INSTITUTIONAL RESEARCH Biotechnology INITIATION REPORT Member FINRA/SIPC

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1 INSTITUTIONAL RESEARCH Biotechnology INITIATION REPORT Member FINRA/SIPC Toll Free: North Federal Highway - Suite 500 Boca Raton, FL Altimmune (Nasdaq/ALT) BUY Investment Highlights Vaccine Value Play Altimmune is developing products to stimulate robust and durable immune responses for the prevention and treatment of disease. 1) Altimmune continues to make progress with its NasoVAX seasonal influenza vaccine addressing the $2 billion US flu vaccine market. So far this year, the Company has announced positive proofof-concept data from its ongoing Phase 2a trial with its NasoVAX intranasal flu vaccine when compared with a leading competitor. Next up for Altimmune in this market will be to evaluate the two best doses from the Phase 2a trial to initiate a quadrivalent formulation Phase 2b trial addressing a wider range of healthy, elderly adults and also a dosage confirmation trial timed to overlap the 2019 and 2020 influenza season. 2) The Company is also advancing its anthrax vaccine candidates, most notably with the recent release of positive pre-clinical data for survival and immunogenicity from the Phase 2 SparVax-L program when compared against competitor BioThrax to prevent anthrax infection. Altimmune has also gained additional patent protection for its NasoShield anthrax vaccine candidate in the US, and its Phase 1 safety study is progressing well. The Company is targeting the release of data from the single dose cohort of the trial later this summer. For SparVax-L, Altimmune is seeking additional government funding to advance this program beyond this year. 3) Finally, earlier this year Altimmune released results from a Phase 1b study of its HepTcell product candidate in chronic hepatitis B infection which showed that although it was well tolerated at all doses tested, the unblended T-cell immunogenicity results were inconclusive. Next steps for the Company regarding HepTcell will be to continue to evaluate the data from the ongoing Phase 1b study and monitor the later time points, while retesting earlier clinical samples with an alternative assay (considered to be more direct and sensitive) to more clearly detect specific HepTcell signals. Altimmune intends to report additional data when available later in 2018, and provide further guidance on the HepTcell program advancement at that time. May 29, 2018 Robert M. Wasserman Senior Research Analyst rwasserman@dawsonjames.com Current Price $0.50 Price Target $2.00 Estimates F2016A F2017A F2018E Revenues($000s) $3,236 $10,738 $11,706 1Q March ,691 A 2Q June 746 3,038 3,005 E 3Q September 901 4,592 2,505 E 4Q December 688 2,809 3,505 E EPS (diluted) ($1.66) ($4.01) ($0.72) 1Q December (0.71) (0.68) (0.25) A 2Q March (0.25) (0.26) (0.15) E 3Q June (0.71) (2.05) (0.18) E 4Q September 0.01 (0.91) (0.15) E EBITDA/Share ($1.45) ($4.38) ($0.72) EV/EBITDA (x) N/A N/A N/A Stock Data 52-Week Range $0.41-$4.46 Shares Outstanding (mil.) 25.8 Market Capitalization (mil.) $12.9 Enterprise Value (mil.) $4.8 Debt to Capital (3/18) N/A Book Value/Share (3/18) $1.57 Price/Book 0.3 x Average Trading Volume (3-month) 641,000 Insider Ownership 14.3% Institutional Ownership 1.7% Short interest 1,700 Dividend / Yield $0.00/0.0% Price target and ratings changes over the past 3 yrs: Initiated - May 29, Buy - Price Target $2.00 Please find Important Disclosures beginning on Page 14. Page 1 of 15

