Welcome, everyone, to day 2 of the 2024 RBC Global Healthcare Conference. My name is Greg Renza, one of the biotechnology biotech research analysts here at RBC, and we're pleased to have this morning aTyr Pharma joining us from the company as the President and CEO, Sanjay Shukla. Sanjay, good to see you. Thanks for joining us. Thank you for the very early invite. 5:00 A.M. Pacific. I love that. Yes, we do that for the West Coasters. Yeah. Get to you early. So this is great. You're at a really exciting time for aTyr and efzofitimod. So maybe for those who aren't too familiar with the aTyr story, just walk us through what you're working on, the biology behind efzofitimod, and maybe the big picture story around tRNA synthetase and the platform discovery. Yeah. So efzofitimod is our late-stage phase III therapy that's currently being tested in a rare lung disease called pulmonary sarcoidosis. We also have a phase II proof-of-concept with the same compound in scleroderma-related interstitial lung disease. This is a program that comes out of our platform. We're a platform company that focuses on tRNA synthetases. These are enzymes in all of our bodies that help us conjugate a reaction between an amino acid and a tRNA. And for a long time, they've been known as basic building block enzymes within the cell to help us make proteins. About a decade ago, 15 years ago, our founder, Paul Schimmel, discovered that these synthetases, these proteins actually break out, break apart into smaller fragments. Those fragments then are released out of the cell, and they seem to play a role in modulating local immune systems. Quite an exciting discovery. About 15 years ago, we are building upon that and now have discovered a really novel way of addressing chronic inflammatory lung disease by using one of these fragments, a fragment of histidyl-tRNA synthetase that has shown excellent efficacy and safety thus far, culminating with the phase II proof of concept that we published in CHEST a few years ago. That's great. What aspects of efzofitimod's mechanism of action do you think are worthy of elaborating on, maybe are underappreciated by both clinicians and, quite frankly, investors? And I think that this is a mode whereas you're developing and advancing the pivotal program. You're also generating greater reassurance for folks just on the clinical rationale and ultimate utility. So early on, this biology, when we go back to the in vitro days, seemed to do a really nice job of modulating myeloid cells. In particular, macrophages, monocytes were quiesced by this protein, has an innate ability to essentially reprogram and retune these aberrant myeloid cells. It's quite exciting to see that early on and then translate over the last seven-eight years. We have de-risked not only the clinical understanding of where this compound could be most useful, but understanding the biology, the mechanistic understanding. We continue to do that even today, highlighting a poster. We're going to have an ATS this weekend. But it's a very, very novel way of retuning a macrophage. And in many of these diseases, for example, in sarcoidosis, granulomatous inflammation, one of the hallmarks is aberrant monocyte and macrophage phenotypes. We are seeing efzofitimod actually change the phenotype of these macrophages. We can visualize it. This was presented last year at ATS. So quite exciting to be able to observe that efficacy. But I think the thing I always like about it clinically is we are not ablating the system like more of the heavy-handed immunosuppressants. We are essentially bringing down these players back to resting levels. And that's what we really need with newer therapies, is the ability to tamp down on the inflammation and the fibrosis without creating new safety issues for patients. Yeah, no, I love that explanation. Just calming it down. Just remind us how you got to this phase III study in sarcoid. You mentioned the CHEST publication, but what data have you shown in the prior studies that really give you the confidence and the momentum to advance the program? So with a novel biology platform that we had, have and had seven or eight years ago, we thought it was very important to have a broad translational array of data. Many companies might run one or two animal models, then they quickly move into the clinic. With this biology, we really wanted to be sure, as we thought it could be useful in chronic inflammatory lung disease. So we embarked on a campaign of over half a dozen animal models, different types of lung injury and inflammation models that allowed us to get the confidence to see consistent anti-inflammatory effects, knockdown of all the important inflammatory and fibrotic markers that you might hear about with many therapies. We're quite upstream in the programming early, early on in the process. So that early understanding. Think about, hey, could this be useful in IPF, in hypersensitivity pneumonitis, in scleroderma-related ILD? We had signals in all of those animal models. Sarcoidosis was also talked about. Sarcoidosis is the most inflammatory form of interstitial lung disease. So we thought this would be a good POC, as our drug seems to have more potent anti-inflammatory effects and probably downstream anti-fibrotic effects, because we're intervening quite early in the cascade. So we did embark on a sarcoidosis program, the phase III you alluded to. And that was really an interesting program, because we were the first company to incorporate a steroid sparing design. I had previously done some work in drug development in other areas, lupus and myasthenia, where we incorporated a lot of these steroid sparing approaches. Steroids are the mainstay for sarcoidosis, unfortunately, and they come with a lot of toxic