AVTX

Additional risks or uncertainties not presently known to us or that we currently deem immaterial may also harm our business.
Moreover, some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
Failure to obtain any necessary capital could force us to delay, limit or terminate our product development efforts or significantly curtail or cease our operations altogether.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time‑consuming, expensive and uncertain process that takes years to complete, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance our current product candidates through or into clinical trials and prepare for later-stage development activities, including manufacturing scale-up, regulatory engagement, and commercialization planning.
Historically, our capital constraints have required us to prioritize certain development programs over others, including deferring, out-licensing or discontinuing certain candidates, and we may be required to do so again in the future.
We will need to raise additional funds or otherwise obtain funding through collaborations to complete the development of abdakibart (AVTX-009) and any other product candidates and to continue our operations.
We plan to finance our operations through a combination of equity offerings, debt financings, collaborations, licensing arrangements and other similar arrangements.
We do not have any committed sources of external financing.
Our ability to raise additional funds may be adversely impacted by global economic conditions, disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, and diminished liquidity and credit availability, and biotechnology-specific market conditions, including reduced investor appetite for clinical-stage companies.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
If we are unable to raise capital when needed or on attractive terms, we would be forced to: • Significantly delay, scale back or discontinue the development or commercialization of abdakibart (AVTX-009) or other product candidates or cease operations altogether; • Seek strategic alliances for research and development programs at an earlier stage than we would otherwise desire or on terms less favorable than might otherwise be available; or • Relinquish, or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize ourselves.
At December 31, 2025, we had $98.3 million in cash and cash equivalents and short-term investments and $12.9 million in current liabilities.
As of the date of this Report, we believe we have sufficient funds to finance our continuing operations into 2028 to further advance abdakibart (AVTX-009) and other product candidates.
This estimate is based on assumptions regarding our operating plan, clinical timelines, and expenditures that may prove to be inaccurate.
We could use our capital resources sooner than we currently expect due to unanticipated delays, cost overruns, changes in regulatory strategy, or other factors.
We will likely need to raise additional funds prior to any phase 3 development and/or indication expansion.
We may never achieve or sustain profitability.
To become and remain profitable, we must succeed in developing, obtaining regulatory approvals for, and eventually commercializing products that generate significant revenue.
This will require us to be successful in a range of challenging activities, including completing clinical trials and preclinical studies and obtaining regulatory approval for one or more of our current and future product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval.
We may never succeed in these activities and, even if we do, may never generate revenue that is significant enough to achieve profitability.
Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
Our failure to become and remain profitable may have an adverse effect on the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates, achieve our strategic objectives or even continue our operations.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Such financing could dilute our stockholders, and failure to secure adequate funding may limit our operational activities.
If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of such financing could include liquidation preference, anti-dilution provisions, or other rights that may negatively impact stockholders.
If we secure additional funds through upfront or milestone payment as part of future collaborations with third parties, we may be required to relinquish valuable rights to abdakibart (AVTX-009) or grant licenses under terms that are not favorable to us.
We have incurred significant net losses in most periods since our inception and we expect to continue to incur net losses for the foreseeable future.
We are a clinical-stage biotechnology company with a limited operating history upon which you can evaluate our business and prospects.
We commenced operations in 2011, have no products approved for commercial sale and have not generated any revenue from product sales.
Since our inception, we have devoted substantially all our resources to building our organization, including an acquisition, raising capital, researching, discovering and developing potential drug candidates, establishing and maintaining our intellectual property portfolio, conducting preclinical studies and clinical trials, organizing and staffing our company, business planning and providing general and administrative support for these operations.
We have not yet demonstrated the ability to successfully obtain regulatory approvals, manufacture products at commercial scale, establish reliable third-party manufacturing capabilities, or conduct sales and marketing activities necessary for successful product commercialization.
Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products.
We incurred a net loss of $78.3 million for the year ended December 31, 2025.
As of December 31, 2025, we had an accumulated deficit of $448.5 million.
