AUTL - Autolus Therapeutics plc (AUTL) Q1 2023 Earnings Call Transcript

2023-05-07 07:20:08 ET

Autolus Therapeutics plc (AUTL)

Q1 2023 Earnings Conference Call

May 4, 2023 08:30 AM ET

Company Participants

Alexandra Deschner - IR, Consultant

Christian Itin - CEO

Lucinda Crabtree - CFO

Conference Call Participants

Mara Goldstein - Mizuho Group

Matthew Phipps - William Blair

Yanan Zhu - Wells Fargo Securities

Gil Blum - Needham & Co.

Kelly Shi - Jefferies

Asthika Goonewardene - Truist

Presentation

Operator

Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics First Quarter 2023 Financial Results Conference Call and Operational Progress. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's conference is being recorded.

I would now like to turn the conference over to your host, Alexandra Deschner, Investor Relations Consultant. Alexandra, please go ahead.

Alexandra Deschner

Thank you so much, Eric. Good morning or good afternoon, everyone, and thank you for joining us to take part in today's call for Autolus' first quarter 2023 financial results and operational highlights. I'm Alexandra Deschner, Investor Relations 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 that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of clinical trials and development and/or regulatory time lines 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 will see the agenda for today's call, which is as follows: Christian will provide an overview of our operational highlights for the first quarter of 2023. Lucy will then discuss the company's first quarter 2023 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

Thank you, Alexandra, and good morning to you all. Thank you for joining us. It's my pleasure to review our progress for the first quarter in 2023.

Moving to Slide number 4. We're really pleased with our program and operational progress during the first quarter of 2023, which is highlighted over the next four slides. We're making good progress with our pipeline of CAR-T programs, particularly with our elite product, Obe-cel, in relapsed/refractory adult ALL patients.

You will recall that we announced in December that the Phase II pivotal clinical trial of Obe-cel in this patient population have met its primary endpoint based on a pre-planned interim analysis of 50 patients with morphological disease and as verified by an independent data monitoring committee. This positive data triggered a $35 million milestone for our partner Blackstone Life Sciences earlier than anticipated.

We're looking forward to presenting the top line data of the FELIX study in an oral presentation at the American Society of Clinical Oncology Annual Meeting on June 2 in Chicago and a second oral presentation at the European Hematology Association Congress being held from the 8th to the 11th of June in Frankfurt. Updates on longer follow-up and additional sub-analysis of the data are planned for the American Society of Hematology meeting at the end of 2023 as well as at medical conferences in the first half of 2024.

Operationally, the key goal for Obi-cel is the filing for a biologics license application to the U.S. Food and Drug Administration by the end of this year. In February, Dr. Claire Rode from UCL presented long-term follow-up data from our adult ALL patients in the ALLCAR19 Phase I study of Obe-cel at the Tandem Meetings of ASTCT and CIBMTR. The data demonstrated that 35% of adult patients remain in complete remission without additional anti-leukemia therapy, an immediate follow-up of 36 months with ranges from 24 months to 48 months.

We're now looking at the broader range of development options for obe-cel and AUTO122 beyond adult patients with acute lymphoblastic leukemia. In the ALLCAR extension study, we have reported Obe-cel high level of clinical activity and well manageable safety profile across non-Hodgkin's lymphoma indications and chronic lymphocytic leukemia. We're completing enrollment in this study and expect to report final data in a peer-reviewed publication.

In the CAROUSEL study, we evaluate Obe-cel in peripheral CNS lymphoma, and we have completed enrollment and continue to see consistent and encouraging safety and efficacy, with adequate follow-up, we are planning to publish the full data in a peer-review journal as well. We're following with interest the early and very encouraging results from the team of [indiscernible] and Andreas Mackensen at the University of Erlangen Germany in patients with refractory systemic lupus and related B cell mediated autoimmune diseases treated with an academic CD19 CAR-T product.

Considering Obe-cel's excellent activity and safety profile and combined with our commercial manufacturing base, this set of indications may become an attractive additional opportunity for the program. In an oral presentation at the 49th European Bone Marrow and Transplant Meeting in April, our key investigator Dr. Sara Ghorashian and Perseomrolia from Great Ormond Street Hospital in London, presented updated data from AUTO1/22, our CD19 and CD22 dual targeting CAR-T product candidate.

Kymriah ineligible pediatric ALL patients showed a high level of clinical activity and good tolerability with over 80% of patients achieving a molecular complete remission with no antigen negative relapses seen with a median follow-up of 8.7 months. Included also were patients who had relapsed after Kymriah therapy with CD19 negative disease.

Additionally, data on the molecular design of AUTO1/22 and preclinical characterizations were published in Molecular Therapy in March and highlighted the state-of-the-art design of AUTO1/22 with its high sensitivity CD22 Kymriah antigen receptor (ph) and the efficient core targeting leveraging Obe-cel's CD19 Kymriah antigen receptor.

Turning to Slide 5 and other pipeline updates. We're looking forward to updating the progress with the AUTO4 peripheral T-cell lymphoma program in an oral presentation at the International Conference for Malignant Lymphoma in Lugano, Switzerland in June as well. Finally, we conclude -- we continue to enroll patients into the CART Phase I trial of AUTO8 in multiple myeloma and expect first data at the end of this year and expect to dose the first patient into Phase I trial of AUTO6NG in Neuroblastoma this year as well.

Turning now to Slide number 6. With continued progress against our strategic and operational goals throughout the quarter. The company's new 70,000 square foot commercial manufacturing facility in Stevenage in the UK has continued to progress on track. Key equipment installation and validation were completed by Autolus in the first quarter of 2023, enabling operational qualifications commencing now in the second quarter of 2023. This facility will have an initial capacity of up to 2,000 batches per year sufficient to serve the global demand in adult ALL.

Just 18 months from groundbreaking, we are now working on the qualification and validation of the Nucleus facility and remain on track for good manufacturing practice operations commencing in the second half of this year. We're also undertaking the development work and report generation for the CMC package planned to support a BLA submission to the FDA. Our industry-leading cell programming platform creates opportunities for collaboration and licensing through our relationships with BMS at Moderna, we added in Q1 a partnership with Cabaletta, granting them access to our proprietary RQR8, rituximab induced safety switch for incorporation into a better selected cell therapy programs.

