Main Street Capital Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 4, 2023

There are 10 speakers on the call.

Operator

Hello, ladies and gentlemen, and welcome to the Altilis 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 As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Alexandra Geschner, Investor Relations Consultant. Alexandra, please go ahead.

Speaker 1

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' 1st quarter 2023 financial results and operational highlights. I'm Alexander Deschner, Investor Relations Consultant for Autolus. With me today are Doctor. Christian Eisen, our Chief Executive Officer and Doctor.

Speaker 1

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.

Speaker 1

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 operational highlights for the Q1 of 2023. Lucie will then discuss the company's Q1 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.

Speaker 2

Thank you, Alexandra, and good morning to you all. Thank you for joining us. It's my pleasure to review our progress for the Q1 in 2023. Moving to Slide number 4. We're really pleased with our program and operational progress during the Q1 of 2023, which is highlighted over the next four slides.

Speaker 2

We're making good progress with our pipeline of CAR T programs, particularly with our lead product, obicel, in relapsed refractory adult ALL patients. You will recall that we announced in December that the Phase 2 pivotal clinical trial of obicel 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 $35,000,000 milestone from our partner Blackstone Life Sciences earlier than anticipated. We're looking forward to presenting the top line data of the FELEX 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 11th 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 twenty twenty four.

Speaker 2

Operationally, the key goal for Omichel is the filing for a biologics license application to the U. S. Food and Drug Administration by the end of this year. In February, Doctor. Claire Rohde from UCL presented long term follow-up data from our adult ALL patients in the OLCAR-nineteen Phase 1 study of OBL cell at the tandem meetings of ASTCT and CIBMTR.

Speaker 2

The data demonstrated that 35% of adult patients remained in complete remission without additional anti leukemia therapy at a median follow-up of 36 months with ranges from 24 to 48 months. We're now looking at the broader range of development options for OBLY Cell and AUTO-one hundred and twenty two beyond adult patients with acute lymphoblastic leukemia. In the OLCAR extension study, we have reported OBLYCELL's 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 OBI Cell in peripheral CNS lymphoma and we have completed enrollment and continue to see consistent and encouraging safety and efficacy.

Speaker 2

With adequate follow-up, we are planning to publish the full data in a peer reviewed journal as well. We're following with interest the early and very encouraging results from the team of Georg Schaedt and Andreas Mackensen at the University of Erlangen in Germany in patients with refractory systemic lupus and related B cell mediated autoimmune diseases treated with an academic CD19 CAR T product. Considering OV Cell'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 investigators, Doctor. Sarah Garochian and Persis Imbolia from Great Ormond Street Hospital in London presented updated data from AUTO1 hundred and twenty two, our CD19 and CD22 dual targeting CAR T product candidate.

Speaker 2

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 hundred and twenty two and preclinical characterizations were published in molecular therapy in March and highlighted the state of the art design of AUTO1 hundred and twenty two with its high sensitivity CD22 chimeric antigen receptor and the efficient core targeting leveraging OBCell's CD19 chimeric 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.

Speaker 2

Finally, we conclude we continue to enroll patients into the MECARTY Phase 1 trial of AUTO8 in multiple myeloma and expect first data at the end of this year and expect to dose the first patient in the Phase 1 trial of AUTO6 NG in neuroblastoma this year as well. Turning now to Slide number 6. We've 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 Q1 of 2023, enabling operational qualifications commencing now in the Q2 of 2023.

Speaker 2

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 Caboleta granting them access to our proprietary RQR8 rituximab induced safety switch for incorporation into a set of selected cell therapy programs.

Speaker 2

In January, we also announced 2 changes to the Board of Directors. The company's non executive Chairman, John Johnson, who has held the role since September 2021, will not stand for reelection at the OTLO's upcoming Annual Shareholder Meeting. Additionally, at the end of February, Doctor. Jay Backstrom, who had served in OTLOS Board of Directors since August 20 20 stepped down from the Board after taking on a public CEO role at Scholar Rock. We also announced team with Doctor.

Speaker 2

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 successes for these posts are underway. Finally, total cash and cash equivalents and restricted cash at the end of March were $343,400,000 We've had a diversified treasury approach in place, which served us well through well during the Silicon Valley Bank meltdown 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 obicel, giving us the platform and distribution capabilities required to commercialize a CAR T cell therapy in the U.

