Atara Biotherapeutics(ATRA) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Atara Biotherapeutics' unaudited Q1 2025 and 2024 financial statements, detailing the shift to net income and ongoing liquidity challenges Item 1. Financial Statements (Unaudited) Presents Atara Biotherapeutics' unaudited Q1 2025 and 2024 financial statements, detailing the shift to net income and ongoing liquidity challenges Condensed Consolidated Balance Sheets Details Atara's financial position, showing changes in assets, liabilities, and equity from December 2024 to March 2025 Balance Sheet Metrics (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $13,841 | $25,030 | | Short-term investments | — | $17,466 | | Total current assets | $27,182 | $64,894 | | Total assets | $62,038 | $109,098 | | Total current liabilities | $47,892 | $134,574 | | Total liabilities | $117,110 | $206,381 | | Total stockholders' equity (deficit) | $(55,072) | $(97,283) | - Total current assets decreased significantly from $64.9 million at December 31, 2024, to $27.2 million at March 31, 2025, primarily due to the reduction in short-term investments and inventories[16] - Total liabilities decreased from $206.4 million to $117.1 million, largely driven by a substantial reduction in deferred revenue[16] - Stockholders' deficit improved from $(97.3) million to $(55.1) million, reflecting a positive change in equity[16] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Outlines Atara's financial performance, including revenue, expenses, and net income (loss) for Q1 2025 and 2024 Statements of Operations Metrics (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Commercialization revenue | $98,149 | $27,357 | | Cost of commercialization revenue | $20,439 | $1,985 | | Research and development expenses | $27,433 | $45,506 | | General and administrative expenses | $11,475 | $11,113 | | Net income (loss) | $38,010 | $(31,752) | | Basic (loss) earnings per common share | $3.53 | $(5.65) | | Diluted (loss) earnings per common share | $3.50 | $(5.65) | - Commercialization revenue increased significantly by $70.8 million, from $27.4 million in Q1 2024 to $98.1 million in Q1 2025, primarily due to the transfer of manufacturing responsibilities to Pierre Fabre[18][179] - The company reported a net income of $38.0 million in Q1 2025, a substantial improvement from a net loss of $(31.8) million in Q1 2024[18] - Research and development expenses decreased by $18.1 million, from $45.5 million in Q1 2024 to $27.4 million in Q1 2025, mainly due to reduced manufacturing activities for tab-cel and the pausing of CAR T programs[18][181] Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) Tracks changes in Atara's stockholders' equity (deficit) from January 1 to March 31, 2025, driven by net income Stockholders' Equity Changes (in thousands) | Metric (in thousands) | Balance as of January 1, 2025 | Balance as of March 31, 2025 | | :-------------------- | :---------------------------- | :--------------------------- | | Total Stockholders' Equity (Deficit) | $(97,283) | $(55,072) | | Net (loss) income | — | $38,010 | | Stock-based compensation expense | — | $4,209 | - The total stockholders' deficit improved from $(97.3) million at January 1, 2025, to $(55.1) million at March 31, 2025, primarily driven by the net income of $38.0 million[20] - Stock-based compensation expense for the three months ended March 31, 2025, was $4.2 million, contributing to additional paid-in capital[20] Condensed Consolidated Statements of Cash Flows Presents cash inflows and outflows from operating, investing, and financing activities for Q1 2025 and 2024 Cash Flow Activities (in thousands) | Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(28,138) | $(29,612) | | Net cash provided by investing activities | $17,199 | $14,717 | | Net cash provided by (used in) financing activities | $(250) | $24,141 | | Cash, cash equivalents and restricted cash at end of period | $13,987 | $35,233 | - Net cash used in operating activities decreased by $1.5 million, from $29.6 million in Q1 2024 to $28.1 million in Q1 2025, mainly due to changes in net working capital following the transfer of manufacturing responsibilities to Pierre Fabre[23][196] - Net cash provided by investing activities increased to $17.2 million in Q1 2025 from $14.7 million in Q1 2024, primarily from maturities and sales of short-term investments[23][197] - Net cash used in financing activities was $(0.3) million in Q1 2025, a significant change from $24.1 million provided in Q1 2024, which included proceeds from pre-funded warrants and ATM facilities[23][198] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Description of Business Describes Atara's focus on T-cell immunotherapy, key programs, manufacturing transfers, and