false Q1 0001604464 --12-31 Large Accelerated Filer 2012-08-01 P6Y6M 0001604464 2020-01-01 2020-03-31 xbrli:shares 0001604464 2020-04-30 iso4217:USD 0001604464 2020-03-31 0001604464 2019-12-31 iso4217:USD xbrli:shares 0001604464 2019-01-01 2019-03-31 0001604464 us-gaap:CommonStockMember 2019-12-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001604464 us-gaap:RetainedEarningsMember 2019-12-31 0001604464 atra:AtTheMarketOfferingMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001604464 atra:AtTheMarketOfferingMember us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001604464 atra:AtTheMarketOfferingMember 2020-01-01 2020-03-31 0001604464 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001604464 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001604464 us-gaap:CommonStockMember 2020-03-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001604464 us-gaap:RetainedEarningsMember 2020-03-31 0001604464 us-gaap:CommonStockMember 2018-12-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001604464 us-gaap:RetainedEarningsMember 2018-12-31 0001604464 2018-12-31 0001604464 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001604464 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001604464 us-gaap:CommonStockMember 2019-03-31 0001604464 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001604464 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001604464 us-gaap:RetainedEarningsMember 2019-03-31 0001604464 2019-03-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0001604464 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0001604464 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-03-31 0001604464 atra:EmployeeStockPurchasePlanMember 2020-01-01 2020-03-31 0001604464 atra:EmployeeStockPurchasePlanMember 2019-01-01 2019-03-31 0001604464 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesShorttermDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:AssetBackedSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesShorttermDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:AssetBackedSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueInputsLevel2Member us-gaap:CertificatesOfDepositMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 us-gaap:CashEquivalentsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001604464 us-gaap:CashEquivalentsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001604464 2019-01-01 2019-12-31 0001604464 us-gaap:LeaseholdImprovementsMember 2020-03-31 0001604464 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001604464 us-gaap:EquipmentMember 2020-03-31 0001604464 us-gaap:EquipmentMember 2019-12-31 0001604464 us-gaap:MachineryAndEquipmentMember 2020-03-31 0001604464 us-gaap:MachineryAndEquipmentMember 2019-12-31 0001604464 atra:ComputerEquipmentAndSoftwareMember 2020-03-31 0001604464 atra:ComputerEquipmentAndSoftwareMember 2019-12-31 0001604464 us-gaap:FurnitureAndFixturesMember 2020-03-31 0001604464 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001604464 us-gaap:ConstructionInProgressMember 2020-03-31 0001604464 us-gaap:ConstructionInProgressMember 2019-12-31 0001604464 atra:MemorialSloanKetteringCancerCenterAgreementMember 2020-03-31 0001604464 atra:MemorialSloanKetteringCancerCenterAgreementMember 2019-01-01 2019-03-31 0001604464 atra:UnderwrittenPublicOfferingMember us-gaap:WarrantMember 2019-07-18 0001604464 atra:UnderwrittenPublicOfferingMember us-gaap:WarrantMember 2019-07-18 2019-07-18 xbrli:pure 0001604464 atra:UnderwrittenPublicOfferingMember us-gaap:WarrantMember srt:MaximumMember 2019-07-18 2019-07-18 0001604464 atra:UnderwrittenPublicOfferingMember us-gaap:WarrantMember srt:MinimumMember 2019-07-18 2019-07-18 0001604464 atra:UnderwrittenPublicOfferingMember 2020-03-31 0001604464 atra:AtTheMarketOfferingMember atra:CowenAndCompanyLimitedLiabilityCompanyMember srt:MaximumMember 2019-02-25 0001604464 atra:AtTheMarketOfferingMember atra:CowenAndCompanyLimitedLiabilityCompanyMember srt:MaximumMember 2020-02-28 0001604464 atra:AtTheMarketOfferingMember atra:CowenAndCompanyLimitedLiabilityCompanyMember srt:MaximumMember 2019-02-25 2019-02-25 0001604464 atra:AtTheMarketOfferingMember atra:CowenAndCompanyLimitedLiabilityCompanyMember srt:MaximumMember 2020-02-28 2020-02-28 0001604464 atra:CowenAndCompanyLimitedLiabilityCompanyMember atra:AtTheMarketOfferingMember 2020-01-01 2020-03-31 0001604464 atra:CowenAndCompanyLimitedLiabilityCompanyMember atra:AtTheMarketOfferingMember 2020-01-03 2020-01-03 0001604464 atra:CowenAndCompanyLimitedLiabilityCompanyMember atra:TwoThousandNineteenAtTheMarketOfferingMember 2020-03-31 0001604464 atra:CowenAndCompanyLimitedLiabilityCompanyMember atra:TwoThousandTwentyAtTheMarketOfferingMember 2020-03-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember atra:FromDateOfGrantMember 2020-01-01 2020-03-31 0001604464 srt:MinimumMember 2020-01-01 2020-03-31 0001604464 srt:MinimumMember atra:TenPercentShareHolderMember 2020-01-01 2020-03-31 0001604464 atra:EmployeesAndNonEmployeesMember 2020-01-01 2020-03-31 0001604464 srt:MinimumMember atra:EmployeesAndNonEmployeesMember 2020-01-01 2020-03-31 0001604464 atra:EmployeesAndNonEmployeesMember srt:MaximumMember 2020-01-01 2020-03-31 0001604464 atra:TwoThousandAndFourteenEquityIncentivePlanMember 2020-03-31 0001604464 atra:InducementPlanMember 2020-03-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001604464 us-gaap:RestrictedStockUnitsRSUMember 2020-03-31 0001604464 us-gaap:EmployeeStockOptionMember 2017-01-01 2017-12-31 0001604464 atra:TwoThousandFourteenEquityIncentivePlanAndInducementPlanMember 2019-12-31 0001604464 atra:TwoThousandFourteenEquityIncentivePlanAndInducementPlanMember 2020-01-01 2020-03-31 0001604464 atra:TwoThousandFourteenEquityIncentivePlanAndInducementPlanMember 2020-03-31 0001604464 us-gaap:EmployeeStockOptionMember 2020-03-31 0001604464 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0001604464 atra:TwoThousandEighteenInducementPlanMember 2020-03-31 0001604464 atra:TwoThousandFourteenEmployeeStockPurchasePlanMember 2020-03-31 0001604464 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-03-31 0001604464 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-03-31 0001604464 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0001604464 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31

