Q1 2025 Autolus Therapeutics PLC Earnings Call
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Speaker Change: Please be advised that today's conference is being recorded. I would not like to hand the conference over to your speaker today. Amanda Cray, Executive Director of Investur Relations, please go ahead.
Speaker Change: Good morning or good afternoon everyone and thank you for joining us on today's call. With me our Chief Executive Officer, Dr. Christian Itin, and Chief Financial Officer, Rob Dolski.
Speaker Change: I'd 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 reformat of 1995.
Speaker Change: These may include, but are not limited to, statements regarding status of the ongoing commercial launch of OCASL in the U.S.
Speaker Change: Autolus is manufacturing sales and marketing plans for Ocastle, the market potential for Ocastle, and the status of clinical trials, development and or regulatory timelines and market opportunities for OVCEL and our other product candidates.
Speaker Change: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statements.
Speaker Change: For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today's press release and in our SEC filing, both available on the investor section of our website.
Speaker Change: Turning to slide three, you'll see the agenda for today's call. As usual, Christian will provide an overview of our operational highlights. Rob will then discuss the financial results, and Christian will conclude with upcoming milestones and closing remarks. We'll then take questions.
With that, I'll turn it over to Christian
Christian: First off, we had a great first quarter. The launch has been off to a really good start. We have seen a substantial level of interest by the physicians in the product profile.
Christian: Clearly there is a significant unmet need for the patients with lapsed refractory acute lymphoplastic leukemia and we're very pleased to report 9 million in recognized revenue in the first quarter.
Christian: Obviously, foundational to the ability to really reach to patients is that we have to be present in the respective clinical centers. And as of yesterday, we have 39 centers that are authorized to deliver a capsule.
Christian: This is a great accomplishment from our onboarding and market access team and we're currently at a level of about 90% of total US medicalized covered, which is a great position this early in a product launch.
Christian: As of April 1st, CMS also published the codes for in and outpatient use for government programs.
Christian: And with that, we have now an ability to get a capsule also be eligible for reimbursement for patients on government programs in addition obviously to the patients who have been covered and are covered through the commercial programs.
Christian: So this sets us up in a really good way leading into the second quarter and we're excited about the initial momentum that we've seen in Q1 and see that very nicely carried over into the second quarter.
With that, I'd like to move to slide number five.
Christian: When we look at the opportunities for growth, so let's say the first opportunity is in the US and one of the key things
Christian: that we're planning to do from here on to the year end is really increase the number of centers that are activated and in a position to deliver Ocastle therapy.
Christian: We're going to go from what's now 39 centers to approximately 60 centers, which will give us approximately 90% access to patients across the US.
Christian: So that's also critical and one of the key things that we're going to see as we go through the course of this year is also that we're looking to build additional momentum and drive and support the launch going forward also with additional data updates.
Christian: A key update is planned for this quarter based on long-term follow-up from the Felix Study, which I believe will be very encouraging and very helpful to understand the impact that a catwalk can have as a single agent in this relaxed and refractory patient population. [inaudible]
Christian: So first push, obviously in the US, also actually driving certainly as we go into next year to start expanding the market share for CAR T products and gradually build from there.
Christian: Now, the second layer of expansion that we're looking at is a geographic expansion. We've reported about a good week ago that we have received a conditional marketing authorization from the MHRA in the UK.
Christian: and are now in the process of engaging with nice and the other relevant bodies in the UK to get the product actually through the reimbursement and access process and then into the launch in the UK.
Christian: In Europe we're progressing well and we expect to receive a decision by the European Agency in the second half of this year.
Christian: From a European perspective, then we will initially are planning to launch in Germany and then actually move gradually from there, obviously with various different processes that we have in Europe related to pricing and reimbursement which has a big impact. [inaudible]
opposite the sequence and how to actually progress in Europe .
Christian: Now, looking beyond the immediate launch and the geographic expansion, we also believe that the product has additional opportunities in the cuteland-roblastic routine.
Christian: Right now, we have the data set in the Relapse for Fractory Population. These are all the patients that are already gone through a very significant amount of exposure. They've been typically up to three years of frontline therapy, have gone through high dose chemotherapy. Many of them have received other agents' targeted agent.
Christian: as well as might ever receive stem cell transplants. So this is a very advanced population. What we do know from OVCEL and are canceling that the product...
Christian: Um, when used in patients that are in earlier in the earlier stages of relapse on also patients that have lower tumor burden at the time of therapy.
The patients do better.
with those profiles, and we believe.
Christian: One of the key areas that I think is important to explore is the utility of the product.
Christian: Ultimately, in a frontline consultation setting, we will start to explore C-exploration of frontline settings through investigator-sponsored trials, and we'll certainly consider our steps in addition to those.
Christian: In addition, when we look at the pediatric population, we're currently treating pediatric patients and we're planning an update and results to be presented by the end.
Christian: of the year. And we're also will review whether there's an opportunity for us to move OBSEL also forward in the pediatric setting and hopefully find a way to make the product accessible to patients in this setting as well.
Now, moving to slide number 6.
Unknown Speaker
Speaker Change: Obviously, what we do have with ODCEL is an ability to target the entire DCEL compartment and there's quite a significant additional set of opportunities that we do have with the product that we can see beyond acute lymphoblastic leukemia.
Christian: So moving to slide seven briefly summarizing our current experience with OBSEL across a range of indications.
I would say you're all aware.
Speaker Change: and you're very well familiar with the product profile in the Relapsory Factory Adult Population.
Speaker Change: LBC asked to present it as well and to publish in the English or English.
Speaker Change: for the Felix Study. But we also obviously have earlier data on pediatric patients as well. What we do is see across all these trials that we've conducted both with our academic partners at UCL as well at the top of our trials.
Speaker Change: The profound ways also shown with the experience we had in the old Karline King study initially where we have more than five years ago.
Full of Office, as well as the Felix Study.
