Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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, 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, $0.001 par value | |
Trading Symbol | AVTX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 192,382,419 | |
Entity Central Index Key | 0001534120 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 10,180 | $ 13,172 |
Other receivables | 1,538 | 1,919 |
Inventory, net | 0 | 20 |
Prepaid expenses and other current assets | 940 | 1,290 |
Restricted cash, current portion | 1 | 15 |
Total current assets | 12,659 | 16,416 |
Property and equipment, net | 2,071 | 2,411 |
Goodwill | 14,409 | 14,409 |
Restricted cash, net of current portion | 131 | 131 |
Total assets | 29,270 | 33,367 |
Current liabilities: | ||
Accounts payable | 789 | 2,882 |
Deferred revenue | 0 | 88 |
Accrued expenses and other current liabilities | 5,216 | 13,214 |
Notes payable, current | 0 | 5,930 |
Total current liabilities | 6,005 | 22,114 |
Notes payable, non-current | 0 | 13,486 |
Royalty obligation | 2,000 | 2,000 |
Deferred tax liability, net | 164 | 141 |
Derivative liability | 4,950 | 4,830 |
Other long-term liabilities | 1,456 | 1,711 |
Total liabilities | 14,575 | 44,282 |
Stockholders’ equity (deficit): | ||
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2023 and December 31, 2022; 192,382,419 and 9,430,535 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 192 | 9 |
Additional paid-in capital | 341,469 | 292,900 |
Accumulated deficit | (326,966) | (303,824) |
Total stockholders’ equity (deficit) | 14,695 | (10,915) |
Total liabilities and stockholders’ equity (deficit) | $ 29,270 | $ 33,367 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 192,382,419 | 9,430,535 |
Common stock, shares outstanding (in shares) | 192,382,419 | 9,430,535 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Total revenues, net | $ 236 | $ 14,949 | $ 1,353 | $ 17,155 |
Operating expenses: | ||||
Cost of product sales | 247 | 528 | 1,505 | 2,814 |
Research and development | 1,249 | 7,042 | 11,917 | 25,136 |
Selling, general and administrative | 2,490 | 3,284 | 7,624 | 17,752 |
Amortization expense | 0 | 0 | 0 | 38 |
Total operating expenses | 3,986 | 10,854 | 21,046 | 45,740 |
Total operating income (loss) | (3,750) | 4,095 | (19,693) | (28,585) |
Other expense: | ||||
Interest expense, net | (1,553) | (898) | (3,498) | (3,221) |
Change in fair value of derivative liability | 100 | 0 | (120) | 0 |
Other expense, net | (17) | 0 | (42) | (20) |
Total other expense, net | (1,470) | (898) | (3,660) | (3,241) |
(Loss) income before taxes | (5,220) | 3,197 | (23,353) | (31,826) |
Income tax expense | 8 | 5 | 23 | 20 |
Net (loss) income | (5,228) | 3,192 | (23,376) | (31,846) |
Comprehensive loss | $ (5,228) | $ 3,192 | $ (23,376) | $ (31,846) |
Net (loss) income per share of common stock, basic (in dollars per share) | $ (0.11) | $ 0.34 | $ (0.96) | $ (3.39) |
Net (loss) income per share of common stock, diluted (in dollars per share) | $ (0.11) | $ 0.34 | $ (0.96) | $ (3.39) |
Product revenue, net | ||||
Revenues: | ||||
Total revenues, net | $ 236 | $ 432 | $ 1,353 | $ 2,638 |
License revenue | ||||
Revenues: | ||||
Total revenues, net | $ 0 | $ 14,517 | $ 0 | $ 14,517 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit |
Balance at the beginning (in shares) at Dec. 31, 2021 | 9,399,517 | |||
Balance at the beginning at Dec. 31, 2021 | $ 23,082 | $ 9 | $ 285,239 | $ (262,166) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares purchased through employee stock purchase plan (in shares) | 5,269 | |||
Shares purchased through employee stock purchase plan | 25 | 25 | ||
Restricted stock units vested during period (in shares) | 938 | |||
Impact of reverse stock split fractional share round-up (in shares) | 8,380 | |||
Stock-based compensation | 6,711 | 6,711 | ||
Net loss | (31,846) | (31,846) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 9,414,104 | |||
Balance at the end at Sep. 30, 2022 | (2,028) | $ 9 | 291,975 | (294,012) |
Balance at the beginning (in shares) at Jun. 30, 2022 | 9,405,724 | |||
Balance at the beginning at Jun. 30, 2022 | (5,951) | $ 9 | 291,244 | (297,204) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Impact of reverse stock split fractional share round-up (in shares) | 8,380 | |||
Stock-based compensation | 731 | 731 | ||
Net loss | 3,192 | 3,192 | ||
Balance at the end (in shares) at Sep. 30, 2022 | 9,414,104 | |||
Balance at the end at Sep. 30, 2022 | $ (2,028) | $ 9 | 291,975 | (294,012) |
Balance at the beginning (in shares) at Dec. 31, 2022 | 9,430,535 | 9,430,535 | ||
Balance at the beginning at Dec. 31, 2022 | $ (10,915) | $ 9 | 292,900 | (303,824) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares pursuant to ATM Program, net (in shares) | 179,058,448 | |||
Issuance of common shares pursuant to ATM Program, net | 32,470 | $ 179 | 32,291 | |
Exercise of pre-funded warrants for common shares (in shares) | 1,403,813 | |||
Exercise of pre-funded warrants for common shares | 0 | $ 1 | (1) | |
Issuance of shares of common stock and warrants in underwritten public offering, net (in shares) | 3,770,000 | |||
Issuance of shares of common stock and warrants in underwritten public offering, net | 13,748 | $ 4 | 13,744 | |
Retirement of common shares in exchange for pre-funded warrants (in shares) | (1,300,000) | |||
Retirement of common shares in exchange for pre-funded warrants | (3,640) | $ (1) | (3,873) | 234 |
Issuance of pre-funded warrants in exchange for retirement of common shares | 3,640 | 3,640 | ||
Shares purchased through employee stock purchase plan (in shares) | 19,623 | |||
Shares purchased through employee stock purchase plan | 67 | 67 | ||
Stock-based compensation | 2,701 | 2,701 | ||
Net loss | $ (23,376) | (23,376) | ||
Balance at the end (in shares) at Sep. 30, 2023 | 192,382,419 | 192,382,419 | ||
Balance at the end at Sep. 30, 2023 | $ 14,695 | $ 192 | 341,469 | (326,966) |
Balance at the beginning (in shares) at Jun. 30, 2023 | 14,036,940 | |||
Balance at the beginning at Jun. 30, 2023 | (6,969) | $ 14 | 314,755 | (321,738) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares pursuant to ATM Program, net (in shares) | 177,013,776 | |||
Issuance of common shares pursuant to ATM Program, net | 25,939 | $ 177 | 25,762 | |
Exercise of pre-funded warrants for common shares (in shares) | 1,331,703 | |||
Exercise of pre-funded warrants for common shares | 0 | $ 1 | (1) | |
Stock-based compensation | 953 | 953 | ||
Net loss | $ (5,228) | (5,228) | ||
Balance at the end (in shares) at Sep. 30, 2023 | 192,382,419 | 192,382,419 | ||
Balance at the end at Sep. 30, 2023 | $ 14,695 | $ 192 | $ 341,469 | $ (326,966) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Operating activities | |||
Net loss | $ (5,228) | $ (23,376) | $ (31,846) |
Adjustments to reconcile net loss used in operating activities: | |||
Depreciation and amortization | 115 | 131 | |
Stock-based compensation | 2,701 | 6,711 | |
Accretion of debt discount | 1,828 | 1,040 | |
Allowance for other long-term asset | 0 | 1,000 | |
Deferred taxes | 23 | 20 | |
Change in fair value of derivative liability | (100) | 120 | 0 |
Changes in assets and liabilities: | |||
Accounts receivable, net | 0 | 1,060 | |
Other receivables | 381 | 2,425 | |
Inventory, net | 20 | 16 | |
Prepaid expenses and other assets | 350 | 1,254 | |
Lease incentive | 158 | 0 | |
Accounts payable | (2,094) | (1,922) | |
Deferred revenue | 0 | 442 | |
Accrued expenses and other liabilities | (8,088) | (3,144) | |
Lease liability, net | (52) | 2 | |
Net cash used in operating activities | (27,914) | (22,811) | |
Investing activities | |||
Leasehold improvements | (158) | 0 | |
Disposal of property and equipment | 25 | 0 | |
Purchase of property and equipment | 0 | (95) | |
