ATRA Stock Hits Five-Year Low on Goldman Bear Note

The shares of drugmaker Atara Biotherapeutics Inc (NASDAQ:ATRA) are hurting today, following a scathing bear note from Goldman Sachs. The analyst downgraded the stock to "sell" from "neutral," and slashed its price target to $9 from $14 -- a roughly 34% discount to last night's close. Goldman cited Atara's lack of near-term catalysts and raised questions about the company's clinical programs -- foreseeing limited commercial opportunity for its tab-cel therapy, used to treat patients with Epstein-Barr virus.

ATRA dipped way lower earlier today, breaching recent support at the $12 region, and hitting a nearly five-year low of $11.50. Looking more broadly, the security has lost more than 60% since suffering a massive post-earnings bear gap in mid-May, and a recent attempt at a breakout was swiftly capped by the 80-day moving average. The equity has managed to recoup some of these losses at midday, though, and is now down 2.7% at $13.21.

Despite this recent negative price action, analysts remain quite bullish, which could lead to even more downgrades. Prior to today, ATRA held six "strong buy" ratings, compared to only two "holds." What's more, the consensus 12-month price target of $31.71 more than doubles current levels. 

While absolute options volume is light, Goldman's downgrade has lit up ATRA's options pits, with 214 puts and nearly 700 calls across the tape so far -- nine times what's typically seen at this point. The October 15 call is most active, while it looks like bears are buying to open the deep out-of-the-money December 2.50 put. 

Short sellers have been falling off the bearish bandwagon, with short interest down 4.6% in the last reporting period. The 8.5 million shares sold short still represent a solid 27.8% of the stock's float, though, and over two weeks of trading, at ATRA's average pace. Today, however, the equity has landed itself on the Short Sale Restricted (SSR) list.