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 ☒ 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 number of outstanding shares of the Registrant’s Common Stock as of October ~~31, 2017~~29, 2021 was ~~30,595,866~~88,417,386 shares.

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

These statements are only current predictions and are subject to known and unknown risks, uncertainties, including, without limitation, risks and uncertainties associated with the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success; the COVID-19 pandemic, which may significantly impact (i) our business, research, clinical development plans and operations, including our operations in South San Francisco and Southern California and at our clinical trial sites, as well as the business or operations of our third-party manufacturer, contract research organizations or other third parties with

whom we conduct business, (ii) our ability to access capital, and (iii) the value of our common stock; the sufficiency of our cash resources and need for additional capital, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading “1A. Risk Factors” and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.

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

Our business is subject to numerous risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. These risks are more fully described below. These risks include, among others:

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2021			2020
Assets
Current assets:
Cash and cash equivalents	$	60,493		$	47,968		$	113,209		$	200,404
Short-term investments		139,728			207,714			244,036			300,255
Restricted cash - short-term		194			194			194			194
Accounts receivable								—			1,250
Prepaid expenses and other current assets		5,802			4,677			12,058			21,170
Total current assets		206,217			260,553			369,497			523,273
Property and equipment, net		22,176			3,259			53,485			50,517
Operating lease assets, net								25,071			12,303
Restricted cash - long-term		1,200			—			1,200			1,200
Other assets		100			102			670			827
Total assets	$	229,693		$	263,914		$	449,923		$	588,120

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,539		$	2,778		$	16,543		$	7,118
Accrued compensation		5,319			3,745			19,140			20,458
Accrued research and development expenses		3,810			2,408			9,974			15,813
Other accrued liabilities		1,848			744
Deferred revenue								31,226			33,455
Other current liabilities								9,267			6,057
Total current liabilities		16,516			9,675			86,150			82,901
Long-term liabilities		7,221			503
Deferred revenue - long-term								26,843			27,795
Operating lease liabilities - long-term								24,574			13,041
Other long-term liabilities								2,215			2,044
Total liabilities		23,737			10,178			139,782			125,781

Commitments and contingencies (Note 7)

Stockholders’ equity:
Common stock—$0.0001 par value, 500,000 shares authorized as of September 30, 2017 and December 31, 2016; 30,596 and 28,933 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		3			3
Common stock—$0.0001 par value, 500,000 shares authorized as of September 30, 2021 and December 31, 2020; 88,387 and 83,372 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively								9			8
Additional paid-in capital		467,378			431,075			1,681,481			1,586,616
Accumulated other comprehensive loss		(88	)		(183	)
Accumulated other comprehensive income								24			296
Accumulated deficit		(261,337	)		(177,159	)		(1,371,373	)		(1,124,581	)
Total stockholders’ equity		205,956			253,736			310,141			462,339
Total liabilities and stockholders’ equity	$	229,693		$	263,914		$	449,923		$	588,120

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2021			2020			2021			2020
License and collaboration revenue													$	5,370		$	0		$	12,792		$	0
Operating expenses:
Research and development	$	20,598		$	18,802		$	56,435		$	43,040			70,333			59,877			202,867			179,096
General and administrative		11,062			7,140			29,295			19,448			19,849			14,829			56,984			48,259
Total operating expenses		31,660			25,942			85,730			62,488			90,182			74,706			259,851			227,355
Loss from operations		(31,660	)		(25,942	)		(85,730	)		(62,488	)		(84,812	)		(74,706	)		(247,059	)		(227,355	)
Interest and other income, net		564			576			1,554			1,684			148			364			283			2,049
Loss before provision for income taxes		(31,096	)		(25,366	)		(84,176	)		(60,804	)		(84,664	)		(74,342	)		(246,776	)		(225,306	)
Provision for income taxes		—			7			2			10			0			6			16			7
Net loss	$	(31,096	)	$	(25,373	)	$	(84,178	)	$	(60,814	)	$	(84,664	)	$	(74,348	)	$	(246,792	)	$	(225,313	)
Other comprehensive loss:
Other comprehensive gain (loss):
Unrealized gain (loss) on available-for-sale securities		26			(158	)		95			553			(38	)		(283	)		(272	)		307
Comprehensive loss	$	(31,070	)	$	(25,531	)	$	(84,083	)	$	(60,261	)	$	(84,702	)	$	(74,631	)	$	(247,064	)	$	(225,006	)
Net loss per common share:
Basic and diluted net loss per common share	$	(1.02	)	$	(0.88	)	$	(2.84	)	$	(2.12	)	$	(0.90	)	$	(0.92	)	$	(2.67	)	$	(3.21	)

Weighted-average shares outstanding used to calculate basic and diluted net loss per common share		30,474			28,801			29,597			28,670			93,602			81,176			92,411			70,170

								Accumulated
	Common				Additional			Other						Total
	Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
For the Nine Months Ended September 30, 2021	Shares		Amount		Capital			Income			Deficit			Equity
Balance as of December 31, 2020		83,372	$	8	$	1,586,616		$	296		$	(1,124,581	)	$	462,339
Issuance of common stock through ATM facilities, net of commissions and offering costs of $139		146		—		2,382			—			—			2,382
RSU settlements, net of shares withheld		449		—		(1,231	)		—			—			(1,231	)
Issuance of common stock pursuant to employee stock awards		108		—		1,749			—			—			1,749
Stock-based compensation expense		—		—		12,268			—			—			12,268
Net loss		—		—		—			—			(78,335	)		(78,335	)
Unrealized loss on available-for-sale securities		—		—		—			(135	)		—			(135	)
Balance as of March 31, 2021		84,075		8		1,601,784			161			(1,202,916	)		399,037
RSU settlements, net of shares withheld		423		—		(13	)		—			—			(13	)
Issuance of common stock pursuant to employee stock awards		256		—		2,599			—			—			2,599
Stock-based compensation expense		—		—		13,807			—			—			13,807
Net loss		—		—		—			—			(83,793	)		(83,793	)
Unrealized loss on available-for-sale securities		—		—		—			(99	)		—			(99	)
Balance as of June 30, 2021		84,754	$	8	$	1,618,177		$	62		$	(1,286,709	)	$	331,538
Issuance of common stock through ATM facilities, net of commissions and offering costs of $1,249		3,259		1		48,700			—			—			48,701
RSU settlements, net of shares withheld		306		—		—			—			—			—
Issuance of common stock pursuant to employee stock awards		68		—		842			—			—			842
Stock-based compensation expense		—		—		13,762			—			—			13,762
Net loss		—		—		—			—			(84,664	)		(84,664	)
Unrealized loss on available-for-sale securities		—		—		—			(38	)		—			(38	)
Balance as of September 30, 2021		88,387	$	9	$	1,681,481		$	24		$	(1,371,373	)	$	310,141

								Accumulated
	Common				Additional			Other						Total
	Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
For the Nine Months Ended September 30, 2020	Shares		Amount		Capital			Income			Deficit			Equity
Balance as of December 31, 2019		56,806	$	6	$	1,108,516		$	220		$	(817,961	)	$	290,781
Issuance of common stock through ATM facilities, net of commissions and offering costs of $704		1,528		—		22,987			—			—			22,987
Exercise of pre-funded warrants		57		—		—			—			—			—
RSU settlements, net of shares withheld		455		—		(1,395	)		—			—			(1,395	)
Issuance of common stock pursuant to employee stock awards		94		—		1,330			—			—			1,330
Stock-based compensation expense		—		—		12,644			—			—			12,644
Net loss		—		—		—			—			(73,509	)		(73,509	)
Unrealized loss on available-for-sale securities		—		—		—			(16	)		—			(16	)
Balance as of March 31, 2020		58,940		6		1,144,082			204			(891,470	)		252,822
Issuance of common stock through ATM facilities, net of commissions and offering costs of $370		14,958		1		189,300			—			—			189,301
RSU settlements, net of shares withheld		219		—		—			—			—			—
Issuance of common stock pursuant to employee stock awards		191		—		1,904			—			—			1,904
Stock-based compensation expense		—		—		13,948			—			—			13,948
Net loss		—		—		—			—			(77,456	)		(77,456	)
Unrealized gain on available-for-sale securities		—		—		—			606			—			606
Balance as of June 30, 2020		74,308	$	7	$	1,349,234		$	810		$	(968,926	)	$	381,125
Issuance of common stock through ATM facilities, net of commissions and offering costs of $878		2,582		1		34,126			—			—			34,127
RSU settlements, net of shares withheld		316		—		(126	)		—			—			(126	)
Issuance of common stock pursuant to employee stock awards		14		—		185			—			—			185
Stock-based compensation expense		—		—		13,255			—			—			13,255
Net loss		—		—		—			—			(74,348	)		(74,348	)
Unrealized loss on available-for-sale securities		—		—		—			(283	)		—			(283	)
Balance as of September 30, 2020		77,220	$	8	$	1,396,674		$	527		$	(1,043,274	)	$	353,935

	Nine months ended September 30,						Nine Months Ended September 30,
	2017			2016			2021			2020
Operating activities
Net loss	$	(84,178	)	$	(60,814	)	$	(246,792	)	$	(225,313	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		17,003			15,128			39,837			39,847
Amortization of investment premiums and discounts		607			2,811
Depreciation expense		678			210
Depreciation and amortization expense								6,857			6,175
Amortization of investment premiums								1,251			458
Non-cash operating lease expense								1,275			1,100
Loss on disposals of property and equipment								0			93
Asset retirement obligation accretion expense								64			58
Changes in operating assets and liabilities:
Accounts receivable								1,250			0
Prepaid expenses and other current assets		(1,125	)		(602	)		10,841			717
Operating lease assets								0			886
Other assets		2			6			27			(209	)
Accounts payable		(1	)		3,018			8,710			(2,718	)
Accrued compensation		1,574			532			(1,318	)		2,004
Accrued research and development expenses		1,402			(3	)		(5,839	)		542
Other accrued liabilities		1,104			433
Long-term liabilities		370			420
Other current liabilities								1,859			(459	)
Deferred revenue								(3,182	)		0
Operating lease liabilities								(1,294	)		(924	)
Other long-term liabilities								201			1,104
Net cash used in operating activities		(62,564	)		(38,861	)		(186,253	)		(176,639	)
Investing activities
Purchases of short-term investments		(152,837	)		(252,279	)		(224,754	)		(279,192	)
Maturities of short-term investments		162,094			127,749
Sales of short-term investments		58,217			187,508
Proceeds from maturities and sales of short-term investments								279,450			199,268
Purchases of property and equipment		(10,535	)		(2,025	)		(8,114	)		(3,912	)
Restricted cash		(1,200	)		—
Net cash provided by investing activities		55,739			60,953
Net cash provided by (used in) investing activities								46,582			(83,836	)
Financing activities
Proceeds from issuance of common stock from "at-the-market" facility, net		19,206			—
Proceeds from sale of common stock in underwritten offerings, net								0			189,301
Proceeds from issuance of common stock through ATM facilities, net								48,739			58,045
Proceeds from employee stock awards								5,190			3,407
Taxes paid related to net share settlement of restricted stock units		(351	)		(75	)		(1,244	)		(1,521	)
Proceeds from employee stock awards		495			250
Principal payments on finance lease obligations								(192	)		(289	)
Other financing activities, net								(17	)		(165	)
Net cash provided by financing activities		19,350			175			52,476			248,778
Increase in cash and cash equivalents		12,525			22,267
Cash and cash equivalents at beginning of period		47,968			23,746
Cash and cash equivalents at end of period	$	60,493		$	46,013
Decrease in cash, cash equivalents and restricted cash								(87,195	)		(11,697	)
Cash, cash equivalents and restricted cash at beginning of period								201,798			75,711
Cash, cash equivalents and restricted cash at end of period							$	114,603		$	64,014
Non-cash investing and financing activities
Capitalized lease obligations	$	6,215		$	—
Property and equipment purchases included in liabilities	$	3,064		$	129
Interest capitalized during construction period for build-to-suit lease transaction	$	133		$	—
Issuance of common stock upon vesting of stock awards	$	—		$	60
Change in long-term liabilities related to non-vested stock awards	$	—		$	(60	)
Property and equipment purchases included in accounts payable and other accrued liabilities							$	1,858		$	230
Proceeds from issuance of common stock through ATM facilities not yet received							$	2,344		$	254
Operating lease assets obtained in exchange for lease obligations							$	13,427		$	0
Finance lease assets obtained in exchange for lease obligations							$	0		$	281
Receivable for options exercised							$	0		$	12
Supplemental cash flow disclosure
Cash paid for taxes	$	—		$	10
Cash paid for interest							$	25		$	50
Cash paid for income taxes							$	16		$	7

Atara Biotherapeutics, Inc. (“Atara”, “we”, “our” or “the Company”) was incorporated in August 2012 in Delaware. Atara is a ~~cell therapy company developing~~pioneer in T-cell immunotherapy, leveraging its novel ~~treatments~~allogeneic EBV T-cell platform to develop transformative therapies for patients with ~~cancer~~serious diseases, including solid tumors, hematologic cancers and multiple sclerosis (MS). The Company’s “off-the-shelf”, or allogeneic, T-cells are engineered from donors with healthy immune function and allow for rapid delivery from inventory to patients without a requirement for pretreatment. Atara’sautoimmune disease.

We have several T-cell immunotherapies in clinical development and are ~~designed~~ progressing multiple next-generation allogeneic chimeric antigen receptor T-cell (“CAR T”) programs. Our most advanced T-cell immunotherapy program, tab-cel^® (tabelecleucel), is currently in Phase 3 development, and in October 2021, we licensed commercialization rights in Europe and select emerging markets in the Middle East, Africa, Eastern Europe and Central Asia to ~~precisely recognize~~Pierre Fabre Medicament (“Pierre Fabre”), following regulatory approval pursuant to a commercialization agreement (“Pierre Fabre Commercialization Agreement”). Atara will retain full rights to tab-cel^®in other major markets, including North America, Asia Pacific and ~~eliminate cancerous~~Latin America. See Note 10 for further information. We have entered into a research, development and license agreement (“Bayer License Agreement”) with Bayer AG (“Bayer”) pursuant to which we granted to Bayer an exclusive, field-limited license under the applicable patents and know-how owned or ~~diseased cells without affecting normal, healthy cells.~~ controlled by us and our affiliates covering or related to ATA2271 and ATA3271. See Note 6 for further information.

We have licensed rights to T-cell product candidates from Memorial Sloan Kettering Cancer Center (“MSK”) ~~in June 2015~~, rights related to our next-generation CAR T programs from MSK and from H. Lee Moffitt Cancer Center (“Moffitt”), and rights to know-how and technology from ~~QIMR Berghofer~~the Council of the Queensland Institute of Medical Research ~~Institute~~ (“QIMR Berghofer”) ~~in October 2015 and September 2016.~~. See Note 67 for further information.

The accompanying unaudited condensed consolidated financial statements include the accounts of Atara and its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and ~~follow~~ the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016, and, in~~2020. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair ~~statement~~presentation of the Company’s consolidated financial ~~information.~~statements. The results of operations for ~~the nine-month~~any interim period ~~ended September 30, 2017~~ are not necessarily indicative of the results to be expected for the full year or any other future period. The condensed consolidated balance sheet as of December 31, ~~2016~~2020 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete consolidated financial statements.

We have incurred significant operating losses since inception and have relied primarily on public and private equity financings and receipts from license and collaboration agreements to fund our operations. ~~As of September 30, 2017, we had an accumulated deficit of $261.3 million.~~ As we continue to incur losses, our transition to profitability will depend on the successful development, approval and commercialization of product candidates and on the achievement of sufficient revenues to support our cost structure. We may never achieve profitability, and unless and until we do, we will need to continue to raise additional capital. ~~Management expects~~We expect that ~~our~~existing cash, cash equivalents and short-term investments as of September 30, ~~2017~~2021 will be sufficient to fund our planned operations ~~into~~for at least the ~~first quarter~~next twelve months from the date of ~~2019.~~issuance of these financial statements.

We place cash and cash equivalents in the custody of financial institutions that management believes are of high credit quality, the amount of which at times, may be in excess of the amount insured by the Federal Deposit Insurance Corporation. We also have short-term investments in money market funds, U.S. Treasury, government agency and corporate debt obligations, commercial paper and asset-backed securities, which can be subject to certain credit risk. However, we mitigate the risks by investing in high-grade instruments, limiting our exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers.

We are subject to certain risks and uncertainties and believe that changes in any of the following areas could have a material adverse effect on future financial position or results of operations: our ability to obtain future financing; regulatory approval and market acceptance of, and reimbursement for, our product candidates, if approved; performance of third-party clinical research organizations and manufacturers upon which we rely; development of sales channels; protection of our intellectual property; litigation or claims against us based on intellectual property, patent, product, regulatory or other factors; and our ability to attract and retain employees necessary to support our growth.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. Significant estimates relied upon in preparing these financial statements include estimates related to revenue recognition, clinical ~~trial~~study and other accruals, stock-based compensation expense ~~construction costs~~ and income taxes. Actual results could differ materially from those estimates.

We lease office space in multiple locations. In addition, we are constructing a manufacturing facility in Thousand Oaks, California under a non-cancelable lease agreement. The leases are reviewed for classification as operating or capital leases. For operating leases, rent is recognized on a straight-line basis over the lease period. For capital leases, we record the leased asset with a corresponding liability for principal and interest. Payments are recorded as reductions to these liabilities with interest being charged to interest expense in our statements of operations and comprehensive loss.

We analyzed the nature of the renovations and our involvement during the construction period of our manufacturing facility and determined that we are the deemed “owner” of the construction project during the construction period. As a result, we are required to capitalize the fair value of the building as well as the construction costs incurred on our condensed consolidated balance sheet along with a corresponding financing liability for landlord-paid construction costs (i.e. “build-to-suit” accounting). Upon occupancy for build-to-suit leases, we are also required to assess whether the circumstances qualify for sale recognition under “sale-leaseback” accounting guidance.

~~In February 2016,~~We consider the applicability and impact of any recent Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”) ~~issued Accounting Standards Update (“ASU”) No. 2016-02,~~ ~~Leases (Topic 842), which is intended to increase~~. Based on our assessment, the ~~transparency and comparability in the reporting of leasing arrangements by generally requiring leased assets and liabilities~~ASUs were determined to be ~~recorded on the balance sheet. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018, with early adoption permitted. We~~either not applicable or are expected to have ~~not yet determined the potential effect the new standard will have~~minimal impact on our ~~consolidated financial statements.~~

~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting (Topic 718)~~, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. We prospectively adopted the new standard on January 1, 2017 and that adoption did not have a material effect on our consolidated financial statements due to the full valuation allowance of our deferred tax assets.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments~~. ASU 2016-13 requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~, which clarifies how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. We have not yet determined the method of adoption and the potential effect the new standard will have on ourcondensed consolidated financial statements.

~~In November 2016, the FASB issued ASU No. 2016-18~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~, which clarifies the statement of cash flow treatment of restricted cash or restricted cash equivalents. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. The standard should be applied using a retrospective transition method to each period presented. We have not yet determined the potential effect the new standard will have on our consolidated financial statements.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.~~ The amended standard specifies the modification accounting applicable to any entity which changes the terms or conditions of a share-based payment award. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. We have not yet determined the potential effect the new standard will have on our consolidated financial statements.

Basic net loss per common share is calculated by dividing net loss by the weighted-average number of shares of common stock and pre-funded warrants outstanding during the period, without consideration of common share equivalents. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock, pre-funded warrants and common share equivalents outstanding for the period. The pre-funded warrants are included in the computation of basic and diluted net loss per common share as the exercise price is negligible and the pre-funded warrants are fully vested and exercisable. Common share equivalents are only included in the calculation of diluted net loss per common share when their effect is dilutive.

Potential dilutive securities which include unvested restricted stock awards (“RSAs”), unvested restricted stock units (“RSUs”), vested and unvested options to purchase common stock and shares to be issued under our employee stock purchase plan (“ESPP”) have been excluded from the computation of diluted net loss per share, as the effect is ~~antidilutive.~~antidilutive, and consist of unvested restricted stock units (“RSUs”), including unvested performance-based RSUs for which established performance criteria have been achieved as of the end of the respective periods; vested and unvested options to purchase common stock; and shares to be issued under our employee stock purchase plan (“ESPP”). Therefore, the denominator used to calculate both basic and diluted net loss per common share is the same in all periods presented.

The following table represents the potential common shares issuable pursuant to outstanding securities as of the related period end dates that were excluded from the computation of diluted net loss per common share, as their inclusion would have an antidilutive effect:

	As of September 30,				As of September 30,
	2017		2016		2021		2020
Unvested RSAs		—		18,510
Unvested RSUs		1,735,999		1,371,269		4,817,939		3,003,142
Vested and unvested options		4,910,449		3,744,176		9,333,994		8,205,062
ESPP share purchase rights		32,205		15,888		101,504		107,970
Total		6,678,653		5,149,843		14,253,437		11,316,174

Our financial assets are measured at fair value on a recurring basis using the following hierarchy to prioritize valuation inputs, in accordance with applicable U.S. GAAP:

We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs. There have been no transfers between Level 1, Level 2 and Level 3 in any periods presented.

Financial assets and liabilities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. U.S. Treasury, government agency and corporate debt obligations, commercial paper and asset-backed securities are valued primarily using market prices of comparable securities, bid/ask quotes, interest rate yields and prepayment spreads and are included in Level 2.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. We have no Level 3 financial assets or liabilities.

The following tables summarize the estimated fair value and related valuation input hierarchy of our available-for-sale securities as of each period end:

		Total			Total		Total			Total				Total			Total		Total			Total
		Amortized			Unrealized		Unrealized			Estimated				Amortized			Unrealized		Unrealized			Estimated
As of September 30, 2017:	Input Level	Cost			Gain		Loss			Fair Value
As of September 30, 2021:													Input Level	Cost			Gain		Loss			Fair Value
		(in thousands)												(in thousands)
Money market funds	Level 1	$	47,593		$	—	$	—		$	47,593		Level 1	$	95,838		$	0	$	0		$	95,838
U.S. Treasury obligations	Level 2		51,692			2		(16	)		51,678		Level 2		123,567			15		(11	)		123,571
Government agency obligations	Level 2		4,760			1		(6	)		4,755		Level 2		18,477			9		(4	)		18,482
Corporate debt obligations	Level 2		82,402			9		(69	)		82,342		Level 2		68,195			35		(20	)		68,210
Commercial paper	Level 2		2,085			—		—			2,085		Level 2		40,782			0		0			40,782
Asset-backed securities	Level 2		7,976			—		(9	)		7,967		Level 2		8,175			5		(5	)		8,175
Total available-for-sale securities			196,508			12		(100	)		196,420				355,034			64		(40	)		355,058
Less amounts classified as cash equivalents			(56,692	)		—		—			(56,692	)
Less: amounts classified as cash equivalents															(111,022	)		0		0			(111,022	)
Amounts classified as short-term investments		$	139,816		$	12	$	(100	)	$	139,728			$	244,012		$	64	$	(40	)	$	244,036

		Total			Total		Total			Total				Total			Total		Total			Total
		Amortized			Unrealized		Unrealized			Estimated				Amortized			Unrealized		Unrealized			Estimated
As of December 31, 2016:	Input Level	Cost			Gain		Loss			Fair Value
As of December 31, 2020:													Input Level	Cost			Gain		Loss			Fair Value
		(in thousands)												(in thousands)
Money market funds	Level 1	$	28,816		$	—	$	—		$	28,816		Level 1	$	168,343		$	0	$	0		$	168,343
U.S. Treasury obligations	Level 2		65,403			3		(21	)		65,385		Level 2		230,239			113		(6	)		230,346
Government agency obligations	Level 2		23,860			5		(5	)		23,860		Level 2		22,537			22		(3	)		22,556
Corporate debt obligations	Level 2		113,649			8		(172	)		113,485		Level 2		50,080			166		(1	)		50,245
Commercial paper	Level 2		699			—		—			699		Level 2		17,990			0		0			17,990
Asset-backed securities	Level 2		13,414			4		(6	)		13,412		Level 2		9,860			10		(5	)		9,865
Total available-for-sale securities			245,841			20		(204	)		245,657				499,049			311		(15	)		499,345
Less amounts classified as cash equivalents			(37,944	)		—		1			(37,943	)
Less: amounts classified as cash equivalents															(199,090	)		0		0			(199,090	)
Amounts classified as short-term investments		$	207,897		$	20	$	(203	)	$	207,714			$	299,959		$	311	$	(15	)	$	300,255

The amortized cost and fair value of our available-for-sale securities by contractual maturity were as follows:

	As of September 30, 2017				As of December 31, 2016				As of September 30, 2021				As of December 31, 2020
	Amortized		Estimated		Amortized		Estimated		Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(in thousands)				(in thousands)				(in thousands)				(in thousands)
Maturing within one year	$	171,265	$	171,220	$	198,022	$	197,956	$	299,282	$	299,320	$	434,828	$	435,023
Maturing in one to five years		25,243		25,200		47,819		47,701		55,752		55,738		64,221		64,322
Total available-for-sale securities	$	196,508	$	196,420	$	245,841	$	245,657	$	355,034	$	355,058	$	499,049	$	499,345

As of September 30, ~~2017, certain available-for-sale securities had been in a continuous unrealized loss position, each for less than twelve months. As of this date,~~2021, no significant facts or circumstances were present to indicate a deterioration in the creditworthiness of the ~~respective~~ issuers of the available-for-sale securities we hold, and the Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis. For all securities with a fair value less than its amortized cost basis, we determined the decline in fair value below amortized cost basis to be immaterial and non-credit related, and therefore no allowance for losses has been recorded. During the ~~three and~~ nine months ended September 30, ~~2017~~2021 and ~~2016~~2020, we did not recognize any ~~other-than-temporary~~ impairment ~~losses.~~losses on our investments.

