Autolus Therapeutics plc (AUTL) Q2 2025 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Autolus Therapeutics plc Second Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amanda Cray, Executive Director, Investor Relations. Please go ahead.

Thank you, Kevin. 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. I'd like to remind you that during today's call, we will make statements related to our business that are forward-looking under federal securities laws and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding the status of the ongoing commercial launch of Obe-cel, Autolus Therapeutics plc's 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 OviCel and our other product candidates. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today's press release and in our SEC filings, both available on the Investors section of our website. On slide three, you'll see the agenda for today's call. As usual, Christian will provide an overview of our operational highlights. Rob will then discuss the financial results, and Christian will conclude with upcoming milestones and closing remarks. We'll then take questions. With that, I'll turn it over to Christian.

Thank you, Amanda, and moving to slide four. Welcome, ladies and gentlemen, and thank you for joining us for the second quarter call. We had an excellent second quarter with good momentum in our launch of Obe-cel. In the second quarter, we generated $20.9 million in product sales, bringing the first six months of the launch to $29.9 million. The product profile resonates very well with treating physicians and there is a clear unmet medical need. Our supply chain has proven to be robust, reliable, and delivering consistent quality to our customers. We continue to expand our center presence with now 46 centers authorized for use of Obe-cel and 90% total US medical lives covered. We're well on track to achieve our year-end objective of reaching 60 plus authorized centers. As of July 1, we have a permanent HCPCS code effective following a positive CMS decision on April 1. The decision by CMS of a split reimbursement based on the infusion of product was a deviation of precedence. The impact was twofold, a change in revenue recognition for the company and an adjustment of the administrative processes at the medical centers. The adjustments were made during the second quarter and did slow patient enrollment at those centers. We expect the impact on patients treated to be resolved by Q4. Moving to slide number five, we're very pleased with the progress of our regulatory filings. In April, we received conditional marketing authorization in the UK and in July from the European Commission. We're working on market access in the UK and are interacting with NