Avalo Therapeutics Reports Third Quarter 2026 Financial Results and Recent Business Updates

Quarterly losses narrowed despite higher development and administrative spending, while nine-month losses widened.

Rhea-AI Summary

Avalo Therapeutics (Nasdaq: AVTX) reported a third-quarter 2026 net loss of $18.945 million while preparing abdakibart for late-stage clinical development. The loss narrowed from $30.625 million a year earlier; basic and diluted loss per share fell to $0.34 from $2.19. Research and development and administrative expenses both increased.

Cash, cash equivalents and investments totaled $462.8 million at September 30, 2026. Avalo expects this funding to support operations into 2029, with FDA feedback on its proposed abdakibart development plan by year-end 2026 and a Phase 3 program in hidradenitis suppurativa, a chronic inflammatory skin condition, planned for the first half of 2027. An application to begin clinical testing of AVTX-010 is also anticipated in the first half of 2027. Nine-month net loss widened to $74.933 million from $64.539 million, and operating cash use was $49.2 million.

7 points · 1 major

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1 major · 8 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.Cash, cash equivalents and investments of $462.8 million are expected to fund operations into 2029.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Abdakibart Phase 3 initiation in hidradenitis suppurativa is planned for the first half of 2027.
• Moderate pointThird-quarter net loss narrowed to $18.945 million from $30.625 million; loss per share fell to $0.34 from $2.19.
• Minor point. Forward-looking: it has not happened yet and may not happen.AVTX-010 Investigational New Drug submission is anticipated in the first half of 2027.
• Minor pointNet interest income rose to $4.249 million quarterly and $7.813 million year-to-date, from $1.114 million and $3.359 million.

2 minor points

• Minor pointQuarterly derivative revaluation produced $0.210 million income, versus $12.530 million expense; nine-month expense fell to $0.320 million from $14.680 million.
• Minor pointStockholders’ equity increased to $436.546 million at September 30, 2026, from $83.049 million at December 31, 2025.

Negative

• Major pointCommon shares outstanding increased to 53,923,083 at September 30, 2026, from 18,512,757 at December 31, 2025.
• Moderate pointNine-month net loss widened to $74.933 million from $64.539 million, despite loss per share narrowing to $1.89 from $5.47.
• Moderate pointResearch and development expenses rose to $15.046 million quarterly and $52.512 million year-to-date, from $13.621 million and $36.817 million.
• Moderate pointAdministrative expenses rose to $8.351 million quarterly and $23.304 million year-to-date, from $5.577 million and $16.366 million.
• Moderate pointOperating activities used $49.2 million of cash in the nine months ended September 30, 2026.
• Moderate pointAbdakibart’s proposed development plan awaits FDA feedback, expected by year-end 2026.

2 minor points

• Minor pointNine-month contingent consideration revaluation generated a $6.574 million expense, versus none a year earlier.
• Minor pointTotal liabilities increased to $44.884 million at September 30, 2026, from $33.409 million at December 31, 2025.

News Explained

Avalo Therapeutics’ third-quarter net loss fell to $18.9 million, a decrease of $11.7 million, even as operating expenses increased by $4.2 million; the company attributes the lower loss mainly to the change in fair value of its derivative liability, not lower expenses.

Key Figures

Cash, cash equivalents and investments: $462.8 million Cash runway: Into 2029 Net cash used in operating activities: $49.2 million +5 more

Cash, cash equivalents and investments

$462.8 million

As of September 30, 2026

Cash runway

Into 2029

Expected funding for operations

Net cash used in operating activities

$49.2 million

Nine months ended September 30, 2026

Net loss

$18.9 million

Third quarter 2026; decreased $11.7 million from Q3 2025

Net loss per share

$0.34

Basic and diluted, Q3 2026; compared with $2.19 in Q3 2025

FDA development-plan feedback

By year-end 2026

Feedback expected on the proposed abdakibart development plan

Abdakibart Phase 3 initiation

First half of 2027

Planned registrational program in hidradenitis suppurativa

AVTX-010 IND submission

First half of 2027

Submission anticipated

Previous Earnings Reports

2 past events · Latest: Aug 06

Same Type 2 events

1. Aug 06

   2Q26 earnings

   24h Move

   -0.7%

   Reiterated H1 2027 abdakibart Phase 3 and AVTX-010 IND plans, with funding runway into 2029.