We have elected the practical expedient to exclude the applicable accrued interest from both the fair value and the amortized cost basis of our available-for-sale securities for purposes of identifying and measuring an impairment. We present accrued interest receivable related to our available-for-sale securities in prepaid expenses and other current assets, separate from short-term investments on our condensed consolidated balance sheet. As of September 30, 2021 and December 31, 2020, accrued interest receivable was $0.4 million and $0.7 million, respectively. We did 0t write off any accrued interest receivables during the nine months ended September 30, 2021 and 2020.

In addition, restricted cash collateralized by money market funds is a financial asset measured at fair value and is a Level 1 financial instrument under the fair value hierarchy. As of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, restricted cash ~~totaled~~was $1.4 ~~million~~million.

The following table provides a reconciliation of cash, cash equivalents and ~~$0.2 million, respectively.~~restricted cash within the condensed consolidated balance sheets that sum to the total of the same such amounts in the condensed consolidated statement of cash flows:

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2021			2020
	(in thousands)						(in thousands)
Leasehold improvements							$	50,143		$	50,132
Lab equipment								12,534			8,033
Machinery and equipment								5,129			5,023
Computer equipment and software								4,140			4,060
Furniture and fixtures								2,436			2,066
Construction in progress	$	19,643		$	970			5,426			879
Lab equipment		2,375			1,506
Leasehold improvements		623			580
Furniture and fixtures		536			526
Computer equipment and software		66			66
		23,243			3,648
Less accumulated depreciation and amortization		(1,067	)		(389	)
Property and equipment, gross								79,808			70,193
Less: accumulated depreciation and amortization								(26,323	)		(19,676	)
Property and equipment, net	$	22,176		$	3,259		$	53,485		$	50,517

Property and equipment includes lab equipment, furniture and fixtures, computer equipment and software, which are depreciated over the estimated useful lives of the assets, ranging from three to five years. Leasehold improvements are amortized over the lesser of the useful life of the leasehold improvements or the lease term. Construction in progress represents capitalized costs for our manufacturing facility in Thousand Oaks, California. Depreciation and amortization expense was ~~$0.3~~$2.3 million and ~~$0.1~~$2.2 million for the three months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively, and ~~$0.7~~$6.9 million and ~~$0.2~~$6.2 million for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively.

In ~~September 2014,~~December 2020, we entered into the Bayer License Agreement to develop mesothelin-directed CAR T-cell therapies for the treatment of solid tumors, pursuant to which we granted to Bayer an exclusive, ~~option agreement~~field-limited license under the applicable patents and know-how owned or controlled by us and our affiliates covering or related to ATA2271 and ATA3271 (the “Licensed Products”).

Under the terms of the Bayer License Agreement, we will be responsible at our cost for all mutually agreed preclinical and clinical activities for ATA2271 through the first in human Phase 1 clinical study in collaboration with MSK, following which Bayer will be responsible for the further development of ATA2271 at its cost. Bayer will be responsible for the development of ATA3271 at Bayer’s cost, except for certain mutually agreed preclinical, translational, manufacturing and supply chain activities to be performed by us relating to ATA3271. Bayer will also be solely responsible for commercializing the Licensed Products at its cost.

In December 2020, we received an upfront cash payment of $45.0 million from Bayer for the exclusive license grant, net of applicable withholding taxes, which were fully recovered in August 2021, and an additional $15.0 million reimbursement payment for certain research and process development activities to be performed by us. We are also entitled to receive (i) up to an additional $5.0 million for additional, specified translational activities under the Bayer License Agreement, of which we ~~had the right~~have invoiced and received $1.3 million, and (ii) an aggregate of up to ~~acquire the exclusive worldwide license rights to three clinical stage T-cell therapies from MSK. In exchange for the option, we paid $1.25~~$610.0 million in ~~cash~~milestone payments upon achieving certain development, regulatory and ~~issued 59,761 shares of our common stock~~commercial milestones relating to ~~MSK. At~~ the ~~time of issuance,~~Licensed Products. In addition, we ~~estimated the fair value~~are eligible to receive from Bayer tiered royalties at percentages up to low double digits on worldwide net product sales of the ~~stock issued~~Licensed Products on a country-by-country and product-by-product basis until the later of 12 years after the first commercial sale in such country or the expiration of specified patent rights in such country, subject to ~~MSK to be $0.75 million. The total~~certain reductions and aggregate minimum floors.

Bayer and we have formed a joint steering committee (“JSC”) that will provide oversight, decision making and implementation guidance regarding the collaboration activities covered under the agreement.

We assessed this arrangement in accordance with ASC 606 and concluded that the promises in the Bayer License Agreement represent transactions with a customer. We concluded that the Bayer License Agreement contains the following promises: (i) a development and commercialization license; (ii) performance of ~~$2.0 million was recorded as~~early-stage research and development ~~expense~~(“R&D”) services, including technology transfer services; (iii) JSC participation; and (iv) chemistry, manufacturing and control (“CMC”) services. In accordance with ASC 606, we determined that the license, early-stage R&D and CMC services were not distinct from each other, as the license, early-stage R&D and CMC services are highly interdependent upon one another. Participation on the JSC to oversee the research and development activities are combined into the single performance obligation as these activities are highly interdependent with the other R&D and CMC services. Accordingly, we determined that these promises should be combined into a single performance obligation.

The transaction price at inception consisted of a $45.0 million upfront payment for the license, $15.0 million for certain research and process development activities and the $5.0 million for additional specified translational activities, and this amount was allocated to the single performance obligation. The potential development and commercial milestone payments that we are eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained based on the probability of achievement. None of the future royalty and sales-based milestone payments were included in the transaction price, as the potential payments represent sales-based consideration. We will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust our ~~statements~~estimate of ~~operations~~the transaction price.

In March 2021, we entered into a Technology Transfer Agreement with Bayer (the “Bayer Tech Transfer Agreement”), which was contemplated as part of the Bayer License Agreement, to transfer to Bayer the ATA3271 manufacturing process being developed as part of the CMC services in the Bayer License Agreement. Upon entering into the agreement, we invoiced Bayer 20 percent, or $3.1 million, of the total fee of $15.3 million under the Bayer Tech Transfer Agreement, which we received in the second quarter of 2021. The remainder of the fee will be billed as follows: (i) 40 percent on January 1, 2022, (ii) 20 percent on January 1, 2023 and ~~comprehensive loss.~~ (iii) 20 percent upon the technology transfer completion.

We assessed this arrangement in accordance with ASC 606 and concluded that the promises in the Bayer Tech Transfer Agreement represent transactions with a customer. We concluded that the Bayer Tech Transfer Agreement should be combined with the Bayer License Agreement and accounted for as a modification of that agreement and that the Bayer Tech Transfer Agreement contains the following promises: (i) technology transfer services and (ii) supply of materials required for the technology transfer services. In accordance with ASC 606, we determined that the technology transfer services and supply of materials required for the technology transfer services were not distinct from each other, as they are highly interdependent upon one another. In addition, we concluded that the technology transfer services and supply of materials required for the technology transfer services were highly interdependent with the license, early-stage R&D and CMC services identified in the Bayer License Agreement. Accordingly, we determined that these promises should be combined into a single performance obligation.

Under the Bayer Tech Transfer Agreement, in order to evaluate the appropriate transaction price, we determined that the $15.3 million fee constituted the entire consideration to be included in the transaction price, and this amount was allocated to the single performance obligation as identified under the Bayer License Agreement.

In March 2021, we entered into a Manufacturing and Supply Agreement with Bayer (the “Bayer Manufacturing Agreement”), which was contemplated as part of the Bayer License Agreement, to manufacture Phase 1 and 2 allogeneic mesothelin-directed CAR T-cell therapies for Bayer to use in clinical trials at a price based on our costs plus a margin, which is consistent with our standalone selling price. Under the Bayer Manufacturing Agreement, we will also provide storage and distribution services to Bayer at a price that is consistent with our standalone selling price for these services.

Upon entering into the Bayer Manufacturing Agreement, Bayer submitted, and we approved, a binding purchase order for manufacturing services and storage services. Any fees for the manufacturing services will be invoiced as follows: (i) 50 percent upon written acceptance by us of the binding purchase order, and (ii) the remainder upon delivery of the certification of analysis of such lots to Bayer. Storage and distribution services are billed monthly as those services are provided to Bayer.

In March 2021, we invoiced Bayer 50 percent of the total estimated supply price of $13.1 million for manufacturing services under the initial purchase order for the supply of six lots, or $6.6 million, which we received in the second quarter of 2021. The remainder of the supply price will be billed upon the release of the lots ordered by Bayer.

We assessed this arrangement in accordance with ASC 606 and concluded that the promises in the manufacturing and supply agreement represent transactions with a customer. We concluded that the Bayer Manufacturing Agreement contains the following promises: (i) manufacturing services; (ii) storage services provided on a month-to-month basis; and (iii) distribution services. In accordance with ASC 606, we determined that the manufacturing services for the initial purchase order of six lots, that are expected to be provided prior to completion of the technology transfer, are not distinct as they are highly interdependent on the manufacturing process being developed and transferred under the Bayer License Agreement and the Tech Transfer Agreement. Accordingly, we determined that these promises should be combined into a single performance obligation. We also determined that each of the other services were distinct and separate performance obligations. We determined that the initial binding order for the manufacture and supply of six lots should be combined with the Bayer License Agreement and accounted for as a modification of that agreement along with the Bayer Tech Transfer Agreement. We also concluded that a binding purchase order from Bayer, together with the Bayer Manufacturing Agreement, form the contract for manufacturing services and storage services and a shipping order from Bayer forms the contract for distribution services. We also determined that the storage services provided on a month-to-month basis and distribution services are distinct and separate performance obligations. All the performance obligations identified above are priced at their standalone selling price.

Under the Bayer Manufacturing Agreement, in order to evaluate the appropriate transaction price, we determined that the $13.1 million fee constituted the entire consideration to be included in the transaction price, and this amount was allocated to the single performance obligation as identified under the Bayer License Agreement. Revenue for the manufacturing services for the initial six lots will be recognized based on the amount of actual costs incurred relative to the total budgeted costs expected to be incurred for the combined performance obligation. Revenue for the storage services will be recognized over time as those services are provided. Revenue for the distribution services will be recognized at a point in time when the product is delivered to a clinical site designated by Bayer.

We utilize a cost-based input method to recognize revenue based on the amount of actual costs incurred relative to the total budgeted costs expected to be incurred for the combined performance obligation. For the three and nine months ended September 30, 2021, we recognized license and collaboration revenue of $5.4 million and $12.8million, respectively, under the Bayer License Agreement, Bayer Tech Transfer Agreement and Bayer Manufacturing Agreement, collectively, the Bayer Agreements. We did 0t recognize any license and collaboration revenue in 2020 under Bayer License Agreement. Deferred revenue related to the Bayer Agreements aggregated to $58.0 million and $61.3 million as of September 30, 2021 and December 31, 2020, respectively. The $58.0 million of deferred revenue as of September 30, 2021, of which $31.2 million is included in current liabilities and $26.8 million is included in long-term liabilities, is expected to be recognized over approximately the next three years. NaN development or sales-based milestone payments have been earned or received through September 30, 2021.

In addition to our existing leases in South San Francisco, Thousand Oaks and Colorado, in March 2021, we entered into a new lease agreement for approximately 33,659 square feet of office, lab and warehouse space in Thousand Oaks, California. During the third quarter of 2021, the lease commenced and we recorded a $13.3 million operating lease right-of-use asset and current and non-current operating lease liabilities of $0.6 million and $12.7 million, respectively, on the consolidated balance sheet. We used an incremental borrowing rate of approximately 9.00% to record the lease on the consolidated balance sheet, based on our incremental borrowing rate determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral as there was no readily determinable rate implicit in the lease. The fixed lease payments for base rent, including tenant improvement rent amounts, total approximately $21.0 million over the lease term of 10.5 years. Base rent is subject to annual increase of 3% with each annual anniversary of the rent commencement date. We have the option to extend this lease for two additional five-year periods after the initial term.

In June 2015, we ~~exercised an option to enter~~entered into an exclusive license agreement with MSK for three clinical stage T-cell therapies.~~In connection with the execution of the license agreement, we paid~~ ~~$4.5 million in cash to MSK, which~~ ~~was recorded as research and development expense in our condensed consolidated statement of operations and comprehensive loss.~~

We are required to make ~~additional~~ payments ~~of up to $33.0 million~~ to MSK based on achievement of specified regulatory and sales-related milestones, as well as mid-single-digit percentage tiered royalty payments based onfuture sales of products resulting from the development of the licensed product candidates, if any. In addition, under certain circumstances, we are required to make certain minimum annual royalty payments to MSK, which are creditable against earned royalties owed for the same annual period. We are also required to pay a low double-digit percentage of any consideration we receive for sublicensing the licensed rights. The license agreement expires on a product-by-product and country-by-country basis on the ~~later~~latest of: (i) expiration of the last licensed patent rights related to each licensed product, (ii) expiration of any market exclusivity period granted by law with respect to each licensed product, and (iii) a specified number of

years after the first commercial sale of the licensed product in each country. Upon expiration of the license agreement, Atara will retain non-exclusive rights to the licensed products.

In May 2018 and December 2018, we licensed additional 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.

In March 2021, we amended and restated our license agreement with MSK to: (i) terminate our license to certain rights related to WT1 and cytomegalovirus (“CMV”); and (ii) license additional know-how rights not otherwise covered by our existing agreements.

In October 2015, we entered into an exclusive license agreement and a research and development collaboration agreement with QIMR Berghofer.

Under the terms of the license agreement, we obtained an exclusive, worldwide license to develop and commercialize allogeneic ~~cytotoxic T-lymphocyte (“CTL”)~~T-cell therapy programs utilizing technology and know-how developed by QIMR Berghofer. In consideration for the exclusive license, we paid $3.0 million in cash to QIMR Berghofer, which was recorded as research and development expense in our statement of operations and comprehensive loss in the fourth quarter of 2015. In September 2016, the exclusive license agreement and research and development collaboration agreement were amended and restated. Under the amended and restated agreements, we obtained an exclusive, worldwide license to develop and commercialize additional ~~CTL~~T-cell programs, as well as the option to license additional technology that we exercised in ~~exchange for $3.3 million in cash, which was recorded as~~June 2018. We further amended and restated our license agreement and research and development ~~expense~~collaboration agreements with QIMR Berghofer in August 2019 to terminate our ~~statement of operations and comprehensive loss in the third quarter of 2016 and paid in October 2016. The~~license to certain rights related to CMV. In addition, we further amended and restated our license agreement and research and development collaboration agreement with QIMR Berghofer in August 2020 to terminate our license to certain rights related to BK polyomavirus and JC polyomavirus. Our current license agreement also provides for various milestone and royalty payments to QIMR Berghofer based on future product sales, if any.

Under the terms of ~~the amended and restated~~our current research and development collaboration agreement, we are also required to reimburse the cost of agreed-upon development activities related to programs developed under the collaboration. These payments are expensed on a straight-line basis over the related development ~~periods and recorded in research and development expense in our condensed consolidated statements of operations and comprehensive loss.~~periods. The agreement also provides for various milestone payments to QIMR Berghofer based on achievement of certain developmental and regulatory milestones.

From time to time, we have entered into other license and collaboration agreements with other parties. For example, we licensed additional rights related to our MSK-partnered next-generation CAR T programs from MSK in May 2018 and we licensed rights related to our next-generation CAR T programs from Moffitt Cancer Center in August 2018, and we agreed to collaborate through sponsored research in connection with each of these licenses. We also licensed rights related to our MSK-partnered next-generation CAR T programs from the National Institutes of Health in December 2018.

Milestones and royalties under each of the above agreements are contingent upon future events and will be recorded as expense when it is probable that the milestones will be achieved or royalties are due. As of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, there were no0 material outstanding obligations for milestones and ~~royalties.~~

~~Amgen License Agreements –~~ In September 2012, we entered into license agreements with Amgen, Inc., for several molecular programs, including PINTA745, ATA842 and STM434. In December 2015, we announced the suspension of further development of PINTA745, and in June 2016, we returned the rights related to this and the ATA842 program to Amgen. In October 2017, we returned all remaining rightsroyalties under ~~the license agreements to Amgen.~~

~~Certain potential payments related to~~ our license and collaboration ~~agreements, including milestone and royalty payments, are detailed in Note 6. As~~agreements.

In December 2019, we entered into a Commercial Manufacturing Services Agreement (the “Cognate Manufacturing Agreement”) with Cognate BioServices, Inc. (“Cognate”). Pursuant to the ~~achievement~~Cognate Manufacturing Agreement, Cognate provides manufacturing services for certain of ~~these milestones and royalties are currently not fixed and determinable, such commitments have not been included in~~ our ~~condensed consolidated balance sheets.~~ product candidates. The initial term of the Cognate Manufacturing Agreement, as amended, runs until May 31, 2022. We may terminate the Cognate Manufacturing Agreement for convenience on six months’ written notice to Cognate, or immediately if Cognate is unable to perform the services under the Cognate Manufacturing Agreement or fails to obtain or maintain certain necessary approvals. In March 2021, Charles River Laboratories Inc. (“CRL”) acquired Cognate.

We may enter into other contracts in the normal course of business with clinical research organizations for clinical trials, with contract manufacturing organizations for clinical, and potentially commercial, product supplies, and with other vendors for pre-clinical studies, supplies and other services for our operating purposes. These contracts generally provide for termination on ~~notice, with the exception of potential termination charges related to one of our contract manufacturing agreements in the event certain minimum purchase volumes are not met.~~ notice.

As of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, there ~~were no~~was $0.6 million and 0ne, respectively, of amounts accrued related to contract termination charges ~~for~~or minimum purchase volumes not being met.

We lease our corporate headquarters in South San Francisco, California under a non-cancellable lease agreement that expires in April 2021. In connection with the lease, we were required to issue a letter of credit in the amount of $0.2 million to the landlord, which expires in December 2017 and is classified as restricted cash in our condensed consolidated balance sheet. We also lease office space in Westlake Village, California under a lease agreement that expires in April 2019.

Rent expense was $0.4 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectively and $1.0 million and $0.9 million, for the nine months ended September 30, 2017 and 2016, respectively.

In February 2017, we entered into a lease agreement for approximately 90,580 square feet of office, lab and cellular therapy manufacturing space in Thousand Oaks, California. The initial 15-year term of the lease commences upon the substantial completion of landlord’s work as defined under the agreement. ~~The contractual obligations during the initial term are $16.4 million in aggregate.~~ We have the option to extend the lease for two additional periods of ten and nine years, respectively, after the initial term. In connection with the lease, we were required to issue a letter of credit in the amount of $1.2 million to the landlord, which is recorded as long-term restricted cash in our condensed consolidated balance sheet.

Based on the terms of the lease agreement and due to our involvement in certain aspects of the construction, we have been deemed the owner of the building (for accounting purposes only) during the construction period in accordance with U.S. GAAP. Under this build-to-suit lease arrangement, we recognize construction in progress based on all construction costs incurred by both us and the landlord. We also recognize a financing obligation equal to all costs funded by the landlord.

As of September 30, 2017, we have recorded $6.2 million of construction in progress relating to landlord’s costs of the building incurred through that date, and have recognized a corresponding long-term financing obligation for the same amount. In addition, we have recorded $12.1 million of construction in progress for construction costs incurred by us and $0.1 million of capitalized interest during the construction period through September 30, 2017. Further, we recorded ground lease expense of $88,000 and $205,000 for the three and nine months ended September 30, 2017 respectively, in our condensed consolidated statement of operations and comprehensive loss, representing the estimated cost of renting the land during the construction period.

In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for indemnification for certain liabilities. The exposure under these agreements is unknown because it involves claims that may be made against us in the future but have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations. We also have indemnification obligations to our directors and executive officers for specified events or occurrences, subject to some limits, while they are serving at our request in such capacities. There have been no claims to date and we

believe the fair value of these indemnification agreements isto be minimal. Accordingly, we did ~~not~~0t record liabilities for these agreements as of September 30, ~~2017~~2021 and December 31, ~~2016.~~2020.

From time to time, we may be involved in legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of our business or otherwise. The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. Regardless of outcome, litigation can have an adverse impact on us because of the defense costs, diversion of management resources and other factors. We are not currently involved in any material legal proceedings.

~~Equity Offering~~Our authorized capital stock consists of 520,000,000 shares, all with a par value of $0.0001 per share, of which 500,000,000 shares are designated as common stock and 20,000,000 shares are designated as preferred stock. There were 0 shares of preferred stock outstanding as of September 30, 2021 and December 31, 2020.

As part of our July 2019 underwritten public offering, we issued and sold pre-funded warrants to purchase 2,945,026 shares of common stock in an underwritten public offering pursuant to a shelf registration on Form S-3. Each pre-funded warrant entitles the holder to purchase 1 share of common stock at an exercise price of $0.0001 per share and expires seven years from the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per the terms of the warrant agreement, a holder of the outstanding warrants is not entitled to exercise any portion of any pre-funded warrant if, upon exercise of the warrant, the holder’s ownership (together with its affiliates) of our common stock or combined voting power of our securities beneficially owned by such holder (together with its affiliates) would exceed 9.99% after giving effect to the exercise (“Maximum Ownership Percentage”). Upon at least 61 days’ prior notice to us by the holder, any holder may increase or decrease the Maximum Ownership Percentage to any other percentage not to exceed 19.99%. As of September 30, 2021, pre-funded warrants to purchase 2,888,526 shares of our common stock from the July 2019 underwritten public offering were outstanding.

In ~~March 2017,~~the second and fourth quarters of 2020, we issued and sold pre-funded warrants to purchase 2,866,961 and 2,040,816 shares of common stock, respectively, in underwritten public offerings pursuant to a shelf registration on Form S-3, with terms similar to those described above. As of September 30, 2021, all of the pre-funded warrants issued and sold as part of the 2020 underwritten public offerings were outstanding.

In February 2020, we entered into a sales agreement (the ~~“ATM facility”~~“2020 ATM Facility”) with Cowen and Company, LLC (“Cowen”) ~~under~~, which ~~we may offer and sell,~~provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to ~~$75.0~~$100.0 million through Cowen, as our sales agent. ~~We will pay Cowen a commission of up to 3.0% of the gross sales proceeds of any common stock sold under the ATM facility.~~ The issuance and sale of these shares by us pursuant to the 2020 ATM ~~facility~~Facility are deemed “at the market” offerings ~~and are available~~as defined in Rule 415 under the Securities Act of 1933, as ~~amended.~~amended (the “Securities Act”), and are registered under the Securities Act. We pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2020 ATM Facility.

