Q3 2025 Autolus Therapeutics PLC Earnings Call

Good day. Thank you for standing by.

Welcome to Ottawa. This is the Autolus Therapeutics third quarter 2025 financial results governance call. At this time, all participants are in 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 *1, 1 on your telephone. You will then hear an automated message advising that your hand is raised.

Please note that today's conference is being recorded.

I will now hand the conference over to your first Speaker. Amanda Craig, executive director for best Solutions. Please go ahead.

Thank you, Olivia. Good morning or good afternoon, everyone. And thank you for joining us on today's call with me. Our chief executive officer Dr. Christian, iten and Chief Financial Officer. Rob dolski.

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, these may include, but are not limited to statements regarding status of the ongoing commercial launch of a council in the US.

Ottawa lists manufacturing sales and marketing plans for a castle.

The market potential for okay, Castle.

And the status of clinical, trials, development, Andor regulatory timelines and Market opportunities for Obel and our other product candidates.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views. Only. As of today, we assume no obligation to update any such forward-looking statements.

For 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 investor section of our website.

On slide 3, you'll see the agenda for today's call as usual. Christian, will provide an overview of our operational highlights. Rob will then discuss the financial results and Christian will conclude with upcoming, milestones and closing remarks.

We'll then take questions.

With that, I'll turn it over to Christian.

Thank you very much Amanda and let's move to slide number 4.

Um, welcome everybody. And thank you for joining us at the third quarter Financial results. Um, we had a very good quarter and I think we're off to a, uh, an excellent launch, uh, with okcastle in, uh, the US, uh, treating or targeting patients with relapsed refractory P. We managed, uh, in the first 9 months, to achieve Market leadership, um, broad Market, access and coverage and established reliable product delivery

We also believe that there is a significant opportunity to grow the carti market in this indication. And we're very pleased with the feedback, we're receiving from Physicians. Using the product, and the interest expressed in, uh, conducting investigators sponsored trials in Frontline settings, um, in all as well.

In our operation, and our ability to deliver product in a timely and high-quality Manner. And we're now actually focusing on optimizing our operation and really leveraging the Investments that we've made in our infrastructure and our systems. And, uh, have now an opportunity with a lot of data that we collected. Um, along the way in these first 9 months to optimize our processes and with that, uh, Drive efficiencies going forward,

Importantly, in parallel, we're expanding, uh, the opportunity that we believe we have with OBS cell or a council and are looking to build a pipeline in a product and are working on, uh, 3 current indications, the first 1 is in pediatric alll where we're uh initiating a potentially pivotal study, a phase 2 study in lupus and Fridays also with an intent uh uh to uh drive towards a label and an exploratory Phase 1 study in uh Progressive multiple sclerosis.

In short, we're focusing on driving market share in all improved, the margins and expand Beyond Al.

Moving to slide number 5 quick uh view on the performance that we have today in our launch of a castle in the US.

We have achieved 21.1 million in net sales in the third quarter. And we have the third revenue of 7.6 million indicating that there is a good number of products currently sitting at the centers. At the end of the third quarter, not yet infused and ready for your infusion in the fourth quarter.

The 9 months ended September 30. We achieved 51 million in sales for the product.

When we look at how we're executing on product delivery and patient access, we're tracking very well. We had, uh, at the beginning of the year, told you that we're targeting to authorize 60 centers, uh, by the end of this year, we achieved that goal. So we're at 60 centers today and we will keep adding additional centers to fill out the geographic gaps that we're having across the US. And with that, uh, minimize the travel distances for patients to access therapy,

The manufacturing success rate is well above 90% And we have attained patient access for more than 90% of us covered lives. So this gives us a very strong Foundation uh, both from a rollout perspective but also from a dynamic perspective. Uh, as a result looking into the fourth quarter and into 2026,

Moving to slide 6.

We believe there's a significant opportunity to increase the penetration and grow the car key market share.

When we look at the level of, uh, carti Market, carti use before, our product entered, uh, commercialization in 2024, we're seeing about 15% market, share for carti Therapies in this indication. When we look in the treatment centers, the 60 treatment centers that were active in now, which actually covered the vast. Uh, majority of the relapse refractory, uh, alll patients, we believe that the market share within that group of 60 centers at this point is probably around 20%. This gives us an opportunity for substantial growth within the centers that were already present in. And the footprint, we already built, this is about relationship building and deepening, those relationships to really drive the uptake further and actually, uh, drive towards the types of levels of uptake that we've seen a few years ago Blindside to achieve in this particular indication.

The importance. I think of the experience that the Physicians are making with the product are really cannot be overstated. The actual hands-on experience is critical here and we believe that the the way that we're seeing the product perform and also what we're seeing uh, being reported or planned to be reported at ash from the rocket Consortium indicates that, there's a very positive experience. Uh, that the Physicians are making with the product consistent with the experience that we have gained through our development and in particular also within our registration study, the, Felix study

Moving to slide number 7.

Um we're going now focusing we're had a quick look at the launch. We're now focusing on the uh key approaches here that we're looking to optimize our operation and really improve the overall margins and efficiencies

Quarter first off, Miranda Neville. Who some of you may actually have met in the past has been actually with the company for about 5 years. And initially worked on uh, on the, uh, planning and setup of the nucleus facility. Then actually took over the overall program team for obl and drove the program through the registrations and, uh, getting us the approvals in the US and Europe. And also, uh, in the UK. And now, actually returns back to product delivery, in the role of Chief technology officer leading the entire team.

