Avalo Therapeutics First Quarter 2022 Financial Results and Business Updates
May 05 2022 - 7:30AM
Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business
updates and first quarter 2022 financial results.
“The first quarter has been highly productive
for the Avalo Therapeutics team. We executed our pipeline
prioritization plan and right-sized the organization needed to
deliver what we think will provide the greatest value for our
shareholders,” said Dr. Garry Neil, Chief Executive Officer of
Avalo Therapeutics. “We remain focused on driving our highest value
programs forward to meet our timelines. These include our Phase 2
clinical trial of AVTX-002 in NEA and our pivotal trial of ATX-803
in LAD II. We have now initiated both programs, and we expect to
dose our first patients in both studies in the second quarter,
keeping the programs on track to meet our year-end data release
milestones.”
Business Update
- The Company executed a reduction in
workforce in March to align with its previously announced, focused
pipeline. With these changes, the Company believes it will achieve
substantial cost savings over time while creating a more
appropriately sized workforce needed to successfully achieve the
Company’s 2022 objectives, most notably obtaining and releasing
data for its Phase 2 clinical trial of AVTX-002 in NEA and pivotal
trial of AVTX-803 in LAD II. Headcount was reduced by approximately
one third from December 31, 2021.
Program Updates and
Milestones:
- AVTX-002:
Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory
diseases.
- NEA: The Company has initiated its
Phase 2 randomized, double-blind, placebo-controlled clinical trial
evaluating AVTX-002 in 80 patients with poorly controlled NEA.
Top-line data from the trial are expected in the fourth quarter of
2022.
- IBD: The Company continues to
consider initiating a randomized, double-blind, placebo-controlled
clinical study in moderate-to-severe refractory patients in
inflammatory bowel disease (IBD).
- AVTX-007:
Anti-IL-18 mAb targeting adult-onset Still’s disease (AOSD).
- AOSD: The Company is evaluating
AVTX-007 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 are currently expected in 2023,
which is subject to change and refinement pending finalization of
the review.
- AVTX-800 programs (AVTX-801
and AVTX-803): Monosaccharide therapies for two congenital
disorders of glycosylation (CDGs): leukocyte adhesion deficiency
type II (LAD II, also known as SLC35C1-CDG) and PGM1-CDG.
- LAD II: The Company has initiated a
single-center (U.S.), double-blind (followed by an open-label
extension) pivotal study of AVTX-803 in patients with LAD II. Data
from this pivotal trial are expected in the fourth quarter of
2022.
- PGM1-CDG: Avalo and the study
sponsor remain in dialogue with the U.S. Food and Drug
Administration (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.
First Quarter 2022 Financial
Update:
As of March 31, 2022, Avalo had $38.5 million in
cash and cash equivalents, representing a $16.1 million decrease as
compared to December 31, 2021. The decrease was primarily driven by
operating expenditures to fund and support pipeline
development.
Total operating expenses decreased $9.0 million
for the three months ended March 31, 2022 as compared to the three
months ended March 31, 2021. The decrease was mainly driven by a
$15.6 million decrease in research and development expenses. The
decrease in research and development expenses was due to: 1) a
$10.0 million upfront license fee incurred in the first quarter of
2021, which did not repeat; and 2) a $5.6 million reduction due to
specific timing of manufacturing and clinical trial activities.
