- Atara Biotherapeutics said late Wednesday that its experimental cell therapy for multiple sclerosis failed in a Phase 2 study, sending the company’s shares tumbling 75% on Thursday.
- The therapy, dubbed ATA188, is designed to target cells infected with Epstein-Barr virus, thought to be a culprit in causing multiple sclerosis. Atara hoped the therapy could counteract the degenerative effects of the disease in people with a form called non-active progressive multiple sclerosis.
- After encouraging Phase 1 results, researchers had initiated a larger study using a measure of disability improvement to test the treatment. To the company’s surprise, patients on ATA188 in the new study only showed a 6% disability improvement, while patients given a placebo experienced a 16% improvement. The Phase 1 study had shown a 33% improvement for patients on ATA188.
In addition to finding that ATA188 failed to meet the study’s primary goal, researchers found no further supportive evidence for the therapy’s use in various biomarkers. The result is essentially “the worst-case scenario,” according to a note from Mizuho Securities analyst Salim Syed.
While Atara is reviewing the research in hopes of figuring out what went wrong, the company doesn’t expect to continue the study and plans to shift its resources to other therapies in its pipeline. It’s possible a large pharmaceutical company might be interested in taking on ATA188 with its clean safety profile, but “folks shouldn’t bank on this,” Evercore ISI analysts wrote in a note to clients.
One consequence of the news Wednesday was that the shift in resources will allow Atara’s cash to last even longer, past the third quarter of 2025, analysts said. The company had already announced a restructuring designed to cut costs on Nov. 1.
Atara said it will have several data readouts from other experimental therapies to offer investors in the next 18 months. It revealed on Nov. 1 an expanded licensing deal with Pierre Fabre Laboratories for its current lead program, tab-cel, which is being developed for post-transplant lymphoproliferative disease associated with Epstein-Barr virus. Already the holder of commercial rights in Europe, Pierre Fabre now has them in the rest of the world, too.
Shares of Atara, which had climbed above $40 in 2018 and early 2019, fell below 30 cents in mid-morning trading Thursday.