BUZZ - Avalo shares plunge due to disappointing clinical trial results of competitor AbbVie's dermatology drug

October 22 - ** Drug developer Avalo Therapeutics (AVTX.O) shares fell 39% to $7.43, hitting a more than one-year low

** Rival AbbVie ABBV.N reported that its experimental skin disease drug lutikizumab (link) showed only an 8 percentage-point efficacy advantage over placebo, missing the 10% to 20% improvement range Cantor analysts had expected in September

** Avalo is developing abdakibart, a monthly injection targeting IL-1β for the treatment of hidradenitis suppurativa (HS), the same chronic skin disease targeted by AbbVie

** According to Cantor, the sharp drop in AVTX shares came because investors have "largely given up on the HS treatment opportunity," fearing abdakibart may face a "similar absolute efficacy drop" as it progresses into late-stage clinical trials

** Wedbush analyst Robert Driscoll pointed out that AbbVie's "modest and limited competitive" efficacy casts doubt on the effectiveness of targeting IL-1β, calling this "the reason for AVTX's share price decline"

** However, Driscoll added that Avalo's approach is "much more robust" because it employs a "high-affinity antibody" rather than AbbVie's dual-targeted bispecific drug—for which the effect on IL-1α "may be irrelevant"

** Including intraday moves, AVTX is down about 59% so far this year

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