During the three ~~and nine-months~~months ended September 30, ~~2017,~~2021, we sold an aggregate of ~~655,876 and 1,349,865~~3,258,909 shares of common stock ~~respectively,~~ under the 2020 ATM Facility, at an average price of $15.33 per share, for gross proceeds of $49.9 million and net proceeds of $48.7 million, after deducting commissions and other offering expenses payable by us. For the nine months ended September 30, 2021, we sold an aggregate of 3,404,539 shares of common stock under our ATM facility at an average price of ~~approximately $15.55~~$15.41 per share, ~~and $14.82 per share, respectively,~~ for gross proceeds of ~~$10.2~~$52.5 million ~~and $20.0 million, respectively~~ and net proceeds of ~~$9.9~~$51.2 million, ~~and $19.2 million, respectively,~~ after deducting commissions and other offering ~~expenses.~~expenses payable by us. On October 1, 2021, we received the remaining net proceeds of approximately $2.3 million from sales of shares of common stock under the 2020 ATM Facility that occurred during September 2021. As of September 30, ~~2017, $55.0~~2021, $27.2 million of common stock remained available to be sold under ~~this facility,~~the 2020 ATM Facility, subject to certain conditions as specified in the ~~agreement.~~sales agreements.

Under the terms of the 2014 Equity Incentive Plan, as amended (“2014 EIP”), we may grant stock options, ~~RSAs~~restricted stock awards (“RSAs”) and RSUs to employees, directors, consultants and other service providers. AsRSUs generally vest over four years. In 2020, we granted performance-based awards to certain of ~~September 30, 2017, a total of 10,310,669 shares~~our employees that provide for the issuance of common stock ~~were reserved for issuance under~~if specified Company performance criteria related to our clinical programs are achieved. The number of performance-based awards that ultimately vests depends upon if, when and which performance criteria are achieved, as well as the employee’s continuous service, as defined in the 2014 ~~Plan,~~EIP, through the date of ~~which 3,921,737 shares were available for future grant and 6,388,932 shares were subject to outstanding options and RSUs.~~

vesting. The fair value of performance-based RSUs is determined as the closing stock price on the date of grant. ~~The weighted average grant date~~

Stock options are granted at prices no less than 100% of the estimated fair value of ~~RSUs~~the shares on the date of grant as determined by the board of directors, provided, however, that the exercise price of an option granted ~~was $15.07~~to a 10% shareholder cannot be less than 110% of the estimated fair value of the shares on the date of grant. Options granted generally vest over four years and ~~$17.83 for the nine months ended September 30, 2017 and 2016, respectively.~~expire in seven to ten years. As of September 30, ~~2017,~~2021, a total of 16,436,898 shares of common stock were reserved for issuance under the 2014 EIP, of which 4,741,067 shares were available for future grant and 11,695,831 shares were subject to outstanding options and RSUs, including performance-based awards.

In February 2018, we adopted the 2018 Inducement Plan (“Inducement Plan”), under which we may grant options, stock appreciation rights, RSAs and RSUs to new employees. In November 2020, we amended the Inducement Plan to reserve an additional 1,500,000 shares of the Company’s common stock for issuance under the Inducement Plan. In September 2021, we further amended the Inducement Plan to reserve an additional 1,500,000 shares of the Company’s common stock for issuance under the Inducement Plan. As of September 30, 2021, 4,031,948 shares of common stock were reserved for issuance under the Inducement Plan, of which 1,546,596 shares were available for future grant and 2,485,352 shares were subject to outstanding options and RSUs.

The following is a summary of RSU activity under our 2014 EIP and Inducement Plan:

As of September 30, 2021, there was ~~$22.8~~$70.9 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 2.8 years. ~~The aggregate intrinsic value~~This excludes unrecognized stock-based compensation expense for performance-based RSUs that were deemed not probable of ~~the RSUs outstanding as of September 30, 2017 was $29.0 million.~~

Under our RSU net settlement procedures, we withhold shares at settlement to cover the minimum payroll withholding tax obligations. During the nine months ended September 30, 2017, we settled 290,534 RSUs, of which 51,592 RSUs were net settled by withholding 21,895 shares. The value of the RSUs withheld was $0.4 million, based on the closing price of our common stock on the settlement date. During the nine months ended September 30, 2016, we settled 153,719 RSUs, of which 10,898 RSUs were net settled by withholding 4,251 shares. The value of the RSUs withheld was $75,000, based on the closing price of our common stock on the settlement date. The value of RSUs withheldvesting in ~~each period was remitted to the appropriate taxing authorities and has been reflected as a financing activity in our condensed consolidated statements of cash flows.~~accordance with U.S GAAP.

The following is a summary of stock option activity under our 2014 ~~EIP:~~EIP and Inducement Plan:

Shares

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Term
(Years)

Aggregate Intrinsic
Value
(in thousands)

Outstanding as of December 31, 2016

3,733,847

$
24.14

Granted

1,155,900

$
15.99

Exercised

—

$
—

Forfeited or expired

(254,298
)

$
25.40

Outstanding as of September 30, 2017

4,635,449

$
22.04

5.3

$
4,102

Vested and expected to vest as of
September 30, 2017

4,635,449

$
22.04

5.3

$
4,102

Exercisable as of September 30, 2017

1,887,909

$
23.77

4.6

$
1,919

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2020		7,851,886		$	22.89		6.4	$	26,834
Granted		2,501,234			15.88
Exercised		(222,930	)		14.27
Forfeited or expired		(776,696	)		26.26
Outstanding as of September 30, 2021		9,353,494		$	20.94		6.7	$	23,156

Aggregate intrinsic value represents the difference between the closing stock price of our common stock on September 30, ~~2017~~2021 and the exercise price of outstanding, in-the-money options. As of September 30, ~~2017,~~2021, there was ~~$32.6~~$49.1 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of ~~2.6~~2.7 years.

Options for 18,947 shares of our common stock were exercised during the nine months ended September 30, 2016, with an intrinsic value of $0.2 million. No options were exercised during the nine months ended September 30, 2017. As we believe it is more likely than not that no stock option related tax benefits will be realized, we do not record any net tax benefits related to exercised options.

The fair value of each option issued was estimated at the date of grant using the Black-Scholes valuation model. The following table summarizes the weighted-average assumptions used as inputs to the Black-Scholes model, and resulting weighted-average grant date fair values of stock options granted to employees during the periods indicated:

~~There were no options granted to consultants in the nine months ended September 30, 2017. 9,000 options were granted to consultants in the nine months ended September 30, 2016.~~

~~The estimated fair value of stock options that vested in the nine months ended September 30, 2017 and 2016 was $10.9 million and $10.4 million, respectively.~~

As of September 30, 2017, there were 827,630 shares available for purchase under the 2014 Employee Stock Purchase Plan (“2014 ESPP”). The Company recorded $0.4 million and $0.3 million of expense related to the 2014 ESPP in the nine months ended September 30, 2017 and 2016, respectively. 43,962 shares were purchased under the ESPP during the nine months ended September 30, 2017. There were no purchases of shares during the nine months ended September 30, 2016.

During the three and nine months ended September 30, 2017, we granted 145,000 options and 275,000 options, respectively, at weighted average exercise prices of $13.65 per share and $13.96 per share, respectively, outside of our 2014 EIP. These options have terms similar to the options granted under the 2014 EIP. The weighted average grant date fair value of such grants were $1.2 million and $2.2 million, respectively. No options were granted outside the 2014 EIP during the three and nine months ended September 30, 2016.

The following shares of common stock were reserved for future issuance under our equity incentive plans as of September 30, ~~2017:~~2021:

Total stock-based compensation expense related to all employee and non-employee stock awards was as follows:

	Three months ended September 30,				Nine months ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016		2021		2020		2021		2020
	(in thousands)				(in thousands)				(in thousands)				(in thousands)
Research and development	$	2,136	$	2,551	$	6,260	$	7,231	$	7,816	$	8,151	$	23,617	$	24,341
General and administrative		3,864		2,718		10,743		7,897		5,946		5,104		16,220		15,506
Total stock-based compensation expense	$	6,000	$	5,269	$	17,003	$	15,128	$	13,762	$	13,255	$	39,837	$	39,847

Effective October 2, 2021, we entered into the Pierre Fabre Commercialization Agreement, pursuant to which, we granted to Pierre Fabre an exclusive, field-limited license to commercialize and distribute “tab-cel^®” in Europe and select emerging markets in the Middle East, Africa, Eastern Europe and Central Asia (the “Territory”) following regulatory approval. Atara will retain full rights to tab-cel^®in other major markets, including North America, Asia Pacific and Latin America.

We will be responsible at our cost for the conclusion of the ongoing Phase 3 ALLELE clinical study and the Phase 2 multi-cohort clinical study. We will also be responsible at our cost for certain other activities directed to obtaining regulatory approval for tab-cel^®for EBV-positive lymphoproliferative disease pursuant to the terms of the Pierre Fabre Commercialization Agreement in Europe and the UK. Pierre Fabre will be responsible at its cost for obtaining and maintaining all other regulatory approvals and for commercialization and distribution of tab-cel^®in the Territory. We will own any intellectual property rights developed solely by us under the Agreement.

We are responsible for manufacturing and supplying Pierre Fabre with tab-cel^®for commercialization in the Territory at Pierre Fabre’s cost.

Pierre Fabre has paid us an upfront cash payment of $45.0 million for the exclusive license grant. We are also entitled to receive an aggregate of up to $318.0 million in milestone payments upon achieving certain regulatory and commercial milestones. In addition, we are eligible to receive significant double-digit tiered royalties as a percentage of net sales of tab-cel^®until the later of 12 years after the first commercial sale in such country, the expiration of specified patent rights, or the expiration of all regulatory exclusivity for such product on a country-by-country basis.

Item 2. Management’s Discussion and ~~Analysis~~Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our ~~unaudited~~ condensed consolidated financial statements and related notes included elsewhere in our Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2017.~~2021. This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the “Risk ~~Factors��~~Factors” section of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Atara Biotherapeutics is a pioneer in T-cell immunotherapy, leveraging its novel allogeneic Epstein-Barr virus (EBV) T-cell platform to develop transformative therapies for patients with serious diseases, including solid tumors, hematologic cancers and autoimmune disease. With our lead program in Phase 3 clinical development, we are the most advanced allogeneic T-cell immunotherapy company and intend to rapidly deliver off-the-shelf treatments to patients with high unmet medical need. Our platform leverages the unique biology of EBV T cells and has the capability to treat a wide range of EBV-driven diseases or other serious diseases through incorporation of engineered chimeric antigen receptors (CARs) or T-cell receptors (TCRs). Atara is applying this one platform, that does not require TCR or HLA gene editing, to create a robust pipeline. Our strategic priorities are:

Our T-cell immunotherapy platform includes the capability to progress both allogeneic and autologous programs and is potentially applicable to a broad array of targets and diseases. Our off-the-shelf, allogeneic T-cell platform allows for rapid delivery of a T-cell immunotherapy product manufactured in advance of patient need and stored in inventory, with each manufactured lot of cells providing therapy for numerous potential patients. This differs from autologous treatments, in which each patient’s own cells must be extracted, genetically modified outside the body and then delivered back to the patient, requiring a complex logistics network. We currently have on handsufficient tab-cel drug product inventory to supply commercial demand, if approved, for at least 12 months. For our allogeneic programs, we select the appropriate set of cells for use based on a patient’s unique immune profile. In addition, our manufacturing facility has the flexibility to manufacture multiple T-cell and CAR T immunotherapies while integrating research and process science functions to enable increased collaboration for rapid product development.We are currently in the process of completing our facility’s commercial production qualification activities for tab-cel^® while building inventory according to our commercial product supply strategy.

In October 2021, we entered into the Commercialization Agreement with Pierre Fabre (Pierre Fabre Commercialization Agreement), pursuant to which we granted to Pierre Fabre an exclusive, field-limited license to commercialize and distribute tab-cel^® in Europe and select emerging markets in the Middle East, Africa, Eastern Europe and Central Asia following regulatory approval. We will retain full rights to tab-cel^®in other major markets, including North America, Asia Pacific and Latin America. Under the terms of the Pierre Fabre Commercialization Agreement, we are currently negotiating a Manufacturing and Supply Agreement as well as a number of ancillary agreements to further advance our collaboration with Pierre Fabre.

In December 2020, we entered into a Research, Development and License Agreement with Bayer (the Bayer License Agreement) pursuant to which we granted to Bayer an exclusive, field-limited license under the applicable patents and know-how owned or controlled by us and our affiliates covering or related to ATA2271 and ATA3271. In March 2021, as contemplated by the Bayer License Agreement, we entered into (i) a Manufacturing and Supply Agreement (Bayer Manufacturing Agreement); (ii) a

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

We have also entered into research collaborations with leading ~~cell therapy company developing~~academic institutions such as Memorial Sloan Kettering Cancer Center (MSK), the Council of the Queensland Institute of Medical Research (QIMR Berghofer) and H. Lee Moffitt Cancer Center and Research Institute (Moffitt) pursuant to which we acquired rights to novel ~~treatments~~and proprietary technologies and programs.

We continue to advance development of tab-cel^® in a Phase 3 clinical trial for patients with ~~cancer and multiple sclerosis, or MS. Our “off-the-shelf”~~EBV+ PTLD (ALLELE), ~~or allogeneic, T-cells are engineered from donors with healthy immune function and allow~~which has received Breakthrough Therapy Designation (BTD) in the U.S. for delivery from inventory to patients in 3 to 5 days without a requirement for pretreatment. Our T-cell immunotherapies are designed to precisely recognize and eliminate cancerous or diseased cells without affecting normal, healthy cells. Our most advanced T-cell immunotherapy in development, ATA129, is being developed for the treatment of ~~cancer patients with~~ rituximab-refractory ~~Epstein-Barr virus, or EBV, associated post-transplant~~EBV-associated lymphoproliferative disorder, or EBV-PTLD, as well as other EBV positive hematologic and solid tumors including nasopharyngeal carcinoma, or NPC. Phase 3 clinical trials of ATA129 in EBV-PTLD are expected to start in the fourth quarter of 2017 and a Phase 1/2 clinical trial in NPC is planned for 2018. In addition, we expect to submit an application for Conditional Marketing Authorization, or CMA, for ATA129disorders, PRIority MEdicines (PRIME) designation in the European Union ~~or EU,~~(EU), and orphan drug designation in ~~2018.~~the U.S. for treatment of EBV+ PTLD.

We continue to progress our development of ATA188, ~~our~~an allogeneic T-cell immunotherapy ~~for autoimmune diseases, selectively targets specific~~targeting EBV antigens believed to be important for the potential treatment of ~~MS. A~~primary and secondary progressive multiple sclerosis (MS).

Our next-generation CAR T immunotherapy programs include autologous ATA2271 and allogeneic ATA3271 targeting mesothelin, which is a tumor antigen expressed on a number of ~~ATA190,~~solid tumors including mesothelioma, ovarian cancer, pancreatic cancer, non-small cell lung cancer and other tumors over-expressing mesothelin. Both programs were licensed to Bayer in December 2020, pursuant to an ~~autologous, or patient-derived, version of ATA188, in progressive forms of MS is ongoing,~~exclusive, field-limited license (the Bayer License Agreement).

We are also developing ATA3219, an off-the-shelf, allogeneic CD19 CAR T immunotherapy targeting B-cell malignancies, as a potential best-in-class therapy without the need for TCR gene editing, using our next-generation 1XX CAR co-stimulatory domain and ~~a Phase 1 ATA188 clinical trial commenced in Australia in October 2017. We expect the trial to expand~~EBV T-cell platform.

In addition to the ~~U.S. in early 2018. Our clinical pipeline also includes ATA520 targeting Wilms Tumor 1, or WT1, and ATA230 directed against cytomegalovirus, or CMV.~~

We licensed rights to T-cell product candidates from MSK in June 2015 and to know-how and technology from QIMR Berghofer Medical Research Institute, or QIMR Berghofer, in October 2015 and September 2016. In connection with the license from QIMR Berghofer,prioritized programs described above, we ~~also received an option to exclusively license the autologous version~~have a number of ~~product candidates intended for the potential treatment of EBV related diseases, including ATA190.~~

Our relationship with QIMR Berghofer provides rights to know-how and a technology that is complementary to that which we licensed from MSK. This know-how and technology is enabling the development of EBV and other virally-targeted CTLs for other indications, such as MS.preclinical programs. We are ~~working~~collaborating with Moffitt to develop ATA2431, a multi-targeted CAR T immunotherapy targeting B-cell malignancies. We returned the acute myeloid leukemia (AML) program to Moffitt in August 2021. We are also collaborating with QIMR Berghofer on the development of ATA368 for patients with human papillomavirus (HPV) associated cancers.

We believe our platform will have utility beyond the current set of targets to which it has been directed. We continue to evaluate additional product candidates, ~~for these new indications.~~including those derived from collaborations with our partners. We also continue to evaluate opportunities to license or acquire additional product candidates or technologies to enhance our existing platform.

Our most advanced T-cell product candidate, ATA129, is currently being investigated for the treatment of EBV-PTLD. In immunocompromised patients, EBV causes lymphomas and other lymphoproliferative disorders, collectively called EBV-PTLD. EBV-PTLD most commonly affects patients after HCT or after SOT. In December 2016, we announced that we had reached agreement with the U.S. Food and Drug Administration, or FDA, on the designs of two Phase 3 trials for ATA129 intended to support approval in two separate indications: the treatment of rituximab-refractory EBV-PTLD after HCT and after SOT.

The MATCH trial (EBV-PTLD after HCT) is designed to be a multicenter, open label, single arm trial designed to enroll approximately 35 patients with rituximab-refractory EBV-PTLD after HCT. The ALLELE trial (EBV-PTLD after SOT) is designed to be a multicenter, open label trial with two non-comparative cohorts. Each cohort is designed to enroll approximately 35 patients. The first cohort will include patients who previously received rituximab monotherapy, and the second cohort will include patients who previously received rituximab plus chemotherapy. Both cohorts are planned to enroll concurrently.

The primary endpoint of both the MATCH and ALLELE trials is objective response rate, defined as the percent of patients achieving either a complete or partial response to treatment with ATA129. Secondary endpoints for both trials include duration of response, overall survival, safety, quality of life metrics, and other data in support of potential health economic benefits. The trials are expected to open initially in the United States and later expand to include ex-U.S. sites.

In addition to our manufacturing facility in ~~June 2016,~~Thousand Oaks, California, we opened a multicenter expanded access protocol, or EAP, trial to provide access to ATA129 treatment and collect additional safety data while the medication is not commercially available or available to patients through another protocol. The trial is open to patientsalso work with ~~EBV-associated viremia or certain malignancies for whom there are no appropriate alternative treatment options. Interim results from the EAP will be presented at the 59~~^th ~~American Society of Hematology Annual~~

~~Meeting in Atlanta, GA in December 2017. These interim results include~~that, at the time of abstract submission in August 2017, all five patients with EBV-PTLD after SOT and four of the five patients with EBV-PTLD after HCT responded to treatment. An additional two EBV-PTLD patients received ATA129 and were too early in the follow-up period to assess. An additional ten patients with other EBV-associated cancers received ATA129 and were included in the safety population. ATA129 was generally well-tolerated. Treatment-related, treatment-emergent serious adverse events were reported in five of the 22 treated patients (two in EBV-PTLD and three in other EBV associated cancers patients). A tumor flare was observed in one patient.

Manufacture of ATA129 to support Phase 3 clinical trials is ongoing and continuing as planned. We have generated comparability data using our refined assays and cell lines produced by our contract manufacturing organization, which data we believe supports the demonstration of comparability, and are in discussions with FDA regarding comparability and Phase 3 clinical trial initiation. We expect to initiate two Phase 3 clinical trials with ATA129 in EBV-PTLD in the fourth quarter of 2017 following these discussions with FDA.

In clinical trials that enrolled patients with EBV-PTLD following HCT or SOT, efficacy following treatment with ATA129 compared favorably with historical data in these patient populations. In rituximab-refractory patients with EBV-PTLD after HCT, treatment with ATA129 resulted in one-year overall survival of approximately 60% in two separate clinical trials in comparison with historical data where median survival, or the time by which 50% of patients had died, was 16-56 days. In the setting of rituximab-refractory EBV-PTLD after SOT, similar results were observed, with one-year overall survival of approximately 60% in ATA129-treated patients in comparison with an expected historical one-year survival of 36% in patients with high risk disease similar to the patients treated in the trials. In February 2015, the FDA granted breakthrough therapy designation for ATA129 in the treatment of rituximab-refractory EBV-PTLD after HCT. Breakthrough therapy designation is an FDA process designed to accelerate 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 February 2016, the FDA granted orphan drug designation for ATA129 for the treatment of patients with EBV-PTLD after HCT or SOT.

We are also pursuing marketing approval of ATA129 in the EU. In March 2016, the EMA issued a positive opinion for orphan drug designation for ATA129 for the treatment of patients with EBV-PTLD. In October 2016, the EMA Committee for Medicinal Products for Human Use, or CHMP, and Committee for Advanced Therapies, or CAT, granted access to the EMA’s newly established Priority Medicines, or PRIME, regulatory initiative for ATA129 for the treatment of patients with rituximab-refractory EBV-PTLD following HCT. PRIME provides early enhanced regulatory support to facilitate regulatory applications and accelerate the review of medicines that address a high unmet need. In January 2017, we announced thatCognate BioServices, Inc. (Cognate) pursuant to parallel scientific advice from the EMA’s Scientific Advice Working Group and several national Health Technology Assessment, or HTA, agencies in the EU, in 2018 we plan to submit an application for CMA of ATA129 in the treatment of patients with rituximab-refractory EBV-PTLD following HCT. The CMA will be based on clinical data from Phase 1 and 2 trials conducted at MSK and dependent on certain available data from our Phase 3 trials in rituximab-refractory EBV-PTLD after HCT and SOT. The Phase 3 data that will be submitted as support for the CMA will require a ~~certain number of patients to be enrolled and evaluated in the ongoing trial prior to the time of filing~~.

~~In April 2017,~~Commercial Manufacturing Services Agreement (the Manufacturing Agreement) that we entered into ~~an agreement where Merck (known as Merck Sharp & Dohme or MSD outside~~in December 2019. Pursuant to the ~~United States and Canada) will provide drug supply~~Manufacturing Agreement, Cognate provides manufacturing services for a trial sponsored and conducted by Atara to evaluate ATA129 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.certain of our product candidates. The ~~Phase 1/2 trial will evaluate the safety, pharmacokinetics, pharmacodynamics, and preliminary efficacy~~initial term of the ~~combination and~~Manufacturing Agreement, as amended, runs until May 31, 2022. We may terminate the Manufacturing Agreement for convenience on six months’ written notice to Cognate, or immediately if Cognate is ~~planned for initiation in 2018.~~

~~ATA188 and ATA190 selectively target specific EBV antigens we believe~~unable to ~~be important for~~perform the ~~potential treatment of MS. ATA188,~~services under the allogeneic version, and ATA190, the autologous version, have the potential to precisely recognize and eliminate EBV-infected B-cells and plasma cells in the central nervous system that may catalyze autoimmune responses and MS pathophysiology.

Our collaborator, QIMR Berghofer, is currently conducting a Phase 1 trial utilizing ATA190 for the treatment of patients with either primary or secondary MS. We have an exclusive option to license this program from QIMR Berghofer.

~~The Phase 1 trial is~~Manufacturing Agreement or fails to obtain or maintain certain necessary approvals. In March 2021, Charles River Laboratories Inc. (CRL) acquired Cognate.

We continue to closely monitor the impact of the ongoing and evolving COVID-19 pandemic on our business and operations and have taken steps designed to ~~enroll ten~~ensure the health and safety of our employees, staff, clinical site staff and patients ~~including five~~and to maintain business continuity. Based on guidance issued by federal, state and local authorities, we have temporarily transitioned most of our workforce to a remote, work-from-home model, while maintaining essential in-person manufacturing and laboratory functions in order to advance key research, development and manufacturing priorities. We implemented safety protocols and procedures to support our onsite workforce.

