Avalyn Pharma Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 12 August 2026: press release. Guidance figures: 5 kept. The quarter’s numbers.

Key takeaways

MIST enrollment completed above target: Enrollment in the 52-week MIST trial closed with 398 patients randomized into three treatment cohorts, against a target of 375. Source
MIST topline timing unchanged: Topline data for the MIST primary FVC endpoint are anticipated in the second half of 2027, as in the prior release. Source
AP03 Phase 1 start still by year-end: The AP03 fixed-dose combination Phase 1 study remains on track to start by the end of 2026, per management. Source
Net loss widened year on year: Net loss was $28.9 million in the quarter, against $20.2 million a year earlier. The six-month net loss was $55.8 million, against $37.7 million. Source
Cash reached $413.5M after IPO: Cash, cash equivalents and marketable securities were $413.5 million at June 30, 2026, up from $138.4 million at December 31, 2025. Source

“Completing global enrollment in MIST marks a significant milestone for Avalyn, and the degree of over-enrollment in this study is a testament to the high level of interest from investigators and patients,”
Lyn Baranowski, Chief Executive Officer of Avalyn Pharma

Guidance

Area	Period	Figure	Against last quarter
MIST topline data Source	second half of 2027	second half of 2027	Kept
AURA topline data Source	late 2027	late 2027	Kept
AP03 Phase 1 initiation Source	by end of 2026	by the end of 2026	Kept
Cash runway Source	into 2029	into 2029	Kept
AURA enrollment target Source	AURA study	160 patients	Kept

What changed from last quarter

New: MIST enrollment is complete, with 398 patients randomized against a 375-patient target. The prior release had said enrollment was on track to complete in mid-2026. Source
New: Two abstracts were accepted for presentation at the ERS Congress, one of which models AP01 lung tissue distribution. Source

MIST enrollment and timing

MIST enrollment completed above target: Enrollment in the 52-week MIST trial closed with 398 patients randomized into three treatment cohorts, against a target of 375. Source
MIST topline timing unchanged: Topline data for the MIST primary FVC endpoint are anticipated in the second half of 2027, as in the prior release. Source
MIST design: two doses against placebo: The trial is randomized, double-blind and placebo-controlled, dosing two AP01 doses twice daily, with change in FVC as the primary endpoint. Source

AP02 and AP03 programs

AURA enrollment on track: The AURA Phase 2 trial of AP02 in IPF is described as on track for enrollment, which began in the first quarter of 2026. Source
AURA topline expected late 2027: Topline data from AURA are anticipated in late 2027, unchanged from the prior release. Source
AP03 Phase 1 start still by year-end: The AP03 fixed-dose combination Phase 1 study remains on track to start by the end of 2026, per management. Source

“Pulmonary fibrosis is a devastating disease with few effective medications, and too many patients remain untreated due to the tolerability challenges associated with currently available options.”
Lyn Baranowski, Chief Executive Officer of Avalyn Pharma

Operating results

Net loss widened year on year: Net loss was $28.9 million in the quarter, against $20.2 million a year earlier. The six-month net loss was $55.8 million, against $37.7 million. Source
G&A expense rose to $6.6M: G&A expenses were $6.6 million in the quarter, against $3.9 million a year earlier. Source
Interest income offset part of costs: Interest income was $2.7 million in the quarter, against $1.6 million a year earlier, and total other income was $2.4 million. Source

Cost drivers

R&D rise from ongoing trials: Higher R&D spend was mainly from the ongoing AP01 and AP02 clinical trials and the AP01 open-label extension study, SAIL. Source
G&A rise from headcount and pay: The G&A increase was mainly from additional G&A headcount and personnel-related costs, including stock-based compensation. Source
Total operating expenses rose: Total operating expenses were $31.3 million in the quarter, against $21.8 million a year earlier, and $59.2 million for the six months. Source