workforce reductions - Atara Biotherapeutics is a leader in T-cell immunotherapy, focusing on its allogeneic Epstein-Barr Virus (EBV) T-cell platform for cancer and autoimmune diseases[26] - Its most advanced program, tab-cel® (Ebvallo™), is approved in the EEA, UK, and Switzerland, and is in Phase 3 development in the US[27] - In March 2025, Atara completed the transfer of all manufacturing responsibility for tab-cel to Pierre Fabre Medicament, who also assumed future remediation costs for a third-party manufacturing facility[28] - The company executed multiple workforce reductions, including approximately 50% in January 2025 and another 50% in March 2025, retaining about 35 employees[32] 2. Summary of Significant Accounting Policies Outlines key accounting principles, including reverse stock split, going concern issues, and capital raising plans - The company effected a 1-for-25 reverse stock split of its common stock on June 20, 2024, retroactively adjusting all equity-related information[35] - Atara has incurred significant operating losses since inception, with the exception of Q1 2025, and expects existing capital resources as of March 31, 2025, will not be sufficient to fund operations for at least 12 months, raising substantial doubt about its ability to continue as a going concern[36][37][38] - To address liquidity risk, the company plans to secure additional capital through public/private security offerings, ATM facilities, and/or strategic transactions[38] Revenue and Net Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue | $98,149 | $27,357 | | Net income (loss) | $38,010 | $(31,752) | 3. Net Income (Loss) per Common Share Details the calculation of basic and diluted earnings per common share, including potential dilutive securities Earnings Per Share Metrics (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Weighted average shares outstanding – Basic | 10,764 | 5,623 | | Weighted average shares outstanding – Diluted | 10,851 | 5,623 | | Basic (loss) earnings per common share | $3.53 | $(5.65) | | Diluted (loss) earnings per common share | $3.50 | $(5.65) | - Potential dilutive securities, including unvested RSUs and options, were excluded from diluted EPS calculation in periods of net loss as their effect would be antidilutive[45] Potential Common Shares Issuable (as of) | Potential Common Shares Issuable (as of) | March 31, 2025 | March 31, 2024 | | :--------------------------------------- | :------------- | :------------- | | Unvested RSUs | 190,231 | 624,208 | | Vested and unvested options | 195,495 | 367,557 | | ESPP share purchase rights | 21,255 | 9,654 | | Total | 406,981 | 1,001,419 | 4. Financial Instruments Discusses the classification and fair value of financial assets, including available-for-sale securities and cash - The company classifies financial assets at fair value using a three-level hierarchy, with all current available-for-sale securities (money market funds) classified as Level 1[47][51] Available-for-Sale Securities (in thousands) | Available-for-Sale Securities (in thousands) | March 31, 2025 Fair Value | December 31, 2024 Fair Value | | :--------------------------------------- | :------------------------ | :--------------------------- | | Money market funds | $12,666 | $13,718 | | U.S. Treasury obligations | — | $27,458 | | Total available-for-sale securities | $12,666 | $41,176 | - Total available-for-sale securities decreased from $41.2 million at December 31, 2024, to $12.7 million at March 31, 2025, with U.S. Treasury obligations no longer held[51] Cash, Cash Equivalents and Restricted Cash (in thousands) | Cash, Cash Equivalents and Restricted Cash (in thousands) | March 31, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $13,841 | $25,030 | | Restricted cash – short term | $146 | $146 | | Total | $13,987 | $25,176 | 5. Out-license Agreements Describes agreements with Pierre Fabre, including manufacturing transfer, revenue recognition, and deferred revenue - Atara expanded its commercialization agreement with Pierre Fabre in October 2023, granting exclusive worldwide rights for tab-cel (Ebvallo) and receiving an additional $20.0 million upfront payment in January 2024[57][61] - In March 2025, Atara transferred all manufacturing responsibility for tab-cel to Pierre Fabre, who also agreed to assume future remediation costs for a third-party manufacturing facility. This accelerated transfer resulted in a reduction of certain potential future regulatory and commercial milestone payments[28][59][61] - Atara recognized $97.9 million in commercialization revenue from deferred revenue during Q1 2025, with all revenue associated with the Initial Territory Obligation recognized as of March 31, 2025[72][69] Deferred Revenue Activity (in thousands) | Deferred