Net cash used in investing activities | (133) | (95) | |
Financing activities | |||
Proceeds from sale of common stock pursuant to ATM Program, net | 25,900 | 32,470 | 0 |
Proceeds from issuance of common stock and warrants in underwritten public offering, net | 13,748 | 0 | |
Principal payments on Notes | (21,244) | (14,806) | |
Proceeds from issuance of common stock under employee stock purchase plan | 67 | 25 | |
Net cash provided by (used in) financing activities | 25,041 | (14,781) | |
Decrease in cash, cash equivalents and restricted cash | (3,006) | (37,687) | |
Cash, cash equivalents, and restricted cash at beginning of period | 13,318 | 54,864 | |
Cash, cash equivalents, and restricted cash at end of period | 10,312 | 10,312 | 17,177 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 1,925 | 2,256 | |
Fair value of common stock retired in exchange for issuance of prefunded warrants | 3,640 | 0 | |
Cash and cash equivalents | 10,180 | 10,180 | 16,943 |
Restricted cash, current | 1 | 1 | 53 |
Restricted cash, non-current | 131 | 131 | 181 |
Total cash, cash equivalents and restricted cash | $ 10,312 | $ 10,312 | $ 17,177 |
Business
Business | 9 Months Ended |
Sep. 30, 2023 | |
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 (Lymphotoxin-like, exhibits Inducible expression, and competes with HSV Glycoprotein D for Herpesvirus 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. Liquidity For the nine months ended September 30, 2023, Avalo generated a net loss of $23.4 million and negative cash flows from operations of $27.9 million. As of September 30, 2023, Avalo had $10.2 million in cash and cash equivalents. In the three months ended September 30, 2023, the Company raised approximately $25.9 million of net proceeds under its “at-the-market” (or “ATM”) program. On September 22, 2023, the Company and its lenders entered into a Payoff Letter (the “Payoff Letter”), pursuant to which the Company repaid all outstanding principal, inclusive of the final payment fee, and interest under the Loan Agreement (as defined in Note 9) in the aggregate amount of $14.3 million. As a result of the payment, all obligations of the parties under the Loan Agreement were deemed satisfied and terminated. 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 unaudited condensed consolidated financial statements included herein were issued. 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, strategic alliances/collaborations or sale of core and non-core programs, and (iii) mergers and acquisitions. There can be no assurance that any financing or business development initiatives can be realized by the Company, or if realized, what the terms may be, or that any amount that the Company is able to raise will be adequate. Raising capital would be more difficult if our common stock is delisted from Nasdaq. The Company is currently in the delisting hearings process with Nasdaq (for more information refer to the “Recent Developments” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”). Further, 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. If the Company requires but is unable to obtain additional funding, the Company may be forced to make further 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 financing and other potential options to raise 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 Quarterly Report on Form 10-Q were issued. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed 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 (“FASB”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The condensed consolidated balance sheet at December 31, 2022 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2022 audited consolidated financial statements. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. Accounting Pronouncements Adopted in 2023 In January 2017, the FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge. Instead, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. This new standard was adopted effective January 1, 2023 and will be applied upon any recognition of any future goodwill impairment charge. This ASU has not had a material impact on our financial statements. Significant Accounting Policies |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Avalo generated its product revenue from sales of Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions, which is considered a prescription drug. Avalo’s license and supply agreement for Millipred ® expired on September 30, 2023. The Company sold its prescription drug in the United States primarily through wholesale distributors. Wholesale distributors accounted for substantially all of the Company’s net product revenues and trade receivables. For the three months ended September 30, 2023, the Company’s two largest customers accounted for approximately 72% and 28% of the Company’s total net product revenues. For the nine months ended September 30, 2023, the Company’s two largest customers accounted for approximately 58% and 42% of the Company’s total net product revenues. Net revenue from sales of prescription drugs was $0.2 million and $0.4 million for the three months ended September 30, 2023 and 2022, respectively, and $1.4 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively. The Company does not expect future gross revenue related to the Millipred ® product given the product’s license and supply agreement expired on September 30, 2023. However, the Company will continue to monitor estimates for commercial liabilities, such as sales returns. As additional information becomes available, the Company could recognize expense (or a benefit) for differences between actuals or updated estimates to the reserves previously recognized. Pursuant the Millipred ® license and supply agreement, Avalo was required to pay the supplier fifty percent of the net profit of the Millipred ® product following each calendar quarter, subject to a $0.5 million quarterly minimum payment dependent on Avalo reaching certain net profit amounts as stipulated in the agreement. The profit share commenced on July 1, 2021 and ended on September 30, 2023. Within twenty-five months of September 30, 2023, the net profit share is subject to a reconciliation process where estimated deductions to arrive at net profit will be trued up to actuals and could result in Avalo owing additional amounts to Teva or vice versa. Aytu BioScience, Inc. (“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 transition service agreements, which included managing the third-party logistics provider. As a result, Aytu collected cash on behalf of Avalo for revenue generated by sales of Millipred ® |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic and diluted EPS is provided below for common stock for the three and nine months ended September 30, 2023 and September 30, 2022. EPS for common stock is computed by dividing the sum of distributed earnings and undistributed earnings by the weighted average number of shares outstanding for the period. The weighted average number of common shares outstanding as of September 30, 2023 and 2022 include the weighted average effect of pre-funded warrants, the exercise of which requires nominal consideration for the delivery of the shares of common stock. Diluted net loss 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) income per share of common stock for the three and nine months ended September 30, 2023 and September 30, 2022 (in thousands, except share and per share amounts): Three Months Ended September 30, 2023 2022 Basic (loss) income per share: Net (loss) income $ (5,228) $ 3,192 Weighted average shares 46,764,117 9,413,466 Basic net (loss) income per share $ (0.11) $ 0.34 Diluted (loss) income per share: Net (loss) income $ (5,228) $ 3,192 Weighted average shares - basic 46,764,117 9,413,466 Effect of dilutive securities: Potentially dilutive