SLC35C1

Announced AVTX-002 (quisovalimab) did not meet its primary endpoint in its Phase 2 PEAK Trial in non-eosinophilic asthma, however AVTX-002 significantly reduced serum LIGHT levels for study duration indicating strong target engagementDisclosed cash of approximately $6.3 million as of June 30, 2023 WAYNE, Pa. and ROCKVILLE, Md., Aug. 03, 2023 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and financial results for the second quarter of 2023. “Although the PEAK trial did not meet its primary endpoint, mechanistically I believe AVTX-002 has promise in other inflammatory driven diseases including IBD and other diseases of the lung, gut and skin. Additionally, we believe an opportunity remains in asthma, particularly in a subset of patients with higher baseline LIGHT levels. We also have high confidence in our preclinical stage fully human BTLA agonist fusion protein (AVTX-008) to potentially treat a wide range of autoimmune diseases and are excited by the drug’s novel mechanism of action and potential usage in patients not responsive to anti-TNF therapy,” said Dr. Garry Neil, Chief Executive Officer and Chairman of the Board. “The team is working tirelessly to determine the best path forward for these assets, including indication selection and funding to support development.” Corporate Updates: In June of 2023, Avalo prepaid $6 million of principal under its loan and security agreement. As of June 30, 2023, the remaining principal payments were $15.2 million.On July 20, 2023, Avalo entered into a forbearance agreement with its debt lenders, pursuant to which the parties agreed that an event of default had occurred due to a material adverse change in the Company’s business and the lenders agreed to forbear from enforcing its full remedies, including acceleration of the amounts due, until August 15, 2023 or earlier triggering event.Avalo is considering out-licensing or sale of its non-core and potentially its core assets to increase focus and reduce future expenses. In July of 2023, Avalo entered into a non-binding letter of intent for the potential sale of AVTX-801 (D-galactose), AVTX-802 (D-mannose) and AVTX-803 (L-fucose). Program Updates: AVTX-002: Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory diseases. Avalo announced that its Phase 2 PEAK trial in patients with NEA did not meet its primary endpoint, measured by the proportion of patients who experienced an asthma-related event (ARE), however AVTX-002 demonstrated a significant and sustained reduction in LIGHT levels and a favorable safety and tolerability profile. Further, a preliminary post-hoc analyses for a sub-population of patients with baseline LIGHT levels over 125 pg/mL, which represented over 50% of patients, showed an approximately 50% reduction in AREs for patients treated with AVTX-002 compared to placebo.Previously demonstrated AVTX-002 was statistically significant in reducing respiratory failure and mortality in patients hospitalized with COVID-19 ARDS in a randomized placebo-controlled trial. AVTX-002 also demonstrated positive trends in an open-label study in Crohn’s Disease.AVTX-002 showed a rapid and sustained reduction of LIGHT levels in all indications studied including COVID-19 ARDS, Crohn’s Disease and NEA.Avalo will continue to evaluate the topline results of the Phase 2 PEAK trial, while also pursuing funding for the program, to inform future development plans. AVTX-008: B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders. Avalo previously identified a lead molecule, is evaluating several immune dysregulation disorders to pursue and plans to rapidly progress the asset to IND, subject to funding. AVTX-803: Fucose replacement for leukocyte adhesion deficiency type II (LAD II, also known as SLC35C1-CDG), a congenital disorder of glycosylation (CDG). In July of 2023, Avalo entered into a non-binding letter of intent for the potential sale of AVTX-801 (D-galactose), AVTX-802 (D-mannose) and AVTX-803 (L-fucose). Second Quarter 2023 Financial Update: Avalo had $6.3 million in cash and cash equivalents as of June 30, 2023, representing a $6.9 million decrease compared to December 31, 2022. The decrease was driven by operating expenditures to fund pipeline development and a $6 million partial prepayment under the loan and security agreement and were partially offset by $20.3 million of net proceeds from equity financings. Total operating expenses decreased $17.8 million for the six months ended June 30, 2023 as compared to the same period in 2022. This decrease was primarily driven by decreases to both selling, general and