Revenue Activity (in thousands) | Amount | | :--------------------------------------- | :----- | | Deferred revenue, January 1, 2025 | $95,092 | | Additions | $18,822 | | Recognized into commercialization revenue | $(97,931) | | Deferred revenue March 31, 2025 | $15,983 | 6. Liability Related to the Sale of Future Revenues Details the agreement with HCRx for future Ebvallo royalties and milestone payments, and related liability amortization - In December 2022, Atara sold a portion of its future Ebvallo royalties and milestone payments in the Initial Territory to HCR Molag Fund, L.P. (HCRx) for $31.0 million, subject to a repayment cap between 185% and 250% of the investment[74][75] - The liability is amortized using the effective interest method, with an annual effective interest rate of approximately 9% as of March 31, 2025[77] Future Revenues Liability (in thousands) | Liability Related to Sale of Future Revenues (in thousands) | Amount | | :-------------------------------------------------------- | :----- | | Liability balance as of January 1, 2025 | $39,006 | | Accretion of interest expense | $852 | | Liability balance as of March 31, 2025 | $39,872 | | Less: current portion | $(489) | | Long-term liability | $39,383 | 7. Leases Covers lease-related expenses, including amortization and impairment for office and lab spaces - Atara recognized an acceleration of amortization expense of $1.0 million for an abandoned office space right-of-use asset in Thousand Oaks, CA, in Q1 2025[80] - A non-cash impairment of $4.1 million was recorded for the ARC lab and warehouse space right-of-use asset in Q1 2025, following the decision to pause CAR-T R&D activities and seek to sublease the facility[81] Lease Liabilities (in thousands) | Lease Liabilities (in thousands) | Operating Leases | Finance Leases | | :------------------------------- | :--------------- | :------------- | | Total lease payments | $49,539 | $2,668 | | Present value of lease liabilities | $39,554 | $2,388 | | Current portion | $12,846 | $1,070 | | Long-term portion | $26,708 | $1,318 | Lease Cost (in thousands) | Lease Cost (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Total operating lease cost | $3,789 | $4,341 | | Total finance lease cost | $306 | $330 | 8. Restructuring Reports on workforce reductions and associated restructuring charges incurred in Q1 2025 and 2024 - Atara announced workforce reductions of approximately 50% in January 2025 ($7.1 million in charges) and another 50% in March 2025 ($2.7 million in charges), retaining about 35 employees[32][91][92] - Total restructuring charges for Q1 2025 were $9.8 million, compared to $4.8 million in Q1 2024, primarily for severance payments and WARN Act wages[93] Restructuring Charges (in thousands) | Restructuring Charges (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development expense | $8,349 | $3,394 | | General and administrative expense | $1,464 | $1,357 | | Total restructuring charges | $9,813 | $4,751 | - As of March 31, 2025, approximately $7.0 million in restructuring liabilities remained, with $6.8 million current and $0.1 million long-term[94] 9. Commitments and Contingencies Addresses legal disputes, program rights discussions, and assignment of manufacturing agreements - Atara resolved a dispute with Memorial Sloan Kettering Cancer Center (MSK) in March 2025 regarding sub-licensing fees, resulting in MSK returning $3.0 million of the $6.0 million paid under protest[99] - The company is in discussions with QIMR Berghofer to return rights to the ATA188 and EBV vaccine programs[100] - In March 2025, Atara assigned its Fujifilm Master Services and Supply Agreement and other minimum commitment agreements to Pierre Fabre as part of the manufacturing transition[104][107] 10. Stockholders' Equity (Deficit) Provides details on common stock, outstanding warrants, and stock-based compensation expense - As of March 31, 2025, 5,924 thousand shares of common stock were issued and outstanding, with a total of 1,070,534 shares reserved for future issuance under equity incentive plans[16][133] - No pre-funded warrants were exercised during Q1 2025, with 4,786,277 pre-funded warrants outstanding as of March 31, 2025, from various offerings[113][116][118][120] - Stock-based compensation expense for Q1 2025 was $4.2 million, a decrease from $8.4 million in Q1 2024[134] Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,598 | $4,713 | | General and administrative | $2,611 | $3,684 | | Total | $4,209 | $8,397 | 11. Supplemental Balance Sheet Information Offers additional details on inventories and property and equipment, net, reflecting recent asset transfers Inventories (in thousands) | Inventories (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------- | :------------- | :---------------- | | Raw