Shares of Avalo Therapeutics Inc (NASDAQ:AVTX) climbed about 5.8% in premarket trading on Monday after Guggenheim launched coverage on the stock with a Buy recommendation and a $50 price target.
Guggenheim analyst Yatin Suneja said he is encouraged by Avalo’s IL-1β inhibitor, AVTX-009, which is being developed to treat hidradenitis suppurativa (HS), a chronic inflammatory skin disease. He pointed to the therapy’s high-affinity, IL-1β-specific mechanism as a potential differentiator versus competing treatments, offering greater selectivity and the prospect of less frequent dosing.
Avalo is currently running its Phase II LOTUS trial, which includes 250 patients, with topline results expected in the second quarter of 2026. Suneja assigns a 65% chance that the program advances into Phase III development.
The analyst also highlighted substantial upside potential, estimating that Avalo’s market value could reach $2 billion to $3 billion in a favorable scenario—equating to roughly a three- to five-fold increase from current levels. Guggenheim projects possible peak global sales of around $2.1 billion for AVTX-009 if it secures regulatory approval.
According to the note, Avalo aims to begin a pivotal HS study in 2027, with topline data potentially available by 2029. With the company’s enterprise value currently near $530 million, Suneja believes there is meaningful headroom for further share price appreciation.