In addition to implementing measures designed to protect the health and safety of our workforce, our clinical study and operational teams are working closely with ~~primary progressive MS, or PPMS, and five with secondary progressive MS, or SPMS. In this trial,~~ ~~patients receive four escalating doses of ATA190 over six weeks and are followed for an additional 20 weeks after the last dose. The objectives of the trial are first,~~clinical sites to assess the safety and tolerability of ATA190 in patients with progressive MS; second, to document preliminary evidence of efficacy through the evaluation of both clinically measured and patient reported changes in MS symptoms during and following treatment; and third, to generate ATA190 at clinical scale from the blood of patients with progressive MS.

Our collaborating investigators at QIMR Berghofer and the University of Queensland reported updated results from the clinical trial, as well as new results characterizing the molecular signature of EBV in MS brain lesions, at MSParis2017 Congress, the 7th Joint Meeting of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) and the Americas Committee for Treatment and Research in Multiple Sclerosis (ACTRIMS) in Paris, France. These updated results showed that six of ten progressive MS patients in the Phase 1 trial experienced clinical improvements, which were first observed 2-14 weeks after the initial infusion. Clinical improvements were reported in primary and secondary progressive MS patients from an established level of disability. Reduction in fatigue was a consistent observation in responding patients. Autologous ATA190 was well-tolerated, and no significant treatment-related adverse events were observed in the study. A correlation between clinical improvement and the reactivity of autologous ATA190 against target EBV antigens (EBV reactivity) was also observed. Five of the six patients who showed clinical improvements received autologous ATA190 with 7% or greater EBV reactivity, including three patients who improved their Expanded Disability Status Scale (EDSS) scores. Of the four patients who received autologous ATA190 with 3% or lower EBV reactivity, one had a mild clinical improvement, one had EDSS worsening, and two reported no change. Clinical improvement also correlated with other mechanistic markers of ATA190 T-cell function in response to EBV. We believe that the clinical improvements observed in six of ten progressive MS patients treated with autologous ATA190, including three patients who improved their EDSS score, highlights the potential that targeting EBV positive B-cells and plasma cells is a potential new treatment modality that could offer ~~a novel alternative to available MS therapies.~~

~~We commenced a Phase 1 trial utilizing ATA188 in 60 patients with progressive or relapsing-remitting MS in October 2017.The primary objective of the Phase 1 trial is to assess~~ support the safety of allogeneic ATA188 in subjects observed for at least one year after the first dose. Key secondary endpoints in the study include measures of clinical improvement such as expanded disability status scalesite staff and ~~annualized relapse rate as well as MRI imaging.~~ ~~We look forward to additional development with both ATA188 and ATA190 to further evaluate the potential therapeutic utility of targeting EBV in the treatment of MS.~~

Our third T-cell product candidate, ATA520, targets cancers expressing the antigen Wilms Tumor 1, or WT1, and is currently in Phase 1 clinical trials. WT1 is an intracellular protein that is overexpressed in a number of cancers, including multiple myeloma, or MM. MSK has two ongoing 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 HCT for patients with relapsed or refractory MM, including plasma cell leukemia, or PCL. Given 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 ATA129, we expect to initiate an additional clinical trial with ATA520 following the further process development of ATA520 as well as the clinical and regulatory advancement of ATA129 and ATA188.

Our fourth T-cell product candidate, ATA230, which is a third-party derived cytomegalovirus, or CMV, CTL, is in Phase 2 clinical trials for refractory CMV infection that occurs in some patients who have received an HCT or SOT or are otherwise immunocompromised. We met with the FDA for an end of Phase 2 meeting to discuss late stage development of ATA230 for the treatment of anti-viral refractory or resistant CMV infection following either HCT or SOT. Atara's collaborating investigators will present updated ATA230 results from 50 post-transplant patients with refractory CMV viremia and disease, including those with disease in the central nervous system, at the 59^th American Society of Hematology Annual Meeting in Atlanta, GA in December 2017. Results to be presented include that the reported response rate of 64% in all patients was similar in those with CMV viremia and disease. Patients who responded to ATA230 showed improved 6 and 12-month survival of 81.3% and 62.1%, 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 3 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~~preserve data integrity and access to treatment as appropriate. Where needed, remote study visits, tele-medicine, home health care, and other methods have been leveraged to ensure continuity of care for patients while preserving key endpoint data.

To date, the ~~treatment~~COVID-19 pandemic has not materially impacted our or our partners’ clinical, research and development, regulatory and manufacturing operations or timelines. However, at the onset of ~~congenital CMV infection. EMA has also granted us orphan status for ATA230 for CMV infection~~the pandemic, we experienced, and depending on the evolving impacts of the ongoing COVID-19 pandemic, we may again experience, some transient delays in ~~patients with impaired cell-mediated immunity. Given~~clinical study operations, as a result COVID-19.

The full extent to which the ~~opportunity~~COVID-19 pandemic may impact our business and operations is subject to ~~pursue a CMA~~future developments which are uncertain and difficult to predict. We continue to monitor the impact of the COVID-19 pandemic on our business and operations and will adjust our activities as appropriate.

For additional information about risks and uncertainties related to the COVID-19 pandemic that may impact our business, financial condition and operations, see the section titled “Risk Factors” under Part II, Item 1A in ~~the EU for ATA129, we have decided to prioritize our EBV related programs ahead of ATA230 at~~ this ~~time, and plan to further evaluate ATA230 Phase 3 trial designs following the initiation of our ATA129 Phase 3 trials.~~Quarterly Report on Form 10-Q.

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

We have never generated revenues and have incurred losses since inception. We do not expect to receive any revenues from any product candidates that we develop until we obtain regulatory approval and commercialize our products or enter into collaborative agreements with third parties.

Our net ~~loss was $84.2~~losses were $246.8 million and $225.3 million for the nine months ended September 30, ~~2017,~~2021 and as2020, respectively. As of September 30, ~~2017,~~2021, we had an accumulated deficit of ~~$261.3 million.~~$1.4 billion. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative expenses associated with our operations. As of September 30, ~~2017,~~2021, our cash, cash equivalents and short-term investments totaled ~~$200.2~~$357.2 million, which we intend to use to fund our operations.

We have never generated revenues from the sale of products and have incurred losses since inception. We do not expect to receive any revenue from product sales unless and until we obtain regulatory approval for and commercialize one of our current or future product candidates. Our revenues to date are derived solely from agreements with Bayer and Pierre Fabre related to upfront license fees, fees for research, process development and translational activities and technology transfer fees.

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

The largest component of our total operating expenses since inception has been our investment in research and development activities, including the preclinical and clinical development of our product candidates. Research and development expenses consist primarily of compensation and benefits for research and development employees, including stock-based compensation; expenses incurred under agreements with contract research organizations and investigative sites that conduct ~~clinical trials~~preclinical and ~~preclinical~~clinical studies; the costs of acquiring and manufacturing clinical ~~trial~~study materials and other supplies; payments under licensing and research and development agreements; other outside services and consulting costs; and ~~an allocation of~~ facilities, information technology and overhead expenses. Research and development costs are expensed as incurred.

We plan to ~~increase our research and development expenses as we~~ continue investment in the development of our product candidates. Our current planned research and development activities include the following:

In addition, we believe it is important to invest in the development of new product candidates to continue to build the value of our product candidate pipeline and our business. We plan to continue to advance our most promising early product candidates into preclinical development with the objective to advance these early-stage programs to human clinical ~~trials~~studies over the next several years.

Our expenditures on current and future preclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs, and timing of clinical ~~trials~~studies and development of our product candidates will depend on a variety of factors, including:

The process of conducting the necessary clinical research to obtain approval from the FDA ~~approval~~and other regulators is costly and time consuming and the successful development of our product candidates is highly uncertain. The risks and uncertainties associated with our research and development projects are discussed more fully in the section of this report titled “1A. Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.

General and administrative expenses consist primarily of compensation and benefits for legal, human resources, finance, commercial and other general and administrative employees, including stock-based compensation; ~~outside~~ professional ~~service~~services costs, including legal, patent, human resources, audit and accounting services; other outside services and consulting ~~costs;~~costs, including those related to pre-commercial activities; and ~~allocated~~ information technology and facilities costs. We anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support our continued research and development and the potential commercialization of one or more of our product candidates.costs.

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

There have been no significant changes ~~during the nine months ended September 30, 2017~~ to our critical accounting policies and significant judgments and estimates asduring the nine months ended September 30, 2021 from those disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020 filed with the SEC on March 1, 2021.

We are an “emerging growth company” as defined in the JOBS Act, and therefore we may take advantage of certain exemptions from various public company reporting requirements. As an “emerging growth company”,

However, we are choosing to irrevocably opt out of the extended transition periods available under the JOBS Act for complying with new or revised accounting standards. We will remain an “emerging growth company” for up to five years from the date of our initial public offering, although we will cease to be an “emerging growth company” upon the earliest of: (1) December 31, 2019; (2) the last day of the first fiscal year in which our annual gross revenues are $1 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a “large accelerated filer” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Comparison of the Three and Nine Months Ended September 30, ~~2017~~2021 and ~~2016~~2020

License and collaboration revenue for the three months and nine months ended September 30, 2021 consisted of revenue related to the recognition of upfront license fees, fees for research, process development and translational activities, and technology transfer and manufacturing service fees under the Bayer Agreements. No revenue was recognized in 2020.

Research and development expenses consisted of the following costs, by program, in the periods presented:

Three months ended September 30,

Increase

Nine months ended September 30,

Increase

2017

2016

(Decrease)

2017

2016

(Decrease)

(in thousands)

(in thousands)

ATA129

$
3,882

$
2,500

$
1,382

$
11,632

$
5,852

$
5,780

ATA230

357

1,772

(1,415
)

1,709

2,146

(437
)
ATA188 and ATA190

693

—

693

1,276

—

1,276

T-cell manufacturing and other program-related

6,345

6,940

(595
)

15,439

15,361

78

Employee and overhead costs

9,321

7,590

1,731

26,379

19,681

6,698

Total research and development

$
20,598

$
18,802

$
1,796

$
56,435

$
43,040

$
13,395

	Three Months Ended							Nine Months Ended
	September 30,				Increase			September 30,				Increase
	2021		2020		(Decrease)			2021		2020		(Decrease)
	(in thousands)							(in thousands)
Tab-cel^® expenses	$	12,127	$	15,723	$	(3,596	)	$	36,874	$	45,426	$	(8,552	)
ATA188, CAR T and other program expenses		7,481		4,127		3,354			24,134		14,339		9,795
Employee and overhead expenses		50,725		40,027		10,698			141,859		119,331		22,528
Total research and development expenses	$	70,333	$	59,877	$	10,456		$	202,867	$	179,096	$	23,771

~~ATA129 costs~~Tab-cel^® expenses were ~~$3.9~~$12.1 million and ~~$11.6~~$36.9 million in the three and nine months ended September 30, ~~2017,~~2021, respectively, as compared to ~~$2.5~~$15.7 million and ~~$5.9~~$45.4 million in the comparative ~~2016~~2020 periods. The ~~increases between the periods~~decreases in 2021 were primarily due to ~~manufacturing and outside service costs~~higher production activities in 2020 related to the ~~preparation for the two Phase 3 clinical trials~~build-up of ~~ATA129 in EBV-PTLD~~our tab-cel^® inventory.

ATA188, CAR T and ongoing costs for our ATA129 EAP clinical trial, which was initiated in mid-2016. We anticipate that ATA129 costs will continue to increase during the remainder of 2017 and 2018 due to preparation for and initiation of two Phase 3 clinical trials for this product candidate.

~~ATA230 costs~~other program expenses were ~~$0.4~~$7.4 million and ~~$1.7~~$24.1 million in the three and nine months ended September 30, ~~2017,~~2021, respectively, as compared to ~~$1.8~~$4.1 million and ~~$2.1~~$14.3 million in the comparative ~~2016~~2020 periods. The ~~decreases between~~increase in the ~~periods were~~three months ended September 30, 2021 was primarily due to increased research and clinical trial costs related to our ATA188 and CAR T programs. The increase in the nine months ended September 30, 2021 was primarily related to ~~lower manufacturing~~milestone and ~~outside services~~license fees due to MSK and QIMR, and an increase in research and clinical trial costs ~~for this product candidate.~~

Employee and overhead expenses were ~~$0.7~~$50.7 million and ~~$1.3~~$141.8 million in the three and nine months ended September 30, ~~2017,~~2021, respectively, as compared to none in the comparative 2016 periods. The increases between the periods were primarily related to increased costs related to preparations for the Phase 1 clinical trial of allogeneic ATA188, which was initiated in October 2017.

~~T-cell manufacturing and other program-related expenses were $6.3~~$40.0 million and ~~$15.4 million in the three and nine months ended September 30, 2017, as compared to $6.9 million and $15.4~~$119.3 million in the comparative ~~2016~~2020 periods. The increases ~~between the periods~~ were primarily due to increased general manufacturing activity for our product candidates and costs associated with our collaboration with QIMR Berghofer. We anticipate that T-cell manufacturing and other program-related expenses will continue to increase during the remainder of 2017 due to an increase in manufacturing activity, the continued development of our manufacturing processes, and the development of products obtained from our collaboration with QIMR Berghofer.

Employee and overhead costs were $9.3 million and $26.4 million in the three and nine months ended September 30, 2017, as compared to $7.6 million and $19.7 million in the comparative 2016 periods. The increases between the three month periods were primarily due to $1.5 million increase in payroll and relatedhigher compensation-related costs from increased headcount, higher outside services, and ~~$0.2 million increase in allocated facilities, information technology and overhead expenses~~higher facility-related costs in support of our continuing expansion of research and development activities. ~~The increases between~~For the ~~nine month periods were primarily due to $3.8 million increase in~~three months ended September 30, 2021, payroll and related costs ~~from~~ increased ~~headcount,~~by $5.6 million, facility-related costs increased by $3.9 million and outside services costs increased by $1.2 million. For the nine months ended September 30, 2021, payroll and related costs increased by $11.8 million, facility-related costs increased by $7.8 million and outside services costs increased by $2.9 ~~million increase in allocated facilities, information technology and overhead expenses in support of our continuing expansion of~~million.

Total research and development ~~activities. We anticipate that employee~~expenses for the nine months ended September 30, 2021 and ~~overhead costs will continue to increase in future periods~~2020 were not significantly impacted as ~~we continue to expand our research and development activities.~~a result of the COVID-19 pandemic.

General and administrative expenses increased to ~~$11.1~~$19.8 million and ~~$29.3~~$57.0 million in the three and nine months ended September 30, ~~2017,~~2021, respectively, as compared to ~~$7.1~~$14.8 million and ~~$19.4~~$48.3 million in the comparative ~~2016~~2020 periods. The increases ~~between the three month periods~~ were primarily ~~due to a $2.3 million increase in payroll and related costs~~ driven by higher compensation-related costs from increased headcount ~~$1.4 million increase in~~ ~~professional services costs,~~ and ~~a $0.2 million increase in travel and other related costs. The increases between the nine month periods were primarily due~~activities to a $6.4 million increase in payroll and related costs driven by increased headcount, $3.2 million increase in professional services costs, and a $0.2 million increase in travel and other related costs. We expect thatsupport our anticipated tab-cel^® launch.

Total general and administrative ~~costs will continue to increase in 2017~~expenses for the nine months ended September 30, 2021 and ~~2018~~2020 were not significantly impacted as ~~we continue to expand our operations.~~a result of the COVID-19 pandemic.

Since our inception in 2012, we have funded our operations primarily through the issuance of common and preferred ~~stock. In October 2014, we completed our initial public offering~~stock, issuance of pre-funded warrants to purchase common stock and ~~received net proceeds of $56.5 million.~~ upfront fees from the Bayer License Agreement and the Pierre Fabre Commercialization Agreement.

In February ~~2015, we completed a follow-on offering and received net proceeds of $69.5 million and in July 2015, we completed a follow-on offering and received net proceeds of $193.9 million.~~

~~In March 2017,~~2020, we entered into a sales agreement (the ~~“ATM facility”)~~2020 ATM Facility) with Cowen and Company, LLC ~~(“Cowen”) under~~(Cowen), which ~~we may offer and sell,~~provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to ~~$75.0~~$100.0 million through Cowen, as our sales agent. ~~We will pay Cowen a commission of up to 3.0% of the gross sales proceeds of any common stock sold under the ATM facility.~~ The issuance and sale of these shares by us pursuant to the 2020 ATM ~~facility~~Facility are deemed “at the market” offerings and are ~~available~~registered under the Securities Act of 1933, as ~~amended.~~amended (the Securities Act), and are registered under the Securities Act. We pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2020 ATM Facility.

During the three ~~and nine-months~~months ended September 30, ~~2017,~~2021, we sold an aggregate of ~~655,876 and 1,349,865~~3,258,909 shares of common stock ~~respectively,~~ under the 2020 ATM ~~facility,~~Facility, at an average price of ~~approximately $15.55~~$15.33 per share ~~and $14.82 per share, respectively,~~ for gross proceeds of ~~$10.2~~$49.9 million ~~and $20.0 million, respectively~~ and net proceeds of ~~$9.9~~$48.7 million, ~~and $19.2 million, respectively,~~ after deducting commissions and other offering ~~expenses.~~ expenses payable by us. For the nine months ended September 30, 2021, we sold an aggregate of 3,404,539 shares of common stock under ATM facilities, at an average price of $15.41 per share, for gross proceeds of $52.5 million and net proceeds of $51.2 million, after deducting commissions and other offering expenses payable by us. On October 1, 2021, we received the remaining net proceeds of approximately $2.3 million from sales of shares of common stock under the 2020 ATM Facility that occurred during September 2021.

As of September 30, ~~2017, $55.0~~2021, we have $27.2 million of common stock remained available to be sold under ~~this facility,~~the 2020 ATM Facility, subject to certain conditions as specified in the agreement.

We have incurred losses and negative cash flows from operations in each year since inception. We do not expect to receive any revenues from the sale of products unless and until we obtain regulatory approval for and commercialize any of our product candidates. As ~~of September 30, 2017, we had an accumulated deficit of $261.3 million. It will be several years, if ever, before we have a product candidate ready for commercialization, and~~such, we anticipate that we will continue to incur losses ~~for at least~~in the ~~next several years.~~foreseeable future. We expect that our ~~research and development and general and administrative~~operating expenses will continue to ~~increase and, as~~increase. As a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We may borrow funds on terms that may include restrictive covenants, including covenants that restrict the operation of our business, liens on assets, high effective interest rates and repayment provisions that reduce cash resources and limit future access to capital markets. In addition, we expect to continue to opportunistically seek access to additional funds through additional public or private equity offerings or debt financings including by utilizing the 2020 ATM Facility, through potential collaborations, partnering or other strategic arrangements, or a combination of the foregoing. To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. To the extent that we

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

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our cash, cash equivalents and short-term investments are held in bank and custodial accounts and consist of money market funds, U.S. Treasury, government agency and corporate debt obligations, commercial paper and asset-backed ~~securities~~. ~~For the remainder of 2017 and early 2018, w~~esecurities. We expect ~~to spend approximately $37.5 million of cash to build-out our office, lab and cellular therapy manufacturing space in Thousand Oaks, California.~~ ~~Management expects~~ that existing cash, cash equivalents and short-term investments as of September 30, ~~2017~~2021, together with the $45.0 million upfront payment received in connection with the Pierre Fabre Commercialization Agreement, will be sufficient to fund our planned operations into the ~~first~~second quarter of ~~2019.~~ 2023.

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

	September 30,		December 31,		September 30,		December 31,
	2017		2016		2021		2020
	(in thousands)				(in thousands)
Cash and cash equivalents	$	60,493	$	47,968	$	113,209	$	200,404
Short-term investments		139,728		207,714		244,036		300,255
Total cash, cash equivalents and short-term investments	$	200,221	$	255,682	$	357,245	$	500,659

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

	Nine months ended September 30,						Nine Months Ended September 30,
	2017			2016			2021			2020
	(in thousands)						(in thousands)
Net cash provided by (used in):
Net cash (used in) provided by:
Operating activities	$	(62,564	)	$	(38,861	)	$	(186,253	)	$	(176,639	)
Investing activities		55,739			60,953			46,582			(83,836	)
Financing activities		19,350			175			52,476			248,778
Net increase in cash and cash equivalents	$	12,525		$	22,267
Net (decrease) increase in cash, cash equivalents and restricted cash							$	(87,195	)	$	(11,697	)

Net cash used in operating activities was ~~$62.6~~$186.3 million in the ~~2017 period~~nine months ended September 30, 2021 as compared to ~~$38.9~~$176.6 million in the ~~2016~~comparative 2020 period. The increase of ~~$23.7~~$9.6 million was primarily due to ~~an $23.4~~a $21.5 million increase in net loss, ~~a $2.2 million decrease in the amortization of investment premiums and discounts, and a $0.5 million decrease in operating assets and liabilities,~~ partially offset by a ~~$1.9~~$10.3 million ~~increase~~decrease in ~~stock-based compensation and a $0.5 million increase in depreciation expense.~~net working capital usage.

Net cash provided by investing activities in the ~~2017 period~~nine months ended September 30, 2021 consisted ~~primarily~~ of ~~$162.1~~$279.5 million received from maturities and ~~$58.2 million from~~ sales of available-for-sale securities, ~~partially~~ offset by ~~$152.8~~$224.8 million used to purchase available-for-sale securities ~~$10.5~~and $8.1 million in purchases of property and equipment. Net cash used in investing activities in the comparative 2020 period consisted of $279.2 million used to purchase available-for-sale securities and $3.9 million in purchases of property and equipment, ~~and a $1.2 million investment in restricted cash. Net cash provided~~partially offset by ~~investing activities during the 2016 period consisted primarily of $127.7~~$199.3 million received from maturities and ~~$187.5 million from~~ sales of available-for-sale ~~securities, partially offset by $252.3 million used to purchase available-for-sale securities and $2.0 million in purchases of property and equipment.~~securities.

Net cash provided by financing activities in the ~~2017 period~~nine months ended September 30, 2021 consisted primarily of ~~$19.2~~$48.7 million of net proceeds received from ~~the~~ ATM ~~facility~~facilities and ~~$0.5~~$5.2 million ~~of net proceeds~~ from employee stock award transactions, partially offset by ~~$0.4~~$1.2 million of taxes paid related to the net share settlement of ~~restricted stock.~~ RSUs.Net cash provided by financing activities in the ~~2016~~comparative 2020 period ~~was $0.2 million.~~consisted primarily of $189.3 million of net proceeds received from an underwritten public offering of common stock and pre-funded warrants, $58.0 million of net proceeds received from ATM facilities and $3.4 million from employee stock award transactions, partially offset by $1.5 million of taxes paid related to the net share settlement of RSUs.

To date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate ~~significant~~any revenue from product sales unless and until we obtain regulatory approval offor and commercialize one of our current or future product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the accumulated losses to increase as we continue the development of and seek regulatory approvals for our product candidates and begin to commercialize any approved products. We are subject to all of the risks inherent in the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need to raise substantial additional funding in connection with our continuing and expected expansion of our operations.

We expect that our existing cash, cash equivalents and short-term investments as of September 30, 2021, together with the $45.0 million upfront payment received in connection with the Pierre Fabre Commercialization Agreement,will be sufficient to fund our planned operations into the ~~first~~second quarter of ~~2019.~~2023. In order to complete the process of obtaining regulatory approval for any of our ~~lead~~ product ~~candidate~~candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our ~~lead~~ product ~~candidate,~~candidates, if approved, we will require substantial additional funding. In addition, we expect to continue to opportunistically seek access to additional funds through additional public or private equity offerings or debt financings, through potential collaborations, partnering or other strategic arrangements, or a combination of the foregoing.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited ~~to:~~to:

~~We did not have during the periods presented, and~~ongoing COVID-19 pandemic, we do not ~~currently have, any off-balance sheet arrangements, as defined in~~know whether additional capital will be available when needed, or that, if available, we will be able to obtain additional capital on reasonable terms. If we are unable to raise additional capital due to the ~~rules and regulations~~volatile global financial markets, general economic uncertainty or other factors, we will be forced to delay, limit, reduce or terminate preclinical studies, clinical studies or other development activities for one or more of ~~the SEC.~~our product candidates.