Um, Cynthia Pina is has taken over uh, from uh, Brent rice. Uh, as the US Chief commercial officer and Country manager, um, and has an extensive set of experience over over in oncology, um, in Immunology. But most importantly for us in cell and gene therapy, she has an extensive experience launching products in this space and we believe is extremely well, positioned to actually grow the opportunity. For our Council from here forward.

And then uh Patrick melani who's uh, taken over from Andrew mirka as the chief accounting officer reporting into Rob dolski. Uh, Patrick joins us from Horizon Pharma where he's been, uh, going through the very significant growth that that company went through and also increasing in complexity and belief is is in uh, has an excellent background to really help us actually go through the

The next phase of, um, optimization and also of growth for the company.

Now, I would like to sort of highlight also the 3 members of our team that actually handed over the responsibilities to Miranda. Cynthia. And Patrick, uh, Dave brochure, who's been the chief technical officer, um, uh, um, handing over to Miranda has done a, an excellent job building our product delivery team. Um, uh building also the nucleus facility taken it into operation and launching the product. There's a huge accomplishment actually go through that entire growth phase and building, uh, that entire part of the operation from the ground up. And there's a huge thanks that goes today. Uh, for that incredible achievement. Um, they, uh, Brent rice. Um, predecessor of Cynthia has done a fantastic job, building a very strong commercial team. Um, the system is required and actually executed an extension, an excellent launch of the product uh and getting us really rolling. Uh, now I think in a way that is quite remarkable and gives us, I think a great outcome

Look, as we're sort of looking into 20 2026 and have under the uh, leadership of Cynthia and also Andrew mirka had built. Obviously, a lot of the uh infrastructure pieces from a corporate side perspective, that Patrick's now taken over and uh also uh, great thanks, going to Andrew as well. So with that, I'd like to move to slide number 9.

And just a few thoughts uh, in terms of the ability to really Drive efficiencies and cost savings, I think where we are, is that we have now built a very strong Foundation through the strong launch performance with a highly reliable product Supply. That's been the critical piece that we had to actually build and establish this year. And frankly has been a very significant challenge for most companies launching cell therapy in a particular, carti products having established that. Now, gives us an ability. Also, with all the learnings that come out of that experience to really streamline the processes, the training wheels can go off and we can now focus on making sure that we're just simple that we as simple as possible and straightforward as possible. In terms of the processes that we run.

Take those processes that we decided that are necessary optimized them and automate them to the extent. We can and importantly innovate and 1 of the the 2 key areas that we're planning to and we're focusing uh to innovate on is really on manufacturing where there's a lot of activity going on on technology um, on automation. Um, but also on the biology side and on Market access, uh, to make sure that we can actually increase the footprint, the geographic footprint, um, for the product and the availability to actually serve a, a substantially larger, uh, group of patients going forward,

Study called catalysts. That is ongoing. We are reporting The Phase 1 portion of that trial, um, at Ash. And we also have just received, uh, a few weeks ago, an rmat designation for the program as well. We're in the process of starting up the phase, 2 portion, um, of this trial. And we're excited about the opportunity. And obviously the, uh, the opportunity to share, uh, the initial experience from our Phase 1.

The second study is the Carlile study in severe systemic lupus patients. We had initial data presented at ACR, and I'll briefly talk about that in the upcoming slides. We are planning for an oral presentation at ASH, with a slightly expanded data set.

Lupus nephritis is the focus for our first pivotal study um, in uh, autoimmune disease. The study is called Lumina. Um, and we expect to have the first patient in the study before the end of the year. And then finally uh our exploratory Phase 1 study in Progressive, multiple sclerosis called Bobcat, um Bobcat started um in the third quarter and uh we had our first patient dosed in October.

Now, in addition to the internal studies, um, we're obviously are going to support the investigator, sponsor trials. Um, exploring the use of a cattle in Frontline settings, but also are obviously, uh, uh, Will Follow The Real World Experience, uh, that the rocker Consortium is collecting for Obel in uh, relapse refractory at all dll. And it's truly a reflection of the real world experience of our customers collected by them and analyzed by them.

So with that, we're going to slide number 12. And just a few words on the data that we actually presented at the ACR conference in Chicago, uh, just at the end of October.

Um, we did present the experience that we had with the product at the 50 million fixed dose, uh, level that we have evaluated in 6 patients.

Um, these patients are patients with very advanced disease. Um, very high, uh, slight high scores at inclusion, very significant impact on their kidney function.

We have at least 6 months of follow-up with the patients that were reported on, and we have seen that 5 out of the 6 patients achieved partial remission. We have 50%, or 3 out of 6, achieved complete renal remission, and we have no evidence of new disease activity up to 40 months of follow-up. The patients do not receive any lupus-directed therapy.

Um, also obviously when you have you know, Doris remission, you're the steroid levels that patients may receive are at or below 5 milligrams per day.