 

 

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 March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 001-36548

 

ATARA BIOTHERAPEUTICS, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

 

46-0920988

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

611 Gateway Blvd., Suite 900

South San Francisco, CA

 

94080

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (650) 278-8930

 

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 April 30, 2020 was 58,952,045 shares.

 

 

 

 


 

ATARA BIOTHERAPEUTICS, INC.

INDEX

 

 

  

 

  

Page

PART I.

  

FINANCIAL INFORMATION

  

 

 

 

 

Item 1.

  

Financial Statements (Unaudited)

  

 

 

 

 

 

  

Condensed Consolidated Balance Sheets

  

3

 

 

 

 

  

Condensed Consolidated Statements of Operations and Comprehensive Loss

  

4

 

 

 

 

  

Condensed Consolidated Statements of Changes in Stockholders’ Equity

  

5

 

 

 

 

  

Condensed Consolidated Statements of Cash Flows

  

6

 

 

 

 

  

Notes to Condensed Consolidated Financial Statements

  

7

 

 

 

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

16

 

 

 

Item 3.

  

Quantitative and Qualitative Disclosures about Market Risk

  

24

 

 

 

Item 4.

  

Controls and Procedures

  

24

 

 

 

PART II.

  

OTHER INFORMATION

  

 

 

 

 

Item 1.