Speaker Change: where we're going to, as mentioned, give an update on long-term outcome later this quarter. We're also obviously seeing the ability of the product to get a proportion of the patients into long-term remission, clearly indicating that we had an ability to make an extremely deep cut.
into the compartment and completely remove the acute leukemia cells.
Speaker Change: Now, this is the experience in leukemia. We have very similar outcomes that we have observed in patients with non-hotchants and phoma, which is part of the old car-19 extension study.
Speaker Change: And what we've seen in that setting is very high levels of metabolic complete remissions. And when we look at the large B cell lymphoma patients in those cohorts, those patients do actually have also majority of the pay of those patients have long term outcomes as well.
So quite clearly a very deep activity. [inaudible]
Speaker Change: What we also see is that the safety profile that we have in acute leukemia is very favorable. Remember we did not actually have, we do not have an obligation for rents.
for a capsule. Ian will have to factory it all day a little
Speaker Change: But when we then look into the lymphoma patients, the profile actually improves further. We have no high-grade cytokine release syndrome in those patients, and we have not, we actually observe neurological toxicities, or I can do that population as well. [inaudible]
Speaker Change: So when we think about this profile and where we can actually wear a deep cut in the compartment can make a big impact on outcomes, there's sort of two key areas to focus on.
Speaker Change: One, our audience mentioned is the frontline consolidation in aggressive B cell malignancies where we aim for long-term outcomes while avoiding over-treatment of these patients.
Speaker Change: What we've seen so far is just add-on strategies and we keep adding more and more toxicity in these patients. However, we start to see sort of diminishing returns and in fact at times negative outcomes from adding additional toxicity.
Speaker Change: So getting to much more compact treatment, shortening treatment, and get to long-term outcomes has to be an objective going forward.
Speaker Change: The second area is obviously the wide range of BSO mediated auto-immunity, where we've seen obviously some quite remarkable data from Gerochette's team in Erlang and indicating that indeed if you do have a deep cut in the compartment,
Speaker Change: You can't actually transform the outcomes for these patients and those outcomes appear to be sustainable.
Speaker Change: So the goal in those indications is to really get to sustained effects with a one-time intervention and that obviously is a very attractive proposition in those disease settings.
Speaker Change: So with that, I'd like to just on slide A briefly just talk about autoimmune disease and the fact that we're looking at when we look at particularly advanced patients
We have on the wrong hand.
Speaker Change: And inflammatory process where you have antigen and B cell engagement as well as T cell engagement that sort of form a loop of activity that actually is a very visual forms a very visual cycle and continuously actually drives an inflammatory process in these patients.
Speaker Change: The other reactive antibodies obviously have then an ability to recruit immune cells and complement onto tissue and onto into organs.
Speaker Change: and actually start to create damage on that issue. If that prolongs, you start to actually get scarring in the tissue. You get scarring and loss of function in those organs and you can have very dramatic effects on the issues that these patients do build up over time.
The treatment is basically various forms [inaudible]
Speaker Change: of Immune Suppression, that you run in these patients, and that also in their own right actually have significant, dry significant adverse events. And unfortunately for most, for many of these patients, do not actually address the underlying disease in a way that allows these patients to live normal life.
Speaker Change: So, when we look at the ability for B-cells to really target this type of therapeutic intervention, it gives the inability to really block that cycle [inaudible]
Speaker Change: Crack it open, remove the diesel component of carry memory, remove the plasma blasts which express the other antibodies, and with that actually stop this wishes cycle of continuous activation and continuous damage in these patients.
Speaker Change: Now, the patients that we're looking for, particularly from a con-t perspective, are patients that do actually have disease that is advanced?
Speaker Change: disease that already actually shows impact on organs, particularly organs like the kidney. And so these are patients that do have an element of structural damage. the end
Speaker Change: Now, there is, when we think about the impact of the therapy [inaudible]
Speaker Change: Clearly, we expect the therapy to have an immediate impact on the inflammatory process and the inflammatory parameters as well as a lot of the manifestations that we see in these diseases and I'll talk on the next slide about the various types of forms of disease that these patients experience.
Speaker Change: And you also would expect that gradually either have a stabilization of the underlying organ that's impacted, and if it is early enough in the progression of the disease, an ability to actually reverse. [inaudible]
Speaker Change: The negative outcome on that organ, so at least stabilize and the outside improve the organ function.
Speaker Change: So, with that as sort of a backdrop, what I'd like to do is really talk now briefly about the outcome that we have presented at the R&D event from our phase-1 Carlisle study in patients with systemic lupus aerobatoso.
Speaker Change: So, when we look at our patient groups that we have, and this is now on slide number nine, when we look at our patients, we do see that these patients actually are quite more advanced.
Speaker Change: Compared to the patients that were treated at the University of Erlongen by Gyarachepstine. These patients are older, they're 50 and 19 to 50 years of age, and they also had quite long disease histories. So the disease history of these patients was at least three years after 23 years. [inaudible]
Speaker Change: So these are patients that have been battling with that with the disease for a long period of time.
Speaker Change: And when you look at the sled-eye scores, which are disease scores in these patients, you see them range from 16 to 28. So this is a very severe population, and in fact all of those patients had kidney involvement.
Speaker Change: To all of them actually had already in time with kidney damage when we looked at these patients closely.
Speaker Change: So, when we look at the patients, we do see that five of six patients had class four disease and four of the six also had class five components and these are patients that have gone through the standard of care.
Have also already gone through...
have gone through the...
Speaker Change: Challenges with regards to B-cell depleting agents as well as calcium urine inhibitors, and what we're seeing is that in many of these patients 4 out of 6 we already had significantly impaired kidney function. [inaudible]
Speaker Change: Now, when we look at the overall adverse end profile in these patients, we do see that the patients obviously had quite a lot of impact related to kidney damage, leading to hypertension, etc. But when we look at the immunological toxicity, we do see that the CRS
Speaker Change: That we're observing in these patients is that three out of the six patients have observed grade one cytokinevalese syndrome, but none of the patient has experienced neurological toxicity or ICANNs.