In January, we also announced two changes to the Board of Directors, the company's non-executive Chairman, John Johnson, who has held the role since September '21, will not stand for reelection at the Autolus upcoming Annual Shareholder Meeting. Additionally, at the end of February, Dr. J. Backstrom, who had served an Autolus Board of Directors since August 2020, stepped down from the Board after taking on a public CEO role at Scholar Rock. We also announced a change to our management team with Dr. Lucinda Crabtree, our CFO, also on the line today, stepping down or planning to step down in August 2023 to pursue a new opportunity. Searches for successors for these posts are underway.

Finally, total cash and cash equivalents and restricted cash at the end of March were $343.4 million. We've had a diversified treasury approach in place, which served us well through -- well during the Silicon Valley Bank [indiscernible], and we continue to diligently monitor development in the financial sector.

Moving on to Slide number 7. There are also several post-period events I'd like to bring to your attention. Last week, we announced that we had selected Cardinal Health as a core distributor for Obe-cel, giving us the platform and distribution capabilities required to commercialize a CAR-T cell therapy in the U.S. Cardinal Health's innovated depot model is intended to reduce delivery time by allowing for transit while product releases being finalized.

Alongside this, we continue to build out Autolus’ own commercial infrastructure and are working towards onboarding the clinical centers over the course of this year. Also, at last week, we held a virtual Capital Markets Day that presented the positioning and commercial opportunity for Obe-cel. The event started with Professor Lori Muffly from Stanford University, reviewing the disease therapeutic options and medical need for adult patients with acute lymphoblastic leukemia.

Professor Claire Roden from UCL then introduced Obe-cel the initial clinical experience in patients with ALL followed by a video presentation of one of her patients and her experiences of living with ALL with an ALL diagnosis as well as her experience with the treatment regimen. With this deeper understanding of the physicians and patients view of this challenging disease, Dr. Matthew Gitlin talked about the ALL market and the prospective payers are taking. And particularly, he looked at the cost of patient management and the impact on hospitals and payers, highlighting the substantial impact on cost of managing high-grade cytokine release syndromes and ICANS.

Finally, Chris Van, Autolus' Chief Operating Officer, walks through the commercial road map for Obe-cel. We believe it was a very informative and well-attended event. And for anyone who missed it, a replay is on the Events section of Autolus website available to you.

Finally, we recently announced the publication of two papers, the first of which included the publication of the preclinical data for AUTO1/22 in molecular therapy, which I mentioned earlier, and the second published in molecular therapy nucleic acids focused on a new set of self-programming modules based on novel Fas-TNF receptor chimeras. This technology converts a threat to the CAR-T cell into an activating or survival signal instead. We're boring here from a martial arts principle of taking an incoming blow and rolling with it.

Slide 8, Obe-cel. Moving to Obe-Cel. With that, I also moving forward to Slide 9. Obe-cel has a unique mechanism of action. What's fundamentally different about our product candidate that it has an ability to engage [indiscernible] with the target cells, rapidly binding to the target, which delivers specificity and paired with a fast offering for rapid disengagement from the target once the cell kill has been delivered. This unique engagement drives maximum activity while minimizing toxicity and is at the heart of the differentiated clinical profile we are observing for Obe-Cel in ALL and non-Hodgkin's lymphoma.

Moving to Slide 10. Our clinical experience with Obe-cel in ALL shows a high overall response rate across all patient populations evaluated. In our prior ALLCAR19 study, we have 35% of patients in long-term remission at 36 months of median follow-up with a range of 24 months to 48 months after receiving Obe-cel and without receiving any further anti-leukemia therapy. The safety profile is well manageable with low levels of high-grade cytokine release syndrome and ICANS.

The mid-section of the slide shows the patients with long-term remissions have continued presence of CAR T cells over the entire observation period, pointing to CAR T cell persistence as an indicator for long-term outcome. The program is developed under RMAT, Prime and ILAP designation.

Moving to Slide 11. We've now completed the enrollment and dosing of our pivotal study, which we call the FELIX study in adult patients with relapsed/refractory ALL. As I mentioned, we announced in December that we have met the primary endpoint based on the overall response rate at an interim analysis on the first 50 patients followed for at least three months.

Clinical benefit in ALL will be assessed based on patients remaining in a sustained complete remission. We conducted this study in 34 centers, 24 centers in the U.S., seven centers in the UK and three centers in Spain, enrolling patients from July 2021 to November 2022 during the peak infection period of the pandemic. It's important to realize that relapsed/refractory adults ALL patients are highly immune suppressed and the [indiscernible] posted significant added risk to them.

Moreover, due to access restrictions and various other pandemic rules and regulations, we could actually not access our clinical trial sites for the most part of the FELIX study. This is a difficult population to work with, as you can imagine, particularly in an environment where there is a high risk of infection. And indeed, we did lose a few patients to cover it.

In many ways, this was more of a real-world study conducted under difficult circumstances. In addition to patient safety, every aspect of product delivery and logistics were pressure tested during the trial with massively reduced air traffic and other impacts of the pandemic and our manufacturing teams. Remarkably, manufacturing for all patients from our facility, the UK turned out to be an asset also for U.S. delivery as the long-haul flights from the U.S. to the UK have priority over domestic flights.

We're pleased that we got it done under such challenging circumstances and credits to our patients and their caregivers, clinical collaborators and the whole Autolus team for this achievement. As mentioned earlier, next key data is planned in oral presentations at ASCO and EHA in early June 2023.

Moving to Slide number 12. This slide summarizes the announcement we made in December regarding the prespecified interim analysis of the first 50 out of 90 patients dosed and have reached at least three months of follow-up. The primary endpoint is based on overall remission rate, which includes patients in complete remission and patients in complete remission with incomplete bone marrow recovery or CR and CRI.

