Q2 2026 Autolus Therapeutics PLC Earnings Call

August 11, 2026

Operator: Good day, and thank you for standing by. Welcome to the Autolus Therapeutics Q2 2026 financial results conference call. At this time, all participants are in 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Executive Director of Investor Relations, Amanda Cray. Please go ahead.

Speaker #1: Good day, and thank you for standing by. Welcome to the Autolus Therapeutics second quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode.

Speaker #1: 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 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your first speaker today, Executive Director of Investor Relations, Amanda Cray. Please go ahead.

Speaker #2: Thank you, Dee Dee. 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.

Amanda Cray: Thank you, DeeDee. Good morning or good afternoon, everyone, and thank you for joining us on today's call. With me, our Chief Executive Officer, Dr. Christian Itin, and Chief Financial Officer, Rob Dolski. 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 ongoing commercial launch of obe-cel in the US and UK, Autolus manufacturing, sales, and marketing plans for obe-cel, the market potential for obe-cel, and the status of clinical trials, development and/or regulatory timelines and market opportunities for obe-cel and our other product candidates.

Speaker #2: 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 #2: These may include, but are not limited to, statements regarding the status of the ongoing commercial launch of obe-cel in the US and UK, Autolus' manufacturing, sales, and marketing plans for obe-cel, the market potential for obe-cel, and the status of clinical trials development and/or regulatory timelines and market opportunities for obe-cel and our other product candidates.

Speaker #2: 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.

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 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 investors section of our website. On slide 3, you will 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 will then take questions. With that, I am happy to turn it over to Christian.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: We'll then take questions. With that, I'm happy to turn it over to Christian.

Speaker #3: Thanks, Amanda. And welcome, everybody, to our second quarter call. We're moving to slide number 4. We had a very positive second quarter with strong O Castle sales growth in this in our second year of launch now.

Christian Itin: Thanks, Amanda, and welcome everybody to our Q2 call. We are moving to slide number 4. We had a very positive Q2 with strong obe-cel sales growth in our second year of launch now. When we look at the obe-cel revenue in Q2, we are at $45.7 million, which is a substantial increase over the $26 million that we had in Q1. For H1 of the year, we reached $71.9 million, which is close to the full year number that we had for our first year of launch last year.

Speaker #3: When we look at the O Castle revenue in the second quarter, we're at $45.7 million. Which is a substantial increase over the 26 million that we had in the first quarter.

Speaker #3: For the first half of the year, we reached $71.9 million, which is close to the full-year number that we had for our first year of launch last year.

Speaker #3: We see that the positive experience that the physicians are having with the product in the centers that were active in, which is also reflected in the data that was collected by the Rocker Consortium and the Real World database that was presented at the tandem meeting, could build a very strong foundation for the adoption of the product and, I think, the continued positive momentum that we're seeing in the market.

Christian Itin: We see that the positive experience that the physicians are having with the product in the centers that we are active in, which is also reflected in the data that was collected by the Walker Consortium and the real world database that was presented at the Tandem Meetings, to build a very strong foundation for the adoption of the product. I think the continued positive momentum that we are seeing in the market. We also obviously have continued to grow our presence from a center perspective. We had indicated at the beginning of the year that we would reach in the range of 80 centers for the full year. We are now at the mid-year point, and we are above 80 centers already, and we continue to add centers in the H2 of the year as well.

Speaker #3: We also obviously have continued to grow our presence from a center perspective. We had indicated at the beginning of the year that we would reach in the range of 80 centers for the full year.

Speaker #3: We're now at the mid-year point, and we're above 80 centers already. We continue to add centers in the second half of the year as well.

Speaker #3: When we look to the UK, we started the launch at the beginning of the year, and we do see strong initial adoption. We obviously continue to add treatment centers as we go through the remainder of the year.

Christian Itin: When we look to the UK, we started the launch at the beginning of the year. We do see a strong initial adoption and we obviously continue to also add treatment centers as we go through the remainder of the year. With that, we are going to move to slide number 5. I think we are on a very good path here and show very good momentum for the goals that we had set for ourselves for 2026. When we look at the net revenue projection that we had for the year, that was originally set at GBP 120 to 135 million, we are now at a point where we can actually increase our guidance to $140 to $150 million for the full year. The gross margin development, we have seen a very nice move as we are going from the Q1 to the Q2. The Q1 was just positive on the gross margin.

Speaker #3: With that, we're going to move to slide number 5. I think we're at a very good path here and show very good momentum for the goals that we had set for ourselves for 2026.

Speaker #3: When we look at the net revenue projection that we had for the year, that was originally set at $120 to $135 million, we're now at a point where we can actually increase our guidance to $140 to $150 million for the full year.

Speaker #3: The gross margin development—we've seen a very nice move as we're going from the first to the second quarter. The first quarter was just positive on the gross margin.

Christian Itin: The gross margin development, we have seen a very nice move as we are going from the Q1 to the Q2. The Q1 was just positive on the gross margin.

Speaker #3: We've now made a very positive step in the second quarter, which is driven by increased volumes in terms of batches that we manufactured at our plant at the Nucleus in the UK, but also a lot of the improvements that we made on the operations as well.

Christian Itin: We now made a very positive step in the Q2, which is driven by increased volumes in terms of batches that we manufactured at our plant at The Nucleus in the UK. A lot of the improvements that we made on the operations as well, both at the manufacturing side as well as the commercial side. All of that actually supports the gross margin development here. That obviously is a key driver towards the company moving towards profitability for this part of our business. When we look at the commercial expansion, we are now in more than 80 centers, as indicated. We continue to grow. We are particularly going to look at areas that may be underserved, where distances to centers are still relatively wide or large, and we want to make sure that patients have adequate access and have centers within reasonable reach.

Speaker #3: Both at the manufacturing side as well as the commercial side. All of that actually supports the gross margin development here that obviously is a key driver towards the company moving towards profitability for this part of our business.

Speaker #3: When we look at the commercial expansion, we're now in more than 80 centers as indicated. We continue to grow, but particularly going to look at areas that may be underserved for this industry centers are still relatively wide or large.

Speaker #3: And we want to make sure that patients have adequate access and have centers within reasonable reach. As we're looking across the US, we do see that we actually have a very good distribution across the US.

Christian Itin: As we are looking across the US, we do see that we actually have a very good distribution across the US and we will continue to add obviously additional centers in some of the states where we may not be active yet at this point. Moving to slide number 6. I think as we are sort of moving through the ramp up here on the launch, it was very important that we are obviously driving towards a very stable delivery of the product, and with that, over time, as we are improving our margins of the product, reach profitability for our business in the relapsed refractory ALL indication. When we look back into last year, the first objective was to really get us to a place where we have very robust, consistent, high-quality product supply and services that we can provide to the centers.

Speaker #3: And we'll continue to add, obviously, additional centers in some of the states where we may not be active yet at this point. Moving to slide number 6, I think as we're sort of moving through the ramp-up here on the launch, it was very important that we're obviously driving towards a very stable delivery of the product.

Speaker #3: And with that, over time, as we're improving our margins on the product, we reach profitability for our business in the relapsed/refractory B-ALL indication. When we look back to last year, the first objective was really to get us to a place where we have very robust, consistent, high-quality product supply and services that we can provide to the centers.

Speaker #3: We achieved that within the first, probably, six to nine months during the course of the first year of launch last year. We then started to shift our focus onto optimizing the processes and really driving for efficiency, as well as, obviously, increasing the volumes.

