Highlights

  • Net loss for the second quarter ended June 30, 2026 was $28.9 million, compared with $20.2 million a year earlier.
  • Cash, cash equivalents and marketable securities were $413.5 million at June 30, 2026; the company expects them to fund operations into 2029.
  • The IPO closed on May 1, 2026, with 19,166,667 shares sold at $18.00 and net proceeds of approximately $316.6 million.
  • Topline data from the MIST Phase 2b trial of AP01 are anticipated in the second half of 2027.

Avalyn Pharma Inc. (NASDAQ: AVLN) shares were trading at USD 25.40 on October 27, 2026, down 6.41%, with a relative volume at time of 4.81. The clinical-stage biopharmaceutical company completed its initial public offering on May 1, 2026, and filed its Form 10-Q for the quarter ended June 30, 2026, on August 12, 2026, reporting a net loss of $28.9 million and no product revenue.

Avalyn Pharma was incorporated in Delaware on May 27, 2011, and has its headquarters at 105 W First Street in Boston, Massachusetts, where it relocated in September 2025. The company develops inhaled medicines to treat rare respiratory diseases, including progressive pulmonary fibrosis, idiopathic pulmonary fibrosis and other interstitial lung diseases. Its product candidates are AP01 (inhaled pirfenidone), AP02 (inhaled nintedanib) and AP03, an inhaled fixed-dose combination of both. It has no products approved for sale. Its fiscal year ends December 31.

Second Quarter Results

For the three months ended June 30, 2026, research and development expenses were $24,729 thousand, compared with $17,882 thousand a year earlier. General and administrative expenses were $6,561 thousand, compared with $3,895 thousand. Total operating expenses were $31,290 thousand, compared with $21,777 thousand. Other income was $2,355 thousand, compared with $1,586 thousand. Net loss was $28.9 million, compared with $20.2 million.

For the six months ended June 30, 2026, net loss was $55.8 million, compared with $37.7 million in the same period of 2025. The company has not generated any revenue since its inception in 2011 and reported an accumulated deficit of $321.2 million at June 30, 2026. It stated that it expects expenses and operating losses to increase.

Pipeline

AP01 is being evaluated in MIST, a global Phase 2b trial in patients with progressive pulmonary fibrosis. The 52-week, randomized, double-blind, placebo-controlled trial has a primary endpoint of change in lung function measured by forced vital capacity. The study overenrolled, with 398 patients randomized 2:1:2 into three treatment cohorts. The company anticipates topline data in the second half of 2027.

AP02 is being evaluated in AURA, a global Phase 2 trial in patients with idiopathic pulmonary fibrosis. The 12-week study is designed to enroll 160 patients, and topline data are anticipated in late 2027. A Phase 1 study of AP03 is on track to initiate by the end of 2026.

Financing, Cash and Going Concern Evaluation

The company sold 19,166,667 shares of common stock in its IPO at a public offering price of $18.00 per share, including 2,500,000 shares sold to the underwriters under their option to purchase additional shares. Net proceeds were approximately $316.6 million after underwriter discounts, commissions and other offering expenses. Outstanding redeemable convertible preferred stock converted into 23,918,194 shares of common stock at closing.

At June 30, 2026, cash, cash equivalents and marketable securities were $413.5 million. Management evaluated going concern conditions and determined that these funds will be sufficient to fund operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the financial statements. The company said it believes they will fund operations into 2029, and that the estimate rests on assumptions that may prove to be wrong.

In February 2026, the company entered into a Loan and Security Agreement with Banc of California for a term loan facility of up to $30.0 million, maturing June 30, 2030. It borrowed $15.0 million, and the other $15.0 million is available for drawdown through December 31, 2027. The company reported covenant compliance at June 30, 2026.

Outlook and Stated Risks

The company gave no financial guidance. It said it will need additional funding for continuing operations, expects to finance them through equity offerings, debt financings or other capital sources, and may be unable to raise funds when needed, or at all. It also said it may have to delay, scale back or discontinue development of product candidates if it fails to raise capital. Planned milestones include the MIST and AURA topline readouts and the AP03 Phase 1 start.