The ORR was 70%, all recent programs in ALL have used ORR as the primary endpoint in their respective studies. Safety analysis was conducted on a larger 92 patient data set and showed an excellent profile with high grade cytokine release experience in less than 3% of patients and high grade ICANS in less than 8%. ICANS are fully reversible and less than 25% of patients had any grade of neurotoxicity. In contrast to approved T-cell or T-cell engaging therapies, a very unusual profile in this patient population. And as I mentioned earlier, the data triggered a $35 million milestone from Blackstone.

Moving to Slide 13. This slide summarizes our current experience with Obe-cel across ALL. As you can see, the data are highly consistent across the various studies, both on safety and efficacy. Worth noting is that CARPALL and ALLCAR were conducted prior to the pandemic, while both parts of the FELIX study were conducted during the pandemic, both the CARPALL and ALLCAR19 studies were conducted in the U.K., while the FELIX study was largely conducted in the U.S.

What we did pick up is that the patients in the FELIX study were more advanced in their disease based on tumor burden and increased presence of so-called extramedullary disease. This is, in essence, again, a function of the leukemia that allows it to leave the bone marrow and successfully settle and grow in other organs. Patients with extramedullary disease respond poorly to antileukemia therapies.

Moving to Slide 14 to look at further into the data we presented at ASH from the ALLCAR19 study. When we look into the ALLCAR or long-term observation from the ALLCAR19 study, where we have up to four years of follow-up, you can see the unusual -- and quite an unusual profile. We could see that clinical benefit in these patients is the ability to convert patients into complete remission, sustain them over time without additional therapy. And as you could see, obviously, a substantial proportion of the patients are indeed in sustained therapy.

So if you go from bottom up, you can see at the bottom patients that obviously did not respond. We have then a group of patients that did respond that relapsed quickly, including patients that have lost the CD19 antigen with then a group of patients that actually relapsed with CD19 positive disease, those are patients that have lost persistence of the CAR-T product. And then there is the top group with a long green survival lines, where you can see patients that actually have continued remission. And in fact, those are also patients that have continued presence or persistence of CAR-T cells.

Overall, obviously, it gives us a lot of confidence in terms of the consistency of the data, understanding the reasons when patients actually do relapse and what the causes for that relapse are and obviously, the proportion of patients that are in ongoing remission without any additional therapeutic need.

Turning to Slide 15. I thought it might help here to give you an overview of the ALL treatment landscape as it stands. The figure on the right represents the NCCN guidelines for the treatment of relapsed/refractory ALL. And you can see it is sort of as two main arms. The low arm actually looks at T-cell lymphoma, which is a subset and relatively small group of patients, and the upper two arms actually include B-cell lymphoma -- sorry, B-cell acute lymphoblast week leukemia. And with that, the disease setting that we're focusing on.

We can also see that we see three novel therapeutics that are being incorporated into that scheme over the past 10 years. The first is BLINATUMOMAB or Blincyto. This is a bispecific T-cell engaging anti-CD19 therapeutic antibody. It's given as a continuous intravenous infusion for 28 days at a cycle, these cycles can be repeated with two weeks of intervals in between the cycles.

The patient starts at the hospital and eventually are discharged from the hospital with a container or a bag that actually contains the product that is continuously delivered through a central port over the entirety of a treatment cycle. These bags are being changed typically once weekly and by a nurse that actually usually visits the patients at home to sort of support the therapy. These cycles can be repeated, but obviously, the patient needs to be in a remission for a continued cycle or a next cycle to be received.

The product is obviously very active, and it's particularly active in patients that have low disease burden. Now unfortunately, like with all therapeutic options today available for adult patients with ALL, while the product is very active, it does not actually lead to long-term remissions. And that is one of the fundamental challenges that we have in the field is that we have active therapies, but we have a hard time converting those effects and responses into long-term remissions.

The next therapeutic that we're looking at is inotuzumab or Besponsa. This is an antibody conjugated drug therapy. It is directed to CD22, which is expressed on most B-cells that can form ALL. And this drug is also associated with a very high response rate, but also like Blincyto is not curative, and in fact, it's usually used as a bridge to transplant.

Finally, the newest product that is available is brexucabtagene or Tecartus, which was approved in 2021, which is the first CAR-T cell therapy approved for adult ALL patients. Both Blincyto and Tecartus which are leveraging or utilizing T-cell do show similar types of immunological toxicities, which are CRS and ICANS whereas this [indiscernible] can cause liver toxicity. Overall, we do have obviously a view that if you have a product that has a high level of clinical activity with a well manageable safety profile, obviously, is very attractive patients with ALL. And if that product actually can translate into at least a proportion of the patients in long-term remission, I think that would represent a big step forward.

Moving to Slide 16 to look at the data from these programs in the space. Blincyto, as I mentioned, is a T-cell engaging CD19 targeting monoclonal bispecific antibody or that has become the standard of care in relapsed refractory ALL as over the last few years. Key to success has been the well-manageable safety profile. Key focus from a patient management perspective is the monitoring of a ICANS, which impacted about two-thirds of the patients.

And in contrast, if you look at Obi-cel, obviously, substantially more patients do experience ICANS. As I mentioned before, we see about 25% of the patients experiencing ICANS with Obe-Cel. High-grade CRS for Blincyto is relatively low at around 5% level, and Obe-cel seems to be similar potentially slightly better in terms of the high grade cytokine-released level.

Now in contrast to Blincyto, Tecartus induced it’s high-grade CRS in a substantially higher proportion of patients and 26% of the patients and high-grade neurotoxicity reaches about 35%, while 87% experience of patients experienced neurotoxicity of any grade. 40% of patients received vasopressors. This is a challenging safety profile to manage and often requires access to ICU.

When we look at inotuzumab, [indiscernible] , the program has liver toxicity and is primarily used to the rig to transplant. None of the therapies established long-term remissions without subsequent stem cell transplant.

Moving to Slide 17. The market opportunity in ALL is unchanged. Obviously, as a consequence of the fact that we didn't actually see any significant move with regards to patients having long-term remissions. And so we still see, as we've seen about 10 years ago, 3,000 patients in high medical need for therapy between the U.S., Europe and Japan.

