Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
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, $0.001 par value | |
Trading Symbol | AVTX | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 112,317,829 | |
Entity Central Index Key | 0001534120 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 71,506 | $ 18,919 |
Accounts receivable, net | 1,435 | 2,177 |
Other receivables | 2,477 | 2,208 |
Inventory, net | 16 | 3 |
Prepaid expenses and other current assets | 1,408 | 2,660 |
Restricted cash, current portion | 164 | 38 |
Total current assets | 77,006 | 26,005 |
Property and equipment, net | 1,410 | 1,607 |
Other long-term asset | 2,000 | 0 |
Intangible assets, net | 304 | 1,585 |
Goodwill | 14,409 | 14,409 |
Restricted cash, net of current portion | 227 | 149 |
Total assets | 95,356 | 43,755 |
Current liabilities: | ||
Accounts payable | 3,568 | 2,574 |
Accrued expenses and other current liabilities | 15,460 | 11,310 |
Current liabilities of discontinued operations | 10 | 1,341 |
Total current liabilities | 19,038 | 15,225 |
Notes payable | 32,483 | 0 |
Royalty obligation | 2,000 | 2,000 |
Deferred tax liability, net | 130 | 90 |
Other long-term liabilities | 1,396 | 1,878 |
Total liabilities | 55,047 | 19,193 |
Stockholders’ equity: | ||
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2021 and December 31, 2020; 112,317,829 and 75,004,127 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 112 | 75 |
Preferred stock—$0.001 par value; 5,000,000 shares authorized at September 30, 2021 and December 31, 2020; 0 and 1,257,143 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 0 | 1 |
Additional paid-in capital | 283,167 | 202,276 |
Accumulated deficit | (242,970) | (177,790) |
Total stockholders’ equity | 40,309 | 24,562 |
Total liabilities and stockholders’ equity | $ 95,356 | $ 43,755 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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) | 112,317,829 | 75,004,127 |
Common stock, shares outstanding (in shares) | 112,317,829 | 75,004,127 |
Preferred stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 1,257,143 |
Preferred stock, shares outstanding (in shares) | 0 | 1,257,143 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Total revenues, net | $ 1,350 | $ 1,111 | $ 5,179 | $ 5,202 |
Operating expenses: | ||||
Cost of product sales | 908 | 77 | 1,067 | 221 |
Research and development | 10,551 | 8,872 | 48,325 | 19,556 |
Acquired in-process research and development | 0 | 0 | 0 | 25,549 |
General and administrative | 5,188 | 4,573 | 16,718 | 13,350 |
Sales and marketing | 738 | 462 | 1,959 | 1,792 |
Amortization expense | 428 | 404 | 1,281 | 1,238 |
Total operating expenses | 17,813 | 14,388 | 69,350 | 61,706 |
Total operating income (loss) | (16,463) | (13,277) | (64,171) | (56,504) |
Other (expense) income: | ||||
Change in fair value of Investment in Aytu | 0 | 0 | 0 | 5,208 |
Other (expense) income, net | (15) | 19 | (20) | 447 |
Interest (expense) income, net | (985) | 0 | (1,207) | 0 |
Total other (expense) income, net from continuing operations | (1,000) | 19 | (1,227) | 5,655 |
Loss from continuing operations before taxes | (17,463) | (13,258) | (65,398) | (50,849) |
Income tax expense (benefit) | 8 | 3 | (180) | (2,607) |
Loss from continuing operations | (17,471) | (13,261) | (65,218) | (48,242) |
Income (loss) from discontinued operations, net of tax | 76 | (198) | 38 | 385 |
Net loss | $ (17,395) | $ (13,459) | $ (65,180) | $ (47,857) |
Common stock | ||||
Earnings Per Share [Abstract] | ||||
Net (loss) income per share of common stock, continuing operations, basic (in dollars per share) | $ (0.17) | $ (0.16) | $ (0.67) | $ (0.68) |
Net (loss) income per share of common stock, continuing operations, diluted in dollars per share) | (0.17) | (0.16) | (0.67) | (0.68) |
Net (loss) income per share, of common stock, discontinued operations, basic (in dollars per share) | 0 | (0.01) | 0 | 0 |
Net (loss) income per share, of common stock, discontinued operations, diluted (in dollars per share) | 0 | (0.01) | 0 | 0 |
Net loss per share, basic (in dollars per share) | (0.17) | (0.17) | (0.67) | (0.68) |
Net loss per share , diluted (in dollars per share) | $ (0.17) | (0.17) | (0.67) | (0.68) |
Preferred Stock | ||||
Earnings Per Share [Abstract] | ||||
Net (loss) income per share of common stock, continuing operations, basic (in dollars per share) | (0.82) | (3.34) | (3.40) | |
Net (loss) income per share of common stock, continuing operations, diluted in dollars per share) | (0.82) | (3.34) | (3.40) | |
Net (loss) income per share, of common stock, discontinued operations, basic (in dollars per share) | (0.01) | 0 | 0.02 | |
Net (loss) income per share, of common stock, discontinued operations, diluted (in dollars per share) | (0.01) | 0 | 0.02 | |
Net loss per share, basic (in dollars per share) | (0.83) | (3.34) | (3.38) | |
Net loss per share , diluted (in dollars per share) | $ (0.83) | $ (3.34) | $ (3.38) | |
Product revenue, net | ||||
Revenues: | ||||
Total revenues, net | $ 1,350 | $ 1,111 | $ 4,554 | $ 5,202 |
License revenue | ||||
Revenues: | ||||
Total revenues, net | $ 0 | $ 0 | $ 625 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - USD ($) $ in Thousands | Total | Underwritten Public Offering | ATM Agreement | Common stock | Common stockUnderwritten Public Offering | Common stockATM Agreement | Preferred Stock | Additional Paid-in Capital | Additional Paid-in CapitalUnderwritten Public Offering | Additional Paid-in CapitalATM Agreement | Accumulated deficit |
Balance at the beginning (in shares) at Dec. 31, 2019 | 44,384,222 | 2,857,143 | |||||||||
Balance at the beginning at Dec. 31, 2019 | $ 20,995 | $ 44 | $ 3 | $ 135,239 | $ (114,291) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of shares of common stock (in shares) | 15,180,000 | ||||||||||
Issuance of shares of common stock | 35,428 | $ 15 | 35,413 | ||||||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | (1,600,000) | |||||||||
Conversion of preferred stock to common stock | 0 | $ 8 | $ (2) | (6) | |||||||
Issuance of shares related to Aevi Merger (in shares) | 3,893,361 | ||||||||||
Issuance of shares related to Aevi Merger | 15,496 | $ 4 | 15,492 | ||||||||
Issuance of shares pursuant to registered direct offering, net (in shares) | 1,306,282 | ||||||||||
Issuance of shares pursuant to registered direct offering, net | 5,137 | $ 2 | 5,135 | ||||||||
Issuance of shares pursuant to common stock private placement, net (in shares) | 1,951,219 | ||||||||||
Issuance of shares pursuant to common stock private placement, net | 3,888 | $ 2 | 3,886 | ||||||||
Exercise of stock options and warrants (in shares) | 50,239 | ||||||||||
Exercise of stock options | 92 | 92 | |||||||||
Restricted Stock Units vested during period (in shares) | 111,667 | ||||||||||
Restricted Stock Units withheld for taxes (in shares) | (35,279) | ||||||||||
Restricted stock units withheld for taxes | (94) | (94) | |||||||||
Shares purchased through employee stock purchase plan (in shares) | 58,336 | ||||||||||
Shares purchased through employee stock purchase plan | 133 | 133 | |||||||||
Stock-based compensation | 5,349 | 5,349 | |||||||||
Net loss | (47,857) | (47,857) | |||||||||
Balance at the end (in shares) at Sep. 30, 2020 | 74,900,047 | 1,257,143 | |||||||||
Balance at the end at Sep. 30, 2020 | 38,567 | $ 75 | $ 1 | 200,639 | (162,148) | ||||||
Balance at the beginning (in shares) at Jun. 30, 2020 | 74,900,047 | 1,257,143 | |||||||||
Balance at the beginning at Jun. 30, 2020 | 50,578 | $ 75 | $ 1 | 199,191 | (148,689) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 1,448 | 1,448 | |||||||||
Net loss | (13,459) | (13,459) | |||||||||
Balance at the end (in shares) at Sep. 30, 2020 | 74,900,047 | 1,257,143 | |||||||||
Balance at the end at Sep. 30, 2020 | 38,567 | $ 75 | $ 1 | 200,639 | (162,148) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 75,004,127 | 1,257,143 | |||||||||
Balance at the beginning at Dec. 31, 2020 | 24,562 | $ 75 | $ 1 | 202,276 | (177,790) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of shares of common stock (in shares) | 14,308,878 | 2,000,000 | |||||||||
Issuance of shares of common stock | $ 29,046 | $ 5,312 | $ 14 | $ 2 | $ 29,032 | $ 5,310 | |||||
Issuance of shares of common stock and pre-funded warrants in underwritten public offering, net (in shares) | 13,971,889 | ||||||||||
Issuance of shares of common stock and pre-funded warrants in underwritten public offering, net | 37,653 | $ 14 | 37,639 | ||||||||
Issuance of equity classified warrants related to venture debt financing agreement | 861 | 861 | |||||||||
Conversion of preferred stock to common stock (in shares) | 6,285,715 | (1,257,143) | |||||||||
Conversion of preferred stock to common stock | 0 | $ 6 | $ (1) | (5) | |||||||
Exercise of stock options and warrants (in shares) | 580,617 | ||||||||||
Exercise of stock options | 1,568 | $ 1 | 1,567 | ||||||||
Restricted Stock Units vested during period (in shares) | 77,917 | ||||||||||
Shares purchased through employee stock purchase plan (in shares) | 88,686 | ||||||||||
Shares purchased through employee stock purchase plan | 207 | 207 | |||||||||
Stock-based compensation | 6,280 | 6,280 | |||||||||
Net loss | (65,180) | (65,180) | |||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 112,317,829 | 0 | |||||||||
Balance at the end at Sep. 30, 2021 | 40,309 | $ 112 | $ 0 | 283,167 | (242,970) | ||||||
Balance at the beginning (in shares) at Jun. 30, 2021 | 96,008,951 | 0 | |||||||||
Balance at the beginning at Jun. 30, 2021 | 21,588 | $ 96 | $ 0 | 247,067 | (225,575) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of shares of common stock (in shares) | 14,308,878 | 2,000,000 | |||||||||
Issuance of shares of common stock | $ 29,046 | $ 14 | $ 2 | $ 29,032 | $ 5,310 | ||||||
Issuance of shares of common stock and pre-funded warrants in underwritten public offering, net | $ 5,312 | ||||||||||
Stock-based compensation | 1,758 | 1,758 | |||||||||
Net loss | (17,395) | (17,395) | |||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 112,317,829 | 0 | |||||||||
Balance at the end at Sep. 30, 2021 | $ 40,309 | $ 112 | $ 0 | $ 283,167 | $ (242,970) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net loss | $ (65,180) | $ (47,857) |
Adjustments to reconcile net loss used in operating activities: | ||
Depreciation and amortization | 1,362 | 1,305 |
Stock-based compensation | 6,280 | 5,349 |
Accretion of debt discount | 445 | 0 |
Acquired in-process research and development, including transaction costs | 0 | 25,549 |
Deferred taxes | 40 | 29 |
Change in fair value of Investment in Aytu | 0 | (5,208) |
Change in fair value of warrant liability and unit purchase option liability | 0 | (14) |
Change in value of Guarantee | 0 | (1,755) |
Changes in assets and liabilities: | ||
Accounts receivable, net | 742 | (172) |
Other receivables | (269) | (4,184) |
Other long-term asset | (2,000) | 0 |
Inventory, net | (13) | 12 |
Prepaid expenses and other assets | 1,252 | (744) |
Accounts payable | 994 | (548) |
Income taxes payable | 0 | 288 |
Accrued expenses and other liabilities | 2,604 | 1,776 |
Lease liability, net | (50) | 10 |
Net cash used in operating activities | (53,793) | (26,164) |
Investing activities | ||
Proceeds from sale of Investment in Aytu, net | 0 | 12,837 |
Net cash paid in merger with Aevi | 0 | (1,251) |
Purchase of property and equipment | (102) | (63) |
Net cash used in investing activities | (102) | 11,523 |
Financing activities | ||
Proceeds from issuance of common stock and pre-funded warrants in underwritten public offering, net | 37,653 | 0 |
Proceeds from Notes and warrants, net of debt issuance costs paid | 32,900 | 0 |
Proceeds from issuance of common stock in underwritten public offering, net | 29,046 | 35,429 |
Proceeds from common stock pursuant to ATM Program, net | 5,312 | 0 |
Proceeds from registered direct offering, net | 0 | 5,136 |
Proceeds from sale of shares pursuant to common stock private placement, net | 0 | 3,888 |
Proceeds from exercise of stock options | 1,568 | 92 |
Proceeds from issuance of common stock under employee stock purchase plan | 207 | 133 |
Restricted stock units withheld for taxes | 0 | (94) |
Net cash provided by financing activities | 106,686 | 44,584 |
Increase in cash, cash equivalents and restricted cash | 52,791 | 29,943 |
Cash, cash equivalents, and restricted cash at beginning of period | 19,106 | 3,729 |
Cash, cash equivalents, and restricted cash at end of period | 71,897 | 33,672 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 796 | 0 |
Cash paid for taxes | 0 | 316 |
Supplemental disclosures of non-cash activities | ||
Issuance of common stock in Aevi Merger | 0 | 15,496 |
Leased asset obtained in exchange for new operating lease liability | 0 | 376 |
Cash and cash equivalents | 71,506 | 33,391 |
Restricted cash, current | 164 | 132 |
Restricted cash, non-current | 227 | 149 |
Total cash, cash equivalents and restricted cash | $ 71,897 | $ 33,672 |
Business
Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Avalo Therapeutics, Inc. (the “Company” or “Avalo”) is a leading clinical-stage precision medicine company that discovers, develops, and commercializes targeted therapeutics for patients with significant unmet clinical need in immunology, immuno-oncology, and rare genetic diseases. The Company has built a diverse portfolio of innovative therapies to deliver meaningful medical impact for patients in urgent need. Avalo’s clinical candidates commonly have a proven mechanistic rationale, biomarkers and/or an established proof-of-concept to expedite and increase the probability of success. In August 2021, the Company changed its corporate name change from Cerecor Inc. to Avalo Therapeutics, Inc. by filing a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware and merged certain wholly-owned subsidiaries into the Company to consolidate its corporate structure. The name change underscores the Company’s transition to developing innovative targeted therapies in immunology, immuno-oncology, and rare genetic diseases. Avalo was incorporated and commenced operation in 2011 and completed its initial public offering in October 2015. Liquidity As of September 30, 2021, Avalo had $71.5 million in cash and cash equivalents. In September 2021, the Company closed an underwritten public offering of 14,308,878 shares of common stock for net proceeds of approximately $29.0 million. Additionally, in August 2021, the Company sold 2.0 million shares of common stock under its “at-the-market” sales agreement (the “ATM Program”) for net proceeds of approximately $5.3 million. In June 2021, the Company entered into a $35.0 million venture debt financing agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP (collectively, the “Lenders”). As of September 30, 2021, the Company has received the full $35.0 million, $20.0 million of which was funded on the closing date in the second quarter of 2021 and the remaining $15.0 million was funded during the third quarter of 2021 in two separate tranches. The Loan Agreement contains certain covenants and certain other specified events that could result in an event of default, which if not cured or waived, could result in the acceleration of all or a substantial portion of the notes. As of the filing date of this Quarterly Report on Form 10-Q, the Company was not aware of any breach of covenants nor received any notice of event of default from the Lenders. In the first quarter of 2021, the Company closed an underwritten public offering of 13,971,889 shares of its common stock and 1,676,923 pre-funded warrants for net proceeds of approximately $37.7 million. In order to meet its cash flow needs, the Company applies a disciplined decision-making methodology as it evaluates the optimal allocation of the Company’s resources between investing in the Company’s existing pipeline assets and acquisitions or in-licensing of new assets. For the nine months ended September 30, 2021, Avalo generated a net loss of $65.2 million and negative cash flows from operations of $53.8 million. As of September 30, 2021, Avalo had an accumulated deficit of $243.0 million. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, losses are expected to continue as the Company continues to invest in its research and development pipeline assets. The Company will require additional financing to fund its operations and to continue to execute its business strategy at least one year after the date the condensed consolidated financial statements included herein were issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. To mitigate these conditions and to meet the Company’s capital requirements, management plans to use its current cash on hand along with some combination of the following: (i) dilutive and/or non-dilutive financings, (ii) federal and/or private grants, (iii) other out-licensing or strategic alliances/collaborations of its current pipeline assets, and (iv) out-licensing or sale of its non-core assets. If the Company raises additional funds through collaborations, strategic alliances or licensing arrangements with third parties, the Company might have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates. Subject to limited exceptions, our venture debt financing agreement prohibits us from incurring certain additional indebtedness, making certain asset dispositions, and entering into certain mergers, acquisitions or other business combination transactions without prior consent of the Lenders. If the Company requires but is unable to obtain additional funding, the Company may be forced to make reductions in spending, delay, suspend, reduce or eliminate some or all of its planned research and development programs, or liquidate assets where possible. Due to the uncertainty regarding future financing and other potential options to raise additional funds, management has |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020 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, 2020 audited consolidated financial statements. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. Significant Accounting Policies |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company generates substantially all of its revenue from sales of Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions, which is considered a prescription drug. The Company sells its prescription drug in the United States primarily through wholesale distributors. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. For the three months ended September 30, 2021, the Company’s three largest customers accounted for approximately 52%, 24%, and 24% of the Company’s total net product revenues. For the nine months ended September 30, 2021, the Company’s three largest customers accounted for approximately 62%, 20%, and 17% of the Company’s total net product revenues. Revenue from sales of prescription drugs was $1.4 million and $1.1 million for the three months ended September 30, 2021 and 2020, respectively, and $4.6 million and $5.2 million for the nine months ended September 30, 2021 and 2020, respectively. The Company has a license and supply agreement for the Millipred ® product with a wholly owned subsidiary of Teva Pharmaceutical Industries Ltd. (“Teva”), which expires on September 30, 2023. Beginning July 1, 2021, Avalo is required to pay Teva fifty percent of the net profit of the Millipred ® product following each calendar quarter, subject to a $0.5 million quarterly minimum payment. For the three and nine months ended September 30, 2021, the Company recognized $0.7 million in cost of product sales related to the royalty. Dr. Sol Barer served as the Chairman of the Company’s board of directors until June 2021 and currently serves as the Chairman of Teva’s board of directors. License revenue was $0.6 million for the nine months ended September 30, 2021, which was related to upfront fees received in the second quarter of 2021 as a result of the out-licenses of the Company’s rights to its non-core neurology pipeline assets: AVTX-301 to Alto Neuroscience, Inc. (“Alto”) and AVTX-406 to ES Therapeutics, LLC (“ES”). ES is a wholly-owned subsidiary of Armistice Capital Master Fund Ltd. (an affiliate of Armistice Capital, LLC and collectively “Armistice”), which is a significant stockholder of |
Aytu Divestiture
Aytu Divestiture | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Aytu Divestiture | Aytu Divestiture Overview of Sale of Pediatric Portfolio and Related Commercial Infrastructure to Aytu BioScience On November 1, 2019, the Company closed on an asset purchase agreement to sell the Company’s rights, title and interest in assets relating to certain commercialized products (the “Pediatric Portfolio”) and the corresponding commercial infrastructure to Aytu BioScience, Inc. (“Aytu”). Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock, and assumed certain of the Company’s liabilities, including the Company’s payment obligations to Deerfield CSF, LLC (“Deerfield”) and certain other liabilities primarily related to contingent consideration and sales returns. Steve Boyd, chief investment officer of Armistice Capital, LLC, a significant stockholder of the Company and a member of the Company’s Board of Directors, served on Aytu’s Board from March 2019 until August 30, 2021. The transactions and agreements between the Company and Aytu were approved in accordance with the Company’s related party transaction policy. Upon the sale of the Pediatric Portfolio to Aytu, the Pediatric Portfolio met all conditions to be classified as discontinued operations. Therefore, the accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 and as of December 31, 2020 reflect the operations, net of taxes, and related assets and liabilities of the Pediatric Portfolio as discontinued operations. Refer to the “Discontinued Operations” section below for more information, including Avalo’s continuing involvement, which the Company expects to end in the second quarter of 2022. Avalo retained all rights to Millipred ® , which the Company considers a non-core asset. Aytu managed Millipred ® commercial operations until June 30, 2021 pursuant to transition service agreements entered into between Aytu and Avalo, which included Aytu collecting cash on behalf of Avalo for sales of Millipred ® until the second quarter of 2020. In the third quarter of 2021, Avalo finalized its trade and distribution channel to allow it to control third party distribution and began managing Millipred ® commercial operations at that time. The Company agreed to postpone receipt of $2.0 million from Aytu in order to better facilitate the transition of commercial operations from Aytu. $1.0 million of the postponement will become due in December 2022 and the remainder in December 2024. The Company recognized the $2.0 million as an other long-term asset on the Company’s condensed consolidated balance sheet as of September 30, 2021. Deerfield Guarantee As of the closing date of the Aytu Divestiture on November 1, 2019, Aytu assumed the Company’s debt obligation to Deerfield which included monthly payments of $0.1 million through January 2021, with a balloon payment of $15.0 million that was to be due in January 2021. Aytu also assumed the contingent consideration liability related to future royalties on Avadel Pharmaceuticals PLC’s (“Avadel”) pediatric products, which included minimum monthly payments of $0.1 million through February 2026. In conjunction with the closing of this transaction, the Company entered into a guarantee in favor of Deerfield, which guarantees the payment of the assumed liabilities to Deerfield, which included the debt obligation and includes the contingent consideration related to future royalties on Avadel’s pediatric products (collectively referred to as the “Guarantee”). Aytu publicly reported that it had paid the $15.0 million balloon payment to Deerfield before it came due in June 2020 and the fixed monthly payments to Deerfield ended in January 2021, thus satisfying the debt obligation. Aytu publicly reported that it had entered into a Waiver, Release and Consent in June 2021, pursuant to which it paid $2.8 million to Deerfield in early satisfaction of the remaining contingent consideration related to future royalties on Avadel’s pediatric products. Aytu agreed to pay the remaining fixed obligation of $3.0 million in six equal quarterly payments of $0.5 million over the next six quarters commencing September 1, 2021. Avalo is required to make a payment under the Guarantee upon demand by Deerfield if all or any part of the fixed payments are not paid by Aytu when due or upon breach of a covenant. The remaining minimum commitments payable (as most recently publicly reported by Aytu) was $3.0 million as of June 30, 2021, which represents Avalo’s estimated maximum potential future payments under the Guarantee. The fair value of the Guarantee, which relates to the Company’s obligation to make future payments if Aytu defaults, was determined at the time of the Aytu Divestiture as the difference between (i) the estimated fair value of the assumed payments using Avalo’s estimated cost of debt and (ii) the estimated fair value of the assumed payments using Aytu’s estimated cost of debt. At each subsequent reporting period, the value of the Guarantee is determined based on the expected credit loss of the Guarantee with changes recorded in (loss) income from discontinued operations, net of tax within the consolidated statements of operations and comprehensive loss. The Company concluded that the expected credit loss of the Guarantee was de minimis as of September 30, 2021 based on considerations such as recent financings, cash position, operating cash flows and trends and Aytu’s ability to meet its financial commitments. Discontinued Operations The following tables summarizes the liabilities of the discontinued operations as of September 30, 2021 and December 31, 2020 (in thousands): September 30, December 31, 2021 2020 Liabilities Current liabilities: Accrued expenses and other current liabilities $ 10 $ 1,341 Total current liabilities of discontinued operations $ 10 $ 1,341 Aytu assumed sales returns of the Pediatric Portfolio made after the transaction close date related to sales prior to November 1, 2019 only to the extent such post-Closing sales returns exceed $2.0 million and are less than $2.8 million (in other words, Aytu will only assume $0.8 million of such returns). Therefore, Avalo is liable for future sales returns of the Pediatric Portfolio sold prior to the transaction close date in excess of the $0.8 million assumed by