UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37378 | --- | --- | --- | |-----------------------------------------------------------------------------------------|------ ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited H1 2023 financial statements show total assets at **$132.7 million**, a **$24.3 million** net loss, and **$57.5 million** from financing activities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $12,313 | $9,981 | | Available-for-sale investments | $96,268 | $56,165 | | **Total Assets** | **$132,747** | **$95,786** | | Total current liabilities | $12,368 | $13,862 | | **Total Liabilities** | **$26,695** | **$24,502** | | **Total Stockholders' Equity** | **$106,052** | **$71,284** | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $9,840 | $9,135 | $19,219 | $18,031 | | General and administrative | $3,718 | $3,449 | $7,126 | $6,931 | | **Loss from operations** | **($13,558)** | **($12,584)** | **($26,345)** | **($24,962)** | | **Consolidated net loss** | **($12,342)** | **($12,421)** | **($24,294)** | **($24,575)** | | **Net loss per share** | **($0.22)** | **($0.44)** | **($0.50)** | **($0.88)** | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($12,600) | ($19,236) | | Net cash (used in) provided by investing activities | ($42,328) | $24,597 | | Net cash provided by financing activities | $57,514 | $1,520 | | **Net change in cash, cash equivalents and restricted cash** | **$2,586** | **$6,881** | - In February 2023, the company completed an underwritten follow-on public offering, raising approximately **$48.1 million** in net proceeds[51](index=51&type=chunk) - During the first six months of 2023, the company sold 4,332,210 shares of common stock through its at-the-market (ATM) offering program, generating net proceeds of approximately **$9.5 million**[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses efzofitimod's clinical development, including Phase 3 and planned Phase 2 studies, and highlights H1 2023 financing activities that bolstered cash to **$112.0 million** [Overview](index=16&type=section&id=Overview) The company focuses on efzofitimod for ILDs, with a pivotal Phase 3 study underway and a Phase 2 study planned, supported by a **$10.0 million** Kyorin milestone payment - The company's primary focus is on its lead product candidate, efzofitimod, for the treatment of interstitial lung disease (ILD), a group of immune-mediated disorders[62](index=62&type=chunk) - A global pivotal Phase 3 study, EFZO-FIT, is currently enrolling 264 subjects to evaluate efzofitimod in patients with pulmonary sarcoidosis, with the first patient dosed in September 2022[64](index=64&type=chunk) - A Phase 2 proof-of-concept study, EFZO-CONNECT, is planned to evaluate efzofitimod in patients with SSc-ILD and is expected to initiate in Q3 2023[65](index=65&type=chunk) - The collaboration with Kyorin for development in Japan generated a **$10.0 million** milestone payment in February 2023, with eligibility for up to an additional **$155.0 million** in milestones plus royalties[67](index=67&type=chunk)[74](index=74&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company held **$112.0 million** in cash and investments, bolstered by **$48.1 million** from a follow-on offering, **$9.5 million** from ATM sales, and a **$10.0 million** Kyorin milestone payment - As of June 30, 2023, the company had cash, cash equivalents, restricted cash, and available-for-sale investments totaling **$112.0 million** and an accumulated deficit of **$441.9 million**[71](index=71&type=chunk) - The company believes its current cash position is sufficient to meet material cash requirements for at least one year from the filing date of the report[71](index=71&type=chunk) Sources of Cash in H1 2023 (in millions) | Source | Net Proceeds | | :--- | :--- | | Underwritten Follow-On Public Offering (Feb 2023) | ~$48.1 | | At-the-Market (ATM) Offering Program | ~$9.5 | | Kyorin Agreement Milestone Payment | $10.0 | Summary of Net Cash Flow (in thousands) | Activity | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | | Operating activities | ($12,600) | ($19,236) | | Investing activities | ($42,328) | $24,597 | | Financing activities | $57,514 | $1,520 | [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q2 2023 R&D expenses increased by **$0.7 million** to **$9.8 million** due to EFZO-FIT study costs, with similar trends for H1 2023 and slight G&A increases Comparison of Operating Expenses - Three Months Ended June 30 (in thousands) | Expense Category | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $9,840 | $9,135 | $705 | | General and administrative | $3,718 | $3,449 | $269 | - The **$0.7 million** increase in Q2 2023 R&D expenses was primarily due to a **$2.5 million** increase in clinical trial costs for the EFZO-FIT study, partially offset by a **$1.0 million** reduction in manufacturing costs and a **$0.7 million** decrease in early-stage research costs[96](index=96&type=chunk) Comparison of Operating Expenses - Six Months Ended June 30 (in thousands) | Expense Category | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $19,219 | $18,031 | $1,188 | | General and administrative | $7,126 | $6,931 | $195 | - The **$1.2 million** increase in H1 2023 R&D expenses was mainly due to a **$4.4 million** increase in EFZO-FIT clinical trial costs, offset by reductions of **$1.9 million** in manufacturing and **$1.5 million** in early-stage discovery costs[99](index=99&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable for the current reporting period - The company has indicated that this item is not applicable[104](index=104&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the quarter[106](index=106&type=chunk) - No changes in internal control over financial reporting were identified during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[107](index=107&type=chunk) [PART II. OTHER INFORMATION](index=23&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and does not anticipate any material adverse effects from ordinary course claims - As of the reporting date, the company is not a party to any material legal proceedings[108](index=108&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks primarily related to clinical development, regulatory pathways, capital needs, historical losses, third-party reliance, and intellectual property protection - The company may face substantial delays in clinical trials and may fail to demonstrate safety and efficacy for its product candidates, including efzofitimod[110](index=110&type=chunk)[113](index=113&type=chunk) - The company will need to raise additional capital to fund operations and has a history of significant losses, which are expected to continue[110](index=110&type=chunk)[170](index=170&type=chunk)[179](index=179&type=chunk) - A significant risk is that the FDA has not approved any product for pulmonary sarcoidosis, meaning there is no established regulatory pathway, and the EFZO-FIT study may not be sufficient for approval[110](index=110&type=chunk)[121](index=121&type=chunk) - The company depends on collaborations, such as with Kyorin, and on third-party manufacturers (CDMOs), and the failure of these partners could materially harm the business[110](index=110&type=chunk)[186](index=186&type=chunk)[191](index=191&type=chunk) - The company's ability to compete depends on obtaining, maintaining, and protecting its intellectual property rights, which is uncertain and costly[111](index=111&type=chunk)[202](index=202&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - None[316](index=316&type=chunk) [Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[316](index=316&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[316](index=316&type=chunk) [Other Information](index=59&type=section&id=Item%205.%20Other%20Information) There was no other information to report for the period - None[316](index=316&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, material contracts, and certifications - The exhibits include the company's Restated Certificate of Incorporation, Amended and Restated Bylaws, various warrants, and certifications by the Principal Executive Officer and Principal Financial Officer[317](index=317&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents aTyr Pharma's unaudited condensed consolidated financial statements for Q1 2023 and 2022, covering Balance Sheets, Operations, and Cash Flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased from **$95.8 million** (2022) to **$136.8 million** (Q1 2023), driven by cash and investments from a public offering Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Highlights | March 31, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $20,690 | $9,981 | | Available-for-sale investments | $93,695 | $56,165 | | Total current assets | $119,447 | $80,871 | | **Total assets** | **$136,838** | **$95,786** | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $13,654 | $13,862 | | Total liabilities | $27,140 | $24,502 | | **Total stockholders' equity** | **$109,698** | **$71,284** | | **Total liabilities and stockholders' equity** | **$136,838** | **$95,786** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss for Q1 2023 was **$12.0 million** (($0.29) per share), a slight decrease from **$12.2 million** (Q1 2022) due to higher other income Condensed Consolidated Statements of Operations (in thousands, except per share data) | Income Statement Highlights | Three Months Ended March 31, 2023 (unaudited) | Three Months Ended March 31, 2022 (unaudited) | | :--- | :--- | :--- | | Research and development | $9,379 | $8,896 | | General and administrative | $3,408 | $3,482 | | **Total operating expenses** | **$12,787** | **$12,378** | | Loss from operations | ($12,787) | ($12,378) | | Total other income (expense), net | $835 | $224 | | **Consolidated net