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 March 31, 2024 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 ...

Drug Development and Clinical Trials - Efzofitimod is a first-in-class biologic immunomodulator in clinical development for interstitial lung disease (ILD) with orphan drug designations from the FDA for sarcoidosis and systemic sclerosis (SSc) [12] - The EFZO-FIT study, a pivotal Phase 3 trial for efzofitimod in pulmonary sarcoidosis, is currently enrolling up to 264 subjects and aims to complete enrollment by Q2 2024 [14][15] - The Phase 1b/2a clinical trial demonstrated consistent dose response for efzofitimod on key efficacy endpoints, including improvements in lung function and symptom measures compared to placebo [13] - The primary endpoint of the EFZO-FIT study is steroid reduction, with secondary endpoints including forced vital capacity (FVC) and quality of life assessments [14] - The EFZO-CONNECT study for efzofitimod in patients with SSc-ILD was initiated in Q3 2023, with the first patient dosed in October 2023 [17][22] - The ongoing Phase 3 clinical trial, EFZO-FIT, aims to enroll up to 264 patients with symptomatic pulmonary sarcoidosis, evaluating the efficacy and safety of IV efzofitimod at doses of 3.0 mg/kg and 5.0 mg/kg [43] - The Phase 1 clinical trial of efzofitimod in healthy volunteers indicated that the drug was well-tolerated at all dose levels tested, with no significant adverse events [57] - The Phase 1b/2a clinical trial for efzofitimod in pulmonary sarcoidosis demonstrated a 58% overall steroid reduction from baseline and a 22% relative reduction compared to placebo in the 5.0 mg/kg treatment group [51] - The EFZO-CONNECT study, targeting SSc-ILD, is a 28-week trial with a planned enrollment of 25 patients, with the first patient dosed in October 2023 [17] - The Phase 2 clinical trial for efzofitimod 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 [56] Financial and Market Considerations - The Kyorin Agreement has generated $20.0 million in upfront and milestone payments, with potential for an additional $155.0 million upon achieving certain milestones [18] - The global market opportunity for pulmonary sarcoidosis and SSc-ILD is estimated to be between $2-3 billion [72] - The company has incurred significant losses since inception and anticipates continued losses for the foreseeable future [10] - The market for ILD treatments remains underserved, presenting a high unmet medical need for effective therapies [12] - The company faces significant uncertainty regarding coverage and reimbursement from third-party payors, which may limit sales of approved products [125][132] - Third-party payors are increasingly scrutinizing pricing and cost-effectiveness, potentially impacting reimbursement rates for approved products [126][129] - The U.S. government and state legislatures are implementing cost containment programs that may reduce the profitability of drug products, including price controls and mandatory discounts [127] Regulatory and Compliance - The FDA requires extensive preclinical and clinical testing before any new biologic can be marketed, which involves significant time and financial resources [96] - A Biologics License Application (BLA) must include all relevant data from preclinical studies and clinical trials, and FDA approval is required before marketing [104] - The FDA may issue a Complete Response Letter (CRL) if the BLA is not ready for approval, outlining deficiencies that need to be addressed [108] - The FDA grants orphan drug designation for drugs treating rare diseases affecting fewer than 200,000 individuals in the U.S., providing financial incentives and exclusivity for seven years if approved first [117][118] - The company is subject to various federal and state healthcare laws, including the Anti-Kickback Statute and the False Claims Act, which could impact operations [136] - The company has implemented safeguards to discourage improper payments under the U.S. Foreign Corrupt Practices Act (FCPA) [135] Research and Development Strategy - The company is focused on advancing efzofitimod toward regulatory approval and exploring its applications in other ILDs [21][22] - The company has advanced two additional tRNA synthetase programs, ATYR0101 and ATYR0750, into preclinical development [23] - The company plans to further elucidate the therapeutic potential of efzofitimod through mechanistic investigations, including in vitro and in vivo preclinical studies [23] - The company plans to invest significant financial and management resources to develop the appropriate commercial infrastructure for its product candidates [75] - The company aims to expand its intellectual property estate by filing patent applications for new methods of treatment and therapeutics [83] Employee and Operational Insights - As of December 31, 2023, the company had 59 employees, with 56 being full-time, including 36 in research and development roles [137] - The company emphasizes the importance of attracting and retaining talented employees to execute its strategy effectively [138] - The company operates in a single accounting segment, indicating a focused business model [141] Drug Mechanism and Efficacy - Efzofitimod targets the NRP2 receptor, which is upregulated during differentiation and activation of myeloid cells, potentially providing a novel therapeutic approach for immune-mediated and fibrotic diseases [32] - Efzofitimod has shown significant reduction in lung inflammation and fibrosis, improving respiratory function parameters in multiple animal models of lung fibrosis [29] - Efzofitimod has been shown to reduce lung and skin fibrosis in an animal model of systemic sclerosis (SSc-ILD), indicating its potential as a therapeutic candidate for this condition [42] - The company has demonstrated that efzofitimod downregulates key inflammatory cytokines such as IL-6, TNF-α, and IFN-γ in both animal models and human clinical trials [29] - Efzofitimod is a novel immunomodulatory Fc fusion protein that selectively modulates NRP2 to downregulate immune responses in inflammatory diseases [24]

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 | --- | --- | --- | |-----------------------------------------------------------------------------------------|------ ...

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, 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 Common Stock, par value $0.001 per share LIFE The Nasdaq Capital Market Indicate by check mark whether the registrant (1) ...

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].