Q3 2019 Earnings Call

Well 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 November 20, Threerd 2018 as well.

Well as discussions of potential risks uncertainties and other important factors in our other periodic filings with the FCC.

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 day of this.

Contagion.

On slide three you will see the agenda for today and it is as follows Christian will provide a brief introduction and that will be followed by our operational highlights for the third quarter of 2019, Andrew will next discussed the Companys 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 now like to turn the call over to Christian.

Thank you feel the are a good morning to all of you and thank you for joining us Im pleased to review our progress in the third.

Quarter of 2019 as well as some a recent company highlights.

On slide five and as reported yesterday, we will have four.

For oral and two poster presentations at Ash in December in Orlando, We're pleased that we'll be presenting data across the majority of our clinical programs. The focus will be on auto loan with three oral presentations alone. This coming weekend also we will have a poster presentation with preclinical data.

On our first solid tumor program auto six Angie.

Turning to slide six let's start the discussion of our Q3 operational highlights with our highest priority programs Autobahn in adult MLL. We're pleased that earlier this week the USS da granted Autobahn orphan drug designation for treatment of acute lymphoblastic leukemia.

Relapse and refractory DSL acute lymphoblastic leukemia represents a significant commercial opportunity both in terms of their potential market size as well as the high level of unmet need in the management of the disease worldwide. Approximately 8400 patients are diagnosed every year with about 6000 of those patients current from the U.S. said to you five euro.

Pete in countries.

While response to initial combination chemotherapy regimens is encouraging only 30% to 40% of adult MLL patients will achieve long term remissions and the median survival for adult patients with relapsed refractory CLL is less than one year.

Welcome Riaz Cdnineteen targeting car T therapy was approved for pediatric JLL patients in 2017, no car T therapy has been approved for adult CLL patients to date, the only redirected T cell therapy approved for it all Dale is been a two remarkably in Cyto, hey by specific Cdnineteen targeting T cell engager.

In a tumor map has a 42 response rate, 42% response rate yet the durability of the responses is limited as of entry survival is 31% at six months.

Slide seven shows that data from ash abstract on Olkaria 19, our auto one study in adults with recurrent refractory aerleo as of right.

Refractory CLL as of the data cut off July 20, 483% of the 12 Evaluable patients achieved MRT negative molecular complete response at one months.

In the prior in April of this year at the AC Our annual meeting reported that a median follow up of five months six out of 10 patients were alive and disease free.

As of July 24th 2019 data cut off that number it remains consistent with seven of 12 patients are 58% remaining in MRT negative remission at a median follow up with nine months. This MRT response is measured by both flow cytometry as well as PCR.

As reported a HCR also and also summarized on slide eight none of the adult patients on none of the pediatric patients develop high grade Crs, although in our adult patients half of them had 50% or higher blast counts in the bone marrow at the start of therapy, which puts them at high risk for developing severe cytokines.

Police syndrome.

By Ash, we will have four additional amounts to follow up on additional patients of valuable.

As reported at HCR, we only have patients only had only one patients transplanted post therapy as no further patient receive transplant since.

During our oral presentation at asked mix Ash next month docs clarity will present additional follow up data, including safety and efficacy.

On slide eight I would like to provide some context on how this data fits into the landscape of it all Dale therapy as you can see in both adult and pediatric JLL auto loan is differentiated and has the potential to be best in class.

I'd like to highlight the consistency between the pediatric and adult datasets, we've seen so far bushel high molecular complete remission rate without inducing grade three or higher cytokine release syndrome or requiring admission to the IC.

You for treatment of high.

During the second half of 2020 will help.

For a via lay filing.

Moving onto a pediatric gale.

Ah two pediatric JLL on slide 10.

As a reminder, pediatric eylea is the most common cancer diagnosed in children with about 3400, new cases diagnosed into us every year.

Pediatric patients respond well to first line treatment, 10% to 20% relapse or refractory to treatments.

Our development track in pediatric Ll will focus on auto on LNG or next generation the pediatric investigational patter paid for auto while.

