Atara Biotherapeutics(ATRA) - 2019 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for the period ended June 30, 2019, detail the company's financial position, operational results, and cash flows, showing a significant increase in net loss driven by higher research and development and general administrative expenses, a decrease in cash and short-term investments, and increased cash usage in operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $59,159 | $60,698 | | Short-term investments | $130,976 | $248,933 | | Total current assets | $201,139 | $321,489 | | Total assets | $274,144 | $391,839 | | Liabilities & Equity | | | | Total current liabilities | $25,803 | $39,979 | | Total liabilities | $41,865 | $52,982 | | Total stockholders' equity | $232,279 | $338,857 | | Total liabilities and stockholders' equity | $274,144 | $391,839 | Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $52,251 | $33,387 | $100,919 | $61,847 | | General and administrative | $23,284 | $19,236 | $42,507 | $33,228 | | Loss from operations | ($75,535) | ($52,623) | ($143,426) | ($95,075) | | Net loss | ($74,328) | ($50,883) | ($140,585) | ($92,326) | | Basic and diluted net loss per share | ($1.60) | ($1.15) | ($3.04) | ($2.20) | Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($124,789) | ($74,256) | | Net cash provided by (used in) investing activities | $117,849 | ($253,794) | | Net cash provided by financing activities | $5,401 | $352,030 | | (Decrease) increase in cash, cash equivalents and restricted cash | ($1,539) | $23,980 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business strategy, pipeline progress, financial results, and liquidity, highlighting the advancement of tab-cel® through Phase 3 trials, significant increases in operating expenses, and the expectation that a July 2019 public offering will fund operations into 2021 Overview and Pipeline Atara is a leading allogeneic T-cell immunotherapies company with a platform focused on cancer, autoimmune, and viral diseases, advancing tab-cel® in Phase 3 for EBV+ PTLD with a planned BLA submission in the second half of 2020, and developing ATA188/190 for multiple sclerosis and a next-generation CAR T program - The company's lead product, tab-cel®, is in Phase 3 development for EBV+ PTLD, with plans to initiate a Biologics License Application (BLA submission) in the second half of 2020[91][92] - The pipeline includes ATA188 (allogeneic) and ATA190 (autologous) for multiple sclerosis, with initial efficacy results for ATA188 expected in the second half of 2019[96] - Atara is advancing a next-generation CAR T program, with an IND planned for autologous ATA2271 in advanced mesothelioma in 2020[97][98] Results of Operations For the three and six months ended June 30, 2019, operating expenses increased significantly compared to 2018, with research and development expenses rising to $52.3 million for the quarter and $100.9 million for the six-month period, driven by higher costs for tab-cel® Phase 3 studies, ATA188/190 MS programs, and increased headcount Research and Development Expenses by Program (in thousands) | Program | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Tab-cel® expenses | $11,252 | $8,089 | $22,891 | $17,134 | | ATA188, ATA190 and other | $9,102 | $6,855 | $15,208 | $11,179 | | Employee and overhead | $31,897 | $18,443 | $62,820 | $33,534 | | Total R&D Expenses | $52,251 | $33,387 | $100,919 | $61,847 | - General and administrative expenses increased to $42.5 million for the six months ended June 30, 2019, from $33.2 million in the prior-year period, primarily due to increased headcount and related compensation costs[116] Liquidity and Capital Resources As of June 30, 2019, Atara had $190.1 million in cash, cash equivalents, and short-term investments, with management expecting that existing cash combined with $140.6 million in net proceeds from a July 2019 underwritten public offering will be sufficient to fund planned operations into 2021 - The company completed an underwritten public offering in July 2019, raising aggregate net proceeds of approximately $140.6 million[119] - Management expects that cash, cash equivalents, and short-term investments as of June 30, 2019, together with the proceeds from the July 2019 offering, will be sufficient to fund planned operations into 2021[121][129] - During the first six months of 2019, the company sold 359,234 shares under its ATM Facility for gross proceeds of $8.0 million[118] Quantitative and Qualitative Disclosures about Market Risk The company states that there were no material changes to its market risk disclosures, including interest rate risk and foreign currency exchange rate risk, during the six months ended June 30, 2019, from what was reported in its 2018 Annual Report on Form 10-K - There were no material changes to the company's market risk disclosures regarding interest rate and foreign currency exchange rate risk during the six months ended June 30, 2019[138] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2019, with no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[139] - No changes in internal control over financial reporting occurred during the six months ended June 30, 2019, that have materially affected, or are reasonably likely to materially affect, internal controls[142] PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently involved in any material legal proceedings - The company reports no material legal proceedings[144] Risk Factors This section details numerous risks that could materially harm the company's business, including a history of substantial financial losses and the need for additional capital, the unproven nature of its T-cell immunotherapy platform, reliance on third parties for manufacturing, challenges in protecting intellectual property, and significant competition - Financial risks include a history of substantial losses ($667.6 million accumulated deficit as of June 30, 2019) and the need for substantial additional financing to achieve goals[147][154] - Development risks center on the novel and unproven nature of T-cell immunotherapy, which could result in heightened regulatory scrutiny, clinical trial delays, or failure to receive approval[170] - The company faces manufacturing risks related to scaling up complex cellular therapy processes, potential contamination, and reliance on a limited number of contract manufacturing organizations (CMOs)[210][213] - Commercialization success depends on gaining market acceptance, securing adequate reimbursement from payors, and competing with established therapies and companies with greater resources[258][260][272] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None reported[323] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[323] Mine Safety Disclosures This item is not applicable to the company - Not applicable[324] Other Information The company reports no other information for this period - None reported[324] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the company's amended and restated certificate of incorporation and bylaws, executive employment agreements, and certifications by the CEO and CFO