What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-28 compared with 2021-03-01 · 108 added, 137 removed, 221 unchanged (53% of the section changed)

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As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual 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.

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 CARs or TCRs.

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

Atara is applying this one platform, that does not require TCR or HLA gene editing, 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 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;

Atara’s most advanced T-cell immunotherapy program, tab-cel ® (tabelecleucel), is partnered with Pierre Fabre Medicament (Pierre Fabre) for commercialization in Europe and select emerging markets and is 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 primary and secondary progressive multiple sclerosis;

CAR T Programs :

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

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

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, currently in clinical development, targeting solid tumors expressing the tumor antigen mesothelin, which is partnered with Bayer;

Allogeneic CAR T therapy, currently in preclinical development, targeting mesothelin, which is partnered with Bayer;

Allogeneic CAR T targeting CD19, currently in preclinical development, 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.

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.

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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.

We currently have on hand sufficient tab-cel drug product inventory to supply commercial demand, if approved and subject to the specifications set forth in such approval, for at least 12 months.

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

In December 2020, we entered into 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.

Under the terms of the Bayer License Agreement, we will be responsible at our cost for all mutually agreed preclinical and clinical activities for ATA2271 through the first in human Phase 1 clinical study in collaboration with MSK, following which Bayer will be responsible for the further development of ATA2271 at its cost.

Bayer will be responsible for the development of ATA3271, except for certain mutually agreed preclinical, translational, manufacturing and supply chain activities to be performed by us relating to ATA3271, in each case at Bayer’s cost.

Bayer will also be solely responsible for commercializing the Licensed Products at its cost.

We have also entered into research collaborations with leading academic institutions such as MSK, QIMR Berghofer and Moffitt pursuant to which we acquired rights to novel and proprietary technologies and programs.

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 October 2021, we entered into the Commercialization Agreement with Pierre Fabre (Pierre Fabre Commercialization Agreement), pursuant to which we granted to Pierre Fabre an exclusive, field-limited license to commercialize and distribute tab-cel ® in Europe and select emerging markets in the Middle East, Africa, Eastern Europe and Central Asia following regulatory approval.

We will retain full rights to tab-cel ® in other major markets, including North America, Asia Pacific and Latin America.

Under the terms of the Pierre Fabre Commercialization Agreement, we are currently negotiating a Manufacturing and Supply Agreement as well as a number of ancillary agreements to further advance our collaboration with Pierre Fabre.

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.

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.

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In addition to our manufacturing facility, we also work with Cognate pursuant to the Manufacturing Agreement that we entered into in December 2019 .

P ursuant to the Manufacturing Agreement, Cognate provides manufacturing services for certain of our product candidates.

The initial term of the Manufacturing Agreement runs until December 31, 2021 and is renewable with Cognate’s approval for an additional one - year period.

Pursuant to the Manufacturing Agreement, Cognate provides manufacturing services for certain of our product candidates.

The initial term of the Manufacturing Agreement, as amended, runs until May 31, 2022.

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.

Financial Overview

We have a limited operating history.

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As of December 31, 2021 , our cash, cash equivalents and short-term investments totaled $371.1 million, which we intend to use to fund our operations.

Financial Overview

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.

Further, we have not generated any revenue to date from the Bayer License Agreement.

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.

Our revenues to date have been derived solely under agreements with Bayer and Pierre Fabre and are primarily 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 Agreements, the Pierre Fabre Commercialization 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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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 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.

Our provision for (benefit from) income taxes consists primarily of income taxes in U.S.

state and foreign jurisdictions.

states and foreign jurisdictions.

Our effective tax rate was 0% for the years ended December 31, 2021, 2020, and 2019.

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Actual results may differ from these estimates under different assumptions and conditions.

Our significant judgments and estimates are detailed below, and our significant accounting policies are more fully described in Note 2 of the accompanying consolidated financial statements .

R evenue Recognition

Revenue from research activities under our research, development, and license agreements is recognized when our customer obtains control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

Revenue generated from our research, development, and license agreements is not subject to repayment and typically includes upfront fees, development, regulatory and commercial milestone payments and royalties on the licensee’s future product sales.

