Earnings Call Transcript - AUTL Q4 2023

Operator, Operator

Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics' Call to discuss the Full Year 2023 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, Michelle. Good morning or good afternoon, everyone. Thanks for joining us on today's call. With me are Dr. Christian Itin, our Chief Executive Officer; and Rob Dolski, our Chief Financial Officer. So, on Slide 2, before we begin, I'd just like to remind you that during today's call we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of clinical trials and development and for 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. On Slide 3, you'll see the agenda. As usual, Christian will provide an overview of our operational highlights, Rob will then discuss the financial results before Christian will conclude with upcoming milestones and closing remarks, and we will then take questions. Over to you, Christian.

Christian Itin, CEO

Thanks a lot, Olivia, and welcome, everyone, to our full year update. It's been a very successful year for us, and we'll go through last year's accomplishments, especially with our lead program, obe-cel, in the following slides. To start, we want to highlight the important transactions completed in February this year, after the reporting period. We conducted two transactions: a strategic collaboration with BioNTech, which positions us well with a strong partner and creates significant opportunities for synergy between our companies. This collaboration focuses on three key platforms we've developed. First, it grants BioNTech access to our manufacturing platform, particularly our Nucleus manufacturing facility and the surrounding product supply systems. Second, we're establishing our commercial platform in preparation for a potential launch of obe-cel at the end of this year, which includes the systems, procedures, and centers we are building, that can also support additional programs beyond obe-cel. Lastly, we are co-developing and co-commercializing two of our product candidates, AUTO1/22 and AUTO6NG, which should accelerate our pipeline programs. We’re looking forward to collaborating with them. BioNTech will also help us launch and expand obe-cel into additional indications. The total contributions from these transactions include an upfront equity investment of $200 million and $50 million in cash, plus up to $582 million in further option exercise and milestone payments. This is a key transaction for us, allowing us to partner with a company that shares our vision for oncology and we're enthusiastic about the opportunities ahead with BioNTech. Additionally, we ran a financing transaction yielding gross proceeds of $350 million. With the two transactions and our year-end cash position of $240 million, we now project a strong cash position of approximately $800 million at the start of the year. Moving to Slide 5, I’d like to highlight key activities we've undertaken with obe-cel last year and those that are ongoing into the first quarter of 2024. We provided two key updates on the FELIX data for obe-cel, including our first data presentation at ASCO, which focused on the morphological cohort of the study with around 94 patients and we reported on the overall outcomes. At the ASH in early December, we presented data from the complete FELIX study that included two additional cohorts—one with patients having minimal residual disease and another with isolated extramedullary disease. These groups are usually excluded from clinical trials due to the challenges they present, and we believe this comprehensive data is crucial for understanding the variety of tumor burdens and risks faced by physicians treating adult ALL patients. The results showed significant clinical activity and a strong safety profile across all risk categories. We also updated on patients from the ALLCAR19 study and the FELIX 1b study, with participants having over three years of median follow-up, providing valuable long-term outcome insights. A critical aspect in this field is our ability to deliver the product, which has been the most challenging part. We focused on establishing our own capability to deliver products, with the Nucleus facility in the U.K. serving as the core component. Last year, we successfully finalized and operationalized the facility, qualifying and validating it, with all relevant data contributing to the BLA filing. From breaking ground to full validation, we achieved this in just 24 months, an exceptionally short timeframe requiring innovative approaches to both building and operations. As reported, we completed a full inspection cycle with the MHRA, which is essential for licenses needed to supply products not only for clinical trials but also for exports. We now have a license that allows us to support patients from the U.K. The next critical step is the regulatory review; we filed the BLA at the end of last year, and by January, the FDA accepted the filing for review, with the PDUFA date set for November 16 this year. We have also submitted an MAA to the European Medicines Agency and are in discussions with the MHRA regarding our registration path in the U.K. Regarding commercial readiness, it is vital to not only create awareness of the product, which is driven by our medical affairs team, but also to ensure our capacity to deliver it. We’re in the process of coordinating the accreditation of centers for commercial use of the product, targeting 30 centers to be ready at launch once approval is granted. These highlights represent our progress with obe-cel over the last year, during which we've tackled the dual challenges of securing clinical data and building manufacturing capabilities. This year, our focus will be on navigating the regulatory process and preparing for launch. Moving to Slide #6. When we look beyond the obe-cel