Atara Biotherapeutics Inc. (NASDAQ: ATRA) was leading the bears early in Monday’s session on some less-than-favorable results. The company announced results from its Phase 2 proof-of-concept clinical trial for PINTA 745 for the treatment of protein energy wasting in patients with end stage renal disease.

However, looking at a broader picture of the company, this is not as bad as we might think. A failed trial is always bad, but Atara has a strong cash balance behind it, not to mention a solid pipeline.

The trial did not meet its primary endpoint, defined as the percentage change from baseline in lean body mass as measured by Dual Energy X-Ray Absorptiometry at week 12 following weekly treatment with PINTA 745. Separately, PINTA 745 did not improve physical function, measures of glycemic control and markers of inflammation. There were no treatment related serious adverse events observed in the trial.

As a consequence of these results, Atara will suspend further development of PINTA 745. With the reaction seen within the stock, investors had previously heavily priced in this drug and the company looks to lose over a third of its market cap.

Instead of pursuing PINTA 745, the company is opting to focus its resources on its portfolio of clinical stage oncology and immunotherapy product candidates. A few examples are:

• Epstein-Barr Virus (EBV) Targeted Cytotoxic T-Lymphocyte (EBV-CTL), which received breakthrough designation in rituximab refractory EBV associated post-transplant lymphoproliferative disorders after allogeneic hematopoietic cell transplant (alloHCT) and is in two ongoing Phase 2 trials for EBV malignancies.
• Cytomegalovirus (CMV) Targeted Cytotoxic T-Lymphocytes (CMV-CTL), which is in two Phase 2 clinical trials for refractory CMV infections that occur in patients who have received an alloHCT.
• Wilms’ Tumor 1 Targeted Cytotoxic T-Lymphocytes (WT1-CTL), which is in two ongoing Phase 1 clinical trials assessing safety and initial anti-tumor efficacy in patients with hematologic malignancies.
• STM 434, an activin inhibitor, which is in an ongoing Phase 1 clinical trial assessing safety and initial anti-tumor efficacy in patients with ovarian cancer and other advanced solid tumors.

Isaac Ciechanover, M.D., president and CEO of Atara, commented on the results:

We are very disappointed that PINTA 745 did not meet the primary endpoint of this Phase 2 clinical trial. These data are unambiguous and contrast with prior clinical and preclinical results. We want to sincerely thank the patients and investigators for their participation in this trial.

On the books, the company has $334.3 million in cash, equivalents and short-term investments. Thomson Reuters consensus estimates predict a net loss of $0.46 per share on no revenues for the fourth quarter of 2015, while 2016 estimates call for a net loss of $2.57 per share on no revenues. However looking at the company’s cash burn rate, Atara can easily last at least another 20 quarters without any unforeseen complications.

Shares of Atara closed Friday down 0.9% at $33.20, with a consensus analyst price target of $59.60 and a 52-week trading range of $17.20 to $65.56. Following the release of the results, shares are down an additional 37% at $20.80 in early trading indications Monday.

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