UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20172019

OR

For the transition period from to

Commission File Number 001-36548

ATARA BIOTHERAPEUTICS, INC.

(Exact name of Registrant as specified in its Charter)

Registrant’s telephone number, including area code: (650) 278-8930

Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.0001 per share, traded

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES Yes☒NO☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES☐ NO No☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES Yes☒NO☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES Yes☒NO☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitiondefinitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES☐NO☒  

The aggregate market value of common stock held by non-affiliates of the Registrant, based on the closing sales price for such stock on June 30, 201728, 2019 as reported by The Nasdaq Stock Market, was $271,251,806.$760,739,420. This calculation excludes 10,528,4209,054,604 shares held by executive officers, directors and stockholders that the Registrant has concluded are affiliates of the Registrant. Exclusion of such shares should not be construed to indicate that any such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the Registrant.

The number of outstanding shares of the Registrant’s Common Stock as of February 15, 201818, 2020 was 38,825,835.58,571,550.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement relating to its 20182020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

ATARA BIOTHERAPEUTICS, INC.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27Athe safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.1995. Such forward-looking statements, which represent our intent, belief or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “predict,” “plan,” “expect” or the negative or plural of these words or similar expressions. Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements about:

These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading “1A. Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.

In this Annual Report on Form 10-K, unless the context requires otherwise, “Atara,” “Atara Biotherapeutics,” “Company,” “we,” “our,” and “us” means Atara Biotherapeutics, Inc. and, where appropriate, its subsidiaries.

PART I

Item 1. Business

Overview

Atara Biotherapeutics is a leading off-the-shelf, allogeneic T-cell immunotherapy company that is developing novel treatments for patients with cancer, autoimmune and viral diseases. The Company's off-the-shelf, or allogeneic, T-cells are bioengineered from donors with healthy immune function and allow for rapid delivery from inventory to patients without a requirement for pretreatment. Atara'sWe have several T-cell immunotherapies in clinical development and are designed to precisely recognize and eliminate cancerousprogressing a next-generation allogeneic chimeric antigen receptor T-cell, or diseased cells without affecting normal, healthy cells. Atara'sCAR T program. Our strategic priorities are:

Our T-cell immunotherapy in development, tabelecleucel (formerly known as ATA129), is being developed forplatform includes the treatment of patients with Epstein-Barr virus, or EBV, associated post-transplant lymphoproliferative disorder, or EBV+ PTLD, who have failed rituximab, as well as other EBV associated hematologic and solid tumors, including nasopharyngeal carcinoma, or NPC. Off-the-shelf ATA188capability to progress both allogeneic and autologous or patient derived, ATA190, the Company'sprograms and is potentially applicable to a broad array of targets and diseases. Our off-the-shelf, allogeneic T-cell immunotherapies using a complementary targeted antigen recognition technology, target specific EBV antigens believed to be important for the potential treatment of multiple sclerosis, or MS. Atara's clinical pipeline also includes ATA520 targeting Wilms Tumor 1, or WT1, and ATA230 directed against cytomegalovirus, or CMV.

Our technologyplatform allows for rapid delivery of a T-cell immunotherapy product that has been manufactured in advance and stored in inventory, with each manufactured lot of cells providing therapy for numerous potential patients. This differs from autologous or patient-derived, treatments, in which each patient’s own cells must be extracted, modified outside the body and then delivered back to the patient. WeFor tab-cel^®, we utilize a proprietary cell selection algorithm to select the appropriate set of cells for use based on a patient’s unique immune profile, and, unlike many other T-cell programs, thereprofile. This matching process is neither a requirement for pre-treatment beforedesigned to allow our cells areto be administered norwithout the pre-treatment that is there extendedrequired for some therapies and to reduce monitoring following administration. For example, inIn addition, our ongoing trials withmanufacturing facility is capable of producing multiple types of therapies and Atara MatchMe™, our most advanced product candidate, tabelecleucel, patients are monitored for one to two hours following receipt of tabelecleucel. Ourproprietary T-cell immunotherapyorder management platform, is applicablebeing developed to a broad array of targets and diseases. With more than 200 patients treated across the platform, we have observed clinical proof of concept across both viral and non-viral targets in conditions ranging from liquid and solid tumorsprovide patient care teams with access to infectious and autoimmune diseases. therapy.

We have also observed a safety profile characterized by few treatment-related serious adverse events, or SAEs, and no evidence of cytokine release syndrome to date.

Our T-cell immunotherapy product candidates are engineered from cells donated by healthy individualsentered into research collaborations with normal immune function. Once cells are collected from a donor, they are bioengineered to expand those T-cells that recognize the antigens of interest. The resulting expanded T-cells are then characterized and heldleading academic institutions such as inventory. From inventory, these cells can be selected, distributed and prepared for infusion in a partially human leukocyte antigen, or HLA, matched patient in approximately 3-5 days. Following administration, our T-cells home to their target, undergo target-controlled proliferation, eliminate diseased cells and eventually recede. Target-controlled proliferation means that our T-cells expand in number when they encounter diseased cells in a patient’s body that express the antigen the cells are designed to recognize.

We have two technology platforms. One of our technology platforms was developed from more than a decade of experience at Memorial Sloan Kettering Cancer Center, or MSK. The other was developed atMSK, the Council of the Queensland Institute of Medical Research, or QIMR Berghofer, Medicaland H. Lee Moffitt Cancer Center and Research Institute, or QIMR Berghofer, in Australia. We licensedMoffitt, to acquire rights to certain know-hownovel and T-cell product candidates from MSKproprietary 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 June 2015. Our most advanced product candidate, tabelecleucel, targets EBV. Tabelecleucel received Breakthrough Therapy Designation, or BTD, from the U.S. Food and Drug Administration, or FDA, and Priority Medicines, or PRIME, designation from the European Medicines Agency, or EMA, andinstances where there is currently being evaluated as monotherapy in two Phase 3 trials for the treatment of patients with EBV+ PTLD. We believe that tabelecleucel has the potential to be the first commercially available off-the-shelf T-cell immunotherapy and the first FDA and EMA approved therapy for EBV+ PTLD. With a European conditional marketing authorization application planned for the first half of 2019 and U.S. biologics licensing applications planned following the completion of one of our ongoing Phase 3 trials, we are currently developing the infrastructure to commercialize tabelecleucel globally in EBV+ PTLD. We are also evaluating the potential utility of tabelecleucel in patients with other EBV associated cancers, such as NPC, to continue its development in solid tumors. Additional product candidates derived from the collaboration with MSK are being developed to treat various cancers and severe viral infections.

In October 2015 and September 2016, we licensed rights to certain know-how and technology from QIMR Berghofer that are complementary to those we which was licensed from MSK. This know-how and technology uses targeted antigen recognition to create off-the-shelf T-cell immunotherapy product candidates applicable to a variety of diseases, including autoimmune conditions such as multiple sclerosis, or MS. We are also working with QIMR Berghofer on the development of EBV and other virally targeted T-cells. Through this technology, we are expanding the role of immunotherapy beyond oncology and viral infections to autoimmune disease. Our most advanced off-the-shelf T-cell product candidate utilizing this technology, ATA188, targets select antigens of EBV and is currently being evaluated in a Phase 1 trial in an initial cohort for the treatment of patients with progressive MS. In connection with the initial license from QIMR Berghofer, we received an option to exclusively license an autologous version of ATA188, also known as ATA190, which recently demonstrated clinical activity in a Phase 1 trial in progressive MS. We expect to broadly explore the utility of our targeted antigen recognition technology in EBV and other virally driven diseases, and additional product candidates derived from our collaboration with QIMR Berghofer are being developed.significant patient need.

Overall, we believe that AtaraPipeline

Our pipeline is a leadingsummarized below:

These investigational agents have not been approved by any regulatory agency. Efficacy and safety have not been established.

EBV+ PTLD: EBV-Associated Post-Transplant Lymphoproliferative Disease; RR: rituximab relapsed/refractory; HCT: allogeneic T-cell immunotherapy company with a robusthematopoietic cell transplant; SOT: solid organ transplant

Other programs: ATA2321 (AML), ATA2431 (B-cell malignancies), ATA230 (CMV), ATA368 (HPV), ATA520 (WT1) and late stage oncology pipeline and potentially transformative T-cell immunotherapies for MS and other viral diseases. With tabelecleucel poised to potentially become the first approved off-the-shelf T-cell therapy and a robust pipeline of high potential candidates, our ambition is to be recognized as the leader in off-the-shelf T-cell immunotherapy.ATA621 (BK/JCV)

Tabelecleucel for Tab-cel^®

EBV+ PTLD following HCT or SOT

Since its discovery as the first human oncovirus, EBV has been implicated in the development of a wide range of diseases, including lymphomas and other cancers. EBV is widespread in human populations and persists as a lifelong, asymptomatic infection. In healthy individuals, a small percentage of T-cellsT cells are devoted to keeping EBV in check. In contrast, immunocompromised patients, such as those undergoing hematopoietic cell transplants, or HCT, or solid organ transplants, or SOT, have a reduced ability to control EBV. Left without appropriate immune surveillance, EBV transformed cells can, in some patients, proliferate and cause an aggressive, life-threatening cancer called EBV+ PTLD. Nearly all cases of PTLD that occur following HCT are EBV positive while approximately 70%60% of PTLD cases that occur following SOT are EBV positive. Approximately 10-15% of PTLD patients are children. Patients

Historical studies suggest a high unmet medical need for improved therapies in patients with EBV+ PTLD are currently treated withwho have failed rituximab or rituximab plus chemotherapy when systemic treatment is indicated,, with approximately 50-60% 40% to 60% of patients either not responding to or progressing following this first line of therapy. Historical studies suggest a high unmet medical need for improved therapies in patients with EBV+ PTLD who have failed rituximab. MedianExpected median overall survival in patients with EBV+ PTLD following HCT who have failed rituximab-based first line therapy is 16-56between 16 and 56 days, with a one-year survival rate of approximately 23% based on our evaluation of available historical outcomes data. One-Estimated one- and two-year survival following incomplete response to rituximab in patients with high-risk EBV+ PTLD after SOT is 36% and 0%, respectively. The use of chemotherapy in patients with EBV+ PTLD who have failed rituximab is frequently associated with significant rates of treatment-related mortality due to the frailty of the patients and severe toxicities associated with chemotherapy.

We believe that the global commercial opportunity for PTLD is attractive. We expect the number of EBV+ PTLD patients to grow over time as a result of increases in the number of transplant procedures and an increasing rate of PTLD following these procedures. Based on our market research, we estimate that in 2019, approximately 164,000 HCT and SOT transplant procedures are expected to be performedthere were several hundred EBV+ PTLD patients who failed rituximab or rituximab plus chemotherapy in the United States,U.S. in 2018.

Tab-cel^®

In June 2015, we licensed certain patent rights, know-how and a library of T cells and cell lines specific to EBV from MSK in an agreement we refer to as the European Union, or EU, Australia, Canada, China, Japan, South Korea2015 MSK License Agreement. In the 2015 MSK License Agreement, we agreed to use commercially reasonable efforts to commercialize the licensed products and Turkey,to make milestone payments with this number expected to increase to approximately 207,000 by 2024, predominantly due to increases in bone marrow, peripheral blood and umbilical cord blood donation and more haploidentical transplants. Similarly, the number of cases of EBV+ PTLD is expected to increase from approximately 4,700 in 2019 to 6,000 in 2024 duerespect to the use of more potent immuno-suppression in haploidentical transplants.

licensed programs and to make royalty payments to MSK to the extent product candidates arising from the collaboration are commercialized. Our most advanced T-cell immunotherapy product candidate, tabelecleucel,tab-cel^®, is part of this MSK collaboration and targets EBV.

Tab-cel^® is an allogeneic EBV-specific T-cell immunotherapy that is in development for the treatment of EBV-associated hematologic malignancies and solid tumors.

Tab-cel^® is currently being investigated in Phase 3 development for the treatment of patients with EBV+ PTLD who have failed rituximab. In February 2015, 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. in 2018. Tab-cel^® received Breakthrough Therapy Designation, or BTD, from the U.S. Food and Drug Administration, or FDA, granted tabelecleucel BTD infor the treatment of patients with EBV+ PTLD after HCT who have failed rituximab,. BTD is an FDA process designed to acceleratePriority Medicines, or PRIME, designation from the development and review of drugs intended to treat a serious condition when early trials show that the drug may be substantially better than current treatment. In October 2016, tabelecleucel was accepted into theEuropean Medicines Agency, or EMA, PRIME regulatory pathway for the same indication, providing enhanced regulatory support. In addition, tabelecleucel has receivedand orphan statusdesignation in the United StatesU.S. and European Union for the treatment of patients with EBV+ PTLD following HCT or SOT.

Tab-cel^® is also under development for other EBV-associated hematologic malignancies and solid tumors through a multi-cohort study, and for nasopharyngeal carcinoma, or NPC, in a separate clinical study.

Tab-cel^® for EBV+ PTLD

In clinical studies conducted at MSK that have enrolled patients with EBV+ PTLD following HCT and SOT, efficacy following treatment with tab-cel^® monotherapy compared favorably with historical data in these patient populations. Patients with EBV+ PTLD after HCT who have failed rituximab and were treated with tab-cel^® had one-year overall survival of approximately 70% in two separate clinical studies. In the setting of EBV+ PTLD after SOT in patients who have failed rituximab, similar results were observed, with one-year overall survival of approximately 60% in tab-cel^®-treated patients. A response rate of greater than or equal to 50% was observed in HCT and SOT patients in these studies.

In December 2016,2017, we announced that we had reached agreement with the FDA on the designs ofinitiated two Phase 3 trialsstudies for tabelecleuceltab-cel^® intended to support approval in two separate indications, the treatment of EBV+ PTLD following HCT (which was referred to as the MATCH study) and SOT in patients who have failed rituximab. In December 2017, following discussion with (which was referred to as the FDA of manufacturing and comparability data generated on material manufactured by our contract manufacturing organization, we initiated these trials in the United States. We expect to expand these trials geographically to include Europe, Canada, and Australia.ALLELE study).

The Phase 3 MATCH trial (EBV+ PTLD following HCT) isstudy was a multicenter, open label, single arm trialstudy designed to enroll approximately 35 patients with EBV+ PTLD following HCT who have failed rituximab. The Phase 3 ALLELE trial (EBV+ PTLD following SOT) isstudy was initially a multicenter, open label trialstudy designed with two non-comparative cohorts. Each cohort is designed to enrollcohorts of approximately 35 patients.patients each. The first cohort will includeincluded patients who previously received rituximab monotherapy, and the second cohort will includeincluded patients who previously received rituximab plus chemotherapy. Both cohorts are planned to enroll concurrently. The primary endpoint of both the MATCH and ALLELE trials isstudies was confirmed best objective response rate, or ORR, defined as the percent of patients achieving either a complete or partial response to treatment with tabelecleuceltab-cel^® confirmed after the initial tumor assessment showing a response.

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 an SOT cohort for EBV+ PTLD patients who have failed rituximab with both chemotherapy and non-chemotherapy prior treatment experience. The protocols areprimary endpoint of ALLELE remains as confirmed best ORR, as determined by independent review, and is designed to rule out a 20% ORR as the null hypothesis. This means that if the lower bound of the 95% confidence interval on ORR among patients receiving at least one dose of tabelecleuceltab-cel^® exceeds 20% at the end of the study, then the trialstudy would be expected to meet the primary endpoint for the treatment of PTLD. For example, assuming anticipated enrollment of 3533 patients in MATCH,a cohort of ALLELE, an observed

ORR above approximately 37% would be expected to meet the primary endpoint. In ALLELE, each of the two cohorts with an anticipated enrollment of 35 patients will be analyzed separately with respect to the primary endpoint and, similarly, as an example, with 35 patients enrolled in either cohort, an observed ORR above approximately 37% would be expected to meet the primary endpoint.for that cohort. Secondary endpoints for both trials include duration of response, overall survival, safety, quality of life metrics, and other measures to evaluate its health economic impact. A safety committee will meet periodicallyAdditionally, we expect to monitor for safety. Results fromexpand the first tabelecleucel Phase 3ALLELE study geographically to include clinical sites outside the U.S. We submitted clinical trial applications, or cohortCTAs, to several European countries in the case of ALLELE,2019 to reach the primary endpoint are expected to be available in the first half of 2019.

In clinical trials conducted at MSK that have enrolled patients with EBV+ PTLD following HCT and SOT, efficacy following treatment with tabelecleucel monotherapy compared favorably with historical data in these patient populations. Patients with EBV+ PTLD after HCT who have failed rituximab and were treated with tabelecleucel had one-year overall survival of approximately 70% in two separate clinical trials. In the setting of EBV+ PTLD after SOT in patients who have failed rituximab, similar results were observed, with one-year overall survival of approximately 60% in tabelecleucel-treated patients. A response rate of greater than or equal to 50% was observed in HCT and SOT patients in these studies. In June 2016, we opened a multicenter expanded access protocol, or EAP, trial. The trial is currently open at more than tenenable opening EU clinical sites in 2020, and our CTAs in Austria, Spain and the United States. The primary objective of this trial isKingdom have been approved.

We plan to provide tabelecleucel monotherapy toinitiate a biologics license application, or BLA, submission for patients with EBV-associated diseases or certain EBV positive malignancies for whom there are no other therapeutic options. Key secondary objectives include evaluationEBV+ PTLD to the FDA in the second half of efficacy and safety through a robust collection2020. We plan to discuss the totality of data. We recently announced the presentation of positive interimtab-cel^® results from this multicenter EAP trial at the 59th American Society of Hematology, or ASH, Annual Meeting. Efficacy results in 11 patients from the planned Phase 3 populations with EBV+ PTLD following HCT and SOT who had failed rituximab were consistent with the single-institution safety profile and response rates previously reported by our collaborating investigators at MSK. The response ratesFDA in botha pre-BLA meeting prior to initiating the five evaluable HCT patients treated in the EAP and the six evaluable SOT patients was greater than 70%. An additional patient with EBV+ PTLD following HCT remains alive but was not evaluable due to lack of post-baseline assessment. We believe these results are consistent with the tabelecleucel profile observed in the Phase 2 trials conducted at MSK. The Phase 3 trials for tabelecleucel are expected to enroll the same EBV+ PTLD patient populations. Tabelecleucel was generally well tolerated in this study population. In this study, five patients experienced treatment-related SAEs. One patient died due to PTLD disease progression. Two possibly related cases of graft versus host disease, or GvHD, in patients with EBV+ PTLD following HCT were reported. A tumor flare was observed in one patient with EBV+HIV-associated plasmablastic lymphoma that resolved without clinical sequelae.BLA submission.

With respect to the total safety population following treatment with tabelecleucel, few treatment-related SAEs have been observed. Among 173 patients treated with tabelecleucel in clinical trials, there have been 12 patients with possibly related SAEs, with no infusion related toxicities, no cytokine release syndrome and three possibly related cases of GvHD.

