What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-09 compared with 2020-08-05 · 112 added, 80 removed, 231 unchanged (45% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.

This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions.

As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Atara Biotherapeutics is a pioneer in T-cell immunotherapy, leveraging its novel allogeneic EBV T-cell platform to develop transformative therapies for patients with severe diseases, including solid tumors, hematologic cancers and autoimmune disease.

Atara Biotherapeutics is a pioneer in T-cell immunotherapy, leveraging its novel allogeneic EBV T-cell platform to develop transformative therapies for patients with serious diseases, including solid tumors, hematologic cancers and autoimmune disease.

With our lead program in Phase 3 clinical development, Atara is the most advanced allogeneic T-cell immunotherapy company and intends to rapidly deliver off-the-shelf treatments to patients with high unmet medical need.

Our platform leverages the unique biology of EBV T cells and has the capability to treat a wide range of EBV-associated diseases or other severe diseases through incorporation of engineered chimeric antigen receptors (CARs) or T-cell receptors (TCRs).

Our platform leverages the unique biology of EBV T cells and has the capability to treat a wide range of EBV-associated diseases or other serious diseases through incorporation of engineered chimeric antigen receptors (CARs) or T-cell receptors (TCRs).

Atara is applying this one platform to create a robust pipeline.

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Autologous CAR T immunotherapy targeting solid tumors expressing the tumor antigen mesothelin;

Allogeneic CAR T immunotherapy targeting mesothelin;

Allogeneic CAR T therapy targeting mesothelin;

Allogeneic CAR T targeting CD19 and being developed as a potential best-in-class product, based on a next generation 1XX co-stimulatory domain and the innate advantages of EBV T cells as the foundation for an allogeneic CAR T platform.

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Based on our market research, we estimate there were several hundred EBV+ PTLD patients who failed rituximab or rituximab plus chemotherapy in the U.S.

Tab-cel ® is also under development for other EBV+ diseases with significant unmet medical need through a planned Phase 2 multi-cohort study.

While clinical study operations and the opening of additional Phase 3 study sites in the United States, Canada and Europe have been impacted by the spread of COVID-19, most sites are currently open for patient enrollment, and we believe we remain on track to initiate a biologics license application (BLA) submission for patients with EBV+ PTLD by the end of 2020.

Tab-cel ® is also under development for other EBV+ diseases with significant unmet medical need through a Phase 2 multi-cohort study that was initiated in the third quarter of 2020.

We continue to advance development of tab-cel ® in Phase 3 for patients with EBV+ PTLD, for which the Company has obtained Breakthrough Therapy Designation (BTD) in the U.S.

and PRIority MEdicines (PRIME) designation in the European Union (EU).

We plan to conduct an interim analysis for the Phase 3 study in the third quarter of 2020 and to discuss the totality of tab-cel ® data with the U.S.

Food and Drug Administration ( FDA) in a pre-BLA meeting prior to initiating the BLA submission.

We remain on track to initiate a biologics license application (BLA) submission for patients with EBV+ PTLD by the end of 2020.

We plan to continue engaging with the FDA as part of our rolling BLA and BTD status and expect to finalize the BLA submission in the third quarter of 2021.

We conducted an interim analysis for the Phase 3 study in the third quarter of 2020.

Data from the interim analysis showed a 50% objective response rate (ORR) to tab-cel ® with independent oncologic and radiographic assessment (IORA) in patients with EBV+PTLD following hematopoietic stem cell transplant (HCT) or solid organ transplant (SOT) that had reached at least 6 months follow-up after achieving a response.

This ORR is consistent with previously published investigator assessed data.

The tab-cel ® safety profile is also consistent with previously published data, with no new safety signals.

We presented a comprehensive data package to the FDA in October 2020 and reached alignment on several key topics related to the tab-cel ® regulatory package, including that (i) a rolling submission is acceptable for the BLA, (ii) we can complete the BLA submission with currently enrolled patients with at least six months follow-up for duration of response, and (iii) the FDA will consider the data from the Phase 2 trials conducted at MSK, our Phase 2 multicenter expanded access protocol (EAP), and the Single Patient Use (SPU) program as supportive data to the pivotal study in the BLA clinical module.

Data from this pivotal study will be presented at an appropriate forum in 2021.

We remain in active discussions with the Pediatric Committee (PDCO) of the European Medicines Agency (EMA) regarding a Pediatric Investigation Plan (PIP).

