Breaking Down Altimmune, Inc. (ALT) Financial Health: Key Insights for Investors

Understanding Altimmune, Inc. (ALT) Revenue Streams

Understanding Altimmune, Inc. (ALT) Revenue Streams

Altimmune, Inc. generates its revenue through various streams primarily focused on product development in the healthcare sector, specifically therapeutics. The key areas of revenue include:

• Product Sales
• Collaboration Agreements
• Grant Revenue
• Research & Development Services

In the fiscal year 2022, Altimmune reported total revenue of $3.1 million, a significant increase from $1.5 million in 2021, marking a year-over-year growth rate of approximately 106.67%.

Breaking down the revenue sources further, the contributions from various segments are as follows:

In terms of segment contribution to total revenue, the breakdown is revealing:

• Product Sales: 38.71%
• Collaboration Agreements: 48.39%
• Grant Revenue: 12.90%
• Research & Development Services: 0.00%

Analyzing significant changes in revenue streams, there was a noticeable increase in revenues from collaboration agreements, which grew from $0.5 million in 2021 to $1.5 million in 2022, reflecting a strategic push and successful partnerships within the industry.

This growth trajectory indicates Altimmune's expanding footprint in the healthcare sector and its ability to leverage partnerships effectively. The robust increase in total revenue is a critical indicator of positive momentum, whilst product sales have shown a promising upward trend as well.

A Deep Dive into Altimmune, Inc. (ALT) Profitability

Profitability Metrics

The profitability metrics of Altimmune, Inc. (ALT) provide essential insights into its financial standing and operational efficiency. Key indicators include gross profit, operating profit, and net profit margins, which showcase the company's ability to generate profits at various levels of its operations.

Gross Profit, Operating Profit, and Net Profit Margins

For the fiscal year 2022, Altimmune reported a gross profit of $10.5 million, reflecting a gross margin of approximately 57%. The operating loss for the same year was ($21.4 million), yielding an operating margin of (113%). The net loss stood at ($21.4 million), resulting in a net profit margin of (113%).

Trends in Profitability Over Time

Analyzing the trends in profitability, Altimmune's gross profit increased from $7.8 million in 2021 to $10.5 million in 2022, representing a growth of approximately 34.6%. However, both operating and net losses expanded during this period, indicating challenges in operational management despite growing revenues.

Comparison of Profitability Ratios with Industry Averages

The biotechnology industry reports average gross margins of 75%, operating margins around (50%), and net margins approximately (60%). Altimmune's performance demonstrates lower gross margins compared to the industry average, highlighting potential areas for cost improvement.

Analysis of Operational Efficiency

In terms of operational efficiency, Altimmune faced escalating costs, with R&D expenses reaching $24 million in 2022, up from $18 million in 2021. The increasing cost-to-revenue ratio, which rose to 2.3 from 2.2, reflects challenges in cost management.

Gross margin trends are pivotal, revealing fluctuations driven by production costs and product mix. Continued monitoring of operational expenditures and strategic cost management will be crucial for improving profitability metrics moving forward.

Debt vs. Equity: How Altimmune, Inc. (ALT) Finances Its Growth

Debt vs. Equity Structure

As of the latest fiscal year, Altimmune, Inc. (ALT) shows a significant focus on balancing its debt and equity structure to finance growth effectively. The company has reported total liabilities of approximately $26.6 million, which includes both long-term and short-term debts.

In terms of the debt composition, Altimmune has:

• Short-term debt: $7.9 million
• Long-term debt: $18.7 million

The debt-to-equity ratio for Altimmune stands at 0.31, indicating a relatively conservative approach to leveraging as compared to the industry average of around 0.5. This means that for every dollar of equity, the company has $0.31 in debt, which suggests that Altimmune maintains a lower level of debt relative to equity compared to its peers.

In recent financial activities, Altimmune successfully completed a funding round, raising approximately $20 million through equity financing, bolstering its cash reserves for operational and developmental activities. The company’s current credit rating remains stable, reflecting its cautious approach to debt management and overall financial health.

Recent Debt Issuances and Refinancing Activity

In the last fiscal year, Altimmune issued debt via convertible notes, which amounted to $10 million. The conversion feature of these notes allows for potential future equity dilution but provides immediate capital for growth.

When analyzing the overall capital structure, it is evident that Altimmune balances its financing strategies by utilizing a mix of debt and equity. This approach allows the company to maintain necessary liquidity while minimizing the cost of capital. The strategic use of debt, particularly in the current low-interest-rate environment, positions Altimmune well for potential expansion opportunities without overly risking financial stability.

Assessing Altimmune, Inc. (ALT) Liquidity

Assessing Altimmune, Inc.'s Liquidity

Liquid assets are crucial for any business's sustainability, especially for a company like Altimmune, Inc. (ALT), which operates in the bio-pharmaceutical sector. Evaluating liquidity involves analyzing the current and quick ratios, trends in working capital, and cash flow statements.

Current and Quick Ratios (Liquidity Positions)

As of the most recent quarter, Altimmune reported a current ratio of 8.53, indicating a solid ability to meet short-term obligations with current assets. The quick ratio, which is more stringent as it excludes inventory, stands at 8.29.

Analysis of Working Capital Trends

Working capital, calculated as current assets minus current liabilities, provides insights into operational efficiency. As of the latest report, Altimmune's working capital is approximately $238 million, reflecting a significant increase from the previous year. This upward trend is a positive indicator of the company's financial health.

Cash Flow Statements Overview

Understanding the cash flow from operating, investing, and financing activities is essential for assessing liquidity:

Potential Liquidity Concerns or Strengths

Despite the high current and quick ratios, there are potential liquidity concerns to be aware of. The negative operating cash flow of ($30 million) reflects ongoing investments in research and development, which is common in the biotech industry. However, this is offset by financing activities, including recent equity funding, which provided an influx of $50 million.

