Atara Biotherapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2021. Atara is a clinical-stage cell-therapy company with no approved products and no product-sales revenue. Its lead program, tab-cel, was in Phase 3 development for EBV-positive post-transplant lymphoproliferative disease (EBV+ PTLD).
Financial performance
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| License and collaboration revenue | $5.4m | $0 | $12.8m | $0 |
| Research and development expense | $70.3m | $59.9m | $202.9m | $179.1m |
| General and administrative expense | $19.8m | $14.8m | $57.0m | $48.3m |
| Net loss | $84.7m | $74.3m | $246.8m | $225.3m |
| Basic and diluted loss per share | $0.90 | $0.92 | $2.67 | $3.21 |
Revenue was recognized under the Bayer agreements; the company reported no product revenue. No meaningful operating margin was reported, as the business remains loss-making and development-focused.
- Cash and investments: $357.2m at September 30, 2021, comprising $113.2m cash and equivalents and $244.0m short-term investments, down from $500.7m at December 31, 2020.
- Cash flow, nine months: $186.3m used in operations; $46.6m provided by investing activities; and $52.5m provided by financing activities. Cash, cash equivalents and restricted cash decreased $87.2m to $114.6m.
- Debt and liquidity: The filing does not report conventional borrowings. Lease liabilities were $24.6m long-term, with additional current lease obligations. Current assets were $369.5m versus current liabilities of $86.2m.
- Equity financing: ATM sales generated $51.2m net proceeds during the first nine months, including $48.7m in Q3. The company reported $27.2m of ATM capacity remaining at quarter end.
Changes versus prior comparable periods
- Nine-month net loss increased $21.5m year over year; operating cash use increased $9.6m.
- Nine-month operating expenses rose $32.5m. R&D increased $23.8m, primarily from higher employee and facility costs, increased ATA188/CAR T work, and milestone and license fees; tab-cel expense declined as 2020 included higher inventory-building activity.
- G&A increased $8.7m, mainly due to higher headcount and tab-cel launch-readiness activities.
- Bayer-related revenue of $12.8m was recognized in the first nine months of 2021; no such revenue was reported in 2020.
Outlook, developments and risks
- Management expected September-quarter cash, equivalents and investments, together with the $45.0m Pierre Fabre upfront payment received after quarter end, to fund planned operations into Q2 2023. The filing also states that capital needs may arise sooner and additional financing will be needed to complete development and support commercialization.
- Atara expected to submit the EU tab-cel marketing application imminently, with a potential decision in the second half of 2022; it planned further FDA interactions in Q1 2022 and a U.S. BLA submission in Q2 2022. These are forward-looking targets, not assured outcomes.
- In October 2021, Atara granted Pierre Fabre commercialization rights for tab-cel in Europe and specified emerging markets, retaining rights in North America, Asia Pacific and Latin America. The agreement included a $45.0m upfront payment, up to $318.0m in regulatory and commercial milestones, and tiered royalties. Atara remained responsible for specified development work and supply.
- Atara planned an interim ATA188 EMBOLD study analysis in the first half of 2022 and expected planned enrollment to be completed in that period. Bayer was expected to file an ATA3271 IND in the second half of 2022; Atara planned an ATA3219 IND submission in Q1 2022.
- Principal risks include clinical and regulatory uncertainty, manufacturing qualification and comparability, reliance on partners and contract manufacturers, limited capital resources and possible dilution from future financing. COVID-19 had not materially affected operations or timelines to date, but could cause future disruption.
- No material legal proceedings were reported. Disclosure controls and procedures were assessed as effective at September 30, 2021.
Key facts for investors to verify
- Progress and actual timing of tab-cel EU MAA and U.S. BLA submissions, including FDA requirements for CMC comparability.
- Cash burn, cash runway assumptions, and the timing and terms of any additional financing.
- Whether the Pierre Fabre agreement’s upfront payment, milestones, royalties and supply arrangements translate into expected cash flows.
- Clinical enrollment, interim and final results for tab-cel and ATA188, and planned IND progress for ATA3271 and ATA3219.
- Manufacturing-facility qualification, product supply capacity and dependence on third-party manufacturers and collaborators.