Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______ Commission File No. 001-37590 AVALO THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware (State or o ...

Financial Performance - Cash, cash equivalents, and short-term investments were approximately $98.3 million as of December 31, 2025, expected to fund operations into 2028[6] - Research and development expenses increased to $50.1 million for the year ended December 31, 2025, up from $24.4 million in 2024, driven by the LOTUS trial[6] - General and administrative expenses rose to $22.9 million for the year ended December 31, 2025, an increase of $5.7 million from 2024[7] - Net loss for the year ended December 31, 2025, was $78.3 million, compared to a net loss of $35.1 million in 2024[7] - Basic and diluted net loss per share was $5.84 for the year ended December 31, 2025, compared to $7.94 in 2024[9] - Total revenues for 2025 were $59,000, a decrease from $441,000 in 2024[9] - Total operating expenses for 2025 were $72.98 million, compared to $68.95 million in 2024[9] - Total assets decreased to $116.5 million as of December 31, 2025, from $150.7 million in 2024[8] - Total stockholders' equity decreased to $83.0 million as of December 31, 2025, from $133.0 million in 2024[8] Clinical Trials and Development - Topline data from the Phase 2 LOTUS trial of abdakibart (AVTX-009) for hidradenitis suppurativa is expected in Q2 2026[5] - The company is focused on the growth and strategy related to its clinical trials for abdakibart (AVTX-009) and other future product candidates[15] - Avalo is conducting the Phase 2 LOTUS trial, with expectations for clinical data readouts to be announced in the future[15] Risk Management - Avalo's management emphasizes that forward-looking statements are based on various assumptions and are subject to significant risks and uncertainties[15] - The company is assessing its anticipated operating expenses and cash runway to ensure sufficient funding for its operations[15] - Avalo acknowledges potential risks including drug development costs, trial timing, regulatory risks, and reliance on key personnel[15]

Topline data expected from Phase 2 LOTUS trial of abdakibart (AVTX-009) for the treatment of hidradenitis suppurativa in the second quarter of 2026Cash, cash equivalents and short-term investments of approximately $98 million as of December 31, 2025 expected to provide runway into 2028 WAYNE, Pa., March 23, 2026 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX) (“Avalo”), a clinical stage biotechnology company fully dedicated to developing IL-1β-based treatments for immune-mediated inflammatory di ...

Group 1: Investment Activity - Ally Bridge Group NY LLC acquired 178,100 shares of Avalo Therapeutics, valued at approximately $2,264,000, making it 1.4% of their portfolio and the 18th largest position [2] - Other institutional investors, including Ameriprise Financial Inc. and Caligan Partners LP, also increased their stakes in Avalo Therapeutics, with investments of $2,714,000 and $10,592,000 respectively [3] - Orbimed Advisors LLC raised its stake by 39.5%, now owning 1,349,300 shares worth $17,150,000, while Two Sigma Investments LP increased its holdings by 282.0% [3] Group 2: Analyst Ratings and Price Targets - Weiss Ratings reaffirmed a "sell (d-)" rating, while HC Wainwright issued a "buy" rating with a target price of $25.00 [4] - Mizuho upgraded Avalo Therapeutics to a "strong-buy" rating, and Guggenheim set a "buy" rating with a $50.00 price target [4] - The average rating for the stock is "Moderate Buy" with a consensus target price of $33.00 [4] Group 3: Company Overview and Performance - Avalo Therapeutics is a clinical-stage biotechnology company focused on therapies for cardiometabolic, fibrotic, and inflammatory diseases [6] - The company’s lead programs include AVTX-002 for hypertension and AVTX-006 targeting fibrosis and metabolic dysfunction [7] - As of the latest data, Avalo Therapeutics has a market capitalization of $292.46 million, with a 1-year low of $3.39 and a high of $20.72 [5]

Summary of Avalo Therapeutics Conference Call Company Overview - Avalo Therapeutics is a small biotechnology company based outside of Philadelphia, focused on immunology and inflammation (I&I) with its lead product AVTX-009 currently in phase 2b trials [5][6] Key Product Information - **AVTX-009**: An anti-IL-1 monoclonal antibody targeting IL-1 beta, which is crucial for treating hidradenitis suppurativa (HS) [5][9] - The LOTUS trial for AVTX-009 has completed enrollment with over 250 patients, making it one of the largest trials in HS to date [41][40] Competitive Landscape - Current competitors include AbbVie's Lutikizumab, which is also targeting IL-1 but is a bispecific antibody [10][17] - Avalo believes AVTX-009 has advantages over Lutikizumab due to its higher affinity for IL-1 beta, longer half-life, and better dosing regimen [18][30] Mechanism of Action - IL-1 plays a central role in HS by attracting neutrophils to lesions and stimulating inflammation [14][15] - Targeting IL-1 beta is seen as a more effective approach compared to targeting IL-1 alpha, which has shown limited efficacy in previous studies [22][23] Clinical Trial Design - The LOTUS trial has a primary endpoint of HiSCR75, with a placebo response rate expected to be between 13%-18% [44] - The trial design includes rigorous training for investigators to minimize placebo effects and ensure data integrity [49][50] Safety Profile - Concerns about infection risks associated with IL-1 inhibitors are addressed, emphasizing that AVTX-009 is not an immunosuppressant and has a favorable safety profile [56][57] - Historical data suggests a reduction in cardiovascular risk and cancer incidence associated with IL-1 inhibitors [58][60] Future Outlook - If successful, Avalo plans to enter the market shortly after AbbVie, leveraging the established market for IL-1 therapies [71][72] - The company is considering future indications in gastroenterology, dermatology, and rheumatology, focusing on diseases with validated mechanisms involving IL-1 [76] Conclusion - Avalo Therapeutics is positioned to potentially outperform competitors in the HS market with its lead product AVTX-009, supported by a strong clinical trial design and a favorable safety profile. The upcoming data release is highly anticipated and could significantly impact the company's trajectory in the I&I space [81][82]

