All right, good day, everyone. Welcome to day two of Cantor Global Healthcare Conference. My name is Prakhar Agrawal. I'm a biotech analyst here. For our next session, we are very excited to host aTyr Pharma, and from aTyr, we have Sanjay Shukla, CEO. Sanjay, thank you for joining us.
Thanks for inviting me.
Maybe to start off, just give us a quick overview of the company and the pipeline focus for those who are less familiar.
Sure, so aTyr is based in San Diego, and we are perhaps industry's only evolutionary intelligence biotech. Everyone in the room here knows what artificial intelligence is, right? You can explain it to me very quickly, but we're leverage evolution and some of the evolutionary signals that are in all of our genetic domains to develop new therapies. Specifically, we're focused on an area of biology called tRNA synthetases, which are ancient enzymes in all of our bodies, construction workers that normally help us make proteins. And our founder, Dr. Schimmel, discovered years ago that these proteins, these enzymes break into proteinaceous fragments, and those fragments play a hidden role in our immunology and help us potentially regulate local immune environment.
We're translating some of these protein fragments into therapies with a completely new modality, outside of small molecules or antibodies.
Okay. So if you can elaborate on tRNA synthetase, when did this evolution happen in terms of its applications in drug development?
In drug development? Yeah. So, Dr. Schimmel, who's been a RNA, tRNA pioneer, he founded Alnylam, for example, discovered about fifteen years ago that these synthetases, as I said, within the cell, allow us to basically conjugate a reaction with a specific amino acid and a tRNA. As it turns out, they have these appended domains that if you look at lower-level species, where we share a lot of homology around these synthetases, in our bodies, we have all these genetic domains that have been added, and it's those domains that, when liberated, for some reason, migrate out of the cell, and they travel to different organ systems.
There we have fundamentally seen and observed, and now validated, that they bind to local receptors with different immune cells, and they can play a role in some instances as a local anti-inflammatory or a local anti-fibrotic. Our lead program, in fact, was highly enriched in lung tissue. We can assay it in all of our bodies. It seems to have a protective mechanism in inflammatory diseases of the lung. This is how we got into the lung by following the signal of one of these synthetases, and we have a IP library. We own, you know, over 200 of these fragments. I'm not saying all of these will have ultimate efficacy, but at least the first one we picked has produced some really outstanding clinical findings.
Okay. And so your lead asset, efzofitimod, I'll call it Efzo in short, maybe just remind us of how the mechanism of action and what's the target?
Sure. So efzofitimod is a fragment of histidyl-tRNA synthetase, and it's a fragment that is in all of our bodies. This is a fragment that I mentioned is highly enriched in lung tissue.
Early on, what we saw is this fragment in the presence of activated myeloid cells seemed to do a really nice job of resetting them. And what I like about it as a therapeutic is it was not immunoablative; it restored the resting phenotype of a myeloid cell or a monocyte. From there, we learned that it binds a receptor called neuropilin-2. We ran a receptor screen of about 5,000 known receptors, very selective hit, and neuropilin-2, thankfully, the literature backed us up, is highly expressed on myeloid cells during a local inflammatory response. So it's a novel mechanism with a novel receptor. The last piece of the puzzle was, is neuropilin-2 important in a disease like sarcoidosis? We assayed granulomas of sarc patients. These are the giant cells within the actual granuloma.
Myeloid cells and CD4 cells create this Langhans giant cell. In IHC tissue, neuropilin lit up, and we were actually featured on the cover of Science Translational Medicine, maybe about last year, in the last year and a half, where an immune cell lit up with neuropilin. So exciting new receptor that, as I said, can be used in a local inflammatory response, very much a precision immunology type of approach we'd like to play.
Okay. And so you mentioned it's very selective to neuropilin-2. How about the potency for drug?
