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, 2024


☐	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

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;

•

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;

•

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.

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.

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.

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.

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.

Atara Biotherapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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.

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.

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.

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.

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

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.

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