ATyr Pharma Shares Plummet After Trial Failure in Inflammatory Lung Disease
Shares of aTyr Pharma experienced a significant drop after its experimental drug, efzofitimod, failed to meet its primary endpoint in a Phase 3 trial. The trial aimed to reduce steroid use in patients with pulmonary sarcoidosis, an inflammatory lung condition. The negative results have raised concerns about the future of the company and its only clinical-stage prospect.
Trial Results and Implications
The Phase 3 trial assessed efzofitimod's ability to help patients with pulmonary sarcoidosis reduce their reliance on steroids. While the drug showed some reduction in steroid use, the difference compared to the placebo group was not statistically significant. This setback casts doubt on the potential of efzofitimod as a treatment for this condition and has significantly impacted aTyr Pharma's market value.
Financial Impact on ATyr Pharma
Following the announcement, aTyr Pharma's shares plummeted by over 80%, trading at around $1 per share on Monday. This drastic decrease in stock price has left the company's valuation roughly equivalent to its cash reserves. Leerink Partners analyst Faisal Khurshid estimates the company's cash balance to be around $113 million, or approximately $1.15 per share.
ATyr Pharma's Strategic Shift and Future Outlook
aTyr Pharma had previously shifted its focus to efzofitimod (formerly ATYR1923) seven years ago, abandoning a cancer-focused project. This latest trial failure puts the company in a precarious position, with its stock price nearing a record low. The company is also testing the drug in a Phase 2 trial in systemic sclerosis-related interstitial lung disease, which could provide some hope for the future, but the focus is now on understanding the next steps for efzofitimod.
Details of the Failed Trial
The trial focused on reducing the reliance on steroids, often necessary for managing inflammation in pulmonary sarcoidosis patients. Prolonged use of high-dose steroids can lead to severe side effects, necessitating additional medications like methotrexate or Rituxan. The highest dose of efzofitimod tested (5 mg/kg monthly infusion) resulted in an average steroid reduction to 2.79 mg/day, compared to 3.52 mg/day in the placebo group. Cantor Fitzgerald analyst Prakhar Agrawal had estimated that a difference of at least 2.5 mg/day was needed to achieve statistical significance.
Physician Expectations and Trial Outcomes
aTyr Pharma reported that approximately 53% of patients taking efzofitimod were able to discontinue steroid use, compared to 40% in the placebo group. However, this result also fell short of expectations. According to Prakhar Agrawal, physicians consulted by his team were seeking at least a 20 percentage point difference to consider changing their treatment practices.
