Atara Biotherapeutics Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 1, 2023

There are 7 speakers on the call.

Operator

Good morning and thank you for standing by. Welcome to Atara Biotherapeutics Third Quarter 2023 Financial Results Conference Call. Please be advised that today's call is being recorded. I would now like to hand the call over to Alex Chapman, Vice President of Corporate Communications and Investor Relations at Atara Biotherapeutics. Please go ahead, sir.

Speaker 1

Thank you, Sherry. Good morning, everyone, and welcome to Atara's conference call to discuss our expanded tab cel global partnership with PFR Laboratories and our Q3 2023 update. Earlier today, we issued a press release announcing this partnership and our Q3 financial results. This press release and an updated slide deck are available in the Investors and Media section at atarabio.com. Joining me on today's call are Doctor.

Speaker 1

Pascal Tuchamp, President and Chief Executive Officer and Eric Killeengren, Chief Financial Officer. We will begin with prepared remarks, then open the call for your questions. We would like to remind listeners that during the call, the company's management will be making forward looking statements. Actual results could differ materially from those stated or implied by our forward looking statements due to risks and uncertainties associated with the company's business. These forward looking statements are qualified in their entirety by the cautionary statements contained in today's press release and the company's SEC filings.

Speaker 1

These statements are made as of today's date and the company undertakes no obligation to update these statements. Now, I'd like to turn the call over to Pascal. Pascal?

Speaker 2

Thank you, Alex, and thank you all for joining us this morning. Today, we announced the global expansion of our FabCell partnership with Peerfab Laboratories. We are already successfully launching this product across Europe. In parallel, we announced a strategic restructuring that together with the expanded TapCel partnership will expand Atara planned cash runway into Q3 2025. This Positioned us well to continue building the value of our pipeline including through anticipated clinical milestone for AT188 with the ENVOLD readout in early November as well as initial data for the ATA-three thousand two hundred and nineteen program in lymphoma.

Speaker 2

Now I'll start by covering the details of the partnership and strategic restructuring followed by upcoming clinical milestones. After a competitive process with significant interest From across the spectrum of large pharma, midsize pharma and biotech companies, we are excited to announce an expanded partnership with Pierre Fab to commercialize tab cel in the U. S. And all remaining global markets. This moment signifies a pivotal transition in Atara's evolution.

Speaker 2

We are now optimally positioned As a nimble allogeneic T cell immunotherapy company with near term catalyst and the opportunity to advance a pipeline of differentiated therapies across a range of oncology and autoimmune indications from our proven EVT cell platform. We sought a partner that is committed to deliver tab cel, A product with life saving potential for the U. S. And global patients. In parallel, we pursued a deal structure that meaningfully reduces our cash burn over the next 2 years and provides Atara and shareholder with significant value both with short term cash and potential milestone payment and long term significant double digit royalties.

Speaker 2

Pierre Fab brings substantial and demonstrated capabilities evidenced by the successful launch of TapCel branded as Advalo in European markets. We have found them to be committed collaborators We're providing competitive certification to expand our partnership for tab cel to reach as many patients as possible worldwide. Specific to the U. S, which is the largest commercial opportunity, ESRB is in a strong position to succeed strengthening Their U. S.

Speaker 2

Presence with TAPCELL as their flagship product and building onto their marketing experience in Europe. Now for the specifics. ATARA will receive up to €640,000,000 in additional consideration plus Significant double digit tiered royalties on net sales. As part of the deal, we will receive approximately €30,000,000 at deal closing in upfront and inventory purchase and €100,000,000 more in potential regulatory milestone payment for potential BLA approval. In addition, Kfabs will reimburse Atara for expected tab cel global development cost through BLA approval and will purchase existing and future tab cel inventory through the BLA transfer date.

Speaker 2

Substantially, all tab cel manufacturing, regulatory and development activities are targeted to transition from MATARA to PF5 at the time of the BLA approval transfer. We remain confident that tab cel represents a significant business opportunity with several 100 EBV positive PTLD addressable patients In the U. S. Alone, we could benefit from this potentially life saving therapy with a favorable safety profile. With significant pricing potential based on its value for patients and health care system in such an ultra rare disease, We believe that TAPCELL has the potential to deliver U.

