Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics FY 2019 Q4 2019 Financial Results Conference Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dr. Lucinda Crabtree, Vice President of Investor Relations. Please go ahead.

Thank you, Kevin. Good morning or good afternoon, everyone, and thank you for taking part in today's call on the financial results and operational highlights for the full year 2019. I am Lucinda Crabtree, Vice President of Investor Relations. With me today are Dr. Christian Itin, our Chairman and Chief Executive Officer; and Andrew Oakley, our Chief Financial Officer. Before we begin, I would like to remind you that during this call, we will be making forward-looking statements. All statements other than the statements of historical facts contained in this presentation are forward-looking statements. Our actual results, performance or achievements may be materially different from those expressed or implied by the forward-looking statements. For a discussion of the risks and uncertainties relating to our business and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, please see the section titled Risk Factors in our annual report on Form 20-F filed on March 3, 2020 as well as discussions of potential risks, uncertainties and other important factors in our other periodic filings with the SEC. The forward-looking statements contained in this presentation reflect the company's views as of the date of this presentation regarding future events, and the company does not assume any obligation to update any forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing the company's views as of any state subsequent to the date of this presentation. On Slide 3, you will see the agenda for today, and it is as follows: Christian will provide a brief introduction, and that will be followed by our operational highlights for the full year of 2019; Andrew will next discuss the company's financial results; and then Christian will conclude with upcoming milestones and other concluding comments. And of course, we will welcome your questions following our remarks. So with that, I'd like to turn the call over to Christian. Thank you.

Thank you, Lucinda, and good morning to all of you, and thank you for joining us. I'm pleased to review our progress for the full year of 2019 as well as some recent company highlights in the fourth quarter. Let me first begin by giving an overview of our corporate strategy on Slide 5. We're focused on progressing our potential best-in-class therapies, AUTO1, for adult ALL and AUTO3 for DLBCL, with major value steps expected through 2020 and 2021. We're in the process of starting our first pivotal study with AUTO1 in adult ALL, which we'll both drive to completion in 2021 and target approval in 2022. We will also move our DLBCL program, AUTO3, to proof-of-concept by midyear and assuming a go decision at that time, would expect to be preparing for a pivotal study in this indication. In addition to our new two lead a clinical candidates, we will be delivering clinical milestones related to our T-cell lymphoma program, AUTO4, and also our first solid tumor indication. To date, we have seen encouraging initial antitumor activity with from AUTO6 targeting GD2, and we are now progressing an enhanced next-generation modular candidate, AUTO6NG, into the clinic in the second half of this year. AUTO6NG is specifically tailored to address some of the challenges related to the solid tumor microenvironment as initially presented at SITC last November. Additionally, we also see 2 of our next-generation development candidates enter Phase I this year. It is AUTO1NG in pediatric ALL and AUTO8 in multiple myeloma. Finally, I would like to highlight our longer-term value-creation steps related to our broad and highly innovative next-generation preclinical pipeline. In addition, we've been working extensively to solidify our scalable, fully enclosed manufacturing platform capabilities, which have, to date, delivered products to our AUTO1 and AUTO3 clinical…

Thanks, Christian, and good morning or good afternoon to everyone. It's my pleasure to review our financial results for the full year, January through December of 2019. And we are on Slide 25. Total -- net total operating expenses for the 12-month period ended December 31, 2019, were $146 million, and that was net of grant income of $2.9 million. That compares to net operating expenses of $74.1 million, also net of grant income of $1.5 million for the same period. The increase in total net operating expenses was due in general to the increase in development activity to support the advancement of our product candidates, increased headcount primarily in our development and manufacturing functions as well as the cost of being a public company. Research and development expenses increased to $105.4 million for the year ending December 31, 2019, from $48.3 million for the year ended December 31, 2018. Cash costs, which exclude depreciation as well as share-based compensation, increased to $83.4 million from $41.5 million. The increase in research and development costs of $41.9 million consisted primarily of an increase in compensation-related costs of $20 million, primarily due to an increase in headcount to support the advancement of our product candidates in clinical development and investment in manufacturing facilities and equipment; an increase of $4.1 million in research and manufacturing consumables, in part due to the migration and expansion of our research and process development laboratories from Forest House to our new location in the MediaWorks facility; preparations in advance of any potential disruption to supply arrangements that may occur due to Brexit; as well as validation and training costs as part of the startup at the Catapult facility; an increase of $10.2 million in facility costs, primarily related to increase the number of facilities, mainly at MediaWorks…