opportunity within ALL, as we had indicated, we also are going to be moving into the autoimmune segment. And in fact, the first study is now open for enrollment and it's called the CARLYSLE study. What is important about where we are with the program is obviously that we're setting up and spacing our program on the very strong foundation that we have built for obe-cel in the adult ALL setting, which gives us a lot of safety data. It gives us obviously the regulatory packages, which are absolute development. It gives us the commercial supply capability and presence in the centers. These points, we believe, are very critical to be able to deliver effectively in the autoimmune setting. And obviously, what we have shown over the last several years is that we have an exceptional profile from both an activity and a safety perspective with obe-cel. Looking at programs beyond obe-cel, we did update on two programs. We updated on AUTO8 at an oral presentation of the MCARTY study at ASH where we could show very high levels of clinical activity, and we believe very nice cellular dynamics that we were seeing beyond just the clinical activity, but also cellular dynamics of the product. Looked very interesting and seemed to benefit from the dual targeting approach that we're choosing, and we've chosen for AUTO8 here targeting both BCMA and CD19. And then the AUTO6NG study in neuroblastoma, the MAGNETO study also is open for enrollment as of the end of last year. So that's actually very nice progress on those products. Not on this slide, we also published pediatric ALL data from AUTO1/22 in the Journal Blood in the September timeframe last year. Moving to Slide #7 to discuss some organizational changes, I would like to congratulate Chris Williams and Alex Driggs on their promotions. Chris has played a key role in various transactions over the years, including the recent BioNTech transaction, and has been promoted to Chief Business Officer. Alex Driggs has been promoted to Senior Vice President for Legal Affairs and will continue as the General Counsel of the company. Additionally, Edgar Braendle will step down as Chief Development Officer to pursue other opportunities but will remain to advise the company during the regulatory processes for the BLA and MAA until their completion and approval. We want to express our gratitude to Edgar for his excellent work since joining us in mid-2021 at the onset of Phase II of the pivotal sections of the FELIX study. He successfully navigated the study to a positive outcome and was instrumental in translating the data from both his team and Dave's team into the BLA and MAA filings, which is an impressive achievement in a short timeframe. We wish Edgar the best in his future endeavors. Miranda Neville will take over from Edgar; she has been leading the obe-cel program for some time and will continue overseeing the development team, ensuring continuity as we move forward. This year, we plan to expand our team into the autoimmune segment, and there will be announcements regarding the development team build-out in that area as well. Finally, we have strengthened our Board of Directors with two new appointments: Lis Leiderman and Bob Azelby. Both bring substantial experience, with Lis having a robust financial and transactions background, and Bob bringing extensive commercialization expertise in oncology, CAR T, and rheumatology. Their contributions will be significant as we move ahead, and we are excited to welcome them to the Board of Directors. Now with that, I'd like to move to Slide #9, and just briefly remind you, of the unique mechanism of action at the heart of the features that we see in the clinical properties with obe-cel, and this is all about driving a product that can physiologically engage with target cells, which means it can engage rapidly, it can deliver the kill, and they can then disengage rapidly as well, so that you do not have overactivation of the CAR T cell in the process. And as a consequence, you'll maximize, on the one hand, the activity, because they recycle the product and the cells get recycled back into action much more quickly, so they have actually more active agents available at any given point in time, but also avoid the toxicity that is seen with overactivation of the T cells. And obviously, is at the core for the reduced cytokine release syndrome, and in general, the immunological toxicities related to neurological toxicities usually referred to as ICANS. So, the feature that's at the core is this very different way of engaging the target antigen, and as you remember, it has resulted in a very different profile for the product. On the next slide, I will discuss several aspects of the FELIX study that we presented during the pooled analysis at the ASH meeting at the end of last year. It's important to note that we conducted this study during the pandemic, which is significant because we are working with patients who are highly immune compromised and at a high risk of infection. Many of these patients may unfortunately succumb to sepsis, a major cause of death. Conducting the study during the pandemic, with travel restrictions and safety concerns for patients, posed considerable challenges. Essentially, this study reflects a real-world scenario. Additionally, in this environment, it's crucial that physicians have the necessary freedom to make the best choices for their patients given the specific circumstances and challenges they faced. A key aspect of the study is the bridging therapy. Many clinical studies in this area limit the types of bridging therapy available, which is the treatment given between cell collection and cell dosing. By restricting these options, it can make patient selection easier for certain types of bridging therapy. However, during a pandemic, such restrictions would have created significant