Autolus Therapeutics PLC (AUTL) 2018 Q4 法說會逐字稿

Good day, and welcome to the Autolus Therapeutics Financial Results Conference Call. (Operator Instructions)

Please note, this event is being recorded.

I would now like to turn the conference over to Silvia Taylor, Vice President of Corporate Affairs and Communications. Please go ahead.

Thanks, Andrew. Good morning, and good afternoon, everyone, and thank you for taking part in today's call. With me today are Christian Itin, Chairman and Chief Executive Officer; and Andrew Oakley, Chief Financial Officer. Also, Christopher Vann, Chief Operating Officer; and Vijay Reddy, Chief Medical Officer, will join us for the Q&A portion of our call.

Before we begin, I would like to remind you that during this call, we will be making forward-looking statements. All statements, other than the statements of historical fact contained in this presentation, are forward-looking statements. Our actual results, performance or achievements may be materially different from those expressed or implied by the forward-looking statements. For a discussion of the risks and uncertainties relating to our business and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, please see the section titled Risk Factors in our annual report on Form 20-F filed on November 23, 2018 as well as discussions of potential risks, uncertainties and other important factors in our other periodic filings with the Securities and Exchange Commission. The forward-looking statements contained in this presentation reflect the company's views as of the date of this presentation regarding future events, and the company does not assume any obligation to update any forward-looking statements. You should therefore not rely on these forward-looking statements as representing the company's views as of any date subsequent to the date of this presentation.

The agenda for today is as follows. Christian will provide a brief corporate overview and introduction followed by our operational highlights during the transition period, October through December 2018. As context, Autolus has changed its fiscal year-end from September 30 to December 31. This move requires the filing of a 20-F transition report under SEC rules. Andrew will discuss the company's financial results, and then Christian will conclude with upcoming milestones and news flow. We welcome your questions following our remarks.

With that, I will now turn the call over to Christian.

Thank you, Silvia. Good morning to you all, and thank you for joining us. I'm pleased to review our recent progress and outlook for 2019. This is Autolus' first earnings call and after our IPO last June, and I would like to start with a brief overview of our company before I get to the highlight of the last 6 months.

On the next slide, Slide 5, the initial CAR T programs that reach commercial stage represent a significant improvement for patients with aggressive leukemia and lymphoma. Those programs, however, also highlight challenges that require different solutions to further enhance patient benefits. Too much immune activation by the initial CAR T programs in patients with acute lymphoblastic leukemia led to severe immunological adverse events. This limitation triggered the development of AUTO1, a program designed to maintain high antitumor activity without inducing severe cytokine release syndrome. Coping with cancer cells that have an inherent ability to defend off T cells using a broad range of defense strategies and mechanisms led to the development to our programs, AUTO3, AUTO3 NG in B cell malignancies AUTO2 in multiple myeloma and AUTO6 NG and AUTO7 in solid tumors.

Starting with AUTO3. This program aims at reducing relapse due to loss of antigen and in combination with pembrolizumab also addresses inhibition by checkpoint.

AUTO3 NG, AUTO6 NG and AUTO7 are designed to expand the capability of T cells to withstand hostile defense mechanisms by including programming modules that render the T cells insensitive to the family of checkpoints and to tumor environmental factors. More of this will be presented at our upcoming R&D event in New York City on March 26.

Finally, AUTO4 and 5 represent a completely new approach to tackle T-cell lymphoma.

Let's start with an overview of our B cell programs where initial focus is on acute B-lymphoblastic leukemia and diffuse large B cell lymphoma. Earlier this month, we announced updated data of AUTO1 from our ongoing Phase I CARPALL trial in pediatric patients with acute B cell lymphoblastic leukemia. The data were presented at the EHA first European CAR T cell meeting in Paris. Data were consistent with initial data presented at ASH in 2017, however, extending the observation time post therapy considerably. This updated presentation confirmed the previously reported high molecular complete remission rate of 86%, with an absence of severe cytokine release syndrome in those patient levels Grade 3 to 5. Eventually, survival at 12 months was 46%, and overall survival at 12 months was 63%.

We also announced initial results from the ongoing Phase I/II AMELIA trial in pediatric ALL at the ASH Annual Meeting in December 2018. AUTO3 was generally well tolerated with no severe CRS and only 1 patient Grade 3 neurotoxicity observed. 80% of patients achieved a molecular complete response, with all patients achieving molecular complete responses at dose levels of 3 million cells per kilogram or higher.

