gorodenkoff
Atara Biotherapeutics, Inc. (NASDAQ:ATRA) is a great speculative biotech play to look into. That’s because it is one step closer to getting its T-cell immunotherapy, known as tabelecleucel (tab-cel), approved for the treatment of patients with Post-Transplant Lymphoproliferative Disease (PTLD).
A Marketing Authorization Application (MAA) has been submitted and European Commission (EC) approval of tab-cel for this specific indication is expected in Q4 of 2022. In terms of the FDA, it has already spoken with the agency and it believes it may be possible to file a Biologics Licensing Application (BLA) to the FDA for tab-cel for PTLD without the need for a new trial. An update on what the biotech plans to do is going to be provided upon the next quarterly call earnings for it. Besides these two catalysts, there is another drug which may yield such potential. This involves the use of AT188 for the treatment of patients with progressive multiple sclerosis (MS). There will be a catalyst approaching in which Atara will provide new phase 1 MRI data and open label extension (OLE) data at an upcoming medical presentation in Q4 of 2022. This provides another shot on goal for investors/traders to look forward to. Lastly, final data from the ongoing phase 2 EMBOLD study, using ATA188 for the treatment of patients with progressive MS is expected at a medical forum presentation in October of 2023. With an expanding pipeline with several drug candidates, plus several catalysts expected within the coming year, these are the reasons why I believe it is a great speculative biotech play to look into.
Tabelecleucel For Post-Transplant Lymphoproliferative Disease
The main program to go over for Atara would be the use of tabelecleucel ((tab-cel)) for post-transplant lymphoproliferative disease. Specifically, it is being used for solid organ or allogenic hematopoietic cell transplant patients with Epstein-Barr Virus-Associated Post-Transplant Lymphoproliferative Disease (EBV+PTLD) The phase 3 ALLELE study, which I will be going over below, is using tab-cel to treat these patients who have already tried and failed with Rituximab alone or Rituximab + chemotherapy. Before diving into the phase 3 study itself, it’s important to understand what EBV and PTLD mean. Epstein Barr Virus (EBV) is a member of the herpes family virus. It can also be called Herpesvirus 4. The primary way that this is spread is through bodily fluids between people, more profoundly with saliva. What makes it so dangerous, though, is that it can cause infectious mononucleosis or other diseases as well. There are several symptoms which are associated with this disease and they are as follows:
- Inflamed throat
- Fever
- Rash
- Fatigue
- Swollen lymph nodes
- Enlarged Spleen
- Several other symptoms
However, even if these are the symptoms, there are a few other things to keep in mind when it comes to this particular virus. For patients who do end up getting EBV, they may not experience severe symptoms. Even if they do get infected with it, symptoms may only last 2 to 4 weeks. The main symptom that these patients may experience might be fatigue but that can last for several more weeks or even possibly months. Another item to be aware of is that the virus may become inactive, meaning it does not cause any issues with the body. The downside is that at any moment it’s possible that it can reactivate and then become a major problem afterwards.
Now that you know what EBV is, it is time to go over what Post-Transplant Lymphoproliferative disease (PTLD) itself means. PTLD is a group of disorders that can occur after a transplant is done. When a patient receives such a transplant it causes the immune system, more specifically, lymphocytes (white blood cells) to multiply in a highly rapid fashion. If the lymphocyte grows to a large type then it is not really much of an issue. However, if it becomes abnormal (lymph node cancer) then it is lymphoma. As you can see, this becomes a major problem for the patient.
Wait a second, so how exactly does EBV + PTLD occur? There are two scenarios where this happens. The first scenario is when a patient who receives a transplant from an infected donor. That’s because when an organ or stem cell is donated, the patient receives all other cells even including B-cells. That is, Epstein-Barr infected B-cells come directly from the donor. The second scenario occurs when a patient receives a transplant and then gets infected with Epstein Barr Virus (EBV) for the first time. That is, the disease doesn’t come from the donor, but occurs as a result of the transplant itself. Either way, these patients suffer from this disease. The only main drug used to treat EBV + PTLD is Rituximab (RITUXAN). If Atara Biotherapeutics can gain European approval or U.S. FDA approval of tab-cel for this specific indication, it would be huge.
