Executive Summary / Key Takeaways

• Coya Therapeutics is a clinical-stage biotechnology company focused on enhancing the function of regulatory T cells (Tregs) to address neurodegenerative, autoimmune, and inflammatory diseases, areas of high unmet medical need with multi-billion dollar market potential.
• The company's core investment thesis centers on its differentiated Treg-enhancing therapeutic modalities, particularly the lead combination biologic COYA 302, which has shown promising early data in ALS and FTD and is advancing towards Phase 2 trials.
• Recent financial results for Q1 2025 show increased R&D spending ($5.21M vs $3.14M YoY) reflecting clinical advancement, alongside a growing net loss ($7.31M vs $5.05M YoY), typical for a development-stage biotech.
• A key operational highlight is the DRL Development Agreement, providing non-dilutive funding ($7.5M upfront, $3.9M amendment payment) and potential significant milestones, validating COYA 302's potential and supporting its development in ALS.
• While the company holds $35.53M in cash as of March 31, 2025, expected to fund operations for at least one year, substantial additional financing will be required to advance its pipeline and achieve commercialization.

The Treg Hypothesis: A New Frontier in Neurodegenerative Disease

Coya Therapeutics is carving a niche in the biotechnology landscape by targeting a fundamental mechanism of immune regulation: the function of regulatory T cells, or Tregs. These specialized lymphocytes are critical for maintaining immune homeostasis and preventing excessive inflammation. In many debilitating diseases, particularly neurodegenerative conditions like Amyotrophic Lateral Sclerosis (ALS) and Frontotemporal Dementia (FTD), as well as autoimmune and metabolic disorders, Treg function becomes impaired. This dysfunction contributes to the chronic inflammation and oxidative stress that drive disease progression. Coya's core strategy is to develop novel therapies designed to restore or enhance Treg function, thereby potentially halting or slowing the devastating effects of these conditions.

The company's approach is multifaceted, exploring three distinct therapeutic modalities: Treg-enhancing biologics, Treg-derived exosomes, and autologous Treg cell therapy. This multi-pronged strategy allows Coya to pursue both ex vivo (cell therapy) and in vivo (biologics, exosomes) methods to modulate Treg activity, offering flexibility and potentially broader applicability across different diseases and patient populations. The historical work on their autologous Treg cell therapy program (COYA 101) in ALS, which completed Phase 1 and Phase 2a studies, provided crucial insights into Treg biology and biomarkers that are now informing the development of their more scalable biologic candidates.

Central to Coya's pipeline is the 300 Series of Treg-enhancing biologics, spearheaded by the lead asset, COYA 302. This investigational combination therapy pairs Coya's proprietary low-dose interleukin-2 (LD IL-2, COYA 301) with CTLA4-Ig. The rationale behind this combination is to simultaneously enhance Treg function via LD IL-2 and suppress pro-inflammatory T effector cells and activated macrophages via CTLA4-Ig, addressing multiple pathways implicated in neuroinflammation. This dual-biologic approach is seen by the company as a potential backbone for a "Pipeline in a Product," applicable to a range of neurodegenerative conditions.

Beyond COYA 302, the company is also advancing COYA 303, a combination of LD IL-2 and a GLP-1 receptor agonist, for inflammatory diseases. Preclinical data published in April 2025 demonstrated a synergistic effect, showing a statistically significant 42% increase in Treg suppressive function compared to single agents (p<0.0010). The study also indicated COYA 303 promoted Treg survival by reducing BAX transcript levels by 20% during prolonged incubation (p 0.01). These quantifiable preclinical results highlight the potential for enhanced efficacy and durability with combination biologics targeting Treg function. The 200 Series focuses on Treg-derived exosomes (COYA 201, COYA 206), offering a potentially cell-free approach to delivering immunomodulatory signals, while the 100 Series continues to explore autologous Treg cell therapy (COYA 101).

