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Item 2. Management’s Discussion and Analysis

2021-05-04 compared with 2020-11-09 · 123 added, 175 removed, 168 unchanged (64% 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 September 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 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 serious diseases through incorporation of engineered chimeric antigen receptors (CARs) or T-cell receptors (TCRs).

Atara Biotherapeutics is a pioneer in T-cell immunotherapy, leveraging its novel allogeneic Epstein-Barr virus (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, we are the most advanced allogeneic T-cell immunotherapy company and intend 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-driven 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.

Our strategic priorities are:

Atara’s most advanced T-cell immunotherapy, tab-cel ® (tabelecleucel), currently in Phase 3 development for patients with Epstein-Barr virus (EBV) associated post-transplant lymphoproliferative disease (EBV+ PTLD) who have failed rituximab or rituximab plus chemotherapy, as well as other EBV-associated hematologic malignancies and solid tumors;

Atara’s most advanced T-cell immunotherapy, tab-cel ® (tabelecleucel), currently in Phase 3 development for patients with EBV-driven post-transplant lymphoproliferative disease (EBV+ PTLD) who have failed rituximab or rituximab plus chemotherapy, as well as other EBV-driven diseases;

T-cell immunotherapy targeting EBV antigens believed to be important for the potential treatment of multiple sclerosis;

CAR T Programs :

Autologous CAR T immunotherapy targeting solid tumors expressing the tumor antigen 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.

Autologous CAR T immunotherapy targeting solid tumors expressing the tumor antigen mesothelin, which is partnered with Bayer AG (Bayer);

Allogeneic CAR T therapy targeting mesothelin, which is partnered with Bayer;

Allogeneic CAR T targeting CD19, 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.

Our T-cell immunotherapy platform includes the capability to progress both allogeneic and autologous programs and is potentially applicable to a broad array of targets and diseases.

Our off-the-shelf, allogeneic T-cell platform allows for rapid delivery of a T-cell immunotherapy product manufactured in advance of patient need and stored in inventory, with each manufactured lot of cells providing therapy for numerous potential patients.

This differs from autologous treatments, in which each patient’s own cells must be extracted, genetically modified outside the body and then delivered back to the patient, and requires a complex logistics network.

This differs from autologous treatments, in which each patient’s own cells must be extracted, genetically modified outside the body and then delivered back to the patient, requiring a complex logistics network.

For our allogeneic programs, we select the appropriate set of cells for use based on a patient’s unique immune profile.

In addition, our manufacturing facility is capable of producing multiple types of therapies and Atara MatchMe™, our proprietary T-cell order management platform, is being developed to select and deliver the most appropriate treatments to the healthcare teams caring for patients.

We have entered into research collaborations with leading academic institutions such as Memorial Sloan Kettering Cancer Center (MSK), the Council of the Queensland Institute of Medical Research (QIMR Berghofer) and H.

Lee Moffitt Cancer Center and Research Institute (Moffitt) to acquire rights to novel and proprietary technologies and programs.

We recognize that our clinical studies may not be available to all patients and we have established expanded access and compassionate use programs in instances where there is a significant patient need.

Atara’s most advanced T-cell immunotherapy, tab-cel ® , is in Phase 3 development for the treatment of patients with EBV+ PTLD who have failed rituximab or rituximab plus chemotherapy.

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 Phase 2 multi-cohort study that was initiated in the third quarter of 2020.

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.

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.

In addition, our manufacturing facility has the flexibility to manufacture multiple T-cell and CAR T immunotherapies while integrating research and process science functions to enable increased collaboration for rapid product development .

We are currently in the process of completing our facility’s commercial production qualification activities for tab-cel ® while building inventory according to our commercial product supply strategy .

In December 2020, we entered into a Research, Development and License Agreement with Bayer (the Bayer License Agreement) pursuant to which we granted to Bayer an exclusive, field-limited license under the applicable patents and know-how owned or controlled by us and our affiliates covering or related to ATA2271 and ATA3271.