Speaker 2

S. Cardinal Health's innovative depot model is intended to reduce delivery time by allowing for transit while product release is being finalized. Alongside this, we continue to build out Ola's 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 OvuCell. The event started with Professor Lori Muffley from Stanford University reviewing the disease therapeutic options and medical need for adult patients with acute lymphoblastic leukemia.

Speaker 2

Professor Claire Rohde from UCL then introduced obicel and 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 deepened understanding of the physicians and patients view of this challenging disease, Doctor. Matthew Gitlin talked about the ALL market and the prospective payers are taking. In 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 in ICANS. Finally, Chris Vann, Otolus' Chief Operating Officer, walked through the commercial roadmap for OV Cell.

Speaker 2

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

Speaker 2

Slide 8, OV Cell, moving to obicel. With that, also moving forward to Slide 9. Obicel has a unique mechanism of action. What's fundamentally different about our product candidate that it has an ability to engage physiologically with the target cell, rapidly binding to the target, which delivers specificity and paired with a fast off rate for rapid disengagement from the target once the cell kill has been delivered. This unique engagement drives maximal activity while minimizing toxicity and is at the heart of the differentiated clinical profile we are observing for OBL cell in ALL and non Hodgkin's lymphoma.

Speaker 2

Moving to Slide 10. Our clinical experience with O B cell and ALL shows a high overall response rate across all patient populations evaluated. In our prior OLCAR-nineteen study, we have 35% of patients in long term remission at 36 months of median follow-up with a range of 24 to 48 months after receiving obicel 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 midsection 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.

Speaker 2

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 3 months. Clinical benefit in ALL will be assessed based on patients remaining in a sustained complete remission.

Speaker 2

We conducted this study in 34 centers, 24 centers in the U. S, 7 centers in the U. K. And 3 centers in Spain, enrolling patients from July 2021 to November 2022 during the peak infection period of the pandemic. Important to realize that relapsed refractory adult ALL patients are highly immune suppressed and the pandemic posed a significant added risk to them.

Speaker 2

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 about as difficult the 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 COVID. 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 in our manufacturing teams. Remarkably, manufacturing for all patients from our facility in the U.

Speaker 2

K. Turned out to be an asset also for U. S. Delivery as the long haul flights from the U. S.

Speaker 2

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 OTLIEBOLIS 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 pre specified interim analysis of the first 50 out of 90 patients dosed and have reached at least 3 months of follow-up.

Speaker 2

The primary endpoints 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 experienced in less than 3% of patients and high grade ICANS in less than 8%. ICANS are fully reversible and less than 25% of patients have any grade of neurotoxicity.

Speaker 2

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 $35,000,000 milestone from Blackstone. Moving to Slide 13. This slide summarizes our current experience with obicel across ALL. As you can see, the data are highly consistent across the various studies both on safety and efficacy.

Speaker 2

Worth noting is that CARPAL and ORILCAR were conducted prior to the pandemic, while both parts of the FELIX study were conducted during the pandemic, both the CARPAL and ORTL CARPAL 19 studies were conducted in the UK, 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 anti leukemia therapies.

Speaker 2

Moving to Slide 14, look at further into the data we presented at ASH from the OLDCAR19 study. When we look into the outcome or long term observation from the OLDCAR19 study, where we have up to 4 years of follow-up, you can see the unusual quite an unusual profile. We could see the 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.

Speaker 2

We have then a group of patients that did respond but relapsed quickly, including patients that have lost the CD19 antigen. We've 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 the 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.

Speaker 2

Overall, obviously, it gives us a lot of confidence in terms of the consistency of data, 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 relapsedrefractory ALL.

Speaker 2

And you can see it is sort of as 2 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 lymphoblastic leukemia, and with that, the disease setting that we're focusing on. We can also see that we see 3 novel therapeutics that are being incorporated into that scheme over the past 10 years. The first is blinatumomab or blincyzo.

Speaker 2

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 2 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.

Speaker 2

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 inatumomab or Besponsa.

