2025 RBC Global Healthcare Conference. My name is Greg Renza, one of the biotech analysts here at RBC, and we're pleased to be joined today by aTyr Pharma, representing the company as the President and CEO, Sanjay Shukla. Sanjay, great to see you. Thanks for being here. Thanks for inviting me. Another year and another conflict with ATS going on, so I know the sacrifices you're making to be fresh from the conference. Look forward to hearing about some of the insights as we really enter what is a critical year for aTyr and the lead program, efzofitimod. Maybe for those who aren't familiar with the story, Sanjay, just walk us through an intro to aTyr, to your lead program, and what the objectives and goals are for the company. Sure. ATyr is, I'd say, the leading interstitial lung disease company right now in industry. We have a major phase III catalyst upcoming this year, next quarter, in a lead indication called pulmonary sarcoidosis for our therapy, efzofitimod, which is potentially the first therapy in 70 years to address sarcoidosis. Very excited about that readout. Lots of energy at ATS. I just came from San Francisco direct to see Greg specifically. I would say a lot of gratitude also for ATS for trying. Someone said to me yesterday, an IPF doc, "Thank you for having the courage to try to go into this indication." This has been a therapy that over the last seven or eight years, we've iteratively moved from preclinical translational phase I, and now we have what we consider a highly de-risked asset, and it's game time next quarter. We think this could really launch aTyr to a new era. We have other assets in our platform biology, but I think the eyes are really fairly, you know, really focused on efzofitimod and this readout that's upcoming. Yeah, maybe, as you mentioned, ATS feedback and the unmet need, maybe past trial challenges in pulmonary sarcoidosis. Maybe just talk a little bit about the historical and also how the development of efzofitimod really fits in and sort of guided you to pull through into the EFZO-FIT pivotal that's ready on the third quarter. We're a data-driven company. I know a lot of biotech say that. We had no particular narrative, but I'm not a pulmonologist by training, so I didn't necessarily have a romantic view to go into pulmonary medicine. But efzofitimod, in its infancy, this protein showed some remarkable ability to modulate myeloid cells. Going back to the petri dish in 2017, it did a really nice job of retuning myeloid cells without ablating them. We saw some initial effects that we thought, "Hey, this could be an interesting therapy." It seems to modulate immune cells in a different manner than more of the heavy-handed immunosuppressants. Because this protein is highly enriched in all of our lungs, we thought it could also play some role in local immunobiology of the lungs. From there, we embarked on a large translational program to look at the effects in a number of lung injury models, animal models, where I think we overinvested in over half a dozen different forms of acute lung injury. The therapy showed remarkable consistency in anti-inflammatory effects, regardless of if it was a bleomycin model or a sarcoid-like granuloma model or a scleroderma GvHD model. Consistent signals always knocking down the same cytokines gave us a lot of confidence to move the therapy forward. When we started to hone in on the specific indication, sarcoidosis, for example, presents with granulomas predominantly in the lungs. We went looking for the receptor, and lo and behold, it lit up. Neuropilin-2, a novel receptor, lit up right there in the cells of greatest pathology, the Langhans giant cells. That gave us also that final piece of the puzzle to say, "Let's try this in sarcoidosis." I didn't believe it until we had good phase II data. I'm a clinical development physician, so as much as we see signals in animals or in the petri dish, that's great. The data that we also produced in phase II was some of the best data that the experts have ever seen. The ability to improve feel and function while also removing steroids, that had never been tried before. We tried bold things, not only from a science perspective, but also in our clinical trial design. If anything, we don't leave any questions unanswered. If the drug works, it's going to work. There's not going to be a confounding element of on top of steroids. That was challenging to convince folks to go in that direction, but a lot of hugs in ATS thanking us for trying the program, embarking on this journey, and now we're nearly there. Maybe we've seen broader market and regulatory receptivity around steroid change and steroid reduction as something that is meaningful. You've mentioned feel and function from the proof of concept, the phase II. Maybe talk about some of those attributes and even the post-hoc analyses that have continued to follow, but how that's shaped your approach, the design of the phase III. We try to be very transparent. We try to publish iteratively everything that I talk about. I would say we're probably one of the most well-published biotech companies out there, and we aim high with our phase II data, putting it in the CHEST journal, publishing some of the findings where we improved forced vital capacity, we improved cough, fatigue, shortness of breath, all in a dose-responsive manner while removing steroids. Now, we took it a step further. Experimental models develop over time. Ohio State developed a granuloma model, Elliott Crouser. We said, "Let's try our potential therapeutic doses in that model." We found the two highest doses, which, by the way, showed the best effects in our phase II trial, inhibited granuloma formation in this new experimental model. That served as a justification to do a pooled analysis. In the pooled analysis, it showed even greater deltas emerge when we looked at 3 mg and 5 mg per kg of efzofitimod based on that granuloma model. The PK/PD of the drug indicates that as you give more of the drug, you have better improvement in your