All right, we're going to go ahead and get started. I'm Stephen Willey, one of the senior biotech analysts here at Stifel, and glad to have with us for the next presentation, CEO of aTyr, Sanjay Shukla. He's going to be giving us a presentation. It should include an overview of the company. We'll probably have some time left for Q&A. If anyone has a question, feel free to raise your hand. We'll get you acknowledged. But Sanjay, thank you so much for coming. I'm going to hand it over to you.
Great. Thanks for the invite. So I'm Sanjay Shukla, CEO of aTyr. We're in San Diego here to talk today about a new approach to treating interstitial lung disease. Here are some of our forward-looking statements. So interstitial lung disease, these are diseases you may have heard of. IPF is actually the most famous form of ILD, but it's a group of severe inflammatory lung diseases that is characterized by a progressive fibrosing type of phenotype. So these are diseases that are chronic, inflammatory, cause quite a bit of morbidity in patients, worsening lung function, a significant amount of cough, shortness of breath, fatigue, and extremely poor quality of life. Unfortunately, we do not have good therapies in ILDs. We have two therapies for IPF that blunt some of the progression, but really, it's really more about extending mortality, unfortunately, for those IPF patients.
Survival rate is largely known to be much, much worse than many common cancers out there right now. Standard of care, quite toxic, mostly relying on steroids and other heavy-handed immunosuppressants. And unfortunately, none of these therapies are disease-modifying. We at aTyr have created an asset here that's over the last six or seven years has now made it into phase III, efzofitimod. It's a first-in-class biologic immunomodulator, largely around myeloid cells. Novel mechanisms of action, phase III readouts are expected in Q3 of next year. It could be a very transformative therapy for a group of diseases where we need to do better. Here's a little bit of the landscape. There on the bottom, you see a sliding scale of inflammation and fibrosis.
And on the left, you see some of the more inflammatory forms of ILD, sarcoidosis being the most inflammatory form, IPF all the way on the right, much more fibrotic. But all of these conditions, of which there are about 200 interstitial lung diseases, you're talking about a spectrum of diseases where there's different etiologies, different presentation, but they're all characterized by this hallmark of inflammatory and fibrotic damage. As I mentioned, poor quality of life, high degree of morbidity and mortality, nothing really actually changing things for patients over the last 60, 70 years, no approved therapies for sarcoidosis, and only a few limited options for scleroderma-related ILD, SSc ILD. These are the two areas that efzofitimod is focused on, we're focused on. But we have some real upside here in other forms of connective tissue disease ILD, CHP, which is hypersensitivity pneumonitis.
You've probably heard of vaping-induced lung disease or burn pit disease. These are forms of hypersensitivity pneumonitis. You even start to see more hypersensitivity pneumonitis now emerge from the PD-1s that are actually activating more of the immune system in cancer, causing PD-1 pneumonitis. Our focus, we estimate, is a very large $2-$5 billion market opportunity. A lot of upside here to move into some of these other ILDs, but right now, we're really focused on getting approval for sarcoidosis and then SSc ILD. So efzofitimod, this is a drug that targets the innate immunity right at the site of inflammation. So it's a very precise precision immunology approach that we're taking here. It's downregulating both inflammatory and fibrotic cells, largely seen in the lungs, mostly macrophages here. Macrophages are very much the quarterback of inflammation, first in, last out. efzofitimod is directly functionally changing these macrophages.
It's addressing a complex immune cascade. What I like about efzofitimod is it works quite upstream of some of the known, say, monoclonal targets, and it's restoring the immune balance, so it's not immunoablative or suppressive. We're not seeing those signs of immunosuppression. That's what I want to see here is restoring the natural phenotype, get the immune system back to where it should be, and not overactive like it is in many of these ILDs. Our proof of concept really was extremely promising, just highlighted again at the CHEST conference in Boston as best of CHEST. We saw, frankly, data that was much better than any of us or the experts expected. We wanted to see potentially the ability to reduce steroids, maybe improve lung function, maybe even improve some symptoms.
