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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, 2021

 

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 30, 2021 was 84,757,551 shares.

 

 

 

 


 

 

ATARA BIOTHERAPEUTICS, INC.

INDEX

 

 

  

 

  

Page

PART I.

  

FINANCIAL INFORMATION

  

 

 

 

 

Item 1.

  

Financial Statements (Unaudited)

  

 

 

 

 

 

  

Condensed Consolidated Balance Sheets

  

5

 

 

 

 

  

Condensed Consolidated Statements of Operations and Comprehensive Loss

  

6

 

 

 

 

  

Condensed Consolidated Statements of Changes in Stockholders’ Equity

  

7

 

 

 

 

  

Condensed Consolidated Statements of Cash Flows

  

8

 

 

 

 

  

Notes to Condensed Consolidated Financial Statements

  

9

 

 

 

Item 2.

  

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

  

18

 

 

 

Item 3.

  

Quantitative and Qualitative Disclosures about Market Risk

  

28

 

 

 

Item 4.

  

Controls and Procedures

  

28

 

 

 

PART II.

  

OTHER INFORMATION

  

 

 

 

 

Item 1.

  

Legal Proceedings

  

29

 

 

 

Item 1A.

  

Risk Factors

  

29

 

 

 

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

  

67

 

Item 3.

  

Defaults Upon Senior Securities

  

67

 

Item 4.

  

Mine Safety Disclosures

  

67

 

Item 5.

  

Other Information

  

67

 

Item 6.

  

Exhibits

  

68

 

 

 

  

Signatures

  

69

 

 

 

 


2


 

 

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which represent our intent, belief or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “predict,” “plan,” “expect” or the negative or plural of these words or similar expressions. The forward-looking statements include, but are not limited to, statements about:

 

our expectations regarding the timing of initiating clinical studies, opening client sites, enrolling clinical studies and reporting results of clinical studies for our programs, including in light of the COVID-19 pandemic;

 

the likelihood and timing of regulatory submissions or related approvals for our product candidates, including the initiation, completion and expectations about the timing of approvals for our BLA for tab-cel® for patients with EBV+ PTLD;

 

the potential indications for our product candidates, if approved for commercial use;

 

the potential market opportunities for commercializing our product candidates;

 

our Research, Development and License Agreement with Bayer, including potential milestone and royalty payments under the agreement;

 

our expectations regarding the potential market size and the size of the patient populations for our product candidates, if approved for commercial use;

 

estimates of our expenses, capital requirements and need for additional financing;

 

our expectation regarding the length of time that our existing capital resources will be sufficient to enable us to fund our planned operations;

 

our ability to commercialize our product candidates, if approved for commercial use;

 

our ability to develop, acquire and advance product candidates into, and successfully complete, clinical studies;

 

the initiation, timing, progress and results of future preclinical studies and clinical studies and our research and development programs;

 

the scope of protection we are able to obtain and maintain for the intellectual property rights covering our product candidates;

 

our financial performance;

 

developments and projections relating to our competitors and our industry;

 

our ability to manufacture our product candidates for our clinical studies, or if approved, for commercial sale;

 

the impact of COVID-19 to our business and operations, as well as the businesses and operations of third parties on which we rely;

 

our ability to sell or manufacture approved products at commercially reasonable values; and

 

timing and costs related to qualification of our manufacturing plant for commercial production.

These statements are only current predictions and are subject to known and unknown risks, uncertainties, including, without limitation, risks and uncertainties associated with the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success; the COVID-19 pandemic, which may significantly impact (i) our business, research, clinical development plans and operations, including our operations in South San Francisco and Southern California and at our clinical trial sites, as well as the business or operations of our third-party manufacturer, contract research organizations or other third parties with whom we conduct business, (ii) our ability to access capital, and (iii) the value of our common stock; the sufficiency of our cash resources and need for additional capital, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading “1A. Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.