Christian Itin: We achieved that within the first probably six to nine months during the course of the first year of launch last year. We then started to shift our focus onto starting to optimize the processes and really drive for efficiency, as well as obviously increasing the volumes. Together, those two parameters are really the key drivers to improve margins, and that's ultimately what gets us to a place where we expect to be in the not-too-distant future to get us to a place where our gross profit margin is going to reach somewhere in the range of 65% to 70% for the ALL business. When we look at the development of gross margins, we're still negative in Q4 last year. We were just on the other side, on the positive side in Q1 this year.

Speaker #3: Together, those two parameters are really the key drivers to improve margins. And that's ultimately what gets us to a place where we expect to be in the not-too-distant future, to get us to a place where our gross profit margin is going to reach somewhere in the range of 65% to 70% for the ALL business.

Speaker #3: Now, when we look at the development of gross margins, we're still negative in the fourth quarter last year. We were just just on the other side, on the positive side in the Q1.

Speaker #3: This year, and we now have a healthy step up to a 55 percent gross margin in the second quarter. And we obviously expect to continue to drive the improvements, the optimizations, to drive for efficiency which obviously are key drivers for the company to reach profitability in this line of business.

Christian Itin: We now have a healthy step up to a 55% gross margin in Q2. We obviously expect to continue to drive the improvements, the optimizations to drive for efficiency, which obviously are key drivers for the company to reach profitability in this line of business. Moving to slide 7, I would like just to briefly summarize where we are from a pipeline perspective. We see obviously a very strong foundation with obe-cel or AUCATZYL in the adult ALL setting. It obviously also gives us a lot of opportunity in other B-cell mediated diseases, both on the oncology but also the autoimmune side.

Speaker #3: Moving to slide number 7, I would like just to briefly summarize kind of where we are from a pipeline perspective. We see obviously a very strong foundation with OBCell or O Castle in the adult ALL setting.

Speaker #3: But it obviously also gives us a lot of opportunity, in that the B cell–mediated diseases, both on the oncology side but also on the autoimmune side.

Speaker #3: As we're sort of going through the new slow that we're expecting for the upcoming periods, I would start out with kind of the key new slow that we're expecting for the end of this year, which is really focused first on the update for the Carlisle study at the ACR conference.

Christian Itin: As we're going through the news flow that we're expecting for the upcoming periods, I would start out with the key news flow that we're expecting for the end of this year, which is really focused first on the update for the CARLYSLE study at the American College of Rheumatology conference, which gives us an opportunity to really give us a longer-term view on the data and a clear understanding on the durability of the effect that we have seen in the systemic lupus patients. We will then look into additional updates coming from the FELIX study where we have a few additional analysis plans to be presented by the end of the year.

Speaker #3: This gives us an opportunity to really provide a longer-term view on the data and a clearer understanding of the durability of the effect that we have seen in the systemic lupus patients.

Speaker #3: We will then look into additional updates coming from the FELIX study, where we have a few additional analyses planned to be presented by the end of the year.

Speaker #3: And as we're going into the next product opportunity with AUTO8, which is a BCMA/CD19-targeting product where we have an initial trial ongoing in AL amyloidosis, we expect initial data to become available by the end of the year as well.

Christian Itin: As we're going into the next product opportunity with AUTO8, which is a BCMA CD19 targeting product where we have an initial trial ongoing in light chain amyloidosis, we expect initial data to become available by the end of the year as well. As we're looking into the first part of 2027, the key focus there is going to be on the first data from our BOBCAT study in progressive multiple sclerosis patients. This will be the first data set out of that study. We expect a second data set to become available H2 of next year, where we expect longer follow-ups, more patients and longer follow-ups in that indication. Both, obviously, important data points as we go through the course of next year.

Speaker #3: As we're sort of looking into the first part of 2027, the key focus there is going to be on the first data from our Bobcat study in progressive multiple sclerosis patients.

Speaker #3: This will be the first data set out of that study. We expect a second data set to become available in the second half of next year, where we expect longer follow-up, more patients, and longer follow-up in that indication.

Speaker #3: Both obviously important data points as we go through the course of next year. When we then look to the end of next year, we're at the point where we expect to have the first data coming from the pivotal study, the CATALYST study, in pediatric ALL.

Christian Itin: When we then look to the end of next year, we are at the point where we expect to have the first data coming from the pivotal study, the CATULUS study in pediatric ALL. That study is enrolling very well. We expect that study to actually reach the end of enrollment by the end of the year. Then obviously we are getting into the follow-up and the workup of that data, hopefully towards the filing by the end of next year, early 2028. When we look a little further out into 2028, we do expect the phase II data from the LUMINA study, in patients with lupus nephritis. There is quite a full set of data that we expect from the various studies, going beyond the adult ALL opportunity, which we obviously continue to update you on as well.

Speaker #3: That study is enrolling very well. We expect that study to actually be reached the end of enrollment by the end of the year. And then obviously we're getting into the follow-up, and then the workup of that data hopefully towards the filing by the end of next year, early 2028.

Speaker #3: And then in when we look a little further out into 2028, we do expect then the phase two data from the Lumina study, and in patients with lupus nephritis.

Speaker #3: So, there's quite a full set of data that we expect from the various studies, going beyond the adult ALL opportunity, which we obviously continue to update you on as well.

Speaker #3: When we then look briefly at slide number 8—what to expect with regard to the Bobcat study in progressive MS—we have, in Q1 next year, targeting the ACRIMS meeting, which is obviously one of the key venues for MS data.

Christian Itin: When we then look briefly on slide 8, what to expect with regards to the BOBCAT study in progressive MS, we have in Q1 next year targeting the ACTRIMS meeting, which is obviously one of the key venues for MS data. We would, at that point, expect to have a total of 12 patients that we can report data from. We are going to look at safety, at PK/PD data, biomarker data, and certainly, early clinical experience. Looking for the H2 of next year with a total of expected 18 patients, we will then have an opportunity to look at clinical response, particularly with the longer term follow-ups. We will expect to have imaging data as well as expanding safety, PK/PD biomarker data. Certainly will, at that point, look at potential next steps for the program.

Speaker #3: We would at that point expect to have a total of 12 patients that we can report data from. We're going to look at safety at the PKPD data, biomarker data, and certainly early clinical experience.

Speaker #3: And then looking for the second half of next year with a total of expected 18 patients. We will then have an opportunity to look clinical response particularly with a longer-term follow-up.

Speaker #3: So, we'll expect to have imaging data, as well as expanding safety, PK/PD, and biomarker data. And certainly, we'll at that point look at potential next steps for the program.

Speaker #3: So we believe that when we look at this opportunity in clinical scores or EVSS scores those obviously do contain elements that are either patient or physician reported.

Christian Itin: We believe that when we look at this opportunity in MS, obviously the key clinical scores or EDSS scores, those obviously do contain elements that are either patient or physician-reported. That is also, I would actually like to have about 12 months of follow-up with patients to understand that indeed the response is a true reflection of the product's activity, and we do not have an overlay of the potential outcomes that are reported, that might actually have a component that might be more of a placebo type of effect. With that, I would like to actually move over to slide 9 and hand over to Rob for the financial results.

Speaker #3: And that is also why I would actually like to have about 12 months of follow-up patients, to understand that indeed the response is a true reflection of the product activity.

Speaker #3: And we don't have an overlay of potential outcomes that are reported, that might actually have a component that could be more of a placebo-type effect.

Speaker #3: So with that, I would like to actually move over to slide number 9 and hand over to Rob for the financial results.

Speaker #1: Thanks, Christian. And good morning or good afternoon to everyone. I'm pleased to review our financial results for what was a strong second quarter of 2026.