2 Conclusion Following a recent name change and merger just last year, Altimmune shares have lagged others in its industry, perhaps due to the investors lack of familiarity with the new company and its additional vaccine and therapeutic programs. However, with a new management team and board of directors, a number of clinical programs showing progress so far this year, and a strong balance sheet backed by several significant government funding awards, we believe both long-term value-oriented and short-term event-focused investors will soon discover these undervalued shares, and thus, we are initiating coverage on ALT shares with a BUY rating and month price target of $2.00. Company Business/History Altimmune, Inc. was established as a result of the May 2017 merger of privately-held Altimmune and publiclytraded PharmAthene. Prior to the merger, PharmAthene, established in 2001, was a biodefense company engaged in Phase 2 clinical trials in developing a next generation anthrax vaccine. Altimmune is focused on the development of products to stimulate robust and durable immune responses for the prevention and treatment of disease. The Company has two proprietary platform technologies, RespirVec and Densigen, each of which has been shown in preclinical studies and early stage clinical trials to activate the immune system in distinctly different ways than traditional vaccine methods. Using these technologies, Altimmune has generated clinical product candidates which potentially represent an entirely new approach to harnessing the immune system. The Company has two programs using the RespirVec recombinant adenovirus technology: NasoVAX, an intranasally administered recombinant influenza vaccine, uses an adenovector to achieve expression of the influenza antigen in the target cell, thereby potentially stimulating a broader and more rapid immune response than traditional influenza vaccines. A planned Phase 2 program for NasoVAX started in September Initial data, released in March 2018, indicated that NasoVAX was well tolerated at all doses tested, and achieved 100% seroprotection with the two higher doses. Final data from this study will be available in Q3/2018 and the company is moving forward with continued development of a quadrivalent NasoVAX product which will be ready for clinical evaluation in early 2019; and A second RespirVec product, NasoShield, is an anthrax vaccine designed to provide rapid, stable protection after one intranasal administration. Altimmune launched a Phase 1 trial for NasoShield in the first quarter of 2018 and anticipates topline data midyear. With the support of NIAID, the Company is also developing an alternative anthrax vaccine candidate, SparVax- L, a recombinant protein-based anthrax vaccine designed to require fewer doses and have a longer shelf-life than the only currently licensed anthrax vaccine. Altimmune has demonstrated a significant improvement (two years at room temperature and six years at refrigerated temperatures) with a new lyophilized formulation, after it was shown that the shelf life of a previous liquid formulation was insufficient to meet government standards and the product was reformulated in a lyophilized (dry powder) formulation. Recent preclinical experiments have shown it to be 100% protective with a two-dose regiment (zero and 14 days) with higher toxin neutralizing antibodies than the currently licensed vaccine. Based on the Densigen platform, HepTcell is an immunotherapy for patients chronically infected with HBV. HepTcell is currently in a Phase 1 trial in the United Kingdom and South Korea in patients with chronic HBV. Preliminary results from this trial were inconclusive, and the Company is awaiting the six month follow up Altimmune 5/29/2018 Page 2 of 15

3 results, which are expected to be available in the third quarter of 2018, to determine whether to continue further development of HepTcell, including any further clinical trials. Oncosyn, a cancer immunotherapeutic, is in preclinical development. The chart below depicts Altimmune s clinical pipeline: Source: Altimmune NasoVAX NasoVAX is an adenovectored influenza vaccine candidate that is delivered intranasally. NasoVAX has demonstrated safety and the ability to induce an immune response against influenza in two Phase 1 trials in healthy volunteers. Altimmune completed enrollment of a Phase 2 clinical trial program in the fourth quarter of 2017 and reported preliminary data in March NasoVAX was well tolerated and immunogenic, and the Company plans to continue development of NasoVAX seasonal influenza vaccine with a quadrivalent study to start in the first half of Additional development of NasoVAX for the treatment of pandemic influenza is contingent on successful results in the seasonal influenza program and financial support from BARDA or other governmental agencies for additional development of a pandemic vaccine. Altimmune believes there is an opportunity to develop and market an improved vaccine to prevent influenza given the low overall efficacy of currently approved vaccines, especially in those populations with the highest needs: children under two years of age, adults older than 65 years of age and immune-compromised patients. NasoVAX is an influenza vaccine candidate that consists of a segment of the influenza viral genome packaged in an adenovector that is delivered intranasally. The power of the Company s RespirVec platform, together with the intranasal route of administration, allows NasoVAX to mimic the typical route of infection taken by influenza viruses, potentially stimulating a highly robust and broad immune response as a result. The Company believes NasoVAX has a number of important advantages over traditional vaccines, including the potential for: Rapid protection in a matter of days, rather than weeks, as demonstrated in preclinical studies; Broader protection against changing virus strains, as demonstrated in preclinical studies; Ability to elicit mucosal immunity at the site of influenza infection; Ability to elicit strong cellular immunity, a T cell response, as demonstrated in Phase 2 clinical trials; Immune activation at very low doses, as demonstrated in Phase 1 and Phase 2 clinical trials; Altimmune 5/29/2018 Page 3 of 15

