Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics Second Quarter 2021 Financial Results Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Dr. Lucinda Crabtree, Vice President, Business Strategy. Please go ahead..

Thank you. Good morning or good afternoon, everyone and thank you for taking part in today's call on the financial results and operational highlights for the second quarter of 2021. I'm Lucinda Crabtree, Vice President of Business Planning and Strategy. With me today are Dr.

Christian Itin, our Chief Executive Officer; and Andrew Oakley, our Chief Financial Officer. Before we begin, I would like to remind you that during today's call, our discussion will contain forward-looking statements. All statements other than statements of historical facts on this call are forward-looking statements.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the section titled Risk Factors in our annual report on Form 20-F filed with the Securities and Exchange Commission on March 4, 2021, which can be accessed on the EDGAR database at www.sec.gov and in subsequent filings that we make with the SEC from time to time.

The forward-looking statements on this call reflect the Company's views as of today, August 5, 2021, regarding future events and should not be relied upon as representing the speakers or the Company's views as of any subsequent date.

While the Company may elect to update these forward-looking statements at some future point, the Company specifically disclaims any obligation to do so, even if the Company's views change. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to today.

Please be advised that today's call is being recorded and webcast. So on Slide 3, you'll see the agenda for today and it is as follows, Christian will provide a brief introduction, and that will be followed by our operational highlights for the second quarter of 2021.

Andrew will discuss the Company's financial results, and then Christian will conclude with upcoming milestones and any other concluding comments. And of course, we will welcome your questions following our remarks. So with that, I'd like to turn the call over to Christian. Thank you..

Thank you, Lucy, and welcome, everybody, to our second quarter call. First off, I'd like to briefly go back to kind of where we started also the Q1 call, which is to have a quick look at the state of the COVID epidemic that we're going through and the impact it will have or has on our business.

As you may remember, we did guide in Q1 that we were hopeful that by the middle of the year, we should reach a level of stabilization due to increased levels of vaccination, but also a substantial number of people actually having recovered from COVID infection, that we should get into an overall more stable environment so that the fluctuations that we see in terms of the cycles of COVID or the waves of COVID should actually start to just ebb and get us to a place where we have overall more stability and a more predictable environment for our patients that were obviously enrolling into our trials.

And we also did guide that we're expecting to be able to actually ramp up enrollment by middle of this year. We are very pleased to say that indeed what we were hoping for actually is a reality today. I think we do have reached now between vaccinated people as well as people who've recovered from infection, at a level of about 70% in the U.S.

and the same actually in the UK and that gives us actually a base level of stability that, I think, is very helpful in terms of the conduct of the clinical studies.

Now, we obviously all have seen the impact of the Delta variant, but we also do see very nicely that indeed while there are surges in certain places that in fact, they seem to be curved much more quickly than what we had seen earlier in the year, and I think they are a nice reflection of the fact that the vaccines are doing actually a great job and [indiscernible].

As we were hoping, that also actually did allow us to increase and ramp up the enrollment rate into our trials. And obviously, this is, obviously, very good news, and I think will allow us to actually keep on track and on the timelines that we were giving with regards to our key studies. If we go to Slide number 5.

A quick update on just the key activities on the pipeline. First off, obviously, the activities on obe-cel. Our FELIX study is progressing well, and we're reiterating our guidance of pivotal data that we will deliver during the course of next year.

Now, in this quarter, we have an opportunity to update additional experiences with obe-cel in patients, not only in ALL, but also in non-Hodgkin's lymphoma. In ALL, we were able to actually look at now a quite extended observation time of the patients of now more than two years.

And what we were able to see is that indeed, the inventory survival in this trial actually was stabilizing at 12 months, just above 50%, and actually that level was sustained over 24 months.

This is very good news because it really gives us the first clear hint that indeed, we may have a transformational therapy for this patient population, and frankly, a suggestive of a durable effect in at least a subset of the patients that we've been treating. So that's obviously very good news.

It's now the data starts to actually mature to a point where I think the data actually has a level of validity that really matters in terms of our own view as well of the program.

In addition, we also, obviously, did look or did present data on patients with non-Hodgkin's lymphoma, particularly follicular lymphoma, mantle cell lymphoma, and we are able to show very high levels of metabolic CR rates. In fact, all patients achieved metabolic CRs and also combined with a very good safety profile.

Now, in addition to, obviously, that key data update at EHA we are also had a publication in Nature Cancer, looking at some of the product features that maybe associated with this long durability of effect that we're starting to see in the ALL patients. Now, moving to the regulatory side.