Materials | $— | $964 | | Work-in-process | $— | $9,691 | | Total inventories | $— | $10,655 | - Inventories decreased from $10.7 million at December 31, 2024, to zero at March 31, 2025, reflecting the transfer of manufacturing responsibility and sale of inventory to Pierre Fabre[135][59] Property and Equipment, Net (in thousands) | Property and Equipment, Net (in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Property and equipment, gross | $1,980 | $18,601 | | Less: accumulated depreciation | $(1,695) | $(17,307) | | Property and equipment, net | $285 | $1,294 | - Net property and equipment decreased from $1.3 million to $0.3 million, largely due to the disposal of assets associated with restructuring activities[136][93] 12. Subsequent Events Discloses events after the reporting period, including further workforce reductions and a new stock offering - In May 2025, Atara announced a further workforce reduction of approximately 30%, expecting $1.4 million in severance and benefits, retaining about 23 employees[138] - On May 14, 2025, the company entered into an underwriting agreement for an offering of common stock and pre-funded warrants, expecting net proceeds of $15.0 million[139] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's analysis of Atara's Q1 2025 financial condition and operations, covering strategy, pipeline, manufacturing, and liquidity Overview Summarizes Atara's T-cell immunotherapy focus, program pauses, manufacturing transfers, and workforce reductions - Atara Biotherapeutics is a T-cell immunotherapy leader, with tab-cel (Ebvallo) approved in EEA, UK, and Switzerland, and in Phase 3 development in the U.S. for EBV+ PTLD[143] - In March 2025, Atara paused development of allogeneic CAR T cell programs and discontinued CAR T operations, including clinical trials for ATA3219 and development for ATA3431[143] - The company expanded its commercialization agreement with Pierre Fabre in October 2023 to include worldwide rights for tab-cel, receiving additional upfront and milestone payments[146] - In March 2025, Atara transferred all manufacturing responsibility for tab-cel to Pierre Fabre, who also assumed costs for third-party manufacturing facility remediation, leading to a reduction in future milestone payments[146] - Multiple workforce reductions occurred in November 2023 (30%), January 2024 (25%), January 2025 (50%), and March 2025 (50%), resulting in significant restructuring charges[152][153][154][155] Review of Strategic Alternatives Discusses the board's exploration of strategic alternatives and its temporary pause pending FDA meeting - Atara's board initiated a process in January 2025 to explore strategic alternatives, including potential acquisitions, mergers, or asset sales, initially focusing on CAR-T assets[156] - The review of strategic alternatives was temporarily paused in April 2025, pending a meeting with the FDA in Q2 2025 to discuss the resubmission of the BLA for tab-cel[156] Pipeline Provides updates on tab-cel's regulatory status, FDA actions, and the pausing of CAR T and ATA188 programs - Tab-cel (Ebvallo) is approved in the EEA, UK, and Switzerland, and is in Phase 3 clinical development in the U.S. for EBV+ PTLD, holding Breakthrough Therapy Designation[157] - The FDA issued a Complete Response Letter for tab-cel's BLA in January 2025, citing manufacturing facility inspection findings, but not clinical efficacy or safety data[157][158] - In January 2025, the FDA placed a clinical hold on Atara's IND applications, including tab-cel and ATA3219, due to GMP compliance issues at a third-party manufacturing facility[159][163] - The FDA lifted the clinical holds for the ALLELE study and tab-cel multi-cohort study in May 2025, following satisfactory remediation of issues[163] - Atara paused development of allogeneic CAR T cell programs (ATA3219, ATA3431) and discontinued development of ATA188 for multiple sclerosis[160][161] Manufacturing Details the transfer of tab-cel manufacturing responsibilities to Pierre Fabre and related agreements - In March 2025, Atara completed the transfer of all manufacturing responsibility for tab-cel to Pierre Fabre, including the assignment of the Fujifilm MSA[162][163] - Pierre Fabre is now responsible for manufacturing and supplying tabelecleucel worldwide at its cost and has agreed to assume remediation costs for the third-party manufacturing facility[163] - The Commercial Manufacturing Services Agreement with Charles River Laboratories (CRL MSA) expired on August 31, 2024, with manufacturing responsibility transitioned to Pierre Fabre[164] Financial Overview Presents a summary of Atara's Q1 2025 net income, accumulated deficit, revenue sources, and expense components - Atara reported