  

Legal Proceedings

  

25

 

 

 

Item 1A.

  

Risk Factors

  

25

 

 

 

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

  

58

 

Item 3.

  

Defaults Upon Senior Securities

  

58

 

Item 4.

  

Mine Safety Disclosures

  

58

 

Item 5.

  

Other Information

  

58

 

Item 6.

  

Exhibits

  

59

 

 

 

  

Signatures

  

60

 

 

 

 

 

 

2


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

70,203

 

 

$

74,317

 

Short-term investments

 

 

144,428

 

 

 

184,792

 

Restricted cash - short-term

 

 

194

 

 

 

194

 

Prepaid expenses and other current assets

 

 

14,392

 

 

 

13,689

 

Total current assets

 

 

229,217

 

 

 

272,992

 

Property and equipment, net

 

 

54,442

 

 

 

54,176

 

Operating lease assets

 

 

13,691

 

 

 

14,007

 

Restricted cash - long-term

 

 

1,200

 

 

 

1,200

 

Other assets

 

 

997

 

 

 

567

 

Total assets

 

$

299,547

 

 

$

342,942

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,079

 

 

$

7,963

 

Accrued compensation

 

 

9,676

 

 

 

14,706

 

Accrued research and development expenses

 

 

7,827

 

 

 

8,341

 

Other current liabilities

 

 

5,938

 

 

 

5,733

 

Total current liabilities

 

 

31,520

 

 

 

36,743

 

Operating lease liabilities - long-term

 

 

13,809

 

 

 

14,136

 

Other long-term liabilities

 

 

1,396

 

 

 

1,282

 

Total liabilities

 

 

46,725

 

 

 

52,161

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock—$0.0001 par value, 500,000 shares authorized as of March 31,

   2020 and December 31, 2019; 58,940 and 56,806 shares issued and

   outstanding as of March 31, 2020 and December 31, 2019, respectively

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

1,144,082

 

 

 

1,108,516

 

Accumulated other comprehensive income

 

 

204

 

 

 

220

 

Accumulated deficit

 

 

(891,470

)

 

 

(817,961

)

Total stockholders’ equity

 

 

252,822

 

 

 

290,781

 

Total liabilities and stockholders’ equity

 

$

299,547

 

 

$

342,942

 

 

 

See accompanying notes.

3


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

$

57,659

 

 

$

48,668

 

General and administrative

 

 

17,038

 

 

 

19,223

 

Total operating expenses

 

 

74,697

 

 

 

67,891

 

Loss from operations

 

 

(74,697

)

 

 

(67,891

)

Interest and other income, net

 

 

1,188

 

 

 

1,634

 

Net loss

 

$

(73,509

)

 

$

(66,257

)

Other comprehensive (loss) gain:

 

 

 

 

 

 

 

 

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

 

 

(16

)

 

 

378

 

Comprehensive loss

 

$

(73,525

)

 

$

(65,879

)

Net loss per common share:

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(1.20

)

 

$

(1.44

)

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding used to calculate basic

   and diluted net loss per common share

 

 

61,208

 

 

 

46,124

 

 

See accompanying notes.

4


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

For the Three Months Ended March 31, 2020

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2019

 

 

56,806

 

 

$

6

 

 

$

1,108,516

 

 

$

220

 

 

$

(817,961

)

 

$

290,781

 

Issuance of common stock through ATM facilities, net of commissions

   and offering costs of $704

 

 

1,528

 

 

 

 

 

 

22,987

 

 

 

 

 

 

 

 

 

22,987

 

Exercise of pre-funded warrants

 

 

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSU settlements, net of shares withheld

 

 

455

 

 

 

 

 

 

(1,395

)

 

 

 

 

 

 

 

 

(1,395

)

Issuance of common stock pursuant to employee stock awards

 

 

94

 

 

 

 

 

 

1,330

 

 

 

 

 

 

 

 

 

1,330

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

12,644

 

