Morning everyone, thank you for joining us at the first day of the Needham Healthcare Conference. My name is Gil Blum, and I am a Senior Biotech Analyst here at Needham & Company, and I cover the immuno-oncology and gene therapy sub-sectors. It is my pleasure to have with me today Christian Itin, the CEO of Autolus. As a reminder, any viewers who are watching through our conference portal are able to submit questions via the Ask a Question box below the video feed window. Christian, maybe a good place to start, just recent developments and setup, maybe for those who are unfamiliar with Autolus' main mission, how you guys differentiate yourself in the CAR-T space.
Yeah. First off, thanks for the invitation. It is obviously great to be here. We've been really focusing on creating CAR-T products that give us an ability to have a high level of clinical activity and combine that with a good safety profile so we can actually provide broad access for patients across the kind of range of the condition that we're in. The primary focus that we have at this point is on our product AUCATZYL or obe-cel, which is on the market in the U.S. now for a little more than a year. It's on the market in the U.K. since the beginning of the year, and we're also working on market access in Europe. The product actually has been performing really well. It's in patients with relapsed refractory acute lymphoblastic leukemia.
It's the B-cell form of the disease, and the focus is on the adult patients, and that's where the label is with the product. What's been really exciting to see as we were launching the product in the U.S. that about 2/3 of our patients were, the data for those were collected in a separate study by the Rocket Consortium and gives us actually a very good understanding how the product is performing in the real-world setting. This is where we are. We manufacture the product ourselves, provide the product out of the U.K. We have a logistics and supply chain that goes back and forth across the pond, which is incredibly robust, and has sort of actually proven even through the pandemic and the conduct of the pivotal study to be extremely reliable, and gives us a very predictable and a very attractive turnaround time.
Also, we've been able to show that we have very high levels of manufacturing success rate, which is obviously critical for these patients. Absolutely important to know that when a patient actually provides T- cells, that, in fact, those cells are coming back genetically engineered to do their job, and in this case, obviously remove the leukemic cells.
Maybe a good place to start, just to remind our viewers, what is the total addressable market in relapsed/refractory?
When we look from a U.S. perspective and look at the relapse refractory adult population, we're at around 1,800 patients that are impacted every year. That is obviously a population with an extremely high medical need. The disease is extremely aggressive. It is primarily located in the bone marrow. As the disease actually progresses and sort of, frankly, goes through the various stages, also has a capability of getting out of the bone marrow and settle in other parts of the body. That creates a lot of very challenging situations because part of the organs that are impacted are the CNS, and this could be either in the brain or it could be even in your spine.
The manifestations at that point can actually be at not just a immunocompromised state that these patients get into because the bone marrow stops working properly, but also can have major impact in terms of cognition, even down to the challenges related to paralysis if you happen to have that disease actually located in your spine.
Excellent. Just again, to set expectations here, how would you say the efficacy of AUCATZYL compares to the standard of care in relapse refractory ALL and specifically to the other CAR-T in the space, Novartis?
What we've been able to show in the pivotal study where we had studied patients that have at least 5% tumor burden at inclusion, is that we had about 78% overall response rate in these patients, with the vast majority of these patients have very deep responses, are MRD-negative, measured by NGS. We saw that that translated in that population with now more than three years of follow-up, that about, give or take, 40% of the patients were in ongoing remission, and the vast majority of those patients had no subsequent therapy, which obviously gives us a lot of confidence that we had a very profound effect in those patients.
What is very interesting is to see that from a commercial perspective and in-market experience perspective, which was collected by the Rocket Consortium and presented at ASH and then at Tandem, is that we're seeing actually that ORR, the objective response rate in these patients in the real-world setting is actually higher. It's around 95%. That has to do with the fact that many of these patients, give or take, about 1/3 of these patients actually were included with relapsing disease, but before they reached 5% of disease burden in the marrow. That gives the patients actually a higher probability of actually being successfully treated and also actually experience responses and longer-term outcomes. That would be consistent also with what we've observed in the FELIX study, in the pivotal study.