net income of $38.0 million for Q1 2025, a significant improvement from a net loss of $(31.8) million in Q1 2024, but still has an accumulated deficit of $2.0 billion as of March 31, 2025[166] - Commercialization revenue is primarily from agreements with Pierre Fabre, including upfront license fees and milestone payments, and is subject to the HCRx Agreement[167] - Cost of commercialization revenue includes expenses for cell selection services, in-license sales-related milestone costs, and period manufacturing expenses, with costs for pre-approval Ebvallo production recorded as R&D expense[169] - Research and development expenses are the largest component of operating expenses, covering preclinical and clinical development, manufacturing, and licensing payments[170] Results of Operations Analyzes the year-over-year changes in commercialization revenue, operating expenses, and other income/expense Operating Results Summary (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase (Decrease) | | :-------------------- | :-------------------------------- | :-------------------------------- | :------------------ | | Commercialization revenue | $98,149 | $27,357 | $70,792 | | Cost of commercialization revenue | $20,439 | $1,985 | $18,454 | | Research and development expenses | $27,433 | $45,506 | $(18,073) | | General and administrative expenses | $11,475 | $11,113 | $362 | | Total other income (expense), net | $(792) | $(481) | $(311) | - Commercialization revenue increased by $70.8 million YoY, primarily due to revenue recognition from the transfer of manufacturing responsibilities to Pierre Fabre[179] - Research and development expenses decreased by $18.1 million YoY, driven by reduced tab-cel manufacturing and the pausing of CAR T programs, partially offset by a $4.1 million lease impairment[181] - Medical and safety expense decreased by $8.2 million YoY, mainly due to a $3.0 million MSK sublicensing fee refund and lower trial costs from the ATA188 Phase 2 EMBOLD study closeout[182] Liquidity and Capital Resources Discusses Atara's cash position, capital sources, future funding needs, and going concern considerations - Atara's liquidity sources include equity financings, pre-funded warrants, upfront fees and milestone payments from collaboration agreements, and the sale of the ATOM Facility[187] - As of March 31, 2025, cash, cash equivalents, and short-term investments totaled $13.8 million, down from $42.5 million at December 31, 2024[194] - The company expects to receive $15.0 million in net proceeds from a May 2025 underwritten registered direct offering, which, combined with cost reductions, is anticipated to fund operations through potential BLA approval[199] - Substantial doubt exists about Atara's ability to continue as a going concern for at least 12 months after the financial statements' issuance date, necessitating additional capital raises[201][233] Cash Flow Summary (in thousands) | Cash Flows (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Operating activities | $(28,138) | $(29,612) | | Investing activities | $17,199 | $14,717 | | Financing activities | $(250) | $24,141 | Item 3. Quantitative and Qualitative Disclosures about Market Risk This section states that there were no material changes to Atara's interest rate risk, market risk, and foreign currency exchange rate risk disclosures during the three months ended March 31, 2025, compared to those reported in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes occurred in interest rate risk, market risk, or foreign currency exchange rate risk disclosures during Q1 2025[207] Item 4. Controls and Procedures This section confirms the effectiveness of Atara's disclosure controls and procedures as of March 31, 2025, and reports no material changes in internal control over financial reporting during the quarter - Atara's Chief Executive Officer and Chief Accounting Officer concluded that disclosure controls and procedures were effective as of March 31, 2025[208] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during Q1 2025[209] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, other information, and exhibits for Atara Biotherapeutics Item 1. Legal Proceedings This section states that Atara Biotherapeutics is not currently involved in any material legal proceedings - Atara is not currently involved in any material legal proceedings[211] Item 1A. Risk Factors Details significant risks to Atara's business, financial condition, and operations, covering finance, development, manufacturing, and IP Risks Related to Our Financial Results, Capital Needs, and Review of Strategic Alternatives Addresses risks associated with strategic alternatives, capital requirements, and the company's ability to continue as a going concern - The