Good afternoon, everyone. Welcome to Piper Sandler Healthcare Conference. It's day three of our conference. My name is Yas Rahimi. I'm a senior biotech analyst here at Piper Sandler. Really thrilled to have the team from aTyr here. Thank you for being here. Sanjay, lots to cover over the next 25 minutes. 2025 is going to be a very big year for the company across bringing your pulmonary sarcoidosis phase II to the finish line and reporting data in the third quarter. You have announced enrollment completion on July 2022, exactly as you projected on time. And I think if we do our fun math of 52-week treatment duration, four to six weeks data analysis, it puts the data at end of August, early September. So is that a correct math?
Do you hope to present it at a scientific conference or just top line it and save the rest at a conference? We'd love to see your color on that.
Yeah, roughly speaking, that's the timeline. We've guided to Q3 2025 for data, so that's squarely in that time frame. As some of you may know, there's a pretty major respiratory conference around that time. European Respiratory Society is typically every September. I can't promise a slot there. I'm not going to be promised one, but I'm working to see how maybe we can get data in there. That doesn't mean I would wait for the conference necessarily, but I think you're looking at that late August, early September time frame for data of some form. And whether or not how much of that gets I'm allowed to embargo and talk about or wait for the conference, that would be a spot landing if we could do those two things that way. Maybe put something out, but then the full presentation at the conference.
I would love to, before we continue speaking about, is if it's an expectation, we do need to maybe address this week's news that came out of a competitor program in pulmonary sarcoidosis that failed. So I just would love to hear sort of your thoughts there? Of course, it's not your program. It's a different mechanism. But if you could share what your impressions are and why that should have not a read-through?
Yeah, I mean, I think it was. I always applaud an effort by any company to try to join the fight for a rare disease like sarcoidosis. I mean, I'm proud that we kicked it off. Nobody was really in the space seven years ago. My thoughts about that readout, first of all, I think it was from a mechanistic standpoint, you brought it up. It's a target. It's a single target. And I think recent history in sarcoidosis, single targets, IL-1, GM-CSF now, IL-18 have not been successful. It's a multinodal, multifactorial disease. I think single targets can be difficult. Pre-clinically, I just don't think they had necessarily the rationale or data. This is what I heard from investigators. We, of course, ran a lot of translational work. We had a granuloma model, a granuloma assay Ohio State developed. I don't believe that asset had that.
And then when you talk about the data itself, the endpoint changed. We had steroid reduction. We've seen other companies that have to change their endpoints. I think they were one of them. And then they also enrolled a large steroid naive population. So really, I would say it would have been a difficult trial to analyze. But I think we now are in the clear, if you will. That was the closest and nearest potential competitor.
Perfect. I think for investors that are new to aTyr in pulmonary sarcoidosis, and given that your primary endpoint is steroid tapering, could you maybe educate us first what the typical journey is for a patient when it comes to steroid tapering, where they end up, and what the consequences of those are? And then we'll talk about.
Yeah, that's a great question about the journey here because patients with sarcoidosis typically can present with a granuloma, largely most of the time seen in the lungs, and these patients then, if they have some morbidity, need to be put on steroids. Now, there are some patients where you'll watch and wait. Maybe they don't have a lot of cough and fatigue and shortness of breath, and it's known that a small proportion of patients, maybe a third, looks like maybe 25%, might self-resolve, but once you get on day-to-day steroids because your cough and shortness of breath are bad enough that it affects your quality of life, now you're on a different trajectory, and that could be over the course of five years or even 15 years of being on steroids. All of those patients are progressing to become fibrotic.
And then what you're doing is you're just trying to address their day-to-day morbidity while balancing their quality of life on steroids. So that's the largest swath of sarc patients. And we're learning there's quite a larger number of steroid-dependent patients, especially here in the U.S. We've done some recent epi and claims work. The disease looks like it's bigger than previously projected, more steroid-dependent population. So the unmet need is for a better and safer therapy, but also one where we don't have this toxic steroid burden. And I think what some experts recently told me, he said, "I like efzofitimod because it's treating two diseases. It's treating sarcoidosis and it's treating steroid toxicity." So I think the journey for these patients, unfortunately, is debilitating effects of not only the disease, but then the medicine for that. Dr. Culver, our lead PI, calls it a devil's bargain.