Following discussion with the PRIME team and after EMA approval of the PIP, we plan to submit a tab-cel ® EU marketing authorization application for patients with EBV+ PTLD in 2021.

In 2019 , after discussion and alignment with regulators, we combined MATCH and ALLELE into a single study (which we now refer to as the ALLELE study) that now consists of a hematopoietic cell transplants (HCT) cohort for EBV+ PTLD patients who have failed rituximab, and a single solid organ transplant (SOT) cohort for EBV+ PTLD patients who have failed rituximab with both chemotherapy and non-chemotherapy prior treatment experience.

Additionally, we expect to expand the ALLELE study geographically to include clinical sites outside the U.S.

We have submitted clinical trial applications (CTAs) to several European countries to enable opening European clinical sites in 2020, and our CTAs in the United Kingdom, France, Germany, Spain, Austria and Belgium have been approved.

We continue to pursue development of tab-cel ® in earlier lines of therapy, including in our planned Phase 2 multi-cohort study.

We expect to initiate enrollment in the second half of 2020 for a Phase 2 multi-cohort study of tab-cel ® with the goal of expanding the potential label in PTLD and closely related diseases.

We intend to focus on extending further into immunodeficiency-associated lymphoproliferative diseases (IA-LPDs) as the next step in the tab-cel ® life cycle plan given the commonality of their EBV-driven mechanism of disease in immunocompromised patients, high unmet medical need and positive clinical data to date with tab-cel ® .

The multi-cohort study will evaluate both treatment-naïve and previously treated patients in six patient populations, including two cohorts with the potential to address front-line EBV+PTLD patients with significant unmet need as well as two cohorts with the potential to address EBV+ LPDs arising out of primary or acquired immune deficiencies, including EBV+ acquired immunodeficiency-associated lymphoproliferative disease (EBV+ AID-LPD) and EBV+ primary immunodeficiency-associated lymphoproliferative disease (EBV+ PID-LPD).

Our Phase 1b study of tab-cel ® in combination with Merck’s anti-PD-1 (programmed death receptor-1) therapy, KEYTRUDA ® (pembrolizumab), in patients with platinum-resistant or recurrent EBV-associated nasopharyngeal carcinoma (NPC) achieved its safety endpoints and stable disease in a subset of patients.

Following discussion with the PRIME team and after EMA approval of the PIP, which we currently expect to occur in December 2020, we plan to submit a tab-cel ® EU marketing authorization application for patients with EBV+ PTLD in the second half of 2021.

In 2019 , after discussion and alignment with regulators, we combined MATCH and ALLELE into a single study (which we now refer to as the ALLELE study) that now consists of an HCT cohort for EBV+ PTLD patients who have failed rituximab, and a single SOT cohort for EBV+ PTLD patients who have failed rituximab with both chemotherapy and non-chemotherapy prior treatment experience.

Additionally, we expanded the ALLELE study geographically to include clinical sites outside the U.S.

Our clinical trial applications (CTAs) in the United Kingdom, France, Germany, Spain, Austria, Belgium and Italy have been approved, and a number of European sites are open for enrollment.

We continue to pursue development of tab-cel ® in earlier lines of therapy with the goal of expanding the potential label in PTLD and closely related diseases.

We initiated a Phase 2 multi-cohort study in third quarter of 2020 concurrently in the U.S.

We expect to enroll the first patient in the fourth quarter of 2020 and data from this Phase 2 study is expected in 2023.

We intend to focus on extending further into immunodeficiency-associated lymphoproliferative diseases (IA-LPDs) as the next step in the tab-cel ® potential label expansion given the commonality of their EBV-driven mechanism of disease in immunocompromised patients, high unmet medical need and positive clinical data to date with tab-cel ® .

The multi-cohort study will evaluate both treatment-naïve and previously treated patients in six patient populations, including four within IA-LPDs and two in other EBV-associated diseases.

Data was featured in an e-poster at the European Society for Medical Oncology (ESMO) 2020 Virtual Congress in September 2020 and demonstrated that tab-cel ® was well-tolerated and showed encouraging clinical activity in patients with EBV+ AID-LPD and EBV+ PID-LPD (Acquired and Primary Immunodeficiency Lymphoproliferative Diseases).

In patients where previous treatments have failed, the objective response rates, including complete response, were 33.3% (three out of nine patients) in AID-LPD and 37.5% (three out of eight patients) in PID-LPD groups.

Tab-cel ® was generally well-tolerated with a favorable safety profile consistent with previously published clinical studies.