As I noted above, there is an ongoing open-label phase 3 registration study known as ALLELE. Again, this study is investigating the use of tab-cel for the treatment of EBV + PTLD following solid organ transplant (SOT) or hematopoietic cell transplant (HCT). The primary endpoint being assessed for this study is objective response rate (ORR) over a 2-year period. The thing is that this phase 3 study did well in still establishing that tab-cel was highly prominent in helping patients. I note this because 90% of patients who achieved a response to this treatment from Atara Biotherapeutics survived after one year. Another item to note is that in a prior phase 2 study 86% of patients who achieved a complete response (CR) or partial response (PR) survived after two years. As of a cut off date of May 2021 with about 38 evaluable patients, data was reported. The split among the patients for this particular study is as follows:
- 24 EBV + PTLD patients following solid organ transplant after failure of rituximab + chemotherapy
- 14 EBV + PTLD patients following Hematopoietic cell transplant (HCT) after failure of rituximab monotherapy
All patients were treated with tab-cel and then had opportunity to be followed for 6 months after having obtained a response. One major thing to note on why I believe this data is sufficient is because these are patients who took a median (average) of 1 (range 1 to 5) prior systemic treatments including rituximab monotherapy, chemotherapy or immunotherapy. It was noted that a 50% objective response rate (ORR) was observed for EBV + PTLD patients following either a solid organ transplant or for those with a hematopoietic cell transplant (HCT). As far as objective response rate (ORR) goes this study was successful in meeting the primary endpoint. However, what I would also like to point out is that there was a major difference for those who responded to tab-cel and then for those who didn’t respond. For instance, for those who responded to tab-cel, the one-year survival rate was 89.2%. On the other hand, for those who didn’t respond to tab-cel, one-year survival rate was 32.4%. Besides meeting the primary endpoint, it is nice to see that the overall survival rate was greatly improved for those who actually did take tab-cel. One other item to note is that about 11 out of 19 responders had a duration of response (DOR) lasting more than 6 months as well.
Based on the data, Atara Biotherapeutics has already filed a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for potential regulatory approval for tab-cel for solid organ or allogenic hematopoietic cell transplant patients with Epstein-Barr Virus-Associated Post-Transplant Lymphoproliferative Disease ((EBV+PTLD)). The EMA validated the regulatory application of tab-cel for this specific indication back on November 30, 2021. There are a few reasons why this is great news for this company. The first reason is because it is the first ever off-the-shelf allogeneic T-cell Therapy to be reviewed by any regulatory agency across the globe for starters. The second reason is because it is the most advanced cell therapy from the biotech in the pipeline (most advanced program). The final reason is because it would allow it to have its first regulatory approved T-cell therapy on the market.
As such, there is a major catalyst opportunity which investors can look forward to as it relates to this specific program. It is expected that Atara could possibly receive EMA regulatory approval for tab-cel for EBV + PTLD by Q4 of 2022. A decision for possible regulatory approval for the European territories is still expected by the Q4 of 2022 timeline. As far as the FDA goes that is 50/50 on to whether or not a regulatory filing can happen. I state that because for the time being Atara is in active discussions with the FDA on the potential to file tab-cel for EBV + PTLD for the U.S. market. The good news it seems is that based on discussion Atara had with the FDA, another study will likely not be required. An update on the BLA filing for the U.S. market will be updated at the company’s next quarterly earnings call.
