A Cheap Biotech Is Testing a Novel Treatment for Multiple Sclerosis

Bill Alpert Health ATRA CELG GILD NOVN.EB ROG.EB Atara Biotherapeutics Celgene Gilead Sciences Roche Holding Roche Holding AG Juno Therapeutics Kite Pharma Novartis Biotechnology Health Care/Life Sciences Biological Therapy Amit Bar-On Pascal Touchon North America United States Research/Development Corporate/Industrial News New Product/Service Testing Political/General News Medical Research Health Medical Conditions Multiple Sclerosis Sciences/Humanities Medical Treatments/Procedures ATRA GILD I/BTC M/HCR N/CNW N/DJN N/GEN N/HLT N/RND N/SCN N/WER NOVN.EB NVS R/NME R/US RHHBY RO.EB ROG.EB Barrons.com Barrons Blogs Wires CODES_REVIEWED Health author Bill Alpert author|Bill Alpert topicid 8520 name Bill Alpert extractedtext Bill Alpert rank 1 codetype author code bill_alpert nameformat surname_first author Bill Alpert id Bill Alpert barrons_display_subject BARHEALTH barrons_display_subject|BARHEALTH codetype BARRONS_DISPLAY_SUBJECT canbedisplaysubject true value BARHEALTH source MANUAL 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usa re|usa codetype re why about source FACTIVA subcat cntry code usa name United States significance prominent onlinesignificance prominent fcode usa re namz re|namz codetype re why lineage source FACTIVA subcat snr code namz name North America fcode namz relay SYND relay|SYND codetype RELAY name Syndication source EXPANDER value SYND code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARHEALTH subject|BARHEALTH ruleid BARHEALTH codetype SUBJECT value BARHEALTH canbedisplaysubject true name Health title Health status modified code BARHEALTH wordcount 851 wordcount|851 Photograph by Marcelo Leal A Cheap Biotech Stock With a Novel Treatment for Multiple Sclerosis A Cheap Biotech Stock With a Novel Treatment for Multiple Sclerosis A Cheap Biotech Stock Tests a Novel Treatment for Multiple Sclerosis

Researchers reported that Atara’ Biotherapeutics treatment showed hints of actually improving the condition of MS patients, instead of just slowing the disease like most available treatments.

A Cheap Biotech Is Testing a Novel Treatment for Multiple Sclerosis

Researchers reported that Atara Biotherapeutics treatment showed hints of actually improving the condition of MS patients, instead of just slowing the disease like most available treatments.

https://www.barrons.com/articles/j-k-rowling-donates-18-9-million-to-ms-research-01568318421 https://www.barrons.com/articles/biogen-stock-multiple-sclerosis-drug-51561726837 mailto:william.alpert@barrons.com A Cheap Biotech Stock With a Novel Treatment for Multiple Sclerosis By Bill Alpert Photograph by Marcelo Leal

Atara Biotherapeutics has an out-of-favor stock and a novel treatment for multiple sclerosis that’s in early clinical trials. At an international meeting of MS doctors on Friday, researchers reported that Atara’s therapy showed hints of actually improving the condition of MS patients, instead of just slowing the disease like most available treatments.

If subsequent trials over the next few years confirm the treatment’s effectiveness, Atara could enter the market for MS drugs. That market approached $20 billion last year, so the opportunity will be significant, for a company of Atara’s size.

The South San Francisco-based firm (ticker: ATRA) had a $50 stock and $3 billion market capitalization last year. Today, its stock trades below $16 and its market cap is just $870 million. That is why investors may want to pay attention to the progress of the MS treatment that Atara currently calls ATA188.

Friday afternoon, at the annual meeting of the European Committee for Treatment and Research in Multiple Sclerosis, in Stockholm, a group of doctors led by University of Pennsylvania researcher Amit Bar-On will present results on the first dozen patients treated with Atara’s therapy. The Phase 1 study was primarily designed to test safety, but it also measured the treatment’s effect on the patients’ symptoms.

The patients all have a severe form of multiple sclerosis called “progressive,” in which their condition continuously declines—instead of the sometimes remitting, then relapsing, form that is most common. There are few treatments available for the progressive forms of the disease.

An abstract of the ATA188 study says the Atara MS treatment was safe and well-tolerated. More intriguing were the efficacy signals. Symptoms in a number of the patients stabilized or improved as those people received increasing doses.

“Recently approved drugs just slow the progression,” Atara chief executive Pascal Touchon told Barron’s, “so if we can stabilize the patients or even improve them, this will be a significant treatment.”

Researchers will follow up this first study with a randomized, controlled, double-blind trial to test efficacy. That could take a couple of years, with another year for analysis, says Touchon.

The need for MS treatments is large. The U.S. has a million people living with the disease. Worldwide, there are more than twice that number. Recently-approved MS treatments have therefore been some of the most successful biotech launches. The Ocrevus product from Roche Holding (RHHBY) hit $2.4 billion in sales in 2018, its second year on the market.

Atara’s treatment is the first that targets a recently suspected cause of multiple sclerosis: the Epstein-Barr virus. The virus is what gives people mononucleosis. MS sufferers typically had mono at an early age and the virus is present in the immune system B-cells of every MS patient. A bunch of genetic traits and immune malfunctions contribute to the nerve scarring that afflicts MS patients, but virus-infected B-cells seem to be a key part.

The ATA188 treatment modifies another actor of the immune system known as the T-cell, to target Epstein-Barr infected B-cells. The reason that Atara stock sold for 50 bucks last year is that Wall Street was ga-ga over these so-called CAR-T therapies, after a few of them showed dramatic success against blood cancers such as lymphoma and leukemia.

In 2017, Gilead Sciences (GILD) paid $12 billion for Kite Pharma and its now-approved treatment for lymphoma, called Yescarta. Celgene (CELG) bought Juno Therapeutics for $9 billion in 2018. Novartis (NVS) has an approved CAR-T treatment for leukemia, Kymriah, that sells for $475,000.

But sales of the approved CAR-T treatments have been slow to grow. That disappointment helped make Atara a cheaper stock—along with the company’s acknowledgment this year that recruitment was going slowly for the clinical trial of its first experimental T-cell treatment, known as tab-cel, which targets a rare form of leukemia caused by the Epstein-Barr virus in some transplant patients.

Atara’s ATA188 MS treatment differs from other CAR-T technologies in an interesting way. Most CAR-T therapies extract the patient’s own T-cells and then soup them up in an expensive and time-consuming process. The ATA188 treatment uses off-the-shelf T-cells from healthy donors, making it cheaper and more convenient.

Atara has already built a $50 million manufacturing facility for its off-the-shelf treatment. A recent stock offering should fund operations until 2021, said Touchon.

With a promising treatment under investigation by the world’s leading multiple-sclerosis researchers, and several other T-cell products in the pipeline, Atara and its beaten-up stock deserve a second look.

Write to Bill Alpert at william.alpert@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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