Atara Biotherapeutics Announces Major Workforce Reduction Amid FDA Setbacks

Atara Biotherapeutics, a California-based biotech company, has revealed plans to cut approximately 50% of its workforce following recent setbacks with the U.S. Food and Drug Administration (FDA). The company, which specializes in T cell immunotherapies, expects to complete the layoffs by June 2025, potentially reducing its employee count to around 80.

FDA Rejection and Clinical Hold

The workforce reduction comes in the wake of two significant FDA-related setbacks for Atara. On January 16, 2025, the FDA rejected Ebvallo, Atara's T cell therapy for post-transplant lymphoproliferative disease in patients positive for the Epstein-Barr virus. The therapy, which is already approved in Europe, was denied due to unresolved manufacturing concerns.

Following this rejection, the FDA took the additional step of placing a clinical hold on Atara's active Investigational New Drug (IND) applications. This hold affects not only Ebvallo but also ATA3219, the company's allogeneic CD19 CAR T therapy being tested for non-Hodgkin's lymphoma and systemic lupus erythematosus. As a result, Atara has had to suspend screening and enrollment of new study patients in both programs, with only currently enrolled patients who may potentially derive clinical benefit allowed to continue treatment under ongoing study protocols.

Financial Implications and Strategic Alternatives

The layoffs are expected to cost Atara approximately $7.5 million in severance and related benefits. This comes at a challenging time for the company, which reported a net loss of $72.7 million for the first nine months of 2024 and an accumulated deficit of $2 billion as of September 30, 2024. At that time, Atara had cash, cash equivalents, and short-term investments totaling $67.2 million.

In light of these developments, Atara has announced that it is in active discussions with several potential parties regarding strategic alternatives. These options could include an acquisition, merger, reverse merger, sale of assets, or other strategic transactions, signaling a potential major shift in the company's future direction.