Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics Third Quarter 2020 Financial Results Conference Call. As a reminder, this conference call 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, Brandy. 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 third quarter 2020. 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 today's call, our discussion will contain forward-looking statements. All statements, other than statements of historical facts on this call, are forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the section titled Risk Factors in our annual report on Form 20-F filed with the Securities and Exchange Commission on March 3, 2020, which can be accessed on the EDGAR database at www.sec.gov and in subsequent filings we make with the SEC from time to time. The forward-looking statements on this call reflect the company's views as of today, November 5, 2020, regarding future events and should not be relied upon as representing the speakers or the company's views as of any subsequent date. While the company may elect to update these forward-looking statements at some future point, the company specifically disclaims any obligation to do so even if the company's views change. These forward-looking statements should not be relied upon as representing the company's views as of any date subsequent to today. Please be advised that today's call is being recorded and webcast. 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 third quarter of 2020. 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, Lucinda, and good morning to all of you, and thank you for joining us. I'm pleased to review our progress for the third quarter 2020. Before summarizing our program update on Slide 5, I would like to briefly address the evolving COVID-19 situation and its potential impact on our operations. At our last financial update call in August, we had entered into a more stable period post the first COVID-19 peak in April, May, and our programs have remained on track throughout the third quarter. However, building in September and accelerating through October and into November, we have seen a substantial increase in infection rates in Europe and in the U.S. And with a few weeks lag, increases in hospitalization and ICU occupation rates followed. In reaction, restrictions on public life have increased across all of Europe end of October. From a company perspective, what helped us enroll patients through the first peak of the pandemic was the concentration of cases in few geographic areas in the U.S. During that period, most of our U.S. clinical trial sites were not impacted. Going into winter now, with an already broad spread of infections across the entire country, the risk for trial disruptions in the U.S. has increased. We will follow the situation closely, and if need be, may have to adjust patient enrollment into our trials. That said, we're working hard with our supply chain and logistics teams as well as our centers to ensure uninterrupted supply of essential goods and services for our operations. This includes timely continental and transatlantic deliveries of leukapheresis and final products to ultimately ensure time lines remain on track. As always, our key focus is on patient safety and ensuring data integrity in our trials. While to date, our lead programs, AUTO1 and…

Thanks, Christian, and good morning or good afternoon. So we're on Slide 19, and it's my pleasure to review our financial results for the third quarter to September 30, 2020. So starting with our cash position, unrestricted cash at the end of the quarter totaled $177.7 million, and that compares with $212 million at the end of June of this year. Net total operating expenses for the 3 months ending 30 September 2020 were $42.7 million, and that is net of grant income of $400,000 and also license revenues of $200,000. That compares to net operating expenses of $35.6 million, net of grant income of $300,000 for the same period in 2019. Research and development expenses increased to $33.5 million for the 3 months ended 30 September from $27.3 million for the same period last year. Cash costs, which exclude depreciation and amortization as well as share-based compensation, increased to $30 million from $21.6 million. The increase in research and development cash costs of $8.4 million consisted primarily of an increase in compensation and employment-related costs, that's net of actually lower travel costs as a result of the ongoing pandemic of $1.5 million, and that's due to an increase in employee headcount to support the advancement of our product candidates in clinical development; secondly, an increase of $3.6 million in project expenses as a consequence of the advancement of our clinical portfolio, and that includes research and process development, manufacturing activities necessary to prepare, activate and monitor clinical trial programs; thirdly, an increase of $2.1 million in facility costs related to the commencement of a lease for a manufacturing facility and the continued scaling of our manufacturing operations; and fourthly, an increase of $1.4 million in IT infrastructure and support for information systems that's related to the conduct of clinical…