Speaker Change: This is relevant because every approach that was tested, Cartier Approach that was tested, outside of the experience at the University of Railongan, in patients with loopless nephritis, have reported ICANNs in their small data sets.
Speaker Change: So, with that moving to the next slide, this is slide number ten. And we're now talking looking at the individual profile that we're seeing, in the patients based on the sled eye 2K scores.
Speaker Change: So the slide-eye scores are scores that actually look at the composite.
of parameters related to the function of organs.
Antibody, auto-antibodies in these patients.
Speaker Change: Compliment, but also looking at the experience related to other forms of the inflammatory diseases that these patients may see.
Speaker Change: Now, I'll focus first on patient number one. Now, what you can see is this patient has a slid-eye score of 28 at the start.
Speaker Change: And in addition to obviously having very significantly impaired kidney function and obviously double strength DNA antibodies and low levels of complement, the patient actually had other manifestations of disease including rash, arthritis, and alopecia.
Speaker Change: Now, when you think about what are those, which ones of those types of parameters the patient actually can experience, those are in fact rash, arthritis and alopecia.
Speaker Change: The lap parameters you can sense, and the kidney function you can't really sense either, so the primary experience of the disease is around those inflammatory processes.
Speaker Change: What you can see is that very quickly within a short period of time all of these symptoms in these additional inflammatory processes actually have been removed and you see then a gradual improvement also on the kidney side.
Speaker Change: When you then look at the other patients, you see combinations of those various forms or manifestations of inflammation but you also see that all of these patients improve on the top line. We have three months to follow up at least and on the bottom line. We have only one month of follow up. [inaudible]
So, with that...
Speaker Change: What I think is important to realize is that although this is a limited amount of time in terms of the follow-up [inaudible]
Speaker Change: We had very quick improvements on those inflammatory processes and we also started to already see that three of the six patients did actually achieve renal complete remissions.
Speaker Change: And that is obviously very meaningful in this population and we expect those patients to sort of continue to improve over time.
Speaker Change: So a very strong start gives a very strong set of indication in terms of the ability of the therapy to actually improve the outcomes for these patients obviously combined with a very good safety profile.
Speaker Change: When we look at the properties of the product, the properties actually are very very consistent with what we have observed in the oncology setting. We see comparable level of peak expansion. What we do see is shorter persistence, so the persistence here is about three months, maybe for a few patients a little bit longer.
Speaker Change: And when you see loss of persistence, you also do see decels coming back and the decels that are coming back are predominantly naive decels that you would expect that then over time for those patients where we have that data at this point start to differentiate into more differentiated forms of decels.
as we would have postulated. [inaudible]
Speaker Change: So, with that, we're going to move to slide number 11.
Speaker Change: Slide number 11 actually looks at the opportunity that we have in Lupus in general with a particular focus on Lupus and Fridays.
Speaker Change: What we're looking to do here is really focus on the patient population with the highest medical need, which are the patients that are refractory to standard of care in the Lupus Nephritis group of patients.
Speaker Change: And that's around 25 to 35,000 patients are about to give or take 10% of the overall SLE population in the US.
Speaker Change: The reason why we're focusing on lupus nephritis is on the one hand, the medical need.
Speaker Change: But on the other hand, it is the importance of having an objective and point that you can follow.
Speaker Change: We just looked on the slide before on SLEDI scores, and you could see the complexity of the scores. What you haven't seen is that some of those scores are actually based on either physician assessment or patient assessment.
Speaker Change: So in other words, there is an element that actually is a much softer type of data that goes into these scores relevant to describe the disease but much harder to actually think about statistical outcomes and be able to actually get to relevant data in a smaller data set.
Speaker Change: Going after Lupus Nefriedis allows you to look at renal complete permissions and wait that I have a very clear endpoint that it can actually follow.
Now, moving to slide number 12.
Speaker Change: What we see in flight number 12 is basically the trajectory that we're planning for our development in Lupusna Fridays. What we're doing with our current study with the Carlis study is actually to establish a fixed dose for adult and adolescent patients.
Speaker Change: With that fixed dose, remember these were SLE patients with kidney manifestations. In fact, they're all categorized as lupus arthritis patients.
Speaker Change: Those patients actually when we look at them are the right kind of backdrop that we would also expect to include into the single arm phase two study that it's as a pivotal character.
Speaker Change: This particular population is our patients that also have been already exposed to B cell depleting agents.
Speaker Change: So these are typically antibody-based therapies, as well as a calcium-neuron inhibitor, and our past those two therapies, so it's a proper refractory lupus mitralitis population.
Speaker Change: So, the approach here is to have a compact opportunity for a compact study with an objective endpoint and with that have an ability to be first to market in this indication with a CD-19 CAR T product.
Speaker Change: We're then actually envisioning that from their own forward there's an opportunity to consider moving into a somewhat earlier stage of disease where we're going to look at a comparative or randomized trial against standard of care. [inaudible]
Speaker Change: But clearly the core of the approach is a fast-to-market strategy based on the refractory population with an objective endpoint.
Transcription by CastingWords
Speaker Change: So, this study obviously is already getting started. We have gone through the regulatory process in the U.S. and interacted with the FDA on the design of the product and also have an open ID for Lupus nephritis.
Speaker Change: and we're in the process, obviously, of going through the regulatory steps in other jurisdictions that we're planning to include in this clinical trial. [inaudible]
Speaker Change: With that, we're moving to slide number 13 and going to look at one of the opportunities we're very excited about which is the opportunity in progressive multiple sclerosis. [inaudible]
Speaker Change: Now this is the part of the disease that really has the highest medical need. It's about 30 percent of the relapse remitting of the total population. You have relapse remitting about 700,000 patients and you have progressive MS in about 300,000 patients.
Speaker Change: That is where we're planning to go. These are patients that have gone through a whole system of care and progress despite exposure to standard of care for at least six months.