loss** | **($11,952)** | **($12,154)** | | Net loss per share, basic and diluted | ($0.29) | ($0.44) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations decreased to **$0.6 million** (Q1 2023) from **$10.1 million** (Q1 2022) due to a **$10.0 million** milestone payment and **$49.5 million** from financing Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Highlights | Three Months Ended March 31, 2023 (unaudited) | Three Months Ended March 31, 2022 (unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | ($590) | ($10,119) | | Net cash (used in) provided by investing activities | ($38,172) | $14,626 | | Net cash provided by financing activities | $49,496 | $1,481 | | **Net change in cash, cash equivalents and restricted cash** | **$10,734** | **$5,988** | | Cash, cash equivalents and restricted cash at end of period | $23,880 | $8,324 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, financial instruments, and collaborations, highlighting liquidity, a **$10.0 million** Kyorin milestone, and a significant public offering - The company believes its existing cash, cash equivalents, restricted cash, and available-for-sale investments of **$117.6 million** as of **March 31, 2023**, are sufficient to meet material cash requirements for at least one year from the filing date[22](index=22&type=chunk) - In **February 2023**, a **$10.0 million** milestone payment was triggered from the Kyorin Agreement after the first patient was dosed in Japan in the EFZO-FIT study. The company is eligible for up to an additional **$155.0 million** in future milestones[46](index=46&type=chunk)[48](index=48&type=chunk) - In **February 2023**, the company completed an underwritten follow-on public offering, raising net proceeds of approximately **$48.1 million**[55](index=55&type=chunk) - Subsequent to the quarter end, from **April 1, 2023**, through **May 5, 2023**, the company sold an additional **916,143 shares** of common stock through its ATM program for net proceeds of **$1.8 million**[63](index=63&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses efzofitimod development for ILD, including ongoing Phase 3 EFZO-FIT and planned Phase 2 SSc-ILD studies, noting improved liquidity from a public offering and Kyorin milestone [Overview](index=16&type=section&id=Overview) aTyr Pharma develops biotherapeutics from its tRNA synthetase platform, focusing on **efzofitimod** for interstitial lung diseases (ILD) by targeting NRP2, and advancing its discovery pipeline - The company's primary focus is on **efzofitimod**, a clinical-stage product candidate targeting **neuropilin-2 (NRP2)** to treat interstitial lung disease (ILD)[67](index=67&type=chunk) - The global pivotal **Phase 3 EFZO-FIT study** for efzofitimod in patients with pulmonary sarcoidosis is currently enrolling subjects in the United States, Europe, and Japan[69](index=69&type=chunk) - The company plans to initiate a **Phase 2 proof-of-concept study** of efzofitimod in patients with SSc-ILD in the **third quarter of 2023**[70](index=70&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) As of **March 31, 2023**, the company held **$117.6 million** in cash and investments, bolstered by a **$48.1 million** public offering and a **$10.0 million** Kyorin milestone, ensuring liquidity for at least one year - As of **March 31, 2023**, the company had cash, cash equivalents, restricted cash and available-for-sale investments of **$117.6 million** and an accumulated deficit of **$429.6 million**[77](index=77&type=chunk) - In **February 2023**, the company raised approximately **$48.1 million** in net proceeds from an underwritten follow-on public offering[78](index=78&type=chunk) - During **Q1 2023**, the company received a **$10.0 million** milestone payment from its partner Kyorin[80](index=80&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Q1 2023 R&D expenses increased by **$0.5 million** to **$9.4 million** due to EFZO-FIT study costs, while other income rose to **$0.8 million** from **$0.2 million** Comparison of Operating Results (in thousands) | Expense/Income Category | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development expenses | $9,379 | $8,896 | $483 | | General and administrative expenses | $3,408 | $3,482 | ($74) | | Other income (expense), net | $835 | $224 | $611 | - The increase in R&D expenses was primarily due to a **$1.9 million** rise in clinical trial costs for the **EFZO-FIT study**, partially offset by reductions in manufacturing and other R&D costs[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is **not applicable**, as the company, a smaller reporting company, is not required to provide this information - The company has indicated that this section is **not applicable**[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were **effective** as of **March 31, 2023**, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of **March 31, 2023**[105](index=105&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[106](index=106&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not currently a party to any material legal proceedings** and does not expect current claims to have a material adverse effect - As of the filing date, aTyr Pharma is **not a party to any material legal proceedings**[107](index=107&type=chunk) [Item 1A. Risk Factors](index=22&type=page&id=Item%201A.%20Risk%20Factors) Details significant business risks, including clinical trial delays for efzofitimod, lack of FDA pathway, financial losses, need for capital, reliance on third parties, and CRO transition - The company may face substantial delays in clinical trials and there is **no established FDA regulatory pathway** for pulmonary sarcoidosis, meaning the **EFZO-FIT study** may not be sufficient for approval[109](index=109&type=chunk)[112](index=112&type=chunk)[121](index=121&type=chunk) - The company has a history of significant losses (**$429.6 million accumulated deficit** as of **March 31, 2023**) and will need to raise additional capital to fund operations, which may be challenging due to macroeconomic conditions[110](index=110&type=chunk)[165](index=165&type=chunk)[174](index=174&type=chunk) - The company is in the process of transitioning its Clinical Research Organization (CRO) for the ongoing **EFZO-FIT study**, which could lead to delays, increased costs, and divert management attention[192](index=192&type=chunk) - The company's business could be adversely affected by macroeconomic conditions, including the effects of the **COVID-19 pandemic**, the **Ukraine-Russia conflict**, and recent **bank failures**[110](index=110&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period covered by this report - **None**[314](index=314&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - **None**[314](index=314&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company - **Not applicable**[314](index=314&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed in this item - **None**[314](index=314&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including corporate governance documents, warrants, and officer certifications - The exhibits include various corporate governance documents, warrants, and required SEC certifications (**31.1, 31.2, 32.1, 32.2**)[315](index=315&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37378 ATYR PHARMA, INC. (Exact name of registrant as specified in its charter) Delaware 20-3435077 (State or other jurisdiction of incor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37378 ATYR PHARMA, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a consolidated net loss of $12.2 million for Q1 2022, increasing from $7.2 million in Q1 2021, driven by higher operating expenses, with cash and investments at $98.7 million and an accumulated deficit of $384.4 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets decreased to $104.8 million from $115.5 million, primarily due to reduced available-for-sale investments, while total stockholders' equity declined to $98.4 million reflecting the net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $8,324 | $2,336 | | Available-for-sale investments | $90,342 | $105,575 | | **Total Assets** | **$104,776** | **$115,537** | | **Liabilities & Equity** | | | | Total current liabilities | $6,269 | $6,013 | | Total stockholders' equity | $98,374 | $109,126 | | **Total Liabilities and Stockholders' Equity** | **$104,776** | **$115,537** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2022, the company reported a net loss of $12.2 million, or ($0.44) per share, compared to $7.2 million in Q1 2021, primarily due to a significant rise in operating expenses, especially research and development Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Research and development | $8,896 | $4,516 | | General and administrative | $3,482 | $2,686 | | **Total operating expenses** | **$12,378** | **$7,202** | | **Loss from operations** | **($12,378)** | **($7,202)** | | **Net loss attributable to aTyr Pharma, Inc.