Like, "Oh, we'll make you better in short term, but you have to take this therapy, which is going to ruin your life and create diabetes and metabolic effects and hypertension." I've talked to patients who have gained 60, 80 pounds within just six months of being put on prednisone. They can't lose that then. And that burden just stays with them with all of the other negative consequences. So it's a slow kind of downward trajectory for these patients. And then what's waiting for them is you see 5% and maybe even 10% of these patients, it's their mortality from progression of fibrosis. So once you progress and become fibrotic, you have to go on nintedanib, pirfenidone, and those aren't great drugs either.
So that, in totality, I think that speaks to the unmet need and the fact that we just need better therapies than what's currently available, change the trajectory for these patients day to day, but also hopefully help them long term.
And what is your expectation around what do you need to show for efzofitimod? We understand it's a big, high unmet need. You've spoken publicly about the powering assumption of the study, but what's the bar for success in your view for a very commercially successful drug?
I mean, this was based on our phase II data. Our phase II data was frankly better than we expected. It was a small trial, but we were hoping to see signals of efficacy, perhaps in steroid reduction or FVC improvement or PRO, cough, fatigue. Could we see some signals? As it turns out, we showed improvement in all of those endpoints, subjective and objective endpoints. We showed a dose response in all of those variables I talked about. So when we went to the FDA, we said, "How should we prioritize?" We've got three families of endpoints here, and they helped us organize the trial with steroid reduction at the top. That's our primary. My expectation in this well-powered trial, this is a trial that's powered over 90%. We've got 268 patients enrolled.
This is going to allow us to hopefully see a delta of steroid reduction. Now, what does that look like? In phase II, we showed about a 20%-25% reduction in a six-month trial. I think we can do a little bit better in this trial. So the trial is powered for about a 30%-35% placebo-adjusted difference. In a longer trial that also we force people to zero, we are going to see more exacerbations or failure in the placebo population because I'm making it harder for these patients to not unmask their morbidity. So I know the placebo failure rate is going to be higher, and I think our drug can do a little bit better. And then over time, in a longer trial, I think that's where you can start to elucidate a delta that's significant.
The question becomes, is three, you might ask me, is three or three and a half? How do the experts view it? Or how does the FDA view it? They view this as a disease that if you can peel off one milligram of prednisone every day, the cumulative benefit of that is tremendous. I think we can do better. But at the same time, we went to the FDA and said, "What's the threshold? Is it five milligrams, 50% reduction?" And they said, "There's no validated clinical threshold." They also agreed any amount of steroid reduction is good for patients. So we sort of went in between there.
We went with looking at our data, and I think a drug label that shows we have that kind of a delta. Look, at the end of the day, that would mean that our drug reduces more than 50% of the original entry dose. And that's, I think, a big number for the community pulmonologist.
What should we expect in steroid-sparing arm for placebo to be?
So in the last, I'm going to first talk. I'd like to be really data-dependent and anchored to that. What did we see in the previous trial? We saw almost 55% of the patients fail the ability to maintain five milligrams in the subtherapeutic and placebo arm. We published this in ERJ in September. The experts said, "You're going to see about 50% not be able to maintain at five." And if you take it out a year, they said, "That's going to be 80%-90%." Add on to the fact that now I'm pushing folks to zero in this trial, the experts view it as it's going to be one in 10 maybe are lucky enough to be able to get to zero and stay at zero for that period of time. Just to be conservative in our stats modeling, I'm saying it's 70% failure.
So maybe magically, three out of 10 of these patients are somehow we induce some sort of short-term remission. So that's kind of what we've anchored for. And we had over 50% in that Kaplan-Meier highly significant difference. So the drug arms only had less than 7% failure rate. So even if you double or triple that, we got a lot of delta there to show benefit.
Is there a scenario by which on the primary endpoint, let's say you don't see a difference between the dose sparing between the treatment arms, but then you see a difference in actually the number of patients on drug that are steroid-free versus, let's say, zero on placebo? Is that a path forward from a regulatory agency? So, is that a scenario that could happen, or is that just impossible without you cannot?
You're talking about a proportion of patients that can get to zero. That's also really important. While it's not a, I would say, named primary or secondary that you'll see on ClinicalTrials.gov, it's really high up there as exploratory. I can tell you the Japanese regulators really are interested in that. The proportion of patients that can get to zero and maintain zero is huge. But not to get too statistically wonky here, a proportional analysis is typically less robust than looking at a continuous variable. These are things that are going to be in our analysis. You're absolutely right. If you start to see a 1.5, two, or three times greater odds ratio of being able to get to zero and stay at zero on our drug, yeah, I mean, that's something like a commercial team would love to highlight.
