Atara Biotherapeutics, Inc. Q3 FY2022 Earnings Call

Good afternoon, everyone. Thank you for standing by, and welcome to the Atara Biotherapeutics Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Please be advised that today's call is being recorded. Now, I'd like to hand the call over to Eric Hyllengren, Vice President of Investor Relations and Finance at Atara Biotherapeutics. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and welcome to Atara's third quarter 2022 results conference call. Earlier today, we issued a press release announcing our third quarter financial results and corporate update. This press release and an updated slide deck are available in the Investors and Media section at atarabio.com. On today's call, members from the Atara executive team will provide an update on our financial results, operational progress and strategy and also review our upcoming key milestones and objectives. Joining me on today's call are Dr. Pascal Touchon, President and Chief Executive Officer; Dr. Jakob Dupont, Executive Vice President and Global Head of Research and Development; Utpal Koppikar, Chief Financial Officer; and Dr. AJ Joshi, Chief Medical Officer. We will begin with prepared comments from Pascal and Jakob then open the call up for your questions. We would like to remind listeners that during the call, the Company's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the Company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and the Company's SEC filings. These statements are made as of today's date, and the Company undertakes no obligation to update these statements. Now I'd like to turn the call over to Pascal.

Thank you, Eric, and thank you all for joining us this afternoon. We are extremely excited that tab-cel, under the trade name of Ebvallo, received a CHMP positive opinion for its first indication and is on track to obtain European Commission approval by the end of this year. This will be the first-ever approval for allogeneic off-the-shelf T-cell therapy. Tab-cel's first indication addresses a very significant unmet medical need as these EBV-positive PTLD patients have no ample therapy and just a few weeks to a few months median survival. The EMA was accordingly very pleased to highlight Ebvallo's positive opinion in the public release as one of the landmarks of the October CHMP meeting. Meanwhile, our commercial partner, Pierre Fabre, is actively preparing for the Ebvallo launch in Europe in Q1 2023. We dearly anticipate this launch as we believe Ebvallo can deliver a compelling value proposition for patients, payers and European health care systems. With significant pricing potential in such an ultra-rare disease and high double-digit royalties with our agreement with Pierre Fabre, we believe Ebvallo commercialization will progressively contribute to Atara's revenues and cash runway. I would like now to give an update on our progress with tab-cel in the U.S. Following constructive discussions with the FDA, including senior leadership, we recently held a Type A CMC meeting with the review team that culminated in clear guidance and agreement on specific CMC module three requirements for a BLA submission. In addition, a Type B clinical meeting request has been granted and is being scheduled to discuss and potentially align on the clinical data pack requirements to prepare for a pre-BLA meeting. Following this meeting and possible further interactions with the FDA, we expect to give further guidance in Q1 2023 on progress towards a BLA submission. At the ASH conference in December, we will present updated interim analysis efficacy and safety results of the Phase 3 ALLELE study in relapse-refractory EBV-positive PTLD with additional patients and longer follow-up confirming the transformative potential of tab-cel. We will also present exciting new data in patients with EBV-positive leiomyosarcoma, a type of EBV-associated solid tumor. Jakob will provide more details on this data in a moment. Finally, for tab-cel, we have started to seek a commercial partner in the U.S. Entering into such a partnership will avoid further investment and could provide additional cash inflows, further extending our cash runway. We are confident in the significant business opportunity that tab-cel represents in the U.S. with potential for peak sales over $500 million per year across multiple indications. Now on to ATA188, our potentially transformative therapy for those suffering from progressive forms of multiple sclerosis. At the ECTRIMS 2022 conference, we presented new MRI biomarker imaging and open-label extension clinical data from the Phase 1 study of ATA188 in progressive MS. New biomarker imaging data addressed patients who achieved confirmed disability improvement, or CDI, demonstrating significantly less brain atrophy over time, and increased NMTR in unenhancing connected two lesions. These data support the brand's structural changes, including potential remyelination, which may underlie the durable CDI associated with ATA188. Also, updated results from the ongoing open-label extension with up to 46 months total follow-up in patients achieving CDI demonstrate durability of improvement once achieved. Remarkably, patients with stable disease, meaning no decline in EDSS, have maintained such stability for up to four years, which would also represent a transformational profile relative to the expected natural course of the disease. As a reminder, based on enrollment at the end of July for the Phase 2 EMBOLD study evaluating ATA188 versus placebo in non-active PMS patients, approximately 90 patients are planned to be included in the readout of the study's primary endpoint of confirmed disability improvement by EDSS at 12 months. We expect to communicate this final data readout in October of 2023. All in all, this new ECTRIMS data from our Phase 1 study and open-label extension, together with the two landmark studies published this year in Science and Nature and our two fast track designations with the FDA, further support our confidence in the possibility for ATA188 to deliver transformational clinical improvement to progressive MS patients. We are truly excited by ATA188's potential as a unique game changer in MS, and we are eager to reach the EMBOLD primary endpoint readout in October 2023. Meanwhile, we'll continue to be opportunistic in exploring potential partnering opportunities with biopharma companies that could maximize the value creation potential of ATA188. Now I would like to hand over to Jakob to provide more details on our pipeline portfolio and strategy before I give you an update on our financials.

