Q1 2022 aTyr Pharma Inc Earnings Call

Good afternoon, ladies and gentlemen, and welcome to the HCA.

First quarter 2022 conference call at this time, all participants are in a listen only mode.

Later, we will conduct a question and answer session.

We'll be given the time.

As a reminder, this conference is being recorded.

Purposes.

My pleasure to hand, the conference call over to Ashley Benson <unk> director of Investor Relations and corporate communications.

You may begin.

Thank you operator, and good afternoon, everyone. Thank you for joining us today to discuss <unk> first quarter 2022 operating results and corporate update we are joined today by Dr. Sanjay Shukla, our president and CEO and Ms. Jill Broadfoot our CFO .

Sanjay will provide an update on our corporate strategy, including our clinical program for excess demand and our research and discovery programs and more appealing to including a preclinical program for <unk> 2010, Jill will review the financial results and our current financial position before handing it back to Sanjay to open up the call for any questions.

Let me 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 provision of the private Securities Litigation Reform Act of 1095. 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 Companys 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 other SEC filings and Euro.

Alliance should not be placed on forward looking statements, which speak only as of the date. They are made as facts and circumstances underlying these forward looking statements may change, except as required by law a tire 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.

Thank you Ashley good afternoon, everyone and thank you for joining us for our first quarter 2022 results conference call.

We're very pleased with the start of 2022 as we work to develop a new class of medicines from our trna synthetase biology platform.

Throughout the first quarter, we continued to make important progress with our <unk> clinical program in pulmonary sarcoidosis or initial interstitial lung disease or ILD indication.

With the receipt of FDA orphan drug designation for <unk> for the month for circuit doses.

And the positive end of phase two meeting with the FDA.

We're on track to initiate our planned Registrational study in pulmonary sarcoidosis in the third quarter of this year.

As we begin I will summarize a few highlights since we last spoke in March.

We announced that posters for us so for the modern pulmonary sarcoidosis were accepted for presentation at the American Thoracic Society or Ats International Conference.

We received FDA orphan drug designation for <unk> for the treatment of systemic sclerosis, or SFC also known as scleroderma.

We presented preclinical data in a poster at the American Association for cancer research or ACR annual meeting for <unk> 2810, or 2810, our lead anti <unk> two.

In our <unk> antibody in cancer.

We've had a highly productive first quarter and a good start to the year set.

Second quarter is shaping up to be a very important period as we prepare to present clinical data from the phase <unk> study of <unk> in pulmonary sarcoidosis at Ats next week and anticipate the potential publication of our related manuscript.

We're focused on operational preparation for <unk>.

Coming planned Registrational study.

So the balance of the year May center upon initiating the study in the U S and Europe and supporting our partner cure and pharmaceutical with the anticipated launch of the study in Japan.

Let's discuss our clinical program for a sofa demand first.

So for the Mod is it.

Potential first in class immuno modulator for fibrotic lung disease.

<unk> is a novel FC fusion protein based on naturally occurring splice variant of the long enriched trna synthetase hardest fragment that downregulates average immune responses in inflammatory disease states.

<unk> has been shown pre clinically to down regulate.

Inflammatory cytokine and chemokine signaling and reduce inflammation and fibrosis.

And our <unk> is up regulated on key immune cells known to play a role in inflammation and is enriched in inflamed lung tissue.

As <unk> bind selectively to MRP to it and therefore has the potential to normalize the immune system, serving to resolve inflammation and prevent progressive fibrosis, thereby stabilizing lung function and alleviating morbidity and mortality for patients.

We're developing <unk> as a potential treatment for patients with fibrotic lung disease initially focusing on patients with ILD at.

A group of rare immune mediated disorders that can cause progressive fibrosis of the lung.

Our initial ILD indication, perhaps of Piedmont is pulmonary sarcoidosis, which is an inflammatory disease characterized by the formation of Granulomas, where comps of immune cells in one or more organs of the body.

So I could doses that affects the lungs is commonly called pulmonary sarcoidosis in the lungs are affected and more than 90% of <unk> patients.

The formation of these granulomas is driven by persistent abrin inflammation.