Aytu. The Company estimated future returns on sales made prior to the transaction close date as of September 30, 2021, which was recognized within accrued expenses and other current liabilities from discontinued operations (and shown in the table above). Changes to the Company’s estimate of sales returns related to the Pediatric Portfolio is included within discontinued operations on the statement of operations and comprehensive loss and is shown within product revenue, net in the table summarizing the results of discontinued operations below. In future periods, as additional information becomes available, the Company expects to recognize expense (or a benefit) related to actual sales returns of the Pediatric Portfolio in excess (or less than) the returns reserve recorded, which will be recognized within discontinued operations. The Company expects this involvement to continue until sales returns are no longer accepted on sales of the Pediatric Portfolio made prior to November 1, 2019. Returns of these products may be accepted through the second quarter of 2022 (in line with the products’ return policies). The following table summarizes the results of discontinued operations for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Product revenue, net $ 76 $ (198) $ 139 $ (1,370) Operating expenses: Sales and marketing — — 101 — Total operating expenses — — 101 — Other income: Change in value of Guarantee — — — 1,755 Total other income — — — 1,755 Income (loss) from discontinued operations, net of tax $ 76 $ (198) $ 38 $ 385 There were no non-cash operating items from discontinued operations for the nine months ended September 30, 2021 and no non-cash investing items from the discontinued operations for the nine months ended September 31, 2021 and 2020. The significant non-cash operating item from the discontinued operations for the nine months ended September 30, 2020 is contained below (in thousands). Nine Months Ended September 30, 2021 2020 Change in value of Guarantee — $ (1,755) |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share (“EPS”) using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company had two classes of stock outstanding during the nine months ended September 30, 2021; common stock and preferred stock. The preferred stock outstanding during the period had the same rights and preferences as the Company’s common stock, other than being non-voting, and is convertible into share of common stock on a 1-for-5 ratio. In April 2021, Armistice, which is a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, serve on the Board of the Company, converted the remaining 1,257,143 shares of convertible preferred stock into 6,285,715 shares of Avalo’s common stock (refer to Note 11 for more information). Therefore, the Company had only common stock outstanding during the three months ended September 30, 2021. Under the two-class method, the convertible preferred stock was considered a separate class of stock until the time it was converted to common shares for EPS purposes and therefore basic and diluted EPS is provided below for both common stock and preferred stock for the three months ended September 30, 2020 and the nine months ended September 30, 2020 and 2021. EPS for common stock and EPS for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for the period. In applying the two-class method, undistributed earnings are allocated to common stock and preferred stock based on the weighted average shares outstanding during the period, which assumes the convertible preferred stock has been converted to common stock. The weighted average number of common shares outstanding as of September 30, 2021 includes the weighted average effect of the pre-funded warrants issued in connection with the underwritten public offering that closed in January 2021, the exercise of which requires nominal consideration for the delivery of the shares of common stock (refer to Note 11 for more information). Diluted net (loss) income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the “treasury stock method” when dilutive; and (ii) common stock to be issued upon the exercise of outstanding warrants, which are included under the “treasury stock method” when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company’s losses. The following tables set forth the computation of basic and diluted net (loss) income per share of common stock and preferred stock for the three and nine months ended September 30, 2021 and 2020 (in thousands, except share and per share amounts): Three Months Ended September 30, 2021 Common stock Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (17,471) $ 76 Denominator: Weighted average shares 100,490,389 100,490,389 Basic and diluted net loss per share $ (0.17) $ 0.00 Nine Months Ended September 30, 2021 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (63,602) $ 37 $ (1,616) $ 1 Denominator: Weighted average shares 95,125,817 95,125,817 483,517 483,517 Basic and diluted net loss per share $ (0.67) $ 0.00 $ (3.34) $ 0.00 Three Months Ended September 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (12,234) $ (183) $ (1,027) $ (15) Denominator: Weighted average shares 74,900,047 74,900,047 1,257,143 1,257,143 Basic and diluted net loss per share $ (0.16) $ (0.01) $ (0.82) $ (0.01) Nine Months Ended September 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (43,511) $ 347 $ (4,731) $ 38 Denominator: Weighted average shares 63,920,795 63,920,795 1,389,990 1,389,990 Basic and diluted net loss per share $ (0.68) $ 0.00 $ (3.40) $ 0.02 The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2021 and 2020, as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2021 2020 Stock options 13,473,412 9,548,262 Warrants on common stock 1 4,406,224 4,024,708 Restricted Stock Units 77,916 155,833 |
Asset Acquisition
Asset Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | Asset AcquisitionAevi Merger 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”). The Merger consideration included (i) stock valued at approximately $15.5 million, resulting in the issuance of approximately 3.9 million shares of Avalo common stock to Aevi stockholders, (ii) forgiveness of $4.1 million the Company had loaned Aevi prior to the Merger closing, (iii) contingent value rights for up to an additional $6.5 million in subsequent payments based on certain development milestones (discussed further in Note 14), and (iv) transaction costs of $1.5 million. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 70,366 $ — $ — December 31, 2020 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* $ 17,503 $ — $ — *Investments in money market funds are reflected in cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company 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 makes 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. As of the lease commencement date, it was not reasonably certain that the Company will exercise the renewal periods or early terminate the lease and therefore the end date of the lease for accounting purposes is January 31, 2030. The Company entered into a sublease for additional administrative office space in Chesterbrook, Pennsylvania in May 2020 (the “Chesterbrook Lease”). The annual base rent under the Chesterbrook Lease is $0.3 million. The lease expires on November 30, 2021. In anticipation of the expiry of the Chesterbrook Lease on November 30, 2021, in September 2021, the Company entered into a lease for administrative office space in Chesterbrook, Pennsylvania that commences on December 1, 2021 (the “New Chesterbrook Lease”). The New Chesterbrook Lease has an initial term of 5.25 years from the lease commencement date. The initial annual base rent under the New Chesterbrook Lease is approximately $0.2 million. The Company will evaluate the accounting impact in the fourth quarter of 2021, including the lease classification test and the recognition of the lease right-of-use (“ROU”) asset and corresponding lease liability as of the lease commencement date on December 1, 2021. Therefore, the information contained below excludes the New Chesterbrook Lease. Supplemental balance sheet information related to the leased properties (excluding the New Chesterbrook Lease) is as follows (in thousands): As of September 30, 2021 December 31, 2020 Property and equipment, net $ 698 $ 917 Accrued expenses and other current liabilities $ 219 $ 426 Other long-term liabilities 977 1,038 Total operating lease liabilities $ 1,196 $ 1,464 The operating lease ROU assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in our condensed consolidated balance sheets. The Company utilized a weighted average discount rate of 7.6% to determine the present value of the lease payments. The weighted average remaining term of the operating leases at September 30, 2021 was 8.0 years. The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease cost* $ 97 $ 102 $ 287 $ 244 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liabilities as of September 30, 2021 1 (in thousands): Undiscounted Cash Flows October 1, 2021 through December 31, 2021 $ 89 2022 174 2023 178 2024 183 2025 187 2026 192 Thereafter 621 Total lease payments $ 1,624 Less implied interest (428) Total $ 1,196 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 and December 31, 2020 consisted of the following (in thousands): As of September 30, 2021 December 31, 2020 Research and development $ 7,425 $ 4,939 Compensation and benefits 3,436 3,119 General and administrative 1,364 771 Sales and marketing 360 31 Commercial operations 1,993 1,913 Royalty payment 653 — Lease liability, current 219 426 Other 10 111 Total accrued expenses and other current liabilities $ 15,460 $ 11,310 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable Overview On June 4, 2021, the Company entered into a $35.0 million Loan Agreement with Horizon Technology Finance Corporation (“Horizon”) and Powerscourt Investments XXV, LP (“Powerscourt”, together with Horizon, the “Lenders”). In accordance with the Loan Agreement, $20.0 million of the $35.0 million was funded on the closing date (the “Initial Note”), with the remaining $15.0 million fundable upon the Company achieving certain predetermined milestones, which the Company met in the third quarter of 2021. On July 30, 2021, after achieving the predetermined milestones, the Company borrowed $10.0 million, which was evidenced by a second note payable (the “Second Note”). On September 29, 2021, after achieving the predetermined milestones, the Company borrowed the remaining $5.0 million, which was evidenced by a third note payable (the “Third Note”, and collectively with the Initial and Second Notes, the “Notes”). Each advance under the Loan Agreement will mature 42 months from the first day of the month following the funding of the advance. Each advance accrues interest at a per annum rate of interest equal to 6.25% plus the prime rate, as reported in the Wall Street Journal (subject to a floor of 3.25%). The Loan Agreement provides for interest-only payments for each advance for the first 18 months, however the interest-only period was extended to 24 months as a result of the Company satisfying the Interest Only Extension Milestone (as defined in the Loan Agreement) in the third quarter of 2021. Thereafter, amortization payments will be payable in monthly installments of principal and interest through each advance’s maturity date. Upon ten business days’ prior written notice, the Company may prepay all of the outstanding advances by paying the entire principal balance and all accrued and unpaid interest, subject to prepayment charges of up to 3% of the then outstanding principal balance. Upon the earlier of (i) payment in full of the principal balance, (ii) an event of default, or (iii) the maturity date, the Company will pay an additional final payment of 3% of the principal loan amount to the Lenders. Each advance of the loan is secured by a lien on substantially all of the assets of the Company, other than Intellectual Property and Excluded Collateral (in each case as defined in the Loan Agreement), and contains customary covenants and representations, including a financial reporting covenant and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions taxes, corporate changes, deposit accounts, and subsidiaries. The events of default under the Loan Agreement include but are not limited to, failing to make a payment, breach of covenant, or occurrence of a material adverse change. If an event of default occurs, the Lenders are entitled to accelerate the loan amounts due, or take other enforcement actions. As of the filing date of this Quarterly Report on Form 10-Q, the Company was not aware of any breach of covenants nor received any notice of event of default from the Lenders. On June 4, 2021, pursuant to the Loan Agreement, the Company issued warrants to the Lenders to purchase 403,844 shares of the Company’s common stock with an exercise price of $2.60 (the “Warrants”). The Warrants are exercisable for ten years from the date of issuance. The Lenders may exercise the Warrants either by (a) cash or check or (b) through a net issuance conversion. The Warrants, which met equity classification, were recognized as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date using a relative fair value allocation method. The Company valued the Warrants at issuance, which resulted in a discount on the debt, and allocated the proceeds from the loan proportionately to the Notes and to the Warrants, of which $0.9 million was allocated to the Warrants. For the nine months ended September 30, 2021, the Company incurred $2.1 million in debt issuance costs, including legal fees in connection with the Loan Agreement, fees paid directly to the lender, and other direct costs, of which $1.7 million were paid in the third quarter of 2021. All fees, warrants, and costs paid to the Lenders and all direct costs incurred by the Company are recognized as a debt discount and are amortized to interest expense using the effective interest method over the term of the loan. The Company did not incur any debt issuance costs for the three months ended September 30, 2021. The effective interest rate of the Notes, including the accretion of the final payment, was 13.5% as of September 30, 2021. Balance sheet information related to the note payable for the Notes is as follows (in thousands): As of September 30, 2021 December 31, 2020 Maturity Initial Note 20,600 — January 2025 Second Note 10,300 — February 2025 Third Note 5,150 — April 2025 Notes payable, gross 1 36,050 — Less: Unamortized debt discount and issuance costs 3,567 — Carrying value of notes payable, non-current $ 32,483 $ — 1 Balance includes $1.1 million final payment fee for the Notes, which represents 3% of the principal loan amount. As of September 30, 2021, the estimated future principal payments due on the Notes were as follows (in thousands): As of September 30, 2021 2021 $ — 2022 — 2023 10,278 2024 23,333 2025 2,439 Total principal payments 1 $ 36,050 1 Balance includes $1.1 million final payment fee, which represents 3% of the principal loan amount. |
