No news is bad news for Atara

The Embold trial continues unchanged, but investors have got cold feet.

A much-hyped interim analysis for ATA188, Atara’s potentially remyelinating therapy for multiple sclerosis, has revealed... nothing much. Before the analysis the sellside had suggested that the outcome that came to pass – continuing the phase 2 portion of the Embold study without upping patient numbers – would be positive.

But investors clearly wanted more: the group’s stock opened down 55% this morning. And, with a dearth of other catalysts and concerns about money, the group is set to come under pressure as the full readout nears.

That readout is expected in October 2023. Atara’s current bank balance will take it into the fourth quarter of that year, putting fundraising on the cards.

Even the usually supportive sellside could find few reasons for optimism, with Evercore ISI calling the update “underwhelming” and Stifel raising concerns about whether Atara could replicate positive phase 1 results. Only Mizuho came out swinging, arguing that there was no new risk “with the actual science and the data itself”.

Targeting EBV

Still, at least ATA188 is still in play: one potential scenario was Embold being stopped for futility. That outcome would have been disastrous for Atara, especially after Bayer recently walked away from its lead Car-T project, ATA2271.

ATA188, meanwhile, is an allogeneic T-cell immunotherapy that targets Epstein-Barr virus-infected B cells and plasma cells; EBV is thought to be a trigger for MS.

Excitement around the project has been building since the uncontrolled phase 1 portion of Embold, in 24 patients, found that some showed improvement in disease, as measured by EDSS – the expanded disability status scale (EAN 2020 – Atara’s multiple sclerosis plan slowly takes shape, May 26, 2020).

The primary endpoint of the phase 2 part of Embold is EDSS improvement at 12 months, and the interim analysis focused on EDSS improvement at six months. The idea was that the six-month data would predict the 12-month result, based on Atara’s phase 1 analysis citing over 85% predictive value.

However, this has not panned out, as per the interim analysis, which involved 34 patients at six months and 15 at 12 months, evenly randomised to ATA188 or placebo. Atara is not saying that the six-month data are not predictive – just that it does not know either way.

Mizuho’s Salim Syed pointed to the low number of patients: only around eight treated with ATA188 were at 12 months. However, Evercore’s Michael DiFiore noted that Atara management “couldn’t say for sure” whether the problem came down to not having enough data. Embold has already enrolled its target of 80 patients, who will be evaluated for the final analysis.

Stifel raised the possibility that ATA188 might merely stabilise disease. This could still be a good outcome in MS, but investors focused on an improvement might still be disappointed.

Of course, if ATA188 does work in the final analysis of Embold, the potential will be huge. While it is too soon to write the project off entirely, things now look even less rosy for Atara.  

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