aTYR PHARMA INC 10-Q

Item 1. Financial Statements aTyr Pharma, Inc. Condensed Consolida ted Balance Sheets (in thousands, except share and per share data) September 30, December 31, 2025 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 6,150 $ 11,055 Available-for-sale investments 84,052 61,070 Other receivables 1,042 1,736 Prepaid expenses 1,770 8,093 Total current assets 93,014 81,954 Restricted cash 2,712 2,951 Property and equipment, net 4,429 4,850 Operating lease, right-of-use assets 5,603 5,817 Financing lease, right-of-use assets 745 1,192 Other assets 149 66 Total assets $ 106,652 $ 96,830 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 4,064 $ 4,323 Accrued expenses 10,185 9,392 Current portion of operating lease liability 799 711 Current portion of financing lease liability 630 541 Total current liabilities 15,678 14,967 Long-term operating lease liability, net of current portion 10,532 11,144 Long-term financing lease liability, net of current portion 398 887 Commitments and contingencies (Note 4) Stockholders’ equity: Preferred stock, $ 0.001 par value per share; 5,000,000 undesignated authorized shares as of September 30, 2025 (unaudited) and December 31, 2024, no shares issued or outstanding as of September 30, 2025 (unaudited) and December 31, 2024 — — Common stock, $ 0.001 par value per share; 170,000,000 authorized shares as of September 30, 2025 (unaudited) and December 31, 2024, issued and outstanding shares – 97,986,634 as of September 30, 2025 (unaudited) and 84,038,922 as of December 31, 2024 98 84 Additional paid-in capital 672,339 602,021 Accumulated other comprehensive loss ( 1 ) ( 40 ) Accumulated deficit ( 592,201 ) ( 532,046 ) Total aTyr Pharma, Inc. stockholders’ equity 80,235 70,019 Noncontrolling interest in Pangu BioPharma Limited ( 191 ) ( 187 ) Total stockholders’ equity 80,044 69,832 Total liabilities and stockholders’ equity $ 106,652 $ 96,830 See accompanying notes. 3 aTyr Pharma, Inc. Condensed Consolidated S tatements of Operations (in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (unaudited) Revenues: License and collaboration agreement revenues $ 190 $ — $ 190 $ 235 Total revenues 190 — 190 235 Operating expenses: Research and development 22,130 14,807 49,328 42,144 General and administrative 4,805 3,336 13,693 10,185 Total operating expenses 26,935 18,143 63,021 52,329 Loss from operations ( 26,745 ) ( 18,143 ) ( 62,831 ) ( 52,094 ) Total other income (expense), net 999 882 2,672 3,040 Consolidated net loss ( 25,746 ) ( 17,261 ) ( 60,159 ) ( 49,054 ) Net loss (gain) attributable to noncontrolling interest in Pangu BioPharma Limited 2 2 4 ( 2 ) Net loss attributable to aTyr Pharma, Inc. $ ( 25,744 ) $ ( 17,259 ) $ ( 60,155 ) $ ( 49,056 ) Net loss per share, basic and diluted $ ( 0.26 ) $ ( 0.23 ) $ ( 0.66 ) $ ( 0.69 ) Shares used in computing net loss per share, basic and diluted 97,153,541 75,801,666 91,292,046 71,419,541 See accompanying notes. 4 aTyr Pharma, Inc. Condensed Consolidated Statements of Comprehensive Loss (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (unaudited) Consolidated net loss $ ( 25,746 ) $ ( 17,261 ) $ ( 60,159 ) $ ( 49,054 ) Other comprehensive loss: Change in unrealized gain on available-for-sale investments, net of tax 74 204 39 110 Comprehensive loss ( 25,672 ) ( 17,057 ) $ ( 60,120 ) $ ( 48,944 ) Comprehensive loss (gain) attributable to noncontrolling interest in Pangu BioPharma Limited 2 2 4 ( 2 ) Comprehensive loss attributable to aTyr Pharma, Inc. common stockholders $ ( 25,670 ) $ ( 17,055 ) $ ( 60,116 ) $ ( 48,946 ) See accompanying notes. 5 aTyr Pharma, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except share data) Three and Nine Months Ended September 30, 2025 (unaudited) Common Stock Additional Paid-In Other Comprehensive Accumulated Noncontrolling Total Stockholders’ Shares Amount Capital Gain/(Loss) Deficit Interest Equity Balance as of December 31, 2024 84,038,922 $ 84 $ 602,021 $ ( 40 ) $ ( 532,046 ) $ ( 187 ) $ 69,832 Issuance of common stock upon release of restricted stock units 21,108 — — — — — — Issuance of common stock upon exercise of stock options 900 — 2 — — — 2 Issuance of common stock from at-the-market offerings, net of offering costs 4,941,895 5 18,752 — — — 18,757 Stock-based compensation — — 1,178 — — — 1,178 Net unrealized loss on investments, net of tax — — — ( 26 ) — — ( 26 ) Net loss — — — — ( 14,880 ) ( 1 ) ( 14,881 ) Balance as of March 31, 2025 89,002,825 89 621,953 ( 66 ) ( 546,926 ) ( 188 ) 74,862 Issuance of common stock upon exercise of stock options 7,520 — 17 — — — 17 Issuance of common stock pursuant to employee stock purchase plan 31,007 — 79 — — — 79 Issuance of common stock from at-the-market offerings, net of offering costs 3,829,830 4 17,930 — — — 17,934 Stock-based compensation — — 1,305 — — — 1,305 Net unrealized loss on investments, net of tax — — — ( 9 ) — — ( 9 ) Net loss — — — — ( 19,531 ) ( 1 ) ( 19,532 ) Balance as of June 30, 2025 92,871,182 93 641,284 ( 75 ) ( 566,457 ) ( 189 ) 74,656 Issuance of common stock from at-the-market offerings, net of offering costs 5,115,452 5 29,748 — — — 29,753 Stock-based compensation — — 1,307 — — — 1,307 Net unrealized gain on investments, net of tax — — — 74 — — 74 Net loss — — — — ( 25,744 ) ( 2 ) ( 25,746 ) Balance as of September 30, 2025 97,986,634 $ 98 $ 672,339 $ ( 1 ) $ ( 592,201 ) $ ( 191 ) $ 80,044 Three and Nine Months Ended September 30, 2024 (unaudited) Common Stock Additional Paid-In Other Comprehensive Accumulated Noncontrolling Total Stockholders’ Shares Amount Capital Gain/(Loss) Deficit Interest Equity Balance as of December 31, 2023 63,286,404 $ 63 $ 558,692 $ ( 74 ) $ ( 468,023 ) $ ( 188 ) $ 90,470 Issuance of common stock upon release of restricted stock units 22,111 — — — — — — Issuance of common stock from at-the-market offerings, net of offering costs 5,045,518 5 8,638 — — — 8,643 Stock-based compensation — — 740 — — — 740 Net unrealized loss on investments, net of tax — — — ( 84 ) — — ( 84 ) Net (loss) gain — — — — ( 15,491 ) 4 ( 15,487 ) Balance as of March 31, 2024 68,354,033 68 568,070 ( 158 ) ( 483,514 ) ( 184 ) 84,282 Issuance of common stock pursuant to employee stock purchase plan 39,364 — 39 — — — 39 Issuance of common stock from at-the-market offerings, net of offering costs 7,402,801 8 12,684 — — — 12,692 Stock-based compensation — — 727 — — — 727 Net unrealized loss on investments, net of tax — — — ( 10 ) — — ( 10 ) Net loss — — — — ( 16,306 ) — ( 16,306 ) Balance as of June 30, 2024 75,796,198 76 581,520 ( 168 ) ( 499,820 ) ( 184 ) 81,424 Issuance of common stock from at-the-market offerings, net of offering costs 15,088 — 20 — — — 20 Stock-based compensation — — 752 — — — 752 Net unrealized gain on investments, net of tax — — — 204 — — 204 Net loss — — — — ( 17,259 ) ( 2 ) ( 17,261 ) Balance as of September 30, 2024 75,811,286 $ 76 $ 582,292 $ 36 $ ( 517,079 ) $ ( 186 ) $ 65,139 See accompanying notes. 6 aTyr Pharma, Inc. Condensed Consolidated S tatements of Cash Flows (in thousands) Nine Months Ended September 30, 2025 2024 (unaudited) Cash flows from operating activities: Consolidated net loss $ ( 60,159 ) $ ( 49,054 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 498 533 Stock-based compensation 3,790 2,219 Accretion of discount of available-for-sale investment securities ( 1,493 ) ( 2,155 ) Amortization of right-of-use assets 661 1,008 Changes in operating assets and liabilities: Other receivables 694 307 Prepaid expenses and other assets 6,240 ( 6,108 ) Accounts payable and accrued expenses 503 ( 2,164 ) Operating lease liability ( 524 ) ( 573 ) Net cash used in operating activities ( 49,790 ) ( 55,987 ) Cash flows from investing activities: Purchases of property and equipment ( 46 ) ( 40 ) Purchases of available-for-sale investment securities ( 80,600 ) ( 43,036 ) Maturities of available-for-sale investment securities 59,150 66,394 Net cash (used in) provided by investing activities ( 21,496 ) 23,318 Cash flows from financing activities: Proceeds from issuance of common stock through option exercises 19 — Proceeds from issuance of common stock through employee stock purchase plan 79 39 Proceeds from issuance of common stock from at-the-market offerings, net of offering costs 66,444 21,355 Principal paid on finance lease liabilities ( 400 ) ( 369 ) Net cash provided by financing activities 66,142 21,025 Net change in cash, cash equivalents and restricted cash ( 5,144 ) ( 11,644 ) Cash, cash equivalents and restricted cash at beginning of period 14,006 26,028 Cash, cash equivalents and restricted cash at the end of period $ 8,862 $ 14,384 Cash and cash equivalents at the end of period $ 6,150 $ 11,458 Restricted cash at the end of period 2,712 2,926 Cash, cash equivalents and restricted cash at the end of period $ 8,862 $ 14,384 Supplemental disclosure of cash flow information: Interest paid $ 75 $ 107 Purchases of property and equipment in accounts payable $ 48 $ 34 See accompanying notes. 