-- Completed enrollment in Phase 2 LOTUS trial of AVTX-009 for the treatment
of hidradenitis suppurativa; topline data expected mid-2026
-- Appointed Kevin Lind to Board of Directors
-- Expanded leadership team with key appointments in business development
and human resources
-- Cash and short-term investments of approximately $112 million as of
September 30, 2025 expected to provide runway into 2028
WAYNE, Pa., Nov. 06, 2025 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), a clinical stage biotechnology company fully dedicated to developing IL-1<BETA>-based treatments for immune-mediated inflammatory diseases, today announced business updates and financial results for the third quarter of 2025.
"Now that enrollment is complete, we're fully focused on completing the LOTUS trial, preparing for the data readout in mid-2026, and progressing our Phase 3 planning," said Dr. Garry Neil, Chief Executive Officer. "This marks an important transition for Avalo as we turn our focus from enrollment to completion of the trial, guided by strong conviction in AVTX-009's high-affinity inhibition of IL-1<BETA> and its potential to deliver meaningful benefit for people living with hidradenitis suppurativa."
Recent Corporate Highlights and Upcoming Anticipated Milestones:
-- Announced completion of enrollment of the Phase 2 LOTUS trial. The global
trial includes approximately 250 adults with moderate to severe
hidradenitis suppurativa to evaluate the efficacy and safety of
subcutaneous bi-weekly and monthly dosing regimens compared to placebo.
-- Topline data expected in mid-2026.
-- Appointed Kevin Lind to the Board of Directors. Mr. Lind brings extensive
leadership experience spanning financial and corporate strategy as well
as business development execution at development-stage biotech companies.
-- Expanded leadership team with the appointment of Taylor Boyd as Chief
Business Officer and Ashley Ivanowicz as Senior Vice President, Human
Resources.
Third Quarter 2025 Financial Update:
-- Cash, cash equivalents and short-term investments were $111.6 million as
of September 30, 2025. Net cash used in operating activities was $37.2
million for the nine months ended September 30, 2025. The Company's
current cash, cash equivalents and short-term investments are expected to
fund operations into 2028.
-- Research and development expenses were $13.6 million for the third
quarter of 2025, an increase of $4.1 million from the third quarter of
2024, driven by costs related to and supporting the Phase 2 LOTUS trial.
-- General and administrative expenses were $5.6 million for the third
quarter of 2025, an increase of $1.3 million from the third quarter of
2024, primarily driven by stock-based compensation expense.
-- Net loss was $30.6 million for the third quarter of 2025, as compared to
net income of $23.0 million for the third quarter of 2024. The difference
was driven by a $47.3 million change in other expenses from the prior
period primarily related to the warrants issued in the March 2024 private
placement, all of which were fully exercised in 2024. Additionally,
research and development expenses increased $4.1 million, as discussed
above. Basic and diluted net loss per share was $2.19 for the third
quarter of 2025 compared to basic net income per share of $0.98 for the
third quarter of 2024, based on 14,000,451 weighted average common shares
outstanding and 5,546,257 weighted average basic common shares
outstanding, respectively. Diluted net loss per share for the third
quarter of 2024 was $2.83, based on 10,784,037 weighted average diluted
common shares outstanding.
Consolidated Balance Sheets
(In thousands, except share and per share data)
September 30, 2025 December 31, 2024
-------------------- ---------------------
(unaudited)
-------------------- ---------------------
Assets
Current assets:
Cash and cash
equivalents $ 26,963 $ 134,546
Short-term
investments 84,654 --
Prepaid expenses and
other current assets 2,139 4,325
Restricted cash,
current portion 90 19
--------------- --------------
Total current assets 113,846 138,890
Property and equipment, net 542 1,209
Goodwill 10,502 10,502
Restricted cash, net of
current portion 210 131
--------------- --------------
Total assets $ 125,100 $ 150,732
=============== ==============
Liabilities, mezzanine
equity and stockholders'
equity
Current liabilities:
Accounts payable $ 474 $ 283
Accrued expenses and
other current
liabilities 7,498 6,317
Derivative liability,
current -- 360
Total current liabilities 7,972 6,960
Royalty obligation 2,000 2,000
Deferred tax liability, net 304 270
Derivative liability,
non-current 23,160 8,120
Other long-term liabilities 117 350
--------------- --------------
Total liabilities 33,553 17,700
Mezzanine equity:
Series D Preferred
Stock--$0.001 par
value; 1 share of
Series D Preferred
Stock authorized at
September 30, 2025 and
December 31, 2024; 1
share of Series D
Preferred Stock issued
and outstanding at
September 30, 2025 and
December 31, 2024 -- --
Series E Preferred
Stock--$0.001 par
value; 1 share of
Series E Preferred
Stock authorized at
September 30, 2025 and
December 31, 2024; 1
share of Series E
Preferred Stock issued
and outstanding at
September 30, 2025 and
December 31, 2024 -- --
Stockholders' equity:
Common stock--$0.001 par
value; 200,000,000
shares authorized at
September 30, 2025 and
December 31, 2024;
17,827,635 and
10,471,934 shares
issued and outstanding
at September 30, 2025
and December 31, 2024,
respectively 18 10
Series C Preferred
Stock--$0.001 par
value; 34,326 shares of
Series C Preferred
Stock authorized at
September 30, 2025 and
December 31, 2024;
19,364 and 24,896
shares of Series C
Preferred Stock issued
and outstanding at
September 30, 2025 and
December 31, 2024,