Speaker Change: Now, when we think about MS, it's a disease that we know has a significant B-cell component. There are obviously a disease where CD-20 targeting monoclonal antibodies are effective. However,
Speaker Change: The disease itself obviously is driven not just by peace cells that are in the periphery and are reachable with a soluble agent that we infuse into the blood.
Speaker Change: But there also be cells that sit on the other side of the blood brain barrier in the brain itself and obviously those cells are not reachable for conventional therapeutic approaches that are based on either on proteins, t-celling agents etc.
Now...
Speaker Change: What we do know about OB-CEL is that OB-CEL actually works very well across the block brain barrier and we've explored that in primary C&S lymphoma in a collaboration with our colleagues at UCL.
Speaker Change: and could show that indeed the product had an ability when given systemically, so infused into the bloodstream had an ability to cross the blood brain barrier and actually lead to tumor reduction in the brain. And that obviously is more exactly the type of activity you would need in these MS patients.
Speaker Change: So getting at those B-cells, malignant B-cell, or B-cells that are sitting behind the Blurrain barrier is at the core of what we're looking to do. We believe OB-cell is exceptionally well-positioned to actually have that type of an activity.
Speaker Change: So, when we look at the approach that we're taking here is we're starting off a study in Progressive MS.
Speaker Change: And in fact, those are patients where we're going to run through a dose escalation. We know in the CNS lymphoma that 200 million cell dose was the dose that was active.
Speaker Change: and gave us a proper activity in the brain, but we're going to run through a dose escalation here, obviously higher levels of doses than the 50 million cell dose that we have used so far in the SLE patient.
Speaker Change: We're going to look at a range of biomarkers as well as imaging and we're going to follow these patients to understand the clinical impact that we and outcomes that we can see in these patients and to see whether we can see an impact on the clinical visibility progression of these patients. [inaudible]
Speaker Change: With positive data, we obviously would then move in the randomized Phase 23 study to drive towards a registration for this type of an indication. Very exciting program and we're looking forward to updating you as we're making progress in this study.
Speaker Change: So with that, I would like to hand over to Rob who will walk us through the financial results.
Thanks Christian and good morning or good afternoon to everyone.
Rob: It's my pleasure to review our financial results for the first quarter of 2025, and I'll be referring to slide 16 in the presentation.
Rob: For our first quarter of product sales, net product revenue for the three months ended March 31st, 2025, was $9 million. We're off to a strong start with the U.S. launch of a catwalk.
Rob: As Christian noted, as well as included in the press release earlier today, on April 1st, CMS included Alcatel in their published coding determinations in outpatient payment rates, formalizing reimbursement for patients on government programs.
Rob: The CMS Hospital Outpatient Perspective Payment System, or OPPS, splits the therapeutic dose of a capsule into two administrations for coding and billing purposes.
Rob: As a result, we are working with our treatment centers on implementing the coding and payment policy from CMS.
Rob: As well, we are internally assessing any potential impact on the timing of our revenue recognition moving forward.
Rob: Moving on to Costa Sales in the first quarter of 2025, Costa Sales totaled 18 million.
Rob: This amount includes the cost of all commercial product delivered to the authorized treatment centers, including product delivered, but yet not yet administered to patients. [inaudible]
Rob: So it's worth noting here that the sales value of these products is not yet recorded as product revenue in the P&L but is reflected as deferred revenue on the balance sheet.
Rob: Additionally, cost-to-sales includes any canceled orders in the period, patient access, program, product, and third-party royalties for certain technology license.
Rob: A research and development expenses decreased to 26.7 million for the three months ending March 31, 2025, compared to 30.7 million during the same period in 2024.
Rob: This change was primarily driven by commercial manufacturing related employee and infrastructure costs, shifting from R&D to cost of sales and inventory, following the approval of a CATSOL and the associated accounting change that occurs at that time.
Rob: This was partially offset by an increase in OBSL clinical trial activity and supply costs.
Rob: Arcelling General Administrative Expenses increased to 29.5 million for the three months ended March 31st, 2025, compared to 18.2 million in the same period in 2024.
Rob: This increase was primarily due to salaries and other employee related costs driven by increased headcount supporting US commercialization activities associated with the launch of a capsule.
Rob: Our loss from operations for the three months ended March 31, 2025 with 65.2 million as compared to 38.8 million for the same period in 2024.
Rob: and finally net loss with 70.2 million for the three months ending March 31, 2025, compared to 52.7 million for the same period in 24.
Akash, Akash equivalents in marketable securities at the end, [inaudible]
Rob: of at the end of Q1 2025, totaled 516.6 million as compared to 588 million at the end of December
Rob: 2024. The decrease was primarily driven by net cash use and operating and investing activities, but also impacted by a delayed cash receipt of approximately $20 million in R&D tax credit that we expect from the UK HMRC.
Rob: We continue to believe that with our current cash equivalents in marketable securities, we are well-capitalized to drive the launch and commercialization of OBSL.
in Relapse Refractory BAL. Well,
Rob: and to obtain data in the Lupus nephritis, Pivotal trial and MS phase 1 trials that Christian just talked about.
Rob: I'll now hand back to Christian to wrap up with a brief outlook on expected milestones.
Christian
Christian: Thanks Rob, moving to slide 18. First off, in terms of the activities that we're expecting on the Hemonk side. First off, we're excited obviously to update you on the longer term follow up from the Felix study, which we expect to be able to do towards the end of the second quarter. Thank you very much.
Christian: We also expect them for the second half of the year, the notification from the EU regarding the market authorization application decision, if for the patients with relapse refractory adult ALL.
Christian: And we are planning towards the end of the year to present initial data from our Pediatric Study PY1.
Christian: When we look at the autoimmune site, we're planning for an update and data presentation for the Carlisle study in the fourth quarter.
Christian: We also expect to be reporting first patient dose for the Phase 2 Lupus and Friday study.
Christian: as well as having first patient dose for the progressive MS phase one study in there towards the second half and actually towards the end of 2025.
