Altimmune ditches COVID-19 nasal spray vaccine, halts therapeutic enrollment after trial setbacks

Five months after the FDA put its intranasal COVID-19 vaccine trial on hold, Altimmune is ditching the candidate after early trial results disappointed. And in a double dose of bad news, the company is halting enrollment on its therapeutic program.

In a phase 1 study of 80 healthy adults between ages 18 and 55, Altimmune said its vaccine hopeful did not produce expected immune responses. The failure comes amid the spread of the COVID-19 Delta variant that is ringing the pandemic alarm once again, with the World Health Organization recommending fully vaccinated people again wear masks.

Altimmune's shares tanked 35% to $10.32 in after hours trading. Jefferies analysts said the vaccine discontinuation was "definitely a disappointment but a prudent move" and Evercore analysts sounded blasé in their note, saying "no biggie" as their model relied more heavily on Altimmune's other programs, anyways. 

The clinical stage biopharma company said the vaccine researchers detected antibodies that bound the SARS-CoV-2 spike protein, and that the vaccine was able to neutralize the virus in a subset of subjects. But it wasn't enough: the percent of participants who responded to the spray, dubbed AdCOVID, was substantially lower than those for other vaccines already on the market.

With that, the company is ending the AdCOVID program. In January, the FDA put a hold on the phase 1 trial due to the need for protocol modifications and additional chemistry, manufacturing and controls (CMC) data. 

RELATED: FDA puts Altimmune's intranasal COVID-19 vaccine trial on hold

Aside from the vaccine news, Altimmune is also axing further enrollment in its phase 1/2 trial for T-COVID, its single dose intranasal therapeutic for treating early COVID-19. The company was able to complete dosing in two of the three planned dose cohorts for the trial, but it was unable to fill a third cohort to evaluate the efficacy of the treatment in patients over the age of 65, or with increased risk due to pre-existing comorbidities. 

The rollout of vaccines in the U.S. and the "decreasing incidence of disease" significantly limited the number of patients meeting the cohort three criteria, the biotech said. Altimmune will assess the future of the development following data analysis and talks with partners, including the U.S. Army Medical Research & Development Command and the Medical Technology Enterprise Consortium.

Altimmune's CEO Vipin Garg, Ph.D., tried to assure shareholders that the company still has a pipeline of other candidates that target significant unmet need. The company will focus on the development of its novel peptide-based therapeutics for obesity and liver diseases, he said. 

Jefferies analysts seemed to confer that the competitive vaccine landscape gives Altimmune an excuse to focus on other products in its pipeline that have "encouraging preliminary data, a clear development and market opportunity." 

RELATED: Altimmune starts testing long-acting rival to AstraZeneca NASH drug

The company recently posted what it said was "encouraging" 6-week interim data on early-stage weight loss drug ALT-801, he said. The company also has a peptide-based dual GLP-1/glucagon receptor candidate challenging a more advanced non-alcoholic steatohepatitis (NASH) rival from AstraZeneca. 

The clinical development of ALT-801 has been "partially derisked" by large efficacy studies from competitors in obesity and NASH, the Jefferies analysts said, pointing to Novo Nordisk's semaglutide for obesity/NASH and Eli Lilly's tirzepatide for obesity. The FDA approved semaglutide, marketed as Wegovy, earlier this month, making it the first chronic weight management treatment approval since 2014.

RELATED: Novo Nordisk, after obesity trial win for injectable semaglutide, plans test for oral version

A peptide-based dual GLP-1/glucagon receptor agonist designed to treat the metabolic dysfunction that causes non-alcoholic steatohepatitis (NASH). 

An IND for obesity is expected in the third quarter of this year, and a phase 2 52-week biopsy-driven NASH study is slated to start in the first quarter of next year, Evercore analysts said.

Despite Jefferies up-beat take, both disease areas have historically been fraught with R&D and commerical setbacks, with obesity drugs of the past hit by serious safety concerns, and NASH development being stalled by poor results across the board. Wins in both these areas will likely be hard to come by. for the biotech, and are certainly no slam dunks.

Editor's note: This story has been updated with information and commentary from Jefferies and Evercore analysts notes.