Company: ATRA
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0000950170-25-035507
Chunk: 284

Company: Atara Biotherapeutics, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 8
Chunk 284
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 other things, a reduction in: (i) royalties Atara is eligible to receive, and (ii) the price mark up on supply purchased by Pierre Fabre. Additionally, Atara also agreed to extend the time period for provision of certain services to Pierre Fabre under the Pierre Fabre Commercialization Agreement. In 2023, the Company entered into an amended and restated Pierre Fabre Commercialization Agreement (the “A&R Commercialization Agreement”).  Under the terms of the A&R Commercialization Agreement, the Company granted Pierre Fabre an expanded license to commercialize and distribute Ebvallo in all other countries in the world and remains responsible for manufacturing and supplying Ebvallo to Pierre Fabre, along with related cell selection services until transfer of responsibility to Pierre Fabre.

In 2024, the Company entered into an agreement with Pierre Fabre to sell certain intermediates used in the manufacture of Ebvallo for $15.5 million. 

The Company recognizes revenue on the commercialization agreements with Pierre Fabre as they satisfy their performance obligations and when a customer obtains control of the promised goods or services. The revenue related to the commercialization agreements with Pierre Fabre is recognized within commercialization revenue within the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2024, the Company recognized $128.9 million of commercialization revenue and deferred revenue amounted to $95.1 million, of which all $95.1 million is included in current liabilities. 

We identified accounting for the commercialization agreements, the revenue recognized, and the estimated deferred revenue to be recognized as revenue as a critical audit matter. Given the judgments necessary to determine the accounting literature to apply to a commercialization agreement, the method to estimate and measure the progress toward the completion of the performance obligations and the estimated contractual term over which the performance obligations would be completed, auditing such judgments and estimates required extensive audit effort due to the complexity of the commercialization agreements and the high degree of auditor judgment applied when performing audit procedures and evaluating the results of those procedures. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to determining the accounting literature to apply to the agreements, assessing management's method for measuring progress and evaluating management’s estimation of the contract term over which the performance obligations will be completed included the following, among others: 

•We reviewed and obtained an understanding of the Company’s revenue generating agreements and related transactions during and at the end of the year via review of internal and external presentations, news and publications