Avalyn Pharma has secured $100 million in an oversubscribed Series D financing round to advance its inhaled drug formulations for pulmonary fibrosis, building on the $175 million raised in September 2023. The funding will support the development of two inhaled versions of existing oral therapies that currently suffer from poor patient adherence due to significant side effects.
Addressing Treatment Tolerability Challenges
The company's pipeline focuses on converting two approved oral drugs for pulmonary fibrosis—pirfenidone and nintedanib—into inhaled formulations. According to CEO Lyn Baranowski, only 30% of the 300,000 U.S. patients with pulmonary fibrosis take either of the oral medications at any given time, despite the disease's deadly nature.
"What's wrong with the drugs? It's that they make you feel terrible," Baranowski explained. The marketed oral versions, administered at much higher doses, are associated with significant gastrointestinal side effects including diarrhea, indigestion, and vomiting.
Pipeline Development Strategy
The Series D funds will advance AP01, Avalyn's inhaled version of pirfenidone, through a Phase IIb trial called MIST. Additionally, the funding will support AP02, an inhaled formulation of nintedanib, into Phase II trials. The company presented Phase I trial data for AP02 at the American Thoracic Society 2025 conference in May, demonstrating favorable tolerability and safety profiles.
Avalyn's approach involves significantly lowering drug doses while utilizing inhalation delivery to target the lungs directly. "The reason they're so successful is because you can target the right organ," Baranowski noted, drawing parallels to successful inhaled treatments used in asthma and COPD.
Disease Context and Market Opportunity
Pulmonary fibrosis represents one of 200 forms of interstitial lung diseases, with only a handful having approved treatments available. The condition involves progressive tissue scarring that causes shortness of breath and rapidly declining lung function. Idiopathic pulmonary fibrosis carries a particularly poor prognosis, with a median survival rate of 3-5 years—"shorter than some cancers," according to Baranowski.
Currently, pirfenidone is available as a generic medication, while Boehringer Ingelheim markets nintedanib in the U.S. under the brand name Ofev.
Regulatory Pathway and Future Plans
Avalyn is engaged in discussions with the pulmonary division of the FDA's Center for Drug Evaluation and Research (CDER) regarding AP01. Following completion of Phase II trials, the company anticipates that CDER will request one Phase III trial before considering a regulatory application.
The latest financing round brings Avalyn's total funding to over $300 million since its 2015 launch. Previous funding rounds included a $62 million Series A in 2017, a $35 million Series B in 2020, and the $175 million Series C in 2023.
