Avalo Announces Q3 2024 Financial Results and Business Updates

15 November 2024
Avalo Therapeutics, a biotechnology firm specializing in immune system disorders, has made strides in its research and business operations during the third quarter of 2024. The company, listed on Nasdaq as AVTX, has reported positive developments and financial health updates.

One of the significant achievements of the quarter was the commencement of the Phase 2 LOTUS trial for AVTX-009, targeting hidradenitis suppurativa (HS). HS is a chronic inflammatory skin condition characterized by painful lumps, abscesses, and tunnels in areas such as the armpits, groin, and buttocks. This condition severely affects patients' quality of life, and current treatment options are limited. AVTX-009 is a monoclonal antibody that targets interleukin-1β (IL-1β), a crucial player in inflammation, offering promise as a new treatment for HS. The trial will involve about 180 adult participants and will evaluate the efficacy and safety of subcutaneous bi-weekly and monthly doses of AVTX-009 compared to a placebo. Initial results from this trial are anticipated in 2026.

Financially, Avalo Therapeutics is on solid footing. As of September 30, 2024, the company had cash and cash equivalents totaling approximately $82 million. Additionally, it received around $58 million from warrant exercises in the fourth quarter of 2024, extending its financial runway into at least 2027. The company reported a net income of $23 million for the three months ended September 30, 2024, compared to a net loss of $5.2 million during the same period in 2023. This positive shift was primarily due to a significant increase in other income, which offset higher operating expenses.

Research and development expenses saw a substantial rise, reaching $9.5 million in the third quarter of 2024, up from $1.2 million in the same quarter of the previous year. This increase was mainly due to the initiation and development costs associated with the AVTX-009 LOTUS trial. General and administrative expenses also increased to $4.3 million from $2.5 million in the third quarter of 2023, driven by higher employee compensation costs, including stock-based compensation, consulting, legal, and other professional fees following a major acquisition and financing activities in the first quarter of 2024.

Avalo Therapeutics continues to evaluate AVTX-009 for other immune-mediated diseases, aiming to select a second indication for further development. This strategy underscores the potential versatility of AVTX-009 as a treatment for various inflammatory conditions.

The company's balance sheet as of September 30, 2024, shows total assets of approximately $98 million, significantly up from $21 million at the end of 2023. Current liabilities also increased to about $61 million from $4.6 million at the end of the previous year, reflecting the company's expanded operations and financial activities.

Avalo Therapeutics remains committed to its mission of addressing immune dysregulation. Beyond AVTX-009, the company is developing additional drug candidates, including quisovalimab (an anti-LIGHT monoclonal antibody) and AVTX-008 (a BTLA agonist fusion protein). These efforts highlight Avalo's dedication to advancing treatments for various immune-mediated diseases and improving patient outcomes.

The Phase 2 LOTUS trial of AVTX-009 is a critical step forward in Avalo's journey to provide new therapeutic options for patients suffering from hidradenitis suppurativa and potentially other inflammatory conditions. With robust financial health and ongoing research, Avalo Therapeutics is well-positioned to make significant contributions to the field of biotechnology.

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