We are also pursuingplanning the submission of a marketing approvalauthorization of tabelecleuceltab-cel^® in the European Union. In MarchFebruary 2016, the EMA issued a positive opinion fortab-cel^® was granted orphan drug designation for tabelecleucelby the European Commission for the treatment of patients with EBV+ PTLD. In October 2016, the EMA Committee for Medicinal Products for Human Use and the Committee for Advanced Therapiespost-transplant lymphoproliferative disorder. Tab-cel^® has also been granted tabelecleucel access to the EMA’s recently established PRIME regulatory initiativescheme. PRIME is a program launched by the EMA to enhance support for the treatment of patients with EBV+ PTLD following HCT who have failed rituximab. PRIME provides early enhanced regulatory support to facilitate regulatory applications and accelerate the reviewdevelopment of medicines that addresstarget an unmet medical need. This voluntary program is based on enhanced interaction and early dialogue with developers of promising medicines, to optimize development plans and speed up evaluation so these medicines can reach patients earlier. The program focuses on medicines that may offer a highmajor therapeutic advantage over existing treatments, or benefit patients without treatment options. These medicines are considered priority medicines by EMA. To be accepted for PRIME, a medicine must show its potential to benefit patients with unmet need. In January 2017, we received parallel scientific advice frommedical needs based on early clinical data. We remain in discussions with the EMA’s Scientific Advice Working Group and several national Health Technology Assessment agencies inEuropean Medicines Agency, or EMA. We have submitted a Pediatric Investigation Plan, or PIP, to EMA. Following an agreement with EMA on the EU, including those in the United Kingdom, Germany and France. Based on these discussions,PIP, we plan to submit ana tab-cel^® EU marketing authorization application for Conditional Marketing Authorization, or CMA, of tabelecleucel in the treatment of patients with EBV+ PTLD following HCT who have failed rituximab in the first half of 2019. The CMA will be based on clinical data from Phase 1 and 2 trials conducted at MSK and supported by available data from2021.

We are continuing our Phase 3 MATCH and ALLELE trials in patients with EBV+ PTLD after HCT and SOT who have failed rituximab, which will be ongoing at the time of filing.

In 2017, we began pre-commercial preparationpreparations to support the planned tabelecleucel EU CMA submission. For example, we are developing a proprietary, web-based, off-the-shelf delivery solution for commercial use that we call Atara MatchMe™commercialization of tab-cel^®. The Atara MatchMe system will be a portal for health care professionals and institutions that allows for order input includingThis includes the provision of required patient HLA and other information, the executiondevelopment of our cell selection algorithm, product shipment and tracking, as well as the capture of data on outcomes following treatment. In the first quarter of 2017, we also signedproprietary T-cell order management platform, Atara MatchMe^TM, that is being developed to provide patient care teams with access to therapy through a lease for an approximately 90,580 square foot facility in Thousand Oaks, California. We are building out a multi-product cellular therapy manufacturing facility with operations expected to commence in 2018. Overall, we believe that tabelecleucel monotherapy has a compelling value proposition in the treatment of patients with EBV+ PTLD who have failed rituximab. web-based interface. We expect to pursue approvals globally for tabelecleucel in patients with EBV+ PTLD following HCT and SOT who have failed rituximabkey geographies and may seek partners to aid in our commercialization efforts in select markets. In addition, we

Tab-cel^® Multi-Cohort Study

We expect to pursue development of tabelecleuceltab-cel^® in earlier lines of therapy, including first line in our planned Phase 2 multi-cohort study. We expect to initiate enrollment in this study including up to six additional EBV+ PTLDultra-rare diseases for patients, in combination with rituximab.the second half of 2020 based on previous clinical experience treating these patients.

TabelecleucelTab-cel^® for nasopharyngeal carcinoma, or NPC

NPC is a type of head and neck cancer that is primarily EBV associated.associated with EBV. Standard treatment for NPC typically includes radiation therapy, withplatinum-based chemotherapy or without platinum-based chemotherapy. In the settinga combination of metastatic disease after the failure of chemotherapy, median survivalboth. Surgical intervention is approximately five to 11 months based on historical data,only rarely employed and thereis usually only utilized in select early stage cases. There are no approved therapeutic agents available to treat relapsed/refractory NPC, although there are multiple agents in development for this disease today. Based on our market research, we estimate that in 2015 there were approximately 9,400 patients with metastatic or recurrent Type III NPC in the United States, the United Kingdom, France, Germany, Italy and Spain and approximately 93,000 in Asia. Treatment with tabelecleucel as a monotherapy has been evaluated in 14 patients with metastatic NPC after failure of one to three lines of chemotherapy in the studies conducted by MSKCC. An ORR of 21% was observed in these patients with one complete response and two partial responses. In addition, 11 of the 14 patients were alive at a median follow up of 18 months with a Kaplan-

Meier survival estimate of 84% at two years. Tabelecleucel was administered to this immune competent patient population without prior lymphodepleting chemotherapy. Additionally, evidence of T-cell expansion following administration was observed. population.

In April 2017, we entered into an agreement with Merck Sharp & Dohme (known as MSD outside of the United StatesU.S. and Canada) to provide drug supply for a trialstudy to be sponsored and conducted by us to evaluate tabelecleuceltab-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 NPC. TheThis Phase 1/1b/2 trialstudy, which was initiated in the fourth quarter of 2018, will evaluate the safety, pharmacokinetics, pharmacodynamics, and preliminary efficacy of the combination and iscombination. We enrolled the final planned for initiationpatient in the second halfPhase 1b part of 2018.the study in February 2020. Based on our market research, we estimate the incidence during 2018 of NPC in the U.S., United Kingdom, France, Italy and Spain was collectively approximately 3,800 patients and approximately 71,000 patients in East Asia. Our study is designed to address a sub-population of the total incidence of this disease.

Other T-CellEAP and SPU Programs

Atara continues to see strong tab-cel^® investigator, physician and patient interest and, for cases in which we are not able to enroll patients in its EBV+ PTLD Phase 3 clinical study, we are providing tab-cel^® to patients in need under our expanded access protocol, or EAP, and single patient use, or SPU, programs. The primary objective of these programs is to provide tab-cel^® monotherapy to patients with EBV-associated diseases or certain EBV+ malignancies for whom there are no other therapeutic options.

ATA188

Multiple Sclerosis

Atara is also developing ATA188, and ATA190a T-cell immunotherapy targeting EBV antigens believed to be important for the potential treatment of multiple sclerosis,

or MS. MS is a chronic autoimmune disorder of the central nervous system, or CNS, that disrupts the myelination and normal functioning of the brain, optic nerves and spinal cord through inflammation and tissue loss. The evolution of MS results in an increasing loss of both physical and cognitive (e.g., memory) function. This has a substantial negative impact on the approximately 2.3more-than two million people worldwide affected by MS.MS, with approximately 800,000 diagnosed prevalent cases of MS in the U.S. and EU in 2019.

There are two categories of MS: progressive MS, or PMS;PMS, and relapsing-remitting MS, or RRMS. RRMS is a form of MS that is characterized by episodes of new or worsening signs or symptoms (relapses) followed by periods of recovery and quiescence during which the disease does not progress. PMS is a severe form of MS with few therapeutic options. Within PMS there are two types of MS: secondary progressive MS, or SPMS; and primary progressive MS, or PPMS. According to the National Multiple Sclerosis Society, there are approximately one million people affected by PMS. Both types of PMS arethat is characterized by persistent progression and worsening of MS symptoms and physical disability over time.time for which there are few therapeutic options. There are two types of PMS: primary progressive MS, or PPMS, and secondary progressive MS, or SPMS. Published reports indicate that together, PPMS and SPMS make up approximately 43% of MS patients. PPMS occurs when the patient has a disease course characterized by steady and progressive worsening after disease onset. SPMS initially begins as RRMS, but once patients have continuous progression of their disease, they have developed SPMS. This is distinct from RRMS, where patients have flares of the disease that are followed by periods of recovery

Scientific and quiescence during which the disease does not progress. There is substantial unmet medical need for new and effective therapies for patients with PMS. Most of the treatment options that work well in reducing the flares in RRMS have not been shown to be effective in slowing or reversing the progression of disability in PMS. The two approved therapeutic options for PMS patients haveclinical findings support a modest impact on symptoms and disease progression and, therefore, we believe that unmet need remains. In the United States, mitoxantrone is approved for SPMS and ocrelizumab was approved in March 2017 for PPMS. Siponimod is currently being studied in Phase 3 trials for SPMS.

There is a strongpotential biologic connection between EBV and MS. EBV is present in nearly all patients with MS. For example, in an international studyThe MS disease course has been shown to correlate with measures of patientsEBV activity, and with clinically isolated syndrome, a CNS demyelinating event isolated in time that is compatible with the possible future developmentexhaustion of MS, only one patient out of 1,407 was seronegative for, or not infected with, EBV.endogenous EBV-specific T cell populations. In addition, in separate studies, clustersclear differences in location and frequency of EBV infected B-cellsEBV-infected B cells and plasma cells were evident inbetween the brains of subjects without MS and the brains of MS patients, but not found in brains of patients without MS. In these studies, the EBV infected B-cellswhere EBV-infected B cells and plasma cells were in close proximity to areas of active demyelination. StudiesFurther data suggest that EBV positive B-cellsEBV-positive B cells and plasma cells in the CNS have the potential to catalyze an autoimmune response, andresulting in the typical MS pathophysiology. In patients with MS, their T-cellsT cells may be unable to control EBV positive B-cellsEBV-positive B cells and plasma cells so that B-cellsB cells and plasma cells could then accumulate in the brain, function as antigen-presenting cells and generate antibodies that attack and destroy myelin, the protective layer that insulates nerves in the brain and spinal cord. This loss of myelin ultimately leads to MS symptoms. MS disease course has also been shown to correlate with measures of EBV activity. The role of B-cellsB cells in MS is supported by the recent approval by the FDA of ocrelizumab for PPMS, which broadly targets B-cellsB cells (and not plasma cells) outside of the CNS through their expression of a cell surface marker known as CD20. Low vitamin D also suppresses T-cells

ATA188

We licensed rights to certain know-how and is associated with MS.

Our secondtechnology from QIMR Berghofer that uses targeted antigen recognition to create off-the-shelf T-cell immunotherapy product candidates applicable to a variety of diseases, including autoimmune conditions such as MS. Our license agreement with QIMR Berghofer requires that we make various milestone and royalty payments to QIMR Berghofer based on the sales of products arising from this collaboration, if any. We are also working with QIMR Berghofer on the development of EBV-targeted and other virally targeted T cells. Through this technology, we are expanding the role of T-cell-based immunotherapy beyond oncology and viral infections to autoimmune diseases.

Our T-cell immunotherapy product candidate utilizing this technology, ATA188, is an off-the-shelf EBV-specific T-cell preparation that utilizes aan MS-specific targeted antigen recognition technology that enables the T-cellsT cells we administer to selectively identify cells expressing the EBV antigens that we believe are important for the potential treatment of MS. We are also developing an autologous version of this product candidate that we call ATA190. ATA190 utilizes the same approach to targeted antigen recognition as ATA188. These product candidates areATA188 is designed to selectively target only those cells which are EBV positiveEBV-positive while sparing those that are not. We believe that eliminating only EBV positive B-cells, includingEBV-positive B cells and plasma cells has the potential to benefit some patients with MS through enhanced efficacy and a better side-effect profile. In October 2015, we obtained an exclusive, worldwide license to develop and commercialize allogeneic T-cell immunotherapy product candidates targeting EBV, including ATA188, utilizing technology and know-how developed by QIMR Berghofer. In connection with this license, we also received an option to exclusively license the autologous version of EBV product candidates, including ATA190.MS.

In the fourth quarter of 2017, we initiated an open label, single arm, multi-center, multi-national Phase 1 trialstudy with allogeneic ATA188 for patients with MS and in January 2018 received clearance of our investigational new drug, or IND, application from the FDA to proceed with patient enrollment at U.S. sites.PMS. The primary objective of this Phase 1 trialstudy is to assess the safety of ATA188 in patients followed for at least one year after the first dose. Key secondary endpoints in the trialstudy include measures of clinical improvement, such asusing recognized scales for MS symptoms, function and disability including Expanded Disability Status Scale, or 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 annualized relapse rate, or ARR, as well as MRI imaging. The trial is expected to enroll a total of 60 patients acrossVisual Acuity. Enrollment for the United States, Australiafourth and Europe: 30 patients with PMS, either PPMS or SPMS, and 30 patients with RRMS. We expect to announce results from our ATA188final Phase 1 trial in patients with PMSdose escalation cohort was completed in the first halfthird quarter of 2019.

In addition, based on the Phase 1 clinical results observed to date with ATA190, we believe the continued development of ATA190 will enhance our understanding of the potential therapeutic utility of targeting EBV in the treatment of MS and further inform and complement our development of ATA188,2019 and we are planning a multicenter Phase 1/2 trial with ATA190 in PMS.

Our collaborating investigators at QIMR Berghofer are currently conducting a Phase 1 trial utilizing autologous ATA190 for the treatment of patients with PMS. We believe this is the first clinical trial to prospectively explore both the feasibilitypresented initial efficacy and potential utility of targeting EBV in MS. The trial is designed to:

Each patient receives four escalating doses of ATA190 over six weeks, with each individual dose given once every two weeks. Patients are followed for 20 weeks after the last dose. An abstract from our collaborating investigators describing interim results from this Phase 1 trial was selected for inclusionstudy in the Emerging Science Program during the 69th American Academy of Neurology Annual Meeting in April 2017 and updated interim results for all ten patients were recently presentedSeptember 2019 at the MSParis 201735^th Congress the 7th Joint Meeting of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS). These results were based on data as of July 29, 2019, and showed that across four planned dose cohorts, ATA188 was well tolerated in PMS patients, with no evidence of cytokine release syndrome, graft versus host disease or dose-limiting toxicities.

Following a six-month assessment of patients in cohort 3 of this study, we selected this cohort 3 dose to initiate the randomized, double-blind, placebo-controlled Phase 1b part of this study, for which we plan to initiate enrollment for patients with PMS in the second or third quarter of 2020. We expect to present six- and twelve-month ATA188 Phase 1a clinical results for cohorts 3 and 4 in the first and second halves of 2020, respectively.

In addition to ATA188, QIMR Berghofer had previously completed a Phase 1 study of ATA190, an autologous EBV-specific T-cell preparation that utilizes the same approach to targeted antigen recognition as ATA188, for the treatment of patients with PMS. Based on continued encouraging ATA188 results, acceleration of the ATA188 randomized Phase 1b study and the Americas CommitteeCompany’s strategic focus on off-the-shelf, allogeneic T-cell immunotherapies, Atara does not plan to initiate a randomized study of ATA190 in PMS at this time and will evaluate strategic options for Treatment and Research in Multiple Sclerosis.this program.

Results presented include data on five SPMS patients and five PPMS patients. Clinical improvements were reported in six of the ten patients treated and these improvements were observed within two to fourteen weeks after the first dose. Three patients improved their EDSS score. EDSSCAR T Programs

Our current CAR T pipeline is a method for quantifying disability and monitoring changes over time. Reduction in fatigue was a consistent observation in responding patients. Five of the six patients who showed clinical improvements received ATA190 with greater than or equal to 7% EBV reactivity, or T-cell reactivity against target EBV antigens following manufacturing. This suggests that EBV reactivity may be an important product characterization metric for future development. ATA190 was well-tolerated, and no significant treatment-related adverse events were observed. A summary of study results is highlighted in the table below.as follows:

AML: acute myeloid leukemia; DNR: Dominant Negative Receptor

Overall, we believe these results are encouraging and support the continued development of ATA188 and ATA190 in MS.ATA2271/ATA3271

ATA520 for hematologic malignancies

Our third T-cell immunotherapy product candidate, ATA520, is an off-the-shelf  WT1 specific T-cell immunotherapy, that targets cancers expressing the antigen WT1 and is currently in Phase 1 clinical trials. WT1 is an intracellular protein that is overexpressed in a number of cancers, including hematological malignances as well as solid tumors. MSK has two Phase 1 clinical trials evaluating ATA520. The first trial is a dose escalation trial of ATA520 for residual or relapsed leukemia after HCT. The second trial is a dose escalation trial of ATA520 following T-cell depleted HCTAtara’s pipeline includes next-generation CAR T immunotherapies for patients with relapsed or refractory multiple myeloma, including plasma cell leukemia, or PCL. Based on data from these trials, we intend to develop ATA520 in a select set of hematologic malignancies and solid tumors. Giventumors, and viral diseases, including ATA2271 and ATA3271 targeting mesothelin, which are partnered with MSK. In 2018, we entered into several agreements to expand our collaboration with MSK to the advances of our EBV-related pipeline programs in NPC and MS, as well as the opportunity to pursue a conditional marketing authorization in the EU for tabelecleucel, we expect to initiate an additional clinical trial with

ATA520 following the further process development of ATA520 asCAR T immunotherapies, with a license in May 2018 related to multiple collaboration targets and a license in December 2018 related to our next-generation CAR T program targeting mesothelin. Under these CAR T agreements, we agreed to use commercially reasonable efforts to develop, obtain regulatory approval and, if approved, commercialize certain collaboration targets and to make certain milestone and royalty payments.

We have prioritized our mesothelin-targeted next-generation CAR T program, which consists of ATA2271 and ATA3271. Results presented by our collaborators at MSK have demonstrated that their regionally-delivered mesothelin-targeted, 1^st generation autologous CAR T cells were well as the clinicaltolerated and regulatory advancementshowed encouraging anti-tumor activity in combination with pembrolizumab, a PD-1 checkpoint inhibitor. These collaborator results support our planned development of tabelecleucelATA2271, a next-generation, mesothelin-targeted autologous CAR T immunotherapy using MSK’s novel 1XX CAR signaling domain and ATA188.

ATA230PD-1 dominant negative receptor, or DNR, checkpoint inhibition technologies for CMV viremia and disease

Our fourth T-cell immunotherapy product candidate, ATA230, ispatients with mesothelin-associated solid tumors. We expect our collaborators at MSK to submit an off-the-shelf CMV specific T-cell immunotherapy, that is in Phase 2 clinical trials for refractory CMV infection that occurs in some patients who have received an HCTinvestigational new drug, or SOT or are otherwise immunocompromised. We met withIND, application to the FDA for an end of Phase 2 meeting to discuss late stage development of ATA230ATA2271 for the treatment of anti-viral refractory or resistant CMV infection following either HCT or SOT. Our collaborating investigators presented updated ATA230 results from 50 post-transplant patients with refractory CMV viremia and disease, including those with diseaseadvanced mesothelioma in the central nervous system,second or third quarter of 2020. In parallel, we are conducting preclinical work on an allogeneic version of this mesothelin CAR T program, ATA3271.

ATA3219

We are also developing ATA3219, an off-the-shelf allogeneic CAR T immunotherapy targeting CD19 for patients with B-cell lymphomas, to serve as a potential proof-of-concept for our next generation technologies and allogeneic EBV CAR T platform.

In February 2020, an academic off-the-shelf, allogeneic CD19 CAR T clinical study using an EBV T-cell construct for patients with relapsed/refractory B-cell malignancies was presented at the 59th ASH Annual Meeting in Atlanta, Georgia, in December 2017. Results reported include a response rate2020 Transplantation and Cellular Therapy (TCT) Meetings. Findings from this study provide 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 and durable responses, low risk of approximately 60% in all patients, which was similar in those with CMV viremiatoxicity and disease. Patients who respondedthat can be rapidly delivered to ATA230 showed improved 6- and 12-month survival rates of approximately 80% and 60%, respectively, versus those patients who did not respond to treatment. One of the 32 patients who responded died of CMV disease. ATA230 was generally well tolerated. Five patients experienced grade 4 or higher adverse events deemed possibility related to ATA230. Recently, the FDA granted orphan drug designation for ATA230 for the treatment of CMV viremia and disease in immunocompromised patients as well as Rare Pediatric Disease Designation for the treatment of congenital CMV infection. The EMA has also granted us orphan status for ATA230 for CMV infection in patients with impaired cell-mediated immunity. Given the opportunity to pursue a CMA in the EU for tabelecleucel, we have decided to prioritize our EBV related programs ahead of ATA230 at this time, and plan to further evaluate our development strategy for ATA230 in 2018.

