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On Monday, H.C. Wainwright analysts upgraded Avalo Therapeutics Inc. (NASDAQ: NASDAQ:AVTX) stock to a Buy rating from the previous Neutral rating. The analysts also set a new 12-month price target of $15.00 for the company, joining a broader consensus among analysts who maintain targets ranging from $18 to $48. According to InvestingPro analysis, the stock appears undervalued at its current price of $4. Avalo Therapeutics is a clinical-stage biotechnology firm focused on developing treatments for immunological diseases.
The lead asset of Avalo Therapeutics, AVTX-009, is a humanized monoclonal antibody designed to bind with high affinity to interleukin-1β (IL-1β), neutralizing its activity. This mechanism provides a risk-mitigated approach for treating immunological diseases, as IL-1β is upstream of both IL-17 and IL-23 in the immune signaling cascade.
Currently, AVTX-009 is being developed to treat hidradenitis suppurativa, a condition with an evolving standard-of-care regimen. Analysts believe that Avalo’s IL-1β-targeted strategy could be an optimal approach, with competitor data validating this method in treating the condition. Despite the presence of IL-17A/F inhibitors setting benchmarks for clinical success, analysts see room for Avalo’s novel modality in the market.
Avalo Therapeutics trades at a negative enterprise value of approximately -$82 million. The company’s cash position of $125 million is expected to fund operations potentially into 2028, covering key value inflection points such as Phase 2 data for AVTX-009 anticipated in 2026. While the stock has faced challenges, declining nearly 60% over the past six months, its strong financial health score of 2.14 on InvestingPro suggests resilient fundamentals. Subscribers can access 9 additional ProTips and comprehensive financial metrics to better evaluate the investment opportunity.
In other recent news, Avalo Therapeutics has made several noteworthy announcements and developments. The company recently appointed Michael Heffernan as the new Chairman of its Board of Directors, succeeding Dr. Garry Neil. This leadership change comes as Avalo advances its lead candidate, AVTX-009, currently in Phase 2 trials for hidradenitis suppurativa (HS). Analysts from Jefferies initiated coverage on Avalo with a Buy rating and a price target of $23, citing the potential of AVTX-009 and the firm’s experienced management team. Similarly, Stifel began coverage with a Buy rating and a $36 price target, emphasizing the drug’s potential in the HS market and Avalo’s strong financial position. Oppenheimer maintained an Outperform rating with a $35 target, highlighting the company’s increased net cash from warrant exercises and ongoing patient enrollment in the LOTUS trial. Avalo’s financial outlook is robust, with sufficient funds to continue operations into 2027, as noted by both Stifel and Oppenheimer. The company is also planning to announce a second indication for AVTX-009 within the year, potentially expanding its therapeutic pipeline. These developments underscore Avalo’s strategic progress in the biotechnology sector.
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