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On Tuesday, Stifel analysts adjusted their outlook on Atara Biotherapeutics (NASDAQ:ATRA) stock, reducing the price target to $5 from the previous $10, while maintaining a Hold rating on the shares. The decision follows an announcement from Atara that the FDA has placed clinical holds on two of its therapies, ATA3219 and EBVALLO (tab-cel).
The holds are not due to new findings but are related to a Complete Response Letter (CRL) concerning a third-party manufacturer involved with both treatments. The news has significantly impacted the stock, which according to InvestingPro data, has declined over 46% in the past week alone.
The Stifel analyst noted that Atara's future value is likely dependent on ATA3219, a CD19 CAR T therapy, which now requires additional financing for its continued development. Despite this setback, Atara's management has confirmed their expectation to release data for a Non-Hodgkin's Lymphoma (NHL) study in the first quarter of 2025.
InvestingPro analysis shows the company is quickly burning through cash, though it maintains more cash than debt on its balance sheet. With a market capitalization of just $34.56 million, the company currently trades below its Fair Value.
The clinical holds have introduced uncertainty regarding the company's anticipated milestones, leading to Stifel's reassessment. The price target adjustment to $5 reflects a delay in product sales and incorporates a higher discount rate of 14% due to increased risks. Despite these challenges, InvestingPro data reveals analysts still anticipate sales growth of 13.23% for the current year. Subscribers to InvestingPro can access 10 additional key insights about Atara's financial health and market position.
Atara's situation is compounded by the clinical holds affecting both ATA3219 and EBVALLO. EBVALLO, known as tab-cel, was under review for potential treatment of post-transplant lymphoproliferative disorder (PTLD). The FDA's clinical hold links back to issues at a third-party facility responsible for producing starting materials for both therapies.
In conclusion, Stifel's revised price target takes into account the potential delays and financial risks Atara faces. The firm's stance remains cautious with a Hold rating on the stock, as the company navigates through the recent challenges presented by the FDA holds.
In other recent news, Atara Biotherapeutics has seen significant developments. The biopharmaceutical company has been reiterated as a Buy by Canaccord Genuity, despite a reduction in its price target due to concerns over the delayed approval of its drug Ebvallo. Analysts at the firm expect the manufacturing issues surrounding the drug to be resolved, acknowledging the complexity of cell therapy manufacturing and FDA regulatory uncertainty.
Atara has also received a Complete Response Letter (CRL) from the FDA for its EBVALLOTM treatment, which was tied to inspection findings at a third-party manufacturing facility. Despite this setback, the company has expressed its commitment to working with the FDA and other parties to secure approval for EBVALLO in the U.S.
In another development, 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.
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