Avalo Therapeutics (NasdaqCM:AVTX) FY Conference Transcript

Summary of Avalo Therapeutics FY Conference Call Company Overview - Company: Avalo Therapeutics (NasdaqCM:AVTX) - Focus: Development of treatments for hidradenitis suppurativa (HS), an inflammatory skin condition Industry Insights - Market Size: HS affects over 1% of the U.S. population, indicating a larger market than previously thought, with significant underdiagnosis and undertreatment [3] - Current Treatments: There are three approved compounds for HS, generating aggregate sales in the multiple billions of dollars, with rapid growth expected [3] Product Development - Product: AVTX-009, an anti-IL-1 monoclonal antibody - Clinical Trials: Top-line Phase II results expected in Q2 2026 [4] - Mechanism of Action: IL-1 is a central target in the inflammatory process of HS, driving neutrophil activity and lesion formation [6][7] - Unique Properties: AVTX-009 has high affinity and specificity for IL-1, allowing better penetration into lesions, which are under high pressure [8][9] Clinical Trial Design - Primary Endpoint: HiSCR75, which measures a 75% reduction in abscess or inflammatory nodule count, is considered more clinically relevant than HiSCR50 [10][11] - Placebo Response Management: The trial design includes a large sample size of over 250 patients and collaboration with experienced investigators to mitigate placebo effects [14][15][16] Regulatory Strategy - Phase III Design: Plans to discuss with the FDA for potential efficiencies in trial design, considering recent guidance for single pivotal trials [17][18][19] Competitive Landscape - Market Dynamics: The HS market is evolving with new entrants and therapies, creating opportunities for differentiation based on mechanism of action, dosing convenience, and safety profile [20][21] - Strategic Directions: Focus on the U.S. market initially, with potential for international partnerships and expansion into other therapeutic areas [23] Financial Position - Cash Reserves: Approximately $95 million in cash, sufficient to fund operations through the upcoming data release, with plans to raise additional funds for Phase III trials [32] Future Outlook - Upcoming Milestones: Anticipation of top-line data from the LOTUS trial next quarter, with potential regulatory discussions for Phase III trials in 2027 [27][29]