Thanks, Andrew. Let me conclude this part of the management discussion with a review of the upcoming milestones and news flow through 2020. Let's move to Slide 27. The upcoming 9 months will be an eventful period for us with multiple clinical milestones and opportunities for value creation. Our chief operational focus will be commencing the registration trial for AUTO1 in adult ALL in the U.K. and U.S. We also expect to report data across multiple programs and to progress a number of our other clinical trial candidates, specifically updates on our ongoing clinical trials, initiation of Phase I study of AUTO1NG in pediatric ALL in the first half of this year; a go no-go decision on Phase II initiation of AUTO3 in DLBCL middle of this year; initiation of a Phase I study for AUTO6NG toward neuroblastoma towards the end of this year; and initiation of the Phase I study of the next-generation program in multi myeloma called AUTO8 also towards the end of 2020; as well as working on some exploratory clinical trials towards allogeneic approaches as well. In conclusion, on Slide 28, I'd like to recap the major messages from today's call. First, AUTO1 is our foundational program and first Autolus program expected to move into pivotal stage. Given the positive safety and efficacy profile today, we believe that AUTO1 has the potential to be a best-in-class CD19 CAR T in ALL. Secondly, our next priority is on AUTO3 in DLBCL, which, obviously, is expected and slated for clinical data middle of the year. We expect to report full Phase I data for AUTO3 in middle of 2020 to reach a decision point for a Phase II trial initiation thereafter. Looking ahead to the remainder of the year, we see opportunity for additional value steps for T-cell lymphoma as well as the -- or the start for the AUTO6 next-generation program, targeting GD2-positive tumors. The company has a strong balance sheet with $286 million in cash, which will create a run rate into 2022. And finally, we're looking forward to seeing many of you at the upcoming AACR, ASCO and EHA meeting over the upcoming few months and are now happy to take questions. Operator, please open the line. Thank you.

[Operator Instructions]. Our first question comes from Debjit Chattopadhyay with H.C. Wainwright.

So I have a question on the barriers -- oh, this is Aaron for Debjit, by the way. This is -- I have a question on the barriers to outpatient treatment with AUTO CAR Ts in DLBCL. So we were looking at a study in which they treated patients with a median of only 2 prior lines with liso-cel in an outpatient setting, and they ended up hospitalizing 59% of the patients at the first time of CRS or neurotox. So what do you think would be a reasonable level of hospitalization that could warrant expansion to the outpatient setting? And do you think that there could be more competition in certain subsets of patients in the outpatient setting for various auto CAR Ts?

So very good question, Aaron. And it's obviously a very interesting kind of analysis when you look at the field, where you realized that approximately at this point, only about 20% of the patients sort of can be targeted with CAR T therapy in the current setting, which is really focused on the centers of excellence. And the reason for that is predominantly driven by the requirement for fairly intense management of these patients to deal with the adverse event profile that the current products have. And what we basically quoted that basically flux of patients back into the hospital that were considered initially to be treated in outpatient setting just indicates the need for a significant level of management of these patients to begin with. And that's a fundamental property of the product itself. And I think it's shared by all of the current products that have either been approved or are about to be approved. So what I think we were highlighting in our presentation is that the AUTO3 at this point has shown no high-grade cytokine release syndrome. And this did not require actual management of the patients. So we didn't actually have to put steroids in -- steroid covering that we have been -- didn't have to put tocilizumab in these patients as a preventative measure and management measure. This is the data actually from unmanaged patients. What was probably more surprising and obviously a remarkable outcome is the fact that we have seen no neurotoxicity of any grade in the patients that we have treated in combo, in combination with pembro across a set of dose levels. And that is truly surprising because none of the programs targeting -- redirecting T cells, targeting CD19 to date has shown this type of a feature. All of them actually have a neurotoxicity as a core type of adverse events that they do experience. The fact that we have seen none, without managing the patients, gives us a lot of confidence that we have a type of profile that should be well manageable also in an outpatient setting and also, importantly, in centers that are not the few centers of excellence in the country, but also much more broadly in the periphery, where, in fact, most of the DLBCL patients do get treated in the U.S. And I think that's going to be a core feature for the program. And to date, what we've seen as a profile certainly has not been reported by anyone else within the field.