In that higher-dose group, 67% had an ongoing molecular CR. Encouragingly, no loss of CD19 or CD22 was noted among relapse patients. Dose escalation in the study continues.

I'll note that for adult ALL, we expect to report first results on our ongoing Phase I/II trial of AUTO1 at AACR during the first week of April. This will be the first time we report on clinical data in this indication.

Finally, at ASH, we also announced initial results on the ongoing Phase I/II ALEXANDER study of AUTO3 in patients with relapsed/refractory diffused large B cell lymphoma or DLBCL. Data was from the initial -- presented was from the initial dose level of 50 million cells with or without consolidation with anti-PD-1 monoclonal antibody pembrolizumab.

Out of 7 patients evaluated for safety, none developed severe CRS, and 1 patient had neurotoxicity Grade 3. No dose-limiting toxicities were observed, and dose escalation continues. Six of the patients were available for response, with 2 achieving a complete response, which were ongoing at 6 and 3 months, respectively. And 2 had a partial response. Two patients did not respond. The ALEXANDER study continues to enroll patients at higher doses of AUTO3.

Next, I would like to provide a short outlook on our program T cell therapy AUTO4 and 5 for the treatment of patients with T cell lymphoma. This program utilizes a pair of epitopes called TRBC1 and TRBC2 on the T cell receptor better chain to target the cancer while preserving a substantial portion of the normal T cell compartment. The companion diagnostic is used to identify whether the T cell lymphoma is TRBC1 or TRBC2 positive. In December, we announced that the first patient had been dosed in the Phase I/II LibrA T1 clinical trial of AUTO4 for relapsed or refractory TRBC1-positive peripheral T cell lymphoma. Preclinical data from the sister program AUTO5 targeting TRBC2-positive T cell lymphoma were presented at ASH as well.

Rounding out our portfolio are our multiple myeloma and solid tumor programs from which we'll be providing updates later in the year. AUTO2 is the first dual targeting program T cell therapy targeting B cell maturation antigen, or BCMA, and the transmembrane activator and CAML interactor or TACI. AUTO2 is designed to address a key escape route used by hematological cancers in response to T cell therapies. This product is currently in Phase I/II for multiple myeloma with completion of Phase I targeted for the end of this year.

And finally, AUTO6 is a program T cell therapy in development for the treatment of neuroblastoma or GD2-positive tumors. AUTO2 targets dislike a single lipid with an optimized binder using humanized targeting domain. The key goal with this program is to target the tumor without inducing the significant neurological adverse events with other GD2 targeted therapies. Data from a Phase I clinical trial with AUTO6 was conducted with Cancer Research U.K. and presented at AACR last year. We're now developing the next-generation version of the product candidate called AUTO6 NG, which incorporates additional programming modules designed to enhance clinical benefit.

Now important on Slide 6 to our ability to serve patients is our product delivery. Our facility at the Gene and Cell Therapy Catapult in Stevenage in the U.K. is critical for clinical trials supply. The facility and our suite have now been licensed by the MHRA, and the suite is fully operational.

In January, we initiated the build-out of a commercial manufacturing facility in Enfield also in the U.K. called the GRiD, which is expected to open in 2020. This facility will provide global supply for viral vector as well as planned capacity of 1,000 T cell therapies annually. The GRiD is planned to serve at our initial commercial launch facility. Also, in January, we signed a long-term, full-building lease for a built-to-suit facility that will be the site of our first full commercial scale manufacturing center with a planned capacity of 5,000 T cell therapies annually. This facility will also house our new U.S. headquarters and will be located in Rockville, Maryland close to our current offices. The facility is expected to open in 2021.

Finally, patient-specific product delivery requires intelligent tracking, tracing and planning systems for efficient manufacturing and certification of supply. We have recently signed agreements with leading providers for enterprise software to track and trace individual batches during manufacture and delivery and for state-of-the-art enterprise quality system. It also will be partially funded through the ground from Innovate U.K., which to date has awarded us various grants totaling GBP 6.7 million or approximately $8.7 million.

Before I end our operational date, I would like to highlight new members to our management team. Many of you have already met Andrew Oakley, our CFO. He brings to Autolus a wealth of international finance experience and more than 15 years as a public life science company CFO. Adam Hacker joined us as Senior Vice President for Regulatory Affairs and Quality, and he brings significant expertise to guide us through our clinical programs and future registration pathways.

