Autolus Therapeutics PLC (AUTL) 2020 Q2 法說會逐字稿

Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics Second Quarter 2020 Financial Results Conference Call. As a remainder this conference call is being recorded. I would now like to turn the conference over to your host, Dr. Lucinda Crabtree, Vice President, Investor Relations. Please go ahead.

Thank you, Crystal. Good morning or good afternoon, everyone, and thank you for taking part in today's call on the financial results and operational highlights for the second quarter 2020. I am Lucinda Crabtree, Vice President, Investor Relations. With me today are Dr. Christian Itin, our Chairman and Chief Executive Officer; and Andrew Oakley, our Chief Financial Officer.

Before we begin, I would like to remind you that during this call, we will be making forward-looking statements. All statements other than statements of historical facts 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 entitled Risk Factors in our annual report on Form 20-F filed on March 3, 2020, as amended, as well as discussions of potential risks, uncertainties and other important factors in our other periodic filings with the SEC.

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.

On Slide 3, agenda, you'll see the agenda for today, and it is as follows: Christian will provide a brief introduction, and that would be followed by our operational highlights for the second quarter of 2020. Andrew will next discuss the company's financial results, and then Christian will conclude with upcoming milestones and other concluding comments. And of course, we will welcome your questions following our remarks.

So with that, I'd like to call -- turn the call over to Christian.

All right. Well, thank you very much, Lucinda. This is probably the most thorough all forward-looking statements that I think we had. So with that, good morning to everyone, and thank you for joining us. I'm pleased to review our progress for the second quarter 2020.

First, on Slide 5, I would like to update you on the current and potential future impact of the COVID-19 pandemic on our business. At our last financial update call in May, we were at the height of the first peak of the COVID-19 infection in New York City metropolitan area, the U.K. and Spain. The patients, whilst -- and for some weeks, patients could not be enrolled into clinical trials in those areas. In contrast, sites in the south of the U.S. continued to operate normally during that period and continued to enroll AUTO3 patients.

In parallel, the start-up of our AUTO1 pipe pivotal study in Q2 has been progressing to plan. While we are now in a more stable situation in the first-hit areas and patient enrollment resumed, we are monitoring with some concern the developments in the south and the west of the U.S. While we continue to enroll patients in those areas, we're closely monitoring the situation. Our key focus is on patient safety and ensuring data integrity in our trials.

Most of our suppliers have been coping well through the first stretch of the pandemic, while some have experienced issues. We are working closely with all our suppliers to ensure uninterrupted supply of essential goods and services for our operations.

Finally, we've been working closely with our logistics partners to ensure uninterrupted and timely continental and transatlantic deliveries of leukapheresed (inaudible) and final products.

To date, our lead programs, AUTO1 and AUTO3, have not been significantly impacted by the COVID-19 outbreak. However, depending on the development of the pandemic in the second half of 2020 and into 2021, our trials could become impacted. For AUTO4, we experienced a delay in patient enrollment for our ongoing Phase I clinical trial. This trial is conducted in the U.K. and in Spain, and the health care systems in both countries have been heavily impacted, leading to a stop of enrollment in the second quarter. The return to normal activity in both countries has been slower than expected, and we now expect first data from this Phase I study to be available in the first half of 2021 instead of the fourth quarter of 2020.

With respect to our preclinical programs, these have been minimally impacted, and we continue to expect AUTO5, AUTO6NG, AUTO7 to enter the clinical development in 2021. Our first clinical studies with AUTO1NG in pediatric ALL and AUTO8 in multiple myeloma remain on track to begin in the second half of 2020.

So moving on to our corporate highlights and starting with our clinical programs on Slide 6. We've had a busy quarter across our portfolio, with positive data presentations at key medical conferences. Both our later-stage clinical programs, AUTO1 and AUTO3, continue to show very encouraging clinical activity with tolerable safety profiles as highlighted in 2 separate presentations at ASCO and EHA. We also follow both these presentations with analyst events. I will touch on these clinical updates a little later. However, focusing on the operational aspects and starting with AUTO1, we have now commenced enrollment of patients with relapsing-remitting adult acute lymphoblastic leukemia in our pivotal Phase Ib/II AUTO1 program, and we're targeting to have data by the end of 2021. With regards to our lead product candidate for the treatment of DLBCL, AUTO3, we have now selected the recommended Phase II range of 150 million to 450 million cells, with the single dose of pembrolizumab included in preconditioning.

In addition, the company has also commenced a 20-patient outpatient cohort as an extension to its ongoing Phase I/II ALEXANDER study, with results expected by the end of 2020. The data from this outpatient cohort will provide important insights that will be used to refine the design of the potential pivotal Phase II part of the ALEXANDER study.

Finally, we are also pleased to have been invited to present a mini oral presentation at ESMO on September 18, 2020, where we'll give a further clinical update from the ALEXANDER study. On that note, we plan to host an analyst event on this same day.