So this is. You know, these proteins are in many ways. I call them elegant. You know, a pharmacologist might say, you know, they're a little soft. So how do we make sure that we actually can have that potency? We have tested six to seven doses in early phase trials. We look at it from a PK/PD perspective. If you look at our phase II data, we did an exposure-response relationship there. Our best PD effects occurred in a dose-dependent manner. So now we actually have the machinery and the ways to basically purify these proteins, make sure they have a high degree of affinity and potency. But one of the ways we're doing that is this fragment is bound. We've engineered it to an Fc fragment. The fragment alone has a very short half-life, four to five minutes.
Can't really use that as a long-term therapy. Maybe in the ICU, it could be something that you could use. But by engineering it and fusing it to an Fc fragment, which is inert, does not have any immune properties, we now have something with a half-life of eight to nine days. So these are the sort of techniques we've learned. In San Diego, we have some early phase manufacturing in-house, and now we have a really good handle on really how to make potent and well manufacturable proteins.
Okay, got it. And so your lead indication is pulmonary sarcoidosis. Maybe talk about what's the current standard of care in this indication, and what's the unmet need?
Yeah, so pulmonary sarcoidosis is a disease that's characterized by clumps of immune cells that largely occur in the lungs, pulmonary, but sarcoidosis, you can have granulomas in your heart, liver, you know, other organs as well. While we don't know the etiology, it always presents with this hallmark of a non-caseating granuloma, so that's how you basically diagnose sarcoidosis. You'd want to rule out a TB granuloma. There are ideas that it could be environmental agents. If you, you know, hear the 9/11 workers who all developed, those folks that cleaned up the pile, a very aggressive form of pulmonary fibrosis. It was all sarcoidosis, so if you look at the incidence of sarc, you know, right in two thousand and two, two thousand and three, you see a big spike, and it's mostly here because of folks in Lower Manhattan.
So while we don't know the etiology, has this sort of hallmark appearance of a granuloma, and then that granuloma is typically treated, unfortunately, by steroids. Steroids help with day-to-day morbidity, cough, and shortness of breath, but unfortunately, like many interstitial lung diseases, you have this progression to fibrosis. So sarcoidosis progresses, it kills, you know, approximately five to 10% of the population out there, about 200,000 patients in the U.S. So it really is a disease that has a big unmet need. Steroids, unfortunately, are the mainstay, and unfortunately, steroids can't prevent the progression of fibrosis.
Is there anything that the doctors use off-label?
There are, as you progress, off-label approaches, primarily drugs like infliximab, azathioprine. But again, these are sort of borrowed from other indications. We would be the first, you know, the first ever approved drug for sarcoidosis if we're successful here. Many of those other off-label drugs also come with their own toxicity.
Okay.
Patients are in a really bad spot here, having to, you know, take toxic therapy to deal with their day-to-day morbidity, and they don't have a lot of hope to prevent that progression of fibrosis.
Okay. And you mentioned 200,000, that's the U.S., right?
Correct, in the U.S.
Okay.
About the same in Europe.
Good.
So, you know, I would say it's an orphan disease, peri-orphan, but it's right on the cusp there. Much larger than I think most folks, you know, understand, and the steroid-dependent population is also quite high. You see upwards of 75% of these patients on steroids for life. Think about it this way, there's our drug could potentially treat two diseases, sarcoidosis and also glucocorticoid toxicity, which in itself is another disease, that we've been able to cure for lupus or myasthenia patients. We're trying to do the same thing for sarc patients.
Right. Based on the population that you're enrolling in the trials, is that the eligible population as well, 200,000?
Yes, we're looking at steroid-dependent patients who are daily maintained on anywhere from 10 to 25 milligrams of prednisone. They obviously have to have a histopath proven biopsy of sarcoidosis, and these are patients that are not too far fibrotic because we wanna be able to move them with FVC and function. Patients who are very fibrotic, less inflammatory substrate, may be harder for our drug to actually show efficacy there. So that's an exclusion criteria that's important.
Okay and you're in phase III trial right now, but you had phase I and II readout a few years back, so maybe just walk us through the results that you saw in pulmonary sarcoidosis back then. What was the patient population, the dose that you tested, and the results on the efficacy?
