Avalo Therapeutics Announces Proposed Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Avalo Therapeutics (NASDAQ: AVTX) commenced an underwritten public offering of common stock and, for certain investors, pre-funded warrants on May 5, 2026. Avalo may grant underwriters a 30-day option to purchase up to an additional 15% of the shares offered.

Proceeds, together with existing cash and investments, are intended to fund clinical development of abdakibart including Phase 3 topline data release, and for working capital and general corporate purposes. Leerink Partners, TD Cowen and BofA Securities are joint bookrunners. The securities are offered under Avalo’s effective Form S-3 shelf registration (No. 333-292614).

Positive

• Provides additional cash to advance Phase 3 development of abdakibart
• Underwritten offering with three joint bookrunners (Leerink, TD Cowen, BofA)

Negative

• Potential shareholder dilution from the public offering and pre-funded warrants
• Underwriters may sell up to 15% more shares, increasing possible dilution

News Market Reaction – AVTX

+34.13% 1.7x vol

99 alerts

+34.13% Session close to close

+91.0% Peak Tracked

-34.0% Trough Tracked

$434.91M Market Cap

1.7x Rel. Volume

In the May 6 session, AVTX gained 34.13%, reflecting a significant positive market reaction. Argus tracked a peak move of +91.0% during that session. Argus tracked a trough of -34.0% from its starting point during tracking. Our momentum scanner triggered 99 alerts that day, indicating high trading interest and price volatility. Trading volume was above average at 1.7x the daily average, suggesting increased trading activity.

Data tracked by StockTitan Argus on the day of publication.

Market Context

The stock surged +34.1% in the session following this news. A strong positive reaction aligns with t...

Analysis

The stock surged +34.1% in the session following this news. A strong positive reaction aligns with the company’s ability to quickly access its effective shelf and raise capital for abdakibart’s development. However, this proposed underwritten public offering of common stock and pre-funded warrants, with an underwriter option for an additional 15% in shares, represents potential dilution. Past AVTX news often saw price moves that diverged from headline tone, so sustained strength would have depended on deal pricing and perceived balance between dilution and clinical progress.

Key Figures

Underwriter option period: 30 days Underwriter overallotment: 15% Shelf registration number: Form S-3 No. 333-292614 +4 more

7 metrics

Underwriter option period 30 days Duration of underwriters’ option to buy additional shares/warrant shares

Underwriter overallotment 15% Additional shares and warrant shares available under the 30-day option

Shelf registration number Form S-3 No. 333-292614 Registration statement used for the proposed offering

Shelf filing date January 8, 2026 Date Form S-3 shelf registration was filed with SEC

Shelf effective date January 20, 2026 Date Form S-3 shelf was declared effective

Shelf capacity $750,000,000 Amount of securities Avalo may offer under current shelf

Carried-forward shelf $326,585,963 Previously registered but unsold securities preserved under Rule 415(a)(6)

Historical Context

5 past events · Latest: Apr 28 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 28	Milestone buyout deal	Positive	-10.8%	Restructured AlmataBio milestone obligations with new buyout option framework.
Mar 23	Earnings and updates	Neutral	+0.6%	Reported 2025 results and cash runway into 2028 with higher R&D spend.
Feb 24	Investor conferences	Neutral	+9.5%	Announced March 2026 healthcare conference participation and webcasts.
Feb 18	Inducement grants	Neutral	+6.5%	Granted stock options to new employees under Nasdaq inducement rule.
Feb 04	Investor conferences	Neutral	-10.0%	Planned February 2026 conference fireside chats and webcast access.

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

Pattern Detected

Recent AVTX headlines often saw sizable moves that diverged from the apparent tone of the news, especially for financing- and event-related updates.

Recent Company History

Over the last six months, Avalo issued several corporate updates, including a milestone buyout amendment on Apr 28, 2026, 2025 financial results with cash of $98.3M expected to fund operations into 2028, and multiple conference participations. Inducement grants on Feb 18, 2026 and conference announcements in February and March drove notable price swings. Against this backdrop, the new underwritten offering under the Form S-3 shelf adds another capital-raising event to a period already marked by financing and governance activity.

Key Terms

pre-funded warrants, underwritten public offering, shelf registration statement, form s-3, +2 more

6 terms

pre-funded warrants financial

"offering of shares of its common stock and, in lieu of common stock to certain investors, pre-funded warrants"

Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.

underwritten public offering financial

"announced that it has commenced an underwritten public offering of shares of its common stock"

An underwritten public offering is when a company sells new shares of its stock to the public with the help of a financial firm, called an underwriter. The underwriter agrees to buy all the shares upfront, reducing the company's risk, and then sells them to investors. This process helps companies raise money quickly and confidently from a wide range of buyers.

shelf registration statement regulatory

"offered pursuant to shelf registration statement on Form S-3 (No. 333-292614)"

A shelf registration statement is a document a company files with regulators that allows it to sell shares or bonds quickly when it’s a good time to raise money. It’s like having a pre-approved plan ready so the company can act fast without going through lengthy paperwork each time they want to sell, making fundraising more flexible.

form s-3 regulatory

"shelf registration statement on Form S-3 (No. 333-292614)"

Form S-3 is a legal document companies use to register their stock sales with the government, making it easier and faster for them to raise money by selling shares to investors. It’s like having a pre-approved shopping list that lets a company quickly sell new shares when they need funds, without going through a lengthy approval process each time.

prospectus supplement regulatory

"This offering is being made only by means of a prospectus supplement and an accompanying prospectus"

A prospectus supplement is an additional document provided alongside a company's main offering details, offering updated or extra information about a specific financial product being sold. It helps investors understand the latest terms, risks, and details of the investment, similar to how an update or revision clarifies or expands on original instructions, ensuring they have current and complete information before making a decision.

u.s. securities and exchange commission regulatory

"that was filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 8, 2026"

The U.S. Securities and Exchange Commission is a government agency responsible for overseeing the stock market and protecting investors. It sets rules to ensure that companies share truthful information and that trading is fair, helping to maintain trust in the financial system. This oversight is important because it helps prevent fraud and ensures that investors can make informed decisions.