 

 

 

 

 

 

 

 

12,644

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(73,509

)

 

 

(73,509

)

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(16

)

 

 

 

 

 

(16

)

Balance as of March 31, 2020

 

 

58,940

 

 

$

6

 

 

$

1,144,082

 

 

$

204

 

 

$

(891,470

)

 

$

252,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

For the Three Months Ended March 31, 2019

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2018

 

 

45,951

 

 

$

5

 

 

$

866,541

 

 

$

(340

)

 

$

(527,349

)

 

$

338,857

 

Effect of the adoption of ASC topic 842 (Leases)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

364

 

 

 

364

 

Balance as of January 1, 2019

 

 

45,951

 

 

$

5

 

 

$

866,541

 

 

$

(340

)

 

$

(526,985

)

 

$

339,221

 

RSU settlements, net of shares withheld

 

 

197

 

 

 

 

 

 

(4,575

)

 

 

 

 

 

 

 

 

(4,575

)

Issuance of common stock pursuant to employee stock awards

 

 

159

 

 

 

 

 

 

2,898

 

 

 

 

 

 

 

 

 

2,898

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

12,269

 

 

 

 

 

 

 

 

 

12,269

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(66,257

)

 

 

(66,257

)

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

378

 

 

 

 

 

 

378

 

Balance as of March 31, 2019

 

 

46,307

 

 

$

5

 

 

$

877,133

 

 

$

38

 

 

$

(593,242

)

 

$

283,934

 

 

See accompanying notes.

5


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(73,509

)

 

$

(66,257

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

12,644

 

 

 

12,269

 

Depreciation and amortization expense

 

 

1,949

 

 

 

1,648

 

Amortization (accretion) of investment premiums (discounts)

 

 

42

 

 

 

(458

)

Non-cash operating lease expense

 

 

364

 

 

 

331

 

Asset retirement obligation accretion expense

 

 

19

 

 

 

17

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(1,888

)

 

 

(1,434

)

Other assets

 

 

(209

)

 

 

38

 

Accounts payable

 

 

(590

)

 

 

2,672

 

Accrued compensation

 

 

(5,030

)

 

 

(3,177

)

Accrued research and development expenses

 

 

(514

)

 

 

(13,016

)

Other current liabilities

 

 

(169

)

 

 

(2,572

)

Operating lease liabilities

 

 

(153

)

 

 

(261

)

Net cash used in operating activities

 

 

(67,044

)

 

 

(70,200

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(56,851

)

 

 

(7,427

)

Proceeds from maturities and sales of short-term investments

 

 

97,157

 

 

 

75,819

 

Purchases of property and equipment

 

 

(1,333

)

 

 

(796

)

Net cash provided by investing activities

 

 

38,973

 

 

 

67,596

 

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock through ATM facilities, net

 

 

24,277

 

 

 

 

Proceeds from employee stock awards

 

 

1,330

 

 

 

2,747

 

Taxes paid related to net share settlement of restricted stock units

 

 

(1,395

)

 

 

(4,575

)

Principal payments on finance lease obligations

 

 

(90

)

 

 

(98

)

Other financing activities, net

 

 

(165

)

 

 

 

Net cash provided by (used in) financing activities

 

 

23,957

 

 

 

(1,926

)

Decrease in cash, cash equivalents and restricted cash

 

 

(4,114

)

 

 

(4,530

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

75,711

 

 

 

62,092

 

Cash, cash equivalents and restricted cash at end of period

 

$

71,597

 

 

$

57,562

 

Non-cash investing and financing activities

 

 

 

 

 

 

 

 

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

 

$

1,098

 

 

$

666

 

Finance lease assets obtained in exchange for lease obligations

 

$

281

 

 

$

 

Accrued costs related to ATM facilities

 

$

112

 

 

$

 

Receivable for options exercised

 

$

 

 

$

151

 

Supplemental cash flow disclosure

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

17

 

 

$

 

Cash paid for income taxes

 

$

 

 

$

 

 

See accompanying notes.

