Earnings Call Transcript - AUTL Q1 2024

Operator, Operator

Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics' Call to discuss its First Quarter 2024 Financial Results and Business Updates. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Olivia Manser. Please go ahead.

Olivia Manser, Host

Thanks, Tanya. Good morning or good afternoon, everyone. Thanks for joining us on today's call. With me are Dr. Christian Itin, our CEO; and Rob Dolski, our CFO. So, on Slide 2, before we begin, I'd just like to remind you as usual that during today's call we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of clinical trials and development and/or regulatory 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. So, moving on to Slide 3, you're going to see the agenda for today's call, which is similar to usual. So Christian is going to provide an overview of our operations highlights. Rob will then take you through the financial results, and Christian will conclude with upcoming milestones and we'll then hand over for questions. So with that, I will hand over to Christian.

Christian Itin, CEO

Well, thank you very much, Olivia, and welcome everybody to our first quarter call. It's been a very successful quarter and obviously with a lot of activity related to Obe-cel, but also quite a lot of overall corporate updates as well. I'll start out with Obe-cel. We started the year with the acceptance of our BLA filing, which was an important event, and also set the target date for the PDUFA, which is expected now for November 16. We also managed, by the end of the quarter, to get the European filing accepted. So we have now both major jurisdictions to filings under review. What was very important, because it led to the overall preparedness of the company towards commercialization, was the inspection that we had of the Nucleus facility by the MHRA that was very successful and resulted in a license for both clinical and commercial supply from the facility. What's important to understand is that this is actually a prerequisite for us to deliver product commercially, and that is a necessary license that we actually need to hold. So getting through that first full inspection and successfully completing it was a huge accomplishment and sets us up very well for the ongoing interactions in the review process, both with the FDA as well as with the European agency. We also started the Phase 1 dose confirmation study in SLE during the quarter and involved our first patients. Now, when you think about data updates, the important next updates are going to be at ASCO and EHA, which are at the end of May, at the beginning or middle of June. At both meetings, we have confirmation that we have an oral presentation of the updated FELIX results, focusing on longer follow-up for the study, the impact of stem cell transplant that patients may have received, as well as the impact of persistence on outcomes. In addition, at EHA, we have two further analyses that will be presented in the form of posters. One looks at the impact of inotuzumab-based bridging regimens in the trial, and the second is on sensitive methodologies to determine the presence of CAR T cells to measure persistence, linking that then to outcome in the study. So, a significant amount of updates and a lot of accomplishments through this year set us up very well for the further review of the program, both by the FDA and the European agency and also set us on a strong trajectory for the target PDUFA date as well, in the middle of November. Now, on the operational corporate side, obviously there was a lot of activity leading into this year, which resulted in early February in two announcements. The first was the announcement of the strategic collaboration with BioNTech, which is an important cornerstone in terms of our relationships that we're building. There are a significant set of options as part of this collaboration related to access that BioNTech will have for the lead program to the Nucleus manufacturing facility to support the launch of their lead CAR T program. That's one area we’re looking at closely, including support on the commercial launch side. We then have activities around access to two of our pipeline programs, AUTO1/22 and AUTO6NG. Both of those have option exercise time points that are before the start of a pivotal study. In addition to those key areas, we also look at technology access we've developed, particularly for the use with in vivo cell therapy approaches, but also for certain applications in the context of other treatment modalities. It's a very comprehensive relationship we are building, and we're very excited about the relationship and the interactions that we're having with BioNTech. Now, in parallel to the transaction with BioNTech, or just following the transaction, we also did a capital markets transaction and added additional capital. Between the two transactions, we added $600 million to our balance sheet, which sets us up well to deliver on the launch of Obe-cel, but also gives us the ability to expand the footprint of indications, particularly for Obe-cel and that also provides a significant opportunity for future growth and expansion for the business. As we're transitioning the company from a development stage to a commercial stage, we have also had transitions at the board level that go alongside that transformation of the company. At the end of last year, Lis Leiderman and Bob Azelby joined, both with strong capital markets experience and operating experience, as well as strong commercial experience. Additionally, we had Mike Bonney, who has taken over as the Chair of the company from John Johnson, and Ravi Rao also joined, who is an expert on immunology and autoimmune diseases, rounding out that experience base on the board. It's an important part of the transition that we are making, ensuring we are set up well and forward-looking to becoming a commercial stage company, and also a company that starts expanding into a broader set of indications. Now, moving to Slide Number 6, I would like to start out with Obe-cel by illustrating one of the questions we are getting quite a bit: How do you ensure that you can deliver product within the U.S. as well as outside of the U.S.? What I thought might be actually helpful is to look at our FELIX study and remember what kind of environment we actually conducted the study in. From 2019 to 2023, the actual study was conducted from the middle of 2020 to the end of 2022. That period coincided with the key period for the COVID-19 pandemic. There were various types of infection peaks reported across the globe. The number of international flights significantly varied throughout that time. Being based in the UK for manufacturing makes us reliant on international flights to reach sites in the U.S. and elsewhere. Interestingly, the actual vein to delivery time over that entire period for the Phase 2 conduct showed virtually no impact on our range of delivery time despite major challenges. We were able to deliver on time for every product, which is a testament to the robustness of our logistics. The international flights that have priority are also critical to our success. This has provided us confidence that our systems have been pressure-tested and delivered even throughout challenging periods. Now, moving to Slide 7, regarding the FELIX study, we're looking at the event-free survival across the entirety of the experience. The curve indicates that we may have a group of patients with a chance for long-term outcomes. This snapshot underpins the ASH presentation and will be important as we have more follow-up data in our next update at ASCO EHA. We've found that the level of disease burden patients have prior to lymphodepletion gives a good predictor of what to expect from efficacy and safety. The outcomes indicate that finding ways to reduce disease burden in patients has a significant impact on outcomes. We believe that patients with lower disease burdens have higher response rates and lower event rates leading to improved long-term outcomes. Now, in terms of commercial launch readiness, we are preparing quite significantly. There are four key areas we are working on, including communication, creating awareness, and supporting engagement with centers and payers. We are building strong connections with key opinion leaders and transitioning centers for onboarding to ensure our product can be appropriately handled in terms of cell collection, delivery, and safety management. We've also mentioned transactions aimed at logistical improvements and an effective manufacturing facility, the Nucleus, which is a remarkable 70,000 square foot facility approved by the MHRA. This facility was groundbreaking to approval in about 27 months, and we are well-positioned to support future launches. Looking forward, there are opportunities in the obe-cel family of products as we develop AUTO1/22 and AUTO8 for the respective disease areas. The ongoing dynamics in autoimmune disease space are exciting with potential for deeper and longer-lasting remissions that surpass what existing therapies have achieved. The Phase 1 study for SLE is open for enrollment, and we anticipate it to provide a clearer landscape of activity and safety as we enroll more patients.

