Avalyn, in pursuit of better lung drugs, banks $300M in an IPO

Dive Brief:

Avalyn Pharma on Wednesday raised $300 million in a large initial public offering that’ll support development of a portfolio of drugs for hard-to-treat lung diseases.
The Boston biotechnology company priced 16.7 million shares at $18 each, significantly exceeding the roughly $200 million target it had originally set. Avalyn will begin trading Thursday on the Nasdaq stock exchange under the ticker symbol “AVLN.”
Avalyn’s offering is the eighth for a young drugmaker in 2026. Those startups have secured a median of $309 million in IPO proceeds, a spike in value compared to previous years that some investors believe will open up opportunities for a broader array of biotech companies.

Dive Insight:

Avalyn is developing treatments for the “progressive” and “idiopathic” forms of pulmonary fibrosis, a rare condition where progressive lung scarring causes difficulty breathing, a decline in organ function and eventually death. According to the company, an estimated 300,000 people in the U.S. have some type of pulmonary fibrosis. They have three marketed medicines that can help manage their symptoms: Ofev, Esbriet and Jascayd.

Esbriet, which Roche won approval for more than a decade ago, prevents scar tissue from building up. Ofev, which is made by Boehringer Ingelheim, blocks some of the cell-surface receptors linked to fibrosis. Jascayd, also from Boehringer, slows the decline of lung function by acting on a different target. Those drugs don’t stop the disease altogether, though, and have tolerability issues, leaving an opportunity for young biotechs like Avalyn to capitalize on.

Avalyn is making inhalable versions of Ofev and Esbriet that it expects will prove more potent and easier to use. One drug, AP01, is in a Phase 2b trial in progressive pulmonary fibrosis. Another, AP02, is in a mid-stage study in the idiopathic form of the disease. Avalyn expects to present topline data from both of those trials by the end of 2027.

A third experimental prospect, AP03, combines Ofev and Esbriet and is set to enter a Phase 1 trial by the end of the year. Avalyn claimed in its IPO prospectus that these specialized, inhalable formulations represent a “more reliable and patient-friendly solution” for the condition.

Avalyn is one of many companies working on newer pulmonary fibrosis drugs, however. Positive late-stage results have positioned United Therapeutics to seek approval of its already-marketed medicine, Tyvaso, in idiopathic disease later this year. That form of the condition is also the target of drugs in development at Bristol Myers Squibb, Contineum Therapeutics and startup Celea Therapeutics. The market for idiopathic pulmonary fibrosis drugs could be worth as much as $5.8 billion by 2034, according to analytics firm GlobalData.

The pace of IPOs in 2026 has, so far, been similar to the slower-than-usual trajectory the sector has experienced over the last five years. Still, two other biotechs — brain drug developer Seaport Therapeutics and blood cancer specialist Hemab Therapeutics — could price offerings this week.