After a series of clinical stumbles, Atara lays off 20% of staff and slims R&D focus

Just under a month after Atara Biotherapeutics’ multiple sclerosis cell therapy turned up inconclusive results in a mid-phase trial, the biotech is taking decisive action to reduce cash burn by laying off 20% of its staff.

The biotech announced a strategy change in its second-quarter earnings update Monday after market, disclosing that 20% of staff would be let go and the company would slim down and refocus its R&D operations. The changes will help reduce annual cash burn by 20% and extend the cash runway into the first quarter of 2024.

But not much will change. Atara is still focusing energy on ATA188, the cell therapy that tried to prove the theory that the Epstein-Barr virus is involved in the development of MS. Recent studies have found EBV in the brains of patients with MS at higher rates than in the average population.

Atara had hoped to confirm the theory in its phase 2 study of ATA188, but the July readout determined that six months’ worth of data was not enough to assess the results.

The company will also focus on tabelecleucel (tab-cel), for post-transplant lymphoproliferative disease, a common complication of solid organ transplants. The FDA has indicated that the therapy has a path to a biologics license application without conducting a new trial, after previously saying another study would be needed, according to Atara.

Finally, Atara will request approval for a human study of the CAR T therapy ATA3219 in B-cell malignancies in the fourth quarter.

Atara will continue work on ATA2271, a CAR T cell therapy that had previously been in development with Bayer. The German pharma walked away from a partnership with the biotech in May after a patient died in a clinical study being conducted with the Memorial Sloan Kettering Cancer Center. But after an autopsy report and data analyses, Atara is satisfied that the therapy has a future and will continue on with the famed cancer center—plus a protocol amendment. Atara plans to discuss the trial change with the FDA shortly.

The off-the-shelf sibling of ATA2271, called ATA3271, which was also subject to the Bayer deal, will be paused while Atara waits for funding to materialize for further clinical development. The therapy had been awaiting an FDA request for a human trial.

Atara had $331.3 million in cash and equivalents on hand as of June 30, compared to $301.8 million at the end of March. The bump is thanks to the sale of the biotech’s ATOM facility that occurred in the second quarter.

Despite also reporting a financial loss for the quarter, Atara's shares climbed nearly 24% Tuesday morning to $4.50 apiece, compared to a previous close of $3.63.

To read more about layoffs across the biotech industry, check out Fierce Biotech's Layoff Tracker.