Q2 2025 Autolus Therapeutics PLC Earnings Call

Dr. Christian Itin: Good day and thank you for standing by. Welcome to the Autolus Therapeutics plc second quarter 2025 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one-one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one-one again. Please be advised today's conference is being recorded. I will now like to hand the conference over to your speaker today, Amanda Cray, Executive Director of Investor Relations. Please go ahead.

Speaker #2: Good day, and thank you for standing by. Welcome to the Autolus second quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone. We will then hear an automated message advising that your hand is raised.

Speaker #2: To withdraw your question, please press *11 again. Please be advised today's conference is being recorded. I would now like to end the conference over to your speaker today, Amanda Cray, Executive Director of Investor Relations.

Speaker #2: Please go ahead.

Amanda Cray: Thank you, Kevin. 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, Robert Dolski. I would like to remind you that during today's call, we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of the ongoing commercial launch of OCATSL, Autolus's manufacturing, sales, and marketing plans for OCATSL, the market potential for OCATSL, and the status of clinical trials, development, and/or regulatory timelines and market opportunities for obe-cel and our other product candidates.

Speaker #3: Thank you, Kevin. Good morning or good afternoon, everyone, and thank you for joining us on today's call. With me are Chief Executive Officer Dr. Christian Itin and Chief Financial Officer Rob Dolski.

Speaker #3: 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 Reform Act of 1995.

Speaker #3: These may include, but are not limited to, statements regarding status of the ongoing commercial launch of OCATSL, Autolus' manufacturing, sales, and marketing plans for OCATSL, the market potential for OCATSL, and the status of clinical trials development and/or regulatory timelines and market opportunities for Obicel and/or other product candidates.

Amanda Cray: 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 statement. 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 filings, both available on the Investors section of our website. On slide three, you will see the agenda for today's call. As usual, Christian will provide an overview of our operational highlights. Robert will then discuss the financial results, and Christian will conclude with upcoming milestones and closing remarks. We will then take questions. With that, I will turn it over to Christian.

Speaker #3: 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.

Speaker #3: We assume no obligation to update any such forward-looking statements. For discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today's press release and in our SEC filings, both available on the Investors section of our website.

Speaker #3: On 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.

Speaker #3: We'll then take questions. With that, I'll turn it over to Christian.

Dr. Christian Itin: Thank you, Amanda. Moving to slide four. Welcome, ladies and gentlemen, and thank you for joining us for the second quarter call. We had an excellent second quarter with good momentum in our launch of OCATSL. In the second quarter, we generated $20.9 million in product sales, bringing the first six months of the launch to $29.9 million. The product profile resonates very well with treating physicians, and there is a clear unmet medical need. Our supply chain has proven to be robust, reliable, and delivering consistent quality to our customers. We continue to expand our center presence with now 46 centers authorized for use of OCATSL and 90% of total U.S. medical lives covered. We are well on track to achieve our year-end objective of reaching 60 plus authorized centers. As of July 1st, we have permanent HCPCS code effective following a positive CMS decision on April 1st.

Speaker #2: Thank you, Amanda. Moving to slide four. Welcome, ladies and gentlemen, and thank you for joining us for the second quarter call. We had an excellent second quarter with good momentum in our launch of OCATSL.

Speaker #2: In the second quarter, we generated $20.9 million in product sales, bringing the first six months of the launch to $29.9 million. The product profile resonates very well with treating physicians, and there is a clear unmet medical need.

Speaker #2: Our supply chain has proven to be robust, reliable, and delivering consistent quality to our customers. We continue to expand our center presence with now 46 centers authorized for use of OCATSL, and 90% of total US medical lives covered.

Speaker #2: We are well on track to achieve our year-end objective of reaching 60 plus authorized centers. As of July 1st, we have permanent HICPIX code effective following a positive CMS decision on April 1st.

Dr. Christian Itin: The decision by CMS of a split reimbursement based on the infusion of product was a deviation of precedent. The impact was twofold: a change in revenue recognition for the company and an adjustment of the administrative processes at the medical centers. The adjustments were made during the second quarter and did slow patient enrollment at those centers. We expect the impact on patients treated to be resolved by Q4. Moving to slide number five, we are very pleased with the progress of our regulatory filings. In April, we received conditional marketing authorization in the UK and in July from the European Commission. We are working on market access in the UK and are interacting with NICE. In the EU, we are looking at a country-by-country evaluation.

Speaker #2: The decision by CMS of a split reimbursement based on the infusion of product was a deviation of precedence. The impact was twofold: a change in revenue recognition for the company, and an adjustment of the administrative processes at the medical centers.

Speaker #2: The adjustments were made during the second quarter and did slow patient enrollment at those centers. We expect the impact on patients treated to be resolved by Q4.

Speaker #2: Moving to slide number five, we're very pleased with the progress of our regulatory filings. In April, we received conditional marketing authorization in the UK, and in July from the European Commission.

Speaker #2: We're working on market access in the UK and are interacting with NICE. In the EU, we are looking at a country-by-country evaluation. While we aim to get OCATSL to as many patients as possible, as a small company with limited resources, we also have to be disciplined and make sure to only launch where market access is economically viable.

Dr. Christian Itin: While we aim to get OCATSL to as many patients as possible, as a small company with limited resources, we also have to be disciplined and make sure to only launch where market access is economically viable. At this stage, we do not expect EU sales in 2025 and 2026. Meanwhile, we continue to engage with physicians and study groups, like the German ALL study group, to enable ISTs in Europe. In addition, we are broadening our real-world experience in the U.S. with OVSL, which may provide additional support for our market access conversations elsewhere. Moving to slide number six, the Felix data continued to mature very favorably. At EHA, we presented an update with 32.8 months of median follow-up. Importantly, 38% of the responding patients remain in remission without any subsequent treatment. On slide seven, consistent with this finding, we see median duration of response reach 42.6 months.

Speaker #2: At this stage, we do not expect EU sales in 2025 and 2026. Meanwhile, we continue to engage with physicians and study groups, like the German ALL study group, to enable ISTs in Europe.

Speaker #2: In addition, we are broadening our real-world experience in the US with Obicel, which may provide additional support for our market access conversations elsewhere. Moving to slide number six, the Felix data continue to mature very favorably.

Speaker #2: At EHA, we presented an update with 32.8 months of median follow-up. Importantly, 38% of the responding patients remain in remission without any subsequent treatment.

Speaker #2: On slide seven, consistent with this finding, we see median duration of response reach 42.6 months. Slide eight, then, looks at the overall survival, which shows a plateau forming at around 40%, with most patients beyond two years of observation.

Dr. Christian Itin: Slide eight then looks at the overall survival, which shows a plateau forming at around 40% with most patients beyond two years of observation. A long-term outcome, together with the favorable safety profile, is a strong foundation to build on. Where next with obe-cel is summarized on slide nine. Our development focus is on expanding the activity of obe-cel beyond adult patients with relapsed refractory ALL. We made good progress with our pediatric PY01 trial. We expect the Phase 1 experience to be presented by the year-end and are expanding the study from a Phase 1 to a Phase 1/2 study with an intent to expand the age range for our current label. Encouragingly, several of the physicians treating commercial patients expressed an interest in exploring obe-cel in frontline consolidation settings, and we expect to see several ISTs active in 2026.

Speaker #2: Along the long-term outcome, together with the favorable safety profile, is a strong foundation to build on. We're next with Obicel is summarized on slide nine.

Speaker #2: Our development focus is on expanding the beauty of Obicel beyond adult patients with relapsed refractory ALL. We made good progress with our pediatric study PY1.

Speaker #2: We expect the phase one experience to be presented by the year end, and are expanding the study from a phase one to a phase one two study with an intent to expand the age range for our current label.

Speaker #2: Encouragingly, several of the physicians treating commercial patients expressed an interest in exploring Obicel in frontline consolidation settings, and we expect to see several ISTs active in 2026.

Dr. Christian Itin: We are also excited about our progress in autoimmune diseases. Building on the encouraging initial experience in SLE, we are starting up a Phase 2 lupus nephritis study with registrational intent. In addition, our Phase 1 study in progressive multiple sclerosis is open for enrollment now. With that, I am handing over to Robert Dolski for the financial results for the second quarter 2025. Robert.

Speaker #2: We are also excited about our progress in autoimmune diseases. Building on the encouraging initial experience in SLE, we are starting up a phase two lupus nephritis study with registrational intent.

Speaker #2: In addition, our phase one study in progressive multiple sclerosis is open for enrollment now. With that, I'm handing over to Rob for the financial results for the second quarter 2025.

Speaker #2: Rob?

