Autolus Therapeutics PLC (AUTL) 2022 Q4 法說會逐字稿

Ladies and gentlemen, and welcome to the Autolus Therapeutics Full Year 2022 Financial Results Conference Call and Fourth Quarter Operational Progress. As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Julia Wilson, Communications Consultant. Please go ahead.

Thank you, Norma. Good morning or good afternoon, everyone, and thank you for joining us to take part in today's call on the full year 2022 financial results and operational highlights for the fourth quarter 2022. I'm Julia Wilson, the Communications Consultant for Autolus. With me today are Dr. Christian Itin, our Chief Executive Officer; and Dr. Lucinda Crabtree, our Chief Financial Officer.

Before we begin, I would like to remind you that during today's call we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include but are not limited to statements regarding the status of clinical trials and development timelines for our product candidates and our expectations regarding our cash runway. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statements.

For 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 Investor section of our website.

On slide 3, you will see the agenda for today, which is as follows. Christian will provide an overview of our operational highlights for the fourth quarter of 2022. Lucinda will then discuss the Company's full year 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.

Thank you, Julia, and Good morning to you all. Thank you for joining us. It's my pleasure to review our progress for the fourth quarter 2022.

Moving to Slide 4, we're really pleased with our program and operational progress during the fourth quarter of 2022, which is highlighted over the next 2 slides. Firstly, we were delighted to announce in December that the pivotal Phase II FELIX clinical study evaluating Obe-cel in relapsed/refractory adult ALL patients met its primary endpoint based on overall response rate in a pre-planned interim analysis of 50 patients with morphological disease and as verified by an independent data monitoring committee. We're another step closer to bringing this potentially innovative treatment to an underserved ALL population, and I'll delve into the data in more detail later in this presentation.

This positive data triggered a $35 million milestone from our partner Blackstone Life Sciences earlier than anticipated, and we're planning to provide a data update on all patients treated by mid this year, most likely at ASCO with longer follow-up plan at the end of 2023, as well as planned BLA submission to the U.S. FDA by the end of the year.

December was a busy month for us. We also had a number of clinical updates at the American Society of Hematology Annual Conference, including presenting longer term follow-up data from our adult ALL patients in the ALLCAR19 Phase I study of Obe-cel, showing 35% of patients in ongoing remission at 36 months of follow up -- median follow up with no additional anti-leukemia therapy. In addition, Obe-cel continued to show high levels of clinical activity in relapsed/refractory non-Hodgkins lymphoma and chronic lymphoblastic leukemia patients paired with a well manageable safety profile.

We're also very encouraged with the data we presented from our pediatric ALL program, the CARPALL Phase I trial of AUTO1/22, our dual targeting CAR-T therapy targeting CD19 and CD22, with over 80% of patients achieving a molecular complete remission with no antigen negative relapses observed. Additionally, we provided longer term follow-up at the LibrA -- on the LibrA T1 Phase I trial of AUTO4 in peripheral T-cell lymphoma, with some patients experiencing durable metabolic CRS, including one patient up to the 1-year mark post treatment, and obviously, in continued remission.

We will be providing updates on these programs over the course of this year and we'll also be presenting data from the CAROUSEL study of Obe-cel in peripheral CNS lymphoma patients, the MCARTY Phase I trial of AUTO8 in multiple myeloma patients, and finally, the Phase I trial of AUTO6NG in neuroblastoma patients is expected to start in the next quarter.

Turning to Slide 5. We've made some great operational progress during the quarter. Towards the end of the year, we closed a public offering, raising aggregate gross proceeds of $164 million and net proceeds after underwriting discounts and offering expenses of $152.4 million, including a partial exercise of the greenshoe by the underwriters.

We believe we are now well positioned financially to bring Obe-cel, an innovative and potentially transformative treatment, to an underserved adult ALL patient population. In 2023, we will be fully focused on submitting a BLA application at the end of the year and working towards commercial launch in 2024.

As I mentioned earlier, we also received a $35 million milestone from our partner Blackstone Life Sciences as a result of the positive interim analysis of Obe-cel in adult ALL. At the same time, we received an additional $35 million milestone from Blackstone as a result of planned activity supporting the performance and qualification of the Obe-cel manufacturing process. You will recall that we signed the agreement with Blackstone at the end of 2021, a part equity and part program financing collaboration for our lead candidate Obe-cel, and we have now received $220 million of the total $250 million committed capital.

We were very pleased to announce 3 deals, 2 in October 2022 and 1 post-period end in January 2023, which underscores what we believe is an industry-leading cell programming technology platform we have developed at Autolus. We signed an agreement with Bristol Myers Squibb, granting them access to our proprietary RQR8 rituximab-induced safety switch for incorporation into a set of selected cell therapy programs.

In addition, Moderna exercised an option on one of the proprietary binders being developed against an undisclosed immuno-oncology target for the delivery of pioneering messenger RNA therapeutics. This license option stems from the deal we announced with Moderna in August 2021.

Finally, in January 2023, we signed an agreement with Cabaletta Bio, which allows them to incorporate the RQR8 safety switch into a cell therapy program for the treatment of autoimmune disease. The total license revenue was $6.2 million in 2022, and each of these deals have the potential for additional revenue in near-term option exercise fees, milestone payments and royalties.

