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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, 2024

 

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 November 6, 2024 was 5,759,750 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

26

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

37

 

 

 

Item 4.

Controls and Procedures

37

 

 

 

PART II.

OTHER INFORMATION

38

 

 

 

Item 1.

Legal Proceedings

38

 

 

 

Item 1A.

Risk Factors

38

 

 

 

 

 

Item 5.

 

Other Information

 

84

 

 

 

 

 

Item 6.

Exhibits

85

 

 

 

Signatures

86

 

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 ATA3219 program;
the likelihood and timing of regulatory submissions or related approvals for our product candidates, including the 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), the European Economic Area (EEA) and Switzerland) 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, the EEA and Switzerland 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, including our ability to enter into a new drug supply agreement with CRL on terms favorable or acceptable to us, or at all;
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, contract manufacturing organizations (CMOs) 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;
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 the manufacturing facilities of our CMOs 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 have one approved product, Ebvallo, in the EEA, the UK and Switzerland. We are generally early in our development efforts and have only one product candidate 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 on terms acceptable to us 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;
the proposed revision of the European legislation on pharmaceuticals could lead to uncertainties over the regulatory framework that will be applicable to medicinal products in the EU, including orphan medicinal products;

4


 

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;
we qualify as a “smaller reporting company” and a “non-accelerated filer,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to such companies could make our stock less attractive to investors;
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,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

46,453

 

 

$

25,841

 

Short-term investments

 

 

20,736

 

 

 

25,884

 

Restricted cash

 

 

146

 

 

 

146

 

Accounts receivable

 

 

1,335

 

 

 

34,108

 

Inventories

 

 

13,980

 

 

 

9,706

 

Other current assets

 

 

9,205

 

 

 

6,184

 

Total current assets

 

 

91,855

 

 

 

101,869

 

Property and equipment, net

 

 

1,661

 

 

 

3,856

 

Operating lease assets

 

 

45,833

 

 

 

54,935

 

Other assets

 

 

3,357

 

 

 

4,844

 

Total assets

 

$

142,706

 

 

$

165,504

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,146

 

 

$

3,684

 

Accrued compensation

 

 

7,768

 

 

 

11,519

 

Accrued research and development expenses

 

 

6,077

 

 

 

17,364

 

Deferred revenue

 

 

116,344

 

 

 

77,833

 

Other current liabilities

 

 

23,644

 

 

 

31,826

 

Total current liabilities

 

 

155,979

 

 

 

142,226

 

Deferred revenue – long-term

 

 

470

 

 

 

37,562

 

Operating lease liabilities – long-term

 

 

35,243

 

 

 

45,693

 

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

 

 

37,584

 

 

 

34,623

 

Other long-term liabilities

 

 

3,969

 

 

 

4,631

 

Total liabilities

 

 

233,245

 

 

 

264,735

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock—$0.0001 par value, 500,000 shares authorized as of September 30,
   2024 and December 31, 2023;
5,740 and 4,258 shares issued and outstanding
   as of September 30, 2024 and December 31, 2023, respectively

 

 

1

 

 

 

 

Additional paid-in capital

 

 

1,951,298

 

 

 

1,870,123

 

Accumulated other comprehensive (loss) income

 

 

22

 

 

 

(204

)

Accumulated deficit

 

 

(2,041,860

)

 

 

(1,969,150

)

Total stockholders’ equity (deficit)

 

 

(90,539

)

 

 

(99,231

)

Total liabilities and stockholders’ equity (deficit)

 

$

142,706

 

 

$

165,504

 

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,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Commercialization revenue

 

$

40,190

 

 

$

2,020

 

 

$

96,187

 

 

$

3,697

 

License and collaboration revenue

 

 

 

 

 

118

 

 

 

 

 

 

624

 

Total revenue

 

 

40,190

 

 

 

2,138

 

 

 

96,187

 

 

 

4,321

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of commercialization revenue

 

 

7,602

 

 

 

2,615

 

 

 

14,214

 

 

 

5,726

 

Research and development expenses

 

 

43,924

 

 

 

56,888

 

 

 

122,762

 

 

 

175,185

 

General and administrative expenses

 

 

10,421

 

 

 

12,247

 

 

 

30,446

 

 

 

39,454

 

Total costs and operating expenses

 

 

61,947

 

 

 

71,750

 

 

 

167,422

 

 

 

220,365

 

Loss from operations

 

 

(21,757

)

 

 

(69,612

)

 

 

(71,235

)

 

 

(216,044

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

459

 

 

 

1,218

 

 

 

1,513

 

 

 

4,715

 

Interest expense

 

 