Speaker 2

S. Peak sales of over €500,000,000 per year following potential label expansion from the multi cohort study. With future sales milestone and significant double digit royalties Through our agreement with CFAB, we believe U. S. Tab cel commercialization will progressively grow future revenues for ATARA over the term of the agreement.

Speaker 2

As we continue to evolve as an organization focused on developing innovative allogeneic cell therapies for Cancer and autoimmune disease, we are undertaking a strategic restructuring to reduce our current workforce by approximately 30%. The benefits of the expanded tab cel partnership Coupled with the restructuring are anticipated to reduce our planned cash expenditures from 2023 levels by approximately 40% or €100,000,000 by the end of 2025. I would like to extend my sincere gratitude To all Atara staff, both those continuing to the next phase of Atara and those departing for their unwavering commitment to the patients' lives We seek to transform their significant contributions in advancing truly innovative medicine for patients in need. Thank you for what you have done to get us where we are today. We believe these actions when combined with cash of approximately €102,000,000 on September 30, 2023 and certain anticipated payments from the extended TapCel commercial partnership will be sufficient to fund Atara plant operations into Q3 2025.

Speaker 2

This will position Atara well to deliver multiple anticipated clinical milestones including the early November onboard data readout as well as key data readouts for the ATA-three thousand two hundred and nineteen program in lymphoma and potentially in autoimmune disease. On the regulatory front, we are encouraged from the recent positive FDA assessment of comparability that supports pulling the pivotal clinical data from different process versions of tab cel in a BLA submission expected in Q2 2024. We now have a clear plan for the clinical data package and the expected VLA submission timing aligns with our filing strategy to include the latest pivotal allele study data for inclusion in and to obviously support both the pre BLA meeting and anticipated BLA filing package. We're also excited to disclose initial data from our Phase 2 multicore study various EBV positive cancer in December at ESMO IO. Now on to 8,188, a potentially transformative therapy for people living with progressive is multiple sclerosis.

Speaker 2

The primary analysis readout for the Phase 2 double blind placebo controlled MOLVE study is on track for early November, which will include the primary outcome measure of confirmed disability improvement by EDSS and relevant imaging and suite biomarkers for more than 90 patients. This includes a number of patients that enrolled earlier in the study and have been evaluated beyond the primary endpoint of 12 months at 15, 18, 21 and 24 months. The EDSS data from this later time point will be analyzed as part of the primary analysis and may give a sense of 8,188 impact on EDSA stability and progression, which usually requires longer follow-up time to assess of disability improvement. Our goal is to disclose sufficient study data to allow investors to evaluate potential value of 8,188 in non active progressive MS. As a reminder, significant unmet need remains in progressive MS, especially non active progressive MS, which which represents the vast majority of the progressive MS population, needs a focus of the EMBLOYD study.

Speaker 2

There are no approved therapies right now that have demonstrated visibility improvement for non active progressive MS. The currently approved therapies only demonstrate more than slowing of visibility progression with an approximately 6% difference versus placebo that is primarily driven by patients with active disease. As a result, anything better Than this ranging from more slowing of progression to stabilization of disability to transform disability improvement to significant improvement is potentially transformative and sets up diverse and robust clinical development opportunities including potential pivotal Phase III trials. Finally, we are progressing our potential best in class allogeneic CAR P assets, which could play a foundational role in our portfolio moving forward. We will focus resources in the near term on clinical development of ATA-three thousand two hundred and nineteen following recent IND clearance and on preclinical activities for AKA-three thousand four hundred and thirty one or CD19, CD20 targeted CAR T.

Speaker 2

While these are the programs that have the highest potential for value creation over the next 2 years, we will also continue to strategically invest in other attractive targets and platform announcements. With respect to AKA-three thousand two hundred and nineteen For allogeneic CAR T for B cell malignancies expressing CD19, we are progressing to activate study centers and start enrolling patients in the coming months The Phase I study in relapsed or refractory B cell NHL. We expect preliminary clinical data in the second half of 2024. We are particularly excited to bring this allogeneic CD19 CAR T assay to the clinic as it's been optimized will serve a potential best in class product profile featuring all the shares availability and clinically validated technologies Like the 1XX signaling domain associated with favorable response rate and durability enrichment for less differentiated T cell memory phenotype for improved clinical responses and retention of the endogenous T cell receptor, which may be a crucial survival signal for T cells. We are also pleased that ATS3431, an allogeneic bispecific CAR directed against CD19 and CD20 Built on the EBV T cell platform with the 1XX co stimulatory domain is moving into IND enabling studies with a competitive profile.