Navigating the Competitive Landscape

The field of neurodegenerative and autoimmune disease therapy is highly competitive, populated by both large pharmaceutical companies and numerous smaller biotechnology firms. Established players like Biogen (BIIB), Novartis (NVS), and Roche (RHHBY) possess significant resources, extensive pipelines, and established market presence with approved therapies for conditions such as multiple sclerosis, Alzheimer's disease, and ALS. These companies often pursue broad immunomodulatory strategies or target specific disease pathways. For instance, Biogen has therapies for ALS and Alzheimer's, while Novartis and Roche have significant neuroscience and immunology portfolios. Denali Therapeutics (DNLI), a clinical-stage peer, also focuses on neurodegenerative diseases using different technological approaches like transport-enabled therapies.

Coya's competitive positioning is defined by its specialized focus on Treg modulation. While larger competitors may have broader pipelines and greater financial muscle, Coya aims to differentiate itself through the depth of its understanding of Treg biology and its multi-modal approach. The proprietary nature of its Treg-enhancing biologics, particularly the combination strategy of COYA 302, represents a potential technological advantage. Preclinical and early clinical data suggesting enhanced Treg function and anti-inflammatory effects could provide a competitive edge in specific patient populations or disease subtypes where Treg dysfunction is a primary driver.

However, Coya faces significant competitive disadvantages stemming from its early stage and limited scale. Its operating costs per unit are likely higher than those of large pharmaceutical companies due to smaller-scale manufacturing. Furthermore, as a pre-revenue company, Coya's financial health is inherently weaker than that of its large-cap competitors, making it more dependent on external funding and potentially vulnerable to the pricing power and market dominance of established players. The high barriers to entry in drug development, including substantial R&D costs and complex regulatory pathways, while protecting Coya's IP, also favor larger companies with greater financial capacity and regulatory experience. Coya's strategy of forming partnerships, such as the significant collaboration with Dr. Reddy's Laboratories (RDY), is a key response to these competitive pressures, providing both funding and commercialization expertise in certain territories.

Financial Performance and Operational Momentum

As a clinical-stage biotechnology company, Coya's financial profile is characterized by significant R&D investment and operating losses, rather than product revenue. For the three months ended March 31, 2025, the company reported collaboration revenue of $257,884, an increase from $126,838 in the same period of 2024. This revenue is derived solely from the DRL Development Agreement and is recognized based on the progress of R&D services performed by Coya for COYA 302 in ALS, measured by the ratio of actual to budgeted expenses. The increase reflects the ramp-up in development activities for this program.

Operating expenses totaled $7.93 million for Q1 2025, up from $5.61 million in Q1 2024. The primary driver of this increase was R&D expenses, which rose by $2.1 million, from $3.14 million to $5.21 million year-over-year. This increase is attributed mainly to the preclinical advancement of COYA 302 in ALS, as well as higher internal R&D costs and sponsored research. General and administrative expenses also increased, from $2.44 million to $2.71 million, primarily due to higher stock-based compensation and investor relations activities associated with operating as a public company. These increased expenses resulted in a net loss of $7.31 million for the quarter, compared to a net loss of $5.05 million in the prior-year period. As of March 31, 2025, the accumulated deficit stood at $48.04 million.

Liquidity remains a critical focus for Coya. The company held $35.53 million in cash and cash equivalents as of March 31, 2025. Based on current plans, this cash position is expected to fund operations for at least one year from the filing date of the financial statements (May 13, 2025). However, the company explicitly states that substantial additional financing will be needed to fund its ongoing operations, advance its pipeline through clinical trials, and prepare for potential commercialization. Cash used in operating activities was $2.83 million in Q1 2025, a shift from cash provided of $2.15 million in Q1 2024. The positive operating cash flow in Q1 2024 was significantly influenced by the $7.5 million upfront payment received from Dr. Reddy's Laboratories in January 2024 under the DRL Development Agreement.

