Dilution Fears Return: Why ALT Stock Is Getting Hit Again

• The offering is at a 13.5% discount to the stock’s closing price on Wednesday.
• Altimmune plans to use the proceeds to support its Phase 3 trial of Pemvidutide in MASH, a liver disease.
• The Phase 3 trial is expected to test multiple doses of Pemvidutide over 52 weeks. 

Shares of Altimmune Inc. (ALT) fell about 13% in pre-market trading on Thursday after the biotech company priced a $225 million public offering at a discount to its previous close, dampening investor sentiment.

The company announced a public offering of roughly 64.3 million shares of common stock, along with warrants to purchase the same number of shares. Additionally, certain investors can opt for pre-funded warrants covering up to 10.75 million shares, each warrant paired with a common stock warrant. The combined offering price is set at $3 per share and accompanying warrant, or $2.999 for pre-funded warrant packages, Altimmune said.

This represents a 13.5% discount to ALT stock’s closing price of $3.47 on Wednesday.

Altimmune plans to use the proceeds to support its Phase 3 trial of Pemvidutide in metabolic dysfunction-associated steatohepatitis (MASH), a severe liver disease.

Earlier in January, the firm announced a registered direct offering of about 17 million shares to raise around $75 million.

What’s The Status Of The Phase 3 Trial?

In January, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation for Pemvidutide. The designation is intended to accelerate the development and review of treatments that show strong early evidence of meaningful improvement over existing options. The company also confirmed alignment with the FDA on Phase 3 trial plans following its end-of-Phase 2 meeting.

The Phase 3 trial is expected to test multiple doses of Pemvidutide over 52 weeks, using liver biopsy-based endpoints to potentially support quick approval. The company has also submitted a request for scientific advice from European regulators.

How Did Retail Traders React?

Retail sentiment on Stocktwits changed to ‘neutral’ from ‘bullish’ a day earlier. The update saw message volumes on the platform increase by 182% over a 24-hour period.

One reader called it a “horror story.”

Another user expects more dilution.

The stock has declined around 10% so far this year.

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