Data on tab-cel ® in patients with life-threatening complications stemming from persistent EBV viremia was accepted for presentation at the 62 nd American Society of Hematology (ASH) Annual Meeting and Exposition being held virtually in December 2020.

These clinical data demonstrate that tab-cel ® was well-tolerated and showed encouraging clinical activity in this patient population with objective response rates ranging from 50% to 80%.

These data will be presented at an appropriate forum in the future.

Based on a strategic prioritization to expand tab-cel ® business potential through the significant opportunity in IA-LPDs, we will now focus our tab-cel ® efforts on the initiation of the multi-cohort Phase 2 study and the planned BLA initiation in EBV+ PTLD.

Based on a strategic prioritization to expand tab-cel ® business potential through the significant opportunity in IA-LPDs, we will focus our tab-cel ® efforts on the execution of the Phase 2 multi-cohort study and the planned BLA initiation in EBV+ PTLD.

At this time, we will not initiate the Phase 2 portion of the NPC study in combination with pembrolizumab.

We intend to generate additional translational data in NPC to further inform our strategy on this patient population.

We intend to generate additional translational data in NPC in 2021 to further inform our strategy on this patient population.

Atara is also developing ATA188, a T-cell immunotherapy targeting EBV antigens believed to be important for the potential treatment of multiple sclerosis (MS).

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Key secondary endpoints in the study include measures of clinical improvement, using recognized scales for MS symptoms, function and disability including Expanded Disability Status Scale (EDSS) Fatigue Severity Score, MS Impact Scale-29 (physical), Timed 25-Foot Walk (T25FW), 9-Hole Peg Test, 12-Item MS Walking Scale (MSWS-12) and Visual Acuity.

Enrollment for the fourth and final Phase 1 dose escalation cohort was completed in the third quarter of 2019 and we presented initial efficacy and updated safety results from this study in September 2019 at the 35 th Congress of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS).

These results were based on data as of July 29, 2019, and showed that across four planned dose cohorts, ATA188 was well tolerated in PMS patients, with no evidence of cytokine release syndrome, graft versus host disease or dose-limiting toxicities.

Safety and sustained disability improvement 12-month data for cohorts 1-3, and six-month data for cohort 4, were presented as a late-breaking e-poster presentation at the 2020 European Academy of Neurology Virtual Congress (EAN) held in May 2020.

All patients in cohorts 1-3 showing sustained disability improvement (SDI) at six months maintained improvement at 12 months , and there was a higher proportion of patients showing SDI with increasing dose .

Enrollment for the fourth and final dose escalation cohort in the Phase 1a portion of the study was completed in the third quarter of 2019 and we presented updated efficacy and safety results from this study at the MSVirtual2020:

8 th Joint ACTRIMS-ECTRIMS Meeting in September 2020.

The data demonstrated that ATA188 was well-tolerated across all four dose cohorts, with no dose-limiting toxicities and no fatal adverse events.

Additionally, patients who demonstrated sustained disability improvement (SDI) at any timepoint maintained improvement at all future timepoints, and higher proportion of patients showed SDI with increasing dose (42% in cohorts 3 and 4 (higher doses) versus 17% in cohorts 1 and 2 (lower doses)).

SDI is defined as clinically significant improvement in EDSS or T25FW observed at two consecutive time points.

While these data will need to be confirmed in a double-blind, placebo-controlled, randomized study, they indicate the potential for the first treatment option in progressive MS to halt or reverse the progression of disease.

We believe these results align with the body of evidence supporting the important role of EBV-infected B cells in the chronic autoimmune pathology of MS .

ATA188 was well-tolerated in patients with progressive forms of MS and n o dose-limiting toxicities or fatal adverse events were reported.

ATA188 treatment showed no clinically meaningful effect on cytokine levels and no dose-related safety trends were identified.

Rhinorrhea (runny nose) was the only treatment-related event that occurred in more than one subject.

We are re-treating patients with cohort 3 dose in the open-label extension (OLE) of the Phase 1a study and expect to present preliminary OLE data in an appropriate forum in the second half of 2020.

Additionally, we expect to present 12-month clinical results for cohort 4 in an appropriate forum in the second half of 2020 .

Following a six-month assessment of patients in cohort 3 of this study, we selected this cohort 3 dose to initiate the randomized, double-blind, placebo-controlled trial (RCT) evaluating the efficacy and safety of ATA188 in patients with progressive forms of MS.

