Avalo Reports Third Quarter 2024 Financial Results and Recent Business Updates
Avalo Therapeutics (AVTX) reported significant Q3 2024 developments, including dosing the first patient in Phase 2 LOTUS trial of AVTX-009 for hidradenitis suppurativa treatment. The company's cash position reached $82 million as of September 30, 2024, with an additional $58 million from warrant exercises in Q4. Research and development expenses increased to $9.5 million, up from $1.2 million in Q3 2023. The company reported net income of $23 million for Q3 2024, compared to a $5.2 million loss in Q3 2023. Current cash runway is expected to extend into at least 2027.
Avalo Therapeutics (AVTX) ha riportato sviluppi significativi per il terzo trimestre del 2024, tra cui la somministrazione del primo paziente nel trial di fase 2 LOTUS per il trattamento dell'idradenite suppurativa con AVTX-009. La posizione di cassa dell'azienda ha raggiunto i 82 milioni di dollari al 30 settembre 2024, con ulteriori 58 milioni di dollari provenienti dall'esercizio di warrant nel quarto trimestre. Le spese per ricerca e sviluppo sono aumentate a 9,5 milioni di dollari, rispetto ai 1,2 milioni di dollari nel terzo trimestre del 2023. L'azienda ha riportato un reddito netto di 23 milioni di dollari per il terzo trimestre del 2024, rispetto a una perdita di 5,2 milioni di dollari nel terzo trimestre del 2023. Si prevede che l'attuale liquidità si estenda almeno fino al 2027.
Avalo Therapeutics (AVTX) informó sobre desarrollos significativos en el tercer trimestre de 2024, incluido el tratamiento del primer paciente en el ensayo de fase 2 LOTUS de AVTX-009 para el tratamiento de la hidradenitis supurativa. La posición de efectivo de la compañía alcanzó los 82 millones de dólares al 30 de septiembre de 2024, con otros 58 millones de dólares provenientes de ejercicios de opciones en el cuarto trimestre. Los gastos de investigación y desarrollo aumentaron a 9,5 millones de dólares, en comparación con 1,2 millones de dólares en el tercer trimestre de 2023. La compañía reportó un ingreso neto de 23 millones de dólares para el tercer trimestre de 2024, en comparación con una pérdida de 5,2 millones de dólares en el tercer trimestre de 2023. Se espera que la actual liquidez se extienda al menos hasta 2027.
Avalo Therapeutics (AVTX)는 2024년 3분기에 중요한 발전을 보고했으며, 이러한 발전에는 hidradenitis suppurativa 치료를 위한 AVTX-009의 2상 LOTUS 시험에서 첫 번째 환자의 투여가 포함됩니다. 회사의 현금 위치는 2024년 9월 30일 기준으로 8200만 달러에 도달했으며, 4분기에는 추가로 5800만 달러를 워런트 행사로 확보했습니다. 연구 및 개발 비용은 2023년 3분기 120만 달러에서 950만 달러로 증가했습니다. 회사는 2024년 3분기에 2300만 달러의 순이익을 보고했으며, 이는 2023년 3분기에 520만 달러의 손실과 비교됩니다. 현재 현금 사용 가능 기간은 최소 2027년까지 지속될 것으로 예상됩니다.
Avalo Therapeutics (AVTX) a rapporté des développements significatifs pour le troisième trimestre 2024, y compris l'administration du premier patient dans l'essai de phase 2 LOTUS d'AVTX-009 pour le traitement de l'hidradenite suppurativa. La position de trésorerie de l'entreprise a atteint 82 millions de dollars au 30 septembre 2024, avec un montant supplémentaire de 58 millions de dollars provenant de l'exercice de bons au quatrième trimestre. Les dépenses de recherche et développement ont augmenté à 9,5 millions de dollars, contre 1,2 million de dollars au troisième trimestre 2023. L'entreprise a déclaré un revenu net de 23 millions de dollars pour le troisième trimestre 2024, par rapport à une perte de 5,2 millions de dollars au troisième trimestre 2023. La trésorerie actuelle devrait durer jusqu'au moins 2027.