shares — 166 Weighted average shares - diluted 46,764,117 9,413,632 Diluted net (loss) income per share $ (0.11) $ 0.34 Nine Months Ended September 30, 2023 2022 Basic and diluted loss per share: Net loss $ (23,376) $ (31,846) Weighted average shares 24,281,306 9,404,679 Basic and diluted net loss per share $ (0.96) $ (3.39) The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2023 and 2022, as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Stock options 1,849,229 1,260,906 Warrants on common stock 1 4,136,990 366,990 Restricted Stock Units — — 1 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, 2023 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* $ 9,324 $ — $ — Liabilities Derivative liability $ — $ — $ 4,950 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 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying unaudited condensed consolidated balance sheets. As of September 30, 2023, 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 and derivative liability. As of December 31, 2022, 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 debt. The carrying amounts reported in the accompanying unaudited condensed consolidated 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. 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 nine months ended September 30, 2023: Derivative liability Balance at December 31, 2022 $ 4,830 Change in fair value of derivative liability 120 Balance at September 30, 2023 $ 4,950 In the fourth quarter of 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”). At the time of the transaction, Armistice was 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. 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. Subsequent to the transaction date, at each reporting period, the derivative liability is remeasured at fair value. As of September 30, 2023, the fair value of the derivative liability was $5.0 million, of which $3.7 million was attributable to the AVTX-501 Milestone and $1.3 million was attributable to the AVTX-007 Milestones and Royalties. For the nine months ended September 30, 2023, the $0.1 million change in fair value was recognized in other expense, net in the accompanying unaudited condensed consolidated statements of operations and comprehensive (loss) income. The fair value of the AVTX-501 Milestone was primarily driven by an approximate 23% probability of success to reach the milestone in approximately 4.1 years. The fair value of AVTX-007 Milestones and Royalties were primarily driven by an approximate 17% probability of success, time to commercialization of approximately 5.1 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. 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. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Avalo currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both of these 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 applicable 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 September 30, 2023 was 4.8 years. Supplemental balance sheet information related to the leased properties include (in thousands): As of September 30, 2023 December 31, 2022 Property and equipment, net $ 1,393 $ 1,750 Accrued expenses and other current liabilities $ 536 $ 532 Other long-term liabilities 1,456 1,711 Total operating lease liabilities $ 1,992 $ 2,243 The operating lease right-of-use (ROU) assets are included in property and equipment, net and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in our unaudited condensed consolidated balance sheets. The Company utilized a weighted average discount rate of 9.1% to determine the present value of the lease payments. The components of lease expense for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost* $ 97 $ 134 $ 350 $ 373 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liabilities as of September 30, 2023 (in thousands): Undiscounted Cash Flows October 1, 2023 through December 31, 2023 $ 133 2024 537 2025 547 2026 557 2027 258 2028 201 Thereafter 224 Total lease payments $ 2,457 Less implied interest (465) Total $ 1,992 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022 consisted of the following (in thousands): As of September 30, 2023 December 31, 2022 Research and development $ 1,331 $ 6,293 Compensation and benefits 449 2,699 Selling, general and administrative 530 1,008 Commercial operations 2,156 1,694 Royalty payment 214 508 Lease liability, current 536 532 Other — 480 Total accrued expenses and other current liabilities $ 5,216 $ 13,214 |
Cost Reduction Plan
Cost Reduction Plan | 9 Months Ended |
Sep. 30, 2023 | |
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”). A reduction in workforce plan was approved to reduce headcount and related expenses. The reduction in workforce plan was considered a one-time termination benefit as defined by ASC No. 420, Exit or Disposal Cost Obligations . The one-time termination benefits mainly relate to severance payments to separated employees. As a result, the Company recognized $1.5 million of expense during 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 of severance payments were paid in the year ended December 31, 2022 and the remaining $0.1 million was paid in the nine months ended September 30, 2023. 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. In addition, previously and separately, during the first quarter of 2022, the Company separated certain section 16 executive officers. Each of the former executives are entitled to the benefits provided in their respective separation agreements, which include severance payments to be paid over twelve |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable On June 4, 2021, the Company entered into a $35.0 million 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”). Between June and September of 2021, the Company borrowed the full $35.0 million (the “Note”) available under the Loan Agreement. In the second quarter of 2022, the Company, as collectively agreed upon with the Lenders, prepaid $15.0 million of principal and accrued interest. In June of 2023, the Company, as collectively agreed upon with the Lenders, prepaid $6.0 million of principal. On September 22, 2023, the Company and the Lenders entered into a Payoff Letter (the “Payoff Letter”), pursuant to which the Company repaid all outstanding principal, inclusive of the final payment fee, and interest under the Loan Agreement in the aggregate amount of $14.3 million. As a result of the payment, all obligations of the parties under the Loan Agreement were deemed satisfied and terminated. 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. Pursuant to the Payoff Letter, Avalo’s obligations under the Warrants shall survive pursuant to the original terms at issuance. 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 recognized debt issuance costs and the amount allocated to the warrants as a debt discount on the date of issuance and amortized these costs to interest expense using the effective interest method over the original term of the loan. As a result of the payoff in the third quarter of 2023, the Company accelerated the remaining $0.9 million amortization of the debt discount, which was recognized as interest expense for the three and nine months ended September 30, 2023. Balance sheet information related to the note payable for the Notes is as follows (in thousands): As of September 30, 2023 December 31, 2022 Initial Note $ — $ 12,139 Second Note — 6,070 Third Note — 3,035 Notes payable, gross 1 $ — $ 21,244 Less: Unamortized debt discount and issuance costs — 1,828 Carrying value of notes payable, current $ — $ 19,416 Less: Current portion — 5,930 Carrying value of notes payable, non-current $ — $ 13,486 1 Balance as of December 31, 2022 includes $1.1 million final payment fee for the Notes, which represents 3% of the original principal loan amount. As of September 30, 2023, there were no remaining contractual future principal payments. |