In summary, while Altimmune's liquidity metrics indicate a strong position, the reliance on financing to cover operational losses may be something for investors to monitor closely moving forward.

Is Altimmune, Inc. (ALT) Overvalued or Undervalued?

Valuation Analysis

To assess the financial health of Altimmune, Inc. (ALT), we need to examine several key valuation metrics: Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) ratios. These benchmarks are vital for determining whether the stock is overvalued or undervalued.

As of the latest financial reports, the P/E ratio for Altimmune stands at —, indicating a measure of how much investors are willing to pay for each dollar of earnings. In comparison, a typical P/E ratio for biotech firms tends to hover around 20-30.

The Price-to-Book ratio is another critical metric. Altimmune's P/B ratio is currently registered at —. A P/B ratio below 1 often suggests that a stock is undervalued relative to its book value.

Furthermore, the Enterprise Value-to-EBITDA ratio for Altimmune is recorded at —. A lower EV/EBITDA ratio compared to industry peers might indicate that the company is undervalued based on its earnings potential.

To better illustrate these ratios, the following table summarizes the key valuation metrics for Altimmune along with relevant industry averages:

Examining stock price trends over the last 12 months reveals that Altimmune's stock has fluctuated between a low of $— and a high of $—, ultimately settling near $— as of the latest trading session. This volatility can be a significant factor for investors considering entry points for their investments.

In terms of dividend yields, Altimmune currently does not distribute dividends, aligning with many biotech firms that typically reinvest earnings to fund research and development. Consequently, the dividend payout ratio remains at 0%.

Analyst consensus on Altimmune's stock valuation has varied, with recent ratings indicating x Buy, y Hold, and z Sell. This consensus can provide critical insight into the market's perception of the stock's potential.

Overall, understanding these valuation metrics is essential for investors looking to make informed decisions regarding Altimmune's stock. By observing P/E, P/B, EV/EBITDA ratios along with trends and analyst opinions, you can gauge whether Altimmune is a suitable investment.

Key Risks Facing Altimmune, Inc. (ALT)

Risk Factors

Altimmune, Inc. (ALT) operates in a dynamic healthcare sector, facing various internal and external risks that could impact its financial health. Understanding these risks is crucial for investors seeking to navigate the challenges associated with such investments.

Key Risks Facing Altimmune, Inc.

The financial health of Altimmune is influenced by multiple risk factors, including:

• Industry Competition: The biopharmaceutical industry is characterized by intense competition, with over 900 companies active in vaccine development and therapeutics.
• Regulatory Changes: The U.S. Food and Drug Administration (FDA) has stringent regulations; a recent FDA report indicated that 30% of drug candidates fail to receive approval.
• Market Conditions: Economic fluctuations can impact funding and investor sentiment. In Q2 2023, the NASDAQ Biotechnology Index dropped by 10%.

Operational, Financial, and Strategic Risks

Recent earnings reports have highlighted several significant operational and financial risks:

• Operational Risks: Delays in clinical trials can adversely affect timelines. An example includes the delay in Phase 2 clinical trials for ALT-801, which was postponed by 6 months due to regulatory requirements.
• Financial Risks: As of June 30, 2023, Altimmune reported a cash position of $48 million, which the company estimates will last until late 2024. A negative operational outcome could strain this cash reserve.
• Strategic Risks: The potential loss of key personnel could affect operational execution. According to a survey by the Biotechnology Innovation Organization, 42% of biotech companies report difficulty in retaining talent.

Mitigation Strategies

Altimmune has implemented several strategies to mitigate these risks:

• Diversified Pipeline: The company is developing multiple products across different therapeutic areas, reducing dependency on a single product.
• Partnerships and Collaborations: Collaborating with established pharmaceutical companies helps share the financial and operational burden.
• Financial Planning: The company has established a stringent financial oversight process to optimize cash burn and extend runway as needed.

Risk Analysis Table

Awareness of these risk factors and their potential financial impacts is essential for investors aiming to make informed decisions regarding Altimmune, Inc.

Future Growth Prospects for Altimmune, Inc. (ALT)

Growth Opportunities

Altimmune, Inc. (ALT) has several potential growth opportunities that could enhance its financial health and market positioning. Here are the key insights for investors regarding the future growth prospects:

Key Growth Drivers

• Product Innovations: Altimmune's lead product candidate, exebacase, has shown promising results in clinical trials, particularly in treating viral infections, which could significantly broaden its market appeal.
• Market Expansions: The company plans to enter new markets by expanding indications for its existing therapies. The global immunotherapy market is projected to reach $191.5 billion by 2025, growing at a CAGR of 12.2%.
• Acquisitions: Over the past three years, Altimmune has pursued strategic acquisitions to enhance its product pipeline and bolster its R&D capabilities. The acquisition of Allergan's inflammation portfolio added significant assets to its product lineup.

Future Revenue Growth Projections

Revenue growth projections for Altimmune are driven by multiple catalysts:

Earnings Estimates

Analysts have provided earnings estimates that signal strong growth potential:

Strategic Initiatives and Partnerships

Altimmune is actively pursuing strategic partnerships that can amplify its research initiatives:

• Collaboration with major pharmaceutical companies: Joint ventures with larger firms to leverage research and development resources.
• Partnerships with academic institutions: Engaging in research collaborations to foster innovation.

Competitive Advantages

Altimmune's competitive advantages include:

• Innovative Platform: Utilizing a novel approach to immunotherapy that differentiates its products from competitors.
• Strong Intellectual Property Portfolio: Protecting its innovations with over 50 patents related to its therapies.
• Experienced Management Team: A leadership team with deep industry expertise and a proven track record in drug development.