3


 

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “Atara,” “Atara Biotherapeutics,” “Company,” “we,” “our,” and “us” means Atara Biotherapeutics, Inc. and, where appropriate, its subsidiaries.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. These risks are more fully described below. These risks include, among others:

 

we have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future;

 

we currently have no approved products and thus have no revenues from commercialization of any products and may never generate revenues from the sale of products or achieve profitability;

 

we are generally early in our development efforts, have only a small number of product candidates in clinical development, and we will need to successfully complete preclinical and clinical testing of our product candidates before we can seek regulatory approval and potentially generate commercial sales;

 

we will require substantial additional financing to achieve our goals, which may not be available to us on acceptable terms, or at all;

 

our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel;

 

the results of preclinical studies or earlier clinical studies are not necessarily predictive of future results, and our existing product candidates in clinical studies, and any other product candidates we advance into clinical studies may not have favorable results in later clinical studies or receive regulatory approval;

 

clinical drug development, both in the U.S. and international jurisdictions, involves a lengthy and expensive process with an uncertain outcome and even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties;

 

our T-cell immunotherapy product candidates and our next-generation CAR T programs represent new therapeutic approaches that could result in heightened regulatory scrutiny and delays in or our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates;

 

the market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small;

 

we may not be able to obtain or maintain orphan drug exclusivity for our product candidates;

 

the COVID-19 pandemic continues to impact our business and operations and could materially and adversely affect our business and operations in the future, as well as the businesses and operations of third parties on which we rely;

 

our success depends upon our ability to obtain and maintain sufficient intellectual property protection for our product candidates, and we may not be able to protect our intellectual property rights throughout the world;

 

our principal stockholders own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval; and

 

we may not be able to obtain and maintain the relationships with third parties that are necessary to develop, commercialize and manufacture some or all of our product candidates.

 

 

4


 

 

Atara Biotherapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

123,856

 

 

$

200,404

 

Short-term investments

 

 

249,524

 

 

 

300,255

 

Restricted cash - short-term

 

 

194

 

 

 

194

 

Accounts receivable

 

 

 

 

 

1,250

 

Prepaid expenses and other current assets

 

 

18,751

 

 

 

21,170

 

Total current assets

 

 

392,325

 

 

 

523,273

 

Property and equipment, net

 

 

51,029

 

 

 

50,517

 

Operating lease assets

 

 

11,548

 

 

 

12,303

 

Restricted cash - long-term

 

 

1,200

 

 

 

1,200

 

Other assets

 

 

689

 

 

 

827

 

Total assets

 

$

456,791

 

 

$

588,120

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

12,301

 

 

$

7,118

 

Accrued compensation

 

 

15,323

 

 

 

20,458

 

Accrued research and development expenses

 

 

12,871

 

 

 

15,813

 

Deferred revenue

 

 

40,968

 

 

 

33,455

 

Other current liabilities

 

 

7,367

 

 

 

6,057

 

Total current liabilities

 

 

88,830

 

 

 

82,901

 

Deferred revenue - long-term

 

 

22,470

 

 

 

27,795

 

Operating lease liabilities - long-term

 

 

12,182

 

 

 

13,041

 

Other long-term liabilities

 

 

1,771

 

 

 

2,044

 

Total liabilities

 

 

125,253

 

 

 

125,781

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

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

   2021 and December 31, 2020; 84,754 and 83,372 shares issued and outstanding

   as of June 30, 2021 and December 31, 2020, respectively

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

1,618,177

 

 

 

1,586,616

 

Accumulated other comprehensive income

 

 

62

 

 

 

296

 

Accumulated deficit

 

 

(1,286,709

)

 

 

(1,124,581

)

Total stockholders’ equity

 

 

331,538

 

 

 

462,339

 

Total liabilities and stockholders’ equity

 

$

456,791

 

 

$

588,120

 

 

 

See accompanying notes.

5


 

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,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

License and collaboration revenue

 

$

3,870

 

 

$

 

 

$

7,422

 

 

$

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

68,475

 

 

 

61,560

 

 

 

132,534

 

 

 

119,219

 

General and administrative

 

 

19,397

 

 

 

16,392

 

 

 

37,135

 

 

 

33,430

 

Total operating expenses

 

 

87,872

 

 

 

77,952

 

 

 

169,669

 

 

 

152,649

 

Loss from operations

 

 

(84,002

)

 

 

(77,952

)

 

 

(162,247

)

 

 

(152,649

)

Interest and other income, net

 

 

225

 

 

 

497

 

 

 

135

 

 

 

1,685

 

Loss before provision for income taxes

 

 

(83,777

)

 

 

(77,455

)

 

 

(162,112

)

 

 

(150,964

)

Provision for income taxes

 

 

16

 

 

 

1

 

 

 

16

 

 

 

1

 

Net loss

 

$

(83,793

)

 

$

(77,456

)

 

$

(162,128

)

 

$

(150,965

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(99

)

 

 

606

 

 

 

(234

)

 

 

590

 

Comprehensive loss

 

$

(83,892

)

 

$

(76,850

)

 

$

(162,362

)

 

$

(150,375

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(0.91

)

 

$

(1.14

)

 

$

(1.77

)

 

$

(2.34

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding used to calculate basic

   and diluted net loss per common share

 

 

92,152

 

 

 

67,975

 

 

 

91,806

 

 

 

64,592

 

 

See accompanying notes.

