Atara Biotherapeutics, Inc.

Good morning and thank you for standing by. Welcome to Atara Biotherapeutics third quarter 2023 financial results conference call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. 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.

Thank you, Sherry. Good morning, everyone, and welcome to Atara's conference call to discuss our expanded TabCell global partnership with PFR Laboratories and our third quarter 2023 update. Earlier today, we issued a press release announcing this partnership and our third quarter financial results. This press release and an updated slide deck are available in the Investors in Media section at atarabio.com. Joining me on today's call are Dr. Pascal Tuchon, President and Chief Executive Officer and Eric Killingran, 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. 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?

Thank you, Alex, and thank you all for joining us this morning. Today, we announce the global expansion of our TAPCEL partnership with Pierre Fab 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 extend ATARA plan cash runway into Q3 2025. This positions us well to continue building the value of our pipeline, including through anticipated clinical milestones for ATA188, with the onboard readout in early November, as well as initial data for the ATA3219 program in lymphoma. 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 Fabre to commercialize TAP cells in the U.S. and all remaining global markets. This moment signifies a pivotal transition in ATARA's evolution. We are now optimally positioned as a nimble allogenic T-cell immunotherapy company with and near-term catalyst, and the opportunity to advance a pipeline of differentiated therapies across a range of oncology and autoimmune indications from a proven eBVT cell platform. We sought a partner that is committed to deliver TapCell, a product with life-saving potential, to the US and global patients. In parallel, we pursued a deal structure that meaningfully reduces our cash burn over the next two years and provides ATARA and shareholders with significant value, both through short-term cash and potential milestone payment and long-term significant double-digit royalties. AirFab brings substantial and demonstrated capabilities, evidenced by the successful launch of TafSell, branded as Edvalo, in European markets. We have found them to be committed collaborators, providing compelling justification to expand our partnership for TabCell to reach as many patients as possible worldwide. Specific to the U.S., which is the largest commercial opportunity, EF-FAB is in a strong position to succeed strengthening their U.S. presence with TabCell as their flagship product and building onto their marketing experience in Europe. Now for the specifics. Tara will receive up to $640 million in additional consideration plus significant double-digit tiered royalties on net sales. As part of the deal, we will receive approximately $30 million at deal closing in upfront and inventory purchase and $100 million more in potential regulatory milestone payment through potential BLA approval. PFAB will reimburse ATARA for expected TAPCEL global development cost through BLA approval and will purchase existing and future TAPCEL inventory through the BLA transfer date. Substantially, all TAPCEL manufacturing, regulatory, and development activities are targeted to transition from ATARA to PFAB at the time of the BLA approval transfer. We remain confident that TAP-Cell represents significant business opportunity with several hundred EBV-positive PTLD-addressable patients in the U.S. alone who could benefit from this potentially lifesaving therapy with a favorable safety profile. With significant pricing potential based on its value for patients and healthcare system in such an ultra-rare disease, we believe that TAP-Cell has the potential to deliver U.S. peak sales of over 500 million per year, following potential labor expansion from the multi-court study. With future sales milestone and significant double-digit royalties who grow agreement with Pierre Fabre, we believe U.S. tap sale commercialization will progressively grow future revenues for ATARA over the term of the agreement. As we continue to evolve as an organization, focused on developing innovative allogenic 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 TAP cell partnership coupled with the restructuring are anticipated to reduce our planned cash expenditures from 2023 levels by approximately 40% or 100 million by the end of 25. 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 and 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 million on September 30, 2023, and certain uncipated payments from the Expanded Tap Cell Commercial Partnership, will be sufficient to fund ATARA plan operations into Q3 2025. This will position ATARA well to deliver multiple uncipated clinical milestones, including the early November onboard data readout as well as key data readouts for the ATA3219 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 pooling the pivotal clinical data from different process versions of TAP cells in a BLA submission expected in Q2 2024. We now have a clear plan for the clinical data package and the expected BLA submission timing aligns with our filing strategy to include the latest pivotal allele study data for inclusion in and to robustly support both the pre-BLA meeting and anticipated BLA filing package. We are also excited to disclose initial data from our Phase II multicore study with various EBV-positive cancer in December at ESMO-IO. Now on to HE188. or potentially transformative therapy for people living with progressive multiple sclerosis. The primary analysis readout for the phase two double-blind placebo control and BALL study is on track for early November, which will include the primary outcome measure of confirmed disability improvement by EDSS and relevant imaging and fluid 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 8188 impact on EDSS stability and progression, which usually requires longer follow-up time to assess that disability improvement. Our goal is to disclose sufficient study data to allow investors to evaluate the potential value of AT188 in non-active progressive MS. As a reminder, significant and met need remains in progressive MS, especially in non-active progressive MS, which represents the vast majority of the progressive MS population, and is the focus of the EMBOL study. There are no approved therapies right now that have demonstrated disability improvement for non-active progressive MS. The currently approved therapies only demonstrate modest slowing of disability 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 transfer disability improvement to significant improvement is potentially transformative and sets up diverse and robust clinical development opportunities including potential pivotal phase 3 trials. Finally, we are progressing our potential best-in-class allogenic CAR-T assets, which could play a foundational role in our portfolio moving forward. We will focus resources in the near term on clinical development of ATA3219 following recent IND clearance and on preclinical activities for ATA3431 or CD19-CD20 targeted CAR-T. While these are the programs that have the highest potential for value creation over the next two years, we will also continue to strategically invest in other attractive targets and platform announcements. With respect to ATA3219 or allogeneic CAR-T for B-cell malignancies expressing CD19, we are progressing to activate study centers and start enrolling patients in the coming months in the phase one study in relapse or refractory B-cell NHL. expect preliminary clinical data in the second half of 2024. We are particularly excited to bring this halogenic CD19 CAR-T asset to the clinic as it's been optimized to offer 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 type 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 ATA-3441, an allogenic bispecific CAR directed against CD19 and CD20, built on the EDV T-cell platform with a 1XX co-stimulatory domain, is moving into IND enabling studies with a competitive profile. Compared to an autologous CD19-CD20 CAR-T benchmark, preclinical data demonstrate potent anti-tumor 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 refractory 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 AT188, ATARA is pioneering the use of an allogeneic T-cell immunotherapy in a neurological autoimmune condition. Building on this experience, we are actively considering options best suited for ATARA allogeneic CAR T-EBV therapies in autoimmune disease. or EBVT 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 and traffic to sites of disease, which provide a versatile platform with off-the-shelf accessibility that can address several potential shortcomings of other approaches. We are actively progressing efforts toward the potential IND to evaluate ATA3219 in autoimmune disease in parallel with NHL development. More to come on that soon. To close, we are excited about the near-term opportunities for ATARA to demonstrate the potential of our pipeline. We are coming up to one of the most exciting milestones in ATARA's history with a primary analysis result of the EMBL study very soon. And we are now well capitalized with planned cash runway into Q3 2025 to pursue a 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&A part of the call. Operator?