Operational progress continues to build the investment narrative. In April 2025, Coya announced positive interim results from an investigator-initiated proof-of-concept study of COYA 302 in five patients with mild to moderate Frontotemporal Dementia, providing early clinical validation for the combination approach in another neurodegenerative indication. Earlier in February 2025, encouraging biomarker data from an investigator-initiated Phase 2 study of LD IL-2 (COYA 301) in Alzheimer's disease were reported, showing statistically significant improvements in inflammatory blood markers, potential indications of increased amyloid-beta clearance, stable neurofilament light chain levels, and Treg expansion. These data points, alongside progress in the exosome program, underscore the breadth of Coya's platform and its potential applicability across multiple diseases driven by inflammation and Treg dysfunction.

The DRL Development Agreement, signed in December 2023 and amended in June 2024, is a cornerstone of Coya's strategy for COYA 302 in ALS. It provides significant non-dilutive funding, including the $7.5 million upfront payment and a $3.9 million amendment payment. Furthermore, it outlines potential future development milestones totaling up to approximately $40 million and sales milestones up to approximately $677.3 million in the licensed territories (US, Canada, EU, UK). While Coya retains responsibility for clinical development and US regulatory approval for ALS, the partnership leverages Dr. Reddy's commercial capabilities and provides a clear path towards potential market access, albeit with Dr. Reddy's holding final decision-making authority in certain development disputes. Other license agreements with ARScience and Methodist also involve potential milestone and royalty payments, adding to future financial obligations but also reflecting the foundational IP underlying Coya's pipeline.

Outlook and Remaining Hurdles

Coya's outlook is firmly focused on advancing its clinical pipeline, particularly COYA 302. The company anticipates continued significant increases in R&D expenses throughout 2025, driven by the planned initiation of a Phase 2 study for COYA 302 in ALS and preparation for an Investigational New Drug (IND) filing for a study of COYA 302 in FTD. The IND filing and subsequent Phase 2b initiation for COYA 302 in FTD are specifically targeted for the second half of 2025. Investors are also awaiting biomarker data from the proof-of-concept study of COYA 302 in ALS, expected in the second quarter of 2025. These clinical milestones represent key catalysts that could significantly impact the company's valuation and future prospects.

Despite the promising early data and strategic partnerships, Coya faces substantial risks inherent in clinical-stage biotechnology. The most significant is the need for substantial additional capital beyond its current cash runway. The success of clinical trials is uncertain, and failure at any stage could severely impact the company's ability to raise funds and continue operations. Regulatory approval is not guaranteed, even with positive clinical data. Competition in the target markets is intense, and larger, better-funded companies could bring competing therapies to market more quickly or effectively. Dependence on key personnel, the ability to attract and retain talent, and the protection of intellectual property are also critical factors. The company's financial statements are prepared on a going-concern basis, highlighting the dependency on future financing to continue operations beyond the current cash runway.

Conclusion

Coya Therapeutics presents a compelling, albeit high-risk, investment opportunity centered on the innovative approach of enhancing regulatory T cell function to combat neurodegenerative and inflammatory diseases. The company's multi-modal platform and lead asset, COYA 302, offer a differentiated strategy targeting the underlying immune dysfunction in conditions with significant unmet medical need. Recent positive interim data for COYA 302 in FTD and encouraging biomarker data for COYA 301 in AD, coupled with the strategic partnership with Dr. Reddy's Laboratories, provide validation for the platform and operational momentum. While the company's financial performance reflects its development stage with increasing R&D costs and net losses, the current cash position offers a runway for key upcoming clinical catalysts. The core investment thesis hinges on the successful execution of planned Phase 2 trials for COYA 302 in ALS and FTD, securing necessary future financing, and navigating the competitive landscape. Investors should closely monitor clinical trial progress, data readouts, IND filings, and the company's ability to raise additional capital as critical indicators of its potential to translate its scientific premise into tangible value.