As it turns out, we saw in that phase II data, which was published in the journal CHEST, all three, steroid reduction, improved lung function, and improvement of symptoms, quite remarkable in a small trial. And thus far, no significant safety issues have emerged. And that's really important because we are trying to replace rather toxic steroid therapy, or at least work our way on the journey to replace steroids in ILDs. Let's talk a little bit now about specifically pulmonary sarcoidosis. So as I mentioned, it's the major form of ILD, high degree of unmet need. Sarcoidosis presents with clumps of immune cells, largely macrophages, that are mostly seen in the lungs. Just here in lower Manhattan, most of the 9/11 workers who cleaned up the debris developed a very aggressive form of sarcoidosis.
These granulomas then present an immune target in our lungs where unremitting inflammation starts to take over, and this can last a lifetime for many of these patients. Unfortunately, a third of these patients, or upwards of a third of these patients, start to develop fibrosis. Those that have this inflammation need some sort of daily immunosuppressant therapy. It can affect almost any organ, but you do see most of it in the lungs. There you see some of the Epi data, about 200,000 patients in the U.S., about similar amounts, a little bit less in Europe. Japan, quite a bit of sarcoidosis also observed there. There, they see a lot of cardiac sarcoidosis on top of pulmonary, where granulomas also observed in lung and heart. You have a sarcoidosis granuloma in the heart. You're really at risk of sudden death, of throwing an arrhythmia there.
Acute age of onset between 30-50, seen a bit more in women, and in particular, Black women, a higher degree of morbidity and mortality in the African American population. We're learning a little bit more about this, not necessarily a genetic factor, more evidence that health access could be a problem here, but this is some of the classic data from an Epi point of view. Diagnosed by doing a bronchoscopy where you'd run a biopsy, make sure this isn't a TB granuloma, very easy to then diagnose as a non-necrotizing granuloma. Exclusion is primarily TB. Prognosis, most of these patients need some form of therapy, mostly steroids that's administered in the first three years, and as I mentioned, a large proportion of these patients are developing lung fibrosis, and that's really when mortality starts to fall off the cliff here once you start to develop lung fibrosis.
These are all big, big drivers of mortality. Sarcoidosis patients, two things here in this slide, high disease burden, high treatment burden. Important to keep those two concepts in your mind. Sarcoidosis robbing the patients of their quality of life. Cough, shortness of breath, fatigue starts to basically trundle downwards where you have major socioeconomic impact. And as I mentioned, 20% of these patients develop the worst form of sarcoidosis, a fibrotic phenotype where you're at risk of organ failure or death. To blunt some of this, patients receive corticosteroids. Corticosteroids are, in the experts' opinion, kind of the devil's bargain here. You got to take steroids to live your life, but they come with another whole host of problems, diabetes, hypertension, sleep apnea, other metabolic effects, weight gain, you're gaining 50-60 pounds in the first year of taking steroids.
The alternatives are off-label, and those alternatives also produce other forms of chronic toxicity. So one of the experts said, "I really like efzofitimod because it's treating two diseases. It's treating sarcoidosis, and it's treating steroid toxicity." And you've seen drugs like Nucala and Tabneos recently getting approved for eosinophilic asthma and vasculitis, also address both the disease burden, but also the treatment burden. Here's some of the target population around Efzo. You start to see about maybe a third of these patients that can be asymptomatic or mild. Many of these patients are watched, and you may not administer steroids for their sarcoidosis. But you start to see then a greater proportion of the patients requiring steroids, moderately to moderately progressive patients. Once you become fibrotic, you have to go on the IPF drugs. We think there's a real addressable population.
That's about three-fourths of the patients here that could be sensitive to efzofitimod. We think it's a frontline therapy. The experts agree with us. It could be a steroid-sparing/reducing agent. Eliminating steroids here is a big part of the value proposition, large addressable market here in the U.S., and a large market that is, frankly, really, really looking forward to getting off steroids. Here's some of the benchmarks. I've mentioned a few of these drugs already. These are drugs that have, in some way, a combination of the three things we're looking at. They have some steroid-sparing ability. They are for rare diseases, and they also are treating ILD. Granted, here it's IPF. efzofitimod positions well when you think about some of these drugs that are priced upwards to almost $200,000 a year. No therapy for the last 50 or 60 years. So I'm not a pulmonologist.