4 A manufacturing process based in mammalian cells instead of chicken eggs, which allows for more appropriate glycosylation, which results in increased efficacy; and Production expected in less than half the time and at anticipated lower costs with greater worker safety compared to traditional egg-based manufacture. A Phase 2a clinical study of NasoVAX was conducted in 60 healthy young adult volunteers randomized to one of 3 doses of NasoVAX. Immunogenicity measures were also compared to those from 20 similar subjects vaccinated in an open label study of Fluzone, an injectable influenza vaccine. One hundred percent (100%) seroprotection was achieved in the two higher NasoVAX doses, compared to 95% seroprotection after Fluzone. Other antibody measurements were similar for Fluzone and the highest NasoVAX dose, and median cellular immune response 8 days after vaccination was over 5-fold higher with NasoVAX. Rates of local and systemic side effects were not statistically different than in placebo recipients and did not increase with dose. The graphs below depict seroprotection and cellular immune response for Phase 2 clinical trial results for NasoVAX: Source: Altimmune The Company s Phase 2 clinical trial program for NasoVAX for the treatment of seasonal influenza commenced in the third quarter of 2017, completed enrollment in the fourth quarter of 2017, and reported data in the first quarter of This trial extended the previous dose ranges tested and evaluated both antibody and cellular immune responses. One hundred percent (100%) of subjects in the two highest dose groups achieved seroprotective antibody levels to the matched strains and strong cellular immune responses were seen in the highest dose group. Final data to include durability of immune response is expected to be available in mid Altimmune is also planning two additional trials as part of the NasoVAX Phase 2 clinical program. One is a dose ranging trial of a quadrivalent NasoVAX vaccine in healthy adult subjects stratified by age to include healthy elderly subjects. This vaccine will include H3 and B strains in addition to the H1 influenza strain evaluated in the recent Phase 2a study. The subjects will be assessed for antibody response and other measures of immunogenicity one-month post vaccination, as well as be regularly monitored for duration of response. The Company anticipates commencing this trial in the first half of 2019 and expects immunogenicity data in the second half of 2019, with additional safety and durability data to follow. The Company plans to use the results of this trial to select dosing for a larger dose confirmation trial. HepTcell HepTcell is an immunotherapy product candidate directed against multiple hepatitis B (HBV) genotypes. HepTcell is a completely synthetic peptide product candidate based on the Company s proprietary Densigen technology which is believed may help the immune system destroy infected cells and clear chronic HBV infection. In July 2015, the Company commenced a Phase 1 trial of HepTcell in the United Kingdom and South Altimmune 5/29/2018 Page 4 of 15

5 Korea in patients chronically infected with HBV. HepTcell was well tolerated but elicited HBV specific cellular immune responses which were not significantly different than placebo. The Company plans to complete evaluation of other immune and virologic measures in these study subjects and will report the end of study results later this year. In HepTcell, specific viral peptide sequences, chosen for their ability to elicit broad human leukocyte antigen (HLA) type-independent immune responses, are coupled to a fluorocarbon chain so that, upon administration, the immunotherapy creates a short-term depot, which is believed to lead to a strong and sustained activation of the immune system. The final study product consists of a mixture of nine peptides between 32 and 40 amino acids long that are designed to be effective across the full spectrum of HBV genotypes. The peptides were selected using bioinformatics and validated using in vitro screening of immune responses from blood of HBVinfected patients. Altimmune believes that its synthetic HepTcell product candidate, if approved, could be produced by commodity peptide manufacturers around the world according to a robust and cost-effective process. Everyone s immune system responds differently to stimuli due to innate differences in HLA type, a shorthand expression for the proteins that, in part, make up the immune system and that vary from individual to individual. For this reason, organ transplants have to be matched carefully to avoid rejection. The HLA type determines how each person s unique immune system will react to immunotherapy, leading to differing levels of efficacy. The discovery of the Densigen technology, on which HepTcell is based, has potentially solved the problem of HLA restriction, with the possibility that nearly all patients may benefit from immunotherapy without a need for matching. In addition, it is believed that HepTcell has potential advantages over therapeutic vaccines under development for chronic hepatitis B (CHB) because it is based on the incorporation of highly antigenic sequences that appear to be constant across multiple HBV strains or genotypes. Initial overview of the data from the Phase 1 HepTcell trial showed: Good safety, slightly increased reactogenicity with the high dose plus IC31; and Cultured ELISpot data proved difficult to interpret, with large variations in individual subject data over time, strong signals in the placebo group with no appreciable difference between treated subjects and placebo controls. The Phase 1 study contained three control arms: 15 patients were dosed with a low dose (150 µg), 30 patients received a low dose with IC31 and a high dose pf HepTcell (500 µg), and the last 15-patient group received a high dose with IC31. Dosing through injection was at days 1, 29 1n 57; primary endpoints were safety and tolerability, secondary endpoint was T Cell response as measured by ELISpot, and an exploratory endpoint of quantitative HBsAg was examined. The Company s near-term plans for its HepTcell program include continuing Phase 1 patient follow-up as per clinical protocol and performing additional immunogenicity analyses on clinical samples. Anthrax Vaccines Candidates: NasoShield and SparVax-L Anthrax is a disease that arises from infection with a bacterial pathogen, Bacillus anthracis. Anthrax can be spread by inhalation of bacterial spores which can be released from infected livestock or livestock products; however, this is extremely rare. The greater fear, and key driver for development of anthrax vaccines, is the potential use of anthrax spores by bioterrorists. The bacterial spores are readily aerosolized and could be used against the military or civilian population. Without timely treatment, inhalation of anthrax is almost always fatal, and antibiotic treatment is significantly less effective if not initiated shortly after infection. The US government has made significant investments in ensuring that appropriate countermeasures are in place to Altimmune 5/29/2018 Page 5 of 15