Finally, the last item I would like to mention on this slide is -- are the forthcoming clinical data updates expected through the second half of 2020. For AUTO1 in adult ALL, we plan to present longer-term follow-up data towards the end of 2020, likely at ASH. For AUTO3, as I've mentioned, we will look to update with additional patients from our ongoing ALEXANDER study as well as longer-term follow-up data at ESMO. We would also look to provide a further update by the end of 2020, again, likely at ASH, by which time, we would also look to update you on the data from the outpatient cohort.

Moving to Slide 7. At AACR, we updated on 3 of our earlier-stage pipeline programs: AUTO5, AUTO6NG and an oral presentation on AUTO7. The preclinical data presented reinforced the strength of our binder discovery capabilities with our ability to selectively target 2 separate population of T cells in T-cell lymphoma as defined by the mutual exclusive expression of T cell receptor beta chain constant domains 1 and 2. We're excited about the profile of AUTO5, our anti-TRBC2 chimeric antigen receptor, which is the complementary program to our clinical asset, AUTO4, which targets TRBC1-positive T cells.

In addition, we also demonstrated the utility of our broad technology toolkit, whereby we showed how our modular approaches in AUTO6NG and AUTO7 can address the hostile solid tumor microenvironment in models of small cell lung cancer and prostate cancer, respectively. The new data suggests that AUTO6NG can overcome key immunosuppressive mechanisms in the tumor microenvironment. Furthermore, the AUTO7 program builds on a novel and optimized CAR to PSMA designed to be highly active even with low PSMA target expression and also in an acidic environment, often characteristic for solid tumors.

AUTO7 then combines modules introduced in AUTO6NG with a novel module, leading to a low-level secretion of interleukin 12 to change the prostate tumor from immunologically hostile to immunologically supportive environment. We have guided that all 3 programs presented at AACR, AUTO5, AUTO6NG and AUTO7, are expected to enter the clinic in 2021.

Moving to Slide #8. Given the maturing of our clinical (inaudible) excited to announce earlier this week Dr. Jay Backstrom's appointment to the Board of Directors. Jay brings a wealth of oncology development, regulatory and portfolio strategy experience to the Board. Under his leadership, Celgene has developed a broad range of therapeutics, including small molecules, biologicals and CAR-T programs in one of the industry's most significant hemato-oncology pipelines.

Furthermore, we also announced Dr. Nushmia Khokhar's promotion to Senior Vice President, Clinical Development, taking over full responsibility for all our clinical development activities. Nushmia has been instrumental in the development of our clinical programs at Autolus, and we very much look forward to her continued strong leadership.

Finally, we announced that Dr. Vijay Peddareddigari will be leaving the company, moving with his young family back to the U.S. Over the past 4 years, Vijay has played a key leadership role in establishing and executing the clinical development strategy to advance our program T cell therapies, and we do wish him well in his future endeavors. As well as the Board and management update, worth mentioning that we're also extending our manufacturing capacity at the Cell and Gene Therapy Catapult to secure initial commercial launch capability.

Moving to Slide #9. I wanted to spend a brief moment recapping on our lead program, AUTO1 in adult ALL. Adult ALL is a challenging disease and typically a disease of elderly patients. A lot of these patients have significant comorbidities, making them a more fragile patient group than in -- than pediatric ALL. The indication is approximately 3x the size of pediatric ALL, which represents an attractive market opportunity. Within the U.S. and the top 5 European countries, approximately 3,000 patients every year at the -- are at the end stage of their treatment, having failed chemotherapy and stem cell transplant, and therefore, require other options.

At this point, there is no CAR-T therapy approved for adult ALL. When we created AUTO1, we designed a product that has an ability to have a very high level of antileukemic activity to cope with the rapid growth of leukemic cells in the bone marrow, a very long persistence to put long-term pressure on the leukemia and get to a transformational outcome, combined with a tolerable safety profile, which is particularly important for elderly patients with acute leukemia.

Now turning to Slide #10. To recap on the update we provided at EHA in June on the ALLCAR19 study with AUTO1, our data suggest that AUTO1 has a superior efficacy profile with a comparable safety profile to standard of care. The overall response rate and MRD-negative CR rate was -- we presented at EHA was 84% for all 19 patients treated in this study. Responses appear durable, and notably, first patients are beyond 18 months in molecular complete remission without receiving a second transplant. In fact, for all the patients treated, only 2 patients have been consolidated with the transplant.

Overall, 11 of the 19 patients continue to be disease-free, with a median follow-up of 12.2 months, with the range ongoing up to 24.4 months. Now putting this data in context with some of the other standard of care therapies that are available, the overall response rate we see is approximately double that of blinatumomab and looking at event-free survival or median PFS, this also compares very favorably to blinatumomab or inotuzumab, where approximately half of the patients are consolidated with transplant.