We continue to make steady progress in our manufacturing at CMC operations. The first phase of the build of our commercial manufacturing facility was completed with the handover of the first of 3 clean rooms at the end of last year. We have named this facility the Nucleus. We're now working on the qualification and validation of the Nucleus. And we remain on track for good manufacturing practice operations commencing in the second half of 2023.

We're also undertaking the development work and report generation for the CMC package plan to support a BLA submission to the FDA. Finally, total cash and cash equivalents and restricted cash at the end of December were $382.8 million.

With that, let's talk more about Obe-cel on Slide #7. Obe-cel has a unique mechanism of action. What's fundamentally different about our product candidate is that it has an ability to engage physiologically with the target cell. Rapidly binding to the target, which delivers specificity, paired with a fast off-rate for rapid disengagement from the target cell once the 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 in acute lymphoblastic leukemia, non-Hodgkin's lymphoma patients and chronic lymphoblastic leukemia patients.

Moving on to Slide #8. Our clinical experience with Obe-cel in ALL shows a high overall response rate across all -- sorry, population -- shows a high level of clinical activity across all indications. Our clinical experience with Obe-cel in ALL shows a high overall response rate across all patient populations, including a very high level of clinical activity over the longer term that we have now observed in the ALLCAR19 study.

We have a median follow up of 36 months now in this study. And with a follow up of 24 to 47 months of observation, we see that 35% of the patients are in long-term remission after receiving Obe-cel and receiving no further anti-leukemia therapy. The safety profile is well manageable with low levels of high-grade CRS and ICANS.

The mid-section of the slide shows the patients with long-term remissions and continued presence of CAR-T cells over the entire observation period. The program is developed under RMAT, Prime and ILAP designations.

Moving to Slide 9. We completed the enrollment and dosing of a pivotal study, a study we call the FELIX study, in adult relapsed/refractory ALL patients. And as I mentioned, we announced in December that we had met the primary endpoint of overall response rate in an interim analysis based on the first 50 patients followed for at least 3 months of follow up. Clinical benefit in ALL will be assessed based on patients remaining in sustained complete remission.

We conducted this study in 34 centers, 24 centers in the U.S., 7 centers in the U.K., 3 centers in Spain during the peak of the pandemic. It is important to realize that relapsed/refractory adult ALL patients are highly immune suppressed and the pandemic poses a significant added risk to them. Moreover, due to access restrictions and various other pandemic rules and regulations, we could not access our clinical trial sites for the most part of the FELIX study. You can imagine, end-stage ALL patients are about as difficult a patient population to work with, particularly in an environment where there is a high risk of infection. And indeed, we did lose patients to COVID. In many ways, this study 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 this trial with massively reduced air traffic and impact of the pandemic on our manufacturing teams. Remarkably, manufacturing for all patients from our facility in the U.K. turned out to be an asset also for U.S. delivery, as the long-haul flights between the U.S. to the U.K. have priority over U.S. and also EU domestic flights. Next key data readout is planned for ASCO in June this year.

Moving to Slide #10. This slide summarizes the announcement we made in December regarding the pre-specified interim analysis of the first 50 out of 90 patients dosed that had reached at least 3 months of follow up. The primary endpoint is based on overall remission rate, which includes patients in complete remission and patients in complete remission with incomplete bone marrow recovery or CR and CRi. The ORR was 70%. And in fact, all recent programs in ALL have used ORR as the primary endpoint in the 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 on high-grade ICANS or neurotoxicity in less than 8% of patients. ICANS were fully reversible, and less than 25% of patients had any grade of neurotoxicity in contrast to approved T-cell or T-cell engaging therapies, a very unusual safety profile in this population.

As I mentioned earlier, this exciting data set triggered a $35 million milestone from Blackstone.

Moving to Slide #11. This slide summarizes our current experience with Obe-cel across ALL. As you can see, the data are highly consistent across the various studies, both in safety and efficacy. Worth noting is that the CARPALL and ALLCAR19 study were conducted prior to the pandemic, while both parts of the FELIX study were conducted during the pandemic. Both the CARPALL and ALLCAR19 study were conducted in the U.K., while the FELIX study was largely conducted in the U.S.

What we did pick up is that the patients in the FELIX study were more advanced in their disease based on bone marrow 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 any type of anti-leukemia therapy.

Moving to Slide 12 to look further into the data we presented at ASH from the ALLCAR19 study. When we then look into the outcome or long-term observation from the ALLCAR19 study, we were up to, obviously, with 4 years of follow-up. And you can see that we have a quite unusual clinical profile. The clinical benefit in these patients is the ability to convert patients into complete remission and sustain them over long periods of time, which is obviously what we're seeing for a good proportion of these patients.

When you look at the swim plot, moving from the bottom up, we had obviously some patients that did not respond to therapy. Then we have some patients that responded, but relapsed quickly. The yellow circles are patients that relapsed with so-called CD19 negative disease. In essence, the leukemia became invisible to the therapy by losing the very structure the therapy was designed to recognize. If you then go a little further up, you see 3 red circles. Those are the patients that relapsed because the CAR-T cells, the Obe-cel product candidate, didn't persist long enough and patients relapsed with CD19 positive disease.

Above those, you then see a group of patients that are in long-term remission between 2 and 4 years without any additional therapy. 7 out of the 20 patients at 35% are in continued remission without receiving any additional anti-leukemia therapy with median follow-up of 36 months in the range of 24 to 47 months. Every single one of these patients has persistent CAR-T cells. You see one additional patient with long-term remission who received a stem cell transplant while in complete remission.

