ATRA - Atara Biotherapeutics: An Underestimated Contender In Autoimmune Diseases CAR-T Cell Therapy

2024-07-03 13:39:37 ET

Summary

• Atara Biotherapeutics is a biotech company developing allogeneic EBV T cells for oncology and autoimmune indications, with a world-first allogeneic CAR-T approval in Europe and nearing FDA approval.
• Assuming no regulatory delays ATRA is well-funded to deliver proof-of-concept clinical data for its CAR-T platform in both B-cell malignancies and lupus, with an estimated cash runway into 2027.
• Despite fierce competition, ATRA's differentiated CAR-T platform combines all the best attributes of the competition, thus having a best-in-class potential.
• The major short-term risk is regulatory delays, meaning delays in pending regulatory milestone payments, which would likely necessitate a cash raise.

Thesis overview

Atara Biotherapeutics ( ATRA ) is a commercial stage biotech developing allogeneic EBV T cells for oncology and autoimmune indications. Notably, ATRA got a world-first approval of an "off-the-shelf" allogeneic T-cell therapy (tab-cel) by EMA in December 2022 and is nearing FDA approval (following considerable regulatory delays). As explained in my prior coverage, ATRA remains significantly undervalued based on tab-cel alone considering remaining regulatory ($80M) and commercial (up to $520M) milestones as well as significant double-digit royalties of potential peak US sales >$500M.

Even though I consider ATRA undervalued based on pending tab-cel milestones and future royalties, in the short/medium-term ATRA will likely have to burn all this cash in its remaining pipeline. Therefore, it is important to consider whether the pipeline is worth it. With a cash runway into 2027 (assuming tab-cel approval in 2024) I believe ATRA has enough cash to deliver first clinical data from its remaining pipeline. Even though ATRA's assets are in the very early stages of clinical development (phase 1) there are good reasons to expect positive results. Furthermore, ATRA's allogeneic EBV T cell-based platform appears to have important advantages over competition. The most important short-term risk is regulatory delays (either FDA not accepting the BLA submission and/or a complete response letter) which would mean the need for a cash raise to get through 2024....

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