We see quite a remarkable high level of activity in the real-world setting, but we also do see a very nice confirmation of the safety profile that we had observed in FELIX. One of the challenges that you have if you have immunologically highly active products, as CAR T-cells are, is that you could also have immunological types of toxicities, and there are two that are standing out. One is cytokine release syndrome, which is what we learned a lot during the COVID pandemic, basically in its mild forms, fever, chills, as we would experience with a viral infection. This can actually go, if you get into grade threes and fours, can go to tremors, aphasia, ultimately seizures.
It's quite a range of manifestations that are sort of increase in intensity as the grading goes up and requires for many of these patients, if you have high-grade neurological toxicities or either CRS high grade or neurological toxicities, called ICANS, you actually have to get these patients into intensive care and manage them. The way you have to manage them at that point is, first of all, it takes quite a bit of time to sort of recuperate, and you need to actually give these patients quite a bit of steroids during that period, which actually makes them much more susceptible for infections and subsequent risks of infections. That's sort of the challenge that you have given the modality.
What was really encouraging was that both in the FELIX study and then now in the real-world setting, we're seeing that the high-grade events are very low. We have actually not observed high-grade cytokine release syndrome in the real-world setting, and we've only seen 3% high-grade neurological toxicities in the real-world setting. Those numbers compare extremely well to any other CAR-T that's been evaluated in the acute leukemia setting and provides an important element of differentiation. More importantly, it actually gives the physician an ability to manage patients and treat patients that otherwise you'd consider too frail, in too much of a challenging position that you wouldn't actually consider even other types of therapies.
We had a recent event where we had some of the KOLs talk that are very well established in the field, and they did highlight that particular aspect, that it actually allows you to treat patients you wouldn't have considered for CAR-T, but actually you wouldn't have considered for any other very active therapy. I think that hopefully gives us an opportunity to really open up. I think this is a treatment option for a much wider group of patients.
If I were to rephrase this a little bit, you're basically trying to say that the safety profile expands the market as it relates to CAR-T treatment.
That is what we're seeing. So we're seeing older patients that actually are getting access to treatment, which is a clear indicator that patients with more comorbidities, in fact, are still considered safe to treat. It also includes patients with very high tumor burden that are included. But on the other end of the spectrum, it also actually opens up to patients that obviously have low disease burden and can actually receive the therapy in a hospital outpatient setting. So it actually goes in every direction by reducing the actual management burden for the hospitals and the treating physicians and nurses. Actually allows you to actually provide broader access, and with that, have an ability to really broaden the utility and market share ultimately for this type of a product.
Great. AUCATZYL's been on the market for over a year now. What can you tell us about kind of the indications of commercial uptake, and what do you think are the primary bottlenecks, if there are any?
Right. We have started, obviously, the launch in the U.S. at the very beginning of last year, and we started with, give or take, 15-20 centers that were sort of ready to start enrolling patients. Centers actually need to be accredited, so they have to go through training. There is a full onboarding process that takes place for the centers to actually be in a position to deliver therapy. We started with about 15-20. By the end of the year, we reached about the mid-60s. We're now in the mid-70s in terms of centers across the U.S. that are actually ready and are in a position to deliver AUCATZYL. That process is obviously important.
What that does, obviously, is that as we're moving through the last year, we gradually added, obviously, a much broader footprint for patients to actually have an ability to access AUCATZYL. We did see that actually in the dynamic that we're seeing with the product. What is very important is that this is very much a disease that depends on the experience of the physicians, the treating physicians with the product, the familiarity, the experience that the physicians are gaining. Obviously, you start out with a group of physicians that have prior experience through the clinical trial work and then gradually actually go and increase that.
That obviously means that even within a given center, you might start with an individual or two physicians at a center that start prescribing, and then you actually see growth of adoption across multiple of the physicians until you have a full penetration within a center. That's true both from a treating physician perspective, but then also in terms of the nature of the patients you're going to use it. As an example, if the physician is a transplanter, obviously the primary problem the transplanter actually faces is patients that are not eligible for transplant. Those patients actually then could be the first for that type of physician to actually take on patients that couldn't be transplanted for whatever reason, biological or other, and actually offering AUCATZYL as an alternative, and that's how they gain initial experience.