With that, I will turn the call over to Andrew for our transition period and 2018 financial update. Andrew?

Thanks, Christian, and good morning and/or afternoon to everyone. It's my pleasure to review our financial results for the 3 months period October to December 2018.

And just as a reminder, the comparative numbers for the 3-month period 31 December 2017 are unaudited.

Net total operating expenses for the 3 months ending December 13 were $25 million, net of grant income of $0.3 million. This compares to net operating expenses of $8.4 million, net of grant income of $0.2 million for the same period in '17. The increase was due in general to the increase in clinical trial activity, which is expected to deliver on key milestones in 2019, increased headcount and the cost of being a public company.

Research and development expenses increased to $17.7 million for the 3 months ended 31 December 2018 from $5.6 million for the 3 months ended in 2017. Cash costs, which exclude depreciation as well as share-based compensation, increased $15.2 million from $5.1 million. The increase in research and development cash costs of $10.1 million consisted primarily of an increase of $4.3 million in project expenses related to clinical trials. An increase in compensation-related costs of $3.8 million was primarily due to an increase in headcount to support the advancement of our product candidates in clinical development and an increase of $2 million in facilities costs and consumables supporting the expansion of our research and translational science capability and investment in manufacturing facilities and equipment.

General and administrative expenses increased to $7.6 million for the 3 months ended December 31, 2018 from $3.1 million for the comparative period. Cash costs, which exclude depreciation, as I mentioned, as well as share-based compensation, increased to $5.7 million from $2.5 million. The increase of $3.2 million consisted primarily of an increase of $2.3 million in insurance, patent costs, commercial costs, investor relations and communications costs and additional facility costs as well as an increase in compensation-related expense of $0.9 million.

Net loss attributable to ordinary shareholders was $20.6 million for the 3 months ended December 31, 2018, and that compared to a loss of $7.5 million for the same period in 2017. The basic and diluted net loss per ordinary share for the 3 months ended December 31, 2018 was a loss of $0.52 compared to a basic and diluted net loss for the comparative period of $0.26.

Cash at December 31, 2018 totaled $217.5 million compared with $129 million at December 31, 2017. This increase was due primarily to the $156.5 million in net proceeds resulting from our June U.S. initial public offering. And we anticipate that cash on hand provides a runway into 2021.

Finally, we are pleased to have been included in the NASDAQ Biotechnology Index as from December 24 last year. And as Christian has mentioned, I would just like to remind you that we will be holding an R&D Day for institutional investors and analysts on March 26 in New York City. So please contact us for more information if you'd like to attend.

And with that, I will now hand the call back to Christian to give you a brief outlook on our expected upcoming milestones for the year. Christian?

Thanks, Andrew. Obviously, with the year already underway, we're well ahead in terms of developing our programs towards the next stage. The key updates that we expect for the course of this year is, first, an update on our AUTO1 clinical trial in adult patients with ALL and AACR, which will be followed by additional updates on AUTO3 midyear; first data expected for our T cell lymphoma program, AUTO4, also in the midyear section; and then all -- for all our hematological programs an update planned for ASH. In addition, we expect to provide first updates on our programs into the solid tumor arena towards the end of the year as well.

So overall, I think what we're looking forward to is moving in our B cell portfolio 2 of our programs into the next development stage during the course of the second half of this year.

With that, we're happy to take questions, and we're going to open up the call for questions at this point.

(Operator Instructions) The first question comes from Graig Suvannavejh of Goldman Sachs.

Can you hear me?

Graig, we can hear you loud and clear.

Okay, great. Three questions, if I may. First two, perhaps, are for Christian, and maybe the last is for Andrew. But Christian, just as it relates to AUTO1 and AUTO3 in the adult setting of ALL, besides, perhaps, just safety and efficacy, are there any other considerations that will go into any decision to advance one over the other? So that's my first question. My second question has to do with just your overall strategy and approach around go and no-go decisions. Is there a certain philosophy that you have with all of your clinical candidates? And then my last question is just for Andrew from a modeling perspective. I know you're not as a company giving 2019 financial guidance, but could you help us think about kind of the evolution of R&D and SG&A throughout the year as the quarters progress?