6 prevent and treat these infections. Individuals at high risk, such as active duty military personnel, are routinely vaccinated as a preventative measure, and the government stockpiles adequate doses of vaccine for distribution to the broader population in case of a bioterrorism attack. BioThrax (the trade name for Anthrax Vaccine Absorbed) is a protein-based vaccine produced from culture filtrates of an avirulent, non-encapsulated strain of Bacillus anthracis. For pre-exposure prophylaxis, it is given as a series of three intramuscular injections at zero, one and six months, at which point the vaccinated subject is considered protected. These initial injections are followed by two additional injections over the next year and yearly booster immunizations thereafter. BioThrax is the only anthrax vaccine approved by the FDA and had sales of $287 million in In a BioThrax study, approximately 60% to 80% of recipients experienced injection site adverse events following the first dose of the vaccine, primarily tenderness, erythema (skin rash), edema (fluid accumulation under the skin), warmth, induration (skin thickening), pain and itching. BioThrax is currently only given to high risk individuals, such as US military personnel, and a significant number of those individuals have refused the vaccine in past voluntary programs, presumably because of the lengthy immunization procedure and documented adverse events. Altimmune s NasoShield is a preclinical vaccine product candidate based on the Company s RespirVec technology encoding the Bacillus anthracis protective antigen. In a head-to-head comparison with the existing approved anthrax vaccine in a gold-standard animal model, a single dose of NasoShield showed complete protection from inhalation anthrax and was non-inferior to multiple doses of the existing approved anthrax vaccine while providing for a more rapid and stable immune response. The Company has developed this product candidate with the support of the US Biomedical Advanced Research and Development Authority (BARDA), and, subject to the agency s continued financial and other support, launched a Phase 1 trial with NasoShield in the first quarter of 2018 and is anticipating data from this trial in mid-year In July 2016, the Company was awarded a $120.2 million, five-year contract from BARDA to advance NasoShield into clinical development, and the contract award was later increased to $127.5 million in March This study is a double-blind placebo controlled dose-escalation study evaluating safety and immunogenicity of NasoShield in healthy volunteers. It will also include a randomized open-label BioThrax comparator arm. The primary endpoint of the trial is safety; the Company will also assess immunogenicity as a secondary endpoint. The trial is expected to take approximately 18 months to complete. Previous work related to the development of NasoShield was also supported by NIAID. The chart below depicts preclinical study results for NasoShield versus BioThrax: Source: Altimmune Altimmune 5/29/2018 Page 6 of 15