Our next question comes from Chad Messer with Needham & Company.

Maybe we'll just start by continuing a little bit the discussion we're just having on AUTO3 and safety, about a go/no decision coming up. Is there an actual bar there you can describe? I mean 0% would be awesome, but maybe not all that practical to hold on to.

I think if you have a low level of neurotox, low-grade neurotox at a low level, I think that would be very well manageable. We also should remember that the patients treated with BLINCYTO actually are treated in an outpatient setting, and they're managed that way. So -- and the neurotox rate obviously for BLINCYTO is not 0, but it is less intense than what we see with the CAR Ts that are currently gone through approval or close to approval. And so there's clearly a bar here that is not a zero number, but definitely want to see a low level of neurotoxicity. And you want to avoid the high-grade cytokine release syndrome, which is really requires you to go back into the hospital.

Okay. And then just again, thinking on efficacy and safety bars. On the AUTO4 program, I mean, for T-cell lymphomas, we don't have good standard of care to compare ourselves up against. So what do you -- what do we need to see later this year for AUTO4 in order to get excited and optimistic about that one?

I think what we would like to see is we see a good level of responses in those patients and evidence that we start to see also a reasonable level of persistence. So we get some durability of those responses. As you pointed out, this is a very devastating disease. There's very little options at this point. And I think a program that gives you a reasonable level of remissions in these patients together with some durability of response will go a long way. And clearly, the bar for this indication is lower than what we're seeing in lymphoma and certainly much lower than what we're seeing in leukemia.

All right. Great. Well, thanks. We're looking forward to all the data you guys are coming up this year.

Excellent. Thanks for joining, Chad.

Our next question comes from Biren Amin with Jefferies.

Christian, on AUTO2, can you just give us a status update on the NG program there?

With multiple myeloma, obviously, went back and reengineered a new program, which is called AUTO8, and that program is slated to get back into the clinic second half of this year.

Got it. And then on AUTO4, thanks for the prior response. But if I look at some of the data with bendamustine, for example, in relapsed/refractory setting, I think there's some data out there that reports an OR of close to 30%; CR of about 20%, 25%; median DOR of about 3.3 months. Is that kind of like the bar that you would need to beat with AUTO4?

I think you want to be above that. But you're right, that is currently what the bar looks like in that disease setting. That is sort of as kind of the best we can do for these patients at this point. So it's clearly one of the CR rate side, but it's clearly a very poor starting point.

Okay. And then maybe just a question on AUTO3. How much data do we need to see later this year to move this program into pivotal? Can you -- and I guess, at what cell dose are you looking at? Greater than 150 million in cell dose? Or are you looking at the 450 million cell dose to make a determination on pivotal studies there?

So we're clearly looking at, at this point at greater of 150 million. We're treating at 450 million, and we'll have to see kind of how the dose levels do differentiate. They do much at this point. And we want to see a sustained CR rate of 50% plus in this population.

50% plus sustained, meaning greater than 6 months?

Greater than three months.

Our next question comes from Matt Phipps with William Blair.

So two questions on AUTO1. First, for the pivotal trial, how are you thinking about the criteria for baseline blast counts? And are you going to do split dosing based on blast counts in a pivotal trial there? Was there any difference in kind of outcomes from that in the original all-CAR study? And then in the trial, what kind of health economic data do you think is particularly important when you go to hospital administrators here in the U.S.? There's been quite a lot coming out recently about the cost of rescue medications or looking at ICU days or potential to get it outpatient by not getting something like CRS or something that causes how patients have to go to a hospital for a certain number of days. I guess what do you think is most important there amongst all these different kind of health economic endpoints that are being looked at?

