Avalo Pays $2.25M Upfront to Cap $15M Phase 3 Milestone Liability
Avalo will pay $2.25 million upfront for a 90-day option to replace a $15 million Phase 3 dosing milestone with a $5.125 million cash-or-stock payment tied to its March 2024 AlmataBio acquisition. This deal cuts contingent liability by $9.875 million and limits potential dilution.
1. Milestone Buyout Option Agreement
Avalo entered a Milestone Buyout Option and Amendment Agreement related to its March 2024 acquisition of AlmataBio. Under the terms, Avalo pays $2.25 million immediately for an option, exercisable within 90 days, to settle a previously disclosed $15 million milestone payment due upon first patient dosing in a Phase 3 trial.
2. Financial Impact
If exercised, the option allows Avalo to pay $5.125 million in cash, common stock or a combination thereof instead of the $15 million contingent milestone. This structure reduces the company’s maximum potential payout by $9.875 million and caps future dilution tied to milestone payments.
3. Strategic Outlook
By limiting liability and controlling dilution, Avalo strengthens its balance sheet ahead of its Phase 2 and anticipated Phase 3 trials for IL-1β-based therapies. The agreement also provides financial flexibility as the company progresses its lead asset, abdakibart (AVTX-009), through clinical development.