Christian: And then, finally, we're also moving forward with our program, Auto 8, the dual targeting CD19-BCMA approach, where we're evaluating that product in light chain amolidosis in a face-long trial together with our collaborators at University College in London.
Christian: With that, I'm getting to slide number 19, which is a summary from what we covered today. First of all, we believe that Autolus is well positioned for value creation.
Christian: And we're building on a very strong foundation with OVCEL. Obviously, we talked about the occassal launch in the U.S. We had a strong first quarter. We're building towards 60 centers which give us the vast majority of patients access in the U.S.
Christian: We obviously are established infrastructure for manufacturing. You remember the new clothes that's shown on the picture on the right hand side as well as obviously our commercial infrastructure which is executing very well.
Christian: And we're starting to move into other jurisdictions with the MHRA authorization that we have received and we're preparing for launch in the UK. And we're also gearing up for our. We're at them on it.
Christian: for the activities in Europe with an expected decision from the EU in the second half of the year.
Christian: When we look at OBSEL in terms of the opportunity beyond the initial opportunity in adult ALL, we obviously are building on the unique mode of action with a fast-off rate, C-19 CAR T, which gives us obviously a very high level of activity as well as a very well-manageable and tolerable profile for the product.
Christian: Remember, the product was the first one, the CD-19 CAR T product that was approved without a REMS obligation.
Christian: And as indicated, we're having long-term follow-up data coming relatively shortly, and then data sets from the PY1 study and the Carlisle study towards the end of the year.
Christian: All of this is built on a strong cash position of 516 million at the end of Q1 and I think sets us up very well from an execution perspective.
Christian: So with that, I think we've reached the end of the presentation and we'd like to open up for questions.
Speaker Change: Thank you. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question, please press star 1-1 again. Please stand by when we compile the Q&A roster.
Speaker Change: Your first question comes on the line of James Shin from Deutsche Bank.
James Shin: Hey, good morning guys. Thank you for taking my questions. I have a couple.
James Shin: Firstly, I guess for the April 1st coding update for Ocatsl and the 18 million of COGS and then associated for revenues, can you say whether the 9 million revenue recognition for 1225 was triggered upon initial dosing? [inaudible]
James Shin: or is Revenue Recognized Only Upon Patients Receiving Their Full Split Dose? [inaudible]
James Shin: and then going forward, it sounds like there may be some impact from the April 1st coding update.
and I have followed [inaudible]
Alright James, first of all, thanks for joining.
Rob: Before we actually, Rob will walk you through the rev-rek answer in detail.
Rob: So let's start maybe with the current guidance that approach that we have discussed previously was in fact kind of that full recognition with confirmation on the first administration and that is what's reflected in Q1.
Rob: As Christian said, we confirm that all of those patients in fact have received both the first and second dose as well, but we were we were really following the policy that we've kind of discussed before.
Rob: As noted CMS.
Rob: Published and this is effective April one.
Rob: On the PPS side. So this is for outpatients split coding and billing into two administrations.
Rob: As I noted, we're working with the centers to adjust things on there and we are evaluating the implications on our own revenue recognition policy as well so.
Rob: So unfortunately, you don't have a final answer here, but I think it might be important maybe to put a few data points here and put it into some perspective.
Rob: When we look at the experience that we have in particular in the Felix study with respect to patients that completed or didn't complete both administrations.
Rob: Five 5% of the patients did not receive the second dose.
Rob: Alright, and Thats before considering any inpatient outpatient.
Rob: Setting in the commercial space, but so from a total number perspective.
Rob: It's a smaller portion of the overall patient population. These also tended to be much more severe patients with median tumor burden at 80% or more.
Rob: The next piece is to think about the timing corridor that we have here and so if you look at the timing corridor between first and second administration currently and the USPI, It's 10 days plus or minus two days.
Rob: And from a commercial experienced year to date, it's early but that average has been about 90 days.
Rob: And so given the number of patients that we're talking about here and certainly the timing between the first and second administration, while we're still evaluating the overall implications for kind of technical revenue recognition.
Rob: We don't expect it to have a material impact on the full year sales.
Rob: So hopefully that helps on that question.
Rob: Thanks, Rob.
Rob: I guess question I have.
Rob: One on tariffs I totally understand car T products were spared from the initial.
Rob: Retaliatory tariffs via annex too and I guess, that's the way I believe 10 o'clock today, President Trump is expected to announce a tariff agreement with the U K.
Rob: We're also expecting pharma specific tariff.
Rob: Over the next week or so I guess long winded way of asking any early color on the <unk> potential exposure to UK or pharma specific tariffs.
Rob: First of all I understand the question I think we're operating on about as much information as you do.
Rob: I think the bottom line is maybe a few points here first of all.
Rob: There's a good reason why blood products tend to be exempt from tariffs because literally it's a single individual patient sales that you're actually going to <unk>, so you're going to tariff the U S and Americans patient cells.
Rob: Before that patient can receive the therapy. So that's in of itself is an interesting thing to think about.
Rob: No.
Rob: A good reason why typically those were excluded we don't know where the administration comes out on this we also don't know yet obviously, what the deal is between the UK and the U S. At this point in time, what is worthwhile to remember, though is that when you think about tariffs is relevant in terms of the value.
Rob: Is that sort of used to actually.
Rob: Calculate the tariff from is not the price of a product.
Rob: The product is sold but it is the.
Rob: The customers value, which is typically linked to the manufacturing of the product itself and the manufacturing related cost of the product.
Rob: And then it has a.
Rob: A few additional finer points to it but basically that's kind of at the core of it. So it is a limited amount that is not the full amount, but then actually would be the basis for the calculation of the tariff we need to see where we end up.
Rob: Obviously its the most initially talk of a 10% tariff corridor for the U K.
Rob: We're all know more in probably about 45 minutes from now.
Rob: Great and then finally.
Rob: Quite fresh.
Rob: Any chance Dr. <unk> Prasad, taking the reins of cheaper named.
