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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 June 30, 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 July 31, 2020 was 74,307,894 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

  

15

 

 

 

Item 3.

  

Quantitative and Qualitative Disclosures about Market Risk

  

25

 

 

 

Item 4.

  

Controls and Procedures

  

25

 

 

 

PART II.

  

OTHER INFORMATION

  

 

 

 

 

Item 1.

  

Legal Proceedings

  

26

 

 

 

Item 1A.

  

Risk Factors

  

26

 

 

 

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

  

60

 

Item 3.

  

Defaults Upon Senior Securities

  

60

 

Item 4.

  

Mine Safety Disclosures

  

60

 

Item 5.

  

Other Information

  

60

 

Item 6.

  

Exhibits

  

61

 

 

 

  

Signatures

  

62

 

 

 

 

 

 

2


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

74,511

 

 

$

74,317

 

Short-term investments

 

 

273,201

 

 

 

184,792

 

Restricted cash - short-term

 

 

194

 

 

 

194

 

Prepaid expenses and other current assets

 

 

11,081

 

 

 

13,689

 

Total current assets

 

 

358,987

 

 

 

272,992

 

Property and equipment, net

 

 

53,587

 

 

 

54,176

 

Operating lease assets

 

 

13,321

 

 

 

14,007

 

Restricted cash - long-term

 

 

1,200

 

 

 

1,200

 

Other assets

 

 

1,016

 

 

 

567

 

Total assets

 

$

428,111

 

 

$

342,942

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,106

 

 

$

7,963

 

Accrued compensation

 

 

12,657

 

 

 

14,706

 

Accrued research and development expenses

 

 

8,244

 

 

 

8,341

 

Other current liabilities

 

 

5,677

 

 

 

5,733

 

Total current liabilities

 

 

31,684

 

 

 

36,743

 

Operating lease liabilities - long-term

 

 

13,420

 

 

 

14,136

 

Other long-term liabilities

 

 

1,882

 

 

 

1,282

 

Total liabilities

 

 

46,986

 

 

 

52,161

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock—$0.0001 par value, 500,000 shares authorized as of June 30,

   2020 and December 31, 2019; 74,308 and 56,806 shares issued and

   outstanding as of June 30, 2020 and December 31, 2019, respectively

 

 

7

 

 

 

6

 

Additional paid-in capital

 

 

1,349,234

 

 

 

1,108,516

 

Accumulated other comprehensive income

 

 

810

 

 

 

220

 

Accumulated deficit

 

 

(968,926

)

 

 

(817,961

)

Total stockholders’ equity

 

 

381,125

 

 

 

290,781

 

Total liabilities and stockholders’ equity

 

$

428,111

 

 

$

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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

61,560

 

 

$

52,251

 

 

$

119,219

 

 

$

100,919

 

General and administrative

 

 

16,392

 

 

 

23,284

 

 

 

33,430

 

 

 

42,507

 

Total operating expenses

 

 

77,952

 

 

 

75,535

 

 

 

152,649

 

 

 

143,426

 

Loss from operations

 

 

(77,952

)

 

 

(75,535

)

 

 

(152,649

)

 

 

(143,426

)

Interest and other income, net

 

 

497

 

 

 

1,207

 

 

 

1,685

 

 

 

2,841

 

Loss before provision for income taxes

 

 

(77,455

)

 

 

(74,328

)

 

 

(150,964

)

 

 

(140,585

)

Provision for income taxes

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Net loss

 

$

(77,456

)

 

$

(74,328

)

 

$

(150,965

)

 

$

(140,585

)

Other comprehensive gain:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on available-for-sale securities

 

 

606

 

 

 

135

 

 

 

590

 

 

 

513

 

Comprehensive loss

 

$

(76,850

)

 

$

(74,193

)

 

$

(150,375

)

 

$

(140,072

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(1.14

)

 

$

(1.60

)

 

$

(2.34

)

 

$

(3.04

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding used to calculate basic

   and diluted net loss per common share

 

 

67,975

 

 

 

46,426

 

 

 

64,592

 

 

 

46,276

 

 

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 Six Months Ended June 30, 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

 

Issuance of common stock and pre-funded warrants through underwritten

   offering, net of offering costs of $370

 

 

14,958

 

 

 

1

 

 

 

189,300

 

 

 

 

 

 

 

 

 

189,301

 

RSU settlements, net of shares withheld

 

 

219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock pursuant to employee stock awards

 

 

191

 

 

 

 

 

 

