Avalo Therapeutics (NASDAQ:AVTX) is preparing to report phase IIb data in the second quarter of 2026 from its LOTUS trial evaluating AVTX-009 in hidradenitis suppurativa (HS), CEO Garry Neil said during a fireside chat at Guggenheim’s Emerging Outlook Biotech Summit 2026.
Neil described LOTUS as a placebo-controlled study in more than 250 patients with moderate to severe HS that is testing two dose regimens of AVTX-009, a “very high-affinity” anti–IL-1 beta monoclonal antibody. The company expects to move “as quickly as we can” into phase III following the readout, with the goal of bringing the drug to market.
Rationale for targeting IL-1 beta in HS
In the discussion, Neil highlighted that IL-1 beta is upstream of other validated targets in HS, including TNF alpha and the Th17/IL-17 pathway. He argued that this upstream role supports IL-1 beta as an attractive target and said Avalo believes AVTX-009’s high affinity could enable greater neutralization and lesion penetration than other approaches.
Why IL-1 alpha and receptor approaches have been less compelling
Neil drew a distinction between IL-1 alpha and IL-1 beta, saying IL-1 alpha is constitutively expressed in epithelial cells and functions primarily as an “alarmin” involved in responding to epithelial injury and supporting wound healing, with a limited role in chronic inflammation. In HS specifically, he said biomarkers do not show an increase in IL-1 alpha versus normal tissue.
He also referenced Johnson & Johnson’s study of bermekimab, an anti–IL-1 alpha drug licensed from XBiotech, saying the study was well controlled and included Humira as a positive control but showed “no drug effect whatsoever” on HS lesions. Neil said this experience “lays to rest” the idea that IL-1 alpha is an important driver in HS.
On IL-1 receptor targeting, Neil described mixed outcomes in the field. He pointed to small studies with anakinra (an IL-1 receptor antagonist) that showed some benefit but noted practicality issues because it must be dosed daily. He also cited canakinumab, an IL-1 beta blocker, as having shown some effect, though he described it as lower affinity than AVTX-009. By contrast, he said AstraZeneca’s MEDI9868, an IL-1 receptor antibody, did not show activity in HS, and he suggested receptor-blocking antibodies can lead to partial antagonism and dosing challenges.
Neil discussed Novartis’ MAS825, a bispecific antibody targeting IL-1 beta and IL-18, calling it an “interesting experiment” that showed benefit and supported IL-1 beta as proof of concept. He added that Avalo does not view IL-18 as an important target in HS and speculated the outcome could have been influenced by dosing and half-life constraints typical of bispecific antibodies, while noting Novartis did not disclose pharmacokinetics.
Competitive context: AbbVie’s lutikizumab and Avalo’s positioning
Neil said Avalo was encouraged by AbbVie’s 2024 phase II results for lutikizumab, a bispecific antibody targeting IL-1 alpha and IL-1 beta that is now in phase III for HS. He described lutikizumab’s IL-1 beta binding as “at least 10-fold lower affinity” than AVTX-009 but still effective, and said both 300 mg weekly and every-other-week dosing appeared to sit on a dose-efficacy plateau.
He emphasized that AbbVie’s phase II population was particularly challenging, noting that 100% of treated patients were Humira failures and that 71% were early stage 3 HS. Neil also suggested that binding IL-1 alpha could theoretically be a disadvantage for a bispecific due to widespread normal IL-1 alpha distribution potentially “soak[ing] up” antibody that might otherwise reach lesions.
LOTUS trial design, enrollment, and upcoming timing
Neil said LOTUS is a three-arm phase IIb study comparing two AVTX-009 dosing regimens versus placebo, each using a loading dose:
- Arm 1: 600 mg loading dose, then 300 mg every four weeks
- Arm 2: 300 mg loading dose, then 150 mg every two weeks
- Control: placebo
He said the study was initially powered for a 25% placebo-subtracted difference on HiSCR75 and assumed a 20% placebo rate, noting that placebo responses have typically been in the 13%–18% range. Avalo increased planned enrollment from 180 to 222 patients to ensure power for comparisons among biologic-naïve and biologic-experienced patients and ultimately enrolled more than 250 participants due to over-enrollment.
Neil said the population is generally comparable to other HS trials in terms of weight, BMI, age, and disease duration, but he expects LOTUS will include more biologic-experienced patients because it allowed TNF and IL-17 failures; he estimated about one-third of patients are biologic-experienced. Geographically, he said most patients are from the U.S. and Canada, with additional sites in Australia and Western Europe and some in Eastern Europe (including Slovakia, Poland, and Bulgaria).
On timing, Neil said enrollment was completed at the end of October. With a 16-week efficacy assessment and a six-week safety follow-up, he expects the last patients will finish follow-up by the end of March. He added that Avalo hopes to report a “complete data set,” including the safety follow-up, consistent with second-quarter guidance. He also said there is no open-label extension for LOTUS.
Discussing safety expectations for IL-1 beta blockade, Neil said the mechanism can increase susceptibility to bacterial infections and can reduce neutrophil counts, though he said neutropenia greater than grade 2 is rare and may be less common in HS patients due to elevated baseline neutrophil counts.
When asked what level of efficacy would be commercially meaningful, Neil said the market has focused on roughly 20% placebo-subtracted improvement, calling it a “clear win” for Avalo and saying 25% would be a “home run.” He also pointed to examples in the HS market where products have seen commercial traction with lower placebo-subtracted response rates, including Cosentyx and Bimzelx, as context for the opportunity.
Neil said LOTUS is not a pivotal study, and Avalo plans to run two phase III trials after discussions with the FDA, but he said the current trial is “large enough” and well controlled to be supportive for a potential biologics license application.
On financial runway, Neil said Avalo reported $100 million in cash at year-end and a burn rate of about $50 million in 2025, which he said should carry the company through the LOTUS readout, though he added Avalo would plan to raise additional capital to fund phase III development.
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.