Thank you, Pascal. As Pascal mentioned, we are extremely excited about the recent positive CHMP opinion for Ebvallo in Europe. We are advancing ever closer to receiving European Commission approval for this first-of-its-kind off-the-shelf T-cell therapy. We also believe that this positive decision provides clinical validation for our overall EBV T cell platform and portfolio, which now has treated more than 500 patients with clear evidence of efficacy and safety, the most of any allogeneic cell therapy company to date. We're also encouraged by the steady progress we're making on the U.S. regulatory front and expect to have more to say in Q1 of next year. Looking ahead to the upcoming 2022 ASH meeting in December, we will present updated efficacy and safety results of the Phase 3 ALLELE study in relapsed/refractory EBV-positive PTLD now with additional patients and longer follow-up. The data to be presented that was published in the ASH abstracts last week are consistent with the transformative potential of tab-cel in EBV-positive PTLD. Specifically, the overall response rate by independent oncologic and radiographic assessment was 51.2% in the sample size of 43 patients. The response rate after HCT was 50% and after SOT was 51.7%. The median time to response was very rapid at one month, and this urgent response is needed for these patients with such an oncologic emergency as EBV-positive PTLD. The duration of response was an impressive 23 months, and the median overall survival was 18.4 months, with patients who responded having longer survival than non-responders. These new ALLELE clinical trial data were impactful for the positive CHMP opinion that we just received. Additionally, at ASH, we will present updated efficacy and safety data from two single-center open-label studies and a multicenter expanded access program in patients with EBV-positive leiomyosarcoma who have received at least one therapy. The clinical benefit rate from tab-cel was 77.8% with an objective response rate of 22.2% in this rare and difficult-to-treat solid tumor, and the estimated median overall survival was 77.4 months. In all these studies, the safety profile of tab-cel remains consistent with previously reported data with no new reports of tumor flare reaction, cytokine release syndrome, transmission of infectious diseases, graft-versus-host disease or infusion reaction related to treatment. We believe these data continue to support the benefit of tab-cel and its potential to transform the lives of thousands of patients each year across multiple indications and geographies. Now on to ATA188, our potentially transformative therapy for those patients with progressive multiple sclerosis. We believe that targeting EBV-infected B-cells is a validated approach towards finding a transformative treatment for these debilitating diseases. The recent publications in nature show that EBV-infected B cells mature into antibody-secreting plasma cells that generate brain-reactive antibodies. Additionally, EBV-infected B cells can stimulate autoreactive T cells and thus drive chronic inflammation. Taken together, these recent scientific advances support our excitement around the potential of this therapy. Now as Pascal noted, the new MRI data and updated OLE data presented at ECTRIMS, on top of previous Phase 1 data, further reinforce our belief in the transformative potential of ATA188. We look forward to the final data readout from the approximately 90 patients who will be included in the primary analysis of the randomized double-blinded placebo-controlled Phase 2 EMBOLD study in October of next year. Now I want to provide an update on our CAR-T therapies as well. With respect to ATA2271, which, as a reminder, is our autologous mesothelin product candidate being currently developed by our partner Memorial Sloan-Kettering Cancer Center, and we are pleased to report that the Phase 1 dose escalation clinical study conducted by MSK has resumed enrollment after the voluntary pause earlier this year due to a fatal serious event in one patient. Additionally, for this program, we expect MSK to provide a Phase 1 data update for ATA2271 in December of this year at the ESMO IO Conference. In addition, we are advancing ATA3219, which is our potentially best-in-class allogeneic CAR-T for B-cell malignancies expressing CD19. Now the manufacturing process optimization is progressing to ensure appropriate scale-up while maintaining a unique memory T-cell phenotype following completion of process optimization and manufacturing runs in the GMP manufacturing suites of our strategic manufacturing partner, FUJIFILM Diosynth Biotechnologies. We now anticipate an IND filing in Q2 of next year. As a reminder, we're using an optimized manufacturing process to ensure enrichment for a memory T cell phenotype, which has shown robust activity in preclinical studies, as shown on Slide 55 of our updated investor deck, where ATA3219 outperforms an autologous CAR-T benchmark on overall survival in a preclinical model. This manufacturing approach is part of the overall optimization of ATA3219 to differentiate it from the existing products and to address the high unmet medical need. Our focus on the memory T cell phenotype for the ATA3219 product candidate is supported by recent preclinical and clinical presentations of autologous CAR T therapy. Upcoming clinical data at this year's ASH meeting of an autologous CD19 CAR-T therapy showed that CAR-T phenotype, with more stemness, is associated with improved response rate and durability of response. Additionally, clinical data from another ASH 2022 abstract with the autologous CD19 CAR-T containing the new 1XX co-stimulatory domain invented by Dr. Michel Sadelain, is associated with favorable response rates, durability and safety. As a reminder, the 1XX costimulatory domain that we have licensed from MSK is incorporated into the ATA3219 construct. We are particularly excited to bring ATA3219 to the clinic since this allogeneic CD19 CAR-T has several key points of differentiation. These include the safety of the EBV CAR T cells, potential best-in-class efficacy, persistence and off-the-shelf accessibility, and the ATA3219 program does not require TCR or HLA gene editing. Before I turn the call back to Pascal, I would like to extend my gratitude to the Atara staff, our collaborators and the patients involved in our studies. Together, we hope to bring to patients in need of allogeneic T cell therapy some with curative potential.

