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
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