Moving to Slide 18. When we look at the actual size of the market, we always look for good surrogates, and we believe that the sales of [indiscernible] are actually a good surrogate for our product. Firstly, the Blincyto has obviously a good -- got a very similar mechanism of action being CD19 T-cell engaging agents. Secondly, it's used largely in the same indication as a similar albeit somewhat higher CRS and ICANS level. So around 80% of the Blincyto cell come from adult ALL and around 20% of the sales from pediatric ALL. And very importantly, it's got a similar type of toxicity profile to Obe-cel as just reviewed above.

The safety profile allows user Blincyto in a broad range of centers, not just in the academic transplant centers. And indeed, Blincyto had a record quarter in Q1, growing 41% year-over-year with sales of $194 million reached in the first quarter. If we are to prudently assume quarterly sales remain constant and do not grow any further, we estimate that full year sales could reach approximately $800 million, which corresponds to year-over-year growth of about 33%.

This development highlights the meaningful commercial opportunity in adult ALL, which is driven by the well-manageable safety profile of Blincyto. And reports the key driver for the increase is attributable to an expansion of the number of treatment centers where Blincyto is being used. We're also seeing that many CAR-T centers are now also expanding the capacity for delivering CAR-T cell therapy. So both Blincyto and ultimately, Obe-cel have the potential to be used in a broader range of hospitals. Prices for CAR T therapy in the U.S. are in the range of $450,000 to about $500,000.

Moving to Slide 19. When we look at the steps forward, first of all, we're planning to disclose a FELIX data in an oral presentation at ASCO and also DHA, long-term follow-up and additional stop analyses are planned for ASH. We're targeting the BLA submission for the program towards the end of this year, MAA filing towards the end of the first quarter in 2024 and the UK filing in the second quarter of next year. That sets up very nicely for the key territories that we expect to be initially active in.

In addition to the mature clinical data, the submission will also require data from the validation of our commercial manufacturing site. This work has been a key focus throughout the first half of 2023 and will do so into the third quarter. Importantly, our commercial manufacturing facility is set up to cover supply for approximately two-thirds of the estimated market from the start.

We've talked about selecting Cardinal Health as our U.S. distribution partner, which is an important step. As we're moving through 2023, we need to prepare the key areas for commercialization. We're creating awareness for the program through a focused medical affairs program. And alongside this, we are establishing the value proposition for payers in our HDA dosage and finally, preparing for and starting center onboarding a process that will take between nine to 15 months to get each vendor ready to deliver CAR-T therapy. Slide 20.

Moving to Slide 21 to talk about the broader opportunity that we see with Obe-cel. As part of the ALLCAR extension study, we've been evaluating Obe-cel in relapsed/refractory non-Hodgkin's lymphoma and CLL patients. We see consistently very high response rates, combined with a very attractive safety profile suitable for outpatient use. That data will conform the basis for the selection of the second indication after ALL. In terms of the life cycle, we're working on the next-generation version of Obe-Cel with Auto122, we're looking to minimize what we're looking to minimize CD19 antigen loss in relapses with this dual targeting approach.

Building on Obe-Cel, we are adding a highly potent CD22 CAR that can recognize very low amounts of CD22 on the surface of leukemia cells. This program was initially evaluated in children had failed Kymriah or were not eligible for in therapy. In this very challenging population, we saw 83% molecular response rate, and this included also patients who had CD19 negative disease, demonstrating the efficacy of the CD22 CAR in isolation. Crucially, amongst responding patients with a median follow-up of 8.7 months, where there have been no cases of leukemic relapse or emergence of MRD related to antigen escape.

Together, these data indicate that combining our optimized CD22 CAR design with the CD19 CAR used in Obe-cel may be effective in preventing antigen loss-driven lapse in pediatric CLL (ph). We're working and further streamlining the manufacturing process for Auto1/22 knowing that we have an attractive life cycle option. Timing of investment decisions in Auto1/22 will be balanced with additional investments for Obe-cel.

Switching gears and headed to Slide 23. Our technology platform allows us to engineer a range of properties into T-cells that drive specific specificity of recognition, resilience against negative signals used by tumor cell T-cell attack and provide survival signals for T-cells. Our strength in T-cell engineering drives our pipeline and is also at the heart of the three collaborations that I have mentioned, which reported on 2022 and early '23 with [indiscernible].

On Slide 24, we have a quick summary of the earlier-stage programs in T-cell lymphoma with AUTO4/5, AUTO6NG neuroblastoma, AUTO8 multiple myeloma. AUTO4 and AUTO8 are in Phase I clinical studies and AUTO6NG is expected to start during the course of the year.

Moving to Slide 25. T-cell lymphoma is a very high medical need, similar to the ALL. In fact, when you look at the NCCN guideline, it basically says that once you're through the frontline therapy and you relapse, you have to look for a clinical trial.

Moving to Slide 26. With its unique targeting approach, all of four starts to show meaningful clinical impact at the higher dose levels that we have explored. The first metabolic CRs are reaching one year post-treatment, and we continue to follow the patients. In addition, we have streamlined the manufacturing process and exploring the activity in an additional cohort, and we're planning to report data at the ICML Conference in June.

Moving to Slide 28 to talk about manufacturing. Cell manufacturing is obviously at the core of any autologous cell therapy, developing a highly reliable, robust and economical process is critical for the success of any program. In addition, we have to be able to deliver a product at scale and matching capacity to the size of the medical need, which is important for a successful rollout of any therapy.

Building on the robust and very well-characterized process used to manufacture for the FELIX clinical study, we're standing up our commercial cell manufacturing facility called the Nucleus about a mile away from the clinical trial manufacturing plant. This proximity is important as we will be able to move our entire staff to the facility, the new facility and many, in fact, of our employees are already in the process of validating the nuclease facility.

The capacity of the nucleus and its initial setup reaches 2,000 patient batches per year or about two-thirds of the adult ALL market size. The nuclear has been a fantastic project to realize with innovative design and about 75% off-site building to accelerate the building while maximizing the quality of the build.

Moving to Slide 29, which is the interest slide to the financial section.

And with that, I would like to turn to Slide 30 and pass the call over to Lucy for our Q1 2023 financial update. Lucy?

