Consider Atara Biotherapeutics As The Tab-Cel Delay Resolves In The US (NASDAQ:ATRA)

This article was first released to Total Pharma Tracker Marketplace subscribers and free trials on Dec. 9.

I covered Atara Biotherapeutics (NASDAQ:ATRA) in February last, and multiple times before that. I used to be a holder, but exited in January. I am considering a reentry.

The company has had a spate of problems interspersed with some good news. Briefly, there was a fatality in a CAR-T trial in February. In May, Bayer ended its collaboration with Atara for a CAR-T program. In July, an interim analysis of its multiple sclerosis candidate sunk the stock. In August, a regulatory update that the FDA will not need a new clinical study for tabelecleucel (tab-cel) for a BLA bouyed the stock. In September, the company announced that it will receive an additional $30mn milestone payment from partner Pierre Fabre upon EU approval. Finally, in October, the EMA backed approval of this product, christened Ebvallo in Europe, as monotherapy to treat patients two years of age and older with relapsed or refractory Epstein‑Barr virus positive post‑transplant lymphoproliferative disease (EBV+ PTLD), who have received at least one prior therapy. If approved (by end-2022), ebvallo will be the first Allogeneic T-Cell Therapy ever approved.

This is Atara in a nutshell since my previous article.

Atara’s lead indication is rituximab refractory patients with Epstein Barr Virus associated post-transplant lymphoproliferative diseases, or EBV+PTLD. Lead asset is tabelecleucel (tab-cel), an allogeneic T Cell immunotherapy. In February, in a separate asset’s trial, there was a setback. There was a fatal event in the phase 1 trial of an experimental autologous chimeric antigen receptor (CAR) T-cell therapy, ATA2271, targeting malignant pleural mesothelioma. The patient had several comorbidities, and the company said the IND-enabling work for a second, allogeneic CAR-T asset will continue as planned.

A direct result of the fatal event described earlier was Bayer terminating a valuable, long term partnership with Atara for its two CAR-T programs. Rights returned to Atara in September, however the company chose not to focus on the program, and especially the ATA3271 IND was taken out of the program for now. The other program was already in the limbo, but enrollment has now been resumed. The company hasn’t updated its website on these programs. There, the Bayer partnership still “continues to progress,” and the IND-enabling work is “ongoing.”

In May, Citi analyst Yigal Nochomovitz had the following comments:

…the U.S. FDA has formally asked the company to conduct an additional phase 3 trial with the commercial version of the drug, which will lead to a filing delay.

Nochomovitz also addressed the progressive multiple sclerosis candidate ATA188, which is in phase 2. He said that given management is only expected to provide “qualitative feedback” during an expected interim analysis in July, he doesn’t see the results moving the stock much.

About Yigal’s second point, the company stock did move a lot before the planned data release in July, according to Seeking Alpha. This is data from the Phase 2 EMBOLD study for ATA188, a CAR T immunotherapy for progressive multiple sclerosis. However, the actual data drop plunged the stock 27%. Here’s what was said:

The interim analysis (IA) included a review by an independent data and safety monitoring committee (IDSMC), which recommended that the mid-stage study continue without any adjustment to the sample size.

The main assessment of the IA was EDSS improvement at six months. EDSS stands for expanded disability status scale, which is a way of measuring how much someone is affected by their multiple sclerosis.

“Based on the analysis of the EMBOLD data available at the time of the IA, there was not a sufficient dataset to draw conclusions about the predictive value of six months EDSS improvement for 12 months EDSS improvement,” Atara (ATRA) said in Tuesday’s statement.

“The IDSMC believes the six-month interim endpoint may be an inaccurate measure of the potential of this intervention in this condition,” ATRA added.

Thus it appears that the interim analysis was inconclusive, kind of like what the Citi analyst predicted. A downgrade from Stifel crashed the stock; Stifel noted discrepancies in the company’s statements. The interim analysis had EDSS data from 34 patients at six months and 15 patients at 12 months. The company, the analyst pointed out, had previously said, based on phase 1 data, that EDSS improvement at six months was more than 85% predictive of achieving EDSS improvement at 12 months. This did not pan out in the interim analysis.

On Atara’s side, it can be said that while there may have been issues with baseline characteristics of patients in the phase 1 trial which led to this outcome, that could have resulted from the small sample size. The company plans to conduct a much larger phase 3 trial, which may set things straight. ATA188 targets MS at its source, which is EBV. As a study suggests:

The underlying cause of MS remains unknown. One possibility is that it’s triggered by a viral infection. Epstein-Barr virus (EBV) has been among the top suspects… To explore whether there is a link between MS and EBV, a team of researchers studied more than 10 million active duty US military personnel between 1993 and 2013. Dr. Alberto Ascherio from the Harvard T.H. Chan School of Public Health led the study. NIH’s National Institute of Neurological Disorders and Stroke (NINDS) partly supported the work. The results appeared in Science on January 13, 2022… The team found a much higher rate of EBV infection among people who developed MS than among controls. Out of the 801 MS cases, only one person tested negative for EBV in their last sample collected before MS onset. The team calculated that people infected with EBV were 32 times as likely to develop MS as uninfected people.