Which if left untreated can lead to irreversible scarring of fibrosis, and diminished lung function, which may lead to respiratory failure or the need for a lung transplant.

We estimate there are close to 200000 patients with pulmonary sarcoidosis in the U S. Although estimates do vary.

About half of these patients will require some form of systemic therapy and 30% of all patients will have chronic progressive disease despite available treatments.

The current standard of care typically includes treating the information with corticosteroids and other immunosuppressive therapies, which can help manage inflammation and alleviate symptoms such as cough and shortness of breath.

However.

They have no demonstrated efficacy on disease progression and can result in serious long term toxicity.

Additionally, many patients do not respond to currently available treatments.

There is a substantial need for safer more effective treatment that could reduce or replace to requirement for chronic corticosteroids or other immunosuppressive therapy and prevent disease progression.

Because this is an orphan disease and treatment options are limited, we applied for and received FDA orphan drug designation for <unk> for the treatment of sarcoidosis.

We recently generated clinical proof of concept for our Sofia demand based on the positive results from our phase <unk> to a study.

Employees took a dose that we reported in September 2021.

<unk>, which included a forced steroid taper.

Demonstrated safety Tolerability and consistent dose response for <unk> on key efficacy endpoints and improvements compared to placebo.

<unk> measures of steroid reduction lung function sarcoidosis symptom measures and inflammatory biomarkers.

According to medical experts. This is the first randomized placebo controlled trial of any therapy for pulmonary sarcoidosis that demonstrates effects on physiologic and quality of life measures.

Current with steroid reduction.

These findings confirm the potential vessel Piedmont to be a tremendously impactful therapy.

We're excited to present additional data from this study in two posters at Ats next week.

Some of the clinical findings that we will present for the first time include greater details regarding steroid reduction and improvements in lung function.

Notably we will also prevent present details of the biomarker data for the first time.

The hallmark lung granulomas in patients with pulmonary sarcoidosis are comprised of immune cells that secrete pro inflammatory chemo kinds of cytokines.

And if left untreated can promote abrin infant inflammation, both systemically and locally that lead to fibrosis.

Standard of care agents, such as Oracle oral corticosteroids can suppress inflammation, but may come with toxicity and in some cases can oversee press the immune system leading to increased risks.

The ability of <unk> to effectively control in inflammatory and sarcoidosis disease Biomarkers in a dose dependent manner over 24 weeks in the context of a corticosteroid taper are very important findings as they are the first demonstration of <unk> anti inflammatory mechanism in pulmonary sarcoidosis.

<unk> patients.

We encourage you to review the posters, which will be available on our web site. Once they are presented.

During Ats, we also plan to host a company reception the event will bring together sarcoidosis medical experts principal principal investigators advocacy organizations analysts investors and members from eight tires management team.

Providing an opportunity to learn more about our <unk> clinical program and the ways in which we can all work together to deliver a potential new treatment to patients in need.

Our presentation, featuring leading sarcoidosis experts Dr. Daniel Culver director of diffuse principal lung disease at the Cleveland Clinic and Dr. Robert Balkman.

<unk> Professor of Medicine at the University of Cincinnati.

Will review results from the Phase <unk> study and discuss the outlook for the planned Registrational study.

In addition to the posters at Ats, We also anticipate the potential publication of our related manuscript with the full results of this study at a major medical journal in the very near future.

An additional abstract further exploring the molecular and cellular mechanism of action of vessel for demand and sarcoidosis that was previously accepted for presentation at Ats will instead be submitted for inclusion at another medical conference later this year.

As we mentioned we've been busy preparing for the next stage of <unk> clinical development in pulmonary sarcoidosis.

We had a positive and a two.

End of Phase II meeting with the FDA that provided productive feedback regarding trial duration dose evaluation to assess the optimal dose for chronic use and endpoint prioritization, including discussion around outcome measures that would best support the evaluation of that still fit a month efficacy include.

Including a combination of both objective and subjective clinically meaningful outcomes.

Preparations for the study are underway and we are on track to initiate this study in the third quarter of this year.

While our primary focus for <unk> is on our planned Registrational study in pulmonary sarcoidosis as.

<unk> mechanism of action.