administrative and research and development expenses as a result of cost savings initiatives implemented in the first quarter of 2022 and fewer programs ongoing in the current year. The net loss and net loss per share for the three months ended June 30, 2023 was largely driven by operating expenses. Consolidated Balance Sheets(In thousands, except share and per share data) June 30, 2023 December 31, 2022 (unaudited) Assets Current assets: Cash and cash equivalents$6,307 $13,172 Accounts receivable 38 — Other receivables 6 1,919 Inventory, net 18 20 Prepaid expenses and other current assets 1,135 1,290 Restricted cash, current portion 15 15 Total current assets 7,519 16,416 Property and equipment, net 2,176 2,411 Goodwill 14,409 14,409 Restricted cash, net of current portion 131 131 Total assets$24,235 $33,367 Liabilities and stockholders’ deficit Current liabilities: Accounts payable$751 $2,882 Deferred revenue — 88 Accrued expenses and other current liabilities 7,588 13,214 Notes payable, current 14,115 5,930 Total current liabilities 22,454 22,114 Notes payable, non-current — 13,486 Royalty obligation 2,000 2,000 Deferred tax liability, net 156 141 Derivative liability 5,050 4,830 Other long-term liabilities 1,544 1,711 Total liabilities 31,204 44,282 Stockholders’ deficit: Common stock—$0.001 par value; 200,000,000 shares authorized at June 30, 2023 and December 31, 2022; 14,036,940 and 9,430,535 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 14 9 Additional paid-in capital 314,755 292,900 Accumulated deficit (321,738) (303,824)Total stockholders’ deficit (6,969) (10,915)Total liabilities and stockholders’ deficit$24,235 $33,367 The condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 have been derived from the reviewed and audited financial statements, respectively, but do not include all of the information and footnotes required by accounting principles accepted in the United States for complete financial statements. Consolidated Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Revenues: Product revenue, net$643 $1,033 $1,117 $2,206 Total revenues, net 643 1,033 1,117 2,206 Operating expenses: Cost of product sales 708 1,567 1,259 2,286 Research and development 4,658 8,510 10,667 18,094 Selling, general and administrative 2,427 2,784 5,134 14,468 Amortization expense — — — 38 Total operating expenses 7,793 12,861 17,060 34,886 (7,150) (11,828) (15,943) (32,680)Other expense: Interest expense, net (996) (1,154) (1,945) (2,323)Change in fair value of derivative liability (40) — (220) — Other expense, net — — (25) (20)Total other expense, net (1,036) (1,154) (2,190) (2,343)Loss before taxes (8,186) (12,982) (18,133) (35,023)Income tax expense 7 5 15 15 Net loss and comprehensive loss$(8,193) $(12,987) $(18,148) $(35,038)Net loss per share of common stock, basic and diluted1$(0.59) $(1.38) $(1.41) $(3.73) 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. The unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 have been derived from the reviewed financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. About AVTX-002 (quisovalimab) AVTX-002 is a fully human monoclonal antibody (mAb), directed against human LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with Herpes Virus Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes). There is increasing evidence that the dysregulation of the LIGHT-signaling network which includes LIGHT, its receptors HVEM and LTβR and the downstream checkpoint BTLA, is a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders. AVTX-002 previously demonstrated proof of concept in COVID-19 induced acute respiratory distress syndrome including reduction in mortality and respiratory failure, as well as a positive signal in Crohn’s Disease. About AVTX-008 AVTX-008 is a fully human B and T Lymphocyte Attenuator (BTLA) agonist fusion protein in the IND-enabling stage. About Avalo Therapeutics Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation by developing therapies that target the LIGHT-signaling network. LIGHT and its signaling receptors, HVEM (TNFRSF14), and lymphotoxin β receptor (TNFRSF3), form an immune regulatory network with two co-receptors of herpesvirus entry mediator, checkpoint inhibitor B and T Lymphocyte Attenuator (BTLA), and CD160 (the LIGHT-signaling network). Accumulating evidence points to the dysregulation of the LIGHT network as a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders. For more information about Avalo, please visit www.avalotx.com. Forward-Looking Statements This press release may include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Avalo’s