By writer to seekingalpha.com
Introduction
Since I first wrote about Atara Biotherapeutics (ATRA) in October 2019, its share value has gone by way of a rollercoaster journey, reflecting the binary nature of investing in clinical-stage biotech firms. Share costs went as excessive as much as over $17, earlier than dropping by over 50% following the inventory market crash as a consequence of uncertainty over the COVID-19 pandemic.
Since my first article, Atara’s new CEO, Pascal Touchon, has settled in nicely and refocused the corporate’s strategic priorities. On this article, I revisit its prospects and reaffirm my bullish views on the corporate.
Scientific Packages Updates
In its Q3 2019 earnings name in November 2019, Atara Biotherapeutics up to date that its strategic focus transferring ahead will probably be on its lead program, tab-cel, ATA 188 for a number of sclerosis (“MS”), ATA2271/3271 Mesothelin-targeted CAR-Ts for stable tumors, and ATA 3219 CD-19 focused CAR-T for B-cell malignancies. Determine 1 lists the corporate’s newest medical applications.
Determine 1: Atara Biotherapeutics’ Scientific Pipeline
(Supply: Company Investor Presentation, February 27, 2020)
As a recap, the corporate’s lead program, tab-cel, is an allogeneic Epstein-Barr virus (“EBV”)-specific T-cell immunotherapy and is being evaluated in a part Three trial for EBV+ Publish-Transplant Lymphoproliferative Illness (“PTLD”) following bone marrow transplant (“HCT”) or stable organ transplant (“SOT”). PTLD is an aggressive and uncommon B-cell lymphoma that happens in immunosuppressed sufferers after transplant and is usually lethal and has no accredited remedy.
Determine 2: Tab-cel medical information for sufferers with EBV+ PTLD
(Supply: Firm Investor Presentation, February 27, 2020)
Tab-cel has proven compelling leads to sufferers with EBV+ PTLD with wonderful goal response charges (“ORR”) reported for the part 2 trial and an ongoing expanded entry protocol (“EAP”). Following an preliminary slower-than-expected enrolment for the ultra-rare illness, Atara had up to date its steering that the submitting of a biologics license functions (“BLA”) will probably be initiated within the second half of 2020. With an anticipated main endpoint threshold of 37%, the present obtainable information for tab-cel have far exceeded the edge, and tab-cel must be the primary allogeneic T-cell immunotherapy to be accredited in any indication. Just lately, the corporate additionally announced enterprise updates concerning the COVID-19 pandemic and confirmed that the timeline for BLA submission of tab-cel would probably not be affected.
Determine 3: Industrial Alternative for Tab-cel
(Supply: Firm Investor Presentation, February 27, 2020)
Moreover, the corporate additionally expects that the slower-than-expected enrolment of tab-cel within the pivotal trial doesn’t mirror the industrial alternative if approval is granted. Because the product is off-the-shelf allogenic, the supply to sufferers may be achieved rapidly and to any transplant middle in comparison with the present medical trial websites, which solely cowl round 10% of US transplant facilities. Assuming approval, physicians can even probably favor the usage of an accredited product fairly than the present state of affairs the place there are competing medical trials with tab-cel. The corporate can also be working a part 2 trial for Nasopharyngeal carcinoma (“NPC”) and plans to begin a part 2 trial within the second half of the 12 months to judge tab-cel in different uncommon EBV+ most cancers. The addition of indications will additional broaden the goal inhabitants that may be handled with tab-cel.
Transferring on to ATA188 for the remedy of MS, the preliminary plan was to dose Four ranges and choose the optimum dose stage. Atara had determined to go forward with dose stage Three for the part 1b research based mostly on a well-tolerated security profile and demonstrated medical enchancment from this dose stage. The corporate had earlier reported interim information for the primary 2-dose stage, and ATA 188 was well-tolerated in sufferers with progressive types of MS with no proof of cytokine launch syndrome, graft versus host illness or dose-limiting toxicities. The part 1b trial was initially anticipated to be initiated in Q2 or Q3 this 12 months, however the firm had introduced that it was suspending enrolment of ATA188 because of the COVID-19 pandemic. Whereas it’s unclear on the total affect on the timeline of the trial, the corporate nonetheless expects to report interim information updates from dose ranges Three and Four of the part 1 trial at an acceptable discussion board.
The corporate’s final two strategic priorities are each specializing in CAR-Ts. Atara’s collaborator, Memorial Sloan Kettering (“MSK”), is predicted to submit an IND within the 2nd or 3rd quarter of 2020 for ATA2271, which is an autologous mesothelin focused CAR-T in sufferers with superior mesothelioma. ATA 2271 incorporates next-generation applied sciences, together with novel co-stimulatory area 1XX which will supply higher persistence and extra physiologic T-cell signaling in addition to a PD-1 dominant unfavourable receptor that’s designed to supply intrinsic checkpoint inhibition and unlock the stable tumor microenvironment.