Rob Dolski, CFO

Thanks, Christian, and good morning or good afternoon to everyone. It’s my pleasure to review our financial results for the first quarter 2024. As you saw from our press release and Form 12b-25 that we filed with the SEC earlier this week, we delayed this call by a few days and I’d like to provide some additional color around that decision. We completed a license and option agreement with BioNTech, as well as an underwritten registered direct equity financing, which enables the company to accelerate our expansion of Obe-cel into autoimmune diseases. The BioNTech deal was a complex transaction. We required additional time to evaluate certain technical accounting matters related to the BioNTech deal, as well as the projected impact of the autoimmune opportunity on our existing Blackstone liability valuation, each of which impacted our financial statements. We needed that time to complete our financial statements and have our accountants complete their quarterly review for us to file our 10-Q with the SEC. The Form 12b-25 gave us a five-day extension on the 10-Q filing. We plan to file the form 10-Q later today. To summarize our results for the quarter, cash and cash equivalents at March 31, 2024 totaled $758.5 million compared to $239.6 million at December 31, 2023. Our total operating loss for the three months ended March 31, 2024 was $38.8 million compared to $39.1 million for the same period in 2023. Our research and development expenses increased from $27.4 million to $30.7 million, primarily due to increases in operating costs related to our new commercial manufacturing facility, employee salaries, and costs related to Obe-cel clinical trial costs. Our general admin expense increased from $9.3 million to $18.2 million, driven by an increase in G&A headcount supporting the overall growth of the business. Our net loss was $52.7 million for the three months ending March 31, 2024, compared to $39.8 million for the same period in 2023. Autolus estimates that with its current cash and equivalents and the proceeds received from the strategic alliance with BioNTech and our equity financing, we are well capitalized to drive the full launch and commercialization of Obe-cel in relapsed/refractory adult ALL as well as advance our pipeline development plans. I’ll now hand things back to Christian to wrap up with a brief outlook on expected milestones for the rest of the year.

