Avalo Therapeutics AVTX
Avalo Therapeutics reported a net loss of $18.95 million for the three months ended Sep 30, 2026.
- Form
- 10-Q
- Filed
- Importance
- Notable
- Accession
- 0001534120-26-000057
- Net loss: $18.95 million for the three months ended Sep 30, 2026
- Diluted EPS: -$0.34 for the three months ended Sep 30, 2026
- Cash and equivalents: $64.99 million at Sep 30, 2026
Written from the 10-Q on EDGAR. AI can make mistakes. Check the filing.
What changed
7 changes since the June 2026 10-Q
Compared with the 10-Q 0001534120-26-000049, filed Aug 6, 2026.
EPS up 59% from Jun 30
−$0.34, was −$0.83.
From the filings
Before
−$0.83Now
−$0.34Net income up 48% from Jun 30
−$18.9M, was −$36.4M.
From the filings
Before
−$36.4MNow
−$18.9MCash down 24% from Jun 30
$65M, was $85.4M.
From the filings
Before
$85.4MNow
$65MResearch and development expenses increased by $1.4 million in the third quarter of 2026 as compared to the…
Adds "$1.4"; drops "$9.3".
From the filings
Before
Research and development expenses increased by $9.3 million in the second quarter of 2026 as compared to the second quarter of 2025. The increase was driven by the recognition of a $10.0 million development milestone for abdakibart payable upon the dosing of the first patient in a phase 3 trial, as achievement of the milestone was determined to be probable as of June 30, 2026. Additionally, CMC expenses increased $1.8 million primarily due to manufacturing preparation activities for AVTX-010. In addition, stock-based compensation expense increased $0.6 million due to the annual employee equity grants and salary and related expenses increased $0.4 million primarily due to higher headcount. These increases were partially offset by a $3.5 million decrease in clinical expenses as LOTUS trial activities declined in the current period leading up to and following the release of topline data in May 2026, compared to significant ongoing trial activities in the prior year.Now
Research and development expenses increased by $1.4 million in the third quarter of 2026 as compared to the third quarter of 2025. The increase was primarily driven by a $5.2 million increase to CMC expenses due to manufacturing activities for AVTX-010, which were not incurred in the prior year period, and increased manufacturing activities for abdakibart in preparation for our registrational studies. In addition, stock-based compensation expense increased $0.6 million due to the annual employee equity grants and salary and related expenses increased $0.4 million due to increased headcount, salaries and other compensation costs. These increases were partially offset by a $5.0 million decrease in clinical expenses due to reduced LOTUS trial and related activities following the release of topline data in May 2026, compared to significant ongoing trial activities in the prior year.Net cash provided by financing activities for the nine months ended September 30, 2025 consisted of net…
Adds "provided by"; drops "used in".
From the filings
Before
Net cash used in financing activities for the six months ended June 30, 2025 consisted primarily of the cash paid to tax authorities related to withholding shares to satisfy RSU vesting withholding obligations on behalf of employees.Now
Net cash provided by financing activities for the nine months ended September 30, 2025 consisted of net proceeds of $14.4 million from the sales of shares under our "at-the-market" sales agreement, partially offset by $0.5 million in cash paid to tax authorities related to withholding shares to satisfy RSU vesting withholding obligations on behalf of employees.The Company's goodwill relates to historical acquisitions that were accounted for as business combinations…
New paragraph in MD&A.
From the filings
Now
The Company's goodwill relates to historical acquisitions that were accounted for as business combinations and represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting. In accordance with ASC 350, Intangibles - Goodwill and Other, goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. A reporting unit is an operating segment or one level below the operating segment. As standalone discrete and detailed financial information is not available or regularly reviewed below the company-wide level, the Company consists of one reporting unit. The Company performs its annual goodwill impairment test on the last day of the fiscal year. The fair value of the reporting unit is estimated using the market approach. The Company utilizes its closing stock price on the date of the impairment test, which is considered a Level 1 input pursuant to ASC 820, Fair Value Measurements and Disclosures, to calculate the reporting unit's fair value.Throughout the year, we consider whether any events or changes in the business environment have occurred…
New paragraph in MD&A.
