Yahoo Finance aTyr Pharma, Inc. (NASDAQ:LIFE) Q4 2023 Earnings Call Transcript
aTyr Pharma, Inc. (NASDAQ:LIFE) Q4 2023 Earnings Call Transcript March 14, 2024
aTyr Pharma, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, ladies and gentlemen, and welcome to the aTyr Pharma fourth quarter and full year 2023 conference call. At this time, all participants are in a listen only mode. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. It is now my pleasure to hand the conference call over to Ashlee Dunston, aTyr's Director of Investor Relations and Public Affairs. Ms. Dunston, you may begin.
Ashlee Dunston: Thank you, and good afternoon, everyone. Thank you for joining us today to discuss aTyr's fourth quarter and full year 2023 operating results and corporate updates. We are joined today by Dr. Sanjay Shukla, our President and CEO, and Ms. Jill Broadfoot, our CFO. On the call, Sanjay will provide an update on our corporate strategy, including our clinical program for Efzofitimod and research and discovery program. Jill will review our financial results and our current financial position before handing it back to Sanjay to open the call up for any questions. Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer in the company's press release issued this afternoon as well as the risk factors in the company's SEC filings and included in our most recent Annual Report on Form 10-K subsequently filed Quarterly Reports on Form 10-Q and in our other SEC filings. Undue reliance should not be placed on forward-looking statements, which speak only as of the day they are made as facts and circumstances underlying these forward-looking statements may change. Except as required by law, aTyr Pharma disclaims any obligation to update these forward-looking statements to reflect future information events or circumstances.
I will now turn the call over to Sanjay.
Sanjay Shukla: Thank you, Ashlee. Good afternoon, everyone, and thank you for joining us for our fourth quarter and full year 2023 results conference call. At aTyr, we are leveraging evolutionary intelligence to translate tRNA synthetase biology into new therapies for fibrosis and inflammation. Our lead therapeutic candidate, Efzofitimod, is a first-in-class biologic immunomodulator based on a naturally occurring, long enriched splice variant of the tRNA synthetases, HARS. Efzofitimod selectively modulates activated myeloid cells via neuropilin-2 or NRP-2 to resolve inflammation without immune suppression and potentially prevent the progression of fibrosis. We're developing Efzofitimod as a treatment for patients with interstitial lung disease or ILD, a group of rare immune-mediated disorders that can cause chronic inflammation and fibrosis of the lungs.
2023 was an important year for aTyr as we progressed and expanded our Efzofitimod clinical development program, which now includes two ongoing clinical studies, the Phase 3 EFZO-FIT study in patients with pulmonary sarcoidosis, a major form of ILD; and the Phase 2 EFZO-CONNECT study in patients with ILD related to systemic sclerosis, which is known as SSc or more commonly, scleroderma. Throughout the past year, we have also greatly enhanced our mechanistic understanding of the way in which Efzofitimod is confirming its anti-inflammatory effects. NRP-2 is highly expressed on activated immune cells doing an inflammatory response, notably myeloid cells, including monocytes and macrophages. By binding NRP-2, Efzofitimod guides the differentiation of monocytes at the site of inflammation into a macrophage subtype that is less pro-inflammatory to resolve aberrant inflammation.
Dysregulated inflammation is a hallmark of myelo-driven diseases such as ILD, where persistent, uncontrolled inflammation can lead to the progression of fibrosis. With this new understanding, we now have even greater clarity and confidence as to why Efzofitimod may represent a breakthrough in treatment for ILD. Our lead indication for Efzofitimod is pulmonary sarcoidosis, the most prevalent form of ILD, where approximately 70% of patients will have symptomatic disease and nearly 20% will develop lung fibrosis. Current standard of care is primarily oral corticosteroids, a highly toxic treatment that has limited clinical evidence, is broadly immunosuppressive, and comes with side effects resulting in a high disease burden for patients. EFZO-FIT is a global pivotal Phase 3 study evaluating Efzofitimod compared to placebo in the context of a four steroid taper in patients with pulmonary sarcoidosis.
This study is currently enrolling at more than 90 centers in nine countries. We're pleased with the progress we've made thus far with this study, which is expected to be the largest interventional study ever conducted in sarcoidosis. Completing enrollment in EFZO-FIT is our primary focus and we anticipate doing so in the second quarter of this year. In the past few months as patients have completed the 52-week EFZO-FIT study, we've received multiple inquiries from study principles -- study principal investigators, or PIs, whose patients have requested to continue treatment once they completed the trial. While aTyr PIs and patients are all blinded to what treatment patients received as part of the study, either Efzofitimod or placebo, the feedback we've received has suggested that some patients have performed well and want to continue on study drug rather than returning to the treatment regimen they had prior to the study.