challenges. Unlike past studies, we allowed any type of bridging therapy except for Blincyto or CD19-targeting T-cell engagers, so that physicians could have all possible options to manage their patients effectively amid the unpredictable nature of the situation many institutions were experiencing. This approach was essential for patient safety and management, and it means that the data we obtained truly reflects a real-world setting. The same is true, obviously, in terms of the types of patients included. I mentioned that before, where we have very low disease burden, you have extremely high disease burden, or you have disease in areas outside of the bone marrow where the disease tends to be very challenging to manage. In all of those cases is where the patients present, and you need to understand actually what the product does in those patients. And one of the strengths of the FELIX study is it actually provides data for all of these risk categories and with that, gives valuable information to the physicians on what to expect with a particular patient and manifestation of the disease in that patient. Slide #12, we did actually look at sort of the change in disease burden in these patients as we are comparing the disease burden at screening versus the disease burden at lymphodepletion. And of course, this is an impact what you see here also of bridging therapy. And what's quite remarkable is that from every level of tumor burden at bridging, you get to every other level of tumor burden at lymphodepletion. So, you can go from very low tumor burden of less than 5% being in minimal residual disease, you can go all the way up to 75% tumor burden. But also the reverse, you can have more than 75% tumor burden at screening and go below 5% at lymphodepletion. It shows the variability of the disease and the dynamic nature of this disease and the impact of actual bridging therapy here for these patients. What was very striking to us, and this is what summarized on the next two slides is when we then actually look at the outcome of these patients dependent on the level of tumor burden at lymphodepletion. And what's quite striking when you look on Slide #13, is that going from a top line in blue where you have below 5% tumor burden to the middle line in green, which is between 5% and 75% tumor burden to the red line, which is above 75% tumor burden of lymphodepletion, you see there's a profound impact on the event-free survival, as you would expect because there's obviously a very different amount of tumor cells that have to be removed in these patients to drive outcome. Now, we see very clear differentiation. But remarkably, patients that are below 75% tumor burden tend to actually reach a plateau on the EFS, which is very encouraging when you think about the potential for long-term outcomes in these patients. Now, if we go to Slide #14, we also see an impact on the tumor burden on the actual adverse event profile, particularly regarding immunological toxicities. And what you can see on the left-hand side is a view on the cytokine release syndrome and ICANS in all patients. You can see we had a very attractive profile having high-grade CRS in 2% of the patients and high-grade ICANS in 7% of the patients. This is very low. This is lower even than what was observed in these types of patients with a product like Blincyto. Now, when we look at the CRS by the blast count, the level of tumor burden at the time of lymphodepletion, you can see that there is clearly quite an interesting behavior here. We see, overall, as tumor burden increases, we see an increase in the overall adverse events with cytokine release syndrome of any grade going from 47% to 88%. However, we do see that consistently across the board the high-grade percentage for cytokine release syndrome is low. It's in the 3% to 4% range between 5% and close to 100% tumor burden. But in patients that have minimal residual disease, we have not observed any high-grade cytokine release syndrome in these patients. Now, very similar when we look at ICANS, first of all, I think it's important to realize that the overall level of ICANS is relatively low compared to other T cell engaging or CAR T approaches. But what we also do see here is the same picture that as tumor burden at lymphodepletion increases, we do see an increase in overall ICANS levels in these patients going from 8% to 43%. But even in the extreme high tumor burden patients who have more than 75% tumor burden, the high-grade ICANS is at 15%, which is comparable to a T cell engager. Now, what's also important, and this goes back to also the view that we had on the CRS, if we look at patients that have less than 5% tumor burden, we do not observe high-grade ICANS in these patients. In fact, the overall ICANS level is very low with 8% overall. So, it points to an impact of tumor burden at lymphodepletion, both on the outcome from a clinical activity perspective, both on an ORR perspective as well as on an EFS perspective, but also see very clear differentiation with regards to immunological toxicity and the risk of these patients experiencing immunological toxicity as a consequence of the therapy. So, this gives you actually an ability to anticipate for the physicians and plan accordingly for these patients. Moving to the sort of the sentinel view based on the ALLCAR19 and the FELIX Phase Ib data, and this is going to get us to Slide 16. So, what we're looking at here on the left-hand side is the event-free survival, and we do see that the event-free survival with or without censoring for stem cell transplant gives us a plateau that's somewhere in the range of 35% to close to 45% here. And that obviously gives us a very attractive proposition because it suggests that indeed a significant proportion of the patients managed to get into a long-term remission. In these