Thanks, Andrew. Let me conclude this part of the management discussion with a review of the upcoming milestones and news flow through the remainder of 2020 and in 2021. Let's move to Slide 21. As we look at the rest of 2020 and into 2021, there are multiple clinical milestones and opportunities for value creation. Our chief and most imminent operational focus will be on continuing enrollment in dosing of patients in the potential pivotal Phase Ib/II trial for AUTO1 in adult ALL. We expect to report clinical data on the AUTO3 ALEXANDER trial at the forthcoming ASH Meeting and to further update from the AUTO1 ALLCAR19 study. AUTO4 data updated in PTCL is planned for 2021. In Q4 2020, we'll also look to progress AUTO1/22, our next-generation program for ALL, into Phase I clinical study in the pediatric setting, together with our academic partner, UCL. In the first half of next year, we expect our next-generation multiple myeloma program, AUTO8, to enter the clinic, and we also expect to progress in the same time from our first allogeneic program into a first exploratory trial with our academic partners. In '21, we will look to progress a number of other preclinical candidates to a point of Phase I readiness, including AUTO5 and our solid tumor programs, AUTO6NG and AUTO7, all of which we had recently updated you on at AACR. In conclusion, on Slide 22, I'd like to recap the major messages from today's call. AUTO1, our first pivotal program, started in Q2 as planned. 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 adult ALL, a disease setting with a very high unmet need. We'll have an update from the old CAR clinical study at ASH in early December. Second, AUTO3 and DLBCL will have an additional clinical data update from our ALEXANDER study at ASH as well. The company is in good position, and combined with a cash on hand of $178 million, we feel we're well positioned for success. We're now happy to take questions.

[Operator Instructions]. Your first question comes from the line of Jim Birchenough from Wells Fargo.

Yes. Congrats on all the progress. I guess a couple from me. Just first, starting with AUTO3. Christian, could you maybe remind us of your view on what profile would support outpatient use? Is there a certain time course to fever a certain level of CRS, an ability to discern CRS from other causes of fever? Just as we go at ASH, just interested in your perspective on what would support an outpatient offering.

Jim, thanks a lot for joining, and thanks for the question. I think the most important aspect of the outpatient core is that we're replicating the safety profile that we have seen in our inpatient population because, obviously, that would give us a lot of confidence around the management of the patients and the consistency of the data, both in the outpatient setting compared to our current experience with the program. And that is ultimately the most important element. For those patients that will -- for those patients experiencing an admission, obviously, we're interested to understand the time of admission, but then also the duration of the admission to understand actually what's driving that and what the impact is in the setting. So those are the key parameters that we're looking for. And really, the core is to really make sure and be clear that we can replicate the data that we have seen before in the outpatient setting, which is really the foundation for the program to be positioned in the outpatient setting.

Great. That's helpful. And maybe just -- maybe for yourself and Andrew as well, just on comments around the supply chain as we go through COVID. It sounded like any disruption, if there would be any, would be around transport of the cells. But are there other points of risk to the supply chain that you see? And maybe update us on progress towards expanding the manufacturing and -- both in terms of ability to supply the market and maybe diversifying across countries.

Yes. It's a very good question. Obviously, the infections can actually have impact at several levels. What we have seen in spring is that we have centers that were basically at -- frankly, at some of the epicenters at the time of the epidemic, particularly in New York City, but also in London actually got to a point where they could no longer admit patients. They could not continue to care for patients. In New York, it was relatively short. It was a few weeks. In London, actually, it stretched out substantially longer than that. So there is a risk that the centers that get overwhelmed or the areas that get overwhelmed with infections get to a place where they basically can no longer care for patients that have need of transplant and that have need of a CAR-T therapy. So that is sort of the extreme end of the range of issues that you can run into that literally the centers cannot continue to operate, and that certainly did happen in spring. As I mentioned, the way we could actually mitigate that risk and still continue to enroll was that we had other centers, particularly at the sites in the U.S., that actually were not impacted at all, and we could continue to enroll in those centers. So that's really managing kind of the navigating basically the hotspots. Now obviously, as I indicated in my remarks, the situation is a bit more complex at this point from that perspective because we don't have just individual hotspots, we have a much more spread distribution of the infections, and we have to see kind of how the centers will cope. On the positive side, obviously, a lot of the centers have learned an enormous amount about the patient management. And with…

Your next question comes from the line of Chad Messer of Needham & Company.

