AUTL - Autolus Therapeutics Could Hold A Winning CAR T-Cell Ticket

2023-06-30 19:34:02 ET

Summary

• Obe-cel and pipeline offer many catalysts in 2023.
• The CAR T-cell candidate offer a safer alternative to commercial rivals.
• Strong cash position should see the company through to obe-cel launch.

Autolus Therapeutics ( AUTL ) is a microcap (~$450 million market cap) clinical-stage biopharmaceutical company developing next-generation programmed T-cell therapies. This year saw great progress with data readouts for their top 3 candidates (Figure 1). Further activities strengthened their leadership and financial positions. The stock is a Buy for a therapy that could be on the market late next year.

Figure 1. Autolus Pipeline

Obe-cel

The lead therapeutic candidate is obecabtagene autoleucel (obe-cel). a CD19 chimeric antigen receptor T cell (CAR-T) therapy. In December, obe-cel met its primary endpoint at an interim analysis of the pivotal Phase 2 FELIX study for relapsed/refractory (R/R) adult B-cell acute lymphoblastic leukemia (B-ALL). The announced selection as an oral presentation of top-line data at the European Hematology Association (“EHA”) 2023 Congress ignited an 86% rally to $3.45 on May 23. Of the 94 patients dosed with obe-cel, 76% achieved a complete response (“CR”) or CR with incomplete hematological recovery (“CRi”), an improvement over the interim analysis’ 70% CR/CRi . Furthermore, with a 9.5-month median follow up, 97% of the responders had no detectable minimal residual disease, and 61% of responders remained in ongoing remission without new anti-cancer therapies.

Two CAR T-cell therapies are commercialized for R/R B-ALL. Novartis’ ( NVS ) KYMRIAH was approved in August 2017 for patients <26 years of age. In October 2021, Gilead Sciences’ ( GILD ) TECARTUS became the first usable for patients ?26 years of age. While there are no head-to-head studies and caution should be used when comparing trials due to differences in their tested populations, obe-cel’s efficacy seems at least on par with the other agents (Table 1).

Table 1. Efficacy in B-cell Acute Lymphoblastic Leukemia Pivotal Trials

TECARTUS carries Black Box Warnings for cytokine release syndrome (“CRS”) and neurologic toxicities. Accordingly, CRS, including fatal or life-threatening reactions, occurred in 92% (72/78) of TECARTUS patients with ALL, including Grade ³ 3 CRS in 26% of patients and 3 study deaths. However, obe-cel was designed to have a “fast-off” target binding rate (Figure 2) to minimize excessive activation of the programmed T cells, which reduces toxicity and makes them less prone to progressive loss of function, and instead could enhance persistence and sustain their serial killing of target cancer cells. With obe-cel, CRS occurred in 76% (71/94) of patients, but only 3% (3/94) were Grade ³ 3, a best-in-class result, for now.

Figure 2. Obe-cel’s “Fast-off” Kinetic

Other Developments

• At the International Conference on Malignant Lymphoma on June 16, Autolus unveiled first-in-human data from the LibrA T1 trial. It is a single-arm, open label, multi-center, Phase 1/2 study evaluating AUTO4, a single-dose intravenous CAR T cell treatment targeting TRBC1 in patients with R/R TRBC1-positive peripheral T-cell lymphoma (PTCL), a rare form of non-Hodgkin lymphoma (NHL). There were no dose-limiting toxicities. All 4 patients at the highest dose tested (450 x 10 ⁶ cell dose) achieved a response ( 3 complete metabolic response and 1 partial response) with 2 in ongoing CMR at 15 and 18-months post-dose, respectively. Autolus noted the fast transport of CAR T cells from the blood to the tumor site in lymph nodes of patients.
• As of June 15, Dr. Robert Iannone, Executive Vice President, Global Head of Research & Development of Jazz Pharmaceuticals (JAZZ), assumed a seat as a Non-Executive Director on Autolus’ Board of Directors. He also sits on the executive committee of Biomarkers Consortium/Foundation for the National Institutes of Health.
• On April 26, Autolus delivered an oral presentation update from the AUTO1/22 study (CARPALL) in Pediatric B-ALL at the 49th Annual Meeting of the European Society for Blood and Marrow Transplantation. A heavily pre-treated cohort of 12 patients with advanced pediatric B-ALL who were ineligible for or relapsed after KYMRIAH received AUTO1/22, a novel CD22 CAR, in addition to obe-cel. The combo maintained the safety profile of obe-cel alone, with no cases of severe (? Grade 3) CRS. AUTO1/22 induced MRD-negative CR/CRi in 83% (10/12) patients. With a median follow up of 8.7 months, there have been no cases of leukemic relapse or emergence of MRD related to antigen-loss. The 6 and 12-month overall survival ("OS") of 75% (95%CI: 41-91%) and event free survival (EFS) of 75% (95%CI: 41-91%) were comparable to KYMRIAH in the ELIANA study: 90% OS (95% CI, 81-95%) at 6 months , 76% (95% CI, 63-86%) at 12 months; 73% EFS (95% CI, 60-82%) at 6 months, 50% (95% CI, 35-64%) at 12 months.

