Autolus Therapeutics plc (NASDAQ:AUTL) Q1 2023 Earnings Call Transcript May 7, 2023

Operator: Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics First Quarter 2023 Financial Results Conference Call and Operational Progress. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the conference over to your host, Alexandra Deschner, Investor Relations Consultant. Alexandra, please go ahead.

Alexandra Deschner: Thank you so much, Eric. Good morning or good afternoon, everyone, and thank you for joining us to take part in today’s call for Autolus’ first quarter 2023 financial results and operational highlights. I’m Alexandra Deschner, Investor Relations Consultant for Autolus. With me today are Dr. Christian Itin, our Chief Executive Officer; and Dr. Lucinda Crabtree, our Chief Financial Officer. Before we begin, I would like to remind you that during today’s call, we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of clinical trials and development and/or regulatory time lines for our product candidates and our expectations regarding our cash runway.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today’s press release and our SEC filings, both available on the Investors section of our website. On Slide 3, you will see the agenda for today’s call, which is as follows: Christian will provide an overview of our operational highlights for the first quarter of 2023. Lucy will then discuss the company’s first quarter 2023 financial results before Christian will conclude with upcoming milestones and any other concluding comments.

Finally, we will, of course, welcome your questions. Over to you, Christian.

Christian Itin: Thank you, Alexandra, and good morning to you all. Thank you for joining us. It’s my pleasure to review our progress for the first quarter in 2023. Moving to Slide number 4. We’re really pleased with our program and operational progress during the first quarter of 2023, which is highlighted over the next four slides. We’re making good progress with our pipeline of CAR-T programs, particularly with our elite product, Obe-cel, in relapsed/refractory adult ALL patients. You will recall that we announced in December that the Phase II pivotal clinical trial of Obe-cel in this patient population have met its primary endpoint based on a pre-planned interim analysis of 50 patients with morphological disease and as verified by an independent data monitoring committee.

This positive data triggered a $35 million milestone for our partner Blackstone Life Sciences earlier than anticipated. We’re looking forward to presenting the top line data of the FELIX study in an oral presentation at the American Society of Clinical Oncology Annual Meeting on June 2 in Chicago and a second oral presentation at the European Hematology Association Congress being held from the 8th to the 11th of June in Frankfurt. Updates on longer follow-up and additional sub-analysis of the data are planned for the American Society of Hematology meeting at the end of 2023 as well as at medical conferences in the first half of 2024. Operationally, the key goal for Obi-cel is the filing for a biologics license application to the U.S. Food and Drug Administration by the end of this year.

In February, Dr. Claire Rode from UCL presented long-term follow-up data from our adult ALL patients in the ALLCAR19 Phase I study of Obe-cel at the Tandem Meetings of ASTCT and CIBMTR. The data demonstrated that 35% of adult patients remain in complete remission without additional anti-leukemia therapy, an immediate follow-up of 36 months with ranges from 24 months to 48 months. We’re now looking at the broader range of development options for obe-cel and AUTO122 beyond adult patients with acute lymphoblastic leukemia. In the ALLCAR extension study, we have reported Obe-cel high level of clinical activity and well manageable safety profile across non-Hodgkin’s lymphoma indications and chronic lymphocytic leukemia. We’re completing enrollment in this study and expect to report final data in a peer-reviewed publication.

In the CAROUSEL study, we evaluate Obe-cel in peripheral CNS lymphoma, and we have completed enrollment and continue to see consistent and encouraging safety and efficacy, with adequate follow-up, we are planning to publish the full data in a peer-review journal as well. We’re following with interest the early and very encouraging results from the team of [indiscernible] and Andreas Mackensen at the University of Erlangen Germany in patients with refractory systemic lupus and related B cell mediated autoimmune diseases treated with an academic CD19 CAR-T product. Considering Obe-cel’s excellent activity and safety profile and combined with our commercial manufacturing base, this set of indications may become an attractive additional opportunity for the program.