Moving to Slide 13. BLINCYTO, a T cell-engaging CD19 targeting monoclonal bispecific antibody has become the standard of care in relapsed/refractory adult ALL over the last few years. Key to its success has been the well manageable safety profile. Key focus from a patient management perspective is the monitoring of neurotoxicity or ICANS, which impact 65% of patients treated with Blincyto. In contrast, Obe-cel had less than 25% of patients experiencing ICANS of any grade. High-grade CRS for Blincyto is low with about 5% and Obe-cel seems to be similar and potentially slightly better in terms of high-grade CRS.

In contrast to Blincyto, Tecartus, a CAR-T program approved for this indication, induces high-grade Cytokine Release Syndrome in 26% of patients and high-grade neurotoxicity in 35% of patients, while 87% experience neurotoxicity of any grade, 40% of patients received vasopressors. Managing such a safety profile often requires access to ICUs.

Finally, Inotuzumab, while active, is primarily used as a bridging therapy.

Moving to Slide 14. The market opportunity in relapsed/refractory ALL is in fact unchanged with about 3,000 patients in high need for therapy between the U.S., Europe and Japan.

Moving to Slide 15. Blincyto, the standard of care in relapsed/refractory ALL, has reached sales in 2022 of $583 million with a year-over-year growth of 24%. This product is commercialized by Amgen. Currently, the product reaches about 2,000-plus adult patients with ALL, on average receiving 2 cycles of Blincyto. Patients with low disease burden can receive up to 4 cycles of Blincyto, at a combined cost comparable to CAR-T therapy.

Key to Blincyto's market penetration is its well manageable safety profile, which allows delivery in nonacademic hospitals, in addition to the academic centers. We believe that Obe-cel with its high level of clinical activity, attractive safety profile, and onetime administration is well positioned to capture that opportunity. When we look overall in terms of the price level for CAR-T therapies in ALL, they are in the range of $450,000 in the U.S.

Moving to Slide 16. When we look at the steps forward, first of all, we're planning to disclose the FELIX data from ALL patients dosed in the mid-2023, likely at ASCO and also at EHA. Long-term follow up is planned for ASH. We're targeting the BLA submission for the program towards the end of the year, MAA filing towards the end of the first quarter 2024, and the U.K. filing in the second quarter of 2024. That sets us up very nicely for the key territories that we expect to be initially active in.

In addition, to the mature clinical data, the submission will also require data from the validation of our commercial manufacturing site. This work has been a key focus throughout the first half of 2023 and will continue into the third quarter. Importantly, our commercial manufacturing facility is set up to cover supply for approximately 2/3 of the estimated market from the start.

As we're moving through 2023, we need to prepare 3 key areas for commercialization. First, creating awareness for the program through a focused medical affairs program; second, establish a value of proposition for payers in our HTA dossiers. And finally, third, prepare for and start center onboarding, a process that will take between 9 and 15 months to get each center ready to deliver CAR-T therapy.

Moving to Slide 18 to talk about the broader opportunity that we see with Obe-cel. As part of the ALLCAR19 extension study, we have been evaluating Obe-cel in relapsed/refractory in non-Hodgkin's lymphoma and chronic lymphoblastic leukemia patients. We see consistently very high response rates, combined with a very attractive safety profile suitable for outpatient use. The data will form the basis for the selection of a second indication after ALL.

In terms of the life cycle, we started to work on the next version of Obe-cel, which we call AUTO1/22. We're looking to minimize with this product CD19 antigen loss-driven relapses with its dual targeting approach. Building on Obe-cel, we're 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 who had failed Kymriah or were not eligible for Kymriah therapy.

In this very challenging patient population, we saw an 83% molecular response rate and none of the children relapsed with the novel CD19-negative disease. Comparing this activity to Obe-cel, we would have expected a molecular CR rate of approximately 40%, maybe 50%. We're working on further streamlining the manufacturing process for AUTO1/22, knowing that we have an attractive life cycle option. Timing of investment decisions in AUTO1/22 will be balanced with additional indication investments for Obe-cel.

Slide 19. Switching gears and moving on, switching gears to Slide 20 as well as 21. Our technology platform allows us to engineer a range of properties into T-cells to drive specificity of recognition, resilience against negative signals used by tumor cells to evade T-cell attack, and providing survival signals for T-cells. Our strength in T-cell engineering drives our pipeline and is also at the heart of the 3 collaborations reported on in 2022 and early 2023 with Moderna, BMS and Cabaletta.

On Slide 22, we have a quick summary of the earlier-stage programs in T-cell lymphoma with AUTO4, 5, AUTO6NG in neuroblastoma and AUTO8 in multiple myeloma. Both AUTO4 and AUTO8 are in Phase I clinical studies, and AUTO6NG is expected to start Phase I in the next quarter.

Moving to Slide 23. T-cell lymphoma has a very high medical need, quite similar to B-ALL. In fact, when you look at the NCCN guidelines, it is basic -- where it basically says that once you're through the frontline therapy and fail, you have to go on a clinical trial.

Moving to Slide 24. With its unique targeting approach, AUTO4 starts to show meaningful clinical impact at the higher dose levels that we have evaluated. The first metabolic CRs are reaching 1-year post treatment, and we continue to follow those patients. In addition, we have streamlined the manufacturing process and are exploring the activity in an additional cohort and we're planning to report on that outcome later in 2023.

