Pain player Allay makes good on launch promises, locking down latest fundraising round to advance lead implant
Drugmakers in the pain space have a difficult road to approval, even outside of opioids, but a fresh-faced startup that launched this summer felt confident that investors would like what it brought to the table. Turns out it was right.
Allay Therapeutics on Wednesday closed a $60 million Series C round the biotech plans to use to advance its lead local analgesic implant into a key Phase IIb study in patients post-knee replacement surgery.
The round was led by Arboretum Ventures with NEA, Temasek, Pavilion Capital, Brandon Capital Partners, Vertex Growth, Vertex Ventures HC, and WTT Investment all participating.
Allay launched back in May with lead candidate ATX-101, a polymerized bupivacaine implant, through Phase I and on its way to a Phase II test. Since then, the plan hasn’t changed much, and Allay mostly called its shots.
In May, Allay was eyeballing a $60 million C round with a slate of crossover investors in both the US and Singapore on board: check. The biotech hoped to kickstart the Phase IIb in the US by the end of 2021 and explore other market opportunities for follow-on candidates: check so far. If anything, the only thing that hasn’t gone to plan is the company’s manufacturing scale-up plans have accelerated faster than anticipated, putting Allay on track for more clinical supply and multiple 10x increases in capacity in the coming years.
“We’ve been very pleased with the progress over the course of the past several months, and, candidly, that catalyzed this round,” CEO Adam Gridley told Endpoints News. “Clearly these investors said, ‘Look, we’re really encouraged by these early results, let’s see how we can expand that leadership elsewhere.'”
In May, Allay released Phase I/IIa data in 22 patients showing ATX-1 cut the number of opioids patients took after 14 days by half to two-thirds compared with standard of care and placebo. Meanwhile, 80% of patients were off opioids at the 14-day mark compared to around 50% on standard of care.
Those results were promising enough to rationalize Phase IIb and get Allay thinking about how to expand its platform of controlled-release pain implants over many indications. The process of deciding follow-on candidates is ongoing, but the team has two finalists identified — in post-shoulder arthroplasty and herniorrhaphy. But the potential is wide open, in Allay’s telling, with plenty of potential pain indications in the line of fire. With that in mind, the company hopes to enter a new candidate into clinical trials every year, Gridley said.
“There’s pros and cons to which one would be first, but our decision in the last six months was to target both — now it just comes down to a matter or resources to which one makes sense to go into,” CTO Patrick Ruane told Endpoints. “I don’t think we’re ever going to run out of indications, because what we have … there’s a lot of windows and doors to be opened here to help patients out.”
Meanwhile, Allay is still on track to have at least 50 employees on board by the end of 2021 — another of its May predictions that have come true — and recently hired a CMO that Gridley said had experience in the pain space.