aTyr Pharma, Inc.
Q1 2021 Earnings Call Transcript

Published: 13 May 2021

[Operator:]

Good afternoon ladies and gentlemen and welcome to the aTyr Pharma First Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. 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 Corporate Communications. Ms. Dunston, you may begin.

[Ashlee Dunston:]

Thank you, operator, and good afternoon everyone. Thank you for joining us today to discuss aTyr's first quarter 2021 operating results and corporate update. We are joined today by Dr. Sanjay Shukla, our President and CEO; Ms. Jill Broadfoot, our CFO; and Leslie Nangle, Vice President of Research.

[Sanjay Shukla:]

Thank you, Ashlee. Good afternoon, everyone, and thank you for joining us for our first quarter 2021 results conference call. 2021 is shaping up to be an impactful year for the company. During the first quarter, we made meaningful progress with our clinical, pre-clinical, and research and discovery programs. We remain focused on advancing our lead therapeutic candidate at ATYR1923 or 1923. With enrolment completed in our Phase 1b/2a clinical trial in pulmonary sarcoidosis, our interstitial lung disease or ILD indication, we are tracking towards readout from this important proof-of-concept study. Having gained key mechanistic insights regarding 1923 anti-inflammatory effects in patients from data obtained from our Phase 2 clinical trial in COVID-19 with severe respiratory complications, we look forward to the expected in the third quarter of this year. Furthermore, we generated additional ATYR2810, or 2810, our anti-neuropilin-2 or NRP2 antibody in pre-clinical development for cancer.

[Leslie Nangle:]

Thank you, Sanjay. I'm thrilled to continue my tenure at aTyr and expand the scope of my responsibilities related to our research and scientific operation, particularly at a time when we are really starting to see some encouraging results from the work that we've been piecing together over the past few years.

[Jill Broadfoot:]

Thank you, Leslie. Total revenues were $0 and $8.1 million for the three months ended March 31st, 2021 and 2020, respectively. Revenues for the three months ended March 31st, 2020 consisted primarily of license and collaboration agreement revenues under company’s license agreement with Kyorin. Research and development expenses were $4.5 million and $3.6 million for the three months ended March 31st, 2021 and 2020, respectively. The increase was due primarily to manufacturing costs related to 1923, increased research and development expenses related to 2810, and increased expenses related to the research program between Pangu, HKUST and the Hong Kong government. General and administrative expenses were consistent between periods at $2.7 million and $2.6 million for the three months ended March 31st, 2021 and 2020, respectively. During the first quarter of 2021, the company raised gross proceeds of $9.9 million through its at-the-market offering program with H.C. Wainwright & Co., LLC and $15.3 million through its common stock purchase agreement with Aspire Capital Fund, LLC. As of March 31st, 2021, we had $50.6 million in cash, cash equivalents, and investments. We expects our expenses to continue to increase in 2021 as research and development of 1923 and 2810 progress. This includes additional manufacturing costs for both 1923 and 2810 to prepare for future clinical trials. Now, I'd like to turn the call back over to Sanjay before we open it up to Q&A.

[Sanjay Shukla:]

Thanks Jill. Our accomplishments this year to-date reflect the hard work, dedication, and thoughtful approach that we have invested in our clinical pre-clinical programs. The readout for our Phase 1b/2a proof-of-concept study of 1923 and pulmonary sarcoidosis represents a key inflection point for a -- really solid foundation for and invested heavily in a robust portfolio of translational work for 1923, which we believe presents a strong rationale for its potential in incredibly -- implementing the same thoughtful and for 2810, regenerate pre-clinical data and evolving our understanding of the mechanism of action to inform our clinical strategy in cancer. We have sufficient capital to take us through the readout, in pulmonary sarcoidosis and launch a Phase 2 trial 2810 and cancer, which supports our ongoing activity to generate value for the company as we progress throughout the year. We appreciate your interest and continued support and look providing you updates in the future. At this time, Jill, Leslie, and I would be happy to take your questions.

[Operator:]

Your first question comes from the line of Hartaj Singh from Oppenheimer. Your line is open.