The safety profile with the product was very positive. The patients had no icons, no, high-grade Saito syndrome. No dlts at the 50 million cell dose level PK and biomarkers. We showed, uh, quick, uh, Bell depletion after infusion. Um, we saw then, obviously that a, at the point when the, uh, cartas cells, uh, stopped persisting that the B cells started to recover and we do see, uh, a predominance of naive B cells and reconstitution more of that data, uh, is expected to be shown at Ash.

Uh, when we look in terms of now, the next steps with the study um there are 2 directions that we're going to go. Uh, that were sort of exploring further, 1 is actually at 50 million cellos, um, adolescent patients, aged 12 to 17, uh, a lot of time for a lot of these patients with early onset of Lupus. Uh, they have a particular challenging course of the disease and there's a very significant medical need. In fact, when you look at the population, the highest medical need is in the youngest patients.

Um so this will be explored at 50 million cell dose which is obviously equivalent to as you may remember the Pediatric uh level that we would use uh, and just translate it into a fixed dose level.

Um and uh we're also exploring um, 1 additional dose level um on the adult side to sort of round out the experience, um, in the SLE patients. Um, the recommended Phase 2 dose is already defined as 50 million cells.

No high-grade infections that we have observed in the patients and not unusual for patients. That have a significant kidney involvement. Uh we have seen uh patients 5 patients with transient hypertension 3 had pre-existing hypertension of the 5.

Um, when we now look on slide 14, uh, this is a view of the Slate, I scores and the progression of the Slate, I scores over time looking at each individual patient and what we're looking at. If you look at the screening uh bars which are on the left hand side or the respective charts, you can see that every 1 of these patients had a significant, uh, kidney component. This is the blue, uh, part of the bar and then the other colors actually relate in part to, uh, increase DNA binding as well as low complement, which is the black and the, and the yellow. And the other colors actually are linked to other forms of uh, autoimmune manifestation, um, and inflammatory processes. Uh, whether this would be, uh, mucosal ulcers rashes arthritis, uh, alopecia. Um, that we have seen in these patients.

so as you can see, these patients have not just actually a renal component, they have a multitude of of, uh, disease manifestations and you can see as these patients progress over time,

These manifestations actually are very quickly reduced and we then actually see uh with a bit of a lag also in as the majority of the patients, a reduction of the renal signal as well. So all very encouraging, what's important is again, none of these patients actually had any form of relapse or flare,

So moving to the next slide, this is a slide number 15. Uh this is a quick look at the uh Doris assessment that. You can see that 5 out of 6 patients, had a median achieved, a Doris remission with a median onset of 5 months. Um and uh again in terms of the steroid dose that 5 months 6, all patients had steroids tapered, uh to less than or equal 5 milligrams per day.

And no other medic. No other uh lupus medication. Of course.

Now, when we look at the upcoming data presentations and slide 16 in oncology pediatric, alll poster presentation Phase 1 experience from the Catalyst study, adult, alal, first and oral presentation from the Felix trial. Looking at the impact of the Product cell phenotypes of the actual features of the product and the linkage to the uh longer term outcome in these patients. Um, and then second a poster um which is looking at cartas sell persistence at Mount 3 and the ability to actually predict outcome based on that data.

Uh, for these patients, the longer term outcomes again, experience from the Felix, from the Felix study.

On the autoimmune side as mentioned, we have an oral presentation for the Carlile trial and uh we uh just want to highlight the fact that the rocker Consortium has several presentations 1 of which looks at the uh, patient characteristics. Toxicity response after real world administration of both Obel and brexit sell alongside the same time Horizon within those centers, which at least to my knowledge is probably the first time we're seeing, uh, ah, ah, basically data collection of 2, cartas in the real world setting in parallel.

Um, with that, um, we're heading to financial results and uh, heading over to Rob.

Thanks Christian and good morning or good afternoon to everyone. It's my pleasure to review our financial results. For the third quarter of 2025, I'll be moving in the slide deck to slide number 18,

In the third quarter, net product revenue for the three months ended September 30, 2025, was $21.1 million compared with $20.9 million in the second quarter.

Our deferred revenue balance at the end of Q3 was 7.6 million compared to 2.1 million in Q2.

As a reminder, the deferred revenue balance represents products delivered to the authorized treatment centers but not yet. Infused for the purposes of Revenue recognition in the p&l.

Moving on the cost of sales in the third quarter. Um that amount total 28.6 million

As we've discussed previously, this amount includes the cost of all commercial product, delivered to the authorized treatment centers, including the product delivered, but not yet. Administered to patients, essentially the manufacturing costs related to that deferred revenue. I just mentioned

Inventory reserves are write-offs for third-party royalties for certain technology licenses, as well as idle capacity.

Our expectation is to see cost of sales improvements as volumes increase and as we improve efficiencies in our own manufacturing operations as Christian spoke about earlier.

Moving on, our research and development, expense was 27.9 Million. For the 3 months, added September 30th 2025.

That's compared to 40.3 million during the same period in 2014.

This change was primarily driven by the commercial manufacturing related employee and infrastructure costs that is shifted from R&D into our cost of sales and inventory accounting.

Our selling in general and administrative expenses increased to 36.3 million for the 3 months, ending September 30th 2025.

And that's compared to 27.3% 2024.