~~Future minimum payments~~We lease our corporate headquarters in South San Francisco, California under ~~our operating leases as~~a non-cancellable lease agreement for approximately 13,670 square feet of ~~September 30, 2017 were $3.4 million.~~office space. In October 2020, we entered into an amendment of this lease to extend the lease term by one year and an option to extend the lease for an additional five years. The amended lease expires in May 2022.

In ~~addition, in~~ February 2017, we entered into a lease agreement for approximately 90,580 square feet of office, lab and cellular therapy manufacturing space in Thousand Oaks, California. The initial 15-year term of ~~the~~this lease ~~commences upon~~commenced in February 2018, and the ~~substantial completion of landlord’s work as defined under the agreement. The aggregate~~ contractual obligations during the initial term are $16.4 ~~million.~~million in aggregate. We have the option to extend ~~the~~this lease for two additional periods of ten and nine years, respectively, after the initial term. ~~We are accounting for~~In connection with this lease, we were required to issue a letter of credit in the amount of $1.2 million to the landlord, which is recorded as long-term restricted cash in our condensed consolidated balance sheet.

In November 2018, we entered into a lease agreement for approximately 51,160 square feet of office space in Thousand Oaks, California. The initial term of this lease expires in February 2026. The contractual obligations during the initial term are $8.5 million in aggregate. We have the option to extend the lease for an additional period of five years after the initial term.

In May 2019, we entered into a new lease agreement for approximately 8,800 square feet of office and lab space in Aurora, Colorado. The initial term of this lease expires in April 2024. In February 2021, we further amended this lease to add an additional 2,861 square feet of lab space. The contractual obligations during the lease term are not material. We have the option to extend this lease for two additional five-year periods after the initial term.

In March 2021, we entered into a new lease agreement for approximately 33,659 square feet of office, lab and warehouse space in Thousand Oaks, California. The initial 10.5-year term of this lease commenced in August 2021 and the contractual obligations during the initial term are $21.0 million in aggregate. We have the option to extend this lease for two additional five-year periods after the initial term.

Our contractual obligations primarily consist of our obligations under ~~build~~non-cancellable operating and finance leases and contracts we enter into in the normal course of business with clinical research organizations for clinical studies, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies and supplies and other services and products for operating purposes. These contracts generally provide for termination on notice, with the exception of one of our contract manufacturing agreements which we may terminate for convenience upon six months’ written notice. With the exception of the aforementioned lease agreement entered into during the first quarter of 2021, there have been no material changes to ~~suit accounting guidance.~~our contractual obligations and commitments reported in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.

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

Item 3. ~~Quantitative~~Quantitative and Qualitative Disclosures about Market Risk

During the nine months ended September 30, ~~2017,~~2021, there were no material changes to our interest rate risk disclosures, market risk disclosures and foreign currency exchange rate risk disclosures reported in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020 filed with the SEC on March 1, 2021.

Under the supervision of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of September 30, ~~2017.~~2021. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, ~~2017~~2021 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussion regarding required ~~disclosure.~~disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, including our Chief Executive Officer and our Chief Financial Officer and Principal Accounting Officer, does not expect that our disclosure controls and procedures and our internal controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can only provide reasonable assurances that the objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected. As these inherent limitations are known features of the financial reporting process, it is possible to design into the process safeguards to reduce, though not eliminate, these risks. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. While our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, there can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

We intend to review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis and to improve our controls and procedures over time and to correct any deficiencies that we may discover in the future. While our Chief Executive and Financial Officer and Principal Accounting Officer have concluded that, as of September 30, 2017, the design of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, was effective, future events affecting our business may cause us to significantly modify our disclosure controls and procedures.

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, ~~2017~~2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Investing in our common stock involves a high degree of risk. ~~You~~Investors should carefully consider all of the risk factors and uncertainties described below, in addition to the other information contained in this Quarterly Report on Form 10-Q, 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 following~~these 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 ~~you~~investors may lose all or a part of ~~your~~their investment. We have marked with an asterisk (*) those risk factors that reflect substantive changes from the risk factors included in our previously filed Annual Report on Form 10-K for the year ended December 31, 2016.

*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~~candidates 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, ~~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 nine months ended September 30, ~~2017,~~2021, we reported a net loss of ~~$84.2 million and we had an accumulated deficit of $261.3 million as of September 30, 2017.~~$246.8 million.

We do not expect to generate product revenues ~~for many years,~~in the near 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 ~~trials~~studies 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~~Because of the anticipated completion of our BLA filing for tab-cel^® in the second quarter of 2022, we plan to ~~transition at some point~~begin transitioning 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~~approved products and thus have no product revenues. We may never generate revenues from the sale of products or achieve profitability.

To date, we have not generated any revenues from product ~~sales or otherwise.~~sales. Even if we are able to successfully achieve regulatory approval for our product candidates, we do not know when we will generate revenues from product sales 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 from the sale of products 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 or a reduction in the incidence of the addressable disease, we may not generate significant revenues from sales of ~~such~~our 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 ~~trials~~studies 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 ~~agreement~~agreements with ~~MSK and QIMR,~~each of our in-license 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 ~~trials~~studies is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates.

We believe that our existing cash, cash equivalents and short-term investments as of September 30, 2021, together with the $45.0 million upfront payment received in connection with the Pierre Fabre Commercialization Agreement will be sufficient to fund our planned operations into the ~~first~~second quarter of ~~2019.~~2023. As of September 30, ~~2017,~~2021, we had total cash, cash equivalents and short-term investments of ~~$200.2~~$357.2 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 other than reimbursements, milestone and royalty payments that we may receive under the Bayer Agreements and milestone and royalty payments that we may receive under Pierre Fabre Commercialization Agreement. While we expect to continue to opportunistically seek access to additional funds through additional public or private equity offerings or debt financings, through potential collaborations, partnering or other strategic arrangements, or a combination of the foregoing, 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 ~~trials~~studies or other development activities for one or more of our product candidates or delay, limit, reduce or terminate our establishment of sales, marketing and ~~marketing~~distribution 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 required 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, ~~your~~or 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 ~~your~~the rights of stockholders. To the extent equity valuations, including the trading price of our common stock, are depressed as a ~~stockholder.~~result of economic disruptions or other uncertainties, for example due to the COVID-19 pandemic or other factors, the potential magnitude of this dilution will increase. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, ~~such as~~including 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 or other rights 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.

We are ~~very~~generally early in our development efforts and have only ~~five~~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~~generally early in our development efforts, and only ~~four~~a small number of our product candidates are in clinical development. ~~All~~The majority of our ~~other~~ product candidates are currently in preclinical development. We have invested ~~substantially all of our efforts and financial~~substantial resources in identifying and developing potential product candidates, ~~and~~ conducting preclinical and clinical studies, ~~clinical trials~~manufacturing 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 many years,~~from the sale of products, if ~~ever,~~approved, will depend heavily on the successful development and eventual commercialization of our product candidates. The success of our product candidates will depend on ~~several~~many factors, including the following:

For example, in December 2015, we announced that our Phase 2 proof-of-concept trial of PINTA745 did not meet its primary endpoint, and we suspended further development of PINTA745 and ATA842, a compound that is related to PINTA745. 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 business and operations have been affected by and could be materially and adversely affected in the future by the effects of health epidemics and pandemics, including the evolving and ongoing effects of the COVID-19 pandemic, in particular with respect to any new variants or resurgences of the pandemic. The COVID-19 pandemic continues to impact our business and operations and could materially and adversely affect our business and operations in the future, as well as the businesses and operations of third parties on which we rely.

Our business could be adversely affected by health epidemics and pandemics, including the ongoing COVID-19 pandemic, which has presented a substantial public health and economic challenge around the world and has affected, and continues to affect, our employees, patients, communities and business operations, as well as the U.S. economy and financial markets. As a result of the ongoing COVID-19 pandemic, the work-from-home model we implemented in March 2020 for most of our employees remains in place. We continue to maintain essential in-person manufacturing and laboratory functions in order to advance key research, development and manufacturing priorities. In connection with these measures, we may be subject to claims based upon, arising out of, or related to COVID-19 and our actions and responses thereto, including any determinations that we may make to continue to operate or to re-open our offices and facilities where permitted by applicable law. The effects of current and potential future state executive orders, local shelter-in-place orders, government-imposed quarantines, our work-from-home policies and potential return-to-office strategy and other similar actions may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

Further quarantines, shelter-in-place or similar restrictions and other actions taken by foreign, federal, state and local governments, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur or could be reinstated, related to the ongoing COVID-19 pandemic or other infectious diseases, could impact our manufacturing capabilities and third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain. In particular, standard transportation channels have been impacted and we and other manufacturing, testing, product disposition, contract manufacturing organizations (CMOs) and external testing laboratories are subject to enhanced risk assessment and mitigation measures. In addition, there have been and may continue to be interruptions in the supply of leukapheresis collections, which supply raw materials used in our products.

Our clinical trials may also be affected by health epidemics and have been affected by the ongoing and evolving COVID-19 pandemic. Clinical site initiation and patient enrollment have experienced delays as a result of the ongoing and evolving COVID-19 pandemic, including due to the prioritization of hospital resources toward COVID-19 and away from clinical trials or as a result of changing practice patterns that impact the diseases our trials address. Some patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services or if patients contract COVID-19 or are forced to quarantine. For example, while most clinical trial sites for our studies, including our Phase 3 clinical trial of tab-cel^® in patients with EBV+ PTLD, remain open to enrollment for patients, some sites have limited the screening and enrollment of new patients due to governmental orders related to COVID-19, or fear of infection of COVID-19, have limited, and may continue to limit, patients’ abilities to access clinical sites. COVID-19-related travel restrictions may also interrupt key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, processing and analyses. At the outset of the COVID-19 pandemic, we observed a temporary slow-down in stem cell and solid organ transplant volumes, which may have decreased the eligible patient population for the tab-cel^® Phase 3 study. In April 2020, we initiated a temporary pause in the screening and enrollment of patients in our EMBOLD study of ATA188 in patients with PMS. Although we were able to resume the screening and enrollment of patients in our EMBOLD study and enrolled the first patient in the study in June 2020, the ongoing COVID-19 pandemic may require us to institute another pause in the screening and enrollment of patients in our EMBOLD study. Similarly, our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may be adversely impacted.

While we expect the ongoing and evolving COVID-19 pandemic to continue to adversely affect our business operations, the extent of the impact on our clinical development and regulatory efforts and the value of and market for our common stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S. and in other countries, and the effectiveness of actions taken globally to contain and treat COVID-19. In addition, to the extent the evolving effects of the ongoing and evolving COVID-19 pandemic adversely affect our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described elsewhere in this “Risk Factors” section.

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 ~~only~~prioritized clinical-stage product candidates are ATA129, which is moving to Phase 3 clinical trials, ATA188, which is in a Phase 1 clinical trial, ATA190, which is in a Phase 1 clinical trial conducted by QIMR, ATA230, which is in Phase 2 clinical trials,include tab‑cel^® and ~~ATA520, which is moving into Phase 1/2 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 States~~U.S. without first obtaining regulatory approval for the product from the FDA; similarly, we cannot commercialize product candidates outside of the ~~United States~~U.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 ~~trials~~studies and depends upon numerous factors, including the substantial discretion of the regulatory authorities. The novel nature of our product candidates may create further challenges in obtaining regulatory approval. For example, the FDA and comparable foreign regulatory authorities have limited experience with regulating the development and commercialization of T-cell immunotherapies, particularly allogeneic T-cell product candidates, and CAR T therapies, including assessing the comparability of different versions of such product candidates. In addition, approval policies, regulations, regulatory positions or the type and amount of clinical and other data necessary to gain approval may change during the course of a product candidate’s clinical development and throughout regulatory interactions, and may vary among ~~jurisdictions.~~jurisdictions, particularly for novel therapies. 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 CMC information, 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. IfFor example, at a recent Type B meeting, we received feedback from the FDA regarding additional information and data that they wish to review prior to submission of the BLA for tab-cel^® for patients with EBV+ PTLD. We have requested and expect to be granted additional interactions with the FDA to progress towards BLA submission, but we cannot be certain of the timing or outcome of such meetings. In addition, 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’ Kymriah^® and Gilead’s Yescarta^®, may not be indicative of what these regulators may require for approval of our therapies. We have multiple clinical trials of our product candidates currently ongoing. If an adverse safety issue, clinical hold or other adverse finding occurs in one or more of our clinical trials, such event could adversely affect our other clinical trials of the same or related product candidates. Moreover, our product candidates may not perform successfully in clinical studies or may be associated with adverse events that distinguish them from those that 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.

Our development and commercialization activities could be harmed or delayed by governmental or regulatory delays due to limitations on the availability of governmental and regulatory agency personnel to review regulatory filings or engage with us, caused by global health concerns, including the ongoing and evolving COVID-19 pandemic, changes to governmental regulatory requirements, policies, guidelines or priorities, reallocation, or availability of government resources, or for other reasons, which may significantly delay the FDA’s, or other regulatory agency, ability to review and process any submissions we have filed or may file or cause other regulatory delays.If global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, or impact reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. For example, in response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and products inspections of domestic manufacturing facilities through April 2020. On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials. On July 10, 2020, the FDA announced that it is working toward the goal of restarting on-site inspections it deems to be “mission critical.” In May 2021, the FDA updated its guidance, first published in August 2020, clarifying how it intends to conduct inspections during the COVID-19 pandemic, including how it plans to determine which inspections are “mission critical.” The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. Regulatory authorities outside the United States may adopt similar restrictions or other policy

measures in response to the COVID-19 pandemic. It is unclear how FDA’s and other health agencies’ policies and guidance will impact any inspections of our facilities, including our clinical trial sites.

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 ~~present significant challenges.~~could result in heightened regulatory scrutiny, delays in clinical development or delays in or our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates.

Our future success is dependent ~~in part~~ 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, ~~and effective,~~pure, potent, comparable to those ~~T-cells~~T cells produced by ~~MSK~~our partners historically, scalable or profitable.

Moreover, ~~public perception of~~actual or perceived 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 one of our product candidates is approved by applicable regulatory authorities, of physicians to subscribe to the novel treatment ~~mechanics.~~ mechanics or of patients to provide consent to

receive a novel treatment despite its regulatory approval. The FDA or other applicable regulatory authorities may require specific post-market studies or additional information that communicates the benefits or risks of our products. New data may reveal new risks of our product candidates 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 ~~trials~~studies 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 ~~trials~~studies or receive regulatory approval.

Success in preclinical studies and early clinical ~~trials~~studies does not ensure that later clinical ~~trials~~studies 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 ~~trials~~studies for our product candidates, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, we do not know whether the clinical ~~trials~~studies we may conduct, or clinical studies in progress, will demonstrate adequate efficacy and safety to result in regulatory approval to market ~~ATA129, ATA520,~~tab-cel^®, ATA188, ~~ATA190, ATA230~~any product candidates resulting from our next-generation CAR T programs or any of our other product candidates in any particular jurisdiction. ~~For example, ATA129~~

Tab-cel^®has ~~only~~ been predominantly evaluated in a single-center ~~trial~~studies under investigator-sponsored ~~INDs~~investigational new drug (INDs) held by MSK and in our EAP, utilizing a different response criteria and endpoints from those we may utilize in later clinical ~~trials.~~studies. The findings may not be reproducible in ~~multi-center trials~~late 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, file a marketing application on the basis of interim data from a subset of the required patients or file a marketing application on the basis of the final data. A marketing application based on interim data would impact the required ORR, may impact the approved indication, and may also result in post-marketing requirements that must be fulfilled. Similarly, 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.

For regulatory approvals of tab-cel^®, we plan on using independent radiologist and/or oncologist assessment of responses which may not correlate with the investigator-reported assessments. In addition, the Phase 2 clinical ~~trials~~studies with ~~ATA129~~tab-cel^® enrolled a heterogeneous group of patients with a variety of ~~EBV-associated~~EBV-driven malignancies, including ~~but not limited to EBV-PTLD~~EBV+ PTLD after HCT and ~~EBV-PTLD~~EBV+ PTLD after SOT. These Phase 2 ~~trials~~studies were not prospectively designed to evaluate the efficacy of ~~ATA129~~tab-cel^® in the treatment of a single disease state for which we may later seek approval.

Moreover, final ~~trial~~study results may not be consistent with interim ~~trial~~study results. Efficacy data from prospectively designed ~~trials~~studies may differ significantly from those obtained from retrospective subgroup analyses. In addition, clinical data obtained from a clinical ~~trial~~study with an ~~autologous~~allogeneic product candidate may not yield the same or better results ~~with~~as compared to an ~~allogeneic~~autologous product candidate. If later-stage clinical ~~trials~~studies 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 clinical studies that we or our partners 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 or our partners may announce or share with regulatory authoritiesinterim “top line” or preliminary data from clinical studies. Interim data from completed clinical studies 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

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 ~~trial~~study process. Product candidates in later stages of clinical ~~trials~~studies 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 ~~trials~~studies and we do not know whether ~~planned~~ clinical ~~trials~~studies 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 ~~trials~~studies of any of our product candidates on clinical hold in the future. Clinical ~~trials~~studies 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 for the ALLELE study of tab-cel^® 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 ~~patient population, the severity of the disease under investigation, the proximity of subjects to~~year as we increased clinical sites ~~the patient referral practices~~and HLA coverage. However, in May 2019, we announced that enrollment in our Phase 3 studies of physicians, the eligibility criteria for the trial, the design of the clinical trial, ability to obtain and maintain patient consents, risk that enrolled subjects will drop out or die before completion, competitiontab-cel^® for patients ~~from other clinical trials, competing clinical trials~~with EBV+ PTLD was proceeding slower than anticipated. Many of our product candidates are designed to treat rare diseases, and ~~clinicians’ and patients’ perceptions~~ as a result, the pool of potential patients with respect to ~~the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.~~a given disease is small. We may not be able to initiate or continue to support clinical ~~trials~~studies of ~~ATA129,~~tab-cel^®, ATA188 ~~ATA520, ATA230~~ or any ~~future~~other product candidates if we are unable to locate and enroll a sufficient number of eligible participants in these ~~trials~~studies as required by the FDA or other regulatory authorities. We have experienced some transient delays in clinical trial site initiation and patient enrollment in certain of our clinical trials, including our Phase 3 clinical trial of tab-cel^®, as a result of the evolving impact of the ongoing COVID-19 pandemic, and if the COVID-19 pandemic continues and persists for an extended period of time, we could experience significant disruptions to our clinical development timelines. 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 ~~trials~~studies may be delayed or our ~~trials~~studies could become too expensive to complete.

We rely on CROs, other vendors and clinical ~~trial~~study 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. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. Reliance on CROs entails risks to which we would not be subject if we conducted our clinical studies ourselves, including reliance on the CRO for clinical site initiation and monitoring, the possibility that the CRO does not maintain the financial resources to meet its obligations under our agreements, the possibility of breach of these agreements by the CRO because of factors beyond our control, including a failure to properly perform their obligations under these agreements, and the possibility of termination or nonrenewal of the agreements by the CROs, based on their own business priorities, at a time that is costly or damaging to us. Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our regulatory responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan, study protocols for the trial, statistical analysis plan and other study-specific documents (for example,

monitoring and blinding plans). Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practice (GCP), International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines, and regulations regarding the informed consent process, safety reporting requirements, data collection guidelines, and other regulations for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. The EMA, also requires us to comply with similar standards. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing 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 and other applicable regulations. In addition, our clinical trials must be conducted with product produced under applicable current Good Manufacturing Practices (cGMP) and current Good Tissue Practices (cGTP) regulations. Our failure to comply with these regulations may require us to conduct new clinical trials, which would delay the marketing approval process. We also are required to register certain ongoing clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

If we experience delays or quality issues in the conduct, completion or termination of any clinical ~~trial~~study 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 ~~trials~~studies 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 ~~trials~~studies 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 ~~trials~~studies 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 ~~trials~~studies 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 or our partners may experience in our clinical ~~trials,~~studies, we or our partners may not receive approval to market any product candidates, which could prevent us from ever generating product or royalty revenues or achieving profitability. Results of our ~~trials~~studies could reveal an unacceptably high severity and incidence of side ~~effects.~~effects, or risks that outweigh the benefits of our product candidates. In such an event, our ~~trials~~studies 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 ~~trial~~study 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 ~~particular~~affected 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 cancer 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 oncology product candidates in this setting. Subsequently, for those products that prove to be sufficiently beneficial, if any, we may seek approval for 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 current 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, including if the COVID-19 pandemic and associated responses impact our ability to engage with key stakeholders within the transplant center in person. Further, new studies, product approvals or market research may change the estimated incidence or prevalence of these diseases, and 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 patient population that suffers from aggressive EBV+PTLD who have failed rituximab or rituximab plus chemotherapy. At the outset of the COVID-19 pandemic, we initially observed a temporary slow-down in stem cell and solid organ transplant volumes. These reductions were transient, but if a reduction in such volumes resumes, it could result in lower PTLD incidence and thus reduce the demand for tab-cel^®. 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 U.S., EU and the United ~~States and Europe,~~Kingdom (U.K.), 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 ~~status~~designation for ~~ATA129~~tab-cel^® for ~~EBV-PTLD~~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~~biologic for the same indication for that time period. The applicable period is seven years in the ~~United States~~U.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. In the U.S., the FDA may still approve a later marketing application blocked by an ongoing period of orphan drug exclusivity in limited circumstances such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the biological product was designated. As a result, even if one of our product candidates receives orphan exclusivity, the FDA can still approve or license other drugs or biological products that have a different active ingredient for use in treating the same indication or disease. Further, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product.

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.

BTD by the FDA and PRIME designation by the EMA 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 BTD and PRIME designation for tab-cel^® for rituximab-refractory EBV+ PTLD in the U.S. and the EU, respectively, these designations may not lead to faster development or regulatory review and do 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 other expedited review programs, such as priority review. Based on our BTD, we may pursue a rolling submission strategy for our BLA for tab-cel^® for EBV+ PTLD in the U.S. While rolling review process may provide the opportunity for ongoing communications with and feedback from the FDA, it may not result in a faster timeline to marketing approval or result in approval at all. The FDA may raise issues and pose questions to us that may delay the initiation and completion of our BLA submission, acceptance of the complete BLA for filing, and approval of the BLA. We may not be able to provide a satisfactory or a timely response to FDA questions or we may not be able to timely gather the required data to prepare our BLA submissions as we plan. If we are unable to address all questions or concerns the FDA may raise or if we do not have timely access to the data required for the preparation of the BLA, we may not be able to timely initiate and complete our BLA and ultimately receive FDA approval. In addition, even if we submit our BLA under the rolling review process, the FDA may decide not to review portions of our BLA under the rolling review process until the submission is deemed to be complete.

PRIME designation supports the development and accelerated review by the EMA of new therapies to treat patients with unmet medical need.