The study design allows for addition of the cohort 4 dose, if desired, based on the 12-month data for cohort 4 that will be available in the third quarter of 2020.

This study enrolled its first patient in June 2020.

In addition to measuring change in disability measures compared to baseline, especially SDI over time, the study will also include multiple measures of patients’ function as well as various biomarkers.

No dose-limiting toxicities and no fatal adverse events have been reported.

The safety profile has remained consistent with previously reported data.

We also presented preclinical translation data at ACTRIMS-ECTRIMS that further support the proposed mechanism of action of ATA188 targeting EBV-infected B cells.

These combined analyses of T cells comprising ATA188 are consistent with its proposed mechanism of targeting EBV-infected B cells by recognizing MS-relevant EBV antigens on these cells via defined TCRs.

We believe these results align with the body of evidence supporting the important role of EBV-infected B cells in the chronic autoimmune pathology of MS.

We are also re-treating patients with cohort 3 dose in an open-label extension (OLE) of the Phase 1a study and we presented the first available data from the OLE at the ACTRIMS-ECTRIMS Meeting.

Data from the OLE with redosing at 12 months show that of the three patients enrolled in the OLE at that time that had SDI at 12 months, all maintained SDI at 15 months, including one patient evaluated at both 15 and 18 months who maintained SDI at both time points.

A fourth patient demonstrated SDI during the OLE at 24 months.

We will present additional data on OLE periodically over the next 12 months, including in an e-poster at the European Charcot Foundation (ECF) 28 th Annual Meeting, to be held in November 2020.

Following a six-month assessment of patients in cohort 3 of this study, we selected the cohort 3 dose to initiate the Phase 1b randomized, double-blind, placebo-controlled trial (RCT) to evaluate the efficacy and safety of ATA188 in patients with PMS;

the design allows for the addition of the cohort 4 dose, if desired.

This study enrolled its first patient in June 2020 and continues active recruitment.

In addition to measuring change in disability measures compared to baseline, especially SDI over time, the study also includes multiple measures of patients’ function as well as various biomarkers.

Based on encouraging clinical results to date in ATA188 studies and the significant unmet medical need in PMS, we are increasing our investment in the ATA188 program.

We plan to expand the RCT to at least 64 patients and amend the RCT to change the primary end point of the study to disability improvement and maintain the biological and functional endpoints.

We plan to discuss the Phase 1a data with the FDA by the end of this year, as well as the updated design of the RCT study, and the potential opportunities for accelerated development of ATA188.

ATA2271/ATA3271

Atara’s next-generation CAR T immunotherapy programs include ATA2271 targeting mesothelin, which is a tumor antigen expressed on a number of solid tumors including mesothelioma, ovarian cancer, pancreatic cancer, non-small cell lung cancer and other tumors over-expressing mesothelin .

Atara’s next-generation CAR T immunotherapy programs include autologous ATA2271 and allogeneic ATA3271 targeting mesothelin, which is a tumor antigen expressed on a number of solid tumors including mesothelioma, ovarian cancer, pancreatic cancer, non-small cell lung cancer and other tumors over-expressing mesothelin .

ATA2271 is designed to improve efficacy persistence, and durability of response versus CD28/CD3z-based CARs by using a novel 1XX CAR co-stimulatory signaling domain and cell intrinsic checkpoint inhibition technology with a PD-1 dominant negative receptor (DNR).

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These data support the first application of the combination of 1XX co-stimulatory domain and cell intrinsic checkpoint inhibition technology with a PD-1 DNR that are associated with less cell exhaustion, improvements in functional persistence, serial cell killing and in vivo efficacy, which was maintained through multiple tumor re-challenges when compared with first-generation CD28/CD3z-based mesothelin CAR.

Our ATA2271 collaborators at MSK recently submitted an IND application to the FDA for patients with advanced mesothelioma.

We are also developing and have initiated IND-enabling studies for ATA3271, an off-the-shelf, allogeneic CAR T immunotherapy targeting mesothelin using a novel combination of 1XX CAR co-stimulatory signing domain and cell intrinsic checkpoint inhibition technology with a PD-1 DNR through our EBV T-cell platform.

We are also developing ATA3219, an off-the-shelf, allogeneic CD19 CAR T immunotherapy targeting B-cell malignancies as a potential best-in-class therapy, using our next-generation 1XX CAR co-stimulatory domain and EBV T-cell platform.

The FDA accepted the IND application submitted by our collaborators at MSK in August 2020, providing clearance to initiate an open-label, single-arm Phase 1 clinical study of ATA2271 for patients with advanced mesothelioma.