(1,183

)

 

 

(1,395

)

 

 

(3,598

)

 

 

(4,109

)

Other income (expense), net

 

 

555

 

 

 

(27

)

 

 

617

 

 

 

(234

)

Total other income (expense), net

 

 

(169

)

 

 

(204

)

 

 

(1,468

)

 

 

372

 

Loss before provision for (benefit from) income taxes

 

 

(21,926

)

 

 

(69,816

)

 

 

(72,703

)

 

 

(215,672

)

Provision for (benefit from) income taxes

 

 

(17

)

 

 

(19

)

 

 

7

 

 

 

4

 

Net income (loss)

 

$

(21,909

)

 

$

(69,797

)

 

$

(72,710

)

 

$

(215,676

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

36

 

 

 

362

 

 

 

226

 

 

 

1,496

 

Comprehensive income (loss)

 

$

(21,873

)

 

$

(69,435

)

 

$

(72,484

)

 

$

(214,180

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(2.93

)

 

$

(16.40

)

 

$

(11.34

)

 

$

(51.27

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted-average shares outstanding

 

 

7,466

 

 

 

4,256

 

 

 

6,414

 

 

 

4,207

 

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, 2024

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity (Deficit)

 

Balance as of January 1, 2024

 

 

4,258

 

 

$

 

 

$

1,870,123

 

 

$

(204

)

 

$

(1,969,150

)

 

$

(99,231

)

Issuance of pre-funded warrants to purchase common stock through a registered direct offering, net of offering costs of $177

 

 

 

 

 

 

 

$

14,823

 

 

 

 

 

 

 

 

 

14,823

 

Issuance of common stock through ATM facilities, net of commissions and offering costs of $168

 

 

493

 

 

 

 

 

 

9,312

 

 

 

 

 

 

 

 

 

9,312

 

RSU settlements, net of shares withheld

 

 

63

 

 

 

 

 

 

(6

)

 

 

 

 

 

 

 

 

(6

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

8,397

 

 

 

 

 

 

 

 

 

8,397

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,752

)

 

 

(31,752

)

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

 

 

 

 

 

 

 

 

 

 

 

149

 

 

 

 

 

 

149

 

Balance as of March 31, 2024

 

 

4,814

 

 

$

 

 

$

1,902,649

 

 

$

(55

)

 

$

(2,000,902

)

 

$

(98,308

)

RSU settlements, net of shares withheld

 

 

81

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Issuance of common stock pursuant to employee stock awards

 

 

9

 

 

 

 

 

 

113

 

 

 

 

 

 

 

 

 

113

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

6,336

 

 

 

 

 

 

 

 

 

6,336

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,049

)

 

 

(19,049

)

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

 

 

 

 

 

 

 

 

 

 

 

41

 

 

 

 

 

 

41

 

Balance as of June 30, 2024

 

 

4,904

 

 

$

 

 

$

1,909,097

 

 

$

(14

)

 

$

(2,019,951

)

 

$

(110,868

)

Issuance of common stock and pre-funded warrants to purchase common stock through a registered direct offering, net of offering costs of $220

 

 

759

 

 

$

1

 

 

$

35,779

 

 

 

 

 

 

 

 

 

35,780

 

RSU settlements, net of shares withheld

 

 

77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

6,422

 

 

 

 

 

 

 

 

 

6,422

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,909

)

 

 

(21,909

)

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

 

 

 

 

 

 

 

 

 

 

 

36

 

 

 

 

 

 

36

 

Balance as of September 30, 2024

 

 

5,740

 

 

$

1

 

 

$

1,951,298

 

 

$

22

 

 

$

(2,041,860

)

 

$

(90,539

)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

3,837

 

 

$

 

 

$

1,821,731

 

 

$

(2,067

)

 

$

(1,693,024

)

 

$

126,640

 

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

 

 

6

 

 

 

 

 

 

590

 

 

 

 

 

 

 

 

 

590

 

RSU settlements, net of shares withheld

 

 

19

 

 

 

 

 

 

(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

 

 

3,862

 

 

$

 

 

$

1,833,992

 

 

$

(1,237

)

 

$

(1,767,795

)

 

$

64,960

 

Exercise of pre-funded warrants

 

 

116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSU settlements, net of shares withheld

 

 

43

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Issuance of common stock pursuant to employee stock awards

 

 

23

 

 

 

 

 

 

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

 

 

4,044

 

 

$

-

 

 

$

1,847,290

 

 

$

(933

)

 

$

(1,838,903

)

 

$

7,454

 

RSU settlements, net of shares withheld

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

4,077

 

 

$

-

 