The decrease in operating expenses was partially
offset by $3.1 million of severance expense and $4.3 million of
non-cash stock-based compensation expense recognized in the first
quarter of 2022 due to headcount reductions from the pipeline
prioritization plan and the termination of employees prior to such
plan. Most of these expenses were general and administrative, and
they were the primary driver of the increase in general and
administrative expenses period over period. The Company expects
salary related expenses to decrease beginning in the second quarter
as a result of the headcount reductions. The net loss and change in
net loss was largely driven by operating expenses.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
March 31, 2022 |
|
December 31, 2021 |
|
|
(unaudited) (a) |
|
(a) |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
38,469 |
|
|
$ |
54,585 |
|
Accounts receivable, net |
|
|
938 |
|
|
|
1,060 |
|
Other receivables |
|
|
1,445 |
|
|
|
3,739 |
|
Inventory, net |
|
|
25 |
|
|
|
38 |
|
Prepaid expenses and other current assets |
|
|
2,682 |
|
|
|
2,372 |
|
Restricted cash, current portion |
|
|
100 |
|
|
|
51 |
|
Total current assets |
|
|
43,659 |
|
|
|
61,845 |
|
Property and equipment,
net |
|
|
2,604 |
|
|
|
2,695 |
|
Other long-term asset |
|
|
1,000 |
|
|
|
1,000 |
|
Intangible assets, net |
|
|
— |
|
|
|
38 |
|
Goodwill |
|
|
14,409 |
|
|
|
14,409 |
|
Restricted cash, net of
current portion |
|
|
227 |
|
|
|
227 |
|
Total assets |
|
$ |
61,899 |
|
|
$ |
80,214 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,757 |
|
|
$ |
3,369 |
|
Accrued expenses and other current liabilities |
|
|
14,136 |
|
|
|
16,519 |
|
Total current liabilities |
|
|
17,893 |
|
|
|
19,888 |
|
Notes payable |
|
|
33,183 |
|
|
|
32,833 |
|
Royalty obligation |
|
|
2,000 |
|
|
|
2,000 |
|
Deferred tax liability,
net |
|
|
122 |
|
|
|
113 |
|
Other long-term
liabilities |
|
|
2,358 |
|
|
|
2,298 |
|
Total liabilities |
|
|
55,556 |
|
|
|
57,132 |
|
Stockholders’ equity: |
|
|
|
|
Common stock—$0.001 par value; 200,000,000 shares authorized at
March 31, 2022 and December 31, 2021; 112,794,203 shares issued and
outstanding at March 31, 2022 and December 31, 2021 |
|
|
113 |
|
|
|
113 |
|
Additional paid-in capital |
|
|
290,447 |
|
|
|
285,135 |
|
Accumulated deficit |
|
|
(284,217 |
) |
|
|
(262,166 |
) |
Total stockholders’
equity |
|
|
6,343 |
|
|
|
23,082 |
|
Total liabilities and
stockholders’ equity |
|
$ |
61,899 |
|
|
$ |
80,214 |
|
|
|
|
|
|
|
|
|
|
(a) The condensed consolidated balance sheets as
of March 31, 2022 and December 31, 2021 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.
Condensed Consolidated Statements of
Operations
(In thousands, except per share data)
|
|
Three Months EndedMarch 31, |
|
|
2022 (a) |
|
2021 (a) |
Revenues: |
|
|
|
|
Product revenue, net |
|
$ |
1,173 |
|
|
$ |
473 |
|
Total revenues, net |
|
|
1,173 |
|
|
|
473 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Cost of product sales |
|
|
720 |
|
|
|
77 |
|
Research and development |
|
|
9,584 |
|
|
|
25,206 |
|
General and administrative |
|
|
9,756 |
|
|
|
4,911 |
|
Sales and marketing |
|
|
1,928 |
|
|
|
435 |
|
Amortization expense |
|
|
38 |
|
|
|
424 |
|
Total operating expenses |
|
|
22,026 |
|
|
|
31,053 |
|
|
|
|
(20,853 |
) |
|
|
(30,580 |
) |
Other (expense) income: |
|
|
|
|
Other expense, net |
|
|
(20 |
) |
|
|
— |
|
Interest (expense) income, net |
|
|
(1,169 |
) |
|
|
17 |
|
Total other (expense) income,
net from continuing operations |
|
|
(1,189 |
) |
|
|
17 |
|
Loss from continuing
operations before taxes |
|
|
(22,042 |
) |
|
|
(30,563 |
) |
Income tax expense |
|
|
9 |
|
|
|
11 |
|
Loss from continuing
operations |
|
$ |
(22,051 |
) |
|
$ |
(30,574 |
) |
Loss from discontinued
operations |
|
|
— |
|
|
|
(106 |
) |
Net loss |
|
$ |
(22,051 |
) |
|
$ |
(30,680 |
) |
|
|
|
|
|
Net loss per share of common
stock, basic and diluted: |
|
|
|
|
Continuing operations |
|
$ |
(0.20 |
) |
|
$ |
(0.32 |
) |
Discontinued operations |
|
|
0.00 |
|
|
|
0.00 |
|
Net loss per share of common
stock, basic and diluted |
|
$ |
(0.20 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
Net loss per share of
preferred stock, basic and diluted: |
|
|
|
|
Continuing operations |
|
|
|
$ |
(1.61 |
) |
Discontinued operations |
|
|
|
|
(0.01 |
) |
Net loss per share of
preferred stock, basic and diluted |
|
|
|
$ |
(1.62 |
) |
|
|
|
|
|
|
|
(a) The unaudited condensed consolidated
statements of operations for the three months ended March 31, 2022
and 2021 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 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 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: 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: Avalo's cash position and the potential need for it to
raise additional capital; 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; 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 BrinzeyICR
WestwickeChris.brinzey@westwicke.com339-970-2843
Avalo Therapeutics (NASDAQ:AVTX)
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