Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 27, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37590 | ||
Entity Registrant Name | AVALO THERAPEUTICS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-0705648 | ||
Entity Address, Address Line One | 540 Gaither Road | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Rockville | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20850 | ||
City Area Code | 410 | ||
Local Phone Number | 522-8707 | ||
Title of 12(b) Security | Common Stock, $0.001 Par Value | ||
Trading Symbol | AVTX | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.8 | ||
Entity Common Stock, Shares Outstanding | 1,034,130 | ||
Entity Central Index Key | 0001534120 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Tysons, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Current assets: | |||
Cash and cash equivalents | $ 7,415 | $ 13,172 | |
Other receivables | 136 | 1,919 | |
Inventory, net | 0 | 20 | |
Prepaid expenses and other current assets | 843 | 1,290 | |
Restricted cash, current portion | 1 | 15 | |
Total current assets | 8,395 | 16,416 | |
Property and equipment, net | 1,965 | 2,411 | |
Goodwill | 10,502 | 14,409 | |
Restricted cash, net of current portion | 131 | 131 | |
Total assets | 20,993 | 33,367 | |
Current liabilities: | |||
Accounts payable | 446 | 2,882 | |
Deferred revenue | 0 | 88 | |
Accrued expenses and other current liabilities | 4,172 | 13,214 | |
Notes payable, current | 0 | 5,930 | |
Total current liabilities | 4,618 | 22,114 | |
Notes payable, non-current | 0 | 13,486 | |
Royalty obligation | 2,000 | 2,000 | |
Deferred tax liability, net | 155 | 141 | |
Derivative liability | 5,550 | 4,830 | |
Other long-term liabilities | 1,366 | 1,711 | |
Total liabilities | 13,689 | 44,282 | |
Stockholders’ equity (deficit) : | |||
Common stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2023 and 2022; 801,746 and 39,295 shares issued and outstanding at December 31, 2023 and 2022, respectively | [1] | 1 | 0 |
Additional paid-in capital | [1] | 342,437 | 292,909 |
Accumulated deficit | (335,134) | (303,824) | |
Total stockholders’ equity (deficit) | 7,304 | (10,915) | |
Total liabilities and stockholders’ equity (deficit) | $ 20,993 | $ 33,367 | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Dec. 31, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | [1] | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | [1] | 801,746 | 39,294 |
Common stock, shares outstanding (in shares) | [1] | 801,746 | 39,294 |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenues: | |||
Total revenues, net | $ 1,924 | $ 18,051 | |
Operating expenses: | |||
Cost of product sales | 1,284 | 3,434 | |
Research and development | 13,784 | 31,308 | |
Selling, general and administrative | 10,300 | 20,711 | |
Goodwill impairment | 3,907 | 0 | |
Amortization expense | 0 | 38 | |
Total operating expenses | 29,275 | 55,491 | |
Operating income (loss) | (27,351) | (37,440) | |
Other expense: | |||
Interest expense, net | (3,417) | (4,170) | |
Change in fair value of derivative liability | (720) | 0 | |
Other expense, net | (42) | (20) | |
Total other expense, net | (4,179) | (4,190) | |
Loss before income taxes | (31,530) | (41,630) | |
Income tax expense | 14 | 28 | |
Net loss | $ (31,544) | $ (41,658) | |
Net loss per share of common stock, basic (in dollars per share) | [1] | $ (114) | $ (1,063) |
Net loss per share of common stock, diluted (in dollars per share) | [1] | $ (114) | $ (1,063) |
Product revenue, net | |||
Revenues: | |||
Total revenues, net | $ 1,408 | $ 3,364 | |
License and other revenue | |||
Revenues: | |||
Total revenues, net | $ 516 | $ 14,687 | |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) | Dec. 28, 2023 | Jul. 07, 2022 |
Income Statement [Abstract] | ||
Conversion ratio | 0.0042 | 0.0833 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | ATM Agreement | Underwritten Public Offering | Common stock | Common stock ATM Agreement | Common stock Underwritten Public Offering | Additional paid-in capital | [1] | Additional paid-in capital ATM Agreement | [1] | Additional paid-in capital Underwritten Public Offering | [1] | Accumulated deficit | |||
Balance at the beginning (in shares) at Dec. 31, 2021 | [1] | 39,164 | ||||||||||||||
Balance at the beginning at Dec. 31, 2021 | $ 23,082 | $ 0 | [1] | $ 285,248 | $ (262,166) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of stock (in shares) | [1] | 23 | ||||||||||||||
Issuance of common stock | $ 34 | $ 34 | ||||||||||||||
Restricted stock units vested during the period (in shares) | [1] | 4 | ||||||||||||||
Shares purchased through employee stock purchase plan (in shares) | [1] | 68 | ||||||||||||||
Shares purchased through employee stock purchase plan | 73 | 73 | ||||||||||||||
Impact of reverse stock split fractional share round-up (in shares) | [1] | 35 | ||||||||||||||
Stock-based compensation | 7,554 | 7,554 | ||||||||||||||
Net loss | $ (41,658) | (41,658) | ||||||||||||||
Balance at the end (in shares) at Dec. 31, 2022 | 39,294 | [2] | 39,294 | [1] | ||||||||||||
Balance at the end at Dec. 31, 2022 | $ (10,915) | $ 0 | [1] | 292,909 | (303,824) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of stock (in shares) | [1] | 746,076 | 15,709 | |||||||||||||
Issuance of common stock | $ 32,470 | $ 13,749 | $ 1 | [1] | $ 32,469 | $ 13,749 | ||||||||||
Retirement of common shares in exchange for pre-funded warrants (in shares) | [1] | (5,417) | ||||||||||||||
Retirement of common shares in exchange for pre-funded warrants | (3,640) | (3,874) | 234 | |||||||||||||
Issuance of pre-funded warrants in exchange or retirement of common shares | 3,640 | 3,640 | ||||||||||||||
Exercise of pre-funded warrants for common shares (in shares) | [1] | 5,850 | ||||||||||||||
Shares purchased through employee stock purchase plan (in shares) | [1] | 99 | ||||||||||||||
Shares purchased through employee stock purchase plan | 67 | 67 | ||||||||||||||
Impact of reverse stock split fractional share round-up (in shares) | [1] | 135 | ||||||||||||||
Stock-based compensation | 3,477 | 3,477 | ||||||||||||||
Net loss | $ (31,544) | (31,544) | ||||||||||||||
Balance at the end (in shares) at Dec. 31, 2023 | 801,746 | [2] | 801,746 | [1] | ||||||||||||
Balance at the end at Dec. 31, 2023 | $ 7,304 | $ 1 | [1] | $ 342,437 | $ (335,134) | |||||||||||
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details.[2]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Parenthetical) | Dec. 28, 2023 | Jul. 07, 2022 |
Statement of Stockholders' Equity [Abstract] | ||
Conversion ratio | 0.0042 | 0.0833 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating activities | ||
Net loss | $ (31,544) | $ (41,658) |
Adjustments to reconcile net loss used in operating activities: | ||
Stock-based compensation | 3,477 | 7,554 |
Depreciation and amortization | 158 | 166 |
Accretion of debt discount | 1,828 | 1,389 |
Allowance for other long-term asset | 0 | 1,000 |
Deferred taxes | 14 | 28 |
Change in fair value of derivative liability | 720 | 4,830 |
Goodwill impairment | 3,907 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 0 | 1,060 |
Other receivables | 1,783 | 1,820 |
Inventory, net | 20 | 18 |
Prepaid expenses and other assets | 447 | 1,082 |
Lease incentive | 158 | |
Accounts payable | (2,436) | (487) |
Deferred revenue | (88) | 88 |
Accrued expenses and other liabilities, excluding lease liability | (9,048) | (3,632) |
Lease liability, net | (76) | (9) |
Net cash used in operating activities | (30,680) | (26,751) |
Investing activities | ||
Leasehold improvements | (158) | 0 |
Disposal of property and equipment | 25 | 0 |
Purchase of property and equipment | 0 | (95) |
Net cash used in investing activities | (133) | (95) |
Financing activities | ||
Proceeds from sale of common stock pursuant to ATM Program, net | 32,470 | 34 |
Proceeds from issuance of common stock in underwritten public offering, net | 13,749 | (14,806) |
Principal payments on Notes | (21,244) | 0 |
Proceeds from issuance of common stock under employee stock purchase plan | 67 | 73 |
Net cash provided by (used in) financing activities | 25,042 | (14,699) |
Decrease in cash, cash equivalents, and restricted cash | (5,771) | (41,545) |
Cash, cash equivalents, and restricted cash at beginning of period | 13,318 | 54,863 |
Cash, cash equivalents, and restricted cash at end of period | 7,547 | 13,318 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 1,925 | 2,931 |
Supplemental disclosures of non-cash activities | ||
Fair value of common stock retired in exchange for issuance of pre-funded warrants | 3,640 | 0 |
Cash and cash equivalents | 7,415 | 13,172 |
Restricted cash, current | 1 | 15 |
Restricted cash, non-current | 131 | 131 |
Total cash, cash equivalents and restricted cash | $ 7,547 | $ 13,318 |
Business
Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Avalo Therapeutics, Inc. (the “Company” or “Avalo” or “we”) is a clinical stage biotechnology company focused on the treatment of immune dysregulation. Avalo’s lead asset is AVTX-009, an anti-IL-1β monoclonal antibody (“mAb”) targeting inflammatory diseases. Avalo’s pipeline also includes quisovalimab (anti-LIGHT mAb) and AVTX-008 (BTLA agonist fusion protein). Avalo was incorporated in Delaware and commenced operation in 2011, and completed its initial public offering in October 2015. On December 28, 2023, Avalo effected a 1-for-240 reverse stock split of the outstanding shares of the Company’s common stock and began trading on a split-adjusted basis on December 29, 2023. The Company retroactively applied the reverse stock split to common share and per share amounts for periods prior to December 28, 2023, including the consolidated financial statements for the year ended December 31, 2022. Additionally, pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity incentive plans have been reduced proportionately. Avalo retroactively applied such adjustments in the notes to consolidated financial statements for periods presented prior to December 28, 2023, including the year ended December 31, 2022. The reverse stock split did not reduce the number of authorized shares of common and preferred stock and did not alter the par value. Previously, on July 7, 2022, Avalo effected a 1-for-12 reverse stock split of the then outstanding shares of the Company’s common stock. Liquidity Since inception, we have incurred significant operating and cash losses from operations. We have primarily funded our operations to date through sales of equity securities, out-licensing transactions and sales of assets. For the year ended December 31, 2023, Avalo generated a net loss of $31.5 million and negative cash flows from operations of $30.7 million. As of December 31, 2023, Avalo had $7.4 million in cash and cash equivalents. For the year ended December 31, 2023, the Company raised approximately $46.2 million of net proceeds from equity offerings. Avalo fully retired its debt in 2023, which included principal payments of $21.2 million, inclusive of the full payoff of the loan in September of 2023. In March 2024, Avalo acquired AVTX-009, an anti-IL-1β mAb, through its acquisition of AlmataBio Inc. (“AlmataBio”). Additionally, in March 2024, the Company closed a private placement financing for up to $185 million in gross proceeds, including initial upfront gross investment of $115.6 million. Avalo estimates upfront net proceeds of approximately $105 million after deducting estimated transaction fees and expenses from both the private placement financing and the acquisition of AlmataBio. The Company could receive an additional $69.4 million of gross proceeds upon the exercise of warrants issued in the financing. Avalo intends to pursue the development of AVTX-009 in hidradenitis suppurativa (“HS”). Topline results from a planned Phase 2 trial in HS are expected in 2026 and the upfront funding is expected to fund operations through this data readout and into 2027. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. Unless otherwise indicated, all amounts in the following tables are in thousands except share and per share amounts. Principles of Consolidation The consolidated financial statements include the accounts of Avalo Therapeutics, Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, the valuation of derivative liabilities, cash flows used in management's going concern assessment, income taxes, goodwill, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. Accounts Receivable, net The Company had one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. The license and supply agreement for the Millipred ® product expired on September 30, 2023. Accounts receivable, net is historically comprised of amounts due from customers in the ordinary course of business. Accounts receivable are written off to net revenue when deemed uncollectible and recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than the payment terms negotiated with the customer. The Company generally negotiates payment terms of 60 days. The Company offers wholesale distributors a prompt payment discount, which is typically 2% as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount. Deferred Revenue The Company’s commercial operations were managed by a third-party logistics provider. Our third-party logistics provider purchased Millipred ® from us and subsequently delivered the product to our customers. As discussed below within “Product Revenue, net”, the Company recognized revenue when the performance obligation was satisfied, which was at a point in time when the product had been received by the customer. Deferred revenue was comprised of cash received from our third-party logistics provider related to product that had not yet been delivered to the customer. Derivative Liability Upon entering into a transaction to sell the Company’s future rights to milestones and royalty payments of previously out-licensed assets, the Company must assess whether the transaction is a derivative under ASC 815, Derivatives and Hedging . The requirements for the sale to be treated as a derivative are as follows: a) one or more underlying; b) one or more notional amounts or payment provisions or both; c) no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and d) net settlement provisions. If the transaction meets the requirements to be treated as a derivative, we estimate the fair value of the derivative liability on the date of issuance. The derivative liability is re-valued each reporting period and any change in the fair value is recorded as a gain or loss in the statements of operations and comprehensive loss. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified two operating leases, which both serve as administrative office space. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company’s consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the consolidated balance sheets and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within selling, general and administrative expenses. Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, depreciation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement’s useful life. The Company uses the lesser of the lease term or ten years for leasehold improvements. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. Property and equipment are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable. If an impairment is deemed to exist, the loss would be calculated based on the excess of the asset’s carrying value over its estimated value. Acquisitions For acquisitions that meet the definition of a business under ASC 805, Business Combinations, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. As of December 31, 2023, the Company’s chief operating decision maker was its Chief Executive Officer. The Chief Executive Officer views the Company’s operations and manages the business as one operating segment. All long‑lived assets of the Company reside in the United States. Goodwill The Company’s goodwill relates to historical acquisitions that were accounted for as business combinations and represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting. In accordance with ASC 350, Intangibles - Goodwill and Other , goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company’s reporting unit below its carrying amount. A reporting unit is an operating segment or one level below the operating segment. As standalone discrete and detailed financial information is not available or regularly reviewed below the company-wide level, the Company consists of one reporting unit. Upon disposal of a portion of a reporting unit that constitutes a business, the Company assigns goodwill based on the relative fair values of the portion of the reporting unit being disposed and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business to be disposed of and the business (or businesses) within the reporting unit that will be retained. Notes Payable Notes payable was recorded on the balance sheet at carrying value, which was the gross balance (inclusive of the final payment fee for the Note (as defined in Note 10)), less the unamortized debt discount and issuance costs. All fees, costs paid to the Lenders (as defined in Note 10) and all direct costs incurred by the Company were recognized as a debt discount and were amortized to interest expense using the effective interest method over the life of the loan. In 2023, the Company repaid all outstanding principal and interest under the Loan Agreement (as defined in Note 10) and all obligations of the parties under the Loan Agreement were deemed satisfied and terminated. As such, there was no remaining notes payable balance at December 31, 2023. Product Revenues, net The Company generated its revenue from sales of its prescription drug to its customers. The license and supply agreement for the Millipred ® product ended on September 30, 2023, therefore the Company does not expect future gross product revenues until the potential commercialization of its pipeline product candidates. The Company had identified a single product delivery performance obligation, which was the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors. The performance obligation was satisfied at a point in time, when control of the product had been transferred to the customer, which was the time the product had been received by the customer. The Company determined the transaction price based on fixed consideration in its contractual agreements and the transaction price was allocated entirely to the performance obligation to provide the prescription drug. Revenues from sales of products were recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration was recorded as a reduction of revenue at the time revenues from product sales were recognized. The Company recognized revenue only to the extent that it was probable that a significant revenue reversal would not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, Company expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company re-assesses these estimates and judgments each reporting period to adjust accordingly. Returns and Allowances Consistent with industry practice, for its Millipred ® product, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product’s expiration date. The Company’s return policy for sales made prior to August 31, 2021, generally allows for customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The Company’s return policy for sales subsequent to August 31, 2021, generally allows for customers to receive credit for expired products within thirty days prior to expiration and within ninety days after expiration. Based on these policies, product returns will be accepted through November of 2024, however, could be received by the Company later depending on timing of receipt and communication by its third-party logistics provider. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The license and supply agreement for the Millipred ® product ended on September 30, 2023. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company reassesses the milestones each reporting period to determine the probability of achievement. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) royalty payments the Company is required to pay based on the product’s net profit pursuant to its license and supply agreement, (iii) the value of any write-offs of obsolete or damaged inventory that cannot be sold and (iv) the write-off of receivables that are deemed not probable to be collected. The license and supply agreement for the Millipred ® product expired on September 30, 2023. Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance and quality; costs and milestones associated with certain licensing agreements, and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. The Company is a party to license and development agreements for in-licensed research and development assets with third parties. Such agreements often contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related research and development expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has its own unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. Clinical Trial Expense Accruals The Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussions with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed might vary and might result in it reporting amounts that are too high or too low for any particular period. Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation , which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. Additionally, the stock price on the date of grant is utilized in the Black-Scholes option pricing model. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss (“NOL”) and tax credit carryforwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including NOLs and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”). See Note 13 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of December 31, 2023, the Company did not believe any material uncertain tax positions were present. Comprehensive Loss Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the years ended December 31, 2023 and 2022, the Company’s net loss was equal to comprehensive loss and, accordingly, no additional disclosure is presented. Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge. Instead, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. This new standard was adopted effective January 1, 2023 and will be applied upon any recognition of any future goodwill impairment charge. The adoption of this ASU has not had a material impact on our financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue License and Other Revenue On October 27, 2023, the Company closed the transaction under the asset purchase agreement (the “Purchase Agreement”) to sell its rights, title and interest in, assets relating to AVTX-801, AVTX-802 and AVTX-803 (collectively, the “800 Series”) to AUG Therapeutics, LLC (“AUG”). The Purchase Agreement was entered into on September 11, 2023. Pursuant to the Purchase Agreement, the Company received an upfront payment of $0.2 million. Additionally, AUG assumed aggregate liabilities of $0.4 million, which included certain liabilities incurred prior to the date of the Purchase Agreement, costs due and payable between the date of the Purchase Agreement and the closing date, and obligations under 800 Series contracts assumed by AUG. Avalo recognized $0.5 million as license and other revenue for the year ended December 31, 2023. Avalo is also entitled to a contingent milestone payment of 20% of certain payments, if any, granted to AUG upon any sale of any priority review voucher related to the 800 Series compounds granted to AUG by the FDA, net of any selling costs, or $15.0 million for each compound (for a potential aggregate of $45.0 million) if the first FDA approval is for an indication other than a Rare Pediatric Disease (as defined in the Purchase Agreement). The Company has not recognized any revenue related to the milestones as of December 31, 2023. In July 2022, Avalo entered into a license agreement with Apollo AP43 Limited, a wholly owned subsidiary of Apollo Therapeutics Group Limited (collectively, “Apollo”) pursuant to which the Company granted Apollo a worldwide, exclusive license to research, develop, manufacture and commercialize AVTX-007, an anti-IL-18 monoclonal antibody (the “Apollo License Agreement”). Pursuant to the Apollo License Agreement, the Company received an upfront payment of $14.5 million, which was recognized as license and other revenue for the year ended December 31, 2022. Additionally, the portion of the ES Transaction (as defined in Note 5) related to AVTX-611 represented a contract modification, which resulted in the Company recognizing $0.2 million of license and other revenue for the year ended December 31, 2022. Product Revenue, net Avalo generated its product revenue from sales of Millipred ® , which we consider a non-core asset. Millipred ® is an oral prednisolone indicated across a wide variety of inflammatory conditions, which is considered a prescription drug. The Company’s license and supply agreement for Millipred ® ended on September 30, 2023. The Company sold its prescription drug in the United States primarily through wholesale distributors. Wholesale distributors accounted for substantially all of the Company’s net product revenues and trade receivables. For the year ended December 31, 2023, the Company’s only two customers accounted for approximately 58% and 42% of the Company’s total net product revenues. For the year ended December 31, 2022, the Company’s only two customers accounted for approximately 68% and 32% of the Company’s total net product revenues. Net revenue from sales of prescription drugs was $1.4 million and $3.4 million for the years ended December 31, 2023 and 2022, respectively. The Company does not expect future gross revenue related to the Millipred ® product given the expiration of the product’s license and supply agreement on September 30, 2023. However, the Company will continue to monitor estimates for commercial liabilities, such as sales returns. As additional information becomes available, the Company could recognize expense (or a benefit) for differences between actuals or updated estimates to the reserves previously recognized. Pursuant to the Millipred ® license and supply agreement, Avalo was required to pay the supplier fifty percent of the net profit of the Millipred ® product following each calendar quarter, subject to a $0.5 million quarterly minimum payment dependent on Avalo reaching certain net profit amounts as stipulated in the agreement. The profit share commenced on July 1, 2021 and ended on September 30, 2023. Within twenty-five months of September 30, 2023, the net profit share is subject to a reconciliation process, where estimated deductions to arrive at net profit will be trued-up to actuals and could result in Avalo owing additional amounts to the supplier or vice versa, which would be recognized in cost of product sales. Aytu BioScience, Inc. (“Aytu”), to which the Company sold its rights, title, and interests in assets relating to certain commercialized products in 2019 (the “Aytu Transaction”), managed Millipred ® commercial operations until August 31, 2021 pursuant to a transition services agreement, which included managing the third-party logistics provider and providing accounting reporting services. As a result, Aytu collected cash on behalf of Avalo for revenue generated by sales of Millipred ® from the second quarter of 2020 through the third quarter of 2021. The transition services agreement allows Aytu to withhold up to $1.0 million until December 2024. In the second quarter of 2022, Avalo fully reserved the $1.0 million receivable as a result of Aytu’s conclusion within its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, that substantial doubt existed with respect to its ability to continue as a going |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share is provided below for common stock for the years ended December 31, 2023 and 2022. Net loss per share for common stock is computed by dividing the sum of distributed earnings and undistributed earnings by the weighted average number of shares outstanding for the period. The weighted average number of common shares outstanding as of December 31, 2023 and 2022 include the weighted average effect of pre-funded warrants, the exercise of which requires nominal consideration for the delivery of the shares of common stock. Diluted net loss per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the “treasury stock method” when dilutive; and (ii) common stock to be issued upon the exercise of outstanding warrants, which are included under the “treasury stock method” when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company’s losses. The following tables set forth the computation of basic and diluted net loss per share of common stock for the years ended December 31, 2023 and 2022 (in thousands, except per share amounts): Year Ended December 31, 2023 Common stock Net loss $ (31,544) Weighted average shares 277,727 Basic and diluted net loss per share $ (114) Year Ended December 31, 2022 Common stock Net loss $ (41,658) Weighted average shares 39,202 Basic and diluted net loss per share $ (1,063) The following outstanding securities at December 31, 2023 and 2022 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2023 2022 Stock options 7,559 6,082 Warrants on common stock 1 17,254 1,537 1 The weighted average number of common shares outstanding includes the weighted average outstanding pre-funded warrants for the period because their exercise price was nominal. There were no pre-funded warrants outstanding as of December 31, 2023. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2023 Fair Value Measurements Using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 7,077 $ — $ — Liabilities Derivative liability $ — $ — $ 5,550 December 31, 2022 Fair Value Measurements Using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 12,133 $ — $ — Liabilities Derivative liability $ — $ — $ 4,830 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying consolidated balance sheets. As of December 31, 2023, the Company’s financial instruments included cash and cash equivalents, restricted cash, other receivables, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, and derivative liability. As of December 31, 2022, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, other receivables, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, derivative liability and debt. The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, restricted cash, accounts receivable, other receivables, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. Level 1 Valuation A goodwill impairment loss of $3.9 million was recognized for the year ended December 31, 2023. The fair value of the reporting unit was estimated using the market approach. The Company utilized the closing stock price on the last day of the fiscal year, which is considered a Level 1 input pursuant to ASC 820, to calculate the reporting unit’s fair value. The $3.9 million impairment loss recognized represents the difference between the reporting unit’s carrying value and its fair value. See Note 7 for additional information. Level 3 Valuation The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the derivative liability for the years ended December 31, 2023 and 2022: Derivative liability Balance at December 31, 2022 $ 4,830 Change in fair value of derivative liability 720 Balance at December 31, 2023 $ 5,550 In the fourth quarter of 2022, Avalo sold its economic rights to future milestone and royalty payments for previously out-licensed assets AVTX-501, AVTX-007, and AVTX-611 to ES Therapeutics, LLC (“ES”), an affiliate of Armistice, in exchange for $5.0 million (the “ES Transaction”). At the time of the transaction, Armistice was a significant stockholder of the Company and whose chief investment officer, Steven Boyd, and managing director, Keith Maher, served on Avalo’s Board until August 8, 2022. The ES Transaction was approved in accordance with Avalo’s related party transaction policy. The economic rights sold include (a) rights to a milestone payment of $20.0 million upon the filing and acceptance of an NDA for AVTX-501 pursuant to an agreement with Janssen Pharmaceutics, Inc. (the “AVTX-501 Milestone”) and (b) rights to any future milestone payments and royalties relating to AVTX-007 under a license agreement with Apollo AP43 Limited, including up to $6.25 million of development milestones, up to $67.5 million in sales-based milestones, and royalty payments of a low single digit percentage of annual net sales (which percentage increases to another low single digit percentage if annual net sales exceed a specified threshold) (the “AVTX-007 Milestones and Royalties”). In