 

$

1,858,433

 

 

$

(571

)

 

$

(1,908,700

)

 

$

(50,838

)

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,

 

 

 

2024

 

 

2023

 

Operating activities

 

 

 

 

 

 

Net income (loss)

 

$

(72,710

)

 

$

(215,676

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

21,155

 

 

 

35,459

 

Depreciation and amortization expense

 

 

3,951

 

 

 

3,624

 

Accretion of liability related to sale of future revenues

 

 

3,180

 

 

 

3,729

 

Amortization (accretion) of investment premiums (discounts)

 

 

(30

)

 

 

(1,320

)

Non-cash operating lease expense

 

 

9,102

 

 

 

8,847

 

Other non-cash items, net

 

 

(340

)

 

 

148

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

32,773

 

 

 

40,058

 

Inventories

 

 

(4,274

)

 

 

(5,005

)

Other current assets

 

 

(3,135

)

 

 

920

 

Other assets

 

 

(254

)

 

 

(119

)

Accounts payable

 

 

(1,537

)

 

 

(319

)

Accrued compensation

 

 

(3,751

)

 

 

(3,229

)

Accrued research and development expenses

 

 

(11,287

)

 

 

(1,024

)

Other current liabilities

 

 

(10,446

)

 

 

607

 

Deferred revenue

 

 

1,419

 

 

 

540

 

Operating lease liabilities

 

 

(8,062

)

 

 

(9,953

)

Other long-term liabilities

 

 

 

 

 

142

 

Net cash used in operating activities

 

 

(44,246

)

 

 

(142,571

)

Investing activities

 

 

 

 

 

 

Purchases of short-term investments

 

 

(19,665

)

 

 

(83,647

)

Proceeds from maturities and sales of short-term investments

 

 

25,069

 

 

 

198,723

 

Purchases of property and equipment

 

 

(156

)

 

 

(1,179

)

Proceeds from sale of property and equipment

 

 

 

 

 

25

 

Net cash provided by (used in) investing activities

 

 

5,248

 

 

 

113,922

 

Financing activities

 

 

 

 

 

 

Proceeds from sale of common stock and pre-funded warrants in registered direct offerings, net

 

 

50,813

 

 

 

 

Proceeds from issuance of common stock through ATM facilities, net

 

 

9,348

 

 

 

590

 

Proceeds from employee stock awards

 

 

113

 

 

 

747

 

Taxes paid related to net share settlement of restricted stock units

 

 

 

 

 

(94

)

Principal payments on finance lease obligations

 

 

(657

)

 

 

(732

)

Other financing activities, net

 

 

(7

)

 

 

(13

)

Net cash provided by financing activities

 

 

59,610

 

 

 

498

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

20,612

 

 

 

(28,151

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

25,987

 

 

 

93,088

 

Cash, cash equivalents and restricted cash at end of period

 

$

46,599

 

 

$

64,937

 

Non-cash investing and financing activities

 

 

 

 

 

 

Property and equipment purchases included in accounts payable and other accrued liabilities

 

$

 

 

$

20

 

Accrued costs related to registered direct offering

 

$

210

 

 

$

 

Supplemental cash flow disclosure

 

 

 

 

 

 

Cash paid for interest

 

$

497

 

 

$

332

 

Cash paid for income taxes

 

$

24

 

 

$

2

 

See accompanying notes to the condensed consolidated financial statements.

9


 

Atara Biotherapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.
Description of Business

Atara Biotherapeutics, Inc. (Atara, we, our or the Company) was incorporated in August 2012 in Delaware. Atara is a leader in T-cell immunotherapy, leveraging its novel allogeneic Epstein-Barr Virus (EBV) T-cell platform to develop transformative therapies for patients with cancer and autoimmune disease.