The data from our Emilio trial of auto three in pediatric JLL as informed us on the encouraging role of dual target antigen targeting with older three as you'll recall, we have had robust clinical efficacy yet the durability of such responses required further improvement.

Yes, we will be moving forward in pediatric JLL using the older one construct through the development of holder, one Mg which incorporates to Cdnineteen car of auto one at a novel Cdtwenty two car.

The hypothesis for this next generation version is to combine to favorable persistence properties observed in auto loan with a promising effect of dual targeting observed in auto three.

We will be presenting data from our Trialysis, both auto loan and auto three in the pediatric population next month at Ash.

Additionally, we expect to initiate clinical evaluation of auto loan and GE in pediatric JLL in the first half of 2020 .

Moving to slide 11 on our program and diffuse large b cell lymphoma, we believe that deal Pcls is a large commercial opportunity given the market size and the aggressive nature of this disease. The ldcs is the most common type of non Hodgkin lymphoma. Approximately 24000 patients are diagnosed every year in the us alone I.

It be combined with a monoclonal antibody led to revision in about 50% to 60% of patients. Thus, we expect the addressable population to be approximately 10000 patients into us and EU five combined.

These sale represents an aggressive and is an aggressive and rapidly progressing cancer for patients relapse or refractory to first line therapy. The current standard of care for second line therapy consist of platinum based chemotherapy regiment with Rituximab.

Patients who respond to second line therapy may go on to receive autologous hematopoietic stem cell transplantation or HCT.

Patients who are not candidates for HCT or those who do not respond to second line therapy.

Or who relapsed after HCT are typically treated with a third line salvage chemotherapy. These patients had a poor prognosis and treatment is generally palliative to try to prevent further cancer growth without the intent to cure.

On slide 12, RTL Bcl product candidate auto three is a dual targeting cdnineteen cdtwenty two car T therapy. The ash abstract published this week show step based on entering phase one data order three is active and well tolerated with no high grade Crs observed we plan to present additional entering phase one data at ash.

Cash.

The first years patients have been enrolled in this study and product has been delivered from our new manufacturing operations at the cell and gene therapy catapulted Stevenage to both us and UK clinical sites.

Our auto sleep program is on track for decision mid next year to advance the program to phase two.

Slide 13, and our it describes our multiple myeloma program as reported in Q2, we have stopped auto too and we'll now move to a next generation program. The phase one experience will be presented in a poster we aim to initiate clinical testing with the new program and the second half Atlantic 20.

On slide 14, finally, I would like to conclude with a brief discussion of two other programs in our pipeline because have the potential to bring additional value inflection and 2020 .

Slide 14 talks about our T cell lymphoma program.

Patient enrollment in our phase one study with auto for both continue into first quarter of next year with supply from the catapult as a result, we expect to present initial phase one data in the second half of 2020 .

Finally on slide 15 to our lead program in solid tumors at R&D day in March we focused on the heterogeneity of the solid tumor micro environment and how the complexity of dynamic nature of these tumors post particular challenges for effective therapies.

Cell therapies can be tailored to combat tumor complexity and programming modules can be added to enhance activities in solid tumors.

At 50. This Saturday, we will now present preclinical data on our auto six and GE program designed to target treaty to positive tumors.

This abstract is important because it shows the impact of advanced cell programming technologies in a solid tumor setting.

By adding.

Seven receptor comerica protein Autistics, Angie demonstrated improved car persistence and they adding dominant negative TGF beta receptive to protein and the truncated <expletive> to protein modified T cells, we're better able to combat the immunosuppressive tumor environment.

Obstruct also shows that in vivo delivery of older six essentially in a challenging mouse model exhibit a potent anti tumor activity and extended survival Rasta clinical activity shown with autos as a clinically active order six could not do that.

Based on these encouraging results, which demonstrate the feasibility safety and efficacy of Autistics Angie we plan on initiating a clinical study in patients with refractory relapse neuroblastoma in the second half of next year.