Capital Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023, 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 At-the-Market Offering Program On May 4, 2023, the Company entered into an “at-the-market” sales agreement (the “Sales Agreement”) with Oppenheimer & Co. Inc. (“Oppenheimer”), pursuant to which the Company could sell from time to time, shares of its common stock having an aggregate offering price of up to $9,032,567 through Oppenheimer. In August 2023, the Company and Oppenheimer entered into an amendment to the sales agreement (the “Amended Sales Agreement”) to increase the aggregate offering amount under the Sales Agreement to $50,000,000 inclusive of shares sold prior to the amendment. In the nine months ended September 30, 2023, the Company sold approximately 179.1 million shares under the ATM program for net proceeds of approximately $32.5 million. Exchange Agreement In May 2023, the Company entered into an exchange agreement (the “Exchange Agreement”) with entities affiliated with Venrock Healthcare Capital Partners (“Venrock”), pursuant to which the Company exchanged an aggregate of 1.3 million shares of the Company’s common stock, par value $0.001 per share, owned by Venrock for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1.3 million shares of common stock (subject to adjustment in the event of stock splits, recapitalization and other similar events affecting common stock), with an exercise price of $0.001 per share. The Exchange Warrants were exercisable at any time, except that the Exchange Warrants would not be exercisable by Venrock if, upon giving effect or immediately prior thereto, Venrock would beneficially own more than 9.99% of the total number of issued and outstanding Avalo common stock, which percentage could change at the holders’ election to any amount less than or equal to 19.99% upon 61 days’ notice to the Company. Venrock exercised the Exchange Warrants in full in September of 2023. In accordance with ASC No. 505 , Equity , in the second quarter of 2023, the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and a corresponding impact to additional paid-in-capital and accumulated deficit at the fair value of the Exchange Warrants on the issuance date. The Exchange Warrants were classified as equity in accordance with ASC 480 and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in-capital and is not subject to remeasurement. The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants. Q1 2023 Financing 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 paid 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, who was a significant stockholder of the Company at the time of the financing, 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 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 warrants were classified as a component of permanent stockholders’ deficit within additional paid-in capital. The warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such warrants do not provide any guarantee of value or return. Common Stock Warrants At September 30, 2023, 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 33,656 $ 31.20 June 2031 3,770,000 $ 5.00 February 2024 4,136,990 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
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. On January 1, 2023, pursuant to the terms of the 2016 Third Amended Plan, an additional 377,221 shares were made available for issuance. As of September 30, 2023, there were 51,284 shares available for future issuance under the 2016 Third Amended Plan. 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 and second quarter of 2023, employees were also granted options that vest on the first anniversary of the grant date. Options granted to directors typically vest either immediately or over a period of one Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 371 $ 279 $ 1,028 $ 931 Selling, general and administrative 582 452 1,673 5,780 Total stock-based compensation $ 953 $ 731 $ 2,701 $ 6,711 As a result of separation agreements that the Company entered into 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. 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 options that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. A summary of option activity for the nine months ended September 30, 2023 is as follows: 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, 2022 1,345,532 $ 28.24 $ 17.48 6.7 Granted 760,272 $ 2.72 $ 2.06 Forfeited (10,101) $ 4.92 $ 3.56 Expired (339,910) $ 42.99 $ 27.13 Balance at September 30, 2023 1,755,793 $ 14.47 $ 9.01 8.4 Exercisable at September 30, 2023 595,159 $ 31.35 $ 18.43 6.9 In February 2023, 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. In May 2023, the Company granted 0.3 million options with service-based vesting conditions to its employees that vest over one year. 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 September 30, 2023, the aggregate intrinsic value of options outstanding was zero. There were 0.3 million options that vested during the nine months ended September 30, 2023 with a weighted average exercise price of $12.78 per share. The total grant date fair value of shares which vested during the nine months ended September 30, 2023 was $2.2 million. The Company recognized stock-based compensation expense of $0.9 million and $2.6 million related to stock options with service-based vesting conditions for the three and nine months ended September 30, 2023, respectively. At September 30, 2023, there was $3.6 million of total unrecognized compensation cost related to unvested service-based vesting condition awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.5 years. 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 nine months ended September 30, 2023: Service-based options Expected term of option (in years) 5 - 6.25 Expected stock price volatility 89.8% - 146.0% Risk-free interest rate 3.43% - 4.13% Expected annual dividend yield 0% Stock options with market-based vesting conditions As of September 30, 2023, 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 share price per share of $39.53 and a weighted average remaining contractual term of 0.7 years. There were no stock options with market-based vesting conditions granted, exercised, or forfeited for the nine months ended September 30, 2023. 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. On January 1 of each calendar year, 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, (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. The number of shares were increased by 41,667 on January 1, 2023. As of September 30, 2023, 192,079 shares remained available for issuance. 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 $48 thousand and $0.1 million for the three and nine months ended September 30, 2023, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized minimal income tax expense for the three and nine months ended September 30, 2023 and 2022 due to the significant valuation allowance against the Company’s deferred tax assets and the current and prior period losses. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
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. Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated. 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. Dispute Notice On August 14, 2023, the Company received a notice from Apollo AP43 Limited alleging that the Company is in breach of the License Agreement between them dated July 29, 2022 by virtue of owing $837,522 to a service provider under the terms of that license. The notice formally initiates a dispute resolution process under the license, beginning with further negotiations between the companies’ executive officers. The possible loss to the Company is between $0 and $837,522. The Company does not believe a loss is currently probable and therefore has not recognized a contingent liability as of September 30, 2023. 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, which we recognized within research and development expenses in 2021. 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 in the nine months ended September 30, 2023. There has been no cumulative expense recognized as of September 30, 2023 related to the milestones under this 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 in the nine months ended September 30, 2023. There has been $0.5 million of cumulative expense recognized as of September 30, 2023 related to the milestones under this license agreement, which was recognized in 2021. 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, which we recognized within research and development expenses and within selling, general and administrative expenses, respectively, in 2021. 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 material expense related to the Sanford Burnham Prebys License Agreement was recognized in the nine months ended September 30, 2023. There has been no cumulative expense recognized as of September 30, 2023 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, which we recognized as license revenue in 2021. 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. The Company has not recognized any milestones as of September 30, 2023. 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, who was a significant stockholder of the Company at the time of the financing and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, served on Avalo’s Board until August 8, 2022. 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, which we recognized as license revenue in 2021. 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. The Company has not recognized any milestones as of September 30, 2023. 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 September 30, 2023 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 September 30, 2023. 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 milestones 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 September 30, 2023 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 September 30, 2023. The Company will continue to monitor the third development milestone at each reporting period. On October 27, 2023, the Company divested AVTX-801, AVTX-802 and AVTX-803 (see Note 14). Avalo remains responsible for the future milestone payment related to the protide molecule described above. 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 the 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 unaudited condensed consolidated balance sheet as of September 30, 2023 and 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn October 27, 2023, the Company closed the transaction under the asset purchase agreement (the “Purchase Agreement”) to sell its rights, title and interest in, assets relating to AVTX-801, AVTX-802 and AVTX-803 (collectively, the “800 Series”) to AUG Therapeutics, LLC (“AUG”). The Purchase Agreement was entered into in on September 11, 2023. AUG paid an upfront payment of $150,000, as well as, for each compound, make a contingent milestone payment of $15,000,000 (for a potential aggregate of $45.0 million) if the first FDA approval is for an indication other than a Rare Pediatric Disease (as defined in the Purchase Agreement), or up to 20% of certain payments, if any, granted to AUG upon any sale of any priority review voucher granted to AUG by the FDA, net of any selling costs. Additionally, AUG assumed up to $150,000 of certain liabilities incurred prior to the date of the Purchase Agreement and assume all costs relating to the 800 Series from the date of the Purchase Agreement. Avalo will evaluate the accounting impact of the transaction in the fourth quarter of 2023. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s unaudited condensed 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 (“FASB”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The condensed consolidated balance sheet at December 31, 2022 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2022 audited consolidated financial statements. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. |
Accounting Pronouncements Adopted in 2023 | Accounting Pronouncements Adopted in 2023 In January 2017, the FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net (Loss) Income Per Share | The following tables set forth the computation of basic and diluted net (loss) income per share of common stock for the three and nine months ended September 30, 2023 and September 30, 2022 (in thousands, except share and per share amounts): Three Months Ended September 30, 2023 2022 Basic (loss) income per share: Net (loss) income $ (5,228) $ 3,192 Weighted average shares 46,764,117 9,413,466 Basic net (loss) income per share $ (0.11) $ 0.34 Diluted (loss) income per share: Net (loss) income $ (5,228) $ 3,192 Weighted average shares - basic 46,764,117 9,413,466 Effect of dilutive securities: Potentially dilutive shares — 166 Weighted average shares - diluted 46,764,117 9,413,632 Diluted net (loss) income per share $ (0.11) $ 0.34 Nine Months Ended September 30, 2023 2022 Basic and diluted loss per share: Net loss $ (23,376) $ (31,846) Weighted average shares 24,281,306 9,404,679 Basic and diluted net loss per share $ (0.96) $ (3.39) |
Schedule of Anti-dilutive Securities | The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2023 and 2022, as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Stock options 1,849,229 1,260,906 Warrants on common stock 1 4,136,990 366,990 Restricted Stock Units — — 1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, 2023 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* $ 9,324 $ — $ — Liabilities Derivative liability $ — $ — $ 4,950 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 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying unaudited condensed consolidated balance sheets. |
Schedule of Changes in the Fair Value | 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 nine months ended September 30, 2023: Derivative liability Balance at December 31, 2022 $ 4,830 Change in fair value of derivative liability 120 Balance at September 30, 2023 $ 4,950 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities Lessee | Supplemental balance sheet information related to the leased properties include (in thousands): As of September 30, 2023 December 31, 2022 Property and equipment, net $ 1,393 $ 1,750 Accrued expenses and other current liabilities $ 536 $ 532 Other long-term liabilities 1,456 1,711 Total operating lease liabilities $ 1,992 $ 2,243 |
Schedule of Lease Cost | The components of lease expense for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost* $ 97 $ 134 $ 350 $ 373 |
Schedule of Operating Lease Liability | The following table shows a maturity analysis of the operating lease liabilities as of September 30, 2023 (in thousands): Undiscounted Cash Flows October 1, 2023 through December 31, 2023 $ 133 2024 537 2025 547 2026 557 2027 258 2028 201 Thereafter 224 Total lease payments $ 2,457 Less implied interest (465) Total $ 1,992 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands): As of September 30, 2023 December 31, 2022 Research and development $ 1,331 $ 6,293 Compensation and benefits 449 2,699 Selling, general and administrative 530 1,008 Commercial operations 2,156 1,694 Royalty payment 214 508 Lease liability, current 536 532 Other — 480 Total accrued expenses and other current liabilities $ 5,216 $ 13,214 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Balance sheet information related to the note payable for the Notes is as follows (in thousands): As of September 30, 2023 December 31, 2022 Initial Note $ — $ 12,139 Second Note — 6,070 Third Note — 3,035 Notes payable, gross 1 $ — $ 21,244 Less: Unamortized debt discount and issuance costs — 1,828 Carrying value of notes payable, current $ — $ 19,416 Less: Current portion — 5,930 Carrying value of notes payable, non-current $ — $ 13,486 1 Balance as of December 31, 2022 includes $1.1 million final payment fee for the Notes, which represents 3% of the original principal loan amount. |
