After phase 2 fail, cell therapy biotech Atara cuts CMO and lays off 25% of staff

After a phase 2 flop late last year, allogeneic T-cell company Atara Biotherapeutics is laying off 25% of staff and sending its chief medical officer out the door.

Atara CMO Manher (AJ) Joshi, M.D., will be terminated from his position effective Feb. 2, according to Securities and Exchange Commission (SEC) documents filed Jan. 8—reports likely lost in the flurry of news incoming from this year’s annual J.P. Morgan Healthcare Conference. Joshi held various roles with the California-based biotech for more than seven years and will continue on as a consultant through Jan. 31, 2025.

A quarter of Atara’s staff have also been sent packing, equating to 44 people, according to a California Worker Adjustment and Retraining Notification Report filed Jan. 29. Before the cuts, the company employed 225 people, a company spokesperson told Fierce Biotech via email.

The layoffs are expected to be complete by May of this year, according to SEC filings.

This is the second round of layoffs Atara has conducted in the wake of the phase 2 failure. The company cut 73 staffers in December 2023, according to the WARN notice. 

The “strategic restructuring” reflects Atara’s “evolving corporate strategy and pipeline focus to progress its potential best-in-class allogeneic CAR-T portfolio for cancer and autoimmune diseases,” the company spokesperson said.

Over the coming year, Atara plans to post preclinical data on its CD19-CD20 CAR-T candidate ATA3431 and preliminary phase 1 data on the CD19 CAR-T ATA3219 in lymphoma patients.  

The restructuring follow a definitive phase 2 fail for Atara’s multiple sclerosis cell therapy in November 2023. The study assessed an off-the-shelf T-cell immunotherapy called ATA188 in people with non-active progressive multiple sclerosis. The investigational therapy failed to improve disability compared to placebo after 12 months, with a 6% disability improvement in the treatment arm compared to a 16% improvement in the placebo group.

The biotech is looking into why the improvement rate in patients on ATA188 fell from 33% in a phase 1 trial to 6% in the phase 2 as well as why the improvement rate on placebo exceeded the 4% to 6% that was expected in the patient population.

The outcome of that investigation will inform the next steps for ATA188, but Atara signaled plans to “significantly reduce its expenses” related to the candidate and focus resources on its CAR-T pipeline in November.