In an oral presentation at the 49th European Bone Marrow and Transplant Meeting in April, our key investigator Dr. Sara Ghorashian and Perseomrolia from Great Ormond Street Hospital in London, presented updated data from AUTO1/22, our CD19 and CD22 dual targeting CAR-T product candidate. Kymriah ineligible pediatric ALL patients showed a high level of clinical activity and good tolerability with over 80% of patients achieving a molecular complete remission with no antigen negative relapses seen with a median follow-up of 8.7 months. Included also were patients who had relapsed after Kymriah therapy with CD19 negative disease. Additionally, data on the molecular design of AUTO1/22 and preclinical characterizations were published in Molecular Therapy in March and highlighted the state-of-the-art design of AUTO1/22 with its high sensitivity CD22 Kymriah antigen receptor (ph) and the efficient core targeting leveraging Obe-cel’s CD19 Kymriah antigen receptor.

Turning to Slide 5 and other pipeline updates. We’re looking forward to updating the progress with the AUTO4 peripheral T-cell lymphoma program in an oral presentation at the International Conference for Malignant Lymphoma in Lugano, Switzerland in June as well. Finally, we conclude — we continue to enroll patients into the CART Phase I trial of AUTO8 in multiple myeloma and expect first data at the end of this year and expect to dose the first patient into Phase I trial of AUTO6NG in Neuroblastoma this year as well. Turning now to Slide number 6. With continued progress against our strategic and operational goals throughout the quarter. The company’s new 70,000 square foot commercial manufacturing facility in Stevenage in the UK has continued to progress on track.

Key equipment installation and validation were completed by Autolus in the first quarter of 2023, enabling operational qualifications commencing now in the second quarter of 2023. This facility will have an initial capacity of up to 2,000 batches per year sufficient to serve the global demand in adult ALL. Just 18 months from groundbreaking, we are now working on the qualification and validation of the Nucleus facility and remain on track for good manufacturing practice operations commencing in the second half of this year. We’re also undertaking the development work and report generation for the CMC package planned to support a BLA submission to the FDA. Our industry-leading cell programming platform creates opportunities for collaboration and licensing through our relationships with BMS at Moderna, we added in Q1 a partnership with Cabaletta, granting them access to our proprietary RQR8, rituximab induced safety switch for incorporation into a better selected cell therapy programs.

In January, we also announced two changes to the Board of Directors, the company’s non-executive Chairman, John Johnson, who has held the role since September ’21, will not stand for reelection at the Autolus upcoming Annual Shareholder Meeting. Additionally, at the end of February, Dr. J. Backstrom, who had served an Autolus Board of Directors since August 2020, stepped down from the Board after taking on a public CEO role at Scholar Rock. We also announced a change to our management team with Dr. Lucinda Crabtree, our CFO, also on the line today, stepping down or planning to step down in August 2023 to pursue a new opportunity. Searches for successors for these posts are underway. Finally, total cash and cash equivalents and restricted cash at the end of March were $343.4 million.

We’ve had a diversified treasury approach in place, which served us well through — well during the Silicon Valley Bank [indiscernible], and we continue to diligently monitor development in the financial sector. Moving on to Slide number 7. There are also several post-period events I’d like to bring to your attention. Last week, we announced that we had selected Cardinal Health as a core distributor for Obe-cel, giving us the platform and distribution capabilities required to commercialize a CAR-T cell therapy in the U.S. Cardinal Health’s innovated depot model is intended to reduce delivery time by allowing for transit while product releases being finalized. Alongside this, we continue to build out Autolus’ own commercial infrastructure and are working towards onboarding the clinical centers over the course of this year.

