10 Hot Biotech Stocks Under $5

2. aTyr Pharma, Inc. (NASDAQ:ATYR)

Potential Upside: 414.52%

Number of Hedge Fund Holders: 25

aTyr Pharma, Inc. (NASDAQ:ATYR) is advancing innovative immunological therapies at the clinical stage. The company’s primary candidate, efzofitimod, targets pulmonary sarcoidosis, a serious interstitial lung disease (ILD) with few treatment options. aTyr is also developing this drug for systemic sclerosis-related ILD, building a stronger long-term pipeline.

aTyr Pharma, Inc. (NASDAQ:ATYR) ended 2024 with $75.1 million in cash and restricted cash, cash equivalents, and investments. It boosted its finances with an $18.8 million ATM offering in early 2025, extending the company’s cash runway at least a year beyond the expected Phase 3 EFZO-FIT trial results. R&D costs reached $54.4 million in 2024, mainly supporting the Phase 3 trial and manufacturing, while administrative expenses were $13.8 million. The company’s partnership with Kyorin Pharmaceutical has already yielded over $20 million in milestone payments. It has the potential for up to $155 million more based on regulatory and commercial success.

Clinically, aTyr Pharma, Inc. (NASDAQ:ATYR) is making significant progress with efzofitimod. It has completed enrollment for its pivotal EFZO-FIT Phase 3 study, testing efzofitimod’s ability to reduce or eliminate corticosteroid use in pulmonary sarcoidosis patients. This study includes 268 patients globally, with results expected in Q3 2025. An independent data and safety monitoring board (DSMB) completed its fourth review in March 2025 and recommended continuing without changes, supporting the drug’s safety profile.

Furthermore, aTyr Pharma, Inc. (NASDAQ:ATYR) is testing efzofitimod for systemic sclerosis-related ILD in its Phase 2 EFZO-CONNECT trial. Interim data from the study on skin benefits is expected to be released in Q2 2025.

aTyr Pharma, Inc. (NASDAQ:ATYR) shares have jumped 107.42% over the past six months. With solid finances, upcoming clinical milestones, and increasing industry recognition, aTyr Pharma remains a hot biotech stock for 2025.