Avalo Therapeutics Reports Third Quarter 2025 Financial Results and Recent Business Updates

Rhea-AI Summary

Avalo Therapeutics (NASDAQ: AVTX) completed enrollment in its Phase 2 LOTUS trial of AVTX-009 for hidradenitis suppurativa (~250 adults) and expects topline data in mid-2026. The company appointed Kevin Lind to the board and added senior leaders in business development and HR. As of September 30, 2025, cash, cash equivalents and short-term investments totaled approximately $111.6 million, which the company said is expected to fund operations into 2028. For Q3 2025, R&D was $13.6M, G&A was $5.6M, and net loss was $30.6M (basic loss per share $2.19).

Positive

• Phase 2 LOTUS enrollment complete (~250 patients)
• $111.6M cash and short-term investments as of Sep 30, 2025
• Cash runway expected into 2028
• Added Kevin Lind to board and senior hires

Negative

• Net loss of $30.6M for Q3 2025
• Research and development rose to $13.6M in Q3 2025 (up $4.1M YoY)
• Non-current derivative liability increased to $23.16M

Insights

Clinical Development and Corporate Finance Expert

Completion of Phase 2 enrollment and a cash runway into 2028 are material operational milestones, while quarterly losses and derivative liability swings merit attention.

Avalo Therapeutics completed enrollment of ~250 patients in its Phase 2 LOTUS trial of AVTX-009, testing bi-weekly and monthly dosing versus placebo, with topline data expected in mid-2026. This moves the program from recruitment risk to data-readout risk and concentrates near-term value drivers around the upcoming efficacy and safety results.

Financially, the company reported $111.6 million in cash, cash equivalents and short-term investments as of September 30, 2025, which management states should fund operations into 2028. R&D spend rose to $13.6 million in the quarter to support LOTUS, and net loss was $30.6 million, driven in part by a change in fair value of derivative liability. The balance sheet shows a notable non‑cash derivative liability increase to $23.16 million (non‑current), which affects reported other expense volatility and earnings comparability.

Watch for the mid-2026 topline readout and any commentary on trial responder rates and safety; these will directly determine program momentum. Also monitor quarterly cash burn versus the stated runway, and further changes in derivative/liability accounting that could swing reported results near-term. Given the mix of a clear clinical milestone and financial headwinds disclosed, the overall impact is assessed as neutral pending the upcoming data and continued cash consumption.

• Completed enrollment in Phase 2 LOTUS trial of AVTX-009 for the treatment of hidradenitis suppurativa; topline data expected mid-2026
• Appointed Kevin Lind to Board of Directors
• Expanded leadership team with key appointments in business development and human resources
• Cash and short-term investments of approximately $112 million as of September 30, 2025 expected to provide runway into 2028
  
  

WAYNE, Pa., Nov. 06, 2025 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), a clinical stage biotechnology company fully dedicated to developing IL-1β-based treatments for immune-mediated inflammatory diseases, today announced business updates and financial results for the third quarter of 2025.

“Now that enrollment is complete, we’re fully focused on completing the LOTUS trial, preparing for the data readout in mid-2026, and progressing our Phase 3 planning,” said Dr. Garry Neil, Chief Executive Officer. “This marks an important transition for Avalo as we turn our focus from enrollment to completion of the trial, guided by strong conviction in AVTX-009’s high-affinity inhibition of IL-1β and its potential to deliver meaningful benefit for people living with hidradenitis suppurativa.”

Recent Corporate Highlights and Upcoming Anticipated Milestones:

• Announced completion of enrollment of the Phase 2 LOTUS trial. The global trial includes approximately 250 adults with moderate to severe hidradenitis suppurativa to evaluate the efficacy and safety of subcutaneous bi-weekly and monthly dosing regimens compared to placebo.
  • Topline data expected in mid-2026.
• Appointed Kevin Lind to the Board of Directors. Mr. Lind brings extensive leadership experience spanning financial and corporate strategy as well as business development execution at development-stage biotech companies.
• Expanded leadership team with the appointment of Taylor Boyd as Chief Business Officer and Ashley Ivanowicz as Senior Vice President, Human Resources.

Third Quarter 2025 Financial Update:

• Cash, cash equivalents and short-term investments were $111.6 million as of September 30, 2025. Net cash used in operating activities was $37.2 million for the nine months ended September 30, 2025. The Company’s current cash, cash equivalents and short-term investments are expected to fund operations into 2028.
  
• Research and development expenses were $13.6 million for the third quarter of 2025, an increase of $4.1 million from the third quarter of 2024, driven by costs related to and supporting the Phase 2 LOTUS trial.
  
• General and administrative expenses were $5.6 million for the third quarter of 2025, an increase of $1.3 million from the third quarter of 2024, primarily driven by stock-based compensation expense.
  