6


 

Atara Biotherapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1.

Description of Business

Atara Biotherapeutics, Inc. (“Atara”, “we”, “our” or “the Company”) was incorporated in August 2012 in Delaware. Atara is a pioneer in T-cell immunotherapy, leveraging its novel allogeneic EBV T-cell platform to develop transformative therapies for patients with severe diseases, including solid tumors, hematologic cancers 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.

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 from Moffitt Cancer Center, and rights to know-how and technology from the Council of the Queensland Institute of Medical Research (“QIMR Berghofer”). See Note 6 for further information.

 

2.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited 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 condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, except for the adoption of accounting pronouncements relating to credit losses on financial instruments, implementation of cloud computing arrangements, and simplification of income tax accounting, effective January 1, 2020, as discussed below. 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 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, 2019 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.

Liquidity and Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the accompanying financial statements are issued. We have incurred significant operating losses since inception and have relied on public and private equity financings to fund our operations. As of March 31, 2020, we had an accumulated deficit of $891.5 million.

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 profitability, and unless and until we do, we will need to continue to raise additional capital. We expect that our cash, cash equivalents and short-term investments as of March 31, 2020 will be sufficient to fund our planned operations into the second quarter of 2021. However, the uncertainties inherent in the Company’s future operations and in our ability to obtain additional funding raise substantial doubt about our ability to continue as a going concern beyond one year from the date these financial statements are issued. The interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We currently plan to raise additional funding as required, based on the status of our development programs and our projected cash flows. We may also need to pursue the sale or sublicense of rights to the Company’s programs and assets on terms potentially unfavorable to us. If we are unable to obtain additional funding, we will be forced to delay, limit, reduce or terminate preclinical studies, clinical studies or other development activities for one or more of our product candidates.

7


 

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 clinical trial and other accruals, stock-based compensation expense and income taxes. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

The Company considers the applicability and impact of any Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). Other than the ASUs we adopted effective January 1, 2020 and listed below, all other ASUs were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.

Adoption of New Accounting Pronouncements

We adopted ASU No. 2016-13 (as amended by ASUs 2018-19, 2019-04, 2019-05 and 2019-11), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, prospectively on January 1, 2020. Under this new guidance, a company is required to estimate credit losses on certain types of financial instruments using an expected-loss model, replacing the current incurred-loss model, and record the estimate through an allowance for credit losses. We do not hold material amounts of the types of financial instruments impacted by this guidance on our balance sheet. The guidance also establishes a new impairment model for available-for-sale debt securities. The adoption did not have a material impact on our condensed consolidated balance sheet or our condensed consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the three months ended March 31, 2020 and 2019.

We adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, effective January 1, 2020, electing a prospective adoption method. The new standard requires that certain implementation costs for cloud computing arrangements are capitalized and amortized over the term of associated hosted cloud computing arrangement service. Capitalized implementation costs are classified in the same line on the balance sheet as amounts prepaid for hosted cloud computing arrangement service, or prepaid expenses and other assets. The amortization of the capitalized asset is presented in the same line on the statement of operations and comprehensive loss as the fees for the associated hosted cloud computing arrangement service and not included with depreciation or amortization expense related to property and equipment or intangible assets. Cash flows related to capitalized implementation costs are presented consistent with the presentation of cash flows for fees related to the hosted cloud computing arrangement service, or cash flows used in operating activities. The adoption did not have a material impact on our condensed consolidated balance sheet or our condensed consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the three months ended March 31, 2020 and 2019.

We adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as of January 1, 2020, which eliminates certain exceptions related to the general principles in ASC 740 and makes amendments to other areas with the intention of simplifying various aspects related to accounting for income taxes. The provisions of the ASU that are applicable to Atara are applied on a prospective basis. The adoption did not have a material impact on our condensed consolidated balance sheet or our condensed consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the three months ended March 31, 2020 and 2019.