Compelling translational and clinical data and the shared immune pathology in ILD strongly suggests that <unk> could have potential to treat other ILD indications as well.

One such ILD that carries a high unmet need.

In the ILB that results from underlying systemic sclerosis also known as Scleroderma square.

Scleroderma is a chronic progressive autoimmune disease characterized by inflammation and fibrosis of connective tissues throughout the body.

More than half of all patients with underlying scleroderma.

Develop ILD, which is the primary cause of death in these patients like sarcoidosis.

SSC ILD results from an uncontrolled persistent immune response, which if left untreated can result in scarring that permanently causes loss of lung function.

Also like sarcoidosis current treatment options are limited.

The pathology of SSC ILD is driven by the same immune cells that are central to circuit Olson's pathology and.

<unk> binding partner is up regulated on these cells, particularly on macrophages.

Furthermore, <unk> has been shown to reduce lung and skin fibrosis in animal models of fibrotic disease, such as <unk>.

<unk> and IPF.

Where it matched or outperformed approved known anti fibrotic agents, including Nintendo and Pirfenidone.

The tentative was recently approved for slowing the rate of lung function decline in scleroderma ILD patients.

But did not display any effects on the underlying disease or patient quality of life in those clinical trials.

We believe our differentiated mechanism of action targeting in our pizza you on immune cells has the potential to translate into benefit not only on lung function, but on the underlying disease as well.

It's estimated that approximately 100000 people in the U S are affected.

Clerodendrum, we recently obtained FDA orphan drug designation for <unk> for the treatment of scleroderma, which validates the anti fibrotic effects of <unk> observed in those previously mentioned preclinical models of ILD.

Now, let's take a few minutes to discuss our preclinical programs, including 28, 10, and anti <unk> antibody in development for cancer.

<unk> is a cell surface receptor that plays a key role in lymphatic development in regulating inflammatory responses.

In cancer <unk> is up regulated on a variety of solid tumors and it's particularly expressed.

Many aggressive cancers.

At <unk> two expression is linked to worsened patient outcomes in several cancers, which may include the promotion of drug resistance.

To certain current therapy, such as chemotherapy or targeted agents.

Metastasis tumor recurrence and overall survival.

2010, as a fully humanized monoclonal antibody that selectively and functionally blocks the interaction between MLP too in veg F. One of its primary ligand.

But Jeff is a validated mediator of tumor survival and growth.

And correlates with tumor Invasiveness and metastasis.

Current therapies that directly target classic VEGF VEGF are signaling do not block <unk>.

Preclinical data suggest that blocking VEGF interaction through <unk>.

That <unk> <unk> 2008, and may be an effective novel therapeutic antibody with a differentiated approach that can target aggressive cancers through the inhibition of metastasis and enhanced chemo sensitivity.

Last month, we presented some important findings at ACR that characterized the effects of $28 million and highly aggressive tumor subtypes.

Research showed that highly aggressive cancers, and those associated with metastasis, including triple negative breast cancer or <unk>.

We are responsive to treatment with 28 tenant come up combination with chemotherapy.

Importantly treatment with 28% alone is able to inhibit metastasis in models of <unk> consistent with an emerging understanding of MRP to slash VEGF signaling as a driver of metastasis and therapy resistance.

Additional findings provided key insights regarding 28 turns ability to impact the lineage plasticity of cancer cells, which contributes to their ability to differentiate into states that are known to play a role in metastasis.

Notably 28, 10 has been shown to Downregulates. The <unk>, one a central regulator of these processes and different model systems, including patient derived organoid and patient derived xenograft.

The poster highlighted work that characterized the gene expression signatures of breast cancer cells that respond to 2810 treatment in combination with chemotherapy.

Paving the way for bioinformatics analysis that may help with clinical development design.

We're in the process of completing the required work for 2008 <unk> to support its planned clinical development in oncology and we expect to initiate a phase one study of 28 to 10 in cancer patients in the second half of this year.

I'll now turn it over to our Chief Financial Officer, Jill Broadfoot to review our financial results.

Thank you Sanjay.

I'm happy to report that we ended the first quarter 2022, with $98 7 million in cash cash equivalents and investments.