[Unidentified Analyst:]

Thank you. Hi, everyone. Good afternoon. It's Jackie in for Hartaj. Thanks for taking our questions. First, just the upcoming readout, I remember when last year you announced the trial got slowly recruited, I think that show study enrolled 36 patients, today's trial study show 37 patients. So, maybe first, just wondering is that some patient dropped and then you reenrolled additional patients? And then second, obviously 37 is not an even number, I was just wondered, which that additional patient kind of fit into your treatment or placebo group, which cohort that person really are? And third, are you going to announce the last patient last visit? Thanks.

[Sanjay Shukla:]

Sure. Thanks Jackie. So, we have previously announced that we had met target enrollment. At that time, as you can imagine, several patients are in the queue. One additional patient at that time -- final count is 37, I think ethically would be difficult to turn away a patient that's being eligible and passed through screening. So that occurred right at that time when we were announcing that we met target enrollment. So, the final enrollment is 37. Your second question is really around which cohort, they have not been assigned backwards into our one or three milligram cohort, they are in our five milligram cohort. So, the most important point here is, it's not a backfill, it's simply a patient that, as I said, had moved through screening at the same time as our 36 patients and therefore, we really want to do the right thing and allow that patient to join. So, over enrolment, not a big issue, not anything really tactical, but really more around clinical operations ethics. With regard to last patient last visit, that’s something we'll consider, I think the main thing is we're on target to have full readout here in the third quarter. And that's really what we're focused on is that 37 patients to basically finish up those things, and any follow-up visits and I think we're very much on track to have a Q3 readout.

[Unidentified Analyst:]

Got it. Thank you for that. And then great event with Sarcoidosis Foundation last night -- side effects of steroids. And if you could talk a bit more on the side effects, those non-steroidal drugs, both short-term and long-term? And then second, thinking about your upcoming third quarter readout, what types of data should we be expecting there, will be a steroid reduction, time to achieve that, or different -- those cohorts, if you could help us frame that talk by release that would great.

[Sanjay Shukla:]

Yes, great questions about some of the toxic effects, you heard quite a bit about what steroids can do from a patient's highlighted -- one patient in particular on that call, really talked a lot about weight gain and some of the other mood and irritability, insomnia effects. So, many of the things that we see in steroids, we know are quite toxic to these patients. In those patients that have moved on to even the more heavy hitting immunosuppressant, that's really where you get even scarier complications, things as a higher degree of infection risk, malignancy is also a concern once you actually move to those agents, many of those agents were actually originally approved for chemotherapy. So, you're really talking about a heavy, toxic burden of some of those more subtle toxic immunosuppressants that these patients had to advance to. So, there's a tremendous amount of interest and it's growing and it's accelerating to therapy, which I mentioned, I think, is something that could be rather transformative in changing the paradigm and how we treat sarcoidosis. One of the ways and probably the most important way we're going to be looking at it from an activity standpoint is the focus on steroid burden. The experts have said this is a key way that they will burn around the -- and feel good about the activity of 1923. But we will be looking at things here and highlighting these things really in the upcoming months around what to expect with regards to percentage reduction, we'd like to see absolute reduction, we'd like to see a cumulative burden over six months, how much better we can . So, these are all the things that we're focused on. We'll look to actually have a potentially another event to really set the table here around expectation. So, from what I can understand from the experts, they are looking for that signal of steroid reduction in this trial. And I think that really increased a tremendous amount of clinical confidence as we move into Phase 3 if we were able observe that in our current trial.

[Unidentified Analyst:]

Got it. That's very helpful. And then last question is, I saw a press release earlier this week that bi-specific candidate coming from University of Hong Kong, you talk about the rationale -- European tour involving bi-specific format, what kind of advantages you can avail versus, I guess, put in some combination therapy more specific format.