You have other physicians who are not transplanters, but are cell therapists. Well, those are the ones that would right away use a product like a AUCATZYL because that's the primary modality that they would normally consider. You got the physicians that are treating predominantly the frontline patients, and they're used to giving high-dose chemotherapy. They might give inotuzumab, blinatumomab. Those are the range of agents that they would actually be giving. If there's a transplant needed for consolidation, they would pass the patient on to the transplanter. It's also for those physicians to actually start to gain experience for those patients of theirs that start to relapse, being a first relapse, and are now in need of another therapeutic approach. That's another dimension that we're going into. That's in every given center. We're going in these basically three directions.
That actually allows us to sort of increase, frankly, the base on which these patients can actually access the product. Ultimately, what you build over time is a larger group of physician and a growing group of physicians that have experience with the product, gain confidence, see the handling, which is obviously a great thing because it's immediate. The safety benefits that we have with the product are immediately experienceable. Over time, see how the patients are doing, and you see actually that starting to translate into momentum. We very much were seeing that during the course of last year, building into this year. We'll expect that we're going to have sort of a gradual kind of growth with the product. We don't expect sort of step functions, but a gradual growth because it's a gradual expansion of experience, which is the foundation here.
Okay. Where would you say the company's investing most of its resources as it relates to promoting the launch?
Actually, most of our resources actually going to providing services. We're supporting the centers and the patients along the entire process from supporting actually getting the patients registered, supporting the apheresis, which is the cell collection at the site, coordinating with the centers and the patient through that. We might provide support for lodging for the patients, as well as the caregiver, and actually go through that entire process, go through treatment, and then obviously through the manufacturing process, logistics, and getting back the product to the centers. There's a lot of support given. In parallel to that support, which is probably where the biggest commercial investment goes into, we obviously do have, obviously, kind of medical education, and that's obviously another key part of the process.
Obviously, a lot of presence at the conferences, a lot of presentations we've been able to actually provide during the course of the last probably 24 months on the product across quite a wide range of types of conferences as well as publications, and really support kind of the knowledge base around the product and the opportunity with the product. Those are kind of the ranges in terms of activities that we're supporting, but it's very much, this is a truly personalized therapy. It is personal. These are relationships. This is support, direct support, to make sure that indeed, that highly coordinated process actually is properly working and is a good experience for the patient as well as the treating physicians and nurses.
Great. Not a unique problem with you guys, but margins for cell therapies can be challenging. Maybe you can walk us through a bit of what is Autolus doing to improve these margins, and what should we expect in the near term?
Right. The type of manufacture we're conducting is obviously personalized. We manufacture each patient individually, and what that requires is a setup that actually allows you to produce, in parallel, a larger number of products to be able to serve that demand. Now, when we look at the flow that goes through any given manufacturing facility, obviously it depends on kind of how many products are running through, on how much of that facility actually is sort of overlaid and burdened on the cost of that individual product. As you start out, you have a handful of products go through per month. Well, you still have to have a whole infrastructure that you have to have in place to support. That obviously means that the cost of goods is relatively high.
When you start actually to get to a good flow of patients and you start to actually have a good overall flow in your manufacturing operation, that contribution of that fixed overhead cost actually is massively reduced. It's very much from there on forward on the actual amount of time that you spend per product manufacturing each product. Those are the key levers. It's the volume that goes through the facility and it's the time you spend per product. Those are the biggest levers that you have in terms of actually reducing overall cost of goods and with that, obviously, improving your overall margins.
Obviously there are a lot of elements that you can do to sort of optimize just the efficiency around the use of resources, materials, and so on, that then actually give you an added layer of improvements and efficiency you can gain. As we're seeing and as we're projecting, obviously first year of launch, you're definitely going to be in a negative place from a gross margin perspective. We're going to positive gross margin this year. We'll see, I think, a very nice transition there. We'll continue actually see that improve as we go into 2027 and 2028, when we're expecting to actually reach a level where we're sort of approaching a positive cash flow out of the ALL business.
Great. You did mention the investor event that happened last week. One really interesting topic that was brought up there is frontline consolidation with AUCATZYL. This is something we've heard from physicians, especially in academic centers in the past as well, and not just for AUCATZYL, for any CAR-T. Maybe to put this in context, what kind of patients would be amenable to this, and how much would that grow your market?