Rob: <unk> result in the ethylene revisiting any already agreed upon pivotal trial designs such as the phase III you have for Lucas.
Rob: I mean, we don't know at this point in time kind of how the what's the impact on the FDA going forward of any or frankly, the nominations and the changes that are are in the works.
Rob: Mostly we had.
Rob: A full conversation with the FDA on the trial design.
Rob: The patient population the description of the patients et cetera. So there was this was not a.
Rob: Sort of.
Rob: Loose sort of conversations are very detailed conversation on the approach so that said.
Rob: We don't know where theres going to be what changes might look like I think in general theres been sort of.
Rob: Two kind of areas that I think we've seen one is I think a clear statement.
Rob: From the administration to look to accelerate.
Rob: Access and also to to accelerate.
Rob: Approval processes. So that's one dimension that we're hearing and then there is obviously the various degrees and views on the individual measures and approaches that.
Rob: That could be considered here.
Rob: I think we'll need to wait and see I don't think Theres a good answer for this at this point in time, obviously from where we are at this point with regards to the product.
Rob: I think the trial will give us a very clear answer on the on the utility of the product in this setting. These are very severe patients. These are not patients that are.
Rob: Where you have actually other options that give them a good outlook.
Rob: And I think medical need bow matter, and we will continue to matter going forward in those assessments.
Speaker Change: Thanks, so much Christian I'll yield the floor. Thank you. Thank you.
Rob: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Matthew Phipps from William Blair.
Matthew Phipps: Thanks for taking my questions. Congrats on the nice start out of the gate.
Speaker Change: Rob could you give us any more breakdown of the Cogs in the quarter as far as just maybe how much came from canceled orders our patient access programs and then going back to some of the data from the R&D day I know.
Speaker Change: Ton of patients, but it does look like you're seeing greater persistence of Ob sell than what others have seen in the autoimmune disease settings.
Speaker Change: It is kind of consistent with maybe what you guys have obviously shown in adult AML and other <unk>.
Speaker Change: <unk> indications, but do you think that's a differentiator in autoimmune disease or.
Speaker Change: Doesn't matter in terms of driving that kind of reset.
Speaker Change: Okay.
Speaker Change: Broke do you want to go first.
Matt: On the cost of goods. Thanks for the question Matt.
Matt: Maybe stepping back a little bit just to clarify in terms of overall high level whats going through cost of sales. Obviously contains the cost of the product manufactured also includes things like third party royalty license and some other period expenses distribution fees for example.
Matt: It kind of flow through there as well as period costs associated with idle capacity and we talked a little bit about.
Matt: That at the end of last year even.
Matt: When we dig into the product cost itself.
Matt: And kind of the components there the two majority.
Matt: Most significant drivers here is really the cost of the product that was sold and recorded a sales in the period.
Matt: As well as what I referred to those orders that were delivered to the treatment center, but not yet booked as product sales, they're showing up in deferred revenue on the balance sheet.
Matt: That's going to make up the majority of the product costs related to patients.
Matt: There are typical smaller pieces that are going to be.
Matt: Associated with patient assistance programs or canceled or kind of scrap batches for lack of a better word.
Matt: But we expect those to be.
Matt: There are consistent with.
Matt: Kind of practice and what you would kind of put through cost of sales, but certainly not driving the vast majority of those costs.
Matt: We will get into specifics kind of patient by patient.
Matt: On that front I think the other piece here too is just again to know the cost associated with all of that is in.
Matt: In particular for the first quarter here.
Matt: At a relatively inefficient level of utilization on the plant. So there are idle charges as we even saw come through in the fourth quarter of last year, when we kind of had to make that change.
Matt: Change on the accounting front following the approval of <unk>.
Matt: Basically idle capacity charges that are coming through on a period expense basis in cost of sales.
Matt: So I'll leave you to disclose the deferred revenues because it's not broken out in the consolidated balance sheet on the income statement I assume it will come in the 10-Q.
Matt: Yes that will be broken out.
Matt: The amount was about $4 7 million that it'll be broken out on the.
Ron: Thanks, Ron.
Matt: Yes.
Speaker Change: Alright, and then the second question was related to the profile that we've seen for Ob cell in the Carlisle study.
Speaker Change: One of the key things that we're really pleased with from the from the study is the consistency on how the products perform and one of the two key parameters to sort of understand performance one is.
Speaker Change: The expansion that you do get with the product, which gives you a lot of the information about the quality of the product and the consistency of the product and what we're seeing is a very consistent expansion and then also very consistent persistence.
Speaker Change: As Matt was pointing out somewhat longer than I think what we have seen with some of the other car T products I think what is obviously very encouraging is that what we're seeing is very consistent with both our experiences for ob sale across all indications that we actually evaluated to date.
Speaker Change: And it is that consistency in the quality.
Speaker Change: Higher levels of expansion than what others have been reporting.
Speaker Change: Obviously in acute leukemia exceptional persistence, but also here somewhat longer persistence that was observed with other programs. We think that is very important because obviously you need its a cell based therapy in order to get a deep cut into the compartment. The sales actually have to stick to right. They have to move around they have to make.
Speaker Change: Tax and they have to eliminate physically each one of the b cells that.
Speaker Change: Or in the body and so that is.
Speaker Change: That takes a certain amount of time and so you do need to have a certain amount of minimum persistence to actually complete the job and we will leave the fact that we have a somewhat higher or longer persistence than what others have observed I think is a good thing and I think should give us a very deep very consistent.
Speaker Change: <unk> of the T cell compartment in these patients.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of sticker Goon awarding from true list.
Speaker Change: Hi, guys congrats.
Speaker Change: Congrats on a great quarter.
Speaker Change: I have a question on the 20%.
Speaker Change: Quite a drop for the quarter.
Speaker Change: Can be part of bank Gilead and <unk> can you quantify how many patients shrink.
Speaker Change: Would it have been frankly quite good.
Speaker Change: Yeah.
Karina: Hi, Karina. Thanks for joining interesting question, obviously, one that we cannot really get have a good resolution for because when you think about.