Speaker 2

Compared to an autologousidenetim CD20 CAR T benchmark, preclinical data demonstrate potent antitumor activity, Long term persistence and superior tumor growth inhibition and this has been accepted for poster presentation at the upcoming ASH meeting in December. Beyond oncology, there has been high interest recently in the potential of CAR T cell therapies for autoimmune disease with remarkable results from early data in patients living with severe thyroid disease such as lupus. At Atara, we have believed for a while in the important role cell therapy can play in addressing autoimmune conditions. With 8,188, Atara is pioneering the use of an allogeneic T cell immunotherapy in a neurological autoimmune condition. Building on this experience, we are actively considering option best suited for atarallogenic CAR T EBV therapies in autoimmune disease.

Speaker 2

Our EDV T cells have compelling potential benefits like persistence and favorable safety with no requirement for complex genetic editing. Specifically, they possess a memory phenotype that can expand in traffic to site of disease, which provide a versatile platform with off the shelf accessibility that can address several potential shortcomings of other approaches. To that end, We are actively progressing efforts toward the potential IND to evaluate ATA-three thousand two hundred and nineteen in autoimmune disease in parallel with NHL development. More to come on that soon. To close, we're excited about the near term opportunities for Agara to demonstrate the potential of our pipeline.

Speaker 2

We We are coming up to one of the most exciting milestone in ATARAZ's story with a primary analysis result of the AMBOLD study very soon And we are now well capitalized with planned cash runway into Q3 2025 to pursue our potential best in class portfolio of CAR T assets in areas of great unmet need where we believe we can make the biggest difference. I will now turn the call over to the operator for the Q and A part of the call. Operator?

Operator

Thank you. Our first question is from Salim Syed with Mizuho. Please proceed.

Speaker 3

Great. Good morning, guys. Congrats on the deal. Just a couple for me if I can. 1 on the process.

Speaker 3

Pascal, you mentioned that there were large pharma players involved here. Just curious the rationale to go with Pierre Fabre. Was it just more operational that you wanted to one partner globally? Was that just really important to you? Or was it also financially driven?

Speaker 3

Did Copart actually offer greater economics? And then second just on the $500,000,000 number that you put out for U. S. Peak sales, Just curious if you could break that down for us even ballpark wise. How much of that is for the first indication EBV for PTLD?

Speaker 3

And just what portion of the $640,000,000 in milestones could you get just on the first indication alone potentially? Ballpark would be helpful.

Speaker 2

Thank you. Thank you, Salim for your question. So the first one, competitive process, a mix of big pharma, mid pharma and biotech, The decision was based on 3 key aspects. 1, of course, is financial. And financial, not only about an upfront level, but very importantly, the way for us to be able to have the partner progressively taking over activities, but immediately taking over the cost of the activities for tab cel.

Speaker 2

That was very important for us because that was the one the way for us to really move into focusing our cash into the development in MS and in allogeneic arteries. So that was one aspect on financial. The other one was the level of commitment that This particular partner will is demonstrating through the process, the diligence and with Peerfab we have experience with them. We know how committed they are to the success of Edvalo in Europe. And then thirdly, it's true that having only one partner is much easier to manage for us As a biotech company, it was not the most important decision point, but it was really an important aspect to say if The financials are exciting because they cover exactly what we need in terms of taking over the course and adding cash to the balance sheet.

Speaker 2

On top of that, having someone who is truly committed to succeed and having Tapsell as their flagship product in the U. S, they're going to put 100% and even more of effort behind it. And then of course, The fact that having only one partner is makes it easier to manage in general. Now on to your second question. The €700,000,000 peak sales as we said is linked with different type of indications.

Speaker 2

So first indication in 2nd line PTLD, DV positive PTLD and additional indications coming from the multicore study that is coming. And by the way, We've announced that there will be some first preliminary data presented at Essmore. Io in December. So that's the way the 500,000,000 pixel is progressively build up there in the U. S.

