The initial public offering (IPO) market showed signs of life for the first time in more than a month as Boston-based Avalyn Pharma filed a registration statement on Wednesday seeking to raise capital to develop its pipeline of respiratory disease treatments.
It’s too early to know how much money Avalyn plans to raise—the registration statement includes a placeholder “$100 million” figure that will inevitably be revised, and doesn’t say how many shares will be sold. It’s also too soon to know how much of the proceeds will go toward each of the three pipeline candidates cited in the filing to the U.S. Securities and Exchange Commission:
- AP01—An inhaled version of pirfenidone, a small molecule modulator of cytokines and growth factors whose development the IPO would advance through Phase IIb topline data and into Phase III. AP01 is under study in the Phase IIb MIST trial (NCT06329401) as a potential treatment for progressive pulmonary fibrosis.
- AP02—An inhaled version of nintedanib, a small molecule inhibitor of multiple tyrosine kinases, being developed to treat idiopathic pulmonary fibrosis (IPF). Avalyn plans to advance AP02 into the Phase II AURA-IPF trial (NCT07194382) after completing single-ascending dose (SAD) and multiple-ascending dose (MAD) Phase I trials in healthy adult volunteers and IPF patients.
- AP03—A preclinical inhaled fixed-dose combination of AP01 and AP02 designed to combine what Avalyn says is their ability to substantially reduce or eliminate the adverse effects of oral pirfenidone and oral nintedanib.
Pirfenidone is an IPF drug marketed as Esbriet® by Genentech, a member of the Roche Group, with several other companies selling generic versions. Nintedanib is a kinase inhibitor with indications in treating IPF and chronic fibrosing interstitial lung diseases (ILDs) and slowing the rate of decline in pulmonary function in adults, marketed as Ofev® by Boehringer Ingelheim, with generic versions approved this month.
“The change we aim to make in the treatment paradigm of pulmonary fibrosis and other ILDs parallels the decades-long evolution seen in the treatment of asthma and COPD,” Avalyn stated in its S-1 statement.
In those diseases, the company explained, treatments advanced from broad, systemic oral therapies to targeted inhaled treatments, and ultimately to combination inhalers.
Pulmonary fibrosis “opportunity”
“We see a similar opportunity in pulmonary fibrosis, where the field still relies on oral antifibrotics today. Our programs are designed to drive a similar evolution, first by shifting treatment toward inhaled, lung-targeted formulations of existing antifibrotics that aim to improve safety and efficacy,” Avalyn explained. “We aspire to deliver inhaled therapies that combine complementary mechanisms into a single device for even greater therapeutic impact.”
In discussing the use of its proceeds, Avalyn said it envisioned advancing AP01 and AP02 through Phase IIb and Phase II topline data, respectively, into Phase III trials. AP03 would be advanced into the clinic and Phase I topline data using capital from the IPO.
Whatever isn’t spent on the pipeline candidates will be set aside for R&D activities for additional programs, working capital, and general corporate purposes, Avalyn added.
Avalyn is the first biotech IPO filing since Generate: Biomedicines completed the year’s largest to date, raising $400 million in gross proceeds toward clinical trials, as well as platform and pipeline R&D efforts. To date, seven companies have completed biotech IPOs, raising just over $1.7 billion in combined proceeds, Jefferies analyst Andrew Tsai wrote in a research note.
“The IPO market has been more of a laggard but showed signs of strength this quarter, with Q1 offerings the largest in the past four years,” Tsai wrote. As a result, he added, the IPO market is on pace to exceed historical levels except for the 2020–2021 IPO boom due to the COVID-19 pandemic.
Mixed on IPO improvement
Heading into 2026, analysts were mixed on whether this year would see improvement in the IPO market compared to 2025, when 11 U.S. companies raised a total of $3 billion on Wall Street. “We think it will be slightly better, but we have not seen enough to suggest that it’s truly rebounding,” Subin Baral, EY global life sciences deals leader, told GEN.
However, Michael Allwin, head of biopharma investment banking, Truist Securities, told GEN that IPOs are typically “the last shoe to drop” after other non-IPO financings show signs of recovery, giving him hope and optimism that 2026 would see a much more active IPO market than 2025: “While we’re not anticipating a resurgence in activity to the tune of what we saw at all-time highs in 2020 and 2021, we are anticipating a more normalized level of activity, maybe on parity with 2019.”
As for Avalyn, should its planned IPO raise the placeholder $100 million amount, it would nearly double the $138.359 million in cash, cash equivalents, and marketable securities with which Avalyn finished 2025.
Avalyn ended last year with no revenue and a net loss of $85.204 million, a 71% increase over the $49.744 million net loss the company reported for 2024. As a result, Avalyn’s accumulated deficit rose from $180.2 million at the end of 2024 to $265.4 million on December 31, 2025.
The IPO comes nine months after Avalyn completed its last financing, an oversubscribed $100 million Series D round completed in July and led by investment firms Suvretta Capital Management and SR One.
Survetta and SR One are two of 18 firms that have invested in Avalyn. The 18 include Novo Holdings, the asset manager of the foundation that controls Novo Nordisk.
Novavax rises on shareholders’ opposition
Novavax (NASDAQ: NVAX) enjoyed a small but noticeable surge in its stock price this past week after its second-largest shareholder ramped up its opposition to the vaccine developer’s leadership on several fronts.