2. May 13

   1Q26 earnings

   24h Move

   -0.5%

   Reported positive LOTUS topline data and a completed equity offering alongside cash runway into 2029.

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

Key Terms

investigational new drug, monoclonal antibody, derivative liability, stock-based compensation

4 terms

investigational new drug regulatory

"with an Investigational New Drug (IND) submission anticipated"

An investigational new drug is a medication that is still being tested in clinical trials to determine if it is safe and effective for treating a specific condition. For investors, it represents a potential breakthrough that could lead to a new treatment and significant financial gains if successful, but also carries risks since it has not yet been approved for widespread use.

monoclonal antibody medical

"next-generation, Fc-engineered, long-acting anti-IL-1β monoclonal antibody"

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.

derivative liability financial

"the impact of the change in fair value related to the derivative liability"

A derivative liability is an obligation a company owes because of a derivatives contract—such as an option, future, swap, or forward—that has moved against it and now has negative value. Think of it like a settled bet that turned into a bill: if market moves go the other way, the company may have to pay cash or deliver assets. Investors care because these liabilities can create sudden losses, add leverage or counterparty risk, and change a company’s true financial exposure beyond its everyday operations.

stock-based compensation financial

"increased stock-based compensation expense"

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

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• Advancing abdakibart toward a registrational Phase 3 program in hidradenitis suppurativa, with initiation planned for the first half of 2027
• Advancing AVTX-010, a next-generation, long-acting anti-IL-1β antibody, toward an Investigational New Drug submission in the first half of 2027
• Cash, cash equivalents and investments of $462.8 million as of September 30, 2026, expected to fund operations into 2029
  

WAYNE, Pa., Nov. 05, 2026 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), a clinical-stage biotechnology company focused on developing therapies targeting the IL-1β pathway for immune-mediated inflammatory diseases, today reported financial results for the third quarter of 2026 and provided a business update.

“LOTUS provides a strong clinical foundation for advancing abdakibart toward registrational development in hidradenitis suppurativa,” said Garry Neil, MD, Chief Executive Officer of Avalo. “The efficacy and safety results observed across both dosing regimens, together with the potential for once-monthly administration, give us confidence in abdakibart’s potential to become an important new treatment option for patients with HS. Our priority is to translate these findings into a rigorous Phase 3 program designed to establish clinically meaningful and durable benefit, informed by upcoming regulatory feedback. We are also advancing AVTX-010, our next-generation, long-acting IL-1β antibody, as we expand our pipeline in IL-1β-mediated diseases. Our strong financial position allows us to pursue these priorities with disciplined capital allocation and investment tied to clear development milestones.”

Recent Corporate Highlights and Upcoming Anticipated Milestones

• Abdakibart (AVTX-009): Continued preparations for a registrational Phase 3 program in hidradenitis suppurativa (HS). Avalo expects feedback from the U.S. Food and Drug Administration on its proposed development plan by year-end 2026 and plans to initiate the Phase 3 program in the first half of 2027.
• AVTX-010: Continued development of its next-generation, Fc-engineered, long-acting anti-IL-1β monoclonal antibody, with an Investigational New Drug (IND) submission anticipated in the first half of 2027. AVTX-010 is being developed for potential use in HS and other inflammatory diseases.
• Phase 2 LOTUS data: Presented a late-breaking oral presentation and poster at the 2026 European Academy of Dermatology and Venereology (EADV) Congress.
  

