Stifel downgraded Atara Biotherapeutics (NASDAQ:ATRA) to “hold” from “buy” and lowered its price target to $5 from $16, following the company’s interim Phase 2 analysis with ATA188 for the treatment of multiple sclerosis. The stock closed at $8.66 on July 12.
“We now have lower conviction that the Phase 1 expanded disability status scale (EDSS) improvement data will be replicated, and recent share pressure and a lack of meaningful near-term catalysts capable of shifting sentiment exacerbate our concerns around cash runway and dilution risk,” writes analyst Benjamin Burnett, Ph.D.
“We still see a path forward for ATA188, especially as a means to stabilize progressive MS patients, which the interim analysis did not address (it was wholly focused on EDSS improvement),” he said.
“But we expect that disease improvement will be a focal point when the Phase 2 top-lines in Oct. 2023 (meanwhile cash runway extends into fourth quarter of 2023),” he added.
Dr. Burnett said that while he only lowered ATA188’s probability of success slightly by 5%, “we’d like to see the balance sheet improve before getting more positive on what we ultimately believe is a high-risk/ high-reward setup.”