Earnings Call Transcript - AUTL Q4 2022

Operator, Operator

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

Julia Wilson, Communications Consultant

Thank you, Norma. Good morning or good afternoon everyone and thank you for joining us to take part in today’s call on full year 2022 financial results and operational highlights for the fourth quarter 2022. I am Julia Wilson, a communications consultant for Autolus. With me today are Dr. Christian Itin, our Chief Executive Officer, and Dr. Lucinda Crabtree, our Chief Financial Officer. Before we begin, I would like to remind you that during today’s call, we will make statements related to our business which are forward-looking under federal securities laws and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include but are not limited to statements regarding stages of clinical trials and development timelines for our product candidates and our expectations regarding our cash runway. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today’s press release and our SEC filings, both available on the Investors section of our website. On Slide 3, you’ll see the agenda for today which is as follows: Christian will provide an overview of our operational highlights for the fourth quarter of 2022. Lucinda will then discuss the company’s full year financial results before Christian will conclude with upcoming milestones and any other concluding comments. Finally, we will of course welcome your questions. Over to you, Christian.

Christian Itin, CEO

Thank you, Julia, and good morning everyone. I appreciate you joining us today. I'm excited to discuss our progress for the fourth quarter of 2022. On Slide 4, we're very pleased with our program and operational advancements in the fourth quarter, which we will highlight over the next two slides. Firstly, in December, we were thrilled to announce that the pivotal Phase II FELIX clinical study evaluating obe-cel in relapsed refractory adult ALL patients met its primary endpoint based on overall response rate in a pre-planned interim analysis of 50 patients with morphological disease, verified by an independent data monitoring committee. This brings us closer to delivering this potentially innovative treatment to a currently underserved ALL population, and I'll provide more detailed data later in this presentation. This promising data also triggered a $35 million milestone from our partner, Blackstone Life Sciences, sooner than expected, and we plan to present a data update on all patients treated by mid-year, likely at ASCO, with further follow-ups expected at the end of 2023, along with a planned BLA submission to the U.S. FDA by the year's end. December was an eventful month for us, with numerous clinical updates at the American Society of Hematology Annual Conference, including the presentation of long-term follow-up data from our adult ALL patients in the ALLCAR19 Phase I study of obe-cel, showing that 35% of patients remain in ongoing remission after a median follow-up of 36 months, without additional anti-leukemia therapy. Additionally, obe-cel continued to demonstrate high clinical activity in relapsed refractory non-Hodgkins lymphoma and chronic lymphoblastic leukemia patients, maintaining a well-managed safety profile. We were also encouraged by the data from our pediatric ALL program, the CARPALL Phase I trial of AUTO1/22, our dual targeting CAR T therapy for CD19 and CD22 targets, which resulted in over 80% of patients achieving a molecular complete remission without any antigen negative relapses. Furthermore, we presented longer term follow-up on the LibrA T1 Phase I trial of AUTO4 in peripheral T cell lymphoma, where some patients experienced durable metabolic CRs, with at least one patient remaining in remission up to a year after treatment. We will continue to provide updates on these programs throughout the year and will also present data from the CAROUSEL study of obe-cel in peripheral CNS lymphoma patients, the MCARTY Phase I trial of AUTO8 in multiple myeloma patients, and we expect the Phase I trial of AUTO6NG in neuroblastoma patients to commence in the next quarter. Moving to Slide 5, we've achieved significant operational progress during the quarter. Toward the end of the year, we completed a public offering that raised gross proceeds of $164 million and net proceeds of $152.4 million after underwriting discounts and offering expenses, including a partial exercise of the overallotment by the underwriters. We believe we are in a strong financial position to advance obe-cel, an innovative and potentially transformative treatment for an underserved adult ALL patient population. In 2023, we will entirely focus on submitting a BLA application by the year's end and preparing for a commercial launch in 2024. As I noted earlier, we also received a $35 million milestone from our partner, Blackstone Life Sciences, due to the positive interim analysis of obe-cel in adult ALL. At the same time, we received another $35 million milestone from Blackstone related to planned activities to