I'm not trained in pulmonary medicine, but I can remember in medical school having to put patients on steroids 30 years ago. We haven't really moved the needle since then. efzofitimod, I think, is the first and only therapy that's even made it this far into phase III, and as a company, we're ahead of even some of the big pharmas here when we think about developing therapy. Let's now talk specifically about efzofitimod. This is a summary of a lot of the preclinical and early clinical data that we've published thus far. It comes from our IP library. aTyr is really interested in this fascinating area of biology built around tRNA synthetases. These are enzymes that are in all of our bodies. They basically help us make proteins.
But our founder, Paul Schimmel, discovered out of the tRNAs that these enzymes break apart into fragments, and some of these fragments have immunomodulatory properties. So the fragment that is, I would say, the main part of the therapy here is this yellow helix-turn-helix domain. That's called a novel HARS domain. HARS stands for histidyl-tRNA synthetase. That little guy, that little 59 amino acid fragment is in all of our bodies. I can assay the blood of everyone in here, and we can see this fragment in our bodies. And for us, for many of us, hopefully none of us have interstitial lung disease, it's there as probably a background immune policeman in the lungs. The idea here is we are giving back this protein, resupplementing to establish homeostasis in patients who have interstitial lung disease.
In those patients that don't tolerate whatever dysfunction they have, whatever aberrant immune response, this is an opportunity to reset the immune system. So that right there is actually the structure of efzofitimod. We fused it to human IgG to enhance the PK. This is a therapy that now has a nine and a half day half-life. This can be administered now once a month through a one-hour IV infusion. It binds selectively to this receptor called neuropilin-2. So we work it with a very novel biology, and we have a really novel receptor. neuropilin-2 is a receptor expressed on macrophages during a local immune response. So now it starts to make sense. We see macrophages upregulated in the lungs. They're expressing neuropilin-2. Our drug binds neuropilin-2, retunes that macrophage back to a resting state. This could be really helpful in interstitial lung disease.
We tested this in about half a dozen animal models. As a biotech company, when I took over as CEO, it's very important when we think about this biology, let's really make sure we're careful before we move into the clinic. A lot of companies sometimes run one or two animal models. We ran a large array of animal data, direct lung injury, indirect lung injury, experimental models. In all of them, what really impressed me was the consistent anti-inflammatory and anti-fibrotic effects, regardless of what kind of model we ran. We published this. We had a poster here at American Thoracic Society in 2018. This actually compelled a partner in Japan, Kyorin, to do a deal with us where we licensed the therapy out for $175 million in milestone payments. We've received already $20 million from that partnership, but really built on solid translational data. I talked about neuropilin.
Neuropilin-2 itself is highly upregulated in sarcoid granulomas. We proved this by looking at in situ hybridization, IHC approaches. We made the cover of Science Translational Medicine last year where one of our immune cells was lit up with neuropilin-2. So it's an exciting new receptor that we've actually discovered as part of our biology here. In an era where everybody is looking for new biology and new receptors, we have that. I would say that we're one of the only companies that probably has something like that that's presenting here today. Great safety profile thus far. Animals, non-human primates, healthy volunteers are phase II data. The things you might worry about with a new kind of immunomodulator is, hey, does it create any other kind of immunosuppression? Does it increase infections? It's an infusion. So sometimes you can get infusion-related reactions. It's chronically administered.
Do you develop antibodies over time? These are all the things I might worry about as a safety physician. We have thus far not seen any of that, and in our phase III data, we have had two successful DSMBs. These are External Drug Safety Monitoring Boards, thus far checking that box, and we continue to check that, and I mentioned the clinical proof of concept. We've got compositional matter all the way to 2039, so this is well positioned here to be an exciting therapy for many years here, so here's the therapeutic hypothesis. We are restoring immune balance, so there are a number of diverse immune triggers. In sarcoidosis, we don't know the etiology. It presents with this clump of immune cells, but they still haven't figured out what's the cause of sarcoidosis.