I think the two key events that were happening in the second quarter.

First, we did receive the so-called PRIME designation from the European Medicine's Agency, which really gives us an ability for a preferred engagement with the key regulatory body in Europe, and which should be very helpful in the actual review process for the program, as we're moving this program through pivotal stage and then further towards an approval.

And when we look into the second designation that we did receive which is so-called ILAP designation from the UK Medicines and Healthcare Agency, MHRA. And what we did actually – and what that allows us to do is, quite similarly to the PRIME designation, it gives you a preferred access to the regulatory body, but it actually goes beyond that.

It also actually allows you to engage with the National Health Service as well as with NICE, and gives you an ability to really approach with innovative therapies, the key players in the UK that not only actually get you through the regulatory process, but also, frankly, ultimately to the patients.

So those developments, we believe, actually are very important because it gives us a very good projection and the path that we can take with the program, and are a reflection of the data that we obviously were able to generate so far.

As I indicated initially also, we are reiterating our guidance to have the pivotal data during the course of 2022 as we have guided before. As indicated, the obe-cel data on relapsed/refractory, obviously, is very encouraging, and I think that gives us, obviously, an opportunity for additional data flow in later part of the year.

And finally, on AUTO4, we did also receive an ILAP designation from the MHRA, again giving us that preferred access that we believe will be helpful to the program going forward. Moving to Slide 6. Just a quick update on the corporate side.

First off, we had sold about 2 million ADSs under the Open Market Sales Agreement during the course of the quarter, which netted $14.3 million in additional capital into the company. We had a change in the Chairman role. Martin Murphy has taken over as non-executive Chairman during the course of the quarter.

And when we look at the post period updates, we're very excited to announce – and actually that happened just in July now the appointment of Dr. Edgar Braendle, who has joined us as the new Chief Development Officer of the company.

Edgar has a tremendous amount of development experience in a range of companies, including, I would say, a very long stay and very significant levels of activities that we had in the context of Novartis' R&D organization as well. In addition, Wolfram Brugger joined us as the new Head of Clinical Development.

Wolfram joined us from MorphoSys where he was running the clinical programs and particularly focused, obviously, on the Monjuvi program or tafasitamab program that was recently, obviously, improved in a subset of diffused large B-cell lymphoma patients.

And then finally, we did announce early in the week an Option and License Agreement with Moderna, actually, where it's kind of a nice recognition of the technology base that we've developed at the company.

This isn't particularly related to our capabilities of engineering binders with very unique properties, and those are types of binders are considered to be used, obviously, in the context of the RNA approaches – platform approaches that Moderna is working on. So, with that, I think we're good to move to Slide 7.

And what I'd like to do is just switch gears, briefly reset sort of Autolus thoughts with regards to ALL.

And as you remember, obviously, our key focus is on delivering the FELIX study in adult patients with relapsed/refractory ALL, which includes patients that are both post blinatumomab as well as inotuzumab, but as well as patients that actually are just in a relapsed setting, but have not yet experienced inotuzumab or blinatumomab.

So we have two subpopulations that we're actually looking at in this particular trial. As we just mentioned, we're exploring the activity of the program of obe-cel, then beyond ALL, and we do that in the context of the ALLCAR19 study with additional cohorts.

And in addition to the data that we just released on first follicular mantle cell patients, we will also actually include patients with DLBCL and CLL, and we are planning for additional update towards the end of the year.

And then as an evolution of the obe-cel or AUTO1 program, we are now actually treating children with AUTO1/22, which is building on the AUTO1 or obe-cel backbone that adds a novel CD22 chimeric antigen receptor where we're evaluating that product in pediatric patients with ALL. So with that, I'd like to move to Slide 8.

And on Slide 8, it's just some of the key, I think, features that are important with regards to ALL as an indication and the standard and status of care that we currently see in this indication.

First off, I think it's important to realize that, particularly in the adult population with ALL, only a smaller percentage of the patients actually have an ability to achieve a long-term benefit. We're looking at somewhere between 30% to 40% of the patients.

This is despite the fact that most of the patients about 90%, actually will achieve a complete remission for frontline therapy. However, for most of these patients that complete remission, actually does not translate into a long-term remission.

So when patients do relapse after, obviously, having gone through very intense high-dose chemotherapy, induction and then consolidation. After they get through that and eventually relapse, many of them would actually go on additional cycles of high-dose chemotherapy followed by stem cell transplant.