Right. When you look at the experience that a frontline, a newly diagnosed patient goes through with ALL, is that once you're diagnosed, you're going on to a combination chemotherapy regimen that is given in cycles so that you can sort of recover in between, and basically interspersed with courses of blinatumomab and courses of inotuzumab. The totality of that treatment is up to 36 months. It's a three-year therapy, which is absolutely horrendous to go through. The challenge is, and that as we were going through this development over the last 20 or so years, is we kept adding mechanisms, reagents, courses of therapy, and we were starting to see actually improvements in the outcome in the patients.
As we've over the last few years kept adding, those improvements started to diminish, and in fact, there are a number of patients where in fact the increase in intensity did not translate into an improved outcome and improved survival. This became very clear with the large landmark study that was conducted by ECOG, called the ECOG 1910 study, where, to the backbone of the standard of care, chemo, additional cycles of blinatumomab were added, which really was beneficial for some of the patients. If you looked at patients that were older than 55 years of age, actually, you were treading water. You increased the intensity of the treatment, but you did not gain an improvement in overall survival, which told you something about the increase in ultimately treatment-related mortality as a consequence of the treatment.
As an issue in terms of the intensity of the treatment, at net-net, you were treading water, and we're not improving any further. One of the key things that becomes very attractive when you look at the frontline setting is to see where there's an ability to actually reduce the time and the intensity of that upfront treatment and get to a definitive consolidation and avoid that long exposure of high levels of toxicity for the patients. That was sort of the approach that several physicians in the U.S. and in Europe approached us with, to actually look at subsets of patients that they would actually explore in that setting. Some of them are high-risk patients that have a genetic makeup that increases the risk for future relapse substantially. That's one category.
One category are patients that still have measurable disease, minimal residual disease, after these initial cycles of high-dose chemotherapy. Another group are elderly patients that have a harder time taking this high level of toxicity. It's a broad range of patients that we basically see that they're not really that well served with the current standard of care, and where the hope is from those physicians by shortening the therapy and go into a definitive consolidation with obe-cel would allow those patients to actually get to overall better outcomes, but also to avoid this huge impact on their quality of life that they're experiencing as they go through. When we look at the numbers here, obviously the number of patients we have are around 4,000 patients-5,000 patients in the U.S. in the frontline setting, the adult population.
We expect that about half of those patients are in the category of patients that are not that well served with the current standard of care and that could benefit. Ultimately, if indeed that works for this high-risk population, obviously, there would be quite a good argument to be made to consider actually increasing, frankly, the opportunity across a broader range of patients. From a development perspective, clearly the initial focus will be on those patients that have a higher medical need, to also actually be able to measure impact in a reasonable period of time. This is currently being explored in investigator-sponsored trials at MD Anderson, when Elias Jabbour talked about that.
There is also another study up between Memorial, Stanford, and City of Hope that's also ongoing in the U.S., and there's this third study in Europe that is being started up as well, each one looking at a slightly different subset of these frontline patients.
What do you expect Autolus would need to do in a clinical perspective in order to kind of realize those patient populations? I'm well aware that NCCN Guidelines can be changed just based on ISTs. That happens all the time, and payers will cover that. I'm just trying to understand what would be the burden for the company.
Right. The initial activity that obviously you will sort of see develop and certainly will see data from over the upcoming few years is driven by these investigator-sponsored studies. We've sort of created an umbrella protocol around those, so there's an ability to look at the data also in an integrated fashion across the studies. Clearly, those are investigator-sponsored studies. To your point, in the past, some of those, also in the ALL field, were actually used by those investigators to actually get inclusion into the NCCN Guidelines, and with that actually, frankly, support the reimbursability of the treatment for the patients from a payer perspective. That's important and that we'll see how that works out and develops, but that's certainly one direction. The other one is obviously thinking about potential clinical trials, and that's an area we're obviously working on.
Certainly, we'll want to see where some of the Investigator-Sponsored Trials may read out, because I think that will give us some information in terms of the focus with regards to what type of patient population to focus on, but also then in terms of what are clinical outcomes that could be expected. I think those will be very helpful pieces of information that we're getting out of those ISTs, and insights we can gain.
I do want to spend a moment on the pediatric side of things. You guys are investing in that as well. Just for our listeners, how much additional number of patients are we talking here?