But you could have an autoimmune disease like scleroderma or RA, and now it attacks your lungs. You can have exposure to dust or allergens, or there's something called pigeon breeders' lung. This is a form of hypersensitivity pneumonitis. People that breed pigeons or are around pigeons a lot, they develop this really bad inflammatory disease of their lungs. So not looking good for Mike Tyson because I know he likes pigeons. In all of these diseases, you see a lot of activated immune response in the lungs. And the hypothesis here is, can you calm down some of these activated macrophages before they progress to a more fibrotic state? efzofitimod binds neuropilin-2, which we have observed and we have validated is expressed on these macrophages.
And by doing so, we think acutely we can improve lung function, improve the symptoms, and over the long term, really prevent that progression of fibrosis, which is what I said really causes quite a bit of mortality here. Here's a snapshot of our proof of concept data. So remember I told you we were looking to see if we saw any trends in steroid reduction or lung function or even symptom improvement. And as it turned out in this small trial, in all of these measures, subjective and objective endpoints, we saw dose response. I want to keep that in mind. Dose response is really important here for any biotech company when you're moving from phase II to phase III. You better see dose response.
At least the way I was trained at Roche and Nutley a couple of decades ago, we only move programs forward into phase III if you see dose response, and you better see dose response with multiple endpoints, and we did that. As you give more drug, one, three, then five milligrams per kilogram, we saw better response in ability to reduce steroids. When you look at our top two doses, those two curves in the middle, the two that trend upwards, those are our top two doses. We saw lung function improvement over six months, and then when you look at fatigue, dyspnea, which is shortness of breath, and KSQ Lung, which is the King's Sarcoidosis Score from King's College in the U.K., as you give more drug, you see the darker green dose response over and over again. This was published in the CHEST journal.
Dan Culver is our lead PI. He's the chair of pulmonary and critical care medicine at Cleveland Clinic. This was really, I think, a big deal. The field really got excited about our therapy. For those of you that like inflammatory biomarkers, an investor earlier today quizzed me on those. We also see dose-dependent improvement there too. So whatever endpoint you like, we're seeing dose response. That's really important, and I would actually say it's harder to demonstrate that in a small trial than a bigger trial. Makes sense, right? If you have 370 patients, I can get trends. I can figure out trends in all kinds of things. 37 patients, much harder to show trends. We saw positive trends here in every single endpoint. This allowed us to move into phase III.
I'll add here, this is a recent publication of a post hoc pooled analysis where we looked at time to relapse. This came out in October. This has generated some nice activity with us recently where folks have really gotten interested. It showed that we significantly prevent Kaplan-Meier, as you can see there, the p-value. Our top two doses, 7% relapse, whereas the subtherapeutic or the placebo population is 55%. So I'm looking to replicate that in phase III. This is an additional publication. And that's another thing I want to point out here. I like to publish everything out there. So it's just going to be a bunch of PowerPoint slides where I'm convincing you. This is an important tenet I have that we want to publish so the experts really understand the value. This helps us enroll. So this is our phase III design.
Primary endpoint after the end of phase II, we had an end of phase II meeting with the FDA looking to align. They guided us to steroid reduction as a primary. They said we should still look at forced vital capacity, and we can look at KSQ Lung because I had all three move in the right direction. So this was important to get alignment there. I then went to European regulators, Japanese regulators, even regulators in Brazil to make sure that this approach made sense. And I'll tell you that all of them lined up very quickly around this endpoint strategy. So it's the first phase III, the only, the biggest phase III. And it's good timing for all of you because we finished enrollment. So don't have to wait on that. Here's the design. Now it's a well-powered trial. 37 patients is obviously underpowered.