ATA621 for BK and JC virus associated diseases

Through our ongoing collaboration with QIMR Berghofer, we recently developed a new T-cell immunotherapy product candidate, ATA621, for BK and JC virus associated diseases. These two viruses are closely related and there are no available antiviral agents approved for use in BK or JC associated diseases. JC virus is associated with progressive multifocal leukoencephalopathy, or PML, which occurs in transplant, HIV and cancer patients as well as in patients treated with other immunosuppressive therapies, including certain therapies utilized for the treatment of MS. Based on our market research, we estimate that there are approximately 7,800 cases of PML annually, worldwide. BK virus is associated with hemorrhagic cystitis, or BKVHC, which mainly occurs following HCT or cyclophosphamide treatment as well as BK virus associated nephropathy, or BKVAN, which is a disease most commonly associated with kidney transplant. Based on Atara market research, we estimate that there are approximately 2,100 cases of BKVAN and 2,300 cases of BKVHC annually, worldwide. We are currently conducting investigational new drug application enabling manufacturing process development and plan to initiate a Phase 1 trial with ATA621 in 2019.

Our pipeline of product candidates is highlighted in the figure below.

patients.

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, or 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 believe our T-cell technology 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 chimeric antigen receptor, or CAR-T, cellCAR 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 intendcontinue to evaluate opportunities to license or acquire additional product candidates or technologies to enhance our existing T-cell technology platform.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our innovative technology, knowledge, experience and scientific resources provide us with competitive advantages, weWe face potential competition from many different sources, including major pharmaceutical, specialtynumerous pharmaceutical and biotechnology companies,enterprises, as well as from academic institutions, government agencies and private and public and private research institutions.institutions for our current product candidates. Some of these competitors or potential competitors may have a moresignificantly greater established presencepresences in the market, financial resources and significantly greater financial, technical and human resourcesexpertise than we have.do. Our commercial opportunityopportunities will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects or are less expensive than any products that we may develop.

T-Cell Product Candidates

Should our T-cell product candidates be approved for use, we will face substantial competition. In addition to the current standard of care for patients, commercial and academic clinical trialsstudies are being pursued by a number of parties in the field of immunotherapy. Early results from these trialsstudies have fueled continued interest in T-cell immunotherapy. In addition, if approved, our T-cell programs would compete with currently marketed drugs and therapies used for treatment of the following indications we are addressing, and potentially with drug candidates currently in development for the same indications.

EBV+ PTLD

There are currently no FDAFDA- or EMA approvedEMA-approved products for the treatment of EBV+ PTLD.PTLD. However, some approvedmarketed products and therapies are currently used off-label in this setting. Companiesthe treatment of EBV+ PTLD, such as rituximab and academic institutions that may license therapies to companies in the future are or may be developing new treatments. These therapies, as well as promotional efforts by competitors and clinical trial results of competitive products, could diminish the ability to market and sell tabelecleucel. The current treatment for EBV+ PTLD involves administration of rituximab as a single agent or in the SOT setting, in combination with chemotherapy regimens. Additionally,In addition, a number of companies and academic institutions are developing drug candidates for EBV+ PTLD and other EBV associatedEBV-associated diseases including Cell Medica Ltd.including: Viracta Therapeutics, Inc., or Cell Medica, which is conducting Phase 1 clinical trials for baltaleucel-T, an autologous EBV specific T-cell therapy in post-transplant lymphoproliferative disorder and Viracta Therapeutics, Inc., or Viracta, which has initiateda Phase 1b/2 clinical trialsstudy for VRx-3996nanatinostat (formerly named tractinostat, or VRx-3996) in combination with antiviral drug valganciclovir in relapsed/refractory EBV⁺ lymphomas.lymphomas, AlloVir (formerly known as ViraCyte), which has completed a Phase 2 clinical study for Viralym-M (ALVR105), an allogeneic, multi-virus T-cell product that targets six viruses including EBV and is planning to initiate several Phase 3 studies in the next year and Tessa Therapeutics Pte Ltd., or Tessa, which has a preclinical product candidate that is an allogeneic CD30-targeted CAR EBV-specific T-cell therapy.

NPC

Drug therapies approved or commonly used for the treatment of NPC include radiation therapy, often given in combination with chemotherapy, and cetuximab, a monoclonal antibody targeting epidermal growth factor receptor, or EGFR. Surgery for NPC is also occasionally used after chemoradiotherapy or to treat relapsed/refractory NPC. Several development candidates are being evaluated for NPC. Tessa is evaluating TT10, an autologous, EBV-specific T-cell product, in a phase 3 clinical study for advanced NPC. In addition, a number of companies are evaluating immunotherapies in combination with PD1/PDL1 inhibitors for the treatment of head and neck cancers, including NPC. These include Bristol-Myers Squibb Company’s ipilimumab, relatilimab and daratumumab, Roche Pharmaceuticals’ bevacizumab and AstraZeneca PLC’s tremelimumab.

Multiple Sclerosis

Competition in the MS market is high with fourteenat least seventeen therapies, including three generics, approved for the treatment of RRMS in the United StatesU.S. and European Union.EU. There are many U.S. and international competitors in the RRMS market, including major multi-national fully-integrated pharmaceutical companies and established biotechnology companies. Most recently, Ocrevus^®Vumerity™ (diroximel fumarate), marketed by F. Hoffmann-La Roche, wasBiogen, and Mayzent^® (siponimod), marketed by Novartis, were approved for the treatment of relapsing forms of MS in the United StatesU.S (Vumerity) and European Union.EU (Mayzent). There are numerous other development candidates in Phase 3 trialsstudies for RRMS including TG Therapeutics’ anti-CD20 monoclonal antibody ublituximab and EMD Serono’s BTK inhibitor, evobrutinib. Novartis’ anti-CD20 monoclonal antibody ofatumumab; Alkermes’ monomethyl fumarate prodrug ALKS 8700; Teva’s laquinimod,ofatumumab and Actelion’s next-generation sphingosine 1-phosphateJ&J/Janssen’s sphingosine-1-phosphate receptor or S1PR, agonist ponesimod.  Celgene recently reported positive results from1 (S1P1) modulator, ponesimod have completed their Phase 3 clinical trials evaluating ozamimod,studies and have filed (ofatumumab) or plan to file (ponesimod) for regulatory approval in the future. Celgene’s ozanimod, an S1PR1 and S1PR5 agonist is awaiting FDA and EMA regulatory approval with a S1PR agonist,Prescription Drug User Fee Act, or PDUFA, date in relapsing MS.March 2020, and EMA in the first half of 2020.

Only threeSix therapies have been approved for the treatment of progressive MS.  Recently,PMS. Ocrevus^® was is approved in the United StatesU.S. and European UnionEU for the treatment of PPMS. Extavia^® (marketed by Novartis) isand Betaferon^® (marketed by Bayer AG) are approved in the United States and European Union for the treatment of SPMS when disease is active, or active SPMS. BetaseronMayzent^®( (siponimod), marketed by Bayer AG) is alsoNovartis and Mavenclad^® (cladribine), marketed by EMD Serono, were most recently approved for the treatment of active SPMS in the European Union. Few therapies have been approved for progressive MS because many candidates have failed during clinical trial testing.U.S. and EU (Mayzent). In the United States, thereaddition, mitoxantrone, which is one drug (mitoxantrone)now generic, is approved to treat SPMS.  SPMS in the U.S.

The SPMS and PPMS markets have active development pipelines and additional novel agents could be approved in the future. Several development candidates are being evaluated in clinical trials including a number of Phase 3 programs: MedDay SA is evaluatingstudies for progressive forms of MS including primary and secondary progressive MS. These are MedDay’s MD-1003, a concentrated form of biotin, for progressive MS;and AB Science is evaluatingScience’s masitinib, a tyrosine kinase inhibitor. Medicinova is planning to initiate a Phase 3 study of its PDE inhibitor, foribudilast (MN166) in patients with non-relapsing secondary progressive MS; and Novartis is evaluating siponimod, an S1P1 modulator, for SPMS; and Actelion Pharmaceuticals is evaluating ponesimod, for SPMS.  MS.

Multiple Myeloma including Plasma Cell Leukemia

Several products are approved for the treatment of relapsed or refractory multiple myeloma, or MM, including immunomodulatory drugs, or IMIDs, such as Thalomid^® (Celgene Corporation), Revlimid^® (Celgene Corporation) and Pomalyst^® (Celgene Corporation); monoclonal antibodies such as Darzalex^® (Janssen Research & Development, LLC) and Empliciti^® (Bristol Myers Squibb); and proteasome inhibitors such as Velcade^® (Millennium Pharmaceuticals, Inc.) and Kyprolis^® (Amgen Inc.).

A number of companies and institutions are pursuing development programs for relapsed or refractory MM.  These development programs include drug candidates being evaluated in clinical trials as a monotherapy or in combination with other approved agents.  In addition, many groups are developing novel T-cell therapies such as autologous CAR T-cell or autologous TCR T-cell candidates.  These include bluebird bio, Inc., which is conducting Phase 2 clinical trials testing bb2121, an anti-BCMA CART; Gilead Sciences, Inc., which is testing KTE-585, an anti-BCMA CART in Phase 1 clinical trials; Juno Therapeutics, which is testing an anti-BCMA CART in Phase 1 clinical trials; Autolus Limited, which is testing AUTO-2, a bi-specific anti-BCMA/TACI CART in Phase 1 clinical trials and Adaptimmune Therapeutics PLC, which is testing an anti-NY-ESO TCR in Phase 1/2 clinical trials.

CMV InfectionT Program

There are numerouscurrently two CAR T therapies approved productsin the U.S. and EU, Novartis’ Kymriah (tisagenlecleucel) and Gilead/Kite’s Yescarta (axicabtagene ciloleucel). Bristol-Myers Squibb filed its BLA with the FDA for lisocabtagene maraleucel (liso-cel) in December 2019. There are more than 100 CAR T’s in development including at least 35 which are allogeneic and off-the-shelf cell therapies. Depending on the diseases that our CAR T therapies for the treatment of CMV infection, and a number of companies and academic institutions that may license therapies to companiestarget in the future, are orwe may be developing new treatments for CMV infection. Theseface competition from both CAR T therapies as well as promotional efforts by competitors and clinical trial results of competitive products, could significantly diminish any ability to market and sell the CMV T-cell immunotherapy. Drug therapies approved or commonly used for CMV infection include antiviral compoundsother modalities, such as Prevymis®, marketed by Merck & Co. Inc.; ganciclovir, valganciclovir, cidofovir or foscarnet.

Additionally, a numbersmall molecules and antibodies, in the indication of companiesinterest.

Terms of Certain License and academic institutions are developing drug candidates for CMV infectionResearch and other CMV-associated diseases, including Shire Plc which is conducting Phase 3 clinical trials of maribavir, a UL97 protein kinase inhibitor; Vical Inc., recently announced ASP0113, a therapeutic bivalent plasma DNA CMV vaccine being evaluated in patients undergoing an allogeneic stem cell transplant, failed to meet primary or secondary endpoints in Phase 3 clinical trials.  In addition, Helocyte, Inc., is conducting two Phase 2 clinical trials for a CMV MVA-vaccine and a CMV peptide vaccine in patients undergoing an allogeneic hematopoietic stem cell transplant;Merck is conducting Phase 1 clinical trials for V160, a CMV DNA vaccine; VBI Vaccines Inc., has completed Phase 1 clinical trials for VBI-1501A, an eVLP vaccine; Hookipa Biotech, is conducting Phase 1 clinical trials for HB101, a bivalent vaccine, ViraCyte, is conducting Phase 1 clinical trials for Viralym-C, a CMV-specific allogeneic cell therapy product; Fate Therapeutics is conducting a Phase 1/2 clinical trial for ProTmune, a small molecule programmed mobilized peripheral blood graft; Chimerix is conducting Phase 1 clinical trials for intravenous Brincidofovir (BCV IV), a nucleotide analog and Moderna Therapeutics is conducting Phase 1 clinical trials for mRNA-1647, an mRNA based prophylactic vaccine.

LicenseDevelopment Collaboration Agreements

2015 MSK Option and License Agreement

In September 2014, we entered into an exclusive option agreement with MSK under which we acquired the right to exclusively license from MSK the worldwide rights to three clinical stage T-cell programs. The initial option period was for 12 months. In exchange for the exclusive option, we paid MSK $1.25 million in cash and issued 59,761 shares of our common stock to MSK. We and MSK also agreed to collaborate on further research to develop additional cellular therapies, which may include T-cell programs targeted against other antigens and/or CAR-T, and which we also would hold an option to license, if developed.

In June 2015, we exercised the option and entered into a license agreement with MSK.the 2015 MSK License Agreement. Under the terms of the license agreement,2015 MSK License Agreement, MSK granted us a worldwide, exclusive license underto certain patent rights, know-how and a library of T-cellsT cells and cell lines, to research, develop, manufacture and commercialize T-cell products specific to cytomegalovirus, or CMV, EBV or WT1 that comprise or are based on or made using suchthese licensed rights. MSK also agreed to transfer certain INDs related to the licensed products to us. We have agreed to use commercially reasonable efforts to commercialize the licensed products and, if commercialized, continue active marketing efforts for any commercialized licensed product through the term of the license agreement.

In connection withUnder the option exercise and the execution of the license agreement,2015 MSK License Agreement, we made an upfront cash payment to MSK of $4.5 million. We are obligated to make additional milestone payments of up to $33.0 million with respect to the three licensed clinical stage T-cell programs based on achievement of specified development, regulatory and sales-related milestones. We are also required to make escalating mid to high single-digit royalty payments to MSK based on sales of any licensed products. In addition, under certain circumstances, we must make certain minimum annual royalty payments to MSK, which are creditable against earned royalties owed for the same annual period. We are also obligated to pay a low double-digit percentage of consideration we receive for sublicensing the licensed rights.

The license agreement2015 MSK License Agreement expires for each licensed T-cell product on a licensed product-by-licensed product basis and a country-by-country basis, on the latest of: (i) expiration of the last licensed patent rights related to sucha licensed product in sucha country, (ii) expiration of any market exclusivity period granted by law with respect to sucha licensed product in sucha country, and (iii) a specified number of years after the first commercial sale of the licensed product in sucha country. Upon expiration of the license agreement,2015 MSK License Agreement, the licenses granted to us will become non-exclusive royalty-free, perpetual and irrevocable. MSK may terminate the license agreement2015 MSK License Agreement if we materially breach the agreement and doesdo not cure suchthis breach within a specified period or if we experience certain insolvency events.

In May and December 2018, we licensed additional CAR T-related technology from MSK. We are obligated to make additional milestone payments based on achievement of specified development, regulatory and sales-related milestones as well as mid-single-digit percentage tiered royalty payments based on future sales of products resulting from the development of the licensed product candidates, if any.

QIMR Berghofer License Agreement and Research and Development Collaboration Agreement

In September 2016, we entered into an amended and restated license agreement and an amended and restated research and development collaboration agreement with QIMR Berghofer, each of which amended and restated prior agreements entered into with QIMR Berghofer in October 2015. We further amended and restated our license agreement and research and development collaboration agreements with QIMR Berghofer in August 2019 to eliminate our license to certain rights related to CMV. We refer to our August 2019 second amended and restated license agreement with QIMR Berghofer as the QIMR License Agreement and our August 2019 second amended and restated research and development collaboration agreement with QIMR Berghofer as our QIMR Collaboration Agreement.

Under the QIMR License Agreement and QIMR Collaboration Agreement, we possess an exclusive, worldwide license to develop and commercialize allogeneic T-cell programs utilizing technology and know-how developed by QIMR Berghofer.

The QIMR License Agreement provides for various milestone payments of up to $15 million and low to mid single-digit royalty payments to QIMR Berghofer based on future product sales, if any. Under the terms of the QIMR Collaboration Agreement, we are required to reimburse the cost of agreed-upon development activities related to programs developed under the collaboration. The QIMR Collaboration Agreement also provides for various milestone payments of up to $7 million to QIMR Berghofer based on achievement of certain developmental and regulatory milestones.

We have the right at any time to terminate the QIMR License Agreement, at will, by providing written notice of termination to QIMR Berghofer and paying QIMR Berghofer a break-up fee equal to 50 percent of the amount of the next milestone payment that would be payable to QIMR Berghofer. QIMR Berghofer or we may terminate the QIMR Collaboration Agreement at any time if either party determines that the collaboration is no longer academically, technically, or commercially feasible by giving the other party 30-day written notice. In the event of a material breach of either agreement, QIMR Berghofer or we may terminate the agreement if the breaching party does not cure such breach within a specified period.

Intellectual Property

Patents

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is toWe seek to protect our proprietary position by, among other methods, filing U.S. and non-U.S. patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business. We also rely on trademarks, trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position. Some of patents, trademarks, trade secrets, know-how and other intellectual property rights we rely on are owned by us and others are in-licensed from our partners. When we refer to “our” technologies, inventions, patents, patent applications or other intellectual property rights, we are referring to both the rights that we own or possess as well as those that we in-license. Additionally, we expect to benefit from a variety of statutory frameworks in the United States,U.S., Europe and other countries that relate to the regulation of biosimilar molecules and orphan drug status. These statutory frameworks provide certain periods of regulatory exclusivity for qualifying molecules. See “Government Regulation.”

Patents

We seek composition-of-matter and/or associated method patents, including method-of-treatment patents, for each of our product candidates in key therapeutic areas. The United StatesU.S. patent system permits the filing of provisional and non-provisional patent applications. A provisional patent application is not examined for patentability by the U.S. Patent and Trademark Office, or USPTO, and automatically expires 12

months after its filing date. As a result, a provisional patent application cannot mature into an issued patent. Provisional patent applications are often used, among other things, to establish an early effective filing date for a later-filed non-provisional patent application. A non-provisional patent application is examined by the USPTO and can mature into a patent once the USPTO determines that the claimed invention meets the standards of patentability.

