Avalo Reports First Quarter 2025 Financial Results and Recent Business Updates

   -- Mike Heffernan appointed as Chairman of the Board 
 
   -- Topline data from Phase 2 LOTUS trial of AVTX-009 for the treatment of 
      hidradenitis suppurativa expected in 2026 
 
   -- Cash on hand of approximately $125 million as of March 31, 2025 expected 
      to provide runway into 2027, with optionality to extend into 2028 

WAYNE, Pa., May 12, 2025 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), a clinical stage biotechnology company focused on the treatment of immune dysregulation, today announced business updates and financial results for the first quarter of 2025.

"We have made considerable progress in our Phase 2 LOTUS trial in hidradenitis suppurativa (HS) with site activations, screenings and enrollment progress all in line with our original projections as we have begun to meaningfully climb the enrollment curve. As such, we believe we are on track to deliver topline data in 2026 and look forward to demonstrating AVTX-009's potential as a leading treatment in HS," said Dr. Garry Neil, Chief Executive Officer. "We are cognizant of current market conditions and are fortunate to have more than sufficient capital to reach our LOTUS trial data readout. Given the current environment, the Company is carefully evaluating the optimal timing for pursuing additional development activities beyond the LOTUS trial, such as the initiation of a second indication, to preserve capital until markets stabilize. Changes to the timing of implementing these secondary development activities could extend cash runway into 2028."

Recent Corporate Highlights and Upcoming Anticipated Milestones:

   -- Phase 2 LOTUS trial: The global study design includes approximately 180 
      adults with HS to evaluate the efficacy and safety of subcutaneous 
      bi-weekly and monthly dosing regimens compared to placebo. 
 
          -- Topline data is expected in 2026. 
 
   -- Second Indication Exploration: Avalo continues to evaluate AVTX-009 for 
      additional immune-mediated diseases with plans to announce a second 
      indication. 

First Quarter 2025 Financial Update:

   -- Cash and cash equivalents were $125.0 million as of March 31, 2025. Net 
      cash used in operating activities was $9.5 million for the first quarter 
      of 2025. The Company's current cash on hand is expected to fund 
      operations into at least 2027. 
 
   -- Research and development expenses were $9.1 million for the first quarter 
      of 2025, an increase of $7.0 million from the first quarter of 2024, 
      driven by direct costs and indirect supporting costs of the Phase 2 LOTUS 
      trial. 
 
   -- General and administrative expenses were $5.5 million for the first 
      quarter of 2025, an increase of $2.4 million from the first quarter of 
      2024, primarily driven by stock-based compensation expense during the 
      period related to increased equity grants and headcount additions. 
 
   -- Net loss was $13.1 million for the first quarter of 2025, a decrease of 
      $108.2 million from $121.3 million in the first quarter of 2024. The 
      difference was driven primarily by a $90.0 million decrease in other 
      expenses from the prior period primarily related to the warrants issued 
      as part of the private placement in 2024. Additionally, operating 
      expenses decreased by $18.1 million, which was attributable to a $27.5 
      million acquired in-process research and development charge for the 
      acquisition of AlmataBio, Inc. in the prior period, partially offset by 
      increased research and development and general and administrative 
      expenses in the first quarter of 2025. Basic and diluted net loss per 
      share, based on 10,514,901 weighted average common shares outstanding, 
      was $1.25 for the first quarter of 2025 compared to $141.14, based on 
      859,381 weighted average common shares outstanding for the first quarter 
      of 2024. 
 
