Autolus Therapeutics plc (NASDAQ:AUTL) Q4 2022 Earnings Call Transcript

Autolus Therapeutics plc (NASDAQ:AUTL) Q4 2022 Earnings Call Transcript March 7, 2023

Operator: Ladies and gentlemen, welcome to the Autolus Therapeutics full year 2022 financial results conference call and fourth quarter operational progress. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Julia Wilson, Communications Consultant. Please go ahead.

Julia Wilson: Thank you Norma. Good morning or good afternoon everyone and thank you for joining us to take part in today’s call on full year 2022 financial results and operational highlights for the fourth quarter 2022. I am Julia Wilson, a communications 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 which 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 stages of clinical trials and development timelines 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’ll see the agenda for today which is as follows: Christian will provide an overview of our operational highlights for the fourth quarter of 2022. Lucinda will then discuss the company’s full year 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 Julia and good morning to you all. Thank you for joining us. It’s my pleasure to review our progress for the fourth quarter 2022. Moving to Slide 4, we’re really pleased with our program and operational progress during the fourth quarter of 2022, which is highlighted over the next two slides. Firstly, we were delighted to announce in December that the pivotal Phase II FELIX clinical study evaluating obe-cel in relapsed refractory adult ALL patients met its primary end point based on overall response rate in a pre-planned interim analysis of 50 patients with morphological disease and as verified by an independent data monitoring committee. We’re another step closer to bringing this potential innovative treatment to an underserved ALL population, and I’ll delve into the data in more detail later in this presentation.

This positive data triggered a $35 million milestone from our partner, Blackstone Life Sciences, earlier than anticipated, and we are planning to provide a data update on all patients treated by mid this year, most likely at ASCO, with longer follow-up planned at the end of 2023 as well as planned BLA submission to the U.S. FDA by the end of the year. December was a busy month for us. We also had a number of clinical updates at the American Society of Hematology Annual Conference, including presenting longer term follow-up data from our adult ALL patients in the ALLCAR19 Phase I study of obe-cel showing 35% of patients in ongoing remission at 36 months of follow-up–median follow-up, with no additional anti-leukemia therapy. In addition, obe-cel continued to show high levels of clinical activity in relapsed refractory non-Hodgkins lymphoma and chronic lymphoblastic leukemia patients paired with a well manageable safety profile.

We were also very encouraged with the data we presented from our pediatric ALL program, the CARPALL Phase I trial of AUTO1/22, our dual targeting CAR T therapy targeting CD19 and CD22 with over 80% of patients achieving a molecular complete remission with no antigen negative relapses observed. Additionally, we’ve provided longer term follow-up on the LibrA T1 Phase I trial of AUTO4 in peripheral T cell lymphoma with some patients experiencing durable metabolic CRs, including one patient up to the one year mark post treatment and obviously in continued remission. We will be providing updates on these programs over the course of this year and will also be presenting data from the CAROUSEL study of obe-cel in peripheral CNS lymphoma patients, the MCARTY Phase I trial of AUTO8 in multiple myeloma patients, and finally the Phase I trial of AUTO6NG in neuroblastoma patients is expected to start in the next quarter.

Turning to Slide 5, we’ve made some great operational progress during the quarter. Towards the end of the year, we closed a public offering, raising aggregate gross proceeds of $164 million and net proceeds after underwriting discounts and offering expenses of $152.4 million, including a partial exercise of the by the underwriters. We believe we are well positioned financially to bring obe-cel, an innovative and potentially transformative treatment to an underserved adult ALL patient population. In 2023, we will be fully focused on submitting a BLA application at the end of the year and working towards commercial launch in 2024. As I mentioned earlier, we also received a $35 million milestone from our partner, Blackstone Life Sciences, as a result of the positive interim analysis of obe-cel in adult ALL.

At the same time, we received an additional $35 million milestone from Blackstone as a result of planned activity supporting the performance and qualification of the obe-cel manufacturing process. You will recall that we signed the agreement with Blackstone at the end of 2021, a part equity and part program financing collaboration for our lead candidate, obe-cel, and we have now received $220 million of the total $250 million committed capital. We were very pleased to announce three deals, two in October 2022 and one post period end in January 2023, which underscores what we believe is an industry-leading cell programming technology platform we have developed at Autolus. We signed an agreement with Bristol Myers Squibb granting them access to our proprietary RQR8 rituximab-induced safety switch for incorporation into a set of selected cell therapy programs.

In addition, Moderna exercised an option on one of the proprietary binders being developed against an undisclosed immuno-oncology target for the delivery of pioneering messenger RNA therapeutics. This license option stems from the deal we announced with Moderna in August 2021. Finally, in January 2023 we signed an agreement with Cabaletta Bio which allows them to incorporate the RQR8 safety switch into a cell therapy program for the treatment of autoimmune disease. The total license revenue was $6.2 million in 2022 and each of these deals has the potential for additional revenue in near term option exercise fees, milestone payments, and royalties. We continue to make steady progress in our manufacturing at CMC operations. The first phase of the build of our commercial manufacturing facility was completed with the handover of the first of three clean rooms at the end of last year.