Moving to Slide 26 to talk about manufacturing. Cell manufacturing is 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 the capacity to the size of the medical need in its indication and it is important to be able to do that to have a successful rollout of your therapy.

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

The capacity of the Nucleus in its initial setup is 2,000 patients per batches per year or about 2/3 of the adult ALL market size in terms of capacity. The Nucleus has been a fantastic project to realize with an innovative design at about 75% off-site building to accelerate the build while maximizing the quality of the build.

So with that, I would like to turn to Slide 28 and pass the call over to Lucinda for our fiscal year 2022 financial update. Lucy?

Thanks, Christian. Good morning or good afternoon to everyone. It's my pleasure to review our financial results for the fiscal year to December 31, 2022.

Cash and cash equivalents and restricted cash at December 31, 2022, totaled $382.8 million as compared to $310.7 million at December 31, 2021.

Net total operating expenses for the 12 months ended December 31, 2022, were $168 million. Net of grant income and license revenue of $6.4 million as compared to total operating expenses of $165 million, net of grant income and license revenue of $2.3 million for the same period in 2021.

Research and development expenses increased by $7.2 million to $142 million for the year ended December 31, 2022, from $134.8 million for the year ended December 31, 2021. This was primarily due to the following: an increase of $11.6 million in critical costs and manufacturing costs, primarily relating to our Obe-cel clinical product candidate. An increase of $0.4 million in legal fees and professional consulting fees in relation to our R&D activity.

An increase of $0.2 million related to information technology infrastructure and support for information systems related to the conduct of clinical trials and manufacturing operations. An increase of $0.2 million in cell logistics costs. A decrease of $3.7 million in facilities costs related to the termination and closure of our U.S. manufacturing facility in 2021 and a shift in our overall manufacturing strategy.

A decrease of $0.9 million in depreciation and amortization related to property and equipment, and intangible assets. And finally, a decrease of $0.6 million in salaries and other employment costs, including share-based compensation expenses, which is mainly due to lower exchange rates used upon consolidation for the year ended December 31, 2022, compared to the year ended 31, 2021, and this was offset by an increase in employees engaged in R&D activities.

General and administrative expenses remained consistent at $31.9 million for the year ended December 31, 2022 and 2021, respectively, primarily due to the following: an increase of $1.4 million in salaries and other employment costs, including share-based compensation expenses, mainly driven by an increase in the average number of employees engaged in G&A activities. An increase of $0.3 million primarily related to information technology costs. A net increase of $0.1 million in legal fees and professional consulting fees in relation to our G&A activities, which was offset against lower D&O insurance, director and officer insurance.

A decrease of $1 million of commercial preparation costs due to the timing of related activities. A decrease of $0.4 million in facilities costs related to the termination of certain lease agreements in the prior year. And a decrease of $0.4 million in depreciation and amortization related to property & equipment and intangible assets.

Interest income increased to $1.7 million for the year ended December 31, 2022, compared to $0.3 million for the year ended December 31, 2021. The increase in interest income of $1.4 million primarily relates to the increase in interest rates on our interest-bearing bank accounts and short-term investments during the year ended December 31, 2022 compared to 2021.

Interest expense increased to $8.9 million for the year ended December 31, 2022, as compared to interest expense of $1.1 million for the year ended December 31, 2021. Interest expense is primarily related to the liabilities of future royalties and sales milestones, which arose upon the execution of our strategic collaboration and financing agreement with Blackstone in November 2021. The increase in interest expense for the year ended December 31, 2022, is primarily driven by the full year of the liability related to the Blackstone collaboration in 2022 compared to a partial year liability accrued in 2021.

Other income or expense increased to an income of $2 million for the year ended December 31, 2022, from an expense of $1 million for the year ended December 31, 2021. During the year ended December 31, 2022, we recognized a foreign exchange gain of $1.7 million, a sublease income of $0.2 million and other income of $0.1 million. This compares to an expense of $0.1 million, as I mentioned, for the year ended December 31, 2021, which included a foreign exchange loss of $2.2 million, offset by a gain on lease terminations of $2 million and other income of $0.1 million.

Income tax benefit increased to $24.4 million for the year ended December 31, 2022, from $23.9 million for the preceding year ended December 31, 2021, due to an increase in qualifying research and development expenditures for the period.

Net loss attributable to ordinary shareholders was $148.8 million for the 12 months ended December 31, 2022, and this compares to $142.1 million for the same period in 2021. The basic and diluted net loss per ordinary share for the 12 months ended December 31, 2022, totaled $1.57 compared to a basic and diluted net loss for ordinary share of $1.97 for the 12 months ended December 31, 2021.

Finally, Autolus estimates that its current cash and cash equivalents on hand and anticipated project financing payments from Blackstone will extend the company's runway into 2025.

And now back to Christian to give you a brief outlook on expected milestones. Christian?

Thanks, Lucy. Moving to Slide 30. Finally, we think we have an exciting year ahead of us. Key focus is on getting Obe-cel into the regulatory process, with BLA filing targeted towards the end of the year, followed by filings in Europe in the first half of next year.

Next up are the planned FELIX data presentations midyear 2023. In addition, we're preparing for commercial product supply and launch readiness. Finally, we also expect to provide updates on the pipeline programs with additional data and follow-up during the year, and with our key programs on partnered at this stage, we have opportunity for setting up collaborations.