Robert Dolski: Thanks, Christian. Good morning or good afternoon to everyone. It's my pleasure to review our financial results for the second quarter 2025. In the second quarter, net product revenue for the three months ending June 30th, 2025 was $20.9 million, compared with $9 million in the first quarter. As Christian noted, we continue to be encouraged by OCATSL's uptake and strong momentum in the US. Cost of sales in the second quarter totaled $24.4 million. As a reminder, this amount includes the cost of all commercial products delivered to the authorized treatment centers, including products delivered but not yet administered to patients. Again, as a reminder, the sales value of these products, not yet recorded as product revenue in the P&L, is reflected as deferred revenue on the balance sheet. Our deferred revenue balance at the end of Q2 was $2.1 million.

Speaker #4: Thanks, Christian. And good morning or good afternoon, to everyone. It's my pleasure to review our financial results for the second quarter 2025. In the second quarter, net product revenue for the three months ending June 30th, 2025, was $20.9 million, compared with $9 million in the first quarter.

Speaker #4: As Christian noted, we continue to be encouraged by OCATSL's uptake and strong momentum in the US. Cost of sales in the second quarter totaled $24.4 million, as a reminder, this amount includes the cost of all commercial product delivered to the authorized treatment centers including product delivered but not yet administered to patients.

Speaker #4: So again, as a reminder, the sales value of these products not yet recorded as product revenue in the P&L is reflected as deferred revenue on the balance sheet.

Speaker #4: And our deferred revenue balance at the end of Q2 was $2.1 million. Additionally, cost of sales includes any canceled orders in the period, our patient access program product, third-party royalties for certain technologies, as well as idle capacity.

Robert Dolski: Additionally, cost of sales includes any canceled orders in the period, our patient access program product, third-party royalties for certain technologies, as well as idle capacity. As expected, this dynamic will drive cost of sales to be higher at the beginning of the launch, as we've experienced, versus what we would consider our ultimate target. Our expectation is to see improvement as volumes increase and as we improve efficiencies in our own manufacturing operations. Moving on to research and development, these expenses decreased to $27.4 million for the three months ending June 30th, 2025. That's compared to $36.6 million during the same period in 2024. This change was primarily driven by the commercial manufacturing-related employee and infrastructure costs that have shifted out of R&D expense into our cost of sales and inventory.

Speaker #4: As expected, this dynamic will drive cost of sales to be higher, at the beginning of the launch, as we've experienced, and versus what we would consider our ultimate target.

Speaker #4: Our expectation is to see improvement as volumes increase and as we improve efficiencies in our own manufacturing operations. Moving on to research and development, these expenses decreased to $27.4 million for the three months ending June 30th, 2025, that's compared to $36.6 million during the same period in '24.

Speaker #4: This change was primarily driven by the commercial manufacturing-related employee and infrastructure costs that have shifted out of R&D expense into our cost of sales and inventory.

Robert Dolski: Our selling, general, and administrative expenses increased to $30.3 million for the three months ending June 30th, 2025, and that's compared to $21.9 million in the same period in 2024. This increase was primarily due to salaries and other employee-related costs driven by increased headcount supporting our commercialization activities. Our loss from operations for the three months ending June 30th, 2025 was $61.2 million as compared to $58.9 million for the same period in 2024. During the quarter, we also recorded $12.1 million in net interest income and expense. This is primarily driven by a one-time non-cash adjustment to the liability related to the valuation of future royalties and milestones associated with the Blackstone and BioNTech agreements. The valuation assessment incorporated the revised commercial assumptions already discussed by Dr. Christian Itin with respect to the EU launch.

Speaker #4: Our selling general and administrative expenses increased to $30.3 million for the three months ending June 30th, 2025, and that's compared to $21.9 million in the same period in '24.

Speaker #4: This increase was primarily due to salaries and other employee-related costs driven by increased headcount supporting our commercialization activities. Our loss from operations for the three months ending June 30th, 2025, was $61.2 million, as compared to $58.9 million for the same period in 2024.

Speaker #4: During the quarter, we also recorded $12.1 million in net interest income and expense. This is primarily driven by a one-time non-cash adjustment to the liability related to the valuation of future royalties and milestones associated with the Blackstone and BioNTech agreements.

Speaker #4: The valuation assessment incorporated the revised commercial assumptions already discussed by Christian with respect to the EU launch. And finally, net loss was $47.9 million for the three months ending June 30th, 2025, reduced from a loss of $58.3 million for the same period in 2024.

Robert Dolski: Finally, net loss was $47.9 million for the three months ending June 30, 2025, reduced from a loss of $58.3 million for the same period in 2024. Our cash equivalents and marketable securities at Q2 2025 totaled $454.3 million as compared to $588 million at the end of December 2024. This decrease was primarily driven by net cash use in operating activities and also impacted by a delayed cash receipt of approximately $21.7 million in R&D tax credit that we expected from the UK HMRC, which was expected to be received during the six months ending June 30 but has been delayed. We continue to believe that with our current cash equivalents and marketable securities, we are well capitalized to drive the launch and commercialization of obe-cel and to obtain data in the LN pivotal trial as well as MS Phase 1 study. I will now hand back to Dr.

Speaker #4: Our cash cash equivalents and marketable securities at Q2 2025 total $434.3 million, as compared to $588 million at the end of December 2024. This decrease was primarily driven by net cash use and operating activities, and also impacted by a delay cash receipt of approximately $21.7 million in R&D tax credit that we've expected from the UK HMRC, which was expected to receive during the six months ending June 30th but has been delayed.

Speaker #4: We continue to believe that with our current cash, cash equivalents, and marketable securities, we are well capitalized to drive the launch and commercialization of Obicel, and to obtain data in the LN pivotal trial, as well as the MS phase one study.

Speaker #4: I'll now hand back to Christian to wrap things up with a brief outlook on expected milestones for the rest of the year. Christian?

Robert Dolski: Christian Itin to wrap things up with a brief outlook on expected milestones for the rest of the year. Christian?

Dr. Christian Itin: Thanks a lot, Rob. This gets me to the outlook for the remainder of the year. The two data releases that we are planning, the first one is the updated data from IO phase one in SLE, which we expect to provide the update at the ACR meeting at the end of October. Then we are aiming to provide a review of the phase one data of our pediatric ALL experience towards the end of the year. When we look at the clinical trial conduct, we expect first patients to be dosed for our lupus nephritis phase two study, our MS phase one study, and the AutoAid study in amyloidosis, which is also expected to dose the first patient in the second half of the year.

Speaker #2: Thanks a lot, Rob. So this gets me to kind of the outlook for the remainder of the year. There are two data releases that we're planning.

Speaker #2: The first one is the updated data from our phase one in SHS, which we expect to provide the update at the ACR meeting at the end of October.

Speaker #2: And then we're aiming to provide a review of the phase one data of our pediatric ALL experience towards the end of the year. When we look at the clinical trial conduct, we expect first patients to be dosed for our lupus nephritis phase two study, our MS phase one study, and the auto aid study in amyloidosis, which is also expected to dose the first patient in the second half of the year.

Dr. Christian Itin: A lot of progress, and I think driving towards a very attractive dynamic on the launch, but also driving hard towards an expanded use of obe-cel beyond the relapsed refractory adult ALL opportunity. With that, I think we are in a great spot for the second half of the year. We are happy for you to actually join us for the Q&A session. Thank you.

Speaker #2: So a lot of progress, and I think driving towards a very attractive dynamic on the launch, but also driving hard to towards an expanded use of Obicel beyond the relapsed refractory adult ALL, opportunity, and with that, I think we're in a great spot for the second half of the year.

Speaker #2: We're happy for you to actually join us for the Q&A session. Thank you. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press *11 on your telephone.

Speaker 5: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one-one on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star one-one again. We will pause for a moment while we compile our Q&A roster. Our first question comes from James Shin with Deutsche Bank. Your line is open.

Speaker #2: If your question has been answered or you wish to move yourself from the queue, please press *11 again. We'll pause for a moment while we compile our Q&A roster.

Speaker #2: Our first question comes from James Shin with Deutsche Bank. Your line is open.

Speaker 6: Good morning, guys. Thank you for the question. First question is for Dr. Christian Itin on the Germany launch. Was this originally a green light, call it, but flipped to hold based on pricing and reimbursement changes from, say, the MFN undercurrent? The second one for Robert Dolski is, once the split reimbursement is, I guess, absorbed or embedded by the hospitals, is enrollment and sales expected to accelerate? What is the recognition pattern or cadence thereafter? Thank you.

Speaker #5: Good morning, guys. Thank you for the question. First question is for Christian on the Germany launch. Was this originally a green light call it but flip to hold based on pricing and reimbursement changes from, say, the MFN undercurrent?

Speaker #5: And then I guess the second one for Rob is, once the split reimbursement is, I guess, absorbed or embedded by the hospitals, is enrollment and sales expected to accelerate or like what's the recognition pattern or cadence thereafter?