Thanks, Jakob. Now on to our financials. In September 2022, we announced an additional near-term milestone payment under an updated tab-cel commercialization agreement with Pierre Fabre. Under this agreement, Atara will receive an additional $30 million upon EC approval and subsequent filing of the MAA transfer to Pierre Fabre. For the third quarter of 2022, with regard to our cash position and runway, we ended the third quarter with approximately $265 million in cash. We believe that this cash balance, together with potential cash inflows from Pierre Fabre and the expected reduction in future operating cash burn will be sufficient to fund the Company plan operations into Q1 of 2024. Following our recent restructuring that is now fully implemented, we are on track to reduce our operating cash burn in 2023 and beyond according to plan. I would like to conclude by extending my sincere gratitude to all Atara staff for their unwavering commitment to patient lives we seek to transform and their significant contributions in advancing truly innovative medicine for patients in need. Thank you all for what you have done. I will now turn the call over to the operator for the Q&A part of the call.

Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question is from Salim Syed with Mizuho Group. Please proceed with your question.

I guess a couple for me on tab-cel. So Pascal, curious if you plan on providing any sort of guidance on the EU tab-cel revenues at any point in '23, maybe the first part of '23 or what format would that take place? And also maybe some of the logistical hurdles that you plan on having or having the first allo T-cell product in Europe? And then also just on the U.S. side, just curious what the gating factors are around finalizing discussions for potential partnership for U.S. commercialization?

Thank you, Salim. Regarding Europe, we are not currently providing any revenue guidance for Europe. However, once we launch in Q1 '23, after receiving approval and transferring responsibilities to Pierre Fabre, we will share more about pricing, which is crucial for any launch. At this point, we have coordinated with Pierre Fabre and understand their pricing strategy, which aligns with the value we offer to patients, physicians, society, and the healthcare system. It is too early to comment on pricing, but we will have more information as we approach the launch in '23. Concerning logistical challenges, we do not foresee significant issues on our end. This launch resembles a biologic launch; it involves allogeneic, off-the-shelf cell therapy, allowing us to deliver the product to treatment sites within days from existing inventory. We have effectively tested our logistics over the past couple of years during clinical trials and expanded access programs across Europe. We have treated numerous patients in key countries and are experienced with this logistics model. We have shared our expertise with Pierre Fabre, and we are confident in their ability to manage this efficiently. On the U.S. partnership front, we are actively seeking a partner. Finalizing the partnership involves finding the right fit and negotiating a favorable value split and financial terms, as well as clarifying the timing for the BLA submission and product approval to prepare for launch. There is an opportunity to seek a commercial partner who can enhance the value of tab-cel in the U.S., which we believe is substantial, while also working with the FDA to finalize the timing of the BLA submission and mitigate related risks through ongoing discussions. Does that answer your question?

Thank you. Our next question is from John Newman with Canaccord. Please proceed with your question.

