The Altimmune (NASDAQ: ALT) stock price has been in a strong uptrend in the past few months. It bottomed at $2.07 in October, and the shares have surged by over 475% to its highest level since February. This rally has brought its total market cap to more than $629 million.
Why is ALT shares soaring?Altimmune share price has been in a strong uptrend in the past few months as demand for weight loss drugs continued rising. Its drug, known as Pemvidutide, which it acquired in 2019, has shown substantial promise, as I wrote here.
In a statement, the company said that the drug achieved a mean weight loss of 15.6% on 2.4 mg dose at 48 weeks. Over 30% of the subjects had 20% more weight loss on 2.4 mg dose at 48 weeks. As a result, analysts believe that its drug could be a game changer in the fast-growing weight loss industry.
This is an industry that is now dominated by the likes of Eli Lilly and Novo Nordisk, the Danish pharmaceutical company. Therefore, if the company’s results continue being encouraging, I see a situation where it can be acquired by a bigger company.
As I wrote recently, Pfizer’s ambitions to enter the weight loss industry ended after a drug it was working on failed.Pfizer, whose stock has been crashing, could make a bid for Altimmune in a bid to compete with Novo and Lilly.
It is not alone. In Switzerland, companies like Novartis and Roche have also been left in the dust in an industry that they were working on. In 2013, Roche ended a trial of a diabetes drug for safety reasons. Similarly, Novartis ended a trial for its weight loss drug in 2023.
The case for Altimmune being acquired has been solidified by the recent deals in the healthcare sector. Johnson & Johnson acquired Ambryx this week while Pfizer recently bought Seagen. Other big pharma companies like Merck, Abbvie, and GSK have all spent on acquisitions.
What next for ALT stock?
Turning to the weekly chart, we see that the ALT stock price has jumped in the past eight straight weeks. In this period, the Average Directional Index (ADX) has jumped to over 40, signaling that th trend is still strong. The stock has also remained above the 50-week Exponential Moving Average, which is a bullish sign.
Therefore, the outlook for the stock is bullish, with the next point to watch being at $17.15, the highest swing in January last year. Still, if I had a position in the stock, I would start to scale my position down.
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