“We are proud of the progress we have made and believe our approach has the potential to drive sustained pipeline expansion and position Avalyn as a leader in transforming the treatment of rare respiratory diseases.”
Lyn Baranowski, Chief Executive Officer of Avalyn Pharma

Cash and runway

Cash reached $413.5M after IPO: Cash, cash equivalents and marketable securities were $413.5 million at June 30, 2026, up from $138.4 million at December 31, 2025. Source
IPO net proceeds now $316.6M: The IPO net proceeds are given as approximately $316.6 million, against approximately $316.1 million in the prior release. Source
Runway projected into 2029: Management projects that current cash and marketable securities, including IPO proceeds, will fund operations into 2029. Source

Balance sheet

Total assets rose to $425.4M: Total assets were $425.4 million at June 30, 2026, against $148.9 million at December 31, 2025. Source
Total liabilities at $27.1M: Total liabilities were $27.1 million at June 30, 2026, against $15.3 million at December 31, 2025. Source
Equity rose to $398.3M: Total stockholders’ equity and redeemable convertible preferred stock was $398.3 million, against $133.6 million at December 31, 2025. Source

Platform and strategy

Three-program inhaled platform: Management described AP01, AP02 and AP03 as a platform intended to unlock established antifibrotic medicines and support longer-term treatment. Source
Tolerability named as the core problem: Management said tolerability challenges with current options leave many pulmonary fibrosis patients untreated, and that inhaled delivery addresses this. Source
Leadership frames rare-disease leadership goal: The CEO said the company believes its approach can drive pipeline expansion and position Avalyn as a leader in rare respiratory diseases. Source

Coming up, as management said on 12 August 2026

ERS posters in September 2026: Two posters are planned at the ERS Congress in Barcelona: one modeling AP01 distribution in healthy and IPF lungs, and one on patient perspectives in trial design. Session details will follow. Source
AP03 Phase 1 start by end-2026: The AP03 Phase 1 study is planned to start by the end of 2026. Source
MIST topline readout in 2H 2027: Topline data from the MIST trial are expected in the second half of 2027. Source
AURA topline readout in late 2027: Topline data from the AURA trial are expected in late 2027. Source

Figures management reported

Figure	Reported
R&D expenses, three months ended June 30, 2026 Source	$24.7 million
R&D expenses, six months ended June 30, 2026 Source	$47.6 million
MIST patients randomized Source	398
AURA target enrollment Source	160 patients

Earlier plans management reported on

Met: The prior release said enrollment was on track to complete in mid-2026. This release reports enrollment completed with 398 patients. Source
On track: Management said the AP03 Phase 1 study remains on track to initiate by the end of 2026. Source
On track: The prior release said enrollment was underway. This release describes enrollment as on track. Source
Not stated: The runway projection into 2029 is repeated from the prior release, with no change in status given. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Avalyn Reports Second Quarter 2026 Financial Results and Recent Business Highlights

Completed enrollment of MIST global Phase 2b trial of AP01 with 398 patients; topline data expected in the second half of 2027

Two abstracts accepted for presentation at the European Respiratory Society (ERS) Congress, including data modeling AP01 lung tissue distribution

Ended the second quarter of 2026 with $413.5 million in cash, cash equivalents and marketable securities; cash runway projected into 2029

BOSTON, MA, August 12, 2026 -- Avalyn Pharma Inc. (Nasdaq: AVLN), a clinical-stage biopharmaceutical company pioneering inhaled therapies to transform the treatment paradigm of serious, rare respiratory diseases, today announced financial results for the second quarter ended June 30, 2026 and recent business highlights.

