T-Cell Technology Tips Scales in Atara’s Favor

Shares of Atara Biotherapeutics, Inc. — a T-cell immunotherapy research and clinical-stage biotech company — have gained 77.8 percent in value since the beginning of the year. What separates Atara in Westlake Village from struggling biotech startups? “Everything is on track going forward,” Maury Raycroft, an analyst at Jefferies in New York, wrote in an August report on the company. While that may sound like “business as usual,” investors are betting on Atara to win a big-money marathon, not a sprint. Admittedly, during the second quarter, the company reported a loss of $50.9 million, or $1.15 a share, which has taken some of the wind from the company’s sails. In his report, Raycroft acknowledged that an investment in Atara can include questions of “efficacy, toxicity and delays,” but guidance for the company’s T-cell Phase 3 trials were on course, as were the multiple sclerosis programs, with development consistent with prior guidance. T-cells are a type of white blood cell that helps the body fight infections. Atara has the capacity to manufacture t-cells to fight specific breeds of virus and the tumors associated with them. The technology is helpful for patients with lymphoma, or cancer of the lymph nodes, and the company’s newest treatment called tab-cel is a potential treatment for patients suffering with the Epstein-Barr virus. Raycroft noted in his report that if tab-cel works, it “could set the stage for strategic expansion” into the market of non-cancer patients with Epstein-Barr, a potentially huge line of business. “We would buy,” Raycroft advised investors, predicting a 12-month price target of $45 per share. Shares closed on Oct. 24 at $32.18. Atara, which is technically headquartered in South San Francisco, has strategic assets in Ventura County. In Westlake Village, it has a 15,380-square-foot research and development facility at 4360 Park Terrace Drive. And in July, the company opened its Atara T-Cell Operations and Manufacturing (nicknamed ATOM) complex in Thousand Oaks. Leased through 2033, ATOM is where Atara manufactures its off-the-shelf T-cell immunotherapies. The facility also houses R&D labs overage from the Westlake Village offices. ATOM’s flexible design will allow for potential manufacturing expansion of tab-cel. “The future of T-cell immunotherapy is both off-the-shelf and across multiple therapeutic areas, Atara’s Chief Executive Officer Dr. Isaac Ciechanover said in a statement. “During the second quarter, we continued to advance our robust T-cell immunotherapy pipeline, highlighted by our ongoing Phase 3 studies of tab-cel.” Besides an exciting tech pipeline, Atara also has money in the bank to fund a major expansion. At the end of the second quarter, the company reported $417 million in cash and cash equivalents. During the quarter, the company sold about 1 million shares on the market for proceeds of $47.6 million. Atara is expected to report its third-quarter earnings by mid-November.