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

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WAYNE, Pa., May 05, 2026 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (NASDAQ: AVTX) (“Avalo”), a clinical-stage biotechnology company fully dedicated to developing IL-1β based treatments for immune-mediated inflammatory diseases, today announced that it has commenced an underwritten public offering of shares of its common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase shares of its common stock. All of the shares of common stock and pre-funded warrants to be sold in this offering are being offered by Avalo. In addition, Avalo intends to grant the underwriters a 30-day option to purchase up to an additional fifteen percent (15%) of shares of its common stock (and shares of common stock underlying pre-funded warrants) offered in the public offering on the same terms and conditions. The proposed offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Avalo intends to use the net proceeds from the offering, together with its existing cash, cash equivalents and short-term investments, to advance the clinical development of abdakibart, including through its Phase 3 topline data release, and for working capital and other general corporate purposes.

Leerink Partners, TD Cowen and BofA Securities are acting as joint bookrunning managers for the offering.

The securities described above are being offered pursuant to shelf registration statement on Form S-3 (No. 333-292614) that was filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 8, 2026, and was declared effective on January 20, 2026. This offering is being made only by means of a prospectus supplement and an accompanying prospectus that form a part of the registration statement.

A preliminary prospectus supplement related to and describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Copies of the preliminary prospectus supplement and an accompanying prospectus related to the offering may also be obtained, when available, from Leerink Partners LLC, Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, or by telephone at (800) 808-7525 ext. 6105, or by email at syndicate@leerink.com; TD Securities (USA) LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at TDManualrequest@broadridge.com; and BofA Securities, Attention: Prospectus Department, 201 North Tryon Street, NC1-022-02-25 Charlotte, NC 28255- 0001, or by email at dg.prospectus_requests@bofa.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.

About Avalo Therapeutics

Avalo Therapeutics is a clinical stage biotechnology company fully dedicated to developing IL-1β-based treatments for immune-mediated inflammatory diseases. Our lead asset, abdakibart (AVTX-009), is an anti-IL-1β monoclonal antibody (mAb). Positive topline data was recently reported for abdakibart in a  Phase 2 clinical trial in hidradenitis suppurativa (HS). We’re also exploring additional opportunities to make an impact in prevalent indications that have significant remaining unmet needs.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release may contain “forward-looking statements” that are subject to substantial risks and uncertainties. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, and include, but are not limited to, statements regarding the completion and timing of the public offering, the anticipated use of proceeds from the offering and the expectation to grant the underwriters a 30-day option to purchase additional shares. Any forward-looking statements are based on Avalo’s current expectations, forecasts, and assumptions and are subject to a number of risks and uncertainties that could cause actual outcomes and results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties related to market conditions and satisfaction of customary closing conditions related to the proposed public offering. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Avalo’s actual results to differ from those contained in the forward-looking statements in this press release, see the section entitled “Risk Factors” in Avalo’s Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent periodic filings with the SEC, as well as in the preliminary prospectus supplement related to the proposed public offering. Forward-looking statements contained in this press release are based on information available to Avalo as of the date hereof and are made only as of the date of this release. Avalo undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing Avalo’s views as of any date subsequent to the date of this press release. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of Avalo.

Investor & Media Contact: 

Christopher Sullivan, CFO
Avalo Therapeutics, Inc.
ir@avalotx.com
410-803-6793

Or

Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com

FAQ

What is Avalo (AVTX) offering in the May 5, 2026 public offering?

Avalo is offering shares of common stock and pre-funded warrants to certain investors. According to the company, the offering may include a 30-day option for underwriters to purchase up to an additional 15% of the shares offered.

How will Avalo (AVTX) use proceeds from the May 2026 offering?

Proceeds will fund clinical development of abdakibart and corporate needs. According to the company, net proceeds plus existing cash will support Phase 3 topline data activities, working capital, and general corporate purposes.

Who are the bookrunners for Avalo's (AVTX) May 5, 2026 offering?

Leerink Partners, TD Cowen and BofA Securities are joint bookrunning managers. According to the company, these firms are handling the underwritten offering and related syndicate activities.

Will Avalo's (AVTX) offering be dilutive to existing shareholders?

Yes. The offering and pre-funded warrants will increase outstanding shares if exercised or sold. According to the company, underwriters also have a 30-day option to buy up to an additional 15% of offered shares.

Where is the Avalo (AVTX) offering registered and how can investors access the prospectus?

The offering is made under Avalo's Form S-3 shelf registration No. 333-292614. According to the company, a preliminary prospectus supplement will be filed with the SEC and available at www.sec.gov and from the listed bookrunners.