We have several T-cell immunotherapies in clinical development and are progressing multiple next-generation allogeneic chimeric antigen receptor T-cell (CAR T) programs. Our most advanced T-cell immunotherapy program, tab-cel® (tabelecleucel), has received marketing authorization approval under the proprietary name Ebvallo™ by the European Commission (EC) for commercial sale and use in the European Economic Area (EEA), by the Medicines and Healthcare products Regulatory Agency (MHRA) for commercial sale and use in the United Kingdom (UK) and by Swissmedic for commercial sale and use in Switzerland. Tab-cel is currently in Phase 3 development in the US. In October 2021, we entered into a commercialization agreement (Pierre Fabre Commercialization Agreement) with Pierre Fabre Medicament (Pierre Fabre), as amended in September 2022, pursuant to which we granted to Pierre Fabre an exclusive, field-limited license to commercialize and distribute Ebvallo in Europe and select emerging markets in the Middle East, Africa, Eastern Europe and Central Asia (the Initial Territory), following regulatory approval. In October 2023, we amended and restated the Pierre Fabre Commercialization Agreement (A&R Commercialization Agreement). Pursuant to the A&R Commercialization Agreement, Pierre Fabre’s exclusive rights to research, develop, manufacture, commercialize and distribute tab-cel (Ebvallo) were expanded to include all other countries in the world (Additional Territory) in addition to the Initial Territory (Initial Territory and Additional Territory together, the Territory), subject to our performance of certain obligations. See Note 5 for further information. In December 2022, we sold a portion of our right to receive royalties and certain milestones in Ebvallo under the Pierre Fabre Commercialization Agreement to HCR Molag Fund L.P. (HCRx) for a total investment amount of $31.0 million, subject to a repayment cap between 185% and 250% of the total investment amount by HCRx. See Note 6 for further information.

We have licensed rights to T-cell product candidates from Memorial Sloan Kettering Cancer Center (MSK), rights related to our next-generation CAR T programs from MSK, and rights to know-how and technology from the Council of the Queensland Institute of Medical Research (QIMR Berghofer). See Note 8 for further information.

We and FUJIFILM Diosynth Biotechnologies California, Inc. (FDB) entered into a Master Services and Supply Agreement and related Statements of Work (collectively, the Fujifilm MSA), which became effective in April 2022 and could extend for up to ten years. Pursuant to the Fujifilm MSA, FDB will supply us with specified quantities of our cell therapy product candidates and any products approved by regulatory authorities, manufactured in accordance with cGMP standards. See Note 8 for further information.

2.
Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Atara and its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited interim condensed consolidated financial statements should therefore be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s condensed consolidated financial statements. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or any other future period. The condensed consolidated balance sheet as of December 31, 2023 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete consolidated financial statements.

10


 

June 2024 Reverse Stock Split

At our annual meeting of stockholders held on June 10, 2024, the stockholders of Atara approved a proposal to authorize our Board of Directors (the Board) to amend our Amended and Restated Certificate of Incorporation to effect a reverse stock split. The Board approved the reverse stock split on June 10, 2024 and, on June 20, 2024, we effected a 1-for-25 reverse stock split of our common stock. The par value and the authorized shares of the common stock were not adjusted as a result of the reverse stock split. All equity related information including per share amounts for all periods presented in these condensed consolidated financial statements and the notes thereto have been adjusted retroactively, where applicable, to reflect the effect of this reverse stock split.

Liquidity Risk

We have incurred significant operating losses since inception and have relied primarily on public and private equity financings and receipts from commercialization and license and collaboration agreements to fund our operations. As we continue to incur losses, our transition to profitability will depend on the successful development, approval and commercialization of product candidates and on the achievement of sufficient revenues to support our cost structure. We may never achieve sustained operating cash inflows or profitability.

Going Concern

We have incurred operating losses since inception and we expect that existing cash, cash equivalents and short-term investments as of September 30, 2024, will not be sufficient to fund our planned operations for at least 12 months from the date of issuance of these condensed consolidated financial statements. Although we anticipate the receipt of certain payments from the amended and restated Pierre Fabre Commercialization Agreement in 2025, such payments are contingent upon the approval of the tab-cel BLA, which is dependent upon the completion of specific development and regulatory activities by us and actions taken by third parties, and are, therefore, uncertain at this time.

To alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, we plan to secure additional capital, potentially through a combination of public or private security offerings; use of our ATM facility as described in Note 9; and/or strategic transactions. We may need to raise additional funding as required based on the status of our development programs and our projected cash flows. Although we have been successful in raising capital in the past, and expect to continue to raise capital as required, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all, or identify and enter into any strategic transactions that will provide the capital that we will require. If we are unable to obtain sufficient funding on acceptable terms, we could be forced to delay, limit, reduce or terminate preclinical studies, clinical studies or other development activities for one or more of our product candidates, which could have a material adverse effect on our business, results of operations, and financial condition. Accordingly, we have concluded that substantial doubt exists with respect to our ability to continue as a going concern for at least 12 months after the issuance of the accompanying condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. Significant estimates relied upon in preparing these financial statements include estimates related to revenue recognition, accrued research and development expenses, stock-based compensation expense, income taxes and the liability related to the sale of future revenues. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

We consider the applicability and impact of any recent Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB). Other than the ASUs listed below, all other ASUs were assessed and determined to be either not applicable to Atara or are expected to have minimal impact on our condensed consolidated financial statements.

