a consequence of an expanding obesity epidemic. Compelling preclinical data generated by Spitfire suggests that ALT-801 could reverse obesity, a primary cause of NASH, thereby reducing excess liver fat, inflammation and fibrosis associated with the disease. The addition of this exciting product candidate to our portfolio is a transformative transaction for Altimmune.

The above statement was followed up by David Collier, CEO at Velocity Pharmaceutical Development and Managing Director at Presidio Partners. Here’s what he had to say:

We believe strongly in the potential of ALT-801 to become an important treatment for NASH and are excited to find a partner with the resources and experience to see this candidate through clinical development.

ALT-801 offers a compelling value proposition, and we look forward to participating in its advancement as shareholders of Altimmune.

This Acquisition Is Significant

Unfortunately NASH is a devastating medical condition that comes with few treatment options. As a result, there is a severe unmet medical need for a treatment like this.

Should the treatment be approved, it will be met with strong market potential. In fact, in the coming years, the market is expected to reach a value of more than $13 billion annually. Should the candidate prove to be a strong option, it could take the lion’s share of the market, representing a massive opportunity for ALT, which has a market cap of just over $36 million.

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