Summary of Avalo Therapeutics FY Conference Call Company Overview - **Company**: Avalo Therapeutics (NasdaqCM:AVTX) - **Focus**: Development of AVTX-009, a high-affinity human monoclonal antibody targeting IL-1 beta for the treatment of hidradenitis suppurativa (HS) [2][3] Key Points and Arguments Product Strategy and Potential - **AVTX-009**: Positioned as a potent IL-1 beta inhibitor with a good half-life and dosing regimen, aiming to be the best in treating HS [3] - **Mechanism of Action**: IL-1 beta is a central driver of inflammation in HS, making it a critical target for treatment [3][7] Competitive Landscape - **Comparison with Other Treatments**: - Anakinra and canakinumab have shown some efficacy but are not practical due to high costs and short half-lives [9][10] - MAS825 (Novartis) is a bispecific targeting IL-1 beta and IL-18, but concerns exist regarding its potency and dosing [14][15][16] - Lutikizumab (AbbVie) has shown strong data in HS, providing proof of concept for IL-1 beta targeting [22][23] Clinical Trial Design and Execution - **Trial Design**: Emphasis on rigorous trial design with experienced dermatologists and a focus on operational optimization [29][30] - **Patient Population**: Inclusion of bio-experienced patients (those who failed previous treatments) to ensure robust data [37][41] Efficacy Expectations - **Efficacy Goals**: Aiming for a placebo-adjusted difference of over 20% in HiSCR 75, with aspirations for 25% or higher [43] - **Market Potential**: The HS market is projected to exceed $10 billion in the next five to six years, with low current penetration of biologics [60][61] Safety Profile - **Safety Considerations**: IL-1 beta mechanism is expected to have a differentiated safety profile, with fewer risks of opportunistic infections compared to TNF and IL-17 inhibitors [47][50] - **Neutropenia Concerns**: Minimal concern regarding neutropenia, with historical data showing low incidence of severe infections [53][54] Future Development Plans - **Phase 3 Readiness**: Plans to request an End-of-Phase 2 meeting with the FDA and begin Phase 3 enrollment in early 2027 [55] - **Expansion Opportunities**: Potential indications in dermatology, rheumatology, and GI diseases, leveraging the validated role of IL-1 beta [71][72] Market Dynamics - **Patient Population Insights**: Approximately 50% of HS patients are not well controlled, indicating a significant opportunity for IL-1 targeting therapies [64] - **Secondary Endpoints**: Interest in differentiating factors such as pain management and healing of draining tunnels associated with HS [66][68] Additional Important Insights - **Market Research**: Direct engagement with HS patients indicates a strong demand for better treatment options [61] - **Potential Ancillary Benefits**: IL-1 beta blockade may offer additional health benefits, such as reduced cardiovascular risks and cancer risks, which could enhance the drug's appeal [49][50] This summary encapsulates the critical insights from the conference call, highlighting Avalo Therapeutics' strategic positioning, competitive landscape, clinical trial rigor, and market potential for AVTX-009 in treating HS.

Summary of Avalo Therapeutics FY Conference Call Company Overview - **Company**: Avalo Therapeutics (NasdaqCM:AVTX) - **Focus**: Development of treatments for hidradenitis suppurativa (HS), an inflammatory skin condition Industry Insights - **Market Size**: HS affects over 1% of the U.S. population, indicating a larger market than previously thought, with significant underdiagnosis and undertreatment [3] - **Current Treatments**: There are three approved compounds for HS, generating aggregate sales in the multiple billions of dollars, with rapid growth expected [3] Product Development - **Product**: AVTX-009, an anti-IL-1 monoclonal antibody - **Clinical Trials**: Top-line Phase II results expected in Q2 2026 [4] - **Mechanism of Action**: IL-1 is a central target in the inflammatory process of HS, driving neutrophil activity and lesion formation [6][7] - **Unique Properties**: AVTX-009 has high affinity and specificity for IL-1, allowing better penetration into lesions, which are under high pressure [8][9] Clinical Trial Design - **Primary Endpoint**: HiSCR75, which measures a 75% reduction in abscess or inflammatory nodule count, is considered more clinically relevant than HiSCR50 [10][11] - **Placebo Response Management**: The trial design includes a large sample size of over 250 patients and collaboration with experienced investigators to mitigate placebo effects [14][15][16] Regulatory Strategy - **Phase III Design**: Plans to discuss with the FDA for potential efficiencies in trial design, considering recent guidance for single pivotal trials [17][18][19] Competitive Landscape - **Market Dynamics**: The HS market is evolving with new entrants and therapies, creating opportunities for differentiation based on mechanism of action, dosing convenience, and safety profile [20][21] - **Strategic Directions**: Focus on the U.S. market initially, with potential for international partnerships and expansion into other therapeutic areas [23] Financial Position - **Cash Reserves**: Approximately $95 million in cash, sufficient to fund operations through the upcoming data release, with plans to raise additional funds for Phase III trials [32] Future Outlook - **Upcoming Milestones**: Anticipation of top-line data from the LOTUS trial next quarter, with potential regulatory discussions for Phase III trials in 2027 [27][29]