For some patients that may entail resuming or increasing steroid dose, which many patients are reluctant to do. Based on this feedback, we decided to implement an individual patient expanded access program or TAP for patients who complete EFZO-FIT. This individual patient EAP is design to allow access to Efzofitimod for patients who all have or are in the process of completing EFZO-FIT beyond the duration of the clinical trial. The company PIs and patients will remain blinded to treatment that occurred as part of EFZO-FIT. Safety is a key component of any EAP. We were able to implement this program based on the existing safety database from prior Efzofitimod clinical studies and additional safety and tolerability data from a Data Safety & Monitoring Board or DSMB review of data from EFZO-FIT, which included the evaluation of patients that completed 52 weeks of treatment.
The DSMB review recommended the study proceed without modification, suggesting no major safety concerns. And while many types of EAPs are typically implemented after data from a study has been unblinded, we decided to implement this individual patient EAP early not only based on feedback and demand, but in part to continue to support those patients who have dedicated their time and entrusted us with their health by participating in this important study. This program reflects our ongoing commitment to the sarcoidosis community as we work to develop a safe and effective treatment for those in need. Our second indication for Efzofitimod is SSc-ILD. SSc is a form of connective tissue disease where ILD commonly occurs and is a leading cause of mortality.
Current treatment options are limited and like sarcoidosis, do not treat the underlying disease or improve quality of life. EFZO-CONNECT is a Phase 2 proof-of-concept study evaluating Efzofitimod compared to placebo in patients with SSc-ILD. This study, which dosed the first patient last quarter, is currently open for enrollment at multiple centers in the US. We're focused on generating data from this study in 2024, and we expect to provide an update on the study later this year. We estimate that the two indications that comprise our current clinical program for Efzofitimod, pulmonary sarcoidosis and SSc-ILD collectively represent a potential $2 billion to $3 billion global market opportunity. This does not include any upside potential and other forms of the more than 200 ILDs, where Efzofitimod's unique mechanism of action to address complex immune pathology and desirable safety profile may be able to disrupt standard of care.
While our primary focus is our clinical program for Efzofitimod, we continue to leverage our intellectual property or IP estate covering domains from all 20 human tRNA synthetases and utilize our platform as an engine to generate new pipeline candidates. tRNA synthetases are ancient essential proteins that have evolved novel domains to regulate diverse pathways, extracellularly, in humans. By identifying extracellular receptors and signaling pathways for these domains, we can elucidate the role these proteins play in cellular response and explore disease areas where they may have therapeutic benefit. Our two most advanced tRNA synthetases candidates in preclinical development are ATYR0101 and ATYR0750, both of which have specific interactions with targets that have implications in fibrosis.
These targets include latent transforming growth factor beta binding protein one or LTBP1 and fibroblast growth factor receptor four or FGFR4, respectively. ATYR0101, which is derived from a domain of the tRNA synthetases DARS exerts its anti-fibrotic effects by selectively inducing a proptosis of myofibroblasts targeting a key hallmark of fibrosis pathology, which is the persistence of activated myofibroblasts. This mechanism may support broad therapeutic application in indications like lung, liver, and kidney fibrosis. The hidden biology that we have been able to unlock from our platform continues to inspire us, including the way in which some of these appended domains like Efzofitimod interact extracellularly with previously under the radar targets like NRP-2 and in particular, its role as an immune regulator or bind more well-known targets in unique ways like ATYR0101 and ATYR0750.
This platform, which is based on signaling pathways that have evolved over billions of years to maintain homeostasis is an excellent example of bio innovation and has the potential to disrupt traditional drug discovery, a process that is increasingly reliant on exploiting existing signaling pathways to generate therapies. Our conviction to the potential of tRNA synthetases biology to lead the transformative medicines continues to grow stronger as our research advances. I'll now turn it over to our Chief Financial Officer, Jill Broadfoot, to review our financial results.
