FDA Denies Atara's Cell Therapy, Stock Plummets

U.S. regulatory authorities have denied approval for a T cell therapy developed by Atara Biotherapeutics and Pierre Fabre, intended to treat a rare, severe condition associated with the Epstein-Barr virus. This condition, which arises in some transplant patients, is known as post-transplant lymphoproliferative disease (PTLD). The therapy, named tabelecleucel or tab-cel, was turned down following an FDA inspection of an external manufacturing facility. According to Atara, the FDA's rejection letter did not point out any specific deficiencies in the manufacture of the therapy itself, nor did it raise concerns about its efficacy or safety. Importantly, Atara noted it would not be necessary to conduct another clinical trial.

The news significantly impacted Atara's stock value, which dropped over 45% on Thursday morning. This setback adds to the company's existing challenges, as it had already been exploring "strategic alternatives" for its product pipeline. If Atara fails to secure additional funding by the end of the first quarter, it plans to cease development on all projects except tab-cel. Furthermore, the company may hand over any remaining "operational activities" related to tab-cel to Pierre Fabre.

Despite the FDA's decision, Atara is still in line to receive a $60 million milestone payment from Pierre Fabre, contingent upon the therapy's approval. Atara's CEO, Cokey Nguyen, expressed that the company is actively working to address the issues identified by the FDA and aims to resubmit its application. A subsequent decision from the FDA is anticipated approximately six months after the resubmission. To facilitate this process, Atara has secured a loan of up to $15 million to support the Biologics License Application (BLA) resubmission effort. Additionally, Atara mentioned that options such as an acquisition, merger, reverse merger, or other asset sales are being considered.

The therapy, tab-cel, is intended for patients aged two and older who suffer from Epstein-Barr virus positive PTLD and have undergone at least one prior treatment. In transplant recipients, the immune system is suppressed to prevent organ rejection; however, this can lead to the unchecked growth of immune cells in those with this rare complication. Currently, there are no approved treatments in the United States specifically for this disease, although it can be managed with the antibody rituximab or chemotherapy.

Tab-cel has previously secured approval in the EU in 2022 and the UK in 2023, where it is marketed under the brand name Ebvallo. The development and commercialization of this therapy in Europe and the UK will be led by Pierre Fabre. As an allogeneic T cell therapy, tab-cel is designed to target cells infected by the Epstein-Barr virus. The therapy underwent evaluation in a Phase 3 open-label trial named ALLELE, where it achieved a 48.8% response rate in patients with EBV-positive PTLD who had previously received treatments such as rituximab or a combination of rituximab and chemotherapy.

Atara's determination to address the FDA's concerns and resubmit their application for tab-cel's approval underscores the company’s commitment to bringing this innovative therapy to patients in need, despite the current challenges.