Quisovalimab

Topline results from planned Phase 2 trial of AVTX-009 in hidradenitis suppurativa expected in 2026Cash on hand of approximately $110 million as of March 31, 2024 with expected cash runway into 2027 WAYNE, Pa. and ROCKVILLE, Md., May 13, 2024 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and financial results for the first quarter of 2024. “Over the past month we have made considerable progress toward initiating our planned Phase 2 trial of AVTX-009 in hidradenitis suppurativa. Our experienced team has been working closely with subject matter experts on trial enabling activities, and we plan to have the trial underway this year,” said Dr. Garry Neil, Chief Executive Officer and Chairman of the Board. “Our main focus remains on the initiation of the Phase 2 trial in hidradenitis suppurativa. Upon trial initiation, we plan to expand our focus to include the evaluation and announcement of a second indication, as well as pursuing the development of a next generation anti-IL-1β mAb.” Program Updates and Milestones: AVTX-009: Anti-IL-1β monoclonal antibody (mAb) targeting inflammatory diseases. Avalo is pursuing the development of AVTX-009 in hidradenitis suppurativa and expects topline data from its planned Phase 2 trial in hidradenitis suppurativa in 2026.In addition to hidradenitis suppurativa, Avalo plans to develop AVTX-009 in at least one other chronic inflammatory indication. Next Generation anti-IL-1β mAb. Avalo is pursuing a next generation anti-IL-1β with an extended half-life. Quisovalimab (AVTX-002): Anti-LIGHT mAb targeting immune-inflammatory diseases. Avalo is conducting a strategic review of the quisovalimab program. AVTX-008: B and T Lymphocyte Attenuator (BTLA) agonist fusion protein targeting immune dysregulation disorders. Avalo is conducting a strategic review of the AVTX-008 program. First Quarter 2024 Financial Update: As of March 31, 2024, Avalo had $110.2 million in cash and cash equivalents. In March 2024, the Company closed a private placement investment for up to $185.0 million in gross proceeds, including an initial upfront gross investment of $115.6 million. The Company could receive up to an additional $69.4 million of gross proceeds upon the exercise of the warrants issued in the financing. The Company’s current cash on hand is expected to fund operations through the data readout of our planned Phase 2 trial in hidradenitis suppurativa and into 2027. For the three months ended March 31, 2024, Avalo generated a net loss of $121.3 million. The increase in net loss as compared to the prior period was primarily driven by the excess of warrant fair value over private placement proceeds. The warrants did not satisfy the conditions to be accounted for as an equity instrument and therefore were classified as a liability upon issuance. The initial fair value of the warrants at issuance was $194.9 million, which exceeded the upfront gross proceeds of $115.6 million, resulting in a $79.3 million loss recognized for the three months ended March 31, 2024. The fair value of the warrant liability was estimated using a Black-Scholes option-pricing model and the key variable input driving the fair value was the closing stock price of $21.75 on March 28, 2024, which was the initial valuation date, as well as the last trading day of the first quarter of 2024. Because the warrants are carried at fair value, future changes in fair value will be recognized in other (expense) income, net at each reporting period until the warrants are either exercised or expired. In addition, Avalo’s acquisition of AlmataBio, Inc. was accounted for as an asset acquisition resulting in the recognition of $27.5 million of acquired in-process research and development (“IPR&D”) expense. Finally, we recognized $9.2 million of private placement transaction expenses within other expense. Net loss per share of common stock decreased as a result of the increase in the shares outstanding from the first quarter of 2023, partially offset by the increase in net loss. Consolidated Balance Sheets(In thousands, except share and per share data) March 31, 2024 December 31, 2023 (unaudited) Assets Current assets: Cash and cash equivalents$110,177 $7,415 Other receivables 35 136 Prepaid expenses and other current assets 997 843 Restricted cash, current portion 4 1 Total current assets 111,213 8,395 Property and equipment, net 1,882 1,965 Goodwill 10,502 10,502 Restricted cash, net of current portion 131 131 Total assets$123,728 $20,993 Liabilities, mezzanine equity and stockholders’ (deficit) equity Current liabilities: Accounts payable$916 $446 Accrued expenses and other current liabilities 7,383 4,172 Warrant liability 194,901 — Contingent consideration 12,500 — Total current liabilities 215,700 4,618 Royalty obligation 2,000 2,000 Deferred tax liability, net 162 155 Derivative liability 5,670 5,550 Other long-term liabilities 1,281 1,366 Total liabilities 224,813 13,689 Mezzanine equity: Series C Preferred Stock—$0.001 par value; 34,326 and 