On May 6, 2026, Paul Varki, acting in his capacity as Chief Legal Officer for Avalo Therapeutics, Inc. (NASDAQ: AVTX), engaged in a dual-step transaction involving the company's common stock. According to regulatory filings, Mr. Varki first exercised stock options to acquire 75,063 shares of common stock. The cost of this acquisition ranged from $8.04 to $13.43 per share, totaling roughly $940,381.
Immediately following the acquisition through option exercise, Mr. Varki sold all 75,063 shares. These sales were executed at prices between $18.912 and $23.71 per share, resulting in total proceeds of approximately $1,513,673. Following these specific transactions, Mr. Varki's direct holdings of Avalo Therapeutics common stock stand at 3,634 shares.
Structured Trading Details
The transactions were conducted under a Rule 10b5-1 trading plan, which was originally established by Mr. Varki on November 12, 2025. This type of plan is designed to facilitate pre-scheduled trades. The options exercised in this transaction were part of two distinct groups:
- 62,500 shares: These originated from an option with a 25% vesting schedule on June 24, 2025, with the remaining portion scheduled to vest monthly over a three-year period.
- 12,563 shares: These were part of an option that saw 25% vest on January 28, 2026, with the balance set to vest monthly over three years, subject to continued employment.
Clinical and Financial Context
This insider activity occurs against a backdrop of notable clinical developments for Avalo Therapeutics. The company recently reported positive data from its Phase 2 LOTUS trial regarding the drug abdakibart, which is being tested for patients suffering from moderate to severe hidradenitis suppurativa. In the trial, response rates at Week 16 were recorded at 42.2% for the 150 mg dosage and 42.9% for the 300 mg dosage. These figures represent the highest response rates observed within a trial of that specific size.
Following these clinical results, Citizens adjusted its outlook on the company, raising its price target from $52 to $62 while maintaining a Market Outperform rating. The analyst noted the potential for the drug to become a blockbuster treatment.
Financially, Avalo Therapeutics is also navigating a capital raise. The company announced the pricing of a $375 million underwritten public offering consisting of 19,730,000 shares of common stock and pre-funded warrants. Common stock was priced at $17.75 per share, while pre-funded warrants were set at $17.749 each. Underwriters also hold a 30-day option to purchase up to an additional 3,169,500 shares under the same terms as part of these efforts to secure financial resources and advance clinical programs.