Shares of the clinical-stage cell therapy company Atara Biotherapeutics (ATRA -1.96%) are under heavy pressure today following a fatality in an ongoing, early-stage dose escalation trial. In response to this clinical setback, the biotech's shares were down by a hefty 12% as of 9:49 a.m. ET Friday morning.
Ahead of the opening bell, Atara announced that Memorial Sloan Kettering Cancer Center (MSK), where the trial is being conducted, informed the Food and Drug Administration that an advanced recurrent mesothelioma patient had passed away. The patient was reportedly being treated with the next-generation autologous chimeric antigen receptor (CAR) T-cell therapy ATA2271, which is being co-developed by Atara and its partner Bayer.
Atara said that enrollment in this trial is being paused on a voluntary basis by MSK while the cause of the fatality is determined. The biotech also noted that this clinical setback won't interfere with other ongoing studies for its earlier-stage, off-the-shelf cell therapy programs.
Atara also revealed that the patient in question had a history of multiple malignancies and other co-morbidities. So this safety event, albeit unfortunate, might not halt ATA2271's clinical development.
Is this stock a bad-news buy? It all depends on your view of the emerging cell-therapy space. Atara is on track to become one of the first companies with an off-the-shelf product on the market, which would certainly be a big win for the biotech. However, cell therapies in general have proved to difficult to commercialize for a whole host of reasons. These logistical hurdles ought to become easier to deal with as off-the-shelf products become a reality.
But the market is also clearly taking a "prove it" approach when it comes to this niche area of biotech right now. Atara's stock, therefore, might take a few years to realize its full potential as a growth vehicle.