7 aTyr Pharma, Inc. Notes to Condensed Consolid ated Financial Statements (Unaudited) 1. Organization, Business, Basis of Presentation and Summary of Significant Accounting Policies Organization and Business We were incorporated in the state of Delaware on September 8, 2005. We are a clinical stage biotechnology company leveraging evolutionary intelligence to translate tRNA synthetase biology into new therapies for fibrosis and inflammation. tRNA synthetases are ancient, essential proteins that have evolved novel domains that regulate diverse pathways extracellularly in humans. Our discovery platform is focused on unlocking hidden therapeutic intervention points by uncovering signaling pathways driven by our proprietary library of domains derived from all 20 tRNA synthetases. Principles of Consolidation Our unaudited condensed consolidated financial statements include our accounts and our 98 % majority-owned subsidiary in Hong Kong, Pangu BioPharma Limited (Pangu BioPharma). All intercompany transactions and balances are eliminated in consolidation. Unaudited Interim Financial Information The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) and follow the requirements of the U.S. Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. In our opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by U.S. GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2024, contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. Liquidity and Financial Condition We have incurred net losses and negative cash flows from operations since our inception in 2005, including a consolidated net loss of $ 25.7 million and $ 60.2 million for the three and nine months ended September 30, 2025. As of September 30, 2025, we had an accumulated deficit of $ 592.2 million. We currently have an “at-the-market” offering program (the Jefferies ATM Offering Program) through an Open Market Sale Agreement SM with Jefferies LLC (Jefferies). During the nine months ended September 30, 2025, we sold an aggregate of 13,887,177 shares of common stock at a weighted-average price of $ 4.94 per share for net proceeds of approximately $ 66.4 million under the Jefferies ATM Offering Program. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years at a minimum. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, we will need to raise substantial additional capital to fund our operations. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our preclinical, clinical and manufacturing development efforts and the timing and nature of the regulatory approval process for our product candidates, including pre-commercial activities. We anticipate that we will seek to fund our operations through equity offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and when we are closer to commercialization of our product candidates potentially through debt financings. However, we may be unable to raise additional capital or enter into such arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such arrangements when needed would have a negative impact on our financial condition and ability to develop our product candidates. We believe that our existing cash, cash equivalents, restricted cash and available-for-sale investments of $ 92.9 million as of September 30, 2025 will be sufficient to meet our material cash requirements from known contractual and other obligations for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q. Restricted Cash As of September 30, 2025, restricted cash was approximately $ 2.7 million, of which $ 2.3 million was held as a security deposit in conjunction with our corporate headquarters facility lease and financing leases as discussed further in Note 4 - Commitments and Contingencies and $ 0.4 million was held as security deposit for our corporate credit card program. 