Just curious if you could comment a little bit more regarding the number of patients that you currently have treated with the commercial formulation for tab-cel and also how much follow-up time you might have there? Just kind of curious as to how the patient distribution looks across commercial product versus the clinical study material?

Thank you, John. Jakob, do you want to take that one?

Sure, Pascal. And John, thanks for the question. So as you know, we filed this IND amendment last year to put the intended commercial material into the clinic, and then we had good discussions with the FDA, and they're certainly interested to see the clinical data for these patients treated with the commercial material. So that's going well. We are not going to comment at the present time on the number of patients treated and the amount of follow-up. But I will say, and we mentioned this previously, but we've had constructive dialogues with the FDA about a possible path forward to BLA submission without needing a new clinical trial and that we could use these commercially treated tab-cel patients. And again, the FDA was supportive of not conducting a new clinical trial. We've previously announced that. And again, we are proceeding ahead, and we're treating patients in the clinic. But at this point, we're not going to give specifics about how many patients have been treated with the commercial material or the duration of follow-up at this point. Pascal?

Yes. No, nothing to add on my side. I mean, in terms of duration of follow-up, the typical one that has been done with the FDA in the past was to have a response and to have the patients followed for six months for a response. But at this stage, we are not going to comment about what the exact requirements regarding this population of patients treated with the commercial product. Suffice it to say that things are progressing well, and we are treating new patients in different settings with the commercial product as time goes on.

I'm curious if you have discussed with the agency or considered including patients in the multi-cohort study who are receiving the commercial product, and whether that might meet the FDA's requirements and also provide an opportunity to potentially expand the label.

Yes. Maybe I start, and Jakob, you might want to chime in. I mean there are two aspects. One is from a safety data base point of view for the intended commercial product, any type of use of that product in terms of indication, in terms of setting, be it in the pivotal study, the ALLELE study, albeit in expanded access program or even single patient use, all that is, of course, not only useful but required for safety assessments, and that will be useful there. From an efficacy point of view, as you can imagine, the FDA is looking more at the specific indications we are pursuing with the future potential BLA filing. So that's where we will need to focus on the efficacy data in that specific indication. Jakob, anything to add?

Yes. I think that's well summarized. Pascal, but I do think the spirit is right. We are treating patients in a variety of settings with the intended commercial material, and all of this is certainly going to be informative for the FDA as they would ultimately make a risk-benefit assessment for these patients treated with tab-cel.

Thank you. Our next question is from Tessa Romero with JPMorgan. Please proceed with your question.

This is Taylor on for Tess. So we were just curious, what is the size and the scope of the data that will be presented on ATA2271 at ESMO? And in particular, will we get more details on the fatal SAE that was reported earlier this year? And what factors led to the MSK study resuming?

Jakob, do you want to take that one?

Yes, indeed. The presentation is planned for the ESMO IO conference before the year ends, and we will present data there. Due to the enrollment hold, we will have data from patients, including the first one in the third dose escalation cohort. We expect that safety data will be included, along with some pharmacokinetic data and potentially details on a specific patient who underwent extensive evaluation, including an autopsy. This translational work will likely be part of the presentation. The FDA assessed certain factors, agreeing that enrollment could resume; these included information on a patient with highly refractory mesothelioma who also had several other health issues. The protocol amendment was developed by investigators at Memorial Sloan Kettering and submitted to the FDA, which accepted the patient’s information, the data provided, and the proposed amendment, leading to the decision to restart enrollment for the trial.

Okay. And are you able to provide any more details on the protocol amendment that was accepted?

Jakob?

Yes. The protocol amendment includes that the study will restart, specifically resuming treatment for patients at the second cohort dose. This means we will return to the previously approved cohort and treat more patients using a dose of three CAR T cells per kilogram out of six. We expect to gather information from additional patients treated under this protocol. There will also be some adjustments to the eligibility criteria, particularly because we had quite a complex patient population that had undergone various treatments, including checkpoint inhibitors and COVID therapies. Consequently, there will be a longer washout period for checkpoint inhibitor therapy before patients can begin treatment with CAR-T therapy in the trial. These were the main changes implemented.

Thank you. Our next question is from Phil Nadeau with Cowen and Company. Please proceed with your question.

A few clarifying questions. First, on your guidance about meeting with the FDA. Are we correct that the next meeting is a Type B meeting and that's simply to prepare for the pre-BLA meeting, the pre-BLA meeting will happen at some time after the Type B meeting?