Also, at last week, we held a virtual Capital Markets Day that presented the positioning and commercial opportunity for Obe-cel. The event started with Professor Lori Muffly from Stanford University, reviewing the disease therapeutic options and medical need for adult patients with acute lymphoblastic leukemia. Professor Claire Roden from UCL then introduced Obe-cel the initial clinical experience in patients with ALL followed by a video presentation of one of her patients and her experiences of living with ALL with an ALL diagnosis as well as her experience with the treatment regimen. With this deeper understanding of the physicians and patients view of this challenging disease, Dr. Matthew Gitlin talked about the ALL market and the prospective payers are taking.

And particularly, he looked at the cost of patient management and the impact on hospitals and payers, highlighting the substantial impact on cost of managing high-grade cytokine release syndromes and ICANS. Finally, Chris Van, Autolus’ Chief Operating Officer, walks through the commercial road map for Obe-cel. We believe it was a very informative and well-attended event. And for anyone who missed it, a replay is on the Events section of Autolus website available to you. Finally, we recently announced the publication of two papers, the first of which included the publication of the preclinical data for AUTO1/22 in molecular therapy, which I mentioned earlier, and the second published in molecular therapy nucleic acids focused on a new set of self-programming modules based on novel Fas-TNF receptor chimeras.

This technology converts a threat to the CAR-T cell into an activating or survival signal instead. We’re boring here from a martial arts principle of taking an incoming blow and rolling with it. Slide 8, Obe-cel. Moving to Obe-Cel. With that, I also moving forward to Slide 9. Obe-cel has a unique mechanism of action. What’s fundamentally different about our product candidate that it has an ability to engage [indiscernible] with the target cells, rapidly binding to the target, which delivers specificity and paired with a fast offering for rapid disengagement from the target once the cell kill has been delivered. This unique engagement drives maximum activity while minimizing toxicity and is at the heart of the differentiated clinical profile we are observing for Obe-Cel in ALL and non-Hodgkin’s lymphoma.

Moving to Slide 10. Our clinical experience with Obe-cel in ALL shows a high overall response rate across all patient populations evaluated. In our prior ALLCAR19 study, we have 35% of patients in long-term remission at 36 months of median follow-up with a range of 24 months to 48 months after receiving Obe-cel and without receiving any further anti-leukemia therapy. The safety profile is well manageable with low levels of high-grade cytokine release syndrome and ICANS. The mid-section of the slide shows the patients with long-term remissions have continued presence of CAR T cells over the entire observation period, pointing to CAR T cell persistence as an indicator for long-term outcome. The program is developed under RMAT, Prime and ILAP designation.

Moving to Slide 11. We’ve now completed the enrollment and dosing of our pivotal study, which we call the FELIX study in adult patients with relapsed/refractory ALL. As I mentioned, we announced in December that we have met the primary endpoint based on the overall response rate at an interim analysis on the first 50 patients followed for at least three months. Clinical benefit in ALL will be assessed based on patients remaining in a sustained complete remission. We conducted this study in 34 centers, 24 centers in the U.S., seven centers in the UK and three centers in Spain, enrolling patients from July 2021 to November 2022 during the peak infection period of the pandemic. It’s important to realize that relapsed/refractory adults ALL patients are highly immune suppressed and the [indiscernible] posted significant added risk to them.

Moreover, due to access restrictions and various other pandemic rules and regulations, we could actually not access our clinical trial sites for the most part of the FELIX study. This is a difficult population to work with, as you can imagine, particularly in an environment where there is a high risk of infection. And indeed, we did lose a few patients to cover it. In many ways, this was more of a real-world study conducted under difficult circumstances. In addition to patient safety, every aspect of product delivery and logistics were pressure tested during the trial with massively reduced air traffic and other impacts of the pandemic and our manufacturing teams. Remarkably, manufacturing for all patients from our facility, the UK turned out to be an asset also for U.S. delivery as the long-haul flights from the U.S. to the UK have priority over domestic flights.