patients, you can see the longest observation with time we have with these patients is at 60 months or five years. When we look at the median overall survival or just the overall survival curve per se, what you do see, the median obviously gets crossed at around 16 months, but the actual story is the fact that we see a tail building and we have around 40% of the patients that are surviving, and it looks like the curve, as we've seen in EFS, is stabilizing suggesting that indeed we have long-term benefit for a proportion of the patients, which is very encouraging and something that, unfortunately, we have not been able to see with other therapeutic modalities in the past in this indication and at this stage of the disease. Moving to Slide 17, this provides a different perspective with swim plots illustrating the same information we just reviewed in a new way. Now, regarding our readiness for the commercial launch, which is our primary focus this year, we are actively working with agencies as we navigate the product review process. I'm pleased to inform you that we recently received the MHRA inspection and approval for the Nucleus facility, and we have submitted the MAA in Europe. We also plan to file an MAA in the U.K. with the MHRA; the specific timing is still being determined, but it will be done as soon as possible. Additionally, we are anticipating the FDA PDUFA date on November 16, which positions us for significant and tangible advancements throughout this year for obe-cel. We also have planned data updates for obe-cel and further follow-up data on the FELIX study around mid-year, coinciding with the ASCO and EHA timeframes, and again at the end of the year during ASH. When we then think about sort of the possibility and the opportunities for expanding obe-cel into additional indications, there's sort of two fundamental paths we can think about. One is to move more broadly into the oncology arena with different forms of B-cell malignancies and alternatively also look at the opportunity in autoimmune disease, where we know that the driving factor for those autoimmune diseases are autoreactive antibodies obviously driven by B cells and corresponding plasma cells. From this approach perspective, obviously, when we think about the life cycle management for obe-cel, it goes into two directions. There's obe-cel itself. And then obviously, AUTO1/22, which is the dual targeting approach that we explored in pediatric patients, which gives us opportunity, particularly in those indications where we have established loss of CD19 antigen as a right of escape and that's certainly shown in ALL, it's clearly shown in DLBCL. So, there's a very clear kind of direction for that type of a product. And with AUTO8, a combination of BCMA targeting with CD19, and obviously, that gives us an option for both moving towards the multiple myeloma segment or related diseases as well as plasma cell and B cell-mediated autoimmune diseases. I previously mentioned that we have initiated the CARLYSLE study and are currently enrolling patients. This study is primarily focused on dose confirmation. It's important to recognize that the product being referenced, which has facilitated the exploration of CD19 CAR T products in autoimmune diseases, was developed at the University of Erlangen by Georg Schett and Andreas Mackensen. This product was originally designed for pediatric ALL patients and shares many structural similarities with the chimeric antigen receptors found in Kymriah and Breyanzi, though it features a distinct manufacturing process. The characteristics of this product are well-understood, allowing us to correlate our pediatric data with the data obtained from the University of Erlangen. We observe a strong alignment in the overall outcomes, similar to what was reported with Kymriah in the CARPALL study. We have noted very high levels of molecular complete responses and comparable long-term outcomes, as well as persistent long-term results. The CAR T product from Erlangen exhibits long-term persistence in pediatric patients, similar to our findings with obe-cel, lasting two to three years or longer. Moreover, the safety profile of obe-cel is superior, due to its different approach to engaging the CD19 antigen. Importantly, the doses used in our studies are consistent with those used for obe-cel in pediatric studies, specifically 1 million cells per kilogram. Therefore, we can confidently state that our clinical data for pediatric ALL patients overlaps with the product utilized in the autoimmune patients studied in Erlangen. Now, the additional point is that we understand the dosage requirements and have a substantial amount of safety data from our product at that level. We are transitioning to a single fixed dose instead of a weight-based dosing of 1 million cells per kilogram, which is necessary for children due to the wide range of body sizes between one-year-olds and young adults. In autoimmune diseases, we typically work with young adults or adults, allowing us to select a fixed dose that simplifies operations at the clinical center and minimizes potential dosing errors associated with variable dosing regimens. Therefore, we are confirming a fixed dose of 50 million cells in six patients. We believe this positions us well to proceed with the next steps and advance this product toward a pivotal study. This serves as an update on the study and our future intentions, highlighting that we do not need to speculate on whether our product's profile is suitable for these patients, as we know it has the same efficacy profile. As we examine other pipeline programs and technologies, we remain committed to updating you on ongoing initiatives, especially with AUTO6NG and AUTO9, which will also enter clinical studies this year. With that, I'll pass it on to Rob for the financial results.

