Avalo Therapeutics, Inc. reported a net loss of $19.6 million for the first quarter of 2026, compared to a net loss of $13.1 million for the same period in 2025. The company's total operating expenses increased to $20.9 million from $14.7 million year-over-year, driven primarily by higher research and development costs, which rose to $14.0 million from $9.1 million. General and administrative expenses also increased to $6.9 million from $5.5 million. The increase in expenses reflects Avalo's ongoing commitment to advancing its clinical programs, particularly the development of its lead asset, abdakibart (AVTX-009), an anti-IL-1β monoclonal antibody.
Avalo's cash and cash equivalents, along with short-term investments, totaled $82.0 million as of March 31, 2026, a decrease from $105.3 million at the end of 2025. The company experienced negative cash flows from operations of $17.7 million during the quarter, which was higher than the $9.5 million reported in the same quarter of the previous year. The increase in cash used in operations is attributed to the company's intensified clinical activities and preparations for upcoming trials. Avalo's total liabilities decreased slightly to $31.6 million from $33.4 million at the end of 2025.
In terms of strategic developments, Avalo recently announced positive topline results from its Phase 2 LOTUS trial for abdakibart, which met its primary endpoint in treating hidradenitis suppurativa. Following this success, the company plans to advance the drug into a registrational Phase 3 program. Additionally, on May 7, 2026, Avalo completed a follow-on offering of its common stock, raising approximately $431.3 million in gross proceeds, which is expected to provide significant funding for its ongoing operations and clinical trials.
Operationally, Avalo's employee headcount has increased, contributing to higher salary and benefit costs. The company is also exploring additional opportunities for its pipeline, including potential collaborations and out-licensing agreements. As of March 31, 2026, Avalo had 24.6 million shares of common stock outstanding, up from 18.5 million shares at the end of 2025, reflecting the issuance of new shares in connection with the company's strategic initiatives.
Looking ahead, Avalo anticipates that its research and development expenses will continue to rise as it prepares for the Phase 3 trials of abdakibart. The company remains focused on advancing its pipeline and exploring strategic partnerships to enhance its market position. Avalo's management believes that the existing cash reserves, combined with the recent capital raise, will be sufficient to fund operations for at least the next twelve months. However, the company acknowledges the inherent risks in the biotechnology sector, including the uncertainties surrounding regulatory approvals and the potential need for additional financing in the future.
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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