Furthermore, AUTO1 event-free survival at 6 months is high at 62% for all patients and 76% for patients treated with the close manufacturing process, which we're using going forward in the pivotal study. With the absence of post CAR-T consolidation with transplants, the treatment effect is that of AUTO1 as a stand-alone therapy.

So based on this data, turning to Slide 11, we have started enrollment into the pivotal program, AUTO1-AL1, in adult ALL. As a reminder, the CTA was filed in the U.K. in Q1 and cleared earlier this year, and the U.S. IND was accepted by the FDA in the second quarter. We have now sites open and running and enrolling patients.

As a reminder, the study has a Phase Ib running, and the pivotal program comprises a single-arm, 100-patient study with relapsed/refractory patients. The primary end point is complete remission rate. Secondary end points include molecular CRs, event-free survival and duration of response. We remain on track to report full data by the end of '21.

Let's now turn to Slide 12, where I would like to switch gears and talk about AUTO3, a program that is designed for the treatment of patients with diffuse large B-cell lymphoma. As you all know, DLBCL is a much bigger indication than adult ALL in a setting where there are already 2 approved CAR-T therapies with Yescarta and Kymriah, plus liso-cel or otherwise known as JCAR-17 pending approval. We know this is a large opportunity with approximately 10,000 patients on the back end of the disease, which is a sizable population with a very significant medical need.

The aim in DLBCL is to achieve durable complete remissions. Approved CAR-T products, Yescarta and Kymriah, have a high objective response rate, between 70% and 80%, but only 29% to 37% of the patient achieve durable complete remissions. The 2 main drivers for relapses post remission are loss of antigen and expression of PD-L1 on lymphoma cells. AUTO3 is designed to achieve a high level of sustained complete remissions. To counteract loss of antigen as innovation mechanism, we engineered 2 chimeric antigen receptors, one targeting CD19, the other, CD22, into each CAR T cell. The rationale is that the lymphoma cell would have to lose both antigens simultaneously to avoid recognition by the CAR T cell, a much less likely event to occur than a single antigen loss.

The molecular composition of ALLCARs is different from any other CAR-T product, even from AUTO1, with different binders targeting the antigens, a different costimulatory domain for the CD19 CAR and a novel CAR architecture for the CD22 CAR.

In addition to the unique molecular design of AUTO3, we're also using pembrolizumab during preconditioning to contract PD-L1-mediated checkpoint inhibition. As reported at ASCO and EHA, AUTO3 shows a high level of complete remissions, with about 60% CRs at the recommended Phase II dose.

Moving to Slide 13. Encouragingly, to date, there have been no early relapses observed from patients who achieved CRs, which bodes well for sustained high level of CRs. Larger patient numbers and more follow-up will provide further clarity towards the end of this year.

Slide 14. Importantly, patients responding to AUTO3 therapy showed limited CAR T-related toxicities, supporting treatment of patients outside of academic centers and also in outpatient setting. This is particularly important in DLBCL as 80% of third-line patients are treated outside academic centers in the U.S. Currently approved products are only tapping into significantly less than 20% of the market, which is managed by the academic centers. It's very little to no penetration of the remaining 80% of the market, which comprise settings that cannot deal with the intensity of management required for the current T -- CAR-T products. We believe this creates a highly attractive opportunity for the profile of product that we are seeing with AUTO3. As I've mentioned, we expect to provide an update on patients treating our outpatient expansion cohort by the end of 2020.

So let's turn to Slide 15. As we have discussed, we've developed the first-in-class CD19 and CD22 CAR, with novel signaling domains designed to provide best-in-class efficacy with high rates of durable complete responses. Given the differentiated clinical and safety profile we have reported on so far, we see a really attractive opportunity for AUTO3 as an outpatient solution for patients with DLBCL, therefore maximizing the commercial potential of a CAR-T product across all settings of care.

Finally, on Slide 16, I wanted to remind you of the broad and exciting next-generation pipeline we are proud to be developing at Autolus. AUTO1NG, our next-generation program in ALL, retains the fast off-rate CD19 CAR we use in AUTO1 and as a CD22 CAR, a novel one. We will look to progress this program into Phase I clinical study in the pediatric setting in the second half of this year. CD19-negative relapse appears to be a greater issue in pediatric patients compared to adult patients with ALL, and hence, the focus with this program first in pediatric patients.

AUTO3NG is a life cycle management program in DLBCL and is representative of the ongoing innovation at Autolus. I also wanted to mention AUTO8, which is our next-generation program in multiple myeloma due to enter the clinic in second half of 2020 as well.

Lastly, the suite of next-generation programs is showcased at AACR a few weeks ago. We will look to move into the clinic in 2021, including our first solid tumor programs for both prostate cancer and small cell lung cancer, which we're exhibiting -- which we're very excited to be progressing.

With that, I will turn over to Andrew for his second call 2020 financial update. Andrew?