Rob Dolski: Thanks, Christian, and good morning or good afternoon to everyone. I am pleased to review our financial results for what was a strong Q2 of 2026, and I will be referring to slide 10 in the presentation. Our total net product revenue for the Q2 of 2026 was $45.77 million. That is compared with $20.9 million in the Q2 of 2025, or compared to $26.2 million in the Q1 of 2026. This quarter reflects sales in both the US and UK markets. While the UK market is showing strong adoption, it is still early in the launch and contribution from the UK was relatively minor when compared to the US. As Christian noted, based on the recent performance, we have increased our net product revenue guidance, and we now expect full year all capital revenue of between $140 million and $150 million.

Speaker #1: And I'll be referring to slide 10 in the presentation. Our total net product revenue for the second quarter of 2026 was $45.77 million. That's compared with $20.9 million in the second quarter of 2025, or compared to $26.2 million in the first quarter of 2026.

Speaker #1: This quarter reflects sales in both the US and UK markets. While the UK market is showing strong adoption, it is still early in the launch, and contribution from the UK was relatively minor compared to the US.

Speaker #1: As Christian noted, based on the recent performance, we've increased our net product revenue guidance, and we now expect full-year all Castle revenue of between $140 million and $150 million.

Speaker #1: We were also pleased to see further improvement in gross margin during the quarter to 55%, up from 6% in Q1 and negative in all prior quarters of 2025.

Rob Dolski: We were also pleased to see further improvement in gross margin during the quarter to 55%, up from 6% in Q1 and negative in all prior quarters of 2025. The improvement was driven by a combination of increasing commercial production volume, operating model efficiency, and cost reduction initiatives that we undertook beginning earlier this year. We also began for the first time, clinical production in our Nucleus facility in Q2, further improving our cost per batch economics. We expect gross margin to continue to improve towards a peak estimate of 65% to 70% in the adult ALL market. Underlying the gross margin, our cost of sales in Q2 totaled $20.5 million. That is compared to $24.4 million in the same period in 2025. The decrease was primarily driven by the improvements just mentioned, as well as lower inventory reserves and write-offs in the quarter.

Speaker #1: The improvement was driven by a combination of increasing commercial production volume, operating model efficiency, and cost reduction initiatives that we undertook beginning earlier this year.

Speaker #1: We also began, for the first time, clinical production in our Nucleus facility in the second quarter, further improving our cost-per-batch economics. We expect gross margin to continue to improve towards a peak estimate of 65% to 70% in the adult ALL market.

Speaker #1: Underlying the gross margin, our cost of sales in the second quarter totaled $20.5 million. That's compared to $24.4 million in the same period in 2025.

Speaker #1: The decrease was primarily driven by the improvements just mentioned, as well as lower inventory reserves and write-offs in the quarter. Our research and development expense was roughly flat at $27.9 million for the second quarter of 2026, compared to $27.4 million during the same period in 2025.

Rob Dolski: Our R&D expense was roughly flat at $27.9 million for Q2 2026, compared to $27.4 million during the same period in 2025. SG&A expenses increased to $41.2 million for Q2 2026, compared to $30.3 million in the same period in 2025. The increase was primarily due to employment-related costs and professional fees supporting commercialization activities in both the US and UK. In addition, the quarter also includes certain one-time items, such as termination-related expenses related to the strategic operational efficiency and cost reduction initiative that we announced back in April of this year. Our loss from operations for Q2 was $43.8 million as compared to $61.2 million for the same period in 2025.

Speaker #1: Selling, general, and administrative expenses increased to $41.2 million for the second quarter of 2026, compared to $30.3 million in the same period in 2025.

Speaker #1: The increase was primarily due to employment-related costs and professional fees supporting commercialization activities in both the U.S. and U.K. In addition, the quarter also includes certain one-time items, such as termination-related expenses, related to the strategic operational efficiency and cost reduction initiative that we announced back in April of this year.

Speaker #1: Our loss from operations for the second quarter was $43.8 million, as compared to $61.2 million for the same period in 25. And finally, net loss was $39.1 million for the three months ending June 30th, 2026, compared to $47.9 million for the same period in 2025.

Rob Dolski: Net loss was $39.1 million for the three months ending 30 June 2026, compared to $47.9 million for the same period in 2025. Last week, we announced that we entered into a strategic financing with Perceptive Advisors for the sale of notes of up to $250 million in aggregate principal amount as part of a five-year interest-only senior credit facility. As part of the transaction, an initial $75 million in principal amount was drawn at closing, and an additional $25 million will be available at our option for up to six months post-closing date. An additional $150 million of subsequent capital may become available in separate tranches upon achievement of certain pre-specified revenue milestones. This financing provides us with additional capital to support key inflection points for the business, including clinical data milestones in our oncology and autoimmune development programs that Christian just walked through.

Speaker #1: Last week, we announced that we entered into a strategic financing with Perceptive Advisors for the sale of notes of up to $250 million in aggregate principal amount as part of a five-year, interest-only senior credit facility.

Speaker #1: As part of the transaction, an initial $75 million in principal amount was drawn at closing, and an additional $25 million will be available at our option for up to six months post-closing date.

Speaker #1: An additional $150 million of subsequent capital may become available in separate tranches upon achievement of certain pre-specified revenue milestones. This financing provides us with additional capital to support key inflection points for the business, including clinical data milestones in our oncology and autoimmune development programs that Christian just walked through.

Speaker #1: We'll have a meaningful opportunity to expand into new and larger markets, which we view as significant growth drivers, and the potential additional tranches provide optionality and flexibility as we advance these pipeline programs.

Rob Dolski: We will have a meaningful opportunity to expand into new and larger markets, which we view as significant growth drivers, and the potential additional tranches provide optionality and flexibility as we advance these pipeline programs. Our cash equivalent, and marketable securities at 30 June 2026, totaled $201.6 million. This excludes the initial drawdown on the Perceptive credit facility, which closed in July. This balance, combined with the anticipated net revenues and the first and second tranches of the credit facility totaling $100 million, provides us with cash runway into Q2 2028. I will now hand back to Christian to wrap things up with expected milestones and conclusions.

Speaker #1: Our cash cash equivalent and marketable securities at June 30th, 2026 totaled $201.6 million. This excludes the initial drawdown on the perceptive credit facility, which closed in July.

Speaker #1: This balance, combined with the anticipated net revenues and the first and second tranches of the credit facility totaling $100 million, provides us with cash runway into the second quarter of 2028.

Speaker #1: I'll now hand back to Christian to wrap things up with expected milestones and conclusions.

Speaker #2: Thanks, Rob. We're moving to slide number 12 for the conclusion. We believe Otolus is well positioned to value creation. We have, on the one hand, the opportunities on the commercial Castle product in relapse refactory BLL patients.

Christian Itin: Thanks, Rob. We are moving to slide number 12 for the conclusion. We believe Autolus is well-positioned for value creation. We have, on the one hand, the opportunities on the commercial obe-cel product in relapsed/refractory B-ALL patients on the adult population. We have shown very strong execution. We have seen a very positive market expansion, reached GBP 71.9 million in net revenue for the H1 of the year. This has allowed us to increase the guidance for the fiscal year 2026 to GBP 140 to 150 million in net product revenue. We believe there is significant opportunity to grow the CAR T market share in this indication, and we are building on very strong physician interest, which is also, I think, exemplified by the interest to investigate obe-cel in the first-line setting in ALL in investigator-sponsored trials, which have already started.

Speaker #2: On the adult population, we have shown very strong execution. We've seen a very positive market expansion, reaching $71.9 million in net revenue for the first half of the year.

Speaker #2: This has allowed us to increase the guidance for the fiscal year 2026 to $140 to $150 million in net product revenue. We believe there's a significant opportunity to grow the CAR-T market share in this indication.

Speaker #2: And we're building on very strong position interest, which is also I think exemplified by the interest to investigate OV cell in the first line setting in ALL in investigators sponsored trials, which actually have already started and we're looking forward to obviously seeing the results of those trials in the upcoming periods.