Right. So first of all, thanks for joining, Matt. With regards to the tumor or the tumor burden of these patients, these are patients that actually are in relapse, in morphological relapse, which means that they have 5% or more blast in the marrow. That's the first, I think, answer to your question. The second answer is with regards to the approach to dosing. We're going to use the same dosing that we have used for the ALLCAR19 study, the Phase I study, which is that we look at a cutoff of 20% blast. If we are -- if the patient is above 20% blast, we do a dose reduction, and we give a lower for initial dose of the product to sort of manage the kinetics of the initial antitumor activity, which is really what determines, to a significant part, the overall toxicity profile in the patients. So yes, there's going to be a very identical approach that is used in the Phase I study. With regards to AUTO1 and kind of the parameters that drive reimbursement and so on, I think it's important, first of all, to understand that this is a patient group that obviously is very intensely managed to date. In other words, the treatment of adult ALL patients is very expensive. Even if the outcome is death, it is a very expensive therapy because you have to manage these patients due to the immune suppression quite frequently at the hospital, manage them through infections and so on and so forth, which requires often ICU stays for these patients. So managing these patients through the final year of life is extremely costly, and it's costing the system to date. So what we're doing with regards to collecting information, we're obviously collecting very diligently information related to resource utilization across all the patients in the trial. And we also do record the information also from a patient's perspective with patient-reported outcomes as well. So we have both perspectives that we collect the data from and that will also be built into the appropriate arguments for the respective payers. And as you know, depending on the health care system we're looking at, there are quite differences on what the various payer groups are actually looking for.

Nice, Christian. Can I -- one follow-up on the split dosing again. I know there were a couple of patients who had some neurotoxicity in the data presented today with AUTO1, and they had higher tumor burden. With the neurotox, do those patients get the second half of the dose? Or did the neurotoxicity occur with that first lower dose?

It's typically linked to the initial expansion of the CAR T cells, which is mostly driven off the first dose. And what we obviously have seen is, and that's what you're referring to, is that the patients did actually developed a higher-grade neurotoxicity with AUTO1 in this particular indication. Where all patients with very high tumor burden, we're looking at more than 50% tumor burden in these patients. And all of them actually responded well to dose steroids to actually get normalized. So obviously, what we can do with these patients, we can execute these patients a steroid cover upfront, given that we kind of identify the patients at risk here, and that should mitigate in a significant way actually the rate of high-grade neurotox in these patients. But it's very clear population of the cells that were at risk of neurotox, and that was trade linked to very high tumor burden in the marrow.

Our next question comes from Graig Suvannavejh with Goldman Sachs.

I've got three this morning, if you don't mind. My first is I noticed you've got a new program, which is as an allogeneic approach. And so I'm just wondering, what's the thought process here? What's the target product profile you're hoping to achieve? How is it different from other allogeneic approaches? So that's kind of all wrapped up in one question. My apologies for that. My second question just has to do with the PRIME technology that you licensed last November. If you could just give us some more color on that opportunity. And then my third question, if you could, just provide some -- this question is for Andrew. Just on 2020 OpEx and how we should think about trends relative to how you finished the year in 2019.

Okay. All right. I'm happy to get started on the first 2 questions. So the first question was related to dimension of approaches towards the allogeneic approaches. Obviously, there are -- if you have patients that are underserved, either have basically no usable T cells that you can actually extract a leukapheresis or are such -- at such a speed of progression that you can actually manufacture a product, that's obviously where you would like to have an allo product that could go in there, even if that allo product will be inferior to the neural products that we're producing. And so what we're looking here is using basically the technology approach that we've been using, which is programming the cells and changing the behavior at the protein level, which is the basic foundation in terms of technology that we're using. We're creating protein modules that change the behavior of cells. What we have outlined is 1 module that actually changes the expression of the T-cell receptor, and the surface of the cells prevents that from happening. And with that, obviously, you do prevent graft-versus-host disease. We're doing some initial clinical testing starting towards the end of this year together in a collaboration with one of our academic partners. So that's sort of moving us towards technologically towards an allogeneic type of approach. So that's what we're doing there. It's built from the same way of programming cells that we're doing, obviously, in general, and it avoids just the usual gene-editing type of approaches that we've seen typically across the space by actually making the modifications at the cellular level, at the protein level in the cell. The second question was related to the PRIME technology that we've in-licensed. And that is, in essence, a technology where that looks to…