So in that trial, it was a small trial, 37-patient trial. We tested three doses of efzofitimod in a six-month trial. One, three, and five milligrams per kilogram were tested against placebo. What we were hoping to see is some trends, maybe some trends of improvement with steroid reduction, maybe some forced vital capacity improvement, maybe PROs improved. As it turns out, it was better than probably any of us expected. We saw improvements in steroid reduction, FVC improvements that were clinically meaningful, and in all of the PROs we tested, the King's Sarcoidosis Questionnaire is cough and shortness of breath. We looked at Transitional Dyspnea Index, Fatigue Assessment Scale. All of them improved, and they improved in a dose-dependent manner. I think it's very important for all the investors to pay attention to.
Anybody shows you phase II data, make sure they show dose dependent. You see that dose response, and let's also see the dose response in subjective and objective endpoints, and that's what we saw. So even though it was a small trial, I think the signals were highly, highly positive. We even went further and did a PK/PD exposure response, looking at each individual patient, and that showed that as you administer more drug, you get better pharmacodynamic effects. And, I think this sort of created a lot of excitement in the field and got us into phase III. That was published in Chest, a few years ago as well.
Right. And the steroid reduction data that you had in phase I and II obviously is very important, given its implications in the phase III. But just walk us what you saw on a relative and an absolute basis there, and what's the clinically meaningful result on steroid reduction?
If you ask patients or you ask providers, any amount of steroid reduction is important to them because remember, it's cumulative. Even if you can peel off one to two milligrams of prednisone a day, over several years, that burden of steroid toxicity, you don't have to deal with. Nonetheless, we showed about a 20%-25% reduction compared to placebo in the last trial. Now, that may not seem much, but if you're taking 10 milligrams and we peel off two and a half milligrams of prednisone a day, that adds up. That benefit, that quality of life benefit really adds up.
In the current trial, we're looking to go a little bit further. It's a one-year trial. It's also a trial where we're pushing people to zero. The last trial, we tapered, we had a forced steroid taper down to five milligrams, and that's where we saw that benefit. We're now, in this trial, going for it and trying to show perhaps even the ability to steroid spare. By pushing folks to zero, we anticipate placebo will have greater rebound, and therefore, we may even see greater differences in our sort of ability to reduce steroids with efzofitimod. Okay.
Did you get anybody to zero in that first study, or you stopped at five?
I'm glad you asked. In the last cohort, the high-dose cohort, we had a protocol amendment written to allow patients, if they were tolerating zero of five well, the clinicians could go to zero. As it turns out, three out of nine patients were able to go to zero. So that was a very unexpected signal that we could actually maintain people at zero. That gave us the confidence to move into this trial and try zero.
All of those measures stayed, like when zero was taken away, you still had the good reductions in everything?
Absolutely. Absolutely. It's important to also highlight in our current trial, we have patients who are currently completing the trial, and in the spring, we announced many of the PIs in the current trial were blinded to the data, said patients have been performing well. They don't want. They're leaving the trial. They want to remain on drug. They don't know what they're getting, but we've been able to wean them off steroids, and they are refusing to go back on steroids. So we had to implement, even though we weren't required with an OLE, an individual expanded access program. I just came back from ERS in Vienna. We have more patients finishing the trial. It's a clear, nice, you know, signal, a biomarker.
Again, we're blinded to what therapy they're on, but clearly, we're trying to step up for the patients that have performed well in the trial, and we are now going to be giving open label drug to bridge them to when we eventually unblind, which would be Q3 next year.
Right. So that's a good segue to the phase III, since you mentioned the expanded access program. So the phase III trial design, just walk us through it, and what's the primary endpoint, and what was the FDA's feedback on the primary endpoint of steroid reduction? Do you have to see benefits on some of the secondaries on lung function, et c, to get approval?