Lucinda Crabtree

Thanks, Christian, and good morning or good afternoon to everyone. It's my pleasure to review our financial results for the first quarter ended March 31, 2023. The cash and cash equivalents and restricted cash at March 31, 2023, totaled $343.4 million as compared to $382.8 million at December 31, 2022.

Net total operating expenses for the three months ended March 31, '23 were $43.1 million, net of license revenue of $1.3 million, as compared to net total operating expenses of $41.8 million, net of grant income of $0.2 million for the same period in 2022.

Research and development expenses decreased by $2.7 million to $31.3 million for the three months ended March 31, 2023 from $34 million for the three months ended March 31, 2022, primarily due to a decrease of $5.5 million in clinical trial and manufacturing costs, which was offset by an increase of $0.8 million in manufacturing material costs due to increased validation activities undertaken, primarily related to our obe-cel clinical product candidate, a decrease of $0.2 million in depreciation and amortization related to property, plant and equipment and intangible assets due to the reduction in our depreciable asset base, a decrease of $0.1 million in legal fees and professional consulting fees in relation to our research and development activities, an increase of $1.4 million in salaries and other employment-related costs, including share-based compensation expense, which was primarily driven by an increase in the number of employees engaged in R&D activities, an increase of $0.7 million related to information technology infrastructure and support for information systems related to the conduct of clinical trials and manufacturing operations; and finally, an increase of $0.2 million in facilities costs related to our new manufacturing facility, the Nucleus in Stevenage, U.K. as well as increase in costs related to maintaining our current leased properties.

General and administrative expenses increased by $1.3 million to $9.3 million for the three months ended March 31, 2023 from $8 million for the three months ended March 31, 2022, primarily due to the following: an increase of $0.7 million in salaries and other employment-related costs, including share-based compensation expenses, which was primarily driven by an increase in the number of employees engaged in G&A activities, an increase of $0.7 million in commercial readiness costs due to increased commercial revenues activities being undertaken an increase of $0.1 million in general office supplies and expenses, facilities costs due to the increase in space utilized for G&A activities, a decrease of $0.2 million, primarily related to a reduction in directors at offices, liability insurance premiums, legal and professional fees.

For the three months ended March 31, 2023, we recognized a loss on disposal of property and equipment of $3.8 million related to fixed assets no longer being utilized in the manufacturing facility exited in Stevenage, U.K. There were no such disposals for the three months ended March 31, 2022.

Other income net decreased to $0.8 million from $0.9 million for the three months ended March 31, '23 and '22, respectively. The decrease of $0.1 million is primarily due to the recognition of the lease termination loss arising from the termination and exit of one of our manufacturing suites in Stevenage, U.K.

Interest income increased to $3.4 million for the three months ended March 31, '23 as compared to $28,000 for the three months ended March 31, 2022. The increase in interest income of $3.4 million primarily relates to the increase in interest rates on our interest-bearing bank accounts and short-term investments during the three months ended March 31, '23 compared to the prior period.

Interest expense increased to $4.9 million for the three months ended March 31, '23 as compared to $1.8 million for the three months ended March 31, '22. Interest expense is primarily related to the liability for future royalties and sales milestones associated with our strategic collaboration agreement with Blackstone.

Net loss attributable to ordinary shareholders was $39.8 million for the three months ended March 31, 2023, compared to $37.1 million for the same period in '22. The basic and diluted net loss per ordinary share for the three months ended March 31, '23 totaled $0.23 compared to a basic and diluted net loss per ordinary share of $0.41 for the three months ended March 31, 2022. Autolus estimates that its current cash and cash equivalents on hand and anticipated future milestone payment from Blackstone will extend the company's runway into 2025.

With that, I'll hand it back to Christian to give you a brief outlook on expected milestones. Christian?

Christian Itin

Thanks, Lucy. Moving to Slide 32. To summarize, we think we have an exciting time ahead of us. Obviously, the key focus on getting Obe-cel into the regulatory process with the BLA filing targeted towards the end of the year, followed by filings in Europe in the first half of next year.

Next up, our planned FELIX presentation, data presentations as for DHA. And in addition, we're preparing for commercial product supply and launch readiness. We also expect to provide updates on the pipeline programs with additional data and follow-up during the year with our key programs that at this point are unpartnered and obviously create opportunity for setting up collaborations around them.

Moving to Slide 33. We got cash to deliver a very significant value step. 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 and broader indications and a valuable pipeline for other oncology programs.

As I mentioned, we're excited about our manufacturing facility, and we have a strong technology foundation, validated our collaborators, BMS, Moderna Cabaletta, which recognize the value of our technology platform and allows us to monetize this value by way of function exercise fees milestone payments, et cetera. Importantly, we look to do more deals also of this nature in the future.

With that, I would like to thank you first for listening to our prepared remarks, and we're happy to take questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] All right. Please stand by while we compile the Q&A roster. And our first question comes from Mara Goldstein with Mizuho. Mara, your line is open. Please go ahead.

Mara Goldstein

Great. Thanks so much for taking the question. So a couple of things. One is, I'm just curious about the data disclosure on FELIX at ASCO versus EHA and will there be anything that's different or incremental at EHA? And then, on the AUTO8 program and data expectation for data this year, can you speak to what the totality of that could look like? How many patients you might have data on?

Christian Itin

Yeah. First off, thanks a lot for joining Mara, and thanks for the question. So the data that we're planning to release at ASCO, EHA, obviously are similar overall. What we're currently looking into is to look at certain additional sub-analysis that we could actually include into the AHA presentation. Obviously, the data cut for the two presentations is obviously the same because we're literally a few days apart. But there's going to be probably slight differences in some of the sub-analyses that we'll be discussing.

In terms of the further flow of data that we go in terms of the totality of the data, obviously, we have enrolled a little bit more than 90 patients, which we'll be reporting on. And that gives us, obviously, a very good, I think, understanding of the overall profile of the product, and it gives us, I think, a good first look in terms of follow-up. And obviously, by the end of the year, we'll be able to add an additional about six months of follow-up, which will give us a start to give us, I think, a pretty good sense of where the product is sort of trending to.

