SEC Filing | Atea Pharmaceuticals, Inc.

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-39661

ATEA PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-0574869
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
225 Franklin Street, Suite 2100 Boston, MA	02110
(Address of principal executive offices)	(Zip Code)

(857) 284-8891

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

AVIR

The Nasdaq Global Select Market

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 every Interactive Data File required to be submitted 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 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 ☒

As of November 7, 2023, the registrant had 83,435,513 shares of common stock, $0.001 par value per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, our clinical development timelines and results and other future conditions. The words “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” "on track," “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

•

our expectations relating to clinical trials for our product candidates, including projected costs, study designs and the timing for initiation, recruitment, completion, and reporting interim, top-line and final data;

•

the potential therapeutic benefits of our product candidates and the potential indications and market opportunities therefor;

•

the potential of bemnifosbuvir to retain antiviral activity against circulating COVID-19 variants of concern and to treat COVID-19;

•

the safety profile and related adverse events of our product candidates;

•

our plans to research, develop and commercialize our current and future product candidates;

•

the potential benefits of any future collaboration we may enter into;

•

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

•

the rate and degree of market acceptance and clinical utility of any products for which we may receive marketing approval;

•

our manufacturing and commercialization capabilities and strategy;

•

our estimates regarding future revenue, expenses and results of operations;

•

the progress of, timing of and amount of expenses associated with our research, development and commercialization activities;

•

our future financial position, capital requirements, needs for additional financing and the availability of such financing;

•

our business strategy;

•

developments relating to our industry and our competitors, including competing treatments and vaccines for diseases we are treating;

•

our expectations regarding federal, state and foreign laws and regulations;

•

our ability to attract, motivate, and retain key personnel; and

•

the impact on our business as COVID-19 continues to evolve.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause actual results to differ materially from current expectations include the initiation, execution and completion of clinical trials, uncertainties surrounding the timing of availability of data from our clinical trials, ongoing discussions with and actions by regulatory authorities, our development activities and those other factors we discuss in Part II, Item 1A. “Risk Factors.” You should read these risk factors and the other cautionary statements made in this report as being applicable to all related forward-looking statements wherever they appear in this report. The risk factors are not exhaustive and other sections of this report may include additional factors which could adversely

impact our business and financial performance. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

As used in this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, the terms “we,” “our,” “us,” and the “Company” refer to Atea Pharmaceuticals, Inc. and its subsidiary. All brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. The principal risks and uncertainties affecting our business include the following:

•

There is significant uncertainty around our development of bemnifosbuvir as a potential treatment for COVID-19.

•

We are highly dependent on our management, directors and other key personnel.

•

We may expend resources in anticipation of potential clinical trials and commercialization of bemnifosbuvir, which we may not be able to recover if bemnifosbuvir is not approved for the treatment of COVID-19, we are not successful at commercializing bemnifosbuvir or bemnifosbuvir is rendered inferior or obsolete due to rapid changes in COVID-19 epidemiology as a result of the emergence of new SARS-CoV-2 variants or subvariants.

•

The market for new therapeutics for the treatment of COVID-19 may be reduced, perhaps significantly, if current vaccines and vaccine updates and current therapeutics remain effective in minimizing serious consequences of the disease.

•

If approved, bemnifosbuvir will face significant competition from other treatments for COVID-19 that are currently marketed or are in development.

•

The continuing evolution of COVID-19 may materially and adversely affect our business opportunities, clinical trials and financial results.

•

We have a limited operating history and no history of successfully developing or commercializing any approved antiviral products, which may make it difficult to evaluate the success of our business to date and to assess the prospects for our future viability.

•

We have incurred significant operating expenses since inception. We expect our expenditures will increase for the foreseeable future. We have no products that have generated any commercial revenue and we may never again achieve or maintain profitability.

•

We will require substantial additional financing, which may not be available on acceptable terms, or at all. A failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

•

Our ability to use our net operating loss carryforwards and other tax attributes to offset taxable income may be subject to certain limitations.