We have named this facility the Nucleus. We are now working on the qualification and validation of the Nucleus and we remain on track for good manufacturing practice operations commencing in the second half of 2023. We’re also undertaking the development work and report generation for the CMC package planned to support the BLA submission to the FDA. Finally, total cash and cash equivalents and restricted cash at the end of December were $382.8 million. With that, let’s talk more about obe-cel on Slide No. 7. Obe-cel has a unique mechanism of action. What’s fundamentally different about our product candidate is that it has an ability to engage physiologically with the target cell, rapidly binding to the target, which delivers specificity paired with a fast off-rate for rapid disengagement from the target cell once the kill has been delivered.

This unique engagement drives maximal activity while minimizing toxicity and is at the heart of the differentiated clinical profile we are observing in acute lymphoblastic leukemia, non-Hodgkins lymphoma patients, and chronic lymphoblastic leukemia patients. Moving onto Slide No. 8, our clinical experience with obe-cel in ALL shows high overall response rate across all–shows a high level of clinical activity across all indications. Our clinical experience with obe-cel in ALL shows a high overall response rate across all patient populations, including a very high level of clinical activity over the longer term that we have now observed in the ALLCAR19 study. We have a median follow-up of 36 months now in this study and with a follow-up of 24 to 47 months of observation, we see that 35% of the patients are in long-term remission after receiving obe-cel and receiving no further anti-leukemia therapy.

The safety profile is well manageable with low levels of high grade CRS and ICANS. The midsection of the slide shows the patients with long term remission and continued presence of CAR T cells over the entire observation period. The program is developed under RMAT, PRIME and ILAP designations. Moving to Slide 9, we completed the enrollment and dosing of a pivotal study, the study we call the FELIX study, in adult relapsed refractory ALL patients, and as I mentioned, we announced in December that we had met the primary end point of overall response rate in an interim analysis based on the first 50 patients followed for at least three months of follow-up. Clinical benefit in ALL will be assessed based on patients remaining in sustained complete remission.

We conducted this study in 34 centers, 24 centers in the U.S., seven centers in the U.K., and three centers in Spain during the peak of the pandemic. It is important to realize that relapsed refractory adult ALL patients are highly immune suppressed and the pandemic poses a significant added risk to them. Moreover, due to access restrictions and various other pandemic rules and regulations, we could not access our clinical trial sites for the most part of the FELIX study. As you can imagine, end stage ALL patients are about as difficult a patient population to work with, particularly in an environment where there is a high risk of infection, and indeed we did lose patients to COVID. In many ways, this study 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 this trial with massively reduced air traffic and impact of the pandemic on our manufacturing teams. Remarkably, manufacturing for all patients from our facility in the U.K. turned out to be an asset also for U.S. delivery as the long haul flights between the U.S. to the U.K. have priority over U.S. and also EU domestic flights. Next, a key data readout is planned for ASCO in June this year. Moving to Slide No. 10, this slide summarizes the announcement we made in December regarding the pre-specified interim analysis of the first 50 out of 90 patients dosed that had reached at least three months of follow-up. The primary end point 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% and in fact all recent programs in ALL have used ORR as a primary end point 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 experienced in less than 3% of patients and higher grade ICANS or neurotoxicity in less than 8% of patients. ICANS were 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 safety profile in this population. As I mentioned earlier, this exciting data set triggered a $35 million milestone from Blackstone. Moving to Slide No. 11, 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 in safety and efficacy.

Worth noting is that the CARFALL and ALLCAR19 studies were conducted prior to the pandemic, while both parts of the FELIX study were conducted during the pandemic. Both the CARFALL and ALLCAR19 study 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 extra-medullary disease. This is in essence a gain of function of the leukemia that allows is to leave the bone marrow and successfully settle and grow in other organs. Patients with extra-medullary disease respond poorly to any type of anti-leukemia therapy. Moving to Slide 12 to look further into the data we presented at ASH from the ALLCAR19 study, when we did look into the outcome or long-term observation from the ALLCAR19 study, we’re up to obviously with four years of follow-up and you can see that we have a quite unusual clinical profile.

The clinical benefit in these patients is the ability to convert patients into complete remission and sustain them over long periods of time, which is obviously what we’re seeing for a good proportion of these patients. When you look at the swing plot moving from the bottom up, we had obviously some patients that did not respond to therapy, then we have some patients that responded but relapsed quickly. The yellow circles are patients that relapsed with so-called CD19 negative disease. In essence, the leukemia became invisible to the therapy while losing the very structure the therapy was designed to recognize. If you then go a little further up, you see three red circles. Those are patients that relapsed because the CAR T cells, the obe-cel product candidate, didn’t persist long enough and patients relapsed with CD19 positive disease.

Photo by National Cancer Institute on Unsplash

Above those, you then see a group of patients that are in long term remission between two and four years without any additional therapy. Seven out of the 20 patients, or 35% are in continued remission without receiving any additional anti-leukemia therapy with median follow-up of 36 months in the range of 24 to 47 months. Every single one of these patients has persistent CAR T cells. You see one additional patient with long term remission who received a stem cell transplant while in complete remission. Moving to Slide 13, Blincyto, a T cell engaging CD19 targeting monoclonal bispecific antibody has become the standard of care in relapsed refractory adult ALL over the last few years. Key to its success has been the well manageable safety profile.