From the filings
Now
Throughout the year, we consider whether any events or changes in the business environment have occurred that could indicate that goodwill may be impaired. Accordingly, we monitor changes in our stock price during interim periods between annual impairment tests and consider overall stock market conditions, the underlying reasons for declines in our stock price, the significance of the decline, and the duration of time that securities have been trading at a lower value. As of September 30, 2026 there were no impairment indicators present and our goodwill balance was $10.5 million. Subsequent to September 30, 2026, there has been a decline in the closing stock price of our common stock likely due to a deterioration in market conditions paired with clinical trial data readouts of competitors. Depending on the stock price and other relevant factors in the fourth quarter of 2026, we may be at risk for future goodwill impairment in the near-term.
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Section by section. Added words and removed words against the earlier filing.
Cover page 3 changes
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June September 30, 2026
23 unchanged paragraphs
As of August 3, November 2, 2026, the registrant had 53,629,989 57,823,083 shares of common stock outstanding.
1 unchanged paragraph
For the Quarter Ended June September 30, 2026
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Financial statements 301 changes
3 unchanged paragraphs
June September 30, 2026 December 31, 2025
Cash and cash equivalents $ 85,382 64,988 $ 15,858
Short-term investments 314,894 327,978 82,478
Prepaid expenses and other current assets 7,607 7,558 6,913
Restricted cash, current portion 49 211 37
Total current assets 407,932 400,735 105,286
Long-term investments 71,878 69,812 —
Property and equipment, net 288 198 460
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Total assets $ 490,783 $ 116,458
Total assets $ 481,430 $ 116,458
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Accounts payable $ 3,347 $ 137
Accounts payable $ 2,458 $ 137
Accrued expenses and other current liabilities 17,783 21,636 12,803
Total current liabilities 21,130 24,094 12,940
1 unchanged paragraph
Deferred tax liability, net 463 470 434
Derivative liability, non-current 18,530 18,320 18,000
1 unchanged paragraph
Total liabilities 42,123 33,409
Total liabilities 44,884 33,409
Series D Preferred Stock—$ 0.001 par value; 0 and 1 share of Series D Preferred Stock authorized at June September 30, 2026 and December 31, 2025, respectively; 0 and 1 share of Series D Preferred Stock issued and outstanding at June 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 June September 30, 2026 and December 31, 2025, respectively; 0 and 1 share of Series E Preferred Stock issued and outstanding at June September 30, 2026 and December 31, 2025, respectively
1 unchanged paragraph
Accumulated deficit ( 504,510 ) ( 448,522 )
Common stock—$ 0.001 par value; 200,000,000 shares authorized at June September 30, 2026 and December 31, 2025; 52,900,692 53,923,083 and 18,512,757 shares issued and outstanding at June September 30, 2026 and December 31, 2025, respectively
Series C Preferred Stock—$ 0.001 par value; 4,085 3,359 and 34,326 shares of Series C Preferred Stock authorized at June September 30, 2026 and December 31, 2025, respectively; 4,085 3,359 and 18,792 shares of Series C Preferred Stock issued and outstanding at June 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 June September 30, 2026 and December 31, 2025, respectively; 4,295 and 0 shares of Series C-1 Preferred Stock issued and outstanding at June September 30, 2026 and December 31, 2025, respectively
Additional paid-in capital 953,700 961,459 531,485
Accumulated other comprehensive (loss) income ( 583 1,512 ) 68
Accumulated deficit ( 523,455 ) ( 448,522 )
Total stockholders' equity 448,660 436,546 83,049
Total liabilities, mezzanine equity and stockholders' equity $ 490,783 481,430 $ 116,458