addition, Avalo waived all its rights to AVTX-611 sales-based payments of up to $20.0 million that were payable by ES. The exchange of the economic rights of the AVTX-501 Milestone and AVTX-007 Milestones and Royalties for cash meets the definition of a derivative instrument. The fair value of the derivative liability is determined using a combination of a scenario-based method and an option pricing method (implemented using a Monte Carlo simulation). The significant inputs including probabilities of success, expected timing, and forecasted sales as well as market-based inputs for volatility, risk-adjusted discount rates and allowance for counterparty credit risk are unobservable and based on the best information available to Avalo. Certain information used in the valuation is inherently limited in nature and could differ from Janssen and Apollo’s internal estimates. The fair value of the derivative liability as of the transaction date was approximately $4.8 million, of which $3.5 million was attributable to the AVTX-501 Milestone and $1.3 million was attributable to the AVX-007 Milestones and Royalties. Subsequent to the transaction date, at each reporting period, the derivative liability is remeasured at fair value. As of December 31, 2023, the fair value of the derivative liability was $5.6 million, of which $3.8 million was attributable to the AVTX-501 Milestone and $1.7 million was attributable to the AVTX-007 Milestones and Royalties. For the year ended December 31, 2023, the $0.7 million change in fair value was recognized in other expense, net in the accompanying condensed consolidated statements of operations and comprehensive loss. The fair value of the AVTX-501 Milestone was primarily driven by an approximate 23% probability of success to reach the milestone in approximately 3.8 years. The fair value of AVTX-007 Milestones and Royalties were primarily driven by approximately 17% probability of success, time to commercialization of approximately 4.8 years, and sales forecasts with peak annual net sales reaching $300 million. As discussed above, these unobservable inputs were estimated by Avalo based on limited publicly available information and therefore could differ from Janssen’s and Apollo’s respective internal development plans. Any changes to these inputs may result in significant changes to the fair value measurement. Notably, the probability of success is the largest driver of the fair value and therefore changes to such input would likely result in significant changes to such fair value. In the event that Janssen and/or Apollo are required to make payment(s) to ES Therapeutics pursuant to the underlying agreements, Avalo will recognize revenue under its existing contracts with those customers for that amount when it is no longer probable there would be a significant revenue reversal with any differences between the fair value of the derivative liability related to that payment immediately prior to the revenue recognition and revenue recognized to be recorded as other expense. However, given Avalo is no longer entitled to collect these payments, the potential ultimate settlement of the payments in the future from Janssen and/or Apollo to ES Therapeutics (and the future mark-to-market activity each reporting period) will not impact Avalo’s future cash flows. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Furniture and equipment $ 248 $ 280 Computers and software 34 56 Right-of-use assets 1,329 1,750 Leasehold improvements 896 739 Total property and equipment 2,507 2,825 Less accumulated depreciation (542) (414) Property and equipment, net $ 1,965 $ 2,411 Depreciation expense was $0.2 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively. Leases Avalo currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both leases are operating leases based on the lease classification test performed at lease commencement. The annual base rent for the Company's office located in Rockville, Maryland is $0.2 million, subject to annual 2.5% increases over the term of the lease. The lease provided for a rent abatement for a period of 12 months following the Company’s date of occupancy. The lease has an initial term of 10 years from the date the Company made its first annual fixed rent payment, which occurred in January 2020. The Company has the option to extend the lease two times, each for a period of five years, and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. The initial annual base rent for the Company’s office located in Chesterbrook, Pennsylvania is $0.2 million and the annual operating expenses are approximately $0.1 million. The annual base rent is subject to periodic increases of approximately 2.4% over the term of the lease. The lease has an initial term of 5.25 years from the lease commencement on December 1, 2021. The weighted average remaining term of the operating leases at December 31, 2023 was 4.6 years. Supplemental balance sheet information related to the leased properties include (in thousands): As of December 31, 2023 December 31, 2022 Property and equipment, net $ 1,329 $ 1,750 Accrued expenses and other current liabilities $ 537 $ 532 Other long-term liabilities 1,366 1,711 Total operating lease liabilities $ 1,903 $ 2,243 The operating lease right-of-use assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in the Company’s consolidated balance sheets. The Company utilized a weighted average discount rate of 9.1% to determine the present value of the lease payments. The components of lease expense for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease cost* $ 460 $ 493 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liability as of December 31, 2023 (in thousands): Undiscounted Cash Flows 2024 543 2025 547 2026 557 2027 258 2028 201 Thereafter 224 Total lease payments $ 2,330 Less implied interest (427) Total $ 1,903 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill for the year ended December 31, 2023 was as follows (in thousands): Goodwill Balance as of December 31, 2022 $ 14,409 Goodwill impairment (3,907) Balance as of December 31, 2023 $ 10,502 There were no changes in the carrying amount of goodwill for the year ended December 31, 2022. The Company consists of one reporting unit. Management evaluates the reporting unit for impairment on an annual basis in the fourth quarter or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company’s reporting unit below its carrying value. The Company recognized $3.9 million of goodwill impairment loss for the year ended December 31, 2023 as part of its annual goodwill impairment test performed on the last day of the fiscal year. The Company’s market capitalization decreased 69% from September 30, 2023 to December 31, 2023, which occurred primarily in the second half of the fourth quarter and on December 28, 2023, Avalo effected a reverse stock split of the Company’s common stock. Additionally, cash runway continued to decline in the fourth quarter and, as of December 31, 2023, the Company needed to raise additional funds to execute its strategy. The impairment loss recognized represents the difference between the reporting unit’s carrying value and its fair value as of December 31, 2023. Because the Company consists of one reporting unit, the Company’s carrying value and fair value represent the reporting unit’s carrying value and fair value, respectively. The fair value of the reporting unit was estimated using the market approach. The Company utilized its closing stock price on the last day of the fiscal year, which is considered a Level 1 input pursuant to ASC 820, to calculate the reporting unit’s fair value. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Research and development $ 352 $ 6,293 Compensation and benefits 580 2,699 Selling, general and administrative 830 1,008 Commercial operations 1,873 1,694 Royalty payment — 508 Lease liability, current 537 532 Other — 480 Total accrued expenses and other current liabilities $ 4,172 $ 13,214 |
Cost Reduction Plan
Cost Reduction Plan | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Cost Reduction Plan | Cost Reduction Plan In the first quarter of 2022, the Board approved a cost reduction plan to enable the Company to execute its strategy of prioritizing the development of its most promising programs (the “Plan”). As part of the Plan, a reduction in workforce plan was approved to reduce headcount and related expenses. The reduction in workforce plan, which was considered a one-time termination benefit as defined by ASC 420, Exit or Disposal Cost Obligations . The one-time termination benefits mainly relate to severance payments to separated employees. As a result, the Company recognized $1.5 million of expense in the first quarter of 2022, of which $0.7 million was recognized in research and development expense, and $0.8 million was recognized in selling, general and administrative expense. $1.4 million of severance was paid during the year ended December 31, 2022 and the remaining liability was paid in the year ended December 31, 2023. Additionally, $0.4 million of stock-based compensation expense was recognized in the first quarter of 2022 related to the Plan, which was mainly related to accelerated vesting of certain separated employees’ stock options. twelve |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable On June 4, 2021, the Company entered into a $35.0 million venture loan and security agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation (“Horizon”) and Powerscourt Investments, XXV, LP (“Powerscourt”, and together with Horizon, the “Lenders”). Between June and September 2021, the Company borrowed the full $35.0 million (the “Note”) available under the Loan Agreement. In the second quarter of 2022, the Company, as collectively agreed upon with the Lenders, prepaid $15.0 million of principal and accrued interest. In June of 2023, the Company, as collectively agreed upon with the Lenders, prepaid $6.0 million of principal. On September 22, 2023, the Company and the Lenders entered into a Payoff Letter (the “Payoff Letter”), pursuant to which the Company repaid all outstanding principal, inclusive of the final payment fee, and interest under the Loan Agreement in the aggregate amount of $14.3 million. As a result of the payment, all obligations of the parties under the Loan Agreement were deemed satisfied and terminated. On June 4, 2021, pursuant to the Loan Agreement, the Company issued warrants to the Lenders to purchase 148 shares of the Company’s common stock with an exercise price of $7,488 per share (the “Warrants”). The Warrants are exercisable for ten years from the date of issuance. Pursuant to the Payoff Letter, Avalo’s obligations under the Warrants shall survive pursuant to the original terms at issuance. The Warrants, which met equity classification, were recognized as a component of permanent stockholders’ equity (deficit) within additional paid-in-capital and were recorded at the issuance date using a relative fair value method. The Company recognized debt issuance costs and the amount allocated to the warrants as a debt discount on the date of issuance and amortized these costs to interest expense using the effective interest method over the original term of the loan. As a result of the payoff in the third quarter of 2023, the Company accelerated the remaining $0.9 million amortization of the debt discount, which was recognized as interest expense for the year ended December 31, 2023. Balance sheet information related to the notes payable for the Notes is as follows (in thousands): As of December 31, 2022 Initial Note 12,139 Second Note 6,070 Third Note 3,035 Notes payable, gross 1 21,244 Less: Unamortized debt discount and issuance costs 1,828 Carrying value of notes payable 19,416 Less: Current portion 5,930 Carrying value of notes payable, non-current $ 13,486 As of December 31, 2023, there were no remaining contractual future principal or interest payments. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Capital Structure | Capital Structure Pursuant to the Company's amended and restated certificate of incorporation, as amended, the Company is authorized to issue two classes of stock; common stock and preferred stock. At December 31, 2023, the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. Common Stock At-the-Market Offering Program On May 4, 2023, the Company entered into an “at-the-market” sales agreement (the “Sales Agreement”) with Oppenheimer & Co. Inc. (“Oppenheimer”), pursuant to which the Company may sell from time to time, shares of its common stock having an aggregate offering price of up to $9,032,567 through Oppenheimer. In August 2023, the Company and Oppenheimer entered into an amendment to the Sales Agreement (the “Amended Sales Agreement”) to increase the aggregate offering amount under the Sales Agreement to $50,000,000 inclusive of shares sold prior to the amendment. During the year ended December 31, 2023, the Company sold approximately 0.7 million shares under the ATM program for net proceeds of approximately $32.5 million. Exchange Agreement In May of 2023, the Company entered into an exchange agreement (the “Exchange Agreement”) with entities affiliated with Venrock Healthcare Capital Partners (“Venrock”), pursuant to which the Company exchanged an aggregate of 5,417 shares of the Company’s common stock, par value $0.001 per share, owned by Venrock, for pre-funded warrants (the “Exchanged Warrants”) to purchase an aggregate of 5,417 shares of common stock (subject to adjustment in the event of stock splits, recapitalization and other similar events affecting common stock), with an exercise price of $0.24 per share. The Exchange Warrants were exercisable at any time, except that the Exchange Warrants would not be exercisable by Venrock if, upon giving effect immediately prior thereto, Venrock would beneficially own more than 9.99% of the total number of issued and outstanding Avalo common stock, which percentage could change at the holders’ election to any amount less than or equal to 19.99% upon 61 days’ notice to the Company. Venrock exercised the Exchanged Warrants in full in September 2023. In accordance with ASC 505, Equity , in the second quarter of 2023, the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and a corresponding impact to additional paid-in-capital and accumulated deficit at the fair value of the Exchange Warrants on the issuance date. The Exchange Warrants were classified as equity in accordance with ASC 480, Distinguishing Liabilities from Equity , and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in-capital and is not subject to remeasurement. The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants. Q1 2023 Financing On February 7, 2023, the Company closed an underwritten public offering of 15,717 shares of its common stock and warrants to purchase up to 15,717 shares of common stock, at a combined price to the public of $955 per share and warrant, resulting in net proceeds of approximately $13.7 million, after deducting the underwriting discounts and commissions and offering expenses payable by us. The warrants were immediately exercisable at an exercise price of $1,200 per share and are exercisable for one year from the issuance date, or February 2024. Prior to their expiration in February 2024, none of the warrants were exercised. Armistice, who was a significant stockholder of the Company at the time of the financing, participated in the offering by purchasing 1,875 shares of common stock and 1,875 warrants, on the same terms as all other investors. Certain affiliates of Nantahala Capital Management LLC and Point72 Asset Management, L.P., which each beneficially owned greater than 5% of the Company’s outstanding common stock at the time of the offering, participated in the offering on the same terms as all other investors. The warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital. The warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such warrants do not provide any guarantee of value or return. Common Stock Warrants At December 31, 2023, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 1,389 $ 36,000 June 2024 148 $ 7,488 June 2031 15,717 $ 1,200 February 2024 17,254 The 15,717 warrants in the table above expired in February 2024. Refer to Note 15 for information regarding common stock and non-voting convertible preferred stock issued pursuant to the Almata Transaction in March 2024 and non-voting convertible preferred stock and warrants issued pursuant to a private placement financing that closed in March 2024. On an as-converted basis and after accounting for these transactions (including the exercise of the warrants), the total number of shares of Avalo common stock outstanding would be approximately 35.4 million immediately after the close of the transactions. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan In April 2016, our board of directors adopted the 2016 Equity Incentive Plan, which was approved by our stockholders in May 2016 and which was subsequently amended and restated in May 2018 and August 2019 with the approval of our board of directors and our stockholders (the “2016 Third Amended Plan”). During the term of the 2016 Third Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year ending on (and including) January 1, 2026, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of December 31, 2023, there were 450 shares available for future issuance under the 2016 Third Amended Plan. On January 1, 2024, pursuant to the terms of the 2016 Third Amended and Restated Plan, an additional 32,070 shares were made available for issuance. Option grants expire after ten years. Employee options typically vest over four years. Employees typically receive a new hire option grant, as well as an annual grant in the first or second quarter of each year. Options granted to directors typically vest immediately or over a period of one Year Ended December 31, 2023 2022 Research and development $ 1,318 $ 1,249 Selling, general and administrative 2,157 6,305 Total stock-based compensation $ 3,475 $ 7,554 As a result of separation agreements executed in the first quarter of 2022 and in accordance with the terms of the pre-existing employment agreements, in 2022, the Company accelerated the vesting of certain separated employees’ stock options and modified certain awards to extend the exercisability periods. As a result, the Company recognized $4.3 million of compensation cost in the first quarter of 2022, all of which was recognized in selling, general and administrative expense. Stock options with service-based vesting conditions The Company has granted stock options that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. The following table summarizes the Company's service-based option activity for the year ended December 31, 2023: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2022 5,734 $ 6,789 $ 3,948 6.7 Granted 3,243 $ 641 $ 479 Forfeited (44) $ 1,137 $ 147 Expired (1,722) $ 10,419 $ 5,966 Balance at December 31, 2023 7,211 $ 3,192 $ 1,930 8.3 Exercisable at December 31, 2023 3,517 $ 5,293 $ 3,056 7.5 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2023, the aggregate intrinsic value of options outstanding and the aggregate intrinsic value of options currently exercisable was zero. There were 2,229 options that vested during the year ended December 31, 2023, with a weighted average exercise price of $2,201 per share. The total grant date fair value of shares which vested during the years ended December 31, 2023 and 2022 was $3.4 million and $9.6 million, respectively. The Company recognized stock-based compensation expense of $3.3 million and $7.4 million related to stock options with service-based vesting conditions for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, there was $2.8 million of total unrecognized compensation cost related to unvested service-based vesting conditions awards. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 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 years ended December 31, 2023 and 2022: Year Ended December 31, Service-based options 2023 2022 Expected term of options (in years) 5 — 6.25 5 — 6.25 Expected stock price volatility 89.8% — 146.0% 84.0% — 93.5% Risk-free interest rate 3.43% — 4.13% 1.50% — 4.25% Expected annual dividend yield 0% 0% The valuation assumptions were determined as follows: • Expected term of options: Due to lack of sufficient historical data, the Company estimates the expected life of its stock options with service-based vesting granted to employees and members of the board of directors as the arithmetic average of the vesting term and the original contractual term of the option. • Expected stock price volatility: The Company estimated the expected volatility based on a blend of Avalo's actual historical volatility of its stock price and the historical volatility of other similar publicly-traded biotechnology companies. The Company calculated the historical volatility of the selected companies by using weekly closing prices over a period of the expected term of the associated award. The companies were selected based on their risk profiles, enterprise value, position within the industry, and historical stock price information sufficient to meet the expected term of the associated award. A decrease in the selected volatility would decrease the fair value of the underlying instrument. • Risk‑free interest rate: The Company bases the risk‑free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected annual dividend yield: The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has never declared or paid dividends to stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in the continued growth of the business. Accordingly, the Company assumed an expected dividend yield of 0%. Stock options with market-based vesting conditions As of December 31, 2023, there were 348 exercisable stock options that contained market-based vesting conditions (that had been previously satisfied). The options have a weighted average stock price per share of $9,488 and a weighted average remaining contractual term of 0.5 years. There were no stock options with market-based vesting conditions granted, exercised, or forfeited for the year ended December 31, 2023. The Company recognized no stock-based compensation expense related to stock options with market-based vesting conditions for the years ended December 31, 2023 and 2022. Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. The Company initially reserved and authorized up to 174 shares of common stock for issuance under the ESPP. During the term of the ESPP, on January 1 of each calendar year ending on (and including) January 1, 2026, the aggregate number of shares that may be issued under the ESPP automatically increases by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 174 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. As of December 31, 2023, 784 shares remained available for issuance. On January 1, 2024, the number of shares available for issuance under the ESPP increased by 174. In accordance with the guidance in ASC 718-50, Employee Share Purchase Plans , the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $0.2 million for the years ended December 31, 2023 and 2022. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected tax consequences or events that have been recognized in our financial statement or tax returns. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in the financial statements. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded in our financial statements for the year ended December 31, 2023. Tax years beginning in 2020 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. ASC 740 provides guidance on the recognition of interest and penalties related to income taxes. There were no interest or penalties related to uncertain tax positions arising in the years ended December 31, 2023 and 2022. It is the Company’s policy to treat interest and penalties, to the extent they arise, as a component of income taxes. The income tax provision from continuing operations consisted of the following for the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Current: Federal $ — $ — State — — Total Current — — Deferred: Federal 24 24 State (10) 4 Total Deferred 14 28 Net income tax expense $ 14 $ 28 The net deferred tax assets (liabilities) consisted of the following for the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Deferred tax assets (liabilities): Net operating losses $ 37,268 $ 32,393 Tax credits 5,854 5,706 Capitalized research and development 6,945 6,567 Stock-based compensation 3,557 3,532 Basis difference in tangible and intangible assets, net 1,843 2,299 Accrued compensation 118 585 Installment sale and revenue recognition 1,601 1,566 Other reserves 336 395 Lease liability 410 523 Prepaid expenses (118) (248) Right-of-use asset (286) (408) Goodwill (774) (702) Total deferred tax assets, net 56,754 52,208 Less valuation allowance (56,909) (52,349) Net deferred taxes $ (155) $ (141) As of December 31, 2023, the Company had approximately $160.4 million of gross net operating losses for federal and state tax purposes that do not expire and $3.4 million that will begin to expire in 2031. As of December 31, 2023, the Company had various research tax credits of $5.9 million that will begin to expire in 2038. The income tax expense for the years ended December 31, 2023 and 2022 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2023 2022 Federal statutory rate 21.00 % 21.00 % Goodwill impairment (2.60) — Stock compensation (1.40) (2.72) State taxes 0.03 (0.01) Research tax credit 0.47 2.01 Other — (0.19) Valuation allowance (17.54) (20.15) Effective income tax rate (0.04) % (0.06) % The valuation allowance recorded by the Company as of December 31, 2023 and 2022, which increased by $4.6 million from the prior year, resulted from the uncertainties of the future utilization of deferred tax assets mainly resulting from net operating loss carry forwards for federal and state income tax purposes as well as the federal research and experimental and orphan drug tax credits. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities, as well as whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences are expected to reverse. The Company has established deferred tax liabilities for indefinite lived intangible assets consisting of goodwill that are not amortized for financial reporting purposes, but are tax deductible and therefore amortized over 15 years for tax purposes. The Company has concluded that the resulting deferred tax liability will also have an indefinite life unless there is an impairment of the related assets (for financial reporting purposes), or the disposal of the business to which the assets relate. Losses generated in years after 2017 will also have an indefinite life and will be available to offset 80 percent of any federal tax liability and will be available to offset many of the state deferred tax liabilities subject to utilization limits. A portion of existing deferred tax assets will reverse in the future, potentially generating net operating losses that will also be available to offset a portion of the indefinite lived deferred tax liability. Based on the consideration of these facts, the Company concluded it is more likely than not that a significant portion of its remaining gross deferred tax assets less the reversal of deferred tax liabilities will not be realized in the future, accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax asset as of December 31, 2023 and December 31, 2022. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or a portion thereof, to be utilized, and will reduce the valuation allowance appropriately at such time when it is determined that the “more likely than not” criteria is satisfied. Sections 382 and 383 of the IRC subject the future utilization of net operating losses and certain other tax attributes, such as research and experimental tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company has undergone an ownership change study through June 2020 and has determined that a "change in ownership" as defined by IRC Section 382 of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, did occur in February 2012, July 2014, and April 2017. Based on the Company having undergone multiple ownership changes throughout the history of these carryforwards, these NOLs will free up at varying rates each year. Subsequent to the changes in ownership previously listed, the NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three‑year period. This could limit the amount of NOLs and research and development credits that the Company can utilize annually to offset future taxable income or tax liabilities. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership after June 30, 2020 and therefore no determination has been made whether the entire NOL carryforward balance is subject to any additional IRC Section 382 limitation. To the extent there is a limitation, which could be significant, there would be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. Subsequent ownership changes may further affect the limitation in future years. All of the Company’s tax years are currently open to examination by each tax jurisdiction in which the Company is subject to taxation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation – General The Company may become party to various contractual disputes, litigation, and potential claims arising in the ordinary course of business. Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated. The Company currently does not believe that the resolution of such matters will have a material adverse effect on its financial position or results of operations except as otherwise disclosed in this report. Dispute Notice Settlement On August 14, 2023, the Company received notice from Apollo AP43 Limited alleging that the Company was in breach of the license agreement between them dated July 29, 2022 by virtue of owing $0.8 million to a service provider under the terms of that license. On January 25, 2024, the Company and Apollo entered into a settlement and release agreement, pursuant to which Avalo agreed to pay Apollo $0.2 million to settle the dispute and Apollo released Avalo from any and all liabilities or claims relating to the dispute that Apollo may have against Avalo from the date of the license agreement through the date of the settlement and release agreement. The Company recognized the $0.2 million settlement within accrued expenses and other current liabilities within the consolidated balance sheet for the year ended December 31, 2023 and made the payment in the first quarter of 2024. Possible Future Milestone Payments for In-Licensed Compounds General Avalo is a party to license and development agreements with various third parties, which contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. AVTX-009 In the first quarter of 2024, Avalo obtained the rights to an anti-IL-1β mAb (AVTX-009), including the world-wide exclusive license from Eli Lilly and Company (the “Lilly License Agreement”), pursuant to its acquisition of AlmataBio. AlmataBio had previously purchased the rights, title and interest in the asset from Leap Therapeutics, Inc. (“Leap”) in 2023. Avalo is required to pay up to $70 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is required to pay sales-based milestones aggregating up to $720 million. Additionally, Avalo is required to pay royalties during a country-by-country royalty term equal to a mid-single digit-to-low double digit of Avalo or its sublicensees’ annual net sales. Refer to the sub-header below entitled “Acquisition Related and Other Contingent Liabilities” for information regarding future development milestones that are payable to the former AlmataBio stockholders. AVTX-002 KKC License Agreement On March 25, 2021, the Company entered into a license agreement with Kyowa Kirin Co., Ltd. (“KKC”) for exclusive worldwide rights to develop, manufacture and commercialize AVTX-002, KKC’s first-in-class fully human anti-LIGHT (TNFSF14) monoclonal antibody for all indications (the “KKC License Agreement”). The KKC License Agreement replaced the Amended and Restated Clinical Development and Option Agreement between the Company and KKC dated May 28, 2020. Under the KKC License Agreement, the Company paid KKC an upfront license fee of $10.0 million, which we recognized within research and development expense in 2021. The Company is also required to pay KKC up to an aggregate of $112.5 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is required to pay KKC sales-based milestones aggregating up to $75.0 million, tied to the achievement of annual net sales targets. Additionally, the Company is required to pay KKC royalties during a country-by-country royalty term equal to a mid-teen