Avalo Therapeutics(AVTX) - 2022 Q1 - Quarterly Report

Financial Performance - Net product revenue for the three months ended March 31, 2022, was $1.2 million, an increase from $0.5 million in the same period of 2021[128]. - The company reported a net loss of $22.1 million for the three months ended March 31, 2022, with negative cash flows from operations of $16.1 million[143]. - Interest expense for the three months ended March 31, 2022, was $1.2 million, related to a venture debt financing agreement[140]. - Net cash used in operating activities was $16.1 million for Q1 2022, primarily due to a net loss of $22.1 million driven by research and development activities[149]. - The company experienced a decrease in cash and cash equivalents of $16.1 million in Q1 2022, compared to an increase of $19.5 million in Q1 2021[150]. - The company reported a net cash used in operating activities of $18.3 million for Q1 2021, with a net loss of $30.7 million[151]. Expenses - Research and development expenses decreased by $15.6 million for the three months ended March 31, 2022, compared to the same period in 2021, primarily due to a $10 million upfront license fee recognized in Q1 2021 that did not repeat[131]. - General and administrative expenses increased by $4.8 million for the three months ended March 31, 2022, compared to the same period in 2021, largely due to severance and stock-based compensation expenses[134]. - Sales and marketing expenses rose by $1.5 million for the three months ended March 31, 2022, compared to the same period in 2021, driven by severance and stock-based compensation expenses[138]. Cash Position and Funding - As of March 31, 2022, Avalo had $38.5 million in cash and cash equivalents and an accumulated deficit of $284.2 million[143]. - Management has expressed substantial doubt regarding the company's ability to continue as a going concern within one year due to uncertainty in obtaining additional funding[146]. - The company plans to use current cash along with potential dilutive and non-dilutive financings, federal and private grants, and strategic alliances to meet capital requirements[145]. - The company has not breached any covenants or received notices of default from lenders as of the filing date of the Quarterly Report[145]. - The company has no off-balance sheet arrangements as defined by SEC rules[154]. Strategic Focus - The company is focusing on advancing its pipeline programs, including AVTX-002 and AVTX-803, with expected pivotal data in Q4 2022[124]. - A cost reduction plan was approved to prioritize the development of promising programs, resulting in a reduction in workforce and related expenses[125]. - The company anticipates decreases in salary and stock-based compensation expenses beginning in Q2 2022 due to the cost reduction plan[126]. - The ultimate ability to achieve profitability will depend on the development and commercialization of pipeline assets and potential receipt of priority review vouchers[146]. - The company uses cash primarily to fund ongoing development of research and development pipeline assets and organizational infrastructure[147].