Speaker 2

In the way we see the potential of that product commercially. Now the milestone that sales milestone are not related to a specific condition just sales milestone. And we're not going to disclose exactly what's the detail of this sales milestone, But we think that they are reasonable in the approach that we're taking in terms of what is the potential of the product and how that potential can be reached. Does it answer

Speaker 3

your question? Sort of. I'm happy to rephrase it if that's okay. But if you can answer, I understand that as well.

Speaker 2

We cannot disclose more on the milestone. That's my point.

Speaker 3

Okay. I guess for the just for the $500,000,000 though, how much of that is weighted on the first indication alone, I guess was the question On the for PTLD, approximately?

Speaker 4

Yes. I

Speaker 2

think it's a significant part because we always say it's Several 100 patients in the first indication. And we also say that we have we believe a significant pricing potential based not only on the expense in Europe where the price in Europe today listed price is about $640,000 or equivalent of 6 $40,000 And usually the difference between the U. S. And Europe is about 30% to 40% for this type of product. That gives us an idea.

Speaker 2

We don't know what Yes. Fab will take us a price, but we've been discussing that with them and we think they will try like they are doing in UOP to optimize the pricing potential in line with the value that the product is giving to patients and healthcare system. But also we've had a lot of discussion as Atara with payers in the U. S. And we know exactly what's the Price sensitivity and what price that will be considered as acceptable to offer significant coverage of the patients.

Speaker 2

We're confident about the number of patients. We're confident about the price. And we're seeing by itself this is going to create to reach a significant part of that 500,000,000

Speaker 3

Got it. All right. Thank you so much, Pascal. Congrats again.

Speaker 2

Thank you.

Operator

Our next question is from John Newman with Canaccord Genuity. Please proceed.

Speaker 4

Hi, there. Thanks for taking my Question and congrats on a nice deal here. So my question is regarding the tab cel regulatory process. I'm just curious Pascal if you could Just give us an update on the new clinical data or the additional clinical data that will be included When you file the application in 2024?

Speaker 2

Yes, certainly. So when we reach the Alignment and agreement on comparability that was when we could then organize a new data cut for the ALLETE study the pivotal study. So that has been done in October. And now we're going to have all the typical time needed to get the data Clean to get the IORA, the independent review of the scans and so on. And that will give us a new set of compared with the one we presented in December 2022 at ASH on 43 patients.

Speaker 2

So that new set of data will then be in the typical way put together presented to the agency pre BLA meeting and then Move on to the BLA submission. So the time needed is really the time to clean up the data. We're very confident in this data and with many reasons to be Very confident in this data. But one that you all know is about the fact that whatever the type of study, whatever the Process versions we've used in the past and we've treated more than 400 patients with TAVCET across different disease and more than 2 60 patients In PTLD, in the V plus PTLD. So we have a very significant data package and experience.

Speaker 2

But whatever the study, whatever the process versions, We always have found similar results from an efficacy and safety point of view. So very similarly efficacy with And over in terms of overall response rate, long term efficacy with good persistence of the response And then of course, favorable safety. So that's why we feel extremely confident about this new data that will be put together and discussed with the agency. Does it answer your question?

Speaker 4

It does. I just had one additional question on ATA188. Just curious, obviously, the data will be coming here shortly, but wondered if you could discuss your thoughts on the commercial plans for that product. If you're concerning a partnership if you're planning on marketing the product on your own if perhaps partnership is being considered for only Europe? Just curious there.

Speaker 4

Thanks.

Speaker 2

Thank you for your question. So it depends on the next step. But if indeed we are to the point where the next step is to move to Phase 3, as we disclosed in the past, we have already discussed with the FDA about the type of Phase 3 that they would like to see when we obtain or 2 Fast Track designation. And that's where the agency mentioned 2 Phase 3, 1 in non active PPMS, 1 in non active SPMS. And the reason they ask for 2 instead of just 1 is mainly because the medical need is Slightly different in the U.

Speaker 2

S. In these two potential indications because in non active SPMS, which is by the way the vast majority of the patient with PMS with secondary progressive MS. In that particular population, there is no approved therapy in the U. S. Whereas in non active PPMS, There is officially one approved therapy recently approved therapy, which is OCREVUS there.