However, although there is a certain chance of cure with the stem cell transplant, still the majority of the patients getting on to transplant will actually relapse again.

And that gets us to the patient population that's really in a very, very difficult spot with a very, very limited time that, indeed, on average, these patients still have available. What we are currently looking at in this field, is that the standard of care, particularly in the U.S., is really starting to concentrate on blinatumomab.

We see about 60% or so of the patients receiving blinatumomab in the U.S. However, although, blinatumomab is active, it does not actually convey long-term remissions in the patients in the relapsed/refractory setting. So when we then look on the CAR-T side, I think, obviously, a very challenging start.

That we have seen the CAR-T approaches in general are getting into the adult population in ALL with a lot of challenging in managing actually the adverse events that were induced by the therapy itself.

And we're now at a point where, obviously, we're starting to see first programs moving with the least that we have, a highly attractive set of properties with our program.

And, obviously, there is an opportunity when we think about a progression and the positioning of the product to ultimately move this type of therapy up the line where we believe it's actually the best place from a benefit-risk perspective that I think that we can get with this type of a therapy.

We just talked about the fact that we did receive, obviously, a set of regulatory designations. Slide 9. Key update that we presented at EHA is really around the event-free survival. We already have communicated, obviously, that we have very high levels of responses.

That we have a good safety profile, but what we're seeing now is, as we're seeing, looking at this event-free survival is that, indeed, that curve is stabilizing over time. And that gives us actually a very good sense that indeed, we have a chance of getting a proportion of these patients into long-term remissions. Moving to Slide 10.

I think I want to make the point that, the fact that we do see the stabilization of the event-free survival, which to our knowledge, hasn't been shown before in this disease setting, is actually correlated with the exceptional persistence that we're seeing with the product.

Not only do we see about a tenfold increase in the maximum number of CAR-T cells that have been reported in other programs, but we also are able to actually maintain the level of CAR-T cells over time. And we believe that, that is actually a prerequisite to be able to actually translate a molecular response into a long-term remission.

And clearly, the data from the ALLCAR study are quite unique, both in the actual – absolute event of CAR-T cells formed in the patient, which is, as indicated, about tenfold over and above other programs, but also the sustained level of CAR-T cells over time.

On the right-hand side, you see basically the adverse event profile, as we have reported it earlier. I think what's important is, obviously, we haven't seen high-grade cytokine release syndrome.

And related to that, when you look actually the treatment that was used to sort of manage the adverse events related to the CAR-T therapy, quite often you see with CAR-T therapies the need for vasopressors to stabilize the patients, and it's important to note that none of the patients received vasopressors.

And what also tells is that these patients didn't actually have to go into ICU to be managed. So it's a very good safety profile. It's very well manageable, and it gives us a very unique efficacy profile. Moving to Slide 11. This is just a quick look at some of the data that we're seeing now in this space.

We have, obviously, the datasets that were the foundation for the approvals for blinatumomab and inotuzumab. And we also now have, as presented at ASCO and then published as well right at the same time, the data from Tecartus also in relapsed/refractory adult ALL, also the basis of a BLA filing that the company made.

So when we look at, overall, at these datasets, we do see that the data from obe-cel does stack up very well against all of these programs. And, certainly, when it comes to safety as well as to the long-term impact, we see event-free survival.

That we have a very advantageous event-free survival profile, which we believe will actually give us overall a very nicely differentiated product in this space. Moving to Slide 12. I did mention before, obviously, the FELIX study. This study is about 100-patient study, relapsed/refractory patients.

As indicated two subpopulations that we are looking at, relapsed/refractory post exposure to blina or inotuzumab, as well as patients who are inexperienced with regards to blina or inotuzumab.

The primary endpoint of the study is overall complete response rate, and the secondary endpoints includes molecular responses as well as event-free survival and duration of response. Quick word onto the data that I referenced before in the non-Hodgkin's lymphoma patients.

This is a swing plot of the nine patients that were dosed and were the subject of the presentation at EHA. As you can see, all of these patients achieved a metabolic complete remission, and the safety profile was very positive. Nobody had a high-grade CRS. None of the patients experienced any form of neurotoxicity.

One of the patients, unfortunately, actually contracted COVID and died as a consequence of COVID. The patient died in metabolic complete remission, which was a very sad event, as well as one patient who developed a lesion in the skin which could be basically removed surgically.