As I said, in the phase II trial, we saw really positive trends in steroid reduction, forced vital capacity, and PROs. We went to the FDA and said, "How should we organize our endpoint?" Now, FVC was initially proposed as the primary, but the FDA pointed out that it's a very variable endpoint, especially in sarc patients, 'cause sarcoidosis patients can present not only with restrictive disease but also obstructive disease, so you might actually want to look at FEV1. It was viewed as an important endpoint, but we put it as a secondary. The discussion became around steroid reduction and the PRO, and ultimately, steroid reduction was viewed as a really nice composite type of endpoint that, you know, you're titrating based on clinical symptoms, but also looking at FVC.
So we prioritize steroid reduction as the primary endpoint, and the PRO, the King's Sarcoidosis Questionnaire lung subscore is the key, you know, other secondary endpoint. This is a one-year trial compared to a six-month trial. It's a trial that tapers everyone down to zero versus five in the last trial, so we're getting a little more aggressive. Our view is, with a more aggressive taper protocol and a longer trial, we'll see a greater rise in those placebo failures.
Yeah.
We'll see the steroids tick up, and then our drug, we think, can maintain a low or potentially no-dose steroid. There's your stat sig. Our trial is now powered 92%, overpowered, 88 per arm. You know, last trial was 37 patients, so we were aiming for 264 patients. We over-enrolled. We just finished enrollment. 268 patients were enrolled. So we've got a highly powered trial to show that either 3 and 5 or 5, our top two doses from the last trial, will show stat sig in steroid reduction. The secondaries you asked about, what I'd like to see is our ability to win on steroids. I think that's clear that the, you know, the experts in the field and the patients want a steroid-sparing drug first and foremost.
We've got to make sure we maintain quality of life and maintain forced vital capacity. Could we see improvements there? That's upside, but I think you have a winner if you have a drug that can peel off, you know, two, three, five milligrams of steroids and make sure you're doing that without any new safety effects, and you're making sure that their feel and function is also not worsening.
Okay, and so you mentioned the trial is 90%-plus powered. What's the minimum steroid reduction you can show?
It's powered to basically show, in that sense, about a 30% reduction, 30, 35%. That's on top of whatever reduction we see from the forced taper.
Okay.
So just understand, the placebo group is going to show that they can lower steroids. It's because we are forcing people down to sort of that basal dose. We want to go a little bit better than that, but I do think that that difference that we're trying to model for is about a 30%-35% reduction. In absolute terms, you're talking about, you know, somewhere in the neighborhood of, you know, three to three and a half milligrams if everyone comes in at, say, about 10.
Okay, and so the baseline steroid use, how would that compare to what you had in phase I, phase II, which was, I think, correct me if I'm wrong, but low teens?
Right. So we enrolled in the last trial anywhere between 10 to 25 was your stable dose.
Okay.
We went a little bit lower here, 7.5 to 25. Why 7.5? We went into Europe. We went into Japan. They tend to do a better job of not overdosing patients with prednisone. These are still similar, what I would call moderate to severe patients. The expectation here is take these folks down to zero by week 12, then look for sort of exacerbations. We have some recent data, it's gonna be published very soon. From a poster last year, we looked at a pooled analysis of our two therapeutic doses, three and five, versus the subtherapeutic one and placebo. The relapse rate was 7% in our therapeutic doses. It was 55% in those, in the placebo and subtherapeutic. In a longer trial, we think that 55% is gonna be higher.
Could be 70, could be 80. Can we then hold the line with our drug and prevent those relapses? That's another way that we can show that the drug is efficacious.
Okay. And the tapering protocol, you said it's more aggressive in phase III with more patients can get to zero, but maybe the speed of the tapering protocol, is it more similar to the phase I, phase II?
We're giving PIs a little bit more time.
Okay.
So, instead of eight weeks, which let's force everyone down to five by eight weeks, this trial, we're allowing them twelve weeks.
Okay.
That's okay because we have a longer maintenance period, if you will. It goes all the way to forty-eight weeks.
Okay.
Giving the PIs and the patients an extra month to try to get to zero, we thought that made sense.
