Avalo plunges after rival AbbVie's skin drug trial disappoints

AbbVie

Today 16:36

** Shares of drug developer Avalo Therapeutics AVTX.O fall 39% to over one-year low of $7.43
** Rival AbbVie ABBV.N reports its experimental skin disease drug, lutikizumab, achieved only an 8-percentage-point benefit over placebo, missing the 10% to 20% improvement range Cantor analysts previously expected in September
** Avalo is developing abdakibart, a monthly injectable targeting IL-1β to treat hidradenitis suppurativa (HS), the same chronic skin condition targeted by AbbVie
** Cantor says AVTX plunged because investors have "largely written off the HS opportunity" over fears abdakibart could face a "similar degradation in absolute efficacy" moving into late-stage trial
** Wedbush analyst Robert Driscoll says AbbVie's "modest and not likely competitive" efficacy raises questions over the validity of targeting IL-1β, citing that as "the reason for AVTX decline"
** However, Driscoll adds Avalo's approach is "a lot more robust" as it uses a "high-affinity antibody" rather than AbbVie's dual-targeting bispecific drug where hitting IL-1α is "unlikely to be relevant"
** Including session moves, AVTX down ~59% YTD

 (Reporting by Kamal Choudhury in Bengaluru)
 ((Kamal.Choudhury@thomsonreuters.com;))