support the performance and qualification of the obe-cel manufacturing process. You may recall that we entered into an agreement with Blackstone at the end of 2021, involving both equity and program financing for our lead candidate, obe-cel, and we have received $220 million of the total $250 million committed capital thus far. We were also pleased to announce three deals, two in October 2022 and one shortly after in January 2023, which emphasize what we consider to be an industry-leading cell programming technology platform developed at Autolus. We entered into an agreement with Bristol Myers Squibb, granting them access to our proprietary RQR8 rituximab-induced safety switch for use in a selected set of cell therapy programs. Additionally, Moderna exercised an option on one of the proprietary binders being developed against an undisclosed immuno-oncology target for the delivery of innovative messenger RNA therapeutics, stemming from a deal announced with Moderna in August 2021. Lastly, in January 2023, we signed an agreement with Cabaletta Bio that permits them to integrate the RQR8 safety switch into a cell therapy program for autoimmune diseases. The total license revenue for 2022 was $6.2 million, with each of these deals holding the potential for further revenue through near-term option exercise fees, milestone payments, and royalties. We are making steady progress in our manufacturing operations at CMC. The first phase of our commercial manufacturing facility build was completed with the handover of the first of three clean rooms at the end of last year. We have named this facility the Nucleus. Currently, we are focusing on the qualification and validation of the Nucleus, and we remain on track to initiate good manufacturing practice operations in the second half of 2023. We are developing and generating reports for the CMC package to support the upcoming BLA submission to the FDA. Additionally, total cash and cash equivalents, along with restricted cash, amounted to $382.8 million at the end of December. With that, let's discuss obe-cel further on Slide 7. Obe-cel utilizes a unique mechanism of action. What sets our product candidate apart is its capability to engage physiologically with the target cell, allowing for rapid binding that offers specificity paired with a quick off-rate for swift disengagement from the target cell once the kill has been delivered. This distinct engagement drives maximum activity while minimizing toxicity, which is central to the differentiated clinical profile we’re observing in patients with acute lymphoblastic leukemia, non-Hodgkins lymphoma, and chronic lymphoblastic leukemia. On Slide 8, our clinical experience with obe-cel in ALL shows a high overall response rate across all indications. Specifically, we see a notable level of clinical activity over the longer term in the ALLCAR19 study. Our median follow-up is now at 36 months, and with observations ranging from 24 to 47 months, we note that 35% of patients remain in long-term remission after receiving obe-cel without any subsequent anti-leukemia therapy. The safety profile is manageable, with low instances of high-grade CRS and ICANS. The midsection of the slide details patients who have maintained long-term remission and continued presence of CAR T cells throughout the entire observation period. The program is being developed under RMAT, PRIME, and ILAP designations. Moving to Slide 9, we completed the enrollment and dosing for the pivotal FELIX study in adult relapsed refractory ALL patients. We previously announced in December that we have met the primary endpoint of overall response rate in an interim analysis based on the first 50 patients, all of whom were followed for a minimum of three months. Clinical benefit in ALL will be evaluated based on patients remaining in sustainable complete remission. This study was conducted across 34 centers, with 24 in the U.S., seven in the U.K., and three in Spain during a time of heightened pandemic challenge. It is crucial to understand that patients with relapsed refractory adult ALL are highly immunosuppressed, facing additional risks due to the pandemic. Moreover, access restrictions and various pandemic-related regulations meant we faced significant challenges in accessing our clinical trial sites for most of the FELIX study. End-stage ALL patients are one of the most challenging populations to work with, especially amidst a high infection risk, and unfortunately, we did lose some patients to COVID. In many ways, this study resembled a real-world trial conducted under tough conditions. Beyond patient safety, every component of product delivery and logistics was rigorously tested during this trial, affected by reduced air traffic and pandemic impacts on our manufacturing teams. Remarkably, manufacturing for all patients from our U.K. facility turned out to be advantageous for U.S. delivery, as long-haul flights from the U.S. to the U.K. took priority over domestic U.S. and EU flights. A significant data readout is anticipated for ASCO in June this