Atara Biotherapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Unaudited results are compared with the three months ended March 31, 2021. Atara is a clinical-stage T-cell immunotherapy company with no approved products or commercial product sales.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| License and collaboration revenue | $7.3 million | $3.6 million; up $3.8 million, primarily from Bayer agreements |
| Research and development expense | $75.0 million | $64.1 million; up $10.9 million |
| General and administrative expense | $20.6 million | $17.7 million; up $2.8 million |
| Total operating expense | $95.5 million | $81.8 million |
| Net loss | $88.1 million | $78.3 million |
| Net loss per share, basic and diluted | $0.87 | $0.86 |
| Cash used in operating activities | $84.5 million | $65.7 million |
- Cash, cash equivalents and short-term investments totaled $301.8 million at quarter-end, down from $371.1 million at December 31, 2021. Cash, cash equivalents and restricted cash were $103.0 million.
- At March 31, total assets were $397.3 million, total liabilities $173.0 million, and stockholders’ equity $224.3 million. The balance sheet reports lease liabilities and deferred revenue; no conventional borrowing balance is presented.
- Net operating cash use increased $18.8 million year over year, reflecting higher net loss and working-capital use. Financing provided $19.9 million, principally from $20.5 million of net ATM proceeds; investing provided $60.2 million, primarily from investment maturities and sales.
- No commercial margins are reported because the company had no product sales. Revenue was from licensing and collaborations.
Material changes and business developments
- Research and development spending rose 17% year over year. Employee and overhead costs increased $12.9 million, partly offset by lower tab-cel and other program spending. General and administrative expense rose mainly with higher compensation costs.
- In Q1, Atara sold 1.32 million shares through its ATM at an average $15.88 per share, receiving $20.5 million net. $57.4 million remained available under the facility at quarter-end. Shares outstanding were 93.4 million as of April 25, 2022.
- The sale of the ATOM manufacturing facility to FUJIFILM Diosynth Biotechnologies closed April 4, 2022, after quarter-end. Atara received $100 million in cash, subject to potential post-closing adjustments, and transferred 136 facility employees. A supply-services agreement with Fujifilm could run up to ten years.
Outlook, commentary and principal risks
- Management said March 31 cash, cash equivalents and short-term investments, together with the $100 million received from Fujifilm in April, were expected to fund planned operations into Q4 2023. The filing also cautions that spending may differ from plan and substantial additional financing may be needed.
- Tab-cel: The EMA moved the EU application from accelerated to standard assessment; Atara anticipated a decision in Q4 2022. The FDA did not agree that comparability between the pivotal-study product and intended commercial product had been demonstrated and recommended an additional clinical study. Atara continued discussions on a potential BLA path that would not require a new Phase 3 study; that outcome was uncertain. Data from a Phase 2 multi-cohort study were expected in 2023.
- ATA188: The company planned a formal interim analysis of the EMBOLD Phase 2 study in June 2022 and expected to communicate next steps in July. Reported Phase 1/extension data showed 20 of 24 patients had EDSS improvement or stability during observation, with follow-up up to 42 months; these early data do not establish later-stage efficacy.
- ATA2271/ATA3271: Enrollment in the MSK Phase 1 ATA2271 study was temporarily paused after a fatal serious adverse event in a higher-dose cohort, pending review. Bayer was expected to file an ATA3271 IND in Q4 2022. Atara planned an ATA3219 IND submission in Q4 2022.
- Atara reported sufficient tab-cel drug-product inventory for at least 12 months of commercial demand if approved and consistent with approval specifications. Its CRL manufacturing agreement ran through May 31, 2022, and extension negotiations were ongoing. Fujifilm commitments under the supply agreement totaled $144.8 million through Q1 2027.
- Key risks include clinical and regulatory failure or delay, manufacturing comparability and supply constraints, reliance on partners and contract manufacturers, ongoing losses and financing needs, potential dilution, and uncertainty around COVID-19 impacts. The filing reports no material legal proceedings and no off-balance-sheet arrangements.
Most important facts for investors to verify
- Whether Atara and the FDA reach an acceptable tab-cel comparability and BLA pathway, and whether an additional clinical study is required.
- The timing and outcome of the EMA’s standard-review decision for tab-cel, and whether the anticipated Q4 2022 timing is achieved.
- ATA188 interim-analysis findings and subsequent development plans, alongside enrollment and data timing for other programs.
- Review results and any resumption of enrollment in ATA2271 after the fatal adverse event.
- Actual cash use and runway after the Fujifilm proceeds, plus any further ATM issuance, financing, or changes to planned operations.
- Execution of manufacturing arrangements, including CRL contract extension, Fujifilm supply performance, and the impact of transferring the ATOM facility and employees.