We expect to have safety and efficacy data from this study in 2021.

We are also developing and have initiated IND-enabling studies for ATA3271, an off-the-shelf, allogeneic CAR T therapy targeting mesothelin using a PD-1 DNR and 1XX CAR co-stimulatory signaling domain through our EBV T-cell platform , and we expect to file the IND in 2022 .

Preclinical data for ATA3271 demonstrates potent anti-tumor activity, functional persistence and significant survival benefit with no evidence of allocytotoxicity in vivo, suggesting that allogeneic MSLN-CAR-engineered EBV T cells are a promising approach for the treatment of MSLN-positive cancers.

These d ata will be presented at the Society for Immunotherapy of Cancer (SITC) 35 th Anniversary A nnual Meeting in November 2020.

We are also developing ATA3219, an off-the-shelf, allogeneic CD19 CAR T immunotherapy targeting B-cell malignancies as a potential best-in-class therapy without the need for TCR gene editing, using our next-generation 1XX CAR co-stimulatory domain and EBV T-cell platform.

In February 2020, an academic off-the-shelf, allogeneic CD19 CAR T clinical study using an allogeneic EBV T-cell construct and CD28/CD3z co-stimulatory domain for patients with relapsed/refractory B-cell malignancies was presented at the 2020 Transplantation and Cellular Therapy (TCT) Meetings.

Findings from this study provided initial clinical proof-of-principle that an EBV T-cell platform has the potential to generate off-the-shelf, allogeneic CAR T immunotherapies with high response rates, durable responses and low risk of toxicity that can be rapidly delivered to patients.

We have initiated IND-enabling studies for ATA3219 and anticipate filing an IND in 2021.

An abstract detailing ATA3219 preclinical data was accepted for presentation at the 62 nd American Society of Hematology (ASH) Annual Meeting and Exposition being held virtually in December 2020.

These preclinical data for ATA3219 demonstrate persistence, polyfunctional phenotype and efficient targeting of CD19-expressing tumor cells, with no evidence of allocytotoxicity in vivo.

We had a pre-IND meeting with the FDA in October 2020, where we received feedback to guide the IND filing for ATA3219.

We have initiated IND-enabling studies and expect to file the IND in 2021.

Additional Programs and Platform Expansion Activities

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We believe our scale-up technology can potentially be a key enabler to deliver biologic-like cost of goods manufactured and could be leveraged across our portfolio, including our CAR T programs.

In addition to our manufacturing facility, we also work with Cognate BioServices, Inc.

In addition to our manufacturing facility , we also work with Cognate Bio S ervices, Inc.

( Cognate ) pursuant to a Commercial Manufacturing Services Agreement ( the Manufacturing Agreement ) that we entered into in December 2019 .

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We may terminate the Manufacturing Agreement for convenience on six months’ written notice to Cognate, or immediately if Cognate is unable to perform the services under the Manufacturing Agreement or fails to obtain or maintain certain necessary approvals.

The Manufacturing Agreement includes standard mutual termination rights for uncured breach or insolvency, or a force majeure event preventing the performance of services for at least 90 days.

COVID-19 Business Update

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Where needed, remote study visits, leveraged tele-medicine, home health care, and other methods have been established to ensure continuity of care for patients while preserving key endpoint data.

T o date, t he COVID-19 pandemic has not materially impacted our or our partners’ clinical, research and development, regulatory and manufacturing operations or timelines .

W e have experienced some t ransient delays in clinical trial site initiation and patient enrollment in certain of our clinical trials as a result of the evolving impact of the ongoing COVID-19 pandemic.

To date, the COVID-19 pandemic has not materially impacted our or our partners’ clinical, research and development, regulatory and manufacturing operations or timelines.

We have experienced some transient delays in clinical trial site initiation and patient enrollment in certain of our clinical trials as a result of the evolving impact of the ongoing COVID-19 pandemic.

For example, due to the COVID-19 pandemic, in April 2020 we temporarily paused the screening and enrollment of patients in our RCT for ATA188.

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We continue to monitor the impact of the COVID-19 pandemic on our business and operations and will seek to adjust our activities as appropriate.

In addition, the pandemic could result in significant and prolonged disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect the financial resources available to us.

For additional information about risks and uncertainties related to the COVID-19 pandemic that may impact our business, financial condition and operations, see the section titled “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q.

