Atara Biotherapeutics, Inc. — Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2020; filed March 1, 2021. Atara is a clinical-stage cell-therapy company with no approved products and no product-sales revenue. Its lead candidate, tab-cel (tabelecleucel), was in Phase 3 development for EBV-positive post-transplant lymphoproliferative disease (PTLD).
Financial performance and position
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | No revenue recognized under the Bayer agreement; no product sales | No product sales |
| Research and development expense | $244.7 million | $216.1 million |
| General and administrative expense | $64.4 million | $79.6 million |
| Total operating expenses | $309.1 million | $295.7 million |
| Net loss | $306.6 million | $291.0 million |
| Net loss per share, basic and diluted | $4.15 | $5.67 |
| Cash, cash equivalents and short-term investments at year-end | $500.7 million | $259.1 million |
| Net cash used in operating activities | $180.8 million | $235.6 million |
| Working capital | $440.4 million | $236.2 million |
| Total liabilities | $125.8 million | $52.2 million |
Gross margin is not applicable because the company had no product sales. The filing does not identify conventional borrowing debt; reported liabilities include lease obligations and deferred revenue. Operating lease obligations totaled $23.2 million and finance lease obligations $0.4 million at year-end. There were no off-balance-sheet arrangements.
Fourth-quarter 2020 net loss was $81.3 million, compared with $78.5 million in fourth-quarter 2019. Quarterly revenue and margin from product sales were not applicable.
Material changes versus prior year
- Net loss increased by $15.6 million as R&D spending rose, partly offset by lower G&A expense and interest income.
- R&D expense increased $28.6 million, including higher tab-cel clinical, manufacturing qualification and BLA-preparation costs, as well as higher employee and facility costs. G&A expense decreased $15.2 million, mainly from lower outside services and stock-based compensation.
- Operating cash use fell $54.9 million, primarily reflecting $52.9 million received in connection with the Bayer agreement and changes in operating liabilities.
- Year-end cash and investments increased $241.6 million. Financing cash inflows included $353.8 million net from underwritten offerings and $69.2 million net from ATM share sales. The company issued substantial equity and pre-funded warrants, diluting existing shareholders.
Outlook, management commentary and risks
- Liquidity outlook: Management estimated that year-end cash, cash equivalents and short-term investments, together with projected U.S. tab-cel sales if approved, would fund operations into 2023. This runway depends on plans and assumptions; the company stated it may need additional financing.
- Tab-cel: The Phase 3 ALLELE interim analysis reported a 50% objective response rate among patients with at least six months of follow-up after response assessment, with no new safety signals reported. Management targeted a rolling U.S. BLA submission, with the clinical module expected in Q3 2021 and potential U.S. approval in H1 2022; an EU marketing application was planned for Q4 2021, with potential approval in H2 2022. These are expectations, not assured outcomes. FDA agreement on presentation of historical data and completion of CMC work remained relevant steps.
- Other programs: ATA188 was in a randomized Phase 2 study for progressive multiple sclerosis; management planned an interim analysis in H1 2022. The Phase 2 tab-cel multi-cohort study began in 2020, with data expected in 2023. The Phase 2 portion of the tab-cel nasopharyngeal cancer study was not being initiated at that time as resources were prioritized to PTLD and other EBV-associated diseases.
- Bayer collaboration: Atara received $45.0 million upfront for the license and $15.0 million for research and process-development activities. The agreement also provides up to $610.0 million in development, regulatory and commercial milestones, plus tiered royalties up to low double digits. No agreement revenue was recognized in 2020; $61.3 million was recorded as deferred revenue and expected to be recognized over an estimated three-year performance period. Milestones and royalties are contingent and not guaranteed.
- Principal risks: Continued losses and dependence on external capital; clinical and regulatory uncertainty; manufacturing scale-up, comparability and commercial qualification; competition and uncertain reimbursement; small target populations; and possible COVID-19 effects on enrollment, clinical sites, donor-material supply and access to capital. Management reported some site and enrollment delays but said key studies had not been significantly affected at the filing date.
- The company reported a 2020 net loss of $306.6 million and an accumulated deficit of approximately $1.1 billion. It did not expect near-term product revenue or profitability. The financial statements received an unqualified audit opinion, and the auditor also issued an unqualified opinion on internal control over financial reporting.
Most important facts for investors to verify
- Whether FDA and EMA requirements, including the FDA’s decision on historical-data presentation and manufacturing readiness, support the stated tab-cel filing and approval timelines.
- Final ALLELE response, durability and safety results, including how the final analyses compare with interim findings.
- Cash burn, financing needs and actual runway relative to management’s estimate into 2023; the estimate partly assumes tab-cel approval and sales.
- Progress and results for ATA188 and the tab-cel multi-cohort study, and any changes to their timing or design.
- Execution and economics of the Bayer collaboration, including deferred-revenue recognition, contingent milestones, royalties and Atara’s retained costs and responsibilities.
- Share-count dilution from equity offerings, ATM sales, pre-funded warrants and outstanding equity awards.