Amgen spinoff Atara banks $38.5M as it races ahead with CKD, cancer trials

Isaac Ciechanover, president and CEO of Atara Biotherapeutics

A little more than a year after launching with a portfolio of 6 early-stage assets from Amgen ($AMGN), Atara Biotherapeutics has rounded up $38.5 million in the first close of its Series B round, fueling its drive into Phase II with a lead asset while teeing up another program for its entry into the clinic.

Celgene ($CELG) stepped in to help fund the second round along with Amgen and EcoR1 Capital, joining a group of original investors that includes Alexandria Venture Investments, DAG Ventures, Domain Associates and Kleiner Perkins Caulfield & Byers.

Thousand Oaks, CA-based Atara is the creation of Isaac Ciechanover, who made the leap into the venture world at Kleiner Perkins, after a stint as Celgene's business development chief, with a plan to launch his own biotech venture with some pharma assets that were then coming available. His timing ended up coinciding nicely with Amgen's plans, as the biotech giant was reviewing its own pipeline with an eye to focusing on a sizable late-stage group of programs. Amgen provided the assets, in exchange for a minority equity stake, and Kleiner Perkins helped with the bankroll, lining up a $20 million Series A with some key venture partners.

"It was kismet," says Ciechanover (that's pronounced sea-hanover). "It was the right time, these were not impaired assets." And Ciechanover and his colleague at Kleiner Perkins, Amgen vet Beth Seidenberg, had some close ties to the people they were working with.

"The goal was to develop assets where there hasn't been as much innovation in recent years," says Ciechanover. So the first shot goes to PINTA 745, one of Amgen's peptibodies which fuses a peptide to an antibody and inhibits myostatin. Atara has launched a mid-stage study to determine its effectiveness against protein energy wasting, a condition that afflicts a large group of patients with chronic kidney disease, expecting that the drug's short half life will make it relatively easy to switch off for patients undergoing frequent rounds of dialysis. Currently, physicians don't have a lot to offer these patients other than protein bars, says the CEO, leaving a lot of opportunity for the first biotech to make a breakthrough.

The second program, which is being readied for a Phase I study, is STM 434, which inhibits activin. That drug will be studied for ovarian cancer, a field that attracted the CEO's attention after his mother--the company's namesake, Atara Ciechanover--was diagnosed with the lethal disease. She died last year. And the drug has potential in other tumors as well. A third program for NINA 842--a myostatin-targeting antibody with a longer half life more suitable to cachexia in cancer--is being positioned for human studies.

Those three program names also reveal something about the company's structure and plans. When Ciechanover set up the company he divided the assets into three separate entities; the Nina, the Pinta and the Santa Maria, which history buffs will recall were the names of the three ships in Christopher Columbus's first voyage to the Americas. While the umbrella company is looking at novel drugs targeting myostatin and activin, the experienced dealmaker wanted to create a company structure which gave him as much flexibility as possible in developing each of the assets, freeing him to do deals on each in a way that could maximize the value creation for each.

With this kind of structure, says Ciechanover, he can avoid a scenario where the lead drug provides the bulk of the value, often at the expense of the other drugs in the pipeline. And if he later decides to sell one, the semi-virtual team of 6 can stay together to pursue the rest of the work, along with a group of consultants who are filling out the ranks without expanding a lean and mean staff set up for maximum efficiency.

But that doesn't mean that Ciechanover plans to sell off assets one at a time. The long-term vision, he says, is to build a standalone company that can develop and later market breakthrough therapies in currently underserved markets.

The new money gets the biotech through 2015, with Phase II data in the lead, Phase I results for the second therapy, and a third program ready to jump into the clinic. That's a big second step for Atara, which has been hustling to get to this stage after only 15 months. And the CEO says that this is just the first close of the Series B, with an opportunity to add more cash to the round as the company develops its business plan.

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