4 unchanged paragraphs
Research and development 23,418 14,074 37,466 23,195
General and administrative 8,099 5,242 14,953 10,789
Total operating expenses 31,517 19,316 52,419 33,984
Loss from operations ( 31,517 ) ( 19,316 ) ( 52,419 ) ( 33,984 )
Other (expense) income:
Interest income, net 2,761 1,097 3,564 2,244
Total other (expense) income, net ( 4,823 ) ( 1,433 ) ( 3,540 ) 94
Loss before taxes ( 36,340 ) ( 20,749 ) ( 55,959 ) ( 33,890 )
Income tax expense 18 16 29 24
Net loss $ ( 36,358 ) $ ( 20,765 ) $ ( 55,988 ) $ ( 33,914 )
Weighted average common shares outstanding 43,602,044 10,829,760 31,919,388 10,673,200
Net loss $ ( 36,358 ) $ ( 20,765 ) $ ( 55,988 ) $ ( 33,914 )
Three Months Ended Six Nine Months Ended
September 30, September 30,
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 ( 1,010 ) 210 ( 2,530 12,530 ) ( 530 320 ) ( 2,150 14,680 )
Change in fair value of contingent consideration — 6,574 ) — ( 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 $ ( 0.83 0.34 ) $ ( 1.92 2.19 ) $ ( 1.75 1.89 ) $ ( 3.18 5.47 )
Weighted average common shares outstanding 55,060,404 14,000,451 39,717,826 11,795,810
Net loss $ ( 18,945 ) $ ( 30,625 ) $ ( 74,933 ) $ ( 64,539 )
1 unchanged paragraph
Unrealized loss on investments, net ( 577 ) ( 34 ) ( 651 ) ( 34 )
Comprehensive loss $ ( 36,935 ) $ ( 20,799 ) $ ( 56,639 ) $ ( 33,948 )
Unrealized (loss) gain on investments, net ( 929 ) 75 ( 1,580 ) 41
Comprehensive loss $ ( 19,874 ) $ ( 30,550 ) $ ( 76,513 ) $ ( 64,498 )
4 unchanged paragraphs
Balance, March 31, 2026 2 $ — 24,637,807 $ 25 13,036 $ — — $ — $ 536,453 $ ( 6 ) $ ( 468,152 ) $ 68,320
Issuance of common stock and pre-funded warrants in underwritten public offering, net — — 22,899,500 23 — — — — 404,889 — — 404,912
Issuance of common stock pursuant to AlmataBio Milestone Buyout Option — — 128,189 — — — — — 1,761 — — 1,761
Issuance of common stock in exchange for Series C Preferred Stock — — 4,656,120 5 ( 4,656 ) — — — ( 5 ) — — —
Issuance of Series C-1 Preferred Stock in exchange for retirement of Series C Preferred Stock — — — — ( 4,295 ) — 4,295 — — — — —
Issuance of common stock from exercise of stock options — — 536,536 — — — — — 5,230 — — 5,230
Redemption of Series D Preferred Stock and Series E Preferred Stock ( 2 ) — — — — — — — — — — —
Vesting of Restricted Stock Units — — 6,334 — — — — — — — — —
Shares purchased through employee stock purchase plan, net of shares withheld for taxes — — 36,206 — — — — — 66 — — 66
Other comprehensive loss — — — — — — — — — ( 577 ) — ( 577 )
Stock-based compensation — — — — — — — — 5,306 — — 5,306
Net loss — — — — — — — — — — ( 36,358 ) ( 36,358 )
Mezzanine preferred stock Common stock Series C preferred stock Series C-1 preferred Stock Additional paid-in Accumulated other Accumulated Total stockholders'
Shares Amount Shares Amount Shares Amount Shares Amount capital comprehensive loss deficit equity
Three Months Ended June September 30, 2026
1 unchanged paragraph
Issuance of common stock in exchange for Series C Preferred Stock 726,000 1 ( 726 ) — — — ( 1 ) — — —
Issuance of common stock from exercise of stock options 296,391 — — — — — 2,540 — — 2,540
Other comprehensive loss — — — — — — — ( 929 ) — ( 929 )
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and 221 more changes in the filing
MD&A 90 changes
4 unchanged paragraphs
In the second quarter of 2026, we reported positive topline Phase 2 LOTUS results for abdakibart in adults with moderate to severe HS. The trial successfully met its primary endpoint at both doses studied (p=0.018 150 mg, p=0.015 300mg and p=0.004, combined), demonstrating a 42.2% and 42.9% absolute improvement in HiSCR75 response rates at Week 16, respectively (42.5% combined, placebo rate 25.6%). Abdakibart also demonstrated statistically significant benefit across the key secondary endpoints, including HiSCR50, change in IHS4, and change in draining tunnel count. Additionally, in the second quarter of 2026, we completed an equity offering for net proceeds of $405.0 million.