Speaker #5: Thank you.

Dr. Christian Itin: Thanks a lot for joining, James. What I think is important to understand in terms of the market access process in Europe in general is that the methodologies that are being used for market access are designed to use data from randomized controlled studies. That has been a challenge, I think, for many of the CAR T cell therapy programs and cell and gene therapy programs in general, which are typically placed in rare diseases and initially typically based on single-arm studies. So that is a methodological challenge that we do have across the board and across all of the assessing agencies and bodies. That is, I think, first the first observation. There is a disjointedness, and with that, an element of a judgment call required.

Speaker #2: Thanks a lot for joining, James. So what I think is important to understand in terms of the market access process in Europe in general is that the methodologies that are being used for market access are designed to use data from randomized controlled studies.

Speaker #2: And that has been a challenge, I think, for I think many of the CAR-T programs and cell and gene therapy programs in general, which are based typically are placed in rare diseases and initially typically based on single-arm studies.

Speaker #2: So that's a methodological challenge that we do have across the board and across all of the assessing agencies and bodies. So that's, I think, first the first observation.

Speaker #2: So there is a disjointedness, and with that, an element of a judgment call required. The second is clearly that we have to make sure that we are navigating, I think, the various processes such that we do get to an outcome that is economically reasonable for us and doable for us.

Dr. Christian Itin: The second is clearly that we have to make sure that we are navigating the various processes such that we do get to an outcome that is economically reasonable for us and doable for us. What we have seen in the past is that, for certain products, they were launched below their actual production prices, which obviously is not a good precedent and does not really, I think, support a sustained business. As a consequence, we have seen a substantial proportion of cell and gene therapy products actually not being launched in Europe. There is something like 8 out of 18 that were not launched. That is the backdrop. We are going to do this very methodically, going to go through country by country and are navigating that.

Speaker #2: What we have seen in the past is that, for certain products, we're launched below their actual production prices, which obviously is not a good precedent.

Speaker #2: And it doesn't really I think support a sustained business. And as a consequence, we've seen a substantial proportion of cell and gene therapy products actually not being launched in Europe.

Speaker #2: But there's something like eight out of 18 that were not launched. So that's the backdrop. So we're going to do this very methodically. We're going to go through country by country and we're navigating that.

Dr. Christian Itin: What is important to understand as well is, obviously, in the current environment, that there are a number of countries that actually do publish the actual negotiated prices. You were pointing to MFN, and you can imagine that also creates, obviously, a possible tension that may or may not be helpful in the process. We are going to take a very disciplined approach. We are going to engage with the respective countries. We are going to work through the process. But we also will certainly make sure that we are going to get to the right outcomes before launching, which is why we are sort of putting to a longer timeline before we realize any sales in Europe. With that, I am handing over to Robert Dolski.

Speaker #2: What is important to understand as well is obviously in the current environment that there is a number of countries actually do publish the actual negotiated prices.

Speaker #2: And you are pointing to MFN, and you can imagine that also creates, obviously, a possible tension. That may or may not be helpful in the process.

Speaker #2: So we're going to take a very disciplined approach. We're going to engage with the respective countries, and we're going to work through the process.

Speaker #2: But we're also will certainly make sure that we're going to get to the right outcomes before before launching, which is why we're sort of putting to a longer timeline before we realize any sales in Europe.

Speaker #2: And with that, I'm handing over to Rob.

Robert Dolski: Yeah, hi, James. Your question on the revenue recognition. So, to maybe clarify the specifics here, we moved from the first quarter where all recognized was recognized on the first administration of obe-cel to a 50/50 split between the first administration and the second administration. At the time, we also called out that this is only for a portion of patients, CMS outpatients. The time between those two time points was, per the label, about 10 days plus or minus two days. I think in the field, we've seen about nine days thus far. The specific implementation of the revenue recognition change, we said at the time, was going to have very little impact, and we kind of see that as this quarter has even played out. The adjustments that Dr.

Speaker #4: Yeah, hi, James. Your question on the revenue recognition. So just to maybe clarify, the specifics here, so we moved from the first quarter where all recognized was recognized on the first administration of Obicel.

Speaker #4: To a 50/50 split between the first administration and the second administration. At the time, you know, we also called out that, obviously, this is only for a portion of patients, CMS outpatients.

Speaker #4: In the time between those two time points was, you know, per the label, about 10 days plus or minus two days, I think, in the field, we've seen about nine days thus far.

Speaker #4: So the specific implementation of the revenue recognition change we, you know, we said at the time was going to have a very little impact and we kind of see that, you know, as this quarter has even played out.

Speaker #4: The adjustments that Christian referred to certainly that the centers had to make more on the administrative side and then in turn, you know, impacting some of the registrations that were happening in that timeframe.

Robert Dolski: Christian Itin referred to, certainly, the centers had to make more on the administrative side, and then in turn, impacting some of the registrations that were happening in that timeframe. We really expect those to resolve themselves on a full quarter basis by Q4, but we will see some of that certainly in Q2 and probably early in Q3.

Speaker #4: We really expect those to resolve themselves kind of a full quarter basis by Q4, but we will see some of that certainly in Q2 and probably early in Q3.

Speaker 6: Thank you.

Speaker #5: Thank you.

Speaker 5: One moment for our next question. Our next question comes from Matt Schiff with William Blair. Your line is open.

Speaker #2: One moment for our next question. Our next question comes from Matt Schiff with William Blair. Your line is open.

Speaker 7: Thanks for taking my question and all the updates today. I guess, Robert, quickly then, what happens if a patient only gets the first infusion? I realize this doesn't happen very often, but is there just an eventual time where you can recognize the rest of that? Then, just thinking ahead, I'm sure no guidance here, but do you think you can become gross profit positive sometime by the end of this year or next year? Just wondering how we think about getting over that fixed cost and getting to capacity levels where you think we at least get to a gross profit level. Thank you.

Speaker #5: Thanks for taking my question and all the updates today. I guess, Rob, quickly then, what happens if a patient only gets the first infusion?

Speaker #5: I realize this doesn't happen very often, but is there just an eventual time when you can recognize the rest of that? And then, just thinking ahead, I'm sure there's no guidance here, but do you think you can become gross profit positive?

Speaker #5: You know, sometime by the end of this year or next year, just wondering if how we think about kind of that getting over that fixed cost and getting to kind of capacity levels where you think we at least get to a gross profit level.

Speaker #5: Thank you.

Dr. Christian Itin: Thanks for joining, Matt. I will take the first question and hand over to Robert. When you have the first infusion and only the first infusion, which is actually extremely rare because obviously, the only reason why that second infusion would not happen is the patient would have an adverse event reaction that would not allow you to actually do the second dose. You remember from our clinical experience, that is exceedingly rare. In fact, we do see this very rarely in the commercial setting. If that happens, then only the first infusion will be recognized. If the second is not administered, that will not be recognized. With that, I am handing over to Robert to address the fixed cost questions.

Speaker #2: Thanks for joining, Matt. I'll take first the first question and hand over to Rob. So when you have the first infusion, and only the first infusion, which is actually extremely rare, because obviously the only reason why that second infusion wasn't happened is the patient would have an adverse event reaction that wouldn't allow you to actually do the second dose.

Speaker #2: And you remember from our clinical experience, that is exceedingly rare. And in fact, we do see this very, very rarely. In the commercial setting, if that happens, then only the first infusion will be recognized.

Speaker #2: If the second is not administered, that will not be recognized. So with that, I'm handing over to Rob to address the fixed cost questions questions.

Robert Dolski: Yeah, Matt. On the gross margin front, certainly we saw, as you looked quarter to quarter from Q4 even last year, where we had to recognize some idle capacity costs. Then into Q1 and Q2, certainly trending the right way in terms of that number getting closer to break even. It is really a volume story for this year. We have been very focused on making sure the product is available. We want to really make sure there are no limitations to the launch. We do expect, as certainly the second half of the year will play out, and we continue to see volume increases that that will continue moving in the right direction. No specific timing in terms of guidance on when something will flip, but we certainly expect in the second half to continue in that direction.

Speaker #4: Yeah, Matt, so on the gross margin front, certainly we saw, as you looked quarter to quarter from Q4, even last year, where we had to recognize some idle capacity costs.

Speaker #4: And then into Q1 and Q2, certainly trending the right way in terms of that number getting closer to break-even. It's really a volume story for this year.

Speaker #4: And so what we've been very focused on is making sure the product is available and we want to really make sure there's no limitations to the launch.

Speaker #4: We do expect, you know, as certainly the second half of the year will play out. And we continue to see volume increases; that that'll continue moving in the right direction.

Speaker #4: No specific timing in terms of guidance. I'm, you know, kind of waiting for when something will flip, but we certainly expect in the second half to continue in that direction.