control), which could cause actual results to differ from the forward-looking statements. Such statements may include, without limitation, statements with respect to Avalo’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “might,” “will,” “could,” “would,” “should,” “continue,” “seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” or similar expressions (including their use in the negative), or by discussions of future matters such as: the future financial and operational outlook; timing and success of trial results and regulatory review; potential attributes and benefits of product candidates; the development of product candidates or products; and other statements that are not historical. These statements are based upon the current beliefs and expectations of Avalo’s management but are subject to significant risks and uncertainties, including: Avalo's debt and cash position and the need for it to raise additional capital in the near future, including the risk that its lender will call the debt on or before the August 15, 2023 end of the current forbearance agreement; the results of our clinical and pre-clinical studies; drug development costs, timing and other risks, including reliance on investigators and enrollment of patients in clinical trials, which might be slowed by the COVID-19 pandemic; reliance on key personnel; regulatory risks; general economic and market risks and uncertainties, including those caused by the COVID-19 pandemic and the war in Ukraine; and those other risks detailed in Avalo’s filings with the SEC. Actual results may differ from those set forth in the forward-looking statements. Except as required by applicable law, Avalo expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Avalo’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. For media and investor inquiries Christopher Sullivan, CFO Avalo Therapeutics, Inc. ir@avalotx.com 410-803-6793 or Chris BrinzeyICR WestwickeChris.brinzey@westwicke.com 339-970-2843

Topline data expected in the second quarter of 2023 from the Phase 2 PEAK Trial of AVTX-002 in non-eosinophilic asthma (NEA)Disclosed cash of approximately $16.7 million as of March 31, 2023 WAYNE, Pa. and ROCKVILLE, Md., May 04, 2023 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and financial results for the first quarter of 2023. “We made significant progress advancing our Phase 2 PEAK trial of AVTX-002 in patients with NEA and we are very excited to be on the cusp of the corresponding and potentially transformational topline data release,” said Dr. Garry Neil, Chief Executive Officer and Chairman of the Board. “There is strong clinical evidence that cytokines regulated by decoy receptor 3 (DcR3): LIGHT (and its signaling network including BTLA), TL1A and FasL are key drivers of inflammatory diseases in the lung, gut and skin. We believe our upcoming data readout will validate the opportunity for AVTX-002 in NEA and support further development in eosinophilic asthma and COPD, as well as other chronic inflammatory diseases of the lung.” Program Updates and Milestones: AVTX-002: Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory diseases. NEA: Avalo has completed enrollment of the Phase 2 PEAK trial evaluating the safety and efficacy of AVTX-002 in 91 patients with NEA. Topline data expected in the second quarter of 2023. AVTX-008: B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders. Avalo identified a lead molecule and is currently evaluating several immune dysregulation disorders, with a target IND submission planned in 2024. AVTX-803: Fucose replacement for leukocyte adhesion deficiency type II (LAD II, also known as SLC35C1-CDG), a congenital disorder of glycosylation (CDG). Timing of pivotal data from the pivotal LADDER trial evaluating the safety and efficacy of AVTX-803 in approximately 2 patients with LAD II is under evaluation. First Quarter 2023 Financial Update: Avalo had $16.7 million in cash and cash equivalents as of March 31, 2023, representing a $3.5 million increase compared to December 31, 2022. The increase was driven by $13.7 million of net proceeds from an equity financing offset by operating expenditures. Total operating expenses decreased $12.8 million for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022. This decrease was primarily driven by decreases to both selling, general and administrative and research and development expenses as a result of cost savings initiatives implemented in the first quarter of 2022. The net loss and net loss per share for the three months ended March 31, 2023 was