Thanks, Christian, and good morning or good afternoon to everyone. If we move to slide -- the next slide. It's my pleasure to review our financial results for the second quarter, that's for June 30, 2020, starting with our cash position. Cash and cash equivalents at the 30th of June totaled $212 million, and that compared with $243 million at the end of the previous quarter. Net total operating expenses for the 3 months ended 30th of June 2020, were $39.5 million. That's net of grant income of $0.3 million, and that compared to net operating expenses of $37.2 million, net of grant income of the same amount for the same period in 2019. Research and development expenses increased to $31.3 million for the 3 months ended 30th of June from $26.2 million for the 3 months ended 30th of June 2019.

Cash costs, which exclude depreciation and amortization as well as share-based compensation, increased to $26.5 million from $20.2 million. The increase in research and development cash costs of $6.3 million consisted primarily of: one, an increase in compensation and employment-related costs, that's net, though, of lower travel cost as a result of the ongoing pandemic of $1.8 million, and that's due to an increase in employee headcount to support the advancement of our product candidates in clinical development; secondly, an increase of $3 million in project expenses as a consequence of the advancement of our clinical portfolio, which includes all of the research process development and manufacturing activities necessary to prepare, activate and monitor the clinical trial programs; thirdly, an increase of $1.3 million in facility costs related to the commencement of the lease for an additional manufacturing suite and the continued scaling of operations in the manufacturing facility; and lastly, an increase in IT and telecoms general office expense and professional fees of $0.6 million, which is offset by a decrease in materials purchases of $400,000.

Noncash costs decreased to $4.8 million for the 3 months ending 30th of June from $6 million for the 3 months ended 30th of June 2019. This decrease is primarily related to share-based compensation expense that's included in research and development expenses, which decreased by $1.3 million as a result of a lower fair value of stock options recognized in the period, and this was offset by a small increase in depreciation.

General and administrative expenses decreased to $8.5 million for the 3 months ended 30th of June 2020, from $11.4 million for the 3 months ending 30th of June 2019. Cash costs, which, as I've explained, exclude depreciation as well as share-based expense compensation, decreased to $6.7 million from $7.3 million for the previous -- the corresponding quarter last year.

Compensation-related expenses decreased by $100,000, aided by lower travel costs as described above. Further, there was a decrease of $0.7 million in commercial activities, and these decreases were offset by a marginal increase in legal and professional fees of $100,000. Noncash costs decreased to $1.8 million for the 3 months ended 30th of June 2020, from $3.9 million for the 3 months ended 30th of June 2019. The decrease is attributed to share-based compensation expense as a result of the lower fair value of stock options being recognized during the period.

Interest income decreased by $1.1 million for the 3 months due to lower interest rates. Other income decreased to $0.5 million for the 3 months ended 30th of June 2020, from other income of $4.4 million for the 3 months primarily related to a decrease of the exchange rate between the U.K. and the pound for the 3 months ending 30th of June 2020, as compared to the 3 months ending 30th of June 2019.

Income tax benefit increased to $7 million for the 3 months ending 30th of June 2020, from $3.3 million for the corresponding period last year, and that's due to increased R&D expenses, which led to an effective higher effective tax rate. Research and development credits are obtained at a maximum rate of 33.35% for our qualifying research and development expenses, and the increase in the net credit was primarily attributable to an increase in that eligible expense.

So overall, net loss attributable to ordinary shareholders was $32 million for the 3 months ending 30th of June 2020, and that compared to $28.5 million for the corresponding period last year. And this resulted in a basic and diluted net loss per ordinary share for the 3 months ending 30th of June of $0.62 compared to a basic and diluted net loss per ordinary share for the corresponding period last year of $0.65. And consistent with the previous guidance, the company anticipates that cash on hand provides us with a runway into 2022.

And with that, I'll now hand the call back to Christian to give you a brief outlook on expected milestones. Christian?

Thanks, Andrew. Let me conclude this part of the management discussion with a review of the upcoming milestones and news flow through 2020.

Let's move to Slide 20. The upcoming 6 months will yet be another eventful period for us with multiple clinical milestones and opportunities for value creation. Our chief and most imminent operational focus will be continuing enrollment and dosing of patients in the pivotal Phase Ib/II trial for AUTO1 in adult ALL and completing the outpatient cohort for AUTO3 in DLBCL. We also expect to report clinical data on the AUTO3 ALEXANDER trial at the forthcoming ESMO meeting and a further update plan for ASH, an updated AUTO1 ALLCAR19 data also planned for ASH.

In the second half of 2020, we'll look to progress AUTO1NG, our next-generation program for ALL, into a Phase I clinical study in the pediatric setting. And in the same period, we also expect our next-generation multiple myeloma program, AUTO8, to enter the clinic. Towards the end of the year, we expect to progress our first allogeneic program into clinical development as well.

