Avalo Reports Third Quarter 2023 Financial Results and Provides Business Updates
- Successfully eliminated $35 million debt paving the way for future growth and innovation
- Divested AVTX-800 series for potential milestone payments of $45 million, fully focusing the pipeline on Avalo’s promising immunology assets
- Disclosed improved cash of approximately $10.2 million as of September 30, 2023
WAYNE, Pa. and ROCKVILLE, Md., Nov. 09, 2023 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and financial results for the third quarter of 2023.
Dr. Garry Neil, Chief Executive Officer and Chairman of the Board remarked, “We made significant progress in the third quarter, highlighted by the full debt payoff and divestiture of the 800 series. Our strengthened balance sheet and focused pipeline underscores our unwavering commitment to execute our strategy to progress our promising immunology drug candidates and positions us to consider collaborations, pursue funding for research and development, and bring innovative treatments to market.”
Dr. Neil continued, “I am excited to potentially kick off a randomized placebo-controlled trial of quisovalimab, our anti-LIGHT mAb, in patients with ulcerative colitis or another inflammatory indication, subject to funding. This drug candidate has previously shown strong target engagement in both acute and chronic inflammatory diseases, and I remain optimistic that it could transform the lives of patients with immunological diseases and address unmet medical needs. Additionally, we look forward to progressing AVTX-008, our BTLA agonist fusion protein with high-binding affinity and serum stability, to IND. Targeting BTLA represents a promising and increasingly recognized avenue for developing therapies that can effectively modulate the immune response in autoimmune diseases while minimizing the risk of systemic immunosuppression. We believe AVTX-008 is unique in this class because it is a fusion protein that utilizes the natural ligand thus avoiding potential problems with agonist mAbs. Finally, we continue to evaluate new opportunities to further augment our immunology pipeline.”
Corporate Updates:
- In September of 2023, Avalo paid off the remaining $14.3 million of its original $35 million debt owed to Horizon Technology Finance Corporation (Nasdaq: HRZN). As a result, Avalo’s obligations under the debt agreement were deemed satisfied.
- On October 27, 2023, Avalo completed the divestiture of its rights, title and interest in, assets relating to AVTX-801, AVTX-802 and AVTX-803 (collectively, the 800 Series) to AUG Therapeutics, LLC (AUG). The Company is entitled to up to $45 million of contingent milestone payments. The Company previously announced it entered into a purchase agreement with AUG to divest the 800 Series on September 12, 2023.
Program Updates:
- Quisovalimab (AVTX-002): Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory diseases.
- Quisovalimab has shown a rapid and sustained reduction of LIGHT levels, as well as a favorable safety and tolerability profile, in all indications studied including COVID-19 Acute Respiratory Distress Syndrome (ARDS), Crohn’s Disease and Non-Eosinophilic Asthma (NEA).
- Quisovalimab was statistically significant in reducing respiratory failure and mortality in patients hospitalized with COVID-19 ARDS in a randomized placebo-controlled trial. Quisovalimab also demonstrated positive trends in an open-label study in Crohn’s Disease.
- A post-hoc analyses in the PEAK Trial showed a sub-population of NEA patients with baseline LIGHT levels over 125 pg/mL, which represented over 50% of patients, had an approximate 50% reduction in asthma-related events (AREs) for patients treated with quisovalimab compared to placebo.
- Avalo is pursuing funding for the program and is considering a randomized placebo-controlled trial in patients with Ulcerative Colitis or other inflammatory conditions.
- AVTX-008: B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders.
- AVTX-008 is uniquely positioned as a fusion protein with high-binding affinity and serum stability. It utilizes the natural ligand thus it may avoid the potential problems with agonist mAbs.
- 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.
Third Quarter 2023 Financial Update:
Avalo had $10.2 million in cash and cash equivalents as of September 30, 2023. The Company fully eliminated its debt with principal payments of $21.2 million, inclusive of the full payoff of the remaining loan in September of 2023. The Company raised $46.2 million of net proceeds from equity financings in the nine months ended September 30, 2023.
Total operating expenses decreased $24.7 million for the nine months ended September 30, 2023 as compared to the same period in 2022. This decrease was primarily driven by decreases to both research and development expenses and selling, general and administrative as a result of cost savings initiatives implemented in the first quarter of 2022 and fewer research and development programs ongoing in the current year.
The net loss and net loss per share for the nine months ended September 30, 2023 was largely driven by operating expenses. The significant decrease in net loss for the nine months ended September 30, 2023 as compared to the prior year period was due to the $24.7 million decrease in operating expenses, partially offset by the $14.5 million of license revenue in the prior year that did not repeat. Net loss per share decreased as a result of the decrease in net loss and due to a significant increase in shares outstanding.
Consolidated Balance Sheets
(In thousands, except share and per share data)
September 30, 2023 | December 31, 2022 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,180 | $ | 13,172 | ||||
Other receivables | 1,538 | 1,919 | ||||||
Inventory, net | — | 20 | ||||||
Prepaid expenses and other current assets | 940 | 1,290 | ||||||
Restricted cash, current portion | 1 | 15 | ||||||
Total current assets | 12,659 | 16,416 | ||||||
Property and equipment, net | 2,071 | 2,411 | ||||||
Goodwill | 14,409 | 14,409 | ||||||
Restricted cash, net of current portion | 131 | 131 | ||||||
Total assets | $ | 29,270 | $ | 33,367 | ||||
Liabilities and stockholders’ equity (deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 789 | $ | 2,882 | ||||
Deferred revenue | — | 88 | ||||||
Accrued expenses and other current liabilities | 5,216 | 13,214 | ||||||
Notes payable, current | — | 5,930 | ||||||
Total current liabilities | 6,005 | 22,114 | ||||||
Notes payable, non-current | — | 13,486 | ||||||
Royalty obligation | 2,000 | 2,000 | ||||||
Deferred tax liability, net | 164 | 141 | ||||||
Derivative liability | 4,950 | 4,830 | ||||||
Other long-term liabilities | 1,456 | 1,711 | ||||||
Total liabilities | 14,575 | 44,282 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2023 and December 31, 2022; 192,382,419 and 9,430,535 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 192 | 9 | ||||||
Additional paid-in capital | 341,469 | 292,900 | ||||||
Accumulated deficit | (326,966 | ) | (303,824 | ) | ||||
Total stockholders’ equity (deficit) | 14,695 | (10,915 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 29,270 | $ | 33,367 |
The condensed consolidated balance sheets as of September 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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Product revenue, net | $ | 236 | $ | 432 | $ | 1,353 | $ | 2,638 | ||||||||
License revenue | — | 14,517 | — | 14,517 | ||||||||||||
Total revenues, net | 236 | 14,949 | 1,353 | 17,155 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of product sales | 247 | 528 | 1,505 | 2,814 | ||||||||||||
Research and development | 1,249 | 7,042 | 11,917 | 25,136 | ||||||||||||
Selling, general and administrative | 2,490 | 3,284 | 7,624 | 17,752 | ||||||||||||
Amortization expense | — | — | — | 38 | ||||||||||||
Total operating expenses | 3,986 | 10,854 | 21,046 | 45,740 | ||||||||||||
(3,750 | ) | 4,095 | (19,693 | ) | (28,585 | ) | ||||||||||
Other expense: | ||||||||||||||||
Interest expense, net | (1,553 | ) | (898 | ) | (3,498 | ) | (3,221 | ) | ||||||||
Change in fair value of derivative liability | 100 |
By: GlobeNewswire
- 09 Nov 2023
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