Yeah. It's actually a very limited added investment that we're making. We're adding basically in the phase II portion, 30 additional patients to the 22 patients from the phase I experience, which we have presented at ASH at the end of last year. What we're looking to do with that population is to actually get us to a place where we have an ability with obe-cel between the adult and a pediatric label to frankly provide therapy across all lines of relapse and refractory disease across all age groups, so that there is a broad approach here that we can do.
I do mention that because when you currently look at what are the patients on the pediatric side that have access and what are the ones that actually do not have access, what we do see is that the patients that actually in the high-risk first-line relapse actually currently are not included in the label for CAR-T. Obviously, those are patients we're including in our current study, and with that should have an ability to open up the access to CAR-T for the entire range of relapsed and refractory disease in pediatrics. That's the goal, is to really have an ability for relapse that were ultimately a label for relapsed refractory ALL across all age groups and all risk categories.
Great. I'd like to spend the remaining time that we have on obe-cel and autoimmunity.
Mm-hmm.
Data that was presented so far from the CARLYSLE study has been impressive. You guys are going to have an update, I think, closer to year-end. What should investors expect there?
I think obviously what we present, the last time point we presented the data was at the end of last year. We will obviously have by the next update, almost an additional 12 months of follow-up on the early patients. We also will have additional patients included in the study. One of the key parts of the population we wanted to include in the study were adolescent patients. These are adolescents between 12 and 18 years of age, which can actually have very aggressive forms of autoimmune disease, and we believe are an important group to capture in the study. We're also including those into the phase II study, the LUMINA study as well.
This is about actually expanding into including also the pediatric or adolescent patients, and then also obviously with the longer follow-up, actually get a more complete picture of the actual clinical benefit that we've been able to induce in those patients and the durability of that effect. That will be the core of what we're looking at, this longer-term follow-up, as well as the younger patients.
Great, maybe a little bit on your strategy here. Your pivotal study design is a slightly different population than some of your competitors, namely Novartis. Can you walk us again through the logic and kind of how you ended up setting yourself up in this specific patient cohort?
Right. One of the things that I think is important is obviously that you have data that clearly tells you that your data is addressing the medical need and is truly differentiated from the standard of care. What we've done here is what you would do normally in oncology, which is you go into a patient population where the standard of care stopped working. The standard of care in these patients includes B-cell targeting antibodies and includes calcineurin inhibitors. What we're looking at are patients that actually have relapsed from both of those mechanisms of action and treatments, and are now outside of the standard of care.
That is the population that we've selected for our pivotal study, which allows us to run a very compact, give or take 30 patients study to actually demonstrate a clinical benefit in those patients, in what you would normally probably characterize the highest medical need group of patients with lupus nephritis.
Maybe to kind of double down on that question, was this just designed to kind of avoid the challenges associated with enrolling lupus nephritis studies, or just the highest unmet medical need?
That does not simplify enrollment because obviously the patients that have kind of exhausted the standard of care, obviously there is a smaller patient population. In enrollment, I'm not sure it actually changes the dynamic fundamentally. That I think is not where the primary focus was. What it clearly also will certainly help you do is have a very clear also health economic story around that, and it gives you a very good initial positioning. It's quite clear that we would consider after that study to consider actually a follow-up that actually expands then the opportunity in a broader range of patients, obviously already with evidence that the product has significant activity, which we believe at that point will be helpful for enrollment.
I do want to switch gears to the multiple sclerosis because I think it's a very interesting indication, where we don't have a ton of data. Maybe starting with the rationale, why do you guys think that obe-cel would be particularly relevant here?
Right. When we look at multiple sclerosis, I think we've seen over the last, give or take 10-15 years, quite a lot of activity addressing the B-cell compartment, and through addressing the B-cell compartment, looking to actually create an improvement for patients, particularly the CD20 monoclonals, which are obviously now standard of care. The patient group we're focusing on are the progressive MS patients. These are patients that had been at least for six months on CD20 monoclonals as well as on S1P inhibitors and continue to actually progress and actually continue to deteriorate if you were to look at a disease score scale like an EDSS scale. Now, from a biological perspective, what obviously the B- cells do is they clearly have an impact, a measurable impact for these patients.