Rob Dolski, CFO

Thanks, Christian, and I'm going to be on Slide 26, the financial summary. Good morning or good afternoon to everyone. It's my pleasure to review our financial results for the full year 2023. Our cash and cash equivalents at December 31, 2023, totaled $239.6 million as compared to $382.4 million at December 31, 2022. Our total operating expenses net for the year ended December 31, 2023, were $179.7 million as compared to $143.4 million for the same period in 2022. Our research and development expenses increased from $117.4 million to $130.5 million for the year ended December 31, 2023, compared to the same period in 2022. This change was primarily due to increases in operating costs related to the company's new manufacturing facility, contractual milestone payments and headcount-related costs, as well as a decrease in our U.K. reimbursable R&D tax credits claimed through the U.K. small- and medium-sized entity scheme. These were partly offset by decreases in clinical and manufacturing costs associated with the obe-cel clinical program. Please note, in prior years, Autolus reported the R&D tax credits as income tax benefits on the statement of operations. The company has revised its financial presentation, including the prior years, and will now present such tax credits as a reduction in R&D and development expense. As a result, income tax benefit has reduced by $19.5 million and $24.6 million for the years ending December 31, 2023 and 2022, respectively, with the corresponding reductions in research and development expenses and total operating expenses. Moving on to general admin. Our expenses increased from $31.9 million to $46.7 million for the year ended December 31, 2023 compared to the same period in 2022. This increase was primarily due to an increase in general administrative headcount, supporting the overall growth of the business, primarily related to pre-commercialization activities. Our net loss attributable to ordinary shareholders was $208.4 million for the year ended December 31, 2023, compared to $148.8 million for the same period in 2022. Autolus estimates that with its current cash and cash equivalents and 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, which includes providing runway to data in our first pivotal study of obe-cel in autoimmune disease. I'll now hand things back to Christian to wrap up with a brief outlook on expected milestones.

Christian Itin, CEO

Thanks, Rob. I want to provide a brief overview of our planned news updates. We are primarily focused on the delivery of obe-cel. We expect to share data at ASCO, EHA, and ASH this year, which will be around June and December. We plan to submit a marketing authorization application to the U.K. MHRA in the latter half of this year. Our PDUFA target action date is November 16. We also intend to present the initial data from our SLE Phase 1 study at the end of this year. Furthermore, updates on AUTO8 are anticipated for the end of this year, along with potential publications related to several of our programs. Now, moving onto the company’s summary, we are in a very strong position. Our execution over the past two years has been consistent, and we are continuing this momentum into 2024. Our cash position remains robust; we started the year with over $800 million in the bank, which includes year-end cash, proceeds from the BioNTech transaction, and funds raised in February. This financial strength allows us not just to advance our lead program to market and prepare for launch but also to explore additional pipeline opportunities, including our collaboration with BioNTech. We have developed strong commercial manufacturing capabilities, which required significant investment last year. Fortunately, the costs associated with those capital investments are decreasing, and we are now transitioning from setup expenses to costs related to launch preparations. We have substantial opportunities with our pipeline, including expanding the indications for obe-cel and increasing our overall product opportunities. In summary, we are well-positioned with a positive outlook for this year and look forward to your questions. Thank you.

Operator, Operator

Thank you. Our first question comes from James Shin with Deutsche Bank. Your line is open.

James Shin, Analyst

Hi. Good morning, guys. Can you hear me? I'm on a bus. I apologize if there's any background noise.

Christian Itin, CEO

No worries, loud and clear. Hi, James.

James Shin, Analyst

Hi, Christian. A question on the MHRA approval. Did their inspection have any overlap with the FDA or EMA or any other upcoming inspections? And then, I have a follow-up on obe-cel for lupus and ALL.

Christian Itin, CEO

The MHRA inspection and license are essential for us to export to either the U.S. or the EU. While it operates independently from the U.S. FDA perspective, it is connected to the European filing process. Specifically, it is required for the European submission, as the facility must obtain a certificate from the MHRA to file with the European agency. Therefore, it is crucial for the European side and necessary for the U.S. side, but it is separate from the FDA's review of the facility.

James Shin, Analyst

Is there any overlapping metrics from the MHRA inspections with FDA inspection by chance?

Christian Itin, CEO

Well, first of all, obviously, the fundamentals are the same. This is all around the GMP manufacturer and the guidelines associated with GMP manufacturing. So, the basis for the inspection, the basis for review is the same basis. So, there's no difference there. But there are two independent bodies that actually do their independent reviews, whereas in Europe, the European agency relies on the MHRA's reviews.

James Shin, Analyst

Understood. And then, as you prepare for obe-cel ALL launch, a lot of oncologists we've spoken to are focused on quality products in a timely manner, given the dire condition of the patient. If you look at some of the peer cell therapy launches, there's been some pickup. What is Autolus doing to make sure or what have you learned from these peer launches to avoid some of these pitfalls?

Christian Itin, CEO

Yeah. I mean it's absolutely a relevant question. In fact, when we talk to physicians and our ad boards, the top question coming back or the top point coming back is, we need access to product. So, the ability to get access to product, to get slots, to get the product in time is absolutely critical. It's a reflection of some of the challenges that the centers experience with prior launches. So, we spent a lot of time optimizing our systems, minimizing the turnaround time will be in terms of delivery time at around 16 days at the time of launch. We're also going to do full runs from each one of the centers through the entire chain to ensure that from every center, actually, the flow and the processes are fully operational before launch, before we're getting to launch. So, there's going to be not only the processes have been adjusted, that be simplified, but also it's going to be a whole bunch of dummy runs from all of those centers to ensure that, indeed, all the aspects of that journey are fully vetted and fully tested for each individual center.