We’re pleased that we got it done under such challenging circumstances and credits to our patients and their caregivers, clinical collaborators and the whole Autolus team for this achievement. As mentioned earlier, next key data is planned in oral presentations at ASCO and EHA in early June 2023. Moving to Slide number 12. This slide summarizes the announcement we made in December regarding the prespecified interim analysis of the first 50 out of 90 patients dosed and have reached at least three months of follow-up. The primary endpoint is based on overall remission rate, which includes patients in complete remission and patients in complete remission with incomplete bone marrow recovery or CR and CRI. The ORR was 70%, all recent programs in ALL have used ORR as the primary endpoint in their respective studies.

Safety analysis was conducted on a larger 92 patient data set and showed an excellent profile with high grade cytokine release experience in less than 3% of patients and high grade ICANS in less than 8%. ICANS are fully reversible and less than 25% of patients had any grade of neurotoxicity. In contrast to approved T-cell or T-cell engaging therapies, a very unusual profile in this patient population. And as I mentioned earlier, the data triggered a $35 million milestone from Blackstone. Moving to Slide 13. This slide summarizes our current experience with Obe-cel across ALL. As you can see, the data are highly consistent across the various studies, both on safety and efficacy. Worth noting is that CARPALL and ALLCAR were conducted prior to the pandemic, while both parts of the FELIX study were conducted during the pandemic, both the CARPALL and ALLCAR19 studies were conducted in the U.K., while the FELIX study was largely conducted in the U.S. What we did pick up is that the patients in the FELIX study were more advanced in their disease based on tumor burden and increased presence of so-called extramedullary disease.

This is, in essence, again, a function of the leukemia that allows it to leave the bone marrow and successfully settle and grow in other organs. Patients with extramedullary disease respond poorly to antileukemia therapies. Moving to Slide 14 to look at further into the data we presented at ASH from the ALLCAR19 study. When we look into the ALLCAR or long-term observation from the ALLCAR19 study, where we have up to four years of follow-up, you can see the unusual — and quite an unusual profile. We could see that clinical benefit in these patients is the ability to convert patients into complete remission, sustain them over time without additional therapy. And as you could see, obviously, a substantial proportion of the patients are indeed in sustained therapy.

So if you go from bottom up, you can see at the bottom patients that obviously did not respond. We have then a group of patients that did respond that relapsed quickly, including patients that have lost the CD19 antigen with then a group of patients that actually relapsed with CD19 positive disease, those are patients that have lost persistence of the CAR-T product. And then there is the top group with a long green survival lines, where you can see patients that actually have continued remission. And in fact, those are also patients that have continued presence or persistence of CAR-T cells. Overall, obviously, it gives us a lot of confidence in terms of the consistency of the data, understanding the reasons when patients actually do relapse and what the causes for that relapse are and obviously, the proportion of patients that are in ongoing remission without any additional therapeutic need.

Turning to Slide 15. I thought it might help here to give you an overview of the ALL treatment landscape as it stands. The figure on the right represents the NCCN guidelines for the treatment of relapsed/refractory ALL. And you can see it is sort of as two main arms. The low arm actually looks at T-cell lymphoma, which is a subset and relatively small group of patients, and the upper two arms actually include B-cell lymphoma — sorry, B-cell acute lymphoblast week leukemia. And with that, the disease setting that we’re focusing on. We can also see that we see three novel therapeutics that are being incorporated into that scheme over the past 10 years. The first is BLINATUMOMAB or Blincyto. This is a bispecific T-cell engaging anti-CD19 therapeutic antibody.

It’s given as a continuous intravenous infusion for 28 days at a cycle, these cycles can be repeated with two weeks of intervals in between the cycles. The patient starts at the hospital and eventually are discharged from the hospital with a container or a bag that actually contains the product that is continuously delivered through a central port over the entirety of a treatment cycle. These bags are being changed typically once weekly and by a nurse that actually usually visits the patients at home to sort of support the therapy. These cycles can be repeated, but obviously, the patient needs to be in a remission for a continued cycle or a next cycle to be received. The product is obviously very active, and it’s particularly active in patients that have low disease burden.