review of strategic alternatives initiated in January 2025 may not result in a successful transaction or deliver expected benefits, potentially disrupting management and incurring significant expenses[214][215][216] - Failure to identify a viable strategic alternative or secure sufficient capital could force the board to pursue liquidation, potentially resulting in a total loss for stockholders[219][221] - Atara has incurred substantial losses since inception and anticipates continued losses in 2026, despite forecasting net income in 2025 due to operating expense reductions[222][223] - The company requires substantial near-term financing, and a failure to obtain it could delay or terminate product development, impair strategic alternative exploration, or lead to business wind-down[230][233][234][236] Risks Related to the Development of Our Product and Product Candidates Covers risks in product development, regulatory approvals, clinical trials, and the uncertainty of T-cell immunotherapies - Atara has only one approved product (Ebvallo in EEA, UK, Switzerland) and paused allogeneic CAR T programs; failure to successfully develop, manufacture, and commercialize products or candidates could materially harm the business[239][240] - The FDA issued a Complete Response Letter for tab-cel's BLA due to manufacturing facility inspection findings, and clinical holds were placed on IND applications, though holds for tab-cel were lifted in May 2025[252] - T-cell immunotherapies represent new therapeutic approaches, potentially leading to heightened regulatory scrutiny, delays, or inability to achieve approval or commercialization[256] - Results from preclinical or earlier clinical studies are not necessarily predictive of future results, and later-stage failures could adversely impact regulatory approval[262][264] - Clinical drug development is lengthy, expensive, and uncertain, with potential delays from enrollment issues, regulatory disagreements, or unforeseen side effects[266][267][268] Risks Related to Manufacturing Highlights challenges in manufacturing processes, supply chain, regulatory approvals, and facility disruptions - Atara faces numerous manufacturing risks, including challenges in transferring processes, scaling production, ensuring comparability, and maintaining consistent supply, which could increase costs and limit product availability[299][300][301] - Product loss due to contamination, equipment failure, or human error is a risk in cellular therapy manufacturing, potentially leading to reduced yields or supply disruptions[302] - Delays in regulatory approvals for products manufactured at CMO facilities could hinder development plans and revenue generation[305] - Damage or destruction of manufacturing facilities or interruptions in production could severely impact business operations and supply, with insurance potentially insufficient to cover losses[310][311] Risks Related to Our Dependence on Third Parties Discusses risks from reliance on CMOs and partners for manufacturing, commercialization, and strategic alliances - Atara relies on CMOs and partners for product production and material acquisition; problems with these third parties could delay development and commercialization[312] - The company is entirely dependent on Pierre Fabre for worldwide manufacturing and commercialization of tab-cel; their failure to meet obligations could adversely affect Atara's business and HCRx Agreement obligations[323][324] - Termination, breach, or expiration of the A&R Commercialization Agreement could materially harm Atara's financial position by reducing or eliminating milestone and royalty payments[326] - Atara may not realize benefits from future strategic alliances or product acquisitions/licenses due to competition, negotiation complexities, or integration challenges[328][329] Risks Related to Our Intellectual Property Addresses challenges in protecting intellectual property, patent validity, infringement claims, and trade secret security - Inadequate intellectual property protection for product candidates could adversely affect commercialization and competitive positioning[330] - Patentability, validity, enforceability, and scope of patents in biotechnology are uncertain, and third parties may challenge or design around Atara's patents[331][334][335] - Lawsuits for infringing third-party intellectual property rights could be costly, time-consuming, and delay development or commercialization efforts[341][343][345] - Atara may not be able to protect its intellectual property rights globally, as foreign laws may offer less protection, and enforcement proceedings can be expensive and uncertain[346][347] - Breaching license agreements with partners, such as MSK, could lead to loss of development and