Avalyn raises $175M to test inhaler versions of IPF medicines in PhII trials

Avalyn Pharma announced Wednesday that it closed a $175 million Series C round, which it plans to put toward two Phase II studies of inhaled versions of idiopathic pulmonary fibrosis drugs.

Avalyn wants to test an inhaled version of pirfenidone in a Phase IIb study. The pill is marketed as Esbriet by Roche, though it lost patent exclusivity last year. Roche went to court in an attempt to keep generics from entering the market but did not succeed, and in May of last year, Sandoz launched a generic version of the drug. Roche earned over $1 billion from Esbriet in 2021, but sales have fallen substantially from the new competition. In its second-quarter report in July, Roche said Esbriet sales had fallen 78% compared to last year.

The Seattle-based company is also trying to develop an inhaled version of nintedanib and hopes to use the new raise to fund a Phase IIa study. Boehringer Ingelheim markets (and has patent exclusivity on) an oral version known as Ofev, which brought in €3.2 billion last year.

Lyn Baranowski

Avalyn says that its inhaler option for pirfenidone can be more safe and effective than the currently available oral medicines, but it has yet to pit them directly against each other in clinical trials.

In October 2022, Avalyn brought on Lyn Baranowski as CEO.

The Series C was led by Perceptive Xontogeny Venture Funds, SR One and Eventide Asset Management, followed by a long list of other investors, including newcomers Vida Ventures, Wellington Management, Rock Springs Capital, Surveyor Capital, Catalio Capital Management and Piper Heartland.

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