percentage of annual net sales. The Company is required to pay KKC a double-digit percentage (less than 30%) of the payments that the Company receives from any sublicensing of its rights under the KKC License Agreement, subject to certain exclusions. Avalo is responsible for the development and commercialization of AVTX-002 in all indications worldwide (other than the option in the KKC License Agreement that, upon exercise by KKC, allows KKC to develop, manufacture and commercialize AVTX-002 in Japan). In addition to the KKC License Agreement, Avalo is subject to additional royalties upon commercialization of up to an amount of less than 10% of net sales. No expense related to the KKC License Agreement was recognized for the year ended December 31, 2023. There has been no cumulative expense recognized as of December 31, 2023 related to the milestones under the KKC License Agreement. The Company will continue to monitor the milestones at each reporting period. AVTX-008 Sanford Burnham Prebys License Agreement On June 22, 2021, the Company entered into an Exclusive Patent License Agreement with Sanford Burnham Prebys Medical Discovery Institute (the “Sanford Burnham Prebys License Agreement”) under which the Company obtained an exclusive license to a portfolio of issued patents and patent applications covering an immune checkpoint program (AVTX-008). Under the terms of the Sanford Burnham Prebys License Agreement, the Company incurred an upfront license fee of $0.4 million, as well as patent costs of $0.5 million, which we recognized within research and development expenses and within selling, general and administrative expenses, respectively, in 2021. The Company is required to pay Sanford Burnham Prebys up to an aggregate of $24.2 million based on achievement of specified development and regulatory milestones. Upon commercialization, the Company is required to pay Sanford Burnham Prebys sales-based milestone payments aggregating up to $50.0 million tied to annual net sales targets. Additionally, the Company is required to pay Sanford Burnham Prebys royalties during a country-by-country royalty term equal to a low-to-mid single digit percentage of annual net sales. The Company is also required to pay Sanford Burnham Prebys a tiered low-double digit percentage of the payments that Avalo receives from sublicensing of its rights under the Sanford Burnham Prebys License Agreement, subject to certain exclusions. Avalo is fully responsible for the development and commercialization of the program. No material expense related to the Sanford Burnham Prebys License Agreement was recognized in the year ended December 31, 2023. There has been no cumulative expense recognized as of December 31, 2023 related to the milestones under this license agreement. The Company will continue to monitor the milestones at each reporting period. AVTX-006 Astellas License Agreement The Company has an exclusive license agreement with OSI Pharmaceuticals, LLC, an indirect wholly owned subsidiary of Astellas Pharma, Inc. (“Astellas”), for the worldwide development and commercialization of the novel, second generation mTORC1/2 inhibitor (AVTX-006). Under the terms of the license agreement, there was an upfront license fee of $0.5 million. The Company is required to pay Astellas up to an aggregate of $5.5 million based on the achievement of specified development and regulatory milestones. The Company is also required to pay Astellas a tiered mid-to-high single digit percentage of the payments that Avalo receives from any sublicensing of its rights under the Astellas license agreement, subject to certain exclusions. Upon commercialization, the Company is required to pay Astellas royalties during a country-by-country royalty term equal to a tiered mid-to-high single digit percentage of annual net sales. Avalo is fully responsible for the development and commercialization of the program. No expense related to this license agreement was recognized for the year ended December 31, 2023. There has been $0.5 million of cumulative expense recognized as of December 31, 2023 related to the milestones under this license agreement. The Company will continue to monitor the remaining milestones at each reporting period. Possible Future Milestone Proceeds for Out-Licensed Compounds AVTX-301 Out-License On May 28, 2021, the Company out-licensed its rights in respect of its non-core asset, AVTX-301, to Alto Neuroscience, Inc. (“Alto”). The Company initially in-licensed the compound from an affiliate of Merck & Co., Inc. in 2013. Under the out-license agreement, the Company received a mid-six-digit upfront payment from Alto, which was recognized as license revenue in 2021. The Company is also eligible to receive up to an aggregate of $18.6 million based on the achievement of specified development, regulatory and commercial sales milestones. Additionally, the Company is entitled to a less than single digit percentage royalty based on annual net sales. Alto is fully responsible for the development and commercialization of the program. The Company has not recognized any revenue related to the milestones as of December 31, 2023. AVTX-406 License Assignment On June 9, 2021, the Company assigned its rights, title, interest, and obligations under an in-license covering its non-core asset, AVTX-406, to ES, a wholly-owned subsidiary of Armistice, who was a significant stockholder of the Company at the time of the transaction. The transaction with ES was approved in accordance with Avalo’s related party transaction policy. Under the assignment agreement, the Company received a low-six-digit upfront payment from ES, which was recognized as license revenue in 2021. The Company is also eligible to receive up to an aggregate of $6.0 million based on the achievement of specified development and regulatory milestones. Upon commercialization, the Company is eligible to receive sales-based milestone payments aggregating up to $20.0 million tied to annual net sales targets. ES is fully responsible for the development and commercialization of the program. The Company has not recognized any revenue related to the milestones as of December 31, 2023. AVTX-800 Series Asset Sale As discussed in Note 3, on October 27, 2023, the Company sold its rights, title and interests in assets relating to the 800 Series to AUG. Pursuant to the Purchase Agreement with AUG, the Company received an upfront payment of $0.2 million. Additionally, AUG assumed aggregate liabilities of $0.4 million, which included certain liabilities incurred prior to the date of the Purchase Agreement, costs due and payable between the date of the Purchase Agreement and the closing date, and obligations under 800 Series contracts assumed by AUG. Avalo is also entitled to a contingent milestone payment of 20% of certain amounts, if any, granted to AUG upon sale of any priority review voucher related to the 800 Series compounds granted to AUG by the FDA, net of any selling costs, or $15.0 million for each compound (for a potential aggregate of $45.0 million) if the first FDA approval is for any indication other than a Rare Pediatric Disease (as defined in the Purchase Agreement). Avalo recognized the upfront fee and assumed liabilities of $0.5 million as license and other revenue for the year ended December 31, 2023. The Company has not recognized any revenue related to the milestones as of December 31, 2023. Acquisition Related and Other Contingent Liabilities Almata Transaction Possible Future Milestone Payments On March 27, 2024, the Company acquired AVTX-009 through its acquisition of AlmataBio. The Company is required to make a cash payment of $7.5 million due to the former AlmataBio stockholders upon the initial closing of the private placement investment, which closed on March 28, 2024. A portion of the consideration for the Almata Transaction includes development milestones to the former AlmataBio stockholders including $5 million due upon the first patient dosed in a Phase 2 trial in patients with hidradenitis suppurativa for AVTX-009 and $15 million due upon the first patient dosed in a Phase 3 trial for AVTX-009, both of which are payable in cash or stock of Avalo (or a combination thereof) at the election of the former AlmataBio stockholders Aevi Merger Possible Future Milestone Payments In the first quarter of 2020, the Company consummated its merger with Aevi Genomic Medicine Inc. (“Aevi”), in which Avalo acquired the rights to AVTX-002, AVTX-006 and AVTX-007 (the “Merger” or the “Aevi Merger”). A portion of the consideration for the Aevi Merger included two future contingent development milestones worth up to an additional $6.5 million, payable in either shares of Avalo’s common stock or cash, at the election of Avalo. The first milestone was the enrollment of a patient in a Phase 2 study related to AVTX-002 (for treatment of pediatric onset Crohn's disease), AVTX-006 (for treatment of any indication), or AVTX-007 (for treatment of any indication) prior to February 3, 2022, which would have resulted in a milestone payment of $2.0 million. The Company did not meet the first milestone prior to February 3, 2022. Therefore, no contingent consideration related to this milestone was recognized as of December 31, 2023 and no future contingent consideration will be recognized. The second milestone is the receipt of an NDA approval for either AVTX-006 or AVTX-007 from the FDA on or prior to February 3, 2025. If this milestone is met, the Company is required to make a milestone payment of $4.5 million. The contingent consideration related to the second development milestone will be recognized if and when such milestone is probable and can be reasonably estimated. No contingent consideration related to the second development milestone has been recognized as of December 31, 2023. The Company will continue to monitor the second milestone at each reporting period. Ichorion Asset Acquisition Possible Future Milestone Payments In September 2018, the Company acquired Ichorion Therapeutics, Inc., including acquiring three compounds for inherited metabolic disorders known as CDGs (AVTX-801, AVTX-802 and AVTX-803) and one other preclinical compound. Consideration for the transaction included shares of Avalo common stock and three future contingent development milestones for the acquired compounds worth up to $15.0 million. All milestones are payable in either shares of the Company's common stock or cash, at the election of Avalo. The first and second milestone were marketing approval of the first and second product, respectively, by the FDA on or prior to December 31, 2021, which would have resulted in milestone payments of $6.0 million and $5.0 million, respectively. The Company did not meet the first or second milestone as of December 31, 2021. As a result, no contingent consideration related to these milestones was recognized as of December 31, 2023 and no future contingent consideration will be recognized. The third milestone was marketing approval of a protide molecule by the FDA on or prior to December 31, 2023, which would have resulted in a milestone payment of $4.0 million. The Company did not meet the third milestone as of December 31, 2023. As a result, no contingent consideration related to this milestone was recognized as of December 31, 2023 and no future contingent consideration will be recognized. AVTX-006 Royalty Agreement with Certain Related Parties In July 2019, Aevi entered into a royalty agreement with, and liabilities thereunder were assumed by, Avalo upon the close of the Aevi Merger in February 2020. The royalty agreement provided certain investors, including LeoGroup Private Investment Access, LLC on behalf of Garry Neil, the Company’s Chief Executive Officer and Chairman of the Board, and Mike Cola, the Company’s former Chief Executive Officer (collectively, the “Investors”), a royalty stream, in exchange for a one-time aggregate payment of $2.0 million (the “Royalty Agreement”). Pursuant to the Royalty Agreement, the Investors will be entitled collectively to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of the Company’s second generation mTORC1/2 inhibitor, AVTX-006. At any time beginning three years after the date of the first public launch of AVTX-006, Avalo may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to the Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Avalo assumed this Royalty Agreement upon closing of the Aevi Merger and it is recorded as a royalty obligation within the Company's accompanying consolidated balance sheet as of December 31, 2023. Because there is a significant related party relationship between the Company and the Investors, the Company has treated its obligation to make royalty payments under the Royalty Agreement as an implicit obligation to repay the funds advanced by the Investors. As the Company makes royalty payments in accordance with the Royalty Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which will result in a corresponding increase in the liability balance. Karbinal Royalty Make-Whole Provision In 2018, in connection with the acquisition of certain commercialized products, the Company entered into a supply and distribution agreement (the “Karbinal Agreement”) with TRIS Pharma Inc. (“TRIS”). As part of the Karbinal Agreement, the Company had an annual minimum sales commitment, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units through 2025. The Company was required to pay TRIS a royalty make whole payment (“Make-Whole Payments”) of $30 for each unit under the 70,000 units annual minimum sales commitment through 2025. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 27, 2024, the Company acquired AVTX-009, a Phase 2-ready anti-IL-1β mAb, through a merger with AlmataBio with and into its wholly owned subsidiary (the “Almata Transaction”). Avalo’s acquisition of AlmataBio was structured as a stock-for-stock transaction whereby all outstanding equity interests in AlmataBio were exchanged in a merger for a combination of Avalo common stock and shares of Avalo non-voting convertible preferred stock, valued at approximately $15 million, resulting in the issuance of approximately 0.2 million shares of Avalo common stock and approximately 2,400 shares of non-voting convertible preferred stock. In addition, a cash payment of $7.5 million is due to the former AlmataBio stockholders upon the initial closing of the private placement investment discussed below. Avalo is also required to pay development milestones to the former AlmataBio stockholders, including $5 million due upon the first patient dosed in a Phase 2 trial in patients with hidradenitis suppurativa for AVTX-009 and $15 million due upon the first patient dosed in a Phase 3 trial for AVTX-009, both of which are payable in cash or stock of Avalo (or a combination thereof) at the election of the former AlmataBio stockholders, subject to the terms and conditions of the definitive merger agreement. On March 28, 2024, Avalo closed a private placement investment with institutional investors to raise up to $185 million in which the investors were issued (i) an aggregate of $115.6 million of non-voting convertible preferred stock, resulting in the issuance of approximately 19,900 shares of non-voting convertible preferred stock and and (ii) warrants to purchase up to an aggregate of approximately 12.0 million shares of Avalo’s common stock or non-voting convertible preferred stock, subject to the terms and conditions set forth in the warrant agreement for an aggregate exercise price of $69.4 million. The warrants are exercisable for approximately $5.80 per underlying share of common stock until the earlier of five years from the date of issuance or 30 days after the public announcement of the first patient dosed in a Phase 2 trial of AVTX-009 in HS. After deducting estimated transaction costs from both the private placement financing and the acquisition of AlmataBio, Avalo expects net upfront proceeds to be approximately $105 million. The estimated transaction costs do not include the $7.5 million cash payment due to former AlmataBio stockholders upon the initial closing of the private placement investment. Subject to Avalo stockholder approval, each share of Avalo non-voting convertible preferred stock (i) issued to former AlmataBio stockholders and ii) pursuant to the private placement investment will automatically convert to 1,000 shares of common stock, subject to certain beneficial ownership limitations set by each holder. The non-voting convertible preferred stock holds no voting rights. On an as-converted basis and after accounting for these transactions (excluding the exercise of the warrants), the total number of shares of Avalo common stock outstanding would be approximately 23.4 million immediately after the close of the transactions. Current officers of the Avalo will continue to lead the Company and no person affiliated with AlmataBio will become an officer or employee of Avalo. Pursuant to the acquisition, Jonathan Goldman, M.D. was appointed to Avalo’s Board of Directors effective on the closing of the transaction. Samantha Truex and Aaron Kantoff were appointed to Avalo’s Board of Directors upon close of the private placement financing. The five existing Avalo directors will continue in their roles. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net loss | $ (31,544) | $ (41,658) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Avalo Therapeutics, Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, the valuation of derivative liabilities, cash flows used in management's going concern assessment, income taxes, goodwill, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. |