<unk> and development expenses were $8 9 million for the first quarter of 2022, which consisted primarily of product development and manufacturing costs crack subset of Mod and our 28 10 program.

General and administrative expenses were $3 5 million for the first quarter of 2022.

Common shares outstanding were approximately $28 1 million and fully diluted shares were $29 2 million as of March 31 2022.

As we head towards the planned Registrational study for <unk> demand, we feel confident that with our current cash position of nearly $100 million.

A clean balance sheet with no debt and support from several high quality long term focused investors. We are in a very good position to carry out our upcoming catalysts.

Now I'd like to turn the call back over to Sanjay before we open it up to Q&A.

Thanks, Joe.

As Gill mentioned, we feel like we're in a very good position amidst what im sure. We can all acknowledge is a very challenging environment for biotech.

We have an experienced management team in place and have actively been building out the team as our programs progress.

We have clinical proof of concept data.

For a novel therapeutic for sarcoidosis, a rare disease that is limited to no treatments.

We believe our clinical execution.

Which includes investing early in our manufacturing in order to have drug product available to meet timelines puts us in a leading position to bring a transformative product to the market for this debilitating disease.

Additionally, we have preclinical data and strong scientific rationale to expand this program to other Isps.

In addition to other preclinical pipeline candidates that are progressing.

And finally, with our trna synthetase biology platform and strong intellectual property portfolio surrounding it.

We have an opportunity to replicate what we've done with <unk>.

Sure.

And one trna synthetase would some of the other trna synthetase gene families.

For a company of our stage and size, we're well capitalized coming off.

And oversubscribed follow on financing last fall and have been good stewards of our capital.

We continue to take a deliberative approach to the programs that we choose to invest in.

To drive the most meaningful value for the company.

We appreciate your interest and continued support at this time, Jill and I will be happy to take your questions.

Thank you at this time I would like to inform everyone in order to ask a question press star one on your telephone keypad again, Thats star one to ask a question.

We have your first question from Todd.

<unk> with Oppenheimer. Your line is open.

Great. Thanks for the questions on the update I apologize, if there's a little bit of background noise.

Just turnkey looking towards Etfs and the.

Presentation not upon drawn your presentation, but <unk> been gearing up for the.

What are some of the aspects of the data that would excite you, especially in terms of unmet need.

And Paul myself.

And then any updates protocol design with Registrational trial.

Number of patients.

Thats been updated number of slide 10, or anything you could share there.

And then lastly for each of the 2810.

How do you see that phase one will be a classic dose escalation dose expansion.

Basket for all whether it be the specific tumor type. Thank you Paul.

Good questions archives. Thank you I'll start with the easiest one first.

Protocol design details sites duration I'm, just going to ask you hold off for one week, we have a pretty detailed presentation next week at Ats.

Dr Culver and Dr. Bachman.

Space many of the thought leaders from around the world to be in San Francisco.

And everyone is really anxious to get started and see those details so I'm going to hold off on that as next Monday, we're going to be outlining.

All of those details you wanted the protocol design as I've mentioned before and we've put this out previously we had a really.

Important in what I would call a successful end of phase II meeting, where we really got clarity around.

The design of the trial and the doses to proceed forward with the duration of the trial the number of patients and really the most important thing is which of our endpoints.

We prioritize.

We are in a unique position because we actually hit on all of those endpoints.

I think this goes to your point about what are we excited about we are the really the first.

Potential therapy here that has seen this level of improvement in lung function symptom scores controlling biomarkers.

In all of those endpoints we saw.

Really better effects.

Any of US who are the experts would have expected and we did all of that.

While reducing steroids is something that really hasn't been done before and thats in the field. So I think this really really positions our therapy to be a transformative therapy and youre starting to see even the agencies start to recognize that with our OTT for scleroderma, another condition, where it's a debilitating fibrosis condition.

So when we talk about sort of the marketplace opportunity here, we've always been very conservative and said there is.

<unk>.

Multibillion dollar market opportunity.

As we start to generate the data, we produce where clearly our leading.

Therapy, and we're set up really well here with this trial, so I'll be able to go through those details next week with regard to 2008 to 10, we are honing in on that clinical strategy.

