Avalo Therapeutics Announces Inducement Grants to New Employees Under Nasdaq Listing Rule 5635(c)(4)

Avalo Therapeutics granted 78,000 inducement stock options to six new hires at a $19.34 exercise price under its 2025 Inducement Award Plan.

Rhea-AI Summary

Avalo Therapeutics (AVTX) granted inducement stock options to six new employees under Nasdaq Listing Rule 5635(c)(4). The Compensation Committee approved nonstatutory options to purchase an aggregate of 78,000 common shares, granted on September 2, 2026, with an exercise price of $19.34 per share, equal to the closing share price on the grant date.

The options vest 25% on each employee’s one-year employment anniversary, with the remaining 75% vesting monthly over the following 36 months, subject to continued service. These awards were granted under Avalo’s 2025 Inducement Award Plan. The company continues to advance its lead anti-IL-1β antibody abdakibart into a planned phase 3 program in hidradenitis suppurativa and is also developing AVTX-010, a next-generation anti-IL-1β monoclonal antibody.

News Explained

The September 2 grants are options, not an immediate share issuance; if exercised as they vest, the additional shares would increase total share count and reduce existing holders’ percentage ownership.

Market Context

Recent Form 4 activity recorded 84,842 shares sold and no shares bought over 90 days. That platform ...

Analysis

Recent Form 4 activity recorded 84,842 shares sold and no shares bought over 90 days. That platform context frames the employee option grants as compensation, while vesting terms and resale activity remain relevant risks to monitor.

Key Figures

New employees: 6 employees Options granted: 78,000 shares Listing rule: Nasdaq Rule 5635(c)(4) +5 more

8 metrics

New employees 6 employees Inducement grants

Options granted 78,000 shares Aggregate nonstatutory stock options

Listing rule Nasdaq Rule 5635(c)(4) Employee inducement awards

Grant date September 2, 2026 Date the options were granted

Exercise price $19.34 per share Equal to closing price on the grant date

Initial vesting 25% Vests on the one-year employment anniversary

Remaining vesting period 36 months Monthly vesting after the initial 25%

Population affected 1-4% Estimated global prevalence of hidradenitis suppurativa

Historical Context

5 past events · Latest: Sep 03 (Neutral)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Sep 03	Investor conferences	Neutral	-1.8%	Upcoming September investor conferences were followed by a -1.76% reaction.
Aug 06	Quarterly earnings	Positive	-0.7%	Pipeline progress and cash runway update were followed by a -0.74% reaction.
Jul 22	Investor conference	Neutral	-3.6%	BTIG Biotechnology Conference participation was followed by a -3.56% reaction.
Jul 07	Investor forum	Neutral	-3.6%	Leerink Partners forum participation was followed by a -3.56% reaction.
Jun 26	Index inclusion	Positive	+1.1%	Russell 2000 and Russell 3000 inclusion was followed by a 1.11% reaction.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Negative price reactions followed four of five recent events, including both conference notices and the latest earnings update; the Russell index inclusion was the sole positive reaction.

Key Terms

il-1β pathway, nonstatutory stock options, nasdaq listing rule 5635(c)(4), monoclonal antibody, +1 more

5 terms

il-1β pathway medical

"developing therapeutics targeting the IL-1β pathway for immune-mediated"

A signaling chain of proteins and cells driven by the molecule interleukin-1 beta (IL-1β) that triggers and sustains inflammation in the body. Think of it as a biological thermostat and alarm system: when IL-1β is released it amplifies immune responses and can drive symptoms in many diseases, making it a common drug target whose success or failure can affect the value of companies developing therapies or diagnostics.

nonstatutory stock options financial

"grants of nonstatutory stock options to purchase an aggregate"

A nonstatutory stock option is a company-issued right that lets an employee or contractor buy shares later at a set price, but it does not qualify for special tax breaks. Think of it like a voucher to buy stock at today’s price; when used, the difference between market price and voucher price is taxed as ordinary income to the holder. Investors care because these options create potential share dilution, affect reported compensation costs, and influence employee incentives and cash flow when taxes and withholdings are settled.

nasdaq listing rule 5635(c)(4) regulatory

"in accordance with Nasdaq Listing Rule 5635(c)(4)"

