aTyr Pharma tumbles on corporate restructure, job cuts
- San Diego-based aTyr Pharma is cutting its workforce by 30% amid a corporate restructuring after preclinical failures, with a goal to save $10 million to $12 million in 2018, the biotech announced with its first-quarter earnings results. The stock fell by a third to an all-time low of $1.55.
- The clinical-stage biotech is axing development of a panel of human antibodies discovered in its immuno-oncology ORCA program, after finding a lack of efficacy in early preclinical studies. The company will focus instead on ATYR1923, an engineered resokine protein in development for the treatment of immune-mediated diseases, currently in Phase 1 in healthy volunteers. This has potential for once-a-month dosing, and potential indications include interstitial lung disease.
- Goals for 2018 include a topline readout for the ATYR1923 Phase I trial in June 2018, and completing translational work, including selecting a lead indication. A Phase 2 trial could begin by the end of 2018, with clinical data released in late 2019 or early 2020.
Struggling aTyr Pharma closed 2017 with $85.1 million in cash, equivalents and available-for-sale investments, stating that it had enough money to fund itself into the third quarter of 2019. That figure fell to $74.1 million as of March 31 and, spurred by the failure of a preclinical program, the company has decided to cut back to save on costs.
"Unfortunately, new preclinical data observed over the last month did not show sufficient levels of efficacy to justify further development of our panel of human antibodies. Therefore, this time, the company will no longer be proceeding with IND-enabling activities for the ORCA program, including GMP manufacturing," said Sanjay Shukla, president and CEO of aTyr, on the earnings call.
"It's not that we didn't see efficacy with the ORCA, it just wasn't sufficient enough for us to justify the necessary investment to compete in this very competitive I/O market."
Project ORCA aimed to create antibodies targeting the resokine pathway, a pathway implicated in the ability of tumors to evade the immune response, to slow or reverse tumor growth. The project will remain on hold unless the company generates further data to support its development.
The restructuring will impact 19 people, including individuals in the manufacturing group and on the research teams.
"Looking ahead to the second half of the year, we expect our cash burn from operations to significantly decrease as a result of this restructuring and our program prioritization, providing us an extended cash runway," said Shukla. "Our goal will be to prioritize clinical development of our '1923 program and achieve significant clinical milestones with our currently available financial resources."
Further preclinical studies are under way to understand the newly-identified binding site for ATYR1923, neuropilin-2, and to select the best indication.
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