Company: ATRA
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0000950170-25-035507
Chunk: 189

Company: Atara Biotherapeutics, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1B
Chunk 189
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Commercialization Revenue and Deferred Revenue – Accounting for Out- License Agreements – Refer to Notes 2 and 5 to the Financial Statements

Critical Audit Matter Description

The Company has entered into certain out-license agreements with Pierre Fabre Medicament ("Pierre Fabre"). 

During 2021, the Company entered into a Commercialization Agreement with Pierre Fabre. Under the terms of the agreement, the Company granted Pierre Fabre a license to commercialize and distribute Ebvallo in an initial territory and became responsible for manufacturing and supplying Ebvallo to Pierre Fabre, along with related cell selection services.  In 2022, the Company entered into an Amendment Agreement to the Pierre Fabre Commercialization Agreement (the “PF Amendment No. 1”). Under the terms of the PF 

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Amendment No. 1, Atara became entitled to an additional milestone payment in exchange for, among 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