7 In addition, the Company has a second anthrax vaccine candidate, SparVax-L, that is based on a recombinant protein technology encoding the Bacillus anthracis protective antigen. In a head-to-head comparison with the existing approved anthrax vaccine in a gold-standard animal model, two doses of SparVax-L showed complete protection from inhalation of anthrax and was non-inferior to two doses of the existing approved anthrax vaccine. Altimmune has also shown extended shelf life both at room temperature (at least 24 months) and refrigerated temperatures (at least 6 years) for this product candidate. Recent preclinical work also showed a greater protective antibody response than the currently licensed vaccine in that head-to-head study. In September 2014, Altimmune signed a contract with the US National Institute of Allergy Infectious Diseases (NIAID) that funded the preclinical development for SparVax-L. Data generated to date demonstrates that this recombinant protective antigen protein can be stably formulated in a lyophilized state for extended storage at room temperature, and even longer at refrigerator temperature. Formulation of SparVax-L for long shelf life also increased the potency of vaccine such that in a preclinical model greater immunogenicity was observed compared to identical doses of a previous formulation of the antigen shown to be well-tolerated and immunogenic in earlier clinical studies. The next phase of this clinical program is a demonstration of the final form of the vaccine in a single unit, dualchambered syringe designed for simpler storage and ease of use. All of the necessary components of the vaccine will be contained in a single logistics transport and storage will be greatly improved. Animal efficacy studies have demonstrated that the vaccine is efficacious even after storage at room temperature, and a repeat dose toxicology study of SparVax-L showed the vaccine to be well-tolerated. These data can be used in support of a filing with the FDA to update the SparVax IND, which is currently on clinical hold, to allow for the commencement of a subsequent clinical trial. In late 2017, the Company initiated an additional preclinical study to demonstrate that a two-dose regimen of SparVax-L was able to protect animals at least as well as the currently licensed vaccine. In fact, the Company showed that a single dose resulted in 67% survival and a twodose regimen achieved 100% survival, and also induced greater toxin neutralizing (protective) antibodies than the currently licensed vaccine. The chart below depicts preclinical study results for two dosage regiments of SparVax-L versus AVA (BioThrax) and placebo: Source: Altimmune Altimmune 5/29/2018 Page 7 of 15

8 Operations At present the Company employs approximately 30 full-time staff, including 14 individuals who hold MD or PhD degrees of the 22 who are engaged primarily in research and development activities. The Company operates out of new, enhanced facilities in Gaithersburg, Maryland and a smaller office in the United Kingdom, and currently the Company relies on third parties for the manufacture of product candidates and for preclinical and clinical studies. Intellectual Property Altimmune holds a number of patents and patent applications related to its technologies and pipeline candidates in both the US and abroad. The Company has patents issued for its RespirVec platform technology related to intranasal application of adenoviral vector vaccines in the US, Europe and Japan, with additional patent applications pending in those three jurisdictions plus in other territories, which would have an expiration date no earlier than March 2032 if all are accepted. Through an exclusive license with the University of Alabama Birmingham Research Foundation, the Company has access to a number of patents in the area of topical noninvasive application of genetic vectors in the US and Europe. Altimmune also holds a non-exclusive license of patent rights held by Janssen Vaccines & Prevention (formerly Crucell Holland) covering a method of producing an adenoviral vector stock using cell lines including the PER.C6 cell line. Finally, the Company is developing several other technologies, including fluorocarbon antigen delivery vectors, and several pipeline products including NasoShield, SparVax-L, HepTcell, Oncosyn and NasoVAX, for which the Company has been issued patents and has patent applications pending in the US, Europe and Japan. Recent Results and Outlook Altimmune recently reported financial results for its Q1/2018, including revenues of $2.7 million as compared to $0.3 million in the prior year period. The increase in revenues this year was primarily due to higher revenues from the BARDA NasoShield contract of $1.6 million, as well as an $770,000 increase in revenues recognized from the NIAID SparVax-L program. Research and Development expenses increased to $5.7 million in Q1/2018, up from $2.8 million the prior year, due to activity in the Vaccine contract programs mentioned above but also due to work on several pipeline candidates, including HepTcell and NasoVAX. General and administrative costs also increased in Q1/2018, but at a slower level, to $2.4 million from $2.0 million in the prior year. After certain non-cash impairment charges related to the recent merger with PharmAthene net loss for the quarter was $5.1 million, or ($0.25) per share, in Q1/2018, as compared to a net loss of $4.7 million, or ($0.68) per share in Q1/2017. Cash burn from operations was approximately $3.6 million in the first quarter for Altimmune, and at the end of March the Company held $8.1 million in cash on hand, as compared with $12.3 million at the start of the year. Among the key highlights for the first quarter for the Company were: Announced positive proof-of-concept data from its Phase 2a intranasal flu vaccine trial with NasoVAX vaccine when compared with a licensed injectable seasonal flu vaccine; Announced positive pre-clinical data for survival and immunogenicity from the Company s Phase 2 SparVax-L program when compared against BioThrax to prevent anthrax infection; Altimmune 5/29/2018 Page 8 of 15