A key focus from a patient management perspective is the monitoring of neurotoxicity of our ICANS, which impact 65% of patients treated with Blincyto. In contrast, obe-cel had less than 25% of patients experience ICANS of any grade. High grade CRS for Blincyto is low with about 5% and obe-cel seems to be similar and potentially slightly better in terms of high grade CRS. In contrast to Blincyto, Tecartus, a CAR T program approved for this indication induces high grade cytokine release interim in 26% of patients and high grade neurotoxicity in 35% of patients, while 87% experience neurotoxicity of any grade. Forty percent of patients received vasopressers. Managing such a safety profile often requires access to ICUs. Finally, inotuzumab while active is primarily used as a bridging therapy.

Moving to Slide 14, the market opportunity in relapsed refractory ALL is in fact unchanged with about 3,000 patients in high need for therapy between the U.S., Europe and Japan. Moving to Slide 15, Blincyto, the standard of care in relapsed refractory ALL has reached sales in 2022 of $583 million with a year-over-year growth of 24%. This product is commercialized by Amgen. Currently, the product reaches about 2,000-plus adult patients with ALL, on average receiving two cycles of Blincyto. Patients with low disease burden can receive up to four cycles of Blincyto at a combined cost comparable to CAR T therapy. The key to Blincyto’s market penetration is its well manageable safety profile which allows delivery in non-academic hospitals in addition to the academic centers.

We believe that obe-cell with its high level of clinical activity, attractive safety profile, and one-time administration is well positioned to capture that opportunity. When we look overall in terms of the price level for CAR T therapies in ALL, they are in the range of $450,000 in the U.S. Moving to Slide 16, when we look at the steps forward, first of all, we’re planning to disclose the FELIX data from all patients dosed in mid 2023, likely at ASCO and also at EHA. Long term follow-up is planned for ASH. We’re targeting the BLA submission for the program towards the end of the year, MAA filing towards the end of the first quarter 2024, and the U.K. filing in the second quarter of 2024. That sets us 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 continue 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. As we’re moving through 2023, we need to prepare three key areas for commercialization: first, creating awareness for the program through a focused medical affairs program; second, establish a value proposition for payors in our HGA dossiers; and finally, third, prepare for and start center on-boarding, a process that will take between nine and 15 months to get each center ready to deliver CAR T therapy.

Moving to Slide 18, we can talk about the broader opportunities we see with obe-cel. As part of the ALLCAR19 extension study, we have been evaluating obe-cel in relapsed refractory non-Hodgkins lymphoma and chronic lymphoblastic leukemia patients. We see consistently very high response rates combined with a very attractive safety profile suitable for outpatient use. The data will form the basis for the selection of our second indication after ALL. In terms of the life cycle, we started to work on the next version of obe-cel, which we call AUTO122. We are looking to minimize with this product CD19 antigen loss-driven relapses with its dual targeting approach. Building on obe-cel, we’re 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 who have failed Kymriah or were not eligible for Kymriah therapy. In this very challenging patient population, we saw an 83% molecular response rate and none of the children relapsed with de novo CD19 negative disease. Comparing this activity to obe-cel, we would have expected a molecular CR rate of approximately 40, maybe 50%. We are working on further streamlining the manufacturing process of AUTO122 knowing that we have an attractive life cycle option. Timing of investment decisions in AUTO122 will be balanced with additional indication investments for obe-cel. Slide 19, switching gears, moving on and switching gears to Slide 20 as well as 21. Our technology platform allows us to engineer a range of properties into T cells to drive specificity of recognition, resilience against negative signals used by tumor cells to evade T cell attack, and providing survival signals for T cells.

Our strength in T cell engineering drives our pipeline and is also at the heart of the three collaborations reported on in 2022 and early 2023 with Moderna, BMS and Cabaletta. On Slide 22, we have a quick summary of the earlier stage programs in T cell lymphoma with AUTO4/5, AUTO6NG in neuroblastoma, and AUTO8 in multiple myeloma. Both AUTO4 and AUTO8 are in Phase I clinical studies and AUTO6NG is expected to start Phase I in the next quarter. Moving to Slide 23, T cell lymphoma has a very high medical need quite similar to B ALL. In fact, when you look at the NCCN guidelines, where it basically says that once you’re through the frontline therapy and fail, you have to go on a clinical trial. Moving to Slide 24, with its unique targeting approach, AUTO4 starts to show meaningful clinical impact at the higher dose levels that we have evaluated.

The first metabolic CRs are reaching one year post-treatment and we continue to follow those patients. In addition, we have streamlined the manufacturing process and are exploring the activity in an additional cohort and we’re planning to report on that outcome later in 2023. Moving to Slide 26 to talk about manufacturing, cell manufacturing is 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 product at scale and matching the capacity to the size of the medical need in its indication, and it is important to be able to do that to have a successful roll-out of your therapy. Building on the robust and 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 site we had used for the study.

This proximity is important as we will be able to move our entire staff to the new facility, and in fact many of them are already in the process of validating the Nucleus facility. The capacity of the Nucleus in its initial set-up is 2,000 patient batches per year or about two-thirds of the adult ALL market size in terms of capacity. The Nucleus has been a fantastic project to realize with an innovative design of about 75% offsite building to accelerate the build while maximizing the quality of the build. With that, I would like to turn to Slide 28 and pass the call over to Lucinda for our fiscal year 2022 financial update. Lucy?