Okay. And I think most investors understand that there's heterogeneity in patients with pulmonary sarcoidosis. Steroid tapering is a little more complex than just FVC, right, where it's one measure. How much fluctuation is among a patient, and what measures were in place in the study design to ensure that you don't get this somebody does downtitrate and then you realize they need to go back up?
So a couple of things here. In our current trial, we are using a validated tool, not really tied to PFTs, and I'll explain why. We're using something called the PGA, Patient Global Assessment. This was something the FDA also advised us to say, "Take it a little bit out of the hands of just clinician judgment. Let's use something that we can assay often to guide titration decisions." So the PGA is a validated tool. This is different from the last trial. Every two weeks, we are asking the patient with the PI, he's asking them, "Do a look back the last two weeks. How's your disease symptoms? How's your cough? What are you feeling?" And that PGA is scored. And if there's any worsening, well, you've got to rescue the patient. If there's improvement or stabilization, you can titrate down.
This is one thing that's important, and I think even the FDA has taught us, probably based on their ChemoCentryx experience, that let's have an objective assessment as opposed to just clinician judgment. Steroid titration here is going to be managed using this assay. When you talk about FVC, it's a little bit different. I will say we went in with FVC as a primary endpoint when we started thinking about the phase III design, and we were guided away from that. Steroid reduction was used as the most clinically relevant endpoint. That's why we prioritize that. FVC is variable in sarc. Unlike IPF, where there's a known natural history of progression of FVC, sarcoidosis, it can be quite variable. I've seen patients with normal FVC, cough, have a lot of morbidity. I've seen folks with FVC of 70, and they're rock climbers in Denver.
So FVC has a lot of variability. It's still important to look at. I'll also highlight that you brought up FEV1. sarc patients can present with restrictive disease, in which case that's where you really look at FVC, but they can also have obstructive disease, in which case FEV1 is more relevant. So the field is learning that PFTs alone, and I think even there's some regret in the IPF side of this, that we relied too much on just FVC. Nonetheless, it's going to be an important secondary, but it's not necessarily going to guide our steroid taper decisions.
Okay. And what are you now that the study is fully enrolled and sort of in full gear for reporting data on a blinded basis, both from an efficacy and safety, but then also I don't think investors appreciate really how hands-on you are in sort of the QC and making sure that there is a quite amount of stringency around quality control for data integration as data comes in. So if you could talk about sort of those aspects, I think that could be really helpful.
Yeah. I think we have a stranglehold on the data. You asked me this before. We have patient tabulation summaries on any patient. And while the data is being cleaned, they can look at it. I mean, some of this is I was a data management person before I became a physician, so I'm a little bit more crazy about that sort of stuff. But I also think it ensures us to have good data integrity because it is a single pivotal. So even things such as capturing anything that looks like an anomaly very early, we want to have the team, our own team, not relying on a CRO, to say, "Okay, what's going on here?
There's something that is sort of going askew of the protocol." At the end of the day, we can also clean the data faster because you want me to put the top line out in the end of August when half the room here is in The Hamptons like taking a vacation, but the point is we want to be quick. I'm not going to sit on the database lock for two months, and it is a big study, and we also have worked in rare disease. A lot of times these investigators don't have experience in a clinical trial. So being able to visualize, I would say our data visualizations are two standard deviations better than any biotech company because we just are a very data-centric company. We look at every patient. We're actively monitoring.
Look, this is maybe some of the reason why things like the EAP were implemented. We saw patients. We see patients who have been able to get off steroids and maintain that for nine months. Those very same centers then came to me and said, "Okay, the patients are leaving the trial. Now they're refusing to go back on steroids." So we had to step up rather aggressively with this compassionate use program, which is typically done more in oncology. So we are administering now five milligrams compassionately to a number of centers. And now you're going to ask me how many patients are those, right?
How many? That's exactly what I was going to say.
Okay. That's one thing I'm not going to do. Why am I not going to do that? Because.
Can you quantify it without giving the number?
Yeah. So you have to understand some countries like Japan, they don't have any pathway like this. So all those patients just frankly are not eligible.
That's right. They have no eligibility.
Other countries like Italy are piggybacking off the oncology compassionate use program, and I've been able to get more in there, so it's hard for me to start to get into numbers. Other times with regulators, I was just in France. The regulators there want the drug to be given to patients outside of the trial right now, which is really strange to me, but they point to the DSMBs are positive and there's a need. To me, I think that's a lot of risk, even for me, but the French say, "Well, let's just not just give it to patients in the trial. How about any patient?" and I said, "We have to wait till we unblind," so in that sense, I'm probably being even more conservative from a safety perspective than they are, so that's why I'm not going to get into those numbers.