Restricted Cash | Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. |
Accounts Receivable, net | Accounts Receivable, net The Company had one commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. The license and supply agreement for the Millipred ® product expired on September 30, 2023. Accounts receivable, net is historically comprised of amounts due from customers in the ordinary course of business. Accounts receivable are written off to net revenue when deemed uncollectible and recoveries of receivables previously written off are recorded when received. |
Deferred Revenue, Product Revenues, net, Returns and Allowances, License and Other Revenue and Cost of Product sales | Deferred Revenue The Company’s commercial operations were managed by a third-party logistics provider. Our third-party logistics provider purchased Millipred ® from us and subsequently delivered the product to our customers. As discussed below within “Product Revenue, net”, the Company recognized revenue when the performance obligation was satisfied, which was at a point in time when the product had been received by the customer. Deferred revenue was comprised of cash received from our third-party logistics provider related to product that had not yet been delivered to the customer. Product Revenues, net The Company generated its revenue from sales of its prescription drug to its customers. The license and supply agreement for the Millipred ® product ended on September 30, 2023, therefore the Company does not expect future gross product revenues until the potential commercialization of its pipeline product candidates. The Company had identified a single product delivery performance obligation, which was the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors. The performance obligation was satisfied at a point in time, when control of the product had been transferred to the customer, which was the time the product had been received by the customer. The Company determined the transaction price based on fixed consideration in its contractual agreements and the transaction price was allocated entirely to the performance obligation to provide the prescription drug. Revenues from sales of products were recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration was recorded as a reduction of revenue at the time revenues from product sales were recognized. The Company recognized revenue only to the extent that it was probable that a significant revenue reversal would not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, Company expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company re-assesses these estimates and judgments each reporting period to adjust accordingly. Returns and Allowances Consistent with industry practice, for its Millipred ® product, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product’s expiration date. The Company’s return policy for sales made prior to August 31, 2021, generally allows for customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The Company’s return policy for sales subsequent to August 31, 2021, generally allows for customers to receive credit for expired products within thirty days prior to expiration and within ninety days after expiration. Based on these policies, product returns will be accepted through November of 2024, however, could be received by the Company later depending on timing of receipt and communication by its third-party logistics provider. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The license and supply agreement for the Millipred ® product ended on September 30, 2023. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company reassesses the milestones each reporting period to determine the probability of achievement. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) royalty payments the Company is required to pay based on the product’s net profit pursuant to its license and supply agreement, (iii) the value of any write-offs of obsolete or damaged inventory that cannot be sold and (iv) the write-off of receivables that are deemed not probable to be collected. The license and supply agreement for the Millipred ® product expired on September 30, 2023. |
Derivative liability | Derivative Liability Upon entering into a transaction to sell the Company’s future rights to milestones and royalty payments of previously out-licensed assets, the Company must assess whether the transaction is a derivative under ASC 815, Derivatives and Hedging . The requirements for the sale to be treated as a derivative are as follows: a) one or more underlying; b) one or more notional amounts or payment provisions or both; c) no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and d) net settlement provisions. If the transaction meets the requirements to be treated as a derivative, we estimate the fair value of the derivative liability on the date of issuance. The derivative liability is re-valued each reporting period and any change in the fair value is recorded as a gain or loss in the statements of operations and comprehensive loss. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. |
Leases | Leases |
Property and Equipment | Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, depreciation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement’s useful life. The Company uses the lesser of the lease term or ten years |
Acquisitions | Acquisitions For acquisitions that meet the definition of a business under ASC 805, Business Combinations, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. |
Segment Information | Segment Information |
Goodwill | Goodwill The Company’s goodwill relates to historical acquisitions that were accounted for as business combinations and represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting. In accordance with ASC 350, Intangibles - Goodwill and Other , goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company’s reporting unit below its carrying amount. A reporting unit is an operating segment or one level below the operating segment. As standalone discrete and detailed financial information is not available or regularly reviewed below the company-wide level, the Company consists of one reporting unit. |
Notes Payable | Notes Payable Notes payable was recorded on the balance sheet at carrying value, which was the gross balance (inclusive of the final payment fee for the Note (as defined in Note 10)), less the unamortized debt discount and issuance costs. All fees, costs paid to the Lenders (as defined in Note 10) and all direct costs incurred by the Company were recognized as a debt discount and were amortized to interest expense using the effective interest method over the life of the loan. In 2023, the Company repaid all outstanding principal and interest under the Loan Agreement (as defined in Note 10) and all obligations of the parties under the Loan Agreement were deemed satisfied and terminated. As such, there was no remaining notes payable balance at December 31, 2023. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance and quality; costs and milestones associated with certain licensing agreements, and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. The Company is a party to license and development agreements for in-licensed research and development assets with third parties. Such agreements often contain future payment obligations such as royalties and milestone payments. The Company recognizes a liability (and related research and development expense) for each milestone if and when such milestone is probable and can be reasonably estimated. As typical in the biotechnology industry, each milestone has its own unique risks that the Company evaluates when determining the probability of achieving each milestone and the probability of success evolves over time as the programs progress and additional information is obtained. The Company considers numerous factors when evaluating whether a given milestone is probable including (but not limited to) the regulatory pathway, development plan, ability to dedicate sufficient funding to reach a given milestone and the probability of success. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals |
Stock-Based Compensation | Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation , which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. Additionally, the stock price on the date of grant is utilized in the Black-Scholes option pricing model. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes |
Comprehensive Loss | Comprehensive Loss |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge. Instead, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. This new standard was adopted effective January 1, 2023 and will be applied upon any recognition of any future goodwill impairment charge. The adoption of this ASU has not had a material impact on our financial statements. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Net Loss Per Share of Common Stock | The following tables set forth the computation of basic and diluted net loss per share of common stock for the years ended December 31, 2023 and 2022 (in thousands, except per share amounts): Year Ended December 31, 2023 Common stock Net loss $ (31,544) Weighted average shares 277,727 Basic and diluted net loss per share $ (114) Year Ended December 31, 2022 Common stock Net loss $ (41,658) Weighted average shares 39,202 Basic and diluted net loss per share $ (1,063) |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Weighted Shares Outstanding | The following outstanding securities at December 31, 2023 and 2022 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2023 2022 Stock options 7,559 6,082 Warrants on common stock 1 17,254 1,537 1 The weighted average number of common shares outstanding includes the weighted average outstanding pre-funded warrants for the period because their exercise price was nominal. There were no pre-funded warrants outstanding as of December 31, 2023. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2023 Fair Value Measurements Using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 7,077 $ — $ — Liabilities Derivative liability $ — $ — $ 5,550 December 31, 2022 Fair Value Measurements Using Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 12,133 $ — $ — Liabilities Derivative liability $ — $ — $ 4,830 |
Schedule of Changes in the Fair Value of the Level 3 Valuation | The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the derivative liability for the years ended December 31, 2023 and 2022: Derivative liability Balance at December 31, 2022 $ 4,830 Change in fair value of derivative liability 720 Balance at December 31, 2023 $ 5,550 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Furniture and equipment $ 248 $ 280 Computers and software 34 56 Right-of-use assets 1,329 1,750 Leasehold improvements 896 739 Total property and equipment 2,507 2,825 Less accumulated depreciation (542) (414) Property and equipment, net $ 1,965 $ 2,411 |
Summary of Assets and Liabilities Lessee | Supplemental balance sheet information related to the leased properties include (in thousands): As of December 31, 2023 December 31, 2022 Property and equipment, net $ 1,329 $ 1,750 Accrued expenses and other current liabilities $ 537 $ 532 Other long-term liabilities 1,366 1,711 Total operating lease liabilities $ 1,903 $ 2,243 |
Summary of Components of Lease Expense | The components of lease expense for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease cost* $ 460 $ 493 *Includes short-term leases, which are immaterial. |
Summary of Operating Lease Maturities | The following table shows a maturity analysis of the operating lease liability as of December 31, 2023 (in thousands): Undiscounted Cash Flows 2024 543 2025 547 2026 557 2027 258 2028 201 Thereafter 224 Total lease payments $ 2,330 Less implied interest (427) Total $ 1,903 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the year ended December 31, 2023 was as follows (in thousands): Goodwill Balance as of December 31, 2022 $ 14,409 Goodwill impairment (3,907) Balance as of December 31, 2023 $ 10,502 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Research and development $ 352 $ 6,293 Compensation and benefits 580 2,699 Selling, general and administrative 830 1,008 Commercial operations 1,873 1,694 Royalty payment — 508 Lease liability, current 537 532 Other — 480 Total accrued expenses and other current liabilities $ 4,172 $ 13,214 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Balance sheet information related to the notes payable for the Notes is as follows (in thousands): As of December 31, 2022 Initial Note 12,139 Second Note 6,070 Third Note 3,035 Notes payable, gross 1 21,244 Less: Unamortized debt discount and issuance costs 1,828 Carrying value of notes payable 19,416 Less: Current portion 5,930 Carrying value of notes payable, non-current $ 13,486 |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Outstanding Common Stock Warrants | At December 31, 2023, the following common stock warrants were outstanding: Number of common shares Exercise price Expiration underlying warrants per share date 1,389 $ 36,000 June 2024 148 $ 7,488 June 2031 15,717 $ 1,200 February 2024 17,254 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense recognized for the years ended December 31, 2023 and 2022 was as follows (in thousands): Year Ended December 31, 2023 2022 Research and development $ 1,318 $ 1,249 Selling, general and administrative 2,157 6,305 Total stock-based compensation $ 3,475 $ 7,554 |
Schedule of Option Activity | The following table summarizes the Company's service-based option activity for the year ended December 31, 2023: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2022 5,734 $ 6,789 $ 3,948 6.7 Granted 3,243 $ 641 $ 479 Forfeited (44) $ 1,137 $ 147 Expired (1,722) $ 10,419 $ 5,966 Balance at December 31, 2023 7,211 $ 3,192 $ 1,930 8.3 Exercisable at December 31, 2023 3,517 $ 5,293 $ 3,056 7.5 |
Schedule of Fair Value Assumptions for Options | The following table shows the assumptions used to compute stock-based compensation expense for stock options with service-based vesting conditions granted under the Black-Scholes valuation model for the years ended December 31, 2023 and 2022: Year Ended December 31, Service-based options 2023 2022 Expected term of options (in years) 5 — 6.25 5 — 6.25 Expected stock price volatility 89.8% — 146.0% 84.0% — 93.5% Risk-free interest rate 3.43% — 4.13% 1.50% — 4.25% Expected annual dividend yield 0% 0% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Provision | The income tax provision from continuing operations consisted of the following for the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Current: Federal $ — $ — State — — Total Current — — Deferred: Federal 24 24 State (10) 4 Total Deferred 14 28 Net income tax expense $ 14 $ 28 |