Moving to Slide 31. So with that, we believe we're at an interest -- a very interesting point with the company. We've got the cash to deliver a very significant value step. We got the data to show that with Obe-cel, we have a differentiated product profile that addresses the high medical need with limited competition, and with possibly a transformational outcome. Alongside that, we have additional opportunities for Obe-cel in broader indications and a valuable pipeline of other oncology programs.

As I mentioned, we're excited about our manufacturing facilities -- facility, and we have a strong technology foundation, validated by our collaborators; BMS, Moderna and Cabaletta. And we look to do more deals of that nature in the future.

With that, thank you very much, and we're happy to take questions.

(Operator Instructions) Our first question comes from the line of Gil Blum with Needham & Company.

Just the first one on the data that was published from the FELIX study. So there appeared to be a slightly higher incidence of Grade 3 CRS and ICANs in kind of earlier studies. Now given that Autolus' goal is to have Obe-cel administered in the community setting, how do you think physicians will adjust to levels of high-grade AEs?

Gil, first of all, thanks a lot for joining. Really good question. So I think it's important when we put the data in perspective. What we did show is that we have less than 3% high-grade CRS and we have less than 8% ICANS. This is a level of Grade 3 events in both -- for both types of adverse events, that is at or below the level of -- for Blincyto, which is currently used in nonacademic centers. And so we believe that actually the profile is very well suited, it matches the experience actually already established with the standard of care in those centers, who believe the data is very well suited and supportive of that broader use of the product.

And another question about the filing. So what data do you expect to include in your BLA? I mean you're going to have additional data by the filing date, including ORR and duration of response. But will you also be including data from your MRD positive cohort?

So really good question. So first of all, in terms of our -- of demonstrated clinical benefit in the morphological cohort, which are patients that have more than 5% disease burden at the time of inclusion into the study. The focus is to demonstrate that it can actually convert these patients into complete remissions that are sustained over time. So what you will have to look at is CRs with a limited -- a minimal level of follow-up to actually establish, in fact, an appropriate level of clinical benefit. So time-dependent outcomes are absolutely a critical parameter that will have to go into a BLA, and will be at the core of the assessment of clinical benefit for the product.

Second, of course, the safety profile was then a key part of the assessment to understand actually the benefit/risk ratio that you have with the product, which is obviously a very key parameter to understand the suitability of the product in any given indication. With regards to the focus, when you think about the review, it's really will be focused, initially, on the patients that have morphological disease. We obviously have also assessed mineral residual disease in these patients, the level of MRD signals that we have in the patients, et cetera. But the inclusion criteria are patients with morphological disease.

The work that we do to expand the knowledge of the properties of the product across the entirety of disease burden, which includes, as you pointed at, also patients with mineral residual disease is a data set that obviously is being generated. But it is also a dataset that is not going to be part of the initial filing. in terms of -- it will go into safety, but it is not an aspect of the efficacy evaluation for the initial filing that we're planning.

And last one for us. You did mention that from your scientific collaborator, there may be some data in multiple myeloma, what do you think the gating factor would be for further development of that program given how crowded the market is?

Yes. Very good question. So what you're referring to is the AUTO8 program that we're working on with our colleagues on the academic side. We're currently running a Phase I clinical trial to evaluate the activity of AUTO8 in relapsed/refractory multiple myeloma patients. I think we're at an interesting spot with regards to the CAR-T therapies in multiple myeloma. We have obviously seen very nice levels of activity with the 2 approved products in the space, but there is also a very high unmet need. And at this point, still a remarkable inability to meet the demand in this indication, and it is likely going to continue for quite some time.

So with regards to what we're looking to see with the program, we also want to see a very high level of complete remissions in these patients, combined with deep molecular remissions. And at the same time, obviously, we're looking at the safety profile. We clearly want to see a very significant level of clinical activity in these patients to -- as a basis to consider taking the program forward. And if we're at that point, clearly, I would anticipate that this would make sense to do in a partnership.

Our next question comes from the line of Mara Goldstein with Mizuho Group.

First of all, on the multiple myeloma data that you do anticipate having this year, can you just give us some element of just the scope of that number of patients? And what exactly we should be prepared to be looking at? And then I also wanted to ask on Obe-cel and thinking forward from a competitive perspective, is the competitive go-to-market strategy versus Blincyto or Tecartus. Can you help us understand what -- how you plan to position Obe-cel?

Yes. Hi, Mara, thanks a lot for the 2 questions. So the first question was related to the AUTO8 study. The AUTO8 study is a small Phase I clinical study. So we're looking at around 10 patients as sort of the initial experience, and then we'll take it from there. So it's going to be initial look at that then at the profile of the product in that initial set of patients.

Now with regards to Obe-cel, what we're expecting to go for is obviously a positioning of the product in the relapsed/refractory setting, whether patients have had already received Blincyto or are post-Blincyto. And I think that is sort of obviously what the current study actually is evaluating its patients that have -- are in very advanced disease, and with a portion having a Blincyto and Inotuzumab or on a portion who didn't. So we're looking to position the product, both in parallel or after Blincyto therapy. Obviously, the card is obviously positioned in that exact same way. So it would be the same type of positioning that we would expect for the program.

Our next question comes from the line of Matthew Phipps with William Blair.