Speaker 5: Thank you. One moment for our next question. Our next question comes from Gil Blum with Needham & Company. Your line is open.

Speaker #2: Thank you. One moment for our next question. Our next question comes from Gil Blum with Needham & Company. Your line is open.

Speaker 7: Good morning, everyone, and congrats on a strong quarter. Maybe a quick question here as it relates to how has the product been received by the community in the U.S.? Do you have some anecdotal feedback and maybe already some level of reorders? I have a follow-up.

Speaker #5: Good morning, everyone. And congrats on a strong quarter. Maybe a quick question here: as it relates to how the product is being received by the community in the U.S.?

Speaker #5: Do you have some anecdotal feedback and maybe already some level of reorders? And I have a follow-up.

Dr. Christian Itin: Thanks a lot for joining, Gil. The reception has been very, very positive. What we are seeing is, and what we have pointed out in the past, is obviously that the safety profile and the manageability was really something that was immediately experienceable. That has been incredibly helpful. We believe it is one of the key reasons also why we had early, very early on, we started to see actually reorders at the centers for the product. That actually is developing very nicely across the centers that are active, commercially active at this point. This looks very positive, and I think has a very nice reinforcing impact. I think it is in line with, frankly, our prior experience.

Speaker #2: Well, thank you very much for joining, Gil. The reception has been very, very positive. What we're seeing, and what we have pointed out in the past, is obviously that the safety profile and the manageability were really something that was immediately observable.

Speaker #2: And that's been incredibly helpful. And we believe it's one of the key reasons also why we had early very early on, we started to see actually reorders at the centers for the product.

Speaker #2: And that actually is developing very nicely across the centers that are commercially active at this point. So this looks very positive, and I think has a very nice reinforcing impact.

Speaker #2: And I think this is in line with, frankly, our prior experience. What we now see, obviously, as we go to the middle of the year, is that the physicians start to see the outcomes—not just the immediate manageability of the product, but also the outcomes in their patients.

Dr. Christian Itin: What we now see, obviously, as we go to the middle of the year, is that we start, obviously, the physicians start to see the outcome, not just the immediate manageability of the product, but also the outcome in their patients. We think that is going to be sort of a second push as we go into the second part of the year. Certainly, the Felix study data that we updated, that we presented at EHA, strongly, I think, point in that direction with the long-term survival plateaus that we are seeing in the data and the survival data. Obviously, a lot of the patients not requiring additional therapy, which is obviously resonating very well.

Speaker #2: And we think that's going to be sort of a second push as we go into the second part of the year. And certainly the Felix data that we update that we present at the EHA strongly I think point in that direction, with the long-term plateau that we're seeing in the data and the survival data and obviously a lot of the patients not requiring additional therapy, which is obviously resonating very well.

Dr. Christian Itin: We are really pleased with what we are seeing, the dynamic, and the feedback we are getting from the product, the experience, but also the experience, obviously, that the centers have with our commercial team and the reliability on the supply side, on the production side, which I think are really important to sort of actually be a real partner, frankly, for these physicians and patients in this space.

Speaker #2: So we're really pleased with what we're seeing, the dynamic, and the feedback we're getting from the product, the experience, but also the experience, obviously, that the centers have with our commercial team and the reliability on the supply side, on the production side, which I think are really important to sort of actually be a real partner, frankly, for these physicians and patients in this space.

Speaker 7: Thank you for that. Can you provide any additional color regarding your negotiations with NICE?

Speaker #5: Thank you for that. And can you provide any additional color regarding your negotiations with NICE?

Dr. Christian Itin: The process is obviously a very regulated process where, you know, there is obviously a query for quite a substantial amount of information and health economic assessments that we sort of provide and provide the data behind that. It is a process that actually involves, to quite an extent, the treating physicians with experience with the product and experience with the indication, but also the patients themselves, which do actually have a voice in this process. So there is a dynamic there where, you know, the company provides information, but we are actually not actively negotiating in that process, in that particular interaction with NICE. It is a process that is actually within that body with, obviously, information requested from us, but then also support from the physician and patient community. This is ongoing. We went through a first step.

Speaker #2: So So the process is obviously a very regulated process. We're, you know, there's obviously a query for quite a substantial amount of information. And health economic assessments that we sort of provide and provide the data behind that.

Speaker #2: And then it is a process that actually involves to quite an extent the treating physicians with experience with the product and experience with the indication, but also the patients themselves, which do actually have a voice in this process.

Speaker #2: So there is a dynamic there where you know there's the company provides information, but we're actually not actively negotiating in that process in that particular interaction with NICE.

Speaker #2: But it's a process that's actually within that body, with obviously information requested from us, but then also support from the physician and patient community.

Speaker #2: And so this is ongoing. We went through a first step. There is a second step now that we're running through. And you know we'll need to see where we get to.

Dr. Christian Itin: There is a second step now that we are running through. We will need to see where we get to. Then there are additional different paths that you can take from there on forward. So we are in the midst of this. This is also a time point where it is very difficult to sort of give a view on where it may go. We will need to see kind of how it develops. But overall, you know, very strong support from the physicians and the patients for the product, which is obviously consistent with the experience that we had with obe-cel or OCATSL in the UK. Obviously, many of the patients that we have treated in our clinical trials were UK patients. So there is a strong amount of experience, also firsthand experience available, which we believe is helpful.

Speaker #2: And then there's additional different paths that you can take from there on forward. So we're in the midst of this. So this is also a time point where it's very difficult to sort of give a view on where it may go.

Speaker #2: And we'll need to see kind of how it develops. But overall, you know, very strong support from the physicians and the patients for the product, which is obviously consistent with the experience that we had with Obicel or OCATSL in the UK and obviously many of the patients that we have treated in our clinical trials were UK patients.

Speaker #2: So there is a strong amount of experience also firsthand experience available, which we believe is helpful.

Speaker 7: Thank you for taking our questions.

Speaker #5: Thank you for taking our questions.

Dr. Christian Itin: Thanks a lot, Gil.

Speaker #2: Thanks a lot, Gil. One moment for our next question. Our next question comes from Astika Gunnaruddin with Truist. Your line is open.

Speaker 5: One moment for our next question. Our next question comes from Ashleigh Kogunawardeen with Truist. Your line is open.

Speaker 6: Hey, guys. Good morning. I will echo my congrats on the strong OCATSL launch here that is panning out. A couple of quick financial questions and operational questions, then I got something more bigger picture. Start with, you have added about a dozen or so ATCs since your Q1 earnings. Can you maybe walk us through the plan for bringing on more centers by year-end? Is there sort of like a training period as you bring on a new center that would make us kind of think about how productive these centers are as they come on? The other quick financial question is, can you quantify the impact of out-of-spec products in your calls?

Speaker #5: Hey, guys. Good morning. I'll echo my congrats on the strong OCATSL launch here that's panning out. A couple of quick financial questions and operational questions that I got something more bigger picture.

Speaker #5: So, starting with the fact that you've added about a dozen or so ATCs since your Q1 earnings, can you maybe walk us through the plan for bringing on more centers by year-end?

Speaker #5: And is there sort of like a training period as you bring on a new center that would make us kind of think about how productive these centers are as they come on?

Speaker #5: And then the other quick financial question is, can you quantify the impact of out-of-spec products in your COGS?

Dr. Christian Itin: Okay. I will take the ATC question first and then hand off to Rob on the OWS question. We did add, obviously, you are correct, we added about 12 authorized treatment centers that are now active. We are going to continue, obviously, to add to the end of the year. We expect to be at 60 plus by the end of the year. That progresses very nicely. When we look at the centers, obviously, the way that we have weighted the centers was to really look at those centers that have larger patient flows and often actually already had experience very early on and then kept adding to that.

Speaker #2: Okay, I'll take the ATC question first and then hand off to Rob on the OS question. So we did add obviously you're correct. We added about 12 ATCs that are now active.

Speaker #2: And we're going to continue obviously to add to the end of the year. We expect to be at 60 plus by the end of the year.

Speaker #2: So that progresses very nicely. When we look at the centers, obviously the way that we have weighted the centers was to really look at those centers that are have larger patient flows and often actually already had experience.

Speaker #2: Very early on and then kept adding to that. So you start actually with what do you think the centers are that will have a relatively high patient flow.

Dr. Christian Itin: You start actually with what do you think the centers are that will have a relatively high patient flow and then gradually actually fill out the network of centers to make sure that patients have a good reach and also would not have too much of a distance to access the therapy. That is kind of what we are in. We are at this point in time, we keep on expanding into geographies that we have not been present in, which we believe is important to make sure we are serving the breadth of the U.S. very well. We are making good progress on that. With that also, I think we have an ability to make sure that the therapy actually becomes truly accessible for the vast majority of patients in the U.S.

Speaker #2: And then gradually actually fill out the network of centers to make sure that patients have a good reach and also wouldn't have too much of a distance to access the therapy.