0 shares of Series CPreferred Stock authorized at March 31, 2024 and December 31, 2023,respectively; 22,358 and 0 shares of Series C Preferred Stock issued andoutstanding at March 31, 2024 and December 31, 2023, respectively 11,457 — Series D Preferred Stock—$0.001 par value; 1 and 0 shares of Series D PreferredStock authorized at March 31, 2024 and December 31, 2023, respectively; 1 and 0shares of Series D Preferred Stock issued and outstanding at March 31, 2024 andDecember 31, 2023, respectively — — Series E Preferred Stock—$0.001 par value; 1 and 0 shares of Series E PreferredStock authorized at March 31, 2024 and December 31, 2023, respectively; 1 and 0shares of Series E Preferred Stock issued and outstanding at March 31, 2024 andDecember 31, 2023, respectively — — Stockholders’ (deficit) equity: Common stock—$0.001 par value; 200,000,000 shares authorized at March 31,2024 and December 31, 2023; 1,034,130 and 801,746 shares issued andoutstanding at March 31, 2024 and December 31, 2023, respectively 1 1 Additional paid-in capital 343,881 342,437 Accumulated deficit (456,424) (335,134) Total stockholders’ (deficit) equity (112,542) 7,304 Total liabilities, mezzanine equity and stockholders’ (deficit) equity$123,728 $20,993 The consolidated balance sheets as of March 31, 2024 and December 31, 2023 have been derived from the reviewed and audited financial statements, respectively, but do not include all of the information and footnotes required by accounting principles accepted in the United States for complete financial statements. Consolidated Statements of Operations (In thousands, except per share data) Three Months EndedMarch 31, 2024 2023 Revenues: Product revenue, net$— $475 Total revenues, net — 475 Operating expenses: Cost of product sales (80) 551 Research and development 2,116 6,008 Acquired in-process research and development 27,538 — General and administrative 3,193 2,708 Total operating expenses 32,767 9,267 (32,767) (8,792) Other expense: Excess of warrant fair value over private placement proceeds (79,276) — Private placement transaction costs (9,220) — Change in fair value of derivative liability (120) (180) Interest income, net 100 (949) Other expense, net — (26) Total other expense, net (88,516) (1,155) Loss before taxes (121,283) (9,947) Income tax expense 7 8 Net loss and comprehensive loss$(121,290) $(9,955) Net loss per share of common stock, basic and diluted1$(141) $(204) 1 Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. The unaudited consolidated statements of operations for the three months ended March 31, 2024 and 2023 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 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 central driver in the inflammatory process. Overproduction or dysregulation of IL-1β is implicated in many autoimmune and inflammatory diseases. IL-1β is a major, validated target for therapeutic intervention. There is evidence that inhibition of IL-1β could be effective in hidradenitis suppurativa and a variety of inflammatory diseases in dermatology, gastroenterology, and rheumatology. About quisovalimab (AVTX-002) Quisovalimab is a fully human monoclonal antibody (mAb), directed against human LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with Herpes Virus Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes). There is increasing evidence that the dysregulation of the LIGHT-signaling network which includes LIGHT, its receptors HVEM and LTβR and the downstream checkpoint BTLA, is a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders. Quisovalimab previously demonstrated proof of concept in COVID-19 induced acute respiratory distress syndrome including reduction in mortality and respiratory failure, as well as a positive signal in patients with Crohn’s Disease. About AVTX-008 AVTX-008 is a fully human B and T Lymphocyte Attenuator (BTLA) agonist fusion protein in the IND-enabling stage. AVTX-008 is differentiated by having specific binding to BTLA, with no binding to LIGHT or CD160. AVTX-008 also has high-serum stability and solubility. About Avalo Therapeutics Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation. Avalo’s lead asset is AVTX-009, an anti-IL-1β mAb, targeting inflammatory diseases. Avalo’s pipeline also includes quisovalimab (anti-LIGHT mAb) and AVTX-008 (BTLA agonist fusion protein). 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: the intended use of the proceeds from the private placement; integration of AVTX-009 into our operations; drug development costs, timing of 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.com410-803-6793 or Chris BrinzeyICR WestwickeChris.brinzey@westwicke.com339-970-2843

