Avalo Therapeutics Highlights AVTX-009 HS Phase II Catalyst, Cash Runway at Oppenheimer Conference

Key Points

• AVTX-009 is an anti-IL-1β monoclonal antibody Avalo positions as having class-leading affinity to improve lesion penetration and neutralize an upstream inflammatory node in hidradenitis suppurativa, potentially addressing neutrophil-driven abscesses and tunneling.
• Avalo expects top-line data from the LOTUS Phase II trial in Q2 using HiSCR75 as the primary endpoint after enrolling >250 patients, and says it implemented CRO selection, investigator training, and operational controls to limit placebo effects and strengthen signal-to-noise.
• The company reported about $95 million in cash, which it says should fund operations through the Phase II readout, but plans to raise capital for Phase III and is open to outside partnerships, particularly outside the U.S.

Avalo Therapeutics NASDAQ: AVTX Chief Executive Officer Dr. Garry Neil discussed the company’s hidradenitis suppurativa (HS) program and upcoming clinical catalyst during a fireside chat at Oppenheimer’s 36th Annual Healthcare Life Sciences Conference. The discussion focused on Avalo’s lead candidate AVTX-009, trial design considerations for HS studies, and the company’s funding position ahead of an anticipated Phase II readout.

HS market framing and unmet need

Neil characterized HS as a common but still underdiagnosed inflammatory disease, noting that estimates suggest prevalence of more than 1% of the U.S. population. He said patients can face an extended delay between first presentation and specialist referral, describing an 8-to-12-year lag from initial visits to definitive therapy. He added that improving recognition and faster referral could expand the treatable market over time.

Neil also pointed to the existing commercial footprint in HS, stating that three compounds are already approved and that aggregate sales are “in the multiple billions of dollars,” with growth described as rapid.

AVTX-009 and the rationale for IL-1β inhibition

Avalo’s lead program, AVTX-009, is an anti-IL-1β monoclonal antibody being evaluated in moderate-to-severe HS. Neil described IL-1β as central to the inflammatory process in HS and highlighted the disease’s neutrophilic features. He said HS lesions are “packed full of neutrophils” and that high levels of IL-1β can be measured within lesions.

According to Neil, IL-1β contributes to neutrophil recruitment and enzyme production, and also activates the matrix metalloproteinase system, which he said helps “liquefy” tissue and contributes to abscess formation and tunneling. He also described IL-1β as upstream of other validated targets in HS, including TNF and the Th17/IL-17 pathway, positioning IL-1β blockade as a way to address a central node in disease biology.

High affinity and lesion penetration as a differentiator

Neil emphasized the challenge of delivering drug into HS lesions, describing them as “pus under pressure” and citing measurements as high as 80 mmHg—roughly four times the surrounding tissue pressure. He said this pressure can make it difficult for therapies, including small molecules and monoclonal antibodies, to reach lesions in sufficient amounts.

He argued that AVTX-009’s “particularly high affinity” and specificity for IL-1β may help in this setting. Neil said antibodies can penetrate lesions by following an affinity gradient toward their target and that higher affinity could translate into higher lesion concentrations, longer dwell time, and improved neutralization of IL-1β to support healing. He described AVTX-009 as having the highest affinity in its class.

LOTUS Phase II design and HiSCR75 endpoint

Avalo expects to report top-line Phase II data from its LOTUS trial in the second quarter, and the company is using HiSCR75 as the primary endpoint. Neil and the moderator contrasted HiSCR75 with the more commonly referenced HiSCR50, with Neil stating that a 75% reduction in abscesses and inflammatory nodules is more clinically relevant than 50% and can improve signal-to-noise in trials.

Neil said placebo response rates on HiSCR75 have generally been consistent in the 13% to 18% range across trials and mechanisms, with some exceptions. He also said Avalo plans to report a range of response thresholds beyond the primary endpoint, including HiSCR50, HiSCR90, and HiSCR100.

In discussing placebo risk—referencing an example where an elevated placebo response affected one trial outcome—Neil outlined steps he said Avalo took to manage trial quality and placebo response:

• Trial size: LOTUS enrolled more than 250 patients, which he described as large for a Phase II study.
• CRO selection: Avalo chose Parexel, which Neil said executed the Bimzelx Phase III trials, citing experience in HS trial conduct.
• Investigator and training efforts: Neil said the company engaged Dr. Alexa Kimball as principal investigator and worked with Dr. Martina Porter to design a video training module to train investigators on the primary endpoint, along with special training on placebo effects for investigators and patients.
• Operational controls: Neil said the company monitored performance against the primary endpoint, sought an even enrollment rate, and tried to avoid last-minute site additions to reduce variability.
• Geography: He said the majority of patients were enrolled in the U.S. and Canada, with some sites in Australia and a limited number in Eastern Europe.

Phase III pathway, differentiation themes, and cash position

Looking ahead, Neil said Avalo intends to engage the FDA at an end-of-Phase II meeting and noted recent discussion suggesting a single pivotal trial may be sufficient for many approvals. He said the company will explore whether it can pursue a more efficient approach, while also describing the more typical HS pathway as two well-controlled studies with a 16-week induction period followed by 52-week follow-up. He added that such a program should support both U.S. and European registration.

On potential differentiation, Neil said Avalo is studying a dosing regimen of one dose every four weeks, with an initial loading dose, which he said could help patients reach therapeutic levels more quickly and potentially support faster onset. He also described IL-1β blockade as having a “remarkably benign” safety profile relative to TNFs, JAKs, and IL-17 inhibitors, and said this could be attractive for HS patients who may have comorbidities such as obesity, pre-diabetes or type 2 diabetes, smoking history, and elevated cardiovascular risk. He also noted prior trial experience in which IL-1β inhibition was associated with a decrease in major cardiovascular events.

Neil said the company is “open” to partnership options, particularly outside the U.S., while focusing on U.S. development. He also referenced longer-term interest in expanding into other inflammation and immunology indications, including other dermatology conditions, rheumatology, and gastrointestinal disease, but said the company would have more to say after releasing LOTUS data.

On funding, Neil said Avalo last reported approximately $95 million in cash, which he stated should carry the company comfortably beyond the Phase II data release. He added that Avalo expects it will need to raise capital for Phase III and plans to do so after it has the Phase II results in hand.

About Avalo Therapeutics NASDAQ: AVTX

Avalo Therapeutics is a clinical-stage biotechnology company focused on the discovery, development and commercialization of novel therapies for cardiometabolic, fibrotic and inflammatory diseases. The company's proprietary drug-design platform enables the creation of long-acting prodrugs with optimized pharmacokinetic profiles, aiming to improve efficacy, safety and patient adherence. By leveraging this technology, Avalo seeks to address key drivers of disease progression that remain underserved by existing treatments.

Its lead programs include AVTX-002, a first-in-class prodrug candidate designed to inhibit angiotensinogen for the treatment of hypertension and related cardiovascular disorders, and AVTX-006, an early-stage candidate targeting pathways implicated in fibrosis and metabolic dysfunction.

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