** | **($12,153)** | **($7,151)** | | Net loss per share, basic and diluted | ($0.44) | ($0.51) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $10.1 million for Q1 2022, offset by $14.6 million from investing activities and $1.5 million from financing, resulting in a $6.0 million net increase in cash and equivalents to $8.3 million Cash Flow Summary (in thousands) | Activity | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($10,119) | ($5,827) | | Net cash provided by (used in) investing activities | $14,626 | ($23,395) | | Net cash provided by financing activities | $1,481 | $24,857 | | **Net change in cash and cash equivalents** | **$5,988** | **($4,365)** | | **Cash and cash equivalents at end of period** | **$8,324** | **$12,587** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's biotherapeutics business, confirming **$98.7 million** in cash is sufficient for at least one year, outlining potential **$165.0 million** Kyorin milestones, and describing recent financing activities including an ATM offering program - The company believes its existing cash, cash equivalents, and available-for-sale investments of **$98.7 million** as of March 31, 2022, are sufficient to meet material cash requirements for at least one year from the filing date[25](index=25&type=chunk) - Under the Kyorin Agreement for efzofitimod in Japan, aTyr is eligible for up to an additional **$165.0 million** in development, regulatory, and sales milestones, plus tiered royalties[46](index=46&type=chunk)[49](index=49&type=chunk) - In Q1 2022, the company sold **260,455 shares** for net proceeds of approximately **$1.5 million** under its Prior ATM Offering Program[55](index=55&type=chunk) - In April 2022, a new ATM Offering Program was established with Jefferies for up to **$65.0 million**[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on efzofitimod and ATYR2810, with efzofitimod's registrational trial planned for Q3 2022, noting increased R&D and G&A expenses in Q1 2022, and confirming a **$98.7 million** cash position sufficient for at least one year [Overview](index=15&type=section&id=Overview) aTyr Pharma focuses on its tRNA synthetase biology platform, advancing efzofitimod for fibrotic lung diseases with a registrational trial planned for Q3 2022, and ATYR2810 for oncology with a Phase 1 trial in H2 2022, while efzofitimod received orphan drug designation for sarcoidosis and systemic sclerosis - The company's primary focus is efzofitimod, a clinical-stage product candidate for fibrotic lung diseases, with a registrational trial planned to initiate in Q3 2022 following positive Phase 1b/2a results[67](index=67&type=chunk) - ATYR2810, an IND candidate for oncology from the NRP2 antibody program, is in preclinical development, with a Phase 1 clinical trial planned for the second half of 2022[70](index=70&type=chunk) - The FDA granted efzofitimod orphan drug designation for the treatment of sarcoidosis in January 2022 and for systemic sclerosis in April 2022[69](index=69&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2022, the company held **$98.7 million** in cash and investments, expected to fund operations for at least one year, with financing primarily from equity sales including an **$80.6 million** follow-on offering and a new **$65.0 million** ATM program - As of March 31, 2022, the company had cash, cash equivalents and available-for-sale investments of **$98.7 million**, sufficient to meet material cash requirements for at least one year[74](index=74&type=chunk) - In September 2021, a follow-on public offering generated net proceeds of approximately **$80.6 million**[76](index=76&type=chunk) - In April 2022, the company established a new at-the-market (ATM) offering program with Jefferies for up to **$65.0 million**, after terminating a prior ATM program under which it raised **$1.5 million** in Q1 2022[78](index=78&type=chunk)[79](index=79&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) In Q1 2022, R&D expenses increased by **$4.4 million** to **$8.9 million** due to higher manufacturing and preclinical development, while G&A expenses rose by **$0.8 million** to **$3.5 million** from increased compensation and professional fees Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Increase/(Decrease) | | :--- | :--- | :--- | :--- | | Research and development | $8,896 | $4,516 | $4,380 | | General and administrative | $3,482 | $2,686 | $796 | - The **$4.4 million** increase in R&D expenses was mainly due to a **$3.2 million** rise in product development and manufacturing costs for efzofitimod and ATYR2810, and a **$0.7 million** increase in preclinical development[102](index=102&type=chunk) - The **$0.8 million** increase in G&A expenses was primarily due to a **$0.5 million** increase in compensation-related expenses and a **$0.3 million** increase in professional fees[103](index=103&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable - Not Applicable[106](index=106&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the quarter[108](index=108&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[109](index=109&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and does not expect any current claims in the ordinary course of business to have a material adverse effect - The company is not a party to any material legal proceedings at this time[111](index=111&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including its history of losses, need for capital, challenges in developing novel product candidates, reliance on third parties, intellectual property issues, and potential adverse effects from the COVID-19 pandemic and competition [Risks Related to Financial Condition and Need for Capital](index=22&type=section&id=Risks%20related%20to%20our%20financial%20condition%20and%20need%20for%20additional%20capital) The company has a history of significant losses, with an accumulated deficit of **$384.4 million**, and will require substantial additional capital to fund operations and clinical trials, which may lead to dilution and may never result in profitability - The company will need to raise additional capital to fund operations, and its cash of **$98.7 million** is projected to be sufficient for at least one year, but this may change[114](index=114&type=chunk) - The company is a pre-commercial entity with a history of significant losses, including a **$12.2 million** net loss for Q1 2022 and an accumulated deficit of **$384.4 million** as of March 31, 2022[119](index=119&type=chunk) [Risks Related to Discovery, Development, and Regulation](index=25&type=section&id=Risks%20related%20to%20the%20discovery%2C%20development%20and%20regulation%20of%20our%20product%20candidates) The company's novel product candidates face inherent risks including potential clinical trial delays, failure to demonstrate safety and efficacy, patient enrollment difficulties, manufacturing challenges for biologics, and regulatory hurdles due to the novel therapeutic approach - The company's product candidates represent a novel therapeutic approach, and there is a risk they may not result in commercially viable drugs due to unforeseen challenges in development, regulatory approval, and manufacturing[141](index=141&type=chunk) - There is a risk of substantial delays in clinical trials due to issues like patient enrollment for rare diseases, regulatory holds, and operational issues, some of which were previously caused by the COVID-19 pandemic[126](index=126&type=chunk)[137](index=137&type=chunk) - Manufacturing biologics like efzofitimod is complex and susceptible to contamination, equipment failure, and other issues, and the company relies on CDMOs and is currently transferring its manufacturing process to an additional CDMO, which carries risk[154](index=154&type=chunk)[159](index=159&type=chunk) [Risks Related to Reliance on Third Parties](index=33&type=section&id=Risks%20related%20to%20our%20reliance%20on%20third%20parties) The company's success is highly dependent on third parties, including its collaboration with Kyorin for efzofitimod in Japan, and reliance on CDMOs for manufacturing and CROs for clinical trials, where unsatisfactory performance could significantly delay development - The company depends on its collaboration with Kyorin for the development and commercialization of efzofitimod in Japan, with future milestone and royalty payments contingent on Kyorin's success[172](index=172&type=chunk) - The company relies on third-party CDMOs for all manufacturing and does not have its own internal manufacturing capabilities, currently relying on a single CDMO for ATYR2810 and transferring the process for efzofitimod to a second CDMO[177](index=177&type=chunk)[180](index=180&type=chunk) - The company relies on third-party CROs and clinical investigators to conduct its clinical trials, which reduces direct control over performance and compliance with regulations like Good Clinical Practices (GCPs)[182](index=182&type=chunk) [Risks Related to Intellectual Property](index=36&type=section&id=Risks%20related%20to%20our%20intellectual%20property) The company's success depends on obtaining and maintaining patent protection for its novel technologies, facing risks that patents may not issue, be challenged, or be insufficient, alongside the potential for third-party infringement claims and adverse changes in patent law - The company's success depends on obtaining and maintaining patent protection for its product candidates, but the patenting process is uncertain and expensive, and issued patents may be challenged or invalidated[187](index=187&type=chunk)[189](index=189&type=chunk) - The company may face claims that its products infringe on the patent rights of third parties, which could lead to costly litigation and potentially block commercialization[195](index=195&type=chunk) - The company relies on license agreements for certain intellectual property and could lose these rights if it fails to comply with its obligations under these agreements[203](index=203&type=chunk) [Risks Related to Business Operations](index=41&type=section&id=Risks%20related%20to%20our%20business%20operations) The company faces operational risks including adverse effects from the COVID-19 pandemic, dependence on retaining key personnel in a competitive industry, and exposure to stringent data privacy laws and cybersecurity threats that could lead to penalties and disruption - The business has been and could continue to be adversely affected by the COVID-19 pandemic, which has caused delays in clinical trials and may disrupt supply chains and employee resources[222](index=222&type=chunk)[223](index=223&type=chunk) - The company is highly dependent on its principal executive team and key scientific personnel, and