Now unfortunately, like with all therapeutic options today available for adult patients with ALL, while the product is very active, it does not actually lead to long-term remissions. And that is one of the fundamental challenges that we have in the field is that we have active therapies, but we have a hard time converting those effects and responses into long-term remissions. The next therapeutic that we’re looking at is inotuzumab or Besponsa. This is an antibody conjugated drug therapy. It is directed to CD22, which is expressed on most B-cells that can form ALL. And this drug is also associated with a very high response rate, but also like Blincyto is not curative, and in fact, it’s usually used as a bridge to transplant. Finally, the newest product that is available is brexucabtagene or Tecartus, which was approved in 2021, which is the first CAR-T cell therapy approved for adult ALL patients.

Both Blincyto and Tecartus which are leveraging or utilizing T-cell do show similar types of immunological toxicities, which are CRS and ICANS whereas this [indiscernible] can cause liver toxicity. Overall, we do have obviously a view that if you have a product that has a high level of clinical activity with a well manageable safety profile, obviously, is very attractive patients with ALL. And if that product actually can translate into at least a proportion of the patients in long-term remission, I think that would represent a big step forward. Moving to Slide 16 to look at the data from these programs in the space. Blincyto, as I mentioned, is a T-cell engaging CD19 targeting monoclonal bispecific antibody or that has become the standard of care in relapsed refractory ALL as over the last few years.

Key to success has been the well-manageable safety profile. Key focus from a patient management perspective is the monitoring of a ICANS, which impacted about two-thirds of the patients. And in contrast, if you look at Obi-cel, obviously, substantially more patients do experience ICANS. As I mentioned before, we see about 25% of the patients experiencing ICANS with Obe-Cel. High-grade CRS for Blincyto is relatively low at around 5% level, and Obe-cel seems to be similar potentially slightly better in terms of the high grade cytokine-released level. Now in contrast to Blincyto, Tecartus induced it’s high-grade CRS in a substantially higher proportion of patients and 26% of the patients and high-grade neurotoxicity reaches about 35%, while 87% experience of patients experienced neurotoxicity of any grade.

40% of patients received vasopressors. This is a challenging safety profile to manage and often requires access to ICU. When we look at inotuzumab, [indiscernible] , the program has liver toxicity and is primarily used to the rig to transplant. None of the therapies established long-term remissions without subsequent stem cell transplant. Moving to Slide 17. The market opportunity in ALL is unchanged. Obviously, as a consequence of the fact that we didn’t actually see any significant move with regards to patients having long-term remissions. And so we still see, as we’ve seen about 10 years ago, 3,000 patients in high medical need for therapy between the U.S., Europe and Japan. Moving to Slide 18. When we look at the actual size of the market, we always look for good surrogates, and we believe that the sales of [indiscernible] are actually a good surrogate for our product.

Firstly, the Blincyto has obviously a good — got a very similar mechanism of action being CD19 T-cell engaging agents. Secondly, it’s used largely in the same indication as a similar albeit somewhat higher CRS and ICANS level. So around 80% of the Blincyto cell come from adult ALL and around 20% of the sales from pediatric ALL. And very importantly, it’s got a similar type of toxicity profile to Obe-cel as just reviewed above. The safety profile allows user Blincyto in a broad range of centers, not just in the academic transplant centers. And indeed, Blincyto had a record quarter in Q1, growing 41% year-over-year with sales of $194 million reached in the first quarter. If we are to prudently assume quarterly sales remain constant and do not grow any further, we estimate that full year sales could reach approximately $800 million, which corresponds to year-over-year growth of about 33%.