A second report from Nature also supported this. According to it:

Recent studies have provided compelling epidemiological and mechanistic evidence for a causal role of EBV in multiple sclerosis (MS).

A lot of current MS medicines either address flares, or are basically immunosuppressants. ATA188 targets one of the suspected root causes of MS. There’s a lot of good logic here, so investors should look at this small hurdle positively.

I observed that Citi analyst Yigal Nochomovitz has been consistently bearish ATRA. I discussed his second point here, about MS. About his more fact-oriented first point, that the FDA would require a new phase 3 study for tab-cel, in August the FDA apparently told Atara they can continue with their BLA with data from the ALLELE study, and would not need a new study. Here’s what the company said:

• Based on constructive discussions with Atara, the FDA recommended a possible path to a Biologics License Application (BLA) submission that does not require a new clinical trial

• Following planned interactions with FDA, Atara intends to provide further guidance on progress to a BLA submission at our next quarterly call

As further support to Atara, The EMA’s Committee for Medicinal Products for Human Use (CHMP) backed the approval of tab-cel for patients two years of age and older with relapsed or refractory Epstein‑Barr virus positive post‑transplant lymphoproliferative disease (EBV+ PTLD), who have received at least one prior therapy. This was in October.

Coming back to the FDA’s not needing a new trial, here’s something I wrote in December last year:

Despite a breakthrough therapy designation which provides for accelerated review and approval, the BLA has been held up by the FDA’s inability to quickly reach a decision:

To initiate the BLA, Atara is awaiting a procedural decision from the FDA related to how the historical non-pivotal data should be presented in the BLA submission. Following the FDA agreement in October 2020 that the pivotal 302 ALLELE data will be the primary basis for approval, and that historical non-pivotal clinical data will be supportive, FDA needs to decide whether they view the drug product manufactured by our academic partner used in historical, non-pivotal studies as comparable to the drug product manufactured by Atara used in the pivotal ALLELE study. This decision will then determine if the Company will submit in the clinical module the pivotal and non-pivotal data combined in pooled analyses or separately in parallel analyses. The type of analysis does not change expectations regarding the proposed product indication for previously treated patients with EBV^+ PTLD.

The initial module for the rolling BLA for tab-cel^® has been ready for submission since early December, and its content is not impacted by this decision. The Company remains on track to complete the BLA filing in Q3 2021 and is simply awaiting this procedural decision from FDA to initiate the BLA.

I must say that with the FDA’s new alignment with Atara, this mixup has been effectively removed, and a BLA is now on its way. Read my last two articles for more background, here and here.

Latest update re the FDA tab-cel program is here:

• Atara recently held a meeting with the U.S. Food and Drug Administration (FDA) that culminated in clear guidance and agreement on specific chemistry, manufacturing, and controls (CMC) Module 3 requirements for potential biologics license application (BLA) submission

Data presented at ASH 2022 shows the following:

• Consistent with the transformative potential of tab-cel in EBV+ PTLD, overall ORR was 51.2% (22/43, 95% CI: 35.5, 66.7), 50% (7/14, 95% CI: 23.0, 77.0) in HCT, and 51.7% (15/29, 95% CI: 32.5, 70.6) in SOT with median TTR of 1.0 month and median duration of response (DOR) of 23 months

• Overall median OS was 18.4 months (95% CI: 6.9, NE), with patients who responded having longer survival versus non-responders

Atara is looking for a partner for US commercialization. In the EU, Pierre Fabre is the partner.

Financials

ATRA has a market cap of $441mn and a cash balance of $265mn. License and collaboration revenue was $4.5 million for the third quarter 2022, primarily consisting of revenue recognized due to the termination of the Bayer agreements. Research and development expenses were $70.2 million for the third quarter 2022, while general and administrative expenses were $18.9 million. At that rate, they have a cash runway for about 3 more quarters.

Bottomline

The company said in its earnings call it expects “to give further guidance in Q1 2023 on progress to a BLA submission.” They will hold a Type B meeting, which in this context is a pre-pre-BLA meeting, hopefully simply to sort out loose strings. But with the FDA, you never know what surprise they will spring, so that Q1 update now takes on catalytic proportions. The EMA positive opinion is the best news out there. ATA188 is a major value driver for the company, and that is also progressing well enough. The stock is trading near all-time lows, so I am considering a reentry at this price point, which I admit is quite risky, but nothing atypical of emerging biopharma investing.