Avalo Therapeutics said it cut staff to align with a previously announced focus of its pipeline to cut costs.
Photo: Garry Neil, CEO of Avalo Therapeutics
The company reduced its headcount by 33 percent in March. The company said the changes it has made will achieve “substantial cost savings while creating a more appropriately sized workforce.”
“We executed our pipeline prioritization plan and right-sized the organization needed to deliver what we think will provide the greatest value for our shareholders,” said Garry Neil, CEO of Avalo Therapeutics. “We remain focused on driving our highest value programs forward to meet our timelines.”
As of March 31, 2022, Avalo had $38.5 million in cash and cash equivalents, representing a $16.1 million decrease as compared to December 31, 2021. The decrease was primarily driven by operating expenditures to fund and support pipeline development.
Total operating expenses decreased $9.0 million for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The decrease was mainly driven by a $15.6 million decrease in research and development expenses. The decrease in research and development expenses was due to a non-recurring $10 million upfront license fee in the first quarter of 2021 and a $5.6 million reduction due to specific timing of manufacturing and clinical trial activities.
The decrease in operating expenses was partially offset by $3.1 million of severance expense and $4.3 million of non-cash stock-based compensation expense recognized in the first quarter of 2022 due to headcount reductions from the pipeline prioritization plan and the termination of employees prior to such plan.
Author: Rare Daily Staff
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