Christian Itin, CEO

Thanks, Rob. Obviously, the next key event we look forward to is the mid-year conferences with ASCO and EHA, the oral presentations, and the update in the posters at EHA. We hope to see you there and connect with you. We're gearing up for the full reviews on the regulatory side, especially towards the November 16 PDUFA date with the FDA review, and we expect a quite involved process with the European agency as well. We will keep you posted on our startup activities towards our next pivotal study. Thank you for your questions.

Operator, Operator

And our first question will be coming from Kelly Shi of Jefferies.

Kelly Shi, Analyst

Congrats on the great progress made and thank you for taking my questions. The first question on the adult ALL, Christian, do you expect AdCom meetings based on prior communications with both regulatory agencies in the U.S. and Europe? I have a follow-up. Thank you.

Christian Itin, CEO

The agency did not expect to hold an AdCom meeting. They communicated that at the acceptance of the filing, and there's been no other communication to suggest otherwise. So we don't expect an AdCom for this product.

Kelly Shi, Analyst

Terrific. For the SLE program, you mentioned that two patients have been enrolled. Can you add more color in terms of patient baseline characteristics compared to trials from Dr. Cizej’s team? For the year-end data disclosure, do you expect data from all six patients? Also, you mentioned T cell engagers in comparison to CAR T for tackling autoimmune diseases. I'm curious, how do you think about its safety profile in autoimmune indications given the prior clinical profile shown in hem oncology indications? Thank you very much. I know there are a lot of questions in one.

Christian Itin, CEO

Regarding the enrollment and what we expect for the end of the year: our expectation is that we should be able to enroll the patients and get them treated. We'll probably have variable follow-up in these patients, which is our current expectation regarding initial data and activity. When considering treatment modalities such as T cell engagers, both teams took a cautious approach to dosing, which is crucial considering safety signals. While the publications indicate limited B cell depletion, they also show some clinical benefit. It’s early days, but it’s too soon to have a firm view on how this might develop.

James Shin, Analyst

Can you help us understand or quantify Cardinal’s benefits to Obe-cel’s delivery logistics and wait times?

Christian Itin, CEO

Cardinal’s presence across the U.S. gives us the ability to ship products while we’re completing quality control and release. This allows us to take approximately three days out in the return time of the product, enabling us to send them to centers shortly before they're signed off. Combining this with faster analytics processes should reduce delivery times from 21 days to about 60 days at launch, which is a significant improvement.

James Shin, Analyst

For autoimmune diseases, is this field becoming a zero-sum clinical or commercial environment? Or is it likely to evolve where patients cycle through various regimens?

Christian Itin, CEO

It's a new quality. There may be opportunities for CAR T approaches to achieve deeper remissions. This ability to target plasma blasts, unlike traditional therapies, may lead to a lasting impact. The question remains on mechanisms that can provide that depth of outcome. I anticipate that the therapeutic landscape will accommodate an evolving range of therapies where some serve transient effects while others may offer a more sustainable reset for patients.

Asthika Goonewardene, Analyst

How much weight do you think physicians will place on the patients' transplant-free rate or transplant-free survival in evaluating outcome data?

Christian Itin, CEO

It's an important question. The interaction between stem cell transplant and CAR T cells is complex, and whether a transplant will improve patient outcomes will depend on the persistence of the CAR T cells. We will do our best to analyze and present both aspects at upcoming conferences.

Matthew Phipps, Analyst

Curious if you've had discussions with the FDA on how they will treat patients that have morphological disease versus those who are MRD in the label.

Christian Itin, CEO

The analysis the FDA will do is based on patients with morphological disease as the primary focus. In Europe, they will take a broader perspective based on patients with measurable disease at the time of inclusion. There are differences in how the data is analyzed, but we are most focused on morphological disease in our current discussions.

Gil Blum, Analyst

Regarding the commercial launch of Obe-cel, do you expect treatment to be provided mostly at centers that already offer other CAR Ts?

Christian Itin, CEO

Yes, the centers treating adult ALL patients typically are highly specialized academic centers that often already provide multiple CAR Ts. This matches the demographic you’d expect given the high intensity of support needed, aligning well with those involved in the FELIX study. Thanks a lot for joining today. It's been a successful quarter for us. We're looking forward to the data updates in the upcoming weeks. We hope to connect at the meetings or conferences coming up, and we will keep you updated as we move towards the approval of Obe-cel in the U.S. as well as our next steps in Europe and the UK.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.