Avalo Therapeutics (AVTX) Guggenheim Securities Emerging Outlook: Biotech Summit 2026 summary

Key data and trial updates

• Phase IIb LOTUS trial data for AVTX-009 in moderate to severe HS expected in Q2 2026, with over 250 patients enrolled and study completion in October, followed by a six-week safety follow-up.

• The trial compares two dosing regimens of AVTX-009 against placebo, with a focus on both biologic-naive and biologic-experienced patients, and is overpowered for its original assumptions.

• Patient population is similar to other studies, but includes a higher proportion of biologic-experienced patients, about one-third of the cohort.

• Primary endpoint is HiSCR75, with placebo rates expected in the 13%-18% range; a 20% or greater placebo-adjusted response is considered a commercial win.

• No open-label extension is planned; full data, including safety, will be released.

Scientific rationale and competitive landscape

• IL-1 beta is identified as the principal driver of inflammation in HS, with AVTX-009 designed as a high-affinity, beta-specific monoclonal antibody.

• IL-1 alpha plays a minimal role in chronic inflammation and HS, as shown by failed trials with bermekimab; lutikizumab and other bispecifics validate the focus on IL-1 beta.

• Other IL-1 receptor-targeted drugs and bispecifics have shown mixed results, with ligand-neutralizing approaches like AVTX-009 considered more effective.

• Lutikizumab phase II data in Humira-failure, severe HS patients showed strong efficacy, but AVTX-009 is expected to have higher affinity and longer half-life.

• AVTX-009 may offer dosing and pharmacokinetic advantages over competitors, potentially improving patient convenience and efficacy.

Safety, endpoints, and future plans

• Main safety considerations are increased risk of bacterial infections and mild neutropenia, but these are expected to be manageable.

• Secondary endpoints include pain reduction and quality of life, with evidence suggesting IL-1 beta blockade may directly relieve pain.

• Time to improvement will be assessed, with rapid onset anticipated due to loading dose and mechanism.

• After phase IIb, two pivotal phase III trials are planned, with additional indications in dermatology, rheumatology, and GI under consideration.

• Cash position at year-end was $100 million, sufficient to reach the data readout; additional capital will be raised for phase III.