1,904

 

 

 

 

 

 

 

 

 

1,904

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

13,948

 

 

 

 

 

 

 

 

 

13,948

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(77,456

)

 

 

(77,456

)

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

606

 

 

 

 

 

 

606

 

Balance as of June 30, 2020

 

 

74,308

 

 

$

7

 

 

$

1,349,234

 

 

$

810

 

 

$

(968,926

)

 

$

381,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

For the Six Months Ended June 30, 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

 

Issuance of common stock through ATM facilities, net of commissions

   and offering costs of $338

 

 

359

 

 

 

 

 

 

7,630

 

 

 

 

 

 

 

 

 

7,630

 

RSU settlements, net of shares withheld

 

 

120

 

 

 

 

 

 

(2,095

)

 

 

 

 

 

 

 

 

(2,095

)

Issuance of common stock pursuant to employee stock awards

 

 

97

 

 

 

 

 

 

1,802

 

 

 

 

 

 

 

 

 

1,802

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

15,201

 

 

 

 

 

 

 

 

 

15,201

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(74,328

)

 

 

(74,328

)

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

135

 

 

 

 

 

 

135

 

Balance as of June 30, 2019

 

 

46,883

 

 

$

5

 

 

$

899,671

 

 

$

173

 

 

$

(667,570

)

 

$

232,279

 

 

See accompanying notes.

5


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(150,965

)

 

$

(140,585

)

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

26,592

 

 

 

27,470

 

Depreciation and amortization expense

 

 

4,002

 

 

 

3,385

 

Amortization (accretion) of investment premiums (discounts)

 

 

170

 

 

 

(817

)

Non-cash operating lease expense

 

 

734

 

 

 

576

 

Loss on disposals of property and equipment

 

 

93

 

 

 

127

 

Asset retirement obligation accretion expense

 

 

38

 

 

 

35

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

1,423

 

 

 

720

 

Operating lease assets

 

 

-

 

 

 

238

 

Other assets

 

 

(288

)

 

 

255

 

Accounts payable

 

 

(2,933

)

 

 

2,649

 

Accrued compensation

 

 

(2,049

)

 

 

(2,814

)

Accrued research and development expenses

 

 

(97

)

 

 

(14,071

)

Other current liabilities

 

 

(406

)

 

 

(1,658

)

Operating lease liabilities

 

 

(535

)

 

 

(299

)

Other long-term liabilities

 

 

541

 

 

 

 

Net cash used in operating activities

 

 

(123,680

)

 

 

(124,789

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(228,224

)

 

 

(17,589

)

Proceeds from maturities and sales of short-term investments

 

 

140,235

 

 

 

136,876

 

Purchases of property and equipment

 

 

(3,409

)

 

 

(1,534

)

Proceeds from sale of property and equipment

 

 

 

 

 

96

 

Net cash (used in) provided by investing activities

 

 

(91,398

)

 

 

117,849

 

Financing activities

 

 

 

 

 

 

 

 

Proceeds from sale of common stock in underwritten offerings, net

 

 

189,623

 

 

 

 

Proceeds from issuance of common stock through ATM facilities, net

 

 

24,172

 

 

 

7,630

 

Proceeds from employee stock awards

 

 

3,234

 

 

 

4,676

 

Taxes paid related to net share settlement of restricted stock units

 

 

(1,395

)

 

 

(6,670

)

Principal payments on finance lease obligations

 

 

(197

)

 

 

(235

)

Other financing activities, net

 

 

(165

)

 

 

 

Net cash provided by financing activities

 

 

215,272

 

 

 

5,401

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

194

 

 

 

(1,539

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

75,711

 

 

 

62,092

 

Cash, cash equivalents and restricted cash at end of period

 

$

75,905

 

 

$

60,553

 

Non-cash investing and financing activities

 

 

 

 

 

 

 

 

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

 

$

253

 

 

$

473

 

Finance lease assets obtained in exchange for lease obligations

 

$

281

 

 

$

 

Accrued costs related to underwritten public offering

 

$

322

 

 

$

 

Receivable for options exercised

 

$

 

 

$

24

 

Supplemental cash flow disclosure

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

37

 

 

$

31

 

Cash paid for income taxes

 

$

1

 

 

$

 

 

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

We have incurred significant operating losses since inception and have relied on public and private equity financings to fund our operations. As of June 30, 2020, we had an accumulated deficit of $968.9 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 June 30, 2020 will be sufficient to fund our planned operations into 2022.

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.

7


 

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