All right. Well, happy to answer your questions, Graig. Starting out with the question of how we're going to actually prioritize the various options that we have for the treatment of patients with acute lymphoblastic leukemia. What we're obviously building on initially is the experience we have in the pediatric patients. And I think, there, we have just updated and just went through some of the data we have from the CARPALL study with AUTO1 where we see a very good set of activities in these kids with a very attractive safety profile. When we look, however, in children, the fundamental challenge we have in children is that a significant proportion of those kids do relapse with target negative disease. Now obviously, AUTO1 is not designed to tackle that particular question. And when we look at that, this is obviously the premise for AUTO3 in pediatric patients with ALL is that what we'd love to see is an improvement in terms of the outcome for patients and a reduction in target negative relapse driven disease. So that's kind of the core thing that we're looking for. So the primary focus in pediatric patients for us is very clearly on AUTO3 in pediatric patients, so a planned update on the data set that we had shown at ASH planned for middle of this year. That's the first part of the question. Second part is adult ALL. Adult ALL is a tricky disease in a sense that is, on the one hand, very close from a general physiology perspective to the pediatric setting. However, the patients have a much harder time coping with the adverse events, and this has been the story, in fact, of adult ALL is that despite the initial win in the early '60s we had with combination chemotherapy, that intensity of care was required to induce these significant outcomes in kids was actually too toxic for adults and adults couldn't take it. Similar to when you look at the profile that we now have as reported for some of the competitive programs, particularly the approved data set, is that there is somewhere in the range of 47% high-grade CRS Grade 3 and higher that was reported. That required actually with the children for the case to actually go into ICU, as reported in that publication for 7 to 8 days. That is a very significant challenge, and it also required 22% of the kids to get on a ventilator. So if you translate that into adult patients, that actually is a much more challenging proposition. And so we believe what you have to find is you have to find an approach that gives you the potency, the clinical activity without actually this massive amount of hematological toxicity that goes along and that we observe in the children. And this is really what AUTO1 was designed to address. We're getting our first data, and as I indicated, is planned -- the first release is planned for AACR early April. And, obviously, if we have a profile that on the safety looks similar to the kids and an activity profile that looks similar to the kids, that is actually an attractive proposition because the standard of care we have to go against is, in essence, blinatumomab, which is obviously a known entity in terms of the response rate, which is in the range of 40% response CRA compared to what we've seen now in the kids in the CARPALL study in the 80% range. So I think there's an attractive proposition if we can get the safety right in the adult ALL patients for AUTO1. Now AUTO3 could obviously add something on top. What we do not know at this point in time, to what extent antigen loss is a driver of relapse in adult patients. And that's something, obviously, we'll learn over time. And we'll have to see how that profile develops, and it may become, over time, an attractive proposition going forward. But very clearly, with an attractive profile for AUTO1, similar activity as in the kids with a reasonable safety profile in adults, we believe that is a very attractive program to take forward. So that's -- I hope that helps you sort of understand our thinking, which is if we have a program that we think we can actually tackle the standard that's currently out there in adult patients in a significant way, that is a program we should be taking forward. But it will not stop us, obviously, to continue to make improvements in the future. When it comes to going over criteria, clearly, what we demand for all our programs is a significant improvement over the current therapeutic options. And that, we think, is important I think for anything we do. And that is sort of the key guiding principle that we're actually using. And as I just illustrated, if you're in the range of 40% CR rate with blinatumomab, if you can move that up by a factor of 2, that clearly is a meaningful and significant improvement over the current opportunities of therapeutic opportunities. And that tells you right away that, that is something you should be pursuing. If it is the marginal benefit you're looking at, then it's questionable, obviously, whether that's the right program to take forward. So we're very stringent at that level, and we'll have mobility with a relatively limited number of patients to actually make that evaluation. And with that, I'll hand it over to Andrew for the financial question.

Graig, I'm very happy to handle the financial question. In terms of evolution of R&D and G&A, I think we're going to stick with the guidance that says that sort of the cash will last into 2021. I think if you look at the 3 months for October, December '18 versus the comparative period for '17, you see quite a significant increase in the level of expense. And that's obviously driven by clinical activity in terms of number of patients that are being treated in clinical studies as well as the investments we continue to make in research as well as in manufacturing as well. So you will see that developed and developed significantly compared to the prior period. But I don't think we're going to give any more guidance at the moment, other than we're good until 2021.