But obviously, that lesion is a progression event in that patient and will have to be recorded that way. Now Slide number 14. Just a quick word on the activities ongoing now, that sort of actually round out the exploration of the activity of obe-cel across a range of indications.

As I indicated to you before, we do evaluate the activity in non-Hodgkin's lymphoma patients as well as CLL patients as part of the extension of the ALLCAR19 study.

We are also conducting in collaboration with our academic partners, the CAROUSEL study, which is a study in patients that have primary CNS lymphoma, which is, in essence, an aggressive lymphoma similar to DLBCL, that is exclusively localized in the brain.

And then as already mentioned, we are conducting an extension of the CARPALL study with AUTO1/22 in pediatric ALL patients. And obviously, all of these programs will give us a very good overview over the range of activity that we see across the range of CD19 positive malignancies. Moving to Slide 15.

On the T cell lymphoma side, we continue to dose escalate the AUTO4 program. We expect the data will be – first update on the data will be in the first half of 2022, and we'll provide that update, obviously, at one of the conferences in the first part of next year.

And alongside the progress on the AUTO4 program, we're also going to time the study entry for the AUTO5 program, which we expect to occur in the same period of time. Now on Slide 16, just a quick reminder that the company has a very strong technology base with probably one of the largest IP estates in the business.

And what you obviously did see on the Moderna side is that aspect of this technology now used in a different setting. This is now obviously, in the case of the Moderna collaboration related to binder technology that is obviously, one of the key elements that we are using in all our products as one of the key elements of differentiation.

And you do remember that, obviously, obe-cel – the key feature in obe-cel is a very unique type of binder with a very unique set of properties, which really gives us that differentiated overall clinical outcome, both in efficacy, on persistence, but also on safety. Now moving to Slide 17.

So the broader program here, obviously, I indicated already, the AUTO1/22 and AUTO5 program. AUTO6NG is moving forward. We expect to be able to have an academic trial up and running with this quite advanced programmed product in the early part of 2022.

And then obviously, as we had guided before, AUTO8 is, obviously, in the clinics this half of 2021, and we are preparing also the AUTO7 program. Now with that, I'd like to actually hand over to Andrew, who will lead you through our financial results. Thank you. .

Thanks, Christian, and good morning or good afternoon to everyone. I think if we can move to Slide 19. It's my pleasure to review our financial results for second quarter through June 30, 2021.

So starting with our cash position, cash and cash equivalents at the 30th of June totaled $216.4 million as compared to $239 million at the end of the first quarter, end of March.

Worth noting that during the three months ending 30th of June 2021, the company issued an aggregate of 2,069,466 ADSs under the ATM program for net proceeds after underwriting discounts and operating expenses of $14.3 million. Turning to the P&L. Total net operating expenses for the three months, 30th of June, 2021, were $37.7 million.

This is net of grant income and license revenues of $1.6 million. So you'll see there an upfront from the Moderna collaboration. This compared to net operating expenses of $39.5 million, net of grant income of just $300,000 for the same period in 2020.

Research and development expenses increased to $32.1 million this quarter compared to $31.3 million for the same period last year. It's worth noting that cash costs, which exclude depreciation and amortization as well as share-based comp, increased to $29.2 million from $26.5 million.

Overall, this increase in R&D cash costs of $2.7 million consisted primarily of an increase in compensation and employment-related costs of $0.7 million, which includes some of the severance payments that relate to the reduction in workforce that we undertook in the first quarter of this year, and that was offset by a reduction in employment costs, obviously, due to a decrease in the headcount from the program.

Secondly, an increase of $1 million in facilities costs is related to continued sort of scaling of the manufacturing operations. Thirdly, an increase of $0.9 million related to sort of materials that consumed in manufacturing process and in the labs.

Fourthly, an increase of $300,000 related to cell logistics and an increase of $300,000 related to IT infrastructure and support. If we move to – looking at non-cash costs, they decreased to $2.9 million for the year for the three months ending 30th of June 2021 from $4.8 million for the same period last year.

The decrease is primarily related to our share-based comp expense which decreased by $2.8 million as a result of the lower value of stock options, combined with the forfeitures of options and unvested RSUs related to those employees that were affected by the reduction in workforce, and this was offset slightly by an increase in depreciation of $900,000.

General and administrative expenses decreased to $7.2 million this quarter from $8.5 million for the same period last year. The cash cost, which again, exclude depreciation as well as share-based comp, decreased to $6.6 million from $6.7 million.