Third Quarter 2026 Financial Update

• Cash, cash equivalents and investments were $462.8 million as of September 30, 2026. Net cash used in operating activities was $49.2 million for the nine months ended September 30, 2026. Avalo’s current cash, cash equivalents, and investments are expected to fund operations into 2029.
• Research and development expenses were $15.0 million for the third quarter of 2026, an increase of $1.4 million from the third quarter of 2025, primarily driven by increased CMC expenses related to manufacturing activities for AVTX-010 and abdakibart, as well as increased stock-based compensation expense and salary and related costs. These increases were partially offset by lower clinical expenses as LOTUS trial and related activities decreased following the topline data readout in May 2026.
• General and administrative expenses were $8.4 million for the third quarter of 2026, an increase of $2.8 million from the third quarter of 2025, primarily driven by increased stock-based compensation expense and salary and related costs.
• Net loss was $18.9 million for the third quarter of 2026, a decrease of $11.7 million from the third quarter of 2025. The difference was mainly driven by a $4.2 million increase in operating expenses due to the $1.4 million increase in research and development expenses and $2.8 million increase in general and administrative expenses, as discussed above, more than offset by the impact of the change in fair value related to the derivative liability. Basic and diluted net loss per share was $0.34 and $2.19 for the third quarters of 2026 and 2025, based on 55,060,404 and 14,000,451 weighted average common shares outstanding, respectively.

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

	September 30, 2026				December 31, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	64,988			$	15,858
Short-term investments		327,978				82,478
Prepaid expenses and other current assets		7,558				6,913
Restricted cash, current portion		211				37
Total current assets		400,735				105,286
Long-term investments		69,812				—
Property and equipment, net		198				460
Goodwill		10,502				10,502
Restricted cash, net of current portion		183				210
Total assets	$	481,430			$	116,458
Liabilities, mezzanine equity and stockholders’ equity
Current liabilities:
Accounts payable	$	2,458			$	137
Accrued expenses and other current liabilities		21,636				12,803
Total current liabilities		24,094				12,940
Royalty obligation		2,000				2,000
Deferred tax liability, net		470				434
Derivative liability, non-current		18,320				18,000
Other long-term liabilities		—				35
Total liabilities		44,884				33,409
Mezzanine equity:
Series D Preferred Stock—$0.001 par value; 0 and 1 share of Series D Preferred Stock authorized at September 30, 2026 and December 31, 2025, respectively; 0 and 1 share of Series D Preferred Stock issued and outstanding at September 30, 2026 and December 31, 2025, respectively		—				—
Series E Preferred Stock—$0.001 par value; 0 and 1 share of Series E Preferred Stock authorized at September 30, 2026 and December 31, 2025, respectively; 0 and 1 share of Series E Preferred Stock issued and outstanding at September 30, 2026 and December 31, 2025, respectively		—				—
Stockholders’ equity:
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2026 and December 31, 2025; 53,923,083 and 18,512,757 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively		54				18
Series C Preferred Stock—$0.001 par value; 3,359 and 34,326 shares of Series C Preferred Stock authorized at September 30, 2026 and December 31, 2025, respectively; 3,359 and 18,792 shares of Series C Preferred Stock issued and outstanding at September 30, 2026 and December 31, 2025, respectively		—				—
Series C-1 Preferred Stock—$0.001 par value; 4,295 and 0 shares of Series C-1 Preferred Stock authorized at September 30, 2026 and December 31, 2025, respectively; 4,295 and 0 shares of Series C-1 Preferred Stock issued and outstanding at September 30, 2026 and December 31, 2025, respectively		—				—
Additional paid-in capital		961,459				531,485
Accumulated other comprehensive (loss) income		(1,512	)			68
Accumulated deficit		(523,455	)			(448,522	)
Total stockholders’ equity		436,546				83,049
Total liabilities, mezzanine equity and stockholders’ equity	$	481,430			$	116,458

The consolidated balance sheets as of September 30, 2026 and December 31, 2025 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.