This development highlights the meaningful commercial opportunity in adult ALL, which is driven by the well-manageable safety profile of Blincyto. And reports the key driver for the increase is attributable to an expansion of the number of treatment centers where Blincyto is being used. We’re also seeing that many CAR-T centers are now also expanding the capacity for delivering CAR-T cell therapy. So both Blincyto and ultimately, Obe-cel have the potential to be used in a broader range of hospitals. Prices for CAR T therapy in the U.S. are in the range of $450,000 to about $500,000. Moving to Slide 19. When we look at the steps forward, first of all, we’re planning to disclose a FELIX data in an oral presentation at ASCO and also DHA, long-term follow-up and additional stop analyses are planned for ASH.

We’re targeting the BLA submission for the program towards the end of this year, MAA filing towards the end of the first quarter in 2024 and the UK filing in the second quarter of next year. That sets up very nicely for the key territories that we expect to be initially active in. In addition to the mature clinical data, the submission will also require data from the validation of our commercial manufacturing site. This work has been a key focus throughout the first half of 2023 and will do so into the third quarter. Importantly, our commercial manufacturing facility is set up to cover supply for approximately two-thirds of the estimated market from the start. We’ve talked about selecting Cardinal Health as our U.S. distribution partner, which is an important step.

As we’re moving through 2023, we need to prepare the key areas for commercialization. We’re creating awareness for the program through a focused medical affairs program. And alongside this, we are establishing the value proposition for payers in our HDA dosage and finally, preparing for and starting center onboarding a process that will take between nine to 15 months to get each vendor ready to deliver CAR-T therapy. Slide 20. Moving to Slide 21 to talk about the broader opportunity that we see with Obe-cel. As part of the ALLCAR extension study, we’ve been evaluating Obe-cel in relapsed/refractory non-Hodgkin’s lymphoma and CLL patients. We see consistently very high response rates, combined with a very attractive safety profile suitable for outpatient use.

That data will conform the basis for the selection of the second indication after ALL. In terms of the life cycle, we’re working on the next-generation version of Obe-Cel with Auto122, we’re looking to minimize what we’re looking to minimize CD19 antigen loss in relapses with this dual targeting approach. Building on Obe-Cel, we are adding a highly potent CD22 CAR that can recognize very low amounts of CD22 on the surface of leukemia cells. This program was initially evaluated in children had failed Kymriah or were not eligible for in therapy. In this very challenging population, we saw 83% molecular response rate, and this included also patients who had CD19 negative disease, demonstrating the efficacy of the CD22 CAR in isolation. Crucially, amongst responding patients with a median follow-up of 8.7 months, where there have been no cases of leukemic relapse or emergence of MRD related to antigen escape.

Together, these data indicate that combining our optimized CD22 CAR design with the CD19 CAR used in Obe-cel may be effective in preventing antigen loss-driven lapse in pediatric CLL (ph). We’re working and further streamlining the manufacturing process for Auto1/22 knowing that we have an attractive life cycle option. Timing of investment decisions in Auto1/22 will be balanced with additional investments for Obe-cel. Switching gears and headed to Slide 23. Our technology platform allows us to engineer a range of properties into T-cells that drive specific specificity of recognition, resilience against negative signals used by tumor cell T-cell attack and provide survival signals for T-cells. Our strength in T-cell engineering drives our pipeline and is also at the heart of the three collaborations that I have mentioned, which reported on 2022 and early ’23 with [indiscernible].

On Slide 24, we have a quick summary of the earlier-stage programs in T-cell lymphoma with AUTO4/5, AUTO6NG neuroblastoma, AUTO8 multiple myeloma. AUTO4 and AUTO8 are in Phase I clinical studies and AUTO6NG is expected to start during the course of the year. Moving to Slide 25. T-cell lymphoma is a very high medical need, similar to the ALL. In fact, when you look at the NCCN guideline, it basically says that once you’re through the frontline therapy and you relapse, you have to look for a clinical trial. Moving to Slide 26. With its unique targeting approach, all of four starts to show meaningful clinical impact at the higher dose levels that we have explored. The first metabolic CRs are reaching one year post-treatment, and we continue to follow the patients.

