aTyr Pharma, Inc.
Q4 2017 Earnings Call Transcript

Published: 20 Mar 2018

[Operator:]

Good day ladies and gentlemen and welcome to the aTyr Pharma Fourth Quarter 2017 Conference Call. As a reminder to our audience, this conference is being recorded for replay purposes. It is now my pleasure to hand the conference over to Mark Johnson, Senior Director of Investor Relations. Sir you may begin.

[Mark Johnson:]

Thank you, Gigi. Good afternoon everyone and thank you for joining us today to discuss aTyr’s fourth quarter and full year 2017 operating results and corporate update. We are joined today by Dr. Sanjay Shukla, our President and CEO; and Dr. David King, our Chief Scientific Officer.Sanjay will be sharing his strategic vision for aTyr over the next couple of years as well as some important highlights from 2017 and early 2018. David will provide an overview of data from our immuno-oncology ORCA program that we recently presented at the American Society of Clinical Oncology, Society for Immunotherapy for Cancer or ASCO-SITC. Finally, Sanjay will provide an update on ATYR1923, our interstitial lung disease program and review the financial results before opening it up to the question-and-answer session. Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management in response to questions on this conference call are forward-looking statements under the Safe Harbor Provision 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 on the Company’s earnings press release issued after the close of market today, as well as the risk factors and the Company’s SEC filings and included in our most recent annual report on Form-10K and quarterly reports on Form-10Q. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made and as facts and circumstances underlying these forward-looking statements may change, except as required by law, aTyr Pharma disclaims any obligation to update the forward-looking statements to reflect future information, events or circumstances. I will now turn the call over to Sanjay.

[Dr. Sanjay Shukla:]

Thank you, Mark, and good afternoon everyone. I’d like to start with a brief refresher for everyone on aTyr in our mission. aTyr Pharma is a clinical stage biotechnology Company, engaged in the discovery and clinical development of innovative medicines using its knowledge of tRNA synthetase Biology. aTyr has discovered noble extracellular functions of protein derived from a number of tRNA synthetase gene. A family of more than 20 genes that influenced immune function and other activities in ways that were previously unknown. Our mission is to translate our understanding of this newly discovered biology into novel first-in-class drug program for conditions with high unmet medical need. Built on more than a decade of foundational science on extra cellular tRNA synthetase biology and its effect on immune responses, we have built a global intellectual property state directed to all 20 human tRNA synthetases as well as our product candidate. Proteins derived from the histidy-tRNA synthetase or HARS gene, for full length and size variance are present in human circulation and play an important role in modulating immune responses. We refer to these excess cellular HARS proteins as Resokine to differentiate themselves and their immunomodulatory activity from intracellular HARS, which are involved in protein synthetase. We at aTyr are currently focused on therapeutic translation of this Resokine pathway. Our initial pipeline of product candidate targets its immunomodulatory Resokine pathway to address diseases within immune component. Today, we will provide updates on our ORCA, ATYR1923, and Resolaris programs. 2017 was a year of meaningful evolution for our Company as we focus our R&D efforts on our ORCA and 1923 programs. Our ORCA program is focused on the development of antibodies to target the Resokine pathway as a potential immunotherapy for the treatment of cancer. In the second half of last year, we unveiled this program and subsequently selected and initiated development on our panel of anti-body. Building of the initial data presented at ASCO-SITC in January, we expect to present and publish more data in support of our ORCA program this year. Our ATYR1923 therapeutic candidate is focused on the development of an engineered Resokine protein as a potential therapy for the treatment of immune-mediated diseases with early translational research indicating potential utility in interstitial lung diseases. In fourth quarter, we initiated our first clinical trial with our 1923 candidate in healthy volunteers. I’m happy to report that enrollment has run smoothly and we remain on track to repot top line results from this study in the second quarter of this year. Our Resolaris program or ATYR1940 is focus on the development of a Resokine protein as a potential therapy for the treatment of rare muscle dystrophies. Our exploratory -- our early exploratory trials produce encouraging signs of activity. However, we have prioritized our portfolio and have made the decision to not advance this program unless we secure strategic development partner. Based on this decision, we are currently not spending significant internal resources financial or otherwise on 1940. We are excited about the promise of our ORCA in 1923 development programs and our strategy to advance both of these programs into potential latest stage trials. As you may recall, I joined aTyr as Chief Medical Officer in March of 2016 and in November of 2017, I assumed my current role as President and CEO. Since then, we as a company have made a commitment to strengthening our mechanistic and translational research to better position ourselves for future clinical development across all of our programs. This research will allow us to better understand how to utilize that Resokine pathway as a therapeutic intervention point for both our ORCA and 1923 programs. I’m extremely proud of the high quality and impactful work produced by our research and manufacturing team. And I’m happy to announce today that Ashraf Amanullah has been promoted to Senior Vice President, Biologics Development and Manufacturing; and David King has been promoted to Chief Scientific Officer. Ashraf has been instrumental in enabling the development and manufacturing of all of our programs since joining in November of 2015. Previously, Ashraf held senior level CMC roles at Gilead and Genentech where he built and led world-class CMC organization. At aTyr, Ashraf has built internal capabilities for the development of both microbial and cell culture device protein therapeutics and also has responsibility for all end to end outsource manufacturing and supply chain. David joined us in September of 2016 and since then we have significantly advanced our understanding of the Resokine pathway. Under his leadership leveraging, levering his experiences and discovery and development of biologics gained at Medarex, Celltech and at AnaptysBio. David has actively built up our immunology and transitional expertise, enhancing our ability to make better program decision. We have a number of insights into this Resokine pathway that we plan to publish and scientific publication and present conferences this year. Earlier this year in January, we presented initial data introducing our ORCA program at ASCO-SITC. Now I’d like to turn it over to our Chief Scientific Officer, David King, to share and overview of that presentation and provide an update on our ORCA program. David?

