Avalo adjusts almost entire pipeline weeks after CEO, CFO say sayonara

Avalo Therapeutics, formerly Cerecor, readjusted almost its entire pipeline Wednesday, just weeks after the biotech's CEO and finance chief hit the exit. 

The culling includes winding down the development of two early-stage drugs, AVTX-006 in lymphatic malformations and AVTX-007 in patients with multiple myeloma. The company will pursue strategic alternatives for AVTX-006.

Avalo also paused development of AVTX-802, intended for MPI-congenital disorder of glycosylation, which impacts the liver and intestinal system, due to "challenges with study feasibility," the biotech said Wednesday. 

Further yet, Avalo is focusing AVTX-002 on a soon-to-be-initiated phase 2 study in patients with non-eosinophilic asthma, or NEA. The biotech will not move forward with the drug in an uncontrolled cohort of patients with ulcerative colitis, but will consider planning a placebo-controlled trial in moderate to severe refractory patients with inflammatory bowel disease, Avalo said. 

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AVTX-002, formerly CERC-002, has also been tested in a phase 2 trial in patients with COVID-19-associated acute respiratory distress syndrome (ARDS). The drug met its main goal of keeping patients alive and free of respiratory failure over a 28-day study period, Avalo said a year ago to the day. Avalo then said in November 2021 that the biotech was discussing trial design for a registrational study in patients with COVID-19 ARDS.

The biotech has remained silent on those discussions over the past four months, and a spokesperson said the company has not provided an update on its plans in COVID-19 ARDS.

"We see the program re-prioritization as strategic and prudent, though now see increased uncertainty around clinical potential of the assets given early stages and look to initial" proof-of-concept data in the NEA trial, RBC Capital Markets analysts wrote in a note.

The only two programs that seem to have steered clear of the pipeline reorganization are AVTX-801 and AVTX-803.

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Avalo is working with the FDA on designing a pivotal study for 801, which is intended for PGM1-CDG, another congenital disorder in which infants are typically born with a cleft palate. Trial data are slated for 2023. Regarding 803, Avalo is initiating a single-center pivotal trial in patients with leykocyte adhersion deficiency type II. Data are expected in the fourth quarter of this year. 

The biotech had $54.6 million in cash on hand as of Dec. 31, 2021, Avalo said Wednesday in its full-year 2021 financial results.

The moves come just weeks after CEO Mike Cola and Chief Financial Officer Schond Greenway departed the company. Chief Scientific Officer Garry Neil filled the chief executive spot, and Chief Accounting Officer Chris Sullivan stepped into the finance role on Feb. 14.

Avalo rebranded from Cerecor in August 2021.