I had said previously that it was a substantial number of sites. I'm not doing this for two patients, and then we also have to balance drug supply needs. We have good clinical drug supply. We've moved to a commercial-grade manufacturer. We made that investment a couple of years ago, and they now need to be ready with commercial-grade material when we file the BLA, so I have to also balance our supply as well.
I think after the data, a big question will be sort of the market size and the segment that would be eligible for the therapy. Could you talk about what work has been done? What is the market opportunity and what's the data supporting that?
We're doing a lot of work in this regard the last six months, and I think we're getting ahead of we're doing some pre-commercial launch work. We don't have the budgets of big pharma, but we found some interesting things in the epi data. So previously, we talked about 200,000 patients in the U.S. The analysis we've done the last six months with some epi and claims databases indicate that the prevalence may be a little bit higher than that. I don't think we're going to have an ODD rescinded, but it seems to be tracking to be a little bit larger. The bigger messages are this. We thought about 50% of the patients are steroid dependent. We're looking at the coding, and we're seeing more like 75% of the patients. And the experts are saying, "You know what? That's probably right.
“We probably are using a lot more steroids than we think.” So bigger steroid dependent population. The other thing we're learning is mortality used to be about 5%. We're seeing that to be potentially 8, 9, 10%. So a sicker population, meaning they are more steroid dependent, a population more susceptible to fibrosis. There was a big patient listening session with the FDA, four to six hours with patients last month. They highlighted they're dying from this disease. They're all on steroids. They need a better therapy, and they want to get off steroids. So I'm hopeful to put out some of that data maybe at some conferences in the spring. I think it's going to be important for people to see that it's a bigger market.
It's also why we've had to maybe adjust some of our assumptions, and we'll be coming back to you to change your model too because that epi data is really, I think, significantly larger.
Okay. That's helpful. I know we only have three minutes to get through EFZO-CONNECT, which you didn't get to. Maybe remind us the timing of the study and what do you hope to gain to commit to moving in SSc-ILD?
Yeah. So SSc-ILD is our next sort of frontier for efzo. We had some previously really nice good animal data, and we've seen neuropilin, our receptor, highly expressed on skin plaques of SSc patients. So this is a proof of concept just in the U.S., about 15 centers. And I'd like to see some trends of efficacy there, similar to what we did with efzo in SARC. The idea here is let's look at a small segment of patients in a more fibrotic ILD. The drug, I feel like, has really good anti-inflammatory effects. Let's see it in a more antifibrotic population. I think what investors need to understand is the read-through here is you can't really compare because steroids aren't used, so steroid isn't the endpoint. It's FVC. The agency is locked in on that.
The agency has approved tocilizumab and nintedanib with label expansions for those drugs for SSc-ILD based on FVC improvement, but I think the real cool thing about this POC is the skin. We saw some really nice ability to ameliorate skin fibrosis in the mouse model. If we can improve skin, no drug has moved the needle in skin for scleroderma patients. A lot of companies have tried. I have access to that tissue. Experts told us neuropilin was highly upregulated. We validated that. We put this out in Milan last year, so there's a lot of neuropilin there, so let's just see if our drug in a more fibrotic condition can start to move some of that skin fibrosis, and what I've committed to is we'll have an interim readout in Q2.
I haven't decided yet if it's going to be the number of patients, if it's skin, if it's skin and lung. I'll come back to everyone in February and kind of guide on exactly what to expect with that readout.
Okay. Very helpful. And then maybe lastly, sort of what's the cash, cash runway to fund beyond EFZO-FIT and EFZO-CONNECT and kind of get you commercially ready?
Yeah. We feel like we're in a good position. We've recently put out we had about $70 million in cash, but we also have brought in some capital off an ATM vehicle that we had some nice interest last quarter. So right now, our cash position is close to $90 million, and we feel as though that solidly gets us not only through the data, but through a BLA filing, which would be probably six to nine months after that. So in that sense, I feel like we're in a good position. Of course, some investors would love for us to have two years of cash, but I think that's an adequate amount for us to read this data out and then just say, "Okay, now how do we want to do things?" We're going to be commercial ready and ready to go.
But I think from a cash position, let's just turn over this data card and see what happens. Yeah.
Very exciting. Can't wait for 2025 as it's going to be a very important year for you and for us. So thank you so much. I want to say thank you for a great discussion and being part of our conference.
Thank you.