Altimmune shares plunge 16% on $75M stock offering pricing
Clinical-stage biotech prices direct offering at 29% discount to fund Phase 3 MASH trial
Altimmune shares plunged as much as 16% in premarket trading on Wednesday after the clinical-stage biotechnology company announced a $75 million registered direct offering priced at a significant discount to the previous day's closing price.
The Maryland-based company will sell 17,045,454 shares of common stock at approximately $4.40 per share, representing a 29% discount to Tuesday's close of $6.18. The offering creates roughly 14% dilution to existing shareholders, with Altimmune currently having approximately 104.3 million shares outstanding.
The steep pricing discount triggered an immediate market reaction, with the stock down 15.86% to $5.21 in premarket trading. The decline comes after the shares surged 71% in January, driven largely by the U.S. Food and Drug Administration's Breakthrough Therapy Designation for pemvidutide, the company's investigational treatment for metabolic dysfunction-associated steatohepatitis (MASH).
Technical indicators had already signaled that the stock was in overbought territory prior to the offering announcement. Various technical analyses showed the 14-day Relative Strength Index ranging from 73 to above 82 in recent days, levels that typically precede corrections. The sharp January rally had pushed the stock well above its 50-day moving average of $4.56.
Altimmune said it intends to use the net proceeds from the offering to fund preparation for its upcoming Phase 3 trial of pemvidutide for MASH, along with working capital and general corporate purposes. The dual glucagon/GLP-1 agonist recently demonstrated positive Phase 2b 48-week topline data, positioning it as a potential competitor in the growing obesity and metabolic disease treatment market.
Despite the near-term pressure on the stock from the discounted offering, analysts maintain a largely positive outlook on the company's prospects. The current consensus rating is a "Buy" or "Strong Buy," with an average price target of $17.75—more than double Tuesday's closing price. Barclays initiated coverage with an "Overweight" rating and $20 price target, reflecting confidence in pemvidutide's potential.
The MASH market represents a significant commercial opportunity, with no approved treatments currently available for the liver disease that affects millions of patients worldwide. Altimmune's Breakthrough Therapy Designation could accelerate the development timeline and provide regulatory advantages.
However, the substantial dilution from the offering raises questions about the company's balance sheet strategy. With minimal revenue—the company reported just $20,000 in trailing twelve-month revenue and an operating margin of negative 4,172%—Altimmune remains dependent on equity financing to fund its clinical programs. The company had approximately $590 million in market capitalization as of Tuesday's close.
Institutional investors hold about 40% of Altimmune's shares, suggesting that Wall Street maintains interest in the stock despite the volatility. The company's management emphasized that the capital raise would "fund preparation for its upcoming Phase 3 trial" while continuing to focus on "delivering meaningful impact for patients and long-term value for shareholders."
The offering is expected to close around January 29, 2026. Investors will be watching closely for updates on the Phase 3 trial design and timeline, as well as any additional partnerships that could help fund development without further shareholder dilution.