[Dr. David King:]

Thank you, Sanjay. It'll be my pleasure. As Sanjay mentioned, I have the opportunity to present for the first time publicly some of our early preclinical research on the potential link of the Resokine pathway cancer at the ASCO-SITC conference held in past January in San Francisco. The presentation was the first introduction of our ORCA program in scientific community. In that, we described the Resokine pathway and it's potentially immunomodulatory activity and also provide the data from in vitro and in vivo experiments as preclinical evidence supporting our hypothesis for the Resokine pathway place an important role in immunomodulation. We highlighted the potential link between the Resokine pathway cancer by comparing Resokine levels in cancer patients to healthy volunteer. We observed the potential up regulation of Resokine in the presence of various types of cancers in these experiments across over 450 patients, we defected elevated levels of Resokine in the population of cancer patients across 15 different tumor types, suggesting that to be a highly druggable target. It's important to remember that Resokine is present in circulation, which means levels of Resokine can be measured using simple liquid biopsies, as opposed to tumor biopsies required with many other immuno-oncology agents. We ended the presentation with data highlighting the anti-tumor activity of antibodies that can block the Resokine pathway. We believe these antibodies act through up regulation of anti-tumor immune responses. The data compare the in vivo efficacy of anti-Resokine antibodies to a combination of anti-PD-L1 and anti- CTLA4 antibodies. Tumor growth was measured over 21 days in a B16-F10 mouse melanoma syngeneic tumor model. Our analysis compared the anti-Resokine treatment group and the combination anti PD-L1, anti-CTLA4 treatment group through a control group of animals treated with a non-specific immunoglobulin gene. Tumor growth was significantly lower than the control with both treatment groups and we were excited to see the tumor growth appeared to trend the lowest in the anti-Resokine treatment group. Now, our antibodies targeting Resokine have also outperformed established checkpoint inhibitors in the number of other animal models, and we plan to highlight some of those findings at the upcoming American Association for Cancer Research or ACCR meeting in April 2018 in Chicago. We will also present some combination studies with established therapies that suggests both the potential improvement even compared to monotherapy. Our initial hypothesis is that multi-tumor types may have high type the Resokine pathway to aid in the invasion of host anti-tumor immune responses. We're excited to develop antibodies from the ORCA program to block the Resokine pathway, which we hope will aid in enabling effective anti-tumor responses. Currently, we are conducting preclinical development and have initiated CMC activities including cell lung development and selected a CDMO or for GMP manufacturing. In addition to AACR, we plan to present aids from the ORCA program at several additional scientific meetings over the next 12 months, and are preparing to file in R&D for an anti-body from the ORCA program next year. Sanjay will now discuss our 1923 program and take you through our financial results. Sanjay?

