Shares of Avalo Therapeutics (AVTX) rose to around $14.86 after the company presented positive Phase II data for its hidradenitis suppurativa (HS) program at the Stifel 2026 Virtual Immunology and Inflammation Forum.
CEO Garry Neil said the LOTUS study met its primary endpoint — HiSCR 75, a clinically meaningful skin-clearance measure — at both tested doses of 300 mg administered every four weeks and every two weeks, with response rates of 42.2% and 42.9%, respectively.
"Both doses met the primary HiSCR 75 endpoint response rates of 42.2%, 42.9% respectively, and we saw very consistent activity across multiple clinically meaningful secondary endpoints. In fact, all of the secondary endpoints were positive," Neil said.
The trial enrolled approximately 250 HS patients. More than one-third had previously been treated with biologics including TNF inhibitors or IL-17 inhibitors. Response rates in biologically experienced patients were "virtually identical" to those in biologically naive patients, according to Neil.
Adverse-event rates were similar between the abdakibart groups and placebo. No cases of neutropenia, serious infections, or opportunistic infections were reported.
Avalo is considering a 600-mg loading dose followed by 300 mg every four weeks as its preferred Phase III regimen. The company expects to begin two Phase III trials in the first half of 2027, subject to final FDA discussions and protocol completion.
Abdakibart, formerly AVTX-009, is a monoclonal antibody targeting IL-1 beta, which Neil described as the central inflammatory driver in HS lesions, present at levels higher than any other cytokine in affected tissue. Avalo acquired the molecule in 2024 through a transaction with Almaden Bio.
Avalo also plans to submit an Investigational New Drug application for AVTX-010, a next-generation long-acting anti-IL-1 beta antibody, later this year.
On the balance sheet, Avalo reported more than $400 million in cash at the end of June 2024, following a $430 million fundraise in May. The company said its cash runway extends through 2029, covering the Phase III top-line program for abdakibart.
The HS market was estimated at roughly $3 billion currently and is projected to exceed $10 billion by the mid-2030s, according to Neil.
Neil added: "I have been doing drug development for over 30 years, many successful programs, and I feel really as good about this one as I do about any program I have ever taken into phase III."