In March 2021, as contemplated by the Bayer License Agreement, we entered into (i) a Manufacturing and Supply Agreement (Bayer Manufacturing Agreement);

(ii) a Pharmacovigilance Agreement;

(iii) a Quality Agreement;

and (iv) a Technology Transfer Agreement (Bayer Tech Transfer Agreement), in each case, with Bayer, to further advance our collaboration with Bayer.

We have also entered into research collaborations with leading academic institutions such as Memorial Sloan Kettering Cancer Center (MSK), the Council of the Queensland Institute of Medical Research (QIMR Berghofer) and H.

Lee Moffitt Cancer Center and Research Institute (Moffitt) pursuant to which we acquired rights to novel and proprietary technologies and programs.

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

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

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, 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%.

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 some patients.

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 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 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).

In the fourth quarter of 2017, we initiated an open label, single arm, multi-center, multi-national Phase 1 study with allogeneic ATA188 for patients with progressive MS (PMS).

The primary objective of this Phase 1 study is to assess the safety of ATA188 in patients followed for at least one year after the first dose.

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 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.

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.

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.

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.

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.

We are in active discussions with the FDA and progressing toward alignment on the content of chemistry, manufacturing and controls (CMC) module 3, including methodologies to assess comparability between the product used in the pivotal ALLELE study and the intended commercial product.

We are working toward completing a BLA submission in the third quarter of 2021 pending alignment with the FDA.

A recent analysis shows that duration of response in the ALLELE study is maturing as anticipated with a larger number of responders followed for at least six months and a safety profile consistent with previously published data with no new safety signals.

In January 2021, we presented transcriptional data for tab-cel ® at the 2021 Transplantation & Cellular Therapy Meeting demonstrating consistency of the product’s activation profile irrespective of donor and consistent enrichment of receptors targeting EBV-driven diseases.

We have data at two medical congresses (presented at the Annual Meeting of the European Society for Blood and Marrow Transplantation in March 2021, and an abstract at the upcoming American Transplant Congress in June 2021) from a combined long-term overall survival (OS) analysis from three clinical studies of tab-cel ® demonstrating that patients with EBV+ PTLD, following both HCT (hematopoietic cell transplantation) and SOT (solid organ transplant), that is relapsed or refractory to initial treatment, derived similar OS benefit greater than 80 percent at two years whether they achieved complete or partial response with tab-cel ® .

We expect to present data from the pivotal ALLELE study at an appropriate congress in the fourth quarter of 2021.

We have submitted a letter of intent to the European Medicines Agency (EMA), starting the process for a submission of an EU marketing authorization application (MAA) for tab-cel ® in patients with EBV+ PTLD in the fourth quarter of 2021.

We anticipate an approval decision with respect to of the MAA in the second half of 2022.

We are continuing our preparations and investing further in commercial readiness activities in anticipation of potential approval and commercialization of tab-cel ® in the U.S in the first half of 2022.

We are in discussions with potential partners for the commercialization of tab-cel ® in Europe.

We continue to pursue development of tab-cel ® in earlier lines of therapy, with an initial focus on immunodeficiency-associated lymphoproliferative diseases (IA-LPDs), 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 ® .

We are actively opening sites in our Phase 2 multi-cohort study, which will evaluate both treatment-naïve and previously treated patients in six patient populations, including four within IA-LPDs and two in other EBV-driven diseases, in both the U.S.

Data from this study is expected in 2023.

Our phase 1b study of tab-cel ® in combination with Merck’s anti-PD1 (programmed death receptor-1) therapy, KEYTRUDA® (pembrolizumab), in patients with platinum-resistant or recurrent EBV-driven nasopharyngeal carcinoma (NPC) achieved its safety endpoints and stable diseases in some patients.

We intend to generate additional translational data in NPC in 2021 for this patient population.

We plan to share data from the NPC study at an appropriate forum in the future.

We continue to progress our development of ATA188, an allogeneic T-cell immunotherapy targeting EBV antigens believed to be important for the potential treatment of multiple sclerosis (MS).

We are currently progressing an open-label extension (OLE) of our open label, single arm, multi-center, multi-national Phase 1 study with allogeneic ATA188 for patients with progressive MS (PMS).