What we also do know is that while they have the impact in the periphery, actually when you look at the CSF, you can still actually see the presence of antibodies in the CSF. You see what's called oligoclonal bands, which is another way of saying the same thing. You actually see the presence of proteins that are attributable to IgGs and other forms of immunoglobulins. Now, the reason why these proteins were still found in the CSF, although you sort of actually tackled the cells in the periphery, is likely due to the fact that there are actually B- cells and plasmablasts in the brain itself on the other side of the blood-brain barrier.
That creates obviously a very significant challenge for a therapeutic approach because now your therapeutic has to be able to cross the blood-brain barrier and then be active on the CNS side. Now, one of the things we know about obe-cel is it does that exceedingly well. There was an example actually given by Lori Muffly last week on a patient that had ALL that actually went into the spine of the patient, was putting pressure on the spinal cord, and she became a paraplegic. By giving obe-cel, the disease was cleared out in the bone marrow. She was MRD negative, but also the CSF was cleared, and the patient actually regained control over her body. It tells you very clearly how active the product is in the CSF behind the blood-brain barrier.
This is why we believe we have a real opportunity here to actually get to that compartment of cells that are likely continue to drive the progression of these patients. That's frankly one of the questions we're asking with the study is indeed whether that intervention actually starts to give us an impact on these patients, first showing presence of our CAR T- cells in the CSF and activity, but then also obviously hopefully, some early information on the kind of clinical experience for these patients.
What do you think investors should be looking for in this relatively early data cut?
What we do know from other products that are looking at clinical or impact on EDSS or any of those disease scores is that it usually takes a bit of time to actually get some stability in the data, because elements of that score are either physician as well as patient-reported elements in it, and of course, that is impacted by how you feel, what your energy level is, and so on. It has a lot of different elements that actually factor in. To get more stability in the data, you need a bit longer observation time. What I think we want obviously to see is we want to see the behavior of the product in the patients. We want to see a good level of expansion of the CAR T- cells. We want to see presence of the CAR T- cells in the CSF.
We want to see an impact on pharmacodynamic markers like oligoclonal bands as well as other pharmacodynamic markers. Over time, hopefully an impact on the actual disease score of the patients themselves.
Great. Just considering all these other indications and autoimmunity, how does that impact your potential manufacturing footprint, and how are you guys considering adjusting, as it relates to investing in manufacturing?
The way we have designed our facility is really to be able to serve the ALL market in full, peds and adults, both in Europe as well as in the U.S. That's what the capacity actually allows us to do. We have currently, as initial capacity of about 2,000 products a year. That can actually be increased. This was for three clean rooms. We already added a fourth clean room, and there is more capacity for expansion. There's an ability to actually increase the scope. Now, that's all good if you have kind of rare diseases, very high unmet medical needs type of situations with small patient numbers. In MS, that could be a step change. This could be a lockstep in demand. What we're looking at is various ways to actually possibly scale without actually having to increase our own commercial manufacturing footprint.
We're exploring different ways of doing that with more than one party. One of the things that we had announced is we're looking, as an example, at the automated setup that Cellares is working on as one example, and we're doing a feasibility study around it. In general, we're looking for ways to be able to actually expand without actually having to invest at the level that we did invest on a capital expenditure perspective, with the Nucleus facility, which obviously was foundational for what we do now in the very high unmet medical need indications.
Excellent. Thank you for all that, Christian. Just reminding the audience, in the last few minutes, if they have any questions, that they can type them in. Maybe kind of a general last one, it's always difficult to launch a drug, and investors tend to take issue with companies launching drugs. What is your kind of last takeaway home messages for the investment community as it relates to Autolus?
Well, first of all, I think we've been able to do a really good launch with the product. We were able to deliver product with a very high level of reliability. We're above 90% success rate on manufacturing. We've been able to actually meet the expansion that we were set up from a center perspective. We have a very healthy growth on physicians that actually are gaining experience with the product. We're seeing that translate also commercially, so we have guidance for this year of $120 million-$135 million in revenue that we're projecting for this year. That gives us a very robust growth for the product. The product, as you've heard from the physician, but also as you see reflected in the real-world experience, actually does translate extremely well and highly consistently with the clinical experience.
We believe we have an opportunity to really increase the market share for CAR-T therapy in hopefully a very significant way in this indication.
Great. With that, Christian, I'd like to thank you for attending today. I don't really see any further questions. Thank you.
Very good. Thanks a lot. Much appreciated.