faces intense competition for skilled employees in the biotechnology industry[230](index=230&type=chunk)[231](index=231&type=chunk) - The company is subject to complex data privacy and security laws (e.g., HIPAA, GDPR, CCPA) and faces risks from cyber-attacks, where a security breach could result in significant fines, litigation, and reputational harm[241](index=241&type=chunk)[293](index=293&type=chunk) [Risks Related to Commercialization](index=47&type=section&id=Risks%20related%20to%20the%20commercialization%20of%20our%20product%20candidates) Commercialization risks include the need to build sales infrastructure or rely on third parties, intense competition, and the uncertainty of market acceptance and adequate reimbursement from third-party payors subject to pricing pressure and healthcare reform - The company currently lacks sales, marketing, and distribution infrastructure and will need to build these capabilities or partner with third parties to commercialize any approved products[251](index=251&type=chunk) - The biotechnology industry is intensely competitive, and competitors may develop more effective or less costly therapies, or achieve regulatory approval sooner[256](index=256&type=chunk)[257](index=257&type=chunk) - Commercial success depends on obtaining adequate coverage and reimbursement from third-party payors like CMS and private insurers, which is uncertain and subject to significant pricing pressure and healthcare cost-containment initiatives[260](index=260&type=chunk)[263](index=263&type=chunk) [Risks Related to Common Stock Ownership](index=50&type=section&id=Risks%20related%20to%20the%20ownership%20of%20our%20common%20stock) The company's stock price is expected to remain highly volatile, with significant insider control, and future equity sales will cause dilution, while the company does not intend to pay dividends and its NOLs are subject to limitations - The market price of the common stock has been highly volatile, with a closing price range between **$2.17** and **$12.48** per share from January 2020 to May 2022[268](index=268&type=chunk)[269](index=269&type=chunk) - As of May 4, 2022, executive officers, directors, and 5% holders owned approximately **42.1%** of the voting stock, allowing them to exert significant influence over corporate matters[270](index=270&type=chunk) - Future sales of equity through existing agreements (Aspire Capital, Jefferies ATM) and potential future offerings will cause dilution to existing stockholders and could depress the stock price[272](index=272&type=chunk)[275](index=275&type=chunk)[278](index=278&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[305](index=305&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[308](index=308&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and certifications by the CEO and CFO - The exhibits include the company's 2022 Inducement Plan, forms of stock option agreements, and certifications from the Principal Executive Officer and Principal Financial Officer[311](index=311&type=chunk)[312](index=312&type=chunk)

Clinical Development - The lead therapeutic candidate, efzofitimod, demonstrated positive results in a Phase 1b/2a clinical trial involving 37 patients with pulmonary sarcoidosis, showing consistent dose response on key efficacy endpoints and improvements compared to placebo[20]. - The company plans to initiate a registrational trial for efzofitimod in the third quarter of 2022, targeting pulmonary sarcoidosis and other interstitial lung diseases (ILDs) such as chronic hypersensitivity pneumonitis (CHP) and connective tissue disease-related ILD (CTD-ILD)[30]. - The Phase 1b/2a clinical trial for efzofitimod included 37 patients with pulmonary sarcoidosis, demonstrating safety and tolerability across all doses[55][59]. - Efzofitimod demonstrated a well-tolerated safety profile in a Phase 1 clinical trial with 36 healthy volunteers, with no significant adverse events reported[62]. - The ongoing COVID-19 pandemic has caused delays in clinical trial enrollment and other research activities, impacting the company's operations[28]. - The company has faced delays in clinical trials, particularly with the Phase 1b/2a trial of efzofitimod due to operational issues related to the COVID-19 pandemic, impacting data evaluation[185]. - The company acknowledges that interim and preliminary data from clinical trials may change as more patient data become available, which could affect business prospects[192]. - The company has not yet commenced or completed any human clinical trials designed to demonstrate efficacy to the satisfaction of the FDA, which is critical for obtaining marketing approval[195]. - The company has not extensively studied efzofitimod's activity in patients with interstitial lung disease (ILD), raising concerns about its therapeutic relevance[208]. Product Candidates - Efzofitimod is designed to selectively modulate NRP2 to downregulate immune responses in inflammatory disease states, with preclinical models demonstrating its therapeutic potential[34]. - ATYR2810, a fully humanized monoclonal antibody targeting NRP2, is in preclinical development for aggressive cancers, with plans to initiate a Phase 1 clinical trial in the second half of 2022[23]. - Efzofitimod is a potential first-in-class immunomodulator targeting immune-mediated disorders, specifically pulmonary sarcoidosis[44]. - The primary target population for efzofitimod is interstitial lung disease (ILD), with a focus on progressive, immune-mediated forms[51]. - The company aims to expand applications of efzofitimod to additional immune-mediated diseases and advance ATYR2810 for cancer indications[217]. Financials and Funding - As of December 31, 2021, the company had cash, cash equivalents, and available-for-sale investments of approximately $107.9 million, expected to meet material cash requirements for at least one year[172]. - The company incurred consolidated net losses of $33.8 million, $16.2 million, and $23.8 million for the years ended December 31, 2021, 2020, and 2019, respectively, with an accumulated deficit of $372.3 million as of December 31, 2021[178]. - The company has not yet generated any revenues from product sales and does not anticipate doing so for the foreseeable future[182]. - The company may seek additional capital through equity or debt offerings, collaborations, or licensing arrangements to fund its operations[172]. - The company anticipates incurring significant costs associated with the commercialization of any approved product candidates, which may exceed expectations due to potential additional clinical trials required by regulatory agencies[184]. Regulatory and Compliance - Efzofitimod received orphan drug designation from the FDA in January 2022 for the treatment of sarcoidosis[22]. - The FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act, requiring approval before marketing any new biologic or dosage form[119]. - The process for obtaining FDA approval involves substantial time and financial resources, with no guarantee of timely approval for product candidates[121]. - A Biologics License Application (BLA) must include all relevant data from preclinical studies and clinical trials, and must demonstrate the safety and effectiveness of the product[129]. - The FDA may condition BLA approval on the sponsor's agreement to conduct additional clinical trials post-approval, known as Phase 4 clinical trials[126]. - The company must comply with Good Clinical Practice (GCP) requirements during clinical trials, which include obtaining informed consent from all research subjects[123]. - The FDA's approval process includes inspections of manufacturing facilities to ensure compliance with current Good Manufacturing Practices (cGMP)[130]. - The company is subject to various regulatory compliance risks, including the U.S. Foreign Corrupt Practices Act and federal civil and criminal false claims laws[161][164]. Market and Competition - The biotechnology and pharmaceutical industries are highly competitive, with potential competition from companies with greater resources[89]. - The oncology market is highly competitive, with over 70 new drug approvals by the FDA since 2015 and more than 100 new treatments projected to be approved in the next five years[96]. - The U.S. government and third-party payors are increasingly scrutinizing pharmaceutical pricing, affecting reimbursement rates[151]. - The marketability of approved products may suffer if adequate coverage and reimbursement are not provided by payors[157]. Intellectual Property - The company has a patent portfolio for efzofitimod that includes over 220 issued patents and allowed patent applications, with expiration dates ranging from 2026 to 2034[102]. - The efzofitimod patent portfolio includes families directed to specific product forms and splice variants, with expected expiration between 2030 and 2038[111]. - The company is expanding its intellectual property estate by filing new patent applications for novel therapeutic compositions and methods[106]. - The company relies on trade secrets and careful monitoring to protect proprietary information that is not suitable for patent protection[103]. Challenges and Risks - The ongoing COVID-19 pandemic has broadly impacted clinical trials, leading to delays in patient enrollment and data availability, particularly for the efzofitimod trial[191]. - The company faces challenges in recruiting suitable patients for clinical trials due to the rarity of certain diseases, which could delay or halt development[198]. - The company faces risks associated with undesirable side effects that could delay or prevent regulatory approval of its product candidates[212]. - The company is developing efzofitimod and ATYR2810, facing challenges related to public perception of safety and adoption of new therapeutics[205].