Avalo Therapeutics (AVTX) hat bedeutende Entwicklungen im dritten Quartal 2024 berichtet, einschließlich der Dosierung des ersten Patienten in der Phase-2-LOTUS-Studie mit AVTX-009 zur Behandlung der hidradenitis suppurativa. Die Liquiditätsposition des Unternehmens erreichte am 30. September 2024 82 Millionen Dollar, mit zusätzlichen 58 Millionen Dollar aus der Ausübung von Warrants im vierten Quartal. Die Forschungs- und Entwicklungskosten stiegen auf 9,5 Millionen Dollar, verglichen mit 1,2 Millionen Dollar im dritten Quartal 2023. Das Unternehmen berichtete von einem Nettoergebnis von 23 Millionen Dollar im dritten Quartal 2024, verglichen mit einem Verlust von 5,2 Millionen Dollar im dritten Quartal 2023. Die aktuelle Liquidität wird voraussichtlich bis mindestens 2027 ausreichen.
- Strong cash position of $82M with additional $58.1M from warrant exercises
- Net income of $23M in Q3 2024 vs $5.2M loss in Q3 2023
- Extended cash runway into 2027
- Initiation of Phase 2 LOTUS trial with first patient dosed
- R&D expenses increased significantly to $9.5M from $1.2M YoY
- G&A expenses increased to $4.3M from $2.5M YoY
- Phase 2 trial results not expected until 2026
Insights
Avalo's Q3 results showcase a significantly strengthened financial position with
The initiation of the Phase 2 LOTUS trial for hidradenitis suppurativa (HS) marks a significant milestone. The 180-patient study design investigating bi-weekly and monthly dosing regimens of AVTX-009 could potentially address an underserved market. The focus on IL-1β inhibition is particularly noteworthy, as this pathway plays a important role in HS pathogenesis. The convenient subcutaneous administration could provide a competitive advantage if efficacy is demonstrated. While the 2026 timeline for topline data indicates a lengthy development process, the robust cash position supports full trial execution.
- Dosed first patient in Phase 2 LOTUS Trial of AVTX-009 for the treatment of hidradenitis suppurativa (HS), with topline data expected in 2026
- Cash position of approximately
$82 million as of September 30, 2024 with subsequent receipt of approximately$58 million of warrant exercise proceeds in 4Q 2024, provides expected runway into at least 2027
WAYNE, Pa. and ROCKVILLE, Md., Nov. 07, 2024 (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 third quarter of 2024.
“We made significant progress in the third quarter and have dosed the first HS patient in our Phase 2 LOTUS trial of AVTX-009, a promising monoclonal antibody targeting interleukin-1β, a key player in inflammation. This achievement moves us closer to offering a vital new treatment for HS patients, with topline data anticipated in 2026. Our goal with the LOTUS trial is to showcase AVTX-009’s potential as a leading treatment for HS due to its potency, specificity, and convenient dosing. We’re committed to executing the trial effectively and exploring AVTX-009’s broader applications for other immune-mediated diseases as we work toward the selection of our second indication,” said Dr. Garry Neil, Chief Executive Officer and Chairman of the Board of Avalo Therapeutics.
Recent Corporate Highlights and Upcoming Anticipated Milestones:
- In October 2024, the first patient was dosed in the Phase 2 LOTUS trial for the treatment of HS.
- The Phase 2 LOTUS trial is a global study in approximately 180 adults with HS to assess the efficacy and safety of convenient subcutaneous bi-weekly and monthly dosing regimens of AVTX-009, compared to placebo.
- Topline data is expected in 2026.
- Avalo continues to evaluate AVTX-009 in additional immune-mediated diseases as it works toward the selection of a second indication.
- Subsequent to September 30, 2024 and through November 6, 2024, Avalo received
$58.1 million from the exercise of warrants issued in the first quarter of 2024 private placement.