Lucinda Crabtree: Thanks Christian. Good morning or good afternoon to everyone. It’s my pleasure to review our financial results for the fiscal year to December 31, 2022. Cash and cash equivalents and restricted cash at December 31, 2022 totaled $382.8 million as compared to $310.7 million at December 31, 2021. Net total operating expenses for the 12 months ended December 31, 2022 were $168 million net of grant income and license revenue of $6.4 million, as compared to total operating expenses of $165 million net of grant income and license revenue of $2.3 million for the same period in 2021. Research and development expenses increased by $7.2 million to $142 million for the year ended December 31, 2022 from $134.8 million for the year ended December 31, 2021.

This was primarily due to the following: an increase of $11.6 million in clinical cots and manufacturing costs, primarily relating to our obe-cel clinical product candidate; an increase of $0.4 million in legal fees and special consulting fees in relation to our R&D activities; an increase of $0.2 million related to information technology infrastructure and support for information systems related to the conduct of clinical trials and manufacturing operations; an increase of $0.2 million in cell logistics costs; a decrease of $3.7 million in facilities costs related to the termination and closure of our U.S. manufacturing facility in 2021 and shifting our overall manufacturing strategy; a decrease of $0.9 million in depreciation and amortization related to property and equipment and intangible assets; and finally a decrease of $0.6 million in salaries and other employment costs, including share-based compensation expenses, which is mainly due to lower exchange rates used upon consolidation for the year ended December 31, 2022 compared to the year ended December 31, 2021, and this was offset by an increase in employees engaged in R&D activities.

General and administrative expenses remained consistent at $31.9 million for the year ended December 31, 2022 and 2021 respectively, primarily due to the following: an increase of $1.4 million in salaries and other employment costs, including share-based compensation expenses mainly driven by an increase in the average number of employees engaged in G&A activities; an increase of $0.3 million primarily related to information technology costs; a net increase of $0.1 million in legal fees and special consulting fees in relation to our G&A activities, which was offset against lower D&O insurance–director and officer insurance; a decrease of $1 million of commercial preparation costs due to the timing of related activities; a decrease of $0.4 million in facilities costs related to the termination of certain lease agreements in the prior year, and a decrease of $0.4 million in depreciation and amortization related to property and equipment and intangible assets.

Interest income increased to $1.7 million for the year ended December 31, 2022 compared to $0.3 million for the year ended December 31, 2021. The increase in interest income of $1.4 million primarily relates to the increase in interest rates on our interest-bearing bank accounts and short term investments during the year ended December 31, 2022 compared to 2021. Interest expense increased to $8.9 million for the year ended December 31, 2022 as compared to interest expense of $1.1 million for the year ended December 31, 2021. Interest expense is primarily related to the liabilities of future royalties and sales milestones which arose upon the execution of our strategic collaboration and financing agreement with Blackstone in November 2021. The increase in interest expense for the year ended December 31, 2022 is primarily driven by the full year of the liability related to the Blackstone collaboration in 2022 compared to a partial year liability accrued in 2021.

Other income or expense increased to an income of $2 million for the year ended December 31, 2022 from expenses of $1 million for the year ended December 31, 2021. During the year ended December 31, 2022, we recognized a foreign exchange gain of $1.7 million, a sublease income of $0.2 million, and other income of $0.1 million. This compares to an expense of $0.1 million, as I mentioned, for the year ended December 31, 2021 which included a foreign exchange loss of $2.2 million offset by a gain on lease terminations of $2 million and other income of $0.1 million. Income tax benefit increased to $24.4 million for the year ended December 31, 2022 from $23.9 million for the preceding year ended December 31, 2021 due to an increase in qualifying research and development expenditures for the period.

Net loss attributable to ordinary shareholders was $148.8 million for the 12 months ended December 31, 2022, and this compares to $142.1 million for the same period in 2021. The basic and diluted net loss per ordinary share for the 12 months ended December 31, 2022 totaled $1.57 compared to a basic and diluted loss per ordinary share of $1.97 for the 12 months ended December 31, 2021. Finally, Autolus estimates that its current cash and cash equivalents on hand and anticipated project financing payments from Blackstone will extend the company’s runway into 2025. Now back to Christian to give you a brief outlook on expected milestones. Christian?

Christian Itin: Thanks Lucy. Moving to Slide 30 finally, we think we have an exciting year ahead of us. A key focus is on getting obe-cel into the regulatory process with BLA filing targeted towards the end of the year, followed by filings in Europe in the first half of next year. Next up are the planned FELIX data presentations midyear 2023. In addition, we are preparing for commercial product supply and launch readiness. Finally, we also expect to provide updates on the pipeline programs with additional data and follow-up during the year, and with our key programs un-partnered at this stage, we have opportunity for setting up collaborations. Moving to Slide 31, with that we believe we’re at a very interesting point with the company.

We’ve got the cash to deliver a very significant value step and 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 in broader indications and a valuable pipeline of other oncology programs. As I mentioned, we’re excited about our manufacturing facility and we have a strong technology foundation validated by our collaborators, BMS, Moderna, Cabaletta, and we look to do more deals of that nature in the future. With that, thank you very much, and we’re happy to take questions.

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Q&A Session

Operator: Thank you. Our first question comes from the line of Gil Blum with Needham & Company. Your line is now open.

Gil Blum: Good morning, good afternoon, and thanks for taking our questions. Just a first one on the data that was published from the FELIX study. There appear to be slightly higher incidence of grade 3 CRS in ICANS than earlier studies. Given that Autolus’ goal is to have obe-cel administered in a community setting, how do you think physicians will adjust to levels of high grade AEs?