Individual patents extend for varying periods of time depending on the date of filing of the patent application, the priority date claimed, and the legal term of patents as determined by the applicable law in the countries in which those patents are obtained. Generally, patents issued from applications filed in the United StatesU.S. are effective for 20 years from the earliest non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period; however, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. Additionally, patent term adjustments can extend term to account for certain delays by the U.S. Patent and Trademark Office, or USPTO during prosecution before that office. The duration of non-U.S. patents varies in accordance with provisions of applicable local law, but typically, the life of a non-U.S. patent is 20 years from the earliest international filing date, not inclusive of any patent term extension that may be available. The actual protection afforded by a patent varies on a product-by-product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of extensions of patent term, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

National and international patent laws concerning protein-based biologics such as our products remain highly unsettled. No consistent policy regarding the patent-eligibility or the breadth of claims allowed in such patents in this field has emerged to date among the United States,U.S., Europe andor other countries. Changes in either the patent laws or in interpretations of patent laws in the United States andU.S. or other countries can diminish our ability to protect our inventions and enforce our intellectual property rights. Accordingly, we cannot predict the breadth or enforceability of claims that may be granted in our patents or in third-party patents. The biotechnology and pharmaceutical industries are characterized by extensive intellectual property litigation. Our ability to maintain and solidify our proprietary position for our product candidates and technology will depend on our success in obtaining effective claims for any patentour patents and enforcing those claims once a patent is granted. We do not know whether any of theour patent applications that we may file or license from third parties will result in the issuance of any patents. TheOur issued patents that we own or may receive in the future may be challenged, invalidated or circumvented, and the rights granted under any issued patents may not provide us with sufficient protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop and commercialize similar drugs or duplicate our technology, business model or strategy without infringing our patents. Because of the extensive time required for clinical development and regulatory review of any drug we may develop from our product candidates, it is possible that, before any of our drugs can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent. The patent positions for our product candidates are summarized below:

Our global patent estate consists of both issued patentssolely-owned and pending patent applications and includes wholly-owned patent applications, in-licensed patents and patent applications, to which we generally hold exclusive commercial rights, and patents and patent applications to which we hold an exclusive option to license commercial rights. Regarding our tabelecleucel for EBV+PTLD following HCT or SOT, tabelecleucel for NPC, ATA188, ATA190, ATA520, ATA230 and ATA621 programs, and our platform technologies underlying these programs, our global patent estate is directed to compositions of matter and/or associated methods, including methods of treatment, and consists of 2543 patent families having a total of 95more than 245 issued patents or patent applications. The issuedOur patents and patent applications (if issued) of our global patent estate are expected to expire between 20232022 and 2038,2040, not inclusive of any patent term extension that may be available isin any associated jurisdiction.

Trade Secrets

In addition to patents, we rely upon unpatented trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed by an employee. These agreements may be breached, and we may not have adequate remedies for any such breach or any unauthorized disclosure of our proprietary information. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Government RegulationTrademarks

OverviewWe also rely upon trademarks to develop and maintain our competitive position, and we continue to pursue and obtain trademark rights relating to our business. We have a vigorous global program of U.S. Government Regulation

The preclinical studiestrademark registration and clinical testing, manufacture, labeling, storage, recordkeeping, advertising, promotion, export, marketingenforcement to maintain and sales, among other things,strengthen the value of our product candidatestrademarks and prevent the unauthorized use of those trademarks. Our global trademark portfolio consists of seven different trademark families comprised of more than 100 registrations and pending applications.

Government Regulation and Product Approval

As a biopharmaceutical company that operates in the United States, we are subject to extensive regulation by governmentalregulation. Our T-cell immunotherapies, if approved, will be products regulated as biologics. With this classification, commercial production of our products will need to occur in registered facilities in compliance with current good manufacturing practice, or cGMP, for biologics. The FDA categorizes human cell- or tissue-based products as either minimally manipulated or more than minimally manipulated and has determined that more than minimally manipulated products require clinical trials to demonstrate product safety and efficacy and the submission of a BLA for marketing authorization. Our product candidates are considered more than minimally manipulated and will require evaluation in clinical trials and the submission and approval of a BLA before we can market them.

Government authorities in the United States (at the federal, state and local level) and in other countries. Incountries extensively regulate, among other things, the United States, pharmaceuticalresearch, development, testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of biopharmaceutical products such as those we are regulateddeveloping. Our product candidates must be approved by the FDA before they may be legally marketed in the U.S. and by the appropriate foreign regulatory agency before they may be legally marketed in foreign countries. Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the U.S., although there can be important differences. Additionally, some significant aspects of regulation in Europe are addressed in a centralized way, but country-specific regulation remains essential in many respects. The process for obtaining regulatory marketing approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

U.S. Product Development Process

In the U.S., the FDA regulates pharmaceutical and biological products under the Federal Food, Drug and Cosmetic Act, and other laws, including, in the case of biologics,or FDCA, the Public Health Service Act.

Our T-cell immunotherapy product candidates, including tabelecleucel (formerly known as ATA129), are regulated byAct, or PHSA, and their implementing regulations. The process of obtaining regulatory approvals and the FDA as biologics, reviewed by the Center for Biological Evaluationsubsequent compliance with appropriate federal, state, local and Research,foreign statutes and willregulations require the submissionexpenditure of BLAssubstantial time and approval by the FDA prior to being marketed in the United States. For T-cell immunotherapy trials conducted at, or sponsored by, institutions receiving NIH funding for recombinant DNA research, prior to the submission of an IND to the FDA, a protocol and related documents must be submitted to, and the study registered with, the NIH Office of Biotechnology Activities, or the OBA, pursuant to the NIH Guidelines for Research Involving Recombinant DNA Molecules, or the NIH Guidelines. Compliance with the NIH Guidelines is mandatory for investigators at institutions receiving NIH funds for research involving recombinant DNA. However, many companies and other institutions, not otherwise subject to the NIH Guidelines, voluntarily follow them. The NIH is responsible for convening the recombinant DNA advisory committee, or RAC, that discusses protocols that raise novel or particularly important scientific, safety or ethical considerations at one of its quarterly public meetings. The OBA will notify the FDA of the RAC’s decision regarding the necessity for full public review of a protocol. RAC proceedings and reports are posted to the OBA website and may be accessed by the public.

financial resources. Failure to comply with FDAthe applicable U.S. requirements both before andat any time during the product development process, approval process or after product approval, may subject us or our partners, contract manufacturers, and suppliersan applicant to administrative or judicial sanctions. FDA sanctions including FDAcould include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, and/refusals of government contracts, restitution, disgorgement or civil or criminal prosecution.

penalties. Any agency or judicial enforcement action could have a material adverse effect on us. The stepsprocess required by the FDA before a biologicbiological product may be approved for marketing of an indicationmarketed in the United StatesU.S. generally include:involves the following:

Before testing any biological product is “safe, pure and potent”, which is analogous to the safety and efficacy approval standard for a chemical drugcandidate, including our product for its intended use;

Before conductingas nonclinical studies, in humans,include laboratory evaluationevaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and efficacyactivity of the biologic candidateproduct candidate. The conduct of the preclinical tests must be conducted. Preclinical toxicology studies in animalscomply with federal regulations and requirements including GLPs. The clinical trial sponsor must be conducted in compliance with FDA regulations. Thesubmit the results of the preclinical tests, together with manufacturing information, and analytical data, are submittedany available clinical data or literature and a proposed clinical protocol, to the FDA as part of anthe IND. Some preclinical testing may continue even after the IND is submitted. In addition to including the results of the preclinical testing, the IND will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the first phase or phases of the clinical trial lend themselves to an efficacy determination. The IND will automatically becomebecomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions regarding the proposed clinical trials and places the trial on a clinical hold within thethat 30-day time period placesperiod. In such a case, the IND on clinical hold because of safety concerns about the product candidate or the conduct of the trial described in the clinical protocol included in the IND. The IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a biological product candidate at any time before or during clinical trials can proceed.

Alldue to safety concerns or non-compliance. If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials for new drugs and biologics must be conductedto begin, or that, once begun, issues will not arise that suspend or terminate such trials.

Clinical trials involve the administration of the biological product candidate to patients under the supervision of onequalified investigators, generally physicians not employed by or more qualified principal investigators in accordance with GCP. They must beunder the trial sponsor’s control. Clinical trials are conducted under protocols detailing, among other things, the objectives of the applicable phase of theclinical trial, dosing procedures, research subject selection and exclusion criteria, and the safety and effectiveness criteriaparameters to be evaluated.used to monitor subject safety, including stopping rules that assure a clinical trial will be stopped if certain adverse events should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND,IND. Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research patients provide informed consent. Further, each clinical trial must be reviewed and approved by an independent IRB at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators. Annual progress reports detailing the statusresults of the clinical trials must be submitted to the FDA annually. SponsorsFDA. Written IND safety reports must also reportbe promptly submitted to the FDA, within certain timeframes,and the investigators for serious and unexpected adverse reactions,events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human patients, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or

investigator’s brochure, or any findings from other studies or animal or in vitro testing investigator brochure. The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that suggest a significant risk in humans exposed to the product candidate. An institutional review board, or IRB, at each institution participating in the clinical trial must review and approve the protocol before a clinical trial commences at that institution, approve the information regardingqualifies for reporting. The sponsor also must notify the trial andFDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the consent form that must be provided to each research subject or the subject’s legal representative, and monitor the trial until completed.

Clinical trials are typically conducted in three sequential phases, but the phases may overlap and different trials may be initiated with the same product candidate within the same phase of development in similar or differing patient populations.

Phase 1 clinical studies may be conducted in a limited number of patients or healthy volunteers, as appropriate. The product candidate is initially tested for safety and, as appropriate, for absorption, metabolism, distribution, excretion, pharmacodynamics and pharmacokinetics.

Phase 2 usually involves trials in a larger, but still limited, patient population to evaluate preliminarily the efficacysponsor’s initial receipt of the product candidate for specific, targeted indications to determine dosage tolerance and optimal dosage and to identify possible short-term adverse effects and safety risks.

Phase 3 trials are undertaken to further evaluate clinical efficacy of a specific endpoint and to test further for safety within an expanded patient population at geographically dispersed clinical trial sites.information. Phase 1, Phase 2 orand Phase 3 testing mightclinical trials may not be completed successfully within any specific timespecified period, if at all, with respect to any of our product candidates. Results from one trial are not necessarily predictive of results from later trials. Furthermore, theall. The FDA or the sponsor or its data safety monitoring board may suspend or terminate a clinical trialstrial at any time on various grounds, including a finding that the subjects orresearch patients are being exposed to an unacceptable health risk.risk, including risks inferred from other unrelated immunotherapy trials. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biological product candidate has been associated with unexpected serious harm to patients.

Concurrently with clinical trials, companies usually complete additional studies and must also develop additional information about the physical characteristics of the biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHSA emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.

U.S. Review and Approval Processes

After the completion of clinical trials of a biological product, FDA approval of a BLA must be obtained before commercial marketing of the biological product. The BLA submission must include results of the preclinicalproduct development, laboratory and animal studies, and clinicalhuman trials, together with other detailed information, including information on the manufacture and composition of the product, are submitted toproposed labeling and other relevant information. The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.

Under PDUFA, as partamended, each BLA must be accompanied by a significant user fee. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual program fee for biological products. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a BLA requesting approval to marketsmall business. Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product candidate foralso includes a proposednon-orphan indication. Under the Prescription Drug User Fee Act the fees payable to the FDA for reviewing a BLA, as well as annual fees for commercial manufacturing establishments and for approved products, can be substantial but are subject to certain limited deferrals, waivers and reductions that may be available. The fees typically increase each year. Each BLA submitted to the FDA for approval is reviewed for administrative completeness and reviewability within

Within 60 days following receipt bysubmission of the application, the FDA ofreviews a BLA submission to determine if it is substantially complete before the application. If the BLA is found complete, the FDA will file the BLA, triggering a full review of the application.agency accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission.submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. The FDA’s established goalresubmitted application also is subject to review 90% of priority BLA applications within six months afterbefore the applicationFDA accepts it for filing. Once the submission is accepted for filing, and 90% of standard BLA applications within 10 monthsthe FDA begins an in-depth substantive review of the acceptance date, whereupon a review decision is to be made.BLA. The FDA however,reviews the BLA to determine, among other things, whether the proposed product is safe, potent, and/or effective for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, safety, strength, quality, potency and purity. The FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During the biological product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is necessary to assure the safe use of the biological product. A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve a product candidate within these established goals and its review goals are subject to change from time to time. Further, the outcome of the review, evenBLA without a REMS, if generally favorable, may not be an actual approval but a “complete response letter” that describes additional work that must be done before the application can be approved. required.

Before approving a BLA, the FDA maywill inspect the facility or facilities at which the product is manufactured andmanufactured. The FDA will not approve the product unless it determines that the facility compliesmanufacturing processes and facilities are in compliance with cGMP.cGMP requirements and adequate to assure consistent production of the product within required specifications. For immunotherapy products, the FDA also will not approve the product if the manufacturer is not in compliance with the GTPs, to the extent applicable. These are FDA regulations and guidance documents that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissue, and cellular and tissue based products, or HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient. The primary intent of the GTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease. FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through screening and testing. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND trial requirements and GCP requirements. To assure cGMP, GTP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.

Notwithstanding the submission of relevant data and information, the FDA may deny approval of aultimately decide that the BLA if applicable statutory ordoes not satisfy its regulatory criteria for approval and deny approval. Data obtained from clinical trials are not satisfied,always conclusive and the FDA may interpret data differently than we interpret the same data. If the agency decides not to approve the BLA in its present form, the FDA will issue a complete response letter that describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or may requiremajor, for example, requiring additional testing or information, which can extendclinical trials. Additionally, the review process. FDA approval of any applicationcomplete response letter may include many delaysrecommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or never be granted. withdraw the application.

If a product is approved,receives regulatory approval, the approval may impose limitations onbe limited to specific diseases and dosages or the usesindications for use may otherwise be limited, which could restrict the product may be marketed,commercial value of the product. Further, the FDA may require that warning statementscertain contraindications, warnings or precautions be included in the product labeling, may require that additional studies be conducted following approval as a condition of the approval, andlabeling. The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a Risk Evaluation and Mitigation Strategy, or REMS,risk management plan, or otherwise limit the scope of any approval. TheIn addition, the FDA must approvemay require post marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to further assess a BLA supplement or a new BLA before a product may be marketed for other uses or before certain manufacturing or other changes may be made. Further post-marketingbiological product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized.

In addition, under the Pediatric Research Equity Act, or efficacyPREA, a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of athe product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is required. Also, product approvalssafe and effective. The FDA may be withdrawn if compliance with regulatory standards is not maintainedgrant deferrals for submission of data or if safetyfull or manufacturing problems occur following initial marketing. In addition, new government requirements may be established that could delay or prevent regulatory approval of our product candidates under development.partial waivers.

Orphan Drug Designation

Under the Biologics Price Competition and Innovation Act of 2009, or the BPCIA, a statutory pathway has been created for licensure, or approval, of biological products that are biosimilar to, and possibly interchangeable with, earlier biological products licensed under the Public Health Service Act. Also under the BPCIA, innovator manufacturers of original reference biological products are granted 12 years of exclusivity before biosimilars can be approved for marketing in the United States. The approval of a biologic product biosimilar to one of our products could have a material adverse impact on our business as it may be significantly less costly to bring to market and may be priced significantly lower than our products.

Both before and after the FDA approves a product, the manufacturer and the holder or holders of the BLA for the product are subject to comprehensive regulatory oversight. For example, quality control and manufacturing procedures must conform, on an ongoing basis, to cGMP and GTP requirements, as applicable and the FDA periodically inspects manufacturing facilities to assess compliance with these standards. Accordingly, manufacturers must continue to spend time, money and effort to maintain compliance.

Orphan Drug Act

The Orphan Drug Act, provides incentivesthe FDA may grant orphan designation to manufacturersa drug or biologic intended to develop and market drugs fortreat a rare diseases and conditions affectingdisease or condition, which is generally a disease or condition that affects fewer than 200,000 personsindividuals in the United States, ator more than 200,000 individuals in the timeU.S. and for which there is no reasonable expectation that the cost of applicationdeveloping and making available in the U.S. a drug or biologic for orphanthis type of disease or condition will be recovered from sales in the U.S. for that drug designation.or biologic. Orphan drug designation must be requested before submitting a BLA. OrphanAfter the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review andor approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the holder of the approvalproduct is entitled to a seven-year exclusive marketing period in the United States for thatorphan product except in very limited circumstances. For example, a drugexclusivity, which means that the FDA considersmay not approve any other applications, including a full BLA, to be clinically superior to, or different from, another approved orphan drug, even thoughmarket the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee.

A designated orphan drug may also obtain approvalnot receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States duringU.S. may be lost if the seven-year exclusive marketing period. In addition, holders of exclusivityFDA later determines that the request for orphan drugs are expecteddesignation was materially defective or if the manufacturer is unable to assure the availability of sufficient quantities of their orphan drugsthe product to meet the needs of patients. Failure to do so could result in the withdrawal of marketing exclusivity for the drug.

Legislation similar to the Orphan Drug Act has been enacted outside the United States, including in the EU. The orphan legislation in the EU is available for therapies addressing chronic debilitating or life-threatening conditions that affect five or fewer out of 10,000 persons or are financially not viable to develop. The market exclusivity period is for ten years, although that period can be reduced to six years if, at the end of the fifth year, available evidence establishes that the product is sufficiently profitable not to justify maintenance of market exclusivity. The market exclusivity may be extended to 12 years if the sponsor completes a pediatric investigation plan agreed uponpatients with the relevant committee of the EMA.rare disease or condition.

Expedited Development and Review and ApprovalPrograms

The FDA has various programs, including Fast Track and Regenerative Medicine Advanced Therapy, or RMAT, priority review and accelerated approval, which area fast track program that is intended to expedite or simplifyfacilitate the process for developing and reviewing promising drugs, or to provide for the approval of a drug on the basis of a surrogate endpoint. Even if a drug qualifies for one or more of these programs, the FDA may later decidenew products that the drug no longer meets the conditions for qualification or that the time period for FDA review or approval will be shortened. Generally, drugs thatmeet certain criteria. Specifically, new products are eligible for these programsfast track designation if they are those for serious or life-threatening conditions, those with the potential to address unmet medical needs and those that offer meaningful benefits over existing treatments. For example, Fast Track and RMAT are processes designed to facilitate the development and expedite the review of drugs to treat serious or life-threatening diseases or conditions and fill unmet medical needs. Priority review is designed to give drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists an initial review within six months as compared to a standard review time of 10 months. Although Fast Track, RMAT, and priority review do not affect the standards for approval, the FDA will attempt to facilitate early and frequent meetings with a sponsor of a Fast Track designated drug and expedite review of the application for a drug designated for priority review. Accelerated approval provides for an earlier approval for a new drug that is intended to treat a serious or life-threatening disease or condition and that fills andemonstrate the potential to address unmet medical need basedneeds for the disease or condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. Unique to a fast track product, the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.

Any product, submitted to the FDA for approval, including a product with a fast track designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval. A product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new product designated for priority review in an effort to facilitate the review. Additionally, a product may be eligible for accelerated approval. Products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint. A surrogate endpoint that is reasonably likely to predict clinical benefit, or on a laboratory measurementclinical endpoint that can be measured earlier than irreversible morbidity or physical sign used asmortality, that is reasonably likely to predict an indirecteffect on irreversible morbidity or substitute measurement representing a clinically meaningful outcome.mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a drug or biological product candidate receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to confirm the clinically meaningful outcome as predicted by the surrogate marker trial.

studies. In addition, to the Fast Track,FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Regenerative Medicine Advanced Therapy (RMAT) designation was established by FDA in 2017 to facilitate an efficient development program for, and priorityexpedite review programs discussed above, breakthrough therapy designation may be pursued. A breakthrough therapyof, any drug that meets the following criteria: (1) it qualifies as a RMAT, which is defined as a drug thatcell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (2) it is intended aloneto treat, modify, reverse, or in combination with one or more other drugs, to treatcure a serious or life-threatening disease or condition,condition; and (3) preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition. RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and eligibility for rolling review and priority review. Products granted RMAT designation may demonstratealso be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites. Once approved, when appropriate, the FDA can permit fulfillment of post-approval requirements under accelerated approval through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence such as electronic health records; through the collection of larger confirmatory datasets; or through post-approval monitoring of all patients treated with the therapy prior to approval.