[Dr. Sanjay Shukla:]

Thanks David. ATYR1923 is our next generation agonist to the Resokine pathway being developed for the potential treatment of interstitial lung disease. This program was developed by using only the end terminal immunomodulatory domain of the Resokine protein and fusing this domain to the FC region of a human anti-body. There are a number of FDA approved FC fusion proteins, making to so well-established modality for delivery of protein therapeutics with good exposure characteristics. Our in vivo experiments have verified that 1923 administration long exposure -- results and long exposure and prolonged the end terminal or IMA domain immunomodulator activity. We’re currently testing 1923 in a Phase 1 clinical trial. This randomized double blind placebo control study will investigate the safety, tolerability, immunogenicity and pharmacokinetic of intravenous 1923 in healthy volunteers. We anticipate learning more about the safety profile and tolerability of 1923 as well as characteristics of its pharmacokinetics in human to better aid in the design of therapeutic dose. As previously highlighted, this trial is on track to complete a schedule and we plan to release top line data in the second quarter of 2018. In parallel, we are expanding our knowledge for the potential for 1923 by conducing study in several additional preclinical models to further elucidate its potential clinical utility. This information provides us optionality in selecting the best indication for future clinical trials for our 1923 programs. Preclinical evidence of 1923 activity in a bleomycin model, a pulmonary fibrosis was presented at the American Thoracic Society or ATS Annual Meeting in Washington DC in May of 2017. In addition, more preclinical work supporting 1923 utility in interstitial lung diseases will be presented at this year’s ATS meeting in San Diego in May. Although, we currently have preclinical evidence that 1923 might be beneficial for patients within interstitial lung diseases, we're carefully building as much evidence for the translation of the program in the clinic prior to developing the protocol. We plan to keep the patient, medical experts and investment community up-to-date this year as we examine the results from the Phase 1 clinical trials and formulate our path forward towards future patient trials with 1923. Now for our financials, we ended the year with 85.1 million of cash and investments compared with 76.1 million at the end of 2016. R&D expenses were 5.3 million for the quarter and 30.1 million for the full year 2017, compared to 9.1 million and 42.8 million for the same period in 2016. The decreases in R&D expenses were primarily driven by the decreasing costs related to manufacturing and clinical trial costs for ATYR1940, partially offset by clinical trial initiated for ATYR1923. G&A expenses were 5.9 million for the quarter, 17.1 million for the full year 2017, compared to 3.4 million and 15.1 million for the same period in 2016. The increases were primarily related to non-cash stock based compensation related to the departure of certain officers in the fourth quarter of 2017, partially offset by reduction in professional fees. We’re committed to developing ORCA and ATYR1923 and are pleased that through our successful financing last year, we have expanded our cash runway, allowing us to advance both programs towards meaningful patient trials. In addition, our research team continues to further elucidate the potential activity from different areas of extracellular tRNA synthetases biology and work towards the development of new product candidates. To summarize our path forward, over the next 12 months, we expect to achieve the following models. President updates from our ORCA program at key scientific conferences, announced top line results from our 1923 Phase 1 healthy volunteer trial, complete translational work for 1923 and select an indication for patient trials initiate a patient trial for 1923. Publish updates on our understanding of tRNA synthetase biology and specifically our knowledge of the Resokine pathway and its mechanism of action, and finally advance our research efforts towards the discovery of new therapeutic candidates, based on different tRNA synthetase genes. We believe 2018 will be a year focused on building the right scientific foundation, to prepare for meaningful clinical trial and we believe delivering on these key milestones will best position us for the successful translation of our science into the clinic. We remain confident in delivering upon our mission to develop innovative therapeutics based on our knowledge of tRNA synthetase biology, and we look forward to updating you on our progress in the months ahead. Thank you everyone. At this time, David and I will be happy to take your questions.

