WAYNE, Pa., May 6, 2026, 12:04 (EDT)
Late Tuesday, Avalo Therapeutics Inc. locked in a $375 million public offering—just hours after rolling out upbeat Phase 2 results for abdakibart. Riding the surge of interest tied to its hidradenitis suppurativa program, the company aims to fund its looming Phase 3 plans. Avalo is set to offer 19.73 million shares at $17.75 apiece, along with pre-funded warrants for another 1.4 million shares at $17.749 each. Closing is slated for May 7, pending standard closing conditions.
This raise takes on new weight as Avalo shifts from mid-stage results to a registrational program—a late-stage trial aimed at supporting a potential drug approval. In a prospectus supplement, the company put its cash, cash equivalents, and short-term investments at roughly $82.0 million as of March 31. Avalo said the proceeds, combined with existing funds, are slated primarily to push abdakibart to Phase 3 topline data.
By 11:50 a.m. EDT, Avalo was sitting at $21.73, up roughly 34%. Shares had briefly hit $25.75 earlier, and intraday volume hovered around 15.9 million.
A total of 253 adults with moderate to severe hidradenitis suppurativa took part in the LOTUS study, which pitted two dosing regimens against placebo for 16 weeks. According to Avalo’s filing, 42.2% of patients who got 150 mg every two weeks hit the HiSCR75 mark—nearly matching the 42.9% for those on the 300 mg every four weeks dose. Placebo response lagged behind, at 25.6%.
HiSCR75 tracks a 75% drop from starting levels in abscesses and inflammatory nodules—no new abscesses, no more draining tunnels. In other words, patients see fewer sore lumps and don’t develop extra tunnel-like lesions beneath the skin.
Avalo notched statistically significant gains on key secondary endpoints too—HiSCR50, IHS4 (a disease-severity score), and draining tunnel count all moved in the right direction. According to the company, adverse-event rates lined up with placebo; headache and nausea turned up most often. Importantly, no cases of neutropenia, serious infections, or opportunistic infections cropped up during the 16-week window.
Avalo CEO Garry Neil said the results gave the company “tremendous confidence” to push abdakibart forward into Phase 3 trials. Dr. John Frew, dermatology professor at the University of New South Wales, described the data as “highly promising,” and suggested IL-1β inhibition could become a “meaningful new therapeutic option” for patients. GlobeNewswire
Abdakibart targets interleukin-1 beta (IL-1β), aiming to block the inflammatory protein. Hidradenitis suppurativa—defined by chronic inflammation—brings painful nodules, abscesses, draining lesions, tunneling, and scarring, especially where skin commonly rubs.
Avalo isn’t venturing into uncharted territory here. Novartis picked up FDA clearance for Cosentyx in moderate-to-severe HS adults last year, and UCB’s Bimzelx got the FDA nod for adults this November. Dermatologists still turn to adalimumab products for tougher HS cases. But it’s worth noting—Avalo’s own slides flagged that their cross-study comparisons to approved drugs aren’t based on direct head-to-head trials, which is a real sticking point for investors sizing up the data.
Still, there are hurdles. The stock sale means dilution for shareholders. That topline data? It might look different after a closer look. Regulators could interpret the results another way, too. And Avalo flagged that even with the fresh capital and what’s left on hand, it won’t be enough to push any pipeline candidate through full development.
Next steps: secure the financing, then present the full LOTUS data at a medical congress, and start rolling out the Phase 3 design. The tougher part? Determining if that 16-week Phase 2 readout will stand up in a bigger, longer trial—especially now that the treatment landscape has shifted so quickly.
