Apollo Therapeutics LLP

ICR joins University of Cambridge, Imperial College London, UCL and King’s College London as a strategic partner; Apollo continues focus on accessing the world’s best science. CAMBRIDGE, England & CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Apollo Therapeutics (‘Apollo’), a portfolio biopharmaceutical company focusing on translational biology and drug development, and The Institute of Cancer Research, London, a world-leading cancer research organisation, announce they have entered into a strategic collaboration to discover and develop new cancer medicines. The collaboration combines the strengths and resources of both organisations to bring forward the development of novel therapies for cancer patients worldwide. As one of the world’s leading cancer research institutions, with more than 800 scientists working across the full spectrum of cancer research, The Institute of Cancer Research (ICR) delivers substantial expertise in cancer biology and drug discovery. Together with its hospital partner The Royal Marsden NHS Foundation Trust, the ICR also brings leading cancer clinical trial experience, including through their joint Drug Development Unit which is the leading oncology-focused Phase I trial unit in the UK. Apollo’s translational scientists and drug development specialists, who are already developing a diverse portfolio of over 20 therapeutic programs, will work with the ICR on research programs to rapidly and efficiently progress those with the greatest promise through preclinical and clinical development and ultimately to patients globally. Cancer remains a highly important health challenge, being responsible for around 10m deaths worldwide in 2020 according to the WHO, demonstrating the significant remaining unmet need for effective oncology treatments.* Dr Richard Mason, Chief Executive Officer of Apollo commented: “I am delighted to be entering into this collaboration with the ICR, an elite global cancer research organisation. The ICR has a hugely impressive track-record of scientific break-throughs and the discovery of important new medicines which have been approved and are in use globally. I am pleased that Apollo’s strength and experience in drug discovery and development together with our unique collaboration model has attracted an institution with ICR’s credibility and capabilities, allowing us to further deliver on our strategy of capital efficient portfolio drug development, at scale. We look forward to working with the ICR and jointly developing new medicines for cancer patients.” Dr Kristian Helin, Chief Executive Officer of the ICR said: “It’s a great opportunity for the ICR to be entering this strategic partnership with Apollo. By working together, I hope we can accelerate our ability to translate our scientific discoveries for the benefit for cancer patients. We are looking forward to working with Apollo”. The ICR joins Apollo’s other top global research partners; the University of Cambridge, Imperial College London, UCL and King’s College London. *World Health Organisation ( ) About Apollo Therapeutics Apollo Therapeutics is a biopharmaceutical company, rapidly advancing a robust pipeline of potentially transformative therapeutic programs based on breakthrough discoveries. We identify and develop pre-clinical and clinical stage assets with strong biological hypotheses and the potential to become meaningful new treatment options. Our team combines ‘drug hunters’ and deep subject matter experts who together are building an expansive and de-risked portfolio in oncology, major inflammatory disorders, and rare diseases. Backed by leading specialist investors including Patient Square Capital and Rock Springs Capital, we have operations in Cambridge, UK, and Boston, USA. Apollo Therapeutics has core innovation sourcing and drug discovery collaborations with five of the world’s leading universities and research institutes; University of Cambridge, Imperial College London, UCL, Kings College London and the Institute of Cancer Research. With our partners, we have built translational leadership in three core areas of biological focus – immunology, cell signalling, and cell stress responses and metabolism. For more information, visit apollotherapeutics.com. About the ICR The Institute of Cancer Research, London, is one of the world’s most influential cancer research institutes, with an outstanding record of achievement dating back more than 100 years. Around 800 scientists work at ICR across the full spectrum of cancer research, from basic cancer biology to clinical trials. The ICR ranked second in REF 2021, the UK government’s most recent comprehensive assessment of research quality, for overall research quality and impact, and first in biological sciences. The ICR is also one of the world’s most successful academic institutions in industry collaboration and is especially well-known for its excellence in drug discovery. Researchers in the ICR’s Centre for Cancer Drug Discovery, have discovered 21 drug candidates since 2005, of which 13 have progressed into clinical trials, in collaboration with industry partners. The blockbuster drug abiraterone (Zytiga®) was discovered and initially developed at the ICR, and ICR science also underpinned the development of the leading PARP inhibitor olaparib (Lynparza®) in BRCA-mutant cancers. The ICR and its hospital partner The Royal Marsden NHS Foundation Trust are together ranked in the top four centres for cancer research and treatment worldwide, and their joint Drug Development Unit is the leading oncology-focused phase I trial unit in the UK. The ICR is also a provider of higher education of international distinction through its postgraduate degree programmes. View source version on businesswire.com: Contacts Apollo Media Contact Rozi Morris / Agnes Stephens Instinctif Partners apollotx@instinctif.com +44 207 457 2020 ICR Media Contact Henry French henry.french@icr.ac.uk +44 20 7153 5315 Source: Apollo Therapeutics View this news release online at:

Transferred anti-IL 18 monoclonal antibody product (AVTX-007) to Apollo Therapeutics in July with the approximate $15 million of upfront payment received in AugustDosed first patient in the Phase 2 PEAK Trial of its anti-LIGHT monoclonal antibody (AVTX-002) for the treatment of non-eosinophilic asthma (NEA)Dosed first patient in the Pivotal LADDER Trial of AVTX-803 for the treatment of Leukocyte Adhesion Deficiency Type II (LAD II)Disclosed cash and cash equivalents of $11 million as of June 30, 2022, which does not include the approximate $15 million received in August WAYNE, Pa. and ROCKVILLE, Md., Aug. 04, 2022 (GLOBE NEWSWIRE) -- Avalo Therapeutics, Inc. (Nasdaq: AVTX), today announced business updates and financial results for the second quarter of 2022. “We have made significant progress advancing our clinical trials while also securing critical nondilutive capital since our first quarter business update,” said Dr. Garry Neil, President and Chief Executive Officer of Avalo Therapeutics. “We are pleased to have enrolled the first patient in both our Phase 2 PEAK trial of AVTX-002 in NEA as well as our pivotal LADDER trial of ATX-803 in LAD II. Additionally, it’s critically important that we secured approximately $15 million of initial consideration from our license and transfer of our AVTX-007 program. The transaction allows us to operationally and financially focus on our most promising programs, most notably AVTX-002.” Business Updates: In July 2022, Avalo granted an exclusive license to Apollo Therapeutics Group Limited (Apollo) granting rights to Apollo to research, develop, manufacture and commercialize AVTX-007. The AVTX-007 program was originally licensed to Avalo by MedImmune Limited, a subsidiary of AstraZeneca plc, and such license was transferred to Apollo as part of the transaction. Avalo received approximately $15 million of upfront consideration.Avalo is also entitled to up to $74 million of milestone payments, as well as a royalty payment of a low single digit percentage of annual net sales. On July 7, 2022, Avalo effected a 1-for-12 reverse stock split to increase the per share price of its common stock to regain compliance with the listing requirements of the Nasdaq Capital Market. On July 22, 2022, the Company received written notification from Nasdaq that Avalo had regained compliance and that the matter is now closed.In June 2022, Avalo, prepaid $15 million under its loan venture loan and security agreement (the Loan Agreement), of which $14.8 million was applied to principal and the remainder applied to accrued interest. As of June 30, 2022, the remaining principal payments were $21.2 million. Program Updates and Milestones: AVTX-002: Anti-LIGHT monoclonal antibody (mAb) targeting immune-inflammatory diseases. NEA: Avalo has initiated its Phase 2 PEAK trial (A Phase 2, Randomized, Double-Blind, Placebo-Controlled, Parallel Group Study to Evaluate the Safety and Efficacy of AVTX-002 for the Treatment of Poorly Controlled Non-Eosinophilic Asthma K) evaluating the safety and efficacy of AVTX-002 in 80 patients with poorly controlled NEA. The first patient was dosed in May 2022. Top-line data from the trial are expected in the first half of 2023. AVTX-800 programs (AVTX-803 and AVTX-801): Monosaccharide therapies for two congenital disorders of glycosylation (CDGs): leukocyte adhesion deficiency type II (LAD II, also known as SLC35C1-CDG) and PGM1-CDG. LAD II: Avalo has initiated its pivotal LADDER trial (A Phase 3, Randomized, Double-blind, Two-period, Crossover, Withdrawal Study to Assess the Efficacy and Safety of AVTX-803 in Subjects with Leukocyte Adhesion Deficiency Type II (LAD II) ER) evaluating the safety and efficacy of AVTX-803 in patients with LAD II (n=2). The first patient was dosed in July 2022. Data from this pivotal trial are expected in the first half of 2023.PGM1-CDG: Milestone timing and the development plan is under review as a result of recent feedback from the U.S. Food and Drug Administration (FDA). Second Quarter 2022 Financial Update: Avalo had $11.2 million in cash and cash equivalents as of June 30, 2022, representing a $43.4 million decrease as compared to December 31, 2021. The decrease was primarily driven by operating expenditures to fund and support pipeline development and a $15.0 million partial prepayment under the Loan Agreement. Subsequent to June 30, 2022, Avalo received the approximate $15 million of upfront payment from its transfer of AVTX-007. Total operating expenses decreased $16.7 million for the six months ended June 30, 2022 as compared to the same period in 2021. Research and development expenses decreased $19.7 million due to a $10.0 million upfront license fee incurred in the first quarter of 2021, which did not repeat, and a $9.2 million reduction due to specific timing of manufacturing, non-clinical activities and clinical trial activities. Selling, general and administrative expenses increased $1.7 million mainly due to severance and stock-based compensation expense driven by headcount reductions from the pipeline prioritization plan announced in the first quarter of 2022 and other separations, partially offset by decreases to legal, consulting and marketing expenses from cost savings initiatives. Cost of product sales increased $2.1 million due to the net profit share of our non-core commercialized product, Millipred®, that began in the third quarter of 2021. Additionally, in the second quarter of 2022, we fully reserved the $1.0 million receivable due in December 2024 pursuant to the transition service agreement with the third party that previously managed Millipred®’s commercial operations. The net loss and change in net loss was largely driven by operating expenses. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) June 30, 2022 December 31, 2021Assets Current assets: Cash and cash equivalents $11,249 $54,585 Accounts receivable, net 544 1,060 Other receivables 1,306 3,739 Inventory, net 23 38 Prepaid expenses and other current assets 1,885 2,372 Restricted cash, current portion 14 51 Total current assets 15,021 61,845 Property and equipment, net 2,567 2,695 Other long-term asset — 1,000 Intangible assets, net — 38 Goodwill 14,409 14,409 Restricted cash, net of current portion 227 227 Total assets $32,224 $80,214 Liabilities and stockholders’ (deficit) equity Current liabilities: Accounts payable $2,164 $3,369 Accrued expenses and other current liabilities 13,231 16,519 Total current liabilities 15,395 19,888 Notes payable, non-current 18,713 32,833 Royalty obligation 2,000 2,000 Deferred tax liability, net 128 113 Other long-term liabilities 1,939 2,298 Total liabilities 38,175 57,132 Stockholders’ (deficit) equity: Common stock—$0.001 par value; 200,000,000 shares authorized at June 30, 2022 and December 31, 2021; 9,405,724 and 9,399,517 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively1 9 9 Additional paid-in capital1 291,244 285,239 Accumulated deficit (297,204) (262,166)Total stockholders’ (deficit) equity (5,951) 23,082 Total liabilities and stockholders’ (deficit) equity $32,224 $80,214 1 Results have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. The unaudited condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 have been derived from the reviewed financial statements, but do not include all of the information and footnotes required by accounting principles accepted in the United States for complete financial statements. Condensed Consolidated Statements of Operations (Unaudited)(In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021Revenues: Product revenue, net $1,033 $2,730 $2,206 $3,204 License revenue — 625 — 625 Total revenues, net 1,033 3,355 2,206 3,829 Operating expenses: Cost of product sales 1,567 83 2,286 159 Research and development 8,510 12,569 18,094 37,774 Selling, general and administrative 2,784 7,404 14,468 12,751 Amortization expense — 428 38 853 Total operating expenses 12,861 20,484 34,886 51,537 (11,828) (17,129) (32,680) (47,708)Other expense: Other expense, net — (5) (20) (5)Interest expense, net (1,154) (239) (2,323) (222)Total other expense, net from continuing operations (1,154) (244) (2,343) (227)Loss from continuing operations before taxes (12,982) (17,373) (35,023) (47,935)Income tax expense (benefit) 5 (199) 15 (188)Loss from continuing operations $(12,987) $(17,174) $(35,038) $(47,747)Income (loss) from discontinued operations — 69 — (38)Net loss $(12,987) $(17,105) $(35,038) $(47,785) Net loss per share of common stock, basic and diluted1: Continuing operations $(1.38) $(2.12) $(3.73) $(5.97)Discontinued operations 0.00 0.01 0.00 0.00 Net loss per share of common stock, basic and diluted $(1.38) $(2.11) $(3.73) $(5.97) Net loss per share of preferred stock, basic and diluted1: Continuing operations $(0.88) $(2.49)Discontinued operations 0.00 0.00 Net loss per share of preferred stock, basic and diluted $(0.88) $(2.49) 1 Results have been retroactively adjusted to reflect the 1-for-12 reverse stock split effected on July 7, 2022. The unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 have been derived from the reviewed financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. About Avalo Therapeutics Avalo Therapeutics is a leading clinical-stage precision medicine company that discovers, develops, and commercializes targeted therapeutics for patients with significant unmet clinical need in immunology and rare genetic diseases. The Company has built a diverse portfolio of innovative therapies to deliver meaningful medical impact for patients in urgent need. The Company’s clinical candidates commonly have a proven mechanistic rationale, biomarkers and/or an established proof-of-concept to expedite and increase the probability of success. For more information about Avalo, please visit www.avalotx.com. Forward-Looking Statements This press release may include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Avalo’s control), which could cause actual results to differ from the forward-looking statements. Such statements may include, without limitation, statements with respect to Avalo’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “might,” “will,” “could,” “would,” “should,” “continue,” “seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” or similar expressions (including their use in the negative), or by discussions of future matters such as: the future financial and operational outlook; the development of product candidates or products; timing and success of trial results and regulatory review; potential attributes and benefits of product candidates; and other statements that are not historical. These statements are based upon the current beliefs and expectations of Avalo’s management but are subject to significant risks and uncertainties, including: Avalo's cash position and the need for it to raise additional capital in the near future; drug development costs, timing and other risks, including reliance on investigators and enrollment of patients in clinical trials, which might be slowed by the COVID-19 pandemic; reliance on key personnel, including as a result of recent management changes; regulatory risks; general economic and market risks and uncertainties, including those caused by the COVID-19 pandemic and tensions in Ukraine; and those other risks detailed in Avalo’s filings with the SEC. Actual results may differ from those set forth in the forward-looking statements. Except as required by applicable law, Avalo expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Avalo’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. For media and investor inquiries Christopher Sullivan, CFO Avalo Therapeutics, Inc.ir@avalotx.com410-803-6793 or Chris BrinzeyICR WestwickeChris.brinzey@westwicke.com339-970-2843