Our research, development, and license agreements may include the transfer of intellectual property rights in the form of licenses, promises to provide research and development services and promises to participate on certain development committees with the collaboration party.

Our significant judgments and estimates

are detailed below, and our significant accounting policies are more fully described in Note 2 of the accompanying consolidated financial statements .

Revenue Recognition

Revenue from out-license agreements is recognized when our customer obtains control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

Revenue generated from our out-license agreements is not subject to repayment and typically includes upfront fees, development, regulatory and commercial milestone payments and royalties on the licensee’s future product sales.

Our out-license agreements may include the transfer of intellectual property rights in the form of licenses, promises to provide research and development services and promises to participate on certain development committees with the collaboration party.

We assess whether the promises in these agreements are considered distinct performance obligations that should be accounted for separately.

Judgment is required to determine whether licenses to our intellectual property are distinct from the research and development services or participation on development committees.

Judgment is required to determine whether these promises are distinct.

The transaction price in each agreement is allocated to the identified performance obligations based on the standalone selling price (SSP) of each distinct performance obligation.

Due to the early stage of our licensed technology, the license of such technology is typically combined with the research and development services and committee participation as one combined performance obligation.

Revenue associated with nonrefundable upfront license fees where the license fees and research and development activities cannot be accounted for as separate performance obligations is deferred and recognized as revenue over the expected period of performance using a cost-based input method.

Due to the early stage of our licensed technology, the license of such technology is typically combined with the additional promises in these agreements as one combined performance obligation.

Revenue associated with nonrefundable upfront license fees where the license fees and other promises cannot be accounted for as separate performance obligations is deferred and recognized as revenue over the expected period of performance using an appropriate recognition method based on the nature of the performance obligations.

We utilize judgment to assess the pattern of delivery of the performance obligation.

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In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates.

A time-based input method requires management to evaluate and estimate the pattern at which the performance obligation will be satisfied over the performance period.

The cumulative effect of revisions to estimated costs to complete our performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated.

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Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months, and long-term deferred revenue consists of amounts that we do not expect will be recognized in the next 12 months.

This estimate is based on the our current operating plan and, if our operating plan should change in the future, we may recognize a different amount of deferred revenue over the next 12-month period

This estimate is based on our current operating plan and, if our operating plan should change in the future, we may recognize a different amount of deferred revenue over the next 12-month period.

Accrued Research and Development Expenses

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We determine accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of studies, or the services completed.

Our estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time.

Our estimates of accrued expenses as of each balance sheet date are based on the facts and

circumstances known at the time.

Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided.

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The fair value is determined on the measurement date, which is generally the date of grant.

The fair value of our RSUs is the fair value of the underlying stock at the measurement date.

The fair value of our RSUs is measured at the market price of our common stock on the measurement date.

The fair value for our stock option awards is determined at the grant date using the Black-Scholes valuation model.

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Expected term for non-employee awards is based on the remaining contractual term of an option on each measurement date.

Expected volatility – Expected volatility is estimated using comparable public companies’ volatility for similar terms.

Expected volatility – Prior to 2021, expected volatility was estimated using comparable public companies’ volatility for similar terms.

Beginning in 2021, volatility is estimated using an average of Atara’s historical volatility and comparable public companies’ volatility for similar terms.

Expected dividend rate – We have not historically declared or paid dividends to our stockholders and have no plans to pay dividends;

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Treasury securities with expected terms similar to that of the associated award.

The fair value of our common stock is based on observable market prices.

The fair value of our common stock is measured at the market price on the measurement date.

For awards with performance-based vesting criteria, we assess the probability of the achievement of the performance conditions at the end of each reporting period and begin to recognize the share-based compensation costs when it becomes probable that the performance conditions will be met.

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Comparison of the Years Ended December 31, 2021, 2020 and 2019

License and collaboration revenue

License and collaboration revenues for the periods indicated were as follows:

Year ended December 31,

Increase (Decrease)

2021 compared to 2020

2020 compared to 2019

(in thousands)

License and collaboration revenues

License and collaboration revenues were $20.3 million in 2021 as compared to zero in 2020 and 2019.