As we move through to the end of the year and into next year, we will look to progress a number of other -- our other preclinical candidates to a point of Phase I readiness, including AUTO5, AUTO6NG and AUTO7, which are the programs we updated you at AACR. We plan for these programs to enter into the clinic in 2021. Finally, in the first half of '21, we look forward to providing an interim update on AUTO4 in T-cell lymphoma, and we expect to present on a smaller number -- small number of additional patients.

In conclusion, on Slide 21, I'd like to recap the major messages from today's call. AUTO1, our first pivotal program, has started in Q2 as planned. Given the positive safety and efficacy profile today, we believe that AUTO1 has the potential to be a best-in-class CD19 CAR-T program in adult ALL, a disease setting with very high unmet need. Second, AUTO3 in DLBCL will have additional clinical data updates at ESMO and possibly ASH. In Q2, we have initiated the outpatient cohort with planned data update on that cohort by year-end. The company is in good -- in a good position, and combined with cash on hand of $212 million, we feel well poised for success. We're now happy to take questions. Operator, please [take] the call.

(Operator Instructions) Our first question is from Mara Goldstein, Mizuho Securities USA.

This is Mara. Can you hear me?

Yes, Mara.

Just a couple of questions. First of all, can you provide some more color regarding the data updates expected at ESMO, such as additional patients and durability and the like?

And then I had a question on AUTO8 and really more around the environment for enrolling patients in multiple myeloma trials given the number of cell therapy trials currently underway and the competing late-line therapeutics for that disease, particularly under the umbrella of where we are now with COVID. And talk a little bit about that.

Sure. With regards to the second question, I think the environment we're seeing is certainly where there is a number of new therapeutic outcomes that are becoming available. I think the primary focus we see with regards to the first approval is just clearly on the U.S., and we'll expect some delay for European approvals. Our initial work will be executed in Europe. And so we think that from that perspective, we will not yet feel an impact for -- by the -- from the new programs coming in. And then I'm -- ask -- maybe ask you to repeat the first question, really sorry.

Right. Just regarding data updates at ESMO. Would you be able to give us some additional -- some color on what we can expect in terms of additional patients, durability and the like?

Thanks, Mara. Yes, the -- so in terms of additional data updates, what we had updated at ASCO was based on a data cut, obviously, in early part of the second quarter. And it included, at that point, 8 patients that were at the recommended Phase II dose. We've completed that cohort, which is a total of about 15 patients. We'll have additional follow-up obviously on these patients, not only response data, but also follow update on these -- from these patients. So it will be sort of round out the recommended Phase II dose experience for the program. That will be some of the key focus for the ESMO presentation. And then as we go towards ASH, we expect to be able to add the patient experience from the outpatient cohort for the end (inaudible).

And if I could just ask one more question, and it's on AUTO3 outpatient program. And within the protocol defined as outpatient, what -- I guess, what would be considered success from an outpatient perspective? At what point when patients are treated, if they have an emergent event and end up having to go to hospital, do they then -- are they then considered an outpatient failure, if you will?

No. I mean the key purpose of the outpatient cohort is actually to familiarize the centers with the product and gain experience with the patients in an outpatient setting, understand handling as well as the overall management. We have to also understand that, obviously, the patients, particularly at the very late-stage of the disease, often require actually hospitalization to manage the disease itself. So this is a lot about gaining experience, understanding the profile, understanding the management. And that is sort of what the key purposes of the outpatient cohort and is really laying the foundation to then include patients in outpatient setting in a pivotal study as well.

Our next question comes from Biren Amin from Jefferies.

Christian, just on the outpatient cohort, are patients dosed with prophylaxis regimen of IL-6 inhibitors and/or steroids?

The answer is no. They're not going to be managed by giving them IL-6 monoclonal or steroids for that matter. So this -- the patient will not be managed that way. That would not be, I think, a good way to go.

And just to clarify, on this outpatient cohort, will the data at the end of the year, will that inform you on its utility for use in the pivotal trial next year in DLBCL?

We believe it will. And as I pointed out, a lot of this is really about gaining experience. And I think in that sense, it's going to be important for the centers to actually gain experience in that setting, and that is important to lay the foundation to include these patients as well.

Got it. And then maybe just one last question. On the AUTO8 program, what learnings did you take from the AUTO2 and apply that to development of AUTO8?

So one of the key focus that we were putting on or putting into the design of the AUTO8 program is really to drive for the ability to make very deep cuts and be active at very low levels of target antigen. Both of those elements, we believe, are important to actually induce a profile or create a profile that can lead to a high level of molecular remissions, which is really what we need to aim for, which are very stringent molecular remissions in that setting. So that is what that program is designed to do, and there is also additional elements that we built in that we haven't yet disclosed.

Our next question comes from Eric Joseph with JPMorgan.

I also just had a follow-up on the outpatient cohort and just in your comments about how to think about the data toward year-end when you describe patient experience. Can you just sort of help us with expectations [on] sort of duration of follow-up there? Do you expect to be reporting efficacy at that point or primarily safety? And maybe just an update on enrollment to date in that cohort.