Designation as a breakthrough therapy is within the discretion of the FDA, and access to PRIME is at the discretion of the EMA. Receipt of a BTD or PRIME designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited FDA or EMA review procedures, and does not assure ultimate approval by either the FDA or EMA. In addition, the FDA or EMA, respectively, may later decide that the product no longer meets the conditions for qualification and rescind the BTD or PRIME designation or decide that the time period for FDA or EMA, respectively, 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,~~EU, the U.K., many Asian countries and other jurisdictions, we, or our current or future commercialization partners, 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 States~~U.S. generally includes all of the risks associated with obtaining FDA ~~approval.~~approval and may include additional risks. Clinical ~~trials~~studies accepted in one country may not be accepted by regulatory authorities in other countries. In addition, many countries outside the ~~United States~~U.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 States~~U.S. on a timely basis, if at all. Approval by ~~the FDA~~and regulatory agency or payor does not ensure approval by any other regulatory or payor authorities in other countries or ~~jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.~~jurisdictions. 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,~~US, EU, the U.K., 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, or our partners 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~~post-

approval clinical ~~trials~~studies that we conduct. They also include any post-approval requirements or commitments imposed by FDA as a condition of approval, or any risk evaluation or mitigation strategies (REMS), if applicable. 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,~~(cGMP), current Good Clinical Practices ~~or GCP,~~(GCP), current good tissue practices ~~or cGTP,~~(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 also generate negative publicity or 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 States~~U.S. will be heavily scrutinized by the FDA, the Department of Justice ~~or the DOJ,~~(DOJ), the Office of Inspector General of the Department of Health and Human Services ~~or HHS,~~(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 States~~U.S. will be heavily scrutinized by comparable foreign entities and stakeholders. For example, a company may not promote “off-label” uses for its drug products. An off-label use is the use of a product for an indication that is not described in the product’s FDA-approved label in the U.S. or for uses in other jurisdictions that differ from those approved by the applicable regulatory ~~authorities.~~agencies. Physicians, on the other hand, may prescribe products for off-label uses. Although the FDA and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, they do restrict promotional communications from companies or their sales force with respect to off-label uses of products for which marketing clearance has not been issued. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling. 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.

~~Although~~Changes 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-cells~~EBV-specific T cells is recognized as a recommended treatment for persistent or progressive ~~EBV-PTLD~~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 relate~~could lead to ~~such matters as~~decreased ability of developing our product ~~usage, dosage, and route of administration and use of related~~candidates, 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 internal development, 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~~ Any product candidates we ~~may form in the future.~~

~~We may form strategic alliances, create joint ventures~~identify, acquire, in-license, or collaborations or enter into licensing arrangements with third parties that we believe will complement or augment our existing business. These relationships, 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 or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic alliances and the negotiation process is time-consuming and complex. Moreover, wedevelop may not be ~~successful in our efforts to establish a strategic alliance~~safe or ~~other alternative arrangements~~effective for ~~any future product candidates~~their targeted diseases, 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~~receive marketing authorization in a timely manner, 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. 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.at all.

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

~~Concurrent~~Concurrently with the ~~license~~in-license of our existing product candidates, we acquired manufacturing process know-how and, ~~certain~~in some cases, inventory of process intermediates ~~as well as certain supplies intended for clinical use, from MSK. To facilitate the manufacture of additional drug substance and drug product for our preclinical studies~~ and clinical ~~trials using this~~materials from our partners. Transferring manufacturing processes, testing and process know-how, we undertook the process of transferring this know-how to our CMO. We are in the final stages of the transfer of this know-how received from MSK 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 will~~partners 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, ~~trials~~clinical studies and commercial launch readiness. ~~We cannot be certain that all relevant know-how has been adequately incorporated into~~To the extent we elect to transfer manufacturing ~~process until the completion of studies (and the related evaluations) intended~~within our network or to third-party CMOs, 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 ~~manufacture~~demonstrate to each of the applicable regulatory authorities that comparable drug ~~substance by us or our CMO~~product was 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 may not agree.~~

The processes by which our product candidates are manufactured were initially developed by ~~MSK~~our partners for clinical purposes. We ~~and our CMO~~ intend to evolve ~~these~~the existing processes ~~for more~~with 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 ~~trials~~studies 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 the ongoing COVID-19 pandemic, earthquakes and other natural or man-made disasters, equipment failures, labor shortages, power failures, and numerous other factors. In addition, there have been, and there may continue to be, interruptions in the supply of leukapheresis collections related to the COVID-19 pandemic, which supply raw materials used in our product candidates. If we are unable to obtain such raw materials or other necessary raw materials in a timely manner, our business operations and manufacturing capabilities could be adversely affected.

~~Additionally, the~~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 substance and~~ 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 ~~and cancer treatment centers, which could adversely affect our ability to operate our business and our results of operations.~~

*We intend to manufacture at least a portion ofthat supports our product ~~candidates ourselves.~~ development efforts, including hospitals and outpatient clinics.

Delays in ~~building, commissioning and~~ receiving regulatory approvals for product candidates produced in our manufacturing facility or at our CMOs facilities could delay our development plans and thereby limit our ability to generate revenues.

~~In February 2017, we entered into a lease to build a~~The research and development and process and analytical development labs within our manufacturing facility in Thousand Oaks, ~~CA, which we intend~~California are currently supporting preclinical development activities. The facility commissioning and qualification activities required to ~~use to manufacture preclinical and clinical trial materials for~~support production at our ~~product candidates. This new manufacturing~~ facility ~~is expected to be~~were completed in 2018. ~~This project may result~~Product-specific qualification to support clinical development is complete and commercial production qualification activities are ongoing. If the appropriate regulatory approvals for manufacturing product candidates in ~~unanticipated delays and cost more than expected due to a number of factors, including regulatory requirements. If construction~~our facility or ~~regulatory approval of~~at our ~~new facility is~~CMOs’ facilities are delayed, we may not be able to manufacture sufficient quantities of our ~~drug~~product 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, and our CMOs facilities, 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~~these 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~~product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of ~~drug~~product 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. ~~Advances~~Without further investment, advances in manufacturing techniques may render our facility and equipment inadequate or ~~obsolete, without further investment.~~obsolete.

~~In order to produce~~A number of the product candidates in our ~~drugs in the quantities that we believe will be required~~portfolio, 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 ~~will~~may 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 ~~drugs~~product 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 facility~~these facilities is otherwise interrupted, our business ~~and prospects~~ would be negatively affected.

If any manufacturing facility in our manufacturing ~~facility~~network or our CMOs’ facilities or the equipment in itany such 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 ~~this~~a 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 FDA~~or may require regulatory approval before selling any products manufactured at that facility. Such an event could delay our clinical ~~trials~~studies 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.

*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 ATA129 and ATA230 programs. We also rely on studies previously conducted by MSK. Our collaborating investigators at QIMR manage the conduct of the ongoing clinical trials for ATA190. We are utilizing a CRO for our EAP trial of ATA129 and intend to utilize a CRO for our planned 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 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 no experience manufacturing our product candidates on a clinical or 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 ~~and~~network to support manufacturing; if we experience problems with ~~any of these~~our third ~~parties, the manufacturing~~party suppliers or CMOs we may delay development and/or commercialization of our product ~~candidates could be delayed.~~candidates.

We ~~do not currently operate~~rely in part on our ~~own facilities~~CMOs or our partners for the ~~manufacturing~~current production of our product ~~candidates. In the case of ATA129, we currently rely on our CMO and MSK for the production of this product candidate~~candidates and the acquisition of materials incorporated in or used in the manufacturing or testing of ~~these~~our 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. Our CMOs or partners are not our employees, and except for remedies available to us under our agreements with ~~such~~our 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. Our CMOs for tab-cel^® will need to be prepared to undergo pre-approval inspection in connection with our anticipated submissions of our BLA and MAA, and we cannot be certain that we will successfully pass any such inspection.

To meet our projected supply needs for clinical and commercial materials to support our activities through regulatory approval and commercial manufacturing of ~~ATA129, ATA520 and ATA230,~~tab-cel^®, ATA188, any product candidates resulting from our next-generation CAR T programs or any other product candidates, we will need to transition the manufacturing of ~~such~~these materials to a CMO ~~and/~~or our own ~~facility, and such CMOs or~~facility. 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 by MSK. We are in the final stages of the transfer of the manufacturing process developed by and housed at MSK for ATA129 to our CMO.~~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 ~~by MSK~~ with that generated by us or 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 are in discussions with FDA regarding comparability and Phase 3 clinical trial initiation.

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 ~~all~~some of our product candidates. ~~In addition, given~~Given the nature of our manufacturing ~~process for our T-cell product candidates,~~processes, 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 ~~compounds~~product 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 methodologies or assessments for these materials, regulatory authorities may require that we conduct additional studies, including bridging comparability testing, and further clinical development of our product ~~candidate~~candidates could be substantially ~~delayed and we would incur substantial additional expenses.~~delayed.

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, the possibility that the third-party does not devote sufficient time

or resources to our product candidates or any products we may eventually commercialize based on its own business priorities, the possibility that the third-party is acquired by another party and changes its business priorities, 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 ~~little~~limited 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 ~~trial~~study could considerably delay initiation or completion of our clinical ~~trials,~~studies, product testing and potential regulatory approval of our product candidates. If ~~our manufacturers~~raw materials or ~~we are unable~~components 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.

Bayer is generally responsible for the conduct and funding of the development and commercialization of ATA2271 and ATA3271.

Pursuant to the Bayer License Agreement, Bayer holds an exclusive, field-limited license to ATA2271 and ATA3271. As a result, other than the development of ATA2271 through Phase 1, Bayer is generally responsible for the development and obtaining and maintaining regulatory approval and commercialization of ATA2271 and ATA3271.

Although we have joint governance and certain decision making rights, we do not control the development activities being conducted or that may be conducted in the future by Bayer, including, but not limited to, the timing of initiation, termination or completion of clinical trials, the analysis of data arising out of those clinical trials or the timing of release of data concerning those clinical trials, which may impact our ability to report on Bayer’s results. Bayer may conduct these activities more slowly or in a different manner than we would if we controlled the development of ATA2271 after Phase 1 and ATA3271. Bayer is responsible for submitting future applications to the FDA and other regulatory authorities for approval of ATA2271 and ATA3271 and will be the owner of marketing approvals issued by the FDA and other regulatory authorities for ATA2271 and ATA3271, if approved. If the FDA or other regulatory authorities approve ATA2271 and/or ATA3271, Bayer will also be responsible for the marketing and sale of the resulting product. However, we cannot control whether Bayer will devote sufficient attention and resources to the development of ATA2271 and/or ATA3271 or will proceed in an expeditious manner. Even if the FDA or other regulatory agencies approve ATA2271 and/or ATA3271, Bayer may elect not to proceed with the commercialization of the resulting product in one or more countries, unless otherwise specified in the Bayer License Agreement.

In March 2021, we entered into the Bayer Manufacturing Agreement for the supply of allogeneic mesothelin-directed CAR T-cell therapies for clinical trials. Delays to the activities contemplated by the Bayer Manufacturing Agreement may result in a delay in the ATA2271 and/or ATA3271 programs and would delay and could prevent us from obtaining revenues for this product candidate.

Disputes may arise between us and Bayer, which may delay or cause the termination of any clinical trials of ATA2271 and/or ATA3271, result in significant litigation or cause Bayer to act in a manner that is not in our best interest. The costs associated with the continuing development of ATA2271 and/or ATA3271 may cause Bayer to reconsider the terms of its investment and seek to amend or terminate our agreement or to suspend the development of ATA2271 and/or ATA3271. If development of ATA2271 and/or ATA3271 does not progress for these or any other reasons, we would not receive milestone payments or royalties on product sales from Bayer with respect to ATA2271 and/or ATA3271. If the results of one or more clinical trials with ATA2271 and/or ATA3271 do not meet Bayer’s expectations at any time, Bayer may elect to terminate further development of ATA2271 and/or ATA3271 or certain of the potential clinical trials for ATA2271 and/or ATA3271, even if the actual number of patients treated at that time is relatively small. In addition, Bayer generally has discretion to elect whether to pursue or abandon the development of ATA2271 and/or ATA3271 and may terminate our strategic alliance in whole or on a product-by-product basis for any reason upon 120 days prior notice. If Bayer abandons ATA2271 and/or ATA3271, it would result in a delay in or could prevent us from commercializing ATA2271 and/or ATA3271 and would delay and could prevent us from obtaining revenues for this product candidate.

If Bayer abandons development of ATA2271 and/or ATA3271 prior to regulatory approval or if it elects not to proceed with commercialization of the resulting product following regulatory approval, we would have to seek a new partner for development or commercialization, curtail or abandon that development or commercialization, or undertake and fund the development of ATA2271 and/or ATA3271 or commercialization of the resulting product ourselves. If we seek a new partner but are unable to do so on acceptable terms, or at all, or do not have sufficient funds to conduct the development or commercialization of ATA2271 and/or ATA3271 ourselves, we would have to curtail or abandon that development or commercialization, which could harm our business.

We are dependent on Pierre Fabre for the potential commercialization of tab-cel in the European Union and several countries outside the United States. The failure of Pierre Fabre to meet its contractual, regulatory or other obligations could adversely affect our business.

We have entered into the Pierre Fabre Commercialization Agreement for tab-cel in Europe and select emerging markets in the Territory for EBV-positive cancers. As a result, we are entirely dependent on Pierre Fabre for marketing and commercialization of tab-cel, if approved, in the Territory. The timing and amount of any milestone and royalty payments we may receive under these agreements, as well as the commercial success of tab-cel in the Territory, will depend on, among other things, the efforts, allocation of resources and successful commercialization of tab-cel by Pierre Fabre.

We are in the process of negotiating various ancillary agreements as contemplated by the Pierre Fabre Commercialization Agreement, including an agreement for the manufacture and supply of tab-cel to Pierre Fabre for commercialization in the Territory. Delays to the negotiation and execution of the ancillary agreements, or the activities contemplated by the ancillary agreements may result in a delay to the commercialization of tab-cel in the Territory and would delay and could prevent us from obtaining revenues for tab-cel in the Territory.

Under the terms of the Pierre Fabre Commercialization Agreement, if we receive the EU marketing authorization for tab-cel in patients with EBV+ PTLD, we are required to transfer the marketing authorization to Pierre Fabre. Pierre Fabre will be responsible for obtaining all other regulatory approvals in the Territory and maintaining all regulatory approvals in the Territory. We will depend on Pierre Fabre to comply with numerous and varying regulatory requirements governing, if and when applicable, 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. We do not control the individual efforts of Pierre Fabre and have limited ability to terminate the Pierre Fabre Commercialization Agreement if Pierre Fabre does not perform as expected. The failure of Pierre Fabre to devote sufficient time and effort to comply with regulatory requirements and maintain the EU marketing authorization and other regulatory approvals in the Territory and/or to meet their obligations to us, could have an adverse impact on our financial results and operations.

We also depend on Pierre Fabre to comply with all applicable laws relative to the commercialization of tab-cel in the Territory. We do not control the individual efforts of Pierre Fabre and have limited ability to terminate the Pierre Fabre Commercialization Agreement if Pierre Fabre does not perform as expected. The failure of Pierre Fabre to devote sufficient time and effort to the commercialization of tab-cel; to meet their obligations to us, including for future royalty and milestone payments; to adequately deploy business continuity plans in the event of a crisis; and/or to satisfactorily resolve significant disagreements with us or address other factors could have an adverse impact on our financial results and operations. In addition, if Pierre Fabre violates, or are alleged to have violated, any laws or regulations during the performance of their obligations for us, it is possible that we could suffer financial and reputational harm or other negative outcomes, including possible legal consequences.

Any termination, breach or expiration of the Pierre Fabre Commercialization Agreement could have a material adverse effect on our financial position by reducing or eliminating the potential for us to receive fees, milestones and royalties. In such an event, we may be required to devote additional efforts and to incur additional costs associated with the transfer of regulatory approvals and commercialization of tab-cel in the Territory. Alternatively, we may attempt to identify and transact with a new commercialization partner, but there can be no assurance that we would be able to identify a suitable partner or transact on terms that are favorable to us.

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

We may desire to form additional strategic alliances, create joint ventures or collaborations, 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 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 a 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.

*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~~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, 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~~our 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,~~(USPTO) and ~~non-US~~non-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 ~~such~~these patents cover our product candidates, third parties may challenge the validity, enforceability or scope thereof, which may result in ~~such~~these 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. In three of our pending patent applications exclusively licensed from MSK, directed to use of ATA230 to treat CMV retinitis in HIV-infected patients or SOT recipients, we do not have exclusive rights, due to one of the named inventors being an employee of an entity other than MSK and ensuing co-ownership of the applications with MSK of this other entity from which we do not presently have a license. 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 ~~the~~our 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~~

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 States~~U.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 on~~We 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. We~~partners 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 in~~and 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 ~~trials~~studies 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. We~~products, 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 ~~such~~these 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 ~~such~~any inventions that result from government-funded research may be subject to certain requirements to manufacture products embodying ~~such~~these 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, ~~such~~the 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 ~~collaborators~~partners 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 ~~analyze~~have analyzed patents or patent applications of ~~our competitors~~third 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 ~~such~~their 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 clear~~difficult 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. Even~~even if we are successful in ~~these~~the 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 ~~such~~the 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 ~~could~~misappropriated 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 block~~limit 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, such~~before 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 ~~such~~of these license ~~agreement~~agreements 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 information~~foregoing, 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 ~~rights~~claim could prevent us from developing or ~~personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be~~commercializing a ~~distraction~~product 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 States~~U.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 ~~licensors~~partners 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 States~~U.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 infringing~~otherwise-infringing products to territories where we and our ~~licensors~~partners 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 ~~licensors~~partners 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 ~~licensors~~partners to stop the infringement of our ~~and our licensors’~~ patents or marketing of competing products in violation of our ~~and our licensors’ proprietary~~intellectual 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 ~~licensors~~partners 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.~~our partners. If we breach any of our license agreements with ~~MSK,~~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, 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. The MSK agreement generally grants us an exclusive~~our partners. Under our

existing license to research, develop, make, use, offer for sale, sell and import, ATA129, ATA520 and ATA230. Three pending applications licensed to us by MSK that are all directed to methods of treating CMV retinitis in HIV-infected patients or SOT recipients, are co-owned by MSK and another entity, and thus our exclusive license from MSK does not convey exclusive rights under those applications. 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 ~~MSK~~our counterparties regarding our rights or obligations under ~~the~~these 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 ~~MSK~~our counterparties may have a right to terminate the affected license. The ~~loss our~~termination of any license agreement with ~~MSK could~~one of our partners would 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 to~~Furthermore, a disagreement under any of these license agreements may harm our ~~patents and other intellectual property rights also apply to~~relationship with the ~~intellectual property rights that we license, and any failure by us or our licensors to obtain, maintain and enforce these rights~~partner, which could have ~~a material adverse effect~~negative 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 ~~such~~these applications unless and until a patent issues from ~~such~~the applications, and then only to the extent the issued claims cover the technology. In the future, we or our ~~licensors~~partners may elect to initiate legal proceedings to enforce or defend our or our ~~licensors’~~partners’ intellectual property rights, to protect our or our ~~licensor’s~~partners’ 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-US~~non-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 ~~preissuance~~pre-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 proceeding~~of these proceedings could require us or our ~~licensors~~partners 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 ~~licensors~~partners 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.

Any intellectual property proceedings can be expensive and time-consuming. Our or our partners’ adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we or our partners can. Accordingly, despite our or our partners’ efforts, we or our partners may not be able to prevent third parties from infringing upon or misappropriating our intellectual property rights, particularly in countries where the laws may not protect our rights as fully as in the U.S. Even if we ~~successfully defend such litigation or proceeding,~~are successful in the relevant proceedings, we may incur substantial costs and ~~it may distract~~the time and attention of our management and scientific personnel could be diverted from other ~~employees.~~activities. We could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent. In addition, in an infringement proceeding, a court may decide that one or more of our patents 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 patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. ~~If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of shares of our common stock.~~

*Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity, and obtaining and enforcing biopharmaceutical patents are costly, time-consuming, and inherently uncertain. The Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our and our licensors’ ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on future decisions by the U.S. Congress, the federal courts and/or the USPTO, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ ability to obtain new patents or to enforce existing patents and patents we and our licensors or collaborators may obtain in the future.

Patent reform legislation that has occurred could increase the uncertainties and costs surrounding the prosecution of our and our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to US patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The USPTO developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our or our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents, all of which could have a material adverse effect on our business and financial condition.

If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be materially adversely affected and our business could be harmed.

In addition to seeking the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and other elements of our technology, discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. The T-cell immunotherapy product candidates and platform technology we have licensed from ~~MSK~~our partners are protected primarily as confidential know-how and trade secrets. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, including by enabling them to develop and commercialize products substantially similar to or competitive with our product candidates, thus eroding our competitive position in the market.

Trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements and invention assignment agreements with our employees, consultants, and outside scientific advisors, contractors and collaborators. These agreements are designed to protect our proprietary information. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, or outside scientific advisors might intentionally or inadvertently disclose our trade secrets or confidential, proprietary information to competitors. In addition, competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent

information and techniques. If any of our confidential proprietary information were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, the laws of certain foreign countries do not protect proprietary rights such as trade secrets to the same extent or in the same manner as the laws of the ~~United States.~~U.S. Misappropriation or unauthorized disclosure of our trade secrets to third parties could impair our competitive advantage in the market and could materially adversely affect our business, results of operations and financial condition.

Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, healthcare payors and ~~cancer treatment centers.~~the medical community, including hospitals and outpatient clinics.

Even if we obtain regulatory approval for any of our product candidates that we may develop or acquire in the future, the product may not gain market acceptance among physicians, healthcare payors, patients or the medical community that supports our product development efforts, including ~~cancer treatment centers.~~hospitals and outpatient clinics. Market acceptance of any of our product candidates for which we receive approval depends on a number of factors, including:

If any of our product candidates are approved but fail to achieve market acceptance among physicians, patients, healthcare payors or cancer treatment centers, we will not be able to generate significant revenues, which would compromise our ability to become profitable.

Even if we are able to commercialize our product candidates, the products may not receive coverage and adequate reimbursement from third-party payors in the ~~United States~~U.S. and in other countries in which we seek to commercialize our products, which could harm our business.

Our ability to commercialize any product successfully will depend, in part, on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, determine which medications they will cover and establish reimbursement levels. A primary trend in the healthcare industry is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Third-party payors may also seek additional clinical evidence, beyond the data required to obtain regulatory approval, demonstrating clinical benefits and value in specific patient

populations before covering our products for those patients. We cannot be sure that coverage and adequate reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. In some countries such as the U.S., greater cost-shifting from the payor to the patient is also a trend, and higher patient copayments or other administrative burdens could lead to reduced demand from patients or healthcare professionals. This could particularly be the case in a challenging economic climate. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain regulatory ~~approval. If reimbursement is not available or is available only at limited levels, we may not be able~~approval, and ultimately our ability to successfully commercialize any product candidate for which we obtain regulatory approval.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may only be temporary. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the ~~United States.~~U.S. Coverage and reimbursement policies for drug products can differ significantly from payor to payor as there is no uniform policy of coverage and reimbursement for drug products among third-party payors in the U.S. Third-party payors in the ~~United States~~U.S. often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. There may be significant delays in obtaining coverage and reimbursement as the process of determining coverage and reimbursement is often time consuming and costly which will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage or adequate reimbursement will be obtained. It is difficult to predict at this time what government authorities and third-party payors will decide with respect to coverage and reimbursement for our drug products. Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

~~Recently enacted~~Current and future legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty and cost for us to obtain regulatory approval of and commercialize our product candidates and affect the prices we may obtain.

The regulations that govern, among other things, regulatory approvals, coverage, pricing and reimbursement for new drug products vary widely from country to country. In the ~~United States~~U.S. and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay regulatory approval of our product candidates, restrict or regulate post-approval activities and affect our ability to successfully sell any product candidates for which we obtain regulatory approval. In particular, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the Affordable Care Act, was enacted, which substantially ~~changes~~changed the way ~~health care~~healthcare is financed by both governmental and private insurers, and continues to significantly ~~impacts~~impact the U.S. pharmaceutical industry. The Affordable Care Act and its implementing regulations, among other things, addressed a new methodology by which

rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, ~~that are inhaled, infused, instilled, implanted or injected,~~ increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs, provided incentives to programs that increase the federal government’s comparative effectiveness research and established a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.program.