• Net loss was $30.6 million for the third quarter of 2025, as compared to net income of $23.0 million for the third quarter of 2024. The difference was driven by a $47.3 million change in other expenses from the prior period primarily related to the warrants issued in the March 2024 private placement, all of which were fully exercised in 2024. Additionally, research and development expenses increased $4.1 million, as discussed above. Basic and diluted net loss per share was $2.19 for the third quarter of 2025 compared to basic net income per share of $0.98 for the third quarter of 2024, based on 14,000,451 weighted average common shares outstanding and 5,546,257 weighted average basic common shares outstanding, respectively. Diluted net loss per share for the third quarter of 2024 was $2.83, based on 10,784,037 weighted average diluted common shares outstanding.
  
  

Consolidated Balance Sheets
(In thousands, except share and per share data)

		September 30, 2025				December 31, 2024
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	26,963			$	134,546
Short-term investments			84,654				—
Prepaid expenses and other current assets			2,139				4,325
Restricted cash, current portion			90				19
Total current assets			113,846				138,890
Property and equipment, net			542				1,209
Goodwill			10,502				10,502
Restricted cash, net of current portion			210				131
Total assets		$	125,100			$	150,732
Liabilities, mezzanine equity and stockholders’ equity
Current liabilities:
Accounts payable		$	474			$	283
Accrued expenses and other current liabilities			7,498				6,317
Derivative liability, current			—				360
Total current liabilities			7,972				6,960
Royalty obligation			2,000				2,000
Deferred tax liability, net			304				270
Derivative liability, non-current			23,160				8,120
Other long-term liabilities			117				350
Total liabilities			33,553				17,700
Mezzanine equity:
Series D Preferred Stock—$0.001 par value; 1 share of Series D Preferred Stock authorized at September 30, 2025 and December 31, 2024; 1 share of Series D Preferred Stock issued and outstanding at September 30, 2025 and December 31, 2024			—				—
Series E Preferred Stock—$0.001 par value; 1 share of Series E Preferred Stock authorized at September 30, 2025 and December 31, 2024; 1 share of Series E Preferred Stock issued and outstanding at September 30, 2025 and December 31, 2024			—				—
Stockholders’ equity:
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2025 and December 31, 2024; 17,827,635 and 10,471,934 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively			18				10
Series C Preferred Stock—$0.001 par value; 34,326 shares of Series C Preferred Stock authorized at September 30, 2025 and December 31, 2024; 19,364 and 24,896 shares of Series C Preferred Stock issued and outstanding at September 30, 2025 and December 31, 2024, respectively			—				—
Additional paid-in capital			526,290				503,285
Accumulated other comprehensive income			41				—
Accumulated deficit			(434,802	)			(370,263	)
Total stockholders’ equity			91,547				133,032
Total liabilities, mezzanine equity and stockholders’ equity		$	125,100			$	150,732

The consolidated balance sheets as of September 30, 2025 and December 31, 2024 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 generally accepted in the United States for complete financial statements.

Consolidated Statements of Operations

(In thousands, except per share data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
			2025				2024				2025				2024
Revenues:
Product revenue, net		$	—			$	249			$	—			$	249
Total revenues, net			—				249				—				249
Operating expenses:
Cost of product sales		$	—			$	(714	)		$	—			$	(453	)
Research and development			13,621				9,538				36,817				16,254
General and administrative			5,577				4,286				16,366				12,008
Acquired in-process research and development			—				—				—				27,641
Total operating expenses			19,198				13,110				53,183				55,450
Loss from operations			(19,198	)			(12,861	)			(53,183	)			(55,201	)
Other (expense) income:
Change in fair value of derivative liability			(12,530	)			(1,100	)			(14,680	)			(6,260	)
Interest income, net			1,117				964				3,367				2,101
Excess of initial warrant fair value over private placement proceeds			—				—				—				(79,276	)
Change in fair value of warrant liability			—				36,025				—				148,071
Private placement transaction costs			—				—				—				(9,220	)
Other expense, net			(3	)			(5	)			(8	)			(5	)
Total other (expense) income, net			(11,416	)			35,884				(11,321	)			55,411
(Loss) income before taxes			(30,614	)			23,023				(64,504	)			210
Income tax expense (benefit)			11				(14	)			35				—
Net (loss) income		$	(30,625	)		$	23,037			$	(64,539	)		$	210
Net (loss) income per share of common stock - basic		$	(2.19	)		$	0.98			$	(5.47	)		$	0.01
Net loss per share of common stock - diluted		$	(2.19	)		$	(2.83	)		$	(5.47	)		$	(22.63	)
Weighted average common shares outstanding - basic			14,000,451				5,546,257				11,795,810				2,491,114
Weighted average common shares outstanding - diluted			14,000,451				10,784,037				11,795,810				6,540,963

The unaudited consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 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 clinical stage biotechnology company fully dedicated to developing IL-1β-based treatments for immune-mediated inflammatory diseases. Our lead asset, AVTX-009, is in a Phase 2 clinical trial for hidradenitis suppurativa (HS). We’re also exploring additional opportunities to make an impact in prevalent indications that have significant remaining unmet needs. For more information about Avalo, please visit www.avalotx.com.