In addition, we have streamlined the manufacturing process and exploring the activity in an additional cohort, and we’re planning to report data at the ICML Conference in June. Moving to Slide 28 to talk about manufacturing. Cell manufacturing is obviously at the core of any autologous cell therapy, developing a highly reliable, robust and economical process is critical for the success of any program. In addition, we have to be able to deliver a product at scale and matching capacity to the size of the medical need, which is important for a successful rollout of any therapy. Building on the robust and very well-characterized process used to manufacture for the FELIX clinical study, we’re standing up our commercial cell manufacturing facility called the Nucleus about a mile away from the clinical trial manufacturing plant.

This proximity is important as we will be able to move our entire staff to the facility, the new facility and many, in fact, of our employees are already in the process of validating the nuclease facility. The capacity of the nucleus and its initial setup reaches 2,000 patient batches per year or about two-thirds of the adult ALL market size. The nuclear has been a fantastic project to realize with innovative design and about 75% off-site building to accelerate the building while maximizing the quality of the build. Moving to Slide 29, which is the interest slide to the financial section. And with that, I would like to turn to Slide 30 and pass the call over to Lucy for our Q1 2023 financial update. Lucy?

Lucinda Crabtree: Thanks, Christian, and good morning or good afternoon to everyone. It’s my pleasure to review our financial results for the first quarter ended March 31, 2023. The cash and cash equivalents and restricted cash at March 31, 2023, totaled $343.4 million as compared to $382.8 million at December 31, 2022. Net total operating expenses for the three months ended March 31, ’23 were $43.1 million, net of license revenue of $1.3 million, as compared to net total operating expenses of $41.8 million, net of grant income of $0.2 million for the same period in 2022. Research and development expenses decreased by $2.7 million to $31.3 million for the three months ended March 31, 2023 from $34 million for the three months ended March 31, 2022, primarily due to a decrease of $5.5 million in clinical trial and manufacturing costs, which was offset by an increase of $0.8 million in manufacturing material costs due to increased validation activities undertaken, primarily related to our obe-cel clinical product candidate, a decrease of $0.2 million in depreciation and amortization related to property, plant and equipment and intangible assets due to the reduction in our depreciable asset base, a decrease of $0.1 million in legal fees and professional consulting fees in relation to our research and development activities, an increase of $1.4 million in salaries and other employment-related costs, including share-based compensation expense, which was primarily driven by an increase in the number of employees engaged in R&D activities, an increase of $0.7 million related to information technology infrastructure and support for information systems related to the conduct of clinical trials and manufacturing operations; and finally, an increase of $0.2 million in facilities costs related to our new manufacturing facility, the Nucleus in Stevenage, U.K. as well as increase in costs related to maintaining our current leased properties.

General and administrative expenses increased by $1.3 million to $9.3 million for the three months ended March 31, 2023 from $8 million for the three months ended March 31, 2022, primarily due to the following: an increase of $0.7 million in salaries and other employment-related costs, including share-based compensation expenses, which was primarily driven by an increase in the number of employees engaged in G&A activities, an increase of $0.7 million in commercial readiness costs due to increased commercial revenues activities being undertaken an increase of $0.1 million in general office supplies and expenses, facilities costs due to the increase in space utilized for G&A activities, a decrease of $0.2 million, primarily related to a reduction in directors at offices, liability insurance premiums, legal and professional fees.

For the three months ended March 31, 2023, we recognized a loss on disposal of property and equipment of $3.8 million related to fixed assets no longer being utilized in the manufacturing facility exited in Stevenage, U.K. There were no such disposals for the three months ended March 31, 2022. Other income net decreased to $0.8 million from $0.9 million for the three months ended March 31, ’23 and ’22, respectively. The decrease of $0.1 million is primarily due to the recognition of the lease termination loss arising from the termination and exit of one of our manufacturing suites in Stevenage, U.K. Interest income increased to $3.4 million for the three months ended March 31, ’23 as compared to $28,000 for the three months ended March 31, 2022.