Mara Goldstein

Okay. And then if I could just ask, since you included it in the sort of news flow on the pipeline under collaboration, anything specifically related to the current collaborators that you think might occur in this year or is this a reference to potential new collaborations?

Christian Itin

I think we'll keep that open. Both of those outcomes are possible.

Mara Goldstein

Okay. Thanks.

Christian Itin

Thanks, Mara.

Operator

And our next question comes from Matthew Phipps with William Blair. Matthew, your line is open. Please go ahead.

Matthew Phipps

Thanks for taking my call and question. So the AUTO immune indication is obviously pretty interesting in Novartis and Bristol talked us up pretty significantly last week during their own earnings calls planning to move a kind of more rapid manufacturing process of their CAR-Ts into those indications. Do you think you'll take Obe-cel as is right into the autoimmune, would you look to maybe add any safety modules just in case of adverse events in that population. And just wondering, do you have any thoughts on what the ideal durability of a CAR-T is in an autoimmune disease? Is this something where you need consistent [indiscernible] or it's more of a reset of the [indiscernible]?

Christian Itin

Very good questions, Matt, and thanks for joining. Obviously, I think we've always been, I think, watching the team in Airline very closely and have the opportunity to also review the data obviously [Technical Difficulty] as well. I think what we're seeing is quite an interesting profile in that the reset of the B-cell compartment, those seems to be important for -- in a number of ways. But what it basically would show or shows is that once the compartment is properly reset that over time, although B cells eventually come back, it doesn't look like the autoreactive sales are coming back. So -- and it appears to be actually a longer-term effect. Obviously, the follow-up is still limited, but it looks very encouraging in that regard that it could actually have been a proper reset of the compartment.

The exact duration for how long yeah, actually have to have [indiscernible] to achieve that goal. I think it's very difficult to tell. What we do see is that in these patients that have overall a relatively normal immune system. Obviously, they're not like ALL patients have not gone through the same kind of rigor of therapeutic pressure. We do see actually that the persistence actually is not as long as in some of the products that were being evaluated to what was seen in AML is an example or in other indications. So there's probably going to be a bit of a difference, but I think there is sort of a certain amount of period that he would like to see the B-cell aplasia to be in place to be sure that you really captured all these potentially autoreactive B cells and be sure that you haven't properly said.

But I think there's more to be learned in the space around that. And I think at this one, probably premature to sort of actually give you an exact number because I think it's just not known. In terms of design, we believe the design of the product actually is a really good design. It fits very well. And obviously, with the safety profile that we now demonstrated in lots of different -- a number of different indications with very different challenging patients, I think, sets us up very well in that setting. And then the final basis, obviously, you have to be able to manufacture, manufacture efficiently and also at the reasonable cost level and it's also one of the key areas we've been focusing on for obe-cel and we believe we are very well positioned.

Matthew Phipps

Thanks, Christian. And I have one quick follow-up. For the AUTO4 update at ICML, will that include the full cohort of patients that were treated with the streamlined manufacturing process?

Christian Itin

Probably not the full cohort as far as I can tell at this point, but there's going to be some additional update, obviously, a longer follow-up of the patients as well as some translational data that I think will be helpful to understand kind of what the traction of travelers.

Matthew Phipps

Great. Thanks for taking the question.

Christian Itin

All right. Thanks a lot, Matt.

Operator

Please standby for our next question. And our next question comes from Yanan Zhu from Wells Fargo Securities. Yanan, please go ahead. Your line is open.

Yanan Zhu

Hi. Thanks for taking our questions. You mentioned that the FELIX study was enrolled during the pandemic, and that presented some challenges such as patient loss to COVID-19. I was wondering whether conducting the study during the pandemic could have also affected the response rate or duration of response and other metrics of the study's endpoints, around the same line of thinking, I was wondering whether the second half of the enrolled population was in any way less affected by the pandemic due to the timing of enrollment?

And lastly, regardless of pandemic impact, I was wondering whether the second half of the enrolled patients have any differences in terms of their disease severity, such as the extramedullary involvement compared with the first 50 patients in the interim analysis. Thanks you for taking the questions.

Christian Itin

Thanks a lot Yanan. These are very insightful questions. And obviously, one of the things that we certainly were keenly observing but also we're concerned about as we're going through the involvement of the study. Obviously, you've seen the data for the interim analysis. Obviously, we have a very high level of response rate -- we have an excellent safety profile. So I think overall, we do know that the program has done really well in this population and during this period of time.

Now one of the key things that we're in the process of evaluating, but we don't have the full answers at this point. It is what is -- what are sort of the individual impact that we did see during that period of time attributable to the conditions that we were having, restrictions on travel for patients, which like the delays for some of the patients to actually get access to treatment, et cetera. So a number of variables there.

But as you pointed out, this is not a constant, but it was a period where we had a lot of activity on the infection cycle in the first quarter of 2022 and then different is if you were beforehand, and you feel afterwards. So we'll do a full analysis of that. We'll evaluate that in more detail. I'm sure we're going to be basically presenting that data in more detail at one of the later conferences, most likely looking at cash, what kind of full review of that.

And so I think at this point, it's premature, I think, to speculate on the questions you were asking. I think they're all very good questions and they're exact questions that we're evaluating in the data, and we're looking for various potential signs of impact, et cetera., over time. And we'll absolutely going to share that with you once these analyses are completed, and we also have enough follow-up with all patients to understand the full impact that might have been there.

Yanan Zhu

Understood. Thanks for taking the questions.

Christian Itin

Thanks, Yanan.

Operator

Okay. Please standby for our next question. And our next question comes from Gil Blum from Needham & Company. Gil, your line is open. Please go ahead.

Gil Blum

Good morning, everyone and thank you for taking our question. So just one sort of multiple myeloma here. It feels like the field is getting -- the standards are getting higher and higher. And I have to admit there is evidence to show the dual targeting can be a good approach. But given the early stage of your program, where do you think this treatment could fit? And what is the best strategy to move it forward and maybe going allogeneic in some way. I'd love your insights here.