Non-cash costs decreased to $0.6 million for the three months from $1.8 million for the same period last year. Again, the similar decrease in non-cash costs attributed to the share-based comp expense.

Other income and expense decreased by $2.3 million for the three months ending 30th of June 2021 from other income of $0.5 million for the same period last year to an other expense of $1.8 million.

The decrease was primarily due to the weakening of the dollar relative to the pound during the three months ending 30th of June compared to the – this year compared to the three months for the prior year.

Income tax benefit decreased to $6.4 million for the three months in 30th of June 2021 from $7 million for the three months ending 30th of June 2020, due to a decrease in R&D qualifying expenses. As research and development credits fell at a faster rate than our net loss before income tax has led to a lower effective tax rate.

Research and development credits are obtained at a maximum rate of 33.35% of our qualifying research and development expenditure, and the increase in the net credit was primarily attributable to an increase in this eligible expenses.

Finally, net loss attributable to ordinary shareholders was $33.2 million for the three months ending 30th of June 2021, and that compares to $32.1 million loss for the same period last year.

The basic and diluted net loss per ordinary share for the three months ending 30th of June 2021, totaled $0.47, and that compares to a basic and diluted net loss per ordinary share of $0.62 for the corresponding period last year. Just turning to guidance on cash runway.

We do have some concern about the continuing strength of the pound relative to the dollar. At current levels, it probably does take a little off the runway we had estimated post the raise that we did in February.

But we are still sort of confident in guiding at this point, the current cash on hand will provide this with a cash runway into the first half of 2023. And with that, I'll now hand the call back to Christian to give you a brief outlook on expected milestones.

Christian?.

All right. Well, thank you very much, Andrew. We're going to Slide 21. I believe we're going to be headed into an exciting second half for this year with quite a significant line of activities, particularly towards the end of the year.

When we look at obe-cel and AUTO1/22, we expect obviously, first of all, primary operational focus is on the execution of the pivotal study. I think it's worthwhile to mention that the FELIX study is one of the very few pivotal studies in adult ALL with a new agent of any kind, first off.

Secondly, it's one of the very few pivotal studies that are ongoing with a new product in the cell therapy, in the CAR-T space, in particular. We are reiterating our guidance to have the data during the course of next year.

And when we then look into the AUTO1/22, pediatric ALL activity, we expect to give an update at the end of this year, as well an update on the additional non-Hodgkin's indications from the ALLCAR study as well at the end of this year. The primary CNS lymphoma activities, we expect will probably be a data release early next year.

And I think that gives us then actually between those various indications start to give us a very good view on the overall profile of the product across not only ALL, but the range of CD19 positive hematological malignancies. AUTO4, we obviously are continuing to dose escalate that program.

We expect interim data during the first half of next year, present at one of the upcoming conferences in that period.

AUTO6NG is scheduled to enter the clinic in the first half of next year, and we're running this program in collaboration with our academic partners, and we're seeing good progress, and we're excited to, obviously, get this patient – get this product back into patients and see the impact of the improvements over and above the AUTO6 program.

The cash balance, as Andrew pointed out, is approximately $216 million at the end of June with a cash runway into the first half of 2023. With that, I think we're through with the formal presentation, and we're happy to take questions..

Thank you, sir. [Operator Instructions] I show our first question comes from the line of Matt Phipps from William Blair. Please go ahead..

Good morning guys. Good morning or good afternoon. Thanks for taking my questions. I guess first on AUTO4 and AUTO5.

Could you just talk about what pushed it back to first half of next year? It's obviously been a program of interest for investors, and yet we've been a while since we've hoping to see data?.

Absolutely. Well, first of, thanks for joining Matt. What we did see with AUTO4 and AUTO5 is still, obviously, as we're going through the first half of the year, impact on the centers. We're now through that, which is very good. And we expect to be sort of enrolling at the predicted rate.

But that was certainly something that we're still have to work through, and we're still sort of going to – getting into the second quarter and a bit longer than frankly we were hoping it would..

Okay, thanks. And then on the FELIX study, I guess, similarly, it sounds like COVID impact has abated.

Do you think it's later this year that you can provide – you can narrow that 2022 guidance, maybe the first half, mid-year or second half?.

Well, let me be specific. The guidance hasn't changed, okay. So we're expecting the primary endpoint to be available middle of next year, and the time-dependent endpoints being available at the end of next year. So that's the guidance that we've been giving consistently, and that is unchanged. There is no impact on the FELIX study..