largely driven by operating expenses. Consolidated Balance Sheets(In thousands, except share and per share data) March 31, 2023 December 31, 2022 (unaudited) Assets Current assets: Cash and cash equivalents $16,687 $13,172 Other receivables 857 1,919 Inventory, net 19 20 Prepaid expenses and other current assets 1,627 1,290 Restricted cash, current portion 63 15 Total current assets 19,253 16,416 Property and equipment, net 2,442 2,411 Goodwill 14,409 14,409 Restricted cash, net of current portion 131 131 Total assets $36,235 $33,367 Liabilities and stockholders’ deficit Current liabilities: Accounts payable $5,565 $2,882 Deferred revenue 111 88 Accrued expenses and other current liabilities 8,273 13,214 Notes payable, current 9,296 5,930 Total current liabilities 23,245 22,114 Notes payable, non-current 10,470 13,486 Royalty obligation 2,000 2,000 Deferred tax liability, net 148 141 Derivative liability 5,010 4,830 Other long-term liabilities 1,629 1,711 Total liabilities 42,502 44,282 Stockholders’ deficit: Common stock—$0.001 par value; 200,000,000 shares authorized at March 31, 2023 and December 31, 2022; 13,200,535 and 9,430,535 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 13 9 Additional paid-in capital 307,499 292,900 Accumulated deficit (313,779) (303,824)Total stockholders’ deficit (6,267) (10,915)Total liabilities and stockholders’ deficit $36,235 $33,367 The condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 have been derived from the reviewed and audited financial statements, respectively, but do not include all of the information and footnotes required by accounting principles accepted in the United States for complete financial statements. Consolidated Statements of Operations (Unaudited)(In thousands, except per share data) Three Months Ended March 31, 2023 2022 Revenues: Product revenue, net $475 $1,173 Total revenues, net 475 1,173 Operating expenses: Cost of product sales 551 720 Research and development 6,008 9,584 Selling, general and administrative 2,708 11,684 Amortization expense — 38 Total operating expenses 9,267 22,026 (8,792) (20,853)Other expense: Interest expense, net (949) (1,169)Change in fair value of derivative liability (180) — Other expense, net (26) (20)Total other expense, net (1,155) (1,189)Loss before taxes (9,947) (22,042)Income tax expense 8 9 Net loss and comprehensive loss $(9,955) $(22,051)Net loss per share of common stock, basic and diluted1 $(0.85) $(2.35) 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. The unaudited condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 have been derived from the reviewed financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. About AVTX-002 AVTX-002, Avalo’s lead development asset, is a fully human monoclonal antibody (mAb), directed against human LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with Herpes Virus Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes). There is increasing evidence that the dysregulation of the LIGHT-signaling network which includes LIGHT, its receptors HVEM and LTβR and the downstream checkpoint BTLA, is a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders, including NEA. AVTX-002 previously demonstrated proof of concept in COVID-19 induced acute respiratory distress syndrome including reduction in mortality and respiratory failure. About AVTX-002 PEAK Trial The Phase 2 PEAK Trial is a randomized, double-blind, placebo-controlled, parallel group trial designed to evaluate the safety and efficacy of AVTX-002 for the treatment of poorly controlled NEA (NCT05288504). Following 12 weeks of treatment, the efficacy and safety of AVTX-002 will be evaluated compared with placebo. The primary endpoint is the proportion of patients who experience any of the following asthma-related events: (i) ≥6 additional reliever puffs of a short-acting beta-agonist (compared to baseline) in a 24-hour period on 2 consecutive days, or (ii) increase in inhaled corticosteroid dose ≥4 times than the dose at baseline, or (iii) a decrease in peak flow of 30% or more (compared to baseline) on 2 consecutive days of treatment, or (iv) an asthma exacerbation requiring the use of systemic corticosteroids (tablets, suspension, or injection) for at least 3 days, or (v) a hospitalization or emergency room visit because of an asthma exacerbation. About Avalo Therapeutics Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation by developing therapies that target the LIGHT network. LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with HSV Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes; also