About AVTX-009 

AVTX-009 is a humanized monoclonal antibody (IgG4) that binds to interleukin-1β (IL-1β) with high affinity and neutralizes its activity. IL-1β is a pro-inflammatory cytokine that plays a central role in the pathogenesis of a wide range of human diseases.¹ It activates immune cells that generate proinflammatory cytokines, including IL-6, TNF-α, and IL-17. Dysregulated IL-1β signaling is a major driver of inflammation, contributing to the progression of autoimmune disorders. IL-1β inhibition has proven effective in multiple immune-mediated inflammatory diseases.^1-3

About the LOTUS Trial

The LOTUS trial is a randomized, double-blind, placebo-controlled, parallel-group Phase 2 trial with two AVTX-009 dose regimens to evaluate the efficacy, safety and tolerability of AVTX-009 in approximately 250 adults with moderate to severe hidradenitis suppurativa. Subjects were randomized (1:1:1) to receive either one of two dosing regimens of AVTX-009 or placebo during a 16-week treatment phase. The primary efficacy endpoint is the proportion of subjects achieving Hidradenitis Suppurativa Clinical Response (HiSCR75) at Week 16. Secondary objectives include but are not limited to: the proportion of patients achieving HiSCR50 and HiSCR90 as well as change from baseline in: International HS Severity Score System (IHS4), draining fistula count, abscess and inflammatory nodule (AN) count, and patients achieving at least a 30% reduction on a numerical rating scale in Patient's Global Assessment of Skin Pain (PGA Skin Pain). For additional information this trial (NCT06603077), please visit www.clinicaltrials.gov or www.lotustrial.com.

About Hidradenitis Suppurativa

Hidradenitis suppurativa (HS) is a chronic, progressive, often debilitating inflammatory skin disease that causes painful nodules, abscesses, and tunnels to form under the skin.^4-6,8 Areas commonly affected by HS include the nape of the neck, breasts, chest, armpits, abdomen, buttocks and anus, groin and genitals, and inner thighs.⁷ If not adequately and promptly treated, the chronic inflammation characteristic of HS may progress to tissue destruction and permanent scarring.^4-6,9 HS typically first presents in late adolescence or early adulthood and is estimated to affect 0.7–1.2% of the U.S. population, though some sources suggest the prevalence may be as high as 2–4%.^10,11,12

References:¹Dinarello CA. Immunol Rev. 2018;281(1):8-27. ²Kany S et al. Int J Mol Sci. 2019;20(23):6008. ³Kimball AB et al. Presented at: American Academy of Dermatology; March 8-12, 2024; San Diego, CA. ⁴Diaz MJ, et al. Curr Iss Mol Bio. 2023;45:4400-4415. ⁵Agnese ER, et al. Cureus. 2023;15(11):e49390. ⁶de Oliveira ASLE, et al. Biomolecules. 2022;12(10):1371. ⁷Ingram JR, et al. J Eur Acad Dermatol Venereol. 2022;36(9):1597-160. ⁸Sabat R, et al. The Lancet. 2025;405(10476):P420-438. ⁹Jemec GB. Clinicalpractice. Hidradenitis suppurativa. N Engl J Med. 2012;366(2):158–164. ¹⁰Garg A, Kirby JS, Lavian J, Lin G, Strunk A. Sex- and Age-Adjusted Population Analysis of Prevalence Estimates for Hidradenitis Suppurativa in the United States. JAMA Dermatol. 2017;153(8):760–764. doi:10.1001/jamadermatol.2017.0201. ¹¹Ingram, John R.British Journal of Dermatology. doi:10.1111/bjd.19435. ¹²Nguyen TV, et al. J Eur Acad Dermatol Venereol. 2021;35(1):50-61.

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

Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com

FAQ

What milestone did Avalo Therapeutics (AVTX) report on November 6, 2025?

Avalo reported completion of enrollment in the Phase 2 LOTUS trial and business and financial updates on Nov 6, 2025.

When does AVTX expect topline data from the LOTUS trial for AVTX-009?

Topline data are expected in mid-2026.

How much cash did Avalo (AVTX) have at September 30, 2025 and how long is the runway?

Cash, cash equivalents and short-term investments were about $111.6 million, expected to fund operations into 2028.

What were Avalo's key Q3 2025 financial metrics (AVTX)?

Q3 2025: R&D $13.6M, G&A $5.6M, and net loss $30.6M (basic loss per share $2.19).

How many patients were enrolled in the Phase 2 LOTUS trial (AVTX-009)?

The global LOTUS trial enrolled approximately 250 adults with moderate to severe hidradenitis suppurativa.

Did Avalo (AVTX) make leadership or board changes in November 2025?

Yes. The company appointed Kevin Lind to the board and named Taylor Boyd chief business officer and Ashley Ivanowicz SVP, HR.