Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37590 | ||
Entity Registrant Name | AVALO THERAPEUTICS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-0705648 | ||
Entity Address, Address Line One | 540 Gaither Road | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Rockville | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20850 | ||
City Area Code | 410 | ||
Local Phone Number | 522-8707 | ||
Title of 12(b) Security | Common Stock, $0.001 Par Value | ||
Trading Symbol | AVTX | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 32.4 | ||
Entity Common Stock, Shares Outstanding | 13,200,535 | ||
Entity Central Index Key | 0001534120 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Tysons, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 13,172 | $ 54,585 | |
Accounts receivable, net | 0 | 1,060 | |
Other receivables | 1,919 | 3,739 | |
Inventory, net | 20 | 38 | |
Prepaid expenses and other current assets | 1,290 | 2,372 | |
Restricted cash, current portion | 15 | 51 | |
Total current assets | 16,416 | 61,845 | |
Property and equipment, net | 2,411 | 2,695 | |
Other long-term asset | 0 | 1,000 | |
Intangible assets, net | 0 | 38 | |
Goodwill | 14,409 | 14,409 | |
Restricted cash, net of current portion | 131 | 227 | |
Total assets | 33,367 | 80,214 | |
Current liabilities: | |||
Accounts payable | 2,882 | 3,369 | |
Deferred revenue | 88 | 0 | |
Accrued expenses and other current liabilities | 13,214 | 16,519 | |
Notes payable, current | 5,930 | 0 | |
Total current liabilities | 22,114 | 19,888 | |
Notes payable, non-current | 13,486 | 32,833 | |
Royalty obligation | 2,000 | 2,000 | |
Deferred tax liability, net | 141 | 113 | |
Derivative liability | 4,830 | 0 | |
Other long-term liabilities | 1,711 | 2,298 | |
Total liabilities | 44,282 | 57,132 | |
Stockholders’ (deficit) equity: | |||
Common stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2022 and 2021; 9,430,535 and 9,399,517 shares issued and outstanding at December 31, 2022 and 2021, respectively1 | [1] | 9 | 9 |
Additional paid-in capital1 | [1] | 292,900 | 285,239 |
Accumulated deficit | (303,824) | (262,166) | |
Total stockholders’ (deficit) equity | (10,915) | 23,082 | |
Total liabilities and stockholders’ (deficit) equity | $ 33,367 | $ 80,214 | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | [1] | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | [1] | 9,430,535 | 9,399,517 |
Common stock, shares outstanding (in shares) | [1] | 9,430,535 | 9,399,517 |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Revenues: | |||
Revenues | $ 18,051 | $ 5,398 | |
Operating expenses: | |||
Cost of product sales | 3,434 | 1,491 | |
Research and development | 31,308 | 59,835 | |
Selling, general and administrative | 20,711 | 24,658 | |
Amortization expense | 38 | 1,548 | |
Total operating expenses | 55,491 | 87,532 | |
Loss from continuing operations | (37,440) | (82,134) | |
Other expense: | |||
Interest expense, net | (4,170) | (2,391) | |
Other expense, net | (20) | (20) | |
Total other expense, net from continuing operations | (4,190) | (2,411) | |
Loss from continuing operations before income taxes | (41,630) | (84,545) | |
Income tax expense (benefit) | 28 | (196) | |
Loss from continuing operations | (41,658) | (84,349) | |
Loss from discontinued operations | 0 | (27) | |
Net loss | $ (41,658) | $ (84,376) | |
Net income (loss) per share of common stock and preferred stock, basic | |||
Net loss per share of common stock and preferred stock, basic (in dollars per share) | $ (4.43) | ||
Net income (loss) per share of common stock and preferred stock, diluted | |||
Net loss per share of common stock and preferred stock, diluted (in dollars per share) | (4.43) | ||
Common stock | |||
Net income (loss) per share of common stock and preferred stock, basic | |||
Net (loss) income per share of common stock and preferred stock, continuing operations, basic (in dollars per share) | [1] | (4.43) | $ (9.95) |
Net (loss) income per share of common stock and preferred stock, discontinued operations, basic (in dollars per share) | [1] | 0 | 0 |
Net loss per share of common stock and preferred stock, basic (in dollars per share) | [1] | (4.43) | (9.95) |
Net income (loss) per share of common stock and preferred stock, diluted | |||
Net (loss) income per share of common stock and preferred stock, continuing operations, diluted (in dollars per share) | [1] | (4.43) | (9.95) |
Net (loss) income per share of common stock and preferred stock, discontinued operations, diluted (in dollars per share) | [1] | 0 | 0 |
Net loss per share of common stock and preferred stock, diluted (in dollars per share) | [1] | $ (4.43) | (9.95) |
Preferred Stock | |||
Net income (loss) per share of common stock and preferred stock, basic | |||
Net (loss) income per share of common stock and preferred stock, continuing operations, basic (in dollars per share) | [1] | (4.15) | |
Net (loss) income per share of common stock and preferred stock, discontinued operations, basic (in dollars per share) | [1] | 0 | |
Net loss per share of common stock and preferred stock, basic (in dollars per share) | [1] | (4.15) | |
Net income (loss) per share of common stock and preferred stock, diluted | |||
Net (loss) income per share of common stock and preferred stock, continuing operations, diluted (in dollars per share) | [1] | (4.15) | |
Net (loss) income per share of common stock and preferred stock, discontinued operations, diluted (in dollars per share) | [1] | 0 | |
Net loss per share of common stock and preferred stock, diluted (in dollars per share) | [1] | $ (4.15) | |
Product revenue, net | |||
Revenues: | |||
Revenues | $ 3,364 | $ 4,773 | |
License and other revenue | |||
Revenues: | |||
Revenues | $ 14,687 | $ 625 | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) | Jul. 07, 2022 |
Income Statement [Abstract] | |
Conversion ratio | 0.0833 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity - USD ($) $ in Thousands | Total | Underwritten Public Offering | ATM Agreement | Common stock | Common stock Underwritten Public Offering | Common stock ATM Agreement | Preferred Stock | Additional paid-in capital | [1] | Additional paid-in capital Underwritten Public Offering | [1] | Additional paid-in capital ATM Agreement | [1] | Accumulated deficit | |||
Balance at the beginning (in shares) at Dec. 31, 2020 | 6,250,344 | [1] | 1,257,143 | ||||||||||||||
Balance at the beginning at Dec. 31, 2020 | $ 24,562 | $ 6 | [1] | $ 1 | $ 202,345 | $ (177,790) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of shares of common stock and pre-funded warrants in underwritten public offering, net (in shares) | [1] | 1,164,323 | |||||||||||||||
Issuance of shares of common stock and pre-funded warrants in underwritten public offering, net | 37,653 | $ 1 | [1] | 37,652 | |||||||||||||
Issuance of stock (in shares) | [1] | 1,192,407 | 166,667 | ||||||||||||||
Issuance of shares of common stock | $ 29,046 | $ 5,230 | $ 1 | [1] | $ 29,045 | $ 5,230 | |||||||||||
Issuance of equity classified warrants related to venture debt financing agreement | 861 | 861 | |||||||||||||||
Conversion of preferred stock to common stock (in shares) | 523,810 | [1] | (1,257,143) | ||||||||||||||
Conversion of preferred stock to common stock | 1 | $ 1 | [1] | $ (1) | 1 | ||||||||||||
Exercise of stock options (in shares) | [1] | 48,385 | |||||||||||||||
Exercise of stock options | 1,567 | 1,567 | |||||||||||||||
Exercise of pre-funded warrants (in shares) | [1] | 25,725 | |||||||||||||||
Shares purchased through employee stock purchase plan (in shares) | [1] | 15,808 | |||||||||||||||
Shares purchased through employee stock purchase plan | 366 | 366 | |||||||||||||||
Restricted stock units vested during the period (in shares) | [1] | 12,049 | |||||||||||||||
Stock-based compensation | 8,172 | 8,172 | |||||||||||||||
Net loss | (84,376) | (84,376) | |||||||||||||||
Balance at the end (in shares) at Dec. 31, 2021 | 9,399,518 | [1] | 0 | ||||||||||||||
Balance at the end at Dec. 31, 2021 | 23,082 | $ 9 | [1] | $ 0 | 285,239 | (262,166) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of stock (in shares) | [1] | 5,438 | |||||||||||||||
Issuance of shares of common stock | $ 34 | $ 34 | |||||||||||||||
Shares purchased through employee stock purchase plan (in shares) | [1] | 16,261 | |||||||||||||||
Shares purchased through employee stock purchase plan | 73 | 73 | |||||||||||||||
Restricted stock units vested during the period (in shares) | [1] | 938 | |||||||||||||||
Impact of reverse stock split fractional share round-up (in shares) | [1] | 8,380 | |||||||||||||||
Stock-based compensation | 7,554 | 7,554 | |||||||||||||||
Net loss | (41,658) | (41,658) | |||||||||||||||
Balance at the end (in shares) at Dec. 31, 2022 | 9,430,535 | [1] | 0 | ||||||||||||||
Balance at the end at Dec. 31, 2022 | $ (10,915) | $ 9 | [1] | $ 0 | $ 292,900 | $ (303,824) | |||||||||||
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity (Parenthetical) | Jul. 07, 2022 |
Statement of Stockholders' Equity [Abstract] | |
Conversion ratio | 0.0833 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (41,658) | $ (84,376) |
Adjustments to reconcile net loss used in operating activities: | ||
Stock-based compensation | 7,554 | 8,172 |
Depreciation and amortization | 166 | 1,657 |
Accretion of debt discount | 1,389 | 794 |
Allowance for other long-term asset | 1,000 | 0 |
Deferred taxes | 28 | 22 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 1,060 | 1,117 |
Other receivables | 1,820 | (1,531) |
Other long-term asset | 0 | (1,000) |
Inventory, net | 18 | (35) |
Prepaid expenses and other assets | 1,082 | 287 |
Accounts payable | (487) | 796 |
Income taxes payable | 0 | 0 |
Deferred revenue | 88 | 0 |
Accrued expenses and other liabilities, excluding lease liability | (3,632) | 3,250 |
Lease liability, net | (9) | (45) |
Derivative liability | 4,830 | 0 |
Net cash used in operating activities | (26,751) | (70,892) |
Investing activities | ||
Purchase of property and equipment | (95) | (113) |
Net cash used in investing activities | (95) | (113) |
Financing activities | ||
Proceeds from issuance of common stock and pre-funded warrants in underwritten public offering, net | 0 | 37,653 |
Proceeds from Notes and warrants, net of debt issuance costs paid | 0 | 32,900 |
Prepayment on Notes | (14,806) | 0 |
Proceeds from issuance of common stock in underwritten public offering, net | 0 | 29,046 |
Proceeds from common stock pursuant to ATM Program, net | 34 | 5,230 |
Proceeds from exercise of stock options | 0 | 1,567 |
Proceeds from issuance of common stock under employee stock purchase plan | 73 | 366 |
Net cash (used in) provided by financing activities | (14,699) | 106,762 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (41,545) | 35,757 |
Cash, cash equivalents, and restricted cash at beginning of period | 54,863 | 19,106 |
Cash, cash equivalents, and restricted cash at end of period | 13,318 | 54,863 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 2,931 | 1,585 |
Cash paid for taxes | 0 | 0 |
Supplemental disclosures of non-cash activities | ||
Leased asset obtained in exchange for new operating lease liability | 0 | 1,373 |
Cash and cash equivalents | 13,172 | 54,585 |
Restricted cash, current | 15 | 51 |
Restricted cash, non-current | 131 | 227 |
Total cash, cash equivalents and restricted cash | $ 13,318 | $ 54,863 |
Business
Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Avalo Therapeutics, Inc. (the “Company” or “Avalo” or “we”) is a clinical stage biotechnology company focused on the treatment of immune dysregulation by developing therapies that target the LIGHT network. LIGHT ( L ymphotoxin-like, exhibits I nducible expression, and competes with HSV G lycoprotein D for H erpesvirus Entry Mediator (“HVEM”), a receptor expressed by T lymphocytes; also referred to as TNFSF14) is an immunoregulatory cytokine. LIGHT and its signaling receptors, HVEM (TNFRSF14), and lymphotoxin β receptor (TNFRSF3), form an immune regulatory network with two co-receptors of herpesvirus entry mediator, checkpoint inhibitor B and T Lymphocyte Attenuator (“BTLA”), and CD160 (collectively, the “LIGHT-signaling network” or the “LIGHT network”). Accumulating evidence points to the dysregulation of the LIGHT network as 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. Avalo was incorporated in Delaware and commenced operation in 2011, and completed its initial public offering in October 2015. On July 7, 2022, Avalo effected a 1-for-12 reverse stock split of the outstanding shares of the Company’s common stock. The Company retroactively applied the reverse stock split to common share and per share amounts for periods prior to July 7, 2022, including the consolidated financial statements for the year ended December 31, 2021. Additionally, pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity incentive plans have been reduced proportionately. Avalo retroactively applied such adjustments in the notes to consolidated financial statements for periods presented prior to July 7, 2022, including the year ended December 31, 2021. The reverse stock split did not reduce the number of authorized shares of common and preferred stock and did not alter the par value. Liquidity In order to meet its cash flow needs, the Company applies a disciplined decision-making methodology as it evaluates the optimal allocation of the Company’ resources between investing in its existing pipeline assets and acquisitions or in-licensing of new assets. As of December 31, 2022, Avalo had $13.2 million in cash and cash equivalents. For the year ended December 31, 2022, Avalo generated a net loss of $41.7 million and negative cash flows from operations of $26.8 million. As of December 31, 2022, Avalo had an accumulated deficit of $303.8 million. On February 7, 2023, the Company closed an underwritten public offering of 3,770,000 shares of its common stock and warrants to purchase up to an aggregate 3,770,000 shares of common stock resulting in net proceeds of approximately $13.7 million, after deducting the underwriting discounts and commissions and offering expenses payable by us. The warrants were immediately exercisable at an exercise price of $5.00 per share and are exercisable for one year from the issuance date. In 2022, Avalo received $19.5 million of upfront payments from business development transactions, including the out-license of AVTX-007 for $14.5 million of upfront consideration. In the second quarter of 2022, the Company made a $15.0 million partial prepayment on the notes issued under its venture loan and security agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation (“Horizon”) and Powerscourt Investments XXV, LP (“Powerscourt”, and together with Horizon, the “Lenders”), as collectively agreed upon with the Lenders. Avalo might consider additional prepayments prior to principal loan amounts coming due, if collectively agreed upon with the Lenders. As of December 31, 2022, the future principal payments were $21.2 million, $5.9 million of which is due in 2023 (beginning in the third quarter). The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, losses are expected to continue as the Company continues to invest in its research and development pipeline assets. The Company will require additional financing to fund its operations and to continue to execute its business strategy within one year after the date the consolidated financial statements included herein were issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. To mitigate these conditions and to meet the Company’s capital requirements, management plans to use its current cash on hand along with some combination of the following: (i) financings, (ii) out-licensing or strategic alliances/collaborations of its current pipeline assets, (iii) out-licensing or sale of its non-core assets, and (iv) federal and/or private grants. If the Company raises additional funds through collaborations, strategic alliances or licensing arrangements with third parties, the Company might have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates. Subject to limited exceptions, the Loan Agreement prohibits the Company from incurring certain additional indebtedness, making certain asset dispositions, and entering into certain mergers, acquisitions or other business combination transactions without the prior consent of the Lenders. Additionally, the Loan Agreement contains certain covenants and certain other specified events that could result in an event of default, which if not cured or waived, could result in the immediate acceleration of all or a substantial portion of the outstanding Notes. As of the filing date of this Annual Report on Form 10-K, the Company was not aware of any breach of covenants or occurrence of material adverse change, nor had it received any notice of event of default from the Lenders (refer to Note 10 of the consolidated financial statements for more information). If the Company requires but is unable to obtain additional funding, the Company may be forced to make reductions in spending, delay, suspend, reduce or eliminate some or all of its planned research and development programs, or liquidate assets where possible. Due to the uncertainty regarding future financings and other potential options to raise additional funds, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date that the financial statements in this Annual Report on Form 10-K were issued. Over the long term, the Company’s ultimate ability to achieve and maintain profitability will depend on, among other things, the development, regulatory approval, and commercialization of its pipeline assets, and the potential receipt and sale of any priority review vouchers it receives. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern (see Note 1). In the second quarter of 2022, the Company concluded that it would include sales and marketing expenses within the selling, general and administrative line in the Company’s consolidated statements of operations. The Company reclassified $2.8 million from sales and marketing expense to selling, general and administrative expense for the year ended December 31, 2021 to conform with the current period presentation. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. Principles of Consolidation The consolidated financial statements include the accounts of Avalo Therapeutics, Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, the valuation of derivative liabilities, cash flows used in management's going concern assessment, income taxes, goodwill, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Discontinued Operations In 2019, the Company entered into an asset purchase agreement with Aytu Bioscience, Inc. (“Aytu”) to sell the Company’s rights, title and interest in assets relating to certain commercialized products (the “Pediatric Portfolio”). Upon the sale of the Pediatric Portfolio during the fourth quarter of 2019, the Pediatric Portfolio met all conditions required to be classified as discontinued operations. For the year ended December 31, 2021, the operating results of the Pediatric Portfolio (as a result of the Company’s limited continued involvement) are reported as income from discontinued operations, net of tax in the accompanying consolidated financial statements. There was no activity related to discontinued operations for the year ended December 31, 2022. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. Accounts Receivable, net The Company has one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Accounts receivable are written off to net revenue when deemed uncollectible and recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than the payment terms negotiated with the customer. The Company generally negotiates payment terms of 60 days. The Company offers wholesale distributors a prompt payment discount, which is typically 2% as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount. Deferred Revenue The Company’s commercial operations are managed by a third-party logistics provider. Our third-party logistics provider purchases Millipred ® from us and subsequently delivers the product to our customers. As discussed below within “Product Revenue, net”, the Company recognizes revenue when the performance obligation is satisfied, which is at a point in time when the product has been received by the customer. Deferred revenue is comprised of cash received from our third-party logistics provider related to product that has not yet been delivered to the customer. Derivative Liability Upon entering into a transaction to sell the Company’s future rights to milestones and royalty payments of previously out-licensed assets, the Company must assess whether the transaction is a derivative under ASC 815, Derivatives and Hedging. The requirements for the sale to be treated as a derivative are as follows: a) one or more underlying; b) one or more notional amounts or payment provisions or both; c) no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and d) net settlement provisions. If the transaction meets the requirement to be treated as a derivative, we estimate the fair value of the derivative liability on the date of issuance. The derivative liability is re-valued each reporting period and any change in the fair value is recorded as a gain or loss in the statement of operations and comprehensive loss. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified two operating leases, which both serve as administrative office space. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company’s consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the consolidated balance sheets and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within selling, general and administrative expenses. Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement’s useful life. The Company uses the lesser of the lease term or ten years for leasehold improvements. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, Business Combinations, the Company accounts for the transaction as an asset acquisition. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. As of December 31, 2022, the Company’s chief operating decision maker was its Chief Executive Officer. The Chief Executive Officer views the Company’s operations and manages the business as one operating segment. All long‑lived assets of the Company reside in the United States. Goodwill The Company’s goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill 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 for business combinations. 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. The Company consists of one reporting unit. Upon disposal of a portion of a reporting unit that constitutes a business, the Company assigns goodwill based on the relative fair values of the portion of the reporting unit being disposed and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business to be disposed of and the business (or businesses) within the reporting unit that will be retained. Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Notes Payable Notes payable are recorded on the balance sheet at carrying value, which is the gross balance (inclusive of the final payment fee for the Notes), less the unamortized debt discount and issuance costs. All fees, costs paid to the Lenders and all direct costs incurred by the Company are recognized as a debt discount and are amortized to interest expense using the effective interest method over the life of the loan. Product Revenues, net The Company generates substantially all of its revenue from sales of its prescription drug to its customers. The Company has one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. The Company has identified a single product delivery performance obligation, which is the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, at the time the product has been received by the customer. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide the prescription drug. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, Company expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy for sales made prior to August 31, 2021, generally allows for customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The Company’s return policy for sales subsequent to August 31, 2021, generally allows for customers to receive credit for expired products within thirty days prior to expiration and within ninety days after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company reassesses the milestones each reporting period to determine the probability of achievement. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) royalty payments the Company is required to pay based on the product’s net profit pursuant to its license and supply agreement, (iii) the value of any write-offs of obsolete or damaged inventory that cannot be sold and (iv) the write-off of receivables that are deemed not probable to be collected. Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance and quality; costs and milestones associated with certain licensing agreements, and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. The Company is a party to license and development agreements for in-licensed research and development assets with third parties. Such agreements often contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related research and development expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has its own unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. Clinical Trial Expense Accruals The Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussions with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed might vary and might result in it reporting amounts that are too high or too low for any particular period. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. Amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations and comprehensive loss and therefore there is no amortization expense included in cost of product sales or selling, general and administrative expense. Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. Additionally, the stock price on the date of grant is utilized in the Black-Scholes option pricing model. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss (“NOL”) and tax credit carryforwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including NOLs and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”). See Note 13 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of December 31, 2022, the Company did not believe any material uncertain tax positions were present. Comprehensive Loss Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the years ended December 31, 2022 and 2021, the Company’s net loss was equal to comprehensive loss and, accordingly, no additional disclosure is presented. Recently Adopted Accounting Pronouncements There have been no new accounting pronouncements made effective during fiscal 2022 that have significance, or potential significance, to our consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue License and Other Revenue In July 2022, Avalo entered into a license agreement with Apollo AP43 Limited, a wholly owned subsidiary of Apollo Therapeutics Group Limited (collectively, “Apollo”) pursuant to which the Company granted Apollo a worldwide, exclusive license to research, develop, manufacture and commercialize AVTX-007, an anti-IL-18 monoclonal antibody (the “Apollo License Agreement”). Pursuant to the Apollo License Agreement, the Company received an upfront payment of $14.5 million, which was recognized as license and other revenue for the year ended December 31, 2022. Additionally, the portion of the ES Transaction (as defined in Note 5) related to AVTX-611 represents a contract modification which resulted in the Company recognizing $0.2 million of license and other revenue for the year ended December 31, 2022. Product Revenue, net Avalo generates substantially all of its product revenue from sales of Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions, which is considered a prescription drug. The Company sells its prescription drug in the United States primarily through wholesale distributors. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. For the year ended December 31, 2022, the Company’s two largest customers accounted for approximately 68% and 32% of the Company’s total net product revenues. For the year ended December 31, 2021, the Company’s three largest customers accounted for approximately 63%, 21%, and 16% of the Company’s total net product revenues. Net revenue from sales of prescription drugs was $3.4 million and $4.8 million for the years ended December 31, 2022 and 2021, respectively. The Company has a license and supply agreement for the Millipred ® product with a wholly owned subsidiary of Teva Pharmaceutical Industries Ltd. (“Teva”), which expires on September 30, 2023. Avalo is required to pay Teva fifty percent of the net profit of the Millipred ® product following each calendar quarter, subject to a $0.5 million quarterly minimum payment, which commenced on July 1, 2021. For the years ended December 31, 2022 and 2021, the Company recognized $1.9 million and $1.0 million, respectively, in cost of product sales related to the royalty. Dr. Sol Barer served as the Chairman of the Company’s board of directors until June 2021 and at the time of the agreement with Teva as, and currently serves as, the Chairman of Teva’s board of directors. Aytu, to which the Company sold its rights, title, and interests in assets relating to certain commercialized products in 2019 (the “Aytu Transaction”), managed Millipred ® commercial operations until August 31, 2021 pursuant to a transition services agreement, which included managing the third-party logistics provider and providing accounting reporting services. Aytu collected cash on behalf of Avalo for revenue generated by sales of Millipred ® from the second quarter of 2020 through the third quarter of 2021 and is obligated to transfer the cash generated by such sales to Avalo. In the third quarter of 2021, Avalo finalized its trade and distribution channel to allow it to control third party distribution and began managing Millipred ® commercial operations at that time. The transition services agreement allows Aytu to withhold cash of $2.0 million until September 30, 2022 and $1.0 million until December 2024. As of December 31, 2022, the total receivable balance, which represents revenue generated by sales of Millipred ® during the time Aytu was managing its commercial operations partially offset by minimal commercial operation liabilities Aytu paid on our behalf, was estimated to be approximately $1.8 million, $0.8 million of which was currently due pursuant to the transition services agreement. Avalo received $0.4 million of the $0.8 million current receivable in January 2023. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share (“EPS”) using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company had only common stock outstanding during the year ended December 31, 2022. The Company had two classes of stock outstanding during the year ended December 31, 2021; common stock and preferred stock. The convertible preferred stock outstanding during the period converted to shares of common stock on a 1-for-0.42 ratio (ratio adjusted for the reverse stock split) and had the same rights, preferences, and privileges as common stock other than it held no voting rights. In April 2021, Armistice converted the remaining 1,257,143 shares of convertible preferred stock into 523,810 shares of Avalo’s common stock. Under the two-class method, the convertible preferred stock was considered a separate class of stock until the time it was converted to common stock for EPS purposes. Therefore basic and diluted EPS is provided below for common stock for the year ended December 31, 2022, and both common stock and preferred stock for the year ended December 31, 2021. EPS for common stock and EPS for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for the period. In applying the two-class method, undistributed earnings are allocated to common stock and preferred stock based on the weighted average shares outstanding during the period, which assumes the convertible preferred stock has been converted to common stock. The weighted average number of common shares outstanding as of December 31, 2021 includes the weighted average effect of the pre-funded warrants issued in connection with the underwritten public offering that closed in January 2021, the exercise of which requires nominal consideration for the delivery of the shares of common stock (refer to Note 11 for more information). Diluted net (loss) income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the “treasury stock method” when dilutive; and (ii) common stock to be issued upon the exercise of outstanding warrants, which are included under the “treasury stock method” when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company’s losses. The following tables set forth the computation of basic and diluted net loss per share of common stock for the year ended December 31, 2022, and common and preferred stock for the year ended December 31, 2021 (in thousands, except per share amounts): Year Ended December 31, 2022 Common stock Net loss $ (41,658) Weighted average shares 9,408,477 Basic and diluted net loss per share $ (4.43) Year Ended December 31, 2021 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Allocation of undistributed net loss $ (82,849) $ (27) $ (1,500) $ — Weighted average shares 8,324,038 8,324,038 361,644 361,644 Basic and diluted net loss per share $ (9.95) $ 0.00 $ (4.15) $ — The following outstanding securities at December 31, 2022 and 2021 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2022 2021 Stock options 1,428,867 1,137,612 Warrants on common stock 1 366,990 367,189 Restricted Stock Units — 937 1 The weighted average number of common shares outstanding as of December 31, 2021 includes the weighted average effect of the 139,747 pre-funded warrants issued in connection with the underwritten public offering that closed in January 2021 because the exercise of such warrants requires nominal consideration ($0.012 per share exercise price for each pre-funded warrant). During 2021, the holder exercised 25,740 of the pre-funded warrants. As of December 31, 2022, the weighted average number of common shares outstanding included the weighted average effect of the remaining 114,007 pre-funded warrants outstanding. Therefore, these pre-funded warrants are not included in the table above. