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Atara, a California-based biotechnology company, specializes in donor-derived cell therapies and is currently testing several for the treatment of various cancers and autoimmune diseases. While its lead therapy is already in Phase 3 trials and was recently submitted for approval in Europe, Atara’s multiple sclerosis treatment has recently drawn attention from analysts and investors.

The cell therapy targets B cells and plasma cells that have been infected by a virus called Epstein-Barr, which is thought to be associated with the development of multiple sclerosis. That hypothesis was strengthened in January with the publication of research linking the immune system response that destroys nerve fibers’ protective coating in multiple sclerosis with prior Epstein-Barr infection.

Atara is currently studying its treatment in a small, mid-stage study, which was set up to have an interim data check to assess whether initial results were meeting the company’s assumptions. But the trial’s monitoring committee found the available data didn’t support any specific conclusions and urged the company to run its study through the expected completion late next year.

On a conference call Tuesday evening, executives said they hadn’t reviewed the actual data, as the study remains blinded, but shared the committee’s conclusion that the six-month interim goal might not be a reliable gauge of their treatment’s potential.

Atara did note that the committee’s review found no safety concerns, however.

The update “didn’t inspire confidence in the program,” analysts at Evercore ISI wrote in a note to clients, adding that they view the drug’s development as a “high-risk gamble.”

“Literally all the emails and investor commentary I received on the news last night were negative, some very, very negative,” wrote Salim Syed, an analyst at Mizuho Securities USA who holds a “buy” rating on the stock, in a note.

Shares in Atara fell by 55% during Wednesday morning trading, erasing more than $400 million in market value.

Atara plans to partner with another drugmaker on Phase 3 development of its treatment, but executives said Tuesday that they don’t plan to share the interim analysis data with potential partners given its inconclusive nature.

Full one-year data from the study, which will enroll more than 80 patients, are expected by October 2023.