And finally, net loss was 79.1 Million for the 3 months. Ending September 30th 2025 reduced from a loss of 82.1 million for the same period in 2024.

Our cash cash equivalents and marketable, securities at September 30th, 2025 total 36667.4 million as compared to 588 million, at the end of December 2024,

This decrease is primarily driven by net cash views and operating activities and also impacted by a delayed cash receipt of approximately 21, 20.1% from the UK hmrc.

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 Obel and relapse, refractory, adult, all, and to generate data in the 2, pivot trials in lupus, nephritis and pediatric all as well as the exploratory Phase 1 trial in Ms.

I'll now hand back to Christian to wrap up with a brief outlook on expected, Milestones first, Jim

Thanks, Rob moving to slide 20. Um, we expect 2 obviously key data points. Um, uh from our key trials, uh, at Ash related, to the Pediatric study and the uh, SLE carile study. Also, there's the, uh, additional 2 presentations. I already mentioned, um, coming from the Felix study. We then actually are in the startup obviously of 2 additional trials. The Lumina trial and lupus, nephritis, our Phase 2 study, and the allar

In patients with light chain AMOLED doses which we're doing in collaboration with uh UCL both of those programs expected to have their first patient um uh before year end. So with that uh, moving to slide 21, the focus is clearly for us to drive market share in the all day. LL improved margins and expand beyond all. And with that um, I think we're ready to open up for questions.

Thank you. Ladies and gentlemen, to ask a question.

Time. You will need to press star 1 1 1 on your telephone, and wait for your name to be announced. So we try your questions simply press star, 1 1 1 again.

As a reminder, please limit yourself to 1 question and 1 follow-up. You may get back into the queue for additional question if time permits please stand by while we compile the Q&A raster,

now, first question coming from the lineup,

which is now open.

Hey guys, good morning. Thanks for taking my question. I got a simple 1. Can you maybe talk to us a little bit about you know, the patient flow that you're getting in here. Um um, and the anticipated patient will going forward. Um, What proportion is patients? Do you think are uh patients, who might have been who were in the near term were were planned to give? Um uh Tartus. And for maybe had a treatment decision Changed by The Physicians to give uh to give all cats. So thank you.

In the space. Um, overall we see, um, I think very consistent, um, you know, access of the, of the product and I think very consistent use, um, uh, across the centers. Um, and we're looking forward to obviously getting, uh, with the additional centers that are opened. Uh, you know, so preparing, uh, running through this border, but also preparing for, uh, 2026 and, uh, I think very excited with the dynamic we're seeing. And I think, uh, we'll have a, uh, a nice. Um, I think reception of the additional data that we're expecting at Ash including uh, The Real World experience with the program.

Thank you, Nan. Next question coming from the lineup and Company your line is now open.

Good morning everyone. And thanks. Uh, for for taking our question, just uh, maybe a quick 1 on on competitive, positioning for Oberon. Pediatric patients is this a similar concept to um what we're seeing uh in the adult relapse refractory patients, meaning that differentiating on safety or um how how are you thinking about this? Thank you.

Yeah, thanks Gail. Ugh, good question. So I think that the the first part I think is to look at the uh actual patients that are eligible. Pediatric patients that are eligible for carti therapy and 1 of the key groups of patients that are actually not eligible for carti therapy or high-risk patients. So um, the patient population that we're focusing on is certainly, um, includes the high risk patients as well. What we do know, obviously know, and you've seen that, um, uh, from our, uh, you know, prior Publications, going all the way back to the carpal study, um, in, in, in, in, in 2019. Um, is that we do have obviously, also in children, a very good safety profile and the very good efficacy profile. I think having, uh, consistent reliable access to product, uh, is absolutely Critical with pediatric patients and expanding, um, the the access, uh, to patients their high risk patients, I think is particularly important because that's the group, they're currently has very limited options.

so that's kind of the key Focus for the program and uh, you know is frankly reflected also um, by frankly, The Physician interest that, uh, we have seen and received and were behind the uh, the decision that we took here, also to move into, uh, the Pediatric setting understanding that, there is a very significant need that they see, um, for, uh, for a product with the properties that they they see for OB sell

Thank you very helpful.

Thank you. Thank you.

No, next question. Coming from the lineup. Tell him, sit with mujo group.

Great. Um, congrats on the progress guys. Um, Christian Rob, maybe just uh I'll ask 1 and then the follow-up as well. Um I guess the first 1 just I'm thinking about 3 Q over 2q performance of a cat. So was there something in particular that drove the more or less flat? It's just since atc's Tik Tok quite meaningfully quarter of a quarter. Is it, are you? Are you starting to see some seasonality in the business with holidays Etc? And, you know, how does this relate all to 4 CES or pent up demand there? I know there's a deferred revenue so that's question. 1 and then, just on the, on the follow-up question on Gross margins. Um, Rob, curious, curious how you're handling DNA, um, in the cogs. We we learned from Ivins this quarter that they had loaded a bunch of DNA into into their cogs that are now stripping it out.

To at least optically, improve gross, margins. Curious how much of your cogs

DNA or how you're exactly handling that. Thank you.