lung function, you have better ability to maintain and improve your symptoms, and you have a better ability to remove steroids. That was published in Frontiers of Pharmacology and also the ERJ over the last three years while we've been waiting for these results. Last thing I'll say is we, a few months ago, published all of our mechanistic work for efzofitimod in Science Translational Medicine. We made the cover. Sarcoidosis is right there on the cover. I don't think there—I can only think of one other biotech that in the last five years that has had two major publications in Science TM. We are a data-driven science shop. We follow the signals. Again, all of those pieces of literature are out there for all investors to look at. I would say compare that to, you know, we're not just about PowerPoint slides. It takes a lot of time, 16 months to get that paper published. As we've been waiting for these results, as you pointed out, we have other breadcrumbs of data that indicate and give us more confidence towards this readout. Yeah, that's great. You're following the science, you're following the data, you're also following the path to the FDA. You've had recent discussions when it comes to the endpoint plan. It's some really nice alignment. Maybe walk us through some of those nuances and how that informs maybe what we and you will see as the bar of success for what's coming in the third quarter. One of the primary—the primary endpoint for our trial is steroid reduction. We can get into how the agency and how just the community feels about that. We had a slight, I would say, confirmation from the FDA when we went in to submit our statistical analysis plan. Typically, this is a meeting that you conduct prior to locking your database. You want to make sure, hey, all the stats and how are you going to analyze the endpoints are locked down. We received a little bit of a curveball in a good way that we swung at, and this was around how we analyze steroid reduction. Previously, we were looking at steroid reduction across the nine months, the last 36 weeks of our trial. We wanted to get an average daily prednisone dose based on how much prednisone you're getting every day divided by the number of days. There's a real-world element to that, which I actually think is the most conservative way of looking at steroid utility. There is emerging guidance, and the stats reviewer mentioned this that, hey, why don't you just look at the end of the trial, the last trailing month of the trial. What this did is it tweaked our model and powering assumptions a little bit in the positive because the variability of the trial is lower at the end. Not to get too statistically wonky, but as variability decreases, your power can go up. If you keep your power anchored, which we were already over 90%, the threshold of showing stat sig actually went down a little bit. In our model, we were looking for a 3 mg-3.5 mg reduction. Now we're closer to 3. People, investors have asked me, did you go into the FDA with this mindset? No, we did not. This was a comment made, and someone wants to give you a layup, you take the lane. Now, I got to turn down that shot. To be honest, if I had probably proactively said, "Hey, we want to look at it this way," they probably would have said no. It's just the way the FDA works. When they give you some guidance, me and my biostatistician said, "Hey, this is what we just sort of kept quiet on the Zoom, looked at each other and said, 'Okay, fine.'" I think this is materially positive for investors. It's not an endpoint change. Some investors have said, "Have you changed your input?" No, this is feedback where we want to look at how you specifically program and analyze this change. I think the greatest delta will emerge at the end of the trial to potentially show a positive stat sig. This is a good thing for us. We think it's also, as I said, aligning with some guidance that's coming out of the agency that lets us look at pre and post and simplify the assessment. Just to clarify, this is a recent in the last few weeks or last month, right? Basically, yeah. It also was not a prompt because of FDA changes. Maybe just provide to the audience that reassurance about the frictionlessness of your interactions with FDA. It's the same review team. It's the same review team that has been there since the end of phase II meeting. The reviewers haven't changed. There are changes at the top occurring. As far as our team from a medical and statistical reviewer, the PRO reviewer, it's still the same team. This was, I think, a welcome development. We're now locked down on how we're going to be looking at steroid reduction. As you pointed out, steroid reduction is becoming, with drugs like TAVNEOS, ChemoCentryx, you are seeing steroid reduction bubble up to a higher degree in the value package of more therapies. Steroid utility, steroid reduction, there is an understanding from a health economic and burden perspective. We presented some posters in San Francisco highlighting some of this. We talked to a number of younger doctors, new fellows. They understand even in a disease like sarcoidosis, we have to do better than steroids. Can we maintain, can we improve symptoms better, maybe get less focused on things like FVC? I think we have a real opportunity here. I think some of these endpoints, let's be honest, are more understandable than if the FDA is moving away from things like biomarkers, which is what we hear, we're not dealing with some esoteric biomarker. It's, let's see if this new therapy can get you off your steroids. That's going to have a number of knock-on positive effects. I think it's a cleaner story than if we were working to find an esoteric biomarker change. Yep, yeah, certainly measurable. It's also supported by some of the secondary endpoints that you're looking at, which are clinically meaningful. The alignment with FDA on the N-steroid measure, the absolute measure of reduction, maybe another development that could be underappreciated is just the sharing