Financial Position - As of September 30, 2021, the company had an accumulated deficit of $363.7 million and cash, cash equivalents, and available-for-sale investments of $116.4 million, expected to meet cash requirements for at least one year[76]. - The company has incurred losses and negative cash flows from operations since inception, with expectations to continue this trend for the foreseeable future[76]. - The company expects to finance cash needs through equity offerings, collaborations, and strategic partnerships until substantial product revenues are generated[89]. - The company faces risks related to funding requirements and may need to delay or limit product development if additional funds cannot be raised[90]. Cash Flow - The company reported net cash used in operating activities of $24.99 million for the nine months ended September 30, 2021, compared to $9.9 million for the same period in 2020[84]. - The company reported net cash used in investing activities of $(42.2) million for the nine months ended September 30, 2021, compared to $3.7 million for the same period in 2020[86]. - Net cash provided by financing activities for the nine months ended September 30, 2021 was $80.6 million from common stock issuance, compared to $18.8 million for the same period in 2020[87]. Clinical Development - The Phase 1b/2a clinical trial of ATYR1923 in patients with pulmonary sarcoidosis showed positive results in 37 patients, demonstrating safety and a consistent dose response on key efficacy endpoints[68]. - The company plans to initiate a registrational trial for ATYR1923 for pulmonary sarcoidosis next year based on positive clinical trial results[68]. - The company is advancing its discovery pipeline, including the lead IND candidate ATYR2810 for oncology, with plans to submit an IND application and initiate a Phase 1 clinical trial in 2022[72]. - The company anticipates increased research and development expenses in the current and future years, primarily for ATYR1923 and ATYR2810[97]. Revenue and Expenses - License and collaboration agreement revenues were $0 for the nine months ended September 30, 2021, a decrease of $8.4 million compared to $8.4 million in 2020[108]. - The company has not generated any revenues from product sales to date and expects significant commercialization expenses if marketing approval is obtained for product candidates[88]. - Research and development expenses increased to $17.3 million for the nine months ended September 30, 2021, up from $12.6 million in 2020, reflecting a $4.7 million rise in product development and manufacturing costs[109]. - General and administrative expenses rose to $8.1 million for the nine months ended September 30, 2021, compared to $6.8 million in 2020, an increase of $1.3 million[108]. - General and administrative expenses increased to $8.1 million for the nine months ended September 30, 2021, up from $6.8 million in 2020, representing a $1.3 million increase[110]. - Other income improved to $0.2 million for the nine months ended September 30, 2021, compared to a loss of $(0.3) million in 2020, primarily due to the repayment of term loans[111]. Collaborations and Agreements - In January 2020, the company entered into a collaboration agreement with Kyorin Pharmaceutical for the development of ATYR1923 in Japan, receiving an upfront payment of $8.0 million and a milestone payment of $2.0 million[71]. - The company received an $8.0 million upfront payment and a $2.0 million milestone payment from Kyorin under a collaboration agreement for ATYR1923[93]. Stock and Share Issuance - The company completed a follow-on public offering in September 2021, raising approximately $80.6 million from the sale of 10,781,250 shares at $8.00 per share[79]. - The company sold an aggregate of 3,000,000 shares at an average price of $5.09 per share for net proceeds of $15.2 million under a common stock purchase agreement with Aspire Capital[83]. Subsidiaries and Arrangements - The company has a 98% majority-owned subsidiary in Hong Kong, Pangu BioPharma, included in its consolidated financial statements[92]. - The company currently has no off-balance sheet arrangements during the periods presented[113]. - There are no applicable quantitative and qualitative disclosures about market risk[114].

Financial Position - The company reported an accumulated deficit of $356.1 million as of June 30, 2021, and expects to continue incurring net losses for the foreseeable future[72]. - As of June 30, 2021, the company had cash, cash equivalents, and available-for-sale investments totaling $44.1 million, sufficient to meet anticipated cash requirements for at least one year[72]. - The company reported net cash provided by financing activities of $26.1 million for the six months ended June 30, 2021, primarily from stock issuances[79]. Operating Activities - For the six months ended June 30, 2021, net cash used in operating activities was $(13.5) million, compared to $(4.3) million for the same period in 2020[79]. - The company has not generated any revenues from product sales to date and expects expenses to increase as it advances clinical development of ATYR1923 and other therapies[82]. Clinical Development - The company completed enrollment in a Phase 1b/2a clinical trial for ATYR1923, targeting pulmonary sarcoidosis, and expects to report data in mid-September 2021[65]. - A Phase 2 study of ATYR1923 in COVID-19 patients showed that a single IV dose was generally safe and well-tolerated, with a signal of activity in the 3.0 mg/kg cohort[66]. - The company is advancing its discovery pipeline, including the lead IND candidate ATYR2810 for oncology, which is in preclinical development[68]. - The company has faced delays in clinical trials due to the COVID-19 pandemic, impacting the timelines and costs of ongoing studies[92]. Revenue and Expenses - For the three months ended June 30, 2021, license and collaboration agreement revenues were $0, a decrease of $189,000 compared to $189,000 in the same period of 2020[97]. - For the six months ended June 30, 2021, license and collaboration agreement revenues were $0, a decrease of $8.3 million compared to $8.3 million in the same period of 2020[102]. - Research and development expenses increased to $7.7 million for the three months ended June 30, 2021, up from $4.4 million in 2020, primarily due to a $3.5 million increase in manufacturing costs for ATYR1923[99]. - Research and development expenses for the six months ended June 30, 2021, were $12.2 million, an increase of $4.2 million from $8.0 million in 2020, driven by a $3.8 million increase in manufacturing costs for ATYR1923[103]. - General and administrative expenses rose to $2.7 million for the three months ended June 30, 2021, compared to $2.1 million in 2020, mainly due to a $0.4 million increase in payroll-related expenses[100]. - General and administrative expenses for the six months ended June 30, 2021, were $5.5 million, up from $4.7 million in 2020, primarily due to a $0.5 million increase in payroll-related expenses[104]. - The company anticipates an increase in research and development expenses in the current and future years, primarily related to the clinical development of ATYR1923 and ATYR2810[91]. Collaborations and Agreements - The company received an $8.0 million upfront payment and a $2.0 million milestone payment from Kyorin Pharmaceutical for the development of ATYR1923 in Japan, with potential additional payments of up to $165.0 million[67]. - The company received an $8.0 million upfront payment and a $2.0 million milestone payment from Kyorin, with potential additional payments of up to $165.0 million upon achieving certain milestones[86]. - The company has entered into a Capital on Demand Sales Agreement with JonesTrading for an ATM Offering Program with an aggregate offering price of up to $25.0 million[78]. Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements as defined by SEC regulations[107].