I'm not sure whether the entire question was fully audible on the reporting. I think the key question is what is the type of data we expect by year-end for AUTO3 in terms of follow-up, safety, et cetera. So I think with regards to the cohort that defined the recommended Phase II dose, obviously, that cohort has been fully enrolled, and patients have been treated before middle of the year.

And so we'll have a very good follow-up in that patient group of 3 months and more, which gives us a very good view in terms of not only the CR rate at 1 month but also starting to get a feel for to sustain CR rate. We've already obviously had patients that we have now observed for 18 months or longer. And obviously, that gives us a very good view in terms of the totality of the CRs that we have induced, give us a very good view over an extended period of time or how these patients are faring. And I think with that, we'll get a very good understanding of what the durable complete remission rate will look like with AUTO3. So I think that is a very important part of the data.

The second part obviously is in a larger patient group, obviously a corroboration of the overall safety profile of the product, which is an important feature of AUTO3. And so I think we're going to have obviously a substantive addition in terms of with the additional 20 patients that we're enrolling to give us a very robust data set, both on the safety overall but also from an overall CR rate perspective. And with regards to durability of effect, obviously, all the patients we've treated until now will have at least 3 months of follow-up, and that gives us a very good view of the ability of those CRs to sustain over time.

Okay. Okay. Great. I guess short of seeing similar safety in the outpatient cohort, is there really anything in terms of logistics, the ability to manage patients in the outpatient setting that would -- or manage patients in the outpatient cohort that would lead you to not pursue it in a pivotal study?

I think it is really about corroborating the data we have in this setting and as I indicated, an ability for the centers to gain experience. The current experience with CAR-T is to use the CAR-Ts predominantly in inpatient setting. That is what all the guidelines are directed to. This is pretty much what the safety management, et cetera, is really focused on. And so it does take experience. And I think this is what the patient cohort actually allows us to start to build and I think will be important as we're looking forward in this program. But it is on the pure safety data side, I think corroborating the data is important, getting a better understanding of duration of adverse events and those types of information as well, I think, will be very helpful in understanding the overall profile and preparing ourselves to include those patients going forward as well.

Our next question is from Jim Birchenough from Wells Fargo.

Congrats on all the progress. A few questions for me. I guess first, just on the outpatient cohort, could you remind us again what the triggers are for patients to be readmitted were -- if they were dosed in the outpatient setting? And around fever, the time course of fever that would require readmission? And are you seeing anything early in the outpatient cohort that's giving you confidence that you've got a viable profile for that setting?

First of all, thanks for joining, Jim. Very good questions. Obviously, the current guidelines in the CAR-T fill and in general, for late-stage DLBCL patients is that when patients develop a fever, you want to be sure that you can exclude infectious disease. And so typically, these patients do get admitted, get put on an antibiotic and then are monitored. If obviously the patients are doing well and the fever subsides quickly, the patient can be discharged quickly as well.

So the timings of around those will be important. And a lot of these patients do, whenever they develop fever, whether they're on the therapy or not, will have to go to the hospital, get checked for potential infections and obviously the risk of sepsis that could develop. And it is really around managing that risk that I think you have to be very mindful and very focused from a fever perspective. Now this is no different whether the patient is on CAR-T or the patient is just being managed at that stage of the disease. And there is no difference in terms of the rules that apply and how you actually manage those patients at that point in time of the disease. So in that regard, that is a key parameter we're looking at.

In terms of kind of the early experience, I think it's -- we don't have enough patients, I think, to have a feel how this is going to develop through the trial. And we have to run the cohort and get a good feel for that as we're looking at the 20 patients in totality.

And then Christian, maybe a broader question on ability to navigate the pandemic. You referenced the Southern U.S. states and the West Coast. What's your exposure to sites in those areas? And is there a way to adapt the study to enroll in sites that are less hot spot?

Yes. We do have a significant number of studies across -- study centers across the U.S., and it's -- and this really allows us, and this is now speaking specifically first for all the 3, allows us to actually focus our enrollment more towards the sites that are less impacted. And that actually has worked well so far. But it's something you have to be very vigilant about and we have to monitor very carefully. We've seen, certainly, in the last -- the month of July, we've seen pretty significant and rapid surges in places like Miami or Houston that I think we all hope to wouldn't see, frankly. Now those centers still continue to operate. The cancer centers still continue to operate, but it's very clear that when you listen to the public health officials that some of those places are approaching or have been approaching maximal capacity on the ICU beds, et cetera, which obviously starts then to put or present a risk where that could spill over into cancer centers as well. So that's certainly one of the things we're looking very carefully at.

From a geographic distribution perspective, we're very well distributed across the U.S. with our centers. And obviously, we're also having centers in the U.K. on the AUTO3 side, and there is an element of an ability to balance out. And as you can imagine, while we were pretty heavily hit in New York City in the middle of -- and towards the end of April, we now actually have enrolled quite a few patients out of New York. So it's really kind of managing as the pandemic kind of flows, frankly, through the country, managing accordingly and making sure we're sort of focusing on the centers that are less impacted or less likely to be impacted in a way that would actually put the patients, frankly, at risk.