Based on encouraging data from the study to date, all patients will be treated or re-treated with the Cohort 4 dose moving forward.

In January 2021, we presented a poster at the 2021 Transplantation & Cellular Therapy Meeting an innovative testing solution that enables detection and quantification of non-engineered allogeneic T-cell therapies for use in ATA188 clinical development.

We plan to present long-term two-year clinical data from the OLE and translation data from the Phase 1 study in the second half of 2021 .

We also continue to enroll patients in a randomized, double-blind, placebo-controlled trial (Phase 2 RCT) evaluating the efficacy and safety of ATA188 in patients with PMS .

In the first quarter of 2021, we filed and received approval of a Clinical Trial Application for the Phase 2 RCT in Canada.

We plan to conduct an interim analysis of the Phase 2 RCT in the first half of 2022 to assess efficacy and safety.

Following the interim analysis, we expect to complete planned enrollment in the first half of 2022.

ATA2271/ATA3271

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).

Data from investigational new drug (IND) enabling studies for ATA2271 were presented at the American Association for Cancer Research (AACR) Virtual Meeting II in June 2020.

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.

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.

Our 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.

Both programs were licensed to Bayer in December 2020, pursuant to an exclusive, field-limited license (the Bayer License Agreement).

In March 2021, as contemplated by the Bayer License Agreement, we entered into (i) the Bayer Manufacturing Agreement;

(ii) a Pharmacovigilance Agreement;

(iii) a Quality Agreement;

and (iv) the Bayer Tech Transfer Agreement, in each case, with Bayer, to further advance our collaboration with Bayer.

In September 2020, MSK initiated an open-label, single-arm Phase 1 clinical study of ATA2271 for patients with advanced mesothelioma.

MSK has completed enrollment of the first cohort of this study and we anticipate presentation of first clinical data from this study to be presented in the fourth quarter of 2021.

We have also 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 the second or third quarter of 2022.

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.

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.

We have initiated IND-enabling studies and plan to submit an IND for ATA3219 for patients with B-cell malignancies in the fourth quarter of 2021 or first quarter of 2022 .

Additional Programs and Platform Expansion Activities

In addition to the prioritized programs described above, we have a number of preclinical programs.

For example, in August 2018, we entered into a strategic collaboration with Moffitt.

As part of this relationship, we agreed to collaborate with Moffitt to develop multi-targeted CAR T immunotherapies designed to address cancers with diverse cell types that often become resistant to treatment, such as acute myeloid leukemia (AML) (ATA2321) and B-cell malignancies (ATA2431), and to make certain milestone and royalty payments associated with the collaboration targets.

In addition, the collaboration includes the use of novel CAR T intracellular co-stimulatory domains that may improve CAR T proliferation when responding to an appropriate antigen and enhance CAR T persistence by reducing T-cell exhaustion.

We are collaborating with Moffitt to develop multi-targeted CAR T immunotherapies to adverse cell types that often become resistant to treatment, such as those targeting acute myeloid leukemia (AML) (ATA2321) and B-cell malignancies (ATA2431).

We are also collaborating with QIMR Berghofer on the development of ATA368 for patients with human papillomavirus (HPV) associated cancers.

We believe our platform will have utility beyond the current set of targets to which it has been directed.

We continue to evaluate additional product candidates, including those derived from collaborations with our partners .

We expect to further research and develop additional cellular therapies, which may include T-cell programs targeted against other antigens as well as engineered T-cell immunotherapies such as CAR T-cell programs.

We believe that viral antigens are well suited to adoptive immunotherapy given that people with normal immune systems are able to mount robust responses to these viral targets, but immunocompromised patients and some cancer patients are not.

We also continue to evaluate opportunities to license or acquire additional product candidates or technologies to enhance our existing platform.

Manufacturing

Our manufacturing facility in Thousand Oaks, California has the flexibility to manufacture multiple T-cell and CAR T immunotherapies while integrating research and process science functions to enable increased collaboration for rapid product development.

Our research and development and process and analytical development labs are currently supporting preclinical development activities.