And obviously that, um, you know, had contributed to the, uh, the the performance that we were seeing, uh, for the third quarter as well. And we did highlight that also at the at the Q2 coal that this is likely going to be the dynamic we're seeing. What is obviously very encouraging is when you look at the uh, deferred revenue is that obviously we have had a very healthy uh amount of patients that actually got manufactured for and were active uh that were ready. Also then for Infusion into the fourth quarter. So that's, you know, kind of I think tells us we're kind of behind that impact you have from CMS which was sort of bridging um, between the second and the third quarter. And in terms of seasonality uh, in the fourth quarter I think you know this is going to be our first fourth quarter. We're going to be running. And so at this point I don't think we can easily judge. Uh, what the impact? What it might look like if there is impact and what it would look like. We're obviously going now into the uh uh Thanksgiving week. Um, in a short, in a short while uh, Ash conference which obviously impacts a number of the Physicians that we're working with. But also,

Also then obviously the Christmas break. Um, I think at this point, it's hard to it's hard to actually estimate um and uh, you know, we'll need to sort of actually go through that and actually gain that experience, I don't think there's something that's easy to sort of actually um uh sort of estimate or adjudicate at this point.

With that. I'm handing over to Rob for the growth margin question. So Selene, thanks for the question. Um, So currently with respect to any kind of deep depreciation amortization. Um, it's kind of very typical accounting treatment. So you absolutely see depreciation from the nucleus, the manufacturing facility flowing through cost of sales. There are, you know, kind of non-cash stock-based comp, it's also in there as well as um some commercial Milestone amortization.

Um, that occurs in the cost of sales line. So we haven't broken that out. I think it's um,

Certainly, as we look into next year, you know, we are, we're already starting to think about, you know, how do we adjust, or how do we think about Communications for next year? And so, it might be something that we can

Think through a little bit more. But right now it's it's kind of presented at the very typical standard way.

Okay, thanks so much, guys.

Thank you.

Thank you.

Our next question, coming from the line of yanzu with Wells Fargo security. Your line is now open.

Great. Thanks for taking our questions. Um, I was wondering if you could uh uh, talk about uh, share grow, uh the uh um uh carti share growth, uh a little more uh as you uh uh alluded to uh in your prepared remarks. Uh, where do you do you think?

The share growth, uh, will come from, uh, in in the current.

Uh, kind of treatment landscape uh, in B, uh all. Um and um and also if if you could comment on any Frontline uh consolidation use

Um, that you see in the real world.

Um, and maybe uh, as a follow-up, uh, in terms of, uh, terms of uh, autoimmune diseases, um, can you give us a an updated, uh, thinking on the lay of land? Um, based on new data from various C players, as well as by specific players? And how does that? Um,

Uh affect uh the positioning um of uh OB sale uh going forward. Thank you.

Okay, thanks a lot on your own. I think these are 3 questions, so I'll I'll try to tackle those uh, in 1 go. So, first of all, uh, the the question of growth where does where can growth come from? I think, what's important to understand is that when we look at the carti penetration, at this point in time,

Um, in the relapse refractory adult alll setting at the center were already present in it is at approximately 20%.

Um, to put it differently, the majority of the patients at this point are not yet, receiving carti therapy and that gives you a significant opportunity for growth, um, in in the current centers that were already active in, um, and that has to do, obviously in a change of practice because of these patients, get treated today, uh, typically without a transplant or other, uh, therapeutic modalities. And so, there is a, a significant opportunity to keep growing for the centers to gain experience for the physician to get comfortable with the treatment modality and to grow from there into the the broader set that's captured in our label. Um and that is currently at this point uh uh many of these patients receiving other types of treatment.

And that builds confidence. So the experience that we think actually, will 1 of the key elements of experience is obviously the safety, which is the immediate experience. But the second part is also that these centers have obviously started treating, um, the early centers starting treating patients in the uh, you know first half of of this year. They now start to actually get a feel for the longer term outcome of these patients and the efficacy not just the responses but also the longer term outcome. And we also believe that that uh visibility for those centers and the Physicians of their own patients, reaching longer term outcomes. I think will actually have a reinforcing effect. And so, those are the key parameters that we're working on and it's not just the the way that we're thinking about it is also when you're going to, when you look at the abstract from the rocket data are also, then will will see the actual presentation. You start to get a good sense of indeed. That that's actually also reflecting very much of what the Physicians are seeing and how they're thinking about the product.

Those Physicians that actually have already gained substantial experience. Are thinking actually already quite a bit beyond the current setting and they're considering running uh investigators sponsored trials in the Frontline consolidation setting so that's that's already happening which tells you something about what the perception is of these Physicians where the product actually should go in their view. Um, what we do not see and I wouldn't expect to see is actually any form of Frontline use for an extended period of time because

Obviously, we do not have data, uh, in Frontline. Setting, nor do we have the labeling Frontline setting.