In June 2026, we announced the appointment of Ron Philip to our Board of Directors. Mr. Philip contributes deep strategic and commercial expertise, with a proven track record of bringing novel therapeutics to market.
2 unchanged paragraphs
For the six nine months ended June September 30, 2026, we generated a net loss of $56.0 $74.9 million and negative cash flows from operations of $37.7 $49.2 million. As of June September 30, 2026, we had $472.2 $462.8 million in cash and cash equivalents and investments.
3 unchanged paragraphs
• Acquiring or in-licensing rights to and/or developing targeted, complementary differentiated preclinical nonclinical and clinical stage compounds that treat immune-mediated inflammatory disease; and
1 unchanged paragraph
There is no guarantee that our products will obtain regulatory approval by the United States Food and Drug Administration (the "FDA") or comparable foreign regulatory authorities. The FDA approval process is complex, time-consuming, and expensive. Prior to submitting a new drug application ("NDA") or biologics license application ("BLA"), the FDA approval process typically involves the following: preclinical nonclinical laboratory and animal testing, submission of an Investigational New Drug ("IND") application, and human clinical trials to establish safety and efficacy. Human clinical trials typically include: Phase 1 studies to evaluate the safety and tolerability of the drug, generally in normal, healthy volunteers (although for biologics and certain serious or inflammatory diseases, first-in-human studies may be conducted in patients); Phase 2 studies to evaluate safety and efficacy, as well as appropriate doses; these studies are typically conducted in patient volunteers who suffer from the particular disease condition that the drug is designed to treat; and Phase 3 studies to evaluate the safety and efficacy of the product at specific doses in one or more larger pivotal trials.
5 unchanged paragraphs
Comparison of the Three Months Ended June September 30, 2026 and 2025
1 unchanged paragraph
Nonclinical expenses $ 249 $ 179 $ 70
Clinical expenses 3,712 7,215 (3,503)
CMC expenses 5,068 3,266 1,802
License and milestone expenses 10,000 — 10,000
The following table summarizes our research and development expenses for the three months ended June September 30, 2026 and 2025 (in thousands):
Three Months Ended June September 30,
Nonclinical expenses $ 385 $ 184 $ 201
Clinical expenses 2,220 7,250 (5,030)
CMC expenses 7,736 2,556 5,180
Salaries, benefits and related costs 2,630 2,181 449 2,825 2,383 442
Stock-based compensation expense 1,680 1,116 564 1,791 1,189 602
Research and development expenses increased by $9.3 $1.4 million in the second third quarter of 2026 as compared to the second third quarter of 2025. The increase was primarily driven by the recognition of a $10.0 $5.2 million development milestone for abdakibart payable upon the dosing of the first patient in a phase 3 trial, as achievement of the milestone was determined increase to be probable as of June 30, 2026. Additionally, CMC expenses increased $1.8 million primarily due to manufacturing preparation activities for AVTX-010, which were not incurred in the prior year period, and increased manufacturing activities for abdakibart in preparation for our registrational studies. In addition, stock-based compensation expense increased $0.6 million due to the annual employee equity grants and salary and related expenses increased $0.4 million primarily due to higher increased headcount, salaries and other compensation costs. These increases were partially offset by a $3.5 $5.0 million decrease in clinical expenses as due to reduced LOTUS trial activities declined in the current period leading up to and related activities following the release of topline data in May 2026, compared to significant ongoing trial activities in the prior year.
Given the positive Phase 2 LOTUS topline results in HS, We expect research and development expenses to increase over time as we advance abdakibart into a registrational Phase 3 program in HS.