This is Gil on for Chad. And congrats on the progress. Just a quick one on -- all right. So we spoke about the data that's going to be presented at ASH from the outpatient cohort. Is there any guidance about how many months post-treatment of these patients will be reported at?

We haven't specifically guided on that, but it is -- what we, obviously, did do is we communicated that. That cohort started after ASCO. So it is actually a limited follow-up that we have on those patients. And we will not have the full data set for ASH as we're still actually managing patients and are finishing the dosing of the cohort.

All right. And on your other programs in solid tumor and AUTO8, should we expect any additional preclinical presentations to be coming on in the next few months?

Well, I think there's opportunity for the conferences next year to present additional information as well as opportunity for the, basically, publication of nonclinical data in peer review journals as well. I think both opportunities are there for the upcoming months and throughout, frankly, 2021.

And kind of lastly here, do you guys have any thoughts about the difficulties that we're seeing with some of the allogeneic programs that are currently ongoing? And how would that contrast with the programs you have planned?

I think it's very difficult to answer that, Gil. I mean we've, obviously, also seen what everybody else has seen. It's information on a small number of patients. I think it's really hard to interpret. And I think we just have to see what the data releases actually are at the conference. And I think, at that point, I think, everyone will have a better understanding of what the challenges are that the companies are dealing with. It's difficult to read at this point.

Your next question comes from the line of Gabriel Fung of Mizuho Securities.

The first question here is that, is there any chance that we could receive any more updates from CARPALL assessing AUTO1 in pediatric ALL? And are there any learnings here that you have transferred to the next-gen trial that you just started?

We're not going to have an update, obviously, on CARPALL at ASH. But obviously, a significant part of the data has been published in the Nature Medicine paper. I think the key learning from the CARPALL study has been sort of several fold. The first is, obviously, the product has a very significant level of clinical activity, very high molecular complete remission rate, combined with a good safety. We didn't have high-grade cytokine release syndrome in the kids, which is very different from the experience with other programs. And we had exceptional persistence. At ASH last year, we could show that we can actually see circulating CAR-T cells after 3 years after dosing, and those -- and in fact, in numbers, that allow you to actually analyze them by facts and understand kind of what the composition of the product is after 3 years. So a very unusual profile. But what we also did see that for those patients that were unfortunate enough to relapse that, actually, 80% of those kids had relapsed with CD19 negative disease. And so what we're aiming to do with the AUTO1/22 program is building on these exceptional properties of AUTO1 with this very unusual level of persistence and add to that an optimized CD22 chimeric antigen receptor so that we can actually minimize the risk of antigen loss-driven relapse in those children. So those are -- I think that's -- in a nutshell, I think, are the key learnings that we have from the study and frankly what informed the design of the next-generation version of the product for kids.

Great. And another question here on AUTO5. And when, in particular, are you looking for in the AUTO4 interim that would prompt the green light for the AUTO5 clinical trial?

Well, we're obviously working through the nonclinical work for AUTO5. Obviously, we didn't start at the same time with the 2 programs. We had AUTO4 first and then we're engineering the AUTO5, and we share some of the information, particularly around the way we generated the particular binder for AUTO5 at the AACR meeting in the middle of the year. So that program is actually running at this point, not dependent on the progress of the AUTO4 program. But we're looking to catch up as much as we can with the AUTO5 program.

Awesome. And just one really last -- quick last one. On the allogeneic program, I'm just wondering whether -- would you be able to disclose what the source of the cells would be there?

We will do that when the study is up and running and we're introducing the study at that point in time.