[Sanjay Shukla:]

Yes, I'll comment even ask Leslie to chime in as well. But our strategy is really as we understand current biology, we like much of our in-house, which is, of course, working on targeting specific episodes to neuropilin-2 and tuning the biology just looking at neuropilin-2. also informed us that your colon is a really interesting receptor, and that it can quarterback other interactions with other receptors, such as toxins, integrins, other VEGF receptors that Leslie pointed out. So, how do we leverage and learn more about that mechanism and potentially even create new types -- this is why the Pangu collaboration doing is basically bring in non-dilutive capital from the Hong Kong government, on the bi-specific approach is really exciting. And I think it offers us another opportunity to create a new pipeline of discovery candidate by really understanding and mining that side of the biology. Leslie, do you want to add anything about just some of the opportunities and some of those other receptor engagement with neuropilin-2?

[Leslie Nangle:]

Sure, Sanjay. I mean, I think one important aspect of this as well is that it provided us an opportunity to expand our antibody engineering into the bi-specific realm, and to bring on some really cutting edge technologies and advanced some of those things forward with some non-dilutive funding in the grant -- under this grand scheme that we have, is really about setting up a platform. But Sanjay is absolutely right that if you're thinking about NRP2 as a receptor, it is actually coming together with these other types of co-receptors, there are novel ways to actually sort of tune those reactions and create agonists. So, most of the time with our mono-antibody or monoclonal antibodies, we're going to be blocking the natural ligand of NRP2. In this case, we can actually bring the receptors together, the co-receptor and NRP2 itself to derive some of that signaling. And so in certain disease states, for example, you may want to and that actually drives a response in that net capacity. So, it lets us come at it from the other side of the coin as well.

[Sanjay Shukla:]

I'll just add one -- I'll just add one other thing. A bi-specific approach -- a few bi-specifics on the market, but we've seen already that market at close to eventually $20 billion in the quarter when you think about bi-specifics. So, it's really, a technology for us to look into this platform approach -- bi-specific approach. And the fact that we can do with accessing these grants with the Hong Kong government, I think is a smart way for us to tap into what could be a really large commercial opportunity in the future.

[Unidentified Analyst:]

Great. Thanks for all the color and really appreciate all the questions. Thank you.

[Operator:]

Next question comes from the line Emanuela Branchetti from H.C. Wainwright. Your line is open.

[Emanuela Branchetti:]

Good afternoon, guys and thank you for taking my question. And happened before to me, so while waiting for the data in fact, with higher 1923, and the potential pivotal trial, are you guys planning to do any formulation work to explore the possibility of a different formulation for a ATYR1923 other than--

[Sanjay Shukla:]

Hi Emanuela. So, that's a great question. I think as a small company, we want to establish proof-of-concept with our IV administration. But I think from a patient perspective, certainly, once a month therapy is great, but then very quickly, from a lifecycle point of view of these patients who wants something perhaps that could be administered even easier than that. When you look at when you look at subcu administration, a lot of companies as they advancing in their lifecycle planning, they consider things like that. I think from a formulation standpoint, your question makes a lot of sense -- strategy. But I think first things first, we're going to establish proof-of-concept here then absolutely we can look at formulations that -- even make therapy more attractive to patients, perhaps a subcu administration that could be administered every three to six months. That's what you see with some of the therapies as they advance in lifecycle planning.

[Emanuela Branchetti:]

Sure. Thank you for that. And with regards to the fight throughputs platform being developed by Pangu, should we expect multiple INDs coming forward from this program? And can you give us a sense of your expectation in terms of timelines? Also, how should we see potential clinical development entities assets? Would they start in China and then move to the U.S. or have you -- I know, it's certainly, but have you -- can you share your thoughts on this?

[Sanjay Shukla:]

Yes, it is early. I like the way you're talking. We definitely think that this is an area. We tend to really start to understand the biology and then start to advance our discovery thinking, but the goal here really is to be described, we'd like to be able to identify a discovery opportunity that leads to an IND candidate from this platform. I think there's an ability to do that. I hesitate to put a timeline on it just right at this moment, because we have just gotten through the first step of this milestone. But I do think that as we look to provide updates during the future, that's the kind of things to pay attention to. Do we have a discovery candidate in the work thereby specifically? With regard to development, I think, it's a little bit too early to say with regards to how we would interface with China. Hong Kong is a little bit of a different situation, although, it is becoming much more -- you have to think about it a little bit more as the -- those connection to Mainland is a little stronger here. But I think that's a strategy that we'll be working on and we'll be getting back to you. We would like to actually emerge with a new discovery pipeline candidate from that platform.