Our facility is designed to global regulatory standards, and the required facility commissioning and qualification activities to support clinical manufacturing are complete.

We are in the process of completing our facility’s commercial production qualification activities for tab-cel ® while building inventory according to our commercial product supply strategy.

We continue to scale our EBV T-cell manufacturing platform to improve product yields from a single donor leukapheresis and have generated data confirming the use of stirred-tank perfusion bioreactors to improve yield and cell growth productivity.

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 Bio S ervices, Inc.

In addition to our manufacturing facility in Thousand Oaks, California, we also work with Cognate BioServices, 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.

In March 2021, Charles River Laboratories Inc.

(CRL) acquired Cognate.

COVID-19 Business Update

We continue to closely monitor the impact of the ongoing COVID-19 pandemic on our business and operations and have taken steps to ensure the health and safety of our employees, staff, clinical site staff and patients and to maintain business continuity.

Based on guidance issued by federal, state and local authorities, we have temporarily transitioned most of our employees and staff to a remote, work-from-home model, while maintaining essential in-person manufacturing and laboratory functions in order to advance key research, development and manufacturing priorities.

We implemented safety protocols and procedures to support our onsite employees and staff.

In addition to implementing measures to protect the health and safety of our employees and staff, our clinical study and operational teams are working closely with clinical sites to ensure the safety of site staff and patients as well as preserve data integrity and access to treatment as appropriate.

Based on guidance issued by federal, state and local authorities, we have temporarily transitioned most of our workforce to a remote, work-from-home model, while maintaining essential in-person manufacturing and laboratory functions in order to advance key research, development and manufacturing priorities.

We implemented safety protocols and procedures to support our onsite workforce.

In addition to implementing measures to protect the health and safety of our workforce, our clinical study and operational teams are working closely with clinical sites to ensure the safety of site staff and patients as well as preserve data integrity and access to treatment as appropriate.

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.

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.

We have experienced, and may continue to experience, some transient delays in clinical study operations, 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.

We were able to resume such activities and enrolled the first patient in the study in June 2020.

Our Phase 3 clinical trial of tab-cel ® in patients with EBV+ PTLD has not been adversely impacted by the ongoing COVID-19 pandemic.

Our Phase 2 multi-cohort study of tab-cel ® has experienced some delays in clinical trial site initiation activities, but we do not believe this study has been significantly impacted.

Our Phase 3 clinical trial of tab-cel ® in patients with EBV+ PTLD has not been significantly impacted by the ongoing COVID-19 pandemic, and most sites are currently open for patient enrollment.

The full extent to which the COVID-19 pandemic may impact our business and operations is subject to future developments which are uncertain and difficult to predict.

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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 $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.

Our net losses were $78.3 million and $73.5 million for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, we had an accumulated deficit of $1.2 billion.

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 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.

We have never generated revenues and have incurred losses since inception.

We do not expect to receive any revenues from any product candidates that we develop until we obtain regulatory approval and commercialize our products or enter into collaborative agreements with third parties.

As of March 31, 2021, our cash, cash equivalents and short-term investments totaled $435.2 million, which we intend to use to fund our operations.

We have never generated revenues from the sale of products and have incurred losses since inception.

We do not expect to receive any revenue from product sales unless and until we obtain regulatory approval for and commercialize one of our current or future product candidates.

Our revenues to date are derived solely from agreements with Bayer related to upfront license fees, fees for research, process development and translational activities and technology transfer fees.

We expect that any revenue we generate from our Bayer License Agreement and any future collaboration and research and license partners will fluctuate from year to year as a result of the timing and number of milestones and other payments.

Research and Development Expenses

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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 and IND-enabling studies;

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

continuing development of ATA188 in progressive MS;

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and information technology and facilities costs .

Interest and Other Income, net

Interest and other income, net consists primarily of interest earned on our cash, cash equivalents and short-term investments.

Interest and Other Income (Expense), net

Interest and other income (expense), net consists primarily of interest earned on our cash, cash equivalents and short-term investments and translation gains and losses on transactions denominated in foreign currencies.

Critical Accounting Policies and Significant Judgments and Estimates

Except for the adoption of ASU No.