Schedule of Contractual Future Principal Payments | As of September 30, 2023, there were no remaining contractual future principal payments. |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Outstanding Common Stock Warrants | At September 30, 2023, 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 33,656 $ 31.20 June 2031 3,770,000 $ 5.00 February 2024 4,136,990 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense recognized for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 371 $ 279 $ 1,028 $ 931 Selling, general and administrative 582 452 1,673 5,780 Total stock-based compensation $ 953 $ 731 $ 2,701 $ 6,711 |
Schedule of Option Activity | A summary of option activity for the nine months ended September 30, 2023 is as follows: 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, 2022 1,345,532 $ 28.24 $ 17.48 6.7 Granted 760,272 $ 2.72 $ 2.06 Forfeited (10,101) $ 4.92 $ 3.56 Expired (339,910) $ 42.99 $ 27.13 Balance at September 30, 2023 1,755,793 $ 14.47 $ 9.01 8.4 Exercisable at September 30, 2023 595,159 $ 31.35 $ 18.43 6.9 |
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 nine months ended September 30, 2023: Service-based options Expected term of option (in years) 5 - 6.25 Expected stock price volatility 89.8% - 146.0% Risk-free interest rate 3.43% - 4.13% Expected annual dividend yield 0% |
Business (Details)
Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 22, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
Net loss | $ (5,228) | $ 3,192 | $ (23,376) | $ (31,846) | ||
Net cash used in operating activities | (27,914) | (22,811) | ||||
Cash and cash equivalents | 10,180 | $ 16,943 | 10,180 | 16,943 | $ 13,172 | |
Proceeds from sale of common stock pursuant to ATM Program, net | $ 25,900 | $ 32,470 | $ 0 | |||
Notes Payable | Horizon & Powerscourt Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable | $ 14,300 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 27 Months Ended | |||
Jul. 01, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2024 | |
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | $ 236 | $ 14,949 | $ 1,353 | $ 17,155 | ||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Other long-term debt | 900 | 900 | ||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Forecast | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 1,000 | |||||
Product revenue, net | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | $ 236 | $ 432 | $ 1,353 | $ 2,638 | ||
Millipred | Teva | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Percent of net profit for installment payments | 50% | |||||
Installment payment | $ 500 | |||||
Major Customer Number One | Sales Revenue | Customer Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration risk percentage | 72% | 58% | ||||
Major Customer Number Two | Sales Revenue | Customer Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration risk percentage | 28% | 42% |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (5,228) | $ 3,192 | $ (23,376) | $ (31,846) |
Weighted average shares, basic (in shares) | 46,764,117 | 9,413,466 | 24,281,306 | 9,404,679 |
Basic net (loss) income per share (in dollars per share) | $ (0.11) | $ 0.34 | $ (0.96) | $ (3.39) |
Potentially dilutive shares (in shares) | 0 | 166 | ||
Weighted average shares, diluted (in shares) | 46,764,117 | 9,413,632 | 24,281,306 | 9,404,679 |
Diluted net (loss) income per share (in dollars per share) | $ (0.11) | $ 0.34 | $ (0.96) | $ (3.39) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock options | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 1,849,229 | 1,260,906 | 1,849,229 | 1,260,906 |
Warrants on common stock | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 4,136,990 | 366,990 | 4,136,990 | 366,990 |
Restricted Stock Units | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 0 | 0 | 0 | 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative liability | 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 | $ 9,324 | $ 12,133 |
Derivative liability | 0 | 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 | 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 | $ 4,950 | $ 4,830 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Change in fair value was recognized | $ 100 | |
AVTX-501 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | $ 20,000 | |
AVTX-611 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum aggregate milestone payment | 20,000 | |
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 | |
Derivative liability | AVTX-501 And AVTX-007 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | 4,800 | 5,000 |
Derivative liability | AVTX-501 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | 3,500 | $ 3,700 |
Derivative liability | AVTX-501 | Measurement Input, Probability Of Success | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 0.23 | |
Derivative liability | AVTX-501 | Measurement Input, Expected Term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input, term | 4 years 1 month 6 days | |
Derivative liability | AVTX-007 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | 1,300 | $ 1,300 |
Derivative liability | AVTX-007 | Measurement Input, Probability Of Success | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 0.17 | |
Derivative liability | AVTX-007 | Measurement Input, Expected Term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input, term | 5 years 1 month 6 days | |
Derivative liability | AVTX-007 | Measurement Input, Sales Forecast Peak | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability, measurement input | 300,000 | |
ES | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Initial valuation of derivative liability | $ 5,000 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Changes in the Fair Value (Details) - Derivative liability $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |
Beginning balance | $ 4,830 |
Change in fair value of derivative liability | 120 |
Ending balance | $ 4,950 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) renewal_option property | |
Lessee, Lease, Description [Line Items] | |
Number of leased properties | property | 2 |
Remaining lease team | 4 years 9 months 18 days |
Discount rate | 9.10% |
Building | Maryland | |
Lessee, Lease, Description [Line Items] | |
Annual base rent | $ 0.2 |
Annual rent increase (as a percent) | 2.50% |
Rent abatement period | 12 months |
Lease term of contract | 10 years |
Number of renewal options | renewal_option | 2 |
Renewal term | 5 years |
Building | Pennsylvania | |
Lessee, Lease, Description [Line Items] | |
Annual rent increase (as a percent) | 2.40% |
Lease term of contract | 5 years 3 months |
Lessee, operating lease, annual base rent | $ 0.2 |
Operating lease, expense | $ 0.1 |
Leases - Schedule of Assets and
Leases - Schedule of Assets and Liabilities Lessee (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Property and equipment, net | $ 1,393 | $ 1,750 |
Accrued expenses and other current liabilities | 536 | 532 |
Other long-term liabilities | 1,456 | 1,711 |
Total operating lease liabilities | $ 1,992 | $ 2,243 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 97 | $ 134 | $ 350 | $ 373 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liability (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
October 1, 2023 through December 31, 2023 | $ 133 | |
2024 | 537 | |
2025 | 547 | |
2026 | 557 | |