The next question comes from Jim Birchenough of Wells Fargo.

So maybe I'll start with Andrew, but Chris, you might weigh in as well. Just thoughts on driving efficiency in your processes to lower cost of goods. It seems like it's one of the limitations of existing CAR T high cost of goods. So maybe you could just comment on how you position your cost of goods and efficiency of manufacturing, and then I have a few clinical follow-ups.

Yes, happy to. Good morning, Jim, and thanks for getting up that early. We know this is highly painful, so we appreciate you're taking the time. So with regards to efficiencies, I think it is important to understand that, obviously, you want to make sure that you have consistent manufacturing for patients. You have consistent quality. And that is first and foremost, I think, the important thing that you have to deliver on manufacturing. When we think about getting efficiencies into the manufacturing process, it is very clear that if you have to manufacture as we do for each patient specifically, you have to put yourself in a position where you can, in fact, manufacture in parallel a large number of samples and products. And only if you can do that efficiently, you can get access to the economies of scale. And so 2 key components here. The first key component is that the manufacturing cost isn't fully enclosed. In other words, we collect the cells from the patient, and we keep these cells in a contained environment throughout the entire manufacturing process, and that obviously reduces handling steps that are manual handling steps, and it avoids actually the requirement for costly infrastructure to be able to run an open cell culture type process, which is sort of where the field originated and started with. So an enclosed process is an absolutely key element to sort of creating an element of efficiency. What you then have to get to is you have to get to a level of automation into the manufacturing process, and this is obviously something that we built in from the get-go, which allow us to as we normally refer to is the semiautomatic manufacturing process. It requires manual loading and offloading, but basically, the actual manufacturing process itself is all machine-based. And that is critical because that allows you to actually get a good level of economies of scale. But more importantly, it gives you a higher level of consistency across the manufacturing process and with that higher quality of the product you can generate. I think with that in mind, I think when we look at this space is we see kind of what the -- those of us who've been around the block a little while and remember the early days of monoclonal antibodies, I think where we are is pretty much at that stage is that level of overall economics that, I think, we can definitely provide with our level of manufacturing. And as we learned in that particular space is then through a consecutive or consequent improvement of processes and improvements that reduce in incremental fashion, that field has moved in an enormous way and basically taken the cost of goods pretty much off the table 20 years later. I think also, as we're here in this field, we're just starting out. We have now to made a big step to get into fully enclosed semi-automated processes. But here -- from here on forward, there's an enormous amount of continued improvements that we expect to make that will also make these manufacturing processes highly cost efficient as we move forward. So at the start of the journey, but I think taking a cue from the journey we went through with the monoclonal antibodies, I think this is where we're headed. And we're starting out in a place that is very similar to where the Herceptin (inaudible) actually started out with 20-some years ago.

A question -- maybe a high-level question, you alluded to it in your comments on AUTO3 and antigen loss and, perhaps, not full information on what proportion of patients experience progression because of antigen loss. But wondering how you can accelerate that process of gaining knowledge on what drives progression from current CAR Ts, whether it's antigen loss, the tumor microenvironment, PD-1, other checkpoints, loss of cells and persistence of cells. How do you tackle that? Because it seems like we still don't know a lot about what drives progression. Perhaps, the leaders are keeping that close to the vest. But how do you drive that information gained with your own programs but also source it externally?