Schedule of Components of Deferred Tax Assets (Liabilities) | The net deferred tax assets (liabilities) consisted of the following for the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Deferred tax assets (liabilities): Net operating losses $ 37,268 $ 32,393 Tax credits 5,854 5,706 Capitalized research and development 6,945 6,567 Stock-based compensation 3,557 3,532 Basis difference in tangible and intangible assets, net 1,843 2,299 Accrued compensation 118 585 Installment sale and revenue recognition 1,601 1,566 Other reserves 336 395 Lease liability 410 523 Prepaid expenses (118) (248) Right-of-use asset (286) (408) Goodwill (774) (702) Total deferred tax assets, net 56,754 52,208 Less valuation allowance (56,909) (52,349) Net deferred taxes $ (155) $ (141) |
Schedule of Reconciliation of Income Tax Expenses Between Federal Statutory Rate and Effective Income Tax Rate | The income tax expense for the years ended December 31, 2023 and 2022 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2023 2022 Federal statutory rate 21.00 % 21.00 % Goodwill impairment (2.60) — Stock compensation (1.40) (2.72) State taxes 0.03 (0.01) Research tax credit 0.47 2.01 Other — (0.19) Valuation allowance (17.54) (20.15) Effective income tax rate (0.04) % (0.06) % |
Business (Details)
Business (Details) $ in Thousands | 12 Months Ended | ||||
Mar. 28, 2024 USD ($) | Dec. 28, 2023 | Jul. 07, 2022 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument | |||||
Conversion ratio | 0.0042 | 0.0833 | |||
Net loss | $ 31,544 | $ 41,658 | |||
Net cash used in operating activities | 30,680 | 26,751 | |||
Cash and cash equivalents | 7,415 | 13,172 | |||
Net proceeds from equity offerings | 46,200 | ||||
Subsequent Event | Private Placement | |||||
Debt Instrument | |||||
Net proceeds | $ 185,000 | ||||
Proceeds from issuance of private placement | 105,000 | ||||
Subsequent Event | Private Placement | Preferred Stock | |||||
Debt Instrument | |||||
Net proceeds | 115,600 | ||||
Subsequent Event | Private Placement | Warrant | |||||
Debt Instrument | |||||
Net proceeds | 69,400 | ||||
Potential proceeds from future exercise of warrants | $ 69,400 | ||||
Horizon & Powerscourt Notes | Notes Payable | |||||
Debt Instrument | |||||
Long-term debt, gross | $ 21,200 | $ 21,244 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2023 reportingUnit contract segment | |
SIGNIFICANT ACCOUNTING POLICIES | |
Payment terms | 60 days |
Prompt payment discount | 2% |
Number of operating leases | contract | 2 |
Number of operating segments | segment | 1 |
Number of reporting units | reportingUnit | 1 |
Computers and software | |
SIGNIFICANT ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 4 years |
Equipment and furniture | |
SIGNIFICANT ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 5 years |
Leasehold improvements | |
SIGNIFICANT ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 10 years |
Revenue (Details)
Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 27 Months Ended | ||||
Oct. 27, 2023 USD ($) | Jul. 01, 2021 USD ($) | Sep. 30, 2021 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2024 USD ($) | Jun. 30, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||
Total revenues, net | $ 1,924 | $ 18,051 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Other long-term assets | $ 700 | $ 1,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Scenario, Forecast | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Proceeds from divestiture of businesses | $ 1,000 | ||||||
Major Customer One | Sales Revenue | Customer Concentration Risk | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk (as a percent) | 58% | 68% | |||||
Major Customer Two | Sales Revenue | Customer Concentration Risk | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk (as a percent) | 42% | 32% | |||||
AVTX-007 | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Proceeds from upfront fees | $ 14,500 | ||||||
AVTX-611 | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total revenues, net | 200 | ||||||
Product revenue, net | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total revenues, net | $ 1,408 | 3,364 | |||||
Millipred | Teva Pharmaceutical Industries Ltd. | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Percent of net profit for installment payments | 50% | ||||||
Installment payments | $ 500 | ||||||
License and other revenue | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total revenues, net | 516 | $ 14,687 | |||||
AUG Therapeutics, LLC | Purchase Agreement | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Upfront payment paid | $ 200 | ||||||
Asset acquisition consideration transferred, liabilities | $ 400 | ||||||
Contingent milestone upfront payment percentage | 0.20 | ||||||
Contingent milestone payment | $ 15,000 | ||||||
Maximum potential payments | $ 45,000 | ||||||
AUG Therapeutics, LLC | Purchase Agreement | License and other revenue | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total revenues, net | $ 500 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share of Common Stock for Continuing and Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Earnings Per Share [Abstract] | |||
Net loss | $ (31,544) | $ (41,658) | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||
Weighted average shares, basic (in shares) | 277,727 | 39,202 | |
Weighted average shares, diluted (in shares) | 277,727 | 39,202 | |
Earnings PEr Share Basic And Diluted EPS [Abstract] | |||
Basic, net loss per share (in dollars per share) | [1] | $ (114) | $ (1,063) |
Diluted, net loss per share (in dollars per share) | [1] | $ (114) | $ (1,063) |
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock options | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 7,559 | 6,082 |
Warrants on common stock | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 17,254 | 1,537 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities from Continuing Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative liability | Derivative liability |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 7,077 | $ 12,133 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Recurring basis | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative Financial Instruments, Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 5,550 | $ 4,830 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Nov. 07, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | $ 3,907 | $ 0 | |
Change in fair value of derivative liability | 720 | 0 | |
Derivative Financial Instruments, Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | 5,550 | $ 4,830 | |
AVTX-501 And AVTX-007 | Derivative Financial Instruments, Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, issuances | $ 4,800 | 5,600 | |
AVTX-501 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maximum aggregate milestone payment | 20,000 | ||
AVTX-501 | Derivative Financial Instruments, Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, issuances | $ 3,500 | 3,800 | |
AVTX-501 | Derivative Financial Instruments, Liabilities | Measurement Input, Probability Of Success | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, measurement input | 0.23 | ||
AVTX-501 | Derivative Financial Instruments, Liabilities | Measurement Input, Expected Term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, measurement input term | 3 years 9 months 18 days | ||
AVTX-007 | Derivative Financial Instruments, Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, issuances | $ 1,300 | $ 1,700 | |
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Probability Of Success | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, measurement input | 0.17 | ||
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Expected Term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, measurement input term | 4 years 9 months 18 days | ||
AVTX-007 | Derivative Financial Instruments, Liabilities | Measurement Input, Sales Forecast Peak | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability, measurement input | 300,000 | ||
AVTX-611 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maximum aggregate milestone payment | $ 20,000 | ||
ES | Derivative Financial Instruments, Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability, issuances | 5,000 | ||
Milestone One | AVTX-007 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maximum aggregate milestone payment | 6,250 | ||
Milestone Two | AVTX-007 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maximum aggregate milestone payment | $ 67,500 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in the Fair Value (Details) - Derivative Financial Instruments, Liabilities $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Change in fair value of derivative liability | $ 720 |
Ending balance | $ 4,830 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,507 | $ 2,825 |
Less accumulated depreciation | (542) | (414) |
Property and equipment, net | 1,965 | 2,411 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 248 | 280 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 34 | 56 |
Right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,329 | 1,750 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 896 | $ 739 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 USD ($) contract renewal_option | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 0.2 | $ 0.1 | ||
Number of operating leases | contract | 2 | |||
Remaining lease term | 4 years 7 months 6 days | |||
Discount rate | 9.10% | |||
Building | MARYLAND | ||||
Property, Plant and Equipment [Line Items] | ||||
Annual base rent | $ 0.2 | |||
Annual rent increase (as a percent) | 2.50% | |||
Rent abatement period | 12 months | |||
Lease term | 10 years | |||
Number of renewal options | renewal_option | 2 | |||
Lease renewal term | 5 years | |||
Building | PENNSYLVANIA | ||||
Property, Plant and Equipment [Line Items] | ||||
Annual rent increase (as a percent) | 2.40% | |||
Lease term | 5 years 3 months | |||
Annual base rent | $ 0.2 | |||
Operating lease, expense | $ 0.1 |
Property and Equipment - Supple
Property and Equipment - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment, net | $ 1,329 | $ 1,750 |
Accrued expenses and other current liabilities | 537 | 532 |
Other long-term liabilities | 1,366 | 1,711 |
Total operating lease liabilities | $ 1,903 | $ 2,243 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net | Property and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Property and Equipment - Lease
Property and Equipment - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Operating lease cost | $ 460 | $ 493 |
Property and Equipment - Leas_2
Property and Equipment - Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
2024 | $ 543 | |
2025 | 547 | |
2026 | 557 | |
2027 | 258 | |
2028 | 201 | |
Thereafter | 224 | |
Total lease payments | 2,330 | |
Less implied interest | (427) | |
Total operating lease liabilities | $ 1,903 | $ 2,243 |
Goodwill - Schedule of Intangib
Goodwill - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 14,409 | |
Goodwill impairment | (3,907) | $ 0 |
Goodwill, ending balance | $ 10,502 | $ 14,409 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 USD ($) reportingUnit | Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Changes in carrying amount of goodwill | $ 0 | ||
Number of reporting units | reportingUnit | 1 | ||
Goodwill impairment | $ 3,907,000 | $ 0 | |
Market capitalization percentage decrease | 69% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Research and development | $ 352 | $ 6,293 |
Compensation and benefits | 580 | 2,699 |
Selling, general and administrative | 830 | 1,008 |
Commercial operations | 1,873 | 1,694 |
Royalty payment | 0 | 508 |
Lease liability, current | 537 | 532 |
Other | 0 | 480 |
Total accrued expenses and other current liabilities | $ 4,172 | $ 13,214 |
Cost Reduction Plan (Details)
Cost Reduction Plan (Details) - Employee Severance - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Restructuring Plan, One-Time Termination Benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 1.5 | ||
Payments for restructuring | $ 1.4 | ||
Share-based payment arrangement, accelerated cost | 0.4 | ||
Restructuring Plan, One-Time Termination Benefits | Research and development | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0.7 | ||
Restructuring Plan, One-Time Termination Benefits | Selling, General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 0.8 | ||
Separation From Certain Section 16 Officers | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1.7 | ||
Share-based payment arrangement, accelerated cost | $ 3.9 | ||
Separation From Certain Section 16 Officers | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Payment term | 12 months | ||
Separation From Certain Section 16 Officers | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Payment term | 18 months |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jun. 04, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 22, 2023 | Feb. 07, 2023 | |
Line of Credit Facility [Line Items] | |||||||
Principal payments on Notes | $ 21,244 | $ 0 | |||||
Accretion of debt discount | 1,828 | $ 1,389 | |||||
Warrant | |||||||
Line of Credit Facility [Line Items] | |||||||
Exercise price per share (in dollars per share) | $ 1,200 | ||||||
Horizon & Powerscourt Notes | Notes Payable | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal amount | $ 35,000 | ||||||
Principal payments on Notes | $ 6,000 | $ 15,000 | |||||
Interest payable | $ 14,300 | ||||||
Horizon & Powerscourt Notes | Notes Payable | Warrant | |||||||
Line of Credit Facility [Line Items] | |||||||
Number of shares issued (in shares) | 148 | ||||||
Exercise price per share (in dollars per share) | $ 7,488 | ||||||
Warrants or rights exercisable term | 10 years | ||||||
Accretion of debt discount | $ 900 |
Notes Payable - Balance Sheet I
Notes Payable - Balance Sheet Information (Details) - Horizon & Powerscourt Notes - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Notes Payable | ||
Debt Instrument | ||
Notes payable, gross | $ 21,200 | $ 21,244 |
Less: Unamortized debt discount and issuance costs | 1,828 | |
Carrying value of notes payable | 19,416 | |
Less: Current portion | 5,930 | |
Carrying value of notes payable, non-current | 13,486 | |
Initial Note | ||
Debt Instrument | ||
Notes payable, gross | 12,139 | |
Second Note | ||
Debt Instrument | ||
Notes payable, gross | 6,070 | |
Third Note | ||
Debt Instrument | ||
Notes payable, gross | $ 3,035 |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||||||
Feb. 07, 2023 USD ($) $ / shares shares | Aug. 31, 2023 USD ($) | May 31, 2023 $ / shares shares | Jul. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) class_of_stock $ / shares shares | Mar. 28, 2024 shares | Dec. 31, 2022 $ / shares shares | ||
Class of Stock [Line Items] | ||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | |||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | |||||||
Common stock, shares authorized (in shares) | [1] | 200,000,000 | 200,000,000 | |||||
Preferred stock, shares authorized (in shares) | 5,000,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.001 | $ 0.001 | |||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||||
Class of warrant or right, ownership, exercise threshold | 61 days | |||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares outstanding after private financing, exercise of warrants and preferred stock conversion | 35,400,000 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares available under warrant (in shares) | 17,254 | |||||||
Minimum | ||||||||
Class of Stock [Line Items] | ||||||||
Class of warrant or right, ownership percentage, exercise threshold | 9.99% | |||||||
Maximum | ||||||||
Class of Stock [Line Items] | ||||||||
Class of warrant or right, ownership percentage, exercise threshold | 19.99% | |||||||
Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 1,200 | |||||||
Number of shares available under warrant (in shares) | 1,875 | |||||||
Common Stock Warrants - Expiration Date of February 2024 | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 1,200 | |||||||
Number of shares available under warrant (in shares) | 15,717 | |||||||
Nantahala Capital Management LLC | ||||||||
Class of Stock [Line Items] | ||||||||
Percentage of ownership | 5% | |||||||
ATM Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Net proceeds | $ | $ 9,032,567 | $ 32,500,000 | ||||||
Sale of stock, maximum amount of shares to be sold | $ | $ 50,000,000 | |||||||
Number of shares issued (in shares) | 700,000 | |||||||
Exchange Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.24 | |||||||
Exchange Agreement | Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 5,417 | |||||||