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2022 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 12,133 $ — $ — Liabilities Derivative liability $ — $ — $ 4,830 December 31, 2021 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 54,010 $ — $ — *Investments in money market funds are reflected in cash and cash equivalents on the accompanying consolidated balance sheets. As of December 31, 2022 and 2021, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, other receivables, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, derivative liability and long-term debt. The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, restricted cash, accounts receivable, other receivables, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. The estimated fair value of the Company’s debt approximates its carrying value as of December 31, 2022 and is in Level Two of the fair value hierarchy (refer to Note 10 for more information). Level 3 Valuation The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the derivative liability for the years ended December 31, 2022 and 2021: Derivative liability Balance at December 31, 2021 $ — Initial valuation of derivative liability 4,830 Change in fair value of derivative liability — Balance at December 31, 2022 $ 4,830 On November 7, 2022, Avalo sold its economic rights to future milestone and royalty payments for previously out-licensed assets AVTX-501, AVTX-007, and AVTX-611 to ES Therapeutics, LLC (“ES”), an affiliate of Armistice, in exchange for $5.0 million (the “ES Transaction”). Armistice is a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, served on Avalo’s Board until August 8, 2022. The ES Transaction was approved in accordance with Avalo’s related party transaction policy. The economic rights sold include (a) rights to a milestone payment of $20.0 million upon the filing and acceptance of an NDA for AVTX-501 pursuant to an agreement with Janssen Pharmaceutics, Inc., (the “AVTX-501 Milestone”) and (b) rights to any future milestone payments and royalties relating to AVTX-007 under a license agreement with Apollo AP43 Limited, including up to $6.25 million of development milestones, up to $67.5 million in sales-based milestones, and royalty payments of a low single digit percentage of annual net sales (which percentage increases to another low single digit percentage if annual net sales exceed a specified threshold) (the “AVTX-007 Milestones and Royalties”). In addition, Avalo waived all its rights to AVTX-611 sales-based payments of up to $20.0 million that were payable by ES (refer to Note 3). The exchange of the economic rights of the AVTX-501 Milestone and AVTX-007 Milestones and Royalties for cash meets the definition of a derivative instrument. The fair value of the derivative liability is determined using a combination of a scenario-based method and an option pricing method (implemented using a Monte Carlo simulation). The significant inputs including probabilities of success, expected timing, and forecasted sales as well as market-based inputs for volatility, risk-adjusted discount rates and allowance for counterparty credit risk are unobservable and based on the best information available to Avalo. Certain information used in the valuation is inherently limited in nature and could differ from Janssen and Apollo’s internal estimates. The fair value of the derivative liability as of the transaction date was approximately $4.8 million, of which $3.5 million was attributable to the AVTX-501 Milestone and $1.3 million was attributable to the AVX-007 Milestones and Royalties. The fair value of the AVTX-501 Milestone was primarily driven by an approximate 23% probability of success to reach the milestone in approximately 5 years. The fair value of AVTX-007 Milestones and Royalties were primarily driven by an approximate 17% probability of success, time to commercialization of 6 years, and sales forecasts with peak annual net sales reaching $300 million. As discussed above, these unobservable inputs were estimated by Avalo based on limited publicly available information and therefore could differ from Janssen and Apollo’s internal development plans. Any changes to these inputs may result in significant changes to the fair value measurement. Notably, the probability of success is the largest driver of the fair value and therefore changes to such input would likely result in significant changes to such fair value. Subsequent to the transaction date, at each reporting period, the derivative liability is remeasured at fair value with changes recognized in other income (expense), net in the accompanying statements of operations and comprehensive loss. There was no change in the fair value as of December 31, 2022 given no significant changes to the inputs and the short time period elapsed. The Company will re-assess the significant unobservable inputs each reporting period. In the event that Janssen and/or Apollo are required to make payment(s) to ES Therapeutics pursuant to the underlying agreements, Avalo will recognize revenue under its existing contracts with those customers for that amount when it is no longer probable there would be a significant revenue reversal with any differences between the fair value of the derivative liability related to that payment immediately prior to the revenue recognition and revenue recognized to be recorded as other expense. However, given Avalo is no longer entitled to collect these payments, the potential ultimate settlement of the payments in the future from Janssen and/or Apollo to ES Therapeutics (and the future mark-to-market activity each reporting period) will not impact Avalo’s future cash flows. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Furniture and equipment $ 280 $ 185 Computers and software 56 56 Right-of-use assets 1,750 2,001 Leasehold improvements 739 739 Total property and equipment 2,825 2,981 Less accumulated depreciation (414) (286) Property and equipment, net $ 2,411 $ 2,695 Depreciation expense was $0.1 million for the years ended December 31, 2022 and December 31, 2021. Leases Avalo currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both leases are operating leases based on the lease classification test performed at lease commencement. The annual base rent for the Company's office located in Rockville, Maryland is $0.2 million, subject to annual 2.5% increases over the term of the lease. The lease provided for a rent abatement for a period of 12 months following the Company’s date of occupancy. The lease has an initial term of 10 years from the date the Company made its first annual fixed rent payment, which occurred in January 2020. The Company has the option to extend the lease two times, each for a period of five years, and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. The initial annual base rent for the Company’s office located in Chesterbrook, Pennsylvania is $0.2 million and the annual operating expenses are approximately $0.1 million. The annual base rent is subject to periodic increases of approximately 2.4% over the term of the lease. The lease has an initial term of 5.25 years from the lease commencement on December 1, 2021. The weighted average remaining term of the operating leases at December 31, 2022 was 5.5 years. Supplemental balance sheet information related to the leased properties include (in thousands): As of December 31, 2022 December 31, 2021 Property and equipment, net $ 1,750 $ 2,001 Accrued expenses and other current liabilities $ 532 $ 485 Other long-term liabilities 1,711 2,018 Total operating lease liabilities $ 2,243 $ 2,503 The operating lease right-of-use (ROU) assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in the Company’s consolidated balance sheets. The Company utilized a weighted average discount rate of 9.2% to determine the present value of the lease payments. The components of lease expense for the years ended December 31, 2022 and 2021 were as follows (in thousands): Year Ended December 31, 2022 2021 Operating lease cost* $ 493 $ 393 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liability as of December 31, 2022 (in thousands): Undiscounted Cash Flows 2023 532 2024 537 2025 547 2026 557 2027 258 Thereafter 426 Total lease payments $ 2,857 Less implied interest (614) Total $ 2,243 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets There were no changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021. The changes in intangible assets for the years ended December 31, 2022 and 2021 were as follows (in thousands): Balance as of December 31, 2020 $ 1,585 Amortization (1,547) Balance as of December 31, 2021 $ 38 Amortization (38) Balance as of December 31, 2022 $ — Avalo’s acquired assembled workforce and acquired product marketing rights were fully amortized in the first quarter of 2022 and fourth quarter of 2021, respectively. The following is a summary of intangible assets held by the Company at December 31, 2022 and 2021, respectively (in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056 $ (5,056) $ — — Acquired Assembled Workforce 900 (900) — — Total $ 5,956 $ (5,956) $ — — December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056 $ (5,056) $ — 0.0 Acquired Assembled Workforce 900 (862) 38 0.1 Total $ 5,956 $ (5,918) $ 38 0.1 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Research and development $ 6,293 $ 8,221 Compensation and benefits 2,699 4,310 Selling, general and administrative 1,008 1,386 Commercial operations 1,694 1,733 Royalty payment 508 375 Lease liability, current 532 485 Other 480 9 Total accrued expenses and other current liabilities $ 13,214 $ 16,519 Pursuant to the out-license of AVTX-007 to Apollo in 2022, Avalo and Apollo agreed to transition to Apollo responsibility for conducting the study of AVTX-007 for the treatment of adult-onset Still’s disease and certain manufacturing activities for the compound, with Avalo remaining responsible for continuing such activities at Apollo’s expense until such transition. The ‘Other’ line above includes $0.5 million of expense incurred by Apollo under specified third-party contracts that are in-process of being transitioned to Apollo. Apollo is contractually obligated to reimburse Avalo for these expenses and therefore we recognized a corresponding receivable within other receivables as of December 31, 2022. |
Cost Reduction Plan
Cost Reduction Plan | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction Plan | Cost Reduction Plan In the first quarter of 2022, the Board approved a cost reduction plan to enable the Company to execute its strategy of prioritizing the development of its most promising programs (the “Plan”). As part of the Plan, the Company announced plans to wind down internal development efforts of AVTX-006 and pause development efforts for AVTX-802. Accordingly, a reduction in workforce plan was approved to reduce headcount and related expenses. The reduction in workforce plan, which was considered a one-time termination benefit as defined by ASC 420, Exit or Disposal Cost Obligations , was completed in the second quarter of 2022. The one-time termination benefits mainly relate to severance payments to separated employees. As a result, the Company recognized $1.5 million of expense in the first quarter of 2022, of which $0.7 million was recognized in research and development expense, and $0.8 million was recognized in selling, general and administrative expense. $1.4 million was paid during the year ended December 31, 2022. The remaining liability will be paid in the first quarter of 2023 pursuant to the separation agreements. Additionally, $0.4 million of stock-based compensation expense was recognized in the first quarter of 2022 related to the Plan, which was mainly related to accelerated vesting of certain separated employees’ stock options. twelve |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes PayableOn June 4, 2021, the Company entered into the $35.0 million Loan Agreement with the Lenders. In accordance with the Loan Agreement, $20.0 million was funded on the closing date (the “Initial Note”), with the remaining $15.0 million fundable upon the Company achieving certain predetermined milestones, which the Company met in the third quarter of 2021. On July 30, 2021, after achieving a predetermined milestone, the Company borrowed an additional $10.0 million, which was evidenced by a second note payable (the “Second Note”). On September 29, 2021, after achieving a second predetermined milestone, the Company borrowed the remaining $5.0 million, which was evidenced by a third note payable (the “Third Note”, and collectively with the Initial and Second Notes, the “Notes”). In June 2022, the Company, as collectively agreed upon with the Lenders, prepaid $15.0 million to the Lenders, of which $14.8 million was applied to principal and the remainder applied to accrued interest. As of December 31, 2022, the outstanding notes payable balance was $21.2 million, inclusive of the final payment fee. Avalo might consider additional prepayments prior to principal loan amounts coming due, if collectively agreed upon with the Lenders. Each advance under the Loan Agreement will mature 42 months from the first day of the month following the funding of the advance. Each advance accrues interest at a per annum rate of interest equal to 6.25% plus the prime rate, as reported in the Wall Street Journal (subject to a floor of 3.25%). The Loan Agreement provides for interest-only payments for each advance for the first 18 months, however the interest-only period was extended to 24 months as a result of the Company satisfying the Interest Only Extension Milestone (as defined in the Loan Agreement) in the third quarter of 2021. Thereafter, amortization payments will be payable in monthly installments of principal and interest through each advance’s maturity date. Upon ten business days’ prior written notice, the Company may prepay all of the outstanding advances by paying the entire principal balance and all accrued and unpaid interest, subject to prepayment charges of up to 3% of the then outstanding principal balance. Upon the earlier of (i) payment in full of the principal balance, (ii) an event of default, or (iii) the maturity date, the Company will pay an additional final payment of 3% of the principal loan amount to the Lenders. Each advance of the loan is secured by a lien on substantially all of the Company’s assets, other than Intellectual Property and Excluded Collateral (in each case as defined in the Loan Agreement), and contains customary covenants and representations, including a financial reporting covenant and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions taxes, corporate changes, deposit accounts, and subsidiaries. The events of default under the Loan Agreement include but are not limited to, failing to make a payment, breach of covenant, or occurrence of a material adverse change. If an event of default occurs, the Lenders are entitled to accelerate the loan amounts to be due or take other enforcement actions. The accelerated payment obligations would include the outstanding principal balance (inclusive of the 3% final payment fee), a prepayment charge on the outstanding principal balance of up to 3%, and any accrued and unpaid interest. As of the filing date of this Annual Report on Form 10-K, the Company was not aware of any breach of covenants, occurrence of a material adverse change, nor had it received any notice of event of default from the Lenders. On June 4, 2021, pursuant to the Loan Agreement, the Company issued warrants to the Lenders to purchase 33,656 shares of the Company’s common stock with an exercise price of $31.20 per share (the “Warrants”). The Warrants are exercisable for ten years from the date of issuance. The Lenders may exercise the Warrants either by (a) cash or check or (b) through a net issuance conversion. The Warrants, which met equity classification, were recognized as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date using a relative fair value allocation method. The Company valued the Warrants at issuance, which resulted in a discount on the debt, and allocated the proceeds from the loan proportionately to the Notes and to the Warrants, of which $0.9 million was allocated to the Warrants. In 2021, the Company incurred $2.1 million in debt issuance costs, including legal fees in connection with the Loan Agreement, fees paid directly to the Lenders, and other direct costs. All fees, warrants, and costs paid to the Lenders and all direct costs incurred by the Company are recognized as a debt discount and are amortized to interest expense using the effective interest method over the term of the loan. The $1.1 million final payment fee is included in the contractual cash flows and is accreted to interest expense using the effective interest method