A class action lawsuit was filed against Altimmune, Inc. (NASDAQ:ALT) on May 6, 2024. The plaintiffs (shareholders) alleged that they bought ALT stock at artificially inflated prices between December 1, 2023 and April 26, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Altimmune stock during that period can click here to learn about joining the lawsuit.
Altimmune is a clinical-stage biopharmaceutical company engaged in the discovery and development of peptide-based therapies for the treatment of obesity and metabolic dysfunction-associated steatohepatitis (MASH). Its lead candidate is pemvidutide, a GLP-1/glucagon dual receptor agonist, which helps in reducing blood sugar levels and promotes weight loss. Altimmune’s claims about pemvidutide as a potential competitor against other GLP-1 weight loss drugs are at the heart of the complaint.
Altimmune’s Misleading Claims
The plaintiffs maintain that Altimmune and three of its senior officers (Individual Defendants) deceived investors by repeatedly making false and misleading public statements about the company’s business prospects during the Class Period.
As per the complaint, the company stated in a press release that the MOMENTUM clinical trial had shown favorable weight loss results at 48 weeks of receiving pemvidutide at varying doses. Furthermore, in a press release, the CEO stated that the impact of weight loss on patients for the 2.4 mg dose was significant. He also said, “For example, 48% of subjects on the 2.4 mg dose with baseline obesity no longer had obesity at the end of the 48-week trial…”
Moreover, the CEO concluded that the magnitude of weight loss, and reductions in triglycerides, LDL cholesterol, and blood pressure shown by the trial alongside the safety profile were good reasons to believe that pemvidutide was different than the other incretin-based therapies.
Here’s How the Truth Was Revealed
The lawsuit accuses the Defendants of omitting truthful information about the significance of the MOMENTUM trial and ancillary issues from SEC filings and related material. Accordingly, the Defendants allegedly caused the Altimmune stock to trade at artificially inflated prices during the time in question.
The information became clear on events that occurred on February 13, 2024 and April 29, 2024. On February 13, short seller Kerrisdale Capital released a report stating that further examination of Altimmune’s trial data showed that the readings were not good enough to compete against the approved incumbents or other GLP-1 agonists that are undergoing clinical trials.
The 15.6% weight loss claim of pemvidutide was lower than that offered by other drugs, such as semaglutide (Ozempic) and tirzepatide (Mounjaro). Plus, the other drugs had the potential to control blood sugar, which pemvidutide did not. The news sent ALT shares spiraling down 18.6%.
Later, on April 29, a Bloomberg report mentioned that research firm Guggenheim Securities’ analyst Seamus Fernandez downgraded his rating for ALT stock to Hold from Buy, sending shares down nearly 12%. The firm cited that it was increasingly unlikely that Altimmune’s lead candidate, pemvidutide, would secure a partnership.
Year-to-date Altimmune stock has lost over 43%, causing massive damages to shareholders’ returns.
