Analyst still sees potential in Altimmune obesity drug after shares plunged on dropout data

Altimmune’s share price took a battering yesterday as investors reacted to interim data from its obesity drug that revealed a high level of discontinuations. But one analyst group says the drug could still compete with Novo Nordisk’s blockbuster-to-be Wegovy.

Yesterday’s readout on pemvidutide showed a dropout rate of 24%, with around half of these withdrawals attributed to gastrointestinal adverse events like nausea and vomiting. The discontinuation rate in the placebo group was slightly higher at 28%. Unlike other trials of other incretin-based drugs, protocols for the phase 2 trial didn’t allow for doses to be reduced due to intolerability, yesterday's press release about the data noted.

The readout was enough to spook investors, who sent the stock plummeting 55% to $4.95 by the end of the day. The stock opened a further 10% down at $4.48 this morning.

But in a note yesterday afternoon, Evercore analysts didn’t sound deterred. “While the world is focused on dropouts, we were and remain focused on the shape of the (weight loss) curve,” they wrote.

The 24-week analysis of the 160 participants in the phase 2 MOMENTUM trial showed mean weight loss of 7.3%, 9.4% and 10.7% for individuals taking the 1.2 mg, 1.8 mg and 2.4 mg doses, respectively. This compared to 1% mean weight loss among the placebo cohort.

Pemvidutide is a GLP-1/glucagon dual receptor agonist designed to imitate the effects of diet and exercise on weight loss. The hope is that pemvidutide can take on Novo Nordisk’s peptidic GLP-1 receptor agonist, Wegovy. Wegovy has been shown to help patients achieve and sustain an average of 15% weight loss for 68 weeks, meaning pemvidutide has a way to go to seriously challenge Novo Nordisk’s blockbuster-to-be.

While 15% weight loss over one year “may be a stretch (unless the mean shifts down dramatically towards the lower bound of the confidence interval),” data from the 1.8 mg dose suggests it could cross over with Wegovy at the 28-week readout, the Evercore analysts stated. “We think it’s possible for the 2.4 mg dose to slide into Wegovy-like weight loss at 48 weeks, but it could cross before,” they wrote.

“As for dropouts, this may be partially mitigated by strategies like dose titration or downward dose adjustment, though that is likely to result in slightly lower weight loss of ~0.35%,” the analysts wrote.

Wegovy and Novo Nordisk's other GLP-1 drug Saxenda brought in a combined $2.5 billion in the obesity indication alone in 2022, despite well-publicized supply constraints. With Eli Lilly’s tirzepatide on the fast track to potential FDA approval and AstraZeneca, Amgen and Novartis all working on earlier-stage obesity candidates, Altimmune will have a fight on its hands to gain a share of the market.