James Shin, Analyst

Appreciate that. And then finally, on CARLYSLE, have you looked or depleted any of the six or the first six patients? And what are the gating factors to get the subsequent six patients?

Christian Itin, CEO

So we haven't guided on dosing or not dosing. The study is open. It's enrolling. The study itself is not a dose escalation study, so we don't have DLT periods and we're not limited by sort of the typical Phase 1 dose-finding studies, which they have to go through review processes in the industry. So, we have an ability to enroll all of these six patients as they become available. But we don't have limitations from the study design that would sort of actually gate or slow down the process.

James Shin, Analyst

Appreciate it. I'll yield to the floor. Thank you.

Christian Itin, CEO

Thanks a lot, James. Appreciate it.

Operator, Operator

Thank you. Our next question comes from Asthika Goonewardene with Truist. Your line is open.

Unidentified Analyst, Analyst

Hi, guys. This is Karina for Asthika. Thanks for taking the question. So, I had a question on the FELIX update at ASCO. Besides the longer follow-up, what new data can we expect in this presentation? Also, will it be able to paint a clear picture of what obe-cel can do in terms of like the favorable impact for patient outcomes without a need for transplant?

Christian Itin, CEO

So, regarding the FELIX study and our expectations, we have a significant amount of information that we have yet to analyze or present, particularly concerning the impact of bridging and other important components. There are also longer follow-up periods and various risk factors that are becoming apparent as we review the data, which I believe will be very insightful. We plan to include additional sub-analyses and a longer-term perspective, which we will be sharing throughout this year. On another note, we are also examining the effects of transplantation and will report on that as well. A key question we are considering is whether transplantation appears to improve outcomes or whether we are observing a different type of result. We will keep you updated on these evaluations throughout the year, especially at ASCO or definitely at ASH.

Unidentified Analyst, Analyst

And the data presentations for EHA and ASH later on, that's just an encore of the ASCO presentation?

Christian Itin, CEO

No, the presentations are somewhat related, but the abstracts are not identical between the two. They may share some of the data, but in terms of focus, they are slightly different.

Unidentified Analyst, Analyst

Okay. Got it. Thank you so much.

Christian Itin, CEO

Thanks a lot, Karina.

Operator, Operator

Thank you. Our next question comes from Gil Blum with Needham & Company. Your line is open.

Gil Blum, Analyst

Hey, good morning and good afternoon. Thanks for taking our questions. So first question, kind of focusing on the bridging aspect in the study. This is something that has also recently come up in the advisory committee materials for ABECMA and CARVYKTI. It looked like bridging had a pretty important impact on patient survival even before you got there, treatment. In many ways, maybe the fact that you allowed physicians to pick their bridging may have actually assisted you here. How can you optimize bridging? Is there like a study to be done here?

Christian Itin, CEO

It's an excellent question. The circumstances are clearly different when comparing multiple myeloma with adult acute lymphoblastic leukemia (ALL). The disease progression in multiple myeloma is generally much slower and less severe than in ALL. In ALL, patients can rapidly progress from minimal residual disease to having over 75% tumor burden, showcasing the disease's aggressive nature. Therefore, bridging is essential for these patients; otherwise, the tumor burden can become overwhelming and pose a significant challenge. While it’s possible to see no impact, where patients stabilize around 75% tumor burden, these patients would certainly be classified as refractory according to functional assessments. However, some patients might experience a temporary and substantial reduction in tumor burden between treatment and dosing, which can significantly influence outcomes. We have previously discussed relevant data that supports this. The analysis of data can be approached in various ways, as different regulatory agencies have differing views on it. For instance, the analysis often focuses on the tumor burden observed at screening, which is the point when physicians assess patients. Those with more than a 5% tumor burden are identified, and these are the morphological patients essential to treatment intent. This perspective aligns with the European agency's primary focus, emphasizing the physician's viewpoint during the decision-making process. In contrast, the FDA's review process for exams like Blincyto and Tecartus emphasizes patients with a 5% tumor burden at the dosing point, particularly at lymphodepletion, as the main group for assessment.

Gil Blum, Analyst

Okay. And switching to autoimmunity, you mentioned that there are a lot of similarities between obe-cel and the German ISD assets. There are a couple of other companies out there who also have very similar programs to the German ISD. What would you say is a differentiator between your program and other programs? And what do you think is your key advantage?