So, it's not something that we expect to see, um, for the upcoming, uh, uh, period ahead of us. Um, and um, you know, certainly with more experience and potentially changes in guidelines, that may change over time. But that will take time to develop

um, and then the last question is related to

The competitive landscape in autoimmune disease. Um, I think was very interesting to see the, uh, the data that was presented in the uh, uh, at the ACR conference. Um, I think encouraging that there's been obviously there's a, a good overall. Um, I think shared view around across data that indeed. The carti therapies irrespective of the nature of the carti therapies. Um do give a a positive uh, outcome of right, positive outcome for patients with autoimmune disease. However, when you look at the data more closely you do, see there's a lot of differences in within the data sets. There's differences in terms of the patients and the severity that the patients actually have with their respective disease. And then we see differences in safety. We see, you know, flares coming up in an independent programs and so on. So it's worthwhile taking a closer look. And actually, look at that, look at the data and keep following the data as it evolves. Um, but I what the sense that we have from our own data set is that we're actually stacking up very

Very well with our data. Um, both on safety as well as in efficacy and believe we're very well positioned, um, in the indications that we chose to, to move, uh, to move into in terms of other modalities Beyond karti. Uh, there's very little data that was actually published, um, I would expect to see more data emerged during the course, of next year, um, and, uh, uh, it'll be interesting to see where some of that data lands, um, I would assume part of it will certainly be our programs that are looking to position against monoclonal antibodies and and try to sort of basically go into that space as you remember. Um, the way that we're positioning our product is actually after the patients, have gone through monoclonal, antibody therapy and sort of relapsed and have recurring disease after that. And so it is a more advanced um, uh, group of patients that we're looking at the patient that has actually, uh, at this point. No approved treatment options. Um, so it is a, it's a different form of severity and level.

Of severity that we're, that we're actually developing in. And so we may see different modalities at slightly different places as we see it today with, you know, going starting with steroids going to uh antimalarials going to uh uh monoclonal antibodies. We see that whole range and then calcium during Inhibitors. We see that whole range, uh, actually evolve and be positioned across the severity grade. And, and the development of the disease, we're focusing on the, on the most severe patients, where we think we can have very profound impact as the initial

Approach. And then, obviously, once we have data on that setting, we'll certainly consider broadening out.

Great. Thanks for all the insights.

Thank you very much.

Thank you.

No, next question. Coming from the line of Jameson with Dojo Bank, your line is Melvin.

Hi. This is Sam on for James.

Just wondering if you can provide uh, more color on the data. Uh, you're expecting an ash.

Do that. Hi Sam. Thanks for joining.

So I did mention on the, uh, the Pediatric Al study. Um, that is obviously the phase 1 experience. So we have, uh, you know, around 20 patients worth of data in that data set that we're going to be presenting, uh, in a posture. Um, obviously has longitudinal data response data safety data. So I think it'll give us a good view and I think it'll, it'll be, um, I think very clear by, uh, we decided to actually move forward into, uh, into the the second stage of that. Study the phase 2 uh, stage of that study.

Um, with regards to the uh the Carlile study, the Carlile study obviously we had uh the data presented and a in a in a poster at ACR that I just referenced earlier, in the prepared remarks, we're going to expand on that data. Certainly, look at additional pharmacodynamic recovery data, Etc to sort of actually round out the picture. I think, tells frankly go through 1 of the impact on the disease, but then also the ability of the immune system to reset without, obviously the disease to recur. Um, so that's going to be a key part of the focus of that presentation. Um, and then, uh, when we're looking at the, um, uh, uh, product profile versus, uh, longer term outcome, obviously an analysis, we've done, where we looked at a range of product parameters,

To see which 1 of these product parameters, actually are tracking with long-term outcome, and I think that's going to be a an interesting, uh, oral presentation. Because it also has a substantial data set behind it.

And with that, I think, uh, you know, meaningful, meaningful, I think, learnings from that, uh, uh, from that analysis, uh, and then, uh, the final part is obviously the when you actually induce a response in the, uh, in the all patients, the obviously would like to know whether I would like to have early information or indication, uh, about the likelihood that the patient will remain in remission for going forward. And so the, the teams and the Physicians have been looking at the various parameters to see what might actually track. And 1 of the areas that they thought was interesting, is to actually look at the, uh, uh, the Persistence of the product at 3 months and as of an indicator. And so we'll need to see obviously. Well, there's more analysis that I was being conducting, but that's going to be a part of the focus of a, of a particular poster, presentation.

Um, so those I think are the, the key parts of the presentation and then, uh, as I pointed out, uh, please go have a look, uh, at the various presentations from The Rocker Consortium. I think very insightful and and I think give you a good sense for what the actual reception is of the product and and why it resonates the way it does.

Thanks very much. Thank you.

Thank you. Now, next question, coming from the line of Matt Pips with William, Blair, your line is now open.

Matt, we can't hear you. Please check your mute button.

All right, I'll go to the next person then, please, req, if you can. And our next question, coming from the line of Clara Dunn with Jeffrey, your line is Melvin.

Hi, good morning, thanks for taking our questions. So 1 for me. Uh so you mentioned the potential pivotal studies in uh pediatric AOL. So just wondering uh whether you've had any regulatory dialogue or what kind of interactions have you had obviously FDA uh in terms of this pivotal trial and what would be the requirement for the trial to be pivotal? Thank you.

