Amgen, Kleiner Perkins Spin-Out Atara Sails Into The Spotlight

Launched in fall 2012 via a partnership between Amgen and Kleiner Perkins Caufield & Byers, the Bay Area biotech has three subsidiary companies housing six biologic assets that used to belong to Amgen. With two financing rounds this year totaling $58.5 million, three candidates are slated to enter the clinic by 2015.

Atara Biotherapeutics Inc., a drug developer spun out of Amgen Inc. last year, has revealed new details about its programs, as well as the $58.5 million it has secured in two rounds of funding from venture investors.

Founded in September 2012 and launched a month later, the Brisbane, Calif.-based Atara closed an initial $20 million Series A round of funding in March 2013; founding investor Kleiner Perkins Caufield & Byers joined a syndicate including Alexandria Venture Investments, DAG Ventures, and Domain Associates in the round [See Deal]. The group expanded for Atara’s new Series B round, a $38.5 million cash infusion that includes Amgen Ventures, Celgene Corp., and crossover fund EcoR1. The round is still open, and Atara is aiming for a new investor to join the group within 90 days, according to CEO Isaac Ciechanover.

Atara was established to house a set of six assets that formerly belonged to Amgen. According to Ciechanover, a former Kleiner Perkins partner who helped create Atara, all of the compounds share some commonality – they’re all part of the transforming growth factor-beta family – but each is unique, and none is considered a backup to any of the others.

The arrangement allowed Amgen to share risk with the venture syndicate while retaining some upside if the compounds should succeed in the clinic. Ciechanover said it was important for Amgen that Atara earmarked funding for more than one asset, rather than concentrating resources behind just one, with a management team whose expertise enabled them to develop all the compounds.

Further Exploring The Clinic

The funding will support human trials on the first three programs, one of which is already in the clinic. The farthest along is PINTA745, previously known as AMG745, a myostatin inhibitor believed to prevent muscle wasting in patients with a variety of diseases. Amgen had previously conducted three Phase I studies of the drug, including two in healthy volunteers and one to combat cachexia in prostate cancer patients. Atara has already dosed the first patient in a Phase II trial of the compound to treat protein energy wasting, a type of muscle loss found in end-stage renal disease patients.

PINTA745 will be housed in its own subsidiary company, one of three under the Atara umbrella. Atara will operate Nina Biotherapeutics Inc., Pinta Therapeutics Inc., and Santa Maria Biotherapeutics Inc.; each will contain programs at different stages of development, according to Ciechanover. Pinta is the only single-asset company, with only PINTA745; Nina has two programs, while Santa Maria has three. The subsidiary companies’ Columbus-inspired names came from a white paper concerning “the new world of drug discovery,” Ciechanover added.

The next program to enter the clinic will be Santa Maria’s STM434, an activin inhibitor with potential in several types of solid-tumor cancers. Atara plans to submit an Investigational New Drug application to FDA sometime during the first half of 2014, with a goal of beginning a Phase I trial of the drug in ovarian cancer.

Ciechanover said NINA842, an antibody that also inhibits myostatin, is about 18 months from the clinic. He said the company decided that it would be a better candidate for a cancer cachexia indication, compared to Pinta’s compound. The round is designed to support trials on all three candidates through the end of 2015.

Myostatin inhibition has frustrated drug researchers before. Wyeth halted development of the myostatin-inhibiting antibody stalumumab, also known as MYO-029, in 2008. The drug was well-tolerated but failed to improve muscle function during a Phase I/II trial in muscular dystrophy patients; Wyeth said it would consider developing the drug in other indications instead.

Pfizer Inc., which bought Wyeth in 2009, has just begun a Phase I trial of PF-06252616, a myostatin-inhibiting antibody. Meanwhile, Acceleron Pharma Inc. and Shire PLC, ended a Phase II study of ACE-031 in 2011, and later said they would not restart research on that myostatin inhibitor; Shire had paid $45 million upfront in 2010 for rights to a group of molecules including ACE-031, but ended the partnership this year (Also see "Shire Finds Another Orphan Opportunity, Licenses Acceleron's DMD Drug" - Pink Sheet, 9 Sep, 2010.).

Yet Another Asset-Focused Structure

Atara is the latest experiment with asset-focused models, which typically involve virtual companies that are set up to house individual compounds. Doing so can streamline the process of partnering or selling rights to the drugs, since they aren’t tied up with other assets, management or other personnel. Most of the experiments have been driven by venture investors.

For example, Index Ventures, which sold an asset from PanGenetics BV to Abbott Laboratories Inc. for $170 million up front in 2009, has since launched its own asset-focused fund, the €150 million Index Life VI, with partners GlaxoSmithKline PLC and Johnson & Johnson (Also see "Backing New Index Fund, GSK, J&J Buy Into Asset-Centric Vision Of Biotech Future" - Pink Sheet, 21 Mar, 2012.). It’s one of several firms attempting asset-focused strategies; Atlas Venture’s Atlas Venture Development Corp., CMEA’s Velocity Pharmaceutical Development, and Versant Ventures’ multiple Inception Sciences Inc. companies are testing similar models ( (Also see "Tigercat Pharma Results From A Regional Partnership For CMEA's Velocity" - Pink Sheet, 20 Aug, 2013.) and (Also see "Series A Financing For Annovation Includes Potential Buyout By TMC" - Pink Sheet, 12 Sep, 2012.)).

In Atara’s case, the umbrella company will distribute resources to the unmanned “sister” companies. Ciechanover said Nina, Pinta and Santa Maria all have separate valuations and capital allotments, while Atara has a management services agreement with each one. Atara currently employs six people; a seventh will be hired soon, Ciechanover said.

Ciechanover said the idea was to “preserve value and optionality” for each asset, though he declined to speculate on Atara’s future partnering strategy. He said the structure was created to allow for Atara to obtain additional assets, which could be housed in either the existing “sister” companies or new ones.

While Celgene often takes options on start-up compounds when it makes investments, Ciechanover said it was a “purely financial” investor in Atara’s Series B round. Amgen did not make a cash investment in the Series A round, but it has held an equity stake in Atara since its inception; the Amgen Ventures unit invested only in the Series B.