Christian Itin, CEO

The first interesting point is that making a comparison of our product to others is challenging due to the lack of available data. However, we can compare our product to the one used in Erlangen, which is important because it helps us understand the features of the Erlangen product versus ours and the predictability of outcomes. In comparing our CARPALL study with the ELIANA study in pediatric ALL patients, there is a significant safety difference: none of our cases experienced high-grade CRS, while 47% in the ELIANA study did. Both studies were conducted in similar environments with the same safety management practices. This significant difference was also noted when comparing our results to the pediatric program in Erlangen that preceded our work on obe-cel.

Gil Blum, Analyst

All right. And maybe a last one on this topic. So, most discussions that we've had on the use of cell therapy and autoimmune diseases suggest that only a relatively small window of deep B cell aplasia is needed to 'reset' the immune system. I mean, I guess that's one kind of hypothesis that is out there, but I'm sure you have maybe a different view on that.

Christian Itin, CEO

It's interesting to consider the various hypotheses out there, but what we know for sure is that our product has been effective in pediatric ALL, particularly in autoimmune patients with active immune systems. However, in these cases, the treatment's effectiveness tends to last for a shorter duration compared to pediatric ALL patients who are not compromised. A long-lasting CAR T program yields the outcomes we aim for, and our product possesses those characteristics. Beyond that, further trials are necessary to explore other possibilities. It’s challenging to draw a correlation between a product that may not be significantly effective in pediatric ALL and its potential efficacy in autoimmune conditions. It’s a possibility, but currently, that assertion lacks supporting data.

Gil Blum, Analyst

All right. Thanks for taking our questions.

Christian Itin, CEO

Thanks a lot, Gil.

Operator, Operator

Our next question comes from Eric Yeung with William Blair. Your line is open.

Eric Yeung, Analyst

Hi. Eric on for Matt Phipps. I was wondering, firstly, with the additional cash on the balance sheet, how you're thinking about obe-cel development in other lymphoma indications. If you plan on enrolling any additional patients within NHL or CLL?

Christian Itin, CEO

Thanks, Eric, for joining. We are currently considering a variety of options as we decide where to focus our investments. We are certain that there will be at least one pivotal study in autoimmune diseases. We are evaluating whether to conduct a second pivotal study in autoimmune or to run an oncology study related to one of the non-Hodgkin's indications. This decision is still pending. Additionally, we are likely to generate more data for obe-cel in the non-Hodgkin's indication to enhance our understanding based on our previous experiences.

Eric Yeung, Analyst

Great. And then just an additional question. I know you've had to do next-generation sequencing on patients for enrollment in AUTO4 and AUTO5 and that paper you guys published in the Blood Journal Cancer on the TRBC1 and 2 staining. I was wondering if you think that paper could be supportive of a potential companion diagnostic for AUTO4 and 5?

Christian Itin, CEO

That's a great question. We've been collaborating with the relevant parties on this topic. If we can transition from next-generation sequencing to using an antibody that can be applied with classical staining, it would simplify the process and likely speed it up. Next-generation sequencing requires specific sequences, proper primers, and complex analysis, which can be challenging. An easier approach would allow us to incorporate staining procedures into a standard panel of stains for tumor characterization. This could even enable the determination of TRBC status in patients before they start therapeutic interventions, similar to how we assess CD19 and other standard markers. Additionally, as you noted, this approach could pave the way for a companion diagnostic based on staining methods.

Eric Yeung, Analyst

Great. Thank you.

Christian Itin, CEO

Thanks a lot, Eric.

Operator, Operator

Thank you. Our next question comes from Yanan Zhu with Wells Fargo. Your line is open.

Yanan Zhu, Analyst

Great. Thanks for taking our questions. First on SLE, I know you mentioned you're not guiding for dosing or not dosing. I'm curious about the level of interest at your first clinical site. Regarding your guidance for data late 2024, I was wondering about the number of patients at the time of readout and the duration of follow-up. Do you have a minimal kind of duration for follow-up?

Christian Itin, CEO

Thanks, Yanan, and thanks for joining. So, first of all, the study we're conducting in the U.K. and in Spain. In the U.K., there are actually no competing studies for these types of patients. That puts us in a good position and one where we think we have a very interesting standout feature around the study and opportunity for patients. In terms of data at the end of the year, we obviously are expecting that we can involve the six patients, and we are able to report on those six patients, how much follow-up we'll have of them. I think that's premature to point to. But the goal would be to have the cohort enrolled and then report data from that cohort.