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Since our inception in 2012, we have devoted substantially all of our resources to identify, acquire and develop our product candidates, including conducting preclinical and clinical studies, acquiring or manufacturing materials for clinical studies, constructing our manufacturing facility and providing general and administrative support for these operations.

Our net losses were $151.0 million and $140.6 million for the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, we had an accumulated deficit of $968.9 million.

Our net losses were $225.3 million and $212.5 million for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, we had an accumulated deficit of $1,043.3 million.

Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative expenses associated with our operations.

As of June 30, 2020, our cash, cash equivalents and short-term investments totaled $347.7 million, which we intend to use to fund our operations.

As of September 30, 2020, our cash, cash equivalents and short-term investments totaled $327.2 million, which we intend to use to fund our operations.

In the second quarter of 2020, we completed an underwritten public offering of shares of common stock and pre-funded warrants and received aggregate net proceeds of $189.3 million.

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continuing to initiate sites and enroll patients in our Phase 3 clinical study of tab-cel ® for the treatment of patients with EBV+ PTLD after HCT and SOT who have failed rituximab;

process development, testing and manufacturing of drug supply to support clinical studies and IND-enabling studies;

process development, testing and manufacturing of drug supply to support clinical and IND-enabling studies;

continuing development of ATA188 in progressive MS;

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significant and changing government regulation;

disruptions caused by man-made or natural disasters or public health pandemics or epidemics, including, for example, the recent outbreak of COVID-19;

disruptions caused by man-made or natural disasters or public health pandemics or epidemics, including, for example, the COVID-19 pandemic;

the timing and receipt of any regulatory approvals, as well as potential post-market requirements.

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2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, none of which had a material impact to us as disclosed in Note 2 to our condensed consolidated financial statements, there have been no significant changes to our critical accounting policies and significant judgments and estimates during the six months ended June 30, 2020 from those disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020.

Simplifying the Accounting for Income Taxes, none of which had a material impact to us as disclosed in Note 2 to our condensed consolidated financial statements, there have been no significant changes to our critical accounting policies and significant judgments and estimates during the nine months ended September 30, 2020 from those disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2020 and 2019

Comparison of the Three and Nine Months Ended September 30, 2020 and 2019

Research and development expenses

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Total research and development expenses

Tab-cel ® expenses were $14.9 million and $29.7 million in the three and six months ended June 30, 2020, respectively, as compared to $11.3 million and $22.9 million in the comparative 2019 periods.

The increases were primarily due to increased production activity, as well as process performance qualification activities at our manufacturing facility.

ATA188, CAR T and other program expenses were $6.1 million and $10.2 million in the three and six months ended June 30, 2020, respectively, as compared to $9.1 million and $15.2 million in the comparative 2019 periods.

Tab-cel ® expenses were $15.7 million and $45.4 million in the three and nine months ended September 30, 2020, respectively, as compared to $11.1 million and $34.0 million in the comparative 2019 periods.

The increases were primarily due to clinical trials and process performance qualification activities at our manufacturing facility, as well as increased activity to support our tab-cel ® BLA filing.

ATA188, CAR T and other program expenses were $4.1 million and $14.3 million in the three and nine months ended September 30, 2020, respectively, as compared to $8.9 million and $24.1 million in the comparative 2019 periods.

The decreases were primarily related to lower clinical study, manufacturing and other outside services costs for programs that are no longer in active development .

Employee and overhead expenses were $40.6 million and $79.3 million in the three and six months ended June 30, 2020, respectively, as compared to $31.9 million and $62.8 million in the comparative 2019 periods.

The increases were primarily due to higher compensation-related costs from increased headcount and higher facility-related costs in support of our continuing expansion of research and development activities.

Relative to the 2019 comparative period, for the three months ended June 30, 2020, payroll and related costs increased by $7.1 million, facility-related costs increased by $1.6 million and outside services costs remained consistent.

Relative to the 2019 comparative period, for the six months ended June 30, 2020, payroll and related costs increased by $13.3 million, facility-related costs increased by $2.9 million and outside services costs remained consistent.

Total research and development expenses for the three and six months ended June 30, 2020 have not been significantly impacted as a result of the COVID-19 pandemic.

Employee and overhead expenses were $ 40.0 million and $ 119.3 million in the three and nine month s ended September 30 , 2020 , respectively, as compared to $ 33.6 million and $ 96.4 million in the comparative 2019 period s .

The increase s w ere primarily due to higher compensation-related costs from increased headcount and higher facility-related costs in support of our continuing expansion of research and development activities .