1 unchanged paragraph
Stock-based compensation expense 3,626 1,602 2,024
The following table summarizes our general and administrative expenses for the three months ended June September 30, 2026 and 2025 (in thousands):
Three Months Ended June September 30,
Salaries, benefits and related costs $ 2,129 2,299 $ 1,555 1,449 $ 574 850
Legal, consulting and other professional expenses 1,982 1,580 402 2,213 1,794 419
Stock-based compensation expense 3,429 1,964 1,465
1 unchanged paragraph
Change in fair value of contingent consideration (6,574) — (6,574)
General and administrative expenses increased by $2.9 $2.8 million in the second third quarter of 2026 compared to the second third quarter of 2025. The increase was primarily driven by a $2.0 $1.5 million increase in stock-based compensation expense related to additional equity awards granted primarily resulting from grants issued since the prior year period as well as $0.8 million of modification and expense associated with the accelerated related to performance stock units deemed probable of vesting in the second quarter of equity awards held by former directors. 2026. Salaries and related expenses increased $0.6 $0.9 million primarily due to higher headcount. In addition, legal, consulting and other professional expenses increased $0.4 million primarily due to increased activity supporting costs to support the Company's operational expanded operations and development activities.
Given the positive Phase 2 LOTUS topline results in HS, We expect general and administrative expense expenses to increase over time as we support the advancement of abdakibart into a registrational Phase 3 program in HS and expand the infrastructure required to support our operations.
Other Income (Expense), Net
The following table summarizes our other income (expense), net for the three months ended June September 30, 2026 and 2025 (in thousands):
Three Months Ended June September 30,
Change in fair value of derivative liability $ (1,010) 210 $ (2,530) (12,530) $ 1,520 12,740
1 unchanged paragraph
The $15.9 million change in other income (expense), net increased $3.4 million for the three months ended June 30, 2026 as compared to the prior year period was primarily driven by a $6.6 million charge related to the contingent consideration recognized under the AlmataBio Buyout Agreement. The increase was partially offset by a $1.5 $12.7 million favorable change in the fair value of the derivative liability associated with the AVTX-007 milestone and royalty payments as compared to driven by a significant change in the three months ended June 30, 2025 prior year valuation that did not repeat (refer to Note 4 - Fair Value Measurements of the unaudited condensed and consolidated financial statements for more information). Interest income increased $1.7 $3.1 million due to higher average cash and investment balances from the prior year.
The Company recognized minimal income tax expense for both the three months ended June September 30, 2026 and 2025.
Comparison of the Six Nine Months Ended June September 30, 2026 and 2025
1 unchanged paragraph
Six Months Ended June 30,
Nonclinical expenses $ 640 $ 262 $ 378
Clinical expenses 9,344 11,065 (1,721)
CMC expenses 9,194 5,245 3,949
The following table summarizes our research and development expenses for the six nine months ended June September 30, 2026 and 2025 (in thousands):
Nine Months Ended September 30,
Nonclinical expenses $ 1,025 $ 445 $ 580
Clinical expenses 11,564 18,315 (6,751)
CMC expenses 16,930 7,802 9,128
1 unchanged paragraph
Salaries, benefits and related costs 5,216 4,030 1,186
Stock-based compensation expense 2,923 2,418 505
Salaries, benefits and related costs 8,040 6,414 1,626
Stock-based compensation expense 4,714 3,606 1,108
Research and development expense expenses increased by $14.3 $15.7 million for the six nine months ended June September 30, 2026 as compared to the six nine months ended June September 30, 2025. The increase was primarily driven by the recognition of a $10.0 million development milestone for abdakibart payable upon the dosing of the first patient in a phase 3 trial, as achievement of the milestone was initially determined to be probable as of June 30, 2026, as well as a $9.1 million increase in CMC expenses increased $3.9 million primarily due to drug manufacturing activities for AVTX-010, which were not incurred in the prior year, and preparations increased manufacturing activities for our planned pivotal HS trial of abdakibart as well as manufacturing in preparation activities for our registrational studies. In addition, salaries, benefits and related costs increased $1.6 million primarily due to AVTX-010. higher headcount, salaries and other compensation costs and stock-based compensation expense increased $1.1 million primarily due to grants issued during the year. These increases were partially offset by a $1.7 $6.8 million decrease in clinical expenses as LOTUS trial and related activities declined in the current period leading up to and following the release of topline data in May 2026, compared to significant ongoing trial activities in the prior year. Additionally, salaries, benefits and related costs increased $1.2 million primarily due to higher headcount.