Okay. And how do you ensure patients who have more fibrosis are not part of the trial? Because the drug has an immune modulatory effect, so how do you ensure that?
We instituted a new exclusion criteria in this trial, where now we're doing baseline HRCT. If you've got fibrosis more than 20%, you're not eligible. That was something we thought from the last trial. There were a couple fibrotic patients we didn't move as much, so we are de-enriching the population by excluding those more fibrotic patients.
Okay. And so you mentioned about the expanded access program. So just talk about why this decision was made.
I mean, a lot of it was an ethical issue. You know, these patients have put their time and effort to be in our trial. They're performing well. If they have to wait another year, they, they're gonna have to be put on steroids another year until we unblind. So the idea was, if we can do it, if we have drug supply, which we did, let's figure out a way to work individually with the sites. Investors have asked, "Why not just do a big open label extension trial?" Number one, we wanna preserve cash, so we... and we're not required to do that from a safety perspective. There's no long-term tox that's been observed.
Then our relative N here, if you take the last trial and this trial, it's gonna be about 200 people who've been exposed for more than nine months. The FDA typically likes to see that-ish number for a safety database, about N of 200 with at least nine months. So there was no need to also have long-term safety there. Nonetheless, we took the step because we started to get, you know, more than a dozen, twenty. You know, centers start to come to you, and they say, "We want, we wanna participate in this." So we had to step up.
How many trial sites are part of the expanded access program, and how many patients are on it?
Yeah, so that's the one part that I'm not gonna sort of get into that sort of scoreboard, because you have to understand, this is blind.
Okay.
They might not all be on drug. I don't know. There's something. You know, I've said something's happening with the infusion. It's a good sign. It's something that we are not going to really get into. You also have to remember, sometimes domiciles, certain countries, there can be operational challenges that even if a patient wants it. So we're working through some of those things. So I'm probably not gonna get into too much of that.
But could you consider disclosing the outcome of expanded access program patients at some point?
I think at some point, especially if we have enough of these patients, a cohort of patients, we can do some long-term data. I will support. I'm talking to some academics now about supporting an 18-month or a 24-month IIT. If they wanna do a small trial on their own, they can do that. They may wanna look at HRCT over the long term. There's some anecdotes that the drug can push people into remission. "Okay, you know, let's do some sort of study there, and let's see what happens.
Right. And so you also are testing efzo in another indication, systemic sclerosis ILD. Maybe just talk about the rationale for testing it in this indication.
We would have loved to have tried efzofitimod in five indications. Yeah, I've worked in large pharma where we could take a backbone therapy and apply it in other places. And in our translational state, we had really nice signals in a scleroderma mouse model. And that was, so the active competitor was nintedanib, which is approved. So there was a lot of interest by those pulmonologists who treat those ILD patients who have systemic sclerosis or RA, and we had already good animal data. The FDA, in fact, granted us a fast track, even without any clinical data. So they looked at the sarc data, and they looked at the animal data, and they said, "This could also be useful in that form of interstitial lung disease." A little more fibrotic, but still quite a bit of inflammation there for those patients.
So we thought, "Okay, let's take the next stepwise approach, and let's do an SSc proof of concept trial." I would love to do something in hypersensitivity pneumonitis and other ILDs, but this is a nice next step, and we did so only after, again, verifying that neuropilin is highly enriched on, in this case, scleroderma plaques, 'cause I could access the skin samples. Neuropilin lit up. A lot of those, you know, pulmonologists down the hall from their sarc colleagues at all these centers said, "Can we try the therapy in these patients?" 'Cause again, they're steroid dependent, they're highly inflamed, and they end up becoming progressively fibrotic. It could be a good therapy here. That's part of our core thesis, that this could really work on those sort of, you know, more inflammatory ILDs.
Right. Just remind us about the trial design and what you're testing in this indication.