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and detailed notes for the periods presented [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$55.1 million** by March 2021, driven by investments, with equity rising to **$49.5 million** | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total assets | $55,128 | $38,726 | +$16,402 | | Cash and cash equivalents | $12,587 | $16,952 | -$4,365 | | Available-for-sale investments | $38,050 | $14,737 | +$23,313 | | Total current liabilities | $4,451 | $5,864 | -$1,413 | | Total stockholders' equity | $49,532 | $31,484 | +$18,048 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **$7.2 million net loss** in Q1 2021, a shift from net income, due to absent collaboration revenue and increased R&D | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | License and collaboration agreement revenues | $0 | $8,065 | -$8,065 | | Research and development expenses | $4,516 | $3,616 | +$900 | | General and administrative expenses | $2,686 | $2,590 | +$96 | | Consolidated net income (loss) | $(7,155) | $1,752 | -$8,907 | | Basic, net income (loss) per share | $(0.51) | $0.25 | -$0.76 | | Shares used in computing basic net income (loss) per share | 14,103,783 | 6,881,791 | +7,221,992 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a **$7.2 million comprehensive loss** in Q1 2021, reflecting net loss and unrealized investment losses | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (in thousands) | | :---------------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Consolidated net income (loss) | $(7,155) | $1,752 | -$8,907 | | Change in unrealized loss on available-for-sale investments, net of tax | $(14) | $(13) | -$1 | | Comprehensive income (loss) | $(7,169) | $1,739 | -$8,908 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased to **$49.5 million** by March 2021, primarily due to **$24.8 million** from stock issuances | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Total Stockholders' Equity | $49,532 | $31,484 | +$18,048 | | Common Stock Shares Outstanding | 16,011,385 | 11,018,954 | +4,992,431 | | Additional Paid-In Capital | $395,422 | $370,210 | +$25,212 | | Accumulated Deficit | $(345,679) | $(338,528) | -$7,151 | - Issuance of common stock from at-the-market offerings, net of offering costs, contributed **$9.6 million in proceeds**[19](index=19&type=chunk) - Issuance of common stock from committed purchase agreement, net of offering costs, contributed **$15.2 million in proceeds**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash and equivalents decreased by **$4.4 million** in Q1 2021, driven by investing and a shift to cash used in operations | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | $(5,827) | $2,058 | -$7,885 | | Net cash provided by (used in) investing activities | $(23,395) | $11,406 | -$34,801 | | Net cash provided by financing activities | $24,857 | $16,779 | +$8,078 | | Net change in cash and cash equivalents | $(4,365) | $30,243 | -$34,608 | | Cash and cash equivalents at end of period | $12,587 | $39,453 | -$26,866 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide essential context to financial statements, detailing accounting policies, agreements, and equity activities [1. Organization, Business, Basis of Presentation and Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Organization%2C%20Business%2C%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section details the company's business, accounting policies, and the impact of COVID-19 on operations - The company is focused on the discovery and development of innovative medicines based on novel biological pathways, specifically extracellular functionality and signaling pathways of tRNA synthetases[24](index=24&type=chunk) - The company incurred a condensed consolidated **net loss of $7.2 million** for the three months ended March 31, 2021, and had an **accumulated deficit of $345.7 million** as of March 31, 2021[28](index=28&type=chunk) - Existing cash, cash equivalents, and available-for-sale investments of **$50.6 million** as of March 31, 2021, are believed to be **sufficient for at least one year** from the 10-Q filing date[28](index=28&type=chunk) - The COVID-19 pandemic has delayed enrollment in the Phase 1b/2a clinical trial for pulmonary sarcoidosis, led to patient discontinuations, temporary facility closures, travel restrictions, and R&D delays[27](index=27&type=chunk) - The company adopted ASU No. 2019-12, Income Taxes (Topic 740), on January 1, 2021, which did not have a **material effect** on its financial position or results of operations[40](index=40&type=chunk) [2. Fair Value Measurements](index=10&type=section&id=2.%20Fair%20Value%20Measurements) This section details the company's financial assets measured at fair value, categorized by valuation inputs | Asset Category | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Cash equivalents (Level 1) | $11,958 | $13,708 | | Available-for-sale investments (Level 2): | | | | Asset-backed securities | $1,008 | $2,219 | | Commercial paper | $18,183 | $5,494 | | Corporate debt securities | $18,859 | $7,024 | | Total available-for-sale investments | $38,050 | $14,737 | | Total assets measured at fair value | $50,008 | $28,445 | - As of March 31, 2021, 15 out of 25 available-for-sale investments were in gross unrealized loss positions, with all having maturity dates of less than two years[47](index=47&type=chunk) [3. License, Collaboration and Other Agreements](index=12&type=section&id=3.%20License%2C%20Collaboration%20and%20Other%20Agreements) This section outlines key license and collaboration agreements, including revenue recognition and grants - In January 2020, the company entered into a collaboration and license agreement with Kyorin for ATYR1923 in Japan, receiving an **$8.0 million upfront payment** and a **$2.0 million milestone payment** in January 2021[48](index=48&type=chunk)[50](index=50&type=chunk) | Revenue Type | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | License and collaboration agreement revenues | $0 | $7,900 | - Pangu BioPharma, a subsidiary, received a grant of **approximately $750,000** with HKUST for a two-year project to build a high-throughput platform for bi-specific antibodies, with aTyr contributing **50% of the project cost**[53](index=53&type=chunk) [4. Debt, Commitments and Contingencies](index=14&type=section&id=4.%20Debt%2C%20Commitments%20and%20Contingencies) This section details the company's lease obligations and other contractual commitments | Lease Payments | Amount (in thousands) | | :------------------------------------ | :----------------------------- | | 2021 | $776 | | 2022 | $1,062 | | 2023 | $404 | | Less: Amount representing interest | $(207) | | Present value of lease payments | $2,035 | | Less: Current portion of operating lease liability | $(890) | | Long-term operating lease liability, net of current portion | $1,145 | - As of March 31, 2021, the **weighted-average remaining lease term was 2.2 years** and the **weighted-average discount rate was 9.6%**[55](index=55&type=chunk) [5. Stockholders' Equity](index=14&type=section&id=5.%20Stockholders'%20Equity) This section details changes in stockholders' equity, including capital raising activities and stock-based compensation - Sold 1,988,254 shares of common stock for **net proceeds of $9.6 million** under the ATM Offering Program with Wainwright, which terminated in March 2021[56](index=56&type=chunk) - Sold 3,000,000 shares of common stock for **net proceeds of $15.2 million** under a Purchase Agreement with Aspire Capital[60](index=60&type=chunk) - Entered into a **new $25.0 million ATM Offering Program** with JonesTrading in March 2021, with no shares issued during the quarter[57](index=57&type=chunk)[58](index=58&type=chunk) | Metric | March 31, 2021 (in thousands) | March 31, 2020 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Stock-based compensation expense | $360 | $423 | -$63 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, strategic focus, clinical programs, liquidity, and capital [Overview](index=16&type=section&id=Overview) aTyr Pharma focuses on novel biotherapeutics, with lead candidate ATYR1923 for inflammatory lung diseases and ATYR2810 for oncology - aTyr Pharma is a biotherapeutics company focused on the discovery and development of innovative medicines based on novel biological pathways, specifically the extracellular functionality and signaling pathways of tRNA synthetases and their extracellular targets like neuropilin-2 (NRP2)[67](index=67&type=chunk) - Lead clinical product candidate, ATYR1923, is a selective modulator of NRP2 being developed for severe inflammatory lung diseases (ILD), including pulmonary sarcoidosis, and showed positive safety data in a Phase 2 study for COVID-19 related severe respiratory complications[68](index=68&type=chunk)[69](index=69&type=chunk) - ATYR2810, a fully humanized monoclonal antibody targeting NRP2, is in preclinical development for aggressive cancers[71](index=71&type=chunk) - New discovery programs for Alanyl-tRNA synthetase (AARS) and Aspartyl-tRNA synthetase (DARS) in immunology, fibrosis, and cancer were announced in February 2021[73](index=73&type=chunk) - The COVID-19 pandemic has delayed enrollment in the Phase 1b/2a clinical trial for pulmonary sarcoidosis, led to