The amount recorded in 2021 relates primarily to revenue recognized under the Bayer Agreements.

Research and development expenses

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Tab-cel ® expenses were $50.1 million in 2021 as compared to $61.2 million in 2020 and $49.2 million in 2019.

Tab-cel ® expenses increased in 2020 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 .

T he slight decrease in 2019 as compared to 2018 was primarily due to higher clinical trial and manufacturing costs in 2018 related to the ramp up of the MATCH and ALLELE Phase 3 clinical studies for patients with EBV+ PTLD.

The decrease in 2021 was primarily due to higher production activities in 2020 related to the build-up of our tab-cel ® and process performance qualification activities at our manufacturing facility.

The increase in 2020 was due to increased clinical trial costs 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 $36.4 million in 2021 as compared to $25.1 million in 2020 and $34.9 million in 2019.

The increase in 2021 was primarily related to research, development, and clinical trial costs to further advance ATA188 and our CAR T programs.

The decrease in 2020 was primarily due to lower clinical study, manufacturing and other outside services costs for programs that are no longer in active development.

The increase in 2019 was primarily related to research and manufacturing process development costs related to our CAR T programs;

increased clinical study, manufacturing and other outside service costs related to the Phase 1 clinical study of ATA188 for patients with PMS;

and other programs .

Employee and overhead expenses were $195.5 million in 2021 as compared to $158.3 million in 2020 and $132.0 million in 2019.

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Facility-related costs increased by $11.7 million in 2021 as compared to 2020 and by $5.1 million in 2020 as compared to 2019.

Outside service costs remained consistent in 2020 as compared to 2019 and increased by $5.6 million in 2019 as compared to 2018.

Total research and development expenses for 2020 were not significantly impacted as a result of the COVID-19 pandemic.

Outside service costs increased by $6.2 million in 2021 as compared to 2020 and remained consistent in 2020 as compared to 2019.

Total research and development expenses for 2021 and 2020 were not significantly impacted by the COVID-19 pandemic.

General and administrative expenses

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Year ended December 31,

(Decrease) Increase

Increase (Decrease)

2021 compared to 2020

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General and administrative expenses were $78.8 million in 2021 as compared to $64.4 million in 2020 and $79.6 million in 2019.

The decrease of $15.2 million in 2020 was primarily due to decreases of $10.1 million in outside services costs and $5.1 million in non-cash stock-based compensation expenses.

The increase of $9.9 million in 2019 was primarily due to increases in compensation-related costs driven by increased headcount.

Total general and administrative expenses for 2020 were not significantly impacted as a result of the COVID-19 pandemic.

Quarterly Results of Operations Data (unaudited)

The following table sets forth our unaudited consolidated statement of operations data for each of the quarterly periods in the years ended December 31, 2020 and 2019.

The unaudited quarterly statement of operations data set forth below have been prepared on a basis consistent with our audited annual consolidated financial statements in this Annual Report on Form 10-K and include, in our opinion, all normal recurring adjustments necessary for a fair statement of the financial information contained in those statements.

Our historical results are not necessarily indicative of the results that may be expected in the future.

The following quarterly financial data should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

Three months ended

(In thousands, except per share amounts)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest and other income, net

Loss before provision for income taxes

Provision for income taxes

Other comprehensive (loss) gain:

Unrealized (loss) gain on available-for-sale securities

Comprehensive loss

Basic and diluted net loss per common share

Three months ended

(In thousands, except per share amounts)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest and other income, net

Loss before provision for income taxes

Provision for income taxes

Other comprehensive gain (loss):

Unrealized gain (loss) on available-for-sale securities

Comprehensive loss

Basic and diluted net loss per common share

The increase in 2021 was primarily due to higher compensation-related costs from increased headcount and activities to support our anticipated tab-cel ® launch.

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

Total general and administrative expenses for 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, issuance of pre-funded warrants to purchase common stock and upfront fees from the Bayer License Agreement.

In December 20 20, we completed an underwritten public offering of 5 , 102 , 041 shares of common stock at a public offering price of $ 24 .

50 per share and pre-funded warrants to purchase 2, 040 , 816 shares of common stock at a public offering price of $ 24 .