Christian Itin: Gil, first of all, thanks a lot for joining. Really good question. I think it’s important to put the data in perspective. What we did show is that we have less than 3% high grade CRS and we have less than 8% ICANS. This is a level of grade 3 events for both types of adverse events that is at or below the level of which is currently used in non-academic centers, and so we believe that actually the profile is very well suited and matches the experience actually already established with the standard of care in those centers, so we believe the data is very well suited and supportive of that broader use of the product.

Gil Blum: Very helpful. Another question about the filing. What data do you expect to include in your BLA? I mean, you’re going to have additional data by the filing date, including ORR and duration of response, but will you also be including data from your MRD positive cohort?

Christian Itin: It’s a really good question. First of all, in terms of demonstrating the clinical benefit in the morphological cohort, which are patients that have more than 5% disease burden at the time of inclusion into the study, the focus is to demonstrate that it can actually convert these patients into complete remissions that are sustained over time. What you will have to look at is CRs with a limited–a minimal level of follow-up to actually establish if that’s an appropriate level of clinical benefit, so time-dependent outcomes are absolutely a critical parameter that will have to go into BLA and will be at the core of the assessment of clinical benefit for the product. Second, of course, the safety profile was then a key part of the assessment to understand actually the benefit-risk ratio that you have with the product, which is obviously a very key parameter to understand the suitability of a product in any given indication.

With regards to the focus when you think about the review, this really will be focused initially on the patients that have morphological disease. We obviously have also assessed minimal residual disease in these patients, the level of MRD signals that we have in the patients, etc., but the inclusion criteria are patients with morphological disease. The work that we do to expand the knowledge of the properties of the product across the entirety of disease burden, which includes, as you pointed out also, patients with minimal residual disease, is a data set that obviously is being generated but it is also a data set that is not going to be part of the initial filing. It will go into safety, but it is not an aspect of the efficacy evaluation for the initial filing that we’re planning.

Gil Blum: Thank you for that clarification. Last one from us, you did mention that from your scientific collaborator, there may be some data on multiple myeloma. What do you think the gating factor would be for further development of that program, given how crowded the market is? Thank you.

Christian Itin: Yes, very good question. What you’re referring to is the AUTO8 program that we’re working on with our colleagues on the academic side. We’re currently running a Phase I clinical trial to evaluate the activity of AUTO8 in relapsed refractory multiple myeloma patients. I think we’re at an interesting spot with regards to the CAR T therapies in multiple myeloma. We have obviously seen very nice levels of activity with the two approved products in the space, but there is also a very high unmet need and, at this point, still a remarkable inability to meet the demand in this indication, and that is likely going to continue for quite some time. With regards to what we’re looking to see with the program, we obviously want to see a very high level of complete remissions in these patients combined with deep molecular remissions, and at the same obviously we’re looking at the safety profile.

We clearly want to see a very significant level of clinical activity in these patients as a basis to consider taking the program forward, and if we’re at that point, clearly we’d anticipate that this would make sense to do in a partnership. Thank you Gil.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Mara Goldstein with Mizuho Group. Your line is open.

Mara Goldstein: Great. Thanks so much for taking my question. First of all on the multiple myeloma data that you do anticipate having this year, can you just give us some element of scope of that, number of patients and what exactly we should be prepared to be looking at? Then I also wanted to ask on obe-cel and thinking forward from a competitive perspective, is the competitive go-to-market strategy versus Blincyto or Tecartus, can you help us understand how you plan to position obe-cel?

Christian Itin: Yes, hi Mara. Thanks a lot for the two questions. The first question was related to the AUTO8 study. The AUTO8 study is a small Phase I clinical study, so we’re looking at around 10 patients as the initial experience and then we’ll take it from there, so it’s going to be an initial look at that, at the profile of the product in that initial set of patients. Now with regards to obe-cel, what we’re expecting to go for is obviously a positioning of the product in the relapsed refractory setting whether patients have had already received Blincyto or are post-Blincyto. I think that is obviously what the current study actually is evaluating, is patients that have very advanced disease and with a portion having had Blincyto and inotuzumab, or in a portion who didn’t, so you’re looking to position the product both in parallel or after Blincyto therapy.

Tecartus obviously is positioned in that exact same way, so it would be the same type of positioning that we would expect for the program.

Mara Goldstein: Okay, thank you.

Christian Itin: Thanks Mara.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Matthew Phipps with William Blair. Your line is now open.

Matthew Phipps : Hi Christian, thanks for taking my questions. At the recent European CAR T meeting, Kite’s, or Gilead presented some long term follow-up from ZUMA-3 with Tecartus, and it shows very few patients really remaining in CR even beyond two years, so it’s a pretty big contrast to the data you presented at ASH from follow-up with ALLCAR19 – it shows, I don’t know, 35, 40% of patients still on CR at three years. Do you expect the FELIX data to recapitulate the ALLCAR19 durability given you’ve talked about a little bit tougher to treat patient populations with extra-medullary disease and such? I guess how do you get that durability message across to physicians in your education process?