Capital Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021, 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 Q3 2021 Financing On September 17, 2021, the Company closed an underwritten public offering of 14,308,878 shares of its common stock for net proceeds of $29.0 million. Armistice, which is a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, currently serve on the Board of the Company, participated in the offering by purchasing 5,454,545 shares of common stock, on the same terms as all other investors. Certain affiliates of Nantahala Capital Management LLC (collectively, “Nantahala”), which beneficially owned greater than 5% of the Company’s outstanding common stock at the time of the offering, participated in the offering on the same terms as all other investors. At-the-Market Offering Program In July 2021, the Company entered into an “at-the-market” sales agreement with Cantor Fitzgerald & Co. and RBC Capital Markets, LLC (together, the “Agents”), pursuant to which the Company may sell from time to time, shares of its common stock having an aggregate offering price of up to $50.0 million through the Agents. In August 2021, the Company sold 2.0 million shares of common stock under the ATM Program for net proceeds of approximately $5.3 million. Q2 2021 Debt Financing Agreement As part of the Loan Agreement entered into in the second quarter of 2021, on June 4, 2021, the Company issued warrants to Horizon and Powerscourt to purchase 403,844 shares of the Company’s common stock with an exercise price of $2.60. The warrants are exercisable for ten years from the date of issuance. Refer to Note 10 for additional information. Q1 2021 Financing In January 2021, the Company closed an underwritten public offering of 13,971,889 shares of its common stock and 1,676,923 pre-funded warrants for net proceeds of $37.7 million. Armistice participated in the offering by purchasing 2,500,000 shares of common stock, on the same terms as all other investors. Nantahala participated in the offering by purchasing 1,400,000 shares of common stock, on the same terms as all other investors. Nantahala also purchased the pre-funded warrants to purchase up to an aggregate of 1,676,923 shares of common stock at a purchase price of $2.599, which represents the per share public offering price for the common stock less the $0.001 per share exercise price for each pre-funded warrant. The pre-funded warrants are exercisable at any time after their original issuance at the option of each holder, in such holder’s discretion, by (i) payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise or (ii) a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant. A holder will not be entitled to exercise any portion of any pre-funded warrant if the holder’s ownership of the Company’s common stock would exceed 9.99% following such exercise. In the event of certain fundamental transactions, the holders of the pre-funded warrants will be entitled to receive upon exercise of the pre-funded warrants the kind of amounts of securities, cash or other property that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction without regard to any limitations on exercise contained in the pre-funded warrants. The pre-funded warrants were classified 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 pre-funded 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 pre-funded warrants do not provide any guarantee of value or return. The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value, and allocated net proceeds from the sale proportionately to the common stock and pre-funded warrants, of which $4.4 million was allocated to the pre-funded warrants and recorded as a component of additional paid-in capital. 2020 Financings On June 11, 2020, the Company closed an underwritten public offering of 15,180,000 shares of its common stock for net proceeds of approximately $35.4 million. Armistice participated in the offering by purchasing 2,000,000 shares of common stock, on the same terms as all other investors. Additionally, certain of the Company’s officers participated in the offering by purchasing an aggregate of 110,000 shares of common stock, on the same terms as all other investors. On March 17, 2020, the Company entered into a securities purchase agreement with Armistice pursuant to which the Company sold 1,951,219 shares of the Company’s common stock for net proceeds of approximately $3.9 million. On February 6, 2020, the Company closed a registered direct offering with certain institutional investors for the sale by the Company of 1,306,282 shares of the Company’s common stock for net proceeds of approximately $5.1 million. Armistice participated in the offering by purchasing 1,256,282 shares of common stock from the Company, on the same terms as all other investors. Aevi Merger On February 3, 2020, under the terms of the Aevi Merger noted above in Note 6, the Company issued approximately 3.9 million shares of common stock. Common Stock Warrants At September 30, 2021, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 2,380 $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 1,676,923 $ 0.001 — 403,844 $ 2.60 June 2031 6,083,147 Convertible Preferred Stock On December 26, 2018, the Company filed a Certificate of Designation of Preferences of Series B Non-Voting Convertible Preferred Stock (“Series B Convertible Preferred Stock” or “convertible preferred stock”) of Avalo Therapeutics, Inc. (the “Certificate of Designation of the Series B Preferred Stock”) classifying and designating the rights, preferences and privileges of the Series B Convertible Preferred Stock. The Certificate of Designation of the Series B Convertible Preferred Stock authorized 2,857,143 shares of convertible preferred stock. The Series B Convertible Preferred Stock converted to shares of common stock on a 1-for-5 ratio and has the same rights, preferences, and privileges as common stock other than it held no voting rights. During the first quarter of 2020, |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan On April 5, 2016, the Company’s board of directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as the successor to the 2015 Omnibus Plan (the “2015 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on May 18, 2016 (the “2016 Plan Effective Date”). Upon the 2016 Plan Effective Date, the 2016 Plan reserved and authorized up to 600,000 additional shares of common stock for issuance, as well as 464,476 unallocated shares remaining available for grant of new awards under the 2015 Plan. An Amended and Restated 2016 Equity Incentive Plan (the “2016 Amended Plan”) was approved by the Company’s stockholders in May 2018, which increased the share reserve by an additional 1.4 million shares. A Second Amended and Restated 2016 Equity Incentive Plan (the “2016 Second Amended Plan”) was approved by the Company’s stockholders in August 2019, which increased the share reserve by an additional 850,000 shares. A Third Amended and Restated Equity Incentive Plan (the “2016 Third Amended Plan”) was approved by the Company’s stockholders in June 2020 which increased the share reserve by an additional 2,014,400 shares. During the term of the 2016 Third Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year ending on (and including) January 1, 2026, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of September 30, 2021, there were 1,748,433 shares available for future issuance under the 2016 Third Amended Plan. Option grants expire after ten years. Employee options typically vest over three one Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Research and development $ 480 $ 384 $ 1,244 $ 1,156 General and administrative 1,171 972 4,720 3,959 Sales and marketing 107 92 316 234 Total stock-based compensation $ 1,758 $ 1,448 $ 6,280 $ 5,349 In June 2021, the Company’s former Chairman of the Board resigned from the Board. The Company and the former Chairman subsequently entered into an agreement for him to serve as a strategic advisor to the Board and the Company, including serving on the Company’s Scientific Advisory Board, for a period of at least one year. As consideration for these services, the Company modified his outstanding stock option awards to allow them to continue to vest during the term during which he serves as a strategic advisor. Additionally, any option award previously granted was amended to extend the exercisability period. As a result of the modification, the Company recognized $1.4 million of compensation cost, $1.0 million of which related to options with market-based vesting conditions (which were fully vested prior to the modification) and $0.4 million of which related to options with service-based vesting conditions in the second quarter of 2021. This expense was recognized in general and administrative expenses. At September 30, 2021, there was $0.2 million of unrecognized compensation cost related to the modification of service-based options that will be recognized over a weighted-average period of 0.7 years. Stock options with service-based vesting conditions The Company has granted awards 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, 2021 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, 2020 8,830,674 $ 3.95 $ 2.36 7.7 Granted 5,017,690 $ 3.24 $ 2.17 Exercised (580,617) $ 2.70 $ 1.74 Forfeited (439,341) $ 3.55 $ 2.27 Expired (354,994) $ 4.53 $ 2.69 Balance at September 30, 2021 12,473,412 $ 3.72 $ 2.30 8.4 Exercisable at September 30, 2021 4,437,524 $ 4.20 $ 2.41 7.4 In March 2021, the Company granted its newly appointed Chief Financial Officer options with service-based vesting conditions to purchase 0.5 million shares of common stock as an inducement option grant, pursuant to NASDAQ Listing Rule 5635(c)(4). In January 2021, the Company granted 2.7 million options with service-based vesting conditions to its employees as part of its annual stock option award. In March 2020, our Chief Executive Officer entered into an amended employment agreement in which his salary in cash was reduced to $35,568 (the “Reduction”), which represents the minimum exempt annual salary. In consideration for the Reduction, on a quarterly basis, the Company grants stock options, which vest immediately, for the purchase of a number of shares of the Company’s common stock with a total value (based on the Black-Scholes valuation methodology) based on a pro rata total annual value of the foregone salary. 