2027 | 258 | |
2028 | 201 | |
Thereafter | 224 | |
Total lease payments | 2,457 | |
Less implied interest | (465) | |
Total | $ 1,992 | $ 2,243 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Research and development | $ 1,331 | $ 6,293 |
Compensation and benefits | 449 | 2,699 |
Selling, general and administrative | 530 | 1,008 |
Commercial operations | 2,156 | 1,694 |
Royalty payment | 214 | 508 |
Lease liability, current | 536 | 532 |
Other | 0 | 480 |
Total accrued expenses and other current liabilities | $ 5,216 | $ 13,214 |
Cost Reduction Plan (Details)
Cost Reduction Plan (Details) - Employee Severance - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Restructuring Plan, One-Time Termination Benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 1.5 | ||
Payments for restructuring | $ 0.1 | $ 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 | |||
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) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Feb. 07, 2023 | Jun. 04, 2021 | Jun. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 22, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||||||||
Principal payments on Notes | $ 21,244,000 | $ 14,806,000 | |||||||
Accretion of debt discount | 1,828,000 | $ 1,040,000 | |||||||
Warrant | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Exercise price per share (in dollars per share) | $ 5 | ||||||||
Warrants or rights exercisable term | 1 year | ||||||||
Horizon & Powerscourt Notes | Notes Payable | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Principal amount | $ 35,000,000 | ||||||||
Principal payments on Notes | $ 6,000,000 | $ 15,000,000 | |||||||
Interest payable | $ 14,300,000 | ||||||||
Notes payable, outstanding | $ 0 | 0 | $ 21,244,000 | ||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Sale of stock (in shares) | 33,656 | ||||||||
Exercise price per share (in dollars per share) | $ 31.20 | ||||||||
Warrants or rights exercisable term | 10 years | ||||||||
Accretion of debt discount | $ 900,000 | $ 900,000 |
Notes Payable - Schedule of Deb
Notes Payable - Schedule of Debt (Details) - Horizon & Powerscourt Notes - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Notes payable, gross | $ 0 | $ 21,244 |
Less: Unamortized debt discount and issuance costs | 0 | 1,828 |
Carrying value of notes payable, current | 0 | 19,416 |
Less: Current portion | 0 | 5,930 |
Carrying value of notes payable, non-current | 0 | 13,486 |
Final payment fee | $ 1,100 | |
Additional final payment percentage | 3% | |
Initial Note | ||
Debt Instrument [Line Items] | ||
Notes payable, gross | $ 0 | 12,139 |
Second Note | ||
Debt Instrument [Line Items] | ||
Notes payable, gross | 0 | 6,070 |
Third Note | ||
Debt Instrument [Line Items] | ||
Notes payable, gross | $ 0 | $ 3,035 |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) | 1 Months Ended | 9 Months Ended | ||||
May 04, 2023 USD ($) | Feb. 07, 2023 USD ($) $ / shares shares | Aug. 31, 2023 USD ($) | May 31, 2023 $ / shares shares | Sep. 30, 2023 USD ($) class_of_stock $ / shares shares | Dec. 31, 2022 $ / shares 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) | 200,000,000 | 200,000,000 | ||||
Preferred stock, shares authorized (in shares) | 5,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||
Class of warrant or right, ownership, exercise threshold | 61 days | |||||
Nantahala Capital Management LLC | ||||||
Class of Stock [Line Items] | ||||||
Percentage of ownership | 5% | |||||
Minimum | ||||||
Class of Stock [Line Items] | ||||||
Class of warrant or right, ownership percentage, exercise threshold | 9.99% | |||||
Maximum | ||||||
Class of Stock [Line Items] | ||||||
Class of warrant or right, ownership percentage, exercise threshold | 19.99% | |||||
Warrant | ||||||
Class of Stock [Line Items] | ||||||
Exercise price per share (in dollars per share) | $ / shares | $ 5 | |||||
Warrants or rights exercisable term | 1 year | |||||
Number of shares available under warrant (in shares) | 500,000 | |||||
ATM Agreement | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, maximum amount of shares to be sold | $ | $ 9,032,567 | $ 50,000,000 | ||||
Sale of stock (in shares) | 179,100,000 | |||||
Net proceeds | $ | $ 32,500,000 | |||||
Exchange Agreement | ||||||
Class of Stock [Line Items] | ||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.001 | |||||
Exchange Agreement | Warrant | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock (in shares) | 1,300,000 | |||||
Exchange Agreement | Venrock | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock (in shares) | 1,300,000 | |||||
Purchase price (in dollars per share) | $ / shares | $ 0.001 | |||||
Underwritten Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock (in shares) | 3,770,000 | |||||
Net proceeds | $ | $ 13,700,000 | |||||
Purchase price (in dollars per share) | $ / shares | $ 3.98 | |||||
Underwritten Public Offering | Armistice | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock (in shares) | 500,000 |
Capital Structure - Schedule of
Capital Structure - Schedule of Outstanding Common Stock Warrants (Details) - Common Stock | Sep. 30, 2023 $ / shares shares |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 4,136,990 |
Common Stock Warrants Expiration Date Of June 2024 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 333,334 |
Exercise price per share (in dollars per share) | $ / shares | $ 150 |
Common Stock Warrants Expiration June 2031 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 33,656 |
Exercise price per share (in dollars per share) | $ / shares | $ 31.20 |
Common Stock Warrants Expiration February 2024 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 3,770,000 |
Exercise price per share (in dollars per share) | $ / shares | $ 5 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jan. 01, 2023 | Apr. 05, 2016 | May 31, 2023 | Feb. 28, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total stock-based compensation | $ 953 | $ 731 | $ 2,701 | $ 6,711 | ||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock remaining for future issuance (in shares) | 192,079 | 192,079 | ||||||||
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 | |||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1% | |||||||||
Increase in shares available (in shares) | 41,667 | |||||||||
Service-based options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total stock-based compensation | $ 900 | $ 2,600 | ||||||||
Granted (in shares) | 760,272 | |||||||||
Outstanding intrinsic value | $ 0 | $ 0 | ||||||||
Options vested (in shares) | 300,000 | |||||||||
Weighted average exercise price (in dollars per share) | $ 12.78 | $ 12.78 | ||||||||
Fair value of options vested in period | $ 2,200 | |||||||||
Compensation not yet recognized | $ 3,600 | $ 3,600 | ||||||||
Period for recognition | 1 year 6 months | |||||||||
Exercisable stock options (in shares) | 1,755,793 | 1,755,793 | 1,345,532 | |||||||
Weighted average share price (in dollars per share) | $ 14.47 | $ 14.47 | $ 28.24 | |||||||
Weighted average remaining contractual term | 8 years 4 months 24 days | 6 years 8 months 12 days | ||||||||
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 | |||||||||
Service-based options | Employee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year | 4 years | ||||||||
Granted (in shares) | 300,000 | 300,000 | ||||||||
Market Based Options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercisable stock options (in shares) | 100,000 | 100,000 | ||||||||
Weighted average share price (in dollars per share) | $ 39.53 | $ 39.53 | ||||||||
Weighted average remaining contractual term | 8 months 12 days | |||||||||
Granted (in shares) | 0 | |||||||||
Exercise of stock options (in shares) | 0 | |||||||||
Forfeited (in shares) | 0 | |||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total stock-based compensation | $ 48 | $ 100 | ||||||||