effects. So we thought, hey, could we incorporate a steroid sparing design? Patients might be made uncomfortable doing that design, but then we'll really be able to look at the feel and function of our drug. Our drug demonstrated, frankly, better results than we expected. It not only reduced steroids, but it also improved the functional endpoints, namely FVC and some of the PFTs we looked at. It improved quality of life quite substantially, and not just one measure, all of the quality of life measures, the cough, the shortness of breath, the fatigue measures. So that consistency that we saw and the dose response we saw was rather remarkable in a small trial. Very difficult to see that consistency, that dose response in a small trial, even statistically speaking, very, very difficult. So very, very strong signal that allowed us to feel confident moving to phase III. Yeah, yeah, consistency is certainly a message worth focusing on. Just remind us a bit around efzofitimod's study design. You touched on the management of sarcoid, but where this helps to improve the standard of care with respect to steroid sparing and just the other sort of usual and maybe unfulfilling measures that are being used today. Sure. Sarcoidosis, I think, if you take a step back, many in the clinic view it as maybe not as serious a disease. It is true that you might have, say, 40%-45% of the patients might self-resolve within, say, the first six months of a diagnosis. But once you progress and you need day-to-day steroid treatment, these patients are on a journey that often lead to fibrosis, and mortality is still about 5%. So it's got a subclinical progression that creates a lot of morbidity, cough, shortness of breath, disability. Then, when you layer on steroids, there's all of that toxic burden of steroids that patients have. So our view was, well, why not address not only the inflammation, but do so in a safer way? If we can remove the steroids, we really have upside here. I really think that this is a therapy that is disease modifying, because it's addressing the core aberrant pathology, these myeloid cells. We even looked further at sarcoid granulomas, and our receptor, neuropilin-2, lights up on IHC, and we published this as well. So I think it's a very rational, well-thought-out process. We have hit a new area of biology, a new way to address this disease, which previously had no good options. And now this opens up other interstitial lung disease markets. You talked about the design. There is an aggressive steroid taper in this protocol. In the first 12 weeks, we are tapering everyone down to zero. We saw great effects in the last trial, tapering down to five. We're going to go further in this trial. By going to zero, we think we're going to actually unmask more disease in the placebo population. So that rebound, that relapse, we're going to see those rates actually get higher in this trial. In the last trial, we saw about 55% of the patients in the subtherapeutic and placebo arms relapse in six months. That's going to be higher in this trial. We also saw in the two what we call therapeutic doses, three mg and five mg per kg, only a 7% relapse. So the Kaplan-Meier curves were quite significant in the last trial and the pooled analysis. This trial, we're following patients longer after forcing them down to zero. I think this is where we have a real chance of winning here, and then continuing to see some of that FVC and function improvement, but now maybe getting even more steroids off the patient's load. Yeah, yeah. So certainly a trial that's being set up for success, learning from the earlier trials, and just having really intuitive and more rational study design. So we had some news yesterday with the DSMB, maybe the second piece of feedback. Just walk us through how that's helping the conviction or what this means as another gateway for the trial. As one of the core value propositions of efzofitimod, it's got to be safer than the standard of care. Standard of care is quite unsafe over the long term, the burden of steroids. So a DSMB, we've worked with the agencies around the world to say, look, we will have iterative reviews. As it turns out, we had a positive DSMB review, our second in our phase III trial. This is the first phase III trial ever in sarcoidosis. So it's important to do these major checkbox exercises. I think investors sometimes take it for granted. Oh, the drug is just going to be safe. But this can really derail a program. And understanding that efzofitimod's goal here is not only to improve the patient, but remove some of this unsafe burden that they have. Therefore, that DSMB, I think, was a really nice milestone for us. We will likely have further DSMBs. We want to look at iterative cuts here, because this is being set up as a single pivotal here. So we want to be very, very careful that we look at the safety. When you think about an immunomodulator, you always have to worry about infection risk, immunosuppression, things like that. It's a biologic, so you have to think about when you administer it, you have to look at infusion-related reaction, ADA production. These are the things top of mind that you have to make sure that, hey, you're clearing all those hurdles before the drug hopefully is eventually available to patients. Just remind us of the timelines of how the study is executing when you're looking for first data. What's the latest on how that's playing out? We're in the sort of home stretch here. It's been, you know, a journey to get to this 264 patients. We expect to hit that this quarter. And then we'd be looking at, you know, probably somewhere in the neighborhood of 13-14 months after that. It's a one-year trial. So we're excited to get that last patient in the door, and