10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36548

ATARA BIOTHERAPEUTICS, INC.

(Exact name of Registrant as specified in its Charter)


Delaware		46-0920988
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2380 Conejo Spectrum Street, Suite 200 Thousand Oaks, CA		91320
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (805) 623-4211

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share	ATRA	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the Registrant’s Common Stock as of November 1, 2022 was 94,878,670 shares.

ATARA BIOTHERAPEUTICS, INC.

INDEX


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets	6

	Condensed Consolidated Statements of Operations and Comprehensive Loss	7

	Condensed Consolidated Statements of Changes in Stockholders’ Equity	8

	Condensed Consolidated Statements of Cash Flows	9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	35

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35
Item 6.	Exhibits	78

	Signatures	79

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which represent our intent, belief or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “predict,” “plan,” “expect” or the negative or plural of these words or similar expressions. The forward-looking statements include, but are not limited to, statements about:

•

our expectations regarding the timing of initiating clinical studies, opening client sites, enrolling clinical studies and reporting results of clinical studies for our programs, including in light of the COVID-19 pandemic;

•

the likelihood and timing of regulatory submissions or related approvals for our product candidates, including the initiation, completion and expectations about the timing of approvals for a biologics license application (BLA) and our marketing authorization application (MAA) for tab-cel® for patients with Epstein-Barr virus with post-transplant lymphoproliferative disease (EBV+ PTLD);

•

the potential indications for our product candidates, if approved for commercial use;

•

the potential commercial market opportunities for our product candidates;

•

our Commercialization Agreement with Pierre Fabre Medicament, including potential milestone and royalty payments under the agreement;

•

our Master Services and Supply Agreement and related transactions with FUJIFILM Diosynth Biotechnologies California, Inc.;

•

our expectations regarding the potential market size and the size of the patient populations for our product candidates, if approved for commercial use;

•

estimates of our expenses, capital requirements and need for additional financing;

•

our expectation regarding the length of time that our existing capital resources will be sufficient to enable us to fund our planned operations;

•

our ability to enter into favorable commercialization arrangements with third parties to commercialize our product candidates, if approved for commercial use;

•

our ability to develop, acquire and advance product candidates into, and successfully complete, clinical studies;

•

the initiation, timing, costs, progress and results of future preclinical studies and clinical studies and our research and development programs;

•

our ability to enter into and maintain contracts with clinical research organizations, manufacturing organizations and other vendors for clinical and pre-clinical studies, supplies and other services;

•

the scope of protection we are able to obtain and maintain for the intellectual property rights covering our product candidates;

•

our financial performance;

•

developments and projections relating to our competitors and our industry;

•

our ability to have our product candidates manufactured for our clinical studies or, if approved, for commercial sale;

•

the impact of COVID-19 to our business and operations, as well as the businesses and operations of third parties on which we rely;

•

the impact of our reduction in workforce on our ability to attract and retain qualified personnel and to our business, operations and financial condition;

•

our ability to have manufactured approved products at commercially reasonable values; and

•

timing and costs related to qualification of our contract manufacturing organizations’ (CMO) manufacturing facilities for commercial production.

These statements are only current predictions and are subject to known and unknown risks, uncertainties, including, without limitation, risks and uncertainties associated with the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success; the COVID-19 pandemic, which may significantly impact (i) our business, research, clinical development plans and operations, including our operations in Southern California and Colorado and at our clinical trial sites, as well as the business or operations of our third-party manufacturers, contract research organizations or other third parties with whom we conduct business, (ii) our ability to access capital, and (iii) the value of our common stock; the sufficiency of our cash resources and need for additional capital, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading “1A. Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “Atara,” “Atara Biotherapeutics,” “Company,” “we,” “our,” and “us” means Atara Biotherapeutics, Inc. and, where appropriate, its subsidiaries.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. These risks are more fully described below. These risks include, among others:

•

we have incurred substantial cumulative losses since our inception and anticipate that we will continue to incur substantial losses for the foreseeable future;

•

we currently have no approved products and thus have no revenues from commercialization of any products and may never generate revenues from the commercial sale of products or achieve profitability;

•

we are generally early in our development efforts, have only a small number of product candidates in clinical development, and we will need to successfully complete preclinical and clinical testing of our product candidates before we can seek regulatory approval and potentially generate commercial sales;

•

we will require substantial additional financing to achieve our goals, which may not be available to us on acceptable terms, or at all;

•

our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel;

•

the results of preclinical studies or earlier clinical studies are not necessarily predictive of future results, and our existing product candidates in clinical studies, and any other product candidates we advance into clinical studies may not have favorable results in later clinical studies or receive regulatory approval;

•

clinical drug development, both in the U.S. and international jurisdictions, involves a lengthy and expensive process with an uncertain outcome and even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties;

•

our T-cell immunotherapy product candidates and our next-generation CAR T programs represent new therapeutic approaches that could result in heightened regulatory scrutiny or our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates;

•

there can be no assurance that we will achieve all of the anticipated benefits of the Fujifilm Transaction and we could face unanticipated challenges;

•

the market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small;

•

we may not be able to obtain or maintain orphan drug exclusivity for our product candidates;

•

the COVID-19 pandemic continues to impact our business and operations and could materially and adversely affect our business and operations in the future, as well as the businesses and operations of third parties on which we rely;

•

our success depends upon our ability to obtain and maintain sufficient intellectual property protection for our product candidates, and we may not be able to protect our intellectual property rights throughout the world;

•

our principal stockholders own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval;

•

our workforce reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business; and

•

we may not be able to obtain and maintain the relationships with third parties that are necessary to develop, commercialize and manufacture some or all of our product candidates.

