aTyr Pharma: Two 2025 data readings could provide inflection point

aTyr Pharma (NASDAQ:ATYR) is a very interesting biotech to look at because it is developing efzofitimod for the treatment of patients with pulmonary sarcoidosis in an ongoing phase 3. EFZO-FIT study. Importantly, if it achieves the primary goal of this study, then it has the potential to be the first drug approved for this specific disorder. The company is expected to release top-line data from this 52-week study in Q3 of 2025, creating a major inflection point for it. If that weren’t enough, there’s an even earlier catalyst opportunity for investors to look forward to. Interim data using the same drug to treat patients with systemic sclerosis (SSc) or scleroderma-associated ILD is expected in the second quarter of 2025. With continued development of its lead drug, efzofitimod for two rare lung disorder indications, plus two data readings expected to be released in 2025, I believe investors could benefit from potential gains.

Efsofitimod for the treatment of patients with pulmonary sarcoidosis

The main clinical program that I wanted to pass for aTyr Pharma is the development of efzofitimod, which is an NRP2 modulator, for the treatment of patients with pulmonary sarcoidosis. The use of this drug is being explored in the ongoing phase 3 EFZO-FIT trial for the treatment of this patient population. Before we go over this late-stage study, plus any catalysts that will come out of this program, I think it’s first important to note what this disruption is and what the market opportunity might be. Pulmonary sarcoidosis is a type of disorder characterized as a rare inflammatory autoimmune disorder that causes problems for the body’s major organs. In this disorder, it can affect any organ in the body, but primarily causes damage to the lungs and lymph nodes. What happens in the lungs is the formation of inflammatory tissue known as granulomas, which affects how the lungs work. It causes a person to be unable to breathe properly. The types of symptoms such patients experience vary, but here are some problems associated with this rare lung disorder:

• Fever
• Chest pains
• Fatigue
• Swollen lymph nodes
• Difficulty breathing that gets worse with movement and/or activity

The 7 major pulmonary sarcoidosis markets are it is estimated to reach a value of USD 53.3 billion by 2034. This is a very large market opportunity for sure, but there are a few things to note about it. The first is that aTyr Pharma must be able to meet the primary endpoint of the ongoing Phase 3 EFZO-FIT trial and receive regulatory approval. Second, the drug must be superior to competing products. Why is that? That’s because it’s not the only game in town when it comes to clinical development of a drug to treat patients with pulmonary sarcoidosis.

The first noted competitor, which is also developing its own pulmonary sarcoidosis drug, would be Novartis (NVS) with its drug CMK-389. Not only is this drug being developed for this disorder, but it is also being advanced as an IL-18 monoclonal antibody for the treatment of patients with severe atopic dermatitis (AD). Regarding the indication of pulmonary sarcoidosis, it is evaluated in a phase 2 study, according to the clinical trial website. Another thing to note is that it is also posted from what I see on company website as the primary indication being this specific disorder for advancing CMK-389.

Another biotech in the process of advancing a drug candidate to treat lung disorders would be Therapeutic relief (OTCQB:RLFTY), which is headquartered in Geneva, Switzerland. The name of this candidate is known as RLF-100, which is a synthetic form of vasoactive intestinal peptide that is being explored in a phase 2 to treat patients with acute respiratory distress syndrome (ARD). A good thing to note about aTyr Pharma is that RLF-100 for the treatment of lung disorders is still in preclinical testing; so he has the advantage of time here.

The last possible biotech that could challenge aTyr Pharma could be a company called Kinevant Sciences, which is a subsidiary of Roivant Sciences (ROIV). Why is this biotech subsidiary important to watch? That’s because it’s even closer to data reporting than aTyr. In fact, Kinevant and its parent company have announced that they have have completed enrollment in the ongoing phase 2 RESOLVE-Long study Back to April 25, 2024. This was an important event for both companies as it set them up to be able to report the results of this mid-term study using their drug namilumab for the treatment of patients with chronic pulmonary sarcoidosis. , by the end of 2024. The thing to remember is that this drug is a monoclonal antibody developed to inhibit the pro-inflammatory cytokine Granulocyte Macrophage Colony Stimulating Factor (GM-CSF). Elevated levels of GM-CSF were thought to be responsible for chronic pulmonary sarcoidosis. Thus, by inhibiting this, it is possible that the data to be published by the end of 2024 will prove positive. However, the effect of using this mechanism of action (MOA) remains to be seen.

financial

right 10-Q Filing SECaTyr Pharma had cash, cash equivalents, restricted cash and investments of $81.4 million as of June 30, 2024. A significant reason for the available cash is due to two highly significant financial transactions that were completed in 2023 and 2024. In 2023, it was noted that the company completed a subsequent underwritten public offering of 23,125,000 shares of its common stock at a price of $2.25 per share. This resulted in net income of $48.1 million after deducting expenses. In 2024, he took a different financial route.

This would be in respect of an open market sale agreement entered into with Jefferies LLC. in April 2022 to be able to sell up to an aggregate of $65 million of its common stock. During the 6 months ended June 30, 2024, it sold a total of 12,448,319 shares of its common stock at a price of $1.77 per share. This particular use of ATM helped him generate around $21.3 million. With a good number of shares still to sell with this ATM, it is possible that it will use it to raise additional cash. It may need to raise additional funds in the coming months. What makes me think that? Well, that’s because it says it believes it has enough cash on hand to fund its operations for at least the next 12 months from the date of its SEC 10-Q filing.

Business risks

There are several risks that investors should be aware of before investing in aTyr Pharma. The first risk to consider would be regarding the development of efzofitimod for the treatment of patients with pulmonary sarcoidosis in the ongoing Phase 3 EFZO-FIT trial. There is no assurance that the primary objective will be met with statistical significance to begin with. Nor that, even if positive data is obtained from it, a regulatory agency will accept a submission for marketing approval.

The second risk to consider would be regarding the development of efsofitimod for the treatment of patients with scleroderma-related interstitial lung disease (ILD). The use of this drug for the treatment of this patient population is being explored in the ongoing phase 2 EFZO-CONNECT study. Upon publication of the data, there is no guarantee that the primary objective of this interim study will be met with statistical significance. Nor that it will be enough to put the company in a position to advance this particular program into phase 3 clinical testing.

The third and final risk to consider would be regarding the financial position that this company is in. That’s because, as mentioned above, it believes that its current cash on hand will only be sufficient to fund its operations for at least the next 12 months from the date of its 10-Q SEC filing on August 13, 2024. This means that it likely will look for ways to raise cash. One of the ways they could raise funds would be to use the Open Market Sale Agreement entered into with Jefferies in April 2022. Especially since there are still funds available to be used under this particular agreement.

Conclusion

aTyr Pharma has been able to make significant progress in the development of its lead clinical drug for the treatment of patients with pulmonary sarcoidosis. Especially when you consider that they are expected to report top-line data from the ongoing Phase 3 EFZO-FIT study in Q3 of 2025. As we’ve shown above, this is a very large market opportunity. However, whether or not they do well with efsophitimod depends largely on what happens with competing drugs that are also being developed. Regarding this indication, there is something much more important to consider, which is that no new treatments have been approved for it in over 60 years. One good thing is that there will be a precursor to the release of this data, as data from the Phase 2 study on the treatment of scleroderma-related ILD will be published for the first time in the second quarter of 2025. This could be some preliminary evidence on whether efsophytimod or not. is able to help treat rare lung disorders.

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