Atara stock holds Neutral rating after workforce cut

Tuesday, H.C. Wainwright maintained its Neutral stance on Atara Biotherapeutics stock (NASDAQ:ATRA), following the company's announcement of a significant workforce reduction. According to InvestingPro data, the stock has shown significant volatility, with a 22% gain in the past week despite a 51% decline over the last year. The company's current market capitalization stands at approximately $42 million. Atara Biotherapeutics, a biopharmaceutical company, disclosed plans to cut about half of its current employees. This decision comes in the wake of the Food and Drug Administration's (FDA) Complete Response Letter (CRL) regarding Atara's EBVALLO application and the subsequent halt of several clinical trials.

According to the company, the workforce reduction is expected to be largely completed by June 2025. Atara has projected that it will incur around $7.5 million in total costs related to severance and related benefits for the affected employees. InvestingPro analysis indicates the company is quickly burning through cash, with short-term obligations exceeding liquid assets, as reflected in a current ratio of 0.59. These costs are anticipated to be primarily cash charges associated with one-time termination benefits.

H.C. Wainwright analysts, led by Robert Burns, were not taken aback by this turn of events. The move aligns with recent challenges faced by the company, including the FDA's CRL and halt of trials related to EBVALLO, a treatment that was under investigation by Atara. The broader analyst consensus shows mixed sentiment, with price targets ranging from $5 to $18 per share. Get access to 10+ additional key insights about ATRA with an InvestingPro subscription. The analysts' previous notes had already reflected these developments and the uncertainty surrounding Atara's path forward.

The firm reiterated its Neutral rating on Atara Biotherapeutics, choosing not to set a price target at this time. The rating reflects the analysts' view on the stock's prospects following the recent FDA decisions and the company's strategic response to reduce its operational expenses through workforce downsizing.

Atara Biotherapeutics has not publicly commented on the impact that the workforce reduction may have on its ongoing operations or its future development plans. The company's focus remains on navigating the challenges posed by the regulatory environment and aligning its resources to support its strategic objectives. Despite these challenges, InvestingPro data shows analysts anticipate sales growth in the current year, though profitability remains a concern with negative EBITDA of $114 million in the last twelve months.

In other recent news, Atara Biotherapeutics has faced a series of developments. Analysts from Stifel and Canaccord Genuity have adjusted their outlook on Atara's stock, with Stifel reducing their price target to $5 and Canaccord Genuity to $17, both due to concerns over the FDA's clinical holds on Atara's therapies, ATA3219 and EBVALLO. This follows Atara's announcement that the FDA has placed these holds due to a Complete Response Letter concerning a third-party manufacturer. Despite these challenges, Atara has confirmed their expectation to release data for a Non-Hodgkin's Lymphoma study in the first quarter of 2025.

Atara has also received a Complete Response Letter from the FDA for its EBVALLO treatment, which was tied to inspection findings at a third-party manufacturing facility. The company has expressed its commitment to working with the FDA and other parties to secure approval for EBVALLO in the U.S.

In addition to these, Atara Biotherapeutics has amended its bylaws, introducing several significant adjustments to stockholder meeting procedures and director nomination requirements. The company has also secured $36 million in a stock sale, extending its cash runway into 2027.

Rodman & Renshaw initiated coverage on Atara, assigning a Buy rating and a price target of $25.00, highlighting Atara's focus on T-cell immunotherapies. Despite the recent challenges, analysts still anticipate sales growth of 13.23% for the current year. These are the recent developments for Atara Biotherapeutics.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.