Lastly, Bristol's, at least it seems to have a strong out of the gate quarter with Breyanzi and there's definitely some physician talk of the safety profile being differentiated and kind of driving more utilization.

Does that give you more confidence in broadening the scope of AUTO1 development even in some of these competitive indications?.

Well, first off, obviously, it's consistent with, I think, what we've been talking about on our side as well, and obviously consistent within investigator feedback that we've been hearing.

What we're very encouraged by is the fact that, obviously, the non-Hodgkin's – early Hodgkin's data give us also a very clear indication that obe-cel has a very attractive safety profile in non-Hodgkin's as well. I think that bodes very well.

So as we had indicated, I wanted to get an overview on the other indications to get a good feel for the competitive profile that we have in each one of those indications, and then we'll pick the one that looks strongest at that point..

All right. Thanks, Christian..

Thanks, Matt..

Thank you..

Thank you. I show next question comes from the line of Eric Joseph from JPMorgan. Please go ahead..

Hi, good morning. This is Rahul on for Eric. And thanks for taking our questions.

Firstly, with respect to the Moderna collaboration, can you share some color on the economics of the deal and the type of indications that may be exposed within the broader field or within immuno-oncology? And also like, is there a timeline associated with the collection of targets indication, I guess? And when should we expect more news flow on that front? And then my second question is in relation to the ZUMA-7 readout.

With the Escada like moving upstream in use, how do you think about the competitive positioning of AUTO3 or AUTO1 in DLBCL, and does this in any way impact your thinking about the future of clinical development strategy in DLBCL?.

All right. Well, thanks a lot for joining. Appreciate it. So first question is to the Moderna Option and License Agreement. So the binders that we're looking at are in the broader immuno-oncology field. We haven't actually narrowed that down in terms of our public statements.

But, obviously, are enabling for approaches that are sort of fit within the technology that Moderna is using on the mRNA side. So it is, I think, important to understand, this is technology that sort of is outside, or basically will be applied outside of the core applications that we're using on the CAR-T side.

And, obviously, are sort of a very nice additional utility and revenue stream we can build up. The compensation itself has obviously elements of option exercise fees as well as development milestones, commercial milestones and royalties. So classical structure, but we haven't guided around the amounts related to that compensation.

But it is a standard structure around the normal development progress and derisking in the program going forward. Second question related to kind of the activities that we do see in the field, moving CAR-T therapy from the last line setting in DLBCL into earlier lines of setting. And we've seen the data from more than one program at this stage.

I think what is very encouraging and also what we think have been expecting in the field is that, as you move up the line, you do actually start to see attractive outcomes, including, obviously, indirect comparison to stem cell transplants. But indeed, the activity looks more attractive on the CAR-T side compared to the stem cell transplant outcomes.

So I think that is a trend that I think we'll be seeing across the indications, and that will certainly be taken into account as we're sort of thinking about our strategy in the non-Hodgkin settings on the path we're going to take with our respective programs..

That’s very helpful. Thank you..

Thank you..

Thanks for joining..

Thank you. I show our next question comes from the line of Asthika Goonewardene from Truist. Please go ahead..

Hi, guys. Good morning, good afternoon. Thanks for taking my questions. So we have a Tecartus regulatory decision coming up. Christian, I'm sure you guys have done – are doing some primary research to see how physicians viewed the profile and how that compares to obe-cel.

I wondered if you could share some of that feedback with us? I've got a few more follow-ups after that?.

Right. So first of all thanks Asthika for joining and thanks for the question. I think if you think back around the communication that we put out and the analyst call that we did around the EHA meeting, we did actually sort of look at – compare, contrast data to the extent that, that was sort of appropriate to do.

I think what is clear is that, obviously, the profile of the product indicates clearly an improvement for the patients – with all the ALL patients, and I think that is a good thing.

What we do see is, and we've seen consistently through the various presentations and publications of data is, as I had indicated in the slide before as well, a significant level of toxicity that's associated with the treatment of the patients, that's certainly is challenging to manage. About 40% of the patients required vasopressors.

So you can assume that at least that proportion of the patient was likely to actually have to be managed in an ICU. So it's an intense patient management that's required. And there is clearly some time gained.

When you look at the overall data, it does not look like there is a stabilization of the responses over time, if you look at inventory, survival, et cetera. But there is clearly a gain in time. So, overall, I think progress for the patients.

But I think, when I think from our product's perspective and the data that we have to date from the program, we believe we have an attractive set of data that should allow us to differentiate in this particular disease setting..