Christian Itin: Really good question, thanks for joining, Matt. What you’re pointing to is really kind of, I think, what we believe was really remarkable data from our initial evaluation of obe-cel in this patient group. Obviously, as you pointed out, what we did see is a stabilization of our long term durability curves, etc., with patients staying in sustained remissions about, as you pointed out, about 35% of patients being in that category, so that is a remarkable outcome and it’s clearly something that has not been possible when developed with Blincyto and has not been shown–clearly not been shown for Tecartus either. What we’re expecting to see with obviously also the FELIX study is that we also see a similar shape of the curve, where exactly that stabilization will ultimately occur.

I think that’s too early to tell – we don’t have enough follow-up in the study at this point in time, but that is what we’re looking for and that is what we expect to see. Whether it’s going to be the exact same level or slightly different level, we do not know at this point in time, and as you pointed out, obviously one of the things that we do have in terms of inclusion into the study is obviously patients that–certainly in that initial data set that we presented, that had pretty significant levels of disease burden as well as extra-medullary disease, which frankly was not too much a surprise given that that first 50 patient data set really was truly peak pandemic, and so we’ll see obviously what the full data set looks like, but we’re obviously expecting to see the same shape of the curve and, at this point in time, we can’t exactly say where that’s actually going to come out.

That requires long term follow-up. The fact that we saw the persistent state had tracked what we had seen before, I think is very encouraging because obviously that was a clear correlation that we did see, that all these patients that had long term outcomes also had long term persistent CAR T cells, and the shape when you look at persistence coming out from the trial, as we had indicated from the interim analysis, was tracking the ALLCAR persistence curve, so that is encouraging. I think it’s the lead indicator, but obviously requires long follow-up to be clear about where we factor we might be landing.

Matthew Phipps: Okay. Can I also ask, at what point do you request the pre-BLA meeting this year? Is that something you do after the ASCO update, or–?

Christian Itin: It’s a really good question. I think what you want to do at the time you go for a pre-BLA meeting is you want to actually have the data with sufficient level of follow-up, so you have a very clear positioning around the outcome that you can actually present and discuss with the agency. Obviously the data we’re going to go with into ASCO, I think will start to give us, I think, a good level of observation, so we would expect that this is going to be an interaction post ASCO.

Matthew Phipps: Okay, great. Thanks Christian.

Christian Itin: Thanks a lot, Matt.

Operator: Thank you. One moment for our next question. Our next question comes from Kelly Shi with Jefferies. Your line is now open.

Kelly Shi: Congrats on the progress, and thank you for taking my questions. Regarding the baseline for patients enrolled in the FELIX trial, does it appear consistent with the Phase Ib cohort of patients with greater than 20% of bone marrow , and also will you be able to provide more information such as patients with and actual medullary disease present on the FELIX trial? Thank you, and I have a follow-up.

Christian Itin: Okay, so thanks for joining, Kelly. Nice to have you on the call. First of all, in terms of the patient population, overall obviously the patient population is close, very close to what we’ve been seeing in the Phase I portion of the study. What we also expect to see is obviously some variability as we started going through the peak pandemic in the study as well, so we’re close. We may actually have seen even a bit of a worsening after that, and if we look at the ORR, obviously small numbers, but it went from 75% to 70%, which could be indicative of a slightly worse population, so that is, I think, where we are. We’re obviously going to present that in detail, the underlying patient characteristics, etc., at the full data presentation.

It’s going to be obviously an important piece of information that I think will help to put the data into the appropriate level of perspective as well, so that’s sort of the answer to the first question. What was the second question?

Kelly Shi: Thank you, super helpful. My second question is given the differentiated profile, especially on of AUTO1, would you consider exploring the opportunity in autoimmune indications such as lupus, given that some proof of concept data has been available? Thanks.

Christian Itin: Thanks for the question. Well, what you’re pointing to is a really remarkable data set that was developed by Andreas Mackensen and his team at the University of Erlangen, who have done a fantastic job evaluating the utility of a CD19 CAR T approach in patients with refractory systemic lupus. The outcome of the data was quite remarkable, there was a major medicine paper published at the end of last year. We know the team, actually had also worked with the team at the early stages of Blincyto development way back, almost 20 years back. Really good data set. We believe obviously that obe-cel has a remarkable profile, obviously now with a lot of data around the safety of the program, and clearly has an absolute outstanding safety profile which is important when you think about use in autoimmune disease.

The other aspect, of course, is that as we all learn in this space, the fundamental tricky part in this with autologous CAR T therapies is you actually have to have an ability to manufacture at scale and do that with quality and economically. Obviously that’s one of the key things we have been developing for obe-cel for its initial application in ALL. So absolutely, we’re following that field very closely. We think it is a very attractive potential future use of programs that are very safe and very active, and we believe obe-cel fits that very well.

Kelly Shi: Thank you.

Operator: Thank you. Our next question comes from the line of James Shin with Wells Fargo. Your line is open.

James Shin: Good morning and afternoon, guys. Just a couple from our end. I just want to dig a little deeper into the positioning of obe-cel. Do you envision obe-cel could be positioned ahead of Blincyto at some point, and is there a future study exploring this? Then on a related matter, cell therapy as a whole has started to make good headway with a couple oncologists. It seems there’s some regulatory hurdles, mainly the FACT immune effector cell accreditation, that makes cell therapy entering the community setting a little bit difficult or intensive. Any thoughts there? Really appreciate it.