Third Quarter 2024 Financial Update:
- Cash and cash equivalents were
$81.9 million as of September 30, 2024. Net cash used in operating activities was$34.0 million for the nine months ended September 30, 2024, which includes a$7.5 million milestone payment to AlmataBio, Inc. pursuant to the terms of the acquisition in the first quarter. Subsequent to September 30, 2024 and through November 6, 2024, Avalo received gross proceeds of$58.1 million pursuant to the exercise of 10,026,847 warrants which resulted in the issuance of 711,580 shares of common stock and 9,315.267 shares of preferred stock. Each share of preferred stock is convertible into 1,000 shares of common stock, subject to certain beneficial ownership limitations. The Company’s current cash on hand is expected to fund operations into at least 2027. - Research and development expenses were
$9.5 million for the third quarter of 2024, an increase of$8.3 million compared to$1.2 million for the same period in 2023. This increase was primarily due to AVTX-009 LOTUS trial initiation and development costs. - General and administrative expenses were
$4.3 million for the third quarter of 2024, an increase of$1.8 million compared to$2.5 million for the same period in 2023. This increase was primarily driven by employee compensation costs, including stock-based compensation expense, as well as increased consulting, legal and other professional expenses following the acquisition and financing that took place in the first quarter of 2024. - Net income was
$23.0 million for the three months ended September 30, 2024 as compared to net loss of$5.2 million for the same period in 2023. The increase to net income was driven by a$37.4 million increase to other income, net which largely related to the change in the fair value of the warrant liability for the period, partially offset by increased operating expenses discussed above. Basic net income per share, based on 5,546,257 weighted average common shares, was$0.98 for the three months ended September 30, 2024 compared to a basic net loss per share of$26.83 , based on 194,851 weighted average common shares outstanding, for the same period in 2023. Diluted net loss per share, based on 10,784,037 weighted average diluted common shares and which excludes the change in fair value of the warrant liability from diluted net loss, was$2.83 for the three months ended September 30, 2024 compared to$26.83 , based on 194,851 weighted average diluted common shares outstanding, for the same period in 2023.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| September 30, 2024 | December 31, 2023 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 81,858 | $ | 7,415 | ||||
| Other receivables | 998 | 136 | ||||||
| Prepaid expenses and other current assets | 3,251 | 843 | ||||||
| Restricted cash, current portion | 41 | 1 | ||||||
| Total current assets | 86,148 | 8,395 | ||||||
| Property and equipment, net | 1,674 | 1,965 | ||||||
| Goodwill | 10,502 | 10,502 | ||||||
| Restricted cash, net of current portion | 131 | 131 | ||||||
| Total assets | $ | 98,455 | $ | 20,993 | ||||
| Liabilities, mezzanine equity and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,811 | $ | 446 | ||||
| Accrued expenses and other current liabilities | 7,033 | 4,172 | ||||||
| Warrant liability | 46,830 | — | ||||||
| Contingent consideration | 5,000 | — | ||||||
| Total current liabilities | 60,674 | 4,618 | ||||||
| Royalty obligation | 2,000 | 2,000 | ||||||
| Deferred tax liability, net | 154 | 155 | ||||||
| Derivative liability | 11,810 | 5,550 | ||||||
| Other long-term liabilities | 1,083 | 1,366 | ||||||
| Total liabilities | 75,721 | 13,689 | ||||||
| Mezzanine equity: | ||||||||
| Series C Preferred Stock— | 1,658 | — | ||||||
| Series D Preferred Stock— | — | — | ||||||
| Series E Preferred Stock— | — | — | ||||||
| Stockholders’ equity: | ||||||||
| Common stock— | 10 | 1 | ||||||
| Additional paid-in capital | 355,990 | 342,437 | ||||||
| Accumulated deficit | (334,924 | ) | (335,134 | ) | ||||
| Total stockholders’ equity | 21,076 | 7,304 | ||||||
| Total liabilities, mezzanine equity and stockholders’ equity | $ | 98,455 | $ | 20,993 | ||||
The consolidated balance sheets as of September 30, 2024 and December 31, 2023 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product revenue, net | $ | 249 | $ | 236 | $ | 249 | $ | 1,353 | ||||||||
| Total revenues, net | 249 | 236 | 249 | 1,353 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of product sales | (714 | ) | 247 | (453 | ) | 1,505 | ||||||||||
| Research and development | 9,538 | 1,249 | 16,254 | 11,917 | ||||||||||||
| Acquired in-process research and development | — | — | 27,641 | — | ||||||||||||
| General and administrative | 4,286 | 2,490 | 12,008 | 7,624 | ||||||||||||
| Total operating expenses | 13,110 | 3,986 | 55,450 | 21,046 | ||||||||||||