Perfect. Thanks, Christian.

I'm wondering, could you then also give us maybe some guidance on the number of patients we can expect for the AUTO4 update in the first half of 2022?.

So what we're rolling in – the nature of the study with AUTO4 is a classical dose escalation study, so we expect that we're going to have probably in the range of approximately 10 patients at the time of presentation, something in that order..

Got it. And then lastly, we're looking forward to seeing the AUTO7 study start in the first half of 2022 as well. But we've seen some unfortunate events for another PSMA directed CAR-T in similar setting. I'm not sure if Martin is on the line or you can channel you're inner margin here.

But maybe you can tell us what gives you some – what do you think is driving that incidence of macrophage activation syndrome and those other toxicities with the competing PSMA CAR-T? And would you need to manage for that with AUTO7, or are you confident that, that might be something that you're not going to share?.

So first off, obviously, there's very little known about what actually happened in that dataset. And I think we need to wait for the actual publication or the presentation at the medical conference to understand to kind of what the actual data is. I think at this point, it's pretty much referenced to a press release to my knowledge.

So that's difficult to judge at this point in time. I think what we can judge – first of all, what we can do from a reference to our own design, one of the key things or elements that we have in our own design is actually the use of off switch. It's an ability to stop the activity of the CAR-T, should that be necessary.

So that's one of the measures that's been in the program from the get-go. Now, what is interesting, I think, is probably two additional data points in sort of the wider PSMA field.

First is the program from Novartis with the radiolabelled PSMA antibody, which obviously has hit the primary endpoint in the Phase III trial and has had a good overall safety profile as was sort of communicated earlier in the year. So clearly, an ability to target PSMA with a very potent mechanism of action.

In addition, Amgen is moving forward what was prior the AMG 160 program, which is a PSMA BiTE. So again, redirecting T cells to PSMA expressing cells. That program obviously, has had some of the data presented and is now clearly moving forward also in combination with a range of products that are used in the hormone refractory prostate cancer space.

So there are at least two programs with – one, the T cell program and the other one, a very high activity program against PSMA, which do not seem to have the type of adverse events that sort of have been anecdotally described.

So from that perspective, I don't think we have the knowledge at this point, whether this is a target issue or whether it is another issue, and I think we have to wait for the release of the data..

Great. Thanks for taking my question guys..

Thank you..

Thank you. Our next question comes from the line of Chad Messer from Needham & Company. Please go ahead..

Great. Thanks for taking our questions. A couple from us. But let me start out with an acknowledgment and congratulations of the Moderna deal, obviously, not the key focus and value driver right now, but I think a nice validation of the differentiated work you're doing on CAR-T enabling technologies.

So maybe just start with the ASH from the ALLCAR extensions in the high-grade NHLs to CLL, maybe set the stage on what we should look for there, and how are those indications different from what we've seen before?.

Thanks for joining Chad. So the indications that we're obviously exploring in the AllCAR extension are, obviously, what we already updated on our patients that have follicular lymphoma as sort of the primary disease, patients that do have mantle cell lymphoma. And then on the high-grade side, you would be looking at DLBCL.

And then in addition to those three, we're also looking at patients with CLL. So these are all – all of those are small exploratory cohorts and we expect to report on all of those. Whether they're all fully enrolled or not, I think we'll see as we get closer to the end of the year.

But I think we will get a very good sense, overall for the activity of the product across the range of indications..

Great. Thanks. I was also curious if you could maybe briefly talk a little bit more about the recent Nature publication which talks about stem cell memory T cells as perhaps being part of a mechanism for durability. Not really familiar with these stem cell memory T cells.

Is this something there's a particular marker for, or is this a well-known or relatively new phenomenon? Maybe just a couple of words on that..

Right.

So one of the remarkable things that we were seeing in the original AUTO1 or obe-cel work that was done on the pediatric patients was that we had observed this exceptional persistence in the children, and we did see persistence of three years and longer and in fact, had an ability to actually take blood samples from the kids and actually analyze the composition of CAR-Ts by flow.

We could do that because the levels of CAR-T cells in circulation were high and that actually allowed us to have actually sufficient material to really do a proper analysis of what's the composition of cells that we're seeing and what is it that we see that's driving it.

We could also then actually look at patients and at the products that could actually – in children that actually did have responses in children that we did not have responses.