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, 2021, the aggregate intrinsic value of options outstanding was $0.2 million. The aggregate intrinsic value of options currently exercisable as of September 30, 2021 was $0.2 million. There were 2,466,684 options that vested during the nine months ended September 30, 2021 with a weighted average exercise price of $3.64 per share. The total grant date fair value of shares which vested during the nine months ended September 30, 2021 was $5.6 million. The Company recognized stock-based compensation expense of $1.7 million and $5.0 million related to stock options with service-based vesting conditions for the three and nine months ended September 30, 2021, respectively. At September 30, 2021, there was $14.8 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 2.8 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, 2021: Service-based options Expected annual dividend yield —% Expected stock price volatility 73.0% - 86.5% Expected term of option (in years) 0.76 - 6.25 Risk-free interest rate 0.07% - 1.23% Stock options with market-based vesting conditions The following table summarizes the Company’s market-based option activity for the nine months ended September 30, 2021 (in thousands except, for share amounts): Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2020 1,000,000 $ 3.29 9.5 $ 65 Granted — $ — Balance at September 30, 2021 1,000,000 $ 3.29 2.7 $ — Exercisable at September 30, 2021 1,000,000 $ — (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. Restricted Stock Units The Company measures the fair value of the restricted stock units using the stock price on the date of the grant. The restricted shares typically vest annually over a four-year period beginning on the first anniversary of the award. The following table summarizes the Company’s restricted stock unit (“RSU”) activity for the nine months ended September 30, 2021: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2020 155,833 $ 4.91 Vested (77,917) Unvested RSUs at September 30, 2021 77,916 $ 4.91 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. Upon the ESPP Effective Date, the Company reserved and authorized up to 500,000 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 shall automatically increases by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 500,000 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 500,000 on January 1, 2021. As of September 30, 2021, 1,836,622 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 $81 thousand and $170 thousand for the three and nine months ended September 30, 2021, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the nine months ended September 30, 2021 and 2020, the Company recognized an income tax benefit of $0.2 million and $2.6 million, respectively. The tax benefit recognized for the nine months ended September 30, 2020 was a result of a tax law change signed into law as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which allowed the Company to carry back certain losses for taxes paid in fiscal year 2017 and thus resulted in a refund claim. The 2021 income tax benefit was a result of the updated estimate of interest receivable and abatement of penalties on the refund claim, as the final federal refund payment was received from the Internal Revenue Service in 2021. The Company recognized a minimal income tax expense for the three months ended September 30, 2021 and 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation - General The Company may become party to various contractual disputes, litigation, and potential claims arising in the ordinary course of business. The Company currently does not believe that the resolution of such matters will have a material adverse effect on its financial position or results of operations except as otherwise disclosed in this report. Karbinal Royalty Make-Whole Provision In 2018, in connection with the acquisition of Avadel’s pediatric 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 Divestiture, which closed on November 1, 2019, the Company assigned all 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. Possible Future Milestone Payments for In-Licensed Compounds General The Company is a party to license and development agreements with various third parties, which contain future payment obligations such as royalties and milestone payments (discussed further below). 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 its own unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. 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 equal to $10.0 million. The Company is also required to pay KKC up to $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 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 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). The Company recognized the upfront license fee of $10.0 million within research and development expenses for the nine months ended September 30, 2021 and made the payment in April 2021. There has been no cumulative expense recognized as of September 30, 2021 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 (which we refer to as 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 $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 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. For the nine months ended September 30, 2021, the Company recognized a $0.5 million development milestone payment within research and development expenses. There has been $0.5 million of cumulative expense recognized as of September 30, 2021 related to the milestones under this license agreement. The Company will continue to monitor the remaining milestones at each reporting period. AVTX-007 AstraZeneca License Agreement The Company has an exclusive global license with Medimmune Limited, a subsidiary of AstraZeneca plc (“AstraZeneca”), to develop and commercialize a fully human, anti-IL-18 monoclonal antibody (which we refer to as AVTX-007). Under the terms of the license agreement, there was an upfront license fee of $6.0 million in cash and equity. The Company is required to pay AstraZeneca up to $71.5 million based on the achievement of certain development and regulatory milestones. Upon commercialization, the Company is required to pay AstraZeneca sales-based milestone payments aggregating up to $90.0 million tied to the achievement of annual net sales targets. Additionally, the Company is also required to pay AstraZeneca royalties during a country-by-country royalty term equal to a tiered low double 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, 2021. There has been $1.5 million of cumulative expense recognized as of September 30, 2021 related to the milestones under this license agreement. The Company will continue to monitor the remaining milestones at each reporting period. AVTX-008 Sanford Burnham Prebys License Agreement On June 22, 2021, the Company entered into an Exclusive Patent License Agreement with Sanford Burnham Prebys Medical Discovery Institute (the “Sanford Burnham Prebys License Agreement”) under which the Company obtained an exclusive license to a portfolio of issued patents and patent applications covering an immune checkpoint program (which we refer to as AVTX-008). Under the terms of the agreement, the Company incurred an upfront license fee of $0.4 million, as well as patent costs of $0.5 million. The Company is required to pay Sanford Burnham Prebys up to $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. The Company recognized the upfront license fee of $0.4 million within research and development expenses and the upfront patent expense of $0.5 million within general and administrative expenses for the nine months ended September 30, 2021. There has been no cumulative expense recognized as of September 30, 2021 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. The Company initially in-licensed the compound from an affiliate of Merck & Co., Inc. (“Merck”) in 2013. Under the out-license agreement, the Company received a mid-six digit upfront payment from Alto. The Company is also eligible to receive up to $18.6 million based on the achievement of specified development, regulatory and commercial sale milestones. Additionally, the Company is entitled to a less than single digit percentage royalty based on annual net sales. Alto is fully responsible for the development and commercialization of the program. Avalo recognized the upfront fee as license revenue for the nine months ended September 30, 2021. The Company has not recognized any milestones as of September 30, 2021. 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, which is a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, currently serve on the Board of the Company. The transaction with ES was approved in accordance with Avalo’s related party transaction policy. Under the assignment agreement, the Company received a low-six digit upfront payment from ES. The Company is also eligible to receive up to $6.0 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is eligible to receive sales-based milestone payments aggregating up to $20.0 million tied to annual net sales targets. ES is fully responsible for the development and commercialization of the program. Avalo recognized the upfront fee as license revenue for the nine months ended September 30, 2021. The Company has not recognized any milestones as of September 30, 2021. AVTX-501 Sale to Janssen In August 2017, the Company sold its worldwide rights to AVTX-501 to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25.0 million. The Company is also eligible to receive up to $20.0 million based on the achievement of specified development and regulatory milestones. Janssen is fully responsible for the development and commercialization of the program. The Company has not recognized any milestones as of September 30, 2021. AVTX-611 License Assignment In August 2019, the Company assigned its rights, title, interest, and obligations under an in-license covering its non-core asset, AVTX-611, to ES, a wholly-owned subsidiary of Armistice, which is a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, currently serve on the Board of the Company. 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, 2021. Related Party and Acquisition Related Contingent Liabilities AVTX-006 Royalty Agreement with Certain Related Parties Prior to Avalo entering into the Aevi Merger, in July 2019, Aevi entered into a royalty agreement with Mike Cola, Avalo’s current Chief Executive Officer, Joseph J. Grano, Jr., Kathleen Jane Grano, Joseph C. Grano, The Grano Children’s Trust, Joseph C. Grano, trustee and LeoGroup Private Investment Access, LLC on behalf of Garry A. Neil, Avalo’s current Chief Scientific Officer (collectively, the “Investors”) in exchange for a one-time aggregate payment of $2.0 million (the “Royalty Agreement”). Collectively, the Investors will be entitled to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of Astellas’ second generation mTORC1/2 inhibitor, AVTX-006. At any time beginning three years after the date of the first public launch of AVTX-006, Avalo may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Avalo assumed this Royalty Agreement upon closing of the Aevi Merger and it is recorded as a royalty obligation within the Company’s accompanying condensed consolidated balance sheet as of September 30, 2021. 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. Aevi Merger Possible Future Milestone Payments A portion of the consideration for the Aevi Merger includes two future contingent development milestones worth up to an additional $6.5 million. The first milestone is the enrollment of a patient in a Phase 2 study related to AVTX-002 for use in pediatric onset Crohn’s disease, AVTX-006 (any indication) or AVTX-007 (any indication) prior to February 3, 2022. If this milestone is met, the Company is required to make a milestone payment of $2.0 million. The second milestone is the receipt of a 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. All milestones are payable in either shares of the Company’s common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of the consummation of the Merger on February 3, 2020 and as of September 30, 2021, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones 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. The first milestone is the first product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million. The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million. The third milestone is a protide molecule being approved 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. All milestones are payable in either shares of the Company’s common stock or cash, at the election of the Company. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020 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, 2020 audited consolidated financial statements. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. |
Aytu Divestiture (Tables)
Aytu Divestiture (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following tables summarizes the liabilities of the discontinued operations as of September 30, 2021 and December 31, 2020 (in thousands): September 30, December 31, 2021 2020 Liabilities Current liabilities: Accrued expenses and other current liabilities $ 10 $ 1,341 Total current liabilities of discontinued operations $ 10 $ 1,341 The following table summarizes the results of discontinued operations for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Product revenue, net $ 76 $ (198) $ 139 $ (1,370) Operating expenses: Sales and marketing — — 101 — Total operating expenses — — 101 — Other income: Change in value of Guarantee — — — 1,755 Total other income — — — 1,755 Income (loss) from discontinued operations, net of tax $ 76 $ (198) $ 38 $ 385 Nine Months Ended September 30, 2021 2020 Change in value of Guarantee — $ (1,755) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Net Loss Per Share of Common Stock | The following tables set forth the computation of basic and diluted net (loss) income per share of common stock and preferred stock for the three and nine months ended September 30, 2021 and 2020 (in thousands, except share and per share amounts): Three Months Ended September 30, 2021 Common stock Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (17,471) $ 76 Denominator: Weighted average shares 100,490,389 100,490,389 Basic and diluted net loss per share $ (0.17) $ 0.00 Nine Months Ended September 30, 2021 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (63,602) $ 37 $ (1,616) $ 1 Denominator: Weighted average shares 95,125,817 95,125,817 483,517 483,517 Basic and diluted net loss per share $ (0.67) $ 0.00 $ (3.34) $ 0.00 Three Months Ended September 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (12,234) $ (183) $ (1,027) $ (15) Denominator: Weighted average shares 74,900,047 74,900,047 1,257,143 1,257,143 Basic and diluted net loss per share $ (0.16) $ (0.01) $ (0.82) $ (0.01) Nine Months Ended September 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (43,511) $ 347 $ (4,731) $ 38 Denominator: Weighted average shares 63,920,795 63,920,795 1,389,990 1,389,990 Basic and diluted net loss per share $ (0.68) $ 0.00 $ (3.40) $ 0.02 |
