Avalo Enters into Agreement to Divest AVTX-800 Series

WAYNE, Pa. and ROCKVILLE, Md. , Sept. 12, 2023 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced it entered into a purchase agreement (the Purchase Agreement) with AUG Therapeutics, LLC (AUG) to sell its rights, title and interest in, assets relating to AVTX-801 (D-galactose), AVTX-802 (D-mannose) and AVTX-803 (L-fucose) (collectively, the 800 Series).

AUG will pay an upfront payment of $150,000, as well as, for each compound, make a contingent milestone payment of $15,000,000 (for a potential aggregate of $45 million) if the first Food and Drug Administration (FDA) approval is for an indication other than a Rare Pediatric Disease (as defined in the Purchase Agreement), or up to 20% of certain payments, if any, granted to AUG upon any sale of any priority review voucher (PRV) granted to AUG by the FDA, net of any selling costs. Additionally, AUG will assume up to $150,000 of certain liabilities incurred prior to the date of the Purchase Agreement and assume all costs relating to the 800 Series from the date of the Purchase Agreement. The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including obtaining certain third-party consents.

“We are excited to announce the transfer of our 800 series programs for the treatment of congenital disorders of glycosylation (CDGs) to AUG. In AUG’s hands, these programs could advance to provide reliable treatments for patients in need. This divestiture also reaffirms Avalo’s unwavering commitment to executing our strategic focus on our immunology assets, which we believe hold the greatest value and potential for our shareholders,” stated Dr. Garry A. Neil, MD, Chief Executive Officer, and Chairman of the Board at Avalo Therapeutics. “This transaction will have an immediate positive impact on our cash flow and reduce the utilization of our internal resources for non-core assets, while also maintaining substantial upside potential for Avalo upon program success.”

About Avalo Therapeutics

Avalo Therapeutics is a clinical stage biotechnology company focused on the treatment of immune dysregulation by developing therapies that target the LIGHT-signaling network.

LIGHT (Lymphotoxin-like, exhibits Inducible expression, and competes with HSV Glycoprotein D for Herpesvirus Entry Mediator (HVEM), a receptor expressed by T lymphocytes; also referred to as TNFSF14) is an immunoregulatory cytokine. LIGHT and its signaling receptors, HVEM (TNFRSF14), and lymphotoxin β receptor (TNFRSF3), form an immune regulatory network with two co-receptors of herpesvirus entry mediator, checkpoint inhibitor B and T Lymphocyte Attenuator (BTLA), and CD160 (the LIGHT-signaling network). Accumulating evidence points to the dysregulation of the LIGHT-signaling network as a disease-driving mechanism in autoimmune and inflammatory reactions in barrier organs. Therefore, we believe reducing LIGHT levels can moderate immune dysregulation in many acute and chronic inflammatory disorders.