Atara Biotherapeutics Has 25% Downside

Goldman Sachs’ Salveen Richter believes that are no major catalysts for Atara Biotherapeutics Inc ATRA ahead of the EBV-CTL pivotal data, which is expected in late-2017 or later.

Richter downgraded the rating on the company from Neutral to Sell, while lowering the price target from $23 to $16. The analyst believes the stock could have 25 percent downside risk, compared to the average 14 percent upside of Goldman Sachs’ coverage universe.

Pivotal Data

Atara Biotherapeutics had announced that pivotal studies for its lead program, EBV-CTL, in post-transplant lympho-proliferative disorder (PTLD) would begin by year-end 2016, following bone marrow stem cell (HSCT) and sold organ (SOT) transplants.

“While management has not provided timeline guidance for results, we expect HSCT data by YE17 at the earliest,” Richter mentioned.

The company also intends to initiate Phase I studies of a second off-the-shelf EBV therapy in MS, nasopharyngeal carcinoma and gastric cancer in 2017, with data expected after 2018.

In-House Manufacturing

According to the Goldman Sachs report, “Transition to in-house manufacturing by YE16 remains a risk pending FDA clearance. ATRA is awaiting final FDA feedback regarding the assays/metrics required to demonstrate comparability vs. MSK-produced material, which is required prior to initiating pivotal studies.”

In addition, Richter believes Atara Biotherapeutics’ academic-partner data, expected to be presented in the near term, would be insufficient to be a “de-risking event.”

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