over the term of the loan. The effective interest rate of the Notes, including the accretion of the final payment, was 20.7% as of December 31, 2022. Balance sheet information related to the notes payable for the Notes is as follows (in thousands): As of December 31, 2022 2021 Maturity Initial Note 12,139 20,600 January 2025 Second Note 6,070 10,300 February 2025 Third Note 3,035 5,150 April 2025 Notes payable, gross 1 21,244 36,050 Less: Unamortized debt discount and issuance costs 1,828 3,217 Carrying value of notes payable 19,416 32,833 Less: Current portion 5,930 — Carrying value of notes payable, non-current $ 13,486 $ 32,833 1 Balance includes $1.1 million final payment fee for the Notes, which represents 3% of the original principal loan amount. As of December 31, 2022, the contractual future principal payments were as follows (in thousands): As of December 31, 2022 2023 5,930 2024 13,463 2025 1,851 2026 — Total principal payments 1 $ 21,244 |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Capital Structure | Capital Structure Pursuant to the Company's amended and restated certificate of incorporation, the Company is authorized to issue two classes of stock; common stock and preferred stock. At December 31, 2022, the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. Common Stock On February 7, 2023, the Company closed an underwritten public offering of 3,770,000 shares of its common stock and warrants to purchase up to 3,770,000 shares of common stock, at a combined price to the public of $3.98 per share and warrant, resulting in net proceeds of approximately $13.7 million, after deducting the underwriting discounts and commissions and offering expenses payable by us. The warrants were immediately exercisable at an exercise price of $5.00 per share and are exercisable for one year from the issuance date. Armistice participated in the offering by purchasing 0.5 million shares of common stock and 0.5 million warrants, on the same terms as all other investors. Certain affiliates of Nantahala Capital Management LLC (collectively “Nantahala”) and Point72 Asset Management, L.P., which each beneficially owned greater than 5% of the Company’s outstanding common stock at the time of the offering, participated in the offering on the same terms as all other investors. The Company will evaluate the accounting impact of the offering in the first quarter of 2023. At-the-Market Offering Program In July 2021, the Company entered into an “at-the-market” sales agreement with Cantor Fitzgerald & Co. and RBC Capital Markets, LLC (together, the “Agents”), pursuant to which the Company may sell from time to time, shares of its common stock having an aggregate offering price of up to $50.0 million through the Agents. The Company has sold 0.2 million shares of common stock under the ATM Program for net proceeds of approximately $5.3 million. 2021 Financings Q3 2021 Equity Financing On September 17, 2021, the Company closed an underwritten public offering of 1.2 million shares of its common stock for net proceeds of $29.0 million. Armistice participated in the offering by purchasing 0.5 million shares of common stock, on the same terms as all other investors. Certain affiliates of Nantahala, which beneficially owned greater than 5% of the Company’s outstanding common stock at the time of the offering, participated in the offering on the same terms as all other investors. Q2 2021 Debt Financing Agreement As part of the Loan Agreement entered into in the second quarter of 2021, on June 4, 2021, the Company issued the Warrants to Horizon and Powerscourt to purchase 33,656 shares of the Company’s common stock with an exercise price of $31.20. The Warrants are exercisable for ten years from the date of issuance. Refer to Note 10 for additional information. Q1 2021 Equity Financing In January 2021, the Company closed an underwritten public offering of 1.2 million shares of its common stock and 139,747 pre-funded warrants for net proceeds of $37.7 million. Armistice participated in the offering by purchasing 0.2 million shares of common stock, on the same terms as all other investors. Nantahala participated in the offering by purchasing 0.1 million shares of common stock, on the same terms as all other investors. Nantahala also purchased pre-funded warrants to purchase up to 139,747 shares of common stock at a purchase price of $31.188, which represents the per share public offering price for the common stock less the $0.012 per share exercise price for each pre-funded warrant. During 2021, Nantahala exercised 25,740 of the pre-funded warrants. As of December 31, 2022, 114,007 pre-funded warrants were outstanding. Common Stock Warrants At December 31, 2022, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 333,334 $ 150.00 June 2024 114,007 $ 0.012 — 33,656 $ 31.20 June 2031 480,997 On February 7, 2023, as part of the underwritten public offering, the Company issued warrants to purchase up to an aggregate of 3,770,000 shares of common stock. The warrants were immediately exercisable upon issuance at an exercise price of $5.00 per share and are exercisable for one year from the issuance date. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan In April 2016, our board of directors adopted the 2016 Equity Incentive Plan, which was approved by our stockholders in May 2016 and which was subsequently amended and restated in May 2018 and August 2019 with the approval of our board of directors and our stockholders (the “2016 Third Amended Plan”). During the term of the 2016 Third Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year ending on (and including) January 1, 2026, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of December 31, 2022, there were 204,290 shares available for future issuance under the 2016 Third Amended Plan. On January 1, 2023, pursuant to the terms of the 2016 Third Amended and Restated Plan, an additional 377,221 shares were made available for issuance. Option grants expire after ten years. Employee options typically vest over four years. Employees typically receive a new hire option grant, as well as an annual grant in the first or second quarter of each year. In addition, in the first and fourth quarters of 2022, employees were granted options that vest on the first anniversary of the grant date. Options granted to directors typically vest immediately or over a period of one plan shares. The amount of stock-based compensation expense recognized for the years ended December 31, 2022 and 2021 was as follows (in thousands): Year Ended December 31, 2022 2021 Research and development $ 1,249 $ 1,775 Selling, general and administrative 6,305 6,397 Total stock-based compensation $ 7,554 $ 8,172 As a result of separation agreements executed in the first quarter of 2022 and in accordance with the terms of the pre-existing employment agreements, the Company accelerated the vesting of certain separated employees’ stock options and modified certain awards to extend the exercisability periods. As a result, the Company recognized $4.3 million of compensation cost in the first quarter of 2022, all of which was recognized in selling, general and administrative expense. Stock options with service-based vesting conditions The Company has granted stock options that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. The following table summarizes the Company's service-based option activity for the year ended December 31, 2022: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2021 1,054,277 $ 44.26 $ 27.45 8.1 Granted 684,968 $ 7.41 $ 5.37 Forfeited (276,212) $ 29.30 $ 19.59 Expired (117,501) $ 47.98 $ 31.28 Balance at December 31, 2022 1,345,532 $ 28.24 $ 17.48 6.7 Exercisable at December 31, 2022 682,038 $ 44.04 $ 26.38 4.4 In March 2022, the Company granted 0.3 million options with service-based vesting conditions to its employees as part of its annual stock option award that vest over four years. Additionally, in March and October 2022, the Company granted 0.1 million and 0.2 options, respectively, to its employees that vest on the first anniversary of the grant date. As a result of the reduction in workforce plan, 0.1 million options were forfeited in the first quarter of 2022, and 0.2 million options were forfeited as a result of other terminations during the year ended December 31, 2022. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2022, the aggregate intrinsic value of options outstanding was $0.3 million. The aggregate intrinsic value of options currently exercisable as of December 31, 2022 was zero. There were 374,074 options that vested during the year ended December 31, 2022, with a weighted average exercise price of $39.29 per share, which included the acceleration of certain options in accordance with the separation agreements entered into in the first quarter of 2022. The total grant date fair value of shares which vested during the years ended December 31, 2022 and 2021 was $9.6 million and $7.0 million, respectively. The Company recognized stock-based compensation expense of $7.4 million and $6.8 million related to stock options with service-based vesting conditions for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, there was $4.6 million of total unrecognized compensation cost related to unvested service-based vesting conditions awards. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.9 years. Subsequent to December 31, 2022, the Company granted 0.3 million options with service-based vesting conditions to its employees as part of its annual stock option award that vests over four years. Additionally, subsequent to December 31, 2022, 0.2 million options expired. Stock-based compensation assumptions The following table shows the assumptions used to compute stock-based compensation expense for stock options with service-based vesting conditions granted under the Black-Scholes valuation model for the years ended December 31, 2022 and 2021: Year Ended December 31, Service-based options 2022 2021 Expected term of options (in years) 5 — 6.25 0.76 — 6.25 Expected stock price volatility 84.0% — 93.5% 73.0% — 86.5% Risk-free interest rate 1.50% — 4.25% 0.07% — 1.34% Expected annual dividend yield 0% 0% The valuation assumptions were determined as follows: • Expected term of options: Due to lack of sufficient historical data, the Company estimates the expected life of its stock options with service-based vesting granted to employees and members of the board of directors as the arithmetic average of the vesting term and the original contractual term of the option. • Expected stock price volatility: The Company estimated the expected volatility based on a blend of Avalo's actual historical volatility of its stock price and the historical volatility of other similar publicly-traded biotechnology companies. The Company calculated the historical volatility of the selected companies by using weekly closing prices over a period of the expected term of the associated award. The companies were selected based on their risk profiles, enterprise value, position within the industry, and historical stock price information sufficient to meet the expected term of the associated award. A decrease in the selected volatility would decrease the fair value of the underlying instrument. • Risk‑free interest rate: The Company bases the risk‑free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected annual dividend yield: The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in the continued growth of the business. Accordingly, the Company assumed an expected dividend yield of 0%. Stock options with market-based vesting conditions As of December 31, 2022, there were 0.1 million exercisable stock options that contained market-based vesting conditions (that had been previously satisfied). The options have a weighted average stock price per share of $39.53 and a weighted average remaining contractual term of 1.5 years. There were no stock options with market-based vesting conditions granted, exercised, or forfeited for the year ended December 31, 2022. The Company recognized no stock-based compensation expense related to stock options with market-based vesting conditions for the year ended December 31, 2022 and recognized $1.1 million for the year ended December 31, 2021. Restricted Stock Units The Company measures the fair value of restricted stock units using the stock price on the date of grant. The restricted shares typically vest annually over a four-year period beginning on the first anniversary of the award. As of December 31, 2022, there were no unvested restricted stock units outstanding. During the year ended December 31, 2022, 938 restricted stock units vested and had a weighted average grant date fair value of $54.00 per unit. Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. The Company initially reserved and authorized up to 41,667 shares of common stock for issuance under the ESPP. During the term of the ESPP, on January 1 of each calendar year ending on (and including) January 1, 2026, the aggregate number of shares that may be issued under the ESPP automatically increases by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 41,667 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. As of December 31, 2022, 170,035 shares remained available for issuance. On January 1, 2023, the number of shares available for issuance under the ESPP increased by 41,667. In accordance with the guidance in ASC 718-50, Employee Share Purchase Plans , the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $0.2 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes . ASC 740 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected tax consequences or events that have been recognized in our financial statement or tax returns. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in the financial statements. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded in our financial statement for the year ended December 31, 2022. Tax years beginning in 2019 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. ASC 740 provides guidance on the recognition of interest and penalties related to income taxes. There were no interest or penalties related to uncertain tax positions arising in the years ended December 31, 2022 and 2021. It is the Company’s policy to treat interest and penalties, to the extent they arise, as a component of income taxes. The income tax provision from continuing operations consisted of the following for the years ended December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Current: Federal $ — $ (219) State — 1 Total Current — (218) Deferred: Federal 24 24 State 4 (2) Total Deferred 28 22 Net income tax expense (benefit) $ 28 $ (196) The net deferred tax liabilities consisted of the following for the years ended December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Deferred tax assets (liabilities): Net operating losses $ 32,393 $ 31,816 Tax credits 5,706 4,871 Capitalized research and development 6,567 — Stock-based compensation 3,532 3,080 Basis difference in tangible and intangible assets, net 1,597 2,020 Accrued compensation 585 965 Installment sale and revenue recognition 1,566 445 Other reserves 395 381 Lease liability 523 590 Prepaid expenses (248) (353) Right-of-use asset (408) (472) Total deferred tax assets, net 52,208 43,343 Less valuation allowance (52,349) (43,456) Net deferred taxes $ (141) $ (113) As of December 31, 2022, the Company had approximately $141.2 million of gross net operating losses for federal and state tax purposes that will begin to expire in 2031. As of December 31, 2022, the Company had various research tax credits of $5.7 million that will begin to expire in 2038. The income tax expense (benefit) for the years ended December 31, 2022 and 2021 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2022 2021 Federal statutory rate 21.00 % 21.00 % Stock compensation (2.72) (1.48) State taxes (0.01) — Research tax credit 2.01 2.52 NOL carryback due to CARES Act — 0.26 Other (0.19) (0.15) Valuation allowance (20.15) (21.93) Effective income tax rate (0.06) % 0.22 % The valuation allowance recorded by the Company as of December 31, 2022 and 2021 resulted from the uncertainties of the future utilization of deferred tax assets mainly resulting from net operating loss carry forwards for federal and state income tax purposes as well as the federal research and experimental and orphan drug tax credits. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities, as well as whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences are expected to reverse. The Company has established deferred tax liabilities for indefinite lived intangible assets consisting of goodwill that are not amortized for financial reporting purposes, but are tax deductible and therefore amortized over 15 years for tax purposes. The Company has concluded that the resulting deferred tax liability will also have an indefinite life unless there is an impairment of the related assets (for financial reporting purposes), or the disposal of the business to which the assets relate. Losses generated in years after 2017 will also have an indefinite life and will be available to offset 80 percent of any federal tax liability and will be available to offset many of the state deferred tax liabilities subject to utilization limits. A portion of existing deferred tax assets will reverse in the future, potentially generating net operating losses that will also be available to offset a portion of the indefinite lived deferred tax liability. Based on the consideration of these facts, the Company concluded it is more likely than not that a significant portion of its remaining gross deferred tax assets less the reversal of deferred tax liabilities will not be realized in the future, accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax asset as of December 31, 2022 and December 31, 2021. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied. Sections 382 and 383 of the IRC of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and experimental tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company has undergone an ownership change study through June 2020 and has determined that a "change in ownership" as defined by IRC Section 382 of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, did occur in February 2012, July 2014, and April 2017. Based on the Company having undergone multiple ownership changes throughout the history of these carryforwards, these NOLs will free up at varying rates each year. Subsequent to the changes in ownership previously listed, the NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three‑year period. This could limit the amount of NOLs and research and development credits that the Company can utilize annually to offset future taxable income or tax liabilities. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership after June 30, 2020 and therefore no determination has been made whether the entire NOL carryforward balance is subject to any additional Internal Revenue Code Section 382 limitation. To the extent there is a limitation, which could be significant, there would be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. Subsequent ownership changes may further affect the limitation in future years. All of the Company’s tax years are currently open to examination by each tax jurisdiction in which the Company is subject to taxation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation – General The Company may become party to various contractual disputes, litigation, and potential claims arising in the ordinary course of business. The Company currently does not believe that the resolution of such matters will have a material adverse effect on its financial position or results of operations except as otherwise disclosed in this report. Employee Incentive Bonus In October 2022, the Compensation Committee of the Board of Directors approved a cash incentive bonus for its employees contingent on positive data of its AVTX-002 PEAK Trial for non-eosinophilic asthma and other specific criteria relating to the Company’s market capitalization and liquidity. The contingent bonus is payable at 25% of each employee’s base compensation, which the Company currently estimates to be approximately $1.4 million. The Company has not recognized a liability within its accompanying consolidated balance sheet as of December 31, 2022 because it does not believe it is probable that the contingent bonus will be earned in context of ASC 450. The Company will evaluate the contingent bonus in regards to recognizing such liability each reporting period. Possible Future Milestone Payments for In-Licensed Compounds General Avalo is a party to license and development agreements with various third parties, which contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. AVTX-002 KKC License Agreement On March 25, 2021, the Company entered into a license agreement with Kyowa Kirin Co., Ltd. (“KKC”) for exclusive worldwide rights to develop, manufacture and commercialize AVTX-002, KKC’s first-in-class fully human anti-LIGHT (TNFSF14) monoclonal antibody for all indications (the “KKC License Agreement”). The KKC License Agreement replaced the Amended and Restated Clinical Development and Option Agreement between the Company and KKC dated May 28, 2020. Under the KKC License Agreement, the Company paid KKC an upfront license fee of $10.0 million. The Company is also required to pay KKC up to an aggregate of $112.5 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is required to pay KKC sales-based milestones aggregating up to $75.0 million, tied to the achievement of annual net sales targets. Additionally, the Company is required to pay KKC royalties during a country-by-country royalty term equal to a mid-teen percentage of annual net sales. The Company is required to pay KKC a double-digit percentage (less than 30%) of the payments that the Company receives from any sublicensing of its rights under the KKC License Agreement, subject to certain exclusions. Avalo is responsible for the development and commercialization of AVTX-002 in all indications worldwide (other than the option in the KKC License Agreement that, upon exercise by KKC, allows KKC to develop, manufacture and commercialize AVTX-002 in Japan). In addition to the KKC License Agreement, Avalo is subject to additional royalties upon commercialization of up to an amount of less than 10% of net sales. No expense related to the KKC License Agreement was recognized for the year ended December 31, 2022. The Company recognized the upfront license fee of $10.0 million within research and development expenses for the year ended December 31, 2021. There has been no cumulative expense recognized as of December 31, 2022 related to the milestones under the KKC License Agreement. The Company will continue to monitor the milestones at each reporting period. AVTX-006 Astellas License Agreement The Company has an exclusive license agreement with OSI Pharmaceuticals, LLC, an indirect wholly owned subsidiary of Astellas Pharma, Inc. (“Astellas”), for the worldwide development and commercialization of the novel, second generation mTORC1/2 inhibitor (AVTX-006). Under the terms of the license agreement, there was an upfront license fee of $0.5 million. The Company is required to pay Astellas up to an aggregate of $5.5 million based on the achievement of specified development and regulatory milestones. The Company is also required to pay Astellas a tiered mid-to-high single digit percentage of the payments that Avalo receives from any sublicensing of its rights under the Astellas license agreement, subject to certain exclusions. Upon commercialization, the Company is required to pay Astellas royalties during a country-by-country royalty term equal to a tiered mid-to-high single digit percentage of annual net sales. Avalo is fully responsible for the development and commercialization of the program. No expense related to this license agreement was recognized for the year ended December 31, 2022. The Company recognized a $0.5 million development milestone payment within research and development expenses for the year ended December 31, 2021. There has been $0.5 million of cumulative expense recognized as of December 31, 2022 related to the milestones under this license agreement. The Company will continue to monitor the remaining milestones at each reporting period. AVTX-008 Sanford Burnham Prebys License Agreement On June 22, 2021, the Company entered into an Exclusive Patent License Agreement with Sanford Burnham Prebys Medical Discovery Institute (the “Sanford Burnham Prebys License Agreement”) under which the Company obtained an exclusive license to a portfolio of issued patents and patent applications covering an immune checkpoint program (AVTX-008). Under the terms of the Sanford Burnham Prebys License Agreement, the Company incurred an upfront license fee of $0.4 million, as well as patent costs of $0.5 million. The Company is required to pay Sanford Burnham Prebys up to an aggregate of $24.2 million based on achievement of specified development and regulatory milestones. Upon commercialization, the Company is required to pay Sanford Burnham Prebys sales-based milestone payments aggregating up to $50.0 million tied to annual net sales targets. Additionally, the Company is required to pay Sanford Burnham Prebys royalties during a country-by-country royalty term equal to a low-to-mid single digit percentage of annual net sales. The Company is also required to pay Sanford Burnham Prebys a tiered low-double digit percentage of the payments that Avalo receives from sublicensing of its rights under the Sanford Burnham Prebys License Agreement, subject to certain exclusions. Avalo is fully responsible for the development and commercialization of the program. No expense related to this license agreement was recognized for the year ended December 31, 2022. The Company recognized the upfront license fee of $0.4 million within research and development expenses and the upfront patent expense of $0.5 million within selling, general and administrative expenses for the year December 31, 2021. There has been no cumulative expense recognized as of December 31, 2022 related to the milestones under this license agreement. The Company will continue to monitor the milestones at each reporting period. Possible Future Milestone Proceeds for Out-Licensed Compounds AVTX-301 Out-License On May 28, 2021, the Company out-licensed its rights in respect of its non-core asset, AVTX-301, to Alto Neuroscience, Inc. (“Alto”). The Company initially in-licensed the compound from an affiliate of Merck & Co., Inc. in 2013. Under the out-license agreement, the Company received a mid-six-digit upfront payment from Alto. The Company is also eligible to receive up to an aggregate of $18.6 million based on the achievement of specified development, regulatory and commercial sales milestones. Additionally, the Company is entitled to a less than single digit percentage royalty based on annual net sales. Alto is fully responsible for the development and commercialization of the program. Avalo recognized the upfront fee as license revenue for the year ended December 31, 2021. The Company has not recognized any revenue related to milestones as of December 31, 2022. AVTX-406 License Assignment On June 9, 2021, the Company assigned its rights, title, interest, and obligations under an in-license covering its non-core asset, AVTX-406, to ES, a wholly-owned subsidiary of Armistice. The transaction with ES was approved in accordance with Avalo’s related party transaction policy. Under the assignment agreement, the Company received a low-six-digit upfront payment from ES. The Company is also eligible to receive up to an aggregate of $6.0 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is eligible to receive sales-based milestone payments aggregating up to $20.0 million tied to annual net sales targets. ES is fully responsible for the development and commercialization of the program. Avalo recognized the upfront fee as license revenue for the year ended December 31, 2021. The Company has not recognized any revenue related to milestones as of December 31, 2022. Acquisition Related and Other Contingent Liabilities Aevi Merger Possible Future Milestone Payments In the first quarter of 2020, the Company consummated its merger with Aevi Genomic Medicine Inc. (“Aevi”), in which Avalo acquired the rights to AVTX-002, AVTX-006 and AVTX-007 (the “Merger” or the “Aevi Merger”). A portion of the consideration for the Aevi Merger included two future contingent development milestones worth up to an additional $6.5 million, payable in either shares of Avalo’s common stock or cash, at the election of Avalo. The first milestone was the enrollment of a patient in a Phase 2 study related to AVTX-002 (for treatment of pediatric onset Crohn's disease), AVTX-006 (for treatment of any indication), or AVTX-007 (for treatment of any indication) prior to February 3, 2022, which would have resulted in a milestone payment of $2.0 million. The Company did not meet the first milestone prior to February 3, 2022. Therefore, no contingent consideration related to this milestone was recognized as of December 31, 2022 and no future contingent consideration will be recognized. The second milestone is the receipt of an NDA approval for either AVTX-006 or AVTX-007 from the FDA on or prior to February 3, 2025. If this milestone is met, the Company is required to make a milestone payment of $4.5 million. The contingent consideration related to the second development milestone will be recognized if and when such milestone is probable and can be reasonably estimated. No contingent consideration related to the second development milestone has been recognized as of December 31, 2022. The Company will continue to monitor the second milestone at each reporting period. Ichorion Asset Acquisition Possible Future Milestone Payments In September 2018, the Company acquired Ichorion Therapeutics, Inc., including acquiring three compounds for inherited metabolic disorders known as CDGs (AVTX-801, AVTX-802 and AVTX-803) and one other preclinical compound. Consideration for the transaction included shares of Avalo common stock and three future contingent development milestones for the acquired compounds worth up to an additional $15.0 million. All milestones are payable in either shares of the Company's common stock or cash, at the election of Avalo. The first and second milestone were marketing approval of the first and second product, respectively, by the FDA on or prior to December 31, 2021, which would have resulted in milestone payments of $6.0 million and $5.0 million, respectively. The Company did not meet the first or second milestone as of December 31, 2021. As a result, no contingent consideration related to these milestones was recognized as of December 31, 2021 and no future contingent consideration will be recognized. The third milestone is marketing approval of a protide molecule by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million. The contingent consideration related to the third development milestone will be recognized if and when such milestone is probable and can be reasonably estimated. No contingent consideration related to the third milestone has been recognized as of December 31, 2022. The Company will continue to monitor the third development milestone at each reporting period. AVTX-006 Royalty Agreement with Certain Related Parties In July 2019, Aevi entered into a royalty agreement, and liabilities thereunder were assumed by Avalo upon close of the Aevi Merger in February 2020. The royalty agreement provided certain investors, including LeoGroup Private Investment Access, LLC on behalf of Garry Neil, the Company’s Chief Executive Officer and Chairman of the Board, and Mike Cola, the Company’s former Chief Executive Officer (collectively, the “Investors”), a royalty stream, in exchange for a one-time aggregate payment of $2.0 million (the “Royalty Agreement”). Pursuant to the Royalty Agreement, the Investors will be entitled collectively to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of the Company’s second generation mTORC1/2 inhibitor, AVTX-006. At any time beginning three years after the date of the first public launch of AVTX-006, Avalo may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Avalo assumed this Royalty Agreement upon closing of the Aevi Merger and it is recorded as a royalty obligation within the Company's accompanying consolidated balance sheet as of December 31, 2022. Because there is a significant related party relationship between the Company and the Investors, the Company has treated its obligation to make royalty payments under the Royalty Agreement as an implicit obligation to repay the funds advanced by the Investors. As the Company makes royalty payments in accordance with the Royalty Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which will result in a corresponding increase in the liability balance. Karbinal Royalty Make-Whole Provision In 2018, in connection with the acquisition of certain commercialized products, the Company entered into a supply and distribution agreement (the “Karbinal Agreement”) with TRIS Pharma Inc. (“TRIS”). As part of the Karbinal Agreement, the Company had an annual minimum sales commitment, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units through 2025. The Company was required to pay TRIS a royalty make whole payment (“Make-Whole Payments”) of $30 for each unit under the 70,000 units annual minimum sales commitment through 2025. As a part of the Aytu transaction, the Company assigned all its payment obligations, including the Make-Whole Payments, under the Karbinal Agreement (collectively, the “TRIS Obligations”) to Aytu. However, under the original license agreement, the Company could ultimately be liable for the TRIS Obligations to the extent Aytu fails to make the required payments. The future Make-Whole Payments to be made by Aytu are unknown as the amount owed to TRIS is dependent on the number of units sold. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern (see Note 1). In the second quarter of 2022, the Company concluded that it would include sales and marketing expenses within the selling, general and administrative line in the Company’s consolidated statements of operations. The Company reclassified $2.8 million from sales and marketing expense to selling, general and administrative expense for the year ended December 31, 2021 to conform with the current period presentation. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Avalo Therapeutics, Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, the valuation of derivative liabilities, cash flows used in management's going concern assessment, income taxes, goodwill, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Discontinued Operations | Discontinued Operations In 2019, the Company entered into an asset purchase agreement with Aytu Bioscience, Inc. (“Aytu”) to sell the Company’s rights, title and interest in assets relating to certain commercialized products (the “Pediatric Portfolio”). Upon the sale of the Pediatric Portfolio during the fourth quarter of 2019, the Pediatric Portfolio met all conditions required to be classified as discontinued operations. For the year ended December 31, 2021, the operating results of the Pediatric Portfolio (as a result of the Company’s limited continued involvement) are reported as income from discontinued operations, net of tax in the accompanying consolidated financial statements. There was no activity related to discontinued operations for the year ended December 31, 2022. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. |