[Operator:]

[Operator instructions] And our first question is from Mathew Luchini from BMO. Your line is now open.

[Mathew Luchini:]

So, couples for me please, first for 1923. Could you talk a little bit about the goals for the healthy volunteer study? And obviously, we want to confirm a safe and tolerable product, but can you talk a little bit about more and more in terms of when you're hoping to show from a profile point of view? And relatively, how do you expect to communicate that information, it will be a press release or do you expect that data to be held for a medical meeting? And then assuming that the data shows the profile that you're looking for, how do we think about the timing as we moved from that Phase 1 study into a potential in human Phase 2 study, which means, basically when do you think you might be able to announce an indication for that study. And yes, so that's it. Thanks.

[Dr. Sanjay Shukla:]

I think first off with the Phase 1 healthy volunteer trial. As you pointed out, safety and tolerability is really the key focus area in this first trial as look to implement in prepare 1923 for patients, but I think one other things to pay attention to is, we want to establish a robust PK profile. We think we have the ability here to confirm that 1923 has the ability to be dosed once a month. So looking at our PK data, I think getting that support and enabling us to check the box there that we could -- we could potentially have a once a month dosing schedule for our Phase 2 work could be particularly attractive. So I think that's an important additional element that we want to readout with that trial. With regards to communicating that, we would press release that information as I mentioned, there could be some top line information in conjunction with the ATS coming out in May. When we'll be in Phase 2, which I think is really your second question. Our focus is to complete this Phase 1 trial, but there is a number of as I said transitional experiment. Those experiments I think will provide us, in a state of evidence to work with the medical expert community, work together with them in conjunction with our Phase 1 data, and then we can affectively plan a Phase 2 program around an indication. I think we’ll provide those updates in the coming months after ATS and then when we have those read out. In particular, I think in another important meeting for us as a company ERS in Paris in September. So I think those are the important time points for us to be guiding towards that indication selection. So, we’ll be releasing this information more the form of press releases rather than part anchors to those meeting. So, I think those are important meeting for us that we will be active at.

[Mathew Luchini:]

And can you just remind me or remind us the doses that are in the Phase 1? And talk just briefly about the rationale behind them?

[Dr. Sanjay Shukla:]

Sure, so we did a number of obviously modeling experiments early on looking at preclinical data. We’ve got six cohorts in that single standing dose study, studying out at 0.3 mcg per kilogram and where can potentially work up to 5 mg per kilogram.

[Operator:]

Our next question is from Cory Kasimov from JP Morgan. Your line is now open.

[Unidentified Analyst:]

Hi guys, this is Carmen on for Cory. So, first, how should you think about the ramp of operating expenses throughout 2018 given all this is going with 1923 and perhaps some changes in the composition of G&A?

[Dr. Sanjay Shukla:]

Well, I think as we’re -- it’s a planning year of course as I've mapped out around our indication selection. With regard to our expenses, we are working on the clinical planning for 1923. Once we actually have that protocol, we’ll probably be able to guide a little bit better as to sort of 2019 costs now we’re looking at that. With regard to G&A costs, you may have picked up on some of the one-time non-cash amount that came in the fourth quarter. As I mentioned, those increases were primarily related to non-cash stock-based compensation that we brought into the fourth quarter of 2017.

[Unidentified Analyst:]

And then coming out of the presentation of preclinical data in January, what has been kind of the most interesting data point so far that’s resonating disposition?

[Dr. Sanjay Shukla:]

Yes. Well, I think so a couple of things and David pointed out the fact that, I think first of all, it’s novel biology, it’s a unique pathway that it has, that data points are seem to be up regulated across all the cancer types we tested with nearly over 450 patients there. So I think the fact that it’s a novel pathway certainly have gotten a lot of folks interested. Secondly, I think the track that it can be really kind of in circulation and we have potential to have our liquid biopsy approach, that’s also particularly in treating to the expert community

[Unidentified Analyst:]

Okay, thank you very much.