Financials

Cash was an excellent $343.4 million as of March 31 after milestone payments and a public offering in December brought in $233.9 million. Net total operating expenses in the first quarter were $43.1 million, including research and development expenses of $31.3 million and general and administrative expenses of $9.3 million. Q1 inflows came from license revenue income of $1.3 million and $3.4 million interest income. Because net loss was only $39.8 million, and along with a final anticipated $30 million obe-cel milestone payment from Blackstone, Autolus reasonably expects a runway into 2025.

Risks

A biotech with no products and little income is always risky in a bear market. Because this is Autolus’ first Biologics Licensing Application (BLA), there is a chance the FDA could reject it for various reasons ranging from incompleteness to deficiencies in areas other than clinical. Their new 70,000 square foot facility is on track to commence Good Manufacturing Practice ("GMP") operations in the latter half of the year, which include qualification activities and development work for the Chemistry Manufacturing and Controls ("CMC") package of the BLA. ImmunityBio ( IBRX ) suffered for their inexperience; they similarly opened a new lab, which promptly failed an FDA inspection. They then received the FDA’s dreaded complete response letter to their first BLA due to CMC issues, although it was the fault of outside contract manufacturing organizations, not their own lab. But because their drug had good clinical outcomes, it will likely get approved after BLA resubmission, leading me to rate IBRX as a Buy .

Clinically, the only plausible concerns for obe-cel would be with heretofore unseen adverse events; however, several more deaths would have to occur before its safety profile becomes as bad as TECARTUS’ (Table 2). If problems do arise with the BLA, the review could get delayed long enough that Autolus may need to secure more financing, leading to more share dilution. Another risk involves collaboration agreements, in which their partners, for whatever reason, could decide to end/change the business relationships. Finally, the company has no infrastructure to commercialize obe-cel once launched.

Table 2. Summary of Treatment Emergent Adverse Events (TEAEs) Observed in at Least 20% of Patients

Conclusion

Autolus is a Strong Buy for its impressive pipeline, stable finances, and many shots on goal. The next major catalysts are longer term follow up data and subgroup analysis data expected at the American Society of Hematology meeting on December 9-12, 2023, as well as a BLA submission to the FDA is planned by the end of 2023. The Q1 earnings report listed multiple other data readouts, with all except the last likely positive:

• Obe-cel in R/R adult B-ALL patients – additional data from the Phase 1 ALLCAR19 study during 2023.
• Obe-cel in R/R B-NHL and chronic lymphocytic leukemia (CLL) patients – additional data from the Phase 1 ALLCAR19 Extension Study during 2023.
• Obe-cel in primary central nervous system lymphoma patients – additional data from the Phase 1 CAROUSEL Study during 2023.
• AUTO1/22 in pediatric B-ALL patients – additional data from the Phase 1 CARPALL Study during 2023.
• AUTO8, which comprises two independent CARs for the multiple myeloma targets, BCMA and CD19 – initial data from Phase 1 MCARTY Study is expected in 2023.

To have an idea of potential initial sales should Autolus execute competently, investors should consider that in the first full year on the market, KYMRIAH with its limited label generated $76 million in 2018, while TECARTUS with its toxicities yielded an even better $136 million in 2021 (U.S. only).

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