Appointments include industry veterans Aaron Kantoff, Jonathan Goldman, and Samantha Truex as Independent Directors Board of Director appointments in conjunction with Avalo’s recent acquisition of AVTX-009, an anti-IL-1β mAb, and up to $185 million private placement financing WAYNE, Pa. and ROCKVILLE, Md., April 02, 2024 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX) today announced the addition of multiple biotech leaders to its Board of Directors. The Avalo Board brings together a team with expertise spanning finance, business operations, drug discovery and clinical development. “I am honored to announce these additions to our Board of Directors and welcome their operational expertise as we pursue the promise of rapidly developing AVTX-009 in hidradenitis suppurativa and other devastating autoimmune conditions," said Garry A. Neil, MD, CEO and Chairman of the Board at Avalo. The recent board appointments include Aaron Kantoff, Jonathan Goldman, and Samantha Truex as Independent Directors. Aaron Kantoff is a founder and Managing Partner of Scion Life Sciences. He has spent over a decade specializing in founding, building and investing in biotech companies. Aaron was a founding board member of Tourmaline Bio (Nasdaq: TRML), Centessa Pharmaceuticals, and RayzeBio, which was recently acquired by Bristol Myers Squibb. From 2011 until 2019, Aaron was a Partner at Apple Tree Partners (ATP), a life sciences venture capital firm. During his time at ATP, he was a board member of several companies, including Akero Therapeutics , Corvidia (acquired by Novo Nordisk), and Syntimmune (acquired by Alexion Pharmaceuticals, Inc.). Aaron received a B.S. in finance and international business from the New York University Leonard N. Stern School of Business. Jonathan Goldman, MD has 30 years of experience across life sciences as a CEO, Chief Medical Officer, investor, and senior executive. He currently serves as the CEO of Clinical ink, a global life science company that brings data, technology, and patient-centric research together. Prior to Clinical ink, Jonathan served as the CEO and a board member of Abzena and was previously the CEO of Aptuit. He has also held senior executive positions at ICON plc and Point Biomedical Corp. in addition to holding appointments as Associate Clinical Professor of Medicine in the division of Cardiology at the University of California San Francisco, and as an Attending Cardiologist at the San Francisco Veterans Administration Medical Center. Jonathan trained in medicine at St. Bartholomew’s Hospital Medical College, in London and in cardiology at St. George’s Hospital Medical School, London. He received a BSc in immunology, as well as MBBS and MD degrees in medicine from the University of London, UK. He was awarded MBAs by Columbia University in New York and the University of California at Berkeley. Samantha Truex is a seasoned biotech executive with almost 30 years of industry experience, including the last five years in CEO roles. Sam is on the board of Artios Pharma and has previously served on the boards of Hotspot Therapeutics, iPierian (acquired by Bristol Myers Squibb) and True North (acquired by Bioverativ Inc.). Sam was the founding CEO of Upstream Bio, the CEO of Quench Bio, COO of Synlogic and CBO for Padlock Therapeutics. Previously, Sam was Vice President of Corporate Development at Biogen Inc. where she led transactional business development activities and served as program executive for now-marketed products FAMPYRA,® ELOCTATE™ and ALPROLIX™. Sam also previously worked in Corporate Development at Genzyme, Chiron Diagnostics and in consulting for Health Advances. Sam earned a BA in biology from Dartmouth College, a BE in biomedical engineering from the Thayer School at Dartmouth and an MBA from the Tuck School at Dartmouth. Samantha also chairs the Board of Advisors for Thayer School of Engineering at Dartmouth and is a member of the Board of Advisors for Life Science Cares. 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 central driver in the inflammatory process. Overproduction or dysregulation of IL-1β is implicated in many autoimmune and inflammatory diseases. IL-1β is a major, validated target for therapeutic intervention. There is evidence that inhibition of IL-1β could be effective in hidradenitis suppurativa and a variety of inflammatory diseases in dermatology, gastroenterology, and rheumatology. About Avalo Therapeutics Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation. Avalo’s lead asset is AVTX-009, an anti-IL-1β mAb, targeting inflammatory diseases. Avalo’s pipeline also includes quisovalimab (anti-LIGHT mAb) and AVTX-008 (BTLA agonist fusion protein). For more information about Avalo, please visit Forward-LookingStatements 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: the intended use of the proceeds from the private placement; integration of AVTX-009 into our operations, including trial design and IND preparation and filing for the planned Phase 2 trial; drug development costs, timing of trials and trial results, and other risks, particularly for AVTX-009, 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 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 . 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 Chris Brinzey ICR Westwicke Chris.brinzey@westwicke.com 339-970-2843