at ATS of the baseline characteristics of the patients. Maybe talk about how what we found there is certainly a mix of the sites and in aggregate what the patients look like coming into the trial. How does this maybe set up for a potential another index of comfort or reassurance? Yeah, it was important that we get the baseline demographics out. What you want to look at is to make sure, first of all, everyone asks, is this indicative of what you saw in phase II? We're talking about 90 centers, nine countries, as opposed to the 15-16 centers we had just in the U.S. in the last trial. Yes, it is what we expected. We expected the average steroid dose to be around 10, a little bit lower than the last trial. Because remember, we went into Europe and Japan, the threshold, the basement dose was 7.5 as opposed to 10. That was expected. I'm glad it's not in the single digits. If it was 8 mg-9 mg, I would say, "Oh, that's different." We ended up at 10.5. I also think that the standard deviation is rather tight. We've got what I would say is a population of moderate to progressive sarc patients that are being treated per the guidelines. Somewhere between 10 mg-15 mg. If you're below 10, you probably have some methotrexate. We looked at background immunomodulator use. That's within the ballpark of what we saw in the last trial, you know, about 30%, 38%, 40% of the patients with some background immunomodulators. You can look at the relative distribution. Japan, we knew we had to enroll 10-15 patients because the Japanese PMDA needed about that much. We had 13% Japanese subjects. Nothing stood out to me from the standpoint of those baseline demographics that was askew of what we saw in phase II. I think there's relative comfort that we've got a comparable population and a population that also makes sense from us that they're not too mild and they're not too fibrotic. We also did some things to exclude fibrotic patients. We did high-res CT at the beginning of the trial because we learned in the last trial that the drug maybe didn't perform as well in the very fibrotic patients. That's also reflected in some of the baseline demographics where you can see clearly there's less fibrotic patients when you look at dyspnea scoring and things of that nature. Happy with the baseline demographics representative of what I think we were trying to enroll from an IE criteria. The PIs also looked at this and said, "We've got good geographic fidelity here that nothing is an outlier that makes us feel like that might create a confounding element to the readout. A reflection of all the hard work you and the team did as far as getting sites activated and enrolling and getting patients into the trials globally, frankly. This was the only phase III ever conducted. So definitely when we started the program, there was also some risk that will you ever enroll and finish? And will you finish within the timeframe you wanted? And we wanted to get done within two years, but the first global multi-center phase III trial ever in an indication that some thought is unenrollable. When I worked in big pharma, we thought it's just too difficult to go into this. So that was also a major accomplishment. I had to go to about 40 centers around the world to twist arms. So, you know, my frequent flyer miles went through the roof. But it was worth it to also get the community engaged. And some of them had never been involved in a clinical trial. We also want to make sure that data integrity and that quality is really tip-top because this will be a pivotal submission. Yeah. Third quarter, just remind us of some of the details of the process up to today with respect to enrollment, the duration of the endpoint, potential data lock, and readout. Last patient was enrolled last July. It's a one-year trial. That last patient will be obviously coming off the line in July. We will start the process from there to lock the database. Now, we want to make sure we have a database with a high degree of rigor. We'll spend a few weeks, get the programming right, look to lock the database four to six weeks after that. Everybody will say, you know, please tell me the data right away. Give me a minute to also collate, get the messaging down. Right now, we are still holding that guidance to Q3. Perhaps as we get closer to our earnings, we'll have a little bit more specificity on month and week, things of that nature. I'll talk to my team about that. Out there in the horizon, I'm not saying we would necessarily wait for that. European Respiratory Society is in the back half of September. It would be great to get a placeholder there. I'm not saying we would necessarily wait for data at that conference, but I am negotiating with that conference because they want us potentially on the stage because this is probably the most important readout in respiratory this year. They want some of our PIs to at least get a placeholder there. That could be something to look forward to as well in Amsterdam. Great. Great. Before we move on to maybe an upcoming data point in the second quarter with EFZO-CONNECT, I just want to ask you, Sanjay, to put some numbers around the commercial potential of efzofitimod and pulmonary sarcoidosis. I think as you and the team have been exploring the market opportunity, maybe you're seeing signals of expansion beyond maybe your going-in assumptions before the trial even started. Maybe talk about the peak potential. Yes. Really having to update the model here because based on some new EPI work, and we're the first to do it in 15 years, and we presented that poster. What that's showing is, first of all, incidence and prevalence is rising. I think some of this has to do with people are looking for sarcoidosis a little bit more closely. The big message here is the steroid-dependent population. We always thought it's 40%-50% of the 200,000-ish patients in the U.S. It's looking more like 75% are on steroids. That's something that our poster the other day, many of the PIs, many of the pulmonologists said, "Yeah, this