2016-13, as amended, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , and ASU No.

2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , and ASU No.

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 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.

There have been no significant changes to our critical accounting policies and significant judgments and estimates during the three months ended March 31, 2021 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, 2020 filed with the SEC on March 1, 2021.

Results of Operations

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

Comparison of the Three Months Ended March 31, 2021 and 2020

Revenue consisted of the following in the periods presented:

Three Months Ended

(in thousands)

License and collaboration revenue

License and collaboration revenue for the three months ended March 31, 2021 consisted of revenue related to the recognition of upfront license fees, fees for research, process development and translational activities and technology transfer fees under the Bayer License Agreement and Bayer Tech Transfer Agreement.

No revenue was recognized in 2020.

Research and development expenses

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Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Tab-cel ® expenses

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Total research and development expenses

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 $ 40.0 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.

Tab-cel ® expenses were $12.0 million in the three months ended March 31, 2021, as compared to $14.8 million in the comparative 2020 period.

The decrease in 2021 was primarily due to higher production activities in 2020 related to the build-up of our tab-cel ® inventory.

ATA188, CAR T and other program expenses were $9.1 million in the three months ended March 31, 2021, as compared to $4.1 million in the comparative 2020 period.

The increase was primarily related to milestone and license fees due to MSK and an increase in research and clinical trial costs to further advance ATA188 and our CAR T programs .

Employee and overhead expenses were $43.0 million in the three months ended March 31, 2021, as compared to $38.7 million in the comparative 2020 period.

The increase was 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 2020 comparative period, for the three months ended March 31, 2021, payroll and related costs increased by $2.8 million, facility-related costs increased by $1.2 million and outside services costs remained consistent.

Total research and development expenses for the three months ended March 31, 2021 and 2020 were not significantly impacted as a result of the COVID-19 pandemic.

General and administrative expenses

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

General and administrative expenses

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.

General and administrative expenses increased to $17.7 million in the three months ended March 31, 2021 as compared to $17.0 million in the comparative 2020 period.

The increase was primarily driven by activities to support our anticipated tab-cel ® launch.

Total general and administrative expenses for the three months ended March 31, 2021 and 2020 were not significantly impacted as a result of the COVID-19 pandemic.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception in 2012, we have funded our operations primarily through the issuance of common and preferred stock and pre-funded warrants to purchase common stock.

In the second quarter of 2020, we completed an underwritten public offering of 14,958,039 shares, inclusive of the exercise of the full option granted to the underwriters, of common stock at a public offering price of $11.32 per share and pre-funded warrants to purchase 2,866,961 shares of common stock at a public offering price of $11.3199 per warrant.

We received net proceeds of approximately $189.3 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Since our inception in 2012, we have funded our operations primarily through the issuance of common and preferred stock, issuance of pre-funded warrants to purchase common stock and upfront fees from the Bayer License Agreement.

In February 2020, we entered into a sales agreement (the 2020 ATM Facility) with Cowen and Company, LLC (Cowen), which provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to $100.0 million through Cowen, as our sales agent.

The issuance and sale of these shares by us pursuant to the 2019 ATM Facility are deemed “at the market” offerings defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act), and are registered under the Securities Act.

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 Securities Act), and are registered under the Securities Act.

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

In February 2020, we entered into a new sales agreement (the 2020 ATM Facility) with Cowen, which provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to $100.0 million through Cowen, as our sales agent.

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.

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 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 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.

During the three months ended March 31, 2021, we sold an aggregate of 145,630 shares of common stock under the 2020 ATM Facility, at an average price of $17.31 per share for net proceeds of $2.4 million, after deducting commissions and other offering expenses payable by us.

As of March 31, 2021, we have $77.1 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 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.

We do not expect to receive any revenues from the sale of products unless and until we obtain regulatory approval for and commercialize any of our product candidates.

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

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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 September 30, 2020 will be sufficient to fund our planned operations into 2022.

We expect that existing cash, cash equivalents and short-term investments as of March 31, 2021, together with projected revenue from U.S.

tab-cel ® sales, if approved, will be sufficient to fund our planned operations into 2023, including expenses related to the BLA filing and potential commercial launch of tab-cel ® in the U.S.