then we'll be looking for data in 2025, you know, about a year after that. So a lot of investors paying attention to the story. We expect them to get even more interested as we sort of set that clock on, hey, this is when data is going to come out. The experts certainly are quite excited, because even some of the EAP announcements we had, you know, just recently, many patients performing quite well for what they're on. I think this is all positive developments here, as we sprint to the finish line here. Yeah. Let's talk a bit about the expanded access. I think that's yet another piece that could be underappreciated as to what that signifies when you have a series of investigators who are willing to rally around, and having aTyr rally around providing drug. Just walk us through the implications, what's available to those patients who are completing the study, and what the factors are in having the EAP come together. The EAP was quite surprising. I mean, we borrowed. I would call it more of a true compassionate use, because we're mid-trial. We also had to look at where we are with drug supply, and we had no obligation to do any sort of open label expansion. The drug has been deemed safe earlier on. So many times, OLEs are put in place, because you want to look at long-term safety. We didn't have that additional part of our protocol to worry about. However, we had, over the last, I would say, six months, significant interest from, you know, one, two, then it gets 10, 12 investigators around the world. There's about 90 centers approaching us saying, look, patients are about to finish our trial. They don't want to go back on steroids. Part of our that's a good signal. Hey, we do know that patients have been able to wean off steroids and remain off six, seven, nine months. Now patients are refusing to go back on steroids. They don't have anything in their arsenal to now give them. They're not. These patients are not fibrotic enough to require the anti-fibrotic. And the other choices are actually probably even more toxic than steroids. So we at aTyr took a look at where we were with drug supply. We took a look at where we are with the safety of the therapy, and having that first DSMB gave us some confidence to say, let's create a compassionate use protocol where we give 5 mg per kg to any of the sites. They will institute an individual single patient EAP. It's a mouthful, but it's really compassionate use, where it also doesn't create any additional financial or operational burden for aTyr. But this is something that the investigators and the patients themselves can then decide to get drug. Once we actually unblind the trial, if successful, we will then have a formal EAP that you typically implement between unblinding and formal approval. So this is an early everybody wants an early biomarker in a trial. I think having a biomarker where people still want to stay in your trial. Pretty good. Pretty good. Yeah, happy with that. Yeah. A couple of questions that we tend to get is maybe the obvious one when the readout comes, but what would count as a win for efzofitimod? Obviously, the primary, but there's more we want to see beyond steroid reduction. You've alluded to that, but maybe just walk us through what that victory is. Well, steroid reduction is set up as our primary. We did quite a bit of work with not only the FDA, but agencies really around the world, Europe, Japan, Brazil. Steroid reduction was readily accepted. We actually went in with FVC quite early in some of the discussions, but FVC is not as reliable an endpoint in sarcoidosis. You can have a lot of variability, unlike IPF, where there's a predictable natural history of decline. So FVC is still an important component, a secondary, but steroid reduction is really our primary goal. And you look at drugs in the vasculitis space, in severe asthma. Steroid reduction has been incorporated as part of the drug approval. That's going to be an important primary, the most important for us. We're also looking at forced vital capacity. We'll look at FEV1. We saw some nice effects there too. Many of these patients have not just restrictive disease, they have obstructive disease. So the experts have said, hey, we also want to look at the upper airway here as well. But the quality of life is the thing that gets me most excited. We reduce steroids, and we improve quality of life in the manner we did in the last trial. This is going to be exactly the type of drug we need for sarcoidosis. Really disease modifying, improve cough, shortness of breath, fatigue. These patients have more or less, I would say, an inflammatory cytokine type fatigue, but it's also related to steroid fatigue. So what is the win here? I believe we can reduce steroids. I believe we can improve quality of life. Forced vital capacity, we saw some really excellent effects in the last trial. My view is, at least we maintaining the lung function would be my goal, because of that variability. We certainly don't want to worsen FVC. Could we see improvement there? Yeah, we have that built-in upside. But I would like to see us reduce steroids and continue those quality of life measures. Then I think it becomes a no-brainer that this would be potentially a first-line therapy worldwide. Great. And then to a first-line therapy potential, how do you break down the commercial landscape? What's up for grabs? And maybe putting some quantification around that opportunity. So there's the prevalence estimates here in the U.S., about 200,000 patients with sarcoidosis. If you talk to some experts, they think that's underestimating by, you know, maybe about 100,000 patients. In the community, you can have some sarcoidosis that doesn't get picked up until patients become fibrotic and they come into the