6


 

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, 2021

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

83,372

 

 

$

8

 

 

$

1,586,616

 

 

$

296

 

 

$

(1,124,581

)

 

$

462,339

 

Issuance of common stock through ATM facilities, net of commissions

   and offering costs of $139

 

 

146

 

 

 

 

 

 

2,382

 

 

 

 

 

 

 

 

 

2,382

 

RSU settlements, net of shares withheld

 

 

449

 

 

 

 

 

 

(1,231

)

 

 

 

 

 

 

 

 

(1,231

)

Issuance of common stock pursuant to employee stock awards

 

 

108

 

 

 

 

 

 

1,749

 

 

 

 

 

 

 

 

 

1,749

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

12,268

 

 

 

 

 

 

 

 

 

12,268

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(78,335

)

 

 

(78,335

)

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(135

)

 

 

 

 

 

(135

)

Balance as of March 31, 2021

 

 

84,075

 

 

 

8

 

 

 

1,601,784

 

 

 

161

 

 

 

(1,202,916

)

 

 

399,037

 

RSU settlements, net of shares withheld

 

 

423

 

 

 

 

 

 

(13

)

 

 

 

 

 

 

 

 

(13

)

Issuance of common stock pursuant to employee stock awards

 

 

256

 

 

 

 

 

 

2,599

 

 

 

 

 

 

 

 

 

2,599

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

13,807

 

 

 

 

 

 

 

 

 

13,807

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(83,793

)

 

 

(83,793

)

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(99

)

 

 

 

 

 

(99

)

Balance as of June 30, 2021

 

 

84,754

 

 

$

8

 

 

$

1,618,177

 

 

$

62

 

 

$

(1,286,709

)

 

$

331,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 through ATM facilities, net of commissions

   and 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

 

 

See accompanying notes.

7


 

Atara Biotherapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(162,128

)

 

$

(150,965

)

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

26,075

 

 

 

26,592

 

Depreciation and amortization expense

 

 

4,540

 

 

 

4,002

 

Amortization of investment premiums

 

 

851

 

 

 

170

 

Non-cash operating lease expense

 

 

755

 

 

 

734

 

Loss on disposals of property and equipment

 

 

 

 

 

93

 

Asset retirement obligation accretion expense

 

 

43

 

 

 

38

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,250

 

 

 

 

Prepaid expenses and other current assets

 

 

2,419

 

 

 

1,423

 

Other assets

 

 

18

 

 

 

(288

)

Accounts payable

 

 

4,356

 

 

 

(2,933

)

Accrued compensation

 

 

(5,135

)

 

 

(2,049

)

Accrued research and development expenses

 

 

(2,942

)

 

 

(97

)

Other current liabilities

 

 

1,522

 

 

 

(406

)

Deferred revenue

 

 

2,188

 

 

 

 

Operating lease liabilities

 

 

(837

)

 

 

(535

)

Other long-term liabilities

 

 

(250

)

 

 

541

 

Net cash used in operating activities

 

 

(127,275

)

 

 

(123,680

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(158,869

)

 

 

(228,224

)

Proceeds from maturities and sales of short-term investments

 

 

208,515

 

 

 

140,235

 

Purchases of property and equipment

 

 

(4,258

)

 

 

(3,409

)

Net cash provided by (used in) investing activities

 

 

45,388

 

 

 

(91,398

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from sale of common stock in underwritten offerings, net

 

 

 

 

 

189,623

 

Proceeds from issuance of common stock through ATM facilities, net

 

 

2,382

 

 

 

24,172

 

Proceeds from employee stock awards

 

 

4,348

 

 

 

3,234

 

Taxes paid related to net share settlement of restricted stock units

 

 

(1,244

)

 

 

(1,395

)

Principal payments on finance lease obligations

 

 

(130

)

 

 

(197

)

Other financing activities, net

 

 

(17

)

 

 

(165

)

Net cash provided by financing activities

 

 

5,339

 

 

 

215,272

 

(Decrease) increase in cash, cash equivalents and restricted cash

 

 

(76,548

)

 

 

194

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

201,798

 

 

 

75,711

 

Cash, cash equivalents and restricted cash at end of period

 

$

125,250