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FDA approves hearing loss gene therapy & Avalyn plans $182 million IPO

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Joachim Eeckhout & Eduardo Longoria
April 27, 2026

 

Good morning. If you occasionally browse Alibaba for cheap goods, you may have noticed an unusual new listing: 500,000 patient records leaked from the UK Biobank. Fortunately, the data was de-identified (no name or address), and no sale was made through the Chinese e-commerce website. Phew!

— Joachim E.

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SNAPSHOT

FDA approves first-of-its-kind hearing loss gene therapy from Regeneron

Why it matters: This is the first therapy to address the root genetic cause of this type of deafness, potentially restoring natural, continuous hearing instead of relying on devices like cochlear implants. It could reshape treatment for genetic hearing loss.

Backstory: People with OTOF-related hearing loss lack a key protein needed for sound transmission in the inner ear. Until now, options were limited to assistive technologies, not cures. Otarmeni uses a modified virus to deliver a working gene directly into the ear.

Big picture: While the eligible population is small for this treatment, the approval is a big win for gene therapy, especially for rare diseases. It also highlights the FDA’s new “national priority” voucher program, designed to speed up high-impact treatments.

Zoom in: The key trial for Otarmeni included 20 patients (ages 10 months–16 years) and acheived 80% moderate-to-normal hearing within six months. Patients could detect at least sounds around 70 decibels (e.g., loud conversation). These benefits appeared across age groups, suggesting a broad treatment window, while side effects were mostly mild and typical of ear procedures.

What’s next: While long-term effectiveness remains uncertain and insurance coverage could be a hurdle given the high cost typical of gene therapies, Regeneron will offer the therapy at no cost to eligible U.S. patients. Researchers will monitor durability and investigate why some patients respond less effectively. 

SNIPPETS

What’s happening in biotech today?

📈 Sales surge: Avalyn Pharma plans to raise approximately $182 million through an IPO to advance its pipeline of inhaled formulations of existing respiratory drugs into late-stage development. Potential proceeds could increase to about $209.7 million if additional shares are sold. Funds will primarily support its lead candidate, AP01, an inhaled version of pirfenidone for idiopathic pulmonary fibrosis, as it moves into phase 3 trials, alongside further development of other assets.

🔬 Pipeline pivot: Cumberland Pharmaceuticals has agreed to sell its branded commercial drug portfolio to Canada-based Apotex for $100 million in cash, pending shareholder approval, in a move designed to sharpen its focus on pipeline development. Cumberland plans to prioritize advancing its lead candidate, ifetroban, currently in multiple phase 2 trials and holds several FDA designations, alongside other programs.

🦠 HSV breakthrough: Adibelivir (IM-250), a novel helicase-primase inhibitor developed by Innovative Molecules, has shown promising potential as a disease-modifying therapy for herpes simplex virus (HSV), according to Phase I/Ib data. The drug demonstrated strong antiviral activity, including against acyclovir-resistant strains, and was well tolerated at doses up to 200 mg with no dose-limiting toxicities. Notably, preclinical models suggest it may impact the latent viral reservoir, addressing a major limitation of current therapies and positioning it as a potential first-in-class treatment.

📉 Stock slide: Grace Therapeutics’ stock declined after the FDA issued a Complete Response Letter for its GTx-104 NDA, citing issues related to chemistry, manufacturing, controls, and non-clinical requirements rather than clinical efficacy. The company plans to address concerns involving packaging, toxicology assessments, and manufacturing deficiencies, and will seek further guidance from the FDA, expressing confidence in resubmission.

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