49 99 per warrant.

We received net proceeds of approximately $ 164 .

3 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us .

In December 2020, we completed an underwritten public offering of 5,102,041 shares of common stock at a public offering price of $24.50 per share and pre-funded warrants to purchase 2,040,816 shares of common stock at a public offering price of $24.4999 per warrant.

We received net proceeds of approximately $164.3 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

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.

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We received aggregate net proceeds of approximately $140.7 million after deducting underwriting discounts and commissions and offering expenses payable by us.

In February 2019, we entered into a sales agreement (the 2019 ATM Facility) with Cowen and Company, LLC (Cowen), which provided 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 were deemed “at the market” offerings defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act), and were registered under the Securities Act.

We paid a commission of up to 3.0% of gross sales proceeds of the common stock sold under the 2019 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 pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2020 ATM Facility.

In the past three years, we have entered into three separate sales agreements with Cowen and Company, LLC (Cowen):

in February 2019 (the 2019 ATM Facility), in February 2020 (the 2020 ATM Facility) and in November 2021 (the 2021 ATM Facility).

Each ATM facility provides or provided 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 ATM facilities are deemed “at the market” offerings defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act), and were registered under the Securities Act.

Commissions of up to 3.0% are due on the gross sales proceeds of the common stock sold under each ATM facility.

During the year ended December 31, 2021, we sold an aggregate of 6,240,601 shares of common stock under the ATM facilities, at an average price of $16.23 per share for net proceeds of $98.9 million, after deducting commissions and other offering expenses payable by us.

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 December 31, 2020, we have fully utilized the 2019 ATM Facility and $79.7 million of common stock remained available to be sold under the 2020 ATM Facility, subject to certain conditions as specified in the agreement.

As of December 31, 2021, we have fully utilized the 2019 ATM Facility and the 2020 ATM Facility, and we had $78.3 million of common stock remaining and available to be sold under the 2021 ATM Facility.

From January 1, 2022 through February 15, 2022, we sold an additional 1,319,878 shares of common stock under the 2021 ATM Facility, at an average price of $15.88 per share, for gross proceeds of $21.0 million and net proceeds of $20.5 million, after deducting commissions and other offering expenses payable by us.

As of February 15, 2022, we had $57.4 million of common stock remaining and available to be sold under the 2021 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.

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

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.

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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 2021 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.

As a consequence, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms.

We may face similar difficulties in obtaining funding through debt financing or other arrangements.

To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

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Total cash, cash equivalents and short-term investments

Contractual Obligations and Commitments

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.

In October 2020, we entered into an amendment of this lease to extend the lease term by one year and in December 2021, we entered into a further amendment to extend the lease for an additional three years.

The amended lease expires in May 2025.

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 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.

In connection with this lease, we were required to issue a letter of credit in the amount of $1.2 million to the landlord, which is recorded as long-term restricted cash in our consolidated balance sheet.

In November 2018, we entered into a lease agreement for approximately 51,160 square feet of office space in Thousand Oaks, California.

The initial term of this lease expires in February 2026.

The contractual obligations during the initial term are $8.5 million in aggregate.

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 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 commenced in August 2021 and the contractual obligations during the initial term are $21.0 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.

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

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Net cash used in operating activities was $220.5 million in 2021 as compared to $180.8 million in 2020.

The decrease of $54.9 million was primarily due to $52.9 million received as a result of the Bayer License Agreement, a $14.9 million increase in other net operating liabilities and a $2.2 million increase in the amortization of investment premiums, partially offset by a $15.6 million increase in net loss.

The increase of $39.7 million was primarily due to an increase in net loss of $33.5 million and increased usage of net working capital, partially offset by $45.0 million received as a result of the Pierre Fabre Commercialization Agreement.

Net cash used in operating activities was $180.8 million in 2020 as compared to $235.6 million in 2019.

The increase of $55.8 million was primarily due to a $60.3 million increase in net loss and a $19.2 million increase in net operating assets, partially offset by a $17.9 million increase in stock-based compensation, a $3.3 million increase in depreciation and amortization expense, and a $1.0 million increase in loss on disposals of property and equipment.

