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, 2023


☐	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

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;

•

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;

•

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.

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.

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.

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.

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