Atara Biotherapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Atara is a clinical-stage T-cell immunotherapy company with no approved products and no commercial product revenue.
Financial performance and liquidity
Amounts below are in millions of dollars, except per-share data.
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| License and collaboration revenue | $51.6 | $3.9 | $58.9 | $7.4 |
| Research and development expense | $64.9 | $68.5 | $139.9 | $132.5 |
| General and administrative expense | $18.8 | $19.4 | $39.4 | $37.1 |
| Operating loss | $(32.1) | $(84.0) | $(120.4) | $(162.2) |
| Net income (loss) | $18.5 | $(83.8) | $(69.6) | $(162.1) |
| Net cash used in operating activities | Not stated for quarter | Not stated for quarter | $(148.5) | $(127.3) |
- Q2 net income included a $50.2 million gain on the ATOM Facility sale. The revenue increase also primarily reflected recognition of remaining deferred Bayer agreement revenue after Bayer’s termination notice; revenue is expected to fall substantially in subsequent quarters.
- At June 30, cash and cash equivalents were $70.7 million and short-term investments were $260.6 million, totaling $331.3 million, down from $371.1 million at year-end 2021. Current assets were $347.0 million and current liabilities $65.7 million.
- Six-month investing cash inflow was $92.0 million, including $94.8 million net proceeds from the ATOM sale; financing cash inflow was $21.0 million, including $20.5 million net ATM proceeds. Cash, cash equivalents and restricted cash declined $35.4 million over the period.
- No conventional borrowings are reported in the provided financial statements. Lease liabilities were $74.7 million operating and $4.8 million finance, including the ATOM lease for which Atara remained jointly and severally liable pending landlord novation.
- Management projected existing cash, cash equivalents and short-term investments would fund planned operations into Q1 2024. The financial-statement liquidity note separately states resources were expected to cover at least the following 12 months from issuance.
Material developments and outlook
- ATOM Facility: Sale to Fujifilm Diosynth closed April 4 for $94.8 million net proceeds and a $50.2 million accounting gain. Fujifilm became a manufacturing supplier under an agreement that could extend up to ten years; minimum purchase commitments apply. Atara had sufficient tab-cel inventory for at least 12 months of potential commercial demand, subject to approval and specifications.
- Bayer programs: Bayer gave notice in May to terminate its agreements covering ATA2271 and ATA3271. On August 2, after quarter-end, the parties accelerated termination effective July 31, returning development rights to Atara; Bayer agreed to pay $4.2 million for certain activities. Atara reported pausing ATA3271 development.
- Tab-cel: The company reported completing six pre-approval inspections required to support the EU marketing application and expected an EU decision in Q4 2022. The FDA had recommended a potential BLA path without a new clinical study, but comparability and the regulatory pathway remained unresolved. Atara planned to seek a U.S. commercialization partner; a Phase 2 multi-cohort study readout was expected in 2023.
- ATA188: The Phase 2 EMBOLD interim analysis led to no sample-size adjustment or study modification. The company planned to report the 12-month primary endpoint in October 2023.
- Safety and pipeline: Enrollment in the ATA2271 Phase 1 study was temporarily paused following a fatal serious adverse event in a higher-dose cohort; the review and possible resumption remained pending. Atara continued to expect a fourth-quarter 2022 IND filing for ATA3219.
- Workforce reduction: On August 8, Atara announced a planned reduction of approximately 20% of its workforce and expected about $6.0 million of cash severance and related charges.
- Atara continued to expect operating losses and stated it would need substantial additional funding. Additional financing may not be available on acceptable terms and could dilute shareholders or require concessions on product rights.
Key investor verification points
- Confirm the timing and terms of the Bayer $4.2 million payment, the impact of losing Bayer collaboration revenue, and plans and funding for ATA2271/ATA3271.
- Track tab-cel’s EU review outcome, FDA alignment on commercial-product comparability and BLA requirements, and any U.S. partnering progress.
- Assess ATA2271’s safety review and whether clinical enrollment resumes; monitor ATA188’s 2023 endpoint and ATA3219’s planned IND filing.
- Verify actual cash burn, the Q1 2024 runway assumption, and potential financing needs against the reduced workforce and ongoing manufacturing and clinical commitments.
- Monitor completion and savings from the workforce reduction, Fujifilm supply performance and minimum commitments, and resolution of Atara’s remaining ATOM lease liability.