Avalo Q1 2024 Financial Results and Business Updates

Avalo Therapeutics, Inc., a clinical-stage biotechnology company, has released its business updates and financial results for the first quarter of 2024. As of March 31, 2024, Avalo reported having approximately $110 million in cash, projecting a financial runway extending into 2027. This financial stability is expected to support the company through the key milestones of its ongoing and upcoming projects.

One of Avalo Therapeutics' prominent developments is the planned Phase 2 trial of AVTX-009 in hidradenitis suppurativa, with topline results anticipated in 2026. AVTX-009 is an anti-IL-1β monoclonal antibody aimed at treating inflammatory diseases. The company is also considering expanding its research to explore AVTX-009’s effectiveness in other chronic inflammatory conditions. Additionally, Avalo is developing a next-generation anti-IL-1β monoclonal antibody with an extended half-life.

Another key asset in Avalo’s pipeline is quisovalimab (AVTX-002), an anti-LIGHT monoclonal antibody targeting immune-inflammatory diseases. Currently, the company is conducting a strategic review of the quisovalimab program. This antibody has shown potential in moderating immune dysregulation in various acute and chronic inflammatory disorders, including positive outcomes in COVID-19 induced acute respiratory distress syndrome and Crohn’s Disease.

Furthermore, Avalo is assessing the AVTX-008 program. AVTX-008 is a B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders. This candidate is in the IND-enabling stage and is distinguished by its specific binding capabilities to BTLA without interacting with LIGHT or CD160. It also exhibits high serum stability and solubility.

Financially, Avalo closed a private placement investment in March 2024, securing up to $185 million in gross proceeds, with an initial upfront investment of $115.6 million. The company has the potential to raise an additional $69.4 million upon the exercise of related warrants. This influx of capital is expected to bolster Avalo's operational capacity until data from the AVTX-009 trial readout is available and beyond.

For the quarter ending March 31, 2024, Avalo reported a net loss of $121.3 million. This increase in net loss compared to the previous period was primarily due to the excess of warrant fair value over private placement proceeds, resulting in a $79.3 million loss. The warrants were classified as a liability upon issuance, with their value estimated using a Black-Scholes option-pricing model. Changes in the fair value of these warrants will continue to impact the financial results until they are exercised or expire.

Additionally, Avalo's acquisition of AlmataBio, Inc. was accounted for as an asset acquisition, leading to the recognition of $27.5 million of in-process research and development expenses. The company also incurred $9.2 million in private placement transaction expenses.

The financial statements for the quarter highlighted Avalo’s assets and liabilities, showing a significant increase in current liabilities due to the newly issued warrants and contingent considerations. Despite the increased net loss per share, which was partially offset by an increase in outstanding shares, Avalo remains financially poised to advance its clinical programs.

In summary, Avalo Therapeutics is making significant progress with its lead asset, AVTX-009, and other promising candidates like quisovalimab and AVTX-008. The company's substantial cash reserves and recent financial maneuvers provide a solid foundation to continue its research and development efforts in the field of immune dysregulation and inflammatory diseases.