Avalyn Raises $175 Million in Oversubscribed Series C Financing to Advance Inhaled Pulmonary Fibrosis Programs into Later Stage Clinical Studies

Financing led by Perceptive Xontogeny Venture Funds, SR One, and Eventide Asset Management, with participation by new and current healthcare investors

Funds to support Phase 2b development of AP01 and Phase 2a development of AP02 for pulmonary fibrosis

September 27, 2023

SEATTLE – September 27, 2023 – Avalyn Pharma Inc., a clinical-stage biopharmaceutical company focused on development of targeted inhalation therapies for life-threatening pulmonary diseases, announced the closing of an oversubscribed $175 million Series C financing. Avalyn plans to use the funds to continue development of its portfolio of inhalation therapies for interstitial lung disease that improve upon currently approved medications, and advance lead clinical assets, AP01 (inhaled pirfenidone) and AP02 (inhaled nintedanib), into mid-stage clinical trials.

The Series C financing was co-led by Perceptive Xontogeny Venture Funds, SR One, and Eventide Asset Management, which were joined by new investors, Vida Ventures, Wellington Management, Rock Springs Capital, funds and accounts advised by T. Rowe Price Associates, Inc., Surveyor Capital (a Citadel Company), Catalio Capital Management, and Piper Heartland. Current investors, including Novo Holdings A/S, Norwest Venture Partners, F-Prime Capital, Pivotal bioVenture Partners, and RiverVest Venture Partners, also participated. In conjunction with the financing, Gianna Hoffman-Luca, Ph.D., of Perceptive Xontogeny Venture Funds, and Jill Carroll of SR One, joined Avalyn’s Board of Directors.

“Pulmonary fibrosis is a fatal disease with a median survival of only 3-5 years. Fewer than 30% of patients in the U.S. are treated with either of the two approved oral medicines today due to their significant tolerability challenges,” said Lyn Baranowski, CEO of Avalyn. “There is an urgent need for effective treatments that patients can tolerate, which we believe can be addressed with inhaled delivery. In fact, our existing clinical data shows potential for both improved tolerability and efficacy. We are thrilled to have the support of such an esteemed group of investors to help realize our mission and impact patients’ lives.”

“We at Perceptive Xontogeny Venture Funds are particularly compelled by the clinical data with AP01 showing preserved forced vital capacity in pulmonary fibrosis and significantly fewer side effects than oral pirfenidone,” stated Dr. Hoffman-Luca. “Avalyn’s business and scientific approach is highly differentiated, and we are proud to support the next phase of growth.”

While oral pirfenidone has been shown to reduce decline of lung function and mortality in patients with idiopathic pulmonary fibrosis (IPF), systemic exposure contributes to significant side effects including nausea, rash, photosensitivity, weight loss, and fatigue, limiting its overall use in patients. In clinical trials to date, inhaled AP01 has been well-tolerated and demonstrated enhanced efficacy, when compared to published results of oral pirfenidone. Additionally, AP02 was well-tolerated in a recently completed open-label Phase 1a trial in IPF patients and healthy volunteers. Avalyn plans to advance AP01 into a Phase 2b trial and AP02 into a Phase 2a trial for patients with pulmonary fibrosis.

Ms. Carroll from SR One added, “The combination of the pipeline and data with such an accomplished team, with a track record of biotech leadership and pulmonology drug development, gives us faith in what Avalyn is trying to accomplish. I am excited to work with the leadership team and Board to help advance these programs and deliver a new era of respiratory treatments that could be paradigm changing.”

About Perceptive Xontogeny Venture Funds

The Perceptive Xontogeny Venture Funds (“PXV Funds”) are Perceptive Advisors’ investment vehicles focused on early-stage, private venture investments in life sciences companies. Primary investments for PXV Funds include companies that are seeking a lead investor for private financings, which include both companies that are seeded and incubated at Xontogeny, and companies that are seeded and incubated by other organizations, accelerators and seed investors. The PXV Funds are also open to participating in syndicated private financings as a co-lead or passive investor with other venture capital firms. For more information, visit www.perceptivelife.com.

About SR One

SR One is a transatlantic biotechnology venture capital firm that collaborates with entrepreneurs and investment partners in an effort to build elite biotechnology companies. SR One’s mission is to translate innovative technologies and scientific discoveries into next-generation medicines with the potential to benefit patients with significant unmet medical needs. For more information, connect at www.srone.com.

About Eventide Asset Management, LLC

Eventide Asset Management, LLC is a Boston-based investment adviser practicing “investing that makes the world rejoice®.” Founded in 2008 and inspired by a biblical worldview, Eventide strives to serve individuals, financial advisors, and institutions by providing high-performance investments that create compelling value for the global common good.

About Avalyn Pharma

Avalyn is a biopharmaceutical company developing targeted therapeutics for the treatment of rare respiratory diseases including pulmonary fibrosis and other interstitial lung diseases (ILD). Pulmonary fibrosis is characterized by scarring, decline in lung function, reduced exercise capacity and quality of life, and is associated with increased mortality. Currently approved therapeutic options slow pulmonary fibrosis progression but are associated with significant toxicities that restrict their use and dosing. Avalyn is developing a pipeline of new inhaled formulations of approved medicines designed to reduce systemic exposure and deliver medication to the site of disease. Avalyn’s pipeline is led by AP01, an optimized inhaled formulation of pirfenidone, which has been assessed in 150 individuals with different forms of pulmonary fibrosis and demonstrated clinical proof-of-concept with improved efficacy and safety over existing therapies. For more information, please visit avalynpharma.com.


Monique Allaire
THRUST Strategic Communications

Cara Mayfield
THRUST Strategic Communications