Speaker #2: And that's kind of what we're in. So we're at this point in time, we keep on expanding. Into geography that we haven't been present in.

Speaker #2: Which we believe is important. To make sure we're serving the breadth of the US very well. And we're making good progress on that. And with that also I think we have an ability to make sure that the therapy actually becomes a truly accessible for the vast majority of patients in the US.

Dr. Christian Itin: This is when you look at the, you can look at the ATC locator and you see we have a very significant amount of centers basically almost in a U-shaped form, from Chicago all the way up through the Midwest down to the south and back up again way up to the west. There are clearly additional centers that we are opening up in between to make sure that we actually have a very good distribution there. That is sort of the way we look at that. Really a clear focus is to make sure that there is access in a reasonable distance. With that, I think having an attractive network of clinics available for the patients to access. With that, I think Rob, just to follow up on the OWS question and potential impact overall.

Speaker #2: So this is when you look at the you can look at the ATC locator and you see we have a very significant amount of centers basically almost in a U-shaped form, you know, from Chicago all the way up on the through the Midwest down to the south and back up again.

Speaker #2: To way up to the west. And there's clearly additional centers that we're opening up in between to make sure that we actually have a very good distribution there.

Speaker #2: So that's sort of the way we look at that. And really a clear focus is to make sure that there is access in a reasonable distance.

Speaker #2: And with that, I think having an attractive network of clinics available for the patients. To access. So with that, I think Rob, just a follow-up on the OS question and potential impact overall.

Robert Dolski: Yep, sure. Thanks, Oscar, for the question. Let me first comment. When you think about out-of-spec and kind of financially where things land, there is actually two places where this can go. It is important to understand what drives that. In certain situations, we do have an out-of-spec protocol that the site can choose to put the patient onto. If the patient does receive the dose, even though it is out-of-spec under that out-of-spec protocol, it actually lands in our R&D expense. What lands in cost of sales is out-of-spec product that is not administered under that protocol, effectively like a scrap charge that goes through our cost of sales. It is very hard to predict where patients will land in those two buckets. It is fair to say that our experience to date overall in terms of our out-of-spec rates have been very in line with the Felix study.

Speaker #4: Yep, sure. Thanks, Astika, for the question. So let me first comment. When you think about out-of-spec and kind of financially where things land, there's actually two places where this can go.

Speaker #4: And so it's important to understand what drives that. So in certain situations, we do have an out-of-spec protocol that the site can choose to put the patient onto.

Speaker #4: And if the patient does receive the dose, even though it's out-of-spec under that out-of-spec protocol, it actually lands in R&D expense. What lands in cost of sales is out-of-spec product.

Speaker #4: That is not administered under that protocol effectively like a scrap charge that goes through across the sales. So it's very hard to predict, you know, where patients will land in those two buckets.

Speaker #4: But it's fair to say that our experience to date overall in terms of our out-of-spec rates have been very in line with the Felix study.

Robert Dolski: We said in the past that that is going to land somewhere between a 5% to 10% kind of range in terms of the experience and to date what we have seen in the commercial launch.

Speaker #4: And, you know, we said in the past that that's going to land somewhere between a 5% to 10% kind of range in terms of the experience and to date what we've seen.

Speaker #4: In the commercial launch.

Speaker 6: Great. Thanks, guys. Then just a bit of a picture question on Europe here, on the European rollout. If you decide to launch in a specific country, let us say in the UK, would you expect patients to travel from neighboring countries to receive therapy? Have you seen this happening with other CAR T cell therapy launches in Europe? Maybe you can talk a little bit about the profile of OCATSL that might permit this to take place.

Speaker #5: Great. Thanks, guys. And then just a bigger picture question on Europe here. On the European rollout, if you decide to launch in a specific country, let's say in the UK, would you expect patients to travel from neighboring countries to receive therapy?

Speaker #5: Have you seen this happening with other CAR-Ts launches in Europe? And maybe you can talk a little bit about the profile of OCATSL that might permit this to take place.

Dr. Christian Itin: is a really good question and something we have been looking into. First of all, what we are seeing from a UK perspective is that there is a certain amount of medical tourism towards the UK for patients to get access. Typically, that medical tourism is coming from outside the EU to the UK, but there is a level of that. When we look within the EU, what we do see is that there are cross-border treatments that we certainly would see in a lot of the, particularly the border regions where, you know, the infrastructure may not be evenly distributed across the border. Some of you know that I am a Swiss national. I grew up close to Basel, which is very close to, obviously, Germany and France, literally bordering on both countries.

Speaker #2: It's a really good question. And something we've been looking into. So first of all, what we're seeing from a UK perspective is that there is a certain amount of medical tourism towards the UK.

Speaker #2: For patients to get access. Typically, that medical tourism is coming from outside the EU to the UK. But there is a level of that.

Speaker #2: When we look in within the EU, what we do see is that there is cross-border treatments that we certainly would see in a lot of the particularly the border regions where, you know, the infrastructure may not be evenly distributed across the border.

Speaker #2: You know, some of you know that I'm a Swiss national. I grew up close to Basel, which is very close to, obviously, Germany and France, literally bordering on both countries.

Dr. Christian Itin: It is quite typical that if there are complex cases, you know, children with complex issues or adults with complex issues, that they might actually be coming from the surrounding areas within Germany or France into the university hospital in Basel across the border to be treated there. There are also movements the other way if the specialty actually is on the other side of the border. That actually does happen. It is probably at this point difficult to quantify, but it clearly is not unusual to actually see that. To what extent that would be applicable for patients with ALL, I do not know. What we do know, and this is my old experience developing BioNTech, though, we had patients from quite a wide range of countries and certainly during clinical trials to access trials in Germany and looking for treatment in Germany.

Speaker #2: And it's quite typical that if there are complex cases, you know, children with complex issues or adults with complex issues, that they might actually be coming from the surrounding areas within Germany or France into the university hospital in Basel across the border to be treated there.

Speaker #2: And there are also movements, the other way, if the specialty actually is on the other side of the border. So that actually does happen.

Speaker #2: And it is probably at this point difficult to quantify. But it clearly is not unusual to actually see that. To what extent that would be applicable for patients with acute leukemia, I do not know.

Speaker #2: But what we do know, and this is my old experience developing Blindsight, though, we had patients from very quite a wide range of countries and certainly during clinical trials to access trials in Germany.

Speaker #2: And looking for treatment in Germany. And we also see that on the results of some of that on the commercial side as well. So it is very much I think it's a possibility.

Dr. Christian Itin: We also see that on the, there is also some of that on the commercial side as well. It is very much, I think, a possibility. I think it is an area we are looking more into. Obviously, this has a lot to do with the nature of the insurance and the payer setup and obviously getting clearance from the payers, which typically for certain emergencies that is clearly happening. We are looking into to what extent and what breadth this would be applicable here as well. It is not unusual to see complex therapies to be accessed across the border.

Speaker #2: And I think it's an area we're looking more into. Obviously, this has a lot to do with the nature of the insurance and the payer setup.

Speaker #2: And obviously getting clearance from the payers. Which typically for certainly emergencies, that's clearly happening. And we're looking into to what extent and what breadth this would be applicable here as well.

Speaker #2: But it is not unusual to see complex therapies to be accessed across the border.

Speaker 6: Thanks, guys.

Speaker #5: Thanks, guys.

Speaker 5: One moment for our next question. Our next question comes from Kelly Xu with Jeffrey. Your line is open.

Speaker #2: One moment for our next question. Our next question comes from Kelly Shee with Jefferies. Your line is open.

Speaker 8: Congrats on the progress and thanks for taking my question. As you are now expanding to 46 treatment centers across the U.S., I am curious if you could share learnings. If the early adopters and also with reordering comes from also high volume centers of Takeda, are you actually seeing a different pattern? Also for Germany and the UK, when could we anticipate the first revenue recording and also have a fallout? Thanks.

Speaker #6: Congrats on the progress and thanks for taking my questions. As you're now expanded to 46 treatment centers across the US, curious if you could share learnings if the early adopters and also with the reordering come from also a high volume centers of cicadas or you actually see a different pattern.

Speaker #6: And also for Germany and the UK, one could we anticipate the first revenue recording and also have a follow-up. Thanks.

Dr. Christian Itin: Okay, very good. Thanks for joining, Kelly. You are right. It is very interesting when we look at our centers in the US and we look at the use pattern across the centers. We have a range of centers that have quite exceeded our expectations in terms of the patients that they treated. Part of that expectation on our side was actually prior knowledge of the level of use of CAR T and this indication in the past. Clearly, that looks changed in a good number of centers. That has been very encouraging. We are also seeing centers where there are multiple physicians actually administering the product, which is another key metric that we are looking at.