We're looking forward to discussing these results with those of you who will be at safety. This weekend.

On slide 16, I want to share a few other updates before I turn the call over to Andrew to discuss our financials.

On the manufacturing site the catapult side is fully operational and delivering all our clinical products for patients in both Europe and the use.

In September PPS group announced that they had acquired mainly from Woodford investment management, an approximate 19% holding of Atlas.

And control of their with all the remaining shares of bottlers by Woodford investment management are in the process of being transferred to shorter UK public Private Trust plc.

Finally, with regards to organizational changes, we announced last month that David brochure has been named senior Vice President head of product delivery delete the transition of the company's manufacturing organization to deliver products for registration studies and ultimately commercial sale, Dave has 30 years of technology operations.

And engineering management expertise into biopharmaceutical industry. He joined Artless in March 2019, as Vice President Technical operations. In addition, we shall make that was nine vice president and head of clinical operations throughout the transition of the company and the to move into the registration studies, we shall joined off list in January 29.

From Celgene, where he had to planning and execution of multiple clinical studies for Karkhi products, we're happy to be working with both of them and these expanded capacities with that I will turn the call over to Andrew for our third quarter 2019 financial update Andrew.

Thanks, Christian and good morning, or good afternoon, everyone.

My pleasure to review our financial results for the three month period July through September of 2019.

On slide 18.

Net total operating expenses for the three months and 30 September 2019, $35.6 million that was native grant income zero point $3 million and that compares to net operating expenses of $17.1 million also net interest income zero point $3 million threat.

For the same period in 2019, the increase was due in general to the increase in development activity increased headcount, primarily in development and manufacturing functions and the cost of being a public company.

Research and development expenses increased to $27.3 million for three months ended 30 September 2019 from $10.1 million for the three months ended 30 September 2018, cash costs, which exclude depreciation as well as share based compensation increased to $21.6 million from nine.

<unk> million dollars.

The increase in research and development cash cost at $12.6 million consisted primarily of an increase of compensation related costs of $5.2 million due to an increase in employee headcount to support the advancement of our product candidates in clinical development, an increase of 3.6 million in research and development program.

Expenses related to it.

Typically is necessary to prepare activate and monitor clinical trial programs, including the manufacturing and technical transfer activities required for auto loan to enable the commencement.

The registration study in adult MLL.

And an increase of 2.6 million in facilities costs supporting the expansion of research development translational science capability and investment in manufacturing facilities and equipment.

And lastly, an increase of zero point $7 million in telecom software costs as well as an increase of point $5 million. It all square.

General and administrative expenses increased $8.6 million for the three months ended 30 September 2019 from $7.3 million for the three months ended September 32018, cash costs, which again excludes depreciation expense and share based compensation.

Question decreased to $5.6 million from five points.

$7 million.

Compensation related expenses decreased by zero point $6 million Itay community.

Cash General office expenses decreased by 0.7 million and that was offset by legal professional fees from 0.9 million and an increase of 8.3 in very preliminary commercial expenses.

Net loss attributable to ordinary shareholders was $27.2 million for the three month period compared to $12.9 million for the same period in 2018.

The basic and diluted net loss per ordinary share for the three months.

Ended 30 September 2019 totaled 0.6, $1.61 cents compared to a basic and diluted net loss per ordinary share of 33 cents for the three months ended.

30 September 2018.

Cash cash equivalents at the end of the period totaled $229.4 million and that compares with $247.1 million at the end of September in 2018.

And we anticipate that cash on hand provides us with the runway into the second half of 2021.

With that I'll now hand, the call back to Christian to give you brief outlook on now expected upcoming milestones Christian. Thank you Andrew I'll. Let me conclude this part of the management discussion with a review of the upcoming milestones at news flow through 2020 , let's move to slide 20.

The upcoming 15 months will be an eventful period for us with multiple clinical milestones and the opportunities for value creation.

If operational focus will be on moving auto loan in adult MLL into registration trial in the UK and use.