Substantially all of our operating losses have resulted from costs incurred in connection with our research and development program and from general and administrative costs associated with supporting our operations.
We expect that our existing cash and cash equivalents and short-term investments will allow us to advance the clinical development of abdakibart (AVTX-009) and other product candidates, and we expect that the remainder will be utilized to fund other research and development activities as well as working capital and other general corporate needs.
We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner or differently than we currently expect.
Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, including but not limited to including clinical trial delays or failures, changes in regulatory requirements, manufacturing challenges, strategic decisions, or competitive developments and we may need to seek additional funds sooner than planned.
Our existing cash and cash equivalents and short-term investments may not be sufficient to complete development of any of our current or future product candidates.

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Failure to obtain any necessary capital could force us to delay, limit or terminate our product development efforts or cease our operations.
At December 31, 2024, we had $134.5 million in cash and cash equivalents and $7.0 million in current liabilities.
As of the date of this Report, we believe we have sufficient funds to finance our continuing operations into at least 2027 to further advance our product candidates.
However, we will likely need to raise additional funds prior to any phase 3 development and/or indication expansion.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time‑consuming, expensive and uncertain process that takes years to complete, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance our current product candidates through or into clinical trials.
As an example, our cash position in the past has caused us to prioritize product candidates for development, out-license certain product candidates and to defer the development of other candidates.
We will need to raise additional funds or otherwise obtain funding through collaborations to complete the development of any of our product candidates and to continue our operations.
Furthermore, our ability to raise capital on a timely basis through the issuance and sale of equity securities might be limited by Nasdaq’s listing rules on transactions that do not qualify as “public offerings” (as defined in Nasdaq listing rules), which might require us to obtain stockholder approval prior to the issuance of common stock (or securities convertible into or exercisable for common stock) at a price per share that is less than the “Minimum Price” if the issuance would equal 20% or more of our common stock outstanding before the issuance.
Such financing could dilute our shareholders, and failure to secure adequate funding may limit our operational activities.
If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of such financing could include liquidation preference, anti-dilution provisions, or other rights that may negatively impact your position as a shareholder.
If we secure additional funds through upfront or milestone payment as part of future collaborations with third parties, we may be required to relinquish valuable rights to AVTX-009 or grant licenses under terms that are not favorable to us.
If we do not raise additional capital when required or on acceptable terms, we may need to: • Significantly delay, scale back or discontinue the development or commercialization of AVTX-009 or other product candidates or cease operations altogether; • Seek strategic alliances for research and development programs at an earlier stage than we would otherwise desire or on terms less favorable than might otherwise be available; or • Relinquish, or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize ourself.
Our future funding requirements, both short and long term, will depend on many factors, including: • The initiation, progress, timing, costs and results of preclinical and clinical studies for AVTX-009 and any future product candidates we may develop; • The level of research and development investment required to develop product candidates; • The rate and level of patient recruitment into clinical trials, including particularly the ongoing LOTUS Trial; • The timing and amount of milestone payments we are required to make under license agreements; • Changes in product development plans needed to address any difficulties that may arise in manufacturing, preclinical activities, clinical trials or commercialization; • The outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and other regulatory authorities, including the potential for such authorities to require that we perform more studies than currently expected; • The initiation and completion of all required safety and efficacy studies necessary for obtaining regulatory approval in the U.S. including additional clinical trials or studies beyond those currently planned to support AVTX-009’s approval and commercialization; • Providing sufficient evidence to the FDA, and other global regulatory bodies demonstrating the safety, efficacy, and an acceptable risk-benefit profile of AVTX-009 or any future other product candidates; • Our ability to promptly submit and secure approval of IND applications for our programs to initiate planned or future clinical trials; • Effectively monitor and manage the occurrence, duration, and severity of any potential side effects or safety concerns associated with our product candidates, if any arise; • Securing timely marketing approvals from the FDA, and other relevant regulatory authorities; • The cost to establish, maintain, expand and defend the scope of our intellectual property portfolio and patent claims, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • The effect of competing technological and market developments; • The cost and timing of selecting, auditing and potentially validating a manufacturing site for commercial‑scale manufacturing; • The cost of future commercialization activities including, developing our sales, marketing. manufacturing and distribution capabilities to accommodate any of our product candidates for which we receive marketing approval and that we determine to commercialize ourselves or in collaboration with our partners; • Market acceptance of any approved product candidates; • The effect of competing product and market developments; • The ability and willingness to enter into new agreements with strategic partners, and the terms of these agreements; and • The costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies.