•

Our business is highly dependent on the success of our most advanced product candidates, including bemnifosbuvir. If we fail to successfully develop bemnifosbuvir for the treatment of COVID-19 or the combination of bemnifosbuvir and ruzasvir for the treatment of hepatitis C or we are unable to obtain regulatory approval or successfully commercialize any of our product candidates, or are significantly delayed in doing so, our business will be harmed.

•

The regulatory approval processes of the US Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities are lengthy, expensive, time-consuming and inherently unpredictable.

•

Clinical development, including enrollment of patients in clinical trials, is an expensive, lengthy and uncertain process. We may encounter substantial delays and costs in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

•

We intend to develop certain of our product candidates in combination with other product candidates that we discover or acquire, which exposes us to additional risks.

•

Our product candidates may be associated with serious adverse events, undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.

•

We currently conduct and may in the future conduct clinical trials of our product candidates in sites outside the United States ("US"). The FDA may not accept data from trials conducted in foreign locations.

iii

•

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•

We may not be successful in our efforts to identify and successfully develop additional product candidates.

•

Risks related to healthcare laws and other legal compliance matters may materially and adversely affect our business and financial results.

•

Risks related to commercialization may materially and adversely affect our business and financial results.

•

Risks related to manufacturing and our dependence on third parties may materially and adversely affect our business and financial results.

•

Risks related to intellectual property may materially and adversely affect our business and financial results.

•

We have only a limited number of employees, which may be inadequate to manage and operate our business.

•

Our business and operations may suffer in the event of system failures, security breaches, deficiencies or intrusions which could materially affect our results.

•

We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

•

We may engage in acquisitions or strategic partnerships that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, cause us to incur debt or assume contingent liabilities, and subject us to other risks.

•

We or the third parties upon whom we depend may be adversely affected by natural disasters or other unforeseen events resulting in business interruptions and our business continuity and disaster recovery plans may not adequately protect us from such business interruptions.

•

Increased attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business.

•

Litigation against us could be costly and time-consuming to defend and could result in additional liabilities.

•

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

•

Risks related to our common stock may materially and adversely affect our stock price.

•

If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company.

Table of Contents


		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		i
SUMMARY RISK FACTORS		iii

PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	89
Item 5.	Other Information	89
Item 6.	Exhibits	90
SIGNATURES		91

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ATEA PHARMACEUTICALS, INC. and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)


	September 30, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	137,886		$	188,460
Marketable securities		457,240			458,249
Prepaid expenses and other current assets		8,190			14,213
Total current assets		603,316			660,922
Property and equipment, net		1,393			1,705
Restricted cash		—			198
Other assets		1,396			1,494
Operating lease right-of-use assets, net		1,970			2,389
Total assets	$	608,075		$	666,708
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	395		$	2,551
Accrued expenses and other current liabilities		17,748			15,206
Current portion of operating lease liabilities		750			721
Total current liabilities		18,893			18,478
Operating lease liabilities		1,835			2,403
Income taxes payable		5,617			5,255
Total liabilities		26,345			26,136
Commitments and contingencies (see Note 12)
Stockholders’ equity:
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 300,000,000 shares authorized; 83,435,513 and 83,287,639 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		83			83
Additional paid-in capital		738,580			701,052
Accumulated other comprehensive loss		(262	)		(684	)
Accumulated deficit		(156,671	)		(59,879	)
Total stockholders’ equity		581,730			640,572
Total liabilities and stockholders’ equity	$	608,075		$	666,708

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATEA PHARMACEUTICALS, INC. and Subsidiary

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	28,181		$	4,905		$	79,198		$	54,396
General and administrative		12,604			11,376			38,391			36,355
Total operating expenses		40,785			16,281			117,589			90,751
Loss from operations		(40,785	)		(16,281	)		(117,589	)		(90,751	)
Interest income and other, net		7,864			4,382			21,466			5,560
Loss before income taxes		(32,921	)		(11,899	)		(96,123	)		(85,191	)
Income tax benefit (expense)		(221	)		3,833			(669	)		3,713
Net loss	$	(33,142	)	$	(8,066	)	$	(96,792	)	$	(81,478	)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale investments		48			(855	)		422			(855	)
Comprehensive loss	$	(33,094	)	$	(8,921	)	$	(96,370	)	$	(82,333	)
Net loss per share - basic and diluted	$	(0.40	)	$	(0.10	)	$	(1.16	)	$	(0.98	)
Weighted-average number of common shares used in computing net loss per share - basic and diluted		83,399,769			83,258,537			83,374,328			83,231,146