We also expect to report data across various programs and to progress the number of our other clinical candidates, specifically updates and our ongoing clinical trials.

Initiation of Phase one study of auto one Mg and pediatric JLL and the first half of next year I go No go decision on phase two initiation of order three and deal Bcl middle of 2020 initiation of a phase one study of Autistics LNG in neuroblastoma, and the second half 2020 and initiation of phase one study.

The next generation program in multiple myeloma also in the second half of 2020 .

In conclusion on slide 23, I'd like to recap the major messages from today's call first auto loan is our foundational program and the first Autoliv program expected to move into pivotal stage, given the positive safety and efficacy profile today, we believe that all along has the potential to be a best in class Cdnineteen R&D in.

Hello.

Secondly, our next priority is on auto three India Bcl with order three LNG as a next generation opportunity.

We expect to report full phase one data for auto three.

Middle of 2020 to reach a decision point on phase two trial initiation thereafter.

Third in pediatric JLL that we have transitioned our focus on auto won and Autozone to auto Walnut auto on energy, while all the three data confirm the dual targeting hypotheses. We believe the excellent persistence with auto on is likely to drive long term remissions.

Looking ahead to 2020, we see opportunity for additional value steps for multiple myeloma T cell lymphoma, Anthony to positive tumor programs.

The company on strong balance sheet with 230 million in cash which provides a runway through the second half of 2021 and finally, we're looking forward to seeing many of you at the upcoming city and Ash annual meetings with now I'd like to take your questions. Operator. Please open the line.

Thank you ladies and gentlemen, if you have a question at this time. Please press Star then the number one key on your touched on Cowen.

Question, that's been answered argue with Jane leave yourself from the Q. Please press the tank.

Your first question comes from the line ALCL block.

And then company your line is open.

Hi, everyone and thank you for taking my question.

Just a quick one about.

So auto six Angie data that's coming on it.

We note that this is kind of mix of T cells network transacted with two different vectors.

What kind of.

What kind of analysis would you have to do on a product.

Flex before using it in human.

How would that.

Product be defined.

Well first of all thanks for joining and thanks for for your question.

Obviously, what we're doing with all the six is the by introducing a substantial amount of genetic information into a single sale.

And that it's actually a level of genetic information.

That he cannot deliver the single vector. So you have to use two vectors to do that.

And this is now actually an approach has been used to the number of programs that have gone through regulatory review and are actually currently the clinic for other types of indications.

And also have gone through the normal regulatory process.

And our active in development.

Ultimate what do you have to show is you have to demonstrate the activity of the product as these anti dwell and do design.

Safety studies et cetera to really understand the activity of the product as a whole.

We have to understand obviously also that even what you'd look at a product that is true enthused with a single vector.

That we have multiple types of.

Differentiation states of T cells in there, which gives you a will quite a wide range of properties of the sales just based on the differentiation state. So that the products are complex to begin with.

And the programming on itself, we don't believe will add.

A significant element on top by adding the two actress Anna themselves vectors are designed to all of them actually recognize the target antigens. So that the basic activity is actually shared amongst all tends to sales.

Alright, thank you for that one.

Maybe a bit of an odd question, but.

Thanks, Kim Ryan or use card ever used off label in adults.

Hi.

Anyone does that.

Well, what we do.

So is that the products obviously are not.

I would not part of the normal payment process to be can actually again.

Two.

Could we expect updates on them on the new program.

For myeloma. Thank you.

Yes. So the next Gen version for the mouth Myeloma program, we expect to update lumber actually entering into clinical trials.

And obviously during the course of next year have opportunity to provide an update on the design of the program.

And do it will do it at that point in time.

Thank you for taking my questions and congrats on the quarter.

Thank you very much thanks for joining.

Your next question comes from the line.

Jim Birchenough from Wells Fargo. Your line is open.

Hi, guys. Thanks for the call and congrats on the progress towards the auto one pivotal im just on that little question.

Could you maybe speak to number one are they going to be any entry criteria, whether its tumor burden or other features that will.