AVTX Surges Over 50% After Hours as Skin Disease Drug Shows Desired Clinical Results

• Avalo said it now plans to advance abdakibart into a registrational late-stage program.
• 42.5% of patients on the drug experienced a 75% reduction in total abscess and inflammatory nodule (AN) count from baseline at week 16.
• The firm also announced a public offering of common stock and pre-funded warrants to raise funds for the further development of the drug candidate.

Shares of Avalo Therapeutics (AVTX) surged more than 50% in after-hours trading on Tuesday after the clinical-stage biotech reported positive topline results from a mid-stage trial of its experimental drug abdakibart in patients with moderate to severe hidradenitis suppurativa (HS).

The stock had already closed up roughly 18% in regular trading ahead of the announcement.

Trial Data

Hidradenitis suppurativa (HS) is a chronic, non-contagious inflammatory skin condition causing painful, recurring, and draining lumps (abscesses or boils) in hair-bearing areas. In the trial, Avalo was evaluating the efficacy and safety of abdakibart in adults with moderate to severe hidradenitis suppurativa across two dosing regimens.

At both doses, the drug demonstrated improvement, with 42.5% of patients experiencing a 75% reduction in total abscess and inflammatory nodule (AN) count from baseline at week 16, the company said. In comparison, only 25.6% of patients on placebo achieved similar outcomes.

The company further noted that abdakibart was well tolerated, with the percentage of subjects with treatment-emergent adverse events similar across abdakibart treatment arms and placebo. Avalo said it now plans to advance abdakibart into a registrational late-stage program.

Separately, Avalo announced a proposed public offering of common stock and pre-funded warrants. It did not disclose the size of the offering. The company said it intends to use the net proceeds, together with existing cash, to advance the clinical development of abdakibart, and for working capital and other general corporate purposes.

How Did AVTX Retail Traders React? 

On Stocktwits, retail sentiment around AVTX stock jumped from ‘bearish’ to ‘bullish’ territory while message volume increased from ‘low’ to ‘high’ levels.

A Stocktwits user called for people to exit their position in light of upcoming dilution.

Another user opined that the rally seems overextended.

AVTX stock has gained 224% over the past 12 months. 

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