Speaker 2

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 plencitos, not curative and in fact is usually used as a bridge to transplant. Finally, the newest product that is available is Brexucel or Tecardis, which is approved in 2021, which is the 1st CAR T cell therapy approved for adult ALL patients. Both BLINCYTA and TECARDUS, which are leveraging or utilizing T cells, do show similar types of immunological toxicities, which are CRS and ICANS, whereas Bithomza can cause liver toxicity.

Speaker 2

Overall, we do have obviously a view that if you have a product that has a high level of clinical activity with a very manageable safety profile, obviously, it's very attractive for patients with B 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. Brincyto, as I mentioned, is a T cell engaging CD19 targeting monoclonal T and that has become the standard of care in relapsedrefractory ALL over the last few years. Key to its success has been the well manageable safety profile.

Speaker 2

Key focus from a patient management perspective is the monitoring of ICANS, which impact about 2 thirds of the patients. And in contrast, if you look at High grade CRS for blingtidal is relatively low. High grade CRS for blintzyda is relatively low at around 5% level and obese cell seems to be similar potentially, slightly better in terms of the high grade cytokine release syndrome level. Now in contrast to blincytodecardis induces 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 experience neurotoxicity of any grade. 40% of patients receive vasopressors.

Speaker 2

This is a challenging safety profile to manage and often requires access to ICU. When we look at inetuzumab, myelobacy active, the program has liver toxicity and is primarily used to the bridge 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.

Speaker 2

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 BLINCYTA are actually good surrogate for our product. Firstly, indaplincytide has obviously a good got a very similar mechanism of action being CD19 T cell engaging agent.

Speaker 2

Secondly, it's used largely in the same indication has a similar albeit somewhat higher CRS and ICANS level. So around 80% of the blintitis sales 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 OBI Cell 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, Plinsighto has had a record quarter in Q1, growing 41% year over year with sales of $194,000,000 reached in the Q1.

Speaker 2

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 $800,000,000 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 Glincidobe. Andrew reports a 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 their capacity for delivering CAR T cell therapy. So both BLINCYTO and ultimately OVYCELL have the potential to be used in a broader range of hospitals.

Speaker 2

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, 1st of all, we're planning to disclose a Phelix data in an oral presentation at ASCO and also at EHA. Long term follow-up and additional sub analysis are planned for ASH.

Speaker 2

We're targeting the BLA submission for the program towards the end of this year, MAA filing towards the end of Q1 in 2024 and the UK filing in the Q2 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 twenty twenty three and will do so into the Q3. Importantly, our commercial manufacturing facility is set up to cover supply for approximately 2 thirds of the estimated market from the start.

Speaker 2

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.

Speaker 2

And alongside this, we are establishing the value proposition for payers in our HDA doses and finally preparing for and starting center onboarding between 9 to 15 months to get each center ready to deliver CAR T therapy. Slide 20. Moving to Slide 21 to talk about the broader opportunity that we see with obicel. As part of the OILCAR extension study, we've been evaluating obicel in relapsed refractory non Hodgkin's lymphoma in CLL patients. We see consistently very high response rates combined with a very attractive safety profile suitable for outpatient use.

Speaker 2

That data will form 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 OV Cell with AUTO1 hundred and twenty 2. We're looking to minimize what we're looking to minimize CD19 antigen loss term relapses with this dual targeting approach. Building on OV Cell, 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 and failed Kymriah or were not eligible for Kymriah therapy.

Speaker 2

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 the responding patients with a median follow-up of 8.7 months where there have been no cases of leukemic relapse or emergence of MRT related to antigen escape. Together, these data indicate that combining our optimized CD22 CAR design with the CD19 CAR used in OV Cell may be effective in preventing antigen loss driven BLAPS in pediatric B ALL. We're working and further streamlining the manufacturing process for AUTO1 hundred and twenty two knowing that we have an attractive life cycle option. Timing of investment decision in AUTO-one hundred and twenty two will be balanced with additional investments for OBI Cell.