Exchange Agreement | Venrock Healthcare Capital Partners | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 5,417 | |||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 0.001 | |||||||
Underwritten Public Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Net proceeds | $ | $ 13,700,000 | |||||||
Number of shares issued (in shares) | 15,717 | |||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 955 | |||||||
Underwritten Public Offering | Armistice | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued (in shares) | 1,875 | |||||||
[1]Amounts for prior periods presented have been retroactively adjusted to reflect the 1-for-240 reverse stock split effected on December 28, 2023. See Note 1 for details. |
Capital Structure - Common Stoc
Capital Structure - Common Stock Warrants (Details) - Common Stock | Dec. 31, 2023 $ / shares shares |
Class of Warrant or Right [Line Items] | |
Number of shares available under warrant (in shares) | 17,254 |
Common Stock Warrants - Expiration Date of June 2024 | |
Class of Warrant or Right [Line Items] | |
Number of shares available under warrant (in shares) | 1,389 |
Exercise price per share (in dollars per share) | $ / shares | $ 36,000 |
Common Stock Warrants - Expiration Date of June 2031 | |
Class of Warrant or Right [Line Items] | |
Number of shares available under warrant (in shares) | 148 |
Exercise price per share (in dollars per share) | $ / shares | $ 7,488 |
Common Stock Warrants - Expiration Date of February 2024 | |
Class of Warrant or Right [Line Items] | |
Number of shares available under warrant (in shares) | 15,717 |
Exercise price per share (in dollars per share) | $ / shares | $ 1,200 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jan. 01, 2024 | May 18, 2016 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 05, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation | $ 3,475 | $ 7,554 | ||||
Expected annual dividend yield | 0% | |||||
Service Based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation | $ 3,300 | $ 7,400 | ||||
Aggregate intrinsic value of options exercisable | 0 | |||||
Options vested (in shares) | 2,229 | |||||
Weighted average exercise price (in dollars per share) | $ 2,201 | |||||
Fair value of options vested in period | 3,400 | $ 9,600 | ||||
Compensation not yet recognized | $ 2,800 | |||||
Period for recognition | 1 year 8 months 12 days | |||||
Expected annual dividend yield | 0% | 0% | ||||
Exercisable stock options (in shares) | 7,211 | 5,734 | ||||
Weighted average exercise price (in dollars per share) | $ 3,192 | $ 6,789 | ||||
Weighted average remaining contractual term | 8 years 3 months 18 days | 6 years 8 months 12 days | ||||
Service Based Options | Special Advisor to the Board | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation | $ 4,300 | |||||
Market Based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercisable stock options (in shares) | 348 | |||||
Weighted average exercise price (in dollars per share) | $ 9,488 | |||||
Weighted average remaining contractual term | 6 months | |||||
Stock options with market-based vesting conditions granted (in shares) | 0 | |||||
Stock options with market-based vesting conditions exercised (in shares) | 0 | |||||
Stock options with market-based vesting conditions forfeited (in shares) | 0 | |||||
Nonvested restricted (in shares) | 0 | 0 | ||||
2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual share reserve increase | 4% | |||||
Common stock remaining for future issuance (in shares) | 450 | |||||
2016 Plan | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in number of shares reserved for issuance (in shares) | 32,070 | |||||
2016 Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award expiration period | 10 years | |||||
2016 Plan | Stock options | Maximum | Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
2016 Plan | Stock options | Maximum | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 3 years | |||||
2016 Plan | Stock options | Minimum | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 1 year | |||||
Employee Stock Purchase Plan (ESPP) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock remaining for future issuance (in shares) | 784 | |||||
Total stock-based compensation | $ 200 | $ 200 | ||||
Purchase price of common stock, percentage | 85% | |||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15% | |||||
Maximum annual amount of fair market value of the company's common stock that a participant may accrue the rights to purchase | $ 25 | |||||
Shares of common stock for future issuance (in shares) | 174 | 174 | ||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1% | |||||
Employee Stock Purchase Plan (ESPP) | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in number of shares reserved for issuance (in shares) | 174 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 3,475 | $ 7,554 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 1,318 | 1,249 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 2,157 | $ 6,305 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Options With Service-based Vesting Conditions (Details) - Service Based Options - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of shares | ||
Balance, beginning of period (in shares) | 5,734 | |
Granted (in shares) | 3,243 | |
Forfeited (in shares) | (44) | |
Expired (in shares) | (1,722) | |
Balance, end of period (in shares) | 7,211 | 5,734 |
Exercisable (in shares) | 3,517 | |
Weighted average exercise price per share | ||
Balance, beginning of period (in dollars per share) | $ 6,789 | |
Granted (in dollars per share) | 641 | |
Forfeited (in dollars per share) | 1,137 | |
Expired (in dollars per share) | 10,419 | |
Balance, end of period (in dollars per share) | 3,192 | $ 6,789 |
Exercisable (in dollars per share) | 5,293 | |
Weighted average grant date fair value per share | ||
Balance, beginning of period (in dollars per share) | 3,948 | |
Granted (in dollars per share) | 479 | |
Forfeited (in dollars per share) | 147 | |
Expired (in dollars per share) | 5,966 | |
Balance, end of period (in dollars per share) | 1,930 | $ 3,948 |
Exercisable (in dollars per share) | $ 3,056 | |
Weighted average remaining contractual term (in years) | ||
Weighted average remaining contractual term | 8 years 3 months 18 days | 6 years 8 months 12 days |
Exercisable | 7 years 6 months |
Stock Based Compensation - St_3
Stock Based Compensation - Stock-based Compensation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0% | |
Service Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0% | 0% |
Service Based Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (in years) | 5 years | 5 years |
Expected stock price volatility | 89.80% | 84% |
Risk-free interest rate | 3.43% | 1.50% |
Service Based Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (in years) | 6 years 3 months | 6 years 3 months |
Expected stock price volatility | 146% | 93.50% |
Risk-free interest rate | 4.13% | 4.25% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Accrued penalties and interest accrued | $ 0 | $ 0 |
Deferred tax assets, tax credit carryforwards, research | 5.9 | |
Increase in valuation allowance | 4.6 | |
Federal and State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, not subject to expiration | 160.4 | |
Operating loss carryforwards, subject to expiration | $ 3.4 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Total Current | 0 | 0 |
Deferred: | ||
Federal | 24 | 24 |
State | (10) | 4 |
Total Deferred | 14 | 28 |
Net income tax expense | $ 14 | $ 28 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets (liabilities): | ||
Net operating losses | $ 37,268 | $ 32,393 |
Tax credits | 5,854 | 5,706 |
Capitalized research and development | 6,945 | 6,567 |
Stock-based compensation | 3,557 | 3,532 |
Basis difference in tangible and intangible assets, net | 1,843 | 2,299 |
Accrued compensation | 118 | 585 |
Installment sale and revenue recognition | 1,601 | 1,566 |
Other reserves | 336 | 395 |
Lease liability | 410 | 523 |
Prepaid expenses | (118) | (248) |
Right-of-use asset | (286) | (408) |
Goodwill | (774) | (702) |
Total deferred tax assets, net | 56,754 | 52,208 |
Less valuation allowance | (56,909) | (52,349) |
Net deferred taxes | $ (155) | $ (141) |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of income tax expense | ||
Federal statutory rate | 21% | 21% |
Goodwill impairment | (2.60%) | 0% |
Stock compensation | (1.40%) | (2.72%) |
State taxes | 0.03% | (0.01%) |
Research tax credit | 0.47% | 2.01% |
Other | 0% | (0.19%) |
Valuation allowance | (17.54%) | (20.15%) |
Effective income tax rate | (0.04%) | (0.06%) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Mar. 27, 2024 USD ($) | Oct. 27, 2023 USD ($) | Feb. 03, 2020 USD ($) milestone | Sep. 24, 2018 USD ($) therapy milestone | Jul. 31, 2019 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2019 unit $ / shares | Aug. 14, 2023 USD ($) | Jun. 22, 2021 USD ($) | Jun. 09, 2021 USD ($) | May 28, 2021 USD ($) | Mar. 25, 2021 USD ($) | |
Loss Contingencies [Line Items] | |||||||||||||
Accrued expenses and other current liabilities | $ 4,172 | $ 13,214 | |||||||||||
Total revenues, net | 1,924 | 18,051 | |||||||||||
Royalty agreement, payment received | $ 2,000 | ||||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||||
Buyout option, percentage of net present value of royalty payments | 75% | ||||||||||||
Aevi | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Payment for contingent consideration | 0 | ||||||||||||
Aevi | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Number of contingent consideration milestones | milestone | 2 | ||||||||||||
Contingent consideration | $ 6,500 | ||||||||||||
Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Contingent consideration | $ 15,000 | ||||||||||||
Payment for contingent consideration | 0 | ||||||||||||
Number of contingent consideration milestones | milestone | 3 | ||||||||||||
AlmataBio Transaction | Subsequent Event | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Payment to acquire business | $ 7,500 | ||||||||||||
License and other revenue | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Total revenues, net | 516 | 14,687 | |||||||||||
CERC-801, CERC-802, And CERC-803 | Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||||
CERC-913 | Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Number of preclinical therapies | therapy | 1 | ||||||||||||
Milestone One | Aevi | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Contingent consideration | 2,000 | ||||||||||||
Milestone One | Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Payment for contingent consideration | $ 6,000 | ||||||||||||
Milestone One | AlmataBio Transaction | Subsequent Event | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Contingent consideration | 5,000 | ||||||||||||
Milestone Two | Aevi | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Contingent consideration | $ 4,500 | ||||||||||||
Milestone Two | Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Payment for contingent consideration | 5,000 | ||||||||||||
Milestone Two | AlmataBio Transaction | Subsequent Event | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Contingent consideration | $ 15,000 | ||||||||||||
Milestone Three | Ichorion | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Payment for contingent consideration | $ 4,000 | 0 | |||||||||||
Lilly License Agreement | AVTX-009 Lilly License Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Collaborative arrangement, rights and obligations, milestone payments | 70,000 | ||||||||||||
Lilly License Agreement | AVTX-009 Lilly License Agreement | Milestone One | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | 720,000 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Upfront license fee | $ 10,000 | ||||||||||||
Percent of payments received from sublicensing | 30% | ||||||||||||
Research and development | 0 | ||||||||||||
Cumulative expense recognized to date | 0 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone One | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 112,500 | ||||||||||||
Kyowa Kirin Co., Ltd. (KKC) | AVTX-002 KKC License Agreement | Milestone Two | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 75,000 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Upfront license fee | $ 400 | ||||||||||||
Research and development | 0 | ||||||||||||
Patent costs | 500 | ||||||||||||
Cumulative expense recognized to date | 0 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone One | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | 24,200 | ||||||||||||
Sanford Burnham Prebys Medical Discovery Institute | AVTX-008 Sanford Burnham Prebys License Agreement | Milestone Two | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | $ 50,000 | ||||||||||||
Astellas Pharma, Inc. (Astellas) | AVTX-006 Astellas License Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum aggregate milestone payment | 5,500 | ||||||||||||
Upfront license fee | 500 | ||||||||||||
Research and development | 0 | ||||||||||||
Cumulative expense recognized to date | 500 | ||||||||||||
Alto | AVTX-301 Out-License | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 18,600 | ||||||||||||
Revenue recognized from milestones to date | 0 | ||||||||||||
ES | AVTX-406 License Assignment | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Revenue recognized from milestones to date | $ 0 | ||||||||||||
ES | Milestone One | AVTX-406 License Assignment | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 6,000 | ||||||||||||
ES | Milestone Two | AVTX-406 License Assignment | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Maximum proceeds from milestones | $ 20,000 | ||||||||||||
AUG Therapeutics, LLC | Purchase Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Upfront payment paid | $ 200 | ||||||||||||
Asset acquisition consideration transferred, liabilities | $ 400 | ||||||||||||
Contingent milestone upfront payment percentage | 0.20 | ||||||||||||
Contingent milestone payment | $ 15,000 | ||||||||||||
Maximum potential payments | 45,000 | ||||||||||||
AUG Therapeutics, LLC | Purchase Agreement | AVTX-800 Series Asset Sale | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Upfront payment paid | 200 | ||||||||||||
Asset acquisition consideration transferred, liabilities | $ 400 | ||||||||||||
Contingent milestone upfront payment percentage | 0.20 | ||||||||||||
Contingent milestone payment | $ 15,000 | ||||||||||||
Maximum potential payments | $ 45,000 | ||||||||||||
AUG Therapeutics, LLC | Purchase Agreement | License and other revenue | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Total revenues, net | 500 | ||||||||||||
TRIS Pharma | Karbinal Agreement | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Minimum quantity required | unit | 70,000 | ||||||||||||
Make whole payment per unit (in dollars per share) | $ / shares | $ 30 | ||||||||||||
Apollo AP43 Limited | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Estimate of possible loss | $ 800 | ||||||||||||
Accrued expenses and other current liabilities | $ 200 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Millions | Mar. 28, 2024 | Mar. 25, 2024 | Mar. 27, 2024 |
Private Placement | |||
Subsequent Event [Line Items] | |||
Net proceeds | $ 185 | ||
Proceeds from issuance of private placement | 105 | ||
Transaction costs | $ 7.5 | ||
Preferred Stock, convertible, shares issuable in common stock (in shares) | 1,000 | ||
Common stock, shares outstanding after private placement and preferred stock conversion | 23,400,000 | ||
Preferred Stock | Private Placement | |||
Subsequent Event [Line Items] | |||
Net proceeds | $ 115.6 | ||
Number of shares issued (in shares) | 19,900 | ||
Warrant | Private Placement | |||
Subsequent Event [Line Items] | |||
Net proceeds | $ 69.4 | ||
Number of shares issued (in shares) | 12,000,000 | ||
Exercise price per share (in dollars per share) | $ 5.80 | ||
AlmataBio Transaction | |||
Subsequent Event [Line Items] | |||
Equity issuable | $ 15 | ||
Common stock shares issued (in shares) | 200,000 | ||
Non-voting convertible preferred stock shares issued (in shares) | 2,400 | ||
Cash payments to acquire assets | $ 7.5 | ||
AlmataBio Transaction | Milestone One | |||
Subsequent Event [Line Items] | |||
Contingent consideration | $ 5 | ||
AlmataBio Transaction | Milestone Two | |||
Subsequent Event [Line Items] | |||
Contingent consideration | $ 15 |