year. On Slide 10, this slide outlines our December announcement concerning the pre-specified interim analysis from the first 50 out of 90 patients dosed who had reached at least three months of follow-up. The primary endpoint is based on the overall remission rate, which includes complete remission patients as well as those in complete remission with incomplete bone marrow recovery. The overall response rate was 70%, and it's worth noting that all recent ALL-related programs have utilized ORR as a primary endpoint in their studies. The safety analysis was conducted on a larger dataset of 92 patients and indicated an excellent profile, with high-grade cytokine release occurring in less than 3% of patients and higher grade ICANS or neurotoxicity in less than 8% of patients. ICANS were fully reversible, and under 25% of patients experienced any grade of neurotoxicity, which contrasts sharply with approved T cell or T cell engaging therapies, demonstrating an unusual safety profile in this patient population. As I mentioned, this exciting dataset prompted a $35 million milestone from Blackstone. On Slide 11, we summarize our current experience with obe-cel across ALL. As illustrated, the data is highly consistent across various studies regarding both safety and efficacy. Notably, the CARFALL and ALLCAR19 studies were conducted before the pandemic, whereas both components of the FELIX study occurred during the pandemic. Both CARFALL and ALLCAR19 were based in the U.K., while the FELIX study was primarily conducted in the U.S. Interestingly, we observed that patients in the FELIX study were farther along in their disease, characterized by tumor burden and increased presence of extra-medullary disease, signifying a gain of function of the leukemia that allows it to spread outside the bone marrow to different organs. Patients with extra-medullary disease typically do not respond well to anti-leukemia therapies. On Slide 12, we further explore the data presented at ASH from the ALLCAR19 study. With up to four years of follow-up data available, we reveal a quite unusual clinical profile, where the clinical benefit for these patients is characterized by the ability to transition into complete remission and maintain that remission over extended periods. Reviewing the data, patients who initially did not respond to therapy are depicted at the bottom, followed by patients who responded but quickly relapsed. The yellow circles denote instances of relapse associated with CD19 negative disease, where the leukemia became resistant to the therapy designed to target it. Additionally, the three red circles represent patients who relapsed due to insufficient CAR T cell persistence, leading to relapses with CD19 positive disease. Above those patients, there is a subset in long-term remission, indicate by a three to four-year remission without further additional therapy. Seven out of twenty patients, or 35%, remain in remission without receiving any other anti-leukemia treatment, with a median follow-up of 36 months, ranging from 24 to 47 months. All these patients have persistent CAR T cells, and there is an additional patient who remains in long-term remission after receiving a stem cell transplant while in complete remission. Slide 13 demonstrates that Blincyto, a T cell engaging CD19 targeting monoclonal bispecific antibody, has established itself as the standard of care for relapsed refractory adult ALL in recent years. A crucial factor in its success is its well-managed safety profile. Patient management emphasizes monitoring neurotoxicity with ICANS, affecting 65% of Blincyto-treated patients. In contrast, fewer than 25% of patients treated with obe-cel experience ICANS of any grade. While Crs rates are low for Blincyto at about 5%, obe-cel appears to be comparable and likely slightly better regarding high-grade cytokine release. In comparison, Tecartus, a CAR T therapy approved for this indication, induces high-grade CRS in 26% of patients and high-grade neurotoxicity in 35%, with 87% experiencing neurotoxicity of any grade. About 40% of Tecartus patients required vasopressors. Managing this type of safety profile often necessitates access to intensive care units. Inotuzumab, while active, is primarily utilized as bridging therapy. The market opportunity area for relapsed refractory ALL remains unchanged, addressing approximately 3,000 patients across the U.S., Europe, and Japan. Slide 15 shows that Blincyto achieved 2022 sales of $583 million, with a year-over-year growth of 24%. The product, commercialized by Amgen, currently serves over 2,000 adult ALL patients, with an average of two treatment cycles per patient. Patients with lower disease burdens may undergo up to four cycles of Blincyto at a combined cost similar to CAR T therapy. Blincyto’s market penetration is attributed to its manageable safety profile, enabling treatment in both non-academic and academic hospitals. We believe that obe-cel, with its high clinical activity, favorable safety profile, and single administration, is well-poised