Christian Itin: We are looking forward to obviously seeing the results of those trials in the upcoming periods. When we then look in terms of the additional opportunities beyond the adult ALL population, we obviously have two pivotal studies ongoing. We have the pediatric ALL study ongoing, the CATULUS study, which is expected to read out by the end of next year. We have also the pivotal study, the LUMINA study in lupus nephritis ongoing, which is expected to deliver data in 2028. Finally, with the opportunity beyond the classical rheumatology indications in the lupus setting, we are also looking at the opportunity in progressive multiple sclerosis, which gives us, I think, a shot at potentially getting to a very substantial commercial opportunity beyond what we are currently targeting in the oncology setting. This program is ongoing in a phase I study.

Speaker #2: When we then look in terms of the additional opportunities beyond the adult ALL population, we obviously have two pivotal studies ongoing. We have the pediatric ALL study ongoing, the Catalyst study, which is expected to read out by the end of next year.

Speaker #2: And we have also the pivotal study, the Lumina study in lupus nephritis ongoing, which is expected to deliver data in 2028. Finally, with the opportunity beyond the classical rheumatology indications in the lupus setting, we're also looking at the opportunity in progressive multiple sclerosis, which gives us I think a shot at potentially getting to a very substantial commercial opportunity beyond what we're currently targeting in the oncology setting.

Speaker #2: This program is ongoing in a Phase 1 study. It's called the Bobcat study. As indicated, we expect to provide data updates during the course of 2027.

Christian Itin: It is the BOBCAT study, and as indicated, we expect to provide data updates during the course of 2027. With that, we believe we actually have a set of interesting data catalysts and updates during the course of 2027, which will set us up well for then the expected opportunity for a launch in pediatric ALL in 2028 and subsequent launches in 2029 on the lupus side. When we look in terms of the overall setup of the company, obviously the foundation that we built is a very strong foundation, both from a manufacturing and from a commercial capability perspective. Obviously having now experience in more than 80 authorized treatment centers across the US and approaching 20 authorized treatment centers also in the UK, which provides a very strong foundation for all the new indications that we are also planning and obviously are developing here as well.

Speaker #2: With that, we believe we're actually have a set of interesting data catalysts and updates during the course of 2027, which will set us up well for then the expected opportunity for a launch in pediatric ALL in 2028.

Speaker #2: And subsequent launches in 2029 on the lupus side. When we look in terms of the overall setup of the company, obviously the foundation that we built is a very strong foundation, both from a manufacturing and from a commercial capability perspective.

Speaker #2: And obviously, having now experience in more than 80 authorized treatment centers across the US and approaching 20 authorized treatment centers also in the UK, which provides a very strong foundation for all the new indications that we're also planning and obviously are developing here as well.

Speaker #2: With that, I'd like to conclude and open up for questions.

Christian Itin: With that, I would like to actually conclude and open up for questions.

Speaker #3: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Salim Syed of Mizuho. Your line is open.

Speaker #3: Please stand by while we compile the Q&A roster. And our first question comes from Haleem Syed of Mizuho. Your line is open.

[Analyst] (Mizuho): Great. Good morning, guys. Congrats on the progress. Just one from us on the guide. Christian, Rob, when you look at the high end of the guide, it would imply a slight decline versus the Q2 $45 million revenue. Is that just conservatism on your part, or are you expecting some sort of seasonality or other one-timers to affect the Q3 and Q4 revenue? Thank you.

Salim Syed: Great. Good morning, guys. Congrats on the progress. Just one from us on the guide. Christian, Rob, when you look at the high end of the guide, it would imply a slight decline versus the Q2 $45 million revenue. Is that just conservatism on your part, or are you expecting some sort of seasonality or other one-timers to affect the Q3 and Q4 revenue? Thank you.

Speaker #1: Great. Good morning, guys. Congrats on the progress. Just one from us on the guide. So Christian Rob, when you look at the high end of the guide, it would imply a slight decline versus the QQ 45 million dollar revenue.

Speaker #1: Is that just conservatism on your part, or are you expecting some sort of seasonality or other one-timers to affect the Q3 and Q4 revenue?

Speaker #1: Thank you.

Christian Itin: Thanks, William. Very good question. When we look at obviously the H1 of the year, we see obviously a pretty significant step-up in Q2. We believe that is in part driven by the positive data that was reported from the real world experience at the Tandem meeting. It certainly did drive a very significant increase in registrations onto the program in the H2 of the Q1. Obviously those patients were driving to quite an extent I think the very positive outcome we have seen in Q2. So we think that creates a very good foundation for the rest of the year. There is certainly going to be elements of seasonality that we would expect during the course of the year. Given that, certainly we have seen that to some extent last year.

Speaker #2: Thanks, Haleem. Very good question. So when we looked at the obviously the first half of the year, we see obviously a pretty significant step up in Q2.

Speaker #2: We believe that is in part driven by the positive data that was reported from the real world experience at the tandem meeting. And certainly this drives a very significant increase in registrations onto the program in the second half of the first quarter.

Speaker #2: And those patients, obviously, were driving to quite an extent, I think, the very positive outcome we've seen in Q2. So we think that creates a very good foundation for the rest of the year.

Speaker #2: There is certainly going to be elements of seasonality that we would expect during the course of the year. And so given that certainly we've seen that to some extent last year, it is an element that we're considering.

Christian Itin: It is an element that we are considering, and we believe that the guidance that we are providing is reasonable and certainly has an element of prudence as well.

Speaker #2: And we believe that the guidance that we're providing is reasonable and certainly has an element of prudence as well.

Speaker #1: Okay. Thanks so much.

[Analyst] (Mizuho): Okay. Thanks so much.

Salim Syed: Okay. Thanks so much.

Speaker #3: Thank you. And our next question comes from Matt Phipps of William Blair. Your line is open.

Operator: Thank you. Our next question comes from Matt Phipps of William Blair. Your line is open.

Speaker #4: Great, thanks. This is Madeline on for Matt Phipps. Thanks for taking our question. On gross margins, could you provide any color on how we should think about the trajectory for the rest of the year, and maybe comment on potential timing to achieve that target of 65% to 70%, given we're at 55% now?

[Analyst] (William Blair): Great, thanks. This is Madeline on for Matt Phipps, thanks for taking our question. On gross margins, could you provide any color on how we should think about the trajectory for the rest of the year, and maybe comment on potential timing to achieve that target of 65% to 70%, given we are at 55% now? Thank you.

Madelyn Schiller: Great, thanks. This is Madeline on for Matt Phipps, thanks for taking our question. On gross margins, could you provide any color on how we should think about the trajectory for the rest of the year, and maybe comment on potential timing to achieve that target of 65% to 70%, given we are at 55% now? Thank you.

Speaker #4: Thank you.

Speaker #2: Thanks, Madeline. Obviously, that's a very good question. It's an area of significant focus from our side. Elements that contributed to this substantial step up in gross margin in the second quarter were, on the one hand, the number of batches that were manufactured during that period.

Christian Itin: Thanks, Madeline. Obviously, very good question. It is an area of significant focus from our side. Elements that obviously contributed to this substantial step up in gross margin in Q2 were, on the one hand, obviously the number of batches that were manufactured through that period. Obviously an increase as you could see on the commercial side, but we also did actually consolidate our clinical trial manufacturing into The Nucleus, so there is a larger amount of volume that we push through, both on the commercial as well as the clinical side. That obviously helps a lot in terms of the key base costs that we have in the operation, the fixed costs within the operation, and obviously allows us to sort of actually get to a broader number of batches that can support that.

Speaker #2: Obviously, an increase, as you could see on the commercial side, but we also did actually consolidate our clinical trial manufacturing into the Nucleus. So there is a larger amount of volume that we pushed through, both on the commercial as well as the clinical side.