tertiary centers. Let's just go with that 200,000. It's about the same in Europe. And you might have about, let's say, at most about half of these patients that might self-resolve within 6 months. But again, those self-resolvers are not on day-to-day steroid treatment. You talk about the other half, say, around 100,000. I'd say 70%-80% of these patients are steroid dependent. You have then a 20,000 patient bucket that is quite fibrotic, and they could have nintedanib on top of steroids, or maybe steroids are removed and you're using azathioprine, things like that. But we look at that kind of market opportunity as rather large for an orphan disease. And I do think with our therapy showing really good phase II data, the early pricing work we've done, most experts, pricing experts say this should be priced closer to pirfenidone and nintedanib, with the kind of effects we're seeing. So those drugs are, you know, over $100,000. So I do think that this is a hidden large market opportunity. And many times in rare disease, as you are the first therapy that might be approved, you start to then see even incidence and prevalence numbers go up. Of course. Because people really then start looking for the sarcoid granuloma. They start to think, oh, I actually have a drug. I think in many diseases, steroids are just thrown, you know, up against the wall, in not only pulmonology, dermatology, in a lot of conditions. Yeah, just take some steroids, you'll be fine. So I do think that we see this as, you know, a multibillion-dollar market when you also add in the other interstitial lung diseases, of which there are about 200. And most of them are steroid dependent. So you talk about the pneumonitis, you talk about scleroderma-related ILD, RA-related ILD. There is a family of diseases here that need a better therapy that actually can improve the lives of these patients. Yeah. I want to touch on scleroderma ILD as well. But before that, when it comes to sarcoid, how do you think about the developmental landscape? The players involved and how efzofitimod can fit in. Certainly, safety and tolerability will be paramount. But as far as its complementarity, and what's this market, and what will this indication look like several years out? Well, I mean, I do think with regard to competition, I mean, we are the leading biopharma in the world in sarcoid, first one ever to get to phase III. So we've survived the gauntlet. Some bigger players have fallen by the wayside. They've addressed or attacked certain cytokines, but have not had success. There are some earlier players in phase I, phase II right now, again, addressing individual cytokines where they try to hammer that cytokine down. Our therapy is completely different. It's multinodal. And I think it reflects really the complexity of what you need, how to address sarcoid, or in any interstitial lung disease. I do think that how this could be used in clinical practice. It was summed up by one of our experts in London who said, more of an IPF expert, look, we have pirfenidone and nintedanib on this side of the fence, but we need an anti-inflammatory version, and something that could be used early on in interstitial lung disease that may even prevent the progression of fibrosis. Now, those drugs generate, you know, close to $4 billion-$5 billion in revenue right now. Let's intervene early with a safer, better therapy, retune the immune system. We may be able to then be used complementary, and maybe it even starts to change the fibrotic morbidity and mortality that some of these patients have. That would be a real upside for us. Sounds good. Let's talk EFZO-CONNECT scleroderma. How's that trial moving along? Talk a bit about the rationale and just the goals on the proof of concepts. Smaller trial, we moved into an adjacent interstitial lung disease, one that is quite inflammatory, but also has quite a bit more fibrosis than sarcoidosis. We had good signals in animal models in SSC ILD we presented at the Scleroderma Foundation years ago. Many pulmonologists wanted us to try the proof of concept there early on, at first. After developing some of the SARC data, most of the autoimmune ILD experts said, hey, can we now start a proof of concept? So we are currently enrolling in a U.S.-only, about 12-15 centers here, looking for a proof of concept, just 25 patients testing a high and low dose of efzofitimod versus placebo. SSc- ILD is a disease that once you have scleroderma and it attacks your lungs, you can have a really steep decline and mortality increases. It's the scariest phenotype if you have scleroderma. So this is a trial where we're trying to capture people early in the process. We think by intervening early, we can improve not only your lung function, but maybe even blunt some of that fibrotic development. The real cool thing about scleroderma for us is the skin plaques these patients have. No therapy has improved quality of life there. Why do we think we have a chance? Well, neuropilin is quite highly expressed in these skin plaques, and efzofitimod, that's the binding partner. So I think there's some ability here to maybe even improve skin, which could then open up efzofitimod to systemic use. So that could be quite exciting. A lot of upside. I'm going to give an update mid-year, kind of where we are with enrollment and when we expect to kind of get some data out from that. But that's sort of the side program to sarcoidosis on the side stage right now. Yeah. Great. Well, that might be a good place to start. We'll look forward to those updates, the enrollment progress of efzofitimod, and top line next year. Sounds good. Yeah. Sounds like I still have a lot of work to do. Yeah, exactly. Thanks, everybody. Thank you, Sanjay. All right. Thanks, Greg. Thanks, Greg.