Relative to the 2019 comparative period, f or the three months ended September 30 , 2020 , payroll and related costs increased by $ 4.8 million , facility-related costs increased by $ 1.3 million and outside services costs remained consistent .

Relative to the 2019 comparative period, for the nine months ended September 30 , 2020 , payroll and related costs increased by $ 18.1 million, facility-related costs increased by $ 4.1 million and outside services costs increased by $ 0.7 million .

Total research and development expenses for the three and nine months ended September 30, 2020 have not been significantly impacted as a result of the COVID-19 pandemic.

General and administrative expenses

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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General and administrative expenses

General and administrative expenses decreased to $16.4 million and $33.4 million in the three and six months ended June 30, 2020, respectively, as compared to $23.3 million and $42.5 million in the comparative 2019 periods.

The decreases in 2020 were primarily due to decreases in outside services costs and lower non-cash stock-based compensation expenses.

Total general and administrative expenses for the three and six months ended June 30, 2020 have not been significantly impacted as a result of the COVID-19 pandemic.

General and administrative expenses decreased to $14.8 million and $48.3 million in the three and nine months ended September 30, 2020, respectively, as compared to $19.0 million and $61.5 million in the comparative 2019 periods.

The decrease between the three-month periods was primarily due to decreases in outside service costs and lower employee-related costs.

The decrease between the nine-month periods was primarily due to decreases in outside services costs and lower non-cash stock-based compensation expenses.

Total general and administrative expenses for the three and nine months ended September 30, 2020 have not been significantly impacted as a result of the COVID-19 pandemic.

Liquidity and Capital Resources

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The 2020 ATM Facility is separate from and does not replace the 2019 ATM Facility in any way.

The issuance and sale of these shares by us pursuant to the 2020 ATM Facility are deemed “at the market” offerings and are registered under the Securities Act of 1933, as amended.

The issuance and sale of these shares by us pursuant to the 2020 ATM Facility are deemed “at the market” offerings and are registered under the Securities Act.

We will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2020 ATM Facility.

During the three months ended June 30, 2020, we did not sell any common stock under the ATM facilities.

During the six months ended June 30, 2020, we sold an aggregate of 1,528,216 shares of common stock under the 2019 ATM Facility, at an average price of $15.50 per share for net proceeds of $23.0 million, after deducting commissions and other offering expenses payable by us.

During the three months ended September 30, 2020, we sold an aggregate of 2,581,768 shares of common stock under the ATM facilities, at an average price of $13.56 per share, for net proceeds of $34.1 million, after deducting commissions payable by us.

For the nine months ended September 30, 2020, we sold an aggregate of 4,109,984 shares of common stock under the ATM facilities, at an average price of $14.28 per share for net proceeds of $57.1 million, after deducting commissions and other offering expenses payable by us.

On October 2, 2020, we received net proceeds of approximately $0.3 million from sales of shares common stock under the 2020 ATM Facility that occurred during September 2020.

On January 3, 2020, we received net proceeds of approximately $1.2 million from sales of shares of our common stock under the 2019 ATM Facility that occurred during December 2019.

As of June 30, 2020, $25.9 million and $100.0 million of common stock remained available to be sold under the 2019 ATM Facility and 2020 ATM Facility, respectively, subject to certain conditions as specified in the agreements.

As of September 30 , 2020 , we have fully utilized the 2019 ATM Facility and $90.9 million of common stock remained available to be sold under the 2020 ATM Facility, subject to certain conditions as specified in the agreement.

We have incurred losses and negative cash flows from operations in each year since inception.

As of June 30, 2020, we had an accumulated deficit of $968.9 million.

As of September 30, 2020, we had an accumulated deficit of $1,043.3 million.

We do not expect to receive any revenues from any product candidates that we develop until we obtain regulatory approval and commercialize our products.

As such, we anticipate that we will continue to incur losses in the foreseeable future.

Additionally, as a result of the COVID-19 outbreak, we have experienced, and may experience in the future, disruptions that could severely impact our business, preclinical studies and clinical trials.

Additionally, as a result of the COVID-19 pandemic, we have experienced, and may experience in the future, disruptions that could severely impact our business, preclinical studies and clinical trials.

We expect that our operating expenses will continue to increase.

1 unchanged sentence

We may borrow funds on terms that may include restrictive covenants, including covenants that restrict the operation of our business, liens on assets, high effective interest rates and repayment provisions that reduce cash resources and limit future access to capital markets.

