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Is aTyr Pharma (NASDAQ:ATYR) In A Good Position To Invest In Growth?

Simply Wall St · 2d ago

We can readily understand why investors are attracted to unprofitable companies. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So should aTyr Pharma (NASDAQ:ATYR) shareholders be worried about its cash burn? In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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How Long Is aTyr Pharma's Cash Runway?

A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. In September 2025, aTyr Pharma had US$90m in cash, and was debt-free. Looking at the last year, the company burnt through US$63m. Therefore, from September 2025 it had roughly 17 months of cash runway. Notably, analysts forecast that aTyr Pharma will break even (at a free cash flow level) in about 4 years. That means unless the company reduces its cash burn quickly, it may well look to raise more cash. You can see how its cash balance has changed over time in the image below.

debt-equity-history-analysis
NasdaqCM:ATYR Debt to Equity History December 18th 2025

Check out our latest analysis for aTyr Pharma

How Is aTyr Pharma's Cash Burn Changing Over Time?

In our view, aTyr Pharma doesn't yet produce significant amounts of operating revenue, since it reported just US$190k in the last twelve months. As a result, we think it's a bit early to focus on the revenue growth, so we'll limit ourselves to looking at how the cash burn is changing over time. As it happens, the company's cash burn reduced by 6.1% over the last year, which suggests that management are maintaining a fairly steady rate of business development, albeit with a slight decrease in spending. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can aTyr Pharma Raise More Cash Easily?

Even though it has reduced its cash burn recently, shareholders should still consider how easy it would be for aTyr Pharma to raise more cash in the future. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

aTyr Pharma has a market capitalisation of US$72m and burnt through US$63m last year, which is 88% of the company's market value. That suggests the company may have some funding difficulties, and we'd be very wary of the stock.

Is aTyr Pharma's Cash Burn A Worry?

On this analysis of aTyr Pharma's cash burn, we think its cash runway was reassuring, while its cash burn relative to its market cap has us a bit worried. Shareholders can take heart from the fact that analysts are forecasting it will reach breakeven. Considering all the measures mentioned in this report, we reckon that its cash burn is fairly risky, and if we held shares we'd be watching like a hawk for any deterioration. On another note, we conducted an in-depth investigation of the company, and identified 5 warning signs for aTyr Pharma (1 is potentially serious!) that you should be aware of before investing here.

If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.