Avalo Therapeutics Inc (NASDAQ:AVTX) shares are surging Wednesday after the company delivered a major clinical win, strengthened its balance sheet with a new offering and picked up fresh support from Wall Street analysts.

• Avalo Therapeutics stock is approaching key resistance levels. Why are AVTX shares at highs?

Phase 2 LOTUS Trial Delivers Best‑In‑Class Results

The big catalyst is Avalo's announcement that its Phase 2 LOTUS trial for abdakibart in moderate to severe hidradenitis suppurativa (HS) met its primary endpoint at both doses. The drug achieved HiSCR75 response rates of 42.2% (150 mg) and 42.9% (300 mg) at Week 16, with p‑values of 0.018 and 0.015, respectively. Avalo noted that these are the highest HiSCR75 rates ever reported in a trial of this size or larger.

The therapy also showed statistically significant improvements across key secondary measures, including HiSCR50, IHS4 and draining tunnel count, with numerically favorable results across all other secondary endpoints. Importantly, abdakibart was well tolerated, with adverse‑event rates similar to placebo and no unexpected safety issues.

On the back of this data, Avalo confirmed it will advance abdakibart into a registrational Phase 3 program.

Public Offering Adds Caution

Avalo also launched an underwritten public offering of common stock and pre‑funded warrants, with all securities in the deal being sold directly by the company. The offering includes a 30‑day option for underwriters to buy up to an additional 15% of the shares and warrants on the same terms.

Avalo said it plans to use the proceeds, together with its existing cash and short‑term investments, to push abdakibart through Phase 3 development and support general corporate needs. Leerink Partners, TD Cowen and BofA Securities are serving as joint bookrunners.

Analysts Raise Price Targets After The Data

Two firms boosted their targets following the readout:

• BTIG analyst Julian Harrison raised its price target from $40 to $58 while maintaining a Buy rating.
• Wedbush analyst Robert Driscoll increased its target from $29 to $40 and reiterated an Outperform rating.

AVTX Shares Are Soaring

AVTX Price Action: Avalo shares were up 32.78% at $21.59 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro.

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