The pharmaceutical industry is known for its capacity to generate significant returns for patient investors, especially in cases of innovative therapeutic breakthroughs. Altimmune, Inc. (NASDAQ:ALT) is a clinical-stage biopharmaceutical company with several promising candidates in the pipeline. ALT stock is up over 340% in the past six months on investor enthusiasm for the company. Despite a lucrative pipeline, ALT stock has been riding a volatility wave since Kerrisdale Capital revealed a short position recently.
Promising Pipeline
Altimmune is a clinical-stage biopharmaceutical company headquartered in Gaithersburg, MD. The company focuses on the development of novel peptide-based therapeutics for the treatment of obesity and liver diseases.
The company’s lead product candidate, Pemvidutide, is a GLP-1/glucagon dual receptor agonist being developed for treating obesity and metabolic dysfunction-associated steatotic liver disease (MASLD). In addition, Altimmune is developing HepTcell, an immunotherapeutic designed to achieve a functional cure for chronic hepatitis B.
Zealand Pharma and Boehringer Ingelheim have recently reported promising results from a study testing their drug, Survodutide, on patients with MASLD. The positive results have caused a significant increase in the biotech stock market, particularly for Altimmune, which uses the same mechanism in Pemvidutide.
Recent Volatility
Altimmune’s stock has seen a remarkable growth of over 340% in the past six months, driven by the promising potential of Pemvidutide. Trading volume in Altimmune has been above average, with a bullish deviation evident in option flow.
However, ALT stock recently experienced a 20% drop due to Kerrisdale Capital’s announcement that they were shorting the stock, claiming that Altimmune’s only drug is “going to bomb.” In response, both Jefferies and B.Riley analysts defended Altimmune, arguing that the Kerrisdale report is light on substantial evidence and shows misunderstanding or miscategorization of data related to Pemvidutide.
Moreover, B. Riley analyst Mayank Mamtani maintained a Buy rating for Altimmune, with a $20 price target, suggesting the dip in the stock offers a promising buying opportunity, expressing that the perceived risks are already factored in the current price.
Is ALT a Buy?
ALT trades at the higher end of the 52-week range of $2.09 to $14.84, with bullish technical indicators – above the 20-day moving average price of $10.61 and a 50-day moving average price of $9.52. Valuation metrics can be difficult to judge for biopharma companies with promising drugs still in the research pipeline. Currently, the stock is trading at a price-to-book ratio of 3.95x, higher than its 5-year historical average of 2.14x.
Analysts following ALT stock are bullish, with analysts at Piper Sandler highlighting it as a top biotech stock to own in 2024. ALT is rated a Strong Buy based on five Buys and one Hold rating. The average price target is $24, representing an upside of 117.2% from current levels.
Final Analysis
While Altimmune has faced volatility recently, expert opinions and the promising potential of the company’s drugs suggest a positive trajectory. The recent drop in stock price, seen by some analysts as an unwarranted sell-off, could present a strategic buying opportunity for investors.
However, potential investors should consider the inherent risks associated with biotech investing, including regulatory hurdles, uncertain clinical trial outcomes, and market competition, which could affect Altimmune’s future performance and stock valuation.
