Avalo Therapeutics Reports 2021 Financial Results and Provides Business Updates
March 02 2022 - 7:30AM
Avalo Therapeutics, Inc. (Nasdaq: AVTX), a leading clinical-stage
precision medicine company that discovers, develops, and
commercializes targeted therapeutics for patients with significant
unmet need in immunology and rare genetic diseases, today announced
business updates and year-end financial results for 2021.
“2021 was an important year for Avalo in that
the Company produced compelling data for AVTX-002 in both acute and
chronic inflammatory diseases. Furthermore, it positioned the
Company to launch a placebo-controlled trial in NEA (AVTX-002), as
well as two rare disease pivotal trials in 2022,” said Dr. Garry
Neil, Chief Executive Officer of Avalo Therapeutics. “We are
focused on the operational execution of these programs and their
corresponding milestones, which have great potential to drive
shareholder value in the coming year. We believe the recent
pipeline prioritization will allow for greater focus on these most
promising programs while also allowing for a reduction in cash
burn.”
Business Updates:
- Promoted Dr. Garry Neil to Chief Executive Officer and Chris
Sullivan to Chief Financial Officer. Dr. Neil brings to this
position extensive clinical development and leadership experience
in the biopharmaceutical industry including his current role as
Chairman of the Board for Arena Pharmaceuticals and prior senior
positions in leading pharmaceutical companies including Johnson
& Johnson, Merck and AstraZeneca. Mr. Sullivan brings strong
financial leadership to Avalo from his prior senior level
finance/accounting positions for various Nasdaq-listed life science
companies and Ernst & Young.
- Appointed June Almenoff M.D., Ph.D., and Mitchell Chan to the
Board of Directors. Dr. Almenoff brings close to 25 years of
leadership experience focused on research and development and
commercialization including her time as the President and Chief
Medical Officer of Furiex Pharmaceuticals. Mr. Chan has more than
15 years of finance experience in the life sciences industry
including his time as Chief Financial Officer of Viela Bio and
senior financial positions at AstraZeneca and Genentech-Roche.
- Announced plans to conduct a new Phase 2 randomized,
double-blind, placebo-controlled trial of AVTX-002 for the
treatment of moderate to severe NEA; top-line data anticipated in
the fourth quarter of 2022. NEA is subtype of asthma with a poor
prognosis that encompasses approximately half of asthma patients.
Biomarker data suggests that LIGHT plays a strong role in
inflammation and airway remodeling in NEA and support the
development of AVTX-002 for poorly controlled NEA patients.
- Optimized the pipeline, with Avalo winding down internal
development efforts of AVTX-006 in lymphatic malformations and
AVTX-007 for the treatment of multiple myeloma (as previously
announced) while pausing current development efforts for AVTX-802
(MPI-CDG). We plan to pursue strategic alternatives for AVTX-006.
Avalo also intends to focus on placebo-controlled trials for
AVTX-002 going forward, starting with NEA. We will therefore not be
moving forward with the uncontrolled cohort of AVTX-002 in
ulcerative colitis (UC) patients. Avalo will consider planning for
a possible randomized, double-blind, placebo-controlled clinical
study in moderate to severe refractory patients with inflammatory
bowel disease.
- Presented data from Phase 1b, open-label, dose-escalation,
signal-finding, multi-center study evaluated the safety,
tolerability, pharmacokinetics, and short-term efficacy of AVTX-002
in adults with moderate to severe, active Crohn’s disease (CD) who
have previously failed anti-tumor necrosis factor alpha (anti-TNFα)
treatment. Fifty percent (4/8 patients) demonstrated evidence of
mucosal healing as determined by colonoscopy and adjudicated by a
central reader with one patient achieving remission
(SES-CD=0).
Program Updates and
Milestones:
- AVTX-002:
Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory
diseases including Non-eosinophilic Asthma and inflammatory bowel
disease (Crohn’s disease and Ulcerative Colitis).
- Non-eosinophilic Asthma: An
investigational new drug (IND) application is active for AVTX-002
for the treatment of NEA and Avalo expects to initiate a Phase 2
randomized, double-blind, placebo-controlled Phase 2 clinical trial
in 80 patients with poorly controlled NEA. Top-line data from the
trial are currently expected in the fourth quarter of 2022.
- Inflammatory Bowel Disease:
Presented positive Phase 1b data in CD with efficacy signal
demonstrated in heavily pre-treated patients supports further
evaluation in inflammatory bowel disease patients’ refractory to
three or more treatments, including anti-TNFα and other biologics.
As Avalo intends to focus on placebo-controlled trials for AVTX-002
going forward, we will not be moving forward with the uncontrolled
cohort of AVTX-002 in UC patients. Avalo will consider planning for
a possible randomized, double-blind, placebo-controlled clinical
study in moderate to severe refractory patients in inflammatory
bowel disease.