Right. It's a very good question, and it comes to really at the core of what we're focusing on as a company, which is understanding the interface between the tumor and the T cells and realizing that every tumor that we're actually identifying a patient for the first time we diagnose for the first time, that tumor already has learned to defend against T cells. And I think that is important to keep in mind. So in most cases, just doing a pure redirection of T cells to a new cell surface antigen is not solving the problem. The exception probably to that rule pretty much is actually ALL, which is a bone marrow disease where it's a place for T cells home very efficiently and then obviously a disease that basically just wins because it grows faster than pretty much anything else, and it grows at the very space where immune cells are generated. And with that, the defenses don't have to be quite that sophisticated. Now what, obviously, you have as a defense mechanism that builds up as you have very fast dividing cell is that obviously, every cell division is an opportunity to accumulate mutations. And a tumor that has a very short generation time, which is true for ALL, in other words, growth-like gangbusters, has a lot of opportunity to accumulate mutations. And this is what we're seeing. So antigen loss is actually primarily driven through a mutational event, either a nonsense mutation or stop codon that could actually be -- that is being generated. And that causes the loss of expression, which is really a total loss of expression of the particular antigen. And because we have a highly powerful selection mechanism using the CAR T cells, we sort of highly specifically select for those very cells that actually have that ability. What we know from my old work with blinatumomab is that also, even in ALL, a small proportion of the patients could actually relapse because of up regulation of PD-L1, which is something we published on several years ago and is now understood to actually be directly driven by a -- secreted cytokines that -- T cells secrete when they undergo and go through the killing of target cells. So we know that there is a dynamic component to this. We know there's a mutational component to it. Now what we do know certainly for pediatric ALL because that's where we have the biggest data set both from Kymriah but also our own data is that if you have a CD19 targeting -- a single targeting approach in pediatric ALL, the predominant reason for relapse is, in fact, antigen loss. And we expect that anywhere in the range of 60% to 80% of the case, the time of relapse actually have lost to antigen. So that's on the one end of the spectrum. What we know from Kite's presentation back in 2017 on patients that have relapsed in the ZUMA-1 trial and DLBCL is that about 1/3 of the patients have relapsed due to antigen loss, and 2/3 have high levels of PD-L1 expression at the time of relapse, indicating that DLBCL may be more defended on the checkpoint site than it is defended on the antigen loss. And it does make a lot of sense when you think about the speed at which DLBCL grows. It's also an aggressive lymphoma but isn't quite in the same category of growth as we have with acute leukemia. Moving into other settings, obviously, the data becomes very scattered and very sparse. And so what we do is a very -- a very intense program to actually look at a wide range of tumors as well as the environment to understand what are the types of markets we pick up, what are the challenges that actually are going to build up in those tumors. And this is actually going to be a key part of the conversation what we'd like to have at our R&D day at the end of March, which is really focused on exactly those questions and then also the technological approach we're taking to address those types of challenges. But it's very clear that the level of sophistication that cancer cells develop, particularly slow-growing cancers develop against incoming T cells, is exquisite or it is scary when you think about the opportunity that, that creates for escape. And so this is the core focus of the company. And it is fundamentally the key question you have to answer if you want to actually improve overall outcome for these patients. If you want to improve clinical benefit, that's the key question you have to tackle, and that's where you have to find solutions to. It's not a cost of goods. It's not cost of therapy. It is actually making a difference for these patients on the outcome. And that ultimately all comes down to understanding the interplay between the T cells and the cancer cells. I hope that sort of addresses the question that you're asking.

Yes -- no, very helpful, Christian. And just a final quick one. Just as we go to AACR, just want to confirm that we should be looking for both safety and efficacy data, i.e. to the extent you're trying to improve a therapeutic index here, I just want to confirm doses or we'll see data on doses where you'd expect to start seeing efficacy and hopefully without the toxicity. Is that the case?

Right. I think, and as I laid it out with regards to adult ALL, you have to have an efficacious therapy, but it has to be tolerable. And so yes, you have to look at both sides of the equation. We expect to be able to -- start to give answers on both sides of that question.

The next question comes from Biren Amin of Jefferies.

Christian, so on AUTO2, what would be the go, no-go decision for this program later this year, given BCMA dynamics where you've got a number of competitive programs that are out there?

