aTyr Pharma (LIFE) is a biotherapeutics company that is involved in the development of medicines based on novel biological pathways. Earlier this month, aTyr reported a loss of $0.51 per share in the fiscal first quarter, compared to a profit of $0.25 per share in the same quarter last year. Analysts were expecting a loss of $0.32 per share.
The company did not earn any revenues in the first quarter versus revenues of $8.1 million in the same quarter last year. The company's revenues in Q1 FY20 were mainly licensing revenues from its collaboration agreement with Kyorin.
Last year, aTyr entered into a collaboration and licensing agreement with Kyorin Pharmaceutical for the commercialization and development of its prime clinical candidate, ATYR1923, in Japan.
Following the earnings, H.C Wainwright analyst Joseph Pantginis reiterated a Buy and a price target of $13 (185% upside) on the stock. Let's have a look at why Pantginis is so bullish on the stock.
aTyr Pharma’s key medicines include ATYR1923 and ATYR2810 that are under development or undergoing preclinical study.
The company’s leading product is ATYR1923, which is currently under development can be used for the treatment of patients with severe inflammatory lung diseases including patients with severe respiratory complications from COVID-19.
LIFE is conducting a Phase 1b/2a multi-center clinical trial for ATYR1923 in 37 patients with interstitial lung diseases (ILDs) like pulmonary sarcoidosis. Data from the trial is expected in the third quarter of this year.
In January, the company reported positive results from its phase 2 clinical trials of ATYR1923 in COVID-19 patients with severe respiratory complications.
aTyr CEO Sanjay S. Shukla said at the company’s earnings call, “We are highly encouraged by our progress and look forward to building upon our programs and novel tRNA synthetase biology platform as we move forward this year.”
Looking at the positive results, Wainwright analyst Pantginis commented, “Accordingly, ATYR1923 treated patients showed at baseline, older age, severe hypoxia, higher number of comorbidities and higher level of biomarker associated with COVID-19-pneumonia such as D-dimer, ferritin and CRP. In addition, ATYR1923’s effect was noted on top of a strong immunosuppressant (dexamethasone) which supports, in our belief, the potent immunomodulatory activity of ATYR1923 therefore projecting a potentially positive outcome in sarcoidosis.”
Pantginis further added, “ATYR1923 is expected to impact a wide spectrum of diseases associated with lung inflammation. Therefore, testing the drug in COVID-19 patients experiencing respiratory complications caused by an excessive inflammatory response in the lung, constitutes a scientifically sound approach, in our belief.”
ATYR2810 is the company’s Investigational New Drug (IND) candidate, a monoclonal antibody that blocks the interaction between a protein-coding gene Neuropilin 2 (NRP2) and one of its primary ligands, vascular endothelial growth factor (VEGF). This drug could be used in the treatment of certain aggressive solid tumors as increased NRP2 expression is associated with worse outcomes in many cancers.
aTyr presented preclinical findings for ATYR2810 at the Virtual Keystone Symposia earlier this month. The preclinical findings were encouraging and indicated that “ATYR2810, a Neuropilin-2 (NRP2) antibody, selectively blocks the NRP2/VEGFR signaling axis and sensitizes patient-derived xenograft models of triple-negative breast cancer (TNBC) to chemotherapy.”
The company has entered into an agreement with Lonza to manufacture ATYR2810 and help it progress to clinical-stage development.
Pantginis commented on the manufacturing agreement, “We believe this agreement solidifies ATYR2810's journey to IND and limits the risk associated with potential shortening of supply material. As mentioned by management, ATYR2810 is expected to be in the clinic in 2022 and to be investigated in patients with a tumor indication selected based on NRP-2 enrichment as well as the outcome of the ongoing preclinical studies.”
Pangu BioPharma is aTyr’s subsidiary in Hong Kong. Earlier this month, LIFE announced that Pangu along with the Hong Kong University of Science and Technology (HKUST) had achieved key milestones in the first year of a two-year project including setting up a skilled research team to establish an antibody discovery platform at HKUST. (See aTyr Pharma stock analysis on TipRanks)
The Hong Kong Government’s Innovation and Technology Commission (ITC) approved a grant of $750,000 as part of the two-year project to develop a “high-throughput platform for the development of bispecific antibodies with an initial focus on diseases in which Neuropilin-2 (NRP2) overexpression.”
Analyst Joseph Pantginis commented on the program, “We believe this program to provide a valid opportunity for the company's pipeline expansion to an attractive market opportunity, bi-specific antibodies, with non-dilutive funding, while leveraging the accumulating knowledge on NRP2 from two programs.”
Wall Street’s Take
Shares of LIFE have soared 16.7% in the past month.
Analysts are bullish on the stock and the consensus rating is a Strong Buy based on 5 Buys. The average analyst price target of $15.50 implies approximately 240% upside potential to current levels.