Avalo Therapeutics, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2025. The company recorded no product revenue for the quarter, a decline from $249,000 in the same period last year, reflecting the expiration of its license and supply agreement for Millipred® in September 2023. For the nine months ended September 30, 2025, Avalo's net loss reached $64.5 million, compared to a modest net income of $210,000 in the prior year. The net loss per share for the quarter was $(2.19), with a diluted loss per share of $(2.19), indicating a substantial increase in losses year-over-year.
Operating expenses for the third quarter of 2025 totaled $19.2 million, up from $13.1 million in the same quarter of 2024. This increase was primarily driven by a rise in research and development costs, which surged to $13.6 million from $9.5 million, largely due to ongoing activities related to the Phase 2 LOTUS trial for AVTX-009, Avalo's lead asset targeting hidradenitis suppurativa. General and administrative expenses also increased to $5.6 million from $4.3 million, reflecting higher stock-based compensation and personnel costs.
Avalo's balance sheet showed a decrease in total assets to $125.1 million as of September 30, 2025, down from $150.7 million at the end of 2024. The company's cash and cash equivalents, along with short-term investments, fell to $111.6 million, a significant drop from $134.5 million at the end of the previous fiscal year. The company reported total liabilities of $33.6 million, up from $17.7 million, largely due to an increase in derivative liabilities, which rose to $23.2 million from $8.5 million.
In terms of strategic developments, Avalo completed enrollment in its Phase 2 LOTUS trial in October 2025, which is a key focus for the company moving forward. The trial aims to evaluate the efficacy and safety of AVTX-009 in treating hidradenitis suppurativa, with topline results expected in mid-2026. Additionally, the company announced the appointment of Kevin Lind to its Board of Directors and expanded its leadership team in business development and human resources, indicating a strategic push to enhance operational capabilities.
Looking ahead, Avalo anticipates that its existing cash and cash equivalents will be sufficient to fund operations for at least the next twelve months. The company plans to continue its focus on advancing its clinical pipeline, particularly the ongoing Phase 2 trial, while exploring potential financing options to support its operations and development initiatives. However, the company cautioned that there are no guarantees regarding the success of its products in obtaining regulatory approval, which remains a critical factor for its future financial performance.
About Avalo Therapeutics, Inc.
Avalo Therapeutics, Inc. is a clinical-stage biotechnology company developing therapies targeting immune dysregulation, with a focus on inflammatory diseases. Its lead product candidate, AVTX-009, is a humanized anti-IL-1β monoclonal antibody aimed at treating conditions like hidradenitis suppurativa. Avalo operates through clinical development, relying on third-party manufacturing and regulatory approvals, targeting global markets in dermatology, gastroenterology, and rheumatology with a focus on innovative biologic therapies.
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