So thanks for the question, Graig. Look, I'm not quite sure that we're really in a position that, I guess, we're going to get sort of too granular in terms of OpEx guidance for the year. Our guidance is that the cash runway we've got will last into '22. In a practical sort of sense, if we look at sort of the 3 sort of buckets of cash spend in terms of R&D, G&A and CapEx itself, you'll probably see an increase in all 3 categories during the course of 2020, but G&A, not too much. R&D, reasonable sort of increase, but there were a lot of sort of costs of -- in terms of validation, training and setup of Catapult that in the '19 year that obviously won't occur in '20, but will then be sort of offset by -- in terms of actual patient processing or manufacturing. So I think that's at the moment about as far as we want to go from a guidance perspective in relation to OpEx for '20. We'll just stick with the concept that we've got a cash runway into '22.

Our next question comes from Jim Birchenough with Wells Fargo.

It's Nick on for Jim this morning. I really would just want to focus on AUTO1. Unfortunately, I joined the call a little late, so I apologize if my questions will be answered from your prepared comments. But as far as the CTA goes, that was filed over three months ago. Have you enrolled a patient in the U.K. into the registration study?

We're expecting enrollment starting actually this month in the U.K.

And then as far as the U.S. goes, obviously, that's lagging in terms of the IND filing. But have you got sites identified, ready to go? How many sites do you think you need for the trial? And is it feasible to warehouse patients for this trial?

So first of all, the U.S. IND is expected to be filed this month. That will allow us to actually enroll and treat the first U.S. patients in the second quarter, which is what we have guided to and which we're on track for. In terms of the clinical centers, yes, they're absolutely identified. We expect to have approximately 30 patients in -- sorry, 30 [indiscernible]. We expect the majority of those centers, more than 20 in the U.S., the remainder in the U.K. and rest of Europe. So yes, all of those centers are obviously active and we're in contracting processes, et cetera, as you would expect.

And so in order to complete the study...

I'm sorry, the last, the last...

Sorry, go ahead.

Question on warehousing patients, the answer is no, you can't. This is a rapidly developing disease. The patients are in need of therapy and you have to treat. You can't just park those patients with some intermediate type of therapy. It's very hard to do. Yes. I mean you may decide within a 2, 3 weeks period sort of thing, but you can't actually park patients for much longer than that.

And so Chris, in your assumptions and for completing this trial 1H '21, what -- obviously, you have to have data on all 70 complete response -- or response rate data on all 70 patients. But what degree of follow-up are you going to need in order to declare the trial has been completed or for registration at least?

So the primary endpoint is CR rate, and the CR rate is determined typically after 1 month. So that is a very early time point in terms of the determination where you're tracking with the trial. It also will give you most of the safety at that point already. There's just very little safety events that happen actually after 1 month. And then you obviously want to see approximately 6 months of follow-up in these patients to get a good sense of what the event-free survival looks like. And so that is sort of the data point that we're looking at. But as you enroll the patients, obviously, you'll have a range of follow-up in these patients. And we expect to discuss with the agency on how we would actually file, and what process we would file the particular trial.

Right, right. Okay. And then are you allowing -- going to allow bridging therapy in this trial?

In general, in -- and this is ALL, adult ALL. Often in adult ALL, there can be some form of bridging therapy that is being used to match the patients. But that is sort of that is truly up to the treating physicians to determine what is appropriate to do with the patient. And there's obviously a range of therapeutic options that can be used typically in some form of chemo. Unfortunately, I would say, with these patients to chemo doesn't really allow you to actually get to any responses in this setting anymore, but it might allow you to sort of just buy a bit of time or keep the disease for a little bit during the manufacturing process.

And just remind me, Christian. For the U.S., will product be manufactured in the U.S. or in the U.K.?

In the U.K.

In the U.K. Okay.

And I'm not showing any further questions at this time.

All right. Well, we'd like to thank you all for joining us this morning. Looking forward to, obviously, keep you updated and seeing you on the road. Thanks a lot. Have a great day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.