respectively -- --
Additional paid-in
capital 526,290 503,285
Accumulated other
comprehensive income 41 --
Accumulated deficit (434,802) (370,263)
--------------- --------------
Total stockholders' equity 91,547 133,032
--------------- --------------
Total liabilities,
mezzanine equity and
stockholders' equity $ 125,100 $ 150,732
=============== ==============
The consolidated balance sheets as of September 30, 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 generally 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,
--------------------------
2025 2024 2025 2024
---------- ---------- ---------
Revenues:
Product
revenue, net $ -- $ 249 $ -- $ 249
Total
revenues,
net -- 249 -- 249
---------- ---------- ---------- ---------
Operating
expenses:
Cost of product
sales $ -- $ (714) $ -- $ (453)
Research and
development 13,621 9,538 36,817 16,254
General and
administrative 5,577 4,286 16,366 12,008
Acquired
in-process
research and
development -- -- -- 27,641
Total
operating
expenses 19,198 13,110 53,183 55,450
---------- ---------- ---------- ---------
Loss from
operations (19,198) (12,861) (53,183) (55,201)
Other (expense)
income:
Change in fair
value of
derivative
liability (12,530) (1,100) (14,680) (6,260)
Interest income,
net 1,117 964 3,367 2,101
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)
Other expense,
net (3) (5) (8) (5)
---------- ---------- ---------- ---------
Total other
(expense) income,
net (11,416) 35,884 (11,321) 55,411
---------- ---------- ---------- ---------
(Loss) income
before taxes (30,614) 23,023 (64,504) 210
Income tax expense
(benefit) 11 (14) 35 --
---------- ---------- ---------- ---------
Net (loss) income $ (30,625) $ 23,037 $ (64,539) $ 210
========== ========== ========== =========
Net (loss) income
per share of
common stock -
basic $ (2.19) $ 0.98 $ (5.47) $ 0.01
Net loss per share
of common stock -
diluted $ (2.19) $ (2.83) $ (5.47) $ (22.63)
Weighted average
common shares
outstanding -
basic 14,000,451 5,546,257 11,795,810 2,491,114
Weighted average
common shares
outstanding -
diluted 14,000,451 10,784,037 11,795,810 6,540,963
The unaudited consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 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 fully dedicated to developing IL-1<BETA>-based treatments for immune-mediated inflammatory diseases. Our lead asset, AVTX-009, is in a Phase 2 clinical trial for hidradenitis suppurativa (HS). We're also exploring additional opportunities to make an impact in prevalent indications that have significant remaining unmet needs. 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-1<BETA> (IL-1<BETA>) with high affinity and neutralizes its activity. IL-1<BETA> is a pro-inflammatory cytokine that plays a central role in the pathogenesis of a wide range of human diseases.(1) It activates immune cells that generate proinflammatory cytokines, including IL-6, TNF-<ALPHA>, and IL-17. Dysregulated IL-1<BETA> signaling is a major driver of inflammation, contributing to the progression of autoimmune disorders. IL-1<BETA> inhibition has proven effective in multiple immune-mediated inflammatory diseases.(1-3)
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, safety and tolerability of AVTX-009 in approximately 250 adults with moderate to severe hidradenitis suppurativa. Subjects were 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: the 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 30% reduction on a numerical rating scale in Patient's Global Assessment of Skin Pain (PGA Skin Pain). For additional information this trial (NCT06603077), please visit www.clinicaltrials.gov or www.lotustrial.com.
About Hidradenitis Suppurativa
Hidradenitis suppurativa (HS) is a chronic, progressive, often debilitating inflammatory skin disease that causes painful nodules, abscesses, and tunnels to form under the skin.(4-6,) (8) Areas commonly affected by HS include the nape of the neck, breasts, chest, armpits, abdomen, buttocks and anus, groin and genitals, and inner thighs.(7) If not adequately and promptly treated, the chronic inflammation characteristic of HS may progress to tissue destruction and permanent scarring.(4-6,9) HS typically first presents in late adolescence or early adulthood and is estimated to affect 0.7--1.2% of the U.S. population, though some sources suggest the prevalence may be as high as 2--4%.(10,11,12)
References:(1) Dinarello CA. Immunol Rev. 2018;281(1):8-27. (2) Kany S et al. Int J Mol Sci. 2019;20(23):6008. (3) Kimball AB et al. Presented at: American Academy of Dermatology; March 8-12, 2024; San Diego, CA. (4) Diaz MJ, et al. Curr Iss Mol Bio. 2023;45:4400-4415. (5) Agnese ER, et al. Cureus. 2023;15(11):e49390. (6) de Oliveira ASLE, et al. Biomolecules. 2022;12(10):1371. (7) Ingram JR, et al. J Eur Acad Dermatol Venereol. 2022;36(9):1597-160. (8) Sabat R, et al. The Lancet. 2025;405(10476):P420-438. (9) Jemec GB. Clinicalpractice. Hidradenitis suppurativa. N Engl J Med. 2012;366(2):158--164. (10) Garg A, Kirby JS, Lavian J, Lin G, Strunk A. Sex- and Age-Adjusted Population Analysis of Prevalence Estimates for Hidradenitis Suppurativa in the United States. JAMA Dermatol. 2017;153(8):760--764. doi:10.1001/jamadermatol.2017.0201. (11) Ingram, John R.British Journal of Dermatology. doi:10.1111/bjd.19435. (12) Nguyen TV, et al. J Eur Acad Dermatol Venereol. 2021;35(1):50-61.
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; 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.
For media and investor inquiries
Christopher Sullivan, CFO
Avalo Therapeutics, Inc.
ir@avalotx.com
410-803-6793
Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com
(END) Dow Jones Newswires
November 06, 2025 07:00 ET (12:00 GMT)
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