Speaker 2

Switching gears and headed to Slide 23. Our technology platform allows us to engineer a range of properties into T cells that drive specificity of recognition, resilience against negative signals used by tumors to evade 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 3 collaborations that I've mentioned, which reported in reported on in 2022 early 2023 with Moderna, BMS and Cabraleta. On Slide 24, we have a quick summary of the earlier stage programs in T cell lymphoma with AUTO4five, AUTO6 NG in neuroblastoma and AUTO8 in multiple myeloma. AUTO4 and AUTO8 are in Phase 1 clinical studies and AUTO6 NG is expected to start during the course of the year.

Speaker 2

Moving to Slide 25. T cell lymphoma has a very high medical need similar to B 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, ALLO-four starts to show meaningful clinical impact at the higher dose levels that we have explored.

Speaker 2

The first metabolic CRs are reaching 1 year post treatment and we continue to follow the patients. In addition, we have streamlined the manufacturing process and are 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 product at scale and matching capacity to the size of the medical need, which is important for a successful rollout of any therapy.

Speaker 2

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 site. This proximity is important as we will be able to move our entire staff to the the facility, the new facility and many, in fact of our employees are already in the process of validating the nucleus facility. The capacity of the Nucleus and its initial setup reaches 2,000 patient batches per year or about 2 thirds of the adult day alone market size. The nucleus has been a fantastic project to realize with innovative design at 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.

Speaker 2

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?

Speaker 3

Thanks, Christian, and good morning or good afternoon to everyone. It's my pleasure to review our financial results for the Q1 ended March 31, 2023. Cash and cash equivalents and restricted cash at March 31, 2023, totaled 343.4 $1,000,000 as compared to $382,800,000 at December 31, 2022. Net total operating expenses for the 3 months ended March 31, 2023, were $43,100,000 net of license revenue of $1,300,000 as compared to net total operating expenses of $41,800,000 net of grant income of $200,000 for the same period in 2022. Research and development expenses decreased by $2,700,000 to $31,300,000 for the 3 months ended March 31, 2023, from $34,000,000 for the 3 months ended March 31, 2022, primarily due to a decrease of $5,500,000 in clinical trial and manufacturing costs, which is offset by an increase of $800,000 in manufacturing material costs due to increased validation activities undertaken, primarily related to our ObuCell clinical product candidate a decrease of $200,000 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 $100,000 in legal fees and professional consulting fees in relation to our research and development activities an increase of $1,400,000 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 and D activities, an increase of $700,000 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 $200,000 in facilities costs related to our new manufacturing facility, The Nucleus, in Stevenage, UK, as well as increases in costs related to maintaining our current leased properties.

Speaker 3

General and administrative expenses increased by 1 $300,000 to $9,300,000 for the 3 months ended March 31, 2023, from $8,000,000 for the 3 months ended March 31, 2022, primarily due to the following: an increase of $700,000 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 and A activities, an increase of $700,000 in commercial readiness costs due to increased commercial readiness activities being undertaken an increase of $100,000 in general office supplies and expenses facilities costs due to the increase in space utilized for G and A activities, a decrease of $200,000 primarily related to a reduction in directors and offices' liability insurance premiums, legal and professional fees. For the 3 months ended March 31, 2023, we recognized a loss on disposal of property and equipment of $3,800,000 related to fixed assets no longer being utilized in the manufacturing facility exited in Stevenage, UK. There were no such disposals for the 3 months ended March 31, 2022. Other income net decreased to $800,000 from $900,000 for the 3 months ended March 31, 2023 and 20 22, respectively. The decrease of $100,000 is primarily due to the recognition of a lease termination loss arising from the termination and exit of 1 of our manufacturing suites in Stevenage, UK.

Speaker 3

Interest income increased to $3,400,000 for the 3 months ended March 31, 23, as compared to $28,000 for the 3 months ended March 31, 2022. The increase in interest income of $3,400,000 primarily relates to the increase in interest rates on our interest bearing bank accounts and short term investments during the 3 months ended March 31, 23 compared to the prior period. Interest expense increased to $4,900,000 for the 3 months ended March 31, 23 as compared to $1,800,000 for the 3 months ended March 31, 22. Interest expense is primarily related to the liability for future royalties and sales milestones, net associated with our strategic collaboration agreement with Blackstone. Net loss attributable to ordinary shareholders was $39,800,000 for the 3 months ended March 31, 2023, compared to $37,100,000 for the same period in 2022.

