Micro-Cap Avalo Therapeutics Stock Rallies As It Snaps AlmataBio For Ex-Eli Lilly Drug For Skin Disorder
Avalo Therapeutics Inc (NASDAQ:AVTX) shares are skyrocketing as the company on Wednesday announced the acquisition of a Phase 2-ready anti-IL-1β mAb, which it refers to as AVTX-009, through the acquisition of privately held AlmataBio Inc.
Avalo announced a private placement of $185 million in gross proceeds, including an initial gross upfront investment of $115.6 million.
Avalo intends to pursue the development of AVTX-009 in hidradenitis suppurativa (HS).
Topline results from a planned Phase 2 trial in HS are expected in 2026 and the upfront funding is expected to fund operations into 2027.
In addition to HS, Avalo intends to develop AVTX-009 in at least one other chronic inflammatory indication.
“We believe AVTX-009, which was originally developed by Eli Lilly, has a high probability of success for the treatment of HS as evidenced by recent data readouts validating inhibition of IL-1β in this disease. We believe that HS is a multi-billion-dollar commercial opportunity and that AVTX-009 has the potential to be best-in-class and best-in-indication because of its target, half-life, and potency, which may allow for strong efficacy and convenient dosing,” said Garry Neil, and Chairman of the Board at Avalo.
AlmataBio shares were exchanged for a combination of Avalo common stock and shares of Avalo non-voting convertible preferred stock, valued at approximately $15 million, resulting in the issuance of approximately 0.2 million Avalo shares and approximately 2,400 shares of non-voting convertible preferred stock.
In addition, a cash payment of $7.5 million is due upon the initial closing of the private placement investment. Avalo will pay development milestones, including $5 million due upon the first patient dosed in a Phase 2 trial in patients with HS for AVTX-009 and $15 million upon the first patient dosed in a Phase 3 trial for AVTX-009.
Price Action: AVTX shares are up 348.60% at $21.31 on the last check Thursday.
Photo by Capri23auto from Pixabay
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