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATEA PHARMACEUTICALS, INC. and Subsidiary

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

(Unaudited)


	Common Stock				Additional		Accumulated Other			Accumulated			Stockholders’
	Shares		Amount		Paid-in Capital		Comprehensive Loss			Deficit			Equity
Balance—December 31, 2022		83,287,639	$	83	$	701,052	$	(684	)	$	(59,879	)	$	640,572
Issuance upon vesting of restricted stock units		53,935		—		—		—			—			—
Issuance of common stock under employee stock purchase plan		57,803		—		165		—			—			165
Stock-based compensation expense		—		—		12,535		—			—			12,535
Other comprehensive income		—		—		—		377			—			377
Net loss		—		—		—		—			(35,467	)		(35,467	)
Balance—March 31, 2023		83,399,377		83		713,752		(307	)		(95,346	)		618,182
Stock-based compensation expense		—		—		12,353		—			—			12,353
Other comprehensive income		—		—		—		(3	)		—			(3	)
Net loss		—		—		—		—			(28,183	)		(28,183	)
Balance—June 30, 2023		83,399,377		83		726,105		(310	)		(123,529	)		602,349
Issuance of common stock under employee stock purchase plan		36,136		—		92		—			—			92
Stock-based compensation expense		—		—		12,383		—			—			12,383
Other comprehensive income		—		—		—		48			—			48
Net loss		—		—		—		—			(33,142	)		(33,142	)
Balance—September 30, 2023		83,435,513	$	83	$	738,580	$	(262	)	$	(156,671	)	$	581,730


	Common Stock				Additional		Accumulated Other			Retained Earnings			Stockholders’
	Shares		Amount		Paid-in Capital		Comprehensive Loss			(Accumulated Deficit)			Equity
Balance—December 31, 2021		83,102,730	$	83	$	653,964	$	—		$	56,030		$	710,077
Exercise of stock options		154,861		—		223		—			—			223
Stock-based compensation expense		—		—		11,661		—			—			11,661
Net loss		—		—		—		—			(42,077	)		(42,077	)
Balance—March 31, 2022		83,257,591		83		665,848		—			13,953			679,884
Stock-based compensation expense		—		—		11,908		—			—			11,908
Net loss		—		—		—		—			(31,335	)		(31,335	)
Balance—June 30, 2022		83,257,591		83		677,756		—			(17,382	)		660,457
Issuance of common stock upon exercise of stock options		1,012		—		7		—			—			7
Issuance of common stock under employee stock purchase plan		29,036		—		140		—			—			140
Stock-based compensation expense		—		—		11,504		—			—			11,504
Other comprehensive loss		—		—		—		(855	)		—			(855	)
Net loss		—		—		—		—			(8,066	)		(8,066	)
Balance—September 30, 2022		83,287,639	$	83	$	689,407	$	(855	)	$	(25,448	)	$	663,187

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATEA PHARMACEUTICALS, INC. and Subsidiary

