Avalyn Pharma (NASDAQ:AVLN) executives outlined the company’s inhaled pulmonary fibrosis strategy at the Jefferies Global Healthcare Conference, emphasizing its recent IPO, ongoing mid-stage studies and plans to position its candidates as potential backbone therapies for idiopathic pulmonary fibrosis and progressive pulmonary fibrosis.
Chief Executive Officer Lyn Baranowski said the company completed its IPO just over a month ago and was participating in its first investor conference as a public company. Avalyn is focused on pulmonary fibrosis, a disease Baranowski described as a “deadly diagnosis” with typical survival of three to five years and survival rates “worse than most forms of cancer.”
Inhaled Delivery Strategy
Avalyn is developing inhaled versions of the two approved antifibrotic drugs. AP01 is inhaled pirfenidone, and AP02 is inhaled nintedanib. Baranowski said the company’s approach is intended to deliver medicine directly to the lung while reducing systemic exposure.
Using pirfenidone as an example, Baranowski said the oral dose is 2,400 milligrams per day, while Avalyn believes 200 milligrams is the right inhaled dose. She said Avalyn can lower the dose by more than 10-fold while achieving better lung exposure because the therapy is targeted to the correct organ.
“We think that is what is now allowing us with this inhaled delivery to really resolve those tolerability challenges that prohibit adoption and limit continuation,” Baranowski said.
Baranowski also said the company believes improved lung exposure may improve efficacy, though she characterized the near-term goal as addressing the tolerability limitations of oral drugs and allowing patients to remain on therapy longer.
AP01 MIST Study and PPF Rationale
Avalyn’s AP01 program is being tested in the MIST study, a global Phase 2b trial that Baranowski said is enrolling 375 patients and is designed “as the first pivotal.” She said the company expects to complete enrollment in the next few months, after which the company will be “just over a year to data” because the trial runs for one year.
Asked by Jefferies Senior Equity Research Analyst Roger Song about translating prior data, largely in idiopathic pulmonary fibrosis, to progressive pulmonary fibrosis, Baranowski said the underlying pathophysiology of fibrosis is identical between IPF and PPF, while the distinction is the cause of disease onset. She cited prior clinical experience showing that when PPF is studied with appropriate criteria, data can be “superimposable” between IPF and PPF.
Baranowski said Avalyn is using criteria similar to those used by Boehringer Ingelheim in the INBUILD study to ensure enrolled PPF patients are declining in a way analogous to IPF patients. She also said Avalyn has its own PPF experience from the ATLAS Phase 1b study, including 28 PPF patients in an open-label portion of the trial.
She said Avalyn has observed the “same stabilization of lung function” in IPF and PPF patients in one-year data and in long-term data extending beyond four years, while cautioning that the long-term data carry responder bias and are not approvable on their own.
Base Case and Regulatory Path
Doug, Avalyn’s chief financial officer, said the company’s base case for AP01 is to “unlock the tolerability challenge” associated with oral antifibrotics. He said that even with efficacy similar to oral drugs, showing tolerability comparable to the ATLAS study would represent a meaningful opportunity because many patients either fail oral drugs or are reluctant to try them.
Doug described the upside scenario as replicating the efficacy observed in ATLAS, including lung function stabilization at 52 weeks. He called that a “grand slam scenario.”
Baranowski said Avalyn expects it will likely need another pivotal trial after MIST because the pulmonary division at the FDA has historically been conservative. She said the expected Phase 3 study would likely be similar to MIST in size, scope and design. However, she added that the company plans to discuss the regulatory path with the FDA after MIST data are available, including whether an early filing could be possible depending on the results.
AP02, Combination Plans and Market Positioning
Avalyn is also advancing AP02, its inhaled nintedanib program, in a global Phase 2 study. Baranowski said the 12-week study includes 160 patients and is evaluating two doses versus placebo. She said the study is designed to select a dose that could move directly into Phase 3, subject to regulatory discussions after the trial wraps up, which she said the company expects in late 2027.
Baranowski said oral nintedanib is dosed at 150 milligrams twice daily, while Avalyn believes the right inhaled dose is likely 2 milligrams or 4 milligrams. She said the 4-milligram inhaled dose produced 27 times better lung exposure than the 150-milligram oral dose. She also said diarrhea was not observed in the AP02 Phase 1 program, though she cautioned that some diarrhea may appear clinically.
The company is also developing AP03, a fixed-dose combination of inhaled pirfenidone and inhaled nintedanib. Baranowski said Avalyn expects to move AP03 into Phase 1 later this year.
Executives framed Avalyn’s products as potential background standard-of-care therapies that could be used with emerging novel mechanisms. Baranowski said the market includes about 300,000 diagnosed U.S. patients, and using the lowest branded pricing of $150,000 per patient per year, she estimated the current market opportunity at $42 billion if every patient were on one drug.
Cash Runway
Doug said Avalyn has just over $400 million in cash following its IPO, which he said funds the company into 2029. He said the capital supports pipeline development, including the company’s base case plans for one Phase 3 study for AP01, one Phase 3 study for AP02 and completion of the AP03 Phase 1 program.
About Avalyn Pharma (NASDAQ:AVLN)
We are a clinical-stage biopharmaceutical company pioneering inhaled therapies to transform the treatment paradigm of serious, rare respiratory diseases with significant unmet needs. Our approach is designed to address the limitations of current oral therapies by delivering optimized inhaled formulations of approved oral medicines directly to the lungs to enhance efficacy and minimize systemic exposure that contributes to side effects and treatment discontinuation. Our current pipeline is focused on treating pulmonary fibrosis, a life-threatening disease with a median survival of three to five years, which is a significantly shorter prognosis than that observed for many forms of cancer.