Given the positive Phase 2 LOTUS topline results in HS, We expect research and development expenses to increase over time as we advance abdakibart into a registrational Phase 3 program in HS.
1 unchanged paragraph
Six Months Ended June 30,
Salaries, benefits and related costs $ 4,298 $ 3,109 $ 1,189
Stock-based compensation expense 5,957 3,541 2,416
The following table summarizes our general and administrative expenses for the six nine months ended June September 30, 2026 and 2025 (in thousands):
Nine Months Ended September 30,
Salaries, benefits and related costs $ 6,597 $ 4,557 $ 2,040
Legal, consulting and other professional expenses 3,910 3,192 718 6,123 4,986 1,137
Stock-based compensation expense 9,386 5,507 3,879
1 unchanged paragraph
Other (Expense) Income, Net
Six Months Ended June 30,
Other 677 1,227 (550)
General and administrative expenses increased $4.2 $6.9 million in six for the nine months ended June September 30, 2026 as compared to the six nine months ended June September 30, 2025. The increase was primarily driven by a $2.4 $3.9 million increase in stock-based compensation expense related to additional equity awards granted grants issued since the prior year period, as well as $0.8 million of modification expense related to the accelerated vesting of equity awards held by former directors, and expense related to performance stock units deemed probable of vesting in the second quarter of 2026. Salaries, benefits and related costs increased $1.2 $2.0 million primarily due to higher headcount, salaries and other compensation costs. Additionally, legal, consulting, and other professional expenses increased $0.7 $1.1 million primarily due to increased activity supporting costs to support the Company's operational expanded operations and development activities.
Given the positive Phase 2 LOTUS topline results in HS, We expect general and administrative expense expenses to increase over time as we support the advancement of abdakibart into a registrational Phase 3 program in HS and expand the infrastructure required to support our operations.
Other Income (Expense), Net
The following table summarizes our other (expense) income (expense), net for the six nine months ended June September 30, 2026 and 2025 (in thousands):
Nine Months Ended September 30,
Change in fair value of derivative liability $ (530) (320) $ (2,150) (14,680) $ 1,620 14,360
2 unchanged paragraphs
The $3.6 $12.2 million change in other (expense) income (expense), net compared to the prior year period was primarily driven by a $6.6 million charge related to the contingent consideration recognized under the AlmataBio Buyout Agreement. This increase in other (expense) income, net was partially offset by a $1.6 $14.4 million favorable change in the fair value of the derivative liability associated with the AVTX-007 milestone and royalty payments as compared to driven by a significant change in the six months ended June 30, 2026 prior year valuation that did not repeat (refer to Note 4 - Fair Value Measurements of the unaudited condensed and consolidated financial statements for more information). Interest income increased $1.3 $4.5 million in the current period due to higher average cash and investment balances from compared to the prior year. These favorable changes were partially offset by a $6.6 million charge related to the contingent consideration recognized in connection with the AlmataBio Buyout Agreement.
The Company recognized minimal income tax expense for both the six nine months ended June September 30, 2026 and 2025.
1 unchanged paragraph
Six Months Ended June 30,
We primarily use cash to fund the ongoing development of our pipeline, primarily abdakibart, and costs associated with our organizational infrastructure. As of June September 30, 2026, we had $472.2 $462.8 million in cash and cash equivalents and investments. We expect future cash used in operating activities to increase over time as we advance abdakibart into a registrational phase 3 program in HS, progress AVTX-010 toward submission of an investigational new drug application and support the infrastructure necessary for our operations.