is actually probably right. We are using a lot of steroids, even though we want to get patients off steroids. That's good for us because we may have an opportunity with a new therapy to reduce or even spare some of these patients. That modeling change adds another 30%-50% to the potential here. As I said, incidence and prevalence is also rising. Whereas before we thought this is maybe a low multi-billion dollar opportunity, it's clearly now showing that it could be potentially five, six, maybe even higher, a billion dollar opportunity. When you look at some of our early pricing work, even if we conservatively price this drug on the lower end of the range we've highlighted, say $100,000, $120,000, we can quickly get to large swaths of the population. My biggest concern and the board we're spending a lot of time is making sure we have enough to meet the demand because we could go to the top of the treatment guidelines very quickly. Treatment guidelines are based on a checkerboard of low degree of evidence of other, even steroids have a low degree of evidence. If we were successful, we would move to a front line or at a minimum second line therapy. Again, this could be something that could be targeted towards those steroid-dependent patients, which we see is based on that poster, somewhere in a neighborhood of 160,000 patients in the U.S. alone. Great. Great. We're going to have some data coming up pretty soon in another indication in scleroderma ILD. Maybe just walk us through some of the differences pathophysiologically, clinically, and how the skin biopsy data has three months and eight patients or so, how this is going to inform or not your confidence in the sarcoid read-through, but also the potential to exploit additional indications and opportunities. We're going to take a little bite and take a look at where we are with the SSc-ILD trial. Now, scleroderma ILD is a foray into a more fibrotic interstitial lung disease. Sarc is very inflammatory. We also had some really good data in an SSc mouse model years ago. We thought this might be useful. The other thing is neuropilin is highly expressed on the scleroderma skin plaques of these patients. We validated that after hearing from academics that that might be a good target. We are going to present eight patients' worth of data here shortly in this quarter. This is going to look at skin only. I do not necessarily think there is a read-through to the sarc data. I view this as upside. There is potential for us to show skin immune pathology or biomarker changes. It might give us some mechanistic data. But I don't necessarily think that it impacts the lung readouts that are coming in sarcoidosis. This is a foray into potentially moving efzofitimod into systemic disease. It's very hard to make changes to these skin plaques. No drug has ever improved that. It is a high, high bar. I do express that to investors. It's difficult. If we saw something here, it could be quite exciting for us to move into systemic. Nonetheless, I still think the therapy could be useful in improving lung symptoms for scleroderma patients. We won't have that until after the sarcoidosis readouts. It's a small look. It's something that I think there's some real upside here. We'll see what this looks like. We still need to complete that trial. I think this could be a label expansion, a next area where we could go into should efzofitimod be successful in sarcoidosis. We could now start to move into those fibrotic mixed inflammatory fibrotic ILDs. It's helpful to have the context of the read-through across to sarc. As far as the utility or how it could inform any near-term decision points with either ILD, are there any objectives you're looking to establish? Anything you're looking to learn from that data near term? Yeah, the base, I mean, in the near term, I think if we saw something here, we'd have to really think about, "Hey, do we want to use efzofitimod in systemic sclerosis and blow the whole program out that way?" If we didn't and continue to see good lung data, it's still part of our base plan. Go into a connective tissue disease ILD, perhaps a basket trial after efzofitimod is successful in sarcoidosis. Then this could clearly be a drug that could be used on the side of the fence away from nintedanib, which is for highly fibrotic, but also used in connective tissue disease, but in the more fibrotic patients. We could be the yin and yang of nintedanib where you give efzofitimod before you get fibrotic in sarcoidosis or other connective tissue disease ILDs. That's the base TPP of how we think about how our therapy could be useful. Yeah. That's great. Just last question because I know we're at time, but you've managed the business to focus on efzofitimod, but you've had a pipeline historically and even seeing a recent IND clearance. How are you and the team thinking about potential in the pipeline and advancing candidates and sort of re-exploring the potential? Very exciting candidate. We debuted a new IND program on Saturday at the Respiratory Innovation Summit. A different tRNA synthetase fragment binds to myofibroblasts through LTBP-1, and it's inducing myofibroblast apoptosis. I'll let that sink in. It's inducing myofibroblast apoptosis. What does that mean? It's reversing some of the fibrotic damage. Again, we try to do big things. We're not trying to aim for less reduction of decline and let's slow down fibrosis. This guy, this asset has the ability, at least in those early signals, to really change the mix. Myofibroblasts are those worst actors in IPF. We are looking to move into IPF. I'll remind everyone that this is the same innovation summit that a couple of years ago, the highlighted drug there was efzofitimod. We're looking to now move this asset forward. This is something that I think is really exciting for our pipeline in the future. Great. I think we have to get you back on a plane to the West Coast again. Thanks for stopping in for 12 hours or so. I really appreciate it. It's great to have you. Thank you.