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(96,792	)	$	(81,478	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		37,271			35,073
Depreciation and amortization expense		312			156
Accretion of premium and discounts on marketable securities		(11,101	)		(2,465	)
Changes in operating assets and liabilities:
Accounts receivable		—			(4,514	)
Prepaid expenses and other current assets		6,023			(4,484	)
Other assets		98			—
Accounts payable		(2,156	)		(3,416	)
Accrued expenses and other liabilities		2,904			(39,109	)
Operating lease liabilities		(120	)		800
Net cash used in operating activities		(63,561	)		(99,437	)
Cash flows from investing activities
Additions to property and equipment		—			(1,943	)
Purchases of marketable securities		(515,132	)		(486,955	)
Sales and maturities of marketable securities		527,664			—
Net cash provided by (used in) investing activities		12,532			(488,898	)
Cash flows from financing activities
Proceeds from issuance of common stock for exercise of stock options		—			230
Proceeds from issuance of common stock under ESPP		257			140
Net cash provided by financing activities		257			370
Net decrease in cash, cash equivalents and restricted cash		(50,772	)		(587,965	)
Cash, cash equivalents and restricted cash at the beginning of period		188,658			764,680
Cash, cash equivalents and restricted cash at the end of period	$	137,886		$	176,715
Cash, cash equivalents and restricted cash at the end of period:
Cash and cash equivalents	$	137,886		$	176,410
Restricted cash		—			305
Total cash, cash equivalents and restricted cash	$	137,886		$	176,715
Supplemental cash flow information:
Right of use assets obtained in exchange for operating lease liabilities	$	—		$	2,938

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATEA PHARMACEUTICALS, INC. and Subsidiary

Notes to Condensed Consolidated Financial Statements

(in thousands, except share and per share amounts)

(Unaudited)

1. Organization

Business Overview

Atea Pharmaceuticals, Inc., together with its subsidiary, Atea Pharmaceuticals Securities Corporation, ("Atea" or the "Company") is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing antiviral therapeutics to improve the lives of patients suffering from severe viral infections. Currently, Atea is conducting a Phase 3 clinical trial evaluating bemnifosbuvir for the treatment of COVID-19. Atea is also currently conducting a Phase 2 clinical trial evaluating the combination of bemnifosbuvir and ruzasvir for the treatment of hepatitis C.

Liquidity and Capital Resources

As of September 30, 2023, the Company had $595.1 million in cash, cash equivalents and marketable securities, which the Company believes will be sufficient to fund its operations for a period through at least twelve months from the issuance date of these unaudited condensed consolidated financial statements.

In November 2021, the Company entered into an open market sales agreement (“Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company may from time to time offer and sell shares of its common stock for an aggregate offering price of up to $200.0 million, through or to Jefferies, acting as sales agent or principal. The shares will be offered and sold under the Company’s shelf registration statement on Form S-3 and a related prospectus filed with the Securities and Exchange Commission (“SEC”) on November 24, 2021, as amended. The Company has agreed to pay Jefferies a commission of 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Jefferies with customary indemnification and contribution rights. As of September 30, 2023, no shares have been issued under the Sales Agreement.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to clinical-stage biopharmaceutical companies. These risks include, but are not limited to, potential failure of preclinical and clinical studies, uncertainties associated with research and development activities generally, competition from technical innovations of others, dependence upon key personnel, compliance with governmental regulations, the need to obtain marketing approval for any product candidate that the Company may develop, the need to gain broad acceptance among patients, payers and health care providers to successfully commercialize any product for which marketing approval is obtained and the need to secure and maintain adequate intellectual property protection for the Company’s proprietary technology and products. Further, the Company is currently dependent on third-party service providers for much of its preclinical research, clinical development and manufacturing activities. Product candidates currently under development will require significant amounts of additional capital, and additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. Even if the Company is able to generate revenues from the sale of its product candidates, if approved, it may not become profitable. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then it may be unable to continue its operations at planned levels and be forced to reduce its operations.

The Company may seek additional capital through one or more of a combination of financing through the sale of additional equity securities, debt financing, or funding in connection with any new collaborative relationships it may enter into or other arrangements. There can be no assurance that the Company will be able to obtain such additional funding, on terms acceptable to the Company, on a timely basis or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s existing stockholders.