Restricted Cash | Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. |
Accounts Receivable, net | Accounts Receivable, net The Company has one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Accounts receivable are written off to net revenue when deemed uncollectible and recoveries of receivables previously written off are recorded when received. |
Derivative liability | Derivative Liability Upon entering into a transaction to sell the Company’s future rights to milestones and royalty payments of previously out-licensed assets, the Company must assess whether the transaction is a derivative under ASC 815, Derivatives and Hedging. The requirements for the sale to be treated as a derivative are as follows: a) one or more underlying; b) one or more notional amounts or payment provisions or both; c) no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and d) net settlement provisions. If the transaction meets the requirement to be treated as a derivative, we estimate the fair value of the derivative liability on the date of issuance. The derivative liability is re-valued each reporting period and any change in the fair value is recorded as a gain or loss in the statement of operations and comprehensive loss. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. |
Leases | LeasesThe Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified two operating leases, which both serve as administrative office space. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company’s consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the consolidated balance sheets and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within selling, general and administrative expenses. |
Property and Equipment | Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement’s useful life. The Company uses the lesser of the lease term or ten years |
Acquisitions | Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, Business Combinations, the Company accounts for the transaction as an asset acquisition. |
Segment Information | Segment Information |
Goodwill | Goodwill The Company’s goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill 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 for business combinations. 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. The Company consists of one reporting unit. |
Intangible Assets and Amortization Expense | Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. Amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations and comprehensive loss and therefore there is no amortization expense included in cost of product sales or selling, general and administrative expense. |
Notes Payable | Notes Payable Notes payable are recorded on the balance sheet at carrying value, which is the gross balance (inclusive of the final payment fee for the Notes), less the unamortized debt discount and issuance costs. All fees, costs paid to the Lenders and all direct costs incurred by the Company are recognized as a debt discount and are amortized to interest expense using the effective interest method over the life of the loan. |
Product Revenues, net, Returns and Allowances, License and Other Revenue, and Cost of Product Sales | Deferred Revenue The Company’s commercial operations are managed by a third-party logistics provider. Our third-party logistics provider purchases Millipred ® from us and subsequently delivers the product to our customers. As discussed below within “Product Revenue, net”, the Company recognizes revenue when the performance obligation is satisfied, which is at a point in time when the product has been received by the customer. Deferred revenue is comprised of cash received from our third-party logistics provider related to product that has not yet been delivered to the customer. Product Revenues, net The Company generates substantially all of its revenue from sales of its prescription drug to its customers. The Company has one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. The Company has identified a single product delivery performance obligation, which is the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, at the time the product has been received by the customer. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide the prescription drug. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, Company expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy for sales made prior to August 31, 2021, generally allows for customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The Company’s return policy for sales subsequent to August 31, 2021, generally allows for customers to receive credit for expired products within thirty days prior to expiration and within ninety days after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company reassesses the milestones each reporting period to determine the probability of achievement. Cost of Product Sales |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance and quality; costs and milestones associated with certain licensing agreements, and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. The Company is a party to license and development agreements for in-licensed research and development assets with third parties. Such agreements often contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related research and development expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has its own unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals |
Stock-Based Compensation | Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. Additionally, the stock price on the date of grant is utilized in the Black-Scholes option pricing model. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes |
Comprehensive Loss | Comprehensive LossComprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the years ended December 31, 2022 and 2021, the Company’s net loss was equal to comprehensive loss and, accordingly, no additional disclosure is presented. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There have been no new accounting pronouncements made effective during fiscal 2022 that have significance, or potential significance, to our consolidated financial statements. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Net Loss Per Share of Common Stock | The following tables set forth the computation of basic and diluted net loss per share of common stock for the year ended December 31, 2022, and common and preferred stock for the year ended December 31, 2021 (in thousands, except per share amounts): Year Ended December 31, 2022 Common stock Net loss $ (41,658) Weighted average shares 9,408,477 Basic and diluted net loss per share $ (4.43) Year Ended December 31, 2021 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Allocation of undistributed net loss $ (82,849) $ (27) $ (1,500) $ — Weighted average shares 8,324,038 8,324,038 361,644 361,644 Basic and diluted net loss per share $ (9.95) $ 0.00 $ (4.15) $ — |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Weighted Shares Outstanding | The following outstanding securities at December 31, 2022 and 2021 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2022 2021 Stock options 1,428,867 1,137,612 Warrants on common stock 1 366,990 367,189 Restricted Stock Units — 937 1 The weighted average number of common shares outstanding as of December 31, 2021 includes the weighted average effect of the 139,747 pre-funded warrants issued in connection with the underwritten public offering that closed in January 2021 because the exercise of such warrants requires nominal consideration ($0.012 per share exercise price for each pre-funded warrant). During 2021, the holder exercised 25,740 of the pre-funded warrants. As of December 31, 2022, the weighted average number of common shares outstanding included the weighted average effect of the remaining 114,007 pre-funded warrants outstanding. Therefore, these pre-funded warrants are not included in the table above. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2022 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 12,133 $ — $ — Liabilities Derivative liability $ — $ — $ 4,830 December 31, 2021 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 54,010 $ — $ — |
Summary of Changes in the Fair Value of the Level 3 Valuation | The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the derivative liability for the years ended December 31, 2022 and 2021: Derivative liability Balance at December 31, 2021 $ — Initial valuation of derivative liability 4,830 Change in fair value of derivative liability — Balance at December 31, 2022 $ 4,830 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Furniture and equipment $ 280 $ 185 Computers and software 56 56 Right-of-use assets 1,750 2,001 Leasehold improvements 739 739 Total property and equipment 2,825 2,981 Less accumulated depreciation (414) (286) Property and equipment, net $ 2,411 $ 2,695 |
Summary of Assets and Liabilities Lessee | Supplemental balance sheet information related to the leased properties include (in thousands): As of December 31, 2022 December 31, 2021 Property and equipment, net $ 1,750 $ 2,001 Accrued expenses and other current liabilities $ 532 $ 485 Other long-term liabilities 1,711 2,018 Total operating lease liabilities $ 2,243 $ 2,503 |
Components of Lease Expense | The components of lease expense for the years ended December 31, 2022 and 2021 were as follows (in thousands): Year Ended December 31, 2022 2021 Operating lease cost* $ 493 $ 393 *Includes short-term leases, which are immaterial. |
Operating Lease Maturities | The following table shows a maturity analysis of the operating lease liability as of December 31, 2022 (in thousands): Undiscounted Cash Flows 2023 532 2024 537 2025 547 2026 557 2027 258 Thereafter 426 Total lease payments $ 2,857 Less implied interest (614) Total $ 2,243 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The changes in intangible assets for the years ended December 31, 2022 and 2021 were as follows (in thousands): Balance as of December 31, 2020 $ 1,585 Amortization (1,547) Balance as of December 31, 2021 $ 38 Amortization (38) Balance as of December 31, 2022 $ — |
Schedule of Finite-Lived Intangible Assets | The following is a summary of intangible assets held by the Company at December 31, 2022 and 2021, respectively (in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056 $ (5,056) $ — — Acquired Assembled Workforce 900 (900) — — Total $ 5,956 $ (5,956) $ — — December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056 $ (5,056) $ — 0.0 Acquired Assembled Workforce 900 (862) 38 0.1 Total $ 5,956 $ (5,918) $ 38 0.1 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Research and development $ 6,293 $ 8,221 Compensation and benefits 2,699 4,310 Selling, general and administrative 1,008 1,386 Commercial operations 1,694 1,733 Royalty payment 508 375 Lease liability, current 532 485 Other 480 9 Total accrued expenses and other current liabilities $ 13,214 $ 16,519 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Balance sheet information related to the notes payable for the Notes is as follows (in thousands): As of December 31, 2022 2021 Maturity Initial Note 12,139 20,600 January 2025 Second Note 6,070 10,300 February 2025 Third Note 3,035 5,150 April 2025 Notes payable, gross 1 21,244 36,050 Less: Unamortized debt discount and issuance costs 1,828 3,217 Carrying value of notes payable 19,416 32,833 Less: Current portion 5,930 — Carrying value of notes payable, non-current $ 13,486 $ 32,833 |
Schedule of Maturities of Long-term Debt | As of December 31, 2022, the contractual future principal payments were as follows (in thousands): As of December 31, 2022 2023 5,930 2024 13,463 2025 1,851 2026 — Total principal payments 1 $ 21,244 |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Outstanding Common Stock Warrants | At December 31, 2022, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 333,334 $ 150.00 June 2024 114,007 $ 0.012 — 33,656 $ 31.20 June 2031 480,997 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense recognized for the years ended December 31, 2022 and 2021 was as follows (in thousands): Year Ended December 31, 2022 2021 Research and development $ 1,249 $ 1,775 Selling, general and administrative 6,305 6,397 Total stock-based compensation $ 7,554 $ 8,172 |
Summary of Option Activity | The following table summarizes the Company's service-based option activity for the year ended December 31, 2022: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2021 1,054,277 $ 44.26 $ 27.45 8.1 Granted 684,968 $ 7.41 $ 5.37 Forfeited (276,212) $ 29.30 $ 19.59 Expired (117,501) $ 47.98 $ 31.28 Balance at December 31, 2022 1,345,532 $ 28.24 $ 17.48 6.7 Exercisable at December 31, 2022 682,038 $ 44.04 $ 26.38 4.4 |
Schedule of Fair Value Assumptions for Options | The following table shows the assumptions used to compute stock-based compensation expense for stock options with service-based vesting conditions granted under the Black-Scholes valuation model for the years ended December 31, 2022 and 2021: Year Ended December 31, Service-based options 2022 2021 Expected term of options (in years) 5 — 6.25 0.76 — 6.25 Expected stock price volatility 84.0% — 93.5% 73.0% — 86.5% Risk-free interest rate 1.50% — 4.25% 0.07% — 1.34% Expected annual dividend yield 0% 0% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision from continuing operations consisted of the following for the years ended December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Current: Federal $ — $ (219) State — 1 Total Current — (218) Deferred: Federal 24 24 State 4 (2) Total Deferred 28 22 Net income tax expense (benefit) $ 28 $ (196) |
Schedule of Components of Deferred Tax Assets | The net deferred tax liabilities consisted of the following for the years ended December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Deferred tax assets (liabilities): Net operating losses $ 32,393 $ 31,816 Tax credits 5,706 4,871 Capitalized research and development 6,567 — Stock-based compensation 3,532 3,080 Basis difference in tangible and intangible assets, net 1,597 2,020 Accrued compensation 585 965 Installment sale and revenue recognition 1,566 445 Other reserves 395 381 Lease liability 523 590 Prepaid expenses (248) (353) Right-of-use asset (408) (472) Total deferred tax assets, net 52,208 43,343 Less valuation allowance (52,349) (43,456) Net deferred taxes $ (141) $ (113) |
Reconciliation of Income Tax Expenses Between Federal Statutory Rate and Effective Income Tax Rate | The income tax expense (benefit) for the years ended December 31, 2022 and 2021 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2022 2021 Federal statutory rate 21.00 % 21.00 % Stock compensation (2.72) (1.48) State taxes (0.01) — Research tax credit 2.01 2.52 NOL carryback due to CARES Act — 0.26 Other (0.19) (0.15) Valuation allowance (20.15) (21.93) Effective income tax rate (0.06) % 0.22 % |
Business (Details)
Business (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Feb. 07, 2023 USD ($) $ / shares shares | Jul. 07, 2022 | Sep. 17, 2021 USD ($) shares | Jun. 30, 2022 USD ($) | Jan. 31, 2021 USD ($) shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument | ||||||||
Conversion ratio | 0.0833 | |||||||
Cash and cash equivalents | $ 13,172 | $ 54,585 | ||||||
Net loss | 41,658 | 84,376 | ||||||
Net cash used in operating activities | 26,751 | 70,892 | ||||||
Accumulated deficit | 303,824 | 262,166 | ||||||
Proceeds from upfront fees | 19,500 | |||||||
Prepayment on Notes | 14,806 | 0 | ||||||
AVTX-007 | ||||||||
Debt Instrument | ||||||||
Proceeds from upfront fees | 14,500 | |||||||
Horizon & Powerscourt Notes | Notes Payable | ||||||||