“Completing global enrollment in MIST marks a significant milestone for Avalyn, and the degree of over-enrollment in this study is a testament to the high level of interest from investigators and patients,” said Lyn Baranowski, Chief Executive Officer of Avalyn Pharma. “This achievement also reflects the dedication and strong execution demonstrated by our teams, who have worked tirelessly to advance the program. Pulmonary fibrosis is a devastating disease with few effective medications, and too many patients remain untreated due to the tolerability challenges associated with currently available options. With AP01, AP02, and our emerging combination therapy product candidate AP03, we are building a differentiated platform designed to unlock the full value of established antifibrotic medications, support longer-term treatment, and improve patient outcomes. We are proud of the progress we have made and believe our approach has the potential to drive sustained pipeline expansion and position Avalyn as a leader in transforming the treatment of rare respiratory diseases.”

Recent Pipeline Progress

AP01 (inhaled pirfenidone)

MIST Phase 2b Trial Enrollment Complete. MIST is a randomized, double-blind, placebo-controlled global trial evaluating two doses of AP01 dosed twice daily in patients with progressive pulmonary fibrosis (PPF). This 52-week trial is designed to assess safety and efficacy of AP01, with a primary endpoint of change in lung function measured by forced vital capacity (FVC). The study overenrolled beyond its target enrollment of 375, with a total of 398 patients randomized into three treatment cohorts. Topline data are anticipated in the second half of 2027.

In September 2026, the Company plans to present two abstracts at the ERS Congress in Barcelona, Spain. The first poster will highlight data modeling effective AP01 distribution throughout the target tissue in both healthy and idiopathic pulmonary fibrosis (IPF) lungs. The second poster will describe the integration of patient perspectives into clinical trial design. Detailed poster session information will be provided in advance of the congress.

AP02 (inhaled nintedanib)

Enrollment On Track in AURA Phase 2 Trial. AURA is a randomized, double-blind global trial evaluating two doses of AP02 dosed twice daily in patients with IPF. Enrollment was initiated in the first quarter of 2026. The 12-week study is designed to enroll 160 patients and will assess safety and efficacy as measured by FVC. Topline data are anticipated in late 2027.

AP03 (inhaled combination of nintedanib and pirfenidone)

Advancing Next-Generation Therapy. A Phase 1 study of AP03, a fixed dose combination of inhaled pirfenidone and nintedanib, remains on track to initiate by the end of 2026.

Financial Results for Second Quarter 2026

Cash Position: Cash, cash equivalents, and marketable securities were $413.5 million as of June 30, 2026. The Company’s current cash, cash equivalents, and marketable securities, which includes net proceeds of approximately $316.6 million from its initial public offering in May 2026, are projected to be sufficient to fund operations into 2029.

Research & Development (R&D) Expenses: R&D expenses were $24.7 million for the second quarter of 2026, as compared to $17.9 million for the second quarter of 2025. The increase in R&D expenses was primarily driven by the ongoing AP01 and AP02 clinical trials and the AP01 open label extension study, SAIL.

General & Administrative (G&A) Expenses: G&A expenses were $6.6 million for the second quarter of 2026, as compared to $3.9 million for the second quarter of 2025. The increase in G&A expenses was primarily driven by the increase of G&A headcount and personnel-related expenses, including stock-based compensation.

Net loss: Net loss was $28.9 million for the second quarter of 2026, as compared to $20.2 million for the second quarter of 2025.

About Avalyn Pharma Avalyn aims to transform the treatment paradigm for pulmonary fibrosis and other serious, rare respiratory diseases. The company is advancing optimized inhaled formulations of established antifibrotic medicines designed to deliver drug directly to the lungs, enhance local efficacy, and reduce systemic side effects. Avalyn’s AP01 program is an optimized inhaled formulation of pirfenidone currently being evaluated in MIST, a global Phase 2b clinical trial in patients with progressive pulmonary fibrosis (PPF). AP01 has indicated encouraging safety and clinical activity across Phase 1b and multi-year open-label extension trials, with long-term data supporting the potential to preserve lung function while improving tolerability relative to historical oral pirfenidone. Avalyn’s AP02 program is an optimized inhaled formulation of nintedanib currently being evaluated in AURA, a global Phase 2 clinical trial in patients with idiopathic pulmonary fibrosis (IPF). Avalyn is also advancing AP03, an inhaled fixed-dose combination of pirfenidone and nintedanib, designed to deliver multiple antifibrotic mechanisms through a single lung-targeted platform. By leveraging its proprietary drug-device approach and deep expertise in rare respiratory disease development, Avalyn aims to establish a new standard of care in pulmonary fibrosis through inhaled, lung-targeted therapies. For more information, please visit avalynpharma.com and follow the company on LinkedIn.