Other legislative changes have been proposed and adopted in the ~~United States~~U.S. since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by the U.S. Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013, and, due to subsequent legislative amendments, will remain in effect ~~through 2025~~into 2031 unless additional Congressional action is taken. COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2021. In January 2013, ~~President Obama signed into law~~ the American Taxpayer Relief Act of 2012 ~~or the ATRA,~~(the ATRA) was enacted which, among other things, further reduced Medicare payments to several providers, including hospitals and ~~cancer treatment centers,~~outpatient clinics, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

There have been judicial and Congressional challenges to numerous elements of the Affordable Care Act, as well as efforts by both the executive and legislative branches of the federal government to repeal or replace certain aspects of the Affordable Care Act. 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 the U.S. Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the Affordable Care Act, such as removing penalties, starting January 1, 2019, for not complying with the Affordable Care Act’s individual mandate to carry health insurance, eliminating the implementation of certain mandated fees, and increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D. On June 17, 2021, the U.S. Supreme Court dismissed a legal challenge to the law brought by several states arguing that, without the individual mandate, the entire Affordable Care Act was unconstitutional. The Supreme Court dismissed the lawsuit without ruling on the merits of the states’ constitutionality arguments. While the legal challenge to the Affordable Care Act was pending, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the Affordable Care Act. In the future, there may be additional challenges and/or amendments to the Affordable Care Act. It is unclear how the United States Supreme Court ruling, other such litigation, and the healthcare form measures of the Biden administration will impact the Affordable Care Act and our business.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of ~~the government,~~governments, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare, ~~and/or impose~~including by imposing price controls, may adversely ~~affect:~~

affect the demand for our product candidates for which we obtain regulatory approval and our ability to set a price that we believe is fair for our products. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private ~~payors, which may adversely affect our future profitability.~~

Since its enactment, there have been judicial and Congressional challenges to numerous provisions of the Affordable Care Act, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the Affordable Care Act. Since January 2017, President Trump has ~~signed two Executive Orders~~ designed to delay the implementation of any certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated by the Affordable Care Act. The Trump administration has also announced that it will discontinue the payment of cost-sharing reduction (CSR) payments to insurance companies until Congress approves the appropriation of funds for the CSR payments. The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the Affordable Care Act. ~~A bipartisan bill to appropriate funds for CSR payments has been introduced in the Senate, but the future of that bill is uncertain.~~ ~~Further, each chamber of Congress has put forth multiple bills designed to repeal or repeal and replace portions of the Affordable Care Act. Although none of these measures has been enacted by Congress to date, Congress may~~ ~~consider other legislation to repeal and replace elements of the Affordable Care Act. Any repeal and replace legislation may have the effect of limiting the amounts that go~~vernment agencies will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure, or may lead to significant deregulation, which could make the introduction of competing products and technologies much easier. Policy changes, including potential modification or repeal of all or parts of the Affordable Care Act or the implementation of new health care legislation could result in significant changes to the health care system, which could have a material adverse effect on our business, results of operations and financial condition.payors.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the ~~FDA~~U.S. or foreign regulations, guidance or interpretations will be changed, or what the impact of ~~such~~these changes on the regulatory approvals of our product candidates, if any, may be.

In the ~~United States,~~U.S., the ~~European Union~~EU and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which has resulted in lower average selling ~~prices.~~prices for certain products in certain markets. For example, in the ~~United States,~~U.S., there have been several ~~recent~~ Congressional inquiries and proposed ~~bills~~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, and reform government program reimbursement methodologies for drugs. For example, the Consolidated Appropriations Act of 2021 included several drug price reporting and transparency measures, such as a new requirement for certain Medicare plans to develop tools to display Medicare Part D prescription drug benefit information in real time and for group and health insurance issuers to report information on pharmacy benefit and drug costs to the Secretaries of Health and Human Services, Labor, and the Treasury.

There have also been administrative developments in the U.S. related to drug pricing. On November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers (“PBMs”), unless the price reduction is required by law (the “Rebate Rule”). In addition, the Rebate Rule creates new safe harbor protection for certain (i) point-of-sale discounts from pharmaceutical manufacturers to Medicare Part D plans, Medicaid managed care organizations, and their contracted pharmacy benefit managers, and (ii) fees for certain services that PBMs provide to pharmaceutical manufacturers. Implementation of the Rebate Rule is uncertain due, at least in part, to a change in the U.S. presidential administration and ongoing litigation challenging the Rebate Rule. The litigants have stipulated to a delay of all provisions of the Rebate Rule until January 1, 2023 and have agreed to hold the case in abeyance pending further review of the Rebate Rule by the Biden administration. Most recently, the bipartisan infrastructure legislation passed by the U.S. Senate in August 2021 included a moratorium on implementation of the Rebate Rule before January 1, 2026; however, it is unclear whether or when such legislation will be enacted. Further, on November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the U.S. District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. On August 10, 2021, CMS issued a proposed rule proposing to rescind interim final rule. 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. Furthermore, the increased emphasis on managed healthcare in the ~~United States~~U.S. and on country and regional pricing and reimbursement controls in the ~~European Union~~EU will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product ~~sales and results of operations.~~sales. These pressures can arise from rules and practices of managed care groups, other insurers, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general. Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

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.

Price controls may be imposed in foreign markets, which may adversely affect our future profitability.

In some countries, particularly member states of the ~~European Union,~~EU and the U.K., the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various ~~European Union~~EU member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we, or our collaborators, may be required to conduct a clinical ~~trial~~study or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.

*We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

We face competition from numerous pharmaceutical and biotechnology enterprises, as well as from academic institutions, government agencies and private and public research institutions for our current product candidates. Our commercial opportunities 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. Additionally, our commercial opportunities will be reduced or eliminated if novel upstream products or changes in treatment protocols reduce the overall incidence or prevalence of our current or future target diseases. Competition could result in reduced sales and pricing pressure on our product candidates, if approved ~~which in turn would reduce our ability to generate meaningful revenues and have a negative impact on our results of operations.~~by applicable regulatory authorities. In addition, significant delays in the development of our product candidates could allow our competitors to bring products to market before us and impair any ability to commercialize our product candidates.

There are currently no ~~FDA~~FDA- or ~~EMA approved~~EMA-approved products for the treatment of ~~EBV-PTLD.~~EBV+ PTLD. However, some ~~approved~~marketed products and therapies are used off-label in the treatment of ~~EBV-PTLD,~~EBV+ PTLD, such as rituximab and combination chemotherapy regimens. In addition, a number of companies and academic institutions are developing ~~drug~~product candidates for ~~EBV-PTLD~~EBV+ PTLD and other ~~EBV associated~~ EBV-driven

diseases including: ~~Cell Medica Ltd.~~Viracta Therapeutics, Inc., which is conducting a pivotal, Phase 12 clinical ~~trials~~study for ~~baltaleucel-T~~nanatinostat (formerly named tractinostat, or VRx-3996) in combination with antiviral drug valganciclovir in relapsed/refractory EBV+lymphomas; AlloVir (formerly known as ViraCyte), which has completed a Phase 2 clinical study for Viralym-M (ALVR105), an ~~autologous~~allogeneic, multi-virus T-cell product that targets six viruses in allogeneic HSCT recipients with ≥1 treatment-refractory infection, including EBV, ~~specific T-cell therapy~~has initiated a pivotal study for Virus-Associated Hemorrhagic-Cystitis, as well as a Phase 2 proof of concept trial for the prevention of BKV, CMV, AdV, EBV, HHV06 and JCV in ~~post-transplant lymphoproliferative disorder. In addition,~~post-allogeneic HSCT patients; and Tessa Therapeutics Pte Ltd., is ~~developing TT10, an~~conducting a Phase 1 clinical study of its autologous ~~EBV specific T-cell therapy, which~~CD30 CAR T in CD30+ NHL and funding a Phase 1, investigator-sponsored study at Baylor College of Medicine, for its allogeneic CD30-CAR EBVST product candidate.

Competition in the MS market is ~~currently being evaluated~~high with at least 20 therapies, including four generics or bioequivalents, approved in ~~Phase 3 clinical trials~~the U.S. and EU for the treatment of ~~nasopharyngeal carcinoma.~~

~~Drug therapies approved or commonly used for CMV infection include antiviral compounds such as ganciclovir, valganciclovir, cidofovir~~various forms of MS, including clinically isolated syndrome, relapsing-remitting MS (RRMS), secondary progressive MS (SPMS) and ~~foscarnet. In addition, a number of~~primary progressive MS (PPMS). There are many competitors in the MS market, including major multi-national fully-integrated pharmaceutical companies and ~~academic institutions are developing drug candidates for CMV infection~~established biotechnology companies. Most recently, Ponvory (S1P modulator), marketed by Johnson & Johnson, and ~~other CMV-associated diseases. These companies and academic institutions are~~Kesimpta^® (anti-CD20 monoclonal antibody), marketed by Novartis, were approved in various stages of development with their product candidates with Merck & Co, Inc. completing Phase 3 clinical trials of letermovir, a CMV terminase inhibitor; Shire Plc, which has initiated Phase 3 clinical trials of Maribavir, a UL97 protein kinase inhibitor and Vical Inc. conducting Phase 3 clinical trials in patients undergoing an allogeneic stem cell transplant for evaluating ASP0113, a therapeutics bivalent plasma DNA CMV vaccine.

~~Several products are approved~~the U.S. and/or EU for the treatment of ~~relapsed~~ relapsing forms of MS.

There are numerous development candidates in Phase 3 studies for both relapsing and/or ~~refractory multiple myeloma,~~progressive forms of MS and additional novel agents could be approved in either or both indications in the future including ~~Kyprolis (marketed by Amgen Inc.)~~TG Therapeutics’ anti-CD20 monoclonal antibody ublituximab (estimated PDUFA 09/2022), ~~Revlimid~~Merck KGaA’s Bruton’s tyrosine kinase (BTK) inhibitor, evobrutinib, Roche’s BTK inhibitor, fenebrutinib, Sanofi’s BTK inhibitor, tolebrutinib and Pomalyst (marketed by Celgene Corporation), Velcade (marketed by Millennium Pharmaceuticals, Inc.) and Darzalex (marketed by Janssen Research & Development, LLC). In addition, a number of companies and academic institutions are in various stages of development for their drug candidates for relapsed or refractory multiple myeloma including AB ~~Science SA, which~~Science’s tyrosine kinase inhibitor, masitinib. Medicinova is ~~conducting~~planning to initiate a Phase 3 study of its PDE inhibitor, ibudilast (MN166) in non-active SPMS.

There are currently five autologous CAR T therapies approved in the U.S. and/or EU: Novartis’ Kymriah^® (tisagenlecleucel), Gilead/Kite’s Yescarta^® (axicabtagene ciloleucel) and Tecartus^TM (brexucabtagene autoleucel) and Bristol-Myers Squibb’s Breyanzi^® (lisocabtagene maraleucel) and Abecma (idecabtagene vicleucel) with bluebird bio. There are many CAR-mediated cell therapies in development, and, although the majority are autologous, they include allogeneic and off-the-shelf cell therapies. There are multiple allogeneic CAR platforms being developed with differences in approaches to minimize instances of donor cells recognizing the patient’s body as foreign or rejection of the donor cells by the patient’s body. These approaches include the use of gene-editing to remove or inhibit the TCR and the use of cell types without a TCR. The majority of clinical ~~trial for masitinib.~~stage allogeneic CAR programs utilize alpha beta T cells as the cell type and gene editing of the T-cell receptor and HLA as the preferred technology approach, however, other strategies are also in development. It is possible that some of these other approaches will have more favorable characteristics than the approach we utilize, which would result in them being favored by potential partners or customers over our products. Depending on the diseases that we target in the future, we may face competition from both autologous and allogeneic CAR therapies and other modalities (e.g., small molecules, antibodies) in the indication of interest.

Many of the approved or commonly used drugs and therapies for ~~EBV-PTLD, CMV~~our current or future target diseases, including EBV+ PTLD and ~~relapsed or refractory multiple myeloma~~MS, are ~~well-established~~well established and are widely accepted by physicians, patients and third-party payors. Some of these drugs are branded and subject to patent protection, and other drugs and nutritional supplements are available on a generic basis. Insurers and other third-party payors may encourage the use of generic products or specific branded products. We expect that, if any of ~~these~~our product candidates isare approved, itthey will be priced at a significant premium over competitive generic products. ~~This~~Absent differentiated and compelling clinical evidence, pricing ~~premium~~premiums may ~~make it difficult for us to differentiate these~~impede the adoption of our products ~~from~~over currently approved or commonly used therapies, ~~and impede adoption of our product,~~ which may adversely impact our business. In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will become as our products continue in clinical development.

Many of our competitors or potential competitors have significantly greater established presence in the market, financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical ~~trials,~~studies, obtaining regulatory approvals and marketing approved products than we do, and as a result may have a competitive advantage over us. Smaller or early-stage companies may also prove to be significant competitors, ~~particularly~~including through collaborative arrangements with large and established companies or if they are acquired by larger companies. These third parties compete with us in recruiting and retaining qualified scientific, commercial and management personnel, establishing clinical ~~trial~~study sites and patient registration for clinical ~~trials,~~studies, as well as in acquiring technologies and technology licenses complementary to our programs or advantageous to our business.

As a result of these factors, these competitors may obtain regulatory approval of their products before we are able to obtain patent protection or other intellectual property rights, which will limit our ability to develop or commercialize our product candidates. Our competitors may also develop drugs that are safer, more effective, more widely used and cheaper than ours, and may also be more successful than us in manufacturing and marketing their products. These appreciable advantages could render our product candidates obsolete or noncompetitive before we can recover the expenses of development and commercialization.

~~Mergers~~We expect the product candidates we develop will be regulated as biological products (biologics), and ~~acquisitions~~they may be subject to competition sooner than anticipated.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) was enacted as part of the Affordable Care Act to establish an abbreviated pathway for the approval of biosimilar and interchangeable biological products. The regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an approved biologic. Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the reference product was approved under a BLA. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when processes intended to implement BPCIA may be fully adopted by the FDA, any of these processes could have a material adverse effect on the future commercial prospects for our biological products.

We believe that any of the product candidates we develop that is approved in the ~~pharmaceutical~~U.S. as a biological product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that thisexclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and ~~biotechnology industries may result in even more resources being concentrated among~~will depend on a ~~smaller~~ number of marketplace and regulatory factors that are still developing.

In addition, the approval of a biologic product biosimilar to one of our ~~competitors. Smaller~~products could have a material adverse impact on our business as it may be significantly less costly to bring to market and ~~other early stage companies~~ may ~~also prove to~~ be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for,priced significantly lower than our ~~programs.~~products.

If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any ~~revenue.~~revenue from the sale of our products.

We ~~do not currently have~~are at an early stage of establishing an organization that will be responsible for the sale, marketing and distribution of pharmaceutical products and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market any products that may be approved by the FDA and comparable foreign regulatory authorities, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. There are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities, or entering into agreements with third parties to market and sell our products, would adversely impact the commercialization of these products. ~~If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties, we~~We may ~~not be able to generate product revenues and may not become profitable. We will~~ be competing with many companies that currently have extensive and well-funded sales and marketing operations. Without ana sufficiently scaled, appropriately timed and trained internal commercial organization or the support of a third party to perform sales and marketing functions, we may be unable to compete successfully against these more established companies. If we are not successful in commercializing our current or future product candidates either on our own or through collaborations with one or more third parties, our future product revenue will suffer and we would incur significant additional losses.

*We ~~will~~may need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of ~~October 31, 2017,~~September 30, 2021, we had ~~160~~578 employees. We ~~need~~have made the decision to grow the size of our organization in order to support our continued development and potential commercialization of our product candidates. In particular, we ~~will~~may need to add substantial numbers of additional personnel and other resources to support our development and potential commercialization of our product candidates. As our development and commercialization plans and strategies continue to develop, or as a result of any future acquisitions, our need for additional managerial, operational, manufacturing, sales, marketing, financial and other resources will increase. Our management, personnel and systems currently in place may not be adequate to support this future growth. Future growth would impose significant added responsibilities on members of management, including:

As our operations expand, we will also need to manage additional relationships with various strategic partners, suppliers and other third parties. Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development efforts and preclinical ~~studies~~ and clinical ~~trials~~studies effectively and hire, train and integrate additional management, research and development, manufacturing, administrative and sales and marketing personnel. Our failure to accomplish any of these tasks could prevent us from successfully growing our company.

Our stock price has been and will likely continue to be volatile and may decline regardless of our operating performance.

Our stock price has fluctuated in the past and can be expected to be volatile in the future. From January 1, 2019 through September 30, 2021, the reported sale price of our common stock has fluctuated between $4.52 and $41.97 per share. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. In particular, the ongoing COVID-19 pandemic has further heightened the volatility of the stock market for biopharmaceutical companies. As a result of this volatility, investors may experience losses on their investment in our common stock. The market price of our common stock may be influenced by many factors, including the following:

In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have experienced significant volatility that has often been unrelated to the operating performance of particular companies, including in connection with the ongoing COVID-19 pandemic, which has resulted in decreased stock prices for many companies. For example, negative publicity regarding drug pricing and price increases by pharmaceutical companies has negatively impacted, and may continue to negatively impact, the markets for biotechnology and pharmaceutical stocks. Likewise, as a result of significant changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade and healthcare spending and delivery, including the possible repeal and/or replacement of all or portions of the Affordable Care Act or changes in tariffs and other

restrictions on free trade stemming from U.S. and foreign government policies, or for other reasons, the financial markets could experience significant volatility that could also negatively impact the markets for biotechnology and pharmaceutical stocks. These market fluctuations may adversely affect the trading price of our common stock.

In the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Any such litigation brought against us could result in substantial costs and divert management’s attention and resources, which could result in delays of our clinical studies or commercialization efforts.

Our principal stockholders own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Our principal stockholders own a significant portion of our outstanding common stock. These stockholders may be able to determine the outcome of all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock. The interests of our significant stockholders may not always coincide with the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the market price for our common stock.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. Moreover, certain holders of shares of our common stock will have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We have registered and intend to continue to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.

We have incurred and will continue to incur increased costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs.

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Stock Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted and will adopt additional rules and regulations, such as mandatory “say on pay” voting requirements, that now apply to us. Stockholder activism, the current political environment and the potential for future regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activities more time-consuming and costly. To the extent these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be the sole source of potential gain for our stockholders.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may sell substantial amounts of common stock or securities convertible into or exchangeable for common stock in one or more transactions at prices and in a manner we determine from time to time. These future issuances of common stock or common stock-related securities, together with the exercise of outstanding options or warrants, and any additional shares issued in connection with acquisitions or in-licenses, if any, may result in material dilution to our investors. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to those of holders of our common stock. To the extent equity valuations, including the trading price of our common stock, are depressed as a result of economic disruptions and uncertainty concerning the COVID-19 pandemic or other factors, the potential magnitude of this dilution will increase.Pursuant to our equity incentive plans, our compensation committee is authorized to grant equity-based incentive awards to our employees, non-employee directors and consultants. Future grants of RSUs, options and other equity awards and issuances of common stock under our equity incentive plans will result in dilution and may have an adverse effect on the market price of our common stock.

Some terms of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Our amended and restated certificate of incorporation (Certificate of Incorporation) and amended and restated bylaws (Bylaws), as well as Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These include terms that:

Any of the factors listed above may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management.

In addition, because we are incorporated in Delaware, we are governed by Section 203 of the Delaware General Corporation Law, which may discourage, delay or prevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders. Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Any term of our Certificate of Incorporation or Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us and our business. In the event securities or industry analysts who cover us downgrade our stock or publish

unfavorable research about us or our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel.

We are highly dependent upon our ~~personnel, including Isaac E. Ciechanover, M.D., our President, Chief Executive Officer~~executive officers and ~~founder,~~other key employees and Christopher Haqq, Ph.D., M.D., our EVP, Chief Scientific Officer. Our employment agreements with Drs. Ciechanover and Haqq are at-will and do not prevent them from terminating their employment with us at any time. Thethe loss of the services of ~~either~~any of ~~them~~our executive officers or other key employees, including scientific, technical or management personnel, could impede the achievement of our ~~research, development and commercialization~~corporate objectives.

Our ~~future growth and~~ success ~~depend~~depends on our ability to recruit, retain, manage and motivate our employees. ~~The loss of~~Although we enter into employment agreements or offer letters with our employees, these documents provide for “at-will” employment, which means that any ~~member~~ of our ~~senior management team~~employees could leave our employment at any time, with or ~~the inability to hire or retain experienced management~~without notice. Competition for skilled personnel ~~could compromise~~in our industry and geographic regions is intense and may limit our ability to execute our business plan and harm our operating results. Because of the specialized scientific and managerial nature of our business, we rely heavily on our ability to attract and retain qualified scientific, technical and managerial personnel. The competition for qualified personnel in the pharmaceutical field is intense and as a result, we may be unable to continue to attracthire and retain qualified personnel ~~necessary for the development~~on acceptable terms or at all. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided equity awards that vest over time. The value to employees of equity awards may be significantly affected by movements in our ~~business.~~stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.

Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse, privacy and other ~~healthcare~~ laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, including physicians, and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain regulatory approval. Our current and future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct research and would market, sell and distribute our products. As a ~~pharmaceutical~~biopharmaceutical 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. If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs, distribution agreements, discounting, commission compensation, certain patient support offerings, and other business arrangements generally. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned here, among other foreign laws. Restrictions under applicable federal and state healthcare laws and regulations that may affect certain business arrangements and our ability to operate include, but are not limited to, the following:

Efforts to ensure that our business arrangements with third parties ~~will~~ comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices ~~may~~do not comply with current or future statutes, regulations or case law involving applicable ~~fraud and abuse or other~~ healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations, ~~that may apply to us,~~ we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from ~~government funded~~government-funded healthcare programs, such as Medicare and Medicaid, disgorgement, additional reporting requirements or oversight if we become subject to a corporate integrity agreement or similar agreement, and the curtailment or restructuring of our operations, reputational harm, contractual damages, and diminished profits and future earnings, any of which could adversely affect our ability to operate our business and our results of operations. If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from ~~government funded~~government-funded healthcare programs.

Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical ~~trials,~~studies, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical ~~trials~~studies and will face an even greater risk if we commercially sell any products that we may develop. Product liability claims may be brought against us by subjects enrolled in our clinical ~~trials,~~studies, patients, healthcare providers or others using, administering or selling our products. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

We currently hold product liability insurance coverage at a level that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, but which may not be adequate to cover all liabilities that we may incur. ~~Insurance coverage is increasingly expensive.~~ We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. We intend to expand our insurance coverage for products to include the sale of commercial products if we obtain regulatory approval for our product candidates in development, but we may be unable to obtain commercially reasonable product liability insurance for any products that receive regulatory approval. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.

If we and our third-party manufacturers fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We and our third-party manufacturers are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our or our third-party manufacturers’ use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials with a policy limit that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, this insurance may not provide adequate ~~cover age~~coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions, which could adversely affect our business, financial condition, results of operations and prospects.

~~Our~~The actual or perceived failure by us, our customers, or vendors to comply with increasingly stringent laws, regulations and contractual obligations relating to privacy, data protection, and data security could harm our reputation, and subject us to significant fines and liability.

We are or may become subject to numerous domestic and foreign laws and regulations regarding privacy, data protection, and data security, the scope of which is changing, subject to differing applications and interpretations and may be inconsistent among countries, or conflict with other rules. We are also subject to the terms of our contractual obligations to customers and third parties related to privacy, data protection, and data security. The actual or perceived failure by us, our customers, our vendors, or other relevant third parties to address or comply with these laws, regulations, and obligations could increase our compliance and operational costs, expose us to regulatory scrutiny, actions, fines and penalties, cause regulators to reject, limit or disrupt our clinical trial activities, result in reputational harm, lead to a loss of customers, reduce the use of our products, result in litigation and liability, and otherwise cause a material adverse effect on our business, financial condition, and results of operations.