referred to as TNFSF14) is an immunoregulatory cytokine. LIGHT and its signaling receptors, HVEM (TNFRSF14), and lymphotoxin β receptor (TNFRSF3), form an immune regulatory network with two co-receptors of herpesvirus entry mediator, checkpoint inhibitor B and T Lymphocyte Attenuator (BTLA), and CD160 (the LIGHT-signaling network). Accumulating evidence points to the dysregulation of the LIGHT network as a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders. For more information about Avalo, please visit www.avalotx.com. Forward-Looking Statements This press release may include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Avalo’s control), which could cause actual results to differ from the forward-looking statements. Such statements may include, without limitation, statements with respect to Avalo’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “might,” “will,” “could,” “would,” “should,” “continue,” “seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” or similar expressions (including their use in the negative), or by discussions of future matters such as: timing and success of trial results and regulatory review; potential attributes and benefits of product candidates; the future financial and operational outlook; the development of product candidates or products; and other statements that are not historical. These statements are based upon the current beliefs and expectations of Avalo’s management but are subject to significant risks and uncertainties, including: Avalo’s debt and cash position and the need for it to raise additional capital in the near future; the results of our clinical and pre-clinical studies; drug development costs, timing and other risks, including reliance on investigators and enrollment of patients in clinical trials, which might be slowed by the COVID-19 pandemic; reliance on key personnel; regulatory risks; general economic and market risks and uncertainties, including those caused by the COVID-19 pandemic and the war in Ukraine; and those other risks detailed in Avalo’s filings with the SEC. Actual results may differ from those set forth in the forward-looking statements. Except as required by applicable law, Avalo expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Avalo’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. For media and investor inquiries Christopher Sullivan, CFO Avalo Therapeutics, Inc. ir@avalotx.com 410-803-6793 or Chris BrinzeyICR WestwickeChris.brinzey@westwicke.com 339-970-2843

Completed enrollment of the Phase 2 PEAK Trial of AVTX-002 in non-eosinophilic asthma (NEA); topline data expected in the second quarter of 2023Disclosed cash of approximately $13 million as of December 31, 2022, non-inclusive of the February 2023 public offeringIncreased cash position with closing of public offering of common stock and warrants for gross proceeds of $15 million on February 7, 2023 WAYNE, Pa. and ROCKVILLE, Md., March 29, 2023 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and year-end financial results for 2022. “We made significant strategic and operational progress over the past year, by executing our goals of streamlining the pipeline to the most promising assets/trials, implementing corresponding infrastructure cost reductions, executing operationally and extending the cash runway through business development transactions,” said Dr. Garry Neil, Chief Executive Officer and Chairman of the Board. “2023 will be a transformational year for Avalo as we look forward to our upcoming data readout of the Phase 2 PEAK trial of AVTX-002 in patients with NEA in the second quarter.” Program Updates and Milestones: AVTX-002: Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory diseases. NEA: Avalo completed enrollment of the Phase 2 PEAK trial evaluating the safety and efficacy of AVTX-002 in 91 patients with NEA. Topline data expected in the second quarter of 2023. AVTX-008: B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders. Avalo identified a lead molecule and is currently evaluating several immune dysregulation disorders, with a target IND submission planned in 2024. AVTX-803: Fucose replacement for leukocyte adhesion deficiency type II (LAD II, also known as SLC35C1-CDG), a congenital disorder of glycosylation (CDG). Timing of pivotal data from the pivotal LADDER trial evaluating the safety and efficacy of AVTX-803 in approximately 2 patients with LAD II is under evaluation. 