Speaker #2: That obviously helps a lot in terms of the key base cost that we have in the operation, the fixed costs within the operation, and obviously allows us to actually get to a broader number of batches that can support that.

Speaker #2: In addition, we've been very active in reviewing our entire operating model, and we've looked at every aspect along the manufacturing process to ensure that we actually gain efficiency in the entirety of the manufacturing process—both production as well as product release.

Christian Itin: In addition, we have been very active on reviewing our entire operating model and looked at every aspect along the manufacturing process to ensure that we actually gain efficiency in the entirety of the manufacturing process, both production as well as product release. Those activities will continue, but we made some significant changes during the course of Q2 that we expect to actually have beneficial impact as we continue the rest of the year. So those are kind of the key areas that actually impact and did drive this very positive development that we are seeing. We are guiding to 65% to 70% for kind of the more mature ALL business, which we expect to reach somewhere in the range of about 12 to 18 months. That is kind of the ballpark that we are currently seeing in terms of development.

Speaker #2: Those activities will continue, but we made some significant changes during the course of the second quarter that we expect to actually have a beneficial impact as we continue the rest of the year.

Speaker #2: So, those are kind of the key areas that actually impact and actually did drive this very positive development that we've seen. But regarding the 65 to 70 percent for kind of the more mature ALL business, we expect to reach somewhere in the range of about 12 to 18 months.

Speaker #2: That's kind of the ballpark that we're currently seeing in terms of development, and we will continue to update you on that. But obviously, it's an important step that we've taken now, which allows us to actually build a very strong foundation for the business.

Christian Itin: We will continue to update you on that, but an important step that we have taken now, and which allows us to actually build a very strong foundation for the business.

Speaker #3: Thank you. And our next question comes from Yann Anjou of Wells Fargo. Your line is open.

Operator: Thank you. Our next question comes from Yanan Zhu of Wells Fargo. Your line is open.

Speaker #5: Oh, great. Thanks for taking our question, and congrats on a great quarter. So, on the sales side, I was just wondering about your confidence about the next quarter or two.

Yanan Zhu: Oh, great. Thanks for taking our question and congrats on a great quarter. On the sales side, I was just wondering about your confidence about the next quarter or two. Given what visibility you might have into Q3, what is the confidence for another quarter with strong sales, given that you have this 74% jump from Q1 to Q2? The main question is ability to maintain continued sales at the new foundation. Similar, I guess, along the lines of a prior question. If you can comment on market share within the CAR T category, and whether the growth is from switching patients or taking share or growing the market in a way. Thanks.

Speaker #5: Given what you what visibility you might have into the third quarter, what's the confidence for another quarter with a strong sales? Given that you have this 74 percent jump from the first quarter to the second quarter, so the main question is ability to maintain continued sales at the new foundation similar I guess along the lines of a prior question.

Speaker #5: And if you can comment on market share within the CAR-T category, and whether the growth is from switching patients, or taking share, or growing the market in any way.

Speaker #5: Thanks.

Speaker #2: Yeah. Hi. Thanks for joining. I think when we looked at the kind of future growth, I think this is very much growing the overall CAR-T market share.

Christian Itin: Yeah. Hi, Yanan. Thanks for joining. I think when we look at the kind of future growth, this is very much growing the overall CAR T market share, which is kind of the key area of focus for us. That is where really most of the drive is to make sure that that is kind of where we are headed with the product. I think most of the dynamic we have seen so far has been both obviously within kind of the patient pool that already had prior access to CAR T, but it also included patients that were kind of somewhat outside of the group of patients that were considered to be suitable for CAR T therapy, and that is already visible in the data that was presented by the Walker Consortium at Tandem when you look at the patient composition.

Speaker #2: It's kind of the key area of focus for us, and so that's sort of where really most of the drive is—to sort of make sure that that's kind of where we're headed with the product.

Speaker #2: We see, I think, most of the dynamic we've seen so far has been both obviously within the patient pool that already has prior access to CAR-T, but it has also included patients that were somewhat outside of the group of patients that were considered to be suitable for CAR-T therapy.

Speaker #2: And that's already visible in the data that was presented by the Rocker Consortium at Tandem when you look at the patient composition. So I think we're seeing a very positive dynamic.

Christian Itin: I think we are seeing a very positive dynamic. I think we see good continued activity and demand. We expect that, obviously, to continue for the rest of the year and then continue to build momentum in 2027. So we are, I think, in a very good place there. As Celine asked before, there is probably going to be some elements of fluctuations that we may see between the quarters. We are very confident with the guidance we are giving for the full year, and I think we are very optimistic for 2027 as well.

Speaker #2: I think we have good, we see good continued activity and demand. We expect that, obviously, to continue for the rest of the year, and then continue to build momentum in 2027.

Speaker #2: So we're I think in a very good place there. As Salim asked before, there's going to probably going to be some elements of fluctuations that we may see between the quarters, but we're very confident with the guidance we're giving for the full year.

Speaker #2: And I think we're very optimistic for 2027 as well.

Speaker #5: Great. Great. Thanks.

Yanan Zhu: Great. Thanks.

Speaker #3: Thank you. And our next question comes from Gil Bloom of Nederman Company. Your line is open.

Operator: Thank you. Our next question comes from Gil Blum of Needham & Company. Your line is open.

Speaker #6: Good morning and good afternoon. I'm also I'd like to add my congratulations on a very strong quarter. Just a couple of quick ones. From us, as it relates to the updated SCR for lupus nephritis, we're assuming it's the same number of patients just with longer follow-up.

Gil Blum: Good morning and good afternoon. I would also like to add my congratulations on a very strong quarter. Just a couple of quick ones from us. As it relates to the updated SCr for lupus nephritis, we are assuming it is the same number of patients, just with longer follow-up, if you have any additional color to give there. As a follow-up, you guys are already at 82 centers, and you are thinking about 80 centers by year-end. How should we think about how many centers you may have by year-end? Thank you.

Speaker #6: If you have any additional callers to give their input, and as a follow-up, you guys are already at 82 centers and you're thinking about 80 centers by year-end.

Speaker #6: How should we think about how many centers you may have by year-end? Thank you.

Speaker #2: Thanks, Gil. Really appreciate the question. With regards to the Carlisle study, obviously, we're going to have a substantial portion of the patients that will have 12 months and longer follow-up, which we believe is going to be very meaningful.

Christian Itin: Thanks, Gil. I really appreciate the question. With regards to the CARLYSLE study, obviously we are going to have a substantial portion of the patients that will have 12 months and longer follow-up, which we believe is going to be very meaningful and give us a real sense for the quality of the reset that I think we have seen early evidence for in our last data update for the CARLYSLE study. This obviously gives a substantially longer view on those patients and believe that this is actually going to be, I think, very helpful to understand the magnitude of the clinical benefit that we may be able to induce in the severe lupus patients. So that is going to be, I think, the key focus, is really the longer-term follow-up and the impact on the clinical outcomes.

Speaker #2: And give us a real sense for the quality of the reset that I think we've seen early evidence for in our last data update for the CAROUSEL study.

Speaker #2: But this obviously gives us substantially longer view on those patients and believe that this is actually going to be I think very helpful to understand sort of the magnitude of the clinical benefit that we may be able to induce in these severe lupus patients.

Speaker #2: So that's going to be, I think, the key focus—really the longer-term follow-up and the impact on the clinical outcomes. With regards to the centers, as you rightly pointed out, we kind of hit the goal mid-year of being at 80 centers or above.