Consolidated Statements of Operations
(In thousands, except per share data)

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2026				2025				2026				2025
Operating expenses:
Research and development	$	15,046			$	13,621			$	52,512			$	36,817
General and administrative		8,351				5,577				23,304				16,366
Total operating expenses		23,397				19,198				75,816				53,183
Loss from operations		(23,397	)			(19,198	)			(75,816	)			(53,183	)
Other income (expense):
Change in fair value of derivative liability		210				(12,530	)			(320	)			(14,680	)
Change in fair value of contingent consideration		—				—				(6,574	)			—
Interest income, net		4,249				1,114				7,813				3,359
Total other income (expense), net		4,459				(11,416	)			919				(11,321	)
Loss before taxes		(18,938	)			(30,614	)			(74,897	)			(64,504	)
Income tax expense		7				11				36				35
Net loss	$	(18,945	)		$	(30,625	)		$	(74,933	)		$	(64,539	)
Net loss per share of common stock, basic and diluted	$	(0.34	)		$	(2.19	)		$	(1.89	)		$	(5.47	)
Weighted average common shares outstanding		55,060,404				14,000,451				39,717,826				11,795,810

The unaudited consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 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 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.

About Abdakibart

Abdakibart 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. 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.

About AVTX-010

AVTX-010 is an Fc-engineered, long-acting anti-IL-1β monoclonal antibody designed to extend half-life while preserving the pharmacology and specificity of abdakibart.

Forward-Looking Statements

This press release includes forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 and other federal securities laws. 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: therapeutic potential, clinical benefits and safety profiles of abdakibart (AVTX-009); advancement of abdakibart into a registrational phase 3 program and correspondence with regulatory authorities; advancement of AVTX-010 into clinical trials and expectations of timing and results from such clinical trials; the timing of an IND submission for AVTX-010 in the first half of 2027; Avalo’s financial condition and expected cash runway into 2029; expectations regarding timing, success and data announcements of ongoing nonclinical studies and clinical trials; drug development costs, reliance on investigators and enrollment of patients in clinical trials; and Avalo’s plans to develop and commercialize its current and any future product candidates and the implementation of its business model and strategic plans for its business.

Any forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements including, without limitation, risks associated with: the timing and anticipated results of Avalo’s current and future nonclinical studies and clinical trials, supply chain, strategy and future operations; the delay of any current and future nonclinical studies or clinical trials or the development of Avalo’s product candidates; the risk that the results of prior nonclinical studies and clinical trials may not be predictive of future results in connection with current or future nonclinical studies and clinical trials, including those for abdakibart and AVTX-010; the timing and outcome of any interactions with regulatory authorities; obtaining, maintaining and protecting Avalo’s intellectual property; the availability of funding sufficient for Avalo’s operating expenses and capital expenditure requirements, 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. Avalo may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on its forward-looking statements. In addition, any forward-looking statements represent Avalo’s view only as of today and should not be relied upon as representing its views as of any subsequent date. You should not rely upon forward-looking statements as predictions of future events and actual results or events could differ materially from the plans, intentions and expectations disclosed herein. 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

Jonathan Neely
VP, Head of Investor Relations
jneely@avalotx.com

Meru Advisors
Lauren Glaser
lglaser@meruadvisors.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Avalo Therapeutics’ third-quarter 2026 financial results?

Avalo reported a $18.945 million net loss, or $0.34 per basic and diluted share, compared with $30.625 million, or $2.19 per share, a year earlier. The narrower quarterly loss reflected the derivative liability fair-value change more than offsetting higher operating expenses.

When does Avalo expect to start abdakibart Phase 3 trials?

Avalo plans to initiate its abdakibart Phase 3 program in hidradenitis suppurativa in the first half of 2027. Feedback from the FDA on the proposed development plan is expected by year-end 2026.

Why did Avalo’s research and development expenses increase in the third quarter of 2026?

The increase primarily reflected manufacturing-related expenses for AVTX-010 and abdakibart, plus higher stock-based compensation and salary-related costs. Lower clinical expenses partially offset these increases as LOTUS trial activities decreased following the May 2026 topline data readout.