Breakthrough therapy designation is also intended to expedite the development and review of products that treat serious or life-threatening conditions. The designation by FDA requires preliminary clinical evidence that a product candidate, alone or in combination with other drugs and biologics, demonstrates substantial improvement over existing therapiescurrently available therapy on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs designatedBreakthrough therapy designation comes with all of the benefits of fast track designation, which means that the sponsor may file sections of the BLA for review on a rolling basis if certain conditions are satisfied, including an agreement with FDA on the proposed schedule for submission of portions of the application and the payment of applicable user fees before the FDA may initiate a review.

Fast Track designation, priority review, RMAT and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process.

Post-Approval Requirements

Any products for which we receive FDA approvals are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the product’s approved uses (known as breakthrough therapies are also eligible“off-label use”), limitations on industry-sponsored scientific and educational activities, and requirements for accelerated approval. The FDA will seekpromotional activities involving the internet. Although a physician may prescribe a legally available product for an off-label use, if the physician deems such product to be appropriate in his/her professional medical judgment, a manufacturer may not market or promote off-label uses. However, it is permissible to share in certain circumstances truthful and not misleading information that is consistent with the product’s approved labeling.

In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the sponsorlong-term stability of the product. cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved BLA, including, among other things, recall or withdrawal of the product from the market. In addition, changes to the manufacturing process are strictly regulated, and depending on the significance of the change, may require prior FDA approval before being implemented. Other types of changes to the approved product, such as adding new indications and claims, are also subject to further FDA review and approval.

The FDA also may require post-marketing testing, known as Phase 4 testing, and surveillance to monitor the effects of an approved product. Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties, among others. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of other risk management measures. Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.

U.S. Marketing Exclusivity

The Biologics Price Competition and Innovation Act, or BPCIA, amended the PHSA to authorize the FDA to approve similar versions of innovative biologics, commonly known as biosimilars. A competitor seeking approval of a breakthrough therapybiosimilar must file an application to establish its molecule as highly similar to an approved innovator biologic, among other requirements. The BPCIA, however, bars the FDA from approving biosimilar applications for 12 years after an innovator biological product candidate receives: intensive guidancereceives initial marketing approval. This 12-year period of data exclusivity may be extended by six months, for a total of 12.5 years, if the FDA requests that the innovator company conduct pediatric clinical investigations of the product.

Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years, as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and the approval of that application. Only one patent applicable to an approved product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may intend to apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.

Pediatric exclusivity is another type of regulatory market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an efficient drug development program; intensive involvement of senior managers and experienced staff onFDA-issued “Written Request” for such a proactive, collaborative and cross-disciplinary review; and rolling review.trial.

Reimbursement

In both domestic and foreign markets, sales and reimbursement of any approved products will depend, in part, on the extent to which the costs of such products will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly challenging the prices charged for medical products and services and imposing controls to manage costs. The containment of healthcare costs has become a priority of federal and state governments and the prices of drugs have been a focus in this effort. Governments have shown significant interest in implementing

cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. For example, in the U.S. there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. Further,Additionally, in May 2018, the U.S. presidential administration laid out a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers. The Department of Health and Human Services, or HHS, has started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority. In January 2019, the HHS Office of Inspector General proposed modifications to U.S. federal healthcare Anti-Kickback Statute safe harbors which, among other things, will affect rebates paid by manufacturers to Medicare Part D plans, the purpose of which is to further reduce the cost of drug products to consumers. Although some of these and other proposals may require authorization through additional legislation to become effective, members of Congress and the Trumppresidential administration have each indicated that itthey will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, to encourage importation from other countries and bulk purchasing.Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. In addition, there is significant uncertainty regarding the reimbursement status of newly approved healthcare products. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. If third-party payors do not consider our products to be cost-effective compared to other therapies, the payors may not cover our products after approved as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

Within the United States,U.S., if we obtain appropriate approval in the future to market any of our current product candidates, we may seek approval and coverage for those products under Medicaid, Medicare and the Public Health Service, or PHS, pharmaceutical pricing program and also seek to sell the products to federal agencies.

Medicaid is a joint federal and state program that is administered by the states for low income and disabled beneficiaries. Under the Medicaid Drug Rebate Program, manufacturers are required to pay a rebate for each unit of product reimbursed by the state Medicaid programs. The amount of the rebate for each product is set by law and may be subject to an additional discount if certain pricing increases more than inflation.

Medicare is a federal program administered by the federal government that covers individuals age 65 and over as well as those with certain disabilities. Medicare Part D provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that do not need to be administered by a physician). Medicare Part D is administered by private prescription drug plans approved by the U.S. government and each drug plan establishes its own Medicare Part D formulary for prescription drug coverage and pricing, which the drug plan may modify from time-to-time.

Medicare Part B covers most injectable drugs given in an in-patient setting, and some drugs administered by a licensed medical provider in hospital outpatient departments and doctors’ offices. Medicare Part B is administered by Medicare Administrative Contractors, which generally have the responsibility of making coverage decisions. Subject to certain payment adjustments and limits, Medicare generally pays for Part B covered drugs based on a percentage of manufacturer-reported average sales price.

Drug products are subject to discounted pricing when purchased by federal agencies via the Federal Supply Schedule, or FSS.

FFS FSS participation is required for a drug product to be covered and paid for by certain federal agencies and for coverage under Medicaid, Medicare Part B and the PHS pharmaceutical pricing program. FSS pricing is negotiated periodically with the Department of Veterans Affairs. FSS pricing is intended to not exceed the price that a manufacturer charges its most-favored non-federal customer for its product. In addition, prices for drugs purchased by the Veterans Administration, Department of Defense (including drugs purchased by military personnel and dependents through the TRICARE retail pharmacy program), Coast Guard, and PHS are subject to a cap on pricing (known as the “federal ceiling price”) and may be subject to an additional discount if pricing increases more than inflation.

To maintain coverage of drugs under the Medicaid Drug Rebate Program, manufacturers are required to extend discounts to certain purchasers under the PHS pharmaceutical pricing program. Purchasers eligible for discounts include hospitals that serve a disproportionate share of financially needy patients, community health clinics and other entities that receive health services grants from the PHS.

The United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In March 2010, the United StatesU.S. Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, or the Affordable Care Act, which included changes to the coverage and payment for drug products under government health care programs. Some of the provisions of the Affordable Care Act have yet to be implemented, andSince its enactment, there have been judicial and Congressional challenges to certain aspectsnumerous elements of the Affordable Care Act, as well as recent efforts by both the Trump administration executive and legislative branches of the federal government to repeal or replace certain aspects of the Affordable Care Act. Since January 2017,For example, the President Trump has signed two Executive Orders designed to delay the implementation of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated by the Affordable Care Act. Concurrently,In addition, the U.S. Congress has considered legislation that would repeal or repeal and replace all or part of the Affordable Care Act. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementationit has enacted laws that modify certain provisions of certain taxes under the Affordable Care Act, have been

enacted. The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effectivesuch as removing penalties, starting January 1, 2019, the tax-based shared responsibility payment imposed byfor not complying with the Affordable Care Act on certain individuals who failAct’s individual mandate to maintain qualifyingcarry health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayedinsurance, delaying the implementation of certain mandated fees, underand increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D. In December 2019, the U.S. Court of Appeals for the 5th Circuit upheld a District Court ruling that the individual mandate was unconstitutional and remanded the case back to the Texas District Court to determine whether the remaining provisions of the Affordable Care Act includingare invalid as well.

Foreign Regulation

In addition to regulations in the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans,U.S., we are subject to a variety of foreign regulations governing clinical studies and commercial sales and distribution of our product candidates. Whether or not we obtain FDA approval for a product candidate, we must obtain approval from the annual fee imposed on certain health insurance providers based oncomparable regulatory authorities of foreign countries or economic areas, such as the European Union, before we may commence clinical studies or market share,products in those countries or areas. The approval process and requirements governing the conduct of clinical studies, product licensing, pricing and reimbursement vary greatly from place to place, and the medical device excise tax on non-exempt medical devices. Congress also could consider additional legislation to repealtime may be longer or replace other elementsshorter than that required for FDA approval.

Certain countries outside of the Affordable Care Act.U.S. have a process that requires the submission of a clinical study application, or CTA, which is much like an IND in the U.S., prior to the commencement of human clinical studies. In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical studies. Once the CTA is approved in accordance with a country’s requirements, clinical study development may proceed in that country. In all cases, the clinical studies must be conducted in accordance with GCP and other applicable regulatory requirements.

Under EU regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralized procedure. We expect to utilize the centralized procedure, which is compulsory for medicinal products produced by biotechnology or those medicinal products containing new active substances for specific indications such as the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases and designated orphan medicines, and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application is submitted to the European Medicines Agency, or EMA, where it will be evaluated by the Committee for Medicinal Products for Human Use. If this committee delivers a favorable opinion, this typically results in the grant by the European Commission of a single marketing authorization that is valid for all EU member states within 67 days of receipt of the opinion. The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period. Conditionalmarketingauthorization in the European Union is permittedbasedonincompleteclinicaldataforalimitednumberofmedicinalproductsforhuman use,includingproductsdesignatedasorphanmedicinalproductsunderEUlaw,if(1)therisk-benefitbalanceoftheproductispositive,(2)itis likelythattheapplicantwillbeinapositiontoprovidetherequiredcomprehensiveclinicalstudydata,(3)unmetmedicalneedswillbefulfilledand(4) thebenefittopublichealthoftheimmediateavailabilityonthemarketofthemedicinalproductoutweighstheriskinherentinthefactthatadditionaldataarestillrequired.Specificobligations,includingwithrespecttothecompletionofongoingornewstudies,andwithrespecttothe collectionofpharmacovigilancedata,maybespecifiedintheconditionalmarketingauthorization.Conditionalmarketingauthorizationsarevalidfor oneyearandmayberenewedannually,iftherisk-benefitbalanceremainspositive,andafteranassessmentoftheneedforadditionalormodified conditions.

As in the U.S., we may apply for designation of a product as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made. Orphan drugs in Europe enjoy economic and marketing benefits, including up to 11 years of exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product. The PRIority MEdicines, or PRIME, initiative was established by the EMA to help promote and foster the development of new medicines in the European Union that demonstrate potential for a major therapeutic advantage in areas of unmet medical need. Benefits from the PRIME designation include early confirmation of potential for accelerated assessment, early dialogue and increased interaction with relevant regulatory committees to discuss development options, scientific advice at key development milestones, and proactive regulatory support from the EMA.

In the EU, companies developing a new medicinal product must agree to a Pediatric Investigation Plan, or PIP, with the EMA and must conduct pediatric clinical trials in accordance with that PIP, unless a deferral or waiver applies, (e.g., because the relevant disease or condition occurs only in adults). The marketing authorization application for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted, in which case the pediatric clinical trials must be completed at a later date. Products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

Outside the United States,U.S., there are additional challenges in ensuring adequate coverage and payment for our products will face challenges.products. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory approval for a product and may require us to conduct a clinical trialstudy that compares the cost effectiveness of our product candidates or products to other available therapies. The conduct of such athis type of clinical trialstudy could be expensive and result in delays in our commercialization efforts. Third-party payors are challenging the prices charged for medical products and services, and many third-party payors limit reimbursement for newly-approved health care products. Recent budgetaryBudgetary pressures in many European Union countries are also causing governments to consider or implement various cost-containment measures, such as price freezes, increased price cuts and rebates. If budget pressures continue, governments may implement additional cost-containment measures. Cost-control initiatives could decrease the price we might establish for products that we may develop or sell, which would result in lower product revenues or royalties payable to us. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.

ForeignAdditional Regulation

In addition to regulations in the United States, we expect to be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our product candidates. Whether or not we obtain FDA approval for a product candidate, we must obtain approval from the comparable regulatory authorities of foreign countries or economic areas, such as the European Union, before we may commence clinical trials or market products in those countries or areas. The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.

Certain countries outside of the United States have a process that requires the submission of a clinical trial application, or CTA, much like an IND prior to the commencement of human clinical trials. In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trial development may proceed in that country. In all cases, the clinical trials must be conducted in accordance with GCP and other applicable regulatory requirements.

Under European Union regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralized procedure. The centralized procedure is compulsory for medicinal products produced by biotechnology or those medicinal products containing new active substances for specific indications such as the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases and designated orphan medicines, and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application is submitted to the European Medicines Agency, or EMA, where it will be evaluated by the Committee for Medicinal Products for Human Use and a favorable opinion typically results in the grant by the European Commission of a single marketing authorization that is valid for all European Union member states within 67 days of receipt of the opinion. The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period. As with accelerated approval in the U.S., conditional marketing authorization in the European Union is permitted based on incomplete clinical data for a limited number of medicinal products for human use, including products designated as orphan medicinal products under EUlaw, if (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) unmet medical needs will be fulfilled and (4) the benefit to public health of the immediate availability on the market of the medicinal product outweighs the risk inherent in the fact that additional data are still required. Specific obligations, including with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data, may be specified in the conditional marketing authorization. Conditional marketing authorizations are valid for one year and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions.

As in the United States, we may apply for designation of a product as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made. Orphan drugs in Europe enjoy economic and marketing benefits, including up to 11 years of exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan designated product. The PRIority MEdicines, or PRIME, initiative was established by the EMA to help promote and foster the development of new medicines in the European Union that demonstrate potential for a major therapeutic advantage in areas of unmet medical need. Benefits from the PRIME designation include early confirmation of potential for accelerated assessment, early dialogue and increased interaction with relevant regulatory committees to discuss development options, scientific advice at key development milestones, and proactive regulatory support from the EMA.

Additional Regulation

As a pharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. We are also subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other present and potential federal, state or local regulations. These and other laws govern our use, handling and disposal of various biological and chemical substances used in, and waste generated by, our operations. Our research and development involves the controlled use of hazardous materials, chemicals and viruses. Although we believe that our safety procedures for handling and disposing of such materials comply with the standards prescribed by state and federal regulations, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result and any such liability could exceed our resources.

Manufacturing

There have beenOur 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. Commercial production qualification activities for our facility are progressing well and, together with our contracted manufacturing partner, are aligned with our planned commercial product supply strategy.

In December 2019, we entered into a number of federalCommercial Manufacturing Services Agreement, or the Manufacturing Agreement, with Cognate Bioservices, Inc., or Cognate. The Manufacturing Agreement supersedes the Development and state proposals duringManufacturing Services Agreement, or the last few years regardingDMSA Agreement, with Cognate dated August 10, 2015, as amended. The Manufacturing Agreement governs similar manufacturing services provided for under the pricing of pharmaceutical and biological products, government control and other changesDMSA Agreement with similar terms. Specifically, pursuant to the healthcare systemManufacturing Agreement, Cognate provides manufacturing services for certain of our product candidates. The initial term of the United States. ItManufacturing Agreement runs until December 31, 2021 and is uncertain what legislative proposals will be adoptedrenewable with Cognate’s approval for an additional one-year period. We may terminate the Manufacturing Agreement for convenience on six months’ written notice to Cognate, or what actions federal, stateimmediately if Cognate is unable to perform the services under the Manufacturing Agreement or private payersfails to obtain or maintain certain necessary approvals. The Manufacturing Agreement includes standard mutual termination rights for medical goodsuncured breach or insolvency, or a force majeure event preventing the performance of services for at least ninety days. In connection with the entry into the Manufacturing Agreement, we and services may take in responseCognate also entered into a Fifth Amendment to any healthcare reform proposals or legislation. We cannot predict the effect medical or healthcare reforms may have on our business, and no assurance can be given that any such reforms will not have a material adverse effect.

ManufacturingDMSA Agreement, which amended the expiration date of the DMSA Agreement to December 31, 2019.

Our initialcurrent manufacturing strategy is to outsourceevaluate each product candidate and determine which site in our manufacturing network provides the phase-appropriate technical, quality and regulatory compliance requirements. In addition, the long-range supply requirements of our product candidates are evaluated periodically to ensure we are planning manufacturing capacity and capabilities accordingly across our network. Our manufacturing network is comprised of our own facility and the manufacturing packaging, labeling, storage,capabilities of our partners, including MSK and distribution for our preclinical studiesan affiliate of QIMR Berghofer, and clinical trials. In selecting contract manufacturing organizations, or CMOs, to manufacture our product candidates, we generally strive to selectincluding Cognate. This strategic approach provides us with the CMO based on the particular technical needs of the product candidate and quality and regulatory compliance. In addition, we aim to work with CMOs that possess the requisite scale, expertise and experienceflexibility to support our clinical and commercial production needs, address time or capacity constraints as well as commercial product manufacturing. We have transferred the manufacturing processes for tabelecleucel (formerly known as ATA129) from MSK to our CMO.  The transfer of manufacturing processes to our CMO includes modifications to the processes, improvements in the manufacturing process as well as product testing. Moreover, we are currently developing commercial-scale manufacturing processes for tabelecleucel for the Phase 3 trials, with the proposed dose and schedule to be used in clinical practice and at a cost sufficient to support profitable commercialization. In December 2017, following discussion with the FDA of manufacturing and comparability data generated on material manufactured by our contract manufacturing organization, we initiated these trials in the United States.

We are building our own manufacturing facility, which is designed to support clinical production and ultimately commercialization of tabelecleucel, if approved.  In addition, we would expect our facility to support theprovide supply needs for our other cellular therapy product candidates.  We would expect to maintain our relationships with our CMOs in order to have redundant sources of supply.  Our internal capabilities and experience in manufacturing encompass a broad range of activities including cell line development, process, analytical and formulation development, clinical and commercial scale GMP manufacturing, quality control and quality assurance. We are building the internal technical expertise in the manufacture of cellular therapeutics through hiring well experienced staff.  This breadth of experience will allow us to effectively oversee our own manufacturing facility as well as direct the activities of our contract manufacturers and testing facilities. Benefits of owning our own facility may include improved cost of goods, increased control and oversight of manufacturing and supply chain activities, greater control over maintenance and management of production capacity across multiple products, development of redundant supply capabilities to reduce risk, and reduced reliance on third parties.redundancy, where appropriate.

Our T-cell product candidates require bloodblood-derived starting materials which are received from healthy, consenting third-party donors through FDA- and EMA-compliant collection centers. Our manufacturing operations are conducted under Code of Federal Regulations Good Manufacturing Practices, or GMPs, as starting materials. The manufacturing process involves co-culturing and incubating viral or cancer specific antigen transformed B-cells collected from the blood of third party-donors with T-cells collected from the same donor, all underwell as Good Tissue Practices, or GTPs. GTPs are FDA regulations and guidance documents that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues and cellularcellular- and tissue basedtissue-based products, or HCT/Ps, which are human cells or tissue intended for implantation, transplant, infusion or transfer into a human recipient. The primary intent of the GTP requirements is to ensure that cell and tissue basedtissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease. FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through screening and testing.

Pursuant toThrough agreements with our June 2015 license agreement with MSK,partners, we have acquired the right to use certain manufacturing process know-how related to producing clinical research-related drug supply. This includedThese include materials to support the manufacturing of clinical trialstudy material, including key starting materials and intermediates as well as existing inventory of clinical trialstudy materials. We also have also entered into athe ability to obtain supply agreement with afrom third partyparties to ensure we have the necessary blood donated from healthy consenting third-party donors.