Christian Itin: Yes, well first of all, thanks for joining, James, and I think a very interesting question. First of all in terms of sequencing, at this point in time, Blincyto obviously is approved both in the relapsed refractory setting as well as obviously in patients that have minimal residual disease and that are basically in CR1 or later, so in essence its patients that have gone through frontline therapy with still remaining residual disease, they’re technically in complete remission but they still have measurable leukemia cells at low levels, hence minimal residual disease, and so the product obviously has labels in those two settings and obviously has been evaluated now as part of the frontline therapy. In that sense, Blincyto will have a place in this earlier part of the treatment scheme and we expect it to move up into that earlier setting.

Now, what we see from the Tecartus approval is that Tecartus is approved for relapsed refractory patients without actually defining is this a second or third line, or a fourth line. Actually it’s any relapsed refractory setting, and so we would expect that obe-cel would have the same type of scope initially, and obviously with the work we do on minimal residual disease and evaluating activity of the program there, I think should allow us to eventually position the program similar to the way that Blincyto is positioned, but that obviously takes time to actually move up in terms of lines of therapy, so I think that’s the first part of the question. The second part of the question was more around how do you actually position CAR T therapy outside of the academic centers, considering that you need a level of training or accreditation of those centers to be able to actually deliver the product.

I think what we need to understand is that particularly with obe-cel, we do obviously have a very, very similar profile to Blincyto, and in fact in patients with low disease burden, obviously we do have an even better profile that we’ve shown in these end stage high tumor burden patients that we obviously quoted in our interim analysis. When you look at that population that has particularly low disease burden, but even the one that we have treated now, the adverse event profile that we have in these patients is exactly what the physicians today do manage with Blincyto, the same level of higher grade CRS – in fact, it’s a little less than what Blincyto has, and it’s actually less neurotoxicity than what you see with Blincyto. What’s very important in that context is that obviously when you look at the overall level of neurotoxicity, it’s about two-thirds of the patients have some level of neurotoxicity with Blincyto which requires you to monitor the patients, the observe them, etc., to make sure that you stay on top of it.

What we have with obe-cel in a more advanced patient population, because obviously we include Blincyto failures in the FELIX study, we actually had a little more than 20% of patients that have some form of neurotoxicity, actually it’s substantially less, so the actual monitoring level is less, that burn that we have, and with that we believe there is an opportunity to actually manage this and with the experience on Blincyto should be able to manage this in non-academic hospitals and associated potentially outpatient settings down the line, so that is sort of where that is now. In terms of the ability to deliver CAR T therapy, there’s obviously a level of not only patient management that’s required, which obviously is covered very well with the experience on Blincyto, but it also obviously requires you to actually handle the cells and manage the cells as part of the therapeutic approach, and that requires a level of training that obviously needs to be put in place, and we believe that that is a possibility for non-academic hospitals and then we have to see how further out we might actually be able to go.

But I think this gives you a very good penetration and ability to reach the ALL population with this profile, as we see basically demonstrated through Blincyto already.

James Shin: Thank you.

Operator: Thank you. One moment. Our next question comes from the line of Sebastiaan van der Schoot with Van Lanschot Kempen. Your line is open.

Sebastiaan van der Schoot: Hi, good morning and good afternoon, everyone. It’s Sebastiaan van der Schoot from Van Lanschot Kempen, but–no worries. Congrats on the progress. I was just wondering at the opportunity of obe-cel in other indications beyond ALL. Will there be additional updates on the ALLCAR study for the other indications with additional patients, and are there any of these indications that you believe would allow for accelerated approval pathway if the additional data can show the same level of efficacy as last year? Then you also spoke a little bit about the life cycle management of AUTO122. Can you expand on your thinking on the possibility to continue development of AUTO122 beyond the pediatric indication into adult indications? Thank you.

Christian Itin: Thanks Sebastiaan and thanks for joining. When we look at the opportunity that we see with obe-cel, obviously what the product has a remarkable profile in is to basically remove the B cell compartment both on malignant cells as well as healthy cells, and do that with a very good safety profile, so that’s the basic property of the product. Where that is suitable obviously is in leukemia, it is in non-Hodgkin’s lymphoma, which is what we’re evaluating what we’re evaluating as part of the ALLCAR19 study, and then as Kelly was pointing out, there is also certain applications in the autoimmune space where that might become quite interesting and some of the lead data would indicate that we might even be transformational in those settings.

This is sort of the range, I think you have in terms of opportunity, significant on the oncology side but also one that starts to build up also on the autoimmune side, so that’s the range. Now it’s a question of choice. What we’re seeing in our ALLCAR19 study is really that we’re having a very high level of clinical activity across the entire range of these indications, and that gives us also more confidence in terms of the overall property of the product. In terms of the individual indications, obviously you have opportunities looking at , as an example, where we see very high levels of complete remissions that are sustained. We haven’t seen any relapses to date in that cohort, which is quite remarkable. There are obviously very interesting data in mantle cell as well as in that we now see.

Now, all those indications are opportunities to develop these segments of the indication which allows it to move relatively quickly and with an accelerated path, and then depending on the indication you look at, you also may then want to sort of go for a last line we’ll want to actually start looking at an earlier line study as well, which typically be a randomized control study in that earlier line. I would want to move on that reasonably–in a reasonable sort of time relation to your last line setting. So that’s sort of the opportunity and we’re looking at these, and obviously the data from the ALLCAR study does give us, I think, a very nice basis just to develop the right options for the investment. You then also asked about how in that conversation, how AUTO122 fits, and as we indicated, we obviously do know that with AUTO122 that we have a very active program.