There is another positive for Atara as it relates to tab-cel and that is the ability to expand it towards other EBV associated disorders. This is possible because there is a multi-cohort phase 2 study using tab-cel in 6 additional patient populations for EBV+ immunodeficiency associated lymphoproliferative diseases (IA-LPDs) and other EBV-driven diseases. This study is continuing to enroll patients in both the United States and Europe. There is a catalyst opportunity which relates to this mid-stage study. It is expected that the first set of results from the multi-cohort phase 2 study, using tab-cel in 6 additional EBV+ patient populations, will be released for a presentation in 2023. This is going to be important, because proof of concept for EBV + PTLD has been already established. It could possibly allow this biotech to expand the label of its treatment towards other EBV+ diseases. Of course, that is if it ultimately receives regulatory approval for tab-cel for this indication in Europe or in the United States.
Financials
According to the 10-Q SEC Filing, Atara Biotherapeutics had cash, cash equivalents and short-term investments of $331.3 million as of June 30, 2022. The reason for the large increase in its cash position is because it enacted the sale of the ATOM facility during Q2 of 2022, in which it generated net proceeds of $94.8 million from it. Based on its current cash on hand, it believes it has enough to fund its operations into Q1 of 2024. I believe that this should be sufficient cash for the time being. However, it has a 2021 ATM Facility sales agreement with Coen, which was developed back in November of 2021. This agreement allowed for the aggregate offering price of up to $100 million through Cowen, which was the sales agent.
The good news is that during the 3 months ending June 30, 2022, there were no sales of common stock under the 2021 ATM Facility. If it does need to raise cash again, I believe it could do so with this method again in the coming months. That’s because it still has $57.4 million of common stock remaining under this 2021 ATM Facility as of June 30, 2022.
Risks To Business
There are several risks that investors should be aware of before investing in this biotech. The first risk involves the upcoming European Commission (EC) decision for potential approval of tab-cel for the treatment of patients with PTLD. There is no guarantee that the treatment will be approved in the European territories for this patient population. In this case, it would be a huge setback for the company in terms of getting its treatment approved. There still could be a chance though depending upon how Atara decides to proceed forward with the FDA for U.S marketing approval for tab-cel for PTLD. Again, an update on the U.S. approval front will be updated at the next quarterly earnings call.
A second risk would be the upcoming readouts for the use of ATA188 for the treatment of patients with progressive MS. The first data release, which is expected Q4 of 2022 at a medical forum, will be phase 1 MRI data and open-label extension data. The second data release relates to the ongoing phase 2 EMBOLD study using ATA188 for progressive MS. Results from this study will be released in October 2023 at a medical forum. There can be no assurance that one or both of these data readouts will be positive.
However, as I noted in the beginning, the company has an expanding pipeline. As such, it expects to file an IND filing for the use of a CAR-T known as ATA3219 in Q4 of 2022 for the treatment of patients with B-cell malignancies. It is an allogeneic CD19 CAR T which will be developed for this specific patient population. This could provide another shot on goal for the pipeline.
Conclusion
The final conclusion is that Atara Biotherapeutics is a great speculative biotech play to look into. That’s because it holds the ability to receive two regulatory approvals for tab-cel for the treatment of patients with PTLD. The European Commission (EC) is expected to decide upon potential approval of this treatment in Q4 of 2022. There is another opportunity when it comes to Atara possibly receiving approval for this treatment in the United States as well. However, the biotech plans to provide an update on potential approval for tab-cel in the next quarterly earnings update call.
Besides the opportunity using its T-cell immunotherapy technology platform for PTLD, it is also using it for the treatment of patients with progressive MS. I also briefly described above the program it has for its CAR T pipeline. It has ATA3219 for the treatment of patients with B-cell malignancies and ATA2271 for mesothelioma and other solid tumors. The use of ATA3271 is currently paused, because the biotech is looking for a partner to fund it.
Based on two potential regulatory approvals for tab-cel for PTLD, several catalysts and expanding pipeline, these are the reasons why I believe it is a great speculative biotech play to look into.
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