Your next question comes from the line of Matt Phipps of William Blair.

It's Hunter [ph] on for Matt. I was just wondering if you could give us an idea of how many patients we'll see data for here coming at ASH, and then any color on what the next steps will be for AUTO3 coming out the other side of ASH.

Yes. Well, thanks a lot for joining. And with regards to the update, obviously, that we're going to give at ASH, it obviously is over and above what we have presented at ESMO, where we presented the recommended Phase II dose cohort with a bit longer follow-up as well. What we're doing now with [indiscernible] is obviously enroll patients into the outpatient cohort, and we're going to have somewhere in the range of about 10 to 15 patients worth of data over and above of what we have been able to present at ESMO. And then with regards to kind of the path into next year, obviously, one of the key decisions is going to be based on that data is then actually the design of the next study. And I will be -- we'll inform on that at the appropriate time.

Your next question comes from the line of Graig Suvannavejh of Goldman Sachs.

I've just got a couple. One, I noticed the latest update on AUTO8. That study was moved to the first half of next year. Just wondering if that's just COVID-related, logistics-related, anything else beyond that. My second question has to do -- competitive landscape in DLBCL. We just saw J&J and Genmab take a bispecific CD3, CD20 into a Phase III for refractory DLBCL. And so I would love to get your thoughts on, if not that particular program, but CD3, CD20 bispecifics in DLBCL. And then my third question actually is for Andrew. Andrew, you've got a lot of programs that are moving into the clinic in 2021, and some study starts in fourth quarter this year. So as we're thinking about R&D, and while I don't anticipate you giving formal guidance for 2021, but can you just give us a sense of kind of R&D spend from this point going forward versus what we've seen previously?

Thanks, Graig. Appreciate it. So the first question was related to AUTO8. That program, we initially expected to be able to get going before the end of the year. That will happen now beginning of next year. It is in part related to kind of the impact that COVID had middle of the year at our academic partner. It took -- a few weeks basically were lost in the process. And I think we're in a good place now in terms of catching up time. So not a significant change from where we look at the program. The second question related to the bispecifics and T-cell engagers, in particular case, CD20, CD3 T-cell engagers, are obviously a whole series of programs with Genmab. You got Regeneron, you got Benitec, you got others as well. I think what we've seen across all of these programs is the sort of single-agent activity in the range of about 20% CR rate that then actually were combined with other modalities to sort of increase the activity. I think what we see is clearly activity. The durability, I think, is still something that needs to be -- we need to see. And in fact, there's more information required. But it's an active therapeutic modality, there's no question about it. But it also seems to be not quite at the level in terms of activity of what we can see with the autologous CAR-T programs. So a relevant modality, a modality that also will be -- is in competition with the CD19 ADCs as well that are also moving into the space, all having very similar types of outcomes. And I think there's going to be a range of opportunities in that range of activity. As far as we can tell at this point, there is a difference -- still quite a significant level of difference in terms of the outcome if we compare to the autologous CAR-T programs at this stage. And then the final question was related to the R&D expenses. I think one of the important things is, as you'll see with our earlier pipeline, is that we're collaborating quite extensively with academic institutions to run the early part of those trials. It actually allows us to manage the R&D expenses in quite a significant way so that the key investments that we're making by sort of a vast margin are going into the late-stage trials. Maybe, Andrew, do you want to continue on that?

Yes. No, I can, Christian. But I think you've hit sort of the nail on the head there, which is the use of academic programs to manage expenditure through the early part of these studies. So R&D expenses will obviously increase. But there's an element that we've seen through sort of '19 and '20 that there's sort of an establishment sort of cost in the -- particularly in terms of the manufacturing side of things that effectively then gets -- as that sort of comes down, obviously, the trial expenditure sort of goes up. So there will be an increase sort of through, particularly sort of the middle of next year in terms of -- when you look at Q2, Q3, but then it probably starts to come down a little bit in Q4. So we're still confident that the statements that we make in terms of cash runway, we'll have cash into '22.