Speaker #2: Okay, very good. Thanks for joining, Kelly. You're right. It's very interesting when we look at our centers in the US. And we look at the use pattern across the centers.

Speaker #2: We have a range of centers that have quite exceeded our expectations. In terms of the patients that they treated, and part of that expectation on our side was actually prior knowledge of the level of use of CAR-T in this indication in the past.

Speaker #2: And clearly that has changed in a good number of centers, so that's been very encouraging. We're also seeing centers where there are multiple physicians actually administering the product, which is another key metric that we're looking at.

Dr. Christian Itin: Not only have one physician at a center prescribed, but actually getting the use of the product more broadly distributed across all of the prescribing physicians for this indication. That is a dynamic we are following very carefully. I think it is one of the key areas that we are going to be focusing on for our centers. It is important to understand that most of the patients are, in fact, being, or expect that most of the patients with the relapsed refractory disease are going to be treated at those, give or take, 60 centers that we are targeting now.

Speaker #2: So not only have one physician at a center prescribed, but actually getting the use of the product more broadly distributed across all of the prescribing physicians.

Speaker #2: For this indication. That's a dynamic we're following very carefully. And I think it's one of the key areas that we're going to be focusing on for our centers.

Speaker #2: It's important to understand that most of the patients are in fact being are expect that most of the patients with the relapsed refractory disease are going to be treated at those give or take 60 centers that we're targeting now.

Speaker #2: And that gives you clearly a significant opportunity to focus from a commercial perspective. And really build on the relationships the connections, the experience at the center to actually keep expanding the use so that we are sort of getting to a place where the patients that are eligible for the therapy and can benefit from the therapy actually get access to it.

Dr. Christian Itin: That gives you clearly a significant opportunity to focus from a commercial perspective and really build on the relationships, the connections, the experience at the center to actually keep expanding the use so that we are sort of getting to a place where the patients that are eligible for the therapy and can benefit from the therapy actually get access to it. The dynamic I think we are seeing is very remarkable. Repeat use is one of the key things we are looking at. We are seeing a very nice adoption of repeat use across all our centers. We are really monitoring that very carefully and supporting that process. This has been very, I think, very interesting. The high volume centers have been phenomenal to see kind of the level of engagement and patient flow that resulted from that. We are clearly building on that.

Speaker #2: So the dynamic I think we're seeing is very remarkable. Repeat use is one of the key things we're looking at. We're seeing a very nice very a nice adoption of repeat use across all our centers.

Speaker #2: And we're really monitoring that very carefully and then supporting that process. So this has been very I think very interesting and the high volume centers have been, you know, phenomenal to see kind of the level of engagement and patient flow that resulted from that.

Speaker #2: And we're clearly building on that and we're sort of going to take the learnings from those centers also into the other centers. And then with regards to the UK and Germany, obviously those are two different processes from a patient access perspective.

Dr. Christian Itin: We are going to take the learnings from those centers also into the other centers. With regards to the UK and Germany, obviously, those are two different processes from a patient access perspective. We are in the midst of the current process in the UK. I hope that over the next few months, we can actually get to a resolution there. If positive, we would expect to be able to launch in the probably early part, end of this year, early part of next year. It is contingent on obviously getting a reasonable outcome that is economically viable for us. That is kind of what we are working towards. In Germany, we certainly want to sort of have more engagement on the physician, the patient side, but also with the respective regulatory bodies in Germany.

Speaker #2: We're in the midst of the current process. In the UK, and I hope that over the next few months we can actually get to a resolution there.

Speaker #2: And then actually if positive, we would expect to be able to launch in the probably early part end of this year, early part of next year.

Speaker #2: But it is contingent on obviously getting a reasonable outcome that is economically viable for us. And so that's kind of what we're working towards.

Speaker #2: And in Germany, we're certainly want to sort of have more engagement. On the physician, the patient side, but also with the respective regulatory bodies in Germany.

Dr. Christian Itin: At the same time, we are looking for more data to also become available over time from the experience, the real-world experience in the US, which we hope would also actually be supportive for these conversations. At this point, we are not guiding to sales in Germany because it ultimately is dependent on where we are going to end up in those negotiations. We are also looking at other European countries, and we may change the order of access within Europe based on where we are and what we know at this point.

Speaker #2: And at the same time, we're looking for more data to also become available over time from the experience of real world experience in the US, which we hope would also actually be supportive for these conversations.

Speaker #2: So at this point, we're not guiding to sales in Germany because it ultimately is dependent on where we're going to end up. In those negotiations, but we're also looking at other European countries that we may change the order of access within Europe based on where we are and what we know at this point.

Speaker 8: Super helpful. Thanks so much. For Autolus Therapeutics plc, curious for the ACR presentation in Q4, what other data points could be included beyond what has been presented in the past? Could you share some additional color? Maybe do you have other ongoing translational studies, maybe to tell us more on a B cell dynamic or some correlation to patient baseline characteristics to guide future development in autoimmune space? Thank you.

Speaker #6: Super helpful. Thanks so much. And also for autoimmune cures, for the ACR presentation in Q4, what other data points could be included beyond what has been presented in the past?

Speaker #6: And also could you share some additional color maybe? Do you have other ongoing translational studies? Maybe to tell us more on like a B cell dynamic or maybe some correlation to patient baseline characteristics to guide future development in autoimmune space.

Speaker #6: Thank you.

Dr. Christian Itin: Yeah, very good questions. Thanks, Kelly. With regards to the data at ACR, obviously, the key update will be related to the longer follow-up of the six patients that we had reported on at the R&D event earlier in Q2. I think that will give us a good idea of how the product overall actually is performing because we are going to have six plus months of follow-up with all the patients. I think that will be, probably the key part of the follow-up. We actually did enroll more patients on the study. There is also going to be earlier data from those patients that will be included.

Speaker #2: Yeah, very good questions. Thanks, Kelly. So on the with regards to the data at ACR, obviously the key update will be related to the longer follow-up of the six patients that we had reported on at the R&D event earlier in Q2.

Speaker #2: And I think that will give us a good idea of kind of how the product overall actually is performing because we're going to have six plus months of follow-up with all the patients.

Speaker #2: So I think that will be I think probably the key part of the follow-up. We actually did enroll more patients. On the study, so there is also going to be earlier data from those patients that will be included.

Dr. Christian Itin: I think that is obviously one of the key areas. We have been looking very carefully at a lot of different parameters for these patients to develop a good understanding of the pharmacodynamics, both of the product, but also on how we are impacting potential disease stations, etc. Those are our data sets that we are also pulling together and we are going to be looking at. We are looking at a range of, obviously, I have been evaluating a range of indications. Obviously, the first one that we sort of decided to move on is lupus nephritis. That is clearly where we are going to double down on. I mentioned the fact that we are obviously opening that study and we are making really good progress there and expect to have patients treated still this year.

Speaker #2: And I think that's obviously one of the key areas. We've been looking very carefully at a lot of different parameters for these patients to develop a good understanding of the pharmacodynamics both of the product, but also and how we're impacting potential disease stations, et cetera.

Speaker #2: So those are our data sets that we're also pulling together and we're going to be looking at. We're looking at a range of obviously have been evaluating a range of indications.

Speaker #2: Obviously the first one that we sort of decided to move on is lupus nephritis. That's clearly where we're going to double down on and I mentioned the fact that we're obviously we're opening that study and we're making really good progress there and expect to have patients treated still this year.

Dr. Christian Itin: That gives us, I think, will give us a very nice momentum in that study, also considering it is a very compact study, will give us a shot to also, frankly, be first in class in that indication. Secondly, we are obviously very interested in seeing the performance of the product in the progressive MS patients. There is going to be also a lot of analysis that will be done in those patients, translational type of analysis to understand the impact of the mechanism of action, etc., in addition to obviously the actual clinical readouts and the imaging readouts that we are going to be taking from those patients. There is quite a lot going on there. There is also obviously additional work that we are doing to look into additional indication options. But obviously, for now, very much focused on the indications I just went through. Thank you.

Speaker #2: And that gives us I think will give us a very nice momentum in that study also considering it's a very compact study will give us a shot to also frankly be first in class in that indication.

Speaker #2: And then secondly, we're obviously are very interested in seeing the performance of the product in the progressive MS patients. And there's going to be also a lot of analysis and that will be done in those patients translational type of analysis to understand the impact of the mechanism of action, et cetera, in addition to obviously the actual clinical readouts and the imaging readouts that we're going to be taking from those patients.

Speaker #2: So there's quite a lot going on there and there is also obviously additional work that we're doing to look into additional indication options but obviously for now very much focused on the indications I just went through.

Speaker #2: Thank you. Thank you. One moment for our next question. Our next question comes from Simon Baker with Rothschild and Company Redburn.