Shah Capital Opportunity Fund, which holds an approximately 9% stake in Novavax, said it will oppose the company’s nominees for re-election to the board of directors when Novavax holds its annual shareholder meeting, scheduled for June (no date had been announced at deadline).
In an open letter to Novavax’s board, Raleigh, NC-based Shah Capital also requested that Novavax:
- Shrink the board from eight to five members and elect new members “with emphasis on pragmatic entrepreneurial experience to turn Novavax into an equity success story.”
- Buy back 10 to 20 million shares.
- Retire its outstanding $225 million convertible bond with cash on hand “at the earliest.” Novavax reported $244.213 million in convertible notes payable and $240.634 million in cash and cash equivalents as of December 31, 2025.
- Persuade a strategic long-term investor to take a 10–20% ownership stake “to reshape Novavax entirely.”
Shah Capital cited a 27% drop in Novavax’s share price from $11 on January 1, 2023, when John C. Jacobs took over as president and CEO, to $8 on March 31, 2026. The fund also expressed frustration that the COVID-19/influenza combination vaccine Novavax is developing with Sanofi (Euronext Paris: SAN)—a potential $5+ billion category, according to Shah Capital—hasn’t yet begun Phase III trials. Sanofi shared positive Phase I/II data in December and told Novavax it is working with regulators on next steps.
“Management has failed to implement aggressive cost-cutting measures necessary to achieve consistent profitability,” Himanshu H. Shah, the fund’s managing partner and chief investment officer, advocated in an open letter to Novavax’s board. “The current senior management team should be reduced by 30% to reflect Novavax’s new royalty and partnership business model.”
“The board size should also be reduced to five from eight, including electing new members with emphasis on pragmatic entrepreneurial experience to turn Novavax into an equity success story,” Shah added.
At odds for months
Shah has been at odds with Jacobs and Novavax leadership for months, having called for a sale of the company last October. Shah has held off pursuing a proxy campaign since the board’s majority has favored current management.
Novavax is based in Gaithersburg, MD, and reported approximately 749 employees as of December 31, 2025, down 21% from 952 a year earlier, according to Form 10-K annual reports.
Novavax investors responded to the Shah Capital letter with a buying spurt that sent shares climbing 5.5% Wednesday, from $7.98 to $8.42 after rising to $8.60 during intraday trading. The momentum continued somewhat on Thursday as shares rose another 1.4%, to $8.54, though Novavax slumped 5% Friday to finish the week at $8.12.
Shah Capital’s letter also sparked a statement to GEN and other news outlets from Novavax, which asserted that its board and management team “are committed to progressing our growth strategy, which is designed to leverage partnerships and R&D innovation to maximize the value of our technology.”
The statement cited recent Novavax efforts that include its up-to-$530 million (plus royalties) partnership with Pfizer (NYSE: PFE), which entered into a non-exclusive license agreement with Pfizer for use of Novavax’s Matrix-M® adjuvant; additional and expanded material transfer agreements with pharmaceuticals; and what the company called “continued progress” on its partnership with Sanofi, from which Novavax generated $225 million in milestone payments last year.
“In addition, we continue to make targeted investments in R&D with the intention of driving further value from our technology, while continuing to significantly reduce costs in our lean and efficient operating model,” Novavax continued. “We maintain constructive dialogue with our shareholders, and we welcome collaborative input that is in the best interest of Novavax and all of its shareholders.”
Shah essentially controls 14,845,097 shares of Novavax stock, including 125,359 shares he owns personally, and 14,719,738 shares owned by Shah Capital and its investment adviser.
Leaders and laggards
- Invivyd (NASDAQ: IVVD) shares jumped 32% from $1.35 to $1.78 Thursday after the company announced positive progress in its REVOLUTION clinical program for VYD2311, a monoclonal antibody candidate designed to prevent symptomatic COVID-19. As of April 6, when the first 1,500 of 1,818 subjects reached Day 45, clinical events supported statistical powering for the high end of anticipated VYD2311 efficacy levels in the Phase III DECLARATION trial (NCT07298434), with about half of the base study still to be carried out, Invivyd said. DECLARATION will enroll ~500 additional subjects, which, according to the company, will likely, depending on recruitment rates, push back the timing for data release by approximately two months, from mid-year to Q3 2026. Invivyd also announced the discovery and advancement of a “highly potent,” half-life-extended, high-resistance-barrier measles monoclonal antibody candidate, VMS063.
- Replimune Group (NASDAQ: REPL) shares tumbled 19.5% from $5.91 to $4.76 Friday after the developer of oncolytic immunotherapies disclosed that the FDA for a second time had rejected the company’s biologics license application (BLA) for its lead product candidate RP1 (vusolimogene oderparepvec) in combination with nivolumab to treat advanced melanoma, instead issuing a complete response letter (CRL). Replimune criticized the FDA for an inconsistent review process, saying the agency contradicted earlier guidance to the company and assessed the resubmitted BLA through a different review team that replaced the team that previously interacted with the company. Replimune also defended the combination therapy’s data in the Phase II IGNYTE trial (NCT03767348)—a 34% response rate with a median duration of 24.8 months and a favorable safety profile, the basis of the combo’s breakthrough therapy designation. “We have no choice but to eliminate jobs, including substantially scaling back our U.S.-based manufacturing operations,” stated Replimune CEO Sushil Patel, PhD. Nivolumab is the cancer immunotherapy marketed as Opdivo® by Bristol Myers Squibb (NYSE: BMY).
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