** Shares of drug developer Avalo Therapeutics AVTX.O rise 2.9% to $19.40 premarket

** Leerink Partners initiates coverage of AVTX with an "outperform" rating and $38 PT

** Brokerage says AVTX's lead drug abdakibart has "best-in-class potential" in hidradenitis suppurativa, a chronic skin disease that causes painful lumps and abscesses

** Leerink says abdakibart showed 42%-43% response rates in a mid-stage study, versus 26% for placebo, among the highest absolute rates seen in similar studies

** Sees drug as differentiated from AbbVie's ABBV.N rival treatment due to potential for less frequent dosing and a more targeted approach

** AVTX plans to meet U.S. FDA in 2H26 and start a late-stage study in 1H27, Leerink says

** Brokerage also sees longer-term upside from AVTX-010, AVTX’s follow-on antibody for inflammatory diseases

** As of last close, AVTX up 3.7% YTD