Debt Instrument | ||||||||
Prepayment on Notes | $ 15,000 | $ 15,000 | ||||||
Total principal payments1 | 21,244 | $ 36,050 | ||||||
2023 | $ 5,930 | |||||||
Underwritten Public Offering | ||||||||
Debt Instrument | ||||||||
Number of shares issued (in shares) | shares | 1,200,000 | 1,200,000 | ||||||
Net proceeds | $ 29,000 | $ 37,700 | ||||||
Subsequent Event | ||||||||
Debt Instrument | ||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 5 | |||||||
Subsequent Event | Underwritten Public Offering | ||||||||
Debt Instrument | ||||||||
Number of shares issued (in shares) | shares | 3,770,000 | |||||||
Net proceeds | $ 13,700 | |||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 5 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2022 USD ($) | Dec. 31, 2022 contract reporting_unit segment | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Selling, general and administrative | $ | $ 2.8 | |
Payment terms | 60 days | |
Prompt payment discount | 2% | |
Number of operating leases | contract | 2 | |
Number of operating segments | segment | 1 | |
Number of reporting units | reporting_unit | 1 | |
Computers and software | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Computer, software, equipment and furniture, useful life | 4 years | |
Equipment and furniture | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Computer, software, equipment and furniture, useful life | 5 years | |
Leasehold improvements | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Computer, software, equipment and furniture, useful life | 10 years |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 27 Months Ended | ||
Jul. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2024 | |
Disaggregation of Revenue [Line Items] | ||||||
Proceeds from upfront fees | $ 19,500 | |||||
Revenues | 18,051 | $ 5,398 | ||||
Proceeds from short-term debt | 800 | $ 400 | ||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 2,000 | |||||
Other long-term assets | 1,800 | |||||
Other receivables | $ 1,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Scenario, Forecast | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 1,000 | |||||
Major Customer Number One | Sales Revenue | Customer Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration risk (as a percent) | 68% | 63% | ||||
Major Customer Number Two | Sales Revenue | Customer Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration risk (as a percent) | 32% | 21% | ||||
Major Customer Number Three | Sales Revenue | Customer Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration risk (as a percent) | 16% | |||||
AVTX-007 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Proceeds from upfront fees | $ 14,500 | |||||
Product revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 3,364 | $ 4,773 | ||||
Millipred | Teva Pharmaceutical Industries Ltd. | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Percent of net profit for installment payments | 50% | |||||
Installment payments | $ 500 | |||||
Royalty expense | 1,900 | $ 1,000 | ||||
AVTX-611 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 200 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2021 shares | Dec. 31, 2022 class_of_stock | Dec. 31, 2021 shares | ||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of classes of stock outstanding | class_of_stock | 2 | |||
Preferred Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Conversion of preferred stock to common stock (in shares) | (1,257,143) | |||
Preferred Stock | Series B convertible preferred stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Preferred stock conversion ratio | 2.38 | |||
Shares converted (in shares) | 1,257,143 | |||
Common stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Conversion of preferred stock to common stock (in shares) | 523,810 | 523,810 | [1] | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share of Common Stock for Continuing and Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net loss | $ (41,658) | $ (84,376) | |
Weighted average shares, basic (in shares) | 9,408,477 | ||
Weighted average shares, diluted (in shares) | 9,408,477 | ||
Net income (loss) per share of common stock, basic (in dollars per share) | $ (4.43) | ||
Net income (loss) per share of common stock, diluted (in dollars per share) | (4.43) | ||
Common stock | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Allocation of undistributed net loss, continuing operations, basic | (82,849) | ||
Allocation of undistributed net loss, continuing operations, diluted | (82,849) | ||
Allocation of undistributed net loss, discontinued operations, basic | (27) | ||
Allocation of undistributed net loss, discontinued operations, diluted | $ (27) | ||
Weighted average shares, basic (in shares) | 8,324,038 | ||
Weighted average shares, diluted (in shares) | 8,324,038 | ||
Net income (loss) per share of common stock, basic (in dollars per share) | [1] | (4.43) | $ (9.95) |
Net income (loss) per share of common stock, diluted (in dollars per share) | [1] | (4.43) | (9.95) |
Basic net (loss) income per share, continuing operations (in dollars per share) | [1] | (4.43) | (9.95) |
Diluted net (loss) income per share, continuing operations (in dollars per share) | [1] | (4.43) | (9.95) |
Basic net (loss) income per share, discontinued operation (in dollars per share) | [1] | 0 | 0 |
Diluted net (loss) income per share, discontinued operation (in dollars per share) | [1] | $ 0 | $ 0 |
Preferred Stock | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Allocation of undistributed net loss, continuing operations, basic | $ (1,500) | ||
Allocation of undistributed net loss, continuing operations, diluted | (1,500) | ||
Allocation of undistributed net loss, discontinued operations, basic | 0 | ||
Allocation of undistributed net loss, discontinued operations, diluted | $ 0 | ||
Weighted average shares, basic (in shares) | 361,644 | ||
Weighted average shares, diluted (in shares) | 361,644 | ||
Net income (loss) per share of common stock, basic (in dollars per share) | [1] | $ (4.15) | |
Net income (loss) per share of common stock, diluted (in dollars per share) | [1] | (4.15) | |
Basic net (loss) income per share, continuing operations (in dollars per share) | [1] | (4.15) | |
Diluted net (loss) income per share, continuing operations (in dollars per share) | [1] | (4.15) | |
Basic net (loss) income per share, discontinued operation (in dollars per share) | [1] | 0 | |
Diluted net (loss) income per share, discontinued operation (in dollars per share) | [1] | $ 0 | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Jan. 31, 2021 | |
Anti-dilutive securities | ||||
Weighted average number of shares issuable (in shares) | 139,747 | |||
Exercise price per share (in dollars per share) | $ 0.012 | $ 0.012 | ||
Pre-funded warrants exercised (in shares) | 114,007 | 25,740 | 25,740 | |
Stock options | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 1,428,867 | 1,137,612 | ||
Warrants on common stock | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 366,990 | 367,189 | ||
Restricted Stock Units | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 0 | 937 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities from Continuing Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative liability | |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 12,133 | $ 54,010 |
Derivative liability | 0 | |
Recurring basis | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Derivative liability | 0 | |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | $ 0 |
Derivative liability | $ 4,830 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in the Fair Value (Details) - Derivative Financial Instruments, Liabilities $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Initial valuation of derivative liability | 4,830 |
Change in fair value of derivative liability | 0 |
Ending balance | $ 4,830 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 12 Months Ended | |
Nov. 07, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | $ 4,830 | |
AVTX-501 And AVTX-007 | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | $ 4,800 | |
AVTX-501 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | 20,000 | |
AVTX-501 | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | $ 3,500 | |
AVTX-501 | Derivative Financial Instruments, Liabilities | Measurement Input, Probability Of Success | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 0.23 | |
AVTX-501 | Derivative Financial Instruments, Liabilities | Measurement Input, Expected Term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Measurement Input, Term | 5 years | |
AVTX-007 | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | $ 1,300 | |
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Probability Of Success | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 0.17 | |
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Expected Term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Measurement Input, Term | 6 years | |
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Sales Forecast Peak | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 300,000 | |
AVTX-611 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | $ 20,000 | |
ES | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | 5,000 | |
Milestone One | AVTX-007 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | 6,250 | |
Milestone Two | AVTX-007 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | $ 67,500 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,825 | $ 2,981 |
Less accumulated depreciation | (414) | (286) |
Property and equipment, net | 2,411 | 2,695 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 280 | 185 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 56 | 56 |
Right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,750 | 2,001 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 739 | $ 739 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) contract renewal_option | Dec. 31, 2021 USD ($) | Jan. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 0.1 | $ 0.1 | |
Number of operating leases | contract | 2 | ||
Remaining lease term | 5 years 6 months | ||
Discount rate | 9.20% | ||
Building | MARYLAND | |||
Property, Plant and Equipment [Line Items] | |||
Annual base rent | $ 0.2 | ||
Annual rent increase (as a percent) | 2.50% | ||
Rent abatement period | 12 months | ||
Lease term | 10 years | ||
Number of renewal options | renewal_option | 2 | ||
Lease renewal term | 5 years | ||
Building | PENNSYLVANIA | |||
Property, Plant and Equipment [Line Items] | |||
Annual rent increase (as a percent) | 2.40% | ||
Lease term | 5 years 3 months | ||
Annual base rent | $ 0.2 | ||
Operating Lease, Expense | $ 0.1 |
Property and Equipment - Supple
Property and Equipment - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net | Property and equipment, net |
Property and equipment, net | $ 1,750 | $ 2,001 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Accrued expenses and other current liabilities | $ 532 | $ 485 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Other long-term liabilities | $ 1,711 | $ 2,018 |
Total operating lease liabilities | $ 2,243 | $ 2,503 |
Property and Equipment - Lease
Property and Equipment - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Operating lease cost | $ 493 | $ 393 |
Property and Equipment - Leas_2
Property and Equipment - Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
2023 | $ 532 | |
2024 | 537 | |
2025 | 547 | |
2026 | 557 | |
2027 | 258 | |
Thereafter | 426 | |
Total lease payments | 2,857 | |
Less implied interest | (614) | |
Total operating lease liabilities | $ 2,243 | $ 2,503 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Changes in carrying amount of goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Intangible assets, beginning balance | $ 38 | $ 1,585 |
Amortization | (38) | (1,547) |
Intangible assets, ending balance | $ 0 | $ 38 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,956 | $ 5,956 |
Accumulated Amortization | (5,956) | (5,918) |
Net Carrying Amount | $ 0 | $ 38 |
Weighted-Average Remaining Life (in years) | 0 years | 1 month 6 days |
Acquired Product Marketing Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,056 | $ 5,056 |
Accumulated Amortization | (5,056) | (5,056) |
Net Carrying Amount | $ 0 | $ 0 |
Weighted-Average Remaining Life (in years) | 0 years | 0 years |
Acquired Assembled Workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 900 | $ 900 |
Accumulated Amortization | (900) | (862) |
Net Carrying Amount | $ 0 | $ 38 |
Weighted-Average Remaining Life (in years) | 0 years | 1 month 6 days |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Research and development | $ 6,293 | $ 8,221 |
Compensation and benefits | 2,699 | 4,310 |
Selling, general and administrative | 1,008 | 1,386 |
Commercial operations | 1,694 | 1,733 |
Royalty payment | 508 | 375 |
Lease liability, current | 532 | 485 |
Other | 480 | 9 |
Total accrued expenses and other current liabilities | $ 13,214 | $ 16,519 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Incurred expense | $ 0.5 |
Cost Reduction Plan (Details)
Cost Reduction Plan (Details) - Employee Severance - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2022 | |
Restructuring Plan, One-Time Termination Benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 1.5 | |
Payments for restructuring | $ 1.4 | |
Share-based payment arrangement, accelerated cost | 0.4 | |
Restructuring Plan, One-Time Termination Benefits | Research and development | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0.7 | |
Restructuring Plan, One-Time Termination Benefits | Selling, General and Administrative Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0.8 | |
Separation From Certain Section 16 Officers | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 1.7 | |
Share-based payment arrangement, accelerated cost | $ 3.9 | |
Separation From Certain Section 16 Officers | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Payment term | 12 months | |
Separation From Certain Section 16 Officers | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Payment term | 18 months |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 29, 2021 USD ($) | Jul. 30, 2021 USD ($) | Jun. 04, 2021 USD ($) day $ / shares shares | Jun. 30, 2022 USD ($) $ / shares | Jan. 31, 2021 $ / shares shares | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares | |
Line of Credit Facility [Line Items] | |||||||||
Prepayment on Notes | $ 14,806 | $ 0 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.012 | $ 0.012 | |||||||
Warrant | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Number of shares issued (in shares) | shares | 139,747 | ||||||||
Horizon & Powerscourt Notes | Notes Payable | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Principal amount | $ 35,000 | ||||||||
Proceeds from debt | $ 5,000 | $ 10,000 | $ 20,000 | $ 15,000 | |||||
Prepayment on Notes | $ 15,000 | $ 15,000 | |||||||
Repayment of debt, principal | $ 14,800 | ||||||||
Total principal payments1 | $ 21,244 | $ 21,244 | $ 36,050 | ||||||
Debt instrument, term | 42 months | ||||||||
Interest rate | 6.25% | ||||||||
Interest-only payment period | 18 months | ||||||||
Interest-only payment extension period | 24 months | ||||||||
Number of business days required for prepayment | day | 10 | ||||||||
Prepayment charges percentage | 3% | ||||||||
Additional final payment percentage | 3% | 3% | 3% | ||||||
Proceeds from issuance of warrants | $ 900 | ||||||||
Debt issuance costs incurred | 2,100 | ||||||||
Debt instrument, final payment fee | $ 1,100 | $ 1,100 | $ 1,100 | ||||||
Effective rate | 20.70% | ||||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Number of shares issued (in shares) | shares | 33,656 | 33,656 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 31.20 | $ 31.20 | $ 31.20 | ||||||
Warrants or rights exercisable term | 10 years | 10 years | |||||||
Horizon & Powerscourt Notes | Notes Payable | Prime Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Floor interest rate | 3.25% |
Notes Payable - Balance Sheet I
Notes Payable - Balance Sheet Information (Details) - Horizon & Powerscourt Notes - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 04, 2021 |
Notes Payable | |||
Debt Instrument | |||
Notes payable, gross | $ 21,244 | $ 36,050 | |
Less: Unamortized debt discount and issuance costs | 1,828 | 3,217 | |
Carrying value of notes payable | 19,416 | 32,833 | |
Less: Current portion | 5,930 | 0 | |
Carrying value of notes payable, non-current | 13,486 | 32,833 | |
Debt instrument, final payment fee | $ 1,100 | 1,100 | |
Additional final payment percentage | 3% | 3% | |
Initial Note | |||
Debt Instrument | |||
Notes payable, gross | $ 12,139 | 20,600 | |
Second Note | |||
Debt Instrument | |||
Notes payable, gross | 6,070 | 10,300 | |
Third Note | |||
Debt Instrument | |||
Notes payable, gross | $ 3,035 | $ 5,150 |
Notes Payable - Estimated Futur
Notes Payable - Estimated Future Principal Payments (Details) - Horizon & Powerscourt Notes - Notes Payable - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 04, 2021 |
Debt Instrument | |||
2023 | $ 5,930 | ||