Biren, thanks for joining. Excellent question. When we look at the multiple myeloma space, in particular, the BCMA-targeting therapies, I think we've seen a remarkable development over the last probably 12 to 18 months. And what we have at this point, if we kind of look back at the data presented across a range of programs, about 10 CAR T programs, certainly, the AMG 420 program from Amgen, which is one of my old Micromet program; as well as probably -- the 10 bispecifics against BCMA that are in the works and somewhere within late preclinical or early clinical development. The most remarkable thing when we look at the data is that the data actually look quite similar when you look at across these programs. So a good level of activity. But it looks that are in our view are quite super imposable if you subtract patient variability and treated versus intend to treat type of analysis and so on. So when we look at this, the challenge we find is that the therapies are very active at that level with PFS levels between 10 and 15 months or so. But they do not seem to actually have a transformational type of quality. When we think about the key data, I think probably some of the most compelling data that we've seen at ASH was from Yescarta and Kymriah both in each one of their indications demonstrating that the survival curve is starting to flatten out and almost horizontal with a significant level of observation time. That is transformational in terms of the activity. We don't think we see anything like that yet in multiple myeloma. In other words, we buy time, but if the patients continue to drift, it doesn't look like we're inducing actual cures in those patients. And that will make it actually challenging to more broadly develop these programs. So we see a place for those programs in the back end of the disease. But given the fact that the T cell engagers as well as the CAR Ts are similar -- quite similar in activity, we will predict quite a fragmented market as a back end of that disease setting. When you then look into third line or second line, you have to actually start to be -- on intend to treat, you have to be 20 months in the third line and 36 months plus in the second line. And both of those numbers are actually going up with increased use of daratumumab. So that creates a very challenging environment. And I mentioned the fact on intent to treat, right now, all the CAR programs you see actually presented untreated, not an intent to treat. But of course, as soon as we got [the lines] it's a proper randomized controlled study and you'll be actually on a level playing field with the other therapies. So that's a tough -- a tall order to take with the current profile. So when we look at it is we obviously want to see kind of where AUTO2 comes out. At this point in time, it doesn't look like antigen loss is the primary driver for the relapse. When we look at it, the data as it was published, it's probably not quite enough in terms of depth of response for these programs that are currently reported on. There is limited persistence of therapy and none of the programs address any of the defense mechanisms that multiple myeloma is known for. So we believe that there is a good sense of what you need to start to address. And so what we're doing is we're going to read out all the 2. We're going to report at the end of the year. If we're in a similar ballpark as the currently leading programs are, we don't think that makes sense to actually push forward because they're nontransformational profiles. And what we're already working on is the next-gen program to address the 3 questions I just posed before as the key limitations of the programs. In our view, we should actually have the aspiration of being transformational also in multiple myeloma. Otherwise, that disease setting, given the long duration of effect we have with other therapeutic modalities, we believe it's going to be challenging.

And our next question comes from Debjit Chattopadhyay of H.C. Wainwright.

Can you hear me?

Yes, Debjit.

So just one question, more on the relapses in the AMELIA program. Could you help us understand in terms of the stringency of defining relapses, whether it's the AMELIA program or the CARPALL program, what has been done traditionally for Kymriah and Yescarta and how you guys define relapses? And how does that relate to in the real world setting?

Right. So traditionally, the relapse in acute lymphoblastic leukemia is based on counting blasts in the bone marrow. If you have more than 5% blasts in the bone marrow, you call that a relapse. That's called a morphological relapse, and that's still the standard criteria to determine and to call out a relapse. And I think what we all learned in the space over last 15 years is that we have actually indication of the patient relapsing earlier than that. And we're actually better off if we start intervening at an earlier time point than waiting for the patient to sort of have a morphological relapse and then actually start contemplating to intervene. And so what the field have started to work on probably 15 years ago is to develop methodologies that would actually allow you to pick up tumor cells with a much higher degree of sensitivity. And the 2 other methods that are predominantly used. There is -- basically as one of the methodologies is fact sorting. So it's flow cytometry where you take a bone marrow aspirate. You run it through and you basically count the number of tumor cells versus the normal cells you have in the marrow. That gives you sensitivity of about 1 in 1,000 typically on flow and in most settings. There's some specialist labs who could push that a bit further, but generally to that 1 in 1,000 cells instead of 5 in 100, which is obviously what the morphological approach would give you. The more stringent approach to actually look at is called the molecular complete remission or molecular assessment. And the molecular assessment is based on TCR based on looking at typical mutations that you find transpositions that you find in the tumor cells. And they give you actually a sensitivity of about 1 in 10,000. So what you'd call a molecular response is actually when you lose that TCR signal. That is actually the loss of signal that gives you the answer. And that was developed over the last probably 15 years. Actually, with blinatumomab many years ago, we did the first prospective trial using this type of an assessment back in 2008. And now it's been very widely adopted. So what we chose to do in the way we presented the data, the AMELIA data at ASH is we chose to actually put or indicate a very stringent -- a much more stringent sort of measurements for relapse. So we showed molecular relapse. In other words, you go from a TCR negative to a TCR positive signal, and you indicate that. And then what we could show is also that with the time delay, which could be a few months in between, you would actually go from a molecular signal to a flow signal. And then again, some time later, that would actually be manifest in the form of a morphological relapse. So when you look at the Kymriah data as it was presented in the New England Journal of Medicine was the key reference point in the registration package as well was based on morphological relapse. It was not based on those more stringent methodologies. We feel you that we should give all of those various parameters because, frankly, if as a physician, you have one of those patients that starts to relapse and you have an opportunity to intervene, you wouldn't actually wait until you have a more "mature relapse." But you would intervene when you have first signs that, indeed, the disease is actually coming back. And so in that sense, the assessment that was used sort of in a -- from an official way in terms of those that was represented in the journals to what the clinical practices actually deviates, to some extent. And hence, we're providing and we're looking to provide all 3 types of data points.

