Atara Biotherapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; balance-sheet comparisons are to December 31, 2020. Atara is a clinical-stage T-cell immunotherapy company with no approved products and no product sales.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| License and collaboration revenue | $3.6 million | $0 |
| Research and development expense | $64.1 million | $57.7 million |
| General and administrative expense | $17.7 million | $17.0 million |
| Total operating expenses | $81.8 million | $74.7 million |
| Net loss | $78.3 million | $73.5 million |
| Basic and diluted net loss per share | $0.86 | $1.20 |
| Cash used in operating activities | $65.7 million | $67.0 million |
Revenue was from Bayer collaboration, research, development and technology-transfer activities; the company reported no product revenue. R&D expense rose mainly because of higher employee and overhead costs and increased ATA188/CAR T program spending, partly offset by lower tab-cel production activity. G&A expense increased primarily to support anticipated tab-cel launch activities. Net loss widened by $4.8 million, while loss per share narrowed, reflecting a higher weighted-average share count.
At March 31, cash and cash equivalents were $151.1 million and short-term investments were $284.1 million, totaling $435.2 million, down from $500.7 million at year-end. Cash, cash equivalents and restricted cash at quarter-end totaled $152.5 million. Current assets were $464.3 million versus current liabilities of $84.2 million. Total liabilities were $130.6 million, including $67.3 million of deferred revenue; the filing reports no conventional borrowings. Stockholders’ equity was $399.0 million. No operating margin is meaningful given the absence of product sales and continuing development-stage losses.
Investing activities provided $13.5 million, primarily reflecting net maturities and purchases of short-term investments; financing activities provided $2.9 million. Atara raised $2.4 million net through its ATM facility and had $77.1 million of ATM capacity remaining. The company stated that existing resources should fund planned operations for at least 12 months; its MD&A further projected funding into 2023, including anticipated U.S. tab-cel sales if approved.
Material changes and agreements
- Bayer collaboration generated $3.6 million of recognized revenue in Q1; deferred revenue under the Bayer arrangements was $67.3 million, expected to be recognized over approximately three years.
- In March, Atara entered into a Bayer technology-transfer agreement with a $15.3 million fee and a manufacturing and supply agreement. It invoiced $3.1 million for technology transfer and $6.6 million, representing 50% of the estimated initial six-lot supply price, recorded in accounts receivable.
- Q1 R&D expense increased $6.4 million year over year; tab-cel expense decreased $2.8 million, while ATA188, CAR T and other program expense increased $4.9 million. Employee and overhead expense increased $4.3 million.
- Cash and short-term investments fell $65.5 million during the quarter. Common shares outstanding were 84.1 million at March 31; the company issued 145,630 shares through the ATM in the quarter.
- Atara entered a new Thousand Oaks lease in March 2021 for 33,659 square feet, with stated aggregate contractual obligations of $19.1 million over the initial 10.5-year term, scheduled to begin in July 2021.
Outlook, commentary and principal risks
- Tab-cel: The company targeted completing a U.S. BLA submission in Q3 2021, contingent on alignment with FDA on CMC comparability. It expected to present pivotal ALLELE data in Q4 2021 and anticipated a potential U.S. approval and launch in the first half of 2022. It initiated the EU MAA process and targeted submission in Q4 2021, with an anticipated decision in the second half of 2022.
- Other programs: Atara planned an ATA188 Phase 2 interim analysis in the first half of 2022 and expected to complete enrollment after that analysis. It planned an ATA3219 IND in Q4 2021 or Q1 2022 and an ATA3271 IND in Q2 or Q3 2022.
- Management said COVID-19 had not materially affected operations or timelines to date, but acknowledged transient site-initiation and clinical-operation delays and warned that further disruption could affect trials, manufacturing, supply chains and access to capital.
- The company expects continuing losses and increasing expenses, and says additional capital will be needed to achieve its goals. Runway estimates depend in part on successful development and approval of tab-cel and projected sales; financing may be unavailable or dilutive.
- Key risks include clinical efficacy and safety uncertainty, FDA comparability and manufacturing qualification, patient enrollment, cell-therapy production and supply constraints, competition, reimbursement and market acceptance, reliance on Bayer for partnered programs, and the possibility that expedited designations will not shorten review or result in approval.
- Tab-cel’s ALLELE response duration was described as maturing, with no new safety signals reported in the cited analysis. These are management-reported updates; later or final study data could differ.
Investor verification priorities
- Confirm FDA alignment on CMC comparability and the timing, completeness and acceptance of the tab-cel BLA; verify the clinical evidence and manufacturing readiness supporting any filing.
- Track actual cash burn against the stated runway, and assess whether the projection into 2023 remains supportable without unapproved-product sales or additional financing.
- Review Bayer revenue recognition, receivable collection, deferred-revenue timing and delivery milestones under the technology-transfer and supply agreements.
- Monitor tab-cel and ATA188 enrollment, data quality, safety and efficacy updates, including whether COVID-19 or other factors change trial timelines.
- Assess future equity issuance and dilution, including use of the remaining ATM capacity and outstanding options, RSUs and pre-funded warrants.