Christian Itin

Yeah. Very good question, Gil. Obviously, an interesting field. And I think I feel we're all learning a lot about. Obviously, we have on the long hand. We have remarkable data coming out of the approved programs in early line therapy. And I think that is certainly one of the key areas where I think everyone can be really excited about, and we hope that this obviously will have a big impact on patients. At the same time, we do see a massive gap between the demand for therapy and the interest for therapy and the actual ability to deliver the therapy. And that certainly has been sort of one of the biggest challenges that I think we've seen in the field is that ability to deliver the market and to serve the market is, at this point, very far apart and quite disconnected.

And now obviously, on the one hand, is a real challenge to manage because there are a lot of patients that would need access to therapy and do not have that access. But on the other hand, it also points to the fact that there is room for a certain number of additional programs to actually help serve the market and to really be able to sort of provide that remarkable type of transition and activity that we have seen to our longitation pool.

When we look in terms of the profile, and I think some of the areas that you obviously want to see is, I think with -- in this disease setting, you'd like to see a product that has a safety profile that can [indiscernible] managed and handled in a broader range of centers, not just at a smaller number of academic transplant centers, but be able to go more broadly than that. So I think safety is important also with the age sort of average of the population as well.

And the other aspect, I think, is that we obviously haven't yet seen whether those initial remarkable activities do translate into true long-term outcomes. And I think that's an area that I think will keep watching. And certainly, when we look at the ability to go after potentially driving sales, which is one of the reasons why we're including a CD19 component into AUTO8, but also having a more sustained presence of the product and persistence may actually be helpful to sort of actually create longer-term outcomes. That's what we're interesting and interested in understanding from our own product from AUTO8.

And it's one of the key things from evaluating in this initial Phase I study. And I think depending on the outcome, I think there are sort of different paths that we can take from there forward, but I think it's somewhat premature in the absence of the data to sort of guide on a portion.

Gil Blum

Thank you, Christian. Very helpful. And just a quick one on AUTO4. How is the company thinking on this program I'm testing early data, but do you think this is more of a company-sponsored effort overall or maybe more partnership material or the jury still out on that one? Thank you.

Christian Itin

Yes. Good question. So obviously, at this point, we are very focused on delivering OVC. It's a full-out effort to deliver the program and really establish the kind of initial infrastructure for commercialization, both in manufacturing and from an actual delivery perspective, commercial delivery perspective. And that certainly required us to sort of focus very substantially on Obe-cel.

And I think there's opportunity across the pipeline to consider entering into partnerships for some of the programs. also as a way to be able to actually move them more and more aggressively and more imperial to the activities that we're conducting with Obe-cel. So there's opportunity there. Obviously, we're excited about all the four. We think it's a very interesting program that starts to have very interesting data and certainly is a program that we feel has a real potential in a high medical need setting.

Gil Blum

Thank you for taking our question.

Christian Itin

Thanks a lot, Gil. Appreciate it.

Operator

Standby for our next question. Next, we have Kelly Shi with Jefferies. Kelly, your line is open. Please go ahead.

Kelly Shi

Thank you for taking my question. For AUTO1 CD22, could you have to elaborate the definition of Kymriah therapy [indiscernible] criteria? Do you see post the CD19 car market attractive to pursue for AUTO1 CD22? And also, we saw two auto new targeting program targeting CD19 CD20 running trials in post-CD19 settings. Could you share your view between CD20 and CD22, which one is still a better antigen to tackle CD19 relapse. Thank you.

Christian Itin

Very good question. Thanks for joining, Kelly. So first one, with regards to AUTO1/22 and the fact that we were describing these -- the patients [Technical Difficulty] can ineligible. The two basic sort of settings that sort of exclude currently the patients certainly in the U.K. from Kymriah therapy. One is if you already have been on Kymriah and have failed, you're not eligible for a second round of Kymriah therapy. So that's one group of patients. And that includes also patients that actually have relapsed with CD19-negative disease that I did refer to before.

The second part of the population is it if you have isolated extramedullary disease, which also excludes you currently from Kymriah therapy. And then there's certainly certain patients that are just too in probably too poor condition to be considered and to be included on the commercial product. But it's a truly refractory population that we have treated here that we also would have expected if we had treated these patients with Obe-cel, we might have been able to get about 40%, maybe for lucky 50% into a CR, but certainly not anywhere close to the 83% that we have seen in the -- in this extension of the CARPALL study.

Now with regards to kind of the dual targeting approach and the choice of antigen, there was say a number of considerations here. And we've seen programs actually for quite some time on the one hand, targeting CD19 together with CD22 targeting or CD19 with CD20 targeting, we and others have been active in this space. Our focus has been on CD22. And the reason for adding CD22 was sort of two-fold. First, similar to CD19, the expression of CD22 is actually seen in a wider range of B-cell differentiation stages, particularly also present in very early stages that are driving acute lymphoblastic leukemia and where, in fact, CD20 is absent. So you don't have CD20 expression on ALL as an example.

The second consideration is that when we think about therapeutic pressure and selection against a particular target. Obviously, we do have the primary pressure when you think about non-Hodgkin's lymphoma indications to be on CD20 with obviously rituximab and the follow-on product from Roche as well, which both actually put heavy pressure. And what we're seeing is that patients that have been on prolonged CD20 therapy at time of relapse often have very low levels of CD20 expression or quoting for NIM, if you look at it by florescent provisions in a paxorder (ph).

So you have -- you sort of through these therapies sort of select for low levels of expression, which obviously also then requires you to, if you want to go utilize that antigen as our second antigen in a dual targeting approach that you really have to drive a product that has an ability to go into these very low levels of expression to ensure they're not actually having or seeing escape due to that extended therapeutic pressure on the target.

When we look at the data, I would say the early work that was done at the University of Wisconsin on CDI and CD20 combination showed a good level of activity, but also eventually showed some relapses. There is limited data from some of the work that's being -- was conducted in China that showed also a good level of activity and the longer-term outcome at this point to our knowledge is certainly not yet been published, but I'm sure we're going to see one of the upcoming conferences.