2022 Financial Update: Avalo had $13.2 million in cash and cash equivalents as of December 31, 2022, representing a $41.4 million decrease compared to December 31, 2021. The decrease was primarily driven by operating expenditures and a $15.0 million partial prepayment under its loan and security agreement, partially offset by $19.5 million of upfront payments received from out-license and business development activity. In February 2023, we closed an equity financing in which we raised approximately $13.7 million in net proceeds. Total net revenues increased $12.7 million for the year ended December 31, 2022. The increase was driven by $14.5 million of upfront consideration received pursuant to the out-license of AVTX-007. Total operating expenses decreased $32.0 million for the year ended December 31, 2022, mainly driven by significantly reduced research and development expenses. Research and development expenses decreased $28.5 million as a result of our narrowed focus in 2022 on primarily progressing our lead development asset, AVTX-002, as opposed to the progression of multiple programs in 2021. We also recognized a $10.0 million upfront license fee in 2021 for the AVTX-002 expanded indication license agreement that did not repeat in 2022. As a result of the focused pipeline, Avalo executed a cost reduction plan, including reducing its headcount and supporting infrastructure. Selling, general and administrative expenses decreased $3.9 million as a result, however, these decreases were partially offset by $6.7 million of severance and stock-based compensation expense from employee separations. The net loss and net loss per share for the year ended December 31, 2022 was largely driven by operating expenses and partially offset by revenue from business development transactions. Consolidated Balance Sheets(In thousands, except share and per share data) December 31, 2022 2021 Assets Current assets: Cash and cash equivalents$13,172 $54,585 Accounts receivable, net — 1,060 Other receivables 1,919 3,739 Inventory, net 20 38 Prepaid expenses and other current assets 1,290 2,372 Restricted cash, current portion 15 51 Total current assets 16,416 61,845 Property and equipment, net 2,411 2,695 Other long-term asset — 1,000 Intangible assets, net — 38 Goodwill 14,409 14,409 Restricted cash, net of current portion 131 227 Total assets$33,367 $80,214 Liabilities and stockholders’ equity Current liabilities: Accounts payable$2,882 $3,369 Deferred revenue 88 — Accrued expenses and other current liabilities 13,214 16,519 Notes payable, current 5,930 — Total current liabilities 22,114 19,888 Notes payable, non-current 13,486 32,833 Royalty obligation 2,000 2,000 Deferred tax liability, net 141 113 Derivative liability 4,830 — Other long-term liabilities 1,711 2,298 Total liabilities 44,282 57,132 Stockholders’ (deficit) equity: Common stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2022 and 2021; 9,430,535 and 9,399,517 shares issued and outstanding at December 31, 2022 and 2021, respectively1 9 9 Additional paid-in capital1 292,900 285,239 Accumulated deficit (303,824) (262,166)Total stockholders’ (deficit) equity (10,915) 23,082 Total liabilities and stockholders’ (deficit) equity$33,367 $80,214 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. The consolidated balance sheets as of December 31, 2022 and 2021 have been derived from the audited financial statements, but do not include all of the information and footnotes required by accounting principles accepted in the United States for complete financial statements. Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2022 2021 Revenues: Product revenue, net$3,364 $4,773 License and other revenue 14,687 625 Total revenues, net 18,051 5,398 Operating expenses: Cost of product sales 3,434 1,491 Research and development 31,308 59,835 Selling, general and administrative 20,711 24,658 Amortization expense 38 1,548 Total operating expenses 55,491 87,532 (37,440) (82,134)Other expense: Interest expense, net (4,170) (2,391)Other expense, net (20) (20)Total other expense, net from continuing operations (4,190) (2,411)Loss from continuing operations before income taxes (41,630) (84,545)Income tax expense (benefit) 28 (196)Loss from continuing operations$(41,658) $(84,349)Loss from discontinued operations — (27)Net loss$(41,658) $(84,376) Net (loss) income per share of common stock, basic and diluted1: Continuing operations$(4.43) $(9.95)Discontinued operations — 0.00 Net loss per share of common stock, basic and diluted$(4.43) $(9.95) Net (loss) income per share of preferred stock, basic and diluted1: Continuing operations $(4.15)Discontinued operations — Net loss per share of preferred stock, basic and diluted $(4.15) 