Christian Itin: With regards to the centers, as you rightly pointed out, we hit the goal mid-year of being at 80 centers or above. I would assume we are going to be at the 90-plus centers by the end of the year. Obviously, that gives us a very good reach, and I think will allow us to make sure that the product is properly accessible across the entirety of the US. So this is really one of the key areas we will continue to work on.

Speaker #2: I would assume we're going to be at the 90-plus centers by the end of the year. And obviously, that gives us a very good reach.

Speaker #2: And I think it will allow us to make sure that the product is properly accessible across the entirety of the US. And so this is really one of the key areas we'll continue to work on.

Speaker #3: Thank you. And our next question comes from Simon Baker of Rothschild and Company. Your line is open.

Operator: Thank you. Our next question comes from Simon Baker of Rothschild & Co. Your line is open.

Speaker #7: Thank you for taking my question. Two quick ones, if I may, please. I wonder if you could give us any help on OPEX run rates.

Simon Baker: Thank you for taking my question. Two quick ones, if I may, please. I wonder if you could give us any help on OpEx run rates. It seems that we've had a fairly similar performance in the last two quarters on SG&A. R&D has fluctuated a little bit. I am just wondering how Q2 or H1 works for those two cost lines as an indicator for the second half. Secondly, a question on capacity. The guidance for this year implies probably about 300 patients treated. Given that volume and given the clinical trial material, which will obviously only increase going forward, I just wonder if you could give us an update on where we are for capacity at The Nucleus as it stands. We know it is a very modular facility, how that can evolve over the coming years. Thanks so much.

Speaker #7: It seems that we've had a fairly similar performance in the last two quarters on SG&A. R&D has fluctuated a little bit. I'm just wondering how Q2 or H1 works for those two cost lines as an indicator for the second half.

Speaker #7: And then secondly, on a question on capacity, the guidance for this year implies probably about 300 patients. Treated. Given the given that volume and given the clinical trial material, which obviously only increased going forward, I just wonder if you could give us an update on where we are for capacity at Nucleus as it stands and we know it's a very modular facility.

Speaker #7: How that can evolve over the coming years. Thanks so much.

Speaker #2: Thanks, Simon. Very good question. I'll start with the capacity question and then hand over for the OPEX question to Bob. On the capacity side, we're very well set up from a capacity perspective.

Christian Itin: Thanks, Simon. Very good question. I will start with the capacity question and then hand over for the OpEx question to Rob. On the capacity side, we are very well set up from a capacity perspective. We have an ability, we believe at this point, to fully serve the ALL market with our current setup, which is both the actual physical setup as well as from an operator and process perspective. So we are very well set up from a capacity perspective, and we have an ability to obviously take on licensed additional clean rooms as we are getting ready to really substantially increase beyond the ALL, which includes both adults and peds, where we are very well set up today. Going beyond, obviously, we can mobilize additional clean rooms at the facility.

Speaker #2: We have an ability, we believe at this point, to fully serve the ALL market with our current setup—which is both the actual physical setup, as well as from an operator and process perspective.

Speaker #2: So we're very well set up from a capacity perspective. And we have an ability to obviously take on licensed additional clean rooms then as we're getting ready to really substantially increase beyond the ALL, which includes both adults and peds, where we're very well set up today.

Speaker #2: Going beyond, obviously, we can mobilize additional clean rooms at the facility. You don't want to do that too early because at that point, it would actually increase your overall cost of goods.

Christian Itin: You do not want to do that too early, because at that point, it would actually increase your overall cost of goods, which you do not want to do, because your operating costs go up with more capacity than in that case might be idle and not properly used. But we have adequate levels of capacity we can mobilize beyond where we are currently set up. But from an ALL perspective, we are fully set up for both adults and pediatrics in the territories we are active in and can actually very well manage that. But it also gives you a good sense for the level of improvements we are expecting to see.

Speaker #2: Which you don't want to do because you're operating costs go up with more capacity than in that case might be idle and not properly used.

Speaker #2: But we have adequate levels of capacity we can mobilize beyond where we're currently set up. But for from an ALL perspective, we're fully set up for both adults and pediatrics in the territories we're actually in.

Speaker #2: And can actually very well manage that. But it also gives you a good sense for the level of improvements we're expecting to see. And with that, obviously, what's ultimately going to drive, as we're increasing the number of batches through the facility, will actually be how this is going to help us drive down the overall cost per batch, but also obviously increase the margins overall for the products.

Christian Itin: With that, obviously, what is ultimately going to drive as we are increasing the number of batches through the facility, well, actually how this is going to help us drive down the overall cost per batch, but also increase, obviously, the margins overall for the products. With that, I think we are headed over to the OpEx question, and I think this is one for you, Rob.

Speaker #2: With that, I think we're headed over to the OPEX question. And I think this is on for you well.

Speaker #7: Yep. Thanks for the question, Simon. I'll give you maybe a little bit more color when you think about our R&D line. It's been, if you look at last year, even it's probably on average of kind of mid to high 20 million per quarter.

Rob Dolski: Yep. Thanks for the question, Simon. I will give you maybe a little bit more color. When you think about our R&D line, if you look at last year even, it is probably on average of mid to high GBP 20 million per quarter. What you will see here is some variability around clinical production and when that actually hits in terms of the actual quarter of production and delivery to the sites. You saw a step up from Q1 to Q2 this year that was largely driven by enrollment in studies more than anything, and some of the clinical production. Those that are associated with that, it is like a one-time event within the study itself. But other than that, I think it is fair to say that we are not expecting any other kind of significant ramp up or decrease.

Speaker #7: What you'll see here is some variability around clinical production. And when that actually hits in terms of the actual quarter of production and delivery to the sites, you saw a step up from Q1 to Q2 this year that was largely driven by kind of enrollment in studies more than anything in some of the clinical production.

Speaker #7: This is associated with that. It's kind of like a one-time event within the study itself. But other than that, I think it's fair to say that we don't expect any other kind of significant ramp-up or decrease.

Speaker #7: We're in the middle of executing a lot of this next wave of studies that Christian's kind of walked through. On the SG&A line, the one thing I would call out is predominantly in the first quarter and second quarter of this year, we also were taking some of these one-time charges associated with the restructuring that we announced back in April.

Rob Dolski: We are in the middle of executing a lot of this next wave of studies that Christian has walked through. On the SG&A line, the one thing I would call out is predominantly in the first quarter and second quarter this year, we also were taking some of these one-time charges associated with the restructuring that we announced back in April. So that is incorporated on this line for the total company. Again, if you look to exit last year, we were in a mid to high 30 range. So when you adjust for some of those things, we are still in that ballpark, with some very typical year-over-year inflation increases and those kind of things. But it is fairly stable from that standpoint. Again, we are not expecting any significant ramp up or decrease other than some of those one-time items, which are largely behind us now with the second quarter.

Speaker #7: So that is incorporated on this line for the total company. Again, if you look to kind of exit last year, we were in kind of a mid to high 30 range and so when you kind of adjust for some of those things, we're kind of still on that ballpark.

Rob Dolski: So when you adjust for some of those things, we are still in that ballpark, with some very typical year-over-year inflation increases and those kind of things. But it is fairly stable from that standpoint. Again, we are not expecting any significant ramp up or decrease other than some of those one-time items, which are largely behind us now with the second quarter.

Speaker #7: With some very typical kind of year-over-year inflation increases and those kind of things. But it's fairly stable from that standpoint. Again, we're not expecting any significant kind of ramp-up or decrease other than some of those one-time items, which are largely behind us now with the second quarter.

Speaker #7: That's great. Thanks so much.

Simon Baker: That is great. Thanks so much.

Speaker #3: Thank you. And our next question comes from Sebastian Vandershoot of Kempen. Your line is open.

Operator: Thank you. Our next question comes from Sebastiaan van der Schoot of Kempen. Your line is open.