But it's going to be a topic we'll have to watch very carefully as we go through the second half of the year with the risk of having kind of a flu on top of COVID. And frankly, people's attitudes starting to wane, and people start to get fed up with where we are. And I think that aspect is probably on the biggest risks that we're all going to be dealing with is that we frankly keep our act together as a population. And depending where we are, we had, I think, our issues with actually doing that. And that is actually, I think, where the fundamental biggest risk is that we're dealing with.

Just a final question, Christian. Just in terms of maybe moving your cell therapies up to earlier lines and away from less -- more up from the brittle patients in the salvage setting. Could you maybe speak to that strategy to maybe move AUTO1 or AUTO1NG or AUTO3 or AUTO3NG up to earlier lines, what the strategy is there?

I think it's a very important point. It's an area we're looking at very intently. So we're looking at ways to -- for earlier lines of therapy settings for AUTO3 and DLBCL, which we believe is important. And we're also looking at that -- also at the opportunities in the ALL setting as well where clearly, we know from the experience with blinatumomab, going to an earlier line of therapy, basically, in that particular -- where that particular redirected T-cell therapy doubled the molecular CR rate by going earlier in the setting.

So there's a very clear, very strong rationale for moving to earlier setting and a very significant opportunity for improved outcomes at a number of levels in these patients. Obviously, less beaten up. They have -- typically, the disease isn't quite as rapidly progressing as we have at the last line setting. And that actually -- together actually gives you an opportunity to have a much more profound impact for these patients.

Our next question comes from Asthika Goonewardene from Truist.

I was wondering about AUTO4. Could you maybe talk to us a little bit about what we would expect in the data in the first half of 2021 and what kind of follow-up? And then also, if I can add on to that, T-cell lymphoma is a very diverse set of diseases. I was wondering if there's potential for you to get a broad indication across all T-cell lymphomas by focusing on the 3 subtypes that you're looking at in the Phase I study.

First of all, thanks for joining, Asthika. The AUTO4 obviously is -- it's still in dose escalation. So it's going to be a smaller number of patients with dose escalation information, and we'll see whether -- where we are at that point in time in terms of the dose levels. But the information will predominantly be on activity of the product at certain dose levels in a small number of patients.

In terms of the disease setting, you're right, T-cell lymphomas are quite heterogeneous in terms of a population. However, when you look at outcomes, the large settings actually have a very similar rather homogeneous outcome. So you can actually include the larger settings in a single trial and actually run it as a single trial in that -- that actually has the same outlook in terms of time line with regards to relapses, duration of responses, et cetera, in general, where they behave very similarly. And that is what we're doing. So we actually allow the major indications in T-cell lymphoma to be recruited into the study and have a indication like PTCL as a separate entity that would actually have to be developed as a separate label.

Our next question comes from Robert Andrew with William Blair.

This is Rob Andrew on for Matt Phipps. Just a couple from me. I noticed in the press release here that the manufacturing capacity has been increased at the cash flow side. Is that just in general to support the pivot of AUTO1 and the potential launch there? Or is that kind of also taking into consideration potential AUTO3 launch as well? And then I guess, given the number of candidates that are entering the clinic in the next kind of 6 to 12 months, is the capacity there now able to support all those studies without strain? Or does there have to be prioritization?

Very good question. So we're adding capacity at the Cell Therapy Catapult to actually support a launch for AUTO1. Supporting launch for AUTO3, we believe, will actually require more capacity, and that's one of the reasons why we're obviously working on the Rockville facility that we have introduced a little while ago.

With regards to the capacity for the conduct of clinical studies, obviously, we do have quite a bit of capacity at this point in terms of our ability to run clinical studies and will, with the capacity we're building up also towards commercial launch, will actually have quite a good level of access to cell manufacturing capacity that we believe will not limit us with regards to the clinical programs. I think also worthwhile in mentioning in this context is that we're obviously also collaborating with academic centers on some of our programs, including AUTO1NG and AUTO8, where the same types of processes -- process that we're running, our AUTO1 and AUTO3 programs, those are actually being run at GMP facilities at some of those academic partners as well. So we're actually having quite a network of capacity that we can work with, particularly for the earlier translational studies.

Okay. Great. And then if I could just follow up on maybe an earlier question on the AUTO8 program. Seeing that we're still on track for initiation in the second half year, any kind of additional information on where we might hear some more about the design of the new CARs that are in there? Maybe any preclinical data that kind of supported this advancement?

I think for now, we're obviously working on publishing quite a bit of our data across our programs. In AUTO8, we're probably going to hold back a bit. We want to see kind of how the product actually [behaves] in the clinic and then actually, we'll make the determination of when and how to present. This program is obviously in a very competitive space, and it's also, frankly, has to hit a very significant biological hurdle that we set for the program. And so we want to actually run it out and see where we get to, and we'll update in due time.