[Dr. Sanjay Shukla:]

I was just kind of say, David. Did you want to add anything to that?

[Dr. David King:]

I think that covers most of it. I would also just add, I think anti-tumor efficacy data is quite good in difficult to treat to model from that compared to established checkpoint therapies is quite attractive.

[Operator:]

[Operator instructions] And our next question is from Joel Beatty from Citi. Your line is now open.

[Unidentified Analyst:]

This is Sean calling in for Joe. I have two questions on your ORCA program. The first is. What do we learn from patients with anti-synthetase syndrome that would support ORCA clinical development program?

[Dr. Sanjay Shukla:]

Thanks Sean. So that's a good pickup on your part. The anti-synthetase syndrome is a rare syndrome where in essence patients are developing antibodies to more or less release circulating Resokine, that's primary Jo-1 antibody syndrome. And this occurs rarely when those patients break tolerance. And what happens in those patients presents us a very interesting, if you go clinical knockout, around our hypothesis. When they develop antibodies, typically these patients develop myositis, interstitial lung disease, sometimes it can have some dermatologic findings, but what you see especially in the lung and muscle tissues is a fluid infiltration and immune invasion of T-cells. So that gives us a lot of confidence around this clinical knockout that antibodies directed against the Resokine pathway, certainly unleash T-cells in that disease in particular it's targeted against those two tissue systems. With regards to ORCA, we hope to harness as we believe tumors hijacking this system to immuno shield themselves from the T-cells. So our hypothesis is really guided by that very real important clinical knockout, you see in anti-synthetase syndrome.

[Unidentified Analyst:]

That's very helpful. Then a quick follow-up to that, although, it's probably very rare the anti-synthetase syndrome is a rare disease in itself. But is there any, any clinical data of anti-synthetase patient that also had cancer or any prognostic information there?

[Dr. Sanjay Shukla:]

Another great question and the group that really looks into this myositis consortium, they meet every two years. That was one of the questions they asked last year, they haven't really explored this enough with not enough data. There's mixed evidence there. I think a bit more data a little bit more work has to look at this correlation as you point out. There doesn't seem to be just quite yet enough evidence to point us in that direction. That could be a suggestion there, but I think that community is still working on figuring out that question. I think that the distinction is between adults and pediatric data cohorts that they're working on.

[Unidentified Analyst:]

Thank you, I appreciate that. And then this is the third quick follow-up question to the previous question. In regards to the live biopsy in the ORCA program, at what point do you see it will point to tumor progression does really kind of really get elevated and do you kind of see this liver biopsy is more of diagnostic or prognostic?

[Dr. Sanjay Shukla:]

I’m going to have David to answer that question. David, why don't you take Sean's question on that's one?

[Dr. David King:]

Yes. That’s a great question. Thanks. We don’t really answer that yet, but that's something that we’re actively investigating. We are looking at patients, which have good clinical history at the moment so that we can understand that question. The data that we have so far as hasn’t been -- haven't been analyzed to that level of detail. But we don’t yet answer that question, but we hope too soon. Our primary focus is obviously is developing a therapeutic or diagnostic, but of course with any program it’s good to have some accompanying company diagnostic measurement that can help you assess the therapy as you go along and maybe select or triage patients of regulated the pathway. So, we’re continuing our research in that area exactly to answer those types of question.

[Operator:]

Thank you and that ends our Q&A session for today. I would like to turn the call back over to Dr. Sanjay Shukla for his final remarks.

[Dr. Sanjay Shukla:]

Thanks very much. Thanks everyone for your time and attention today. We look forward to providing updates as our science and program advanced. Thanks again.

[Operator:]

And with that, ladies and gentlemen, we thank you for participating in today’s conference. This concludes the program and you may all disconnect. Have a wonderful day.