Atara Biotherapeutics Announces Major Restructuring, Halts CAR T Programs Amid FDA Setbacks

Atara Biotherapeutics, a California-based biotechnology company, has unveiled a significant restructuring plan following recent regulatory challenges. The company is implementing a second round of workforce reductions and pausing two key CAR T programs in response to FDA-related setbacks earlier this year.

Workforce Reduction and Program Discontinuation

Atara disclosed in a March 3 SEC filing that it will reduce its workforce by approximately 50% for the second time this year. This latest cut comes on the heels of a similar reduction announced in January. Once both rounds of layoffs are complete, expected by June, the company's headcount could drop to around 40 employees from the 159 reported as of September 30, 2024.

In conjunction with the workforce reduction, Atara is discontinuing development activities for two CAR T programs:

1. ATA3219: An allogeneic anti-CD19 chimeric antigen receptor (CAR) T cell therapy being evaluated for non-Hodgkin's lymphoma and systemic lupus erythematosus.
2. ATA3431: Another CAR T program that was in earlier stages of development.

The company will terminate all clinical studies related to ATA3219 as part of this decision.

FDA Setbacks and Clinical Hold

The restructuring follows two significant FDA-related setbacks in January 2025:

1. On January 16, the FDA rejected Ebvallo, Atara's therapy for post-transplant lymphoproliferative disease in Epstein-Barr virus-positive patients. The rejection cited unresolved manufacturing concerns, despite the therapy's approval in Europe.

2. Less than a week later, the FDA placed a clinical hold on Atara's active investigational new drug applications, including Ebvallo and ATA3219, due to the same manufacturing concerns.

These regulatory challenges have prompted Atara to reevaluate its pipeline and resource allocation, leading to the current restructuring efforts.

Financial Implications and Strategic Alternatives

The latest workforce reduction is expected to cost Atara approximately $3 million in severance and related benefits. The company may incur additional charges related to the restructuring.

As of September 30, 2024, Atara reported:

• An accumulated deficit of $2 billion
• Cash, cash equivalents, and short-term investments totaling $67.2 million
• A net loss of $72.7 million for the first nine months of 2024

In light of these financial pressures and recent setbacks, Atara announced on January 16 that it is actively exploring strategic alternatives. These could include an acquisition, merger, reverse merger, sale of assets, or other strategic transactions.

Atara's remaining pipeline includes additional next-generation allogeneic CAR T approaches for hematological malignancies and solid tumor AlloCAR T programs. However, the company's future remains uncertain as it navigates these significant challenges and explores potential strategic options.