268 patients out of our target of 264 enrolled. The last patient enrolled in July. We took forward our top two doses. Important to notice here that this is a longer trial. It's a one-year trial. It's also a trial that we're trying to taper patients. In the last trial, we took them down from a starting dose of 10-25 milligrams down to five. This trial, because of some of the effects we saw in the last trial, we're going to try to actually go to zero. So you'll see over the first 12 weeks here, we're trying to taper folks to zero, and then I'm observing. I expect the placebo population will fail. You'll start to see more disease, and they'll need to be rescued with steroids. Those on our drug, I'll be able to keep at a low to no dose.
That's the basic concept here. It's a very real-world type of trial. We've enrolled in over 90 centers, nine countries around the world. I'm trying to exclude some of the more fibrotic patients because the drug seems to actually work better when there's a little bit less fibrosis. We're being very careful around how we taper steroids because the FDA has learned some things from the ChemoCentryx approval. They want us to have a really tight control here. One thing that's really interesting, patients who have already finished their trial, about six months ago, I started to get a lot of questions from PIs. Patients are doing well. They've been steroid-free. Now they're leaving the trial. I don't know what they're on, but they're refusing to go back on steroids. We had to do something rather atypical, a compassionate use program that was ahead of even unblinding.
This individual patient expanded access program is something that I've had to implement. It's on a case-by-case basis for patients that still want our drug. This is something that I think is very atypical, but also a good sign. People have performed well. I don't know what they're on, but they've been steroid-free for six, seven, eight, nine months. So we have had to step up here and give efzofitimod five milligrams. I'll end here with just our SSc program. This is an indication expansion trial, a small proof of concept that we're running right now. SSc is another one of these conditions in ILD where here the etiology is known. It's an autoimmune disease. efzofitimod is slightly smaller than what you would see, but you're still talking about over a million patients worldwide. Scleroderma, a systemic disease, highly fibrotic, mostly of the skin.
But then when it impacts your lungs, this is probably the worst type of diagnosis for a scleroderma patient. High degree of mortality, three times more likely than just general scleroderma. You start to see a rapid onset of fibrosis in these patients. Very scary. A higher proportion of these patients are also developing lung fibrosis. There are a few approved therapies that slow some of the decline, tocilizumab and nintedanib. They slow the decline of forced vital capacity. But I think we can do better. I think in our trial, not only might we see FVC improvement, but I'm hoping to perhaps see skin improvement. No drug has improved skin ever. Why am I bullish on that? Quite a bit of neuropilin expression in the skin. We validated that with some of the experts. So this is a small trial, 10, 10, 5. Interim data is expected in Q2.
It allows us to test efzofitimod in a slightly more fibrotic population. We already had really good animal data in a scleroderma mouse model. So working with some of the rheumatologists who saw the SARC data and said, "Hey, can we now try this in our patients down the hall in the pulmonary and rheumatology divisions?" So I'll wrap up here. Here's our pipeline. We are really focused today. I talked a lot about efzofitimod. We have other programs, preclinical programs that I'm not going to talk about today, but this is based on our IP. Other fragments as part of our protein fragment library. We are seeing modulate fibroblasts and also modulate myofibroblasts. So we're testing in other forms of kidney fibrosis, lung fibrosis, aTyr0101. This is going to be highlighted at the Keystone Fibrosis Conference next month in Whistler.
aTyr0750 is a really nice fibroblast modulator that we're testing in liver disorders. Our corporate summary, I'll point you to the bottom. Everyone wants to see that. We're in a good cash position here, certainly to get not only through the readouts, but really to get to BLA as well. We're fortunate to have some really strong shareholders at the top of the table that have been really consistent and helped us along. Fidelity and Federated own a large portion of the company. Our lead candidate, I think, really represents a very large opportunity. We have a nice pipeline that we'd like to turn on after efzofitimod reads out. And then the biology, for those that are interested in the science. We've been published in Science and Nature. Dr. Schimmel has a track record of founding some interesting companies: Alnylam, Alkermes, Repligen, Cubist.
So he has an expectation with aTyr that he wants us to at least get to that level and do so as quickly as possible. So with that, I'll take a few questions in the remaining time we have.