 
Consolidated Balance Sheets 
 (In thousands, except share and per share data) 
 
                                  March 31, 2025     December 31, 2024 
                                 ----------------  --------------------- 
                                   (unaudited) 
                                 ----------------  --------------------- 
Assets 
Current assets: 
    Cash and cash equivalents     $      125,046    $         134,546 
    Prepaid expenses and other 
     current assets                        1,833                4,325 
    Restricted cash, current 
     portion                                  62                   19 
                                     -----------       -------------- 
Total current assets                     126,941              138,890 
Property and equipment, net                  949                1,209 
Goodwill                                  10,502               10,502 
Restricted cash, net of current 
 portion                                     131                  131 
                                     -----------       -------------- 
Total assets                      $      138,523    $         150,732 
                                     ===========       ============== 
Liabilities, mezzanine equity 
and stockholders' equity 
Current liabilities: 
    Accounts payable              $          681    $             283 
    Accrued expenses and other 
     current liabilities                   4,574                6,317 
    Derivative liability, 
     current                                 360                  360 
Total current liabilities                  5,615                6,960 
Royalty obligation                         2,000                2,000 
Deferred tax liability, net                  278                  270 
Derivative liability, 
 non-current                               7,740                8,120 
Other long-term liabilities                  275                  350 
                                     -----------       -------------- 
Total liabilities                         15,908               17,700 
Mezzanine equity: 
  Series D Preferred 
  Stock--$0.001 par value; 1 
  share of Series D Preferred 
  Stock authorized at March 
  31, 2025 and December 31, 
  2024; 1 share of Series D 
  Preferred Stock issued and 
  outstanding at March 31, 
  2025 and December 31, 2024                  --                   -- 
  Series E Preferred 
  Stock--$0.001 par value; 1 
  share of Series E Preferred 
  Stock authorized at March 
  31, 2025 and December 31, 
  2024; 1 share of Series E 
  Preferred Stock issued and 
  outstanding at March 31, 
  2025 and December 31, 2024                  --                   -- 
Stockholders' equity: 
  Common stock--$0.001 par 
   value; 200,000,000 shares 
   authorized at March 31, 2025 
   and December 31, 2024; 
   10,827,620 and 10,471,934 
   shares issued and 
   outstanding at March 31, 
   2025 and December 31, 2024, 
   respectively                               11                   10 
  Series C Preferred 
  Stock--$0.001 par value; 
  34,326 shares of Series C 
  Preferred Stock authorized 
  at March 31, 2025 and 
  December 31, 2024; 24,696 
  and 24,896 shares of Series 
  C Preferred Stock issued and 
  outstanding at March 31, 
  2025 and December 31, 2024, 
  respectively                                --                   -- 
    Additional paid-in capital           506,016              503,285 
    Accumulated deficit                 (383,412)            (370,263) 
                                     -----------       -------------- 
Total stockholders' equity               122,615              133,032 
                                     -----------       -------------- 
Total liabilities, mezzanine 
 equity and stockholders' 
 equity                           $      138,523    $         150,732 
                                     ===========       ============== 
 
 

The consolidated balance sheets as of March 31, 2025 and December 31, 2024 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 
 (In thousands, except per share data) 
 
                                              Three Months Ended 
                                                  March 31, 
                                          -------------------------- 
                                              2025          2024 
Operating expenses: 
  Cost of product sales                            --         (80) 
  Research and development                      9,123       2,116 
  General and administrative                    5,546       3,193 
  Acquired in-process research and 
   development                                     --      27,538 
    Total operating expenses                   14,669      32,767 
                                           ----------    -------- 
  Loss from operations                        (14,669)    (32,767) 
Other income (expense): 
  Change in fair value of derivative 
   liability                                      380        (120) 
  Interest income, net                          1,148         100 
  Excess of initial warrant fair value 
   over private placement proceeds                 --     (79,276) 
  Private placement transaction costs              --      (9,220) 
Total other income (expense), net               1,528     (88,516) 
                                           ----------    -------- 
Loss before taxes                             (13,141)   (121,283) 
Income tax expense                                  8           7 
                                           ----------    -------- 
Net loss and comprehensive loss           $   (13,149)  $(121,290) 
 
Weighted average common shares 
 outstanding                               10,514,901     859,381 
                                           ----------    -------- 

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