aTyr Pharma, Inc.(ATYR) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements for Q1 2024, including balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | March 31, 2024 (unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,808 | $22,544 | | Total current assets | $96,916 | $102,992 | | Total assets | $113,251 | $120,653 | | Total current liabilities | $15,979 | $16,416 | | Total stockholders' equity | $84,282 | $90,470 | - The company's cash and cash equivalents decreased significantly from $22.5 million at the end of 2023 to $6.8 million at the end of Q1 2024, reflecting cash used in operations[5] Condensed Consolidated Statements of Operations Statement of Operations (in thousands) | Statement of Operations (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenues | $235 | $0 | | Research and development | $13,364 | $9,379 | | General and administrative | $3,507 | $3,408 | | Loss from operations | $(16,636) | $(12,787) | | Net loss attributable to aTyr Pharma | $(15,491) | $(11,951) | | Net loss per share, basic and diluted | $(0.23) | $(0.29) | - The net loss for Q1 2024 increased to $15.5 million from $12.0 million in Q1 2023, primarily driven by a significant rise in research and development expenses[6] Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,380) | $(590) | | Net cash used in investing activities | $(1,356) | $(38,172) | | Net cash provided by financing activities | $7,730 | $49,496 | | Net change in cash, cash equivalents and restricted cash | $(16,006) | $10,734 | - Net cash used in operating activities increased substantially to $22.4 million in Q1 2024 from $0.6 million in Q1 2023. Net cash from financing activities decreased significantly, primarily due to a large follow-on public offering in Q1 2023 that was not repeated in Q1 2024[13][14] Notes to Condensed Consolidated Financial Statements - The company believes its existing cash, cash equivalents, restricted cash, and available-for-sale investments of $87.7 million as of March 31, 2024, are sufficient to meet material cash requirements for at least one year from the filing date[20] - In Q1 2024, the company recognized $0.2 million in collaboration revenue from Kyorin for drug product material sold for the Japan portion of the EFZO-FIT study. The company is eligible for up to an additional $155.0 million in future milestones from this agreement[53][51] - During Q1 2024, the company sold 5,045,518 shares of common stock through its "at-the-market" (ATM) offering program, generating net proceeds of approximately $8.6 million[60] - Subsequent to the quarter end, from April 1 to April 30, 2024, the company sold an additional 656,907 shares through its ATM program for net proceeds of $1.1 million[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses therapeutic development, focusing on efzofitimod's clinical trials, R&D expenses, liquidity, and capital requirements Overview - The lead therapeutic candidate, efzofitimod, is being evaluated in a global pivotal Phase 3 trial (EFZO-FIT™ study) for patients with pulmonary sarcoidosis. Enrollment is expected to be completed in the second quarter of 2024[70][73] - A Phase 2 proof-of-concept clinical trial (EFZO-CONNECT™ study) is underway to evaluate efzofitimod in patients with systemic sclerosis-associated ILD (SSc-ILD)[75] - The company's discovery pipeline includes ATYR0101 and ATYR0750, which are being investigated for their therapeutic potential in immunology and fibrosis[78][79][80] Liquidity and Capital Resources - As of March 31, 2024, the company had cash, cash equivalents, restricted cash, and available-for-sale investments of $87.7 million, which is believed to be sufficient to fund operations for at least one year[82] - Net cash used in operating activities was $22.4 million for Q1 2024, a substantial increase from $0.6 million in Q1 2023. The increase was primarily due to higher costs for ongoing clinical trials and upfront payments for manufacturing efforts[87] - Financing activities in Q1 2024 provided $7.7 million, primarily from the ATM offering program. This is a significant decrease from Q1 2023, which included $48.1 million from an underwritten public offering[89][84] Results of Operations Operating Results (in thousands) | Operating Results (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | License and collaboration revenues | $235 | $0 | | Research and development expenses | $13,364 | $9,379 | | General and administrative expenses | $3,507 | $3,408 | - Research and development expenses increased by $4.0 million year-over-year, mainly due to a $3.7 million increase in clinical trial costs for the EFZO-FIT and EFZO-CONNECT studies and a $0.8 million increase in manufacturing costs in preparation for a possible Biologics License Application (BLA)[105] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable, as permitted for smaller reporting companies - As a smaller reporting company, aTyr Pharma is not required to provide quantitative and qualitative disclosures about market risk[108] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - The company's management concluded that its disclosure controls and procedures were effective as of the end of the quarter[110] - 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 controls[111] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[112] Item 1A. Risk Factors This section outlines key risks including clinical trial delays, novel therapeutic challenges, capital needs, third-party reliance, and IP protection - The company faces substantial risk related to clinical development, including potential delays in its EFZO-FIT and EFZO-CONNECT trials and the lack of an established FDA regulatory pathway for pulmonary sarcoidosis, which could hinder approval[114][117][125] - A critical financial risk is the need to raise additional capital to fund operations. The company has a history of significant losses and anticipates they will continue for the foreseeable future[114][169][174] - The company is heavily reliant on third parties, including its collaboration with Kyorin for development in Japan and its dependence on Contract Development and Manufacturing Organizations (CDMOs) for producing its product candidates[114][180][187] - The company's product candidates are based on a novel therapeutic approach (tRNA synthetase biology), which presents unique challenges and uncertainties in development, regulatory approval, and market acceptance[114][136] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - There were no unregistered sales of equity securities in the reported quarter[312] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - There were no defaults upon senior securities during the period[312] Item 4. Mine Safety Disclosures This section is not applicable to the company's operations - Mine safety disclosures are not applicable to the company's operations[312] Item 5. Other Information No other information required to be disclosed was reported for the period - There was no other information to report for the period[312] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and SOX certifications - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer, as well as interactive data files (XBRL)[312][313]