A reverse stock split by Atara Biotherapeutics Inc. has brought the share price of the Thousand Oaks company back into compliance with Nasdaq rules.
The 1:25 split, which took effect on June 20, raised the stock price from a close of 42 cents on June 17 to an adjusted close of $9.86 on June 18.
The reverse stock split was part of the company’s plan to regain compliance with the minimum bid price requirement of $1 per share required to maintain continued listing on The Nasdaq Global Select Market, among other benefits. A higher stock price could help Atara attract employees and other service providers, the company said.
“We believe that some potential employees and service providers are less likely to work for a company with a low stock price, regardless of the size of the company’s market capitalization,” Atara said in its proxy statement for the annual meeting of shareholders on June 10, at which there was a vote on the stock split. “If the reverse stock split successfully increases the per-share price of our common stock, we believe this increase would enhance our ability to attract and retain employees and service providers.”
The stock closed at $8.90 on June 20. That represents an 81% decrease from the adjusted closing price of $47.75 on the same date a year ago.
Disappointing drug trial results
The Atara share price has been under $1 since early November, except for three days in early February when it climbed back up to more than that amount. It declined to less than $1 in the wake of a phase 2 failure for its drug ATA188 to treat non-active progressive multiple sclerosis.
Pascal Touchon, the chief executive of Atara, said that he was surprised and disappointed with the study’s results, particularly for the multiple sclerosis patient community which is in urgent need of new treatment options.
“We are further evaluating the data as we continue to believe in the critical role EBV (Epstein-Barr virus) plays in multiple sclerosis pathogenesis,” Touchon said in a statement from November. “However, we anticipate stopping the study as no treatment benefit was observed.”
Atara uses its allogeneic Epstein-Barr virus T-cell platform to develop therapies for patients with cancer and autoimmune diseases.
“Looking ahead, we maintain our strong conviction in the potential of our pipeline reinforced by the first ever regulatory approval of an allogeneic T-cell immunotherapy, Ebvallo, in Europe,” Touchon continued.
The company late last year expanded its partnership with Pierre Fabre Group, a French drugmaker, on tabelecleucel or Ebvallo, a medication used to treat patients with EpsteinBarr virus positive post-transplant lymphoproliferative disease, an ultra-rare and aggressive blood cancer. Through that partnership, Atara said it anticipates receiving additional payments of up to $640 million and double-digit royalties on net sales of the drug.
“We are currently well positioned with a cash runway well beyond upcoming milestones, including pre-clinical data for ATA3431 in December (of last year), preliminary clinical data from our phase 1 study of ATA3219 in relapsed B-cell non-Hodgkin’s lymphoma anticipated in the second half of 2024, and expanding ATA3219 development into autoimmune disease,” Touchon said in his November statement.
Atara said it plans to initiate a phase 1 study of ATA3219 for the treatment of systemic lupus erythematosus with kidney involvement (lupus nephritis) in the fourth quarter of this year with initial clinical data anticipated in the first half of next year.