Obviously, what's interesting when we think about CD19 loss, at least in our hands, we haven't seen that in the non-Hodgkin's lymphoma treated with obe-cel. So we haven't seen patients actually relapsing with CD19 negative disease. And we also actually have seen certainly in aggressive lymphoma. We haven't seen actually relapses of patients that achieve the CR and most of the patients, as you may remember, did actually achieve an interval CR with Obe-cel. So whether or not there is a significant added contribution from CD20, I don't know at this point.

I think it's probably still something that we'll need to see over time. And obviously, we're following the space. But if we want to use in it less area where we know most about CD19 negative, this loss of CD19, which is an AOL. Unfortunately, CD20 is not suitable. And the only other suitable antigen that it can go after is actually useful in this setting is CD22, which is the reason why we chose it in the context of our life cycle.

Kelly Shi

Very insightful. Thank you.

Christian Itin

Thank you.

Operator

Thank you very much and stand by for our next caller. And our next question comes from Asthika Goonewardene at Truist. Asthika, your line is open. Please go ahead.

Asthika Goonewardene

Hi, guys. Thanks for taking my questions. So I just want to dig into the answer you gave to the Gil’s question for a minute, Christian. And maybe just how do you compare the type of number of centers where you can get BLINCYTO versus the number at the centers where you can get to [indiscernible]. And then as you plan to commercialize obe-cel, what is your strategy for targeting these medical centers where it's likely to be used and the size of the sales force they should need? And then I have a couple of quick follow-ups.

Christian Itin

Very good. Thanks for joining us. This is a very interesting question. And so when you look at where BLINCYTO got launched, it was launched basically initially in the transplant centers in the U.S. and also in Europe, which is in the U.S., give or take, 60 centers to sort of really represent the real core of enters treating ALL patients with advanced disease. So you do have a pretty significant concentration of these very severe -- severely sick patients to be treated in this smaller number of centers. So that's -- I think that's the first aspect.

And obviously, we have in the current trial in the FELIZ study, we got 24 of those 60 centers in the trial included and having gained experience with the product. When you think about the broader opportunity, that is really one of the key things. I think the learnings for pension, I think there will be that will also be relevant for obe-cel is that the patients that have lower disease burden tend to be better manageable, tend to have less adverse events. And also in the case of BLINCYTO also then have elevated levels of responses that were observed.

And it is that profile that I think allows you to consider actually treating these patients in non-academic transplant centers in the U.S., which actually allows you to expand the footprint quite a bit and frankly, allows you to get closer on average, get closer to where the patients actually do live. And that actually takes risk out. It makes access easier. And I think it's certainly an important part. And what we do know with BLINCYTO that if you look at the second course of treatment, the third course of treatment, actually those courses tend to actually induce very little adverse events, and they typically can actually be initiated without actually taking the patient into the hospital, so basically have an ambulatory setting can be hooked up and then monitored for a short while, and then the patient can actually move on.

So there is an initial part where you have the major tumor burden that needs to be taken care of where you have merged the adverse events, which is true also for CAR-T therapy, of course, the difference being we're only giving a single dose. We have to go, have knock to pull back. We don't have to change drugs wells, et cetera. So when we look at the actual adverse event profile than of the two programs of obe-cel, clearly, obe-cel if anything, actually has an improved safety profile. And that actually gives you a very good, I think, proxy for the ability to build over the product. Initially, we will also start, obviously, with the stem cell transplant centers. And the 60 centers or so that I quoted before, which is sort of an initial core, which address allows you to actually reach a substantial proportion of 70% to 80% of the patients.

And over time, as there is more experience of the product as it was the case with BLINCYTO, we expect to be able to then actually increase the footprint to centers that are not academic transplant centers, obviously sophisticated and not academic transplant centers. And with that, also expand the footprint and with them should be able to reach the same patient population have access and provide access to therapy for the same breadth of the patient population as we're seeing today with BLINCYTO, so that is where we're looking at that, how we're projecting that.

In terms of the sales force side, actually, that's pretty focused. It's not a classical sales force either because what we're providing is more of a service than a classical market driven commercial activity. And in fact, that's a very focus given the number of centers focused team. What we do see is actually that was the size, although the workload is a bit different than BLINCYTO actually very comparable with a launch basically size of the commercial organization for the U.S. of about 120 to 150 people.

Asthika Goonewardene

Great. Thank you, Christian. And then if I can follow up with a couple of quick ones. At ASCO, what proportion of patients -- of the 50 patients in the efficacy analysis will have six months of follow-up. And then at EHA, I was just wondering if you could maybe give me a little color of what kind of sub analyses will be presented. I might need a little help convincing my DOR (ph) as to why we need to go to Frankfurt?

Christian Itin

Well, there's always the opportunity to have a beer, and that seems like a good reason for why you might want to go. There you go. There you go. Okay. Look, when we went obviously we're going to report on all the 90-plus patients that were dosed in the study, when we look overall in the study, we will be close to lower between eight and nine months of follow-up of the median. So that gives you, I think, a pretty good sense of what that may look like. So that's what that in terms of the overall data. The nature of what we're going to show ultimately on any additional potential analysis, I think that is still actually being finalized. It would be too early to guide on. So I think it comes down to -- you'd probably have to go for the beer to be on the safe side, so there, you're not going to miss anything.

Asthika Goonewardene

Okay. Appreciate the color, guys. Thanks so much.

Christian Itin

Thank you.

Operator

Okay. That concludes our Q&A for today. I would like to now turn it back to Dr. Christian Itin, Chief Executive Officer for closing remarks.

Christian Itin

All right. Well, thank you very much. First of all, thanks all for joining today. Fantastic to have you all well and you taking the time. And we're obviously looking to -- forward to hopefully seeing you in person during one of the two main conferences this summer. And if not, hopefully, upon our recent upcoming trips to the respective your respective areas. And with that, I'd like to conclude at this point. Thanks again, and looking forward to keeping you updated with the next update, obviously at ASCO in a few weeks' time. Thank you.

Operator

And thank you very much for your participation. This does conclude our program. You may now disconnect.

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Autolus Therapeutics plc (AUTL) Q1 2023 Earnings Call Transcript