[Emanuela Branchetti:]

Sure. Thank you. And, again, another maybe forward looking question. When looking at the results reported the AACR in the triple-negative breast cancer models, ATYR2810 seems to inhibit tumor growth when used in conjunction with cisplatin and bevacizumab. So you talk more before about the mechanism of action behind these effects. But how do you think the drug would be better positioned for the treatment of triple-negative breast cancer, should you decide to move forward with the clinical development in this population?

[Sanjay Shukla:]

Sure. And again, I'll have Leslie chime in here, but clearly a very aggressive form of cancer where we still have a lot of room to improve efficacy. We made really amazing strides in the last couple of years treating TNBC. There's quite a bit of resistance and also still develops. And I think what we are learning is our drug can add utility, not only to have that tumor inhibition and growth, but you're also seeing quite a bit of exciting data that can help patients who might become resistant to existing therapy. And that we have a mechanistic understanding of how that might be occurring. So Leslie can also add some of her thoughts more specifically about that data.

[Leslie Nangle:]

Yes, absolutely. So we have a number of different types of aggressive solid tumors. And we've made the most amount of -- we generated the most amount of data specifically in triple-negative breast cancer, because of our strong connection with UMass and Dr. Arthur Mercurio’s lab, where they have a strong focus there. So that is where we're getting a lot of early data coming out that you're seeing. And I think Sanjay captures it very well. And this is a very aggressive type of tumor that has very high NRP2 expression, and has a lot of issues with resistance to current therapies. And so we're seeing especially interesting to me is that tumor organoids that we see. So we are directly patient derived tumor organoids, where we're seeing a response of sensitizing the tumor organoids to these chemotherapy or bevacizumab type treatment, conventional therapies. And we're understanding the mechanism in those organoids and able to see gene changing that are indicating the processes surrounding ENT, or this development of a stem cell are being reversed in the presence of 2810. And so we're starting to piece together that mechanism and figure out that that will be -- that is a potential population that could be really be helped with something that could do that in particular.

[Emanuela Branchetti:]

Got it. Got it. Thank you very much.

[Operator:]

Your next question comes from the line of Zegbeh Jallah from ROTH Capital Partners. Please open.

[Zegbeh Jallah:]

Hi, guys. Thanks for taking my questions, and congrats Leslie, really exciting for you. Just have a couple of questions. I think just follow-up to some of the questions that have been asked. I think the first one for me, is in terms of relationship with Pangu, just wanted to make sure that you're retaining full rights to the bi-specific platform, or is that some kind of agreement that you have in place?

[Sanjay Shukla:]

Yes. Certainly, that's a great question, Zegbeh. And yes, we are retaining full rights for the work that we do there. So I think that's a key component of retaining the value of what we think is a really outstanding opportunity for us to explore bi-specific.

[Zegbeh Jallah:]

Thank you. And then the next one, again, another follow-up for 1923. I know we're still waiting for the data, but like someone else alluded to the call that you participated on was really good in terms of really articulating the concerns about using steroids in patients with pulmonary sarcoidosis. And so I was just wondering, that's kind of how this Kyorin study is set up in terms of figuring out if patients who use less steroids, I was just wondering if that's probably going to be the same setup for your Phase 2, 3 potentially pivotal study?

[Sanjay Shukla:]

Yes. I think we are well to -- basically interrogate an endpoint that is accelerating in its validity that something that may -- really need to look at closely. I think you've heard the FSR that they are spending quite a bit of time with the FDA, educating them with Mary over their new CEO, around working in clinical meaningfulness causes endpoint, plus get off steroids. We always thought that at the doses we’re looking at 10 milligrams or higher, that was certainly the case, but I think what you heard on the call is, some patients now, they don't want to go on steroids at all. So very quickly, I think our therapy is being looked at as a first line therapy, something that we can -- corticosteroids standard approach. But there's more and more momentum, we just have a better alternative with steroids, based on proof of mechanism in particular, I think, our therapy, as I said, could be transformative here as a first line option for sarcoidosis patients, especially given the fact that we thus far demonstrated really a great safety profile. And I think we're poised well in the sense of this endpoint is becoming more and more spotlighted by the FSR.

