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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, 2023

 

OR

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 October 27, 2023 was 101,922,250 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 Income (Loss)

7

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

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

35

 

 

 

Item 4.

Controls and Procedures

36

 

 

 

PART II.

OTHER INFORMATION

37

 

 

 

Item 1.

Legal Proceedings

37

 

 

 

Item 1A.

Risk Factors

37

 

Item 6.

Exhibits

81

 

 

 

Signatures

82

 

 

 

 

2


 

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 our ATA188 and ATA3219 programs;
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) for tab-cel® for patients with Epstein-Barr virus with post-transplant lymphoproliferative disease (EBV+ PTLD);
the potential indications for our product and product candidates;
commercialization of tab-cel (Ebvallo™ in the United Kingdom (UK) and the European Union (EU)) worldwide and our amended and restated Commercialization Agreement with Pierre Fabre Medicament, including potential milestone and royalty payments under the agreement (Ebvallo in the UK and the EU subject to the Purchase and Sale Agreement with HCR Molag Fund, L.P.);
our Purchase and Sale Agreement and related transactions with HCR Molag Fund, L.P.;
our Commercial Manufacturing Services Agreement with Charles River Laboratories, Inc. (CRL) and other agreements we may enter into with CRL;
our Master Services and Supply Agreement and related transactions with FUJIFILM Diosynth Biotechnologies California, Inc.;
our expectations regarding the potential commercial market opportunities, market size and the size of the patient populations for our product and product candidates;
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, including our going concern assessment;
our ability to enter into favorable commercialization arrangements with third parties to commercialize our product candidates;
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 preclinical studies, supplies and other services;
the scope of protection we are able to obtain and maintain for the intellectual property rights covering our product and product candidates;
our financial performance;
our election to rely on reduced reporting and disclosure requirements available to smaller reporting companies may make our common shares less attractive to investors;
developments and projections relating to our competitors and our industry;
our ability to have our product and product candidates manufactured for our clinical studies or for commercial sale, including at commercially reasonable values;
the impact of public health emergencies, such as COVID-19, to our business and operations, as well as the businesses and operations of third parties on which we rely;

3


 

the impact of our workforce reductions on our ability to attract, retain and motivate qualified personnel and on our business, operations, and financial condition; and
timing and costs related to the 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 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 under the heading “1A. Risk Factors” and elsewhere in this report and include, among others:

we have incurred substantial losses since our inception and anticipate that we will continue to incur substantial losses for the foreseeable future;
we have earned limited commercialization revenues to date, and we may never achieve profitability;
we are generally early in our development efforts and have only a small number of product candidates in clinical development, and all of our other product candidates are still in preclinical development. If we or our collaborators are unable to successfully develop, manufacture and commercialize our product or product candidates or experience significant delays in doing so, our business may be materially harmed;
we will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or manufacturing efforts;
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 involves a lengthy and expensive process with an uncertain outcome;
our T-cell immunotherapy product and product candidates and our next-generation CAR T programs represent new therapeutic approaches that could result in heightened regulatory scrutiny, delays in clinical development 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 and 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;
we have been affected by and could be adversely affected in the future by the effects of health epidemics and pandemics, such as the COVID-19 pandemic, which 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;
if we are unable to obtain and maintain sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our ability to commercialize our product candidates successfully and to compete effectively may be adversely affected;

4


 

our principal stockholders own a significant percentage of our stock and will be able to exert control or significant influence over matters subject to stockholder approval;
our workforce reductions may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business; and
maintaining clinical and commercial timelines is dependent on our end-to-end supply chain network to support manufacturing; if we experience problems with our third party suppliers or CMOs, development and/or commercialization of our product and product candidates may be adversely affected.

5


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

64,791

 

 

$

92,942

 

Short-term investments

 

 

37,617

 

 

 

149,877

 

Restricted cash

 

 

146

 

 

 

146

 

Accounts receivable

 

 

163

 

 

 

40,221

 

Inventories

 

 

6,591

 

 

 

1,586

 

Other current assets

 

 

9,388

 

 

 

10,308

 

Total current assets

 

 

118,696

 

 

 

295,080

 

Property and equipment, net

 

 

4,628

 

 

 

6,300

 

Operating lease assets

 

 

59,175

 

 

 

68,022

 

Other assets

 

 

6,289

 

 

 

7,018

 

Total assets

 

$

188,788

 

 

$

376,420

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

6,511

 

 

$

6,871

 

Accrued compensation

 

 

14,430

 

 

 

17,659

 

Accrued research and development expenses

 

 

23,968

 

 

 

24,992

 

Deferred revenue

 

 

11,611

 

 

 

8,000

 

Other current liabilities

 

 

22,569

 

 

 

21,394

 

Total current liabilities

 

 

79,089

 

 

 

78,916

 

Deferred revenue – long-term

 

 

73,929

 

 

 

77,000

 

Operating lease liabilities – long-term

 

 

48,508

 

 

 

58,064

 

Liability related to the sale of future revenues – long-term

 

 

33,252

 

 

 

30,236

 

Other long-term liabilities

 

 

4,848

 

 

 

5,564

 

Total liabilities

 

 

239,626

 

 

 

249,780

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock—$0.0001 par value, 500,000 shares authorized as of September 30,
   2023 and December 31, 2022;
101,922 and 95,927 shares issued and outstanding
   as of September 30, 2023 and December 31, 2022, respectively

 

 

10

 

 

 

10

 

Additional paid-in capital

 

 

1,858,423

 

 

 

1,821,721

 

Accumulated other comprehensive (loss) income

 

 

(571

)

 

 

(2,067

)

Accumulated deficit

 

 

(1,908,700

)

 

 

(1,693,024

)

Total stockholders’ equity (deficit)

 

 

(50,838

)

 

 

126,640

 

Total liabilities and stockholders’ equity (deficit)

 

$

188,788

 

 

$

376,420

 

See accompanying notes to the condensed consolidated financial statements.