In addition, we expect to continue to opportunistically seek access to additional funds through additional public or private equity offerings or debt financings including by utilizing our ATM facilities, through potential collaborations, partnering or other strategic arrangements, or a combination of the foregoing.

In addition, we expect to continue to opportunistically seek access to additional funds through additional public or private equity offerings or debt financings including by utilizing the 2020 ATM Facility, through potential collaborations, partnering or other strategic arrangements, or a combination of the foregoing.

However, the trading prices for our common stock and other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic.

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Treasury, government agency and corporate debt obligations, commercial paper and asset-backed securities .

We expect that existing cash, cash equivalents and short-term investments as of June 30 , 2020 will be sufficient to fund our planned operations into 202 2 .

We expect that existing cash, cash equivalents and short-term investments as of September 30, 2020 will be sufficient to fund our planned operations into 2022.

Our cash, cash equivalents and short-term investments balances as of the dates indicated were as follows:

September 30,

(in thousands)

2 unchanged sentences

Total cash, cash equivalents and short-term investments

Comparison of the Six Months Ended June 30, 2020 and 2019

Comparison of the Nine Months Ended September 30, 2020 and 2019

The following table details the primary sources and uses of cash for each of the periods set forth below:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

3 unchanged sentences

Financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Operating activities

Net cash used in operating activities was $176.6 million in the 2020 period as compared to $176.9 million in the 2019 period.

The decrease of $1.1 million was primarily due to decreased working capital usage and a decrease in accretion of investment discounts, partially offset by a $10.4 million increase in net loss.

The decrease of $0.3 million was primarily due to a decrease in working capital usage and a decrease in accretion of investment discounts, offset by an increase in net loss.

Investing activities

2 unchanged sentences

Financing activities

Net cash provided by financing activities in the 2020 period consisted primarily of $189.6 million of net proceeds received from the underwritten public offering of common stock and pre-funded warrants, $24.2 million of net proceeds received from the 2019 ATM Facility and $3.2 million of net proceeds from employee stock award transactions, partially offset by $1.4 million of taxes paid related to the net share settlement of RSUs.

Net cash provided by financing activities in the 2019 period consisted primarily of $7.6 million net proceeds from the 2019 ATM Facility and $4.7 million of net proceeds from employee stock award transactions, partially offset by $6.7 million of taxes paid related to the net share settlement of RSUs.

Net cash provided by financing activities in the 2020 period consisted primarily of $189.3 million of net proceeds received from the underwritten public offering of common stock and pre-funded warrants, $58.0 million of net proceeds received from the ATM facilities and $3.4 million of net proceeds from employee stock award transactions, partially offset by $1.5 million of taxes paid related to the net share settlement of RSUs.

Net cash provided by financing activities in the 2019 period consisted primarily of $140.9 million of net proceeds received from the underwritten public offering of common stock and pre-funded warrants , $12.6 million of net proceeds from the 2019 ATM Facility and $4.9 million of net proceeds from employee stock award transactions, partially offset by $6.7 million of taxes paid related to the net share settlement of RSUs.

Operating Capital Requirements and Plan of Operations

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We lease our corporate headquarters in South San Francisco, California under a non-cancellable lease agreement for approximately 13,670 square feet of office space.

The lease expires in May 2021.

In October 2020, we entered into an amendment of this lease to extend the lease term by one year and an option to extend the lease for an additional five years.

The amended lease expires in May 2022.

In February 2017, we entered into a lease agreement for approximately 90,580 square feet of office, lab and cellular therapy manufacturing space in Thousand Oaks, California.

The initial 15-year term of this lease commenced in February 2018, and t he contractual obligations during the initial term are $16.4 million in aggregate.

The initial 15-year term of this lease commenced in February 2018, and the contractual obligations during the initial term are $16.4 million in aggregate.

We have the option to extend this lease for two additional periods of ten and nine years, respectively, after the initial term.

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These contracts generally provide for termination on notice, with the exception of one of our contract manufacturing agreements which we may terminate for convenience upon six months’ written notice.

There have been no material changes to our contractual obligations disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

There have been no material changes to our contractual obligations and commitments reported in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020.

Off-Balance Sheet Arrangements

We did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC, during the periods presented.

Quantitative and Qualitative Disclosures about Market Risk

During the six months ended June 30, 2020, there were no material changes to our interest rate risk disclosures, market risk disclosures and foreign currency exchange rate risk disclosures reported in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis