Atara Biotherapeutics, Inc. — Q2 2020 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2020. Unaudited consolidated financial statements. Atara is a clinical-stage T-cell immunotherapy company with no approved products and no revenue to date.
Key financial results
| Metric | Q2 2020 | Q2 2019 | Six months 2020 | Six months 2019 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $61.6m | $52.3m | $119.2m | $100.9m |
| General and administrative expense | $16.4m | $23.3m | $33.4m | $42.5m |
| Net loss | $77.5m | $74.3m | $151.0m | $140.6m |
| Basic and diluted loss per share | $1.14 | $1.60 | $2.34 | $3.04 |
| Operating cash used | Not separately provided | Not separately provided | $123.7m | $124.8m |
Gross margin is not meaningful because the company reported no revenue. Q2 R&D expense rose 18% year over year, mainly from tab-cel production and qualification work, higher employee costs and facility expense. G&A fell, primarily due to lower outside services and stock-based compensation. Lower loss per share reflected a higher weighted-average share count, not improved net income.
Financial position and liquidity
- At June 30, 2020, cash and cash equivalents were $74.5m and short-term investments were $273.2m, totaling $347.7m; total assets were $428.1m.
- Total liabilities were $47.0m, including $13.4m of long-term operating lease liabilities. The filing does not report a material conventional borrowing balance.
- Current assets were $359.0m versus current liabilities of $31.7m. Accumulated deficit was $968.9m.
- Management expected available cash, cash equivalents and short-term investments to fund planned operations into 2022. The company cautioned that estimates rely on assumptions and additional capital may be needed.
- Six-month financing cash flow was $215.3m, mainly reflecting $189.6m net proceeds from an underwritten offering and $24.2m from ATM sales. The offering included common shares and pre-funded warrants; shares outstanding increased to 74.3m at June 30, from 56.8m at year-end 2019.
Material changes versus prior periods
- Six-month net loss increased $10.4m year over year, as higher R&D more than offset lower G&A and interest income.
- R&D expense increased $18.3m for the first half. Tab-cel spending rose $6.8m; employee and overhead costs rose $16.5m, partly offset by lower ATA188, CAR T and other program spending.
- Operating cash use was broadly similar year over year. Investing cash flow shifted to a $91.4m use in 2020 from $117.8m provided in 2019, largely due to increased purchases of short-term investments.
- The public offering materially increased liquidity and stockholder dilution. The company also had $25.9m and $100.0m remaining available under its 2019 and 2020 ATM facilities, respectively, subject to conditions.
Outlook, programs and risks
- Tab-cel: Phase 3 study for EBV-positive PTLD continued; management planned an interim analysis in Q3 2020 and aimed to begin a U.S. BLA submission by year-end, subject to data and FDA discussions. Most sites were open, but COVID-19 had caused some site and enrollment delays. An EU application was planned for 2021, subject to pediatric-plan and regulatory steps. A planned Phase 2 multi-cohort study was expected to start enrollment in the second half of 2020.
- The company deprioritized initiating the Phase 2 portion of its tab-cel/pembrolizumab nasopharyngeal cancer study, focusing instead on the PTLD filing and additional EBV-associated disease opportunities.
- ATA188: The progressive-MS randomized, placebo-controlled study enrolled its first patient in June 2020 after a temporary COVID-related pause. Early Phase 1 findings were described as encouraging but require confirmation in a controlled study.
- CAR T programs: ATA2271 and ATA3271 target mesothelin; ATA3219 targets CD19, with an IND anticipated in 2021. The Thousand Oaks facility was completing commercial production qualification for tab-cel while building inventory.
- Risks: Clinical efficacy, safety, regulatory approval and commercial manufacturing remain uncertain. Other key risks include enrollment and supply interruptions, dependence on partners and manufacturers, limited addressable patient populations, competition, future financing needs and potential dilution. COVID-19 effects remained unpredictable; management reported transient trial delays and emphasized possible future operational, supply-chain and capital-market disruption.
- No material legal proceedings were reported. Management concluded disclosure controls were effective as of June 30, 2020; no material change in internal control over financial reporting was identified.
Investor facts to verify
- Results and timing of the planned tab-cel Phase 3 interim analysis, subsequent FDA discussions and the proposed BLA timetable.
- Whether COVID-19, patient enrollment, transplant volumes or site access alter clinical timelines or the projected patient opportunity.
- Actual cash burn versus management’s runway assumptions, and any further equity issuance or use of ATM facilities.
- Progress on commercial manufacturing qualification, supply capacity and the planned EU regulatory steps.
- Whether ATA188 controlled-trial data confirm the preliminary Phase 1 observations.