Atara Biotherapeutics(ATRA) - 2021 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section covers unaudited financial statements, management's analysis, market risks, and internal controls Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for the nine months ended September 30, 2021, along with key notes on business, liquidity, and collaboration agreements Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2021, shows a decrease in total assets and stockholders' equity compared to December 31, 2020, primarily due to a reduction in cash, cash equivalents, and short-term investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $113,209 | $200,404 | | Short-term investments | $244,036 | $300,255 | | Total current assets | $369,497 | $523,273 | | Total assets | $449,923 | $588,120 | | Liabilities & Equity | | | | Total current liabilities | $86,150 | $82,901 | | Total liabilities | $139,782 | $125,781 | | Total stockholders' equity | $310,141 | $462,339 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the nine months ended September 30, 2021, the company reported a net loss of $246.8 million, an increase from the $225.3 million loss in the same period of 2020 Statement of Operations Highlights (Nine Months Ended Sep 30, in thousands) | Account | 2021 | 2020 | | :--- | :--- | :--- | | License and collaboration revenue | $12,792 | $0 | | Research and development | $202,867 | $179,096 | | General and administrative | $56,984 | $48,259 | | Loss from operations | ($247,059) | ($227,355) | | Net loss | ($246,792) | ($225,313) | | Net loss per share | ($2.67) | ($3.21) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2021, net cash used in operating activities was $186.3 million, while investing activities provided $46.6 million and financing activities provided $52.5 million Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($186,253) | ($176,639) | | Net cash provided by (used in) investing activities | $46,582 | ($83,836) | | Net cash provided by financing activities | $52,476 | $248,778 | | Net decrease in cash | ($87,195) | ($11,697) | Notes to Condensed Consolidated Financial Statements The notes provide details on the company's business, accounting policies, and financial statement line items, including liquidity and collaboration agreements - Atara is a pioneer in T-cell immunotherapy, leveraging its allogeneic EBV T-cell platform to develop therapies for solid tumors, hematologic cancers, and autoimmune diseases[31] - The company expects that its existing cash, cash equivalents, and short-term investments as of September 30, 2021, will be sufficient to fund planned operations for at least the next twelve months[35] - The company recognized $5.4 million and $12.8 million in license and collaboration revenue for the three and nine months ended September 30, 2021, respectively, under its agreements with Bayer[68] - Effective October 2, 2021, Atara entered into a commercialization agreement with Pierre Fabre for tab-cel® in Europe and other select markets, receiving an upfront cash payment of $45.0 million[97] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses business strategy, pipeline progress, and financial results, highlighting key program updates, expense trends, and liquidity outlook Pipeline and Program Updates This section details significant progress across key programs, including imminent EU MAA and planned U.S. BLA for tab-cel®, and advancements in ATA188 and CAR T programs - Tab-cel®: - EU Marketing Authorization Application (MAA) for EBV+ PTLD to be submitted imminently, with a potential decision in H2 2022 - U.S. Biologics License Application (BLA) submission planned for Q2 2022[105] - ATA188 (Multiple Sclerosis): - An interim analysis of the Phase 2 EMBOLD study is planned for the first half of 2022 to assess efficacy and safety[107] - CAR T Programs: - ATA2271/ATA3271 (partnered with Bayer): Partner Bayer is expected to file an IND for the allogeneic ATA3271 in H2 2022 - ATA3219 (in-house): An IND submission for B-cell malignancies is planned for Q1 2022[108][109] Results of Operations Comparing the nine months ended September 30, 2021, to the same period in 2020, revenue from the Bayer collaboration was $12.8 million, while R&D and G&A expenses increased due to program expansion and headcount growth Research and Development Expenses (Nine Months Ended Sep 30, in thousands) | Program | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Tab-cel® expenses | $36,874 | $45,426 | ($8,552) | | ATA188, CAR T and other program expenses | $24,134 | $14,339 | $9,795 | | Employee and overhead expenses | $141,859 | $119,331 | $22,528 | | Total R&D Expenses | $202,867 | $179,096 | $23,771 | General and Administrative Expenses (in thousands) | Period | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $19,849 | $14,829 | $5,020 | | Nine Months Ended Sep 30 | $56,984 | $48,259 | $8,725 | Liquidity and Capital Resources As of September 30, 2021, the company had $357.2 million in cash, cash equivalents, and short-term investments, expected to fund operations into Q2 2023, supplemented by $51.2 million from ATM facility sales - The company expects that existing cash, cash equivalents, and short-term investments as of September 30, 2021, together with the $45.0 million upfront payment from Pierre Fabre, will be sufficient to fund planned operations into the second quarter of 2023[140][148] Cash Position (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $113,209 | $200,404 | | Short-term investments | $244,036 | $300,255 | | Total | $357,245 | $500,659 | - During the nine months ended September 30, 2021, the company sold 3.4 million shares under its ATM facility for net proceeds of $51.2 million[136] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company states that there have been no material changes to its market risk disclosures, including interest rate and foreign currency exchange rate risk, since its Annual Report on Form 10-K for the year ended December 31, 2020 - There were no material changes to the company's interest rate risk, market risk, and foreign currency exchange rate risk disclosures during the nine months ended September 30, 2021[159] Item 4. Controls and Procedures Based on an evaluation as of September 30, 2021, the company's CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[161] - No change in internal control over financial reporting occurred during the quarter that has materially affected, or is reasonably likely to materially affect, internal controls[162] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other required disclosures, including exhibits Item 1. Legal Proceedings The company reports that it is not currently involved in any material legal proceedings - The company reports no material legal proceedings[164] Item 1A. Risk Factors This section outlines significant business risks, including financial sustainability, early-stage product development, regulatory challenges, manufacturing complexities, and reliance on third-party collaborations - Financial Risks: The company has a history of substantial losses, has no products approved for sale, and will require significant additional financing to achieve its goals[166][172] - Development & Regulatory Risks: Product candidates are in early development stages and represent new therapeutic approaches (allogeneic T-cell immunotherapy) that could face heightened regulatory scrutiny, development delays, or failure in clinical trials[179][193][202] - COVID-19 Impact: The pandemic could materially and adversely affect business operations, clinical trials, manufacturing, and supply chains[181] - Manufacturing Risks: The company faces risks related to the complex and highly regulated process of manufacturing cellular therapies, including process scale-up, product loss due to contamination, and reliance on its sole manufacturing facility and third-party CMOs[230][233][240] - Commercialization Risks: Success depends on market acceptance, obtaining adequate reimbursement from payors, and navigating competition from established therapies[291][293][306] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None reported[376] Item 5. Other Information The company reports no other information required to be disclosed - None reported[376] Item 6. Exhibits This section lists the exhibits filed with the quarterly report, including an amendment to a manufacturing agreement, certifications by the CEO and CFO, and Inline XBRL documents - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and an amendment to the Commercial Manufacturing Services Agreement with Cognate BioServices, Inc. (10.1)[381][382][383][384]