And the subset of T cells or the differentiation that you mentioned just before, with the stem cell like characteristic, seem to be present in those kids that actually did have a proper expansion and a response to the disease. But it seemed to be absent in the kids actually that did not respond.

So it is something that I think – it's an interesting observation. We, obviously, would like to corroborate that in a larger data set. But I think it is interesting, because it may point to a certain differentiation state of the cells that seemed to be associated with outcome.

And I think that needs to be obviously further investigated and further corroborated. But I think it may give a start to give us a sense of some of the drivers that may actually give us a good indication about the ultimate quality of the product.

So I think that's kind of what we were – what the paper was about, and was basically putting forward as an observation, hypothesis that, obviously, needs to be corroborated going forward in larger data sets..

Great. Thanks. Helpful. And maybe just a quick one for Andrew. In your comments on the P&L, you attributed the $1.5 million fee to something.

I didn't catch that?.

I suggested that the license income for the quarter included the upfront – an upfront payments from Moderna..

Okay. That made into 2Q. All right. Thank you..

Yes, it did make it into 2Q, yes..

Thank you. I show our last question comes from the line of Kelly Shi from Jefferies. Please go ahead..

Thank you for taking my questions. I have a question on Autolus fully closed the semi-automated manufacturing process. I remember for ALLCAR19 programming adult ALL, improved result rates have been observed in the patients treated with the cell products from this optimized manufacturing process.

I wonder if this additional benefit also translated to better event-free survival at 24 months. I don't know if you have done stratified analysis on that.

And also for the extension trial and other upcoming trials, are you also using this manufacturing process to drive better efficacy? And lastly, is there any impact on cost of goods sold from this fully closed manufacturing process? Thank you..

Thanks a lot Kelly. Very good questions. So as you pointed out, when the exploration of obe-cel in the adult patients started, the first few patients were treated with product that was generated, frankly, by hand using classical cell culture, similar to actually the way Kymriah was manufactured.

The majority of the patients, however, were then manufactured using the enclosed system that we're also using, obviously, from a commercial perspective, and obviously, it's the basis for the pivotal study as well as the basis, frankly, for all the other programs that we had run in the past, but also running at this point in time.

So when we look at the potential impact, so what you were referring to is that, obviously, it looked – when you looked at these initial patients in the ALLCAR study, that the patients that were actually manufactured with the commercial manufacturing process, they look a tad better than the patients that were initially manufactured by hand.

That is true. It does look different. The question is whether this is a true difference in the – related to manufacturing or whether it was an overhang on patients that just didn't have a place to go and were just basically kept, or managed to just about getting into the trial. That is difficult to discern.

Looking at the individual contributions and EFS actually gets very tricky, because we just don't have enough patients that were actually manufactured by hand. So that analysis becomes very difficult to do, because literally just – you don't have enough patients to follow.

By eye, you would assume that they probably did it tad worse, because also, obviously some of these patients did not respond. So there is potential impact. But whether it's causal or not, I think that's not an easy one to really firmly conclude.

What I think we can say is that the manufacturing process using the enclosed system actually is, obviously, more robust, and it's highly likely more reproducible. And I think that contributes overall to the quality of the outcome, to the quality of the trial.

And it is the fact that it is semi-automated which actually has an impact on the overall cost of goods, because it actually reduces the operator time that you need to put in per product manufactured. And frankly, you can produce more products.

You also actually can simplify the manufacturing infrastructure, because with the enclosed process on the semi-automated setup, you can actually run a large number of products in parallel in the very same suite without physical separation. So it's a single room where you can run them in.

That, obviously, gives you a more efficient environment to work in, compared to an approach where you actually do manual and open manipulations of the patient samples.

That requires you to actually operate in hoods within a clean room, and each product segregated physically into an individual room, one product per room to sort of actually run that manufacturing.

So there is quite an impact on the overall cost that is associated, but it's also on the consistency of manufacture, because you reduce the actual operator manipulations per product, and that actually is giving you an advantage in terms of the efficiency and the cost of manufacture..

Thank you very much, Christian..

Thanks a lot, Kelly..

Thank you. That concludes our Q&A session. At this time, I'd like to turn the call back over to Mr. Christian Itin, CEO, for closing comments..

Well, thank you very much for joining. Thanks for all the questions. We're looking forward to, obviously, keeping you updated. Hope you get a bit of a summer break, and then we'll get back together at the latest, obviously, when we're getting into the September swing and back on the normal circuit. All right. Well, thank you very much.

Have a great day, and we'll speak soon..

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