2016 Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual share reserve increase | 4% | |||||||||
Increase in number of shares reserved for issuance (in shares) | 377,221 | |||||||||
Common stock remaining for future issuance (in shares) | 51,284 | 51,284 | ||||||||
2016 Plan | Equity Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award expiration period | 10 years | |||||||||
2016 Plan | Equity Option | Maximum | Director | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
2016 Plan | Equity Option | Maximum | Employee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 4 years | |||||||||
2016 Plan | Equity Option | Minimum | Director | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 953 | $ 731 | $ 2,701 | $ 6,711 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 371 | 279 | 1,028 | 931 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 582 | $ 452 | $ 1,673 | $ 5,780 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Option Activity (Details) - Service-based options - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of shares | ||
Balance, beginning of period (in shares) | 1,345,532 | |
Granted (in shares) | 760,272 | |
Forfeited (in shares) | (10,101) | |
Expired (in shares) | (339,910) | |
Balance, ending of period (in shares) | 1,755,793 | 1,345,532 |
Exercisable (in shares) | 595,159 | |
Weighted average exercise price per share | ||
Balance, beginning of period (in dollars per share) | $ 28.24 | |
Granted (in dollars per share) | 2.72 | |
Forfeitures (in dollars per share) | 4.92 | |
Expired (in dollars per share) | 42.99 | |
Balance, ending of period (in dollars per share) | 14.47 | $ 28.24 |
Exercisable (in dollars per share) | 31.35 | |
Weighted average grant date fair value per share | ||
Balance, beginning of period (in dollars per share) | 17.48 | |
Granted (in dollars per share) | 2.06 | |
Forfeited (in dollars per share) | 3.56 | |
Expired (in dollars per share) | 27.13 | |
Balance, ending of period (in dollars per share) | 9.01 | $ 17.48 |
Exercisable (in dollars per share) | $ 18.43 | |
Weighted average remaining contractual term (in years) | ||
Weighted average remaining contractual term | 8 years 4 months 24 days | 6 years 8 months 12 days |
Exercisable | 6 years 10 months 24 days |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Fair Value Assumptions for Options (Details) - Service-based options | 9 Months Ended |
Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected annual dividend yield | 0% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term of option (in years) | 5 years |
Expected stock price volatility | 89.80% |
Risk-free interest rate | 3.43% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term of option (in years) | 6 years 3 months |
Expected stock price volatility | 146% |
Risk-free interest rate | 4.13% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 40 Months Ended | 64 Months Ended | |||||||
Jul. 31, 2019 USD ($) | Sep. 30, 2018 USD ($) milestone therapy | Mar. 31, 2020 USD ($) milestone | Sep. 30, 2023 USD ($) | Dec. 31, 2018 unit $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Aug. 14, 2023 USD ($) | Jun. 22, 2021 USD ($) | Jun. 09, 2021 USD ($) | May 28, 2021 USD ($) | Mar. 25, 2021 USD ($) | Feb. 03, 2020 USD ($) | |
Operating Leased Assets [Line Items] | |||||||||||||
Payment received | $ 2,000,000 | ||||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||||
Percentage of net present value of royalty payments | 75% | ||||||||||||
Apollo AP43 Limited | Maximum | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Estimate of possible loss | $ 837,522 | ||||||||||||
Apollo AP43 Limited | Minimum | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Estimate of possible loss | $ 0 | ||||||||||||
Aevi | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Milestone payment | $ 0 | ||||||||||||
Aevi | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Number of milestones | milestone | 2 | ||||||||||||
Contingent consideration | $ 6,500,000 | ||||||||||||
Ichorion Therapeutics, Inc | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Number of milestones | milestone | 3 | ||||||||||||
Contingent consideration | $ 15,000,000 | ||||||||||||
Milestone payment | 0 | ||||||||||||
Milestone One | Aevi | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Contingent consideration | $ 2,000,000 | ||||||||||||
Milestone One | Ichorion Therapeutics, Inc | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Milestone payment | $ 6,000,000 | ||||||||||||
Milestone Two | Aevi | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Contingent consideration | $ 4,500,000 | ||||||||||||
Milestone Two | Ichorion Therapeutics, Inc | Forecast | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Milestone payment | $ 5,000,000 | ||||||||||||
Milestone Three | Ichorion Therapeutics, Inc | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Milestone payment | 0 | ||||||||||||
Milestone Three | Ichorion Therapeutics, Inc | Forecast | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Milestone payment | $ 4,000,000 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Upfront license fee | $ 10,000,000 | ||||||||||||
Percent of payments received from sublicensing | 30% | ||||||||||||
Research and development expense | 0 | ||||||||||||
Cumulative expense recognized to date | 0 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone One | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 112,500,000 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone Two | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 75,000,000 | ||||||||||||
Astellas Pharma, Inc. (Astellas) | AVTX-006 Astellas License Agreement | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Upfront license fee | 500,000 | ||||||||||||
Maximum aggregate milestone payment | 5,500,000 | ||||||||||||
Research and development expense | 0 | ||||||||||||
Cumulative expense recognized to date | 500,000 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Upfront license fee | $ 400,000 | ||||||||||||
Research and development expense | 0 | ||||||||||||
Cumulative expense recognized to date | 0 | ||||||||||||
Patent costs | 500,000 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone One | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum aggregate milestone payment | 24,200,000 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone Two | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 50,000,000 | ||||||||||||
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 | ||||||||||||
AVTX-301 Out-License | Alto | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 18,600,000 | ||||||||||||
Revenue recognized from milestones to date | 0 | ||||||||||||
AVTX-406 License Assignment | ES | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Revenue recognized from milestones to date | $ 0 | ||||||||||||
AVTX-406 License Assignment | ES | Milestone One | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 6,000,000 | ||||||||||||
AVTX-406 License Assignment | ES | Milestone Two | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 20,000,000 | ||||||||||||
AVTX-801, AVTX-802, And AVTX-803 | Ichorion Therapeutics, Inc | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||||
AVTX-913 | Ichorion Therapeutics, Inc | |||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||
Number of preclinical therapies | therapy | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - AUG Therapeutics, LLC - Purchase Agreement $ in Thousands | Oct. 27, 2023 USD ($) |
Subsequent Event [Line Items] | |
Upfront payment paid | $ 150 |
Contingent milestone payment | 15,000 |
Maximum potential payments | $ 45,000 |
Contingent milestone upfront payment percentage | 0.20 |
Asset acquisition consideration transferred, liabilities | $ 150 |