Yes, that's the case. I mean the pre-BLA meeting will be after the Type B, and the Type B is really to discuss and align on the number of patients and the duration of follow-up that they want to see in the clinical data package, then to move to the pre-BLA meeting.

Got it. And the update in Q1 of next year, that's after the Type B meeting, presumably not after the pre-BLA meeting.

Yes. At this stage, what we're talking about the meeting that is being scheduled as we speak is a Type B meeting.

Got it. Okay. And do you have a sense of how long it's going to take for you to complete the CMC module three based on the requirements that have been agreed upon with the FDA? Or is that dependent upon comes with the Type B meeting with how many patients of clinical data you're going to need?

No, it is independent from the clinical meeting. I mean, we have now a very clear view about what's needed for the BLA filing, what type of information needs to be gathered and so on. Nothing surprising here. So it's aligned with our expectations. So we are not giving any guidance for the time, but that's a reasonable timeframe in line with our expectations regarding that CMC part. So we think that the now the main next item to clarify before we can give guidance on the timing of the BLA filing is really the clinical part. CMC is very clear.

And do you think the clinical part is gating? Or is that likely to be gating for the final?

We cannot comment on whether it's going to be gating until we have that meeting with the FDA because that's really the key aspect to discuss with them is about how many patients for how long and how do we relate to the other type of patients and so on.

Got it. Okay. And then last question for me is just on the partnership in the U.S. Can you talk a little bit more about the strategic rationale for signing a partner at this point in development? It sounds like you're getting close to the U.S. filing. We wouldn't imagine the commercial spend is too large for a disease like PTLD. So can you talk a little bit more about why you think a partnership would be wise?

Yes, we see a strong business case for tab-cel in the U.S., starting with its initial indication and expanding to additional indications as part of our planned label expansion, particularly regarding the multi-core study. We've invested considerable effort into preparing for this launch, including pricing and reimbursement discussions with payers, and we have identified a price point that will be suitable for the healthcare system. We have also ensured that the product will be included in the 18 treatments to be offered next year, and the preparation around payers and reimbursement is solid. We've mapped out the centers where key account management and medical affairs efforts will be concentrated at launch. Additionally, launching a product in an ultra-rare disease with significant unmet medical needs and no competition, especially among post-transplant patients undergoing testing for EBV, makes our case even stronger. Physicians now recognize that lymphoma in these patients is often linked to EBV positive PTLD. Educating physicians will be crucial during the launch, and we are actively advancing that awareness. For example, the new data we will present at ASH in a few weeks will be essential in increasing physician awareness about how tab-cel can significantly impact patients' lives, presenting compelling efficacy and safety data. Atara has prepared thoroughly for the launch, ensuring effective communication of scientific data. However, executing the launch will require investment to establish a full commercial and medical team before we can reach breakeven and attain profitability. Although we anticipate a rapid penetration into this population due to the unmet need and lack of competition, we believe it's strategically advantageous to partner with a company that already has a commercial structure in the U.S. This partnership will help us minimize commercialization investments and free up resources, while also allowing us to generate cash inflows, as evidenced by our previous deal for Europe which included a $45 million upfront payment. Given that the U.S. market is significantly larger than Europe's in this indication, we are confident we can leverage this opportunity to extend our cash runway and continue creating value, particularly for our allogeneic CAR-T programs. Does this address your question?

Yes, that's very helpful.

Thank you. Our next question is from Ben Burnett with Stifel. Please proceed with your question.

This is Kallie Briza on for Ben Burnett. I just had a quick question about the Phase 3 ALLELE updated slated for ASH. I was just curious if you guys could give us an idea of how many patients there are going to be at this update as opposed to the previous update that we had received, I think, actually, maybe a couple of years ago on this program? And then maybe how many of these new patients that are in this update, how many of these patients are also new to the FDA?

Okay. I'll start, and then Jakob can add to this. I want to clarify that the last update we provided on ALLELE was actually just a year ago at ASH 2021, not a couple of years ago. The new update is based on the abstract released last week. Jakob, perhaps you can discuss the number of patients involved. Additionally, I want to emphasize that the regulatory aspect is very significant for obtaining the European positive opinion at the CHMP level, as it was part of the submitted data.