Speaker 3

The basic and diluted net loss per ordinary share for the 3 months ended March 31, 2023, totaled CAD 0.23 compared to a basic and diluted net loss per ordinary share of CAD 0.41 for the 3 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 you back to Christian to give you a brief outlook on expected milestones. Christian?

Speaker 2

Thanks, Lucy. Moving to Slide 32. To summarize, we think we have an exciting time ahead of us. Obviously, key focus on getting Ovisalign to 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 presentations, data presentations ASCO DHA.

Speaker 2

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 We've got the cash delivered a very significant value step. We've got the data to show that with obicel, 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 obicel in 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 by our collaborators BMS, Moderna and Caboleta, which recognize the value of our technology platform and allows us to monetize this value by way of option exercise fees, milestone payments, etcetera.

Speaker 2

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. Thank

Operator

And our first question comes from Mara Goldstein with Mizuho. Mara, your line is open. Please go ahead.

Speaker 4

Great. Thanks so much for taking the questions. So a couple of things. One is, I'm just curious about the data disclosure on Felix at ASCO versus and will there be anything that's different or incremental at 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?

Speaker 2

Yes. First off, thanks a lot for joining, Mara, and thanks for the question. So the data that we're planning to release at ASCO and 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 presentation. Obviously, the data cut for the 2 presentations is obviously the same because they're literally a few days apart.

Speaker 2

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 dose in terms of the totality of the data, Obviously, we have involved 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 6 months of follow-up, which will give us and start to give us, I think, a pretty good sense of where the product is sort of trending to.

Speaker 4

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

Speaker 2

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

Speaker 4

Okay. Thanks.

Speaker 2

Thanks, Meredith.

Operator

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

Speaker 5

Thanks for taking my call. Question. So the autoimmune indications, obviously, pretty interesting in Novartis and Bristol talked those 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 OVAcell as is right into the autoimmune? Would you look to maybe add any safety modules, just in case of adverse events in that population?

Speaker 5

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 B cell ablation or it's more of a reset of the B cell comparement?

Speaker 2

Very good questions, Matt, and thanks for joining. Obviously, I think we all have been, I think, watching the team in Airline very closely and have the opportunity to also review the data, obviously, once more closely as well. I think what we're seeing is quite an interesting profile in that the reset of the B cell compartment, though, it seems to be 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 auto reactive B cells are coming back. So it appears to be actually a longer term effect.

Speaker 2

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 you actually have to have B cell aplasia 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, also they're not like ALL patients who 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 elevated to what was seen in AML as an example or in other indications. So there seems there's probably going to be a bit of a difference, but I think there's 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 he really captured all these potentially auto reactive B cells and be sure that you have the proper reset. But I think there's more to be learned in the space around that.

Speaker 2

And I think at this point, 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 in a number of different indications with very different challenging patients, I think sets us up very well in that setting. And then the final bit is obviously you have to be able to manufacture, manufacture efficiently and also at the reasonable cost level.

Speaker 2

And it's also one of the key areas we've been focusing on for obicel, and we believe we are well positioned.

Speaker 5

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

Speaker 2

Probably not the full cohort as far as ENCOTEL 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 trajectory of travel is.

Speaker 5

Great. Thanks for taking the questions.

Speaker 2

All right. Thanks a lot, Matt.

Operator

And our next question comes from Yanan Xu from Wells Fargo Securities. Yanan, please go ahead. Your line is open.

Speaker 6

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-nineteen. I was wondering whether conducting a study during the pandemic could have also affected the response rate or duration of response and other metrics of the study's endpoints. Along 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?

Speaker 6

Thank you for taking the questions.

Speaker 2

Well, 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.

Speaker 2

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, is what is what are sort of the individual impact that we could see during that period of time attributable to the conditions that we were having, restrictions on travel for patients, which led to delays for some of the patients to actually get access to treatment, etcetera. 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 Q1 of 2022 and then the differences if you look beforehand and if you look afterwards.

Speaker 2

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 ASH for kind of a 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 in fact questions that we're evaluating in the data and we're looking for various potential signs of impact, etcetera, over time.

Speaker 2

And Vilevsos is going to share that with you. And once these analyses are completed, we also have enough follow-up with all patients to understand the full impact that might have been there.

