Altimmune Stock Sinks As Kerrisdale Capital Announces Short Position: 'Obvious Dead End'

Altimmune, Inc ALT shares are trading lower Tuesday after short-selling investment firm Kerrisdale Capital published a new research report on the stock and announced a short position.

What To Know: Altimmune shares are up more than 250% over the last three months. The company reported positive results in early December showing that patients taking a dose of its pemvidutide lost 15.6% of their total weight after 48 weeks, but Kerrisdale Capital believes the rally will be short lived.

“Investors are in for a rude awakening: a deeper examination of Altimmune's data reveals a drug with little chance of competing against either the approved incumbents or the other GLP-1 agonists progressing through clinical trials,” the short seller said in a research note published on Tuesday.

“We don't think legitimate prospective partners want to spend hundreds of millions of dollars and years of trials pursuing an obvious dead end.”

Investors bidding up the stock are hoping the company will announce a big-pharma partnership or become an acquisition target, according to Kerrisdale, but the short seller believes the data isn’t as promising as the market is making it out to be.

“Even if pemvidutide did result in 15.6% weight-loss, that's not good enough,” Kerrisdale said.

See Also: Jim Cramer Calls Affirm ‘A Winner,’ But Not C3.ai: ‘I Can’t Recommend A Stock With No Earnings’

Competitors in the GLP-1 space, including Novo Nordic’s NVO Ozempic and Eli Lilly And Co’s LLY Mounjaro, have demonstrated superior weight loss with the additional benefit of controlling blood-sugar levels, the short seller said.

Furthermore, Kerrisdale called pemvidutide's tolerability results “atrocious” with 42% of patients discontinuing treatment. That’s not a good sign for the drug’s commercial prospects, but what’s even more worrisome is the looming phase-3 trial, Kerrisdale said, noting that the FDA requires phase-3 weight loss studies to include data from patients who discontinued treatment.

“If pemvidutide trial participants discontinue at the rate they did in phase-2 – and we see no reason why they won't – that 15.6% will end up closer to a 10% headline weight-loss number. At that level of effectiveness, the drug is toast,” Kerrisdale said.

Kerrisdale further highlighted competitive disadvantages of going up against large pharmaceutical companies with plenty of capital and experienced management teams. The short seller pointed to previous failures from the company’s top executives and noted that the chances that Altimmune could gain an edge on Novo Nordisk or Eli Lilly are slim.

Benzinga reached out to Altimmune for comment, but the company did not immediately respond.

Read Next: Eli Lilly’s Weight Loss Drug Tirzepatide Is Expanding Market Share, Analyst Outlines What Lies Ahead 

ALT Price Action: Altimmune shares were down 19.47% at $8.38 at the time of publication, according to Benzinga Pro.

Photo: PublicDomainPictures from Pixabay.