to capture this market opportunity. Pricing for CAR T therapies in ALL generally ranges around $450,000 in the U.S. On Slide 16, as we discuss future steps, we plan to present FELIX data for all patients dosed in mid-2023, likely at ASCO and EHA, and long-term follow-up will be presented at ASH. The BLA submission for this program is targeted toward the end of the year, with MAA filing expected by the end of Q1 2024 and a U.K. filing in Q2 2024. This sets us up well for the key territories where we anticipate initial activity. Beyond mature clinical data, submission will also necessitate data validation from our commercial manufacturing site, which has been a key focus for the first half of 2023 and will continue into Q3. Our commercial manufacturing facility is designed to cover approximately two-thirds of the anticipated market demand from the outset. In 2023, our preparation for commercialization includes three critical areas: first, increasing awareness for the program through targeted medical affairs efforts; second, establishing a compelling value proposition for payers in our HGA dossiers; and third, preparing for and starting center onboarding, a process expected to take between nine and 15 months to get each center ready to administer CAR T therapy. On Slide 18, we address broader opportunities associated with obe-cel. As part of the ALLCAR19 extension study, we have been assessing obe-cel in relapsed refractory non-Hodgkins lymphoma and chronic lymphoblastic leukemia patients. We have observed consistently high response rates alongside an attractive safety profile suitable for outpatient treatment. This data will serve as the foundation for our second indication after ALL. Regarding the product life cycle, we have begun work on the next iteration of obe-cel, referred to as AUTO122. This version aims to minimize relapses driven by CD19 antigen loss through its dual targeting strategy. Building upon obe-cel, we are integrating a highly potent CD22 CAR that can detect very low levels of CD22 on leukemia cell surfaces. This program was initially tested in children who either failed Kymriah or were ineligible for Kymriah treatment. We observed an impressive 83% molecular response rate in this challenging patient group, with none relapsing with de novo CD19 negative disease. Compared to expected molecular CR rates of around 40 to 50% for obe-cel, this performance is quite promising. We aim to further refine the manufacturing process for AUTO122, recognizing it as an attractive lifecycle option. Investments in AUTO122 will be carefully balanced with additional indication investments for obe-cel. On Slide 20, our technology platform enables us to engineer various properties into T cells to enhance specificity of recognition, resilience against negative signals hormone by tumor cells to evade T cell attacks, and provide survival signals for T cells. Our expertise in T cell engineering drives our pipeline and is central to the three collaborations reported in 2022 and early 2023 with Moderna, BMS, and Cabaletta. On Slide 22, we summarize earlier stage programs in T cell lymphoma, including AUTO4/5, AUTO6NG in neuroblastoma, and AUTO8 in multiple myeloma. Both AUTO4 and AUTO8 are in Phase I clinical studies, and AUTO6NG is set to begin Phase I next quarter. On Slide 23, we highlight that T cell lymphoma presents a substantial medical need, resembling the situation in B ALL. According to the NCCN guidelines, once individuals complete frontline therapy without a response, they must participate in a clinical trial. Moving to Slide 24, with its unique targeting approach, AUTO4 is beginning to show meaningful clinical impact at the higher doses assessed. We’re witnessing the first metabolic CRs reaching a year post-treatment and will continue monitoring those patients. As we discuss manufacturing on Slide 26, it's imperative to note that successful autologous cell therapy relies heavily on developing a highly reliable, robust, and economical process. Furthermore, we must be able to provide product at scale and match capacity to the marketplace size within the indication. Ensuring this is crucial for the successful introduction of any therapy. Building from the robust and well-characterized process used in the FELIX clinical trial, we are establishing our commercial cell manufacturing facility, the Nucleus, located about a mile from the clinical trial manufacturing site utilized for the study. This proximity is advantageous as it allows our entire team to transition to the new facility, with many already validating the Nucleus setup. The capacity of the Nucleus, in its initial configuration, is designed for 2,000 patient batches per year, equating to two-thirds of the adult ALL market capacity. The Nucleus project has been a remarkable undertaking, featuring an innovative design that incorporates approximately 75% offsite building to expedite the build while ensuring quality. Now, I would like to turn to Slide 28 and hand the call over to Lucinda for our fiscal year 2022 financial update. Lucy?