Speaker 5: Thank you. One moment for our next question. Our next question comes from Simon Baker with Rothschild & Company, Redburn.

Speaker 6: Thank you for taking my questions, too, if I may, please. Firstly, Christian, going back to the European launch outlook. For, shall we say, traditional drug launches, there is a fairly established routine of going in Germany first because you can set your price and then it gets adjusted and then work your way through the countries, ultimately receiving towards the end reimbursement in France. Clearly, that is not the same in cell therapy. So I wonder if you could just highlight any areas where there is a markedly different process of seeking reimbursement, which affects the order of countries in which you will seek to launch. Secondly, going back to the UK, at the same time that NICE was saying no to OCATSL, the MHRA introduced the world's first framework for point-of-care manufacture of cell therapies, including CAR T.

Speaker #7: Thank you for taking my questions too. If I may please. Firstly, Christian, just going back to the European launch outlook. For shall we say traditional drug launches, there's a fairly established routine of going Germany first because you can set your price and then it gets adjusted.

Speaker #7: And then work your way through the countries ultimately receiving towards the end reimbursement in France. Clearly, that's not the same in cell therapy. So I wonder if you could just if you highlight any areas where there is a markedly different process for seeking reimbursement which affects the order of countries in which you will seek to launch.

Speaker #7: And then secondly, going back to the UK, at the same time that NICE was saying no to OCATSL, the MHRA introduced the world's first framework for point of care manufacture of cell therapies, including CAR-T.

Speaker 6: I just wanted to get your perspectives on the pertinence of that to Autolus and if any other regulators in the world are looking at similar approaches. Thanks so much.

Speaker #7: I just wanted to get your perspectives on the pertinence of that to Autolus. And if any other regulators in the world are looking at similar approaches.

Speaker #7: Thanks so much.

Dr. Christian Itin: Yeah, good question. The first one is around kind of sequence of launch in Europe. You are correct for many of more traditional therapies.

Speaker #2: Yeah, good question. So the first one is around kind of the sequence of launch in Europe. You're correct. For many of the more traditional therapies, the sequence of launch tends to be Germany, at least traditionally, but Germany, and then you kind of walk through a series of countries to ultimately get the majority of them.

Dr. Christian Itin: of launch tends to be Germany, traditionally, be it Germany, and then you kind of walk through a series of countries to ultimately get the majority of them. That started to actually change somewhat. Germany is still the single biggest market, but in terms of market access, not necessarily the most attractive country in Europe. That's, I think, and that we're talking sort of pre the current administration. That's certainly been true. When we look at the current administration, I think there are a few things to keep in mind. First of all, the most favored nation process is one that actually references prices in various territories. There are two types of prices that tend to be quoted. One is a list price, the other one is a discounted price. Different countries actually deal with that in different ways. Some countries publish list prices, but not negotiated prices.

Speaker #2: That started to actually change somewhat. Obviously, Germany is still the single biggest market, but in terms of market access, it's not necessarily the most attractive country in Europe.

Speaker #2: So, that's, I think that's, and that we're talking sort of pre the current administration. That's certainly been true. When we look at the current administration, I think there are a few things to keep in mind.

Speaker #2: First of all, the most favorite nation process obviously is one that actually reference prices in various territories. Now, there are two types of prices that tend to be quoted.

Dr. Christian Itin: Some countries publish negotiated prices. You can imagine in the current environment where there's a lot of uncertainty around what processes are, frankly, what are the rules, what's going to be applicable, and so on and so forth. That creates, I think, a lot of questions for, frankly, all pharmaceutical companies looking at launching in Europe because, depending on where you are, what you agreed to, etc., you may actually have a discrepancy to the U.S. price, at which point you might actually be having an exposure that may or may not be reasonable to take. So that's one generally across the board, I think, something that every pharmaceutical company needs to look at, needs to think about because it's a very significant level of uncertainty and a very unclear set of rules that ultimately may apply or may not apply. So that's one area to look at.

Dr. Christian Itin: The second part is that, and this has been one of the real challenges in the cell and gene therapy space, is that the methodology to actually calculate the prices and provide market access has been designed for very different types of products and very different types of clinical data. When you look at the cell and gene therapy space, most of the indications we're developing in, we're developing in very high medical need settings, in smaller indications, and we're going for very high treatment effects. The reason, what that does is, allows us to actually develop, and which is what all regulators agree with, to develop with single-arm clinical trials for approval and demonstrating very clear-cut clinical benefit and risk-benefit profile, in those indications.

Dr. Christian Itin: We see that across the board. There is a huge disconnect between the view that we have with the regulators and the methodology that we are seeing for market access, which are all based on classical randomized controlled studies that then also assume you can do a direct comparison to a similar product. Quite often, that is typically difficult. You have not seen CAR T therapies that are being compared in a single trial. We are not going to see that going forward. That is not actually doable. What is then happening is your next best thing is you have got to kind of compare against some form of standard of care, which varies widely of what that actually is considered to be.

The reason uh, what that does is is allows us to actually develop and which is what all Regulators agree with to develop with single arm, clinical trials, for approval and demonstrating very clear-cut, clinical benefits. And, and um, uh, uh, uh, and risk benefit profile, uh, in those indications and we see that across the board.

There's a huge disconnect between the view that we have with the regulators and the methodology that we're seeing for Market access, which are all based on classical randomized control studies. That then also assume you can do a direct comparison to a similar product and quite often. And so that's typically then you know, obviously difficult you haven't seen, you know, uh car.

Dr. Christian Itin: In the absence of an actual direct comparison and randomized controlled data to your product, it creates a situation that the model does not actually allow you to quantify because the model cannot handle the data. As a consequence, you get a benefit, which is acknowledged, but it cannot be quantified. Hence, it is called a non-quantifiable benefit, which is an oxymoron in English. It kind of works in Germany where some of those concepts came from. The problem that that creates is a very significant disconnect that actually the system is not set up to value that. On top of that, you have, not in the UK, but for most of Europe, a disconnect between how healthcare actually and healthcare costs are looked at. You have obviously a very significant component that are infrastructure related.

RT therapies that are being compared in a single trial, and we're not going to see that going forward. That's not actually doable. So what's then happening is your next best thing is you've got to kind of compare against some form of standard of care, which varies widely of what that actually is considered to be.

Um, and then in the absence of a actual direct comparison and randomized, Control Data to your product, creates the situation that the model doesn't actually allow you to quantify because the model doesn't can't handle the data. And so, as a consequence, you get a benefit which is acknowledged, but it cannot be Quantified and hence, it's called a non-quantifiable benefit, which is an oxymoron in English. It kind of works in German where some of those Concepts came from

So the the the problem that that creates is is a very significant disconnect that actually the system is not set up to value that.

And uh, and on top of that, you have

Not in the UK but for most of Europe, a disconnect between how health care actually. And healthcare costs are looked at

Dr. Christian Itin: These are your hospitals, your staffing, your basic operation, etc., which is a huge chunk of the cost in any healthcare system. In most European countries, that is covered by taxes. It is opaque, not transparent, not visible to the public what that actually costs. What then actually is going into the assessment is, in essence, what is left over. That is mostly the therapeutic cost and the diagnostic cost and some very specific procedures. That is actually what is carried by the payers.

You have obviously, a very significant component. There are infrastructure related. Uh, these are your hospitals, your Staffing, your basic operation, Etc, which is a huge chunk of the cost in any health care System. Well in most European countries that is covered by taxes and it's opaque non actually, uh, not transparent, not visible to the public, what that actually costs.

What then actually is sort of going into the assessment is in essence. What's left over? And that's mostly the therapeutic cost and the diagnostic cost and some very specific procedures.

Dr. Christian Itin: That disconnect is very, very significant and creates a problem because then if you want to have a full value assessment, you cannot actually properly do that because obviously a big chunk, as an example of a one-off therapy that gives you a curative outcome, as a hypothetical example, that has a huge impact on your infrastructure bit and not using, not actually utilizing that infrastructure. That is not covered. That is not part of the model. Hence, we do have a huge disconnect in the view of value. That is where the fundamental disconnect is in the various systems. That is why there is this is more of an actual process to go through and why it leads to kind of quite different types of outcomes and different assessments.

Dr. Christian Itin: Those are, I think, a few points there to consider, which are just very different, significant differences in the underlying methodology and the way that, frankly, healthcare is being paid for.

Dr. Christian Itin: Great. Thank you.

Of 1 of therapy that gives you Curative accurate outcome as a hypothetical example that has a huge impact on your infrastructure bit and not using not actually utilizing that infrastructure. That's not covered, that's not part of the model. And hence we do have a huge disconnect in the view of value. And that's where the fundamental disconnect is in the various systems. And that is sort of why there is, this is more of an actual process to go through and why it is a uh it leads to kind of quite different types of outcomes and different assessments. So those are I think a few a few points there to consider which are are just very different significant differences in the underlying methodology and the way that frankly Healthcare is being paid for

Amanda Cray: One moment for our next question. Our next question comes from Yan and Zhu with Wells Fargo.