Schedule of Anti-dilutive Securities Excluded From Computation of Diluted Weighted Shares Outstanding | The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2021 and 2020, as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2021 2020 Stock options 13,473,412 9,548,262 Warrants on common stock 1 4,406,224 4,024,708 Restricted Stock Units 77,916 155,833 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 70,366 $ — $ — December 31, 2020 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* $ 17,503 $ — $ — *Investments in money market funds are reflected in cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Assets and Liabilities Lessee | Supplemental balance sheet information related to the leased properties (excluding the New Chesterbrook Lease) is as follows (in thousands): As of September 30, 2021 December 31, 2020 Property and equipment, net $ 698 $ 917 Accrued expenses and other current liabilities $ 219 $ 426 Other long-term liabilities 977 1,038 Total operating lease liabilities $ 1,196 $ 1,464 |
Lease, Cost | The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease cost* $ 97 $ 102 $ 287 $ 244 |
Lessee, Operating Lease, Liability, Maturity | The following table shows a maturity analysis of the operating lease liabilities as of September 30, 2021 1 (in thousands): Undiscounted Cash Flows October 1, 2021 through December 31, 2021 $ 89 2022 174 2023 178 2024 183 2025 187 2026 192 Thereafter 621 Total lease payments $ 1,624 Less implied interest (428) Total $ 1,196 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of September 30, 2021 and December 31, 2020 consisted of the following (in thousands): As of September 30, 2021 December 31, 2020 Research and development $ 7,425 $ 4,939 Compensation and benefits 3,436 3,119 General and administrative 1,364 771 Sales and marketing 360 31 Commercial operations 1,993 1,913 Royalty payment 653 — Lease liability, current 219 426 Other 10 111 Total accrued expenses and other current liabilities $ 15,460 $ 11,310 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 December 31, 2020 Maturity Initial Note 20,600 — January 2025 Second Note 10,300 — February 2025 Third Note 5,150 — April 2025 Notes payable, gross 1 36,050 — Less: Unamortized debt discount and issuance costs 3,567 — Carrying value of notes payable, non-current $ 32,483 $ — 1 Balance includes $1.1 million final payment fee for the Notes, which represents 3% of the principal loan amount. |
Schedule of Estimated Future Principal Payments | As of September 30, 2021, the estimated future principal payments due on the Notes were as follows (in thousands): As of September 30, 2021 2021 $ — 2022 — 2023 10,278 2024 23,333 2025 2,439 Total principal payments 1 $ 36,050 1 Balance includes $1.1 million final payment fee, which represents 3% of the principal loan amount. |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Outstanding Common Stock Warrants | At September 30, 2021, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 2,380 $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 1,676,923 $ 0.001 — 403,844 $ 2.60 June 2031 6,083,147 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 and 2020 was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Research and development $ 480 $ 384 $ 1,244 $ 1,156 General and administrative 1,171 972 4,720 3,959 Sales and marketing 107 92 316 234 Total stock-based compensation $ 1,758 $ 1,448 $ 6,280 $ 5,349 |
Summary of Option Activity | A summary of option activity for the nine months ended September 30, 2021 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, 2020 8,830,674 $ 3.95 $ 2.36 7.7 Granted 5,017,690 $ 3.24 $ 2.17 Exercised (580,617) $ 2.70 $ 1.74 Forfeited (439,341) $ 3.55 $ 2.27 Expired (354,994) $ 4.53 $ 2.69 Balance at September 30, 2021 12,473,412 $ 3.72 $ 2.30 8.4 Exercisable at September 30, 2021 4,437,524 $ 4.20 $ 2.41 7.4 Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2020 1,000,000 $ 3.29 9.5 $ 65 Granted — $ — Balance at September 30, 2021 1,000,000 $ 3.29 2.7 $ — Exercisable at September 30, 2021 1,000,000 $ — |
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, 2021: Service-based options Expected annual dividend yield —% Expected stock price volatility 73.0% - 86.5% Expected term of option (in years) 0.76 - 6.25 Risk-free interest rate 0.07% - 1.23% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company’s restricted stock unit (“RSU”) activity for the nine months ended September 30, 2021: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2020 155,833 $ 4.91 Vested (77,917) Unvested RSUs at September 30, 2021 77,916 $ 4.91 |
Business (Details)
Business (Details) $ in Thousands | Sep. 29, 2021USD ($) | Sep. 17, 2021USD ($)shares | Jul. 30, 2021USD ($) | Jun. 04, 2021USD ($)shares | Jun. 11, 2020USD ($)shares | Aug. 31, 2021USD ($)shares | Jul. 31, 2021USD ($) | Jan. 31, 2021USD ($)shares | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)shares | Mar. 31, 2021USD ($)shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)tranche | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Subsequent Event [Line Items] | |||||||||||||||
Cash and cash equivalents | $ 71,506 | $ 33,391 | $ 71,506 | $ 33,391 | $ 18,919 | ||||||||||
Sale of stock (in shares) | shares | 13,971,889 | ||||||||||||||
Number of Tranches | tranche | 2 | ||||||||||||||
Net loss | 17,395 | $ 13,459 | $ 65,180 | 47,857 | |||||||||||
Net cash used in operating activities | 53,793 | $ 26,164 | |||||||||||||
Accumulated deficit | 242,970 | 242,970 | $ 177,790 | ||||||||||||
Warrant | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of stock (in shares) | shares | 1,676,923 | 1,676,923 | |||||||||||||
Horizon & Powerscourt Notes | Notes Payable | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Principal amount | $ 35,000 | 35,000 | $ 35,000 | $ 35,000 | |||||||||||
Proceeds from debt | $ 5,000 | $ 10,000 | $ 20,000 | $ 15,000 | $ 20,000 | ||||||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of stock (in shares) | shares | 403,844 | 403,844 | |||||||||||||
Underwritten Public Offering | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of stock (in shares) | shares | 14,308,878 | 15,180,000 | 13,971,889 | ||||||||||||
Net proceeds | $ 29,000 | $ 35,400 | $ 37,700 | $ 37,700 | |||||||||||
ATM Agreement | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of stock (in shares) | shares | 2,000,000 | ||||||||||||||
Net proceeds | $ 5,300 | $ 50,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | Jul. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 1,350 | $ 1,111 | $ 5,179 | $ 5,202 | |
Product Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 1,350 | 1,111 | 4,554 | 5,202 | |
Millipred | Teva | |||||
Disaggregation of Revenue [Line Items] | |||||
Percent of net profit for installment payments | 50.00% | ||||
Installment payment | $ 500 | ||||
Royalty expense | $ 700 | 700 | |||
License revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 0 | $ 0 | $ 625 | $ 0 | |
Sales Revenue | Customer Concentration Risk | Major Customer Number One | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 52.00% | 62.00% | |||
Sales Revenue | Customer Concentration Risk | Major Customer Number Two | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 24.00% | 20.00% | |||
Sales Revenue | Customer Concentration Risk | Major Customer Number Three | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 24.00% | 17.00% |
Aytu Divestiture - Narrative (D
Aytu Divestiture - Narrative (Details) $ in Thousands, shares in Millions | Sep. 01, 2021USD ($)paymentquarter | Nov. 01, 2019USD ($)shares | Dec. 31, 2024USD ($) | Dec. 31, 2022USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Other long-term asset | $ 2,000 | $ 0 | ||||||
Maximum potential future payments | $ 3,000 | |||||||
AYTU | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Remaining contingent consideration | 2,800 | |||||||
Deerfield Obligation | AYTU | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Periodic payment | $ 500 | $ 100 | ||||||
Balloon payment to be paid | $ 15,000 | |||||||
Debt repayment | $ 15,000 | |||||||
Maximum potential future payments | $ 3,000 | |||||||
Number of quarterly payments | payment | 6 | |||||||
Number of quarters with payments | quarter | 6 | |||||||
AYTU | Convertible Preferred Stock | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Investment (in shares) | shares | 9.8 | |||||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from sale of assets | $ 4,500 | |||||||
Other long-term asset | $ 2,000 | |||||||
Sales returns | 800 | |||||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Minimum | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Sales returns | 2,000 | |||||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Maximum | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Sales returns | $ 2,800 | |||||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Forecast | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from divestiture of businesses | $ 1,000 | $ 1,000 |
Aytu Divestiture - Summary of L
Aytu Divestiture - Summary of Liabilities of the Discontinued Operations (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current liabilities: | ||
Total current liabilities of discontinued operations | $ 10 | $ 1,341 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Current liabilities: | ||
Accrued expenses and other current liabilities | 10 | 1,341 |
Total current liabilities of discontinued operations | $ 10 | $ 1,341 |
Aytu Divestiture - Summary of I
Aytu Divestiture - Summary of Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other income: | ||||
Change in value of Guarantee | $ 0 | $ 1,755 | ||
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Product revenue, net | $ 76 | $ (198) | 139 | (1,370) |
Operating expenses: | ||||
Sales and marketing | 0 | 0 | 101 | 0 |
Total operating expenses | 0 | 0 | 101 | 0 |
Other income: | ||||
Change in value of Guarantee | 0 | 0 | 0 | 1,755 |
Total other income | 0 | 0 | 0 | 1,755 |
Income (loss) from discontinued operations, net of tax | $ 76 | $ (198) | $ 38 | $ 385 |
Aytu Divestiture - Summary of C
Aytu Divestiture - Summary of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Change in value of Guarantee | $ 0 | $ (1,755) | ||
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Change in value of Guarantee | $ 0 | $ 0 | $ 0 | $ (1,755) |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | Dec. 27, 2018 | Dec. 26, 2018 | Apr. 30, 2021shares | Sep. 30, 2021 | Mar. 31, 2020shares | Sep. 30, 2021class_of_stockshares | Sep. 30, 2020shares |
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of classes of stock outstanding | class_of_stock | 2 | ||||||
Preferred stock conversion ratio | 0.20 | 0.20 | |||||
Preferred Stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Conversion to common stock (in shares) | (1,257,143) | (1,600,000) | |||||
Common Stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Conversion to common stock (in shares) | 6,285,715 | 8,000,000 | 6,285,715 | 8,000,000 | |||
Series B Preferred Stock | Preferred Stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | ||||
Shares converted (in shares) | 1,257,143 | 1,600,000 | 1,257,143 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Common stock | ||||
Numerator [Abstract] | ||||
Allocation of undistributed net loss, continuing operations, basic | $ (17,471) | $ (12,234) | $ (63,602) | $ (43,511) |
Allocation of undistributed net loss, continuing operations, diluted | (17,471) | (12,234) | (63,602) | (43,511) |
Allocation of undistributed net loss, discontinued operations, basic | 76 | (183) | 37 | 347 |
Allocation of undistributed net loss, discontinued operations, diluted | $ 76 | $ (183) | $ 37 | $ 347 |
Denominator [Abstract] | ||||
Weighted average shares, basic (in shares) | 100,490,389 | 74,900,047 | 95,125,817 | 63,920,795 |
Weighted average shares, diluted (in shares) | 100,490,389 | 74,900,047 | 95,125,817 | 63,920,795 |
Basic net loss per share, continuing operations (in dollars per share) | $ (0.17) | $ (0.16) | $ (0.67) | $ (0.68) |
Diluted net loss per share, continuing operations (in dollars per share) | (0.17) | (0.16) | (0.67) | (0.68) |
Basic net loss per share, discontinued operations (in dollars per share) | 0 | (0.01) | 0 | 0 |
Diluted net loss per share, discontinued operations (in dollars per share) | $ 0 | $ (0.01) | $ 0 | $ 0 |
Preferred Stock | ||||
Numerator [Abstract] | ||||
Allocation of undistributed net loss, continuing operations, basic | $ (1,027) | $ (1,616) | $ (4,731) | |