Clearly like 28, <unk> for a number of tumor types youre question around will it be a basket trial or whether or not we actually will focus in on one tumor type stay tuned with that we can go into either of those two directions again, we've seen effects with 2008 to 10 and a number number of solid tumor environment.

It seems to play a really really nice roll in.

Blunting metastasis, and we know that.

That also comes with the ability to enhance.

Chemotherapy.

We're working now through that program I really want to get the sarcoidosis trial launched and then we'll come back to you around plans and.

Inevitably everyone will want to see the protocol design for 2008 and 10 in the future as well.

Great. Thank you Sanjay thanks for the update and looking forward to the update ATF into the rest of the year.

Thanks.

We have your next question from Zack de La.

Capital Partners. Your line is open.

Hi, Thanks for taking my questions and congrats on the progress.

Anthony Sanfilippo Ahmad Raleigh, Raleigh, Charlotte that you'll be starting the pivotal study a registrational study by the third quarter 2020, that's pretty fast and I was just wondering if you could just comment on some of the things that have the investigators are excited about this program.

And your plans around clinical application, how many vehicles.

Any overlap with what you just said, but just kind of comment a little bit more on that and how you expect the cadence of that to kind of pick up over time and then at what point.

Do you start with Albert in Europe .

And in Japan.

Yes.

Great. Thanks for the questions. So.

We have been fast and we've been fortunate.

Not only reading out the data.

But quickly having that sort of correspondence with the FDA and now we're in a position to start as you said very quickly here.

The timelines between our last data readout and what I expect to initiate this trial is a quick turnaround in.

In between there. We've obviously had to also discuss things with our partner in Japan. So I'm really proud of the way that we've executed in this.

Quote unquote downtime between these two trials.

Last trial reading out in this next trial starting.

We want to start fast with this trial, we have more demand worldwide with at least eight to 10 countries very very interested in participating I'm going to be having.

Many discussions next week in San Francisco with those investigators that are traveling etfs as the preeminent respiratory meeting.

And as I said, our event is going to be where we will be able to outline all of the details that everybody wants to see we think thats. The best moment for us to put everything out where we have the greatest number of eyes on our story.

Our clinical execution.

I think what people sometimes forget is we were able to execute enroll and readout our trial with minimal disruption during COVID-19 and this was a severe respiratory disease, we're talking about.

So I have.

No doubt that our clinical operations team is two standard deviations better than really anybody out there in industry because many companies had to abandon trials. During COVID-19. We were in respiratory we completed a trial, but I think that speaks to also have some <unk> that the patients.

We really continue to come into the clinic and did everything that they needed to do.

Because obviously they were feeling good and the drug was doing something.

For them, so I think that.

That's what I'm excited about I'm excited to get more patients in this next trial.

And.

I'm looking forward to next Monday, where we can go through all of the details that that I'm sure you want.

Thank you and then of course I will ask one just about 2018.

I know you noted.

No doubt that the study will be starting in the second half of 2022 again <unk> commented on working through some manufacturing issues. So I was just confirming.

Getting clinic.

Manufacturing is eliminated back to you regarding the timeline and then I know you guys know.

Thank you work on this closing.

The indication, but I was just wondering.

The clinicians you've spoken to you about the program.

And had they been actually talking about maybe even having you explore other combinations beyond chemo.

Yes.

Your first question, we invested rather early in sort of the manufacturing development plan and if you recall for 2018, we <unk>.

Qualified for a bit of a faster track program that <unk> had.

We are not in any way.

Rate limited by that.

It's fortunate that we actually planned ahead right now there are a lot of supply issues with a number of <unk> out there.

But our timelines are not going to be affected because we did invest quite early and making sure that this was organized well so.

We're looking forward to starting that.

While on time really your second question around indications, we have shown data consistently.

In a number of models here that.

Again as an anti metastatic is something that basically potentiate chemotherapy, we are seeing that rather consistently.

Last data that we presented at ACR I think got most of the notice from from most of the clinical oncologists that we have something really differentiated so right now it's really around honing in on which of those.

<unk> enriched tumors, we want to move into.

We've shown a lot of good data over the last couple of years. This program is built well has a cogent pre.