We have incurred significant net losses in most periods since our inception and we expect to continue to incur net losses in the future.
We incurred a net loss of $35.1 million for the year ended December 31, 2024.
As of December 31, 2024, we had an accumulated deficit of $370.3 million.
Substantially all of our operating losses have resulted from costs incurred in connection with our research and development program and from general and administrative costs associated with our operations.
Our future profitability will depend, in part, on the rate of future growth of our expenses as we develop our product candidates and our ability to obtain approval of one or more of our product candidates to generate revenues.
We face risks associated with short-term liquid investments.
At December 31, 2024, we had $134.5 million in cash and cash equivalents.
We historically have invested our cash in money market funds and intend to invest in a variety of investment-grade marketable securities such as corporate and government bonds, commercial paper, asset-backed securities, U.S. treasury securities, money market funds, and other cash equivalents, that are intended to preserve principal value and maintain a high degree of liquidity while providing current income.
Interest rate fluctuations can negatively impact the returns on our fixed-income investments.
Further, these types of investments are not insured against loss of principal, and cash and cash equivalents held in deposit accounts bear the risk of bank failure.
Unused NOLs generated after December 31, 2017 of $183.0 million, will not expire and may be carried forward indefinitely, but will be only deductible to the extent of 80% of current year taxable income in any given year.
As of December 31, 2024, the Company had various research tax credits of $6.3 million that will begin to expire in 2038.
To the extent there is a limitation, there could be a reduction in the $7.0 million deferred tax asset related to Federal loss carryforwards and tax credits that may have expired unutilized with an offsetting reduction in the valuation allowance.
Our quarterly and annual operating results historically have fluctuated and are likely to continue to fluctuate depending on several factors, many of which are beyond our control.
Our role as a guarantor of certain obligations assigned to Aytu exposes us to risk of loss or illiquidity.
In connection with the Aytu Divestiture, as defined in the Notes to our Consolidated Financial Statements, we assigned payment obligations (“TRIS Obligations”) to Aytu under a supply and distribution agreement (the “Karbinal Agreement”) with TRIS Pharma Inc.
(“TRIS”), which includes a per-unit royalty make whole payment for each unit sold under an annual minimum sales commitment through 2025.
The total future make-whole payments to be made by Aytu are unknown as the amount owed to TRIS is dependent on the number of units sold.
As a part of the assignment, we became a guarantor to the TRIS Obligations.
If Aytu defaults under the terms of the Karbinal Agreement, we could be liable as a guarantor for unpaid amounts of the TRIS Obligation.
Any amount we would be required to pay under the TRIS Obligation would limit the amount of cash available for development of our clinical pipeline and may expose us to significant losses, which would materially and adversely affect our results of operations.
Our supply and license agreement for our only commercial pharmaceutical product, Millipred ® , which the Company considered a non-core asset, expired, as planned, on September 30, 2023.
The product revenue from Millipred ® was not sufficient to provide adequate capital for the continued development of our product candidates.
Our ability to increase revenue in the future will depend on developing and commercializing our current and future product candidates.
Risks Related to Development of Our Product Candidates We are substantially dependent on the success of AVTX-009, and our ongoing and anticipated clinical trials of AVTX-009 may not be successful.
Our future success relies heavily on our ability to successfully develop AVTX-009 for marketing approval and eventual commercialization.
We are dedicating the majority of our efforts and financial resources to the research and development of AVTX-009.

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