Allocation of undistributed net loss, continuing operations, diluted | (1,027) | (1,616) | (4,731) | |
Allocation of undistributed net loss, discontinued operations, basic | (15) | 1 | 38 | |
Allocation of undistributed net loss, discontinued operations, diluted | $ (15) | $ 1 | $ 38 | |
Denominator [Abstract] | ||||
Weighted average shares, basic (in shares) | 1,257,143 | 483,517 | 1,389,990 | |
Weighted average shares, diluted (in shares) | 1,257,143 | 483,517 | 1,389,990 | |
Basic net loss per share, continuing operations (in dollars per share) | $ (0.82) | $ (3.34) | $ (3.40) | |
Diluted net loss per share, continuing operations (in dollars per share) | (0.82) | (3.34) | (3.40) | |
Basic net loss per share, discontinued operations (in dollars per share) | (0.01) | 0 | 0.02 | |
Diluted net loss per share, discontinued operations (in dollars per share) | $ (0.01) | $ 0 | $ 0.02 |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 31, 2021 | |
Nantahala | |||||
Anti-dilutive securities | |||||
Number of shares available under warrant (in shares) | 1,676,923 | 1,676,923 | 1,676,923 | ||
Stock options | |||||
Anti-dilutive securities | |||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 13,473,412 | 9,548,262 | 13,473,412 | 9,548,262 | |
Warrants on common stock | |||||
Anti-dilutive securities | |||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 4,406,224 | 4,024,708 | 4,406,224 | 4,024,708 | |
Restricted Stock Units | |||||
Anti-dilutive securities | |||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 77,916 | 155,833 | 77,916 | 155,833 |
Asset Acquisition (Details)
Asset Acquisition (Details) - Aevi - USD ($) shares in Millions, $ in Millions | Feb. 03, 2020 | Mar. 31, 2020 |
Business Acquisition [Line Items] | ||
Consideration transferred, shares issued | $ 15.5 | |
Shares issued (in shares) | 3.9 | 3.9 |
Forgiveness of loan | $ 4.1 | |
Contingent consideration | $ 6.5 | 6.5 |
Transaction costs | 1.5 | |
Fair value of asset acquisition | 25.5 | |
Fair value assigned to intangible asset at purchase | 24 | |
Cash acquired | 0.3 | |
Assembled Workforce | ||
Business Acquisition [Line Items] | ||
Intangible assets acquired | $ 0.9 | |
Useful life | 2 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 70,366 | $ 17,503 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)change | Sep. 30, 2020USD ($)change | |
Fair Value Disclosures [Abstract] | ||
Number of changes in valuation techniques | change | 0 | 0 |
Amount of transfers of assets from level 1 to level 2 | $ 0 | $ 0 |
Amount of transfers of assets from level 2 to level 1 | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($)propertyrenewal_option | |
Lessee, Lease, Description [Line Items] | |
Number of leased properties | property | 2 |
Annual base rent | $ 0.2 |
Lease term of contract | 5 years 3 months |
Discount rate | 7.60% |
Remaining lease team | 8 years |
Building | Maryland | |
Lessee, Lease, Description [Line Items] | |
Annual base rent | $ 0.2 |
Annual rent increase | 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 base rent | $ 0.3 |
Lease term of contract | 5 years 3 months |
Lessee, operating lease, annual base rent | $ 0.2 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Property and equipment, net | $ 698 | $ 917 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Accrued expenses and other current liabilities | $ 219 | $ 426 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Other long-term liabilities | $ 977 | $ 1,038 |
Total operating lease liabilities | $ 1,196 | $ 1,464 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 97 | $ 102 | $ 287 | $ 244 |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
October 1, 2021 through December 31, 2021 | $ 89 | |
2022 | 174 | |
2023 | 178 | |
2024 | 183 | |
2025 | 187 | |
2026 | 192 | |
Thereafter | 621 | |
Total lease payments | 1,624 | |
Less implied interest | (428) | |
Operating lease liability | $ 1,196 | $ 1,464 |
Lease term of contract | 5 years 3 months | |
Annual base rent | $ 200 |
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, 2021 | Dec. 31, 2020 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Research and development | $ 7,425 | $ 4,939 |
Compensation and benefits | 3,436 | 3,119 |
General and administrative | 1,364 | 771 |
Sales and marketing | 360 | 31 |
Commercial operations | 1,993 | 1,913 |
Royalty payment | 653 | 0 |
Lease liability, current | 219 | 426 |
Other | 10 | 111 |
Total accrued expenses and other current liabilities | $ 15,460 | $ 11,310 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) $ / shares in Units, $ in Millions | Sep. 29, 2021USD ($) | Jul. 30, 2021USD ($) | Jun. 04, 2021USD ($)business_day$ / sharesshares | Jan. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021shares | Sep. 30, 2021USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Sale of stock (in shares) | shares | 13,971,889 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.001 | |||||||
Proceeds from issuance of warrants | $ 4.4 | |||||||
Warrant | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Sale of stock (in shares) | shares | 1,676,923 | 1,676,923 | ||||||
Horizon & Powerscourt Notes | Notes Payable | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Principal amount | $ 35 | $ 35 | $ 35 | $ 35 | ||||
Proceeds from debt | $ 5 | $ 10 | $ 20 | $ 15 | $ 20 | |||
Debt instrument, term | 42 months | |||||||
Interest rate | 6.25% | |||||||
Interest-only payment period | 18 months | |||||||
Interest-only payment extension period | 24 months | |||||||
Number of business days required for prepayment | business_day | 10 | |||||||
Prepayment charges percentage | 3.00% | |||||||
Additional final payment percentage | 3.00% | 3.00% | 3.00% | |||||
Proceeds from issuance of warrants | $ 0.9 | |||||||
Debt issuance costs incurred | $ 0 | $ 2.1 | ||||||
Payments of debt issuance costs | $ 1.7 | |||||||
Effective rate | 13.50% | 13.50% | ||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Sale of stock (in shares) | shares | 403,844 | 403,844 | ||||||
Exercise price per share (in dollars per share) | $ / shares | $ 2.60 | $ 2.60 | ||||||
Warrants or rights exercisable term | 10 years | 10 years | ||||||
Horizon & Powerscourt Notes | Notes Payable | Prime Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Floor interest rate | 3.25% |
Notes Payable - Balance Sheet I
Notes Payable - Balance Sheet Information (Details) - Horizon & Powerscourt Notes - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 04, 2021 | Dec. 31, 2020 |
Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 36,050 | $ 0 | |
Less: Unamortized debt discount and issuance costs | 3,567 | 0 | |
Carrying value of notes payable, non-current | 32,483 | 0 | |
Final payment fee | $ 1,100 | ||
Additional final payment percentage | 3.00% | 3.00% | |
Initial Note | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 20,600 | 0 | |
Second Note | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 10,300 | 0 | |
Third Note | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 5,150 | $ 0 |
Notes Payable - Estimated Futur
Notes Payable - Estimated Future Principal Payments (Details) - Horizon & Powerscourt Notes - Notes Payable - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 04, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
2021 | $ 0 | ||
2022 | 0 | ||
2023 | 10,278 | ||
2024 | 23,333 | ||
2025 | 2,439 | ||
Total principal payments | 36,050 | $ 0 | |
Final payment fee | $ 1,100 | ||
Additional final payment percentage | 3.00% | 3.00% |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) $ / shares in Units, $ in Millions | Sep. 17, 2021USD ($)shares | Jun. 04, 2021USD ($)$ / sharesshares | Jun. 11, 2020USD ($)shares | Mar. 17, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Feb. 03, 2020shares | Dec. 27, 2018 | Dec. 26, 2018shares | Aug. 31, 2021USD ($)shares | Jul. 31, 2021USD ($) | Apr. 30, 2021shares | Jan. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021class_of_stock$ / sharesshares | Jun. 30, 2021$ / sharesshares | Mar. 31, 2021USD ($)shares | Mar. 31, 2020shares | Sep. 30, 2021class_of_stock$ / sharesshares | Sep. 30, 2020shares | Dec. 31, 2020$ / sharesshares |
Common Stock | |||||||||||||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | 2 | |||||||||||||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | 205,000,000 | |||||||||||||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Sale of stock (in shares) | 13,971,889 | ||||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||||
Percent ownership threshold | 9.99% | ||||||||||||||||||
Proceeds from issuance of warrants | $ | $ 4.4 | ||||||||||||||||||
Preferred stock conversion ratio | 0.20 | 0.20 | |||||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 1,257,143 | ||||||||||||||||
Preferred Stock | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Conversion to common stock (in shares) | (1,257,143) | (1,600,000) | |||||||||||||||||
Preferred Stock | Series B Preferred Stock | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | ||||||||||||||||
Shares converted (in shares) | 1,257,143 | 1,600,000 | 1,257,143 | ||||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||||||||||||||
Common Stock | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Conversion to common stock (in shares) | 6,285,715 | 8,000,000 | 6,285,715 | 8,000,000 | |||||||||||||||
Aevi | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Shares issued (in shares) | 3,900,000 | 3,900,000 | |||||||||||||||||
Nantahala Capital Management LLC | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Percentage of ownership | 5.00% | ||||||||||||||||||
Warrant | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 1,676,923 | 1,676,923 | |||||||||||||||||
Horizon & Powerscourt Notes | Notes Payable | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Proceeds from issuance of warrants | $ | $ 0.9 | ||||||||||||||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 403,844 | 403,844 | |||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 2.60 | $ 2.60 | |||||||||||||||||
Warrants or rights exercisable term | 10 years | 10 years | |||||||||||||||||
Nantahala | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Number of shares available under warrant (in shares) | 1,676,923 | 1,676,923 | 1,676,923 | ||||||||||||||||
Underwritten Public Offering | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 14,308,878 | 15,180,000 | 13,971,889 | ||||||||||||||||
Net proceeds | $ | $ 29 | $ 35.4 | $ 37.7 | $ 37.7 | |||||||||||||||
Underwritten Public Offering | Armistice | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 5,454,545 | 2,000,000 | 2,500,000 | ||||||||||||||||
Underwritten Public Offering | Nantahala | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 1,400,000 | ||||||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 2.599 | ||||||||||||||||||
Underwritten Public Offering | Officers | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 110,000 | ||||||||||||||||||
ATM Agreement | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 2,000,000 | ||||||||||||||||||
Net proceeds | $ | $ 5.3 | $ 50 | |||||||||||||||||
Armistice Purchase Agreement | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 1,951,219 | ||||||||||||||||||
Net proceeds | $ | $ 3.9 | ||||||||||||||||||
Registered Direct Offering | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 1,306,282 | ||||||||||||||||||
Net proceeds | $ | $ 5.1 | ||||||||||||||||||
Registered Direct Offering | Armistice | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Sale of stock (in shares) | 1,256,282 | ||||||||||||||||||
Private Placement | Preferred Stock | Series B Preferred Stock | |||||||||||||||||||
Common Stock | |||||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 |
Capital Structure - Warrants (D
Capital Structure - Warrants (Details) - $ / shares | Sep. 30, 2021 | Jan. 31, 2021 |
Common Stock Warrants | ||
Exercise price per share (in dollars per share) | $ 0.001 | |
Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 6,083,147 | |
Common Stock Warrants Expiration May 2022 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 2,380 | |
Exercise price per share (in dollars per share) | $ 8.68 | |
Common Stock Warrants Expiration Date Of June 2024 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 4,000,000 | |
Exercise price per share (in dollars per share) | $ 12.50 | |
Common Stock Warrants No Expiration | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 1,676,923 | |
Exercise price per share (in dollars per share) | $ 0.001 | |
Common Stock Warrants Expiration June 2031 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 403,844 | |
Exercise price per share (in dollars per share) | $ 2.60 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) | Jan. 01, 2021 | May 18, 2016 | Apr. 05, 2016 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jan. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Aug. 31, 2019 | May 31, 2018 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Common stock remaining for future issuance (in shares) | 1,748,433 | 1,748,433 | 1,748,433 | |||||||||||||
Annual share reserve increase | 4.00% | |||||||||||||||
Total stock-based compensation | $ 1,758,000 | $ 1,448,000 | $ 6,280,000 | $ 5,349,000 | ||||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Common stock remaining for future issuance (in shares) | 1,836,622 | 1,836,622 | 1,836,622 | |||||||||||||