Moreover, an instructional just lately presented a medical proof-of-principle that an EBV T-cell platform has the potential to generate allogeneic CAR-Ts with excessive and sturdy responses, in addition to a low threat of toxicity. Within the EBV CD-19 CAR-T research, 5 out of 6 sufferers have been noticed to have sturdy full responses, with a median follow-up of 26.9 months. Based mostly on this, the corporate has began preclinical IND enabling research for ATA3219, which is an allogeneic EBV CD-19 focused CAR-T that comes with 1XX.
Determine 4: Atara Biotherapeutics’ CAR-T Developments
(Supply: Firm Investor Presentation, February 27, 2020)
Lastly, the corporate has additionally began preclinical IND enabling research for ATA3271, which is the allogeneic model of ATA 2271 and incorporates findings from each ATA2271 and ATA 3219.
Prospects
As of December 31, 2019, money and equivalents available have been $259.1 million, which the corporate expects to fund operations into the second quarter of 2020. Given the comparatively brief money runway, I’d count on the corporate to lift additional cash on the subsequent occasion of a optimistic catalyst, which might be probably the initiation of a BLA submission for tab-cel. Whereas buyers could be happy to listen to that there aren’t any anticipated additional delays to the BLA submission of tab-cel, the enrolment of ATA188 has been suspended. It’s also unclear if there will probably be any delays to ATA2271, which will probably be carried out by MSK and never Atara. A number of medical trials have already been delayed globally, and it’s unclear if this may any affect on the corporate’s money burn.
As an allogeneic immunotherapy firm that’s increasingly focusing on CAR-T, Atara competes with a number of firms, notably these which can be creating allogeneic CAR-Ts. Such firms embrace Cellectis (CLLS), Allogene Therapeutics (ALLO), Precision BioSciences (DTIL) and CRISPR Therapeutics (CRSP). The primary distinction amongst these firms is primarily the selection of gene-editing instruments. Cellectis is each Allogene’s accomplice and competitor, and each use TALEN, whereas Precision is utilizing ARCUS and CRISPR is utilizing its namesake CRISPR/Cas9 for gene enhancing. All these firms are in an identical stage of medical improvement in allogeneic CAR-T, with a number of applications deliberate in early-stage trials.
Determine 5: Benefits of Atara Biotherapeutics’ Platform
(Supply: Firm Investor Presentation, February 27, 2020)
Atara’s EBV-based platform has a number of benefits over the talked about firms’ applied sciences. Firstly, EBV is current within the majority of the inhabitants and is implicated in a variety of cancers and autoimmune ailments. There isn’t any want for gene enhancing for EBV T cells, which provides it a long-term persistence benefit and it might probably develop in sufferers with none lymphodepleting chemotherapy pre-treatment.
Past wholesome donors derived allogeneic therapies, firms comparable to Fate Therapeutics (FATE) are engaged on induced pluripotent stem cells (“IPSC”)-derived allogeneic therapeutics. By utilizing IPSCs as a renewable cell supply, there may be a number of benefits over wholesome donor-derived allogeneic therapies. Such benefits embrace improved product consistency and efficiency, and a producing course of that’s extra akin to the well-established biologics area the place they’re produced from a single cell line. Whereas the expertise is promising, the corporate focus seems to be extra on Pure Kill (“NK”) cells. In any case, Destiny’s medical trials are comparatively early stage in comparison with Atara, whose tab-cel is probably the most superior allogeneic T cell immunotherapy in medical improvement for any indication.
Conclusion
Regardless of share value dropping by round 50% since my first article, I stay extraordinarily bullish on Atara’s long-term prospects, because it has probably the most superior T cell immunotherapy in medical improvement for any indication and, for my part, is prone to obtain approval. Its EBV-based platform additionally holds a number of benefits over different CAR-T gamers, as mentioned above.
On the company entrance, the corporate appears to have stabilized for the reason that slower anticipated enrolment of tab-cel and the exodus of administration. Nonetheless, my preliminary hopes of Atara being purchased out seem to have gone away for the brief time period, with the corporate’s latest appointment of a chief industrial officer signaling its intent to self-commercialize tab-cel within the close to time period. Given the present circumstances, the corporate ought to focus its efforts on efficiently commercializing tab-cel to maximise shareholder worth.
Total, I stay bullish on Atara’s prospects and I nonetheless maintain a medium-sized place that’s within the purple at present, I’ve no intention of promoting them anytime quickly. I do, nevertheless, change my advice from “Very Bullish” to “Bullish” because of the latest market turmoil and the dearth of intention to enter new positions to common down, given the unlikelihood of a near-term buyout and the corporate’s comparatively brief money runway.
As all the time, buyers ought to conduct their very own due diligence and take into account their threat appetites and time horizon earlier than taking on any place. I specialize in protecting tech and biotech companies. Readers who’re are welcome to observe me to learn and touch upon my articles.
Disclosure: I’m/we’re lengthy ATRA. I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it (aside from from Searching for Alpha). I’ve no enterprise relationship with any firm whose inventory is talked about on this article.
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