Speaker Change: <unk>.
Speaker Change: Labels that go into that the cargo sales they include both.
Speaker Change: The mantle cell lymphoma label as well as the <unk> label, we do know that brands. He obviously.
Speaker Change: <unk> has started to expand its use of mantle cell lymphoma, which is sort of actually quite a bit ahead of our own our own launch. So it's very difficult to actually try to triangulate I think what might be.
Speaker Change: <unk> contribution on the ALLL side versus the mantle cell side, I think it's reasonable to assume that the majorities propylene coming from the mantle cell side.
Speaker Change: That sort of contributed to the somewhat reduced our level of sales that were reported.
Speaker Change: And can you also comment on the medium turnaround time, so far in the med tech tax rate.
Speaker Change: Yes, so the.
Speaker Change: The turnaround time is very much an in line of what we what we were targeting so that our target is to get to 16 days remember our experience.
Speaker Change: Well in the.
Speaker Change: Felix trial was around 21 days and so we're tracking very nicely towards to 16. So thats I think kind of what we were hoping for kind of where we are.
Speaker Change: And in terms of the success rate, that's something that I think is premature to talk about.
Speaker Change: Overall I would say the fact that we have are out of the gate the way that we actually got aggregate indicates that we've been firing on all cylinders with good quality product.
Speaker Change: Okay. Thank you. Thank you.
Speaker Change: Thank you. Our next question one moment for our next question or.
Speaker Change: Our next question comes from the line of Gill from Needham <unk> Company.
Speaker Change: Good morning, everyone.
Speaker Change: Allow me to add my congratulations for a strong first quarter.
Speaker Change: So maybe addressing the same topic in a slightly different manner.
Speaker Change: Is it fair to assume that every single patient that was treated in the first quarter.
Speaker Change: It would have otherwise received a competing car T or do you think youre starting to see some level of expanding.
Speaker Change: Potential patient pool.
Speaker Change: It is a really good question Gail and thanks for joining.
Speaker Change: It feels like particularly as you quite often when you launch a product.
Speaker Change: And depending on the experience of a center. If there is a center that doesn't have that experience with your product you typically get patients that are in pretty poor condition.
Speaker Change: And so there is a sense of theyre probably patients in there that might not have been considered for a car T therapy before.
Speaker Change: So I think sort of on the on the worse end of the spectrum I think we have certainly patients in there that were certainly part of that.
Speaker Change: Really difficult to treat category.
Speaker Change: Whether we had we're starting to see sort of patients on the upside so with low tumor burden or early relapse I think thats too early to call.
Speaker Change: But I think we're clearly having patients that are probably would have not been considered for car T therapy before.
Speaker Change: In some of the centers that we had seen in Q1.
Speaker Change: Okay.
Speaker Change: As it relates to your.
Speaker Change: Update on that.
Speaker Change: Upcoming for autoimmune disease.
Speaker Change: Just remind us what the.
Speaker Change: Data is kind of probably include here a number of patient follow up.
Speaker Change: The.
Speaker Change: Increased dose as well.
Speaker Change: Right. So so I would say at this point, we have six patients that are somewhere between one eight months of follow up so all of these patients.
Speaker Change: Six we'll all be.
Speaker Change: Think well beyond.
Speaker Change: Sort of the five to six months range all of those so I think that gives us sort of a good understanding of the of the behavior of the product.
Speaker Change: Longer term as the recovery for the B cell compartment in those patients.
Speaker Change: In addition to what we're currently doing as we're dosing three patients at 100 million cell dose. So that's twice of what we have used in the first six and we're planning to also treat three.
Speaker Change: Three adolescent patients at the $50 million, so dose level and hopefully we have.
Speaker Change: Those patients included in the update by the end of the year.
Speaker Change: Great. Thanks for taking my questions.
Gail: Thanks, a lot Gail.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Jan on June from Wells Fargo.
Speaker Change: Great. Thanks.
Speaker Change: For taking our questions.
Speaker Change: Congrats on the very strong launch of <unk>.
Speaker Change: Cassel.
Speaker Change: So oh.
Speaker Change: Sorry, I'll castle.
Speaker Change: I was wondering can you remind us of the.
Speaker Change: The.
Speaker Change: Takata.
Speaker Change: Current revenue what percentage by your estimate could be coming from B a L. L. It feels as though that you know just in the first quarter of launch you have achieved.
Speaker Change: Any significant market share.
Speaker Change: In D a L L.
Speaker Change: Given that.
Speaker Change: At current sales is only.
Speaker Change: 80% roughly $80 million at <unk>.
Speaker Change: Only 100 million and give us a sense of the proportion of <unk> in there.
Speaker Change: Perfect.
That said <unk>. Thanks.
Speaker Change: Thanks.
Speaker Change: Very very difficult question to answer actually because it's never been properly broken out and with the dynamic we're seeing with brands you moving in.
Speaker Change: It's kind of hard to tell where that split is between the indications.
Speaker Change: <unk>.
When we look back.
Speaker Change: Probably a year or two years ago it might've been.
Speaker Change: Somewhere between 20, and 40% being ALLL patients, but it's actually it's a hard thing to actually estimate.
Speaker Change: Because there is no there'll be able clear dataset that he could actually delineated from so it's the majority of abboud are expected to be mantle cell patients a minority to be ALLL, but how that has moved now with the change.
Speaker Change: Of brands and moving into the Mcl side very difficult to estimate I don't think we can get it gives you a good answer there.
Speaker Change: Got it and then secondarily given the information that the $4 7 million is.
Speaker Change: Deferred revenue.
Speaker Change: Line would be.
Speaker Change: And products, that's delivered but not yet infused so two clarifying questions one.
Speaker Change: So this $4 7 million will represent the cost and not the actual.
Speaker Change: That you will receive from the product is not whether thats the correct impression and two typically.
Speaker Change: What is that.
Speaker Change: Between receipt reception of the product and then.