8 Employee Retention Credit Under the Coronavirus Aid, Relief, and Economic Security Act of 2020, we were eligible to claim the employee retention credit (ERC), which is a refundable tax credit against certain employment taxes. During the year ended December 31, 2023, we amended certain payroll tax filings and applied for a refund of $ 1.2 million of ERC benefits. The refund was recorded within the other receivables in our audited consolidated balance sheets, and as a $ 0.8 million reduction of research and development expenses and a $ 0.4 million reduction of general and administrative expenses in our audited consolidated statements of operations for the year ended December 31, 2023. As of September 30, 2025, we have fully received the ERC benefits refund. Allowance of Credit Losses For available-for-sale investments in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale investments that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the severity of the impairment, any changes in interest rates, market conditions, changes to the underlying credit ratings and forecasted recovery, among other factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account. Any impairment that has not been recorded through an allowance for credit losses is included in other comprehensive income (loss) on the unaudited condensed consolidated statements of operations and comprehensive loss. We elected the practical expedient to exclude the applicable accrued interest from both the fair value and amortized costs basis of our available-for-sale investments for purposes of identifying and measuring an impairment. Accrued interest receivable on available-for-sale investments is recorded within other receivables on our unaudited condensed consolidated balance sheets. Our accounting policy is to not measure an allowance for credit loss for accrued interest receivable and to write-off any uncollectible accrued interest receivable as a reversal of interest income in a timely manner, which we consider to be in the period in which we determine the accrued interest will not be collected by us. Use of Estimates Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure for these items in our unaudited condensed consolidated financial statements and accompanying notes. The most significant estimates in our unaudited condensed consolidated financial statements relate to clinical trial and research and development expenses. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ materially from these estimates and assumptions. Accrued Expenses Accrued expenses include salaries, wages, benefits costs, consulting fees, legal and research and development costs. We have entered into contractual arrangements related to our clinical studies with clinical research organizations (CROs) and contracted development and manufacturing organizations (CDMOs) and recognize expense based on work completed and efforts expended pursuant to our contractual arrangements. We make estimates of our accrued CRO costs as of each balance sheet date based on facts and circumstances known at the time and include total trial management costs, sites activated, patients enrolled and number of patient visits. We estimate the time period over which services will be performed and the level of effort to be expended in each period. There may be instances in which payments made to our service providers including CROs and CDMOs, will temporarily exceed the level of services provided and result in a prepayment of the expense. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense balance accordingly. Historically, our estimated accrued liabilities have materially approximated actual expenses incurred. Leases We determine if an arrangement is a lease at inception. Short-term leases with an initial term of 12 months or less are not recorded on our balance sheet. For long-term leases with an initial term of greater than 12 months, we recognize a right-of-use asset (ROU) and a lease liability based on the present value of future lease payments using an estimated rate of interest that we would pay to borrow equivalent funds on a collateralized basis at the lease commencement date. We determine the lease term at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise. Rent expense for operating leases is recognized on a straight-line basis over the lease term and is included in operating expenses in our unaudited condensed consolidated statements of operations. For financing leases, interest expense and amortization of the ROU is included in operating expenses in our unaudited condensed consolidated statements of operations and variable lease payments are expensed as incurred. 9 If a lease is modified, the modified contract is evaluated to determine whether it is or contains a lease. If a lease continues to exist, the lease modification is determined to be a separate contract when the modification grants the lessee an additional ROU that is not included in the original lease and the lease payments increase commensurate with the standalone price for the additional ROU. A lease modification that results in a separate contract will be accounted for in the same manner as a new lease. For a modification that is not a separate contract, we reassess the lease classification using the modified terms and conditions and the facts and circumstances as of the effective date of the modification and recognize the amount of the remeasurement of the lease liability for the modified lease as an adjustment to the corresponding ROU asset. Our ROU assets consist of a non-cancelable operating lease for our corporate headquarters and financing leases for various research and development and information technology equipment. We do not separate lease and non-lease components for our long-term leases. Revenue Recognition We evaluate our agreements under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers and ASC Topic 808, Collaborative Arrangements . We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreement, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation. As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. We use key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. We recognize revenue in one of two ways, over time or at a point in time. We recognize revenue over time when we are executing on our performance obligation over time and our partner receives benefit over time. For example, we recognize revenue over time when we provide research and development services. We recognize revenue at a point in time when we transfer control of a distinct performance obligation to our partner. For example, if a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of warrants for common stock, options and restricted stock units outstanding under our stock option plans and estimated shares to be purchased under our employee stock purchase plan. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to our net loss position. Potentially dilutive securities not considered for the calculation of diluted net loss per share are as follows (in common stock equivalents): Nine Months Ended September 30, 2025 2024 Common stock warrants — 2,886 Common stock options and restricted stock units 9,811,268 6,071,781 Employee stock purchase plan 46,883 37,023 Total 9,858,151 6,111,690 10 Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (CODM) in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business in one operating segment, which includes all activities related to the discovery and development of our product candidates. Our CODM is our Chief Executive Officer , who reviews and evaluates consolidated research and development expenses, general and administrative expenses, net loss, net cash used in operating activities and our consolidated cash and cash equivalents for purposes of making operating decisions, allocating resources and planning and forecasting future periods. The table below summarizes the significant expense categories regularly reviewed by our CODM for the three and nine months ended September 30, 2025 and 2024. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 License and collaboration agreement revenues $ 190 $ — $ 190 $ 235 Research and development expenses: Efzofitimod expenses 18,765 11,948 39,858 34,232 Preclinical development and other shared research and development expenses 2,890 2,525 8,075 6,929 Non-cash expenses (depreciation and stock-based compensation) 475 334 1,395 983 Total research and development expenses 22,130 14,807 49,328 42,144 General and administrative expenses: Other general and administrative expenses 3,888 2,800 10,880 8,476 Non-cash expenses (depreciation and stock-based compensation) 917 536 2,813 1,709 Total general and administrative expenses 4,805 3,336 13,693 10,185 Other segment items (1) 999 882 2,672 3,040 Consolidated net loss $ 25,746 $ 17,261 $ 60,159 $ 49,054 (1) Other segment items included interest income and interest expense. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. We adopted the standard on January 1, 2025 . The adoption did not have a material effect on our consolidated financial statements disclosures. In November 2024, the FASB issued ASU 2024-03, which requires entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items on the face of the income statement. The guidance addresses investors’ requests for more detailed expense information, which they said is critical to understanding an entity’s performance, assessing its prospects for future cash flows, and comparing its performance both over time and with that of other entities. The standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted . We are currently evaluating the disclosure requirements related to the new standard. 2. Fair Value Measurements The carrying amounts of cash equivalents, prepaid and other assets, accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Investment securities are recorded at fair value. 11 The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial assets measured at fair value on a recurring basis consist of investment securities. Investment securities are recorded at fair value, defined as the exit price in the principal market in which we would transact, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Level 2 securities are valued using quoted market prices for similar instruments, non-binding market prices that are corroborated by observable market data, or discounted cash flow techniques and include our investments in commercial paper, corporate debt securities and U.S. government agencies securities. We have no financial liabilities measured at fair value on a recurring basis. None of our non-financial assets and liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. Assets measured at fair value on a recurring basis are as follows (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2025 Assets: Current: Cash equivalents $ 4,630 $ 4,630 $ — $ — Available-for-sale investments: Commercial paper 42,300 — 42,300 — Corporate debt securities 36,698 — 36,698 — Municipal bonds 5,054 — 5,054 — Total available-for-sale investments 84,052 — 84,052 — Total assets measured at fair value $ 88,682 $ 4,630 $ 84,052 $ — Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2024 Assets: Current: Cash equivalents $ 9,581 $ 9,581 $ — $ — Available-for-sale investments: Commercial paper 38,139 — 38,139 — Corporate debt securities 14,067 — 14,067 — U.S. government agencies 8,864 — 8,864 — Total available-for-sale investments 61,070 — 61,070 — Total assets measured at fair value $ 70,651 $ 9,581 $ 61,070 $ — 12 As of September 30, 2025 and December 31, 2024, available-for-sale investments are detailed as follows (in thousands): September 30, 2025 Contractual Maturity Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Market Value Available-for-sale investments: Commercial paper Within 1 year $ 42,278 $ 22 $ — $ 42,300 Corporate debt securities Within 1 year 36,684 18 ( 4 ) 36,698 Municipal bonds Within 2 years 5,041 13 — 5,054 $ 84,003 $ 53 $ ( 4 ) $ 84,052 December 31, 2024 Contractual Maturity Gross Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Market Value Available-for-sale investments: Commercial paper Within 1 year $ 38,135 $ 23 $ ( 19 ) $ 38,139 Corporate debt securities Within 1 years 14,058 12 ( 3 ) 14,067 U.S. government agencies Within 1 year 8,867 — ( 3 ) 8,864 $ 61,060 $ 35 $ ( 25 ) $ 61,070 We evaluate our available-for-sale debt securities for credit losses when the amortized cost basis exceeds fair value. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account. Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive loss. When evaluating an investment for impairment, we review factors such as the severity of the impairment, changes in underlying credit ratings, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. We recorded no allowance for credit losses in the unaudited condensed consolidated statements of operations and comprehensive loss during the three and six months ended September 30, 2025. As of September 30, 2025, all available-for-sale investments had a variety of effective maturity dates of less than two years . As of September 30, 2025, $ 79.0 million of our short-term investments had maturities less than one year and $ 5.1 million had maturities greater than one year. As of September 30, 2025, 7 out of 28 available-for-sale investments were in a gross unrealized loss position, no ne of which were at such position for greater than 12 months . As of September 30, 2025 and December 31, 2024, accrued interest receivable on available-for-sale investments was $ 0.5 million and $ 0.3 million, respectively. 3. License, Collaboration and Other Agreements Kyorin Pharmaceutical Co., Ltd. In January 2020, we entered into a collaboration and license agreement (Kyorin Agreement) with Kyorin Pharmaceutical Co., Ltd. (Kyorin) for the development and commercialization of efzofitimod for the treatment of interstitial lung disease (ILD) in Japan. Under the Kyorin Agreement, Kyorin received an exclusive right to develop and commercialize efzofitimod in Japan for all forms of ILD, and is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan. In 2020, Kyorin conducted and funded a Phase 1 clinical trial of efzofitimod (known as KRP-R120 in Japan). The Phase 1 clinical trial was a placebo-controlled clinical trial to evaluate the safety, pharmacokinetics (PK) and immunogenicity of efzofitimod in 32 healthy Japanese male volunteers. Efzofitimod was observed to be generally well-tolerated with no drug-related serious adverse events, and PK findings were consistent with previous studies of efzofitimod. Kyorin has also participated in the EFZO-FIT study as the local sponsor in Japan. In February 2023, Kyorin dosed the first patient in Japan in the EFZO-FIT study which triggered a $ 10.0 million milestone payment to us. To date, the Kyorin Agreement has generated $ 20.0 million in upfront and milestone payments to us and we are eligible to receive up to an additional $ 155.0 million in the aggregate upon achievement of certain development, regulatory and sales milestones, as well as tiered royalties on any net sales in Japan. Either party may terminate the Kyorin Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement. 13 We assessed our license and collaboration with Kyorin in accordance with Topic 606 which applies to delivered goods or services to a customer and concluded that Kyorin is a customer. For each of the nine months ended September 30, 2025 and 2024, we recognized $ 0.2 million in collaboration revenue from Kyorin for drug product material sold to Kyorin. The remaining milestones and royalty payments under the Kyorin Agreement are variable consideration. Since milestone payments are binary in nature, we will use the “most-likely” method to evaluate whether the milestones should be included as revenue. We will constrain these amounts until the milestone is probable of being achieved. The royalties are dependent on future sales by Kyorin which are at the full discretion of Kyorin. Accordingly, we constrain these amounts until the future sales have occurred. 4. Commitments and Contingencies Operating Leases Corporate Headquarters Facility Lease In May 2022, we entered into a non-cancelable facility lease that is subject to base lease payments that started at $ 5.75 per square foot of rentable area per month for the first 12 months of the lease and which escalate 3.0 % annually over the term of the lease, and additional charges for common area maintenance and other costs. The term of the lease (the Lease Term) commenced on March 20, 2023 (the Lease Commencement Date) and will continue for 124 months from the Lease Commencement Date. We also have one option to extend the Lease Term for five years . In April 2024, we entered into a lease amendment for additional common area amenities, effective as of June 2023. The amendment increased the total rentable square feet from 23,696 rentable square feet to 24,866 rentable square feet. We provided a $ 0.7 million security deposit in the form of a letter of credit which is included in restricted cash as of September 30, 2025. Future minimum payments under the facility lease and a reconciliation to the operating lease liability as of September 30, 2025 were as follows (in thousands): Operating Leases 2025 $ 434 2026 1,780 2027 1,916 2028 1,975 2029 and thereafter 9,837 Less: Amount representing interest ( 4,611 ) Present value of lease payments 11,331 Less: Current portion of operating lease liability ( 799 ) Long-term operating lease liability, net of current portion $ 10,532 For each of the three months ended September 30, 2025 and 2024, we recorded an operating lease expense of $ 0.4 million. For the nine months ended September 30, 2025 and 2024, we recorded an operating lease expense of $ 1.2 million and $ 1.1 million, respectively. As of September 30, 2025, the weighted-average remaining lease term was 7.8 years and the weighted average discount rate was 8.8 %. Financing Leases In April 2022, we entered into a master financing lease agreement to lease various research and development and information technology equipment over a 48-month term. Future minimum payments under the financing lease and reconciliation to the financing lease liability as of September 30, 2025 were as follows (in thousands): Financing Leases 2025 $ 158 2026 676 2027 264 Less: Amount representing interest ( 70 ) Present value of lease payments 1,028 Less: Current portion of financing lease liability ( 630 ) Long-term financing lease liability, net of current portion $ 398 As of September 30, 2025, the weighted-average remaining lease term was 1.3 years and the weighted-average discount rate was 8.4 %. As of September 30, 2025, we have a $ 1.5 million deposit held as collateral for the leased equipment, and this deposit is included in restricted cash. 14 Litigation On October 9, 2025 and October 22, 2025 , two substantially similar putative securities class action complaints were filed in the U.S. District Court for the Southern District of California, naming aTyr Pharma, Inc. and our Chief Executive Officer, Sanjay Shukla . The complaints allege certain violations of the U.S. federal securities laws and seek unspecific damages. We make provisions for liabilities when they are both probable that a liability has been incurred and the amount can be reasonably estimated. No such liability has been recorded related to this matter. With regard to legal fees, such as attorney fees related to this matter or any other legal matters, we recognize such costs as incurred. 5. Stockholders’ Equity At the Market Offering Programs In April 2022, we entered into an Open Market Sale Agreement SM with Jefferies implementing the Jefferies ATM Offering Program. In December 2024, we amended the Jefferies ATM Offering Program. Under the Jefferies ATM Offering Program we may offer and sell, from time to time and at our option, up to an aggregate of $ 215.0 million of shares of our common stock (inclusive of $ 65.0 million of sales made prior to the amendment) through Jefferies, acting as sales agent. Jefferies is entitled to a fixed commission rate of up to 3.0 % of the gross sales proceeds of shares sold under the Jefferies ATM Offering Program. During the year ended December 31, 2024, we sold an aggregate of 20,653,450 shares of common stock at a weighted-average price of $ 2.02 per share for net proceeds of approximately $ 40.3 million under the Jefferies ATM Offering Program. During the nine months ended September 30, 2025, we sold an aggregate of 13,887,177 shares of common stock at a weighted-average price of $ 4.94 per share for net proceeds of approximately $ 66.4 million under the Jefferies ATM Offering Program. Common Stock Reserved for Future Issuance Common stock reserved for future issuance was as follows: September 30, 2025 Common stock options and restricted stock units 9,811,268 Shares available under the 2015 equity incentive plan 6,627,202 Shares available under the 2022 inducement plan 39,967 Shares available under the employee stock purchase plan 619,347 17,097,784 The following table summarizes our stock option activity under all equity incentive plans for the nine months ended September 30, 2025: Number of Outstanding Stock Options Weighted- Average Exercise Price Outstanding as of December 31, 2024 6,130,226 $ 4.29 Granted 3,714,577 $ 3.72 Exercised ( 8,420 ) $ 2.27 Canceled/forfeited/expired ( 45,223 ) $ 42.30 Outstanding as of September 30, 2025 9,791,160 $ 3.90 The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Expected term (in years) 6.02 – 6.08 5.27 – 6.08 5.50 – 6.08 5.27 – 6.08 Risk-free interest rate 3.8 % – 3.9 % 3.6 % – 3.9 % 3.8 % – 4.5 % 3.6 % – 4.5 % Expected volatility 77.7 % – 77.9 % 76.6 % – 77.1 % 75.9 % – 77.9 % 76.6 % – 80.5 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % 15 The following table summarizes our restricted stock unit activity under all equity incentive plans for the nine months ended September 30, 2025: Number of Outstanding Restricted Stock Units Weighted-Average Grant Date Fair Value Balance as of December 31, 2024 41,216 $ 5.48 Released ( 21,108 ) $ 5.44 Balance as of September 30, 2025 20,108 $ 5.52 Stock-based Compensation The allocation of stock-based compensation for all options and restricted stock units and stock issued pursuant to our employee stock purchase plan is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development $ 330 $ 178 $ 959 $ 513 General and administrative 977 574 2,831 1,706 Total stock-based compensation expense $ 1,307 $ 752 $ 3,790 $ 2,219