Jill Broadfoot: Thank you, Sanjay. We ended 2023 with $101.7 million in cash, restricted cash, cash equivalents and investments. Collaboration and license revenue related to the Kyorin agreement was $0.4 million for the year ended 2023, which consisted of drug product materials sold to Kyorin for the Japan portion of EFZO-FIT. As a reminder, Kyorin, our partner for the development and commercialization of Efzofitimod demand for ILD in Japan, where they are responsible for costs related to EFZO-FIT in Japan. And purchase drug product material from us with a small markup. Under this agreement, we have received $20 million in upfront and milestone payments from this partnership to date, and we are eligible to receive up to an additional $155 million, which is primarily related to certain development and regulatory milestones.
Research and development expenses were $42.3 million for the year ended 2023, which consisted primarily of clinical trial costs for EFZO-FIT and EFZO-CONNECT studies manufacturing costs for the Efzofitimod program, and research and development costs for the Efzofitimod and discovery programs. General and administrative expenses were $13 million for the year ended 2023. Based on our current operational plans and existing cash we, maintain our prior financial guidance and believe our cash runway is expected to be sufficient to fund the company through the filing of a biologics license application for Efzofitimod and pulmonary sarcoidosis. This takes into account the continued allocation of the majority of our resources to our Efzofitimod clinical development program, which is our main value driver for the company while also committing judicious resources to our tRNA synthetases pipeline candidates to maintain an active discovery program and advance our IP estate.
Furthermore, our forecast for our cash guidance does not include any potential future milestone payments from Kyorin or any proceeds that may result from additional potential partnerships or sources of non-dilutive funding. So it does consider our proceeds from the prudent use of our at-the-market facility. We implemented this operational plan more than a year ago, driven by our emphasis on maximizing efficiency and adapting to prevailing macroeconomic conditions, and this plan continues to be an effective way to meet our primary corporate objectives relative to optimal capital utilization. Now, I'd like to turn the call back over to Sanjay before we open it up to Q&A.
Sanjay Shukla: Thanks, jill. As we look back on the past year, we're filled with optimism for the future. Our scientific expertise in understanding tRNA biology is unparalleled across the industry. We're leveraging this unique biology and harnessing Ancient genetic codes developed throughout the course of billions of years in a trillion species. While other companies are just beginning to explore the untapped potential of tRNA biology we're leading the way with our decades of understanding this science, which we have leveraged to progress a Phase 3 therapeutic candidate. It's not just our understanding of the endless frontier of tRNA synthetase biology that sets us apart. Scleroderma represents the reality, not just the concept, of a potential near-term, meaningful tRNA-based therapy that can change the lives of patients.
We're on the cusp of a once-in-a-generation therapy for sarcoidosis engineered from our natural physiology and are marching towards the chance to transform the lives of ILD patients. tRNA sarcoidosis is only the starting point for how have Efzofitimod may be able to help millions of ILD patients. As the only biotech company in Phase 3 development for this indication, we note the accelerating pipeline of candidates not just for sarcoidosis, but also for ILD more broadly. Other biopharmaceutical companies who are following our lead also see the multibillion-dollar market opportunity in this space. While these companies have yet to show proof of concept have Efzofitimod well beyond that, with patients requesting to remain on treatment as they complete our current trial in sarcoidosis due to the benefits they are experiencing.
So we believe it's just the beginning for us here at aTyr. New validated targets are emerging from our evolutionary intelligence or AI driven drug discovery platform. Alternatively, artificial intelligence or AI driven drug discovery is really in its infancy, and these unproven hyped approaches do not have the advantage of our AI drug discovery engine. aTyr is uncovering hidden functions embedded in our genetic code that were developed throughout evolution encompassing infinite real-life biological experiments in over a trillion species over billions of years. Just think about that. The synthetase domains that we have mapped have developed over billions of years since the beginning of the tree of life. Since the evolution of complex systems, all species, including humans share these same genetic domains that were created over billions of years of biological stress and strain, allowing all species to thrive, and overcome disease and dysfunction.
As companies embark on computational models and approaches to quote-unquote, find new and novel targets. aTyr meanwhile has an IP library of hundreds of potentially efficacious proteins just waiting to be unleashed from our own genetic programming, leveraging novel domains that have been tested and validated since the beginnings of life, that we now look to target towards current day disease and dysfunction. I hope you can now better understand why we're so optimistic here at aTyr, not only in the short term with Efzofitimod, but also in the long-term potential aTyr to become the next transformative biotech company of our time. We appreciate your interest at this time. Jill and I will be happy to take your questions.
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