Forward Looking Statements

Forward-looking statements notice

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, without limitation, implied and express statements about Avalyn’s beliefs and expectations regarding: topline data readout for MIST expected in the second half of 2027; the ongoing enrollment in the AURA Phase 2 trial of AP02 in patients with IPF and the expected timing of results in late 2027; the expected initiation of a Phase 1 trial of AP03 by the end of 2026, the interpretation and potential implications of clinical data; the potential of its product candidates to address significant unmet needs in the treatment of pulmonary fibrosis and related diseases; the possibility that improved tolerability may translate into clinically meaningful benefit; the advancement of its pulmonary fibrosis programs; the potential for any of the Company’s product candidates to establish or contribute to a new standard of care; and Avalyn’s expectations regarding the anticipated timeline of its cash runway and future financial performance.

Forward-looking statements notice

Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, risks associated with: the risk that earlier results may not be indicative of future results, risks related to clinical trial site activation, delays in enrollment generally or enrollment rates that are lower than expected; delays related to assessment of clinical trial results; risks related to unexpected safety or efficacy data observed during clinical studies; risks related to volatile market and economic conditions, risks related to our ability to protect and maintain our intellectual property position or relationships with third-parties, the initiation, timing, progress and results of our current and future research and development programs, preclinical studies and clinical trials; our ability to successfully complete our clinical trials; our ability to advance any product candidates that we may identify and successfully complete any clinical studies, including the manufacture of any such product candidates; the likelihood of our clinical trials demonstrating safety and efficacy of our product candidates; and risks related to needs for additional financing. These and other risks and uncertainties are described in greater detail in the section entitled “Risk Factors” in Avalyn’s current and future filings with the Securities and Exchange Commission, including those described from time to time under the caption “Risk Factors.” In addition, any forward-looking statements represent Avalyn’s views only as of today and should not be relied upon as representing its views as of any subsequent date. Avalyn explicitly disclaims any obligation to update any forward-looking statements subject to any obligations under applicable law. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements.

Investor Contact: Cassie Saitow, Avalyn Pharma Inc.

Sr. Director, IR and Corporate Communications ir@avalynpharma.com

	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
AVALYN PHARMA INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except share and per share amounts)
(Unaudited)
OPERATING EXPENSES:
Research and development	$24,729	$17,882	$47,618	$33,201
General and administrative	6,561	3,895	11,581	7,292
Total operating expenses	31,290	21,777	59,199	40,493
LOSS FROM OPERATIONS	(31,290)	(21,777)	(59,199)	(40,493)
OTHER INCOME (EXPENSE):
Interest income	2,696	1,627	3,821	2,875
Interest expense	(272)	-	(370)	-
Other expense	(69)	(41)	(56)	(76)
Total other income	2,355	1,586	3,395	2,799
NET LOSS	$(28,935)	$(20,191)	$(55,804)	$(37,694)

	June 30,	December 31,
	2026	2025
AVALYN PHARMA INC.
CONSOLIDATED BALANCE SHEET DATA
(In thousands)
(Unaudited)
Cash, cash equivalents, and marketable securities	$413,528	$138,359
Total assets	425,448	148,881
Total liabilities	27,102	15,316
Total stockholders’ equity (deficit) and redeemable convertible preferred stock	$398,346	$133,565

Contacts
Precision AQ avalyn@precisionaq.com