The following table summarizes our cash flows for the six nine months ended June September 30, 2026 and 2025 (in thousands):
Nine Months Ended September 30,
1 unchanged paragraph
Operating activities $ (37,679) $ (20,847) $ (16,832)
Investing activities (304,420) (70,860) (233,560)
Financing activities 411,608 (469) 412,077
Operating activities $ (49,220) $ (37,212) $ (12,008)
Investing activities (315,652) (84,121) (231,531)
Financing activities 414,149 13,900 400,249
Net increase (decrease) in cash and cash equivalents $ 69,509 49,277 $ (92,176) (107,433) $ 161,685 156,710
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and 10 more changes in the filing
Unregistered sales of stock 1 change
(a) On April 26, 2026, we entered into the AlmataBio Buyout Agreement pursuant to which the parties agreed, among other things, to amend the Phase 3 Milestone and all related rights and obligations such that we will (i) pay $2.25 million to the former AlmataBio stockholders upfront and (ii) have the option, exercisable in its sole discretion within ninety (90) days of the effective date, to pay $5.125 million, payable in cash, shares of common stock, or a combination thereof at the our election, in lieu of and in full satisfaction of the $15.0 million Phase 3 Milestone. Further, in the second quarter of 2026, we made the $2.25 million upfront payment and exercised the Milestone Buyout Option, which was settled in 50% cash and 50% common stock, resulting in the payment of $2.6 million and the issuance of 128,189 shares of common stock to the former AlmataBio stockholders on June 3, 2026. These shares of common stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Other information 12 changes
1 unchanged paragraph
During the three months ended June September 30, 2026, the following directors and executive officers had adopted , modified or terminated contracts, instructions or written plans for purchase or sale of our securities as follows:
2 unchanged paragraphs
Garry Neil, M.D. , Chief Executive Officer
Paul Varki, Chief Legal Officer Trading plan intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) Termination Modification ( May 13, August 25, 2026 )
June 30, 2027 90,000 Exercises of vested stock options and sales of shares of the Company's common stock pursuant to terms of the trading plan
Jennifer Riley , Chief Strategy Officer
Christopher Sullivan, Chief Financial Officer Trading plan intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) Modification (May 18, Adoption ( August 13, 2026 May 31, 2027 149,786 (2) )
Garry Neil, M.D., Chief Executive Officer Trading plan intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) Adoption May 28, 2026) May 31, 30, 2027 227,080 29,800 Exercises of vested stock options and sales of shares of the Company's common stock pursuant to terms of the trading plan
Christopher Sullivan , Chief Financial Officer
Trading plan intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) Termination ( September 17, 2026 )
(3) 92,771 Exercises of vested stock options and sales of shares of the Company's common stock pursuant to terms of the trading plan (1) Represents the maximum number of shares that may be sold pursuant to the 10b5-1 arrangement. The number of shares sold is dependent on the satisfaction of certain conditions as set forth in the trading plans.
1 unchanged paragraph
(3) The arrangement was originally scheduled to remain in effect through June 30, 2026 May 31, 2027 and was terminated on May 13, September 17, 2026, effective immediately.
Other than as disclosed above, none of our directors or executive officers adopted , modified or terminated any Rule 10b5-1(c) trading arrangements or any non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K) during the three months ended June September 30, 2026.
Exhibits 15 changes
1 unchanged paragraph
3.1 Certificate of Designation for Avalo Therapeutics, Inc.'s Series C-1 Preferred Stock filed with the Secretary of State of Delaware on June 11, 2026 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on June 12, 2026).
4.1 Form of Pre-funded Warrant issued May 7, 2026 by Avalo Therapeutics, Inc. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on May 7, 2026 ) .
10.1# Amendment No.2 to Garry Neil Letter Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on For m 8-K filed on June 12, 2026).
10.2# Amendment No.3 to Christopher Sullivan Letter Agreement (incorporated by reference to Exhibit 10. 2 to the Current Report on For m 8-K filed on June 12, 2026).
