Atara Biotherapeutics, Inc. — Q3 2020 Form 10-Q
Reporting period: Three and nine months ended September 30, 2020. Amounts below are in U.S. dollars; financial statement amounts are in millions unless noted. Atara is a clinical-stage T-cell immunotherapy company with no approved products or product revenue.
Financial results and liquidity
| Metric | Q3 2020 | Q3 2019 | Nine months 2020 | Nine months 2019 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $59.9 | $53.5 | $179.1 | $154.5 |
| General and administrative expense | $14.8 | $19.0 | $48.3 | $61.5 |
| Total operating expenses | $74.7 | $72.6 | $227.4 | $216.0 |
| Net loss | $74.3 | $71.9 | $225.3 | $212.5 |
| Basic and diluted loss per share | $0.92 | $1.31 | $3.21 | $4.32 |
- Cash and investments: Cash and cash equivalents were $62.6 and short-term investments were $264.6, totaling $327.2 at September 30, 2020, up from $259.1 at December 31, 2019. Management expects these funds to support planned operations into 2022.
- Cash flow, nine months: Net cash used in operations was $176.6, nearly unchanged from $176.9 in 2019. Investing activities used $83.8, primarily reflecting net purchases of short-term investments and $3.9 of property and equipment purchases. Financing activities provided $248.8. Cash, cash equivalents and restricted cash decreased by $11.7 to $64.0.
- Balance sheet: Total assets were $405.5; current assets $339.4; current liabilities $36.1; total liabilities $51.6; and stockholders’ equity $353.9. The filing reports lease liabilities and finance-lease payments, but no material conventional debt balance is identified.
- Margins: Not meaningful because the company had no revenue. Accumulated deficit was $1,043.3.
Changes versus the prior comparable periods
- Q3 operating expenses rose 3.0% and net loss widened 3.4% year over year. For the first nine months, operating expenses rose 5.3% and net loss widened 6.0%.
- R&D expense increased, reflecting higher tab-cel clinical, manufacturing qualification and BLA-preparation activity, as well as increased employee and facility costs. G&A expense declined, primarily due to lower outside-service costs and, year to date, lower non-cash stock-based compensation.
- Loss per share improved despite higher net losses, as the weighted-average share count increased substantially: 81.2 million versus 54.9 million in Q3 and 70.2 million versus 49.2 million year to date.
- Financing included $189.3 million net proceeds from a second-quarter underwritten offering and $57.1 million net proceeds from ATM sales year to date. At September 30, $90.9 million remained available under the 2020 ATM facility; the 2019 facility was fully utilized.
Outlook, programs and key risks
- Tab-cel: The company reported interim Phase 3 data showing a 50% objective response rate by independent oncologic and radiographic assessment among specified EBV+ PTLD patients with at least six months of follow-up after response; no new safety signals were reported. This is interim evidence, not final study results. Management said it remained on track to initiate a rolling U.S. BLA submission by year-end 2020 and expected to complete the submission in Q3 2021. A European application was planned for the second half of 2021, subject to EMA-related steps including approval of a pediatric investigation plan. COVID-19 had caused some site and enrollment delays, though most sites were open.
- Portfolio priorities: A Phase 2 multi-cohort tab-cel study for additional EBV-associated diseases began in Q3; first enrollment was expected in Q4 2020, with data expected in 2023. Atara will not initiate the Phase 2 portion of the tab-cel/pembrolizumab nasopharyngeal cancer study for now, prioritizing PTLD and other EBV-associated disease opportunities. ATA188’s randomized Phase 1b study enrolled its first patient in June; management planned to expand it to at least 64 patients and discuss a revised disability-improvement endpoint with FDA. The company expected ATA2271 study data in 2021, an ATA3219 IND filing in 2021 and an ATA3271 IND filing in 2022.
- Funding and dilution: Atara expects continuing losses and increasing expenses and will require additional capital to complete development and potentially commercialize products. Further equity financing could dilute shareholders; debt or partnering may impose restrictions or require the company to relinquish rights. Existing funds are not a guarantee of the timing or cost of development.
- Other risks and contingencies: Clinical efficacy and safety remain unproven at later stages; regulatory approval, manufacturing scale-up and commercial supply are uncertain. COVID-19 could disrupt trials, supply chains, operations or capital access. The company reported no material legal proceedings, no material milestone or royalty obligations outstanding at quarter-end, and no off-balance-sheet arrangements. Disclosure controls were reported effective.
Important facts for investors to verify
- Whether final ALLELE Phase 3 data support the interim tab-cel response findings and the planned BLA timeline.
- Whether EMA pediatric-plan discussions and other regulatory requirements affect the expected European submission schedule.
- Whether the stated cash runway into 2022 remains valid as clinical, manufacturing and pre-commercial spending evolves, and whether additional financing is needed.
- How enrollment, endpoint changes and additional follow-up affect ATA188’s randomized study and interpretation of early results.
- Whether manufacturing qualification, clinical supply and COVID-19-related disruptions affect trial timelines or readiness for potential commercialization.
- Future share issuance, including use of the remaining ATM capacity, outstanding pre-funded warrants and equity awards, and the resulting dilution.