11


 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendment requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Additionally, all disclosure requirements under the guidance are required for public entities with a single reportable segment and are to be applied retrospectively to all periods presented. We will adopt the amendments effective for the fiscal year ending December 31, 2024, and for interim periods within fiscal years beginning January 1, 2025. The adoption of ASU 2023-07 will not have a material impact on our consolidated financial statements and will consist of the inclusion of additional disclosures related to our single reportable segment in the notes to the consolidated financial statements. The amendments in this update do not affect the recognition, measurement or financial statement presentation of expenses.

In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhancements to certain income tax disclosures, most notably the income tax rate reconciliation and income taxes paid. We will adopt the amendments effective for the fiscal year ending December 31, 2025. We do not expect the adoption of this standard will have a material impact on our disclosures.

3.
Net Loss per Common Share

Basic net loss per common share is calculated by dividing net loss by the weighted-average number of shares of common stock and pre-funded warrants outstanding during the period, without consideration of common share equivalents. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock, pre-funded warrants and common share equivalents outstanding for the period. The pre-funded warrants are included in the computation of basic and diluted net loss per common share as the exercise price is negligible and the pre-funded warrants are fully vested and exercisable. Common share equivalents are only included in the calculation of diluted net loss per common share when their effect is dilutive.

Potential dilutive securities, which include unvested restricted stock units (RSUs), unvested performance-based RSUs and performance-based options to purchase common stock for which established performance criteria have been achieved as of the end of the respective periods, vested and unvested options to purchase common stock and shares to be issued under our employee stock purchase plan (ESPP), have been excluded from the computation of diluted net loss per common share as the effect is antidilutive. Therefore, the denominator used to calculate both basic and diluted net loss per common share is the same in all periods presented.

The following table represents the potential common shares issuable pursuant to outstanding securities as of the related period end dates that were excluded from the computation of diluted net loss per common share, as their inclusion would have an antidilutive effect:

 

 

 

 

 

 

 

As of September 30,

 

 

2024

 

 

2023

 

Unvested RSUs

 

495,996

 

 

 

338,244

 

Vested and unvested options

 

263,788

 

 

 

491,521

 

ESPP share purchase rights

 

34,511

 

 

 

18,942

 

Total

 

794,295

 

 

 

848,707

 

 

4.
Financial Instruments

Our financial assets are measured at fair value on a recurring basis using the following hierarchy to prioritize valuation inputs, in accordance with applicable U.S. GAAP:

Level 1: Quoted prices in active markets for identical assets or liabilities that we have the ability to access.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves.

Level 3: Inputs that are unobservable data points that are not corroborated by market data.

We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs. There have been no transfers between Level 1, Level 2 and Level 3 in any periods presented.

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Financial assets and liabilities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. U.S. Treasury, government agency and corporate debt obligations, commercial paper and asset-backed securities are valued primarily using market prices of comparable securities, bid/ask quotes, interest rate yields and prepayment spreads and are included in Level 2.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. We have no Level 3 financial assets or liabilities.

The following tables summarize the estimated fair value and related valuation input hierarchy of our available-for-sale securities as of each period end:

 

 

 

 

Total

 

 

Total

 

 

Total

 

 

Total

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

As of September 30, 2024:

 

Input Level

 

Cost

 

 

Gain

 

 

Loss

 

 

Fair Value

 

 

 

 

 

(in thousands)

 

Money market funds

 

Level 1

 

$

23,334

 

 

$

 

 

$

 

 

$

23,334

 

U.S. Treasury obligations

 

Level 2

 

 

40,472

 

 

 

24

 

 

 

 

 

$

40,496

 

Corporate debt obligations

 

Level 2

 

 

1,497

 

 

 

 

 

 

(2

)

 

$

1,495

 

Commercial paper

 

Level 2

 

 

495

 

 

 

 

 

 

 

 

$

495

 

Total available-for-sale securities

 

 

 

 

65,798

 

 

 

24

 

 

 

(2

)

 

 

65,820

 

Less: amounts classified as cash equivalents

 

 

 

 

(45,077

)

 

 

(7

)

 

 

 

 

 

(45,084

)

Amounts classified as short-term investments

 

 

 

$

20,721

 

 

$

17

 

 

$

(2

)

 

$

20,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

Total

 

 

Total

 

 

Total

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

As of December 31, 2023:

 

Input Level

 

Cost

 

 

Gain

 

 

Loss

 

 

Fair Value

 

 

 

 

 

(in thousands)

 

Money market funds

 

Level 1

 

$

14,376

 

 

$

 

 

$

 

 

$

14,376

 

U.S. Treasury obligations