10.3# Amendment No.1 to Mittie Doyle Employment Agreement (incorporated by reference to Exhibit 10. 3 to the Current Report on For m 8-K filed on June 12, 2026).
10.4# Amendment No.1 to Taylor Boyd Employment Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on For m 8-K filed on June 12, 2026).
10.5+# Amendment No. 1 to Paul Varki Employment Agreement.
10.6+# Amendment No. 1 to Jennifer Riley Employment Agreement.
10.7# Second Amended and Restated 2016 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 8, 2026).
21.1+ List of Subsidiaries of the Registrant.
3 unchanged paragraphs
101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June September 30, 2026 (Unaudited) and December 31, 2025; (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Six Nine Months Ended June September 30, 2026 and 2025; (iii) Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Nine Months Ended June September 30, 2026 and 2025; (iv) Condensed Consolidated Statements of Mezzanine and Stockholders' Equity (Unaudited) for the Three and Six Nine Months Ended June September 30, 2026 and 2025; and (v) Notes to Unaudited Financial Statements.
1 unchanged paragraph
# Contains compensatory arrangement or plan.
1 unchanged paragraph
** Portions of this exhibit (indicated by asterisks) were omitted in accordance with the rules of the Securities and Exchange Commission
2 unchanged paragraphs
Date: August 6, 2026
Date: November 5, 2026
4 unchanged paragraphs
Unchanged: Market risk, Controls and procedures, Legal proceedings, Risk factors, Defaults on senior securities, Mine Safety Disclosures
Compared by code from the two filings' text and XBRL. Not advice.
The reading, claim by claim
- The company reported a net loss of $18.9 million for the quarter, according to the financial statements (XBRL) source.
- The company's balance sheet as of September 30, 2026, shows total assets of $481,430 thousand.
- Current assets totaled $400,735 thousand, with cash and cash equivalents at $64,988 thousand.
- Long-term investments were $69,812 thousand, and property and equipment, net, was $198 thousand.
- Liabilities, mezzanine equity, and stockholders' equity totaled $481,430 thousand.
- Current liabilities were $24,094 thousand, and total liabilities were $44,884 thousand.
- Stockholders' equity was $436,546 thousand, with common stock at $54 thousand and additional paid-in capital at $961,459 thousand.
7 of 7 claims matched the filing text.
From the filing's financial data, not stated in its text
From this 10-Q's financial data (XBRL) for the quarter ended September 30, 2026
- The filing includes unaudited condensed consolidated financial statements.
From the filing
Item 1. Financial Statements.
Item 1. Financial Statements.
AVALO THERAPEUTICS, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
September 30, 2026 December 31, 2025
(unaudited)
Assets
Current assets:
Prepaid expenses and other current assets 7,558 6,913
Long-term investments 69,8124 —
Restricted cash, net of current portion 183 210
Total assets $ 481,4302 $ 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
Other long-term liabilities — 35
— —
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:
— —
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 961,4597 531,485
Accumulated other comprehensive (loss) income ( 1,512 ) 68
Total liabilities, mezzanine equity and stockholders' equity $ 481,4305 $ 116,458
See accompanying notes to the unaudited condensed consolidated financial statements.
3
Table of Contents
AVALO THERAPEUTICS, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Change in fair value of contingent consideration — — ( 6,574 ) —
See accompanying notes to the unaudited condensed consolidated financial statements.
4
Table of Contents
AVALO THERAPEUTICS, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Mezzanine and Stockholders' Equity (Unaudited)
(In thousands, except share amounts)
Common stock Series C preferred stock Series C-1 preferred Stock Additional paid-in Accumulated other Accumulated Total stockholders'
Shares Amount Shares Amount Shares Amount capital comprehensive loss deficit equity
5
Table of Contents
Mezzanine preferred stock Common stock Series C preferred stock Series C-1 preferred Stock Additional paid-in Accumulated other Accumulated Total stockholders'
Shares Amount Shares Amount Shares Amount Shares Amount capital comprehensive (loss) income deficit equity
Issuance of common stock in exchange for Series C Preferred Stock — — 11
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