Very good. Sanjay, can you talk about just the powering assumptions that you've built into the phase III EFZO-FIT study? And again, I think this is the first phase III in this indication. It's the first to look at this steroid taper. And so what's your level of confidence around that assumption that you've built into the control arm specifically? What are the confidence intervals that you think are around that endpoint?
Yeah, so I'm glad you asked me the stats question as a biostatistician. I love that you went there first. We wanted to make sure this was an overpowered trial. Typically, run about an 80% power. This is 92% power that either three or five milligrams per kilogram show a stat sig compared to placebo. So we've overpowered here with a backup dose to first try to basically make sure that, hey, this is a single pivotal we're going in with. We want a definitive answer. When you talk about some of those confidence intervals, they're based on assumptions that you alluded to in the placebo population of what sort of placebo response might you expect.
Now, what the experts have told me is if you take a stably managed SARC patient who's been on steroids for five, 10, or 15 years, and now you take them to zero, 90% of these patients, some have said 100%, but most have said 90% of these patients, there's no way they're going to be able to tolerate zero. They're going to flare within that timeframe. With that being said, I'm trying to be conservative. I'm assuming 70% in our trial. So if we magically show that three out of 10 can get to zero, I'm still powered to show a stat sig from the steroid dose. Now, in terms of hard numbers, I expect the placebo population to, let's say everybody comes in at 10, I could probably get them down to zero for a period of time, but then they'll trend back up.
Probably the average dose is going to be in the 7.5 , maybe eight milligram range because you'll start to basically need to rescue these folks. I think efzofitimod, if it matches what it did in the last trial, will be around five milligrams, maybe four and a half. So I'm looking for about a three milligram absolute difference between placebo. That will also represent more than a 50% reduction overall. And these are nice round numbers that pulmonologists like to see. It's, hey, you've reduced steroids 50% or by five milligrams. But I'm powering for about three milligram change or about 30-35% percentage change. That some of that is based on our last data and some of it is also based on some of these assumptions that I've outlined.
To what extent are those assumptions informed by what the treating community perceives to be clinically meaningful?
They actually think any amount of steroid reduction, if I peel away one milligram a day over several years, that reduction of that burden is tremendous. It impacts all those other comorbidities I talked about. I'd like to do better than one milligram. In my view, peeling off five milligrams overall is going to be. There's probably some Delphi consensus around that that's generating that that would be a really, really big, a large treatment effect. I feel confident that if we hit that, we'll be in good shape.
I think the trial you showed the eligibility allows patients who are on a background dose of anywhere between 7.5-25.
Yes.
Is there any data to suggest that your ability to taper a patient and then the consequence of that tapering is different as a function of what that baseline OCS dose is?
Yeah, I think the reality is you're going to see most patients kind of in that 10-15 range. The treatment guidelines say that's where you should kind of get people to their resting state. I don't think we'll get too many patients 20-25. Now, if you're tapered down to say 10 milligrams, what I've learned is the experts have said even small incremental differences can start to exacerbate these patients. So if anything, I think we'll have a very tight population that's going to be very sensitive to even one to two milligram differences. But you're probably right that if you had more 20-25s, you'd have more room to actually decline these patients. But I would posit that these patients still can be evaluated as part of our titration protocol.
Maybe they end up resting back up to 15, which is probably where they should have been anyway coming into the trial.
Okay. And then we get data from the ILD trial in the second quarter. So that'll be kind of interesting to read.
We'll have a small interim look in SSc. It's a more fibrotic condition. I don't think there's an absolute read-through, but it allows us potential upside here because if we see some signals there, well, I think efzofitimod then, frankly, might be even tried in a systemic population.
Yeah, so is the urgency with which you pursue that ILD opportunity driven by the data that you get in the sarcoidosis?
Yeah, I kind of want to really see where that shakes out because that also can imply if sarcoidosis reads out well, I would just need to do more of a supplemental type of trial for SSc. Maybe I don't have to blow it out to do a 300-patient trial.
Okay. There are no other questions. Sanjay, really appreciate the time. Thank you very much.
Thank you.