The share price of Thousand Oaks-based immunotherapy company Atara Biotherapeutics nearly doubled on May 7 after a welcome dose of positive news.
The company reported that the U.S. Food and Drug Administration has laid out a path for resubmission of Atara’s cell therapy drug candidate that the agency had twice before rejected.
Shareholder jubilation was immediate. Within hours, Atara’s stock had nearly doubled to $10 a share. The price closed on May 7 at $9.93 – up 93% – with a record volume of 77 million shares. The stock slipped a bit in the following days though rebounded on May 13, a day after the company’s earnings release, closing at $10.48. The price still remains below the $14 to $18 range the stock was trading before news of the FDA’s second rejection hit in early January.
FDA rejections
Atara’s drug, called tabelecleucel (tab-cel for short), targets a rare and often fatal blood cancer that can occur after organ or stem cell transplants. Atara developed the drug in partnership with Paris-based pharma giant Pierre Fabre Laboratories. The latter company has taken the drug through the FDA regulatory process. The drug had already been approved in 2022 for sale in the European Union nations under the brand name Ebvallo.
In January of last year, the FDA rejected the drug for the first time, citing deficiencies in the manufacturing process, a common issue that arises in initial FDA reviews of drug applications. After meeting with the FDA to map out a corrective course of action, Pierre Fabre resubmitted the drug last summer to the FDA, fully expecting approval.
But in early January, the FDA shocked both companies by rejecting the drug a second time. The issue this time was more substantial: the failure to include “double-arm” clinical trial results in the application. A double-arm clinical trial is considered the gold standard. It involves one group of participants that receive the drug and another control group that receives either a placebo or the existing standard therapy.
In an interview with the Business Journal, Atara Chief Executive Cokey Nguyen said that they didn’t consider it ethical to deny some clinical trial participants the potentially life-saving drug. Instead, the companies used pre-determined baseline standards in so-called “single-arm” clinical trials.
News of this second denial was devastating: Atara’s share price plunged by more than two-thirds over two days as many shareholders concluded this denial was the FDA’s final word on the application. The denial was also taken as a sign that the FDA under the second administration of President Donald Trump was being far more rigorous in its reviews of new drug applications.
Hopeful meeting with FDA
Pierre Fabre sought and was granted another meeting earlier this month with the FDA to try to map out a way forward for approval. According to an announcement released on May 7 from Atara Biotherapeutics, the FDA agreed in the meeting to allow the usage of the single-arm clinical trial method. In exchange, Pierre Fabre agreed to submit additional data with a longer period of patient follow-up.
“We appreciate the FDA’s continued engagement with PFP and Atara, and we believe the Type A Meeting provided helpful alignment on the regulatory framework to resubmit,” Nguyen said in the announcement.
No timeline was given for resubmission of this expanded clinical trial data to the FDA. But Nguyen said an update would be issued in the third quarter.
One year cash runway
Last week, Atara released its quarterly earnings statement. The company reported $516,000 in revenue during the first quarter, down sharply from $98.2 million for the same quarter last year. The company noted that last year’s revenue figure was impacted by a one-time acceleration of sales as it transferred tabelecleucel manufacturing to Pierre Fabre.
Atara reported a net loss of $4.15 million for the first quarter as opposed to a gain of $38 million for the same quarter last year – also impacted by the one-time transfer. Atara reported that it expects its cash runway to last until the middle of next year, thanks to $4.8 million in proceeds from recent share offerings and extensive cutbacks. The company has shed more than 95% of its staff over the last five years.