Okay, thank you. 1 moment for our next question.

Dr. Christian Itin: Hi. This is Jeff on for Yan and thanks for taking our questions. For the obe-cel launch in the U.S., can you provide any detail on how many patients were treated in Q2 and year to date? The second question on the longer-term SLE readout at ACR in late October. It was mentioned that additional patients have been enrolled beyond the initial six. How many patients do you anticipate including in the readout? I believe there were a total of 12 to be dosed in Phase 1. Have all 12 been treated, and were any of them adolescent? Thanks.

Our next question, comes from yin and zoo with Wells Fargo.

Hi, this is Jeff on for Yen, and thanks for taking our questions.

For the oh cattell. Launched in the US. Can you provide any detail on how many patients were treated?

In the second quarter and year to date. And then a second question on the longer-term SLE readout at ACR and late October.

Dr. Christian Itin: Yeah. Very good question. First of all, we have not guided on the number of patients, but you can actually backtrack the numbers, I think, reasonably well, from knowing the cost of the therapy. We haven't given a detailed number there, but I think you get very close just by backtracking. The second is related to the number of SLE patients. We obviously continue to dose patients. We had a small cohort at an elevated dose level of 100 million cells, and we have expanded the trial to include three adolescent patients. We do not expect, given the timing for the data cut, to actually have adolescent patients in the analysis. The focus will be on the adult patients, and we'll give an up-to-date view on the experience with the 50 million and probably initial experience on 100 million.

I was mentioned that additional patients have been enrolled beyond the initial six. Um, how many patients do you anticipate including in the readout? I believe there were a total of twelve to be dosed in Phase 1. Have all twelve been treated, and were any of them adolescents? Thanks.

Yeah, very good question. So, first of all, um, we have not guided on the number of patients, but you can actually backtrack the numbers. I think reasonably well, um, from the uh, knowing the cost of the therapy but we haven't given the detailed number there. Um, uh, but I think you get very close. Um, just by backtracking, the second is related to the number of SLE patients. Uh, we obviously continue to do those

Dr. Christian Itin: Got it. Thank you very much.

Patients. We had, um, uh, a small cohort at an elevated, uh, uh, at an elevated dose level of 100 million cells and we have, um, uh, uh, expanded the trial to include, uh, 3 adolescents. Um, we are, do not expect given the time if the data caught to actually have adolescent patients in the analysis. The focus will be on the adult patients. Um, and uh, uh, will sort of give an up-to-date view on the experience, um, uh, with the 50 million and uh, and probably initial experience on 100 billion.

Dr. Christian Itin: Thank you.

Amanda Cray: One moment for our next question. Our next question comes from Max Dahl with Goldman Sachs. Your line is open.

Got it. Thank you very much.

Thank you. 1 moment for our next question.

Dr. Christian Itin: Hi. This is Max for Roger and Sharma. Thank you for taking my question. First one is, could you comment on what proportion of your centers are now operational and enrolling patients? How should we think about the revenue momentum and trajectory? Is the growth between Q1 and Q2 a good run rate for the full year? The second question is about the lupus Phase 2 trial. Could you talk us through when we could see data from this trial and what you see as the bar for success? Thank you.

Our next question comes from Max D., with Goldman Sachs. The line is open.

Uh, hi. This is Max for Roger and Shama. Uh, thank you for taking my question. Uh, first one is, uh, could you comment on, uh, what proportion of your centers are now operational and enrolling patients?

And uh, how should should we think about the revenue momentum and trajectory is a growth uh between 1 and 2 Q. Good run rate for the full year.

Dr. Christian Itin: Yeah. So, thanks for joining, Max. The momentum we are seeing has been very positive first half of the year. As we indicated, we do see an impact from the resolution of the CMS decision on the pricing because it had an impact on the centers to adjust their actual internal policy and procedures. During that process, some of the centers were not enrolling patients or had to slow down enrollment of patients. That has an impact because that obviously then goes through given the time it takes to manufacture, release, and ultimately treat the patient. We are expecting to have an impact in the current quarter. We expect to be outside of any impact related to the CMS decision in the fourth quarter. That is kind of where we are. We are kind of obviously have a very good first half.

Uh and the second question is about uh the lupus uh Phase 2 trial, could you uh uh talk us through 1. We could see data from this trial and what you see as the the bar for success. Thank you.

Yeah, so so thanks for joining Max. Um, so the the um, momentum obviously we're seeing has been very positive first half the year as we indicated, uh, the um we're doing. We do see an impact from uh, the resolution of the C, CMS decision on the pricing, because it had an impact on the centers to sort of, adjust their actual internal policy and procedures. And during that process some of the centers were actually not enrolling. Uh not enrolling patients, you have to slow down involvement of patients. So that's an impact because that obviously then, you know, wrap all go through given the time, it takes to their manufacturer release and actually ultimately treat the patient. So we're we're expecting to have a

Dr. Christian Itin: I think we had a very good second quarter, and we think we are going to actually overall have a very positive continuation in the second half of the year, but we are not going to at this point can give you more guidance than that. With regards to the centers that are active, out of the 46 centers you see on the access page, the vast majority of those patients actually have treated obviously their patients. There are obviously some very new ones that are actually starting now to be have are now ready and are ready to actually receive patients. Those are obviously in the process of actually getting their first patient, but the vast majority of the centers that you see on the ADC locator actually have been already treating patients, and many of them actually have treated multiple patients.

Impact. Um, uh, in in the current quarter, we expect to be uh outside of any impact related to CMS, uh, the CMS decision in the fourth quarter. So that's kind of where we are. So so we're, you know, we're, we're kind of obviously have a very good first half. Uh, I think we had a very good second quarter and we think we're going to, we're going to actually overall have a very positive continuation, um, in the second half of the year, but we're not going to at this point can give you sort of more guidance than that.

Dr. Christian Itin: The question related to the lupus nephritis study and when to expect data, I think that is premature at this point in time. We have indicated, I think the regulatory hurdle that the trial is basically designed to take. As we discussed in the Q&A session at the R&D event, there is obviously a regulatory hurdle, but there was also an expectation that we are probably going to exceed, or would like to set that level to be exceeded. In terms of data, that is too early to tell. We are starting the study up. We have not enrolled a single patient at this point. We expect to have enrolled patients by the end of the year. This is premature to actually give guidance on the timeline for enrollment and data. Thank you.

With the vast majority of the centers that you see, on the, on the uh, uh, ATC locator actually have been, um, already treating patients and many of them actually have treated multiple patients.

Um, and then the, uh, the question related to the lupus nephritis study and went to expected data. I think that is premature at this point in time. We have indicated, um, I think the regulatory hurdle, uh, that the trial is basically designed to, um, to sort of take, um, and as we discussed that the, uh,

In the Q&A session at the R&D event. Uh, there's obviously a regulatory hurdle, but we're also an expectation that we're probably going to exceed, uh, or would like to set that level to be exceeded. Um, but in terms of data, that is too early to tell, we're start, we're starting the study up. We have an enrolled, a single patient at this point, we expect to have involved patients by the end of the year. Um, uh, so this is premature to actually give guidance on the timeline for enrollment and data.

Amanda Cray: I'm not showing any further questions at this time. I'd like to turn the call back to Christian for any further remarks.

Thank you.

Dr. Christian Itin: First of all, thanks a lot for joining. Obviously, great quarter. We are keeping you updated. As we go through the third quarter here, we are very pleased with the dynamic we are seeing and the reception of the product. We keep pushing, and we certainly keep pushing our clinical trials and are looking forward to looking for ways to actually make the product available to a larger number of patients beyond adult ALL. We will obviously show first data in that regard towards the end of the year, both on the SLE side as well as the pediatric ALL side. With that, I would like to thank you for joining and wish you a great summer. Thank you.

I'm not showing any further questions at this time, I'd like to turn the call back to Christian for any further remarks.

Well, first of all, thanks a lot for joining. Uh, uh, I would say a great quarter. We're uh, keeping you updated. The I would say as we go through the third quarter here, um, we're very pleased with the dynamic, we're seeing, um, and the reception of the product we keep pushing and we certainly keep pushing our clinical trials, and, uh, are looking forward to sort of, uh, looking for ways to actually make in the product available to a larger number of patients Beyond at all day LL. And

Amanda Cray: Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.

Will obviously show First Data in that regard towards the end of the year, both in the, on the SLE side, as well as the Pediatric. Uh, alll site with that, I'd like to thank you for joining and, uh, wish you a great summer, thank you. Thank you, ladies and Gentlemen, let's conclude today's presentation, you may now disconnect and have a wonderful day,