Atara Biotherapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)


	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	65,114		$	106,084
Short-term investments		200,290			264,984
Restricted cash		1,346			194
Accounts receivable		249			986
Prepaid expenses and other current assets		16,047			12,373
Total current assets		283,046			384,621
Property and equipment, net		7,270			53,780
Operating lease assets		70,834			26,159
Restricted cash - long-term		—			1,200
Other assets		7,166			2,367
Total assets	$	368,316		$	468,127

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	11,296		$	17,368
Accrued compensation		17,605			25,150
Accrued research and development expenses		17,868			13,451
Deferred revenue		2,662			40,760
Other current liabilities		22,813			9,057
Total current liabilities		72,244			105,786
Deferred revenue - long-term		42,338			55,708
Operating lease liabilities - long-term		61,072			25,518
Other long-term liabilities		5,549			1,501
Total liabilities		181,203			188,513

Commitments and contingencies (Note 10)

Stockholders’ equity:
Common stock—$0.0001 par value, 500,000 shares authorized as of September 30, 2022 and December 31, 2021; 94,879 and 91,671 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		9			9
Additional paid-in capital		1,808,515			1,744,695
Accumulated other comprehensive (loss) income		(2,959	)		(368	)
Accumulated deficit		(1,618,452	)		(1,464,722	)
Total stockholders’ equity		187,113			279,614
Total liabilities and stockholders’ equity	$	368,316		$	468,127

See accompanying notes.

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
License and collaboration revenue	$	4,459		$	5,370		$	63,352		$	12,792
Operating expenses:
Research and development		70,157			70,333			210,018			202,867
General and administrative		18,924			19,849			58,308			56,984
Total operating expenses		89,081			90,182			268,326			259,851
Loss from operations		(84,622	)		(84,812	)		(204,974	)		(247,059	)
Other income (expense), net:
Gain on sale of ATOM Facility (See Note 7)		—			—			50,237			—
Interest and other income (expense), net		541			148			1,017			283
Total other income (expense), net		541			148			51,254			283
Loss before provision for income taxes		(84,081	)		(84,664	)		(153,720	)		(246,776	)
Provision for income taxes		10			—			10			16
Net loss	$	(84,091	)	$	(84,664	)	$	(153,730	)	$	(246,792	)
Other comprehensive gain (loss):
Net unrealized gain (loss) on available-for-sale securities		(341	)		(38	)		(2,591	)		(272	)
Comprehensive loss	$	(84,432	)	$	(84,702	)	$	(156,321	)	$	(247,064	)

Basic and diluted loss per common share	$	(0.82	)	$	(0.90	)	$	(1.51	)	$	(2.67	)

Basic and diluted weighted-average shares outstanding		102,423			93,602			101,590			92,411

See accompanying notes.

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(In thousands)


								Accumulated
	Common				Additional			Other						Total
	Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
For the Nine Months Ended September 30, 2022	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance as of January 1, 2022		91,671	$	9	$	1,744,695		$	(368	)	$	(1,464,722	)	$	279,614
Issuance of common stock through ATM facilities, net of commissions and offering costs of $419		1,320		—		20,516			—			—			20,516
RSU settlements, net of shares withheld		405		—		(616	)		—			—			(616	)
Issuance of common stock pursuant to employee stock awards		10		—		96			—			—			96
Stock-based compensation expense		—		—		14,335			—			—			14,335
Net loss		—		—		—			—			(88,105	)		(88,105	)
Unrealized gain (loss) on available-for-sale securities		—		—		—			(1,524	)		—			(1,524	)
Balance as of March 31, 2022		93,406	$	9	$	1,779,026		$	(1,892	)	$	(1,552,827	)	$	224,316
RSU settlements, net of shares withheld		647		—		(3	)		—			—			(3	)
Issuance of common stock pursuant to employee stock awards		303		—		1,309			—			—			1,309
Stock-based compensation expense		—		—		14,117			—			—			14,117
Net income		—		—		—			—			18,466			18,466
Unrealized gain (loss) on available-for-sale securities		—		—		—			(726	)		—			(726	)
Balance as of June 30, 2022		94,356	$	9	$	1,794,449		$	(2,618	)	$	(1,534,361	)	$	257,479
RSU settlements, net of shares withheld		517		—		(4	)		—			—			(4	)
Issuance of common stock pursuant to employee stock awards		6		—		47			—			—			47
Stock-based compensation expense		—		—		14,023			—			—			14,023
Net loss		—		—		—			—			(84,091	)		(84,091	)
Unrealized gain (loss) on available-for-sale securities		—		—		—			(341	)		—			(341	)
Balance as of September 30, 2022		94,879	$	9	$	1,808,515		$	(2,959	)	$	(1,618,452	)	$	187,113


								Accumulated
	Common				Additional			Other						Total
	Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
For the Nine Months Ended September 30, 2021	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance as of January 1, 2021		83,372	$	8	$	1,586,616		$	296		$	(1,124,581	)	$	462,339
Issuance of common stock through ATM facilities, net of commissions and offering costs of $139		146		—		2,382			—			—			2,382
RSU settlements, net of shares withheld		449		—		(1,231	)		—			—			(1,231	)
Issuance of common stock pursuant to employee stock awards		108		—		1,749			—			—			1,749
Stock-based compensation expense		—		—		12,268			—			—			12,268
Net loss		—		—		—			—			(78,335	)		(78,335	)
Unrealized gain (loss) on available-for-sale securities		—		—		—			(135	)		—			(135	)
Balance as of March 31, 2021		84,075	$	8	$	1,601,784		$	161		$	(1,202,916	)	$	399,037
RSU settlements, net of shares withheld		423		—		(13	)		—			—			(13	)
Issuance of common stock pursuant to employee stock awards		256		—		2,599			—			—			2,599
Stock-based compensation expense		—		—		13,807			—			—			13,807
Net loss