- AVTX-007:
Anti-IL-18 mAb targeting adult-onset Still’s disease (AOSD) and
Systemic Juvenile Idiopathic Arthritis (SJIA).
- AOSD: AVTX-007 is being evaluated in a multicenter, Phase 1b
study in 12 refractory or steroid-dependent patients with AOSD in
two cohorts. Management is currently reviewing preliminary data and
the path forward related to this indication. Top-line data
currently expected in 2023, though this is subject to change and
refinement pending finalization of the review.
- Multiple Myeloma: Data from a
multicenter, Phase 1b study in relapsed and refractory multiple
myeloma patients indicated AVTX-007 was generally safe and well
tolerated at doses up to 14mg/kg. Additionally, pharmacodynamic
data indicate deep reductions in IL-18 levels occur withing
24-hours after dosing. However, as previously announced, due to a
lack of efficacy signal Avalo is winding down internal development
efforts in this indication.
- AVTX-006: Dual
mTORc1/c2 small molecule inhibitor for lymphatic malformations.
- As a result of a portfolio
prioritization review, Avalo is winding down internal development
of AVTX-006 and has decided to pursue strategic alternatives for
this program.
- AVTX-800 programs (AVTX-801, AVTX-802, and
AVTX-803): Therapeutic doses of monosaccharide therapies
for congenital disorders of glycosylation (CDGs).
- Avalo is in the process of initiating a single-center (US),
double-blind (followed by an open-label extension) pivotal study of
AVTX-803 in patients with leukocyte adhesion deficiency type II
(LAD II) caused by loss-of-function mutation in the SLC35C1 gene,
with pivotal trial data expected in the fourth quarter of
2022.
- Avalo and the study sponsor remain in dialogue with the FDA to
align on a suitable clinical study design for AVTX-801 (PGM1-CDG).
Pivotal trial data are expected in 2023. Avalo is currently working
with the study sponsor to refine milestone timing.
- The Company is pausing internal development of AVTX-802
(MPI-CDG) at this time due to challenges with study
feasibility.
2021 Financial Update:
As of December 31, 2021, Avalo had $54.6 million
in cash and cash equivalents, representing a $35.7 million increase
as compared to December 31, 2020. The increase was primarily driven
by gross proceeds of approximately $72.2 million from underwritten
public offerings and $35.0 million from a debt facility. Such
increases were partially offset by operating expenditures, the
majority of which were related to pipeline development.
Total operating expenses increased $8.0 million
for the year ended December 31, 2021 as compared to the year ended
December 31, 2020. The increase in operating expenses was largely
driven by a $27.6 million increase in research and development
expenses to support our maturing pipeline and a $4.4 million
increase in general and administrative expenses, partially offset
by a $25.5 million reduction in acquired in-process research and
development expense as this charge in 2020 did not repeat.
Consolidated Balance Sheets
(In thousands, except share and per share
data)
|
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
54,585 |
|
|
$ |
18,919 |
|
Accounts receivable, net |
|
|
1,060 |
|
|
|
2,177 |
|
Other receivables |
|
|
3,739 |
|
|
|
2,208 |
|
Inventory, net |
|
|
38 |
|
|
|
3 |
|
Prepaid expenses and other current assets |
|
|
2,372 |
|
|
|
2,660 |
|
Restricted cash, current portion |
|
|
51 |
|
|
|
38 |
|
Total current assets |
|
|
61,845 |
|
|
|
26,005 |
|
Property and equipment,
net |
|
|
2,695 |
|
|
|
1,607 |
|
Other long-term asset |
|
|
1,000 |
|
|
|
— |
|
Intangible assets, net |
|
|
38 |
|
|
|
1,585 |
|
Goodwill |
|
|
14,409 |
|
|
|
14,409 |
|
Restricted cash, net of
current portion |
|
|
227 |
|
|
|
149 |
|
Total assets |
|
$ |
80,214 |
|
|
$ |
43,755 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,369 |
|
|
$ |
2,574 |
|
Accrued expenses and other current liabilities |
|
|
16,519 |
|
|
|
11,310 |
|
Income taxes payable |
|
|
— |
|
|
|
— |
|
Current liabilities of discontinued operations |
|
|
— |
|
|
|
1,341 |
|
Total current liabilities |
|
|
19,888 |
|
|
|
15,225 |
|
Notes payable, net |
|
|
32,833 |
|
|
|
— |
|
Royalty obligation |
|
|
2,000 |
|
|
|
2,000 |
|
Deferred tax liability,
net |
|
|
113 |
|
|
|
90 |
|
Other long-term
liabilities |
|
|
2,298 |
|
|
|
1,878 |
|
Total liabilities |
|
|
57,132 |
|
|
|
19,193 |
|
Stockholders’ equity: |
|
|
|
|
Common stock—$0.001 par value; 200,000,000 shares authorized at