It appears to do exactly what we want in terms of avoiding the occurrence of target negative relapses, which is the key thing that obviously you’d be looking to address, and where we know that is particularly important is obviously in acute leukemia. There’s been initial reports that there is a certain proportion of patients that do actually show CD19 negative relapses in the context of diffuse large B cell lymphoma. There haven’t been as many reports more recently. In our own hands and with obe-cel, we haven’t seen CD19 negative relapses, nor did we with our collaborator programs , so whether or not that is a major issue to actually address in those indications, I think is unclear at this point in time, and I think that is one of the questions I think we’ll look into in terms of the ability to broaden the utility of the dual targeting approach into additional indications.

But where it’s very clear is that in ALL, that is certainly a driver for relapse both for children as well as for adult patients, and we believe that at some point it makes sense to consider that program to move into the succession of obe-cel in the acute leukemia setting as well, so that’s sort of our take in terms of the range as well as the way we’re thinking about it, and ultimately these are a set of investment decisions and it’s a question of sequencing those investments, and I think the priority will first be on actually broadening the opportunity for obe-cel and then in the second step actually then moving forward with AUTO122 in terms of the actual life cycle to obe-cel.

Sebastiaan van der Schoot: Great, thank you very much.

Christian Itin: Thanks Sebastiaan.

Operator: Thank you. One moment. Our last question comes from Asthika Goonewardene with Truist. Your line is open.

Karina Rabayeva: Hi, this is Karina for Asthika. Just have two questions on pricing. With the filings due by year end, how are you guys thinking to price obe-cel, and can you also discuss some preliminary feedback you have received from payors in the U.S. and Europe? Also, is there any potential for your pricing power to change with detailed data at ASCO? Thank you.

Christian Itin: Sorry Karina, I didn’t get the last part of the question.

Karina Rabayeva: The pricing power with the next update at ASCO.

Christian Itin: Oh, I see – okay. Thank you. Well first of all, thanks for joining, Karina. Interesting questions related to pricing. I think what we’ve been seeing across the space is there’s two dimensions. First of all, we’re having ALL typically obviously with Blincyto and the use of Blincyto in patients with lower disease burden. We also previously used up to four cycles in those patients, which is basically getting the price for that product into the range of between $400,000 and $500,000 per patient in the U.S, so that’s one benchmark which is standard of care and kind of what that bracket that is. When you then look on the approved CAR T therapy in ALL, that is in the range of $450,000 during the course–expected to be during the course of this year, so that’s sort of the second, I think, bracket that we’re seeing in the U.S, and we would expect that we would be pricing in a similar range.

Obviously we believe that we do have a product that actually allows you to be more efficient from a cost perspective because the product should induce less toxicity with far less patient management. With that, I think there should be a good, healthy economic argument supporting the use of obe-cel in addition to obviously its clinical profile. With regards to Europe, we’re obviously seeing across the board with CAR T therapy that the prices are starting in the range of where the U.S. prices are, with some level of discount depending on the jurisdictions you’re looking at and the indication that the products are delivering, so that is more variable and we’ll see how that develops over the upcoming period of time. We will keep you updated how that field evolves over time, but I think this is where we stand, and the current expectation is that we would consider to be somewhere in line with what we can see in the space.

In terms of data flow, I think we’re going to have a very interesting data flow as we go through this year. Obviously at ASCO, obviously the data from all the patients that were dosed but also still a limited follow-up on some of the patients, that I think the focus on a lot of the descriptions of the patients, the basic activity, the behavior of the product in every aspect, and then I think as we go to ASH and then even later into ’24, I think much more longer term follow-up which I think will flow obviously as an important parameter into the assessments and value assessments that will be conducted by the payors, so that’s kind of, I think, where we are with those particular questions.

Karina Rabayeva: Do you think the longer term follow-up is going to push pricing higher?

Christian Itin: Well first of all, the impact of the longer term follow-up, by showing an impact on longer term follow-up I think is obviously strengthening your value argument for the product, so I think it will clearly make a very strong case for using the product based on more patients achieving long term outcome, and I think that is certainly going to be a key parameter that will drive the value assessment by anyone who would look at the program, so it will definitely influence the overall assessment. To what extent that would influence pricing, I think it’s premature to discuss.

Karina Rabayeva: Okay, thank you.

Christian Itin: Thank you Karina.

Operator: Thank you. At this time, I’d like to turn the call back over to Mr. Christian Itin for closing remarks.

Christian Itin: Well first of all, thanks everybody for joining. Obviously it was great to be able to update you on t he very exciting fourth quarter that we are running through. We’re in, I think, a very important stretch as we go through the course of this year, getting the product ready for filings, and I think obviously a real opportunity for substantive data updates as we go through the course of the year, with the next ones expected for the midyear section, so really looking forward to meeting you hopefully in person and updating you on the program along those venues, and successful first half of the year, and then I think for all of us, I think a more relaxed second half of the year with some hope that some of the big picture items hopefully will start to turn into a more favorable environment. With that, I’d like to thank you all and wish you a good day.

Operator: Ladies and gentlemen, thank you for your participation, and due to time limitations, we were conscious of the time and we weren’t able to reach out to everyone, so management will connect with everyone that wasn’t able to connect to the call, after the call. Thank you very much. Please enjoy your day. You may now disconnect.