Lucinda Crabtree, CFO

Thanks, Christian. Good morning or good afternoon to everyone. I am pleased to discuss our financial results for the fiscal year ending December 31, 2022. As of December 31, 2022, our cash and cash equivalents, along with restricted cash, amounted to $382.8 million, an increase from $310.7 million on December 31, 2021. For the year ended December 31, 2022, our total operating expenses were $168 million, net of grant income and license revenue of $6.4 million, compared to total operating expenses of $165 million, net of grant income and license revenue of $2.3 million, for the same period in 2021. Research and development expenses rose by $7.2 million to $142 million for the year ended December 31, 2022, up from $134.8 million for the previous year. This increase was mainly driven by $11.6 million in clinical and manufacturing costs associated with our obe-cel clinical product candidate, along with smaller increases in legal and consulting fees, IT infrastructure, and cell logistics costs. We also saw a $3.7 million decrease in facilities costs due to the closure of our U.S. manufacturing facility in 2021, along with decreases in depreciation, amortization, and employment costs, affected by currency exchange rates. General and administrative expenses remained steady at $31.9 million for both years, primarily due to $1.4 million in increased salaries and employment costs, $0.3 million in IT costs, and minor changes in legal fees, commercial preparation costs, and facility costs. Interest income rose to $1.7 million for the year, largely due to higher interest rates on our bank accounts and short-term investments, compared to $0.3 million in 2021. Interest expense increased to $8.9 million due to liabilities from future royalties and sales milestones established through our collaboration with Blackstone in November 2021. The rise in interest expense is attributed to a full year of that liability in 2022, unlike the partial year in 2021. Other income rose to $2 million from an expense of $1 million in the previous year, with a notable foreign exchange gain of $1.7 million and sublease income of $0.2 million. The income tax benefit increased to $24.4 million from $23.9 million, driven by higher qualifying research and development expenditures. The net loss attributable to ordinary shareholders was $148.8 million for the year, compared to $142.1 million in 2021. The basic and diluted net loss per ordinary share for the year was $1.57, compared to $1.97 for the prior year. Finally, Autolus anticipates that its current cash and cash equivalents, along with expected project financing from Blackstone, will support the company's operations into 2025. Now I’ll hand it back to Christian for an overview of our upcoming milestones.

Christian Itin, CEO

Thanks, Lucy. Moving to Slide 30 finally, we think we have an exciting year ahead of us. A key focus is on getting obe-cel into the regulatory process with BLA filing targeted towards the end of the year, followed by filings in Europe in the first half of next year. Next up are the planned FELIX data presentations midyear 2023. In addition, we are preparing for commercial product supply and launch readiness. Finally, we also expect to provide updates on the pipeline programs with additional data and follow-up during the year, and with our key programs un-partnered at this stage, we have the opportunity for setting up collaborations. Moving to Slide 31, with that we believe we’re at a very interesting point with the company. We’ve got the cash to deliver a very significant value step and we’ve got the data to show that with obe-cel, we have a differentiated product profile that addresses a high medical need with limited competition and with possibly a transformational outcome. Alongside that, we have additional opportunities for obe-cel in broader indications and a valuable pipeline of other oncology programs. As I mentioned, we’re excited about our manufacturing facility and we have a strong technology foundation validated by our collaborators, BMS, Moderna, Cabaletta, and we look to do more deals of that nature in the future. With that, thank you very much, and we’re happy to take questions.