For example, the EU adopted the General Data Protection Regulation (EU) 2016/679 (EU GDPR), in May 2018 which has direct effect in all EU member states and has extraterritorial effect where organizations outside of the EU process personal information of individuals in the EU in relation to the offering of goods or services to those individuals (“targeting test”) or monitoring of their behavior (“monitoring test”). As such, the EU GDPR applies to us to the extent we are established in an EU Member State or we meet the requirements of either the targeting test or the monitoring test. These laws impose onerous and comprehensive privacy, data protection, and data security obligations onto data controllers and processors, including, as applicable: (i) contractual privacy, data protection, and data security commitments, including the requirement to implement appropriate technical and organizational measures

to safeguard personal information; (ii) establishing means for individuals to exercise their data protection rights; (iii) limitations on retention of personal information; (iv) additional requirements pertaining to sensitive information (such as health data) and pseudonymized (i.e., key-coded) data; (v) data breach notification requirements to supervisory authorities without undue delay (and no later than 72 hours where feasible) and/or concerned individuals; (vi) higher standards for obtaining valid consent from data subjects and changes to consent practices; (vii) obligations to consider data protection as any new products or services are developed; and (viii) the provisions of more detailed privacy notices for clinical trial subjects and investigators. Penalties for non-compliance with the EU GDPR can be significant and include fines in the amount of the greater of €20 million or four percent of consolidated global turnover and restrictions or prohibitions on data processing, which could impair our ability to do business in the EU, reduce demand for our services and adversely impact our business and ~~operations would suffer~~results of operations. The EU also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the EU GDPR. The EU GDPR also provides that EU member states may introduce further laws and regulations limiting the processing of genetic, biometric, or health data, which could limit our ability to collect, use and share European data, cause our compliance costs to increase, require us to change our practices, adversely impact our business, and harm our financial condition. Assisting our customers, partners, and vendors in complying with the EU GDPR, or complying with the EU GDPR ourselves, may cause us to incur substantial operational costs or require us to change our business practices. There may also be a risk that the measures will not be implemented correctly or that individuals within the business will not be fully compliant with the required procedures.

European privacy, data protection, and data security laws, including the EU GDPR, restricts the transfer of personal information from the European Economic Area (EEA) to the United States and other countries that the European Commission does not recognize as having “adequate” data protection laws unless the parties to the transfer have implemented an appropriate data transfer mechanism in accordance with the EU GDPR. Data protection laws in the ~~event~~U.K. (as discussed below) and Switzerland impose similar restrictions. One of ~~computer system failures~~the primary mechanisms allowing U.S. companies to import personal information from Europe has been certification to the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield frameworks. However, the EU-U.S. Privacy Shield framework was invalidated in July 2020 in a decision by the Court of Justice of the EU (CJEU) and subsequent guidance required additional compliance efforts to analyze international data flows and take steps to ensure adequate protections for personal information transferred to the U.S. and other certain jurisdictions, including in certain cases by implementing supplementary measures that provide privacy protections in addition to those provided under the Standard Contractual Clauses (or SCCs). Similarly, the Swiss-U.S. Privacy Shield Framework was declared as inadequate by the Swiss Federal Data Protection and Information Commissioner in light of the CJEU’s July 2020 decision. Moreover, new versions of the European Commission’s SCCs (new EU SCCs), now the primary mechanism for the lawful transfer of personal information from Europe to the United States and other countries have been released requiring additional compliance and implementation efforts. If we are unable to implement a valid solution for personal information transfers to the United States and other countries, we will face increased exposure to regulatory actions, substantial fines, and injunctions against processing or ~~security breaches.~~transferring personal information from Europe, and we may be required to increase our data processing capabilities in Europe at significant expense. Inability to import personal information from Europe to the United States or other countries may decrease demand for our products and services as our customers that are subject to the EU GDPR may seek alternatives that do not involve personal information transfers out of Europe. Moreover, where we rely on the new EU SCCs, we must now evaluate and where required, implement supplementary measures that provide privacy protections additional to those provided under the new EU SCCs. This evaluation will, in particular, include an assessment as to whether the types of personal data transferred pursuant to SCCs may be subject to government surveillance in the data importer’s country and an assessment as to whether the data importer can meet its contractual obligations under the new EU SCCs.

~~Our internal computer systems,~~Further, following a referendum in June 2016 in which voters in the United Kingdom approved an exit from the EU, the United Kingdom government initiated a process to leave the EU, known as Brexit. Following December 31, 2020, the EU GDPR’s data protection obligations continue to apply to the United Kingdom in substantially unvaried form under the so called “UK GDPR” by virtue of section 3 of the European Union (Withdrawal) Act 2018. The UK GDPR exists alongside the UK Data Protection Act 2018 which implements certain derogations in the UK GDPR into UK law. Under the UK GDPR, companies not established in the United Kingdom but who process personal information in relation to the offering of goods or services to individuals in the United Kingdom, or to monitor their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of global turnover. As a result, we are potentially exposed to two parallel data protection regimes, each of which authorizes fines and the potential for divergent enforcement actions. It should also be noted that the new EU SCCs do not automatically apply in the UK since Brexit, and the UK Government has not yet formally acknowledged the new EU SCCs, i.e., as a valid data transfer mechanism under the UK GDPR. Indeed, on 11 August 2021, the UK Information Commissioner’s Office (ICO) launched a public consultation on its draft international data transfer agreement and guidance. This included the publication of a draft UK addendum that can be used with the new EU SCCs – however, this is unlikely to be finalized before the end of 2021 and as such, for the time being transfers from the UK to a third country should continue to be made in reliance on the ”old” SCC.

Other countries outside of Europe continue to enact or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business. For example, Brazil enacted the General Data Protection Law (Lei Geral de Proteção de Dados Pessoais or LGPD) (Law No.

13,709/2018), which broadly regulates the processing of personal information and imposes compliance obligations and penalties comparable to those of ~~MSK,~~the EU GDPR.

Regulation of privacy, data protection and data security has also become more stringent in the United States. For example, the California Consumer Privacy Act (CCPA), which took effect on January 1, 2020, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. The CCPA will be expanded substantially on January 1, 2023, when the California Privacy Rights Act of 2020 (CPRA) becomes fully operative. The CPRA will, among other things, give California residents the ability to limit use of certain sensitive personal information, further restrict the use of cross-contextual advertising, establish restrictions on the retention of personal information, expand the types of data breaches subject to the CCPA’s private right of action, provide for increased penalties for CPRA violations concerning California residents under the age of 16, and establish a new California Privacy Protection Agency to implement and enforce the new law. Other states have already passed similar comprehensive privacy laws that will also go into effect in 2023, and several more are considering their own versions of privacy legislation, demonstrating a strong trend towards more stringent state privacy, data protection and data security legislation in the U.S., which could increase our potential liability and adversely affect our business.

Compliance with U.S. and foreign privacy, data protection, and data security laws and regulations could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business. Moreover, complying with these various laws could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure to comply with U.S. and foreign privacy, data protection, and data security laws and regulations could result in government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business. Claims that we have violated individuals’ privacy rights, failed to comply with privacy, data protection, and data security laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, and results of operations.

If our security measures are compromised, or our information technology systems or those of our vendors, and other relevant third parties fail or suffer security breaches, loss or leakage of data, and other disruptions, this could result in a material disruption of our services, compromise sensitive information related to our business, harm our reputation, trigger our breach notification obligations, prevent us from accessing critical information, and expose us to liability or other adverse effects to our business.

In the ordinary course of our business, we may collect, process, and store proprietary, confidential, and sensitive information, including personal information (including health information), intellectual property, trade secrets, and proprietary business information owned or controlled by ourselves or other parties. It is critical that we do so in a secure manner to maintain the confidentiality, integrity, and availability of such information. We face several risks relative to protecting this critical information, including loss of access risk, inappropriate use or disclosure, inappropriate modification, and the risk of our being unable to adequately monitor, audit and modify our controls over our critical information. This risk extends to the third-party service providers who handle elements of our operations.

We, our partners, our CROs, our CMOs, and other business vendors on which we rely depend on information technology and telecommunication systems for significant elements of our operations, including, for example, systems handling human resources, financial reporting and controls, regulatory compliance and other infrastructure operations. Notwithstanding the implementation of security measures, given the size and complexity of our information technology systems and those of our third-party vendors and other contractors and consultants, and the increasing amounts of proprietary, confidential and sensitive information that they maintain, such information technology systems are potentially vulnerable to ~~damage from computer viruses, unauthorized access,~~breakdown, service interruptions, system malfunction, natural disasters, ~~fire,~~ terrorism, war and telecommunication and electrical ~~failures. We exercise little~~failures, as well as security breaches from inadvertent or ~~no control over these~~intentional actions by our personnel, third-party vendors, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information), which ~~increases~~may compromise our ~~vulnerability~~system infrastructure, or that of our third-party vendors and other contractors and consultants, or lead to ~~problems with their systems. If~~data leakage. The risk of a security breach or disruption, particularly through accidental actions or omissions by trusted insiders, cyber-attacks or cyber intrusions, including by computer hackers, viruses, foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased. Additionally, the increased usage of computers operated on home networks due to the shelter-in-place or similar restrictions related to the COVID-19 pandemic may make our systems more susceptible to security breaches. For example, in March 2021, MSK provided notice that MSK was one of many customers impacted by a data breach at Accellion, Inc., which provides a document-sharing system. MSK subsequently notified us that certain documents related to one of our discontinued programs were subject to the breach, which compromise we deemed immaterial. Although we take measures to protect sensitive data from unauthorized access, use or disclosure, we and our third party service providers frequently defend against and respond to cyber attacks, and our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to personnel error, malfeasance, or other malicious

or inadvertent disruptions. Any such ~~an event were~~breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost, or stolen.

Failures or significant downtime of our information technology or telecommunication systems or those used by our third-party service providers could cause significant interruptions to ~~occur and cause interruptions in~~ our operations, ~~it could result in a material disruption~~including preventing us from conducting tests or research and development activities and preventing us from managing the administrative aspects of our ~~drug development programs.~~business. For example, the loss of clinical ~~trial~~study data from completed, ongoing or planned clinical ~~trials~~studies could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development of our product candidates could be delayed and our business could be otherwise adversely affected.

We may not be able to anticipate all types of security threats, and we may not be able to implement preventative measures effective against all such security threats. We also may not be effective in responding to contain or mitigate the risks of an attack. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations, hostile foreign governments or agencies, or cybersecurity researchers. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or those of our third-party vendors and other contractors and consultants, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of our products and services could be delayed.

The costs related to significant security breaches or disruptions could be material and could exceed the limits of the cybersecurity insurance we maintain, if any, against such risks. If the information technology systems of our third-party vendors and other contractors and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.

We cannot assure you that our data protection efforts and our investment in information technology will prevent significant breakdowns, data leakages, breaches in our systems, or those of our third-party vendors and other contractors and consultants, or other cyber incidents that could have a material adverse effect upon our reputation, business, operations, or financial condition. For example, if such an event were to occur and cause interruptions in our operations, or those of our third-party vendors and other contractors and consultants, it could result in a material disruption of our programs and the development of our services and technologies could be delayed. Furthermore, significant disruptions of our internal information technology systems or those of our third-party vendors and other contractors and consultants, or security breaches could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information, and personal information), which could result in financial, legal, business, and reputational harm to us. For example, any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our customers or employees, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.

Although we take measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to personnel error, malfeasance, or other malicious or inadvertent disruptions. Any such breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost, or stolen.

Any such access, breach, or other loss of information could result in legal claims or proceedings, liability under domestic or foreign privacy, data protection and data security laws such as HIPAA and HITECH, and penalties. Notice of certain security breaches must be made to affected individuals, the Secretary of HHS, and for extensive breaches, notice may need to be made to the media or state attorneys general. Such notice could harm our reputation and our ability to compete. Although we have implemented security measures, such data is currently accessible through multiple channels, and there is no guarantee we can protect our data from breach. Unauthorized access, loss or dissemination could also damage our reputation or disrupt our operations, including our ability to conduct our analyses, conduct research and development activities, collect, process and prepare company financial information, and manage the administrative aspects of our business.

Penalties for violations of these laws vary. For instance, penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly, and include significant civil monetary penalties and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty of up to $50,000 and up to one-year imprisonment. The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain or malicious harm.

Further, various states, such as California and Massachusetts, have implemented similar privacy laws and regulations, such as the California Confidentiality of Medical Information Act, that impose restrictive requirements regulating the use and disclosure of health information and other personally identifiable information. These laws and regulations are not necessarily preempted by HIPAA, particularly if a state afford greater protection to individuals than HIPAA. Where state laws are more protective, we have to comply with the stricter provisions. In addition to fines and penalties imposed upon violators, some of these state laws also afford private rights of action to individuals who believe their personal information has been misused. California’s patient privacy laws, for example, provide for penalties of up to $250,000 and permit injured parties to sue for damages. Similarly, the CCPA allows consumers a private right of action when certain personal information is subject to unauthorized access and exfiltration, theft or disclosure due to a business’ failure to implement and maintain reasonable security procedures. The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and data we receive, use and share, potentially exposing us to additional expense, adverse publicity and liability. Further, as regulatory focus on privacy issues continues to increase and laws and regulations concerning the protection of personal information expand and become more complex, these potential risks to our business could intensify. Changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, for the treatment of genetic data, along with increased customer demands for enhanced data security infrastructure, could greatly increase our cost of providing our products, decrease demand for our products, reduce our revenues and/or subject us to additional liabilities.

Changes in tax laws or regulations that are applied adversely to us or our customers may have an adverse effect on our business, cash flows, financial condition or results of operations.

We are subject to income and non-income based taxes in the U.S. and various jurisdictions outside the U.S. Our business and financial condition could be adversely affected by changes in federal, state, local or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, changes in accounting principles, applicability of withholding taxes, and changes to our business operations. For example, US legislations such as the Tax Act, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the American Rescue Act, made significant changes to the corporate tax rate, the potential realization of net deferred tax assets relating to our operations, taxation of foreign earnings, and deductibility of expenses, and could have a material impact on our financial position or results of operations.

Our ability to use net operating loss carryforwards and certain tax assets to offset future taxable income or taxes may be subject to certain limitations.

Our ability to use our net operating ~~loss carryforwards~~losses (NOLs) and certain other tax attributes ~~may be limited.~~

~~Our ability to use federal and state net operating loss, or NOL, carryforwards~~ to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon our generation of future taxable income, ~~before the expiration dates of the NOL carryforwards,~~ and we cannot predict with certainty when, or whether, we will generate sufficient taxable income to use all ~~or a portion~~ of our ~~NOL carryforwards.~~ NOLs.

As of December 31, ~~2016,~~2020, we had significant U.S. federal and state NOLs due to prior period losses. Under the Tax Act, as modified by the CARES Act, federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the utilization of such federal NOLs arising in taxable years beginning after December 31, 2020 is limited to 80% of current year taxable income. The CARES Act temporarily suspends this 80% taxable income limitation, allowing an NOL ~~carryforwards for~~carryforward to fully offset taxable income in tax ~~return purposes of $100.0 million~~years beginning before 2021. It is uncertain if, and ~~$130.1 million, respectively, which, if not utilized, begin~~ to ~~expire in~~what extent, various ~~amounts beginning in~~states will conform to the ~~year 2032. Under~~Tax Act or the CARES Act.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended ~~or the Code, if over a rolling three-year period, the cumulative change in our ownership exceeds 50% (as determined under applicable Treasury regulations)~~(the Code), our ability to utilize ~~our U.S. NOL carryforwards~~these NOLs and other ~~pre-change~~ tax attributes, ~~(such~~such as ~~research~~federal tax ~~credits) to offset future~~credits, in any taxable ~~income or taxes~~year may be ~~limited.~~limited if we have experienced an “ownership change”. Generally, a Section 382 ownership change occurs if one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a three-year testing period. Similar rules may apply under state tax laws. We completed a Section 382 study of transactions in our stock through December 31, ~~2016~~2020 and concluded that we have experienced ~~at least one~~ ownership ~~change~~changes since inception ~~and~~that we believe under Section 382 of the Code will result in limitations on our ~~utilization of NOL carryforwards will therefore be subject to annual limitation. Our~~ ability to ~~utilize our NOL carryforwards~~use certain pre-change NOLs and credits. In addition, we may ~~be further limited~~experience subsequent ownership changes as a result of ~~subsequent~~future equity offerings or other changes in the ownership ~~changes.~~of our stock, some of which are beyond our control. As a result, the amount of the NOLs and tax credit carryforwards presented in our financial statements could be limited and, in the case of NOLs generated in tax years beginning on or before December 31, 2017, may expire unused. Any such material limitation or expiration of our NOLs may harm our future operating results by effectively increasing our future tax obligations. Similar ~~rules may apply under~~provisions of state tax ~~laws. Further, other provisions~~law may also apply to limit the use of ~~the Code may limit our ability to utilize NOLs incurred before our recapitalization to offset income or gain realized after the recapitalization, unless~~accumulated state tax attributes. Regulatory changes, such ~~income or gain is realized by the same entity that originally incurred such NOLs. In addition, at the state level, there may be periods during which~~as suspensions on the use of NOLs, ~~is suspended~~or other unforeseen reasons, may cause our existing NOLs to expire, decrease in value or otherwise ~~limited. Such limitations could result in the expiration of our NOL carryforwards before they can~~ be ~~utilized and, if we are profitable, our~~unavailable to offset future ~~cash flows could be adversely affected due to our increased~~income tax ~~liability.~~liabilities.

Business disruptions could seriously harm our future revenues and financial condition and increase our costs and expenses.

Our operations could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or ~~manmade~~man-made disasters or business interruptions, for which we are predominantly self-insured. Two of our corporate locations are located in California, an area prone to ~~earthquakes.~~earthquakes and fires. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce our product candidates. Our ability to obtain clinical supplies of product candidates could be disrupted, if the operations of these suppliers are affected by a man-made or natural disaster or other business ~~interruption. The ultimate impact on us, our significant suppliers and our general infrastructure is unknown, but our operations and financial condition could suffer in~~interruption, including, for example, the ~~event of a major earthquake, fire or other natural disaster.~~ongoing COVID-19 pandemic.

*Our stock price has been and will likely continue to be volatile and may decline regardless of our operating performance.

Our stock price has fluctuated in the past and can be expected to be volatile in the future. From October 16, 2014, the first date of trading of our common stock, through September 30, 2017, the reported sale price of our common stock has fluctuated between $9.66 and $65.56 per share. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may experience losses on their investment in our common stock. The market price of our common stock may be influenced by many factors, including the following:

~~We may be subject to securities litigation, which is expensive and could divert management attention.~~

The market price of our common stock has been volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

~~Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.~~

Our executive officers, directors and stockholders own a significant portion of our outstanding voting stock. These stockholders may be able to determine the outcome of all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock.

~~Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.~~

We are an “emerging growth company” and are taking advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our common stock being less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we are taking advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company, which in certain circumstances could be for up to five years from the date of our initial public offering. We will cease to be an “emerging growth company” upon the earliest of: (1) December 31, 2019; (2) the last day of the first fiscal year in which our annual gross revenues are $1 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a “large accelerated filer” as defined in the Exchange Act.

~~Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.~~

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

~~We have incurred and will continue to incur increased costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs.~~

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Stock Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted and will adopt additional rules and regulations, such as mandatory “say on pay” voting requirements, that will apply to us when we cease to be an emerging growth company. Stockholder activism, the current political environment and the potential for future regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activities more time-consuming and costly. To the extent these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services.

~~Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of potential gain.~~

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Pursuant to our equity incentive plans, our compensation committee is authorized to grant equity-based incentive awards to our employees, non-employee directors and consultants. Future grants of RSUs, options and other equity awards and issuances of common stock under our equity incentive plans will result in dilution and may have an adverse effect on the market price of our common stock.

Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation, or certificate of incorporation, and amended and restated bylaws, or bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These include provisions that will:

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management. For example, our board is divided into three classes. Each class has a three-year term. These classes make it more difficult to replace a majority of our directors in a short period of time. Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may discourage, delay or prevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders. Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

~~If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.~~

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. In the event securities or industry analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Item 2. ~~Unregister~~edUnregistered Sales of Equity Securities and Use of Proceeds

Exhibit

Incorporated by Reference

Filed

No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Herewith

3.1

Amended and Restated Certificate of Incorporation of Atara Biotherapeutics, Inc.

S-1

333-196936

3.2

6/20/2014

3.2

Amended and Restated Bylaws of Atara Biotherapeutics, Inc.

S-1

333-196936

3.4

6/20/2014

10.1+

Amendment No. 1 to Commercial Manufacturing Services Agreement between Atara Biotherapeutics, Inc., and Cognate BioServices Inc., dated September 1, 2021

31.1

Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification by Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1(1)

Certifications of Chief Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL.

Exhibit

Incorporated by Reference

Filed
No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Herewith

  3.1

Amended and Restated Certificate of Incorporation of Atara Biotherapeutics, Inc.

S-1

333-196936

3.2

6/20/2014

  3.2

Amended and Restated Bylaws of Atara Biotherapeutics, Inc.

S-1

333-196936

3.4

6/20/2014

  4.1

Form of Atara Biotherapeutics, Inc. Common Stock Certificate.

S-1/A

333-196936

4.1

7/10/2014

  4.2

Investor Rights Agreement of Atara Biotherapeutics, Inc., dated March 31, 2014.

S-1

333-196936

4.2

6/20/2014

31.1

Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

31.2

Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

32.1(1)

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

X

101.INS

XBRL Instance Document

X

101.SCH

XBRL Schema Document

X

101.CAL

XBRL Calculation Linkbase Document

X

101.LAB

XBRL Labels Linkbase Document

X

101.PRE

XBRL Presentation Linkbase Document

X

101.DEF

XBRL Definition Linkbase Document.

X

(1)
The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Pursuant to the requirements of the Securities Exchange Act of 1934, Atara Biotherapeutics, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		46-0920988
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

611 Gateway Blvd., Suite 900 South San Francisco, CA		94080
(Address of principal executive offices)		(Zip Code)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share		ATRA		The Nasdaq Stock Market LLC

Large accelerated filer	☐☒		Accelerated filer	☒☐
Non-accelerated filer	☐ ~~(Do not check if a small reporting company)~~		Smaller reporting company	☐
Emerging growth company	☒	☐

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets	3

	~~Condensed Consolidated Statements of Operations and Comprehensive Loss~~	4

	~~Condensed Consolidated Statements of Cash Flows~~	5

	Condensed Consolidated Statements of Operations and Comprehensive Loss	6

	Condensed Consolidated Statements of Changes in Stockholders’ Equity	7

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	69

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1519

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2428

Item 4.	Controls and Procedures	2429

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	2530

Item 1A.	Risk Factors	2530

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5669
Item 3.	Defaults Upon Senior Securities	5669
Item 4.	Mine Safety Disclosures	5669
Item 5.	Other Information	5669
Item 6.	Exhibits	5770

	Signatures	5871

	RSUs
	Shares			Weighted Average Grant Date Fair Value
Unvested as of December 31, 2016		1,286,262		$	16.61
Granted		782,413		$	15.07
Forfeited		(50,063	)	$	15.41
Vested		(282,613	)	$	12.02
Unvested as of September 30, 2017		1,735,999		$	16.70
Vested and unreleased		17,484
Outstanding as of September 30, 2017		1,753,483

	Nine months ended September 30, 2017			Nine months ended September 30, 2016
Assumptions:
Expected term (years)		4.5			4.5
Expected volatility		69.1	%		69.0	%
Risk-free interest rate		1.8	%		1.3	%
Expected dividend yield		0.0	%		0.0	%
Fair Value:
Weighted-average estimated grant date fair value per share	$	8.88		$	11.23
Options granted		1,155,900			795,700
Total estimated grant date fair value	$	10,264,000		$	8,935,000

	Total Shares Reserved
2014 Equity Incentive Plan		~~10,310,669~~16,436,898
2018 Inducement Plan		4,031,948
2014 Employee Stock Purchase Plan		~~827,629~~
~~Options issued outside the 2014 EIP~~		~~275,000~~972,265
Total reserved shares of common stock		~~11,413,298~~21,441,111

	ATARA BIOTHERAPEUTICS, INC.
Date: November ~~9, 2017~~4, 2021
		~~By:~~	~~/s/ Isaac Ciechanover~~
		~~Isaac Ciechanover~~By:	/s/ Pascal Touchon
		Pascal Touchon
		President and Chief Executive Officer
		(Duly Authorized Officer and Principal
		Executive Officer)
			~~By:~~	~~/s/ John F. McGrath, Jr.~~
		~~John F. McGrath, Jr.~~By:	/s/ Utpal Koppikar
		~~Executive Vice President and~~ Utpal Koppikar
		Chief Financial Officer
		(Duly Authorized Officer and Principal
		Financial and Accounting Officer)