The recent European CAR-T meeting, Kate or Gilead presented some long-term follow-up from ZUMA-3 with Tecartus. And it shows very few patients really remaining in CR even beyond 2-years. And so it's a pretty big contrast to the data you presented at ASH from a follow-up with ALLCAR19, shows, I don't know, 35%, 40% of patients still in CR 3-years. So do you expect the FELIX data to recapitulate the ALLCAR19 durability, given you've talked about a little bit tougher to treat patient populations with extramedullary disease and such? And I guess just how do you kind of get that durability message across to physicians in your kind of education process?

So a really good question. Thanks for joining, Matt. It's really what you're pointing to is really kind of the -- I think, what we believe was really remarkable data from our initial evaluation of Obe-cel, in this patient group. And obviously, as you pointed out, what we did see is a stabilization of our long-term durability curves, et cetera, with patients staying in sustained remissions about as you pointed out, about 35% of the patients being in that category. So that is a remarkable outcome, and it's clearly something that has not been passible when developed with my old team, Blincyto and have not been shown, clearly not been shown with Tecartus either.

So what we're looking -- what we're expecting to see with Obe-cel and the FELIX study is that we also see a similar shape of the curve, where exactly that stabilization will ultimately occur. I think that's too early to tell. We don't have enough follow-up in the study at this point in time. But that is what we're looking for and that's what we expect to see. Whether it's going to be the exact same level or slightly a different level, we do not know at this point in time. And as you pointed out, obviously, one of the things that we do have had in terms of inclusion into the studies, obviously, patients that certainly in that initial data set that we presented that had pretty significant levels of disease burden, as well as extramedullary disease, which frankly was not too much a surprise given that, that first 50 patient data set really was truly peak pandemic.

And so we'll see obviously what the full data set looks like, but we're obviously expecting to see the same shape of the curve. And at this point in time, we cannot exactly say where that's actually going to come out that requires long-term follow-up. The fact that we saw the persistence data track what we had seen before, I think, is very encouraging because obviously, that was a clear correlation that we did see that all these patients that have long-term outcomes also have long-term persistent CAR-T cells. And the shape when you look at persistence coming out from the trial as we had indicated from the interim analysis was tracking the ALLCAR resistance CAR. So that is encouraging. I think it's sort of the lead indicator, but obviously it requires long follow-up to sort of be clear about where exactly we might be landing.

Can I also ask at what point do you request a pre-BLA meeting this year? Is that something you do after kind of the ASCO update or?

So really good question. So I think what you want to do at the time you go through a pre-BLA meeting is, you want to actually have the data with sufficient level of follow-up. So you have a very clear positioning around the outcome that you can actually present and discuss with the agency. And obviously, the data we're going to go with in, to ask, I think, will start to give us, I think, a good level of observation. So we would expect that, that was -- this is going to be an interaction post ASCO.

ur next question comes from Kelly Shi with Jefferies.

Congrats on the progress. Regarding the baseline for patients enrolled in FELIX trials, does it appear consistent with Phase I being cohort on your fraction of patients with greater than 20% of the bone marrow blast? And also, will you be able to provide more information such as patients with disease and the extramedullary disease presence on the Felix trial? I also has a follow-up. I have a follow-up.

So thanks for joining, Kelly. Nice to have you on the call. First of all, in terms of the patient population, overall, obviously, the patient population is close and very close to what we've been seeing in the Phase I portion of the study. And what we expect to -- what we also expect to see is obviously some variability as we're sort of going through the peak pandemic in the study as well. So we're close. We may actually have seen a bit of a worsening after that. And if you look at the ORR, obviously, small numbers, but it went from 75% to 70%, which could be indicative of a slightly worse population.

So that is sort of, I think, where we are. We're obviously going to present that in detail, the underlying patient characteristics, et cetera, at the full data presentation. It's going to be also an important piece of information, I think, will help to put the data into the appropriate level of perspective as well. So that's sort of the answer to the first question.

What was the second question?

So my second question is, given the differentiated profile, especially on safety front of AUTO1, would you consider exploring the opportunity in AUTO in new indications such as lupus given that some proof-of-concept data has been available?

Well, what you're pointing to is a really remarkable data set that was developed by Andreas Mackensen and his team at the University of Erlangen, who's done a fantastic job evaluating the utility of the CD19 CAR-T approach in patients with refractory systemic lupus. The outcome of the data was quite remarkable. It's a major medicine paper at the end of -- published at the end of last year. We know the team actually had also worked with the team at the early stage of insight development way back, almost 20 years back. Really good data set. We believe, obviously, that Obe-cel has a remarkable profile, obviously, now with a lot of data around. The safety of the program and clearly has an absolute outstanding safety profile, which is important when you think about use in autoimmune disease.

And the other aspect, of course, is that as we all learned in this space is the fundamental tricky part in this with autologous CAR-T therapies is you actually have to have an ability to manufacture at scale, and do that at quality and economically. And obviously, that's one of the key things we have been developing for Obe-cel for its initial application in ALL. So absolutely, we're following that field very closely. We think it is a very attractive potential future use of programs that are very safe and very active, we believe Obe-cel fits that very well.

And our next question comes from the line of James Shin with Wells Fargo.

Just a couple from our end. I just want to dig a little deeper into the positioning of Obe-cel. So do you envision Obe-cel could be positioned ahead of Blincyto at some point? And is there a future study exploring this? And then on a related matter, I mean, cell therapy as a whole has started to make good headway to the earlier (technical difficulty) with a couple of oncologists. It seems there's some regulatory hurdles, namely the FACT immune effector cell accreditation that makes cell therapy entering the community setting a little bit difficult or intensive. Any thoughts there? Really appreciate it.