Operator, Operator

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

Gil Blum, Analyst

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

Christian Itin, CEO

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

Gil Blum, Analyst

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

Christian Itin, CEO

It's a great question. To begin, regarding the demonstration of clinical benefit in the morphological cohort, which consists of patients having over 5% disease burden at the time they enter the study, the goal is to show that we can achieve complete remissions that are maintained over time. It's essential to evaluate complete responses with a minimal follow-up period to determine if that level of clinical benefit is appropriate, so time-dependent outcomes are a crucial factor that will be included in the Biologics License Application and will be central to assessing the clinical benefit of the product. Additionally, the safety profile is an important aspect of the evaluation to understand the benefit-risk balance of the product, which is vital for determining its suitability in any particular indication. When considering the review, the focus will primarily be on patients with morphological disease. We have also evaluated minimal residual disease in these patients and the presence of MRD signals, but the inclusion criteria specify patients with morphological disease. We are generating data to enhance our understanding of the product's properties across the full spectrum of disease burden, which includes those with minimal residual disease, but this dataset will not be part of the initial filing. While it will be addressed in the safety assessment, it will not be included in the efficacy evaluation for our upcoming filing.

Gil Blum, Analyst

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

Christian Itin, CEO

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

Operator, Operator

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

Mara Goldstein, Analyst

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

Christian Itin, CEO

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

Operator, Operator

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

Matthew Phipps, Analyst

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

Christian Itin, CEO

Thank you for the question, Matt. What you're highlighting reflects what we consider impressive data from our initial analysis of obe-cel in this patient population. As you mentioned, we observed a stabilization in our long-term durability curves, with approximately 35% of patients maintaining sustained remissions. This is a significant outcome and something that hasn't been achieved with Blincyto, nor has it been demonstrated with Tecartus. We anticipate that the FELIX study will show a similar curve pattern, though it's still too early to determine the exact point of stabilization due to insufficient follow-up at this stage. We're hopeful for the same type of results, but we can't say for certain if they will match the same level or differ slightly. Also, as you noted, several patients in the initial dataset had substantial disease burden and extra-medullary disease, which aligns with the timing of that first 50 patient dataset during the peak pandemic. We look forward to seeing the complete dataset and expect a similar curve shape, but definitive results will require long-term follow-up. The persistent state we've observed corresponds with previous findings, which is encouraging, as patients with long-term outcomes also retained long-term CAR T cells. The persistence data we've seen so far aligns with the ALLCAR persistence curve, which is a positive indication. While it suggests a direction, it necessitates long-term follow-up to understand where we may ultimately position ourselves.

Matthew Phipps, Analyst

Okay. Can I also ask when you plan to request the pre-BLA meeting this year? Is that something you do after the ASCO update?

Christian Itin, CEO

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

Operator, Operator

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

Kelly Shi, Analyst

Congrats on the progress, and thank you for taking my questions. Regarding the baseline for patients enrolled in the FELIX trial, does it appear consistent with the Phase Ib cohort? And also will you be able to provide more information such as patients with primary medullary disease present on the FELIX trial? Thank you, and I have a follow-up.

Christian Itin, CEO

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

Kelly Shi, Analyst

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

Christian Itin, CEO

Thanks for the question. Well, what you’re pointing to is a really remarkable data set that was developed by Andreas Mackensen and his team at the University of Erlangen, who have done a fantastic job evaluating the utility of a CD19 CAR T approach in patients with refractory systemic lupus. The outcome of the data was quite remarkable; there was a major medicine paper published at the end of last year. We know the team, actually had also worked with the team at the early stages of Blincyto development way back, almost 20 years back. Really good data set. We believe obviously that obe-cel has a remarkable profile, obviously now with a lot of data around the safety of the program, and clearly has an outstanding safety profile which is important when you think about use in autoimmune disease. The other aspect, of course, is that as we all learn in this space, the fundamental tricky part in this with autologous CAR T therapies is you actually have to have an ability to manufacture at scale and do that with quality and economically. Obviously, that’s one of the key things we have been developing for obe-cel for its initial application in ALL. So absolutely, we’re following that field very closely. We think it is a very attractive potential future use of programs that are very safe and very active, and we believe obe-cel fits that very well.