patient discontinuations, temporary facility closures, travel restrictions, and R&D delays[74](index=74&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The company has an **accumulated deficit of $345.7 million**, with **$50.6 million** in cash, relying on equity sales for funding - **Accumulated deficit of $345.7 million** as of March 31, 2021, with expected continued net losses[75](index=75&type=chunk) - Cash, cash equivalents, and available-for-sale investments totaled **$50.6 million** as of March 31, 2021, **sufficient for at least one year** of anticipated cash requirements[75](index=75&type=chunk) - Primary funding sources include equity securities sales, convertible debt, venture debt, term loans, and license/collaboration agreement revenues[76](index=76&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | $(5,827) | $2,058 | | Net cash provided by (used in) investing activities | $(23,395) | $11,406 | | Net cash provided by financing activities | $24,857 | $16,779 | - Future funding requirements are uncertain and depend on clinical trial progress, regulatory approvals, manufacturing, and commercialization efforts, with plans to seek additional capital through equity, grants, collaborations, or debt[85](index=85&type=chunk)[86](index=86&type=chunk) [Financial Operations Overview](index=20&type=section&id=Financial%20Operations%20Overview) Financial operations show no Q1 2021 collaboration revenue, increased R&D, and consistent G&A expenses - **No license and collaboration agreement revenue was recognized** for the three months ended March 31, 2021, compared to **$7.9 million in the prior year**, following the upfront payment and milestone from the Kyorin agreement[92](index=92&type=chunk)[100](index=100&type=chunk) | Expense Category | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Research and development | $4,516 | $3,616 | +$900 | | General and administrative | $2,686 | $2,590 | +$96 | - The increase in R&D expenses was primarily due to **$0.4 million higher manufacturing-related costs for ATYR1923** and **$0.4 million for ATYR2810 R&D**[101](index=101&type=chunk) - Critical accounting policies and estimates have **not materially changed** from those disclosed in the 2020 Annual Report[99](index=99&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 2021 saw no collaboration revenue, increased R&D, stable G&A, and improved other income due to debt repayment | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Increase / (Decrease) (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | License and collaboration agreement revenues | $0 | $8,065 | $(8,065) | | Research and development expenses | $4,516 | $3,616 | $900 | | General and administrative expenses | $2,686 | $2,590 | $96 | | Other income (expense), net | $47 | $(107) | $(154) | - The increase in R&D expenses was primarily due to **$0.4 million higher manufacturing related costs for ATYR1923** and **$0.4 million of research and development expenses related to ATYR2810**[101](index=101&type=chunk) - The change in other income (expense), net, was primarily a result of term loans which were paid in full in November 2020[102](index=102&type=chunk) [Recent Accounting Pronouncements](index=22&type=section&id=Recent%20Accounting%20Pronouncements) The company refers to Note 1 for details on recently issued accounting pronouncements - Refer to Note 1 for details on recent accounting pronouncements[103](index=103&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) The company did not have any off-balance sheet arrangements during the periods presented - The company did not have any **off-balance sheet arrangements** during the periods presented[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section indicates **no material quantitative or qualitative disclosures** about market risk - The company has **no material quantitative or qualitative disclosures about market risk**[105](index=105&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no significant changes in internal control - Disclosure controls and procedures were evaluated as **effective at the reasonable assurance level** as of March 31, 2021[107](index=107&type=chunk) - **No significant changes in internal control over financial reporting occurred** during the three months ended March 31, 2021[108](index=108&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not a party to any material legal proceedings** that would adversely affect its operations - The company is **not a party to any material legal proceedings** at this time[109](index=109&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant investment risks, including financial condition, product development, and IP [Summary of Risks Associated with Our Business](index=23&type=section&id=Summary%20of%20Risks%20Associated%20with%20Our%20Business) Investing involves **substantial risks**, including capital needs, ongoing losses, clinical trial failures, and COVID-19 impacts - **Key risks include the need for additional capital, significant ongoing losses, potential delays or failures in clinical trials, challenges in commercializing novel therapeutic approaches, undesirable side effects, reliance on third-party collaborations, intellectual property protection issues, and the adverse effects of the COVID-19 pandemic**[112](index=112&type=chunk) [Risks related to our financial condition and need for additional capital](index=23&type=section&id=Risks%20related%20to%20our%20financial%20condition%20and%20need%20for%20additional%20capital) The company needs substantial additional capital, faces ongoing losses, and future equity financing will dilute shareholders - The company **needs to raise additional capital or enter strategic partnerships to fund operations**, as **current cash ($50.6 million as of March 31, 2021) is sufficient for only about one year**[113](index=113&type=chunk) - **Failure to obtain timely funding could lead to curtailment, delay, or discontinuation of research/development programs or commercialization efforts**[115](index=115&type=chunk) - The company has **incurred net losses since its 2005 inception**, including a **$7.2 million net loss** for Q1 2021, and has an **accumulated deficit of $345.7 million** as of March 31, 2021[120](index=120&type=chunk) - The company **expects to continue incurring significant expenses and operating losses for the foreseeable future**, as it has **not generated any revenue from product sales**[122](index=122&type=chunk)[124](index=124&type=chunk) [Risks related to the discovery, development and regulation of our product candidates](index=25&type=section&id=Risks%20related%20to%20the%20discovery%2C%20development%20and%20regulation%20of%20our%20product%20candidates) Clinical trials face risks of delays, failures, and patient enrollment challenges, with novel approaches being unproven and potential side effects - Clinical trials are **expensive, time-consuming, often delayed, and uncertain**, with **risks of failure at any stage**, potentially preventing or delaying regulatory approval[126](index=126&type=chunk) - **Patient enrollment in clinical trials, especially for rare diseases like pulmonary sarcoidosis, is challenging and can be further impacted by factors like the COVID-19 pandemic, leading to delays or discontinuations**[138](index=138&type=chunk)[139](index=139&type=chunk) - The company's **novel therapeutic approaches based on extracellular tRNA synthetase and NRP2 biology are unproven**, posing challenges in defining indications, obtaining regulatory approval, and ensuring safety and efficacy[141](index=141&type=chunk)[142](index=142&type=chunk) - **Undesirable side effects or safety issues**, such as antibody development or infusion-related reactions, could **delay or prevent regulatory approval or limit commercialization**[148](index=148&type=chunk)[149](index=149&type=chunk) - The **FDA may not accept data from clinical trials conducted outside the United States**, potentially delaying development plans[146](index=146&type=chunk) [Risks related to our reliance on third parties](index=34&type=section&id=Risks%20related%20to%20our%20reliance%20on%20third%20parties) Reliance on third-party collaborators, CDMOs, and CROs introduces risks of non-performance, supply disruptions, and loss of control - The company's revenue depends on collaborators' performance (e.g., Kyorin for ATYR1923 in Japan), over which it has **limited control**, and agreements can be terminated[171](index=171&type=chunk)[173](index=173&type=chunk) - **Reliance on third-party CDMOs and CROs for manufacturing and clinical testing introduces risks such as inability to negotiate favorable terms, reduced control, termination of agreements, and disruptions to operations**[174](index=174&type=chunk)[176](index=176&type=chunk)[179](index=179&type=chunk) - **Manufacturing biologics is complex and susceptible to product loss, contamination, and equipment failure**, and processes may not be adaptable across different product candidates[157](index=157&type=chunk) - Sharing trade secrets with third parties increases the **risk of disclosure or misappropriation**, potentially impairing competitive position[183](index=183&type=chunk)[184](index=184&type=chunk) [Risks related to our intellectual property](index=38&type=section&id=Risks%20related%20to%20our%20intellectual%20property) Success