A mid-October computer glitch led to one of the stranger IPO stories in recent memory. An obscure drug company saw its shares incorrectly priced at $200,000 apiece, reflecting a market value of $3.9 trillion, according to Bloomberg. It’s hard to line up demand for shares when that kind of valuation is already in place.

It’s a good thing that the error was quickly fixed. Shares of Atara Biotherapeutics, Inc. (Nasdaq: ATRA) were eventually priced at $11 a share, zoomed to nearly $30 a share in early November, and have recently back-slid toward the $20 mark on profit-taking. At current prices, this biotech holds a great deal of appeal.

Atara, which was spun off from biotech behemoth Amgen, Inc. (Nasdaq: AMGN) in 2012, is pursuing drug treatments for muscle wasting conditions and cancer.

The company’s lead drug compound, PINTA 745, has progressed into Phase II clinical trials. The Phase I study showed  that the drug markedly increased muscle mass in patients with end-stage kidney disease who developed protein energy wasting (PEW) syndrome, a condition of increasing frailty and muscle shrinkage. PINTA 745 aims to improve these patients’ quality of life by enhancing their physical strength.

The potential market opportunity is significant: Atara’s management estimates there are more than 800,000 end-stage kidney disease patients with PEW worldwide, and current treatments are lacking.

#-ad_banner-#Atara expects the 40-patient Phase II trial to be completed in the second half of 2015. If the robust results from the first trial are confirmed, then shares should get a nice pop. The trial could help in identifying other markets for PINTA 745 as well, such as orthopedics, inflammatory disease, age-related muscle loss and weight loss related to cancer, management says.

Atara also has a novel ovarian cancer drug, STM 434, though it’s not as far along. Sixty-six patients with ovarian cancer and other so-called solid tumors are enrolled in a Phase I trial, which is expected to begin soon.

What makes STM 434 novel? Animal studies show it can block a certain protein (Activin A) that is associated with solid tumor growth. This suggests STM 434 could be effective not only against ovarian cancer in general, but also other tumors  that don’t respond well to traditional treatments like chemotherapy.

Here, too, the commercial potential is vast. Ovarian cancer is the fifth leading cause of cancer-related death in American women, and there were more than 22,000 new cases in the United States last year, according to estimates by the National Cancer Institute.

Yet another potential revenue source for Atara is an exclusive option agreement with Memorial Sloan Kettering (MSK) Cancer Center. In September, the two entities agreed to jointly  develop and commercialize so-called T-cell therapies that harness the immune system against certain cancers and serious viral infections. Under the agreement, Atara has the option to acquire a worldwide license to market three of these therapies currently under development.

These include treatments for Epstein Barr virus, cytomegalovirus (a highly contagious virus that can cause mononucleosis-like symptoms) and Wilms Tumor 1 (a rare form of cancer that usually occurs in children). All three treatments are in Phase I or Phase II trials.

MSK receives cash and Atara common stock in return for the exclusivity. Assuming Atara exercises its option, MSK will also get an upfront licensing fee and be eligible for royalties and additional payments based on potential future sales.

As with any clinical-stage firm, Atara is unlikely to post revenue for several years, and the company is burning roughly $6 million in cash per quarter. Current cash on hand exceeds $100 million, thanks to the recent IPO. Still, additional capital raises may be necessary before that happens.

Risks to Consider: Early-stage biotech companies carry considerable risk, and Atara is no exception. Even though its drugs have thus far been be quite promising, they still must deliver solid results in later-stage clinical trials. If those trials don’t deliver robust results, then the stock could be a dud.

Action to Take –> Trading glitches aren’t how we usually identify promising stocks. But the one involving Atara Biotherapeutics could very well end up being a great tip. The company seems well on its way to capitalizing on some lucrative biotech niches. Interested investors should monitor the stock and consider establishing a position once the Phase II trial results on PINTA 745 are available, assuming of course those results are favorable.

Atara’s medicine has huge game-changing potential. If you want to learn more about investing ideas with the capability of drastically moving the markets — and possibly changing the world — then check out Game-Changing Stocks. We recently released a new report called “The Hottest Investment Opportunities For 2015.” To gain access to these revolutionary ideas, trends and investments, click here.