Investing activities

Net cash provided by investing activities in 2021 consisted primarily of $334.0 received from maturities and sales of available-for-sale securities, partially offset by $301.1 million used to purchase available-for-sale securities and $10.6 million in purchases of property and equipment.

Net cash used in investing activities in 2020 consisted primarily of $425.9 million used to purchase available-for-sale securities and $4.5 million in purchases of property and equipment, partially offset by $309.7 million received from maturities and sales of available-for-sale securities.

Net cash provided by investing activities in 2019 consisted primarily of $336.3 million received from maturities and sales of available-for-sale securities, partially offset by $270.2 million used to purchase available-for-sale securities and $5.7 million in purchases property and equipment.

Net cash used in investing activities in 2018 consisted primarily of $466.5 million used to purchase available-for-sale securities and $35.9 million used to purchase property and equipment, partially offset by $306.1 million received from maturities and sales of available-for-sale securities.

Financing activities

Net cash provided by financing activities in 2021 consisted primarily of $98.7 million of net proceeds from ATM facilities and $6.8 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 2020 consisted primarily of $353.8 million of aggregate net proceeds received from the two underwritten public offerings of common stock and pre-funded warrants, $69.2 million of net proceeds from ATM facilities and $6.7 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.

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 2019 consisted primarily of $140.9 million of net proceeds received from an underwritten public offering of common stock and pre-funded warrants, $47.7 million of net proceeds from ATM facilities and $7.4 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 2018 consisted of $293.3 million of aggregate net proceeds from the underwritten public offerings in January and March 2018, $47.6 million of net proceeds from ATM facilities and $24.7 million of net proceeds from employee stock award transactions, partially offset by $7.5 million of taxes paid related to the net share settlement of restricted stock and $0.5 million of principal payments on capital lease obligations.

Operating Capital Requirements and Plan of Operations

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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 as of December 31, 2020, 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.

We expect that existing cash, cash equivalents and short-term investments as of December 31, 2021 together with the anticipated $100.0 million from FUJIFILM Diosynth Biotechnologies California Inc.

(FDB), payable upon closing of the strategic transaction with FDB, will be sufficient to fund our planned operations into the fourth quarter of 2023.

See Note 12 – Subsequent Events for further information.

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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Our future funding requirements will depend on many factors, including, but not limited to :

the timing, costs and results of our ongoing and planned clinical and preclinical studies for our product candidates, including any potential impact of the COVID-19 pandemic;

the timing, costs and results of our ongoing and planned clinical and preclinical studies for our product candidates;

our success in establishing and scaling commercial manufacturing capabilities;

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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 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 timing of proceeds from the Bayer License Agreement and the Pierre Fabre Commercialization 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 expect to continue to seek access to the equity and debt capital markets to support our development efforts and operations.

extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

To the extent that we raise additional funds through collaboration or partnering arrangements, we may be required to relinquish some of our rights to our technologies or rights to market and sell our products in certain geographies, grant licenses or other rights on terms that are not favorable to us, or issue equity that may be substantially dilutive to our stockholders.

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If we are unable to raise additional capital due to the volatile global financial markets, general economic uncertainty or other factors, we will be forced to delay, limit, reduce or terminate preclinical studies, clinical studies or other development activities for one or more of our product candidates.

Contractual Obligations and Commitments

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.

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 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.

In November 2018, we entered into a lease agreement for approximately 51,160 square feet of office space in Thousand Oaks, California.

The initial term of this lease expires in February 2026.

The contractual obligations during the initial term are $8.5 million in aggregate.

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 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.

The following table summarizes our contractual obligations as of December 31, 2020:

Payments Due by Period

(in thousands)

Operating lease obligations

Finance lease obligations

Purchase obligations (1)

Total contractual obligations

We enter into contracts 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.

Payments in the table above represent our estimate of contractual minimum purchase obligations.

Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction.

Payments in the table above do not include any termination penalties or fees.

The above amounts exclude potential milestone and royalty payments related to our license and collaboration agreements, as the achievement of these milestones is currently not fixed and determinable.

Off-Balance Sheet Arrangements

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

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-K

Item 7. Management’s Discussion and Analysis