Speaker Change: Infusion I'd imagine, it's pretty short turnaround.
Speaker Change: If that's the case then.
Speaker Change: $4, seven meaning could already be translating to a $9 million.
Speaker Change: <unk>.
Speaker Change: Early in the quarter, so just want to get a sense of those two.
Speaker Change: Questions.
Rob: I'll answer the second question and then hand over to Rob for the first question.
Rob: The time of dosing as client variable in the commercial setting for these patients.
Speaker Change: So there is the.
Speaker Change: With a lot of these patients you have quite a lot of variability in terms of the state the condition that they're in so some of these patients may have picked up an infection.
Speaker Change: Actually something you have to kind of go through you have to treat you have to get them back to a reasonable state before you dose.
Speaker Change: Other patients are in good shape can be brought to intercompany those quickly. So it is actually quite a wide range.
Speaker Change: That we're seeing and I don't think we have yet a good feel of where Canada.
Speaker Change: So the bulk of the patients will be landing on.
Speaker Change: But it is variable.
Speaker Change: Based on sort of the underlying comorbidities of the patients and frankly the issues that they are encountering as a consequence of the advanced stage of their disease. So it is variable and it is more variable that what we have seen during the clinical trial, there's more variability there. So I think as we sort of get more experience and probably have a few more quarter.
Speaker Change: As in I think we started probably have a better sense of kind of what the actual.
Speaker Change: Numerical ranges will be but at this point clearly it's somewhat larger than what we have observed.
Speaker Change: In the field study.
Rob: With that handing over to Rob for the first part of the question.
Rob: So yes, let me clarify on the deferred revenue piece. So the deferred revenue represents the sales value. It's not the cost of the product so the way to think about.
Speaker Change: Product that was delivered to the treatment centers, they've got administered reflected in the P&L on the $9 million.
Speaker Change: The value of that product or that the revenue value of that product.
Speaker Change: Not yet recognized in the P&L fits as deferred revenue.
Speaker Change: So that's kind of the total piece to think about that now.
Speaker Change: The pieces a little bit maybe counterintuitive is when you do start to think about the costs for that.
Speaker Change: All of the costs for both the deferred revenue amount and patients as well as the P&L recognized him out do you see it in our Q1.
Speaker Change: Cost of sales line.
Speaker Change: And the reason for that largely is once we deliver product to the center, we no longer really can hold that as inventory and becomes kind of an immediate expense item.
Speaker Change: Once it's delivered and so Christian alluded to there is some time and some variability around that you also for example could have patients where we've delivered the product reflected in deferred revenue and unfortunately, a patient passes away and so that would actually still wind up.
Speaker Change: Have been accounted for in your cost of sales, but would be differ.
Speaker Change: Deferred revenue that you may not realize.
Speaker Change: Got it and this is all Super helpful. Thank you for Capex coordination, yes, if I may one last question perhaps for questions.
Speaker Change: Can you give us a sense in terms of your positioning.
Speaker Change: Competitive landscape for lupus nephritis with your planned dosing our first patient by year end 'twenty five.
Speaker Change: Where are you vis.
Speaker Change: The other companies who also is interesting.
Speaker Change: <unk> already taken on lupus nephritis.
Speaker Change: Thank you.
Speaker Change: Thanks Sudan.
Speaker Change: We are very well positioned.
Speaker Change: And the combination obviously of having.
Speaker Change: Having a very compact study design.
Speaker Change: As well as obviously being well set up in many of the clinical centers.
Speaker Change: In the U S and we're obviously.
Speaker Change: Gearing up in the UK as well from a commercial perspective, I think what should this should set us up well in our ability to deliver the trial. So we believe we're very well positioned.
Speaker Change: With that many of the trials that have been in the lupus space more generally that have been sort of considered or are underway of randomized controlled studies with substantially larger patient numbers.
Speaker Change: And those types of studies have been notoriously challenging to recruit if you look at <unk> et cetera experience in this space.
Speaker Change: The patient numbers are 1% to two patients per center per year.
Speaker Change: That we're seeing and so conducting these larger studies will take.
Speaker Change: Or can take a good amount of time.
Speaker Change: Very helpful. Thanks, and congrats again on quarter.
Speaker Change: Thanks, a lot appreciate it.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Kelly Shane from Jefferies.
Speaker Change: Hi, This is <unk> from Jefferies on behalf of Kelly. Thank you for taking my question and congratulations on a very strong Q1.
Speaker Change: I have a question on the phase two trial I'm wondering like how many patients you expect it to enroll in the phase two and <unk>.
Speaker Change: Certainly probably like what's your expected patient follow up.
Speaker Change: Balance your strategy to like fast to market and in the meantime indicators show the cell therapies potential E induce durable drug free remission. Thank you.
Speaker Change: Well thanks for joining.
Speaker Change: Had indicated that the at the R&D day that we are expecting this study to be at around 30 patients. It's relatively compact study.
Speaker Change: As indicated.
Speaker Change: And in terms of follow up when you look at other studies in this space you do see that.
Matthew Phipps: Do you have meaningful follow up in these patients with a year follow up.
Matthew Phipps: Oh. So you can you can also follow these patients further but you've got a pretty good sense within a year from a value perspective.
Matthew Phipps: Actual readout that we expect to be able to go forward could be shorter than that given the.
Matthew Phipps: Time, a dynamic that we've seen in terms of the risk.
Matthew Phipps: Our response development in these patients.
Matthew Phipps: But I think one year is a reasonable period of time to consider.
Matthew Phipps: Thank you.
Speaker Change: Thank you. This concludes today's Q&A session I would now like to turn the conference back over to Christian Eitan CEO for closing remarks.
Speaker Change: Thanks, a lot well thanks, everybody for joining fantastic to sort of give you the update I know you're very keen to hear how we're doing for the first quarter. It was a great quarter. We're looking forward to keeping you updated as we go through the rest of the year.
Speaker Change: But we're very excited about where we are and we're going to push hard. Thank you very much.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].