Purchase price of common stock, percentage | 85.00% | |||||||||||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15.00% | |||||||||||||||
Maximum annual amount of fair market value of the company's common stock that a participant may accrue the rights to purchase | $ 25,000 | |||||||||||||||
Shares of common stock for future issuance (in shares) | 500,000 | |||||||||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1.00% | |||||||||||||||
Increase in shares available (in shares) | 500,000 | |||||||||||||||
Special Advisor To The Board | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award requisite service period | 1 year | |||||||||||||||
Total stock-based compensation | $ 1,400,000 | |||||||||||||||
Market Based Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted (in shares) | 0 | |||||||||||||||
Exercisable aggregate intrinsic value | $ 0 | $ 0 | $ 0 | |||||||||||||
Market Based Options | Special Advisor To The Board | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total stock-based compensation | 1,000,000 | |||||||||||||||
Service Based Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total stock-based compensation | 1,700,000 | 5,000,000 | ||||||||||||||
Compensation not yet recognized | 14,800,000 | 14,800,000 | $ 14,800,000 | |||||||||||||
Period for recognition | 2 years 9 months 18 days | |||||||||||||||
Granted (in shares) | 5,017,690 | |||||||||||||||
Share-based compensation on service-based vesting conditions | $ 2,700,000 | |||||||||||||||
Outstanding intrinsic value | 200,000 | 200,000 | $ 200,000 | |||||||||||||
Exercisable aggregate intrinsic value | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||||||
Options vested (in shares) | 2,466,684 | |||||||||||||||
Weighted average exercise price (in dollars per share) | $ 3.64 | $ 3.64 | $ 3.64 | |||||||||||||
Fair value of options vested in period | $ 5,600,000 | |||||||||||||||
Service Based Options | Special Advisor To The Board | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total stock-based compensation | $ 400,000 | |||||||||||||||
Compensation not yet recognized | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||||||
Period for recognition | 8 months 12 days | |||||||||||||||
Service Based Options | Executive Officer | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted (in shares) | 500,000 | |||||||||||||||
Service Based Options | Chief Executive Officer | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Annual base salary | $ 35,568 | |||||||||||||||
Restricted Stock Awards | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting period | 4 years | |||||||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total stock-based compensation | $ 81,000 | $ 170,000 | ||||||||||||||
2016 Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 600,000 | 1,400,000 | ||||||||||||||
Common stock remaining for future issuance (in shares) | 464,476 | |||||||||||||||
2016 Plan | Equity Option | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award expiration period | 10 years | |||||||||||||||
2016 Plan | Equity Option | Minimum | Director | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting period | 1 year | |||||||||||||||
2016 Plan | Equity Option | Minimum | Employee | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting period | 3 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 Second Amended Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 850,000 | |||||||||||||||
2016 Third Amended Plan | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 2,014,400 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 1,758 | $ 1,448 | $ 6,280 | $ 5,349 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 480 | 384 | 1,244 | 1,156 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 1,171 | 972 | 4,720 | 3,959 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 107 | $ 92 | $ 316 | $ 234 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Options With Service-based Vesting Conditions (Details) - Service Based Options - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Number of shares | ||
Balance, beginning of period (in shares) | 8,830,674 | |
Granted (in shares) | 5,017,690 | |
Exercises (in shares) | (580,617) | |
Forfeited (in shares) | (439,341) | |
Expired (in shares) | (354,994) | |
Balance, ending of period (in shares) | 12,473,412 | 8,830,674 |
Exercisable (in shares) | 4,437,524 | |
Weighted average exercise price per share | ||
Balance (in dollars per share) | $ 3.72 | $ 3.95 |
Granted (in dollars per share) | 3.24 | |
Exercised (in dollars per share) | 2.70 | |
Forfeited (in dollars per share) | 3.55 | |
Expired (in dollars per share) | 4.53 | |
Exercisable (in dollars per share) | 4.20 | |
Option Activity, Fair value of options granted | ||
Balance (in dollars per share) | 2.30 | $ 2.36 |
Granted (in dollars per share) | 2.17 | |
Exercised (in dollars per share) | 1.74 | |
Forfeited (in dollars per share) | 2.27 | |
Expired (in dollars per share) | 2.69 | |
Exercisable (in dollars per share) | $ 2.41 | |
Weighted average remaining contractual term (in years) | ||
Balance | 8 years 4 months 24 days | 7 years 8 months 12 days |
Exercisable | 7 years 4 months 24 days |
Stock Based Compensation - St_3
Stock Based Compensation - Stock-based Compensation Assumptions (Details) - Service Based Options | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected annual dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected stock price volatility | 73.00% |
Expected term of option (in years) | 9 months 3 days |
Risk-free interest rate | 0.07% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected stock price volatility | 86.50% |
Expected term of option (in years) | 6 years 3 months |
Risk-free interest rate | 1.23% |
Stock Based Compensation - St_4
Stock Based Compensation - Stock Options With Company's Market-based Option Activity (Details) - Market Based Options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Number of shares | |||
Balance, beginning of period (in shares) | 1,000,000 | ||
Granted (in shares) | 0 | ||
Balance, ending of period (in shares) | 1,000,000 | 1,000,000 | |
Exercisable (in shares) | 1,000,000 | ||
Weighted average exercise price per share | |||
Balance (in dollars per share) | $ 3.29 | $ 3.29 | |
Granted (in dollars per share) | $ 0 | ||
Weighted average remaining contractual term (in years) | |||
Balance | 2 years 8 months 12 days | 9 years 6 months | |
Aggregate intrinsic value | |||
Aggregate intrinsic value | $ 65 | $ 0 | |
Exercisable aggregate intrinsic value | $ 0 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Units (Details) - Restricted Stock Awards - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Restricted Stock Award, Number of Shares | ||
Unvested RSUs at December 31, 2020 (in shares) | 155,833 | |
Vested (in shares) | (77,917) | |
Unvested RSUs at June 30, 2021 (in shares) | 77,916 | |
Weighted average grant date fair value | ||
Unvested RSUs balance (in dollars per share) | $ 4.91 | $ 4.91 |
Vested (in dollars per share) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ (8) | $ (3) | $ 180 | $ 2,607 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, $ in Thousands | Feb. 03, 2020USD ($)milestone | Jul. 31, 2019USD ($) | Sep. 30, 2018USD ($)therapymilestone | Aug. 31, 2017USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2018unit$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2023USD ($) | Jun. 22, 2021USD ($) | Jun. 09, 2021USD ($) | May 28, 2021USD ($) | Mar. 25, 2021USD ($) | Aug. 31, 2019USD ($) |
Operating Leased Assets [Line Items] | |||||||||||||||||
General and administrative expense | $ 5,188 | $ 4,573 | $ 16,718 | $ 13,350 | |||||||||||||
Payment received | $ 2,000 | ||||||||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||||||||
Percentage of net present value of royalty payments | 75.00% | ||||||||||||||||
Aevi | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Milestone payment | 0 | ||||||||||||||||
Aevi | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Number of milestones | milestone | 2 | ||||||||||||||||
Contingent consideration | $ 6,500 | $ 6,500 | |||||||||||||||
Ichorion | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Number of milestones | milestone | 3 | ||||||||||||||||
Contingent consideration | $ 15,000 | ||||||||||||||||
Milestone payment | 0 | ||||||||||||||||
AVTX-801, AVTX-802, And AVTX-803 | Ichorion | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||||||||
AVTX-913 | Ichorion | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Number of preclinical therapies | therapy | 1 | ||||||||||||||||
Milestone One | Aevi | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Contingent consideration | 2,000 | ||||||||||||||||
Milestone One | Ichorion | Forecast | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Milestone payment | $ 6,000 | ||||||||||||||||
Milestone Two | Aevi | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Contingent consideration | $ 4,500 | ||||||||||||||||
Milestone Two | Ichorion | Forecast | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Milestone payment | $ 5,000 | ||||||||||||||||
Milestone Three | Ichorion | Forecast | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Milestone payment | $ 4,000 | ||||||||||||||||
Alto | AVTX-301 Out-License | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum proceeds from milestones | $ 18,600 | ||||||||||||||||
Revenue recognized from milestones to date | 0 | 0 | |||||||||||||||
ES | AVTX-406 License Assignment | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Revenue recognized from milestones to date | 0 | 0 | |||||||||||||||
ES | AVTX-611 License Assignment | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum proceeds from milestones | $ 20,000 | ||||||||||||||||
Revenue recognized from milestones to date | 0 | 0 | |||||||||||||||
ES | Milestone One | AVTX-406 License Assignment | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum proceeds from milestones | $ 6,000 | ||||||||||||||||
ES | Milestone Two | AVTX-406 License Assignment | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum proceeds from milestones | $ 20,000 | ||||||||||||||||
Janssen Pharmaceuticals, Inc. (Janssen) | AVTX-501 | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum proceeds from milestones | $ 20,000 | ||||||||||||||||
Revenue recognized from milestones to date | 0 | 0 | |||||||||||||||
Proceeds from sale | $ 25,000 | ||||||||||||||||
Karbinal Agreement | TRIS Pharma | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Minimum quantity required | unit | 70,000 | ||||||||||||||||
Make whole payment per unit (in dollars per share) | $ / shares | $ 30 | ||||||||||||||||
AVTX-002 KKC License Agreement | Kyowa Kirin Co., Ltd. (KKC) | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Upfront license fee | $ 10,000 | ||||||||||||||||
Percent of payments received from sublicensing | 30.00% | ||||||||||||||||
Research and development expense | 10,000 | ||||||||||||||||
Cumulative expense recognized to date | 0 | 0 | |||||||||||||||
AVTX-002 KKC License Agreement | Kyowa Kirin Co., Ltd. (KKC) | Milestone One | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | $ 112,500 | ||||||||||||||||
AVTX-002 KKC License Agreement | Kyowa Kirin Co., Ltd. (KKC) | Milestone Two | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | $ 75,000 | ||||||||||||||||
AVTX-006 Astellas License Agreement | Astellas Pharma, Inc. (Astellas) | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Upfront license fee | 500 | 500 | |||||||||||||||
Maximum aggregate milestone payment | 5,500 | 5,500 | |||||||||||||||
Research and development expense | 500 | ||||||||||||||||
Cumulative expense recognized to date | 500 | 500 | |||||||||||||||
AVTX-007 AstraZeneca License Agreement | AstraZeneca plc (AstraZeneca) | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Upfront license fee | 6,000 | 6,000 | |||||||||||||||
Research and development expense | 0 | ||||||||||||||||
Cumulative expense recognized to date | 1,500 | 1,500 | |||||||||||||||
AVTX-007 AstraZeneca License Agreement | AstraZeneca plc (AstraZeneca) | Milestone One | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | 71,500 | 71,500 | |||||||||||||||
AVTX-007 AstraZeneca License Agreement | AstraZeneca plc (AstraZeneca) | Milestone Two | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | 90,000 | 90,000 | |||||||||||||||
AVTX-008 Sanford Burnham Prebys License Agreement | Sanford Burnham Prebys Medical Discovery Institute | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Upfront license fee | $ 400 | ||||||||||||||||
Research and development expense | 400 | ||||||||||||||||
Cumulative expense recognized to date | $ 0 | 0 | |||||||||||||||
Patent costs | 500 | ||||||||||||||||
General and administrative expense | $ 500 | ||||||||||||||||
AVTX-008 Sanford Burnham Prebys License Agreement | Sanford Burnham Prebys Medical Discovery Institute | Milestone One | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | 24,200 | ||||||||||||||||
AVTX-008 Sanford Burnham Prebys License Agreement | Sanford Burnham Prebys Medical Discovery Institute | Milestone Two | |||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||
Maximum aggregate milestone payment | $ 50,000 |