Yeah, thanks a lot. I'll clarify for joining much appreciated. Uh, yes, of course, we had, uh, we reviewed the, uh, The Phase 1 data with the agency, um, and, uh, uh, review it with them, the trial design, which is the trial design that we have developed with Cog. Uh, the children's oncology group, the leading oncology group, in, in the US, um, and the, the spin agreement that, uh, you know, this, first of all, that the

The, the medical need in the, in the high-risk patients, obviously significant. Um, and that it would be, uh, it would be beneficial to actually have a, um, a product that actually could include these patients in therapy and provided a therapeutic option. Um, so very clear conversation around the, the patient population, uh, the type of data that uh, we need to have as well as the, uh, the size of the study. Um, so very consistent, and it was only after we had those conversations and we had Clarity on the path forward that we actually communicate it. Um, that indeed, this is what we're going to do, which I think, is what we did for the first time at the Q2 call.

Thank you.

Thank you.

Q's. Matt tips from William. Blair your line is now open.

Hi, can you hear me now?

Yes, we can.

Great. Sorry for the technical issues. This is Moline on for Matt. Thanks for taking the question. Um for the Pediatric opportunity. Do you have any rough timelines at this point for completing the pivotal cohort and then related to that? What do you think is the sort of the total Market opportunity across both adult and Ale? Um, pediatric AOL patience, thank you.

Thanks Madeline for joining. Um,

So, the, uh, uh, with regards to the the, the Pediatric, uh, opportunity. Um, we do believe that the, uh, uh, when you look at the, at the current. Um, so the medical needs segments, it's about a thousand patients, all in, um, between Europe and us. So it's about 500 in the US. Um, and um, there is a, you know, a good proportion of these patients are in the high risk category and are currently not being treated uh or not being not actually having direct access to carti therapy. So we would be expect that we'd be able to sort of capture and support that part, uh, as well as having an opportunity, um, to sort of actually, uh, broaden out, um, the, uh, the use of the product more broadly across the, the population. I think, at this point I think it's not, uh, quite straightforward to give you a number. But we're what we're seeing in general is I think there's an opportunity for a few hundred patients.

That could be actually reached, uh, through that type of a label in terms of the study itself, we're we're starting up the phase 2 portion of the study. Um, we have, certainly The Phase 1 seen a good uh, rate of enrollment and we hope that that will continue and we expect that that is something we can actually build on uh, in the phase 2. Um, so that the um, you know, we should actually be in the follow-up period or get into the follow-up period, uh, uh, in 2027 and uh you know, hoping have data maybe at the end of 27 or early 28,

Thank you. Thank you. Thank you.

Our next question, coming from the line of sham Kalia with Goldman Sachs, your line is now open.

Hi there. Sean here, from Golden sights on behalf of roggen. So I just had a, uh, a question on for cats or Dynamics sport for the remainder of 25. So you mentioned already the, uh, the CMS coding impact that impacted 3225. So I just wanted to get a bit more color. Were you expecting revenues to be flat quarter on quarter? Or was this above your expectations, and therefore, given that the CMS flag was expected to be resolved in 4225? How should we think about or cats, or cats or sales or 4? Should we still expect to see some upside to 3 EQ, or would it likely be broadly flat? So that's the first 1 and then a follow on going forwards. You mentioned that you're in.

Answering a new phase of growth. Um, so how should we think about a capsule trajectory for 2026? Thank you.

Thanks a lot for joining. Thanks for the question. So, in terms of the Q3, uh, Dynamic, we did highlight already at the Q2 call that we expected to have, uh, an impact. Um, for, in terms of the recovery from the, the CMS event and actually going through that, um, and we did guide to, uh, you know, I think relatively flat, um, uh, trajectory at that point in time because we did not know that other, uh, that, you know, the clearly was a lack in patients that were actually coming into into the, the, the, the, the the third quarter, um, which obviously will have a was a clear, they would have an impact on the overall dynamic. In the third quarter, we saw that actually the second half of the quarter actually uh being fully reversed and actually the second half of the quarter actually running at the at the expected clip. Um for Q4 I don't think we're going to give guidance on Q4 the basic reason as I mentioned before is that this is the first time we're going through the the the end of the year stretch uh with uh you know, certainly you know, Thanksgiving week.

Which leads to a Slowdown typically at the clinics, um, Ash tends to have an impact and then, obviously, the holiday season. So it's something that I think we just need to experience. We don't think that we have a good a good way to handicap that at this point. Um and give a good sense around that what? What? To expect at this point.

Um, you know, we're still in the first year of launch, there's a steep learning curve um and I think the fourth quarter certainly will be uh will be important to sort of understand the uh the dynamic we're seeing there in the market, which is too early to call.

Thank you.

You.

Thank you. Our next question. Coming from the lineup, Simon Baker with West Charles and Company Redbarn is Melvin.

Related 2-part if I may please. Um, just going back to the um the question of of revenues and deferred revenues. Well, I think you said it was 7, the deferred revenue balance was about 7.6 million. Um could you just give us any any idea as to how typical that is if there any any factors in there? I'm just trying to get an idea of of is this simply the effectively, the timing of a of the the back end of the quarter just from when you book it, it just gets into the next or whether there are any other factors um within that

Just really from a modeling perspective, and then related to that. Um, clearly at this stage, the cost of goods line is understandably noisy. Um, but I just wondered if you could give us an idea of the underlying sequential trends here. Are you, is it too early to be seeing an underlying improvement in gross margin and over what time period do you expect to see an improvement in the gross margin? Thanks so much.