Summary of Avalo Therapeutics Conference Call Company Overview - **Company**: Avalo Therapeutics (NasdaqCM:AVTX) - **Event**: 2026 Conference on February 11, 2026 - **Focus**: Discussion on the upcoming phase 2b data from the LOTUS trial for AVTX-009, a monoclonal antibody targeting IL-1 beta Key Points Industry and Product Insights - **Product**: AVTX-009, a high-affinity anti-IL-1 beta monoclonal antibody - **Trial**: LOTUS trial, over 250 patients, placebo-controlled, focusing on moderate to severe hidradenitis suppurativa (HS) [2][36] - **Expected Data Release**: Phase 2b data anticipated in Q2 2026 [2][60] Mechanism of Action - **IL-1 Beta Role**: Principal driver of inflammation in HS, with higher concentrations than other inflammatory markers [6][14] - **Comparison with Other Drugs**: IL-1 beta is considered more effective than IL-1 alpha in treating HS, as evidenced by the failure of anti-IL-1 alpha drugs like bermekimab [13][14] Trial Design and Execution - **Trial Structure**: Three-arm study comparing two dosing regimens of AVTX-009 against placebo [34][35] - **Patient Population**: Over 250 patients enrolled, including a significant number of biologically experienced patients [37][42] - **Placebo Response**: Historical placebo response rates in HS trials range from 13% to 18% [35] Safety and Efficacy Considerations - **Safety Profile**: Expected increase in bacterial infections and potential for neutropenia, but generally manageable [47] - **Efficacy Expectations**: Aiming for a response rate of 20% or higher beyond placebo, with a potential "home run" at 25% [49][50] Future Directions - **Next Steps**: Plans for two pivotal phase III trials following the LOTUS study data [52] - **Potential Indications**: Interest in expanding into dermatology, rheumatology, and gastrointestinal diseases due to the potency of AVTX-009 [53] Financial Position - **Cash Reserves**: $100 million reported at the end of the previous year, with a burn rate of $50 million [68] Additional Considerations - **Quality of Life Metrics**: Focus on pain relief and quality of life improvements as key endpoints in the trial [54][55] - **Data Release Timeline**: Complete data set expected to include a 6-week safety follow-up, with final patient visits concluding in March 2026 [62][64] This summary encapsulates the critical insights from the Avalo Therapeutics conference call, highlighting the company's strategic focus, product development, and market positioning within the biotech industry.

Core Insights - Avalo Therapeutics Inc. has completed enrollment for the Phase 2 LOTUS trial of its lead drug candidate AVTX-009, targeting approximately 250 adults with moderate to severe hidradenitis suppurativa, with topline data expected in mid-2026 [1] Group 1: Trial and Drug Information - The LOTUS trial will evaluate the efficacy and safety of bi-weekly and monthly dosing regimens of AVTX-009 compared to a placebo [1] - HiSCR75, a key measure for the trial, is defined as a 75% reduction in total abscess and inflammatory nodule count from baseline [3] Group 2: Analyst Insights - Cantor analyst Prakhar Agarwal notes that Avalo's stock could face a significant decline of 85-90% if the trial fails, but there is potential for stock upside if HiSCR75 change is around 18-19% [2] - If the HiSCR75 change is between 20-25%, the stock could rally by 100-150%, while a change of 25-30% could lead to a stock increase of over 200% [3] Group 3: Stock Performance and Ratings - Avalo's stock has underperformed compared to the SPDR S&P Biotech ETF, falling approximately 13% year-to-date, while the ETF has increased by 2% [4] - Recent analyst ratings have been positive, with Guggenheim initiating coverage with a target price of $50.00, and HC Wainwright maintaining a $25.00 target [5][6] - Mizuho has given an 'Outperform' rating with a $39.00 target, and BTIG reiterated a 'Buy' rating with a $40.00 target [6]

Core Viewpoint - Top Wall Street analysts have revised their outlook on several prominent stocks, indicating potential shifts in investment sentiment and opportunities in the market [1] Group 1 - Analysts have made changes to ratings, including upgrades, downgrades, and initiations for various stocks [1]