And do you plan to present your data set with the morphological relapses down the road for an apples-to-apples comparison?

Right. So the plan is that we're looking to actually present all 3 parameters. So actually, you have a real understanding of how it compares to some of the other data but also to get a sense for the trend and get kind of an early information should, indeed, that patients start to progress. The plan is to show all 3. And we've just also submitted for publication, the CARPALL data, and that actually will include all 3 measurements.

The next question comes from Matt Phipps of William Blair.

First, some of the competitors are already kind of moving into earlier lines of therapy in DLBCL. So just, obviously, you need to see the data with AUTO3. But do you think that this is something where maybe you move the AUTO3 next generation into earlier lines of therapy? Or would you look to kind of start in third line or second line trial with AUTO3 initially and move that forward to be a little bit quicker? And then secondly, with AUTO1, you talked about some of these CAR T therapies putting patients in the intensive care unit. And that's obviously a major cost and also something that physicians are -- want to avoid if possible. So do you think AUTO1 could be provided in almost an outpatient setting if it continues to have the safety profile you've seen to date?

Okay. Matt, thanks for joining. Excellent questions. The first question related to DLBCL. I think as -- the way the current trial is set up, which is set up as kind of a Phase I/II trial that allows us to go to dose and then from dose to a data set that, obviously, if it's strong enough, obviously, will be supported for registration. That trial is designed in a relapsed/refractory patient group. So that is sort of at the back end of the disease. And the reason obviously for going there is obviously, it gives you the fastest way in terms of actually getting a readout. And at the same time, it is a setting where we do know that -- we do know what sort of the comparable data sets look like. This is not obviously in a true head-to-head comparison because it's not going to be a randomized study. But we do obviously know that between Yescarta, Kymriah and JCAR-17, the programs are relatively close together with potentially Yescarta being slightly ahead in terms of efficacy with kind of the 2-year data pointing to a value between about 35% and 40% complete remission rate at that point in time. But it also gives you enough room to actually show improvement over and above on terms of the complete remission rate, and that's sort of the primary objective for AUTO3 to see whether we can actually demonstrate that. In terms of moving up the lines, obviously, we're very keen in moving forward our next program, which, obviously, builds on AUTO3 in its current form. And it's expected to add 2 additional modules, one that tends the cells -- or renders the cells insensitive to checkpoint. In fact, not just one, but the family of checkpoints; but also secondly, renders the cells insensitive to micro environmental factors like [TGF-beta]. And that is sort of what we're planning to do with that program. We are, obviously, moving this forward. Expect to be in the clinic end of this year, early next year with that program as well. But as with the conversation we had at AUTO1 before, if we have the appropriate level of activity with AUTO3 and DLBCL, that program is a go because in the end, this is all about clinical outcome. The signs may be assessed, yes, it may come. In the end, the only thing that matters is does it make a difference to the patients? And is it a sizable difference? If it is, we're running with the program now and then, obviously, have an opportunity to see whether the next-gen program shows in a few patients a relatively small trial, a differentiated profile. If it does, then it's a program we can take forward as well, and we keep on improving outcomes for patients that way. The second question that you asked was related to AUTO1, and you mentioned the safety. And in many ways, what we're aiming to do with AUTO1 is sort of creating a phenotype similar to what we knew the phenotype of blinatumomab to be, which is short engagement with the target cells and with that stimulation of the immune system but not an over stimulation of the immune system. And indeed, if we can replicate that data set in some of larger patient groups, that actually is a data set that absolutely can render -- support an outpatient use of this type of therapy and that obviously will be a huge benefit from an overall perspective in terms of resources, but also from a patient experience perspective would be a huge benefit.

Thanks for joining.

This concludes the Autolus Therapeutics Financial Results Conference Call. Thank you for attending today's presentation. You may now disconnect.