6


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Commercialization revenue

 

$

2,020

 

 

$

 

 

$

3,697

 

 

$

 

License and collaboration revenue

 

 

118

 

 

 

4,459

 

 

 

624

 

 

 

63,352

 

Total revenue

 

 

2,138

 

 

 

4,459

 

 

 

4,321

 

 

 

63,352

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of commercialization revenue

 

 

2,615

 

 

 

 

 

 

5,726

 

 

 

 

Research and development expenses

 

 

56,888

 

 

 

70,157

 

 

 

175,185

 

 

 

210,018

 

General and administrative expenses

 

 

12,247

 

 

 

18,924

 

 

 

39,454

 

 

 

58,308

 

Total costs and operating expenses

 

 

71,750

 

 

 

89,081

 

 

 

220,365

 

 

 

268,326

 

Loss from operations

 

 

(69,612

)

 

 

(84,622

)

 

 

(216,044

)

 

 

(204,974

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,218

 

 

 

973

 

 

 

4,715

 

 

 

1,904

 

Interest expense

 

 

(1,395

)

 

 

(123

)

 

 

(4,109

)

 

 

(256

)

Gain on sale of ATOM Facility

 

 

 

 

 

 

 

 

 

 

 

50,237

 

Other income (expense), net

 

 

(27

)

 

 

(309

)

 

 

(234

)

 

 

(631

)

Total other income (expense), net

 

 

(204

)

 

 

541

 

 

 

372

 

 

 

51,254

 

Loss before provision for (benefit from) income taxes

 

 

(69,816

)

 

 

(84,081

)

 

 

(215,672

)

 

 

(153,720

)

Provision for (benefit from) income taxes

 

 

(19

)

 

 

10

 

 

 

4

 

 

 

10

 

Net loss

 

$

(69,797

)

 

$

(84,091

)

 

$

(215,676

)

 

$

(153,730

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

 

362

 

 

 

(341

)

 

 

1,496

 

 

 

(2,591

)

Comprehensive loss

 

$

(69,435

)

 

$

(84,432

)

 

$

(214,180

)

 

$

(156,321

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$

(0.66

)

 

$

(0.82

)

 

$

(2.05

)

 

$

(1.51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted-average shares outstanding

 

 

106,401

 

 

 

102,423

 

 

 

105,163

 

 

 

101,590

 

See accompanying notes to the condensed consolidated financial statements.

7


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

For the Nine Months Ended September 30, 2023

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity (Deficit)

 

Balance as of January 1, 2023

 

 

95,927

 

 

$

10

 

 

$

1,821,721

 

 

$

(2,067

)

 

$

(1,693,024

)

 

$

126,640

 

Issuance of common stock through ATM facilities, net of commissions and offering costs of $97

 

 

148

 

 

 

 

 

 

590

 

 

 

 

 

 

 

 

 

590

 

RSU settlements, net of shares withheld

 

 

463

 

 

 

 

 

 

(93

)

 

 

 

 

 

 

 

 

(93

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,764

 

 

 

 

 

 

 

 

 

11,764

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(74,771

)

 

 

(74,771

)

Unrealized gain (loss) on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

830

 

 

 

 

 

 

830

 

Balance as of March 31, 2023

 

 

96,538

 

 

$

10

 

 

$

1,833,982

 

 

$

(1,237

)

 

$

(1,767,795

)

 

$

64,960

 

Exercise of pre-funded warrants

 

 

2,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSU settlements, net of shares withheld

 

 

1,074

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Issuance of common stock pursuant to employee stock awards

 

 

574

 

 

 

 

 

 

747

 

 

 

 

 

 

 

 

 

747

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

12,552

 

 

 

 

 

 

 

 

 

12,552

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(71,108

)

 

 

(71,108

)

Unrealized gain (loss) on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

304

 

 

 

 

 

 

304

 

Balance as of June 30, 2023

 

 

101,102

 

 

$

10

 

 

$

1,847,280

 

 

$

(933

)

 

$

(1,838,903

)

 

$

7,454

 

RSU settlements, net of shares withheld

 

 

820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,143

 

 

 

 

 

 

 

 

 

11,143

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69,797

)

 

 

(69,797

)

Unrealized gain (loss) on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

362

 

 

 

 

 

 

362

 

Balance as of September 30, 2023

 

 

101,922

 

 

$

10

 

 

$

1,858,423

 

 

$

(571

)

 

$

(1,908,700

)

 

$

(50,838

)

 

 

 

 

 

 

 

 

 

 

 

 

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) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 (loss) 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) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

See accompanying notes to the condensed consolidated financial statements.

8


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(215,676

)

 

$

(153,730

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Gain on sale of ATOM Facility

 

 

 

 

 

(50,237

)

Stock-based compensation expense

 

 

35,459

 

 

 

42,475

 

Depreciation and amortization expense

 

 

3,624

 

 

 

4,398

 

Accretion of liability related to sale of future revenues

 

 

3,729