Operator, Operator

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

James Shin, Analyst

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

Christian Itin, CEO

Yes, well first of all, thanks for joining, James, and I think a very interesting question. First of all in terms of sequencing, at this point in time, Blincyto obviously is approved both in the relapsed refractory setting as well as obviously in patients that have minimal residual disease and that are basically in CR1 or later, so in essence its patients that have gone through frontline therapy with still remaining residual disease, they’re technically in complete remission but they still have measurable leukemia cells at low levels, hence minimal residual disease, and so the product obviously has labels in those two settings and obviously has been evaluated now as part of the frontline therapy. In that sense, Blincyto will have a place in this earlier part of the treatment scheme and we expect it to move up into that earlier setting. Now, what we see from the Tecartus approval is that Tecartus is approved for relapsed refractory patients without actually defining is this a second or third line, or a fourth line. Actually it’s any relapsed refractory setting, and so we would expect that obe-cel would have the same type of scope initially, and obviously with the work we do on minimal residual disease and evaluating activity of the program there, I think should allow us to eventually position the program similar to the way that Blincyto is positioned, but that obviously takes time to actually move up in terms of lines of therapy, so I think that’s the first part of the question. The second part of the question was more around how do you actually position CAR T therapy outside of the academic centers, considering that you need a level of training or accreditation of those centers to be able to actually deliver the product. I think what we need to understand is that particularly with obe-cel, we do obviously have a very, very similar profile to Blincyto, and in fact in patients with low disease burden, obviously we do have an even better profile that we’ve shown in these end-stage high tumor burden patients that we obviously quoted in our interim analysis. When you look at that population that has particularly low disease burden, but even the one that we have treated now, the adverse event profile that we have in these patients is exactly what the physicians today do manage with Blincyto, the same level of higher-grade CRS - in fact, it’s a little less than what Blincyto has, and it’s actually less neurotoxicity than what you see with Blincyto. What’s very important in that context is that obviously when you look at the overall level of neurotoxicity, it’s about two-thirds of the patients have some level of neurotoxicity with Blincyto which requires you to monitor the patients, the observe them, etc., to make sure that you stay on top of it. What we have with obe-cel in a more advanced patient population, because obviously we include Blincyto failures in the FELIX study, we actually had a little more than 20% of patients that have some form of neurotoxicity, actually it’s substantially less, so the actual monitoring level is less, that burn that we have, and with that we believe there is an opportunity to actually manage this and with the experience on Blincyto should be able to manage this in non-academic hospitals and associated potentially outpatient settings down the line, so that is sort of where that is now. In terms of the ability to deliver CAR T therapy, there’s obviously a level of not only patient management that’s required, which obviously is covered very well with the experience on Blincyto, but it also obviously requires you to actually handle the cells and manage the cells as part of the therapeutic approach, and that requires a level of training that obviously needs to be put in place, and we believe that that is a possibility for non-academic hospitals and then we have to see how further out we might actually be able to go. But I think this gives you a very good penetration and ability to reach the ALL population with this profile, as we see basically demonstrated through Blincyto already.

Sebastiaan van der Schoot, Analyst

Hi, good morning and good afternoon, everyone. It’s Sebastiaan van der Schoot from Van Lanschot Kempen. Congrats on the progress. I was just wondering about the opportunity of obe-cel in other indications beyond ALL. Will there be additional updates on the ALLCAR study for the other indications with more patients, and are there any of these indications that you think could allow for an accelerated approval pathway if the new data shows the same level of efficacy as last year? You also mentioned the life cycle management of AUTO122. Can you elaborate on the possibility of continuing development of AUTO122 beyond the pediatric indication into adult indications? Thank you.