Yes. Well, first of all, thanks for joining, James, and I think a very interesting question. So first of all, in terms of sequencing, at this point in time, obviously, Blincyto is approved both in the relapsed/refractory setting, as well as, also in patients that have mineral residual disease, and that are basically in CR1 or later. So in essence, it's patients that have gone through frontline therapy with still remaining residual disease. They're technically in complete remission, but they still have measurable leukemia cells at a levels minimal residual disease. And so the product obviously has levels in those 2 settings and obviously has been evaluated now as part of the frontline therapy. So in that sense, Blincyto has -- will have a place in this earlier part of the treatment scheme, and we expect it to just sort of move up into that earlier setting.

Now what we see from the Tecartus approval is that Tecartus was approved for relapsed/refractory patients, without actually defining the second, the third line or fourth line, actually, it's any relapsed/refractory setting. And so we would expect that Obe-cel will have the same type of scope, initially. And obviously, with the work we do on minimal residual disease and evaluating the activity of the program there, I think, should allow us to eventually position the program similar to the way that Blincyto's position. But that obviously takes time to sort of actually move up in terms of the lines of therapy. So I think that's the first part of the question.

The second part of the question was more around how do you actually position CAR-T therapy outside of the academic centers, considering that you need a level of training or accreditation of those centers to be able to actually deliver the product. I think what we need to understand is that particularly with Obe-cel, we do obviously have a very, very similar profile to Blincyto, in fact in patients with low disease burden, obviously, we do have an even better profile that we've shown in these end-stage high tumor burden patients, that we obviously quoted in our interim analysis.

So when you look at that, that population that has low particularly lower disease burden, but even the one that we have treated now. The adverse event profile that we have in these patients is exactly what the physicians today do manage with Blincyto, the same level of high-grade CRS. In fact, it's a little less than what Blincyto has, and it's actually less neurotoxicity than what we see with Blincyto.

What's very important in that context is that, obviously, when you look at the higher -- at the overall level of neurotoxicity, it's in about 2/3 of the patients have some level of neurotoxicity with Blincyto, which requires you to monitor the patients, to observe them et cetera, make sure that you stay on top of it. What we have with Obe-cel in a more advanced patient population because, obviously, we include Blincyto failures in the FELIX study. We actually had a little more than 20% of patients that have some form of neurotoxicity actually substantially less. So the actual monitoring level is less burden that have. And with that, we believe there is an opportunity to actually manage this and with the experience of Blincyto we should be able to manage this, in nonacademic hospitals and associated potentially outpatient setting standalone, so that is sort of where that is.

Now in terms of the ability to deliver CAR-T therapy, there's obviously a level of not only patient management that's required, which obviously is covered very well with the experience of Blincyto. But it is also obviously requires you to actually handle the cells and manage the cells as part of the therapeutic approach, and that requires a level of training that obviously needs to be put in place. And we believe that, that is a possibility for nonacademic hospitals, and then we have to see how further out you might actually be able to go. But I think this gives you a very good penetration and ability to reach the ALL population with this profile, as we see basically demonstrated through Blincyto already.

And our next question comes from the line of Sebastiaan van der Schoot with Van Lanschot Kempen.

It's Sebastiaan van der Schoot from Van Lanschot Kempen. But no worries. Congrats on the products. I was just wondering for the opportunity of Obe-cel and other indications beyond the ALL, will there be an additional updates on the ALLCAR study for the other indications with additional patients? And are there any of these indications that you believe would allow for an accelerated approval pathway if additional data can show the same level of efficacy as this goes as last year? And then you also spoke a little bit about the life cycle management with AUTO1/22. Can you expand on your thinking on the possibility to continue development of AUTO1/22 beyond the pediatric indication into adult automatic indications?

Thanks, Sebastiaan, and thanks for joining. So when we look at the opportunity that we see with Obe-cel, obviously, what the product has a remarkable profile in Phase II, basically remove the B-cell compartment, both on malicious cells as well as healthy cells and do that with a very good safety profile. And so that's the basic property of the product. Where that is suitable, obviously, is in leukemia, it is in non-Hodgkin's lymphoma, which is what we're evaluating, and CLL what we're evaluating as part of the ALLCAR19 study. And then as Kelly was pointing out, there is also certain applications in the autoimmune space where that might become quite interesting, and some data would indicate that we might even be transformational in those settings.

So this is sort of the range I think you have in terms of opportunity. We have been doing well on the oncology side, but also one that starts to build up also in the autoimmune side. So that's the range. And that's the question of choice. What we're seeing in our ALLCAR19 study is, really that we're having a very high level of clinical activity across the entire range of these indications, and that gives us a lot of confidence in terms of the overall property of the product.

In terms of the individual indications, obviously, you have opportunities looking at the DLBCL as an example, where we see very high levels of complete remissions that are sustaining. We haven't seen any relapses to-date, in that cohort, which is quite remarkable. There are also obviously a very interesting data in mantle cell as well as in CLL that we have seen. Now the opportunity -- all those indications, there are opportunities to develop in segments of the indication, which allows it to move relatively quickly and with an accelerated path.