Employees

As of February 15, 2018,December 31, 2019, we had 185 full-time employees consisting of research and development, regulatory affairs, technical operations, commercial operations, medical affairs and general administrative functions.393 employees. We consider our relations with our employees to be good.

Corporate Information

We were incorporated in Delaware in 2012 and completed our initial public offering in October 2014.2012. Our principal corporate offices are located at 611 Gateway Blvd., Suite 900, South San Francisco, CACalifornia 94080 and our telephone number at that address is (650) 278-8930.

Available Information

Our website address is www.atarabio.com.

Available Information

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other materials with the Securities and Exchange Commission, or SEC. We are subject to the informational requirements of the Exchange Act and file or furnishmake these reports proxy statements, and other information with the SEC.  Such reports and other information filed by the Company with the SEC are available free of charge onthrough our website at investors.atarabio.com.

as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC. The public may also read and copyinformation contained on, or that can be accessed through, our website is not a part of or incorporated by reference in this Annual Report on Form 10-K or in any materials filed by Ataraother filings we make with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  SEC.

The SEC also maintains a websitean internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Yourisks. Investors should carefully consider all of the risk factors and uncertainties described below, in addition to the other information contained in this Annual Report on Form 10-K, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated and combined financial statements and related notes, before investing in our common stock.

The risks described below may not be the only ones relating to our company and additional risks that we currently believe are immaterial may also affect us. If any of the followingthese risks, including those described below, materialize, our business, competitive position, reputation, financial condition, and results of operations, cash flows and future prospects could be seriously harmed. In these circumstances, the market price of our common stock could decline, and youinvestors may lose all or a part of yourtheir investment.

Risks Related to Our Financial Results and Capital Needs

We have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future.

We are a clinical-stage biopharmaceutical company. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to prove effective, gain regulatory approval or become commercially viable. We do not have any products approved by regulatory authorities and have not generated any revenues from product sales or otherwise to date, and have incurred significant research, development and other expenses related to our ongoing operations and expect to continue to incur such expenses. As a result, we have not been profitable and have incurred significant operating losses in every reporting period since our inception. For the year ended December 31, 2017,2019, we reported a net loss of $119.5$291.0 million and we had an accumulated deficit of $296.7$818.0 million as of December 31, 2017.2019.

We do not expect to generate revenues for many years,the foreseeable future, if at all. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate these losses to increase as we continue to research, develop and seek regulatory approvals for our product candidates and any additional product candidates we may acquire, in-license or develop, and potentially begin to commercialize product candidates that may achieve regulatory approval. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. If any of our product candidates fails in clinical trialsstudies or does not gain regulatory approval, or if approved, fails to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. We anticipate that our expenses will increase in the future as we continue to invest in research and development of our existing product candidates, investigate and potentially acquire new product candidates and expand our manufacturing and commercialization activities.

We have a limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Our company was formed in August 2012. Our operations to date have been limited to organizing and staffing our company, acquiring product and technology rights and conducting product development activities for our product candidates. We have not yet demonstrated our ability to successfully complete any Phase 2 or Phase 3 clinical trials,studies, obtain regulatory approval, consistently manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization for any of our product candidates. In addition, the adoptive immunotherapy technology underlying our T-cell product candidates, including our next-generation CAR T programs, is new and largely unproven. Any predictions about our future success, performance or viability, particularly in view of the rapidly evolving cancer immunotherapy field, may not be as accurate as they could be if we had a longer operating history or approved products on the market.

In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition. We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, any of our quarterly or annual periods’ results are not indicative of future operating performance.

We currently have no source of revenues. We may never generate revenues or achieve profitability.

To date, we have not generated any revenues from product sales or otherwise. Even if we are able to successfully achieve regulatory approval for our product candidates, we do not know when we will generate revenues or become profitable, if at all. Our ability to generate revenues from product sales and achieve profitability will depend on our ability to successfully commercialize products, including any of our current product candidates, and other product candidates that we may develop, in-license or acquire in the future. Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to:

Our revenues for any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable disease patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenues from sales of suchour products, even if approved. In addition, we anticipate incurring significant costs associated with commercializing any approved product candidate. As a result, even if we generate revenues, we may not become profitable and may need to obtain additional funding to continue operations. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce our operations.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

We expect to expend substantial resources for the foreseeable future to continue the clinical development and manufacturing of our T-cell immunotherapy product candidates, and the advancement and expansion of our preclinical research pipeline. We also expect to continue to expend resources for the development and manufacturing of product candidates and the technology we have licensed or have an exclusive right to license from QIMR Berghofer, including ATA188 and ATA190, which are in development for the treatment of MS.our partners. These expenditures will include costs associated with research and development, potentially acquiring or licensing new product candidates or technologies, conducting preclinical studies and clinical trialsstudies and potentially obtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for

sale, if any. Under the terms of our license agreements with each of MSK and QIMR Berghofer,our partners, we are obligated to make payments upon the achievement of certain development, regulatory and commercial milestones. We will also need to make significant expenditures to develop a commercial organization capable of sales, marketing and distribution for any products, if any, that we intend to sell ourselves in the markets in which we choose to commercialize on our own. In addition, other unanticipated costs may arise. Because the design and outcome of our ongoing, planned and anticipated clinical trialsstudies is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates.

Our future capital requirements depend on many factors, including:

We believe that our existing cash, cash equivalents and short-term investments as of December 31, 2019, together with net proceeds from the sale of our common stock from our 2019 ATM Facility in January 2020, described in Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources section of this Annual Report on Form 10-K, will be sufficient to fund our planned operations into the first halfsecond quarter of 2020.2021. As of December 31, 2017,2019, we had total cash, cash equivalents and short-term investments of $166.1 million, and in January 2018, we completed an underwritten public offering, resulting in net proceeds to us of approximately $131.4$259.1 million. However, our operating plan may change as a result of many factors currently unknown to us, and we may need additional funds sooner than planned. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

We do not have any committed external source of funds. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trialsstudies or other development activities for one or more of our product candidates or delay, limit, reduce or terminate our establishment of sales, marketing and marketingdistribution capabilities or other activities that may be necessary to commercialize our product candidates.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on terms that are unfavorable terms to us.

We may seek additional capital through a variety of means, including through private and public equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, youror if existing holders of warrants exercise their rights to purchase common stock, the ownership interest of existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect yourthe rights as a stockholder.of stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such asincluding incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends. If we raise additional funds from third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts for our product candidates, or grant to others the rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.ourselves or take other actions that are adverse to our business.

Risks Related to the Development of Our Product Candidates

We are very early in our development efforts and have only a small number of product candidates in clinical development. All of our other product candidates are still in preclinical development. If we or our collaborators are unable to successfully develop and commercialize product candidates or experience significant delays in doing so, our business may be materially harmed.

We are very early in our development efforts, and only a small number of our product candidates are in clinical development. AllThe majority of our other product candidates are currently in preclinical development. We have invested substantially all of our efforts and financialsubstantial resources in identifying and developing potential product candidates, and conducting preclinical and clinical studies, clinical trialsmanufacturing activities and manufacturing activities.preparing for the potential commercial launch of our product candidates. Our ability to generate revenues, which we do not expect will occur for manyseveral years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates. The success of our product candidates will depend on severalmany factors, including the following:

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which could materially harm our business.

Our future success is dependent on the regulatory approval of our product candidates.

We do not have any products that have gained regulatory approval. Currently, our onlyprioritized clinical-stage product candidates are tabelecleucel (formerly known as ATA129), for which we recently initiated Phase 3 clinical trials in the United States, ATA188, which is in a Phase 1 clinical trial, ATA190, which is in a Phase 1 clinical trial conducted by QIMR Berghofer,include tab‑cel^® and ATA230, which is in Phase 2 clinical trials.ATA188. Our business is substantially dependent on our ability to obtain regulatory approval for, and, if approved, to successfully commercialize our product candidates in a timely manner.

We cannot commercialize product candidates in the United StatesU.S. without first obtaining regulatory approval for the product from the FDA; similarly, we cannot commercialize product candidates outside of the United StatesU.S. without obtaining regulatory approval from comparable foreign regulatory authorities. Before obtaining regulatory approvals for the commercial sale of any product candidate for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and clinical trials, generally including two well-controlled Phase 3 trials,studies, that the product candidate is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate.candidate to assure safety, purity and potency.

The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trialsstudies and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates or any future product candidates will ever obtain regulatory approval.

Our product candidates could fail to receive regulatory approval from the FDA or a comparable foreign regulatory authority for many reasons, including:

The FDA or a comparable foreign regulatory authority may require more information, including additional preclinical or clinical data to support approval, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program. If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request (including failing to approve the most commercially promising indications), may grant approval contingent on the performance of costly post-marketing clinical trials,studies, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

In addition, the clinical study requirements of the FDA, EMA and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate are determined according to the type, complexity, novelty and intended use and market of the potential products. The regulatory approval process for novel product candidates, such as our novel T-cell product candidates and next-generation CAR T programs, can be more complex and consequently more expensive and take longer than for other, better known or extensively studied pharmaceutical or other product candidates. Approvals by the EMA and FDA for existing autologous CAR T therapies, such as Novartis’s Kymriah and Gilead’s Yescarta, may not be indicative of what these regulators may require for approval of our therapies. Moreover, our product candidates may not perform successfully in clinical studies or may be associated with adverse events that distinguish them from that which have previously been approved, such as existing autologous CAR T therapies. For instance, allogeneic product candidates may result in adverse events not experienced with autologous products.

In January 2019, the U.S. federal government entered a prolonged shutdown suspending services deemed non-essential, including certain activities of the FDA, and U.S. politicians have expressed interest in future similar shutdowns as a negotiating tactic. Our development and commercialization activities could be harmed or delayed by a similar shutdown of the U.S. federal government in the future, which may significantly delay the FDA’s ability to timely review and process any submissions we have filed or may file or cause other regulatory delays.

Even if a product candidate were to successfully obtain approval from the FDA and comparable foreign regulatory authorities, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. If we are unable to obtain regulatory approval for one of our product candidates in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding to continue the development of that product or generate revenues attributable to that product candidate. Also, any regulatory approval of our current or future product candidates, once obtained, may be withdrawn.

Our T-cell immunotherapy product candidates and our next-generation CAR T programs represent new therapeutic approaches that could result in heightened regulatory scrutiny, delays in clinical development or delays in or our inability to achieve regulatory approval, commercialization or commercializationpayor coverage of our product candidates.

Our future success is dependent on the successful development of T-cell immunotherapies and our next-generation CAR T programs in general and our development product candidates in particular. Because these programs, particularly our pipeline of allogeneic T-cell product candidates that are bioengineered from donors, represent a new approach to immunotherapy for the treatment of cancer and other diseases, developing and commercializing our product candidates subject us to a number of challenges, including:

We cannot be sure that the manufacturing processes used in connection with our T-cell immunotherapy product candidates will yield a sufficient supply of satisfactory products that are safe, pure and effective,potent, comparable to those T-cellsT cells produced by MSK or QIMR Berghoferour partners historically, scalable or profitable.

Moreover, actual or perceived of safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials,studies, or if approved by applicable regulatory authorities, of physicians to subscribe to the novel treatment mechanics. The FDA or other applicable regulatory authorities may ask for specific post-market requirements, and additional information informing benefits or risks of our products may emerge at any time prior to or after regulatory approval.

Physicians, hospitals and third-party payors often are slow to adopt new products, technologies and treatment practices that require additional upfront costs and training. Physicians may not be willing to undergo training to adopt this novel therapy, may decide the therapy is too complex to adopt without appropriate training or not cost-efficient, and may choose not to administer the therapy. Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs.

The results of preclinical studies or earlier clinical trialsstudies are not necessarily predictive of future results. Our existing product candidates in clinical trials,studies, and any other product candidate we advance into clinical trials,studies, may not have favorable results in later clinical trialsstudies or receive regulatory approval.

Success in preclinical studies and early clinical trialsstudies does not ensure that later clinical trialsstudies will generate adequate data to demonstrate the efficacy and safety of an investigational drug. ALikewise, a number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience than us, have suffered significant setbacks in clinical trials,studies, even after seeing promising results in earlier preclinical studies or clinical trials. For example, in December 2015, we announced that our Phase 2 proof-of-concept trial of PINTA 745 did not meet its primary endpoint even though earlier clinical trials and preclinical studies had indicated that it might be effective to treat protein energy wasting in patients with end stage renal disease.studies. Despite the results reported in earlier preclinical studies or clinical trialsstudies for our product candidates, we do not know whether the clinical trialsstudies we may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market tabelecleucel, ATA520,tab-cel^®, ATA188, ATA190, ATA230any product candidates resulting from our next-generation CAR T programs or any of our other product candidates in any particular jurisdiction. Tabelecleucel

Tab-cel^®has been predominantly evaluated in a single-center trialstudies under investigator-sponsored INDs held by MSK and in our EAP, utilizing a different response criteria and endpoints from those we may utilize in later clinical trials. For example, the primary endpoint of both the MATCH and ALLELE trials is confirmed best objective response rate defined as the percent of patients achieving either a complete or partial response to treatment with tabelecleucel confirmed after the initial tumor assessment showing a response. In contrast, the prior MSK trials did not include response confirmation.studies. The findings may not be reproducible in multi-center trialslate phase studies we conduct. For instance, the current protocol for our ALLELE study is designed to rule out a 20% ORR as the null hypothesis. This means that if the lower bound of the 95% confidence interval on ORR among patients receiving at least one dose of tab-cel^® exceeds 20% at the end of the study, then the study would be expected to meet the primary endpoint for the treatment of PTLD. For example, assuming enrollment of 33 patients in a cohort of ALLELE, an observed ORR above approximately 37% would be expected to meet the primary endpoint for that cohort. In addition, our amended ALLELE study protocol includes an interim analysis as well as a final study analysis. Depending on discussions with regulators, we may, for example, submit a filing on the basis of interim data from a subset of the required patients or submit a filing on the basis of the final data. A filing based on interim data would impact the required ORR.

For regulatory approvals of tab-cel^®, we areplan on using independent radiologist and/or oncologist assessment of responses which may not correlate with the MSK reportedinvestigator-reported assessments. In addition, the Phase 2 clinical trialsstudies with tabelecleuceltab-cel^® enrolled a heterogeneous group of patients with a variety of EBV-associated malignancies, including but not limited to EBV+ PTLD after HCT and EBV+ PTLD after SOT. These Phase 2 trialsstudies were not prospectively designed to evaluate the efficacy of tabelecleuceltab-cel^® in the treatment of a single disease state for which we may later seek approval. If conditional marketing authorization is granted from the European Commission, we may be subject to ongoing obligations, including the need to provide additional clinical data at a later stage to confirm a positive benefit/risk balance.

Moreover, final trialstudy results may not be consistent with interim trialstudy results. Efficacy data from prospectively designed trialsstudies may differ significantly from those obtained from retrospective subgroup analyses. In addition, clinical data obtained from a clinical trialstudy with an autologousallogeneic product candidate such as ATA188 may not yield the same or better results withas compared to an allogeneicautologous product candidate.candidate such as ATA190. If later-stage clinical trialsstudies do not produce favorable results, our ability to achieve regulatory approval for any of our product candidates may be adversely impacted. Even if we believe that we have adequate data to support an application for regulatory approval to market any of our product candidates, the FDA or other regulatory authorities may not agree and may require that we conduct additional clinical trials.studies.

Interim “top line” and preliminary data from our clinical studies that we may announce or share with regulatory authorities from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may announce or share with regulatory authoritiesinterim “top line” or preliminary data from our clinical studies. Interim data from clinical studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or “top line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously announced. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could impact the regulatory approval of, and significantly harm the prospects of any product candidate that is impacted by the applicable data.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trialstudy process. Product candidates in later stages of clinical trialsstudies may fail to show the desired safety and efficacy traits despite having progressed through preclinical and clinical trials.studies.

We may experience delays in our ongoing or future clinical trialsstudies and we do not know whether planned clinical trialsstudies will begin or enroll subjects on time, will need to be redesigned or will be completed on schedule, if at all. There can be no assurance that the FDA or comparable foreign regulatory authorities will not put clinical trialsstudies of any of our product candidates on clinical hold in the future. Clinical trialsstudies may be delayed, suspended or prematurely terminated for a variety of reasons, such as:

Patient enrollment, a significant factor in the timing of clinical trials,studies, is affected by many factors including including:

As an example, we activated additional clinical sites over the course of 2018 and increased HLA coverage during this period. As a result, enrollment in our studies was limited in the early part of 2018 and increased through the course of the year as we increased clinical sites and HLA coverage. However, in May 2019, we announced that enrollment in our Phase 3 studies of tab-cel^® for patients with EBV+ PTLD was proceeding slower than anticipated. Many of our product candidates are designed to treat rare diseases, and as a result the pool of potential patients with respect to a given disease is small. We may not be able to initiate or continue to support clinical trialsstudies of tabelecleucel,tab-cel^®, ATA188 ATA520, ATA230 or any futureother product candidates if we are unable to locate and enroll a sufficient number of eligible participants in these trialsstudies as required by the FDA or other regulatory authorities. Even if we are able to enroll a sufficient number of patients in our clinical trials,studies, if the pace of enrollment is slower than we expect, the development costs for our product candidates may increase and

the completion of our trialsstudies may be delayed or our trialsstudies could become too expensive to complete.

We rely on CROs, other vendors and clinical trialstudy sites to ensure the proper and timely conduct of our clinical trials,studies, and while we have agreements governing their committed activities, we have limited influence over their actual performance.

If we experience delays or quality issues in the conduct, completion or termination of any clinical trialstudy of our product candidates, the approval and commercial prospects of such product candidate will be harmed, and our ability to generate product revenues from such product candidate will be delayed. In addition, any delays in completing our clinical trialsstudies will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any delays in completing our clinical trialsstudies for our product candidates may also decrease the period of commercial exclusivity. In addition, many of the factors that could cause a delay in the commencement or completion of clinical trialsstudies may also ultimately lead to the denial of regulatory approval of our product candidates.

Our product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval.

Undesirable side effects caused by our product candidates, their delivery methods or dosage levels could cause us or regulatory authorities to interrupt, delay or halt clinical trialsstudies and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authority. For example, hypoxia has been observed in some patients receiving ATA230 for the treatment of their CMV pneumonitis. As a result of safety or toxicity issues that we may experience in our clinical trials,studies, we may not receive approval to market any product candidates, which could prevent us from ever generating revenues or achieving profitability. Results of our trialsstudies could reveal an unacceptably high severity and incidence of side effects.effects, or side effects outweighing the benefits of our product candidates. In such an event, our trialsstudies could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. The drug-related side effects could affect patient recruitment or the ability of enrolled subjects to complete the trialstudy or result in potential product liability claims. Any of these occurrences may have a material adverse effect on our business, results of operations, financial condition, cash flows and future prospects.

Additionally, if any of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including that:

Any of these events could prevent us from achieving or maintaining market acceptance of the particularaffected product candidate, if approved.approved by applicable regulatory authorities.

The market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small.

