Atara Biotherapeutics, Inc. — Q1 2016 Form 10-Q
Reporting period: Three months ended March 31, 2016; unaudited. Atara is a clinical-stage biopharmaceutical company with no product revenue.
Financial performance and liquidity
| Metric | Q1 2016 | Q1 2015 or prior year-end |
|---|---|---|
| Revenue | $0 | $0 reported to date |
| Research and development expense | $11.2 million | $5.8 million; up approximately 95% |
| General and administrative expense | $5.8 million | $3.5 million; up approximately 64% |
| Total operating expenses | $17.1 million | $9.3 million |
| Net loss | $16.6 million | $9.2 million |
| Basic and diluted loss per share | $0.58 | $0.42 |
| Cash, cash equivalents and short-term investments | $306.4 million at March 31 | $320.5 million at December 31, 2015 |
| Net cash used in operating activities | $12.5 million | $6.6 million |
Cash and short-term investments declined $14.1 million from year-end. Investing cash flow was a net inflow of $10.9 million, largely reflecting purchases and maturities or sales of short-term securities. The balance sheet reports $9.1 million of total liabilities, including $8.9 million current; it presents no debt balance. Profitability and operating margins are not meaningful because the company had no revenue and incurred operating losses. Accumulated deficit was $114.7 million.
Changes versus the prior comparable period
- Net loss widened from $9.2 million to $16.6 million as operating expenses increased, particularly R&D and stock-based compensation.
- R&D expense rose $5.5 million. Increased T-cell program and employee/overhead spending more than offset lower molecular-program costs.
- Operating cash use increased by $5.9 million. Q1 2015 financing included $69.5 million of common-stock proceeds; Q1 2016 financing cash flow was negligible.
Outlook, management commentary and risks
- Management said available cash, cash equivalents and short-term investments were expected to fund planned operations through 2018, while warning that additional capital will be needed to advance programs and potentially commercialize products.
- Atara planned to initiate two pivotal EBV-CTL trials for EBV-associated post-transplant lymphoproliferative disorder toward the end of 2016, and a multi-center expanded-access trial around mid-2016. The FDA indicated the proposed single-arm trial design might support approval but was unlikely to receive a Special Protocol Assessment.
- EBV-CTL had FDA and EMA orphan-drug designations. CMV-CTL and WT1-CTL were also in clinical development; STM 434 was in a Phase 1 trial.
- The Phase 2 PINTA 745 study failed to meet its primary endpoint. Atara announced suspension of further development and gave notice that it was returning rights to PINTA 745 and ATA 842 to Amgen.
- Material risks include clinical and regulatory failure or delay, uncertain trial enrollment, reliance on third-party manufacturers and clinical organizations, manufacturing scale-up and comparability challenges, intellectual-property and licensing risks, and the possibility that financing needs arise sooner than expected. The filing reports no material legal proceedings.
- Potential future license payments are contingent on milestones and sales; the filing cites up to $58 million to Amgen and up to $33 million to MSK under the relevant agreements. Operating lease commitments totaled $4.3 million at March 31, 2016.
Important facts for investors to verify
- Whether the anticipated EBV-CTL trial starts, its final design and regulatory path, and subsequent clinical results.
- Actual cash burn and whether the stated runway through 2018 remains achievable as trial and manufacturing spending grows.
- Progress in transferring and scaling T-cell manufacturing, including whether product comparability and supply requirements are met.
- Details and timing of the PINTA 745 and ATA 842 rights return, and any resulting changes to obligations or development plans.