Yanan Zhu, Analyst

Great. Thanks for that color. On FELIX, wondering for the mid-year data update. Would the data be a pooled analysis? Or would it be the pivotal cohort? Also, since you commented on your real-world bridging therapy strategy, I was wondering, does that have any implication for FDA review?

Christian Itin, CEO

Yeah, really good question. In terms of the data update, obviously, as I indicated, we're looking, in particular, at different risk groups within the data set, so that's going to be a key focus. The general update will be likely across the entire study because from a physicians' perspective, that outlook is actually what's really relevant because that reflects the patients that you would actually see in actual practice. We're probably going to report on that as a reference point referencing back to the ASH data. The bridging itself, obviously, is relevant in the sense that the analysis that you can run is in two different ways and different agencies take different positions on it. You have to look at the analysis based on the tumor burden that's screening, which is basically, frankly, at the time point where any physician can look at the patients and you focus on the patients that have more than 5% tumor burden. Those are the morphological patients that's the intent to treat. The primary focus you'll see with the European agency is the primary view, which is to the physician's view. This is when the physician can make a decision. When you look at the review process for Blincyto as well as for Tecartus, the focus of the FDA has is more on the patients that actually have 5% tumor burden at the time point of dosing. That would be 5% at lymphodepletion. That would be the primary group for assessment.

Yanan Zhu, Analyst

Great. Appreciate the color. Thank you.

Christian Itin, CEO

Thanks a lot.

Operator, Operator

Thank you. Our next question comes from Kelly Shi with Jefferies. Your line is open.

Unidentified Analyst, Analyst

Hi. This is Dev on for Kelly. I have a couple of questions. One is you did an analysis on obe-cel and the German product, which is similar. Can you talk about what kind of patient baseline you're thinking about enrolling in your study? For data presentation, are you thinking of presenting at that medical conference?

Christian Itin, CEO

When we look at the patients that we're enrolling in the study, we're rolling patients that have obviously our lupus patients that have or do not have kidney involvement. So both manifestations, we do see. We do have patients, as that's done in the Erlangen study, that will have at least one organ involvement in these patients. It's very much track alongside what you have seen and read about in the publications from the Erlangen team. So, it's a very comparable patient population that we're enrolling in terms of inclusion/exclusion criteria. The plan would be for us to see that we can have our first data at one of the medical conferences at the end of the year. So that would be the plan.

Unidentified Analyst, Analyst

Great. Thank you.

Christian Itin, CEO

Thank you very much.

Operator, Operator

Thank you. Our next question comes from Jacob Mekhael with KBC Securities. Your line is open.

Jacob Mekhael, Analyst

Hi, and thank you for taking my question. I have a few inquiries if that's alright. First, I would like to ask about the option agreement with BioNTech regarding AUTO1/22 and AUTO6NG. What milestones do you need to achieve with those programs to prompt BioNTech to opt-in? That’s my first question. Additionally, I have a broader question about autoimmunity. Considering the larger patient population, from your perspective, what must occur in the CAR T ecosystem to guarantee that, if approved, there is sufficient capacity for those patients to access the treatments? Thank you.

Christian Itin, CEO

Thanks, Jacob. Those are two very good questions. First, regarding the option agreements on AUTO1/22 and AUTO6NG with BioNTech, the options must be exercised before we begin pivotal studies with those programs. This will be triggered by progression rather than a specific outcome or activity level. The latest point for exercising the options will be at the decision to move into pivotal study, although it could happen earlier. In terms of the scope for autoimmune indications, we anticipate that the initial application for CAR T will target the more refractory populations within those indications. This is generally a smaller segment of the broader autoimmune indications. For example, although there may be a few hundred thousand patients in the overall lupus population, we expect only a few thousand to be suitable for a CAR T approach. This smaller subset is likely applicable to other indications as well. Therefore, we believe that we can manage and adequately serve this capacity. However, the challenge remains in determining how we can effectively enter these indications and provide a compelling value proposition for patients. We still need to explore how far we can go into earlier or less severe stages of disease with CAR T therapy. This is something we need to clarify and gather data on to better understand the appropriate target areas and the potential breadth of our approach. We are confident that our initial positioning can be effectively supported by our current infrastructures and technologies.

Jacob Mekhael, Analyst

All right. Thank you very much. Thank you. Appreciate it.

Operator, Operator

Thank you. That's all the time we have for questions. I'd like to turn the call back over to Christian Itin for closing remarks.

Christian Itin, CEO

Thank you very much for joining today. It's obviously great to have the opportunity to really review, I think, all the progress we've been able to go through the course of last year and into this year. A lot more to come this year. We appreciate the continued support and interest, and wish you all a great upcoming period and look forward to connecting in person again. Thank you.

Operator, Operator

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, have a great day.