Avalo Therapeutics (AVTX) stock price nosedived on Monday after the company published relatively weak financial results. It tumbled by over 23.5% in the pre-market session and reached a low of $16.60. This plunge has lowered its market cap to about $19 million.
Avalo Therapeutics earningsAvalo Therapeutics has made several headlines in the past few weeks. Last week, the company acquired AlmataBio in a stock deal valued at $22 million. This acquisition gave it AVTX-009, a phase 2-ready monoclonal antibody for treating hidradenitis suppurativa (HS). The company believes that this drug is worth billions of dollars if its trials succeed.
Avalo Therapeutics also completed a private placement from a group of investors led by Commodore Capital and TCGX. The total deal was valued at over $185 million, with the initial amount being $115.6 million. Avalo hopes to use these funds to fund its phase 2 study of its hidradenitis suppurative.
On Monday. Avalo published its financial results for the last financial year. Its revenue plunged to $1.9 million from the previous year’s $18 million. It also remained deeply in the red as its net loss came in at $31.5 million from the previous year’s $41.6 million.
The company also said that it was conducting a strategic review for the quisovalimab program. In its AVTX-002 program, Avalo Therapeutics is targeting immune-inflammatory diseases. It is also considering strategic alternatives for the AVTX-008 program, which aims to infuse proteins in dysregulation disorders.
AVTX stock price forecast
Avalo Therapeutics stock has been highly volatile in the past few years. It bottomed at $3.54 in March and then jumped to almost $40. Its highest point last week was its highest level since October last year. It was also 907% above its lowest point this year.
Avalo remains much higher than the 50-day moving average while the Average True Range (ATR) has risen to its highest point this year. The ATR is one of the most popular volatility indicators.
Therefore, the stock will likely attempt to fill last week’s gap as investors start taking profits. I suspect that it will drop to the important support point at $15 in the coming weeks.
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