[Zegbeh Jallah:]

Thanks, Sanjay. And then the last follow-up here, just on your efforts with your NRP2 antibody got excited with the AACR data then the partnership with Lonza. I was just wondering what else is left to kind of be done for the IND? And then lastly, adding comments on some of the discovery efforts with CSL Behring, I think at one point you guys mentioned, focusing on NK cell biology. I just wonder any updates on that because that sounded really exciting?

[Sanjay Shukla:]

With regard to what our next steps for the neuropilin program, as I said, we'd like to get in to -- we expect to be inincredible progress here in cancer. So as we continue to look at different in vivo models, tumor models, we know neuropilin is implicated in a number of different tumor sides. So we'll can take that a few other models. And that will then allow us to basically focus in on where we have our best effects to where we think our best indication should be for our first cancer trial. So I think that what you can expect to see as the active for the remainder of the year with a follow on data, which then should focus everyone's attention to, okay, this is where 2810 has its best utility. And here's the best opportunity to really help patients who will be finishing some of that translational work throughout the course of this year. We'll complete some of that toxicology work that is required before we actually move into the clinic. And this is another reason why it was important for us to highlight the Lonza collaboration because we're working with the preeminent, if you will, CDMO out there, very important for us to actually get that relationship locked up. So we can actually have really clinical material ready to go into the clinic. Also important right now, I think a lot about the companies are estimating the supply chain demand with manufacturers. So for us to get ahead of that, it's not something we hear a lot about, and companies talk about, because I think they're struggling with their ability to actually engage and plan ahead with those with CDMO. So this is not going to slow us down. And we are really thrilled to have a top notch like Lonza. With regard to some of the findings we put out earlier this year with NK cell, we have still a lot of interest there to mature some of those findings and getting receptive candidates, we want to be transparent about that, put that out in some form of publication or abstract. So that's tracking well. I think the important thing there is, we're now in the process of validating those receptor targets on them. We like to be very, very thoughtful and make sure that we cross all the T's, dot all the I's there. But I aspect they would change from that program as well to be able to highlight what I think is going to be our next receptor target, much like we did in the neuropilin-2 a few years ago. I think that's what's in the cart there for that program.

[Zegbeh Jallah:]

Perfect. Thanks again and congrats on this.

[Operator:]

Your next question comes from the line of Yale Jen from Laidlaw. Your line is open.

[Yale Jen:]

Good afternoon, and thanks for taking the question. Just want to -- first question is about the 1923. Just a little bit forward looking questions, which is that, if the readout on the third quarter is robust, I assume you guys going to advance into a potential pivotal study. My question is that if the steroid-sparing type of endpoint could be accepted by the a primary endpoint or you need to conduct more functional type of endpoint plus the way to potentially gain approval?

[Sanjay Shukla:]

Yeah. Thanks, Yale for the question. Certainly, our plans and this will involve interaction with the FDA to propose and move aggressively into a pivotal trial. I think when you talk about a rare disease like some patients don't have a lot of time to wait. And we set on a lifecycle of 10 years of running trial here. Many of these folks need therapy today. Secondly, we know and we're learning more and more as these patients want to desperately get off steroids. And the ones that are newly diagnosed don't want to be put on steroids. So it's easy. The second question, there's ever a time for the regulators to really look seriously at steroid-sparing certainly as the primary end point. I can tell you that in the years I've been involved in this program, there is significant momentum moving in that direction. And this is the reason why engaging more with the patient community, how we have done this internally, bringing in Andrea, as a patient advisor, and also the FSR is focused on highlighting the toxicity of steroids here. I think it sets up really well for us to have a discussion with the regulators and say this action should now be thought of more as a primary endpoint. So I think right now, what the outcomes of those discussions will be with worldwide regulators. But I will say that right now, the momentum is really building for a steroid reduction endpoint to be at a minimal part of a composite primary endpoint. I think it sets up really well for us as we've been focusing on endpoint --.