Speaker #2: Hi, team. Congrats on the excellent quarter. I was wondering whether you could provide some insights into those 80 activated sites. How many of those have actually already treated and have had the experience without cuts in?

Sebastiaan van der Schoot: Hi, team. Congrats on the excellent quarter. I was wondering whether you could provide some insights into those 80 activated sites. How many of those have actually already treated and have had experience with our

Speaker #2: And do you see an acceleration of the time between activation and first patient treatment? And then regarding capacity, are you also evaluating an automated system?

Christian Itin: Do you see an acceleration of the time between activation and first patient treatment? Regarding the capacity, you are also evaluating an automated system. When would you implement such a system? Is it already in for adult ALL indication, or will that only be if you also get approvals in autoimmune? Thank you. Thanks a lot, Seb. With regards to the 80 sites, the vast majority of them actually have already treated a patient. We do see that actually that transition from getting activated and actually treating patients, it tends to be fairly quick. Quite often, actually, the activation is sort of motivated by one or two patients that are suitable for CAR T therapy at the center, and that is really driving the process and obviously, I think is a key part of the motivation also for centers to get authorized and to get online.

Speaker #2: When would you implement such a system? Is that already in the for adult ALL indication or would that only be if you also get approvals in autoimmune?

Speaker #2: Thank you. Thanks a lot, Seth. . With regards to the 80 sites, the majority vast majority of them actually have already treated a patient.

Speaker #2: So we do see that, actually, that transition from getting activated and actually treating patients tends to be fairly quick. Quite often, actually, the activation is sort of motivated by one or two patients that are suitable for CAR-T therapy at the center.

Speaker #2: And that's really driving the process and obviously I think is a key part of the motivation also for centers to get authorized and to get online.

Speaker #2: So we're seeing a very positive dynamic there. And obviously, depending on the level of familiarity with Obe-cel, most of the centers that we are now actually adding have not been part of clinical trials with Obe-cel before.

Christian Itin: We are seeing a very positive dynamic there. Obviously depending on the level of familiarity with obe-cel, most of the centers, obviously, that we now actually are adding have not been part of clinical trials with obe-cel before. That obviously is going to be then the first time that they are going to be using the product. That is certainly, I think the dynamic that we are seeing at the stage that we are at. Obviously early on, we had a lot of centers that already had experience, and we basically had all of the seamless roll forward in terms of the experience from the development to the commercial side. Now, most of the centers we are adding on are centers that actually, where obe-cel is going to be a properly new product, that has not been actually used at the center before.

Speaker #2: So that obviously is going to be then the first time that we're going to be using the product. So that is certainly I think the dynamic that we're seeing at the stage that we're at.

Speaker #2: Obviously, early on, we had a lot of centers that already had experience and we basically had all of the seamless roll forward in terms of the experience from the development to the commercial side.

Speaker #2: Now, most of the centers we're adding on are centers that actually where OV cell is going to be properly a new product. That hasn't been actually used at the center before.

Speaker #2: And that also obviously certainly as the centers start building doesn't lead to an acceleration, but a pretty steady pace that we're seeing across these centers from here on forward.

Christian Itin: That also, obviously, certainly as the centers start building, it does not lead to an acceleration, but a pretty steady pace that we are seeing across these centers from here on forward. That is sort of the expectation. With regards to the capacity question, obviously, as I indicated before to Simon, we are very well set up. Our manufacturing process is actually to quite a significant extent already automated. We are going to expect to do another significant change on our current platform, probably over the next 12 to 15 months, which will get us to a very, very high level of automation on the system. Then obviously we are looking at additional technology for future opportunities.

Speaker #2: That's sort of the expectation. With regards to the capacity question, obviously, as I indicated before to Simon, we're very well set up. Our manufacturing process is actually to quite a significant extent already automated.

Speaker #2: We are going to expect to do another significant change on our current platform probably over the next 12 to 15 months, which will go to a very, very high level of automation on the system.

Speaker #2: And then obviously, we're looking at additional technology for future opportunities. But in terms of the ALL setup, we're very well set up. And we're basically getting a lot of the gains out of the operational improvements that we're doing in the facility.

Christian Itin: But in terms of the ALL setup, we are very well set up and we are basically getting a lot of the gains out of the operational improvements that we are doing in the facility, not just on the actual manufacturing process, but the entirety of the whole chain of events that from the input into the facility, products coming in to all processes through testing, through release, and then obviously the products reaching or being sent back to the treatment centers. Every one of those steps actually is currently being evaluated and we are working on improvements and efficiency gains. There has been quite significant progress that we have already been able to actually realize and build into the operation at this point in time.

Speaker #2: Not just on the actual manufacturing process, but the entirety of the whole chain of events—from the input into the facility, products coming in, to all processes, through testing, through release, and then, obviously, the products being sent back to the treatment centers.

Speaker #2: Every one of those steps is currently being evaluated, and we're working on improvements and efficiency gains. There's been quite significant progress that we've already been able to realize and build into the operation at this point in time.

Speaker #3: Thank you. And our next question comes from Rajan Sharma of Golden Sachs. Your line is open.

Operator: Thank you. Our next question comes from Rajan Sharma of Goldman Sachs. Your line is open.

Speaker #8: Hi. Thanks for taking my question. I realize it's early, but just could you help us understand what the UK contribution was to or capital revenues in the quarter and what the initial feedback has been on the launch there?

Rajan Sharma: Hi. Thanks for taking my question. I realize it is early, but could you help us understand what the UK contribution was to obe-cel revenues in the quarter and what the initial feedback has been on the launch there? Perhaps if you could just help us understand also how we should think about contribution for the remainder of the year, and where you are in terms of center activation. Thank you.

Speaker #8: Perhaps if you could just help us understand also how we should think about contribution for the remainder of the year and where you are in terms of center activation.

Speaker #8: Thank you.

Speaker #2: Yep. Thanks a lot, Rajan. Really good question. So when we look obviously at the UK, the UK has about give or take 60 million people, which is about one sixth of the US population.

Christian Itin: Yep. Thanks a lot, Rajan. Really good question. So when we look, obviously, at the UK, the UK has about, give or take, 60 million people, which is about one-sixth of the US population. So I think that is a ratio, I think, that sort of gets you to the what is the potential ultimately, and what is the ultimate patient numbers that you are going to have. They are certainly going to be about that ratio in terms of differential that we are going to expect. We do see a very positive initial momentum. Obviously, we have been active in a substantial number of clinical trials over the years in the UK. So there is an element of familiarity with the product across a number of the academic centers. We now also have activated already a good number of them. We expect to be at around 20 or so by the end of the year.

Speaker #2: So I think that's a ratio I think that sort of gets you sort of what's the potential ultimately and what's the ultimate patient numbers that you're going to have.

Speaker #2: There's certainly going to be about that ratio in terms of differential. That we're going to expect. We do see a very positive initial momentum.

Speaker #2: Obviously, we've been active in a substantial number of clinical trials over the years in the UK. So there's an element of familiarity with the product across a number of the academic centers.

Christian Itin: Obviously, we have been active in a substantial number of clinical trials over the years in the UK. So there is an element of familiarity with the product across a number of the academic centers. We now also have activated already a good number of them. We expect to be at around 20 or so by the end of the year.

Speaker #2: And we've now obviously already activated a good number of them. We expect to be at around 20 or so by the end of the year.

Speaker #2: And that gives us, we believe, a good footprint across the UK. Now, at this point, when we talk about the UK, we're really talking about predominantly the England.