Speaker 2

So that's why there is a slight medical need from a fast track and potential BTD type of status later on. So we'll discuss with the agency. These 2 Phase 3 studies will be Also put together with a Phase 2 program to go in earlier stage of MS and maybe some other autoimmune indications. All that will be a very significant clinical development program that we believe will benefit from having a strategic partner that could bring financial and operational capabilities to be able to run all of these studies in parallel. So at this stage, the idea will be to consider partnership, but not The PURE licensing out more of a strategic co development maybe with some options for other activities especially in the U.

Speaker 2

S. And that's really the aim being to activate rapidly this next stage of the development, but at the same time We take significant value from within ATARA. And we've discussed in the past that the type of partnership with Profit split, particularly in the U. S, which is about 75% to 80% of the world market for MS, could make sense for the company and our shareholders. So too early to say what type of partnership and how we will implement that.

Speaker 2

But certainly it's something that we have been actively Considering and discussing with a large number of big pharma company over the last couple of years.

Speaker 4

Great. Thank you for taking my questions.

Operator

Our next question is from Phil Nadeau with Cowen and Company. Please proceed.

Speaker 5

Good morning. Let us add our congratulations on the expanded partnership. Couple of questions from us. First in terms of the royalty that you're going to get from Pierre Fab, Can you give us any more information on the magnitude of that royalty? Is it a graded royalty?

Speaker 5

And any sense of the royalty range? And then second, a follow-up on the IMbOLD trial. Could you talk us through your current thought process as to how you would frame the gono go decision Post the IMbOLD data, what do you need to see in IMbOLD to advance 188 into those 2 Phase III trials? Thanks.

Speaker 2

Thank you for your question. So the first one, unfortunately, we cannot say more than significant double digit tiered royalties. And it's an agreement with our partner PFR that is not willing for us to disclose the royalty level. So we cannot say more than significant double digit tiered royalties. And let's say that we are very pleased with that deal.

Speaker 2

Now on your second question, The way we see the different scenarios as we explained in the past is as follows. We believe that if we have a significant Statistical results on top of an impactful clinical results in terms of showing a percentage of CDI or confirmed disability improvements in active versus placebo in that case will be with a significant P, will be considering moving into Phase 3. But it could be also the case if it is not a significant P, but a very strong front supported by a number of additional data from other clinical measures from imaging biomarkers such as MTR, magnetization transfer ratio or some additional bio food biomarkers. So I think the strong trend supported by this type of biomarkers and additional clinical data could also make the case for moving into Phase 3. So that's the type of scenario where we'll move to Phase 3.

Speaker 2

The scenario where we will not move to Phase 3 in this Specific indication of non active progressive MS will be a scenario where we have evidence of FX, but that there is a need either to Continues the study till it's end is a 2 year study or to be able to have data for example on stability on a larger number of patients. We'll have already data on stability of the disability and the ability to limit progression of disability. But we might want to have more patients than to have all the patients reaching a 2 years' time point. We might also have some particular signal strong signal in subgroups of patients based on the data. So all that could lead to the need to continue some additional work for AMBOLD, expansion of AMBOLD Or just a continuation of Amboard or some other studies that we could do to be able then to be in the stage where we could move to Phase 3.

Speaker 2

So that's the best way probably to answer your question right now is, if it is statistical significance or very strong trend backed by Biomarkers and other data there is a clear path to moving to Phase 3 following end of Phase 2 meeting with the agency and scientific advice in Europe. If it is something that shows evidence of effect, which by the way will be a big first and truly transformational already because nobody has ever shown In such a large study that there is evidence of effect versus placebo that could be of a significant signal to be able to Explore further or continue the study till it's end. So that particular scenario will require some additional work, but we are well positioned to do that work.

Speaker 5

That's very helpful. Congratulations again and thanks for taking my questions. Thank you.

Operator

Our next question statement is from Jonathan Miller with Evercore ISI. Please proceed.

Speaker 4

Hey, guys. Congrats so much on the TapCel deal. We're really looking forward to MS data coming out obviously. I would love to get a little bit deeper into the, I guess the pipeline and the runway from here. So you mentioned there are certain anticipated payments included in the cash runway to $25,000,000 there.

