Allay Therapeutics has announced the successful close of a $57.5 million Series D financing round, complemented by venture debt financing from HSBC Innovation Banking.
The round was co-led by Lightstone Ventures and ClavystBio, with participation from existing and new investors across the US and Asia.
The Californian company plans to use the funding to advance its lead candidate, ATX101, through a Phase IIb registration trial for pain relief following total knee arthroplasty (TKA). Adding that the latest funding round would allow the company to complete clinical trials and pursue regulatory approval for ATX101.
The investment is also expected to facilitate the continued development of Allay’s proprietary ultra-sustained analgesic platform, which aims to reduce or eliminate the need for opioids after surgery.
Clinical Development
ATX101 is a biopolymer-based formulation of bupivacaine designed to provide localized pain relief for several weeks following surgery. Administered at the end of the surgical procedure, ATX101 gradually dissolves into water and carbon dioxide, offering extended analgesia from a single application. Unlike traditional post-operative pain treatments that last hours to a few days, ATX101 aims to bridge a critical gap in pain control during the early recovery period.
The product’s goal is to improve patient recovery outcomes and significantly reduce the reliance on opioids, which continue to be a driver of post-operative complications and addiction risk. In December, ATX101 received Breakthrough Therapy Designation from the US Food and Drug Administration (FDA).
ATX101 is currently being evaluated in a Phase IIb registration trial known as SPARK 2 (NCT06799845). This randomized, double-blind, placebo- and active comparator-controlled study involves 200 patients undergoing unilateral total knee arthroplasty. Participants are randomized into three arms: ATX101 (1,500 mg), placebo (saline), and an active comparator (bupivacaine).
The trial’s primary endpoint is the area under the curve (AUC) for the Numerical Rating Scale at Rest (NRS-R), a standardized 0–10 scale measuring pain intensity over the first 168 hours (7 days) post-surgery.
Secondary endpoints extend AUC measurements to 336 hours (Day 15) and 504 hours (Day 22), evaluating prolonged pain control. The study also measures total post-surgical opioid consumption and pain intensity during activity (NRS-A) using the Timed Up and Go (TUG) test at Day 15.
Findings from the registration trial will be released in Q4 2025, and a Phase III trial is scheduled for 2026.
Strategic Expansion and Global Partnerships
Allay’s Japanese partner, Maruishi Pharmaceutical, has expanded its license agreement to include South Korea and Taiwan, in addition to Japan. Maruishi is conducting its own Phase I/II safety study of ATX101 across multiple Japanese sites and has made an additional investment in Allay as part of the Series D round.
According to Allay CEO Adam Gridley, the company is also exploring the potential of its ultra-sustained pain platform for other surgical indications, including orthopedics, plastic surgery, and soft tissue procedures. “With our recent breakthrough therapy designation and a clear regulatory path from our March 2025 Type B meeting with the FDA, we’re well-positioned to advance ATX101 and additional programs,” said Gridley.
Allay also expanded its board, with Joe Zakrzewski, a seasoned executive in biotech and pharma, joining the company as Chairman of the Board of Directors. Additionally, Anselm Tan from ClavystBio has joined the board in connection with the financing.