depends on robust, yet uncertain, patent and IP protection, facing risks of infringement claims and trade secret disclosure - **Obtaining and maintaining patent protection is expensive, time-consuming, and uncertain**, with **risks that patent applications may not issue, or issued patents may be challenged, narrowed, or invalidated**[185](index=185&type=chunk)[187](index=187&type=chunk) - The **limited lifespan of patents means protection may expire before or shortly after product commercialization**, potentially leading to competition from generics or biosimilars[198](index=198&type=chunk) - **Reliance on trade secrets for non-patentable know-how carries risks of disclosure, misappropriation, or independent discovery by competitors**[189](index=189&type=chunk)[190](index=190&type=chunk) - The company faces **potential claims of infringement from third parties, which could lead to costly litigation, substantial damages, or the need to obtain licenses on unfavorable terms or at all**[194](index=194&type=chunk)[197](index=197&type=chunk) - **Changes in patent law, such as the Leahy-Smith America Invents Act and recent Supreme Court rulings, could diminish the value of patents and increase uncertainties and costs**[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Risks related to our business operations](index=42&type=section&id=Risks%20related%20to%20our%20business%20operations) Limited resources, COVID-19 impacts, personnel retention, international operations, and compliance risks affect business - **Limited resources may lead to foregoing more profitable strategies or product candidates**, impacting business success[219](index=219&type=chunk)[220](index=220&type=chunk) - The **COVID-19 pandemic continues to cause significant disruptions, including delays in clinical trials, supply chain issues, and challenges in raising capital**[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - Future success is **highly dependent on attracting and retaining key employees, consultants, and advisors in a competitive industry with a shortage of skilled personnel**[228](index=228&type=chunk)[229](index=229&type=chunk) - International operations (e.g., Hong Kong subsidiary, international clinical trials) expose the company to risks like **differing regulatory requirements, reduced intellectual property protection, and economic instability**[232](index=232&type=chunk)[233](index=233&type=chunk) - The company is exposed to **risks of fraud or misconduct by employees, investigators, consultants, and partners, including non-compliance with regulatory standards and healthcare fraud/abuse laws**[234](index=234&type=chunk) - **Product liability claims**, even if successfully defended, could result in **substantial costs, reputational harm, and delays** in regulatory approvals or commercialization[235](index=235&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - **Non-compliance with stringent and evolving data privacy and security laws** (e.g., GDPR, CCPA) could lead to **government enforcement actions, fines, and material adverse impacts** on the business[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) [Risks related to the commercialization of our product candidates](index=49&type=section&id=Risks%20related%20to%20the%20commercialization%20of%20our%20product%20candidates) Commercialization faces risks from lack of infrastructure, manufacturing, intense competition, and uncertain market acceptance/reimbursement - The company **lacks sales, marketing, and distribution infrastructure** and faces risks in building its own or relying on third parties, potentially leading to **high costs, delays, or lower profitability**[249](index=249&type=chunk)[250](index=250&type=chunk) - The company has **not secured commercial manufacturing capabilities** and relies on third-party CDMOs, posing **risks to full-scale production, process validation, and supply continuity**[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - The biotechnology and pharmaceutical industries are **intensely competitive**, with larger competitors possessing **greater resources**, potentially developing **more effective or cheaper therapies**, or achieving **earlier market penetration**[254](index=254&type=chunk)[255](index=255&type=chunk) - Commercial success depends on **market acceptance by physicians, patients, and third-party payors**, which is **uncertain and requires significant resources for education**[256](index=256&type=chunk)[257](index=257&type=chunk) - **Obtaining adequate insurance coverage and reimbursement is crucial but uncertain**, with significant delays and varying policies among payors[258](index=258&type=chunk) - International sales are subject to **governmental price controls and cost-containment initiatives**, potentially leading to **lower revenues and profits**[259](index=259&type=chunk)[260](index=260&type=chunk) - **Heightened governmental scrutiny on pharmaceutical pricing and healthcare reform measures** (e.g., ACA, executive orders) create **pricing pressures and uncertainty** for future product commercialization[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) [Risks related to the ownership of our common stock](index=53&type=section&id=Risks%20related%20to%20the%20ownership%20of%20our%20common%20stock) Common stock price is volatile, influenced by clinical results and dilution from equity sales, with no dividends planned - The **market price of common stock is highly volatile**, influenced by factors such as clinical trial results, regulatory decisions, competition, and macroeconomic conditions[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - Executive officers, directors, and 5% holders collectively own **approximately 29.1% of voting stock**, enabling them to exert **significant control** over company matters[267](index=267&type=chunk) - Future sales and issuances of equity securities (e.g., remaining **$4.8 million** under Aspire Capital Purchase Agreement, **$25.0 million** ATM Offering Program) will **dilute existing stockholders and could depress the stock price**[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) - The company has **substantial net operating losses (NOLs)** that may be subject to **limitations** (e.g., Section 382 of the Code, state tax limits) in offsetting future taxable income, potentially **increasing future tax liability**[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - The company does **not intend to pay cash dividends on common stock**, meaning stockholder returns will be **limited to stock appreciation**[277](index=277&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk) [General Risk Factors](index=57&type=section&id=General%20Risk%20Factors) General risks include environmental compliance, cyber-attacks, public company costs, anti-corruption, and litigation exposure - **Non-compliance with environmental, health, and safety laws could lead to fines, penalties, or significant costs**[285](index=285&type=chunk)[286](index=286&type=chunk) - **System failures, cyber-attacks, and security breaches** (including data loss, unauthorized access) pose significant risks to proprietary and sensitive information, potentially causing **operational disruptions, reputational harm, and increased costs**[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk) - Operating as a public company incurs **significant legal, accounting, and compliance costs**, requiring **substantial management time**[297](index=297&type=chunk) - The company is subject to **anti-corruption laws** (e.g., FCPA), and non-compliance could result in **criminal/civil penalties and reputational harm**[293](index=293&type=chunk) - The **stock price can be affected by securities analysts' research and reports**, and the company is exposed to the risk of securities class action litigation[298](index=298&type=chunk)[299](index=299&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) **No unregistered sales of equity securities or use of proceeds were reported** - **No unregistered sales of equity securities or use of proceeds were reported**[301](index=301&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) **No defaults upon senior securities were reported** - **No defaults upon senior securities were reported**[302](index=302&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company - **Mine Safety Disclosures are not applicable to the company**[303](index=303&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) **No other information was reported** - **No other information was reported**[304](index=304&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including organizational documents and certifications - The **exhibits include restated certificates of incorporation, amended bylaws, specimen common stock certificates, warrants, employment agreements, sales agreements, equity incentive plans, code of business conduct and ethics, and certifications** (e.g., Rule 13a-14(a), 18 U.S.C. Section 1350)[306](index=306&type=chunk)[307](index=307&type=chunk) SIGNATURES The report is formally signed by the company's President, CEO, and Chief Financial Officer - The report was signed by Sanjay S. Shukla, M.D., M.S., President and Chief Executive Officer, and Jill M. Broadfoot, Chief Financial Officer, on May 14, 2021[310](index=310&type=chunk)[311](index=311&type=chunk)