Speaker 6

Understood. Thanks for taking the questions.

Speaker 2

Thanks, Anam.

Operator

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

Speaker 7

Good morning, everyone, and thanks for taking our question. So, just one for multiple myeloma here. So it feels like the field is getting the standards are getting higher and higher. And I have to admit, there is evidence to show that 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?

Speaker 7

I'd love your insights here.

Speaker 2

Yes. Very good question, Gil. Obviously, an interesting field and I think a field we're all learning a lot about. Obviously, we have on the one 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.

Speaker 2

At the same time, we do see a massive gap between the demand for therapy and the interest 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 that obviously on the one hand is a real challenge to manage because 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 larger patient pool. When we look in terms of the profiles and I think some of the areas that you obviously would want to see is I think with the in this disease setting, you'd like to see a product that has a safety profile that can sort of be managed and handled in a broader range of centers, not just at a smaller number of academic transplant centers, but be able to more broadly than that.

Speaker 2

So I think safety is important. Also, with the age as 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 we will keep watching. And certainly, when we look at the ability to go after potentially driving cells, 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.

Speaker 2

That's what we're interested in understanding from our own product, from AUTO8, And it's one of the key things we're evaluating in this initial Phase 1 study. And I think depending on the outcome, I think there's 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 particular path.

Speaker 7

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

Speaker 7

Thank you.

Speaker 2

Yes, good question. So I would say at this point, we are very focused on delivering obicel. It's a full out effort to deliver the program and really establish the kind of initial infrastructure for commercialization both the manufacturing and from an actual delivery perspective commercial delivery perspective. And that certainly required us to sort of focus very substantially on OBLYCELL. 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 aggressively and more in parallel to the activities that we're conducting with Oviso.

Speaker 2

So there's opportunity there. Obviously, we're excited about AUTO4. 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.

Speaker 7

Thank you for taking our questions.

Speaker 2

Thanks a lot, Phil. Appreciate it.

Operator

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

Speaker 8

Thank you for taking my questions. For AUTO1 3022, could you have to elaborate the definition of Kymriah knowledgeable criteria? Do you see post CD19 car market attractive to pursue for AUTO1 and CD22? And also, we saw 2 auto dual targeting programs targeting CD19, CD20 running trials in post CD19 settings. Could you share your view between CD20 and CD22, which one you feel a better antigen to tackle CD19 and lab?

Speaker 8

Thank you.

Speaker 2

Very good question. Thanks for joining, Kelly. So first one with regards to AUTO1 hundred and twenty two and the fact that we're describing these patients that we're looking for right ineligible, the 2 basic sort of settings that sort of exclude currently the patients certainly in the U. K. From Kymriah therapy.

Speaker 2

1 is, if you already have been on chymriah and have failed, you're not eligible for a second round of chymriah 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 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. So it's a truly refractory population that we have treated here that we also would have expected if we had treated these patients with obicel, we might have been able to get about 40%, maybe if we're lucky 50% into a CR, but certainly not anywhere close to the 83% that we have seen in this extension of the CAR TON study.

Speaker 2

Now with regards to kind of the dual targeting approach and the choice of antigen, there was 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 twofold. 1st, 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.

Speaker 2

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 the patients that have been on prolonged CD20 therapy at time of relapse often have very low levels of CD20 expression or dim if you look at it by fluorescence in a PACS order. So you have a you sort of through these therapies sort of select for low levels of expression, which also then requires you to if you want to go utilize that antigen as your 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 that you'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 CD19 and CD20 combination showed a good level of activity, but also eventually showed some relapses.

Speaker 2

There's limited data from some of the work that's being was conducted in China that showed also good level of activity. And the longer term outcome at this point, to our knowledge, has certainly not yet been published, but I'm sure we're going to see them at 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 lymphomas treated with Urbicel. So we haven't seen patients actually relapsing with CT19 negative disease. And we also actually have seen certainly an aggressive lymphoma.

Speaker 2

We haven't seen actually relapses of patients that achieve a CR. And most of the patients, as you may remember, did actually achieve an antibody CR with Oviso. So whether or not there is a significant added contribution from CD20, I do not know at this point. And I think it's probably still something that we'll need to see over time. And we'll obviously, we're following the space.