The FDA often approves new therapies initially only for use in patients with relapsed or refractory metastatic disease. We expect to initially seek approval of tab-cel^® and our other product candidates in this setting. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval in earlier lines of treatment and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved, would be approved for earlier lines of therapy, and, prior to any such approvals, we will have to conduct additional clinical trials.

Our projections of both the number of people who have the diseases we are targeting, as well as the subset of people with these diseases in a position to receive second or later lines of therapy, and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or our own market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. For instance, we expect our lead product candidate, tab-cel^®, to initially target a small patient population that suffers from aggressive EBV+PTLD who have failed rituximab or rituximab plus chemotherapy. Even if we obtain significant market share for our product candidates, because the potential target populations are small, we may never achieve profitability without obtaining regulatory approval for additional indications.

We may not be able to obtain or maintain orphan drug exclusivity for our product candidates.

Regulatory authorities in some jurisdictions, including the United StatesU.S. and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States.U.S. Both the FDA and the EMA have granted us orphan statusdesignation for tabelecleuceltab-cel^® for EBV+ PTLD after HCT or SOT. EMA has granted us orphan status for ATA230 for CMV infection in patients with impaired cell-mediated immunity and FDA has granted us orphan status for the ATA230 for the treatment of CMV viremia and disease in immunocompromised patients.

Generally, if a product with an orphan drug designation subsequently receives the first regulatory approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same drug for that time period. The applicable period is seven years in the United StatesU.S. and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Even if we obtain orphan drug exclusivity for a product, that exclusivity may not be maintained or effectively protect the product from competition because different drugs can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve a new drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

Breakthrough Therapy Designation by the FDA may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval.

Although we have obtained Breakthrough Therapy Designation, or BTD, for tab-cel^® for EBV+ PTLD, this may not lead to faster development or regulatory review and does not increase our likelihood of success. A breakthrough therapy is defined as a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug, or biologic in our case, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For product candidates that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the study can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Biologics designated as breakthrough therapies by the FDA may also be eligible for priority review.

Designation as a breakthrough therapy is within the discretion of the FDA. Receipt of a BTD for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited the FDA review procedures and does not assure ultimate approval by the FDA. In addition, the FDA may later decide that the product no longer meets the conditions for qualification and rescind BTD or decide that the time period for FDA review or approval will not be shortened.

Failure to obtain regulatory approval in international jurisdictions would prevent our product candidates from being marketed abroad.

In addition to regulations in the United States,U.S., to market and sell our products in the European Union, many Asian countries and other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements.requirements, both from a clinical and manufacturing perspective. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United StatesU.S. generally includes all of the risks associated with obtaining FDA approval. Clinical trialsstudies accepted in one country may not be accepted by regulatory authorities in other countries. In addition, many countries outside the United StatesU.S. require that a product be approved for reimbursement before it can be approved for sale in that country. A product candidate that has been approved for sale in a particular country may not receive reimbursement approval in that country. We may not be able to obtain approvals from regulatory authorities or payor authorities outside the United StatesU.S. on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory or payor authorities in other countries or jurisdictions, and approval by one regulatory or payor authority outside the United StatesU.S. does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any market. If we are unable to obtain approval of any of our product candidates by regulatory or payor authorities in the European Union, Asia or elsewhere, the commercial prospects of that product candidate may be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition.diminished.

Even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties.

Even if we obtain regulatory approval for a product candidate, it would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, adverse event reporting, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-marketing information. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance by us and/or our contract manufacturing organizations, or CMOs, and CROs for any post-approval clinical trialsstudies that we conduct. The safety profile of any product will continue to be closely monitored by the FDA and comparable foreign regulatory authorities after approval. If the FDA or comparable foreign regulatory authorities become aware of new safety information after approval of any of our product candidates, they may require labeling changes or establishment of a risk evaluation and mitigation strategy, impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.

In addition, manufacturers of drug products and their facilities are subject to initial and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current good manufacturing practices, or cGMP, current Good Clinical Practices, or GCP, current good tissue practices, or cGTP, and other regulations. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may:

The occurrence of any event or penalty described above may inhibit our ability to successfully commercialize our products and generate revenues.products.

Advertising and promotion of any product candidate that obtains approval in the United StatesU.S. will be heavily scrutinized by the FDA, the Department of Justice, or the DOJ, the Office of Inspector General of the Department of Health and Human Services, or HHS, state attorneys general, members of the U.S. Congress and the public. Additionally, advertising and promotion of any product candidate that obtains approval outside of the United StatesU.S. will be heavily scrutinized by comparable foreign regulatory authorities.entities and stakeholders. Violations, including actual or alleged promotion of our products for unapproved or off-label uses, are subject to enforcement letters, inquiries and investigations, and civil and criminal sanctions by the FDA.FDA or comparable foreign bodies. Any actual or alleged failure to comply with labeling and promotion requirements may have a negative impact on our business.result in fines, warning letters, mandates to corrective information to healthcare practitioners, injunctions, or civil or criminal penalties.

Regulations, guidelines and recommendations published by various government agencies and organizations may affect the use of our product candidates.

AlthoughChanges to regulations, recommendations or other guidelines advocating alternative therapies for the indications we treat could result in decreased use of our products. For example, although treatment with EBV specific T-cellsEBV-specific T cells is recognized as a recommended treatment for persistent or progressive EBV+ PTLD as set forth in the 2017 National Comprehensive Cancer Network Guidelines, future guidelines from governmental agencies, professional societies, practice management groups, private health/science foundations and other organizations involved in various diseases may relatecould lead to such matters asdecreased ability of developing our product usage, dosage, and route of administration and use of relatedcandidates, or competing therapies. Changes to these recommendations or other guidelines advocating alternative therapies could result in decreased use of our product candidates, which may adversely affect our results of operations.products once approved by applicable regulatory authorities.

We may not successfully identify, acquire, develop or commercialize new potential product candidates.

Part of our business strategy is to expand our product candidate pipeline by identifying and validating new product candidates, which we may develop ourselves, in-license or otherwise acquire from others. In addition, in the event that our existing product candidates do not receive regulatory approval or are not successfully commercialized, then the success of our business will depend on our ability to expand our product pipeline through in-licensing or other acquisitions. We may be unable to identify relevant product candidates. If we do identify such product candidates, we may be unable to reach acceptable terms with any third party from which we desire to in-license or acquire them.

We may not realize the benefits of strategic alliances that we may form in the future.future or of potential future product acquisitions or licenses.

We may desire to form strategic alliances, create joint ventures or collaborations, or enter into licensing arrangements with third parties or acquire products or business, in each case that we believe will complement or augment our existing business. These relationships or transactions, or those like them, may require us to incur nonrecurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, reduce the potential profitability of the products that are the subject of the relationship or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic alliances and transactions and the negotiation process is time-consuming and complex.complex and there can be no assurance that we can enter into any of these transactions even if we desire to do so. Moreover, we may not be successful in our efforts to establish a strategic alliance or other alternative arrangements for any future product candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs may be deemed to be at too early a stage of development for collaborative effort and third parties may not view our product candidates and programs as having the requisite potential to demonstrate safety and efficacy. If we license products or acquire businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture. We cannot be certain that, following a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transaction.positive benefit/risk profile. Any delays in entering into new strategic alliances agreements related to our product candidates could also delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market.

If we license products or acquire businesses, we may not be able to realize the benefit of these transactions if we are unable to successfully integrate them with our existing operations and company culture. We cannot be certain that, following an acquisition or license, we will achieve the financial or strategic results that would justify the transaction.

Risks Related to Manufacturing

We are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidates.

ConcurrentConcurrently with the license of our existing product candidates, we acquired manufacturing process know-how and, certainin some cases, inventory of process intermediates as well as certain supplies intended forand clinical use,materials from MSK and QIMR Berghofer. To facilitate the manufacture of additional drug product for our Phase 3 clinical trials using the MSKpartners. Transferring manufacturing processes, testing and process know-how, we undertook the process of transferring this know-how to our CMO. Transferring manufacturing testing and processes andassociated know-how is complex and involves review and incorporation of both documented and undocumented processes that may have evolved over time. In addition, transferring production to different facilities may require utilization of new or different processes to meet the specific requirements of a given facility. WeEach stage is retroactively and concurrently verified to be compliant with appropriate regulations. As a result, there is a risk that all relevant know-how was not adequately transferred to us from our CMOs willpartners or that previous execution was not compliant with applicable regulations.

In addition, we need to conduct significant development and scale-up work to transfer these processes and manufacture each of our product candidates for various studies, trialsclinical studies and commercial launch readiness. We cannot be certain that all relevant know-how has been adequately incorporated intoTo the extent we elect to transfer manufacturing process until the completion of studies (and the related evaluations) intendedwithin our network, we are required to demonstrate that the comparability of material previously produced by MSK with that generated by our CMO.product manufactured in the new or “receiving” facility is comparable to the product manufactured in the original or “sending” facility. The inability to manufacturedemonstrate to each of the applicable regulatory authorities that comparable drug product by us or our CMOwas manufactured could delay the continued development of our product candidates.  Although we believe we have manufactured material that is comparable to that previously produced by MSK, the FDA, EMA, and other comparable regulatory authorities may not agree.

The processes by which our product candidates are manufactured were initially developed by MSK or QIMR Berghoferour partners for clinical purposes. We and our CMO intend to evolve thesethe existing processes for morewith our partners to support advanced clinical trials or commercialization.studies and commercialization requirements. Developing commercially viable manufacturing processes is a difficult and uncertain task, and there are risks associated with scaling to the level required for advanced clinical trialsstudies or commercialization, including cost overruns, potential problems with process scale-up, process reproducibility, stability issues, consistency and timely availability of reagents or raw materials. The manufacturing facilities in which our product candidates will be made could be adversely affected by earthquakes and other natural disasters, equipment failures, labor shortages, power failures, and numerous other factors.

Additionally, the process of manufacturing biologics and cellular therapies is complex, highly regulated and subject to several risks, including but not limited to:

Any adverse developments affecting manufacturing operations for our product candidates may result in lot failures, inventory shortages, shipment delays, inventory shortages, lot failures,product withdrawals or recalls or other interruptions in the supply of our drug product which could delay the development of our product candidates. We may also have to write off inventory, incur other charges and expenses for supply of drug product that fails to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. Inability to meet the demand for our product candidates could damage our reputation and the reputation of our products among physicians, healthcare payors, patients or the medical community that supports our product development efforts, including hospitals and cancer treatment centers, which could adversely affect our ability to operate our business and our results of operations.outpatient clinics.

We intend to manufacture at least a portion of our product candidates ourselves. Delays in building, commissioning and receiving regulatory approvals for our manufacturing facility could delay our development plans and thereby limit our ability to generate revenues.

In February 2017, we entered into a lease to build aThe research and development and process and analytical development labs within our manufacturing facility in Thousand Oaks, California which we intendare currently supporting preclinical development activities. The facility commissioning and qualification activities required to use to manufacture preclinical and clinical trial materials forsupport production at our product candidates. This new manufacturing facility is expected to bewere completed in 2018. Product-specific qualification to support clinical development is complete and commercial production in 2019. This project may result in unanticipated delays and cost more than expected due to a number of factors, includingqualification activities are ongoing. If the appropriate regulatory requirements. If construction or regulatory approval ofapprovals for our new facility isare delayed, we may not be able to manufacture sufficient quantities of our drug candidates, which would limit our development activities and our opportunities for growth. Cost overruns associated with constructing our manufacturing facility could require us to raise additional funds from other sources.

In addition to the similar manufacturing risks described in "Risks“Risks Related to Our Dependence on Third Parties,"” our manufacturing facility will be subject to ongoing, periodic inspection by the FDA, EMA or other comparable regulatory agencies to ensure compliance with cGMP and GTP. Our failure to follow and document our adherence to such cGMP and GTPthese regulations or other regulatory requirements may lead to significant delays in the availability of products for clinical or, in the future, commercial use, may result in the termination of or a hold on a clinical trial,study, or may delay or prevent filing or approval of commercial marketing applications for our drugs.product candidates. We also may encounter problems with the following:

Failure to comply with applicable regulations could also result in sanctions being imposed on us, including fines, injunctions, civil penalties, a requirement to suspend or put on hold one or more of our clinical trials,studies, failure of regulatory authorities to grant marketing approval of our drug candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of drug candidates, operating restrictions and criminal prosecutions, any of which could harm our business.

Developing advanced manufacturing techniques and process controls is required to fully utilize our facility. AdvancesWithout further investment, advances in manufacturing techniques may render our facility and equipment inadequate or obsolete, without further investment.obsolete.

In order to produceA number of the product candidates in our drugs in the quantities that we believe will be requiredportfolio, if approved by applicable regulatory authorities, may require significant commercial supply to meet anticipated market demand of any of our drug candidates if approved,demand. In these cases, we willmay need to increase, or "scale“scale up,"” the production process by a significant factor over the initial level of production. If we are unable to do so, are delayed, or if the cost of this scale up is not economically feasible for us or we cannot find a third-party supplier, we may not be able to produce our drugsproduct candidates in a sufficient quantity to meet future demand.

If our sole clinical or commercial manufacturing facility or our CMO is damaged or destroyed or production at this facilitythese facilities is otherwise interrupted, our business and prospects would be negatively affected.

If any manufacturing facility in our manufacturing facilitynetwork, or the equipment in itthese facilities, is either damaged or destroyed, we may not be able to quickly or inexpensively replace our manufacturing capacity or replace it at all. In the event of a temporary or protracted loss of thisa facility or its equipment, we may not be able to transfer manufacturing to a third party.party in the time required to maintain supply. Even if we could transfer manufacturing to a third party, the shift would likely be expensive and time-consuming, particularly since the new facility would need to comply with the necessary regulatory requirements and we would need FDAor may require regulatory approval before selling any products manufactured at that facility. Such an event could delay our clinical trialsstudies or reduce our commercial product sales.

Currently, we maintain insurance coverage against damage to our property and to cover business interruption and research and development restoration expenses. However, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer. We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facility or processes.

Risks Related to Our Dependence on Third Parties

We rely on third parties to conduct our preclinical studiesMaintaining clinical and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if we lose any of our CROs, we may not be able to obtain regulatory approval for or commercialize our product candidates on a timely basis, if at all.

We have relied upon and plan to continue to rely upon third-party CROs and contractors to monitor and manage data for our ongoing preclinical and clinical programs. For example, our collaborating investigators at MSK manage the conduct of the ongoing clinical trials for ATA520 as well as perform the analysis, publication and presentation of data and results related to this program and the tabelecleucel and ATA230 programs.  We also rely on studies previously conducted by MSK. Our collaborating investigators at QIMR Berghofer manage the conduct of the ongoing clinical trials for ATA190. We are utilizing a CRO for our EAP trial of tabelecleucel and for our open Phase 3 trials for EBV+ PTLD after HCT and SOT. We rely on these parties for the execution of our preclinical studies and clinical trials, and we control only some aspects of their activities. Nevertheless, we are responsible for ensuring that each of our trialscommercial timelines is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities. We also rely on third parties to assist in conducting our preclinical studies in accordance with Good Laboratory Practices, or GLP, and the Animal Welfare Act requirements. We and our CROs are required to comply with federal regulations, GCP, which are international standards meant to protect the rights and health of patients that are enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities for all of our products in clinical development, and cGTP, which are standards designed to ensure that cell and tissue based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable diseases. Regulatory authorities enforce GCP and cGTP through periodic inspections of trial sponsors, principal investigators and trial sites. If we, or any of our partners or CROs, fail to comply with applicable GCP or cGTP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our regulatory applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP or cGTP requirements. In addition, our clinical trials must be conducted with product produced under cGMP and cGTP requirements. We are also required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, clinicaltrials.gov, within a specified timeframe. Failure to comply with these regulations may require us to repeat preclinical studies and clinical trials, which would delay the regulatory approval process and result in adverse publicity.

Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources, including experienced staff, to our ongoing clinical, nonclinical and preclinical programs. They may also have relationships with other entities, some of which may be our competitors. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. CRO or contractor errors could cause our results of operations and the commercial prospects for our product candidates to be harmed, our costs to increase and our ability to generate revenues to be delayed.

Our internal capacity for clinical trial execution and management is limited and therefore we have relied on third parties. Outsourcing these functions involves risk that third parties may not perform to our standards, may not produce results or data in a timely manner or may fail to perform at all. Other data from studies or trials previously conducted by MSK or QIMR Berghofer may emerge in the future. In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. We currently have a small number of employees, which limits the internal resources we have available to identify and monitor our third-party providers. To the extent we are unable to identify and successfully manage the performance of third-party service providers in the future, our business may be adversely affected. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impactdependent on our business, financial condition and prospects.

Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addition, some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated. Identifying, qualifying and managing performance of third-party service providers can be difficult, time consuming and cause delays in our development programs. In addition, there is a natural transition period when a new CRO commences work and the new CRO may not provide the same type or level of services as the original provider. If any of our relationships with our third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so timely or on commercially reasonable terms.

We have limited experience manufacturing our product candidates on a clinical scale and no experience manufacturing on a commercial scale. We are, and expect to continue to be, dependent on third parties for the manufacturing of our product candidates and ourend-to-end supply chain andnetwork to support manufacturing; if we experience problems with any of theseour third parties, the manufacturingparty suppliers we may delay development and/or commercialization of our product candidates could be delayed.candidates.

We do not currently operate our own facilities for the manufacturing of our product candidates.  In the case of tabelecleucel, we currently rely in part on our CMOCMOs or our partners for the production of thisour product candidatecandidates and the acquisition of materials incorporated in or used in the manufacturing or testing of theseour product candidates. In the case of ATA230, we currently rely on MSK for the production of this product candidate and acquisition of the materials incorporated in or used in the manufacturing or testing. In the case of ATA520, we currently rely on our CMO for the production of this product candidate.  In the case of ATA188 and ATA190, we currently rely on an affiliate of QIMR Berghofer for the production of these product candidates and acquisition of the materials incorporated in or used in the manufacturing or testing. Our CMOs or partners are not our employees, and except for remedies available to us under our agreements with suchour CMOs or partners, we cannot directly control whether or not they devote sufficient time and resources, including experienced staff, to the manufacturing of supply for our ongoing clinical, nonclinical and preclinical programs.

To meet our projected supply needs for clinical and commercial materials to support our activities through regulatory approval and commercial manufacturing of tab-cel^®, ATA188, ATA190, ATA520 and ATA230,any product candidates resulting from our next-generation CAR T programs or any other product candidates, we will need to transition the manufacturing of suchthese materials to a CMO and/or our own facility, and such CMOs orfacility. Regardless of where production occurs, we will need to develop relationships with suppliers of critical starting materials or other materials,reagents, increase the scale of production and demonstrate comparability of the material produced at these facilities to the material that was previously produced. Transferring manufacturing processes and know-how is complex and involves review and incorporation of both documented and undocumented processes that may have evolved over time.

In addition, transferring production to different facilities may require utilization of new or different processes to meet the specific requirements of a given facility. We would expect additional comparability work will also need to be conducted to support the transfer of certain manufacturing processes and process improvements. We cannot be certain that all relevant know-how and data has been adequately incorporated into the manufacturing process until the completion of studies (and the related evaluations) intended to demonstrate the comparability of material previously produced with that generated by our CMO.  For example, we generated and evaluated data from new material manufactured by our CMO and identified certain assays that need refinement prior to initiating the Phase 3 trials.  We have generated comparability data using our refined assays and cell lines produced by our CMO which data we believe supports the demonstration of comparability, and we recently initiated the Phase 3 trials in the U.S. following discussions with FDA.