Christian Itin, CEO

Thank you for joining us. When we examine the opportunity with obe-cel, it stands out for its ability to effectively eliminate B cells, both malignant and healthy, while maintaining a strong safety profile. This characteristic makes it suitable for treating leukemia and non-Hodgkin’s lymphoma, which we are currently studying in the ALLCAR19 trial. Additionally, as Kelly mentioned, there may be interesting applications in the autoimmune space, and early data suggests we might achieve transformative results in those areas too. Overall, we see significant opportunities on the oncology front as well as potential growth in the autoimmune sector. In our ALLCAR19 study, we are observing a high level of clinical activity across all these indications, which boosts our confidence in the product's overall efficacy. For instance, in diffuse large B-cell lymphoma, we are seeing high rates of sustained complete remissions, with no reported relapses in this cohort, which is impressive. We're also observing promising data in mantle cell lymphoma and other indications. These insights represent various opportunities that enable us to develop targeted segments quickly, potentially paving the way for accelerated paths. Depending on the specific indication, we might consider moving from last-line treatment to earlier studies, typically involving randomized controlled trials. We are keen to pursue these avenues in a timely manner. Regarding how AUTO122 fits into this discussion, we recognize that AUTO122 has an active program that appears effective at preventing target negative relapses, an important factor in acute leukemia. Initial reports indicated a portion of patients could experience CD19 negative relapses in diffuse large B-cell lymphoma, but recent data has been less frequent. In our experience with obe-cel, we have not observed any CD19 negative relapses, nor have our collaborators. The significance of addressing this issue in those indications remains uncertain, and we will explore the potential of a dual-targeting approach for broader use. However, it's evident that in acute lymphoblastic leukemia, this is a notable cause of relapse for both children and adults. We believe it could be beneficial to consider advancing AUTO122 alongside obe-cel in the acute leukemia context. This represents our overall perspective on the range of opportunities and strategies we are contemplating. Ultimately, these considerations entail investment decisions and the sequencing of those investments, with our initial focus being on expanding the potential for obe-cel, followed by progressing AUTO122 in relation to the obe-cel lifecycle.

Operator, Operator

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

Karina Rabayeva, Analyst

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

Christian Itin, CEO

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

Karina Rabayeva, Analyst

The pricing power with the next update at ASCO.

Christian Itin, CEO

Thank you for joining, Karina, and for your interesting questions related to pricing. We are observing two key aspects in this space. First, regarding ALL, we typically use Blincyto for patients with lower disease burden, which previously involved up to four treatment cycles. This pricing ranges between $400,000 and $500,000 per patient in the U.S. This serves as one benchmark for standard of care. Looking at approved CAR T therapy in ALL, that price is expected to be around $450,000 this year, making it a second reference point in the U.S., and we anticipate pricing for our product to align within this range. We believe our product offers increased efficiency from a cost perspective due to its potential for reduced toxicity and less patient management. Thus, we feel there’s a solid economic case for using obe-cel alongside its clinical benefits. In Europe, we see CAR T therapy prices starting similarly to those in the U.S., although some discounts apply depending on the jurisdiction and product indication, resulting in variability. We'll keep you informed on these developments. Currently, we expect to align with pricing seen in the market. Regarding data flow, we anticipate a significant amount of data this year, particularly from ASCO, which will include updates from the patients who were treated, although with limited follow-up for some. As we look to ASH and into 2024, we expect longer-term follow-up data, which will play a critical role in reimbursement and value assessments by payors. That sums up our stance on these matters. Do you think the longer-term follow-up is going to push pricing higher?

Karina Rabayeva, Analyst

Okay, thank you.

Christian Itin, CEO

Thank you, Karina.

Operator, Operator

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

Christian Itin, CEO

Well first of all, thanks everybody for joining. Obviously, it was great to be able to update you on the very exciting fourth quarter that we are running through. We’re in, I think, a very important stretch as we go through the course of this year, getting the product ready for filings, and I think obviously a real opportunity for substantive data updates as we go through the course of the year, with the next ones expected for the midyear section, so really looking forward to meeting you hopefully in person and updating you on the program along those venues, and wishing you all a successful first half of the year, and then I think for all of us, I think a more relaxed second half of the year with some hope that some of the big picture items hopefully will start to turn into a more favorable environment. With that, I’d like to thank you all and wish you a good day.

Operator, Operator

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