9 Extended its IP protection of NasoShield in the US with a Notice of Allowance from the US Patent Office; and Consolidated multiple Gaithersburg (Maryland) sites, including laboratory buildout, into new headquarters in Gaithersburg. The Company s balance sheets for the periods Q1/2018 and Q4/2017 are shown below: Source: DJSI estimates, Altimmune Going forward, Altimmune s plans for its clinical pipeline programs are as follows: NasoVAX the Company anticipates moving this program forward clinically in the first half of next year. This summer, Altimmune expects to announce additional data results from the ongoing Phase 2a study that will include durability of the immune response six months after vaccination, measurement of mucosal antibody levels, and additional data characterizing the cellular immune response observed, compared to Fluzone, Sanofi s (SNY, Not Rated) licensed injectable vaccine. Next steps for NasoVAX for the Company will be the evaluation of the two best doses from the ongoing phase 2a study, for the purpose of initiation of a quadrivalent formulation phase 2b trial that will include a wider age range of patients including healthy, elderly adults. Subsequently, Altimmune plans a dosage confirmation trial timed to overlap the 2019 and 2020 influenza season. NasoShield Anthrax Vaccine Candidate Altimmune s Phase 1 NasoShield safety study is progressing well after a successful investigational new drug submission to the FDA in December The study, which has a similar trial design to the NasoVAX influenza vaccine trial, is evaluating the safety and immunogenicity of a single intranasal dose of NasoShield in four escalating dose cohorts, and will also test a two-dose schedule of the highest dose. The study includes a blinded placebo and open label comparator to injected BioThrax. Enrollment of the 145 patients is proceeding as planned and the Company continues to anticipate sharing data about the single dose cohorts later in summer Altimmune 5/29/2018 Page 9 of 15

10 May 29, 2018 Logistically, NasoShield is funded through a BARDA contract which is expected to provide funding through the end of the Phase 2 study if existing contract options are exercised. The two- year base period of the contract with modifications included approximately $22 million in funding and included work through phase 1 clinical results. The full value of this five-year contract includes an additional $105 million in options if fully executed. The Company anticipates that a portion of the remaining options that run through mid-2021 will be exercised later this year, provided positive Phase 1 data can be garnered. Altimmune continues to work closely with BARDA to identify and fund the next stages of program development. Regarding the SparVax-L Anthrax vaccine, Altimmune previously announced positive pre-clinical data comparing SparVax-L with BioThrax against anthrax infection. SparVax-L is funded by a government contract, in this case the Federal National Institute of Allergy and Infectious Disease agency. Work on this contract is scheduled to end later this year, but Altimmune is seeking additional government funding to further advance this program. HepTcell Immunotherapy for chronic hepatitis B Altimmune continues to evaluate previous data obtained from this clinical program and continues to monitor the later time points as per the clinical protocol. At present the Company is looking at immune responses to the specific hepatitis B antigen sequences that were part of the HepTcell peptide, retesting clinical samples with an alternative assay considered to be more direct and sensitive, and also looking at the quantitative surface antigen levels for all of the time points. The Company expects to report these data as they are available later this year, and the results of these data will determine whether to continue to advance this program or not. At the time of the Q1/2018 earnings release in mid-may Altimmune also reiterated previous guidance relating to financial results and cash flow such that adequate resources are expected to be available to last into calendar year For 2018, we are estimating that the Company will post revenues of $11.7 million, including government funding for the company s anthrax vaccine candidates, and a net loss to common shareholders of $17.7 million, or ($0.72) per share. Management Altimmune s management team and supervisory board includes: Bill Enright serves as President and Chief Executive Officer of the Company and has been a member of the Board of Directors since Prior to joining the Company, he held management positions at GenVec and Life Technologies. Dr. Scott Roberts joined Altimmune in 2012 and serves as Chief Scientific Officer. Prior to joining the Company, he held key positions at ImQuest BioSciences and Wellstat Biologics Corporation. Dr. Roberts received his Ph.D. from the Johns Hopkins School of Medicine, Department of Pharmacology and Molecular Sciences, and completed a post-doctoral fellowship at the National Cancer Institute, Laboratory of Molecular Virology. Will Brown was appointed Acting Chief Financial Officer in 2018 and will serve as the Company s principal financial officer and principal accounting officer until the appointment of his successor. Prior to joining Altimmune, he held financial positions at PwC, Rheem Manufacturing, and Redmont CPAs. Other key management at the Company includes: Dr. Bertrand Georges, Chief Technology Officer, and formerly with Immune Targeting Systems and SEDAC Therapeutics; Dr. Sybil Tasker, Chief Medical Officer and formerly with Genocea Biosciences and the US Navy; and Ori Solomon, Outside General Counsel, who is a Partner at Proskauer Rose LLP in the Private Equity and M&A Group. Altimmune 5/29/2018 Page 10 of 15