Christian Itin: That gives us, we believe, a good footprint across the UK. At this point, when we talk about the UK, we are really talking about predominantly England. We are in the process of market access in Scotland. That will obviously then expand to the full size of the UK as well. So we are, I think, on very good footing there, very good momentum, and we do expect that that will actually continue going forward for the H2 of the year. So from, I think, an initial perspective, we do believe that we actually have seen very nice momentum. But given the difference in just the population size, we are looking at substantially less than 10% of US sales that we are sort of seeing at this point in time. So that gradually, I think, we will sort of probably get beyond that.

Speaker #2: We're in the process of market access in Scotland. That will obviously then extend to the full size of the UK. As well. So there is we're in I think on very good footing there.

Speaker #2: That's very good momentum, and we do expect that will actually continue going forward for the second half of the year. So from, I think, an initial perspective, we do believe that we actually see very nice momentum.

Speaker #2: But given the difference in just population size, we're looking at substantially less than 10% of US sales. That we're sort of seeing at this point in time.

Speaker #2: So that, eventually, I think, will probably get beyond that. But it's an early part of the launch, and we have just completed the second quarter of the launch in the UK.

Christian Itin: It is an early part of the launch, and we are just half completed the Q2 of the launch in the UK.

Speaker #8: Thank you.

Rajan Sharma: Thank you.

Speaker #3: Thank you. And our next question comes from Emily Bodnar of HC Wainwright. Your line is open.

Operator: Thank you. Our next question comes from Emily Bodnar of H.C. Wainwright. Your line is open.

Emily Bodnar: Hi. Good morning. Thanks for taking the questions, and congrats on the quarter as well. Maybe can you frame the ALARIC readout for us by year-end and what you are looking to see response rate-wise for BCMA CAR T to maybe want to move this program forward? Thank you.

Speaker #5: Hi, good morning. Thanks for taking the questions, and congrats on the quarter as well. Maybe can you frame the Alaric readout for us by year-end, and what you're kind of looking to see response rate-wise versus BCMA CAR-T to maybe want to move those programs forward?

Speaker #5: Thank you.

Speaker #2: Thanks, Emily. On the Alaric study, this is a study we're conducting with our colleagues at UCL, and we are evaluating, obviously, the use of the BCMA program here.

Christian Itin: Thanks, Emily. On the ALARIC study, this is a study we are conducting with our colleagues at UCL, and we are evaluating, obviously, the use of the BCMA program here in the light chain amyloidosis setting. What we are interested in is to see, obviously, a good level of activity, a good safety profile, which is important in these patients, and with that, I think, build the foundation for the program. I think at this point, it is probably too early to guide on how we might want to consider taking the program forward. We are in this phase I study, which is not complete at this point. This is the first data set coming out of the study, and certainly a bit premature to get a good feel for how the program might stack up.

Speaker #2: In the light chain amyloidosis setting. What we're interested in is to see obviously a good level of activity, a good safety profile, which is important in these patients.

Speaker #2: And, sort of with that, I think we've built the foundation for the program. I think at this point, it's probably too early to guide on how we might want to consider taking the program forward.

Speaker #2: We're in this phase one study, which is not complete at this point. This is the first data set coming out of the study. And certainly a bit premature to sort of actually get a good feel for how the program might stack up.

Speaker #2: I think it's worthwhile keeping in mind that the activity you expect in this indication is very high, and it's probably not going to be straightforward to actually look at differentiation based on response rates in this indication.

Christian Itin: I think it is worthwhile keeping in mind that the activity that we expect in this indication is very high, and it is probably not going to be straightforward to look at differentiation based on response rates in this indication, certainly not on small patient numbers. But I think we want to see a very solid response rate in these patients and a good safety profile. I think those are the two hallmarks and the two pieces of information we are looking for.

Speaker #2: Certainly not on small patient numbers. But I think we want to see a very solid response rate in these patients and a good safety profile.

Speaker #2: I think those are the two hallmarks and the two pieces of information we're looking for.

Speaker #5: Great. Thank you.

Emily Bodnar: Great. Thank you.

Speaker #3: Thank you. And our next question comes from Roger Song of Jefferies. Your line is open.

Operator: Thank you. Our next question comes from Roger Song of Jefferies. Your line is open.

[Analyst] (Jefferies): Hi. This is Fiona on for Roger. Congrats on an amazing quarter, and thanks for taking our question. Just following up on the question regarding the activated centers and physician adoption, can you comment on the utilization and repeat behavior from physicians among the centers that is more active or you have more visibility into? Is it more concentrated in certain centers, or is it more widely distributed? Thanks, and I will hop back in the queue.

Fiona Huang: Hi. This is Fiona on for Roger. Congrats on an amazing quarter, and thanks for taking our question. Just following up on the question regarding the activated centers and physician adoption, can you comment on the utilization and repeat behavior from physicians among the centers that is more active or you have more visibility into? Is it more concentrated in certain centers, or is it more widely distributed? Thanks, and I will hop back in the queue.

Speaker #6: Hi. This is Fiona for Roger. Congrats on an amazing quarter. And thanks for taking our question. Just following up on the question regarding the activated centers and physician adoption.

Speaker #6: Can you comment on the utilization and repeat behavior from physicians among the centers that are more active or where you have more visibility? Is it more concentrated in certain centers, or is it more widely distributed?

Speaker #6: Thanks. And I'll head back in the queue.

Speaker #2: Thanks a lot, Fiona. So, when we look at the centers that we've been active in for a longer period of time now, we do see very positive adoption across those centers.

Christian Itin: Thanks a lot, Fiona. When we look at the centers that we've been active in for a longer period of time now, we do see a very positive adoption across those centers. They do report the patients slightly differently depending on the center. So you might actually have centers that report predominantly through one name, but actually what's happening behind that name is actually that the broader team that's actually utilizing the product and actually employing it. Other centers actually report on the individual physician basis, and we have better visibility. So we see, but in general, we see a very nice level of adoption across obviously all the CAR T users at the centers.

Speaker #2: They do report the patients slightly differently depending on the center. So you might actually have a center that reports predominantly through one name, but actually what's happening behind that name is a broader team that's utilizing the product and employing it.

Speaker #2: Other centers actually report on the individual physician basis. And we have better visibility. So we see, but in general, we see a very nice level of adoption across obviously all the CAR-T users at the centers.

Speaker #2: And one of the key things that we're obviously looking at, and we're certainly working on, is to see that we can ultimately expand the number of CAR-T users in those centers to really get a much broader adoption in each one of the centers.

Christian Itin: One of the key things that we're obviously looking at and we're working on is to see that we can expand, ultimately, the number of CAR T users in those centers to really get a much broader adoption in each one of the centers. That's one dimension. The other dimension that we're certainly looking at very carefully is obviously the referral patterns into the centers and obviously to look for ways to support the referrals into the centers as well.

Speaker #2: That's one dimension. The other dimension that we're certainly looking at very carefully is obviously the referral patterns into the centers and obviously to look for ways to support the referrals into the centers as well.

[Analyst] (Jefferies): Very helpful. Thank you.

Fiona Huang: Very helpful. Thank you.

Speaker #6: Very helpful. Thank you.

Speaker #3: Thank you. I'm showing no further questions at this time. I'd like to turn it back to Christian Itin for closing remarks.

Operator: Thank you. I am showing no further questions at this time. I would like to turn it back to Christian Itin for closing remarks.

Speaker #2: Well, thank you very much for joining us. For our Q2 update, obviously a very positive quarter. A lot of good momentum and we're looking forward to keeping you updated.

Christian Itin: Well, thank you very much for joining us for our Q2 update. Obviously, a very positive quarter, a lot of good momentum, and we are looking forward to keeping you updated and talk to you at the latest at our next quarterly update, but most likely meet in between. Thank you very much, and have a great day.

Speaker #2: And talk to you at the latest at our next quarterly update, but most likely meet in between. Thank you very much, and have a great day.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

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