| Loss from operations | (12,861 | ) | (3,750 | ) | (55,201 | ) | (19,693 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Excess of initial warrant fair value over private placement proceeds | — | — | (79,276 | ) | — | |||||||||||
| Change in fair value of warrant liability | 36,025 | — | 148,071 | — | ||||||||||||
| Private placement transaction costs | — | — | (9,220 | ) | — | |||||||||||
| Change in fair value of derivative liability | (1,100 | ) | 100 | (6,260 | ) | (120 | ) | |||||||||
| Interest income (expense), net | 964 | (1,553 | ) | 2,101 | (3,498 | ) | ||||||||||
| Other expense, net | (5 | ) | (17 | ) | (5 | ) | (42 | ) | ||||||||
| Total other income (expense), net | 35,884 | (1,470 | ) | 55,411 | (3,660 | ) | ||||||||||
| Income (loss) before taxes | 23,023 | (5,220 | ) | 210 | (23,353 | ) | ||||||||||
| Income tax (benefit) expense | (14 | ) | 8 | — | 23 | |||||||||||
| Net income (loss) | $ | 23,037 | $ | (5,228 | ) | $ | 210 | $ | (23,376 | ) | ||||||
| Net income (loss) per share of common stock1: | ||||||||||||||||
| Basic | $ | 0.98 | $ | (26.83 | ) | $ | 0.01 | $ | (231.05 | ) | ||||||
| Diluted | $ | (2.83 | ) | $ | (26.83 | ) | $ | (22.63 | ) | $ | (231.05 | ) | ||||
| 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. | ||||||||||||||||
The unaudited consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 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 Avalo Therapeutics
Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation. Avalo’s lead asset is AVTX-009, an anti-IL-1β mAb, targeting inflammatory diseases. Avalo also has two additional drug candidates, which include quisovalimab (anti-LIGHT mAb) and AVTX-008 (BTLA agonist fusion protein). For more information about Avalo, please visit www.avalotx.com.
About AVTX-009
AVTX-009 is a humanized monoclonal antibody (IgG4) that binds to interleukin-1β (IL-1β) with high affinity and neutralizes its activity. IL-1β is a central driver in the inflammatory process. Overproduction or dysregulation of IL-1β is implicated in many autoimmune and inflammatory diseases. IL-1β is a major, validated target for therapeutic intervention. There is evidence that inhibition of IL-1β could be effective in hidradenitis suppurativa and a variety of inflammatory diseases in dermatology, gastroenterology, and rheumatology.
About the LOTUS Trial
The LOTUS Trial is a randomized, double-blind, placebo-controlled, parallel-group Phase 2 trial with two AVTX-009 dose regimens to evaluate the efficacy and safety of AVTX-009 in approximately 180 adults with moderate to severe hidradenitis suppurativa. Subjects will be randomized (1:1:1) to receive either one of two dosing regimens of AVTX-009 or placebo during a 16-week treatment phase. The primary efficacy endpoint is the proportion of subjects achieving Hidradenitis Suppurativa Clinical Response (HiSCR75) at Week 16. Secondary objectives include but are not limited to: proportion of patients achieving HiSCR50 and HiSCR90 as well as change from baseline in: International HS Severity Score System (IHS4), draining fistula count, abscess and inflammatory nodule (AN) count and patients achieving at least a
About Hidradenitis Suppurativa
Hidradenitis suppurativa (HS) is a chronic inflammatory skin condition characterized by painful nodules, abscesses, and tunnels that form in areas of the body such as the armpits, groin, and buttocks, severely impacting the quality of life of affected individuals.1 HS is often underdiagnosed or misdiagnosed and therefore estimates of HS vary between 0.2
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: drug development costs, timing of trials and trial results and other risks, including reliance on investigators and enrollment of patients in clinical trials; reliance on key personnel; regulatory risks; integration of AVTX-009 into our operations; general economic and market risks and uncertainties, including those caused by the war in Ukraine and the Middle East; and those other risks detailed in Avalo’s filings with the Securities and Exchange Commission, available at www.sec.gov. 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.
References
1Patel ZS et al. Curr Pain Headache Rep. 2017;21(12):49.
2Egeberg A, et al. JAMA Dermatol 2016;152:429–34
3Phan K, et al Biomed Dermatol 2020; 4: 2-6
4Jfri, A, et al. JAMA Dermatol. 2021;157(8):924-31
5Nguyen TV, et al. J Eur Acad Dermatol Venereol. 2021;35(1):50-61
For media and investor inquiries
Christopher Sullivan, CFO
Avalo Therapeutics, Inc.
ir@avalotx.com
410-803-6793
or
Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com
FAQ
What was Avalo Therapeutics (AVTX) cash position in Q3 2024?
When will AVTX report topline data for the LOTUS trial?
What was AVTX's net income for Q3 2024?
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