December 31, 2021 and 2020; 112,794,203 and 75,004,127 shares
issued and outstanding at December 31, 2021 and 2020,
respectively |
|
|
113 |
|
|
|
75 |
|
Preferred stock—$0.001 par value; 5,000,000 shares authorized at
December 31, 2021 and 2020; 0 and 1,257,143 shares issued and
outstanding at December 31, 2021 and 2020, respectively |
|
|
— |
|
|
|
1 |
|
Additional paid-in capital |
|
|
285,135 |
|
|
|
202,276 |
|
Accumulated deficit |
|
|
(262,166 |
) |
|
|
(177,790 |
) |
Total stockholders’
equity |
|
|
23,082 |
|
|
|
24,562 |
|
Total liabilities and
stockholders’ equity |
|
$ |
80,214 |
|
|
$ |
43,755 |
|
The consolidated balance sheets as of December
31, 2021 and 2020 have been derived from the audited financial
statements, 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)
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
Product revenue, net |
|
$ |
4,773 |
|
|
$ |
6,699 |
|
License revenue |
|
|
625 |
|
|
|
— |
|
Total revenues, net |
|
|
5,398 |
|
|
|
6,699 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Cost of product sales |
|
|
1,491 |
|
|
|
300 |
|
Research and development |
|
|
59,835 |
|
|
|
32,193 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
25,549 |
|
General and administrative |
|
|
21,832 |
|
|
|
17,418 |
|
Sales and marketing |
|
|
2,826 |
|
|
|
2,341 |
|
Amortization expense |
|
|
1,548 |
|
|
|
1,741 |
|
Total operating expenses |
|
|
87,532 |
|
|
|
79,542 |
|
|
|
|
(82,134 |
) |
|
|
(72,843 |
) |
Other (expense) income: |
|
|
|
|
Change in fair value of Investment in Aytu |
|
|
— |
|
|
|
5,208 |
|
Other (expense) income, net |
|
|
(20 |
) |
|
|
409 |
|
Interest (expense) income, net |
|
|
(2,391 |
) |
|
|
49 |
|
Total other (expense) income,
net from continuing operations |
|
|
(2,411 |
) |
|
|
5,666 |
|
Loss from continuing
operations before income taxes |
|
|
(84,545 |
) |
|
|
(67,177 |
) |
Income tax benefit |
|
|
(196 |
) |
|
|
(2,793 |
) |
Loss from continuing
operations |
|
$ |
(84,349 |
) |
|
$ |
(64,384 |
) |
(Loss) income from
discontinued operations |
|
|
(27 |
) |
|
|
884 |
|
Net loss |
|
$ |
(84,376 |
) |
|
$ |
(63,500 |
) |
|
|
|
|
|
Net (loss) income per share of
common stock, basic and diluted: |
|
|
|
|
Continuing operations |
|
$ |
(0.83 |
) |
|
$ |
(0.87 |
) |
Discontinued operations |
|
|
0.00 |
|
|
|
0.01 |
|
Net loss per share of common
stock, basic and diluted |
|
$ |
(0.83 |
) |
|
$ |
(0.86 |
) |
|
|
|
|
|
Net (loss) income per share of
preferred stock, basic and diluted: |
|
|
|
|
Continuing operations |
|
$ |
(4.15 |
) |
|
$ |
(4.38 |
) |
Discontinued operations |
|
|
0.00 |
|
|
|
0.06 |
|
Net loss per share of
preferred stock, basic and diluted |
|
$ |
(4.15 |
) |
|
$ |
(4.32 |
) |
The consolidated statements of operations for
the years ended December 31, 2021 and 2020 have been derived from
the audited 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 leading clinical-stage precision medicine company that discovers,
develops, and commercializes targeted therapeutics for patients
with significant unmet clinical need in immunology and rare genetic
diseases. The Company has built a diverse portfolio of innovative
therapies to deliver meaningful medical impact for patients in
urgent need. The Company’s clinical candidates commonly have a
proven mechanistic rationale, biomarkers and/or an established
proof-of-concept to expedite and increase the probability of
success.
For more information about Avalo, please visit
www.avalotx.com.
Forward-Looking StatementsThis 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: the future financial and
operational outlook; the development of product candidates or
products; timing and success of trial results and regulatory
review; potential attributes and benefits of product candidates;
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: 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, including as a result of recent
management changes; regulatory risks; Avalo's cash position and the
potential need for it to raise additional capital; general economic
and market risks and uncertainties, including those caused by the
COVID-19 pandemic and tensions 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
Chris BrinzeyWestwicke, an ICR
CompanyChris.brinzey@westwicke.com339-970-2843
or
Maxim Jacobs, CFA Vice President, Investor RelationsAvalo
Therapeuticsmjacobs@avalotx.com610-254-4201
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