Preclinical program and now we're basically looking forward to starting the phase one trial as I mentioned.

There are some approaches here to look at basket versus not I think right now that's what the team is working through and we'll be coming back to.

The public with the plans there later this year.

Thanks, Brian John and then just follow up on the last one about.

Potential combination.

Beyond chemo I know I'm getting ahead of myself, but just kind of excited again.

There are there is some evidence that we're seeing with with different combinations I think youre sort of probably thinking.

Probably listening to whats occurring right and our research team meetings, because I think right now it is something where we are looking at different types of combo therapies. As you are aware combination therapy is something that a lot of companies are looking at how do they enhance and potentiate existing products.

We are continuing to produce more evidence there and it could very well be something that we incorporate in our next protocol looking at a combination from a unknown marketed therapies. So stay tuned I know you're excited to hear more about that program.

But.

There will be more and more data coming.

Thanks, and congrats again on the pipeline.

We have your next question from Yale Jen with Laidlaw and company. Your line is open.

Good afternoon, and congrats with all of the.

<unk> and anticipate more next week too.

Two quick questions here. The first one is for the scleroderma.

What's your current thought or maybe the gating factors before you.

Formally committed to a clinical study.

That's a great question, Neil I mean, I think right now we're really focused on the circuit OS trial and getting that on track and launched my point is we had data previously in our scleroderma model I think following our data.

Released for sarcoidosis, it really validated the.

Compound as potentially being a game changer in ILD, because we have this data in an animal model, we submitted for that ODT and quickly got.

A green light on that so scleroderma ILD is a is it.

Another very very serious debilitating condition.

High degree of mortality.

You'll see us kind of dig in a little bit more as we think about how do we want to position of softer demand and that program, but right now im really focused on getting sarcoidosis.

Launched.

We may continue to do more work in the background.

Two to potentially.

Validate a sofa to mod in scleroderma. There are some things that we can do from a research a mechanistic point of view I alluded to the fact that one of our posters were going to be.

Just holding back as we have more data to present now.

So I think this is this is another area for us.

For the public to start paying attention to because the market opportunity just grows tremendously as you start to move into other interstitial lung diseases of which as I pointed out there is really no therapy like ours that has shown a physiologic and quality of life benefit.

Okay, Great and maybe one more question here and slightly variable actually quite full or looking at this point, which is named accounts into cancer side.

Earlier, a few weeks ago.

Oh deck meeting talking about that the FDA seems to have greater preference for placebo control study versus single.

I know, it's still early for 2810 at this stage, but what does that has any impact.

Your thoughts going forward in terms of how to.

Think about the future study design there.

So the aspect and thanks.

So we are monitoring very closely.

Sure.

The comings and goings from the FDA, sometimes the consistency is something that may not always be there, but from the cancer Division. We are paying very close attention to how theyre thinking about oncology drug development, we want to be crisp with our execution on the oncology side as well.

Similar to what we've done on the respiratory side and I think youre right that we are looking very closely at the design whats. The next Gen type designs, they want to see as more and more therapies start too.

Fail as they get into second third line and more treatment resistance, we think 2008 tenants positioned really really well.

<unk> therapy that can aid existing therapies in addressing some of the resistance you start to see there and then as I said as an anti metastatic.

Well differentiated compared to as a potential anti metastatic, we're really well differentiated to some of the other things out there.

So again stay tuned on that.

That protocol that design as we get into the second half of the year I'll be able to give you more details as we get closer to the launch of 2008 <unk> phase one trial.

Okay, great. Thanks, and again congrats on the progress.

Thanks Neil.

Again, if you would like to ask the question Bryan just one on your telephone keypad again, but it is star one to ask a question.

Im showing no further questions at this time.

I would like to.

Turn the conference back to Mr. Sanjay Shukla, our president and CEO for any closing remarks.

Well thanks, everybody for listening. This is a quick update obviously, we're going to have.

Another meeting update in about a week at American Thoracic Society, I'm really looking forward to.

Seeing some of the analysts that are traveling out to that event.

I appreciate the questions here and we will certainly be talking to you in the near future. Thank you for your support.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

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