Atara Biotherapeutics, Inc. — Q1 2020 Form 10-Q
Reporting period: Three months ended March 31, 2020; filed May 6, 2020. Atara is a clinical-stage T-cell immunotherapy company with no approved products or product revenue.
Financial results and liquidity
| Metric | Q1 2020 | Q1 2019 / prior date |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $57.7 million | $48.7 million |
| General and administrative expense | $17.0 million | $19.2 million |
| Total operating expenses / loss from operations | $74.7 million | $67.9 million |
| Net loss | $73.5 million | $66.3 million |
| Basic and diluted net loss per share | $1.20 | $1.44 |
| Net cash used in operating activities | $67.0 million | $70.2 million |
| Cash, cash equivalents and short-term investments | $214.6 million | $259.1 million at Dec. 31, 2019 |
| Total assets / total liabilities | $299.5 million / $46.7 million | $342.9 million / $52.2 million at Dec. 31, 2019 |
At March 31, cash and cash equivalents were $70.2 million; short-term investments were $144.4 million. Total current assets were $229.2 million versus current liabilities of $31.5 million. The filing reports no conventional funded debt; liabilities include operating lease obligations. The company had an accumulated deficit of $891.5 million. As a pre-revenue company, operating margins are not meaningful.
Changes and cash flows
- R&D expense rose $9.0 million year over year, principally from higher tab-cel production and manufacturing qualification activity, increased headcount and facility costs. Spending on ATA188, CAR T and other programs declined, partly because some programs were no longer in active development.
- G&A expense fell $2.2 million, primarily due to lower professional services costs. Net loss increased $7.3 million; loss per share narrowed, while weighted-average shares increased to 61.2 million from 46.1 million.
- Operating cash use was $67.0 million. Investing activities provided $39.0 million, mainly reflecting net maturities and sales of investments; financing activities provided $24.0 million, primarily from ATM stock sales. Cash, cash equivalents and restricted cash decreased $4.1 million in the quarter.
- Atara sold 1.53 million shares through its 2019 at-the-market facility during the quarter, reporting net proceeds of $23.1 million from those sales. It had $25.9 million remaining under the 2019 facility and $100.0 million under a separate 2020 ATM facility at quarter-end.
Outlook, risks and notable items
- Management expected quarter-end cash, cash equivalents and short-term investments to fund planned operations into the second quarter of 2021. However, the filing also identifies substantial doubt about the company’s ability to continue as a going concern beyond one year from issuance and says additional funding is required. Another risk-factor passage states it does not have sufficient funds for at least the next 12 months from filing. These statements make the liquidity runway disclosure important to reconcile.
- Management is seeking capital through equity or debt financing, collaborations, partnering or other strategic arrangements. There is no assurance funding will be available on acceptable terms. Failure to obtain funds could force delays, reductions or termination of development programs; equity financing could dilute shareholders, while partnerships could require rights concessions.
- Tab-cel Phase 3 site operations and expansion were affected by COVID-19, though most sites remained open. Atara said it remained on track to begin a U.S. BLA submission in the second half of 2020, subject to a pre-BLA discussion with FDA; it planned an EU marketing authorization application in 2021, subject to agreement on a pediatric investigation plan.
- ATA188 screening and enrollment were temporarily paused to protect participants and allow sites to focus on COVID-19 care; enrollment was still expected to begin in Q2 or Q3 2020. COVID-19 could also affect enrollment, manufacturing, supply chains, study monitoring, timelines and access to capital.
- Other stated development plans included a tab-cel study expansion into additional EBV-associated populations, MSK’s anticipated ATA2271 IND submission in Q2 or Q3 2020, and ongoing IND-enabling work for ATA3271 and ATA3219. These are forward-looking plans, not reported outcomes.
- The company has never generated revenue and expects continuing losses. Key risks include clinical and regulatory failure, slower enrollment, manufacturing scale-up and supply constraints, competition, dependence on licensed technology and third-party partners, and the need for additional capital. No material legal proceedings were reported. Disclosure controls were assessed as effective.
Important facts for investors to verify
- Reconcile the stated cash runway into Q2 2021 with the filing’s substantial-doubt and “not sufficient for at least the next 12 months” disclosures; assess subsequent financing and cash use.
- Check whether tab-cel’s planned BLA timing, pre-BLA discussions and European regulatory milestones were achieved, and review the supporting clinical data and enrollment status.
- Verify the extent and duration of COVID-19 impacts on trial enrollment, manufacturing, supply and the ATA188 program.
- Track ATM utilization, share dilution, remaining authorized issuance capacity and any alternative financing or partnering terms.
- Assess progress in commercial manufacturing qualification and the company’s ability to maintain adequate clinical and future commercial supply.