INDEX
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| PART I. | FINANCIAL INFORMATION | |
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| Item 1. | Financial Statements (Unaudited) | |
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| | Condensed Consolidated Balance Sheets | 6 |
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| | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | 7 |
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| | Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) | 8 |
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| | Condensed Consolidated Statements of Cash Flows | 9 |
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| | Notes to Condensed Consolidated Financial Statements | 10 |
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 |
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| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 43 |
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| Item 4. | Controls and Procedures | 43 |
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| PART II. | OTHER INFORMATION | 44 |
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| Item 1. | Legal Proceedings | 44 |
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| Item 1A. | Risk Factors | 44 |
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| Item 5. | Other Information | 100 |
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| Item 6. | Exhibits | 101 |
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| | Signatures | 102 |
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which represent our intent, belief or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “predict,” “plan,” “expect” or the negative or plural of these words or similar expressions. The forward-looking statements include, but are not limited to, statements about:
| ● | our review of strategic alternatives; |
| ● | our expectations with regard to our programs, including clinical sites, the clinical studies, and reporting results of such studies; |
| ● | the likelihood and timing of regulatory submissions or related approvals for tab-cel, including the expectations about the timing of approvals for a biologics license application (BLA) for tab-cel® for patients with Epstein-Barr virus with post-transplant lymphoproliferative disease (EBV+ PTLD); |
| ● | the potential indications for tab-cel; |
| ● | commercialization of tab-cel (Ebvallo™ in the United Kingdom (UK), the European Economic Area (EEA) and Switzerland) worldwide and our amended and restated Commercialization Agreement with Pierre Fabre Medicament, including potential milestone and royalty payments under the agreement (Ebvallo in the UK, the EEA and Switzerland subject to the Purchase and Sale Agreement with HCR Molag Fund, L.P.); |
| ● | our Purchase and Sale Agreement, as amended, and related transactions with HCR Molag Fund, L.P.; |
| ● | our expectations regarding the potential commercial market opportunities, market size and the size of the patient populations for tab-cel; |
| ● | estimates of our expenses, capital requirements and need for additional financing; |
| ● | our expectation regarding the length of time that our existing capital resources will be sufficient to enable us to fund our planned operations, including our going concern assessment; |
| ● | the scope of protection we are able to obtain and maintain for the intellectual property rights covering tab-cel; |
| ● | our financial performance; |
| ● | our election to rely on reduced reporting and disclosure requirements available to smaller reporting companies; |
| ● | developments and projections relating to our competitors and our industry; |
| ● | our partner’s ability to have tab-cel manufactured for clinical studies or for commercial sale, including at commercially reasonable values; |
| ● | the impact of public health emergencies to our business and operations, as well as the businesses and operations of third parties on which we rely; |
| ● | the impact of our workforce reductions on our ability to attract, retain and motivate qualified personnel and on our business, operations, and financial condition; and |
| ● | timing and costs related to the qualification of the manufacturing facilities of CMOs for commercial production. |
These statements are only current predictions and are subject to known and unknown risks and uncertainties, including, without limitation, risks and uncertainties associated with the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success; the sufficiency of our cash resources and need for additional capital; and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading “Item 1A. Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.
In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “Atara,” “Atara Biotherapeutics,” “Company,” “we,” “our,” and “us” means Atara Biotherapeutics, Inc. and, where appropriate, its subsidiaries.
Summary Risk Factors
Our business is subject to numerous risks and uncertainties that may have a material adverse effect on our business, financial condition, or results of operations. These risks are more fully described under the heading “Item 1A. Risk Factors” and elsewhere in this report and include, among others:
| ● | our activities to review and pursue strategic alternatives may not result in a strategic transaction, and even if we do consummate a strategic transaction, there is no assurance that it will deliver the benefits we expect or enhance stockholder value; |
| ● | our board of directors may determine to pursue a liquidation and dissolution or other wind down of our business, and in such event, the amount of cash available for distribution to our stockholders, if any, will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities; |
| ● | we have incurred substantial losses since our inception and anticipate that we will continue to incur substantial losses for the foreseeable future; |
| ● | we have earned limited commercialization revenues to date, and we may never achieve profitability or we may be unable to sustain profitability on a continuing basis; |
| ● | we will require substantial near-term financing to continue operations, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce, or terminate our product development or manufacturing efforts, or impair our exploration of strategic alternatives, or require us to pursue a liquidation and dissolution or other wind down of our business; |
| ● | we have one approved product, Ebvallo, in the EEA, the UK, and Switzerland. If we or our collaborators are unable to successfully develop, manufacture, and commercialize tab-cel, or experience significant delays in doing so, our business may be materially harmed; |
| ● | tab-cel represents a new therapeutic approach that could result in heightened regulatory scrutiny, delays in clinical development or our inability to achieve regulatory approval, or our partner’s inability to achieve commercialization or secure payor coverage of tab-cel; |
| ● | the results of preclinical studies or earlier clinical studies are not necessarily predictive of future results, and tab-cel may not receive regulatory approval in the U.S.; |
| ● | clinical drug development involves a lengthy and expensive process with an uncertain outcome; |
| ● | the market opportunities for tab-cel may be limited to those patients who are ineligible for or have failed prior treatments and may be small; |
| ● | we may not be able to obtain or maintain orphan drug exclusivity for tab-cel; |
| ● | the revision of the legislation on pharmaceuticals such as in the EU, changes in governmental administration, or changes in leadership at relevant regulatory agencies could lead to uncertainties over the regulatory framework that will be applicable to medicinal products in the EU and US, including orphan medicinal products; |
| ● | maintaining clinical and commercial timelines is dependent on our partner’s end-to-end supply chain network to support manufacturing; if they experience problems with their third party suppliers or CMOs, development and/or commercialization of tab-cel may be adversely affected; |
| ● | if we are unable to obtain and maintain sufficient intellectual property protection for tab-cel, or if the scope of the intellectual property protection is not sufficiently broad, our partner’s ability to commercialize tab-cel successfully and to compete effectively may be adversely affected; |
| ● | our principal stockholders own a significant percentage of our stock and will be able to exert control or significant influence over matters subject to stockholder approval; |
| ● | we qualify as a “smaller reporting company” and a “non-accelerated filer,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to such companies could make our stock less attractive to investors; |
| ● | our future success depends on our ability to retain our executive officers and to attract, retain, and motivate qualified personnel; and |
| ● | our workforce reductions may not result in anticipated savings, could result in total costs and expenses that are greater than expected, and could disrupt our business. |