11 In addition to management team member Bill Enright, Altimmune s Board of Directors includes: Dr. Mitchell Sayare, Chairman of the Board and formerly CEO of ImmunoGen; Dr. David Drutz, formerly CEO of DARA BioSciences and Inspire Pharmaceuticals; Philip Hodges, currently Managing Partner at Redmont Capital, a private equity firm, Brigadier General (retired) Klaus O. Schafer, the former Deputy Assistant to the Secretary of Defense for chemical and biological defense and Assistant Surgeon General of the Air Force; Dr. Derace L. Schaffer, former CEO of Ide Imaging Group and founder of The LAN Group, a venture capital firm specializing in healthcare investments; and John M. Gill, former CEO of TetraLogic Pharmaceuticals and 3- Dimensional Pharmaceuticals. The Company s Scientific Advisory Board includes Dr. John Petricciani, Senior Vice President at CancerVax; and Dr. Richard Whitley, a distinguished Professor of Pediatrics, Microbiology, Medicine and Neurosurgery at the University of Alabama at Birmingham. Stock Valuation/Comparables We have compiled a comparable company group for ALT comprised primarily of smaller capitalization vaccine (non-oncology) biotechnology stocks, including BiondVax Pharmaceuticals (BVXV, Not Rated), Genocea Biosciences (GNCA, NR), Heat Biologics (HTBX, NR), VaxArt (VXRT, NR), and Vical (VICL, NR). On average, our comparable stock group shows market capitalization metrics of approximately $50 million, representing a significant premium to ALT s current market cap of $13 million, perhaps due to Altimmune s relative lack of familiarity with investors following last year s merger with PharmAthene. In addition, there are a number of similar vaccine companies with much larger valuations, including Emergent BioSolutions (EBS, Not Rated), which could be viewed as longer-term comparables for Altimmune should one or more of its pipeline candidates prove successful. However, we believe as ALT continues to obtain clinical success for its R&D programs, more investors will discover these shares, and, and therefore, we are initiating coverage on ALT shares with a Buy rating and month price target of $2.00 per share, based on the average market capitalization of our five-stock comparable group. Risk Factors In addition to normal economic and market risk factors that impact most equities and the common risks shared by Altimmune with other companies in the industry, we believe an investment in ALT involves the following risks: Reliance on key management At present, ALT relies on several key members of its management team and board of directors who have been in these key positions for an extended period of time. Should one or more of these key executives leave the Company, ALT could find it difficult to replace their long-standing knowledge of operations and industry expertise. In addition, the Company is currently seeking to appoint a new Chief Financial Officer, and there can be no assurance that this will occur in the near future. Reliance on future collaborations and partnerships To date, ALT has signed several large development contracts in the vaccine area, and is also seeking potential development collaborations and/or partnerships for pipeline R&D programs. Oftentimes in the case of government contracts, partnerships or joint ventures certain factors related to research and/or new product development may be determined by third parties and out of the control of Company management. Limited stock liquidity Trading volume in ALT on the Nasdaq exchange is comparatively light as these shares have a relatively limited history of trading compared with other healthcare stocks. As such, Altimmune 5/29/2018 Page 11 of 15