[Yale Jen:]

Okay. Great. That's very helpful. And another question is that the -- for 2810, which is involved in a process called EMT you mentioned and that seems to be a space very few competitors at least, we cannot find any. Do you have any comments in terms of you guys find either so competing program also in this space, or you are potentially could be the first-in-class therapy, if successful?

[Sanjay Shukla:]

So Yale, we're cutting-edge science companies, we literally came out of Paul's lab. Paul has been a tremendously successful scientific entrepreneur, talk to you about the founding of mylamin , Cubist and replica in places like, so we were not afraid to be bold around some of the times as long as it makes sense and we can see it mechanistically. So our findings for me in two year, we're really excited about that. We think and some authors have even said that this could potentially be a backbone type of therapy, if we are remodulating some of those mesenchymal cells, that that as Leslie pointed out to stemless there. We significantly can make leaps here in cancer and attack resistance. So I do think that it's an area that we think is very much untapped. Our biology is pointing us on mechanistic understandings pointing us in that direction. So we're going to follow it. And I think, again, we get the lead here, potentially an area where even at ACR, is in this last meeting in the meeting for that you see more and more interest in EMP. So perhaps in about five years, this will be an area where we can teach some other companies what we've learned about it. So stay tuned for that. I really think that that's an interesting area that Leslie certainly is going to be working hard on.

[Yale Jen:]

Okay, great. And maybe the last question here is all your bi-specific approach. I understood the NRP was not necessarily an IO immune oncology therapies. But given that the -- they generally work in the tumor microenvironment, in terms of device specific would it be consider one of the by target will be -- will could be in any kind of checkpoint related or other type of immune related targets? I don't know whether that make any sense as a consideration? And thanks.

[Sanjay Shukla:]

No, that makes sense to me, for sure. And I'm going to have Leslie, say something as well here. But the colocation we don't want to does here is the other receptors I like to aggregate and co locate next to neuropilin-2. So it's very much a quarterback that we can we create a by specific essentially to agonies and create a bridge and say another receptor, you are absolutely right, this could be another asset that we could turbocharge an immune response, if you will an attack cancer cell. But we have to understand that mechanistically improvement. So I think this is really part of our scientific rationale. And it's why we were able -- we were awarded the grant because I think the letters I pointed everything in that direction, now we're working to basically build a candidate that, we may exactly do what you say here. Leslie, do you want to add anything for you?

[Leslie Nangle:]

Absolutely. So you know, I think we alluded to it a little bit as we walked through the call today around this expression that we see for NRP2 on these T cells that are located in the tumor microenvironment. So not only the tumor cells itself, but also tumor-associated and myeloid-derived suppressor cells to name a couple of them. So we presented a poster earlier this year out of Keystone where we walk through that with. And we're definitely in a mode of heavy investigation to understand the role for neuropilin-2 on those cells and how that might be interplaying with the activity and what's happening with these more mesenchymal epithelial cells of the tumor. So I think, it's stay tuned, we're heavily at work on that and really investigating it. And I think the mechanism itself will bear out whether or not it makes sense to go at that with advice specific approach or whether there's really a monoclonal strategy that can work as well. So we're -- as Sanjay said, we try to be cutting edge and on really open to new science and let the mechanism in the data drive us where we should go. And so I think we're very open to the best way to drug these targets. And so, stay tuned.

[Yale Jen:]

Okay, great. Thanks a lot. And again, congrats on the progress so far.

[Operator:]

And there are no further questions over the phone line at this time. I would like to turn back the call over to Sanjay Shukla, sir.

[Sanjay Shukla:]

Thank you. Great questions today, obviously a large interest in not only our clinical program, but the advances we're making in neuropilin biology or bi-specific platform and Pangu as well. I think many of you have picked up on really intriguing new area that opens up a lot of potential for our pipeline. Really appreciate the questions and interest from everyone today, looking forward to speaking to you on future calls. So thanks, everyone, be well.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. We thank you all for participating. You may now disconnect. Have a great day.