So in this SSc trial, it's a six-month trial again. We are enrolling known systemic sclerosis patients who now are developing early forms of interstitial lung disease. You wanna capture these folks early. The scary thing about if you have SSc-ILD, ILD is the worst phenotype of scleroderma. It has the highest amounts of morbidity and mortality. It also has a quick decline, unlike, say, scleroderma or even IPF. In that first year or two, you can really actually drop off with your forced vital capacity. This is why FVC is a primary endpoint. We're enrolling newly incidental ILD patients who have a history of scleroderma. They're already on mycophenolate for their systemic disease, and we're gonna follow them over six months and look at their FVC. The addi...
The additional benefit here is let's see if we can actually see any immune system changes with the skin. So we're also gonna do punch biopsy at baseline and week 12 to see if we can actually move the skin. If we can actually improve some of the skin markers, no drug has actually improved anything in the quality of life for scleroderma patients with skin. So we're bullish, and we're excited about that. That presents a real upside for the therapy. We could then potentially look at it in systemic diseases.
Okay, and so remind us about the timeline of this readout.
We expect to have some interim readouts in Q2 next year, so it'd be ahead of sarcoidosis, and a lot of folks have asked: What does that readout look like? I'll probably have a better idea later this year, but I would say I'm gonna prioritize the skin endpoints first. Let's see how many patients we can also report out with regard to FVC.
Okay, so I guess, yeah, what's the read-through from SSc-ILD to the pulmonary sarcoidosis indication?
It's two different diseases. They're both interstitial lung disease, but SSc is a tougher, more fibrotic condition.
Okay.
I look at it this way, that I think we had some nice efficacy. Let's see how the drug performs with a more fibrotic phenotype? We'll learn something about that. I don't see it as necessarily guiding us one way or the other about the sarc readouts, and obviously, the skin is completely different.
Right.
So, I don't necessarily see it tied in, you know, whether the signal was positive or negative there. I see it as a different disease.
Right, and on skin endpoints, what do you hope to see on the efficacy?
Well, I'd like to see some immune biomarker changes. We're gonna be really looking at immune panel. I'd like to see some histopathological improvement of some sort, less layering of fibrosis. The upside there is there's a pinch test. If the pinch test, the clinician says, there is, you know, that's a modified, you know, Rodnan skin score. These are the sort of things we'd look at, but that's very difficult once you have a lot of fibrosis there. That's why I'm gonna be looking a little bit more at the biomarker work there.
Okay. And Efzo is an IV drug right now. Any plans to develop a subcutaneous formulation?
We do have some plans set aside. That would be after approval as our next life cycle change, we'd be looking to maybe go to a subcutaneous formulation, but that would be after we get the drug approved and initially launch with the IV formulation.
Okay, and remind us about the IP protection for Efzo.
We are protected well into the, you know, the mid-to-late 2030s, so we'd be looking at sort of that 2036 timeframe. We also have strategies to extend the patent life. We have orphan designation, so there's things that I think we're in good shape there to have a therapy with good coverage.
Got it, and you also have your Japanese partner, Kyorin, so just remind us about the milestones there and their involvement in the pulmonary sarcoidosis trial.
Kyorin has taken a license on our therapy for all interstitial lung diseases, just ILDs only in the Japanese market. That was a $175 million deal that we announced a few years ago. We have received $20 million in milestone payments. We are eligible for $150 million more. Many of them are tied to, obviously, the end, you know, the approval of Efzo in sarc in Japan, but then there's also royalties and, you know, sales revenue targets after that as well, but most of that is tied to, you know, approval of Efzo after this trial.
Got it. And so last question, in the interest of time: cash runway right now, and what does the guidance envision?
Feeling great about where we are, north of $80 million, clearly enough to get through these endpoints, and even have some cash to spare. We'll have a better idea later this year once we're in the budget process right now of finalizing guidance per se. I know everybody wants guidance the exact quarter. But if you kind of look at our burn, you know, plenty of cash to get through these endpoints even further. We'll guide to how many months further we have after that as well.
Okay. That's all the time we have, but thank you, Sanjay, for joining us today.
Thank you, Prakhar.