SCHEDULE: BVF Entities Disclose 9.99% Stake in Avalo Therapeutics

Biotechnology Value Fund and its affiliates, including Mark N. Lampert, reported a combined beneficial ownership of 9.99% in Avalo Therapeutics, Inc. common stock as of September 30, 2025.

Summary

• Biotechnology Value Fund L.P. (BVF) and its affiliated entities, including Mark N. Lampert, collectively reported beneficial ownership of 1,458,151 shares of Avalo Therapeutics, Inc. common stock.
• This aggregate ownership represents 9.99% of the outstanding common stock as of September 30, 2025.
• The ownership includes 102,895 shares issuable upon conversion of Series C Non-Voting Convertible Preferred Stock, which is subject to a 9.99% beneficial ownership limitation.
• Individually, BVF beneficially owns 806,414 shares (5.5%), BVF2 beneficially owns 580,975 shares (4.0%), and Biotechnology Value Trading Fund OS LP beneficially owns 40,633 shares (0.3%).
• The total outstanding shares used for percentage calculation is 14,596,107, which includes 13,152,356 shares outstanding as of August 6, 2025, plus shares issued on August 12, 2025 (900,938) and September 26, 2025 (439,918), and 102,895 shares issuable from Series C Preferred Stock.

Sentiment

Score: 5

Explanation: The filing is a routine disclosure of beneficial ownership by an institutional investor group. It does not contain new information that would significantly alter the perception of the company's performance or prospects, nor does it indicate any immediate positive or negative operational events. The sentiment is neutral as it's a compliance filing.

Positives

• Significant institutional investor, Biotechnology Value Fund, maintains a substantial stake in Avalo Therapeutics, indicating continued interest.
• The beneficial ownership is capped at 9.99% due to a pre-existing limitation, which can prevent immediate dilution from full conversion of preferred stock.

Risks

• The existence of a large block of Series C Preferred Stock (2,797,613 underlying shares) that is not fully converted due to a 9.99% beneficial ownership limitation could represent potential future dilution if the limitation is removed or adjusted.

Future Outlook

NA

Management Comments

• The securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under §§ 240.14a-11.

Industry Context

This filing indicates continued institutional investor interest in Avalo Therapeutics, a biotechnology company. Such disclosures are common in the biotech sector where institutional investors often take significant stakes in companies with promising pipelines or strategic positions.

Comparison to Industry Standards

• The 9.99% beneficial ownership limit is a common strategy employed by institutional investors to avoid certain regulatory thresholds or to maintain a passive investment stance, which is standard practice in the investment community.
• Biotechnology Value Fund is a specialized fund focusing on the biotechnology sector, and its significant stake aligns with typical investment patterns of such funds in emerging or developing biotech companies.

Stakeholder Impact

• Shareholders: Provides transparency regarding significant institutional ownership, potentially signaling confidence from a specialized biotech investor. The 9.99% cap on conversion of preferred stock limits immediate dilution.
• Company Management: Awareness of a significant, passive institutional shareholder group.

Key Dates

Keywords

Avalo Therapeutics, AVTX, Biotechnology Value Fund, BVF, Mark N. Lampert, Schedule 13G, beneficial ownership, common stock, Series C Preferred Stock, institutional investor, SEC filing