Yeah, very, very good question, Simon. I'll, I'll I'll start. And then, I will handle hand over to, to Rob, to sort of, uh, um, add to that. So, first of all, with regards to to to revenue and great deferred revenue, I would say 1 of the, the the the I think characteristics of this type of a therapy is that um, you obviously, um, have quite a time period between the inclusion of a patient and a farasis of a patient and the actual dosing

Um, and what that does is that as you get towards the end of the quarter, you obviously continue to actually include patients in your manufacture. For those patients, the products actually get released and then get shipped to the centers. Typically, when the product is at the centers, they're still, you know, scheduling to be done to get the patient in. You may have situations where the patient may have actually picked up an infection; if that's the case, then the patient first needs to sort of get rid of the infection before you could actually start the lymphodepletion and then the treatment. So there is a gap; there is a lack between, and depending on the condition of the patients, um, you may actually have, um, you know, a set of products that are actually shipped but not yet dosed.

And so, these sit basically at the center and there's in the process of scheduling the patient or managing the patient through the, through a crisis, the patient may have experienced before the patient. Actually can receive the product and it's only when the patient actually gets the product. Um, infused and in fact, um, you know, obviously with the first and then the second infusion that in fact, the full payment actually becomes to and the revenue will be recognized in our numbers. So that's why there is a lack there. Um and why you have a build-up towards the end of the end of the the the quarter you have a good proportion of product that is either still, you know, finishing manufacturing or or or has already finished manufacturing has been shipped and it's that portion of the ones that are finished and shipped and received at the centers that go into the

Um, deferred revenue bucket. So that's the dynamic. And I think that's a dynamic. We're just going to see, and it's sort of a reflection of sort of the continuous flow of activity that we see, you know, quarter into from 1 quarter into the next quarter. Um, the, the cocks to your point obviously, are are noisy and that's true. And obviously 1 of the key elements. Particularly, as you start, as you launch, is that you, you launch obviously initially have a number of patients going through your manufacturing setup. That is not obviously anywhere close to the setup uh that you actually designed for the larger opportunities. In other words, there is a significant portion of the infrastructure that is not actually utilized for commercial Supply particularly early on in the launch and into, you know, early on is still, you know, certainly within the first year of the launch

Um, and as you obviously, then keep on growing the opportunity and you run more products through the facility. That's actually where you actually, where you're, you're, sort of, you're you're overhead costs. You're overall cost for the facility gets divided by a larger number. You see a decrease over time. So, that's 1 Dynamic. So volume is 1 of the key drivers that actually will reduce. Um, so the, the the actual, uh, cost of goods, um, uh, line, um, overall and it proves the ratio between revenue and cost of goods.

Um, the other part is actually the improvements in the actual operations itself. So in other words, in very simplistic terms, you know, there's there's work that goes in which are work hours and there is materials that go in. And then there is some operating cost in terms of running the clean rooms.

Experience with optimizing your operating model. Um and actually really take all the experience. We've now gained and and take that and actually create uh develop a more efficient operating model over time. And so that's a significant improvement process you're going to run through and we are going to run through and that gives us an ability to actually reduce on a per batch basis. The actual cost that is, uh, driven by actually producing this particular batch in terms of the work and the materials that go in. So those are key parameters that impact. So, we expect to actually see as we increase sales during the course of next year. We actually expect that. We also see a decrease or, um, in the the uh, the ratio, um, uh of uh, you know, costs that we have or cost of sales, uh, versus what we're seeing in the first year of launch. So that's the dynamic we're looking at and handing over to Rob to sort of add on maybe some of the more technical accounting points. Yeah, thanks Chris.

And thanks Simon is the only thing I might add. I think Christian covered it, it very well. Um but I think you made the point, these are 3 quarters 3 data points. And I would say that there's still a little bit of um,

Noise. And and we've got to get to a a more steady pattern, so to speak. So to the CMS issue, and to the Q2, and Q3 quarters that that Christian talked about, you know, the CMS really impacted the end of the Q2 early. Q3 you actually saw that play through from a treatment perspective, even in some of the deferred revenue balance there, right? So that's a difference between the finish that we have in the Q3 with Q3 that deferred revenue. We've recognized a much larger quantity. In fact, really quarter to quarter

The main difference in our gross margin was driven by the amount of deferred revenue that we had to recognize the cost for, but that's also going to, you know, kind of give us a nice load, so to speak, with sales and gross margins going in.

To Q4, we still have to play out the rest of the year. And you know, again Christian mentioned going through the the first time with the holidays in in Ash. Um, so I just think that we need to we need some more time and data point here to really see more of a a smoothing effect in more of these quarter of a quarter Dynamics.

Thanks so much.

Thanks a lot Simon.

Thank you. I will now turn the call back over to Dr. Christian Ein for any closing remarks.

Well, thank you very much for for joining us today. Um, uh, we're really looking forward to seeing you, um, either at Ash uh, through, uh, 1 or the 1, or the other of the many data updates, uh, or then at the latest early in the year in San Francisco. I hope you're doing well and looking forward to connecting with you in 1 of those venues. Thank you. Bye, bye.

Conference call. Thank you for your participation, and you may now disconnect.