Avalyn Pharma Inc., a biopharmaceutical company focused on development of improved therapies for life threatening pulmonary diseases, today announced the completion of a $35.5 million Series B financing. The round was led by Norwest Venture Partners along with participation by new investor Pivotal bioVenture Partners, and existing investors F-Prime Capital, Novo Holdings A/S, RiverVest Venture Partners, and TPG Biotech. Concurrent with the financing, venture capitalists Robert Mittendorff, M.D. and Heather Preston, M.D. joined the Board of Directors.

Avalyn has just finished enrollment in a clinical study of two-dose regimens of aerosolized pirfenidone (AP01) in patients with idiopathic pulmonary fibrosis (IPF). Proceeds from the Series B expand the company's pipeline and will support the launch of a Phase II/III trial of AP01 in chronic lung allograft dysfunction (CLAD), the most common form of graft failure which occurs in over 50% of lung transplant recipients within five years of transplant and leads to re-transplant or death. Additionally, funds will support a Phase I study of AP02, aerosolized nintedanib, a program entering clinical development after successful preclinical studies in two lung injury models.

"Reformulating systemic drugs for targeted inhaled lung delivery has successfully improved the efficacy and decreased systemic adverse effects of corticosteroids and bronchodilators in both asthma and COPD, and of antibiotics in cystic fibrosis," said Dr. A. Bruce Montgomery, CEO of Avalyn Pharma. "Despite the 2014 approval of two oral antifibrotic therapies, IPF and other fibrotic lung diseases remain fatal diseases with substantial unmet needs. We hope to accomplish improved tolerability and efficacy with both aerosolized pirfenidone and nintedanib. We are pleased by the safety profile we have seen to date with aerosolized pirfenidone in nearly 100 patients."

About Avalyn Pharma

More information can be found at www.avalynpharma.com

Clinical Need

IPF and other fibrotic lung diseases are characterized by progressive scarring, reduced exercise capacity and ultimate death from respiratory failure and/or co-morbidities. IPF treatments are relatively new, with the first and only approvals coming in 2014: oral pirfenidone (Esbriet®) and oral nintedanib (Ofev®). Both medicines, while effective in slowing disease progression are associated with significant adverse effects that limit dosing and their full potential for efficacy. While these medicines are an important first step to treat IPF, a substantial unmet need remains for therapies with improved safety profiles and better efficacy as either stand-alone or add-on combination therapies in both IPF and other fibrotic lung diseases.

CLAD is a common form of graft failure after lung transplant, leading to progressive loss of lung function resulting in re-transplant or death. CLAD occurs despite treatment with maximum systemic doses of multiple anti-rejection drugs and affects the small airways and lung tissue. There has been promising early data treating CLAD with oral pirfenidone, however, the full potential for effective treatment is limited by severe systemic adverse effects associated with oral dosing.

The Inhaled Advantage

Although pirfenidone has shown promise to slow IPF disease progression, it is a low potency drug requiring a very large oral dose to achieve efficacious lung levels. Unfortunately, oral delivery results in blood levels which cause substantial adverse effects and limit the delivered lung dose. In a Phase I single dose study of AP01, we have demonstrated the potential of aerosolized pirfenidone to improve both efficacy and safety. Inhalation of a dose of AP01 equivalent to 1/16 of the licensed oral dose delivered 35-fold higher peak lung levels of pirfenidone with minimal adverse effects.