commercialization rights for product candidates[348] - Failure to protect trade secrets and proprietary information could allow competitors to duplicate technology, harming Atara's competitive advantage[353][355][356] Risks Related to Commercialization of Our Product and Product Candidates Covers market acceptance, reimbursement, regulatory changes, competition, and the ability to market products - Commercial success depends on achieving significant market acceptance among physicians, patients, and payors, which is influenced by efficacy, safety, pricing, and competition[357] - Lack of coverage and adequate reimbursement from third-party payors in the U.S. and other countries could harm business, as cost containment is a primary trend in healthcare[359][360] - Current and future legislation, including unfavorable pricing regulations or healthcare reform initiatives (e.g., ACA, IRA), may increase costs and affect product pricing and reimbursement[363][367][368] - Atara faces substantial competition from pharmaceutical and biotechnology companies, academic institutions, and other therapies, which could reduce sales and pricing power[376] - Product candidates regulated as biologics may face earlier competition from biosimilars due to the BPCIA, potentially impacting commercial prospects[385][387] - Inability to enter into agreements with third parties to market and sell products could prevent revenue generation from sales[388] Risks Related to Ownership of Our Common Stock Discusses stock price volatility, stockholder control, potential dilution, anti-takeover provisions, and reporting status - Atara's stock price has been and is expected to remain volatile, influenced by factors such as competitive products, regulatory actions, clinical study results, and financing efforts[391][392] - Principal stockholders own a significant percentage of stock, enabling them to exert control or influence over matters requiring stockholder approval, potentially conflicting with other stockholders' interests[395] - Future sales and issuances of common stock or rights to purchase common stock could result in additional dilution for existing stockholders and cause the stock price to fall[401] - Certain terms in charter documents and Delaware law may have anti-takeover effects, discouraging acquisitions or making it difficult to replace current management[402][404][405] - As a 'smaller reporting company' and 'non-accelerated filer,' Atara may use reduced reporting requirements, potentially making its stock less attractive to some investors[408][409] General Risk Factors Encompasses risks related to personnel, regulatory compliance, product liability, environmental laws, and IT security - Future success depends on retaining executive officers and attracting/motivating qualified personnel; recent workforce reductions pose risks to coordination, corporate culture, and talent retention[411][413] - Relationships with customers and third-party payors are subject to anti-kickback, fraud and abuse, and privacy laws, potentially leading to criminal sanctions, civil penalties, and reputational harm[414][416] - Employee misconduct, including noncompliance with regulatory standards or inaccurate reporting, could result in significant liability and harm Atara's reputation[417] - Product liability lawsuits could lead to substantial liabilities, decreased demand, clinical holds, and reputational damage, potentially exceeding insurance coverage[418][421] - Failure to comply with environmental, health, and safety laws could result in fines, penalties, or increased costs[422][424] - Compromised security measures or IT system failures could disrupt services, compromise sensitive information, harm reputation, and expose Atara to liability[443][446][449] Item 5. Other Information This section confirms that none of Atara's directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025[463] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, warrant forms, and certifications, with specific amendments to license and commercialization agreements - Key exhibits include amendments to the exclusive license agreement with Memorial Sloan Kettering Cancer Center (dated March 11, 2025) and the amended and restated commercialization agreement with Pierre Fabre Medicament (dated March 31, 2025)[465] - Certifications by the Chief Executive Officer and Principal Financial and Accounting Officer pursuant to the Sarbanes-Oxley Act of 2002 are included[465] Signatures This section contains the required signatures for the Form 10-Q, confirming its submission by authorized officers of Atara Biotherapeutics, Inc - The report is signed by AnhCo Thieu Nguyen, President and Chief Executive Officer, and Yanina Grant-Huerta, Chief Accounting Officer, on May 15, 2025[469]