aTyr Pharma, Inc.(ATYR) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements 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 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 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 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 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] - 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][48] - In February 2023, the company completed an underwritten follow-on public offering, raising net proceeds of approximately $48.1 million[55] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - 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] - 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] Liquidity and Capital Resources 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] - In February 2023, the company raised approximately $48.1 million in net proceeds from an underwritten follow-on public offering[78] - During Q1 2023, the company received a $10.0 million milestone payment from its partner Kyorin[80] Results of Operations 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] Item 4. Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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][112][121] - 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][165][174] - 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] - 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][247][248] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period covered by this report - None[314] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None[314] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[314] Item 5. Other Information The company reported no other information required to be disclosed in this item - None[314] Item 6. Exhibits 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]