If we are not able to successfully transfer this know-how and produce comparable product candidates, our ability to further develop and manufacture our product candidates may be negatively impacted. We

While our manufacturing facility in Thousand Oaks, California provides us with flexibility within our manufacturing network, we still may need to identify additional CMOs for continued production of supply for allsome of our product candidates. In addition, givenGiven the nature of our manufacturing processes, for our T-cell immunotherapy product candidates, the number of CMOs who possess the requisite skill and capability to manufacture our T-cell immunotherapy product candidates is limited. We have not yet identified alternate suppliers in the event the current CMOs that we utilize are unable to scale production, or if we otherwise experience any problems with them. In February 2017, we entered into a lease agreement to build our own cellular therapy manufacturing facility in Thousand Oaks, CA.  At this facility, we intend to manufacture our product candidates for clinical or commercial use, if approved.  

Manufacturing cellular therapies is complicated and tightly regulated by the FDA and comparable regulatory authorities around the world, and although alternative third-party suppliers with the necessary manufacturing and regulatory expertise and facilities exist, it could be expensive and take a significant amount of time to arrange for alternative suppliers, transfer manufacturing procedures to these alternative suppliers, and demonstrate comparability of material produced by such new suppliers. New manufacturers of any product candidate or intermediate would be required to qualify under applicable regulatory requirements. These manufacturers may not be able to manufacture our compoundsproduct candidates at costs, or in sufficient quantities, or in a timely manner necessary to complete development of our product candidates or make commercially successful products. If we are unable to arrange for alternative third-party manufacturing sources, or to do so on commercially reasonable terms or in a timely manner, we may not be able to complete development of our product candidates, or market or distribute them. In addition, should the FDA or comparable regulatory authorities not agree with our product candidate specifications and comparability assessments for these materials, further clinical development of our product candidate could be substantially delayed and we would incur substantial additional expenses.

Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including reliance on the third party for regulatory compliance and quality assurance, the possibility that the third-party manufacturer does not maintain the financial resources to meet its obligations under the manufacturing agreement, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control, including a failure to synthesize and manufacture our product candidates or any products we may eventually commercialize in accordance with our specifications, misappropriation of our proprietary information, including our trade secrets and know-how, and the possibility of termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or damaging to us. In addition, the FDA and other regulatory authorities require that our product candidates and any products that we may eventually commercialize be manufactured according to cGMP, cGTP and similar regulatory jurisdictional standards. These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation. The FDA or similar foreign regulatory agencies may also implement new standards at any time or change their interpretations and enforcement of existing standards for manufacture, packaging or testing of products. We have littlelimited control over our manufacturers’ compliance with these regulations and standards.standards and although we monitor our manufacturers, we depend on them to provide honest and accurate information. Any failure by our third-party manufacturers to comply with cGMP or cGTP or failure to scale up

manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates. In addition, such failure could be the basis for the FDA to issue a warning letter, withdraw approvals for product candidates previously granted to us, or take other regulatory or legal action, including recall or seizure of outside supplies of the product candidate, total or partial suspension of production, suspension of ongoing clinical trials,studies, refusal to approve pending applications or supplemental applications, detention or product, refusal to permit the import or export of products, injunction or imposing civil and criminal penalties.

We depend on third party suppliers for key materials used to produce our product candidates. Any significant disruption in our supplier relationships could harm our business. Any significant delay in the supply of a product candidate for an ongoing clinical trialstudy could considerably delay initiation or completion of our clinical trials,studies, product testing and potential regulatory approval of our product candidates. If our manufacturersraw materials or we are unablecomponents cannot be purchased or fail to purchase key materials after regulatory approval has been obtained for our product candidates,meet approved specifications, the commercial launch of our product candidates could be delayed, or there could be a shortage in supply, which could impair our ability to generate revenues from the sale of our product candidates.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our ability to commercialize our product candidates successfully and to compete effectively may be adversely affected.

We rely upon a combination of patents, trademarks, trade secrets and confidentiality agreements – both that we own or possess or that are owned or possessed by our partners that are in-licensed to us – to protect the intellectual property related to our technology and product candidates. The T-cell immunotherapyWhen we refer to “our” technologies, inventions, patents, patent applications or other intellectual property rights, we are referring to both the rights that we own or possess as well as those that we in-license, many of which are critical to our intellectual property protection and our business. For example, the product candidates and platform technology we have licensed from MSK and QIMR Berghoferour partners are protected primarily by patent or patent applications of our partners that we have licensed and as confidential know-how and trade secrets. If the intellectual property that we dorely on is not adequately protect our intellectual property,protected, competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. have.

The patentability of inventions and the validity, enforceability and scope of patents in the biotechnology field is generally uncertain because it involves complex legal, scientific and factual considerations, and it has in recent years been the subject of significant litigation. Moreover, the standards applied by the U.S. Patent and Trademark Office, or USPTO, and non-USnon-U.S. patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology patents.

Consequently, the patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates in the United States or in other countries. There is no assurance that all potentially relevant prior art relating to our patents and patent applications is known to us or has been found in the instances where searching was done. We may be unaware of prior art that could be used to invalidate an issued patent or prevent a pending patent application from issuing as a patent. There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim of one of our patents or patent applications, which may, nonetheless, ultimately be found to affect the validity or enforceability of such claim. As a consequence of these and other factors, our patent applications may fail to result in issued patents with claims that cover our product candidates in the U.S. or in other countries.

Even if patents have issued or do successfully issue from patent applications, and even if suchthese patents cover our product candidates, third parties may challenge the validity, enforceability or scope thereof, which may result in suchthese patents being narrowed, invalidated or held to be unenforceable. No assurance can be given that if challenged, our patents would be declared by a court to be valid or enforceable. Furthermore, even

Even if they are unchallenged, our patents and patent applications or other intellectual property rights may not adequately protect our intellectual property, provide exclusivity for our product candidates or prevent others from designing around our claims. There is no guarantee that we will be able to obtain a license from this other entity on commercially reasonable terms, or at all. If this entity licenses its rights elsewhere, our competitors might gain access to this intellectual property. Also, theThe possibility exists that others will develop products on an independent basis which have the same effect as our product candidates and which do not infringe our patents or other intellectual property rights, or that others will design around the claims of patents that we have had issued that cover our product candidates. If the breadth or strength of protection provided by theour patents and patent applications we hold, license or pursue with respect to our product candidates is threatened, it could jeopardize our ability to commercialize our product candidates. candidates and dissuade companies from collaborating with us.

We may also desire to seek a license from a third party who owns intellectual property that may be useful for providing exclusivity for our product candidates, or for providing the ability to develop and commercialize a product candidate in an unrestricted manner. There is no guarantee that we will be able to obtain a license from such a third party on commercially reasonable terms, or at all.

In addition, the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Any of these outcomes could have an adverse impact on

We and our business.

If patent applications that we hold or in-license with respect to our technology or product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our product candidates, it could dissuade companies from collaborating with us. Wepartners have filed a number of patent applications covering our product candidates or methods of using or making those product candidates. We cannot offer any assurances about which, if any, patents will be issued with respect to these pending patent applications, the breadth of any such patents that are ultimately issued or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful challenge to these patents or any other patents owned by or exclusively licensed to us could deprive us of rights necessary for the

successful commercialization of any product candidate that we or our collaborators may develop. Because patent applications in the United StatesU.S. and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our partners were the first to file any patent application related to a product candidate. Furthermore, if third parties have filed such patent applications that have never had a claim with an effective filing date onWe or after March 16, 2013, an interference proceeding in the United States can be initiated by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications or patents. Similarly, we could become involved in derivation proceedings before the USPTO to determine inventorship with respect to our patent applications. We may become involved in inter partes review or post-grant review proceedings in the USPTO regarding our intellectual property rights. Wepartners may also become involved in opposition proceedings inregarding our patents, including patent infringement lawsuits, interference or derivation proceedings, oppositions, and inter partes and post-grant review proceedings before the USPTO the European Patent Office or counterpart offices inand other jurisdictions regarding our intellectual property rights. In addition,non-U.S. patent offices.

Even if granted, patents have a limited lifespan. In the United States,U.S., the natural expiration of a patent generally occurs 20 years after it is filed. Although various extensions may be available if certain conditions are met, the life of a patent and the protection it affords is limited. If we encounter delays in our clinical trialsstudies or in obtaining regulatory approvals, the period of time during which we could exclusively market any of our product candidates under patent protection, if approved, could be reduced. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be vulnerable to competition from biosimilar products. Any loss of patent protection could have a material adverse impact on our business. Weproducts, as we may be unable to prevent competitors from entering the market with a product that is similar or identical to our product candidates, which could harm our business and ability to achieve profitability.candidates.

Furthermore, the research resulting in certain of our licensed patent rights and technology was funded by the U.S. government. As a result, the government has certain rights such as march-in rights, to suchthese patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to practice the invention for or on behalf of the United States.U.S. These rights may permit the government to disclose our confidential information on which we rely to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to U.S. industry. In addition, our rights in suchany inventions that result from government-funded research may be subject to certain requirements to manufacture products embodying suchthese inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business, results of operations, financial condition and future prospects.U.S.

If we are sued for infringing the intellectual property rights of third parties, suchthe resulting litigation could be costly and time-consuming and could prevent or delay our development and commercialization efforts.

Our commercial success depends, in part, on us and our collaboratorspartners not infringing the patents and proprietary rights of third parties. There is a substantial amount of litigation and other adversarial proceedings, both within and outside the United States,U.S., involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interference or derivation proceedings, oppositions, and inter partes and post-grant review proceedings before the USPTO and non-U.S. patent offices. Numerous U.S. and non-U.S. issued patents and pending patent applications owned by third parties exist in the fields in which we are developing and may develop our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of third parties’ patent rights, as it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform or predictable.

Third parties may assert infringement claims against us based on existing or future intellectual property rights, alleging that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacturing of our product candidates that we failed to identify. For example, applications filed before November 29, 2000, and certain applications filed on or after that date that will not be filed outside the United States, remain confidential until issued as patents. Except for the preceding exceptions, patent applications in the United States and elsewhere are generally published only after a waiting period of approximately 18 months after the earliest filing date. Therefore, patent applications covering our product candidates could have been filed by others without our knowledge. In addition,knowledge, since these applications generally remain confidential for some period of time after their filing date. Even pending patent applications that have been published, including some of which we are aware, could be later amended in a manner that could cover our product candidates or their use or manufacture. WeIn addition, we may analyzehave analyzed patents or patent applications of our competitorsthird parties that we believe are relevant to our activities and believe that we are free to operate in relation to any of our product candidates, but our competitors may obtain issued claims, including in patents we consider to be unrelated, which may block our efforts or potentially result in any of our product candidates or our activities infringing suchtheir claims.

If we or our partners are sued for patent infringement, we would need to demonstrate that our product candidates, products and methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving that a patent is invalid is difficult. For example, in the United States, proving invalidity in a district court proceeding requires a showing of cleardifficult and convincing evidence to overcome the presumption of validity enjoyed by issued patents, and proving invalidity in an inter partes

review proceeding in the USPTO requires a showing of a preponderance of the evidence. Eveneven if we are successful in thesethe relevant proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted which could have a material adverse effect on us.from other activities. If any issued third-party patents were held by a court of competent jurisdiction to cover aspects of our materials, formulations, methods of manufacture or methods for treatment, we could be forced, including by court order, to cease developing, manufacturing or commercializing the relevant product candidate until suchthe relevant patent expired. Alternatively, we may desire or be required to obtain a license from such third party in order to use the infringing technology and to continue developing, manufacturing or marketing the infringing product candidate. However, we may not be able to obtain any required license on commercially reasonably terms, or at all. Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property licensed to us. Ultimately,

We may face claims that we couldmisappropriated the confidential information or trade secrets of a third party. If we are found to have misappropriated a third party’s trade secrets, we may be prevented from commercializing a product candidate, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. This could harm our business significantly.

Parties making claims against us may obtain injunctive or other equitable relief,further using these trade secrets, which could effectively blocklimit our ability to further develop and commercialize one or more of our product candidates.

Defending against intellectual property claims of patent infringement or misappropriation of trade secrets could be costly and time consuming, regardless of the outcome. Thus, even if we were to ultimately prevail, or to settle at an early stage, suchbefore a final judgment, any litigation could burden us with substantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of our management team, distracting them from the pursuit of other company business. During the course of any intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings in the litigation and these announcements may have negative impact on the perceived value of our product candidates, programs or intellectual property. In the event of a successful intellectual property claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent, or to redesign our infringing product candidates, which may be impossible or require substantial time and monetary expenditure. In addition to paying monetary damages, we may lose valuable intellectual property rights or personnel and the parties making claims against us may obtain injunctive or other equitable relief, which could impose limitations on the conduct of our business. We may also elect to enter into license agreements in order to settle patent infringement claims prior to litigation, and any suchof these license agreementagreements may require us to pay royalties and other fees that could be significant.

We may face claims that we misappropriated As a result of all of the confidential informationforegoing, any actual or trade secrets of a third party. If we are found to have misappropriated a third party’s trade secrets, we may be prevented from further using such trade secrets, which could limit our ability to develop our product candidates. We are not aware of any material threatened or pending claims related to these matters, but in the future litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rightsclaim could prevent us from developing or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and becommercializing a distractionproduct candidate or force us to management. During the course of any patent or other intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative, the perceived valuecease some aspect of our product candidates, programs or intellectual property could be diminished. Accordingly, the market price of our common stock may decline.business operations.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, enforcing and defending patents on all of our product candidates in all countries throughout the world would be prohibitively expensive. Our or our licensors’ intellectual property rights in certain countries outside the United StatesU.S. may be less extensive than those in the United States.U.S. In addition, the laws of certain foreign countries do not protect intellectual property rights to the same extent as laws in the United States.U.S. Consequently, we and our licensorspartners may not be able to prevent third parties from practicing our and our licensors’ inventions in countries outside the United States,U.S., or from selling or importing infringing products made using our and our licensors’ inventions in and into the United StatesU.S. or other jurisdictions. Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection or where we do not have exclusive rights under the relevant patent(s)patents to develop their own products and, further, may export otherwise infringingotherwise-infringing products to territories where we and our licensorspartners have patent protection but where enforcement is not as strong as that in the United States.U.S. These infringing products may compete with our product candidates in jurisdictions where we or our licensorspartners have no issued patents or where we do not have exclusive rights under the relevant patent(s),patents, or our patent claims and other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us and our licensorspartners to stop the infringement of our and our licensors’ patents or marketing of competing products in violation of our and our licensors’ proprietaryintellectual property rights generally. Proceedings to enforce our and our licensors’ patent rights in foreign jurisdictions could result in substantial costs and divert our attention from other aspects of our business, could put our and our licensors’ patents at risk of being invalidated or interpreted narrowly, could put our and our licensors’ patent applications at risk of not issuing, and could provoke third parties to assert claims against us or our licensors.partners. We or our licensorspartners may not prevail in any lawsuits that we or our licensors initiate, and even if we or our licensors are successful the damages or other remedies awarded, if any, may not be commercially meaningful.

We have in-licensed a significant portion of our intellectual property from MSK and QIMR Berghofer.our partners. If we breach any of our license agreements with MSK or QIMR Berghofer,these partners, we could lose the ability to continue the development and potential commercialization of one or more of our product candidates.

We hold rights under license agreements with our partners, including MSK, and QIMR Berghofer and Moffitt that are important to our business. Our discovery and development platform is built, in part, around patent rights exclusively in-licensed from MSK and QIMR Berghofer. The MSK agreement generally grants us an exclusive license to research, develop, make, use, offer for sale, sell and import, tabelecleucel, ATA520 and ATA230.our partners. Under our existing MSK license agreement,agreements, we are subject to various obligations, including diligence obligations with respect to development and commercialization activities, payment obligations upon achievement of certain milestones and royalties on product sales, as well as other material obligations.sales. If there is any conflict, dispute, disagreement or issue of nonperformance between us and MSKour counterparties regarding our rights or obligations under thethese license agreements, including any such conflict, dispute or disagreement arising from our failure to satisfy diligence or payment obligations, under any such agreement, we may be liable to pay damages and MSKour counterparties may have a right to terminate the affected license. The loss ourtermination of any license agreement with MSKone of our partners could materially adversely affect our ability to proceed to utilize the affected intellectual property that is subject to that license agreement in our drug discovery and development efforts, our ability to enter into future collaboration, licensing and/or marketing agreements for one or more affected product candidates and our ability to commercialize the affected product candidates. The risks described elsewhere pertaining toFurthermore, a disagreement under any of these license agreements may harm our patents and other intellectual property rights also apply torelationship with the intellectual property rights that we license, and any failure by us or our licensors to obtain, maintain and enforce these rightspartner, which could have a material adverse effectnegative impacts on other aspects of our business.

We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and have a material adverse effect on the success of our business and on our stock price.business.

Third parties may infringe our patents the patents of our licensors, or misappropriate or otherwise violate our or our licensor’s intellectual property rights. Our and our licensor’s patent applications cannot be enforced against third parties practicing the technology claimed in suchthese applications unless and until a patent issues from suchthe applications, and then only to the extent the issued claims cover the technology. In the future, we or our licensorspartners may elect to initiate legal proceedings to enforce or defend our or our licensors’partners’ intellectual property rights, to protect our or our licensor’spartners’ trade secrets or to determine the validity or scope of our intellectual property rights we own or control.rights. Any claims that we or our partners assert against perceived infringers could also provoke these parties to assert counterclaims against us or our partners alleging that we or our partners infringe their intellectual property rights or that our intellectual property rights are invalid. In addition, third parties may initiate legal proceedings against us or our licensors to challenge the validity or scope of intellectual property rights we own or control. The proceedings can be expensive and time-consuming. Many of our or our licensor’s adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we or our licensors can. Accordingly, despite our or our licensors’ efforts, we or our licensors may not be able to prevent third parties from infringing upon or misappropriating intellectual property rights we own or control, particularly in countries where the laws may not protect our rights as fully as in the United States. Litigation could result in substantial costs and diversion of management resources, which could harm our business and financial results. In addition, in an infringement proceeding, a court may decide that a patent owned by or licensed to us is invalid or unenforceable, in whole or in part, or may refuse to stop the other party from using the technology at issue on the grounds that our or our licensors’ patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our or our licensors’ patents at risk of being invalidated, held unenforceable or interpreted narrowly.

Interference or derivation proceedings provoked by third parties, brought by us or our licensors or collaborators,partners, or brought by the USPTO or any non-USnon-U.S. patent authority may be necessary to determine the priority of inventions or matters of inventorship with respect to our patents or patent applications. We or our partners may also become involved in other proceedings, such as reexamination or opposition proceedings, inter partes review, post-grant review or other preissuancepre-issuance or post-grant proceedings in the USPTO or its foreign counterparts relating to our intellectual property or the intellectual property of others. An unfavorable outcome in any such proceedingof these proceedings could require us or our licensorspartners to cease using the related technology and commercializing our product candidates, or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us or our licensorspartners a license on commercially reasonable terms if any license is offered at all. Even if we or our licensors obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us or our licensors. In addition, if the breadth or strength of protection provided by our or our licensor’s patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.