And then depending on the indication you look at, you also made it on to as we go for a last line filing, we'll want to actually start looking at an earlier line study as well, which intently would be a randomized controlled study in that earlier line and we want to move on that reasonably -- in reasonable, to the time in relation to your last line setting. So that's sort of the opportunity, and we're looking at these and also the data from the ALLCAR data -- ALLCAR study does give us, I think, a very nice basis to sort of develop the right options for the investment.

You then also asked about how in that conversation AUTO1/22 fair. And as we indicated, we obviously do know with AUTO1/22 that we have a very active program. It appears to do exactly what we want in terms of avoiding the occurrence of target negative relapses, which is the key thing that obviously it will be looking to address. And where we know that is particularly important is obviously in acute leukemia. There's been initially reports that there is a certain proportion of patients that do actually show CD19 negative relapses in the context of the acute T-cell lymphoma. There haven't been as many reports more recently. In our own hands and with Obe-cel we haven't seen CD19 negative relapses nor did we with our collaborator program, AUTO3. So whether or not that is a major issue to actually address in those indications, I think it's unclear at this point in time.

And I think that is sort of one of the entire questions I think, we'll look into in terms of the ability to broaden the utility of the dual partnering approach into additional indications. So where it's very clear is an ALL that its certainly in drive for relapse, both for children as well as adult patients, and we believe at some point, it makes sense to consider that program to move into the succession of a B-cell in the acute leukemia setting as well. So that's sort of, I think, is in terms of the range as well as the feel of the way we're thinking about it. And ultimately, it's -- these are a set of investment decisions. And if this question sequencing those investments. And I think the priority will first be on actually broadening the opportunity for Obe-cel and then in a second step actually then moving forward with AUTO1/22 in terms of the actual life cycle to Obe-cel.

Our last question comes from Asthika Goonewardene with Truist.

This is Karina for Asthika. Just have a few questions on pricing. With the filings due by year-end, how are you guys thinking to price Obe-cel? And can you also discuss some preliminary feedback you received from payers in the U.S. and Europe? And also, is there any potential for your pricing power change with detail data at ASCO?

Sorry, Karina, I didn't get the last part of the question.

The pricing power with the next updated ASCO.

Oh, I see. Okay. Thank you. Well, first of all, thanks for joining, Karina. Interesting questions related to pricing. I think what we've been seeing across the space is 2 dimensions. First of all, we're having ALL specifically, obviously, with Blincyto and the use of Blincyto in patients with low disease burden. And we also do see a use of AUTO4 cycles in those patients, which is basically getting the price for that product into the range between $400,000 and $500,000 per patient in the U.S. So, that's sort of one benchmark, which is standard of care and kind of what bracket that is.

When you then look on the approved CAR-T therapy in ALL, that is in the range of $450,000 during the course -- are expected to be during the course of this year. So that's sort of the second sort of, I think, the bracket that we're seeing in the U.S. And we would expect that we will be pricing in a similar range. Obviously, we believe that we do have a product that actually allows you to be more efficient from a cost perspective, because the product should induce less toxicity with wireless patient management. And with that, I think there should be a good health economic argument supporting the use of Obe-cel, in addition to obviously its clinical profile.

With regards to Europe, we're obviously seeing across the board with CAR-T therapy that the prices are sort of starting in the range of where the U.S. prices with same level of discount depending on the jurisdictions you're looking at, and the indication that the products are delivered in. So that is more variable, and we'll see how those develop over the upcoming period of time. And so we'll, obviously, we will keep you updated, how that's field evolves over time, but I think this is where we stands. And the current expectation is that we would consider to be somewhere in line with what we've been seeing in the space.

In terms of data flow, I think we're going to have a very interesting data flow as we go through this year, obviously, at ASCO, obviously, data from all the patients that were dosed, but also still a limited follow-up on some of the patients that I think were focused on a lot of the descriptions of the patients, the basic activity, the behavior of the product in every aspect. And then I think as we go to ASH and then even later into '24, I think, obviously, much more longer-term follow up, which will, I think, will flow obviously as an important parameter into the HTA assessments and value assessments that will be conducted by the payers. So that's kind of think where we are with those particular questions.

So just do you think the longer-term follow-up is going to push pricing higher?

Well, first of all, what -- the impact of the longer-term follow-up and showing an impact on longer-term follow-up, I think is obviously strengthening your value argument for the product. So I think it will clearly make a very strong case for using the product based on more patients achieving long-term outcome. And I think that is certainly going to be a key parameter that will drive the value assessment by anyone who would look at the program. So it will definitely influence the overall assessment. To what extent that would influence pricing, I think it's premature to discuss.

Thank you. At this time, I would like to turn the call back over to Mr. Christian Itin for closing remarks.

Well, first of all, thanks, everybody, for joining. Obviously, it was great to be able to update you on a very exciting fourth quarter that we're running through. We're in, I think, a very important stretch as we go through the course of this year, getting the product ready for filings. And I think, obviously, a real opportunity for substantive data updates as we go through the course of the year, with the next one also expected for the midyear section.

So really looking forward to meeting you, hopefully, in person and updating you on the program along those venues. And wishing you a successful first half of the year. And then I think for all of us, I think, a more relaxed second half of the year with some hope that some of the big picture items hopefully will start to turn into a more favorable environment. So with that, I'd like to thank you all and wish you a good day.

Ladies and gentlemen, thank you for your participation. And due to time limitation, we were conscious of the time and we weren't able to reach out to everyone. So management will connect with everyone that weren't able to connect to the call, after the call. Thank you very much. Please enjoy your day. You may now disconnect.