Speaker 2

But if we want to use and address the area where we know most about CD19 negative disease or loss of CD19, which is an ALL, unfortunately, CD20 is not suitable. And the only other suitable antigen that it can go after that is actually useful in this setting is CD22, which is the reason why we chose it in the context of our life cycle for Oviso.

Speaker 8

Very insightful. Thank you.

Operator

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

Speaker 6

Hi, guys. Thanks for taking my question. So I just want

Speaker 9

to dig into the answer you gave to the guilt question for a minute, Christian. And maybe just ask how do you compare the type and number of centers where you can get Bloom's phyto versus the number at the centers where you can get TECARTIS? And then as you plan to commercialize OBI Cell, what is your strategy for targeting these medical centers where it's likely to be used and the size of the sales force that you'll need? And then I have a couple of quick follow ups.

Speaker 2

Very good. Well, thanks for joining us, Pikat. This is a very interesting question. And so when you look at where Wincytok was launched, it got launched basically initially in the transplant centers in the U. S.

Speaker 2

And also in Europe, which is in the U. S. Give or take 60 centers that sort of really represent the real core of centers 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.

Speaker 2

And obviously, we have in the current trial in the Felix study, we got 24 of those 60 centers in the trial included and having gained experience with the product. When you think about then the broader opportunity, that is really one of the key things, I think the learnings for glincitron, I think there will be that will also be relevant for OV Cell 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 Brincita 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.

Speaker 2

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 is 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 when they're actually taking the patient into the hospital.

Speaker 2

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 really the initial part where you have the major tumor burden that needs to be taken care of, where you have most of the adverse events, which is true also for the CAR T therapy, of course, the difference being we're only giving a single dose. We have to go have not to go back. We don't have to change drug reservoir, etcetera. So when we look at the actual adverse event profile then of the 2 programs of blintzite and omicel, Clearly, obicel, if anything, actually has an improved safety profile.

Speaker 2

And that actually gives you a very good, I think, proxy for the ability to deliver 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 the initial core, which address and allows you to actually reach a substantial proportion, if 70% to 80% of the patients. And over time, as there is more experience with the product, as it was the case with Glencaito, 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 to have the footprint and with that should be able to reach the same patient have access and provide access to therapy for the same breadth of the patient population as we're seeing today with TENZYTO. So that is where we're looking at that, how we're projecting that.

Speaker 2

In terms of the sales force size, 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 age driven commercial activity. And in fact, that's a very focused given the number of centers focused team. What we did do see is actually that the Aristides, although the workload is a bit different than with Flinsight, it's actually very comparable with a launch, basically size of your commercial organization for the U. S.

Speaker 2

Is about 120 to 150 people.

Speaker 9

Great. Thank you, Christian. And then if

Speaker 7

I can follow-up, a couple of

Speaker 9

quick ones. At ASCO, about what proportion of patients of the 50 patients in the efficacy analysis will have 6 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 as to why we need to go to Frankfurt.

Speaker 2

There's always opportunity to have a beer, and that seems like a good reason for why you might want to go. I won't fly anywhere. Okay. There you go. There you go.

Speaker 2

Okay. Look, when we went so 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 somewhere between 8 9 months of follow-up on 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.

Speaker 2

The nature of what we're going to show ultimately on any additional potential analysis, I think that is still actually being finalized and would be too early to guide on. So I think it comes down to you probably have to go for the beer to be on the safe side. So you're there, you're not going to miss anything.

Speaker 9

Okay. Appreciate the color guys. Thank you so

Operator

Okay. That concludes our Q and A for today. I would like to now turn it back to Doctor. Christian Ithen, Chief Executive Officer for closing remarks. All right.

Speaker 2

Well, thank you very much. First of all, thanks all for joining today. Fantastic to have you all on and for taking the time. And we're obviously looking to forward to hopefully seeing you in person during one of the 2 main conferences this summer. And if not, hopefully upon our recent upcoming trips to the respective areas.

Speaker 2

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. And thank you very much

Operator

for your participation. This does conclude our program. You may now disconnect.

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Earnings Conference Call
Main Street Capital Q1 2023
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