The Company is also subject to risks associated with the continued evolution of COVID-19 and its consequences, including actual and potential delays associated with certain of its ongoing and anticipated trials, and potential negative impacts on the Company’s business operations and its ability to raise additional capital to finance its operations. Geopolitical events, including civil or political unrest and terrorism, have resulted in a significant disruption of global business and financial markets. In addition, recent or future market volatility, increased inflation and higher interest rates, if sustained, may increase our cost of financing and may restrict our access to potential sources of future liquidity.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification (“ASC”), Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such SEC rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2023.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and nine month period ended September 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2023, the results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022. The results for the nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, or any other interim period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and in these accompanying notes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors and assumptions that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, which include but are not limited to estimates of accrued research and development expenses, valuation of marketable securities, the valuation of stock-based awards, valuation of operating lease right-of-use assets and lease liabilities and income taxes. Changes in estimates are recorded in the period in which they become known.

Principles of Consolidation

The consolidated financial statements include the accounts of Atea Pharmaceuticals, Inc. and its wholly- owned subsidiary, Atea Pharmaceuticals Securities Corporation. All intercompany amounts have been eliminated in consolidation.

Significant Accounting Policies

There were no changes in the Company’s significant accounting policies as described in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 28, 2023.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures.

3. Collaboration Agreement

Background

In October 2020, the Company entered into a License Agreement (the “Roche License Agreement”) with F. Hoffmann-LaRoche Ltd. and Genentech, Inc. (together, “Roche”) under which the Company granted an exclusive license for certain development and commercialization rights related to bemnifosbuvir outside of the United States (other than for certain HCV uses) to Roche.

On November 12, 2021, Roche provided the Company with a notice of termination of the Roche License Agreement which became effective in February 2022. Upon termination, the rights and licenses granted by the Company to Roche under the Roche License Agreement were returned to the Company, resulting in the Company having all rights to continue the clinical development and future commercialization of bemnifosbuvir worldwide. Global development plan activities and related cost sharing between the parties continued through the effective date of the termination.

The activities undertaken as a part of the global development plan were accounted for under ASC 808. Expenses incurred and reimbursements made or received from Roche were accounted for pursuant to ASC 730, Research and Development. As such, the Company was expensing costs as incurred, including any reimbursements made to Roche, and recognizing reimbursement received from Roche as a reduction of research and development expense through the effective date of the termination.

For the three and nine months ended September 30, 2022, the Company recorded a credit to research and development expense of $14,572 and $5,838, respectively. For the three and nine months ended September 30, 2023, the Company recorded a credit to research and development expense of $3,748 and $12,625, respectively. The credits recorded represent changes in estimates as a result of close out activities and related reporting of amounts incurred by Roche associated with the global development plan. Included in prepaid expenses and other current assets as of September 30, 2023 is a net balance due from Roche of $3,748.

4. Marketable Securities


								As of September 30, 2023
	Amortized Cost		Unrealized Gain		Unrealized Losses			Fair Value
Marketable Securities
US Treasury obligations	$	149,721	$	8	$	(104	)	$	149,625
US Government agency securities		171,645		55		(106	)		171,594
Commercial paper		84,281		—		—			84,281
Corporate bonds		51,855		—		(115	)		51,740
Total	$	457,502	$	63	$	(325	)	$	457,240


								As of December 31, 2022
	Amortized Cost		Unrealized Gain		Unrealized Losses			Fair Value
Marketable Securities
US Treasury obligations	$	59,422	$	—	$	(304	)	$	59,118
US Government agency securities		15,000		—		(59	)		14,941
Commercial paper		310,433		—		—			310,433
Corporate bonds		61,504		—		(255	)		61,249
Asset-backed securities		12,574		—		(66	)		12,508
Total	$	458,933	$	—	$	(684	)	$	458,249

As of September 30, 2023, the Company held 39 securities that were in an unrealized loss position of $325 with an aggregate fair value of $272,304. The Company has the intent and ability to hold such securities until recovery. As a result, the Company did not record any charges for credit-related impairments for its marketable debt securities for the three and nine months ended September 30, 2023.

None of the securities had remaining maturities longer than one year as of September 30, 2023.

The Company received proceeds of $527,664 from sales and maturities of marketable securities during the nine months ended September 30, 2023. There were no sales and maturities of marketable securities during the nine months ended September 30, 2022.

5. Fair Value Measurements