2024 | 13,463 | ||
2025 | 1,851 | ||
2026 | 0 | ||
Total principal payments | 21,244 | $ 36,050 | |
Debt instrument, final payment fee | $ 1,100 | $ 1,100 | |
Additional final payment percentage | 3% | 3% |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |||||||||
Feb. 07, 2023 USD ($) $ / shares shares | Sep. 17, 2021 USD ($) shares | Jun. 04, 2021 $ / shares shares | Aug. 31, 2021 USD ($) shares | Jul. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares shares | Dec. 31, 2022 class_of_stock $ / shares shares | Dec. 31, 2021 $ / shares shares | Mar. 31, 2021 shares | ||
Class of Stock [Line Items] | |||||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | ||||||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | ||||||||||
Common stock, shares authorized (in shares) | [1] | 200,000,000 | 200,000,000 | ||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | ||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.001 | $ 0.001 | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.012 | $ 0.012 | |||||||||
Pre-funded warrants exercised (in shares) | 114,007 | 25,740 | 25,740 | ||||||||
Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 5 | ||||||||||
Warrant | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 139,747 | ||||||||||
Warrant | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 5 | ||||||||||
Number of shares available under warrant (in shares) | 500,000 | ||||||||||
Warrant | Horizon & Powerscourt Notes | Notes Payable | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 33,656 | 33,656 | |||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 31.20 | $ 31.20 | |||||||||
Warrants or rights exercisable term | 10 years | 10 years | |||||||||
Nantahala Capital Management LLC | |||||||||||
Class of Stock [Line Items] | |||||||||||
Percentage of ownership | 5% | ||||||||||
Nantahala Capital Management LLC | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Percentage of ownership | 5% | ||||||||||
Nantahala | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares available under warrant (in shares) | 139,747 | ||||||||||
Warrants outstanding (in shares) | 114,007 | ||||||||||
ATM Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 200,000 | ||||||||||
Net proceeds | $ | $ 5.3 | $ 50 | |||||||||
Underwritten Public Offering | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 1,200,000 | 1,200,000 | |||||||||
Net proceeds | $ | $ 29 | $ 37.7 | |||||||||
Underwritten Public Offering | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 3,770,000 | ||||||||||
Common stock (in dollar per share) | $ / shares | $ 3.98 | ||||||||||
Net proceeds | $ | $ 13.7 | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 5 | ||||||||||
Underwritten Public Offering | Armistice | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 500,000 | 200,000 | |||||||||
Underwritten Public Offering | Armistice | Subsequent Event | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 500,000 | ||||||||||
Underwritten Public Offering | Nantahala | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 100,000 | ||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 31.188 | ||||||||||
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. See Note 1 for details. |
Capital Structure - Common Stoc
Capital Structure - Common Stock Warrants (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2021 |
Class of Warrant or Right [Line Items] | |||
Exercise price per share (in dollars per share) | $ 0.012 | $ 0.012 | |
Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares available under warrant (in shares) | 480,997 | ||
Common Stock Warrants Expiration Date of June 2024 | Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares available under warrant (in shares) | 333,334 | ||
Exercise price per share (in dollars per share) | $ 150 | ||
Common Stock Warrants No Expiration | Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares available under warrant (in shares) | 114,007 | ||
Exercise price per share (in dollars per share) | $ 0.012 | ||
Common Stock Warrants Expiration June 2031 | Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares available under warrant (in shares) | 33,656 | ||
Exercise price per share (in dollars per share) | $ 31.20 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jan. 01, 2023 | Jan. 01, 2022 | May 18, 2016 | Oct. 31, 2022 | Mar. 31, 2022 | Mar. 08, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 05, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total stock-based compensation | $ 7,554 | $ 8,172 | |||||||||
Expected annual dividend yield | 0% | ||||||||||
Employee Stock Purchase Plan (ESPP) | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock remaining for future issuance (in shares) | 170,035 | ||||||||||
Increase in number of shares reserved for issuance (in shares) | 41,667 | ||||||||||
Total stock-based compensation | $ 200 | $ 300 | |||||||||
Purchase price of common stock, percentage | 85% | ||||||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15% | ||||||||||
Maximum annual amount of fair market value of the company's common stock that a participant may accrue the rights to purchase | $ 25 | ||||||||||
Shares of common stock for future issuance (in shares) | 41,667 | 41,667 | |||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1% | ||||||||||
Subsequent Event | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in shares) | 300,000 | ||||||||||
Options expired (in shares) | 200,000 | ||||||||||
Service Based Options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in shares) | 684,968 | ||||||||||
Forfeited (in shares) | 276,212 | ||||||||||
Aggregate intrinsic value | $ 300 | ||||||||||
Aggregate intrinsic value of options exercisable | $ 0 | ||||||||||
Options vested (in shares) | 374,074 | ||||||||||
Weighted average exercise price (in dollars per share) | $ 39.29 | ||||||||||
Fair value of options vested in period | $ 9,600 | $ 7,000 | |||||||||
Total stock-based compensation | $ 7,400 | 6,800 | |||||||||
Compensation not yet recognized | $ 4,600 | ||||||||||
Period for recognition | 1 year 10 months 24 days | ||||||||||
Expected annual dividend yield | 0% | 0% | |||||||||
Exercisable stock options (in shares) | 1,345,532 | 1,054,277 | |||||||||
Weighted average exercise price (in dollars per share) | $ 28.24 | $ 44.26 | |||||||||
Weighted average remaining contractual term | 6 years 8 months 12 days | 8 years 1 month 6 days | |||||||||
Service Based Options | Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in shares) | 300,000 | ||||||||||
Award vesting period | 4 years | ||||||||||
Service Based Options | Special Advisor to the Board | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total stock-based compensation | $ 4,300 | ||||||||||
Market Based Options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Aggregate intrinsic value of options exercisable | $ 1,100 | ||||||||||
Exercisable stock options (in shares) | 100,000 | ||||||||||
Weighted average exercise price (in dollars per share) | $ 39.53 | ||||||||||
Weighted average remaining contractual term | 1 year 6 months | ||||||||||
Stock options with market-based vesting conditions granted, exercised (in shares) | 0 | ||||||||||
Exercise of stock options (in shares) | 0 | ||||||||||
Granted (in shares) | 0 | ||||||||||
Nonvested restricted (in shares) | 0 | ||||||||||
Retention Grant | Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in shares) | 200,000 | 100,000 | |||||||||
Reduction of Workforce Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Forfeited (in shares) | 100,000 | ||||||||||
Other Terminations | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Forfeited (in shares) | 200,000 | ||||||||||
Restricted Stock Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 4 years | ||||||||||
Nonvested restricted (in shares) | 0 | ||||||||||
Restricted stock units vested (in shares) | 938,000 | ||||||||||
Vested (in dollars per share) | $ 54 | ||||||||||
2016 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Annual share reserve increase | 4% | ||||||||||
Common stock remaining for future issuance (in shares) | 204,290 | ||||||||||
2016 Plan | Subsequent Event | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Increase in number of shares reserved for issuance (in shares) | 377,221 | ||||||||||
2016 Plan | Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award expiration period | 10 years | ||||||||||
2016 Plan | Stock options | Maximum | Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 4 years | ||||||||||
2016 Plan | Stock options | Maximum | Director | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
2016 Plan | Stock options | Minimum | Director | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 1 year |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 7,554 | $ 8,172 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 1,249 | 1,775 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 6,305 | $ 6,397 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Options With Service-based Vesting Conditions (Details) - Service Based Options - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of shares | ||
Balance, beginning of period (in shares) | 1,054,277 | |
Granted (in shares) | 684,968 | |
Forfeited (in shares) | (276,212) | |
Expired (in shares) | (117,501) | |
Balance, end of period (in shares) | 1,345,532 | 1,054,277 |
Exercisable (in shares) | 682,038 | |
Weighted average exercise price per share | ||
Balance, beginning of period (in dollars per share) | $ 44.26 | |
Granted (in dollars per share) | 7.41 | |
Forfeited (in dollars per share) | 29.30 | |
Expired (in dollars per share) | 47.98 | |
Balance, end of period (in dollars per share) | 28.24 | $ 44.26 |
Exercisable (in dollars per share) | 44.04 | |
Weighted average grant date fair value per share | ||
Balance, beginning of period (in dollars per share) | 27.45 | |
Granted (in dollars per share) | 5.37 | |
Forfeited (in dollars per share) | 19.59 | |
Expired (in dollars per share) | 31.28 | |
Balance, end of period (in dollars per share) | 17.48 | $ 27.45 |
Exercisable (in dollars per share) | $ 26.38 | |
Weighted average remaining contractual term (in years) | ||
Weighted average remaining contractual term | 6 years 8 months 12 days | 8 years 1 month 6 days |
Exercisable | 4 years 4 months 24 days |
Stock Based Compensation - St_3
Stock Based Compensation - Stock-based Compensation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0% | |
Service Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected stock price volatility | 73% | |
Expected annual dividend yield | 0% | 0% |
Service Based Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (in years) | 5 years | 9 months 3 days |
Expected stock price volatility | 84% | |
Risk-free interest rate | 1.50% | 0.07% |
Service Based Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (in years) | 6 years 3 months | 6 years 3 months |
Expected stock price volatility | 93.50% | 86.50% |
Risk-free interest rate | 4.25% | 1.34% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Accrued penalties and interest accrued | $ 0 | $ 0 | ||
Deferred tax assets, tax credit carryforwards, research | $ 5,700 | |||
Income tax (benefit) expense, current | $ (2,600) | 0 | (218) | |
Federal refund additional benefit | $ 400 | 200 | ||
Federal and State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 141,200 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 0 | $ (219) | |
State | 0 | 1 | |
Total Current | $ (2,600) | 0 | (218) |
Deferred: | |||
Federal | 24 | 24 | |
State | 4 | (2) | |
Total Deferred | 28 | 22 | |
Net income tax expense (benefit) | $ 28 | $ (196) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets (liabilities): | ||
Net operating losses | $ 32,393 | $ 31,816 |
Tax credits | 5,706 | 4,871 |
Capitalized research and development | 6,567 | 0 |
Stock-based compensation | 3,532 | 3,080 |
Basis difference in tangible and intangible assets, net | 1,597 | 2,020 |
Accrued compensation | 585 | 965 |
Installment sale and revenue recognition | 1,566 | 445 |
Other reserves | 395 | 381 |
Lease liability | 523 | 590 |
Prepaid expenses | (248) | (353) |
Right-of-use asset | (408) | (472) |
Total deferred tax assets, net | 52,208 | 43,343 |
Less valuation allowance | (52,349) | (43,456) |
Net deferred taxes | $ (141) | $ (113) |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of income tax expense | ||
Federal statutory rate | 21% | 21% |
Stock compensation | (2.72%) | (1.48%) |
Research tax credit | (0.01%) | 0% |
Research tax credit | 2.01% | 2.52% |
NOL carryback due to CARES Act | 0% | 0.26% |
Other | (0.19%) | (0.15%) |
Valuation allowance | (20.15%) | (21.93%) |
Effective income tax rate | (0.06%) | 0.22% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Feb. 03, 2020 USD ($) milestone | Sep. 24, 2018 USD ($) therapy milestone | Oct. 31, 2022 USD ($) | Jul. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2018 unit $ / shares | Jun. 22, 2021 USD ($) | Jun. 09, 2021 USD ($) | May 28, 2021 USD ($) | Mar. 25, 2021 USD ($) | |
Operating Leased Assets [Line Items] | |||||||||||
Employee’s base compensation | $ 1,400 | ||||||||||
Selling, general and administrative | $ 20,711 | $ 24,658 | |||||||||
Royalty agreement, payment received | $ 2,000 | ||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||
Buyout option, percentage of net present value of royalty payments | 75% | ||||||||||
Aevi | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Payment for contingent consideration | 0 | ||||||||||
Aevi | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Number of contingent consideration milestones | milestone | 2 | ||||||||||
Contingent consideration | $ 6,500 | ||||||||||
Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Number of contingent consideration milestones | milestone | 3 | ||||||||||
Contingent consideration | $ 15,000 | ||||||||||
Payment for contingent consideration | 0 | ||||||||||
CERC-801, CERC-802, And CERC-803 | Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||
CERC-913 | Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Number of preclinical therapies | therapy | 1 | ||||||||||
Milestone One | Aevi | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Contingent consideration | 2,000 | ||||||||||
Milestone One | Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Payment for contingent consideration | $ 6,000 | ||||||||||
Milestone Two | Aevi | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Contingent consideration | $ 4,500 | ||||||||||
Milestone Two | Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Payment for contingent consideration | 5,000 | ||||||||||
Milestone Three | Ichorion | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Payment for contingent consideration | $ 4,000 | 0 | |||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Upfront license fee | $ 10,000 | ||||||||||
Research and development | 0 | 10,000 | |||||||||
Cumulative expense recognized to date | 0 | ||||||||||
Percent of payments received from sublicensing | 30% | ||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone One | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum aggregate milestone payment | $ 112,500 | ||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone Two | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum aggregate milestone payment | $ 75,000 | ||||||||||
Astellas Pharma, Inc. (Astellas) | AVTX-006 Astellas License Agreement | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Upfront license fee | 500 | ||||||||||
Maximum aggregate milestone payment | 5,500 | ||||||||||
Research and development | 0 | 500 | |||||||||
Cumulative expense recognized to date | 500 | ||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Upfront license fee | $ 400 | ||||||||||
Research and development | $ 0 | 400 | |||||||||
Cumulative expense recognized to date | 0 | ||||||||||
Patent costs | 500 | ||||||||||
Selling, general and administrative | 500 | ||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone One | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum aggregate milestone payment | 24,200 | ||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone Two | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum aggregate milestone payment | $ 50,000 | ||||||||||
Alto | AVTX-301 Out-License | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum proceeds from milestones | $ 18,600 | ||||||||||
Revenue recognized from milestones to date | 0 | ||||||||||
ES | AVTX-406 License Assignment | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Revenue recognized from milestones to date | $ 0 | ||||||||||
ES | Milestone One | AVTX-406 License Assignment | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum proceeds from milestones | $ 6,000 | ||||||||||
ES | Milestone Two | AVTX-406 License Assignment | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Maximum proceeds from milestones | $ 20,000 | ||||||||||
TRIS Pharma | Karbinal Agreement | |||||||||||
Operating Leased Assets [Line Items] | |||||||||||
Minimum quantity required | unit | 70,000 | ||||||||||
Make whole payment per unit (in dollars per share) | $ / shares | $ 30 |