Avalo Therapeutics Inc. (NASDAQ:AVTX) shares surged 33.02% in Wednesday pre-market trading to $21.63 after the clinical-stage company delivered a Phase 2 trial win and priced a $375 million equity offering late Tuesday.
Phase 2 LOTUS Trial Clears Primary Hurdle
Avalo announced positive topline data from its Phase 2 LOTUS trial evaluating abdakibart, a humanized monoclonal antibody, in patients with moderate to severe hidradenitis suppurativa, a chronic inflammatory skin disease that affects an estimated 0.7% to 1.2% of the U.S. population, with some estimates ranging as high as 2% to 4%, according to the company.
The 253-patient, randomized, double-blind and placebo-controlled trial met its primary endpoint at both doses studied.
The announcement was made after the markets closed on Tuesday.
$375M Offering Funds Path To Phase 3
Later that night, Avalo priced an underwritten public offering of 19.73 million common shares and 1.4 million pre-funded warrants at $17.75 per share, targeting gross proceeds of approximately $375 million before fees.
Joint bookrunners include Leerink Partners, TD Cowen, BofA Securities, Piper Sandler (NYSE:PIPR) and Cantor.
The closing is expected on May 7.
According to the company, proceeds will fund abdakibart’s Phase 3 program through topline data readout, as well as working capital and other general corporate purposes.
Trading Metrics, Technical Analysis
Avalo has a market capitalization of $434.38 million, with a 52-week high of $20.72 and a 52-week low of $3.39.
The small-cap stock has a Relative Strength Index (RSI) of 60.83.
Over the past 12 months, AVTX has gained 240.17%.
The stock of the biotech is positioned at about 74% of its 52-week range, indicating it is closer to its high than its low.
Price Action: According to Benzinga Pro data, AVTX closed the regular session at $16.26, up 18%.
With a strong Momentum in the 93rd percentile, Benzinga’s Edge Stock Rankings indicate that AVTX is experiencing long-term upward movement along with medium and short-term long-term consolidation.
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