Shares of the clinical-stage cancer immunotherapy company Atara Biotherapeutics (ATRA -8.56%) are up by more than 25% today on sky-high volume in response to the Food and Drug Administration green-lighting two late-stage trials for its off-the-shelf T-cell therapy candidate, tabelecleucel. The two studies will broadly assess tabelecleucel as a potential treatment for Epstein-Barr virus (EBV) associated post-transplant lymphoproliferative disorders in patients who fail to respond to Roche's rituximab.
Off-the-shelf T-cell therapies are the next logical step in the evolution of these game-changing cancer treatments. At present, patients have to visit specialized clinics equipped to first harvest, and subsequently modify, their own T cells prior to treatment. That presents a number of logistical problems for patients and clinicians alike, especially for patients who are extremely sick. Atara's product candidate, tabelecleucel, by contrast, is designed to be shipped to a doctor's office and used in an outpatient manner, making it far more convenient for patients.
While the first to market with such a therapy would undoubtedly hold a key advantage, investors should probably temper their expectations -- at least in the near term. Atara, after all, is only now starting to enroll patients in these trials, and the first trial isn't scheduled to produce a top-line data readout until mid-2019.
In other words, Atara will likely need to tap the public markets one or more times in the next year to both fund these trials and prepare for a regulatory filing. That doesn't mean Atara's shares aren't an attractive buy in the wake of this positive news, but there's also no pressing reason to buy this risky biotech stock just yet. Given the hefty dose of risk involved here, Atara is arguably best-suited as a top watch-list candidate at this stage of its life cycle.