Avalyn Pharma Inc.

What they do

Avalyn develops inhaled formulations of existing antifibrotic drugs for progressive pulmonary fibrosis (PPF), idiopathic pulmonary fibrosis (IPF), and other interstitial lung diseases. Its lead candidate AP01 (inhaled pirfenidone) is in the MIST Phase 2b trial, AP02 (inhaled nintedanib) is in the AURA Phase 2 trial, and AP03, an inhaled fixed-dose combination of pirfenidone and nintedanib, is set to begin Phase 1 by end-2026. The company completed its IPO in May 2026 and funds operations through equity and a term loan.

Revenue drivers

• AP01 (inhaled pirfenidone) — Lead program in MIST Phase 2b for PPF; no revenue today, with topline data expected in the second half of 2027.
• AP02 (inhaled nintedanib) — Phase 2 AURA trial in IPF; enrollment initiated Q1 2026 with topline data anticipated in late 2027.
• AP03 (inhaled pirfenidone and nintedanib) — Preclinical fixed-dose combination; a Phase 1 study remains on track to initiate by the end of 2026.

Recent performance

Avalyn reported a second-quarter 2026 net loss of $28.9 million, compared with $20.2 million in the second quarter of 2025, and a six-month net loss of $55.8 million versus $37.7 million a year earlier. R&D expenses rose to $24.7 million from $17.9 million, driven by AP01 and AP02 trials and the SAIL open-label extension. G&A expenses increased to $6.6 million from $3.9 million on higher headcount and stock-based compensation. Cash, cash equivalents, and marketable securities were $413.5 million as of June 30, 2026, which includes approximately $316.6 million in net IPO proceeds.

Strategy

The company completed enrollment of the MIST Phase 2b trial with 398 patients and plans to report topline data in the second half of 2027. It is enrolling the 160-patient AURA Phase 2 trial of AP02 and plans to initiate a Phase 1 study of AP03 by the end of 2026. Management states it is building a differentiated inhaled platform for rare respiratory diseases and expects current cash to fund operations into 2029. The company also plans to present two abstracts at the ERS Congress in September 2026.

Risks

• No approved products or revenue — Avalyn has not generated any revenue since inception in 2011 and depends entirely on clinical success for future income.
• Clinical trial failure — AP01, AP02, and AP03 are investigational; topline results for MIST and AURA are not expected until 2027 and may not demonstrate safety or efficacy.
• Ongoing losses and cash burn — Net losses were $55.8 million for the six months ended June 30, 2026, with an accumulated deficit of $321.2 million.
• Regulatory and competitive uncertainty — Inhaled formulations of pirfenidone and nintedanib require regulatory approval and face competition from established oral antifibrotic therapies.

Outlook

Management expects topline data from the MIST Phase 2b trial of AP01 in the second half of 2027 and from the AURA Phase 2 trial of AP02 in late 2027. A Phase 1 study of AP03 remains on track to initiate by the end of 2026. The company projects its $413.5 million in cash, cash equivalents, and marketable securities will fund operations into 2029.