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

monoclonal antibody medical

"lead anti-IL-1β monoclonal antibody (mAb) drug candidate"

A monoclonal antibody is a laboratory-made protein designed to recognize and attach to a specific target in the body, such as a disease-causing substance or cell. It functions like a highly precise lock-and-key tool, helping to treat or detect illnesses. For investors, companies developing monoclonal antibodies can represent promising opportunities in the healthcare sector, especially as these treatments often address unmet medical needs.

phase 3 medical

"into a phase 3 registrational program in hidradenitis suppurativa"

Phase 3 is the late-stage clinical testing step for a new drug or medical treatment, where the product is given to large groups of patients to confirm effectiveness, monitor side effects, and compare it to standard care. Successful Phase 3 results are often the final scientific hurdle before regulators decide on approval and market launch—like passing a final exam before graduation—and can sharply change a company's valuation and future revenue prospects.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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WAYNE, Pa., Sept. 04, 2026 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), a clinical stage biotechnology company dedicated to developing therapeutics targeting the IL-1β pathway for immune-mediated inflammatory diseases, today announced the grant of inducement equity awards to six new employees. The Compensation Committee of the Board of Directors of Avalo approved the grants of nonstatutory stock options to purchase an aggregate of 78,000 shares of common stock (the “Options”) as inducements material to the employees entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

The Options were granted on September 2, 2026 and have an exercise price of $19.34 per share, which is equal to the closing price of Avalo’s common stock on the grant date. The Options will vest as to 25% of the underlying shares of common stock on the one-year anniversary of the applicable employee’s start date of employment, and the balance of the underlying shares of common stock vesting monthly thereafter over 36 months, subject to the applicable employee’s continued service relationship with Avalo through the applicable vesting dates. The Options are subject to the terms and conditions of Avalo’s 2025 Inducement Award Plan and award agreements thereunder.

About Avalo Therapeutics

Avalo Therapeutics is a clinical stage biotechnology company dedicated to developing therapeutics targeting the IL-1β pathway for immune-mediated inflammatory diseases. Avalo is advancing its lead anti-IL-1β monoclonal antibody (mAb) drug candidate, abdakibart, into a phase 3 registrational program in hidradenitis suppurativa (HS), a chronic inflammatory skin condition that affects an estimated 1-4% of the population globally. Avalo is pursuing additional development opportunities in IL-1β driven indications. Avalo is also developing AVTX-010, a long-acting next-generation anti-IL-1β mAb. 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: 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

or

Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com

FAQ

What equity awards did Avalo Therapeutics (AVTX) grant to new employees in September 2026?

Avalo Therapeutics granted nonstatutory stock options to purchase an aggregate of 78,000 shares of common stock to six new employees. These inducement awards were approved by the Board’s Compensation Committee and were made under the company’s 2025 Inducement Award Plan in line with Nasdaq Listing Rule 5635(c)(4).

What is the exercise price and grant date of the new Avalo Therapeutics (AVTX) inducement stock options?

The inducement stock options were granted on September 2, 2026, with an exercise price of $19.34 per share. The exercise price equals the closing price of Avalo’s common stock on the grant date, as specified by the company.

How do the inducement stock options granted by Avalo Therapeutics (AVTX) vest for the new employees?

The options vest as to 25% of the shares on each employee’s one-year anniversary of employment. The remaining 75% of the underlying shares vest monthly over the following 36 months, subject to the employee’s continued service with Avalo through each vesting date.

Under which plan were Avalo Therapeutics (AVTX) inducement options granted and why?

The inducement options were granted under Avalo’s 2025 Inducement Award Plan. The company states that these nonstatutory stock options were approved as inducements material to the employees entering into employment, in accordance with Nasdaq Listing Rule 5635(c)(4).

What clinical programs does Avalo Therapeutics (AVTX) highlight alongside the inducement grant announcement?

Avalo highlights its lead anti-IL-1β monoclonal antibody abdakibart, which it plans to advance into a phase 3 registrational program in hidradenitis suppurativa. The company is also developing AVTX-010, a long-acting next-generation anti-IL-1β monoclonal antibody, and is pursuing additional IL-1β driven indications.