WAYNE, Pa. - Avalo Therapeutics, Inc. (NASDAQ:AVTX), a biotech company engaged in developing treatments for immune dysregulation, has announced the procurement of $69.4 million in gross proceeds following the full exercise of warrants from its March 2024 private placement. This exercise has brought the total gross proceeds from the transaction to $185 million.
The company has expressed gratitude for the unwavering support of its investors, who fully exercised their warrants from the earlier private placement. The exercise of 11,967,526 warrants at a price of $5.796933 per share resulted in the issuance of 781,259 shares of common stock and 11,186.267 shares of series C non-voting convertible preferred stock.
Avalo's CEO, Dr. Garry Neil, emphasized that while the company remains focused on the Phase 2 LOTUS trial for the treatment of hidradenitis suppurativa, the funds will aid in exploring additional inflammatory indications for their AVTX-009 program. The improved financial position is expected to extend the company's cash runway into at least 2027.
The private placement in March was conducted with leading investors including Commodore Capital and TCGX, alongside BVF Partners, Deep Track Capital, OrbiMed, Petrichor, and RA Capital Management. As of November 8, 2024, Avalo has 10,463,633 shares of common stock and 24,895.92 shares of series C preferred stock outstanding. Each share of series C preferred stock is convertible into 1,000 shares of common stock, within certain ownership limits.
Avalo Therapeutics focuses on the development of therapeutics for autoimmune and inflammatory diseases. Its lead asset, AVTX-009, is an anti-IL-1β monoclonal antibody targeting diseases characterized by overproduction or dysregulation of IL-1β, a central driver in inflammation. The LOTUS Trial is a Phase 2 study assessing the efficacy and safety of AVTX-009 in adults with moderate to severe hidradenitis suppurativa.
The information provided is based on a press release statement from Avalo Therapeutics. The company has made forward-looking statements regarding the intended use of proceeds and the development of its drug candidates. These statements are subject to risks and uncertainties that could cause actual results to differ from those projected.
In other recent news, Avalo Therapeutics has been maintaining a strong pace with significant developments. The company initiated a Phase 2 clinical trial, LOTUS, using AVTX-009, a monoclonal antibody, to treat hidradenitis suppurativa, a chronic skin condition. The trial is set to involve around 180 participants, with top-line data expected in 2026. Oppenheimer has maintained an Outperform rating on Avalo Therapeutics, emphasizing the potential of AVTX-009 and the company's strategic initiatives.
Avalo Therapeutics has also regained compliance with Nasdaq's Market Value of Listed Securities Standard, a noteworthy achievement following a previous notification of non-compliance. This development has been accompanied by strategic changes within the company, including the appointment of Mittie Doyle as the new Chief Medical (TASE:PMCN) Officer and Paul Varki as the new Chief Legal Officer.
Moreover, Avalo Therapeutics expanded its equity incentive and employee stock purchase plans, which have been approved by its stockholders. These changes include an increase in the total number of shares reserved for issuance, with automatic annual increases planned through January 1, 2034. These are some of the recent developments at Avalo Therapeutics, providing investors with a comprehensive view of the company's progress.
InvestingPro Insights
Avalo Therapeutics' recent financial maneuver has significantly bolstered its cash position, aligning with one of the InvestingPro Tips which highlights that the company "holds more cash than debt on its balance sheet." This improved financial standing is crucial for a biotech firm in the development stage, especially as it extends the company's cash runway into at least 2027.
However, investors should note that Avalo faces some challenges. According to InvestingPro Data, the company's revenue for the last twelve months as of Q3 2024 was only $0.82 million, with a concerning revenue growth of -63.54% over the same period. This aligns with another InvestingPro Tip indicating that Avalo is "quickly burning through cash," which is not uncommon for biotech companies in the research and development phase.
Despite these challenges, the market seems to be showing some optimism. InvestingPro Data reveals a strong 38.89% return over the last month and a 33.84% return over the last three months. This recent positive momentum could be attributed to the successful warrant exercise and the potential of the AVTX-009 program.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Avalo Therapeutics, providing a deeper understanding of the company's financial health and market position.
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