 

3.

Net Loss per Common Share

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

Potential dilutive securities, which include unvested restricted stock units (“RSUs”), unvested performance-based RSUs 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 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.

8


 

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 March 31,

 

 

2020

 

 

2019

 

Unvested RSUs

 

3,630,713

 

 

 

1,860,374

 

Vested and unvested options

 

8,096,471

 

 

 

6,842,443

 

ESPP share purchase rights

 

178,397

 

 

 

37,538

 

Total

 

11,905,581

 

 

 

8,740,355

 

 

 

4.

Financial Instruments

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

 

Level 1:

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

 

Level 2:

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

 

Level 3:

Inputs that are unobservable data points that are not corroborated by market data

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

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.

9


 

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 March 31, 2020:

 

Input Level

 

Cost

 

 

Gain

 

 

Loss

 

 

Fair Value

 

 

 

 

 

(in thousands)

 

Money market funds

 

Level 1

 

$

42,382

 

 

$

 

 

$

 

 

$

42,382

 

U.S. Treasury obligations

 

Level 2

 

 

58,993

 

 

 

318

 

 

 

 

 

 

59,311

 

Government agency obligations

 

Level 2

 

 

6,686

 

 

 

9

 

 

 

(2

)

 

 

6,693

 

Corporate debt obligations

 

Level 2

 

 

85,121

 

 

 

92

 

 

 

(210

)

 

 

85,003

 

Commercial paper

 

Level 2

 

 

14,471

 

 

 

 

 

 

 

 

 

14,471

 

Asset-backed securities

 

Level 2

 

 

5,269

 

 

 

2

 

 

 

(4

)

 

 

5,267

 

Total available-for-sale securities

 

 

 

 

212,922

 

 

 

421

 

 

 

(216

)

 

 

213,127

 

Less: amounts classified as cash equivalents

 

 

 

 

(68,689

)

 

 

(10

)

 

 

 

 

 

(68,699

)

Amounts classified as short-term investments

 

 

 

$

144,233

 

 

$

411

 

 

$

(216

)

 

$

144,428

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

Total

 

 

Total

 

 

Total

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Estimated

 

As of December 31, 2019:

 

Input Level

 

Cost

 

 

Gain

 

 

Loss

 

 

Fair Value

 

 

 

 

 

(in thousands)

 

Money market funds

 

Level 1

 

$

63,554

 

 

$

 

 

$

 

 

$

63,554

 

U.S. Treasury obligations

 

Level 2

 

 

52,805

 

 

 

46

 

 

 

(1

)

 

 

52,850

 

Government agency obligations

 

Level 2

 

 

6,151

 

 

 

1

 

 

 

(1

)

 

 

6,151

 

Corporate debt obligations

 

Level 2

 

 

100,512

 

 

 

180

 

 

 

(10

)

 

 

100,682

 

Commercial paper

 

Level 2

 

 

26,290

 

 

 

 

 

 

 

 

 

26,290

 

Asset-backed securities

 

Level 2

 

 

7,266

 

 

 

6

 

 

 

 

 

 

 

7,272

 

Certificates of deposit

 

Level 2

 

 

500

 

 

 

 

 

 

 

 

 

500

 

Total available-for-sale securities

 

 

 

 

257,078

 

 

 

233

 

 

 

(12

)

 

 

257,299

 

Less: amounts classified as cash equivalents

 

 

 

 

(72,507

)

 

 

 

 

 

 

 

 

(72,507

)

Amounts classified as short-term investments

 

 

 

$

184,571

 

 

$

233

 

 

$

(12

)

 

$

184,792

 

 

The amortized cost and fair value of our available-for-sale securities by contractual maturity were as follows:

 

 

As of March 31, 2020

 

 

As of December 31, 2019

 

 

Amortized

 

 

Estimated