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. The consolidated statements of operations for the year ended December 31, 2022 and 2021 have been derived from the audited financial statements, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. About AVTX-002 AVTX-002, Avalo’s lead development asset, is a fully human monoclonal antibody (mAb), directed against human LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with Herpes Virus Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes). There is increasing evidence that the dysregulation of the LIGHT-signaling network which includes LIGHT, its receptors HVEM and LTβR and the downstream checkpoint BTLA, is a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders, including NEA. AVTX-002 previously demonstrated proof of concept in COVID-19 induced acute respiratory distress syndrome including reduction in mortality and respiratory failure. About AVTX-002 PEAK Trial The Phase 2 PEAK Trial is a randomized, double-blind, placebo-controlled, parallel group trial designed to evaluate the safety and efficacy of AVTX-002 for the treatment of poorly controlled NEA (NCT05288504). Following 12 weeks of treatment, the efficacy and safety of AVTX-002 will be evaluated compared with placebo. The primary endpoint is the proportion of patients who experience any of the following asthma-related events: (i) ≥6 additional reliever puffs of a short-acting beta-agonist (compared to baseline) in a 24-hour period on 2 consecutive days, or (ii) increase in inhaled corticosteroid dose ≥4 times than the dose at baseline, or (iii) a decrease in peak flow of 30% or more (compared to baseline) on 2 consecutive days of treatment, or (iv) an asthma exacerbation requiring the use of systemic corticosteroids (tablets, suspension, or injection) for at least 3 days, or (v) a hospitalization or emergency room visit because of an asthma exacerbation. About Avalo Therapeutics Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation by developing therapies that target the LIGHT network. LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with HSV Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes; also referred to as TNFSF14) is an immunoregulatory cytokine. LIGHT and its signaling receptors, HVEM (TNFRSF14), and lymphotoxin β receptor (TNFRSF3), form an immune regulatory network with two co-receptors of herpesvirus entry mediator, checkpoint inhibitor B and T Lymphocyte Attenuator (BTLA), and CD160 (the LIGHT-signaling network). Accumulating evidence points to the dysregulation of the LIGHT network as a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders. For more information about Avalo, please visit www.avalotx.com. Forward-Looking Statements This press release may include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Avalo’s control), which could cause actual results to differ from the forward-looking statements. Such statements may include, without limitation, statements with respect to Avalo’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “might,” “will,” “could,” “would,” “should,” “continue,” “seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” or similar expressions (including their use in the negative), or by discussions of future matters such as: the future financial and operational outlook; the development of product candidates or products; timing and success of trial results and regulatory review; potential attributes and benefits of product candidates; and other statements that are not historical. These statements are based upon the current beliefs and expectations of Avalo’s management but are subject to significant risks and uncertainties, including: Avalo's debt and cash position and the need for it to raise additional capital in the near future; drug development costs, timing and other risks, including reliance on investigators and enrollment of patients in clinical trials, which might be slowed by the COVID-19 pandemic; reliance on key personnel; regulatory risks; general economic and market risks and uncertainties, including those caused by the COVID-19 pandemic and the war in Ukraine; and those other risks detailed in Avalo’s filings with the SEC. Actual results may differ from those set forth in the forward-looking statements. Except as required by applicable law, Avalo expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Avalo’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. For media and investor inquiries Christopher Sullivan, CFO Avalo Therapeutics, Inc.ir@avalotx.com410-803-6793 or Chris BrinzeyICR WestwickeChris.brinzey@westwicke.com339-970-2843