Allay Therapeutics rakes in $60M for 'tunable' non-opioid treatment for joint replacement pain

Backed by a treatment-tuning platform, Allay Therapeutics is giving pain relief a major upgrade. Rather than relying on drugs repeatedly administered by capsule or IV to find their way to the point of pain, Allay’s analgesics are implanted directly into the surgical site and, thanks to slow-dissolving biopolymers, can provide post-op relief for several weeks.

Those mechanisms are controlled by the Allay platform, which adjusts not only the drugs’ dosage but also their rate of release, allowing them to offer more localized and sustained pain relief after total knee replacement operations, programmed to taper off as a patient’s condition improves.

That offer of long-term pain relief without highly addictive systemic opioids has landed Allay an overstuffed venture funding round. The series C totaled $60 million, bringing Allay’s lifetime tally to nearly $100 million.

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The round was led by Arboretum Ventures, whose Nicole Walker, a managing partner at the Michigan-based VC firm, will now join Allay’s board of directors.

Also participating in the round were Temasek, Pavilion Capital, Brandon Capital Partners, Vertex Growth, Vertex Ventures HC, WTT Investment and NEA, the last of which led Allay’s $25 million series B in 2019.

“The vote of confidence by these investors is gratifying as we pursue our goal of allaying patients’ fears of extended painful recoveries and reliance on opioids after surgery,” said Allay CEO Adam Gridley. “We share a common belief that our underlying platform of tunable product candidates will change the way that patients, physicians and payors manage pain and will reduce costs to the overall healthcare system.”

The financing will be used to begin a phase 2b study of Allay’s first drug candidate—the dissolvable ATX-101 for total knee arthroplasties—before advancing the rest of the analgesics in the company’s pipeline. Those include new formulations combining analgesics with dissolvable biopolymers, as well as drugs that can be administered via injection or “on-demand” by patients, and new pain relievers to treat other indications besides knee replacements.

Allay is aiming to bring at least one formulation in its pipeline into clinical trials in each of the coming years. Those efforts will be supported by the Menlo Park, Calif.-based company’s ongoing expansion of its Bay Area manufacturing facilities.

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The series C closes less than half a year after Allay emerged from stealth in May, promising early trial results in hand.

A phase 1b/2a single-group trial of 22 patients found that those who received 1,500 mg of ATX-101 after total knee arthroplasty—with the implanted treatment programmed by the Allay platform to release diminishing amounts of bupivacaine as they recovered—ultimately required an opioid dosage up to two-thirds smaller than that of the average knee replacement patient.

Additionally, according to the study, within two weeks of the operation, 80% of the treated patients were off opioids, compared to about 50% in standard recovery processes.

With the new funding backing the phase 2b study of ATX-101, Allay is well on its way to achieving its goal of filing for FDA approval by 2024.