Our next question comes from Graig Suvannavejh from Goldman Sachs.

Congrats on the progress that you're making. I had 2 questions, if I could. The first is just on the competitive landscape, we recently saw approvals for Monjuvi, which is in a second-line setting for DLBCL, and BLENREP, which is BCMA-targeting asset and perhaps in a fifth-line setting for multiple myeloma. So just with that in mind, could you just remind us how you're thinking about AUTO3 and AUTO8, respectively, and how they are going to be positioned relative to those products?

And then my second question is actually maybe best for Andrew. I'm just thinking about as you advance, particularly AUTO1, and you're getting closer to potential filing and hopefully, commercialization. Just trying to get a better sense of when, as a company, you guys are thinking about increasing investment around precommercialization activities or commercial infrastructure ahead of that.

All right. Well, thanks a lot for joining, Graig. Thanks for the questions. So with regards to competitive landscape, obviously, on the -- within the DLBCL segment, there's obviously quite a good number of programs that are active in this space. We had, as you pointed out, the recent approval of the CD19 monoclonal antibody from MorphoSys and Xencor. And -- but there is also obviously quite a wide range of activities with bispecific antibodies, ADCs as well as obviously a range of different types of CAR T approaches. So absolutely a competitive environment.

With regards to the CD19 monoclonal antibody, I think the attractive part about that program and the current setting is that it's a setting where the patients actually have a hard time tolerating significant adverse events. It's patients that are not eligible for an organ transplant. And what we basically need for these patients is a very well-tolerated approach that still gives them an opportunity to actually get a longer-lasting remission in that particular setting. And that is really what the program managed to do, combined obviously with a rather mild chemotherapy component, which I think was the critical piece there to sort of created therapeutic options for patients that otherwise would have a hard time taking on a lot of toxicity. So that is, I think, where that program is.

When you look at the data in last-line setting, the CRs actually come down dramatically. And there may be a 20% -- whether they're sustainable, I think it's too early to tell. So they're very similar to other approaches that we've seen in last-line setting and where, in fact, the CAR-T programs are set apart significantly. When you look at the Yescarta data, which is still today the best long-term data that we have in DLBCL patients, which is around 37%, that is clearly substantially over and above any of the other therapeutic modalities currently being tested.

So I think that's important to keep in mind. What we see today with AUTO3 is that we may be tracking above Yescarta on long-term remissions, and we'll need to obviously have more data and more follow-up to prove that. But the data today look very promising that we might be on good track to be -- to actually demonstrate a superior profile.

So from that perspective, I think that landscape hasn't changed. I think there's a new component for patients that have limited ability to take toxicity. And I think that is important, and it does matter, but it also is a setting where you could see CAR T actually move in as well and be highly active as well is where I would -- certainly from the data that we've seen across the various lines of therapy in DLBCL, would expect.

On AUTO8, the BCMA-ADC [executive], there's no question about it. It does buy some time but not an awful lot of time. When we look at the -- basically the data we see in the field on the CAR T side, be that bluebird or be it the J&J program, particularly the J&J program has very significant, very deep molecular complete remissions, a very impressive data set. And substantially, over and above, we believe any of the other therapeutic modalities currently out there. And we'll have to see kind of where ultimately ADCs and other therapeutic modalities fit in and how they're going to be slotted across the spectrum of lines of therapy and also the opportunity to potentially combine with other therapeutic modalities as well. So I think in that sense, the landscape hasn't changed in a significant way as far from our perspective. And we still see very significant opportunity unchanged, frankly, for CAR T approaches with differentiated profiles in DLBCL and multiple myeloma.

Andrew, do you want to take the second one?

Yes, I do. It's -- Graig, thanks for the question. I mean look, I mean, in terms of where we are talking about commercial sort of ramp-up, et cetera, that will be a question, I think, we'll be addressing in '22. There's not a huge need at the moment for that. We're very fortunate that we have a very experienced commercial group. It's a very small commercial group but a very experienced commercial group. And so they're providing all of the thinking and the input that we need at this point. The physical sort of boots on the ground side of thing is certainly a question that I'd be happy to talk to you about when we get to 2022.

Thank you. So it looks like that's all the time that we have for questions. The company will be happy to take any follow-up questions directly. And I'll now turn you back over to Dr. Christian Itin.

All right. Well, thank you all for joining us today. It's great to actually be able to give you an update. Great to see many of you joining the call in the middle of August or beginning of August here. So we're looking forward to the end of the quarter and update you on AUTO3. And then obviously, at the end of the year at ASH for the additional updates on both our hemo-on programs in B-cell malignancies.

With that, thanks a lot for your continued support, and we're looking forward to also being in touch and keeping you updated. Thanks a lot. Buh-bye.