The increase in interest income of $3.4 million primarily relates to the increase in interest rates on our interest-bearing bank accounts and short-term investments during the three months ended March 31, ’23 compared to the prior period. Interest expense increased to $4.9 million for the three months ended March 31, ’23 as compared to $1.8 million for the three months ended March 31, ’22. Interest expense is primarily related to the liability for future royalties and sales milestones associated with our strategic collaboration agreement with Blackstone. Net loss attributable to ordinary shareholders was $39.8 million for the three months ended March 31, 2023, compared to $37.1 million for the same period in ’22. The basic and diluted net loss per ordinary share for the three months ended March 31, ’23 totaled $0.23 compared to a basic and diluted net loss per ordinary share of $0.41 for the three months ended March 31, 2022.

Autolus estimates that its current cash and cash equivalents on hand and anticipated future milestone payment from Blackstone will extend the company’s runway into 2025. With that, I’ll hand it back to Christian to give you a brief outlook on expected milestones. Christian?

Christian Itin: Thanks, Lucy. Moving to Slide 32. To summarize, we think we have an exciting time ahead of us. Obviously, the key focus on getting Obe-cel into the regulatory process with the BLA filing targeted towards the end of the year, followed by filings in Europe in the first half of next year. Next up, our planned FELIX presentation, data presentations as for DHA. And in addition, we’re preparing for commercial product supply and launch readiness. We also expect to provide updates on the pipeline programs with additional data and follow-up during the year with our key programs that at this point are unpartnered and obviously create opportunity for setting up collaborations around them. Moving to Slide 33. We got cash to deliver a very significant value step.

We’ve got the data to show that with Obe-cel, we have a differentiated product profile that addresses a high medical need with limited competition and with possibly a transformational outcome. Alongside that, we have additional opportunities for Obe-cel and broader indications and a valuable pipeline for other oncology programs. As I mentioned, we’re excited about our manufacturing facility, and we have a strong technology foundation, validated our collaborators, BMS, Moderna Cabaletta, which recognize the value of our technology platform and allows us to monetize this value by way of function exercise fees milestone payments, et cetera. Importantly, we look to do more deals also of this nature in the future. With that, I would like to thank you first for listening to our prepared remarks, and we’re happy to take questions.

Q&A Session

Operator: Thank you. [Operator Instructions] All right. Please stand by while we compile the Q&A roster. And our first question comes from Mara Goldstein with Mizuho. Mara, your line is open. Please go ahead.

Operator: And our next question comes from Matthew Phipps with William Blair. Matthew, your line is open. Please go ahead.

Operator: Please standby for our next question. And our next question comes from Yanan Zhu from Wells Fargo Securities. Yanan, please go ahead. Your line is open.

Operator: Okay. Please standby for our next question. And our next question comes from Gil Blum from Needham & Company. Gil, your line is open. Please go ahead.

Operator: Standby for our next question. Next, we have Kelly Shi with Jefferies. Kelly, your line is open. Please go ahead.

Operator: Thank you very much and stand by for our next caller. And our next question comes from Asthika Goonewardene at Truist. Asthika, your line is open. Please go ahead.

Operator: Okay. That concludes our Q&A for today. I would like to now turn it back to Dr. Christian Itin, Chief Executive Officer for closing remarks.

Christian Itin: All right. Well, thank you very much. First of all, thanks all for joining today. Fantastic to have you all well and you taking the time. And we’re obviously looking to — forward to hopefully seeing you in person during one of the two main conferences this summer. And if not, hopefully, upon our recent upcoming trips to the respective your respective areas. And with that, I’d like to conclude at this point. Thanks again, and looking forward to keeping you updated with the next update, obviously at ASCO in a few weeks’ time. Thank you.

Operator: And thank you very much for your participation. This does conclude our program. You may now disconnect.