Speaker 4

Is BLA approval included in that runway for instance? What are the certain anticipated payments that you're counting explicitly and what are you not counting? And secondly, how much of the CAR T program, the oncology program trial initiations are counted in the runway and how much of those trials are covered versus not covered with your current expectation?

Speaker 2

No. Thank you for your question, John. So in terms of the expected payment from the deal, This is really around the regulatory milestone. It's not only a milestone of approval. It's through approval.

Speaker 2

We have a number of steps That is successfully achieved will be linked with payments. So that's why we say €100,000,000 regulatory milestone for BLE approval. That includes the BLA approval by the way, but it's not the only milestone. There are a number of milestones before the BLA approval that could lead to payment from Piafab based on the progress we're making on regulatory front. So that's to answer your first question.

Speaker 2

On your second question, What we are putting together in this cash runway expectation is the start as we're doing right now of our study in lymphoma with ATA-three thousand two hundred and nineteen is also starting the study in autoimmune disease as we believe that there is a great potential for that product in autoimmune diseases like lupus and we're working on that right now. And it's also the IND enabling studies for 3,431 which Very exciting, very competitive CD19, CD20 CAR T, allogeneic CAR T. And then of course we have evolved that is continuing Because even though we're going to present very soon the 12 months readouts, the study as you know is comparing that to 2 years. So we have a number of patients that have reached already 2 years, but many that have not yet reached 2 years. So we'll be able to continue that till next year of course.

Speaker 2

So all that is part of the expenses knowing that on the top cell phone the expenses are mostly covered by DFAT. Does it answer your question?

Speaker 4

Yeah. That's very helpful. Thank you.

Operator

Our next question is from Salveen Richter with Goldman Sachs. Please proceed.

Speaker 6

Thanks so much for taking our questions. This is Tommy on for Salveen and congrats on the deal. So with the closing in December and the workforce reduction, can you kind of walk us Through what the financial impact will be into year end if any? And on the MS release, how much detail do you expect to provide here? Will be more so just P values or could we actually see the trends and more quantitative measures too?

Speaker 6

Thank you so much.

Speaker 2

Eric, do you want to take the first question? I'll take the second one.

Speaker 4

Yes, absolutely. So Tommy, the way we're looking at it, obviously, there's going to be We signed the deal, but then there's going to be the customary HSR review, which we don't expect to be a problem. So Bigger kind of a December effective date there. So benefits of the upfront Payment inventory purchases, it's going to be right around end of December early January depending on That and the payment terms. And then yes, the 30% reduction in force, obviously, there's the lower headcount benefit, but then that's offset by Some severance, of course, for those folks.

Speaker 4

So I would expect the main you look at the main benefits to begin in 2024 as a step down and then another step down in 2025 as we fully transition regulatory development and

Speaker 2

And on to your second question. So what we said so far that we plan to disclose Sufficient data for investors to be able to have a better understanding of the value created by that study and for that particular asset. So it's Difficult to say exactly we'll disclose, but it depends on the data. But you can expect more than just the primary analysis of the 12 months confirmed disability improvement active versus placebo. And as you know there will be data on Beyond 12 months because we have a number of patients that will have been evaluated at 15, 18, 21, 24 months.

Speaker 2

So not only confirmed disability improvement, but also CDP confirmed disability progression to see what's happening on the stability front. And then there will be imaging biomarkers for gamma ray and MTR in particular the biomarker we presented from our Phase 1 a Couple of years ago at Extreme that showed that sign of feminination within the chronic lesion in the brain of the patient that we're improving on the treatment. So you can expect that type of data as well. And then of course a number of other type of clinical and potential biomarkers. So Ideally, we'd like to give enough information for investors to be able to have an understanding of what's the value created by the study so far And for this particular product and of course to try to also disclose what we see as a next step for the program.

Speaker 2

Does it answer your question?

Speaker 6

Thanks so much.

Speaker 4

Thank you.

Operator

That concludes our question and answer session for today. Thank you for joining Atara Biotherapeutics' 3rd quarter 2023 financial results Conference Call. You may now disconnect.

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