Yes, absolutely. So just to give a little granularity, and this is also captured in our press release from today, but when you look at the Phase 3 ALLELE study, obviously, in relapsed/refractory EBV-positive PTLD patients, we're now presenting data from a total of 43 patients that are evaluable here. And as I mentioned in my initiating remarks, we do have that overall response rate of 51.2% response rate. And of those, 14 patients had been post-HCT. So again, and the response rate here was 50%, so 7 out of those 14 patients were responders. And then if you look particularly at the SOT patients, we had 29 patients in 15 of those patients who were responders, an overall response rate of 51.7% response rate, which again is a remarkably high response rate in this particular population of patients that have a very high unmet need. And as Pascal mentioned, these data from the ALLELE study were really the crown jewel of the MAA filing that led to the positive CHMP opinion just a few weeks ago. And then obviously, we had median overall survival data of 18.4 months, which again is quite remarkable when you consider that for these patients post SOT or HCT, you're looking at a median overall survival of somewhere between 0.7 months and 4 months median survival. So again, these are really pretty remarkable data.

Thank you. Our next question is from John Miller with Evercore. Please proceed with your question.

This is Jessica Hui on for John. A couple of questions for me. First, on tab-cel, could you just give a little bit more color on this new meeting plan with the FDA to discuss clinical data? So you just said now that a new Phase 3 may not necessarily be required for BLA submission. But what are the range of possibilities for clinical data package requirements for tab-cel? And then also, how much could you expect to extend cash runway with a potential U.S. commercialization partner? And then lastly, just a question on ATA188, are there any updates on potential large pharma partnership interest?

Thank you. Jakob, do you want to take the first one? I'll take the next two?

Yes, absolutely. To summarize the status with the FDA, we've had constructive discussions between Atara's senior management and the FDA. The feedback we received over the summer, which was a reversal from what we heard in February, indicates a possible path to BLA submission without needing a new clinical trial if we utilize the commercially intended version of tab-cel. As mentioned, we implemented this product version in clinical trials late last year, allowing us to gain valuable clinical experience. We proposed to the agency the idea of leveraging clinical data from patients treated with the intended commercial product alongside other sources. We believe we have successfully navigated the CMC hurdle, which has been a significant topic of discussion for the past few years. Additionally, we mentioned an upcoming clinical Type B meeting, which was recommended by FDA leadership to discuss and align on the clinical data package for the pre-BLA meeting. We are actively preparing our arguments; we will leverage the data from patients treated with the commercial material while also highlighting our extensive clinical experience, having treated over 400 patients with tab-cel in the clinic. This approval is expected in Europe very soon, and we have nearly 200 patients treated for PTLD as well. We think this clinical experience will be quite influential. We are preparing the argument for patients treated with the intended commercial product as well as presenting our strong clinical experience. We anticipate an engaging Type B clinical meeting where we hope to align with the FDA on the contents of the clinical package. Pascal, do you have anything further to add?

No, I think that's clear. Regarding your other questions, Jessica, we won't comment on the cash for extension. We are beginning discussions with potential partners. We've had a successful process in Europe, receiving six term sheets for the product, with a preferred partner offering $45 million upfront for Europe along with a few emerging markets and other milestones, including regulatory and sales achievements, plus a significant double-digit royalty. We've secured a strong partner and a beneficial deal for the company. In the U.S., we aim to replicate this success, as we believe there is a much larger business opportunity than in Europe, with peak sales potential over $500 million in our view. This could be significant in line with the product's value in its initial and follow-up indications. Additionally, we've previously stated that we are managing our cash runway through various activities to fund the company into late 2024, aiming for a year of cash beyond the EMBOLD readout, which we see as a key value inflection point in October 2023. We're now in Q1 2024, and while we have cash beyond the EMBOLD readout, we believe there are further growth opportunities. On partnering for 188, we are not providing specific updates, but we reiterate that we are in discussions with various companies. If we consider partnering before the EMBOLD readout, it must reflect significant recognized value and a fair potential value split in the future to ensure our shareholders benefit from the anticipated inflection point after the EMBOLD results in October 2023. Thank you.

Thank you. Our next question is from Salveen Richter with Goldman Sachs. Please proceed with your question.

This is Mason on for Salveen. On 188, what might give you confidence that one year could be sufficient for the Phase 2 data there?

Sure. Thanks for the question. The confidence for one year being sufficient really drives from the Phase 1 data that we saw where when you look for the disability improvers of the confirmed disability improves by EDSS, almost all of them improved within that first 12-month time frame. As you know, the study is a two-year study. So, we are following patients beyond that one-year time point. But because really, the large majority of improvements that occurred in that first 12-month timeframe, we have confidence that that will be a good endpoint for the EMBOLD readout.

This concludes our question-and-answer session for today. Thank you for joining the Atara Biotherapeutics Third Quarter 2022 Financial Results Conference Call. You may now disconnect.