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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