And our final question comes from the line of Kelly Shi of Jefferies.

I will continue the question regarding the outpatient setting cohort. And what type of data would support a pivotal trial? For example, do you set a threshold on certain proportions of like patients for readmission or getting into ICU? And also a related question regarding the tox profile of AUTO3. Do you see the pattern of CRS on your tox occurrence differentiated from other CD19 CAR-Ts? For example, have you observed the laydown side of CRS and the Neurotox? And also what's the middle duration of each toxic now?

Thanks, Kelly. Thanks for the questions. The -- in terms of the outpatient cohort, as I indicated to Jim's question as well, is really to demonstrate that we have -- that we can replicate the adverse event -- safety profile that we've seen in the inpatient cohort as well so that we can basically show that behavior of the product is the same. Whether we're treating the patient inpatient or outpatient, we see the same manifestations. Now one of the important things with regards to the toxicity profile of the program is that when we look at patients that are responding to CAR-T therapy, so get into complete remission, those patients tend to have a lot of CAR-T expansion, and that is actually where you see with most other programs a significant level of adverse events directly related to the CAR-T expansion and the activity of the CARs in those patients. Surprisingly, that is actually not what we're seeing. When we look at those patients that are actually achieving a CR, we don't see actually that they develop neurotoxicity. They have no neurotoxicity that we have observed. And they also have limited cytokine release. They have no high-grade cytokine release that we've observed so far. And that, I think, is important because it gives us a profile that is actually quite remarkable in terms of the CAR-T mediated adverse events. Obviously, these patients do have all sorts of adverse events that's disease-related. But those are obviously shared across any therapeutic modality you'd be applying to these patients. So when it comes to the specific CAR-T-related adverse events, we believe that our profile is remarkably good and give us a lot of opportunity and room. And so from an outpatient perspective, obviously, we want to see that replicated. Obviously, if there are admissions, we're obviously interested in what are the reasons for those, the duration of it. But also, obviously, what is important is get an understanding whether those patients need it, any form of intense management. And clearly, that is sort of the key challenge when you think about these patients out, when they have to get admitted, if you actually have to have ICU access. That is actually a much more significant burden on the respective institution than if you just actually have to do an antibiotics or prophylaxis just to manage patients and be sure that there is no infection ongoing. So I think those are the parameters that we're looking at. And obviously, we want to see that, in fact, we can replicate the adverse event profile, but also that if there are reasons for admission, that those admissions actually are relatively short and also do not require an ICU intervention.

It's very helpful. May I have a follow-up question that regarding -- as the CAR-T space -- the competition in CAR-T space is actually heating up, especially in the cell B setting, do you have plan to moving AUTO1, AUTO3 into earlier lines of therapy?

I think with every oncology indication, I think you'll start at the back end of the disease, and you work your way up towards the earlier lines of therapy. And that is certainly what we would intend to do, both in the ALL setting, but also in a DLBCL setting. But the first thing to establish is establish yourself in the last-line setting and then actually move from there. Obviously, as you go up into earlier lines of therapy, you're also, at that point, you're moving and basically have to demonstrate activity and profile against the established standard of care so the nature of the trial start to look different and the time it takes to conduct the trials also tends to increase versus the third-line setting. And that's also one of the key reasons why you start in third line, to establish yourself and then actually move from there.

There are no further questions at this time. I would now like to turn the call back over to Christian Itin, CEO, for any additional or closing comments.

All right. Well, thank you very much. Thanks all for joining. We appreciate -- this is an incredibly busy season, particularly with the overlay of the ASH abstract coming out and a lot of them released quite a bit early. So appreciate your taking time for the presentation today, and we'll give you an update, obviously, when we get to ASH. Thank you very much. Bye-bye.

Thank you. That does conclude today's conference call. You may now disconnect.