12 news regarding ALT, its target market, partners and/or competitors could lead to significant volatility in the stock price. Competitive markets The Company and its potential collaborative partners are expected to compete in its target vaccine market with a number of companies, many of which are considerably larger than the Company. There can be no assurance that the Company and its partners will be able to successfully compete and launch new products and services into these competitive markets in the future. FDA and regulatory risks ALT is subject to regulatory review for ongoing research and development efforts, including approval and review processes of the US Food and Drug Administration and potentially other international regulatory agencies. In addition, the operation of the Company's facilities will be subject to ongoing oversight and regulation, and any negative correspondence from the FDA or other regulatory agencies in the future could have an adverse effect on the ongoing operations of the Company. Lack of historic profitability ALT has not achieved operating profitability since its founding, and according to our forecasts may not be expected to do so in the near future. Although the Company maintains adequate cash reserves at the present time, there can be no assurance the Company will not need to raise additional working capital in the future should operating losses continue. Need to defend trade secrets and other intellectual property ALT currently holds patents, exclusive patent licenses or has patent applications pending on a number of its key platform technologies and processes. The Company may be required to defend its patents or patent licenses in the US and overseas in the future, and there can be no assurance these defenses will be successful. Altimmune 5/29/2018 Page 12 of 15

13 Source: Dawson James Securities, Inc. estimates; Company documents Altimmune 5/29/2018 Page 13 of 15

14 Important Disclosures: Price Chart: Price target and ratings changes over the past 3 years: Initiated Buy - May 29, 2018 Price Target $2 Dawson James Securities, Inc. (the Firm ) is a member of the Financial Industry Regulatory Authority ( FINRA ) and the Securities Investor Protection Corporation ( SIPC ). The Firm does not make a market in the securities of the subject company (s). The Firm has NOT engaged in investment banking relationships with ALT in the prior twelve months, as a manager or co-manager of a public offering and has NOT received compensation resulting from those relationships. The Firm may seek compensation for investment banking services in the future from the subject company(s). The Firm has NOT received other compensation from the subject company(s) in the last 12 months for services unrelated to the managing or co-managing of a public offering. Neither the research analyst(s) whose name appears on this report nor any member of his (their) household is an officer, director or advisory board member of these companies. The Firm and/or its directors and employees may own securities of the company(s) in this report and may increase or decrease holdings in the future. As of April 30, 2018, the Firm as a whole did not beneficially own 1% or more of any class of common equity securities of the subject company (s) of this report. The Firm, its officers, directors, analysts or employees may effect transactions in and have long or short positions in the securities (or options or warrants related to those securities) of the company(s) subject to this report. The Firm may effect transactions as principal or agent in those securities. Analysts receive no direct compensation in connection with the Firm's investment banking business. All Firm employees, including the analyst(s) responsible for preparing this report, may be eligible to receive non-product or service specific monetary bonus compensation that is based upon various factors, including total revenues of the Firm and its affiliates as well as a portion of the proceeds from a broad pool of investment vehicles consisting of components of the compensation generated by investment banking activities, including but not limited to shares of stock and/or warrants, which may or may not include the securities referenced in this report. Although the statements in this report have been obtained from and are based upon recognized statistical services, issuer reports or communications, or other sources that the Firm believes to be reliable, we cannot guarantee their accuracy. All opinions and estimates included in this report constitute the analyst s judgment as of the date of this report and are subject to change without notice. Information about valuation methods and risks can be found in the STOCK VALUATION and RISK FACTORS sections of this report. Altimmune 5/29/2018 Page 14 of 15

15 The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. Additional information is available upon request. Ratings Definitions: 1) Buy: the analyst believes the price of the stock will appreciate and produce a total return of at least 20% over the next months; 2) Neutral: the analyst believes the price of the stock is fairly valued for the next months; 3) Sell: the analyst believes the price of the stock will decline by at least 20% over the next months and should be sold. The following chart reflects the range of current research report ratings for all companies followed by the analysts of the Firm. The chart also reflects the research report ratings relating to those companies for which the Firm has performed investment banking services in the last twelve months. Analyst Certification: The analyst(s) whose name appears on this research report certifies that 1) all of the views expressed in this report accurately reflect his (their) personal views about any and all of the subject securities or issuers discussed; and 2) no part of the research analyst s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this research report; and 3) all Dawson James employees, including the analyst(s) responsible for preparing this research report, may be eligible to receive non-product or service specific monetary bonus compensation that is based upon various factors, including total revenues of Dawson James and its affiliates as well as a portion of the proceeds from a broad pool of investment vehicles consisting of components of the compensation generated by investment banking activities, including but not limited to shares of stock and/or warrants, which may or may not include the securities referenced in this report. Altimmune 5/29/2018 Page 15 of 15