Financial Performance Overview

Revenue Trends

• Total revenue decreased 25% to $7 million in Q1 2024 compared to $9.4 million in Q1 2023
  • Revenue from Amgen collaboration decreased 52% due to near completion of research programs
  • Revenue from AbbVie collaboration decreased slightly due to lower contributed employee hours
• The company has 3 active collaborations with AbbVie, Amgen, and Adaptimmune
  • These collaborations have provided $142.8 million in revenue to date
  • Additional milestone payments possible in future based on progress of programs

Expenses and Losses

• Operating expenses increased 19% to $29.7 million in Q1 2024
  • Primarily driven by higher R&D expenses related to lead program povetacicept
• Net loss increased 35% to $17.9 million compared to $13.3 million in Q1 2023
• Net loss expected to continue increasing over next several years as clinical programs advance

Cash and Investments

• Ended Q1 2024 with $362.4 million in cash, cash equivalents, and investments
• Cash balance provides funding for at least 12 months of operations
• Company will need to raise additional capital in future, likely through partnerships or equity financings

Lead Program: Povetacicept for Autoimmune Diseases

• Povetacicept targets BAFF and APRIL cytokines, plays key role in multiple autoimmune diseases
• Encouraging clinical data presented at medical conference in IgA nephropathy and autoimmune cytopenias
• Met with FDA and plans to start phase 3 study in IgA nephropathy in 2H 2024
• Also plans phase 2 study in systemic lupus erythematosus (SLE)
• Significant additional market opportunity in other disease areas

Merger Agreement with Vertex

• Entered agreement in April 2024 to be acquired by Vertex for $65 per share in cash
• Transaction expected to close in Q2 2024, will result in company becoming private subsidiary
• Requires tender of majority shares, regulatory approvals, and other closing conditions

Financial Condition and Liquidity

Cash Resources

• $362.4 million in cash, cash equivalents, and investments as of March 31, 2024
• Expects available cash sufficient to fund for at least 12 months
• Main sources of cash so far:
  • Equity offerings - $454.2 million
  • Collaboration revenue - $142.8 million
  • Debt financing
  • Merger with Nivalis - $44.1 million

Future Capital Requirements

• Does not generate product revenue currently, not expected for several more years
• Operating losses expected to continue increasing substantially
  
• Additional financing needed prior to regulatory approval and commercialization
• Equity or debt financings most likely sources of future capital
• Uncertainty around ability to raise additional capital

Equity Financing Agreements

• Entered $100 million “at-the-market” agreement in April 2023
  • Allows shares to be sold over time into public market
  • $10 million raised so far
• Completed public offering in November 2023
  
  • Raised $152.2 million in net proceeds
  • Issued common stock and prefunded warrants
    

Critical Accounting Policies

• Key policies include revenue recognition, research accruals, stock-based compensation
• Revenue recognized over time using cost-based input method
• Significant estimates required around costs to complete research activities
• Stock-based compensation expense involves Black-Scholes option valuation model

Financial Outlook

• Collaboration revenue expected to fluctuate quarter to quarter
• Operating expenses projected to increase substantially
  
• Clinical development, personnel, public company costs driving expense growth
• Multiple years until potential product revenue
• Need to raise significant additional capital prior to commercialization

So in summary, while Alpine has shown promising data for its lead autoimmune disease program, it continues to operate at a net loss due to substantial research investments. The merger agreement with Vertex offers a path to liquidity for stockholders, but there are no assurances the transaction will be completed under the negotiated terms. Alpine’s financial condition is dependent on continued capital raising and advancing the povetacicept program towards commercialization.