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

September 30,

(in thousands)

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Total cash, cash equivalents and short-term investments

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

Comparison of the Three Months Ended March 31, 2021 and 2020

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

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Financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Operating activities

Net cash used in operating activities was $65.7 million in the 2021 period as compared to $67.0 million in the 2020 period.

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.

The decrease of $1.3 million was primarily due to a $5.9 million increase in net operating liabilities, partially offset by a $4.8 million increase in net loss.

Investing activities

Net cash used in investing activities in the 2020 period consisted of $279.2 million used to purchase available-for-sale securities and $3.9 million in purchases of property and equipment, partially offset by $199.3 million received from maturities and sales of available-for-sale securities.

Net cash provided by investing activities in the 2021 period consisted of $109.8 million received from maturities and sales of available-for-sale securities, partially offset by $94.1 million used to purchase available-for-sale securities and $2.2 million in purchases of property and equipment.

Net cash provided by investing activities in the 2020 period consisted primarily of $97.2 million received from maturities and sales of available-for-sale securities, partially offset by $56.9 million used to purchase available-for-sale securities and $1.3 million in purchases of property and equipment.

Financing activities

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.

Net cash provided by financing activities in the 2021 period consisted primarily of $2.5 million of net proceeds received from the ATM facilities and $1.7 million of net proceeds from employee stock award transactions, partially offset by $1.2 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 $24 .3 million of net proceeds from ATM facilities and $1.3 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.

Operating Capital Requirements and Plan of Operations

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We do not know when, or if, we will generate any revenue from product sales.

We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.

We do not expect to generate any revenue from product sales unless and until we obtain regulatory approval for and commercialize one of our current or future product candidates.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect the accumulated losses to increase as we continue the development of and seek regulatory approvals for our product candidates and begin to commercialize any approved products.

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We anticipate that we will need to raise substantial additional funding in connection with our continuing and expected expansion of our operations.

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

We expect that our existing cash, cash equivalents and short-term investments as of March 31, 2021, together with projected revenue from U.S.

tab-cel ® sales, if approved, will be sufficient to fund our operations into 2023, including expenses related to the BLA filing and potential commercial launch of tab-cel ® in the U.S.

In order to complete the process of obtaining regulatory approval for any of our product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we will require substantial additional funding.

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subject to receipt of regulatory approval, costs associated with the commercialization of our product candidates and the amount of revenues received from commercial sales of our product candidates;

the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish;

the timing of proceeds from the Bayer License Agreement, as well as the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish;

the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other intellectual property rights;

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We have the option to extend the lease for an additional period of five years after the initial term.

In May 2019, we entered into a new lease agreement for our approximately 8,800 square feet of office and lab space in Aurora, Colorado.

The term of this lease expires in April 2024.

The contractual obligations during the lease term are $1.1 million in aggregate.

In May 2019, we entered into a new lease agreement for approximately 8,800 square feet of office and lab space in Aurora, Colorado.

The initial term of this lease expires in April 2024.

In February 2021, we further amended this lease to add an additional 2,861 square feet of lab space.

The contractual obligations during the lease term are not material.

We have the option to extend this lease for two additional five-year periods after the initial term.

In March 2021, we entered into a new lease agreement for approximately 33,659 square feet of office, lab and warehouse space in Thousand Oaks, California.

The initial 10.5-year term of this lease is scheduled to commence in July 2021 and the contractual obligations during the initial term are $19.1 million in aggregate.

We have the option to extend this lease for two additional five-year periods after the initial term.

Our contractual obligations primarily consist of our obligations under non-cancellable operating and finance leases and contracts we enter into in the normal course of business with clinical research organizations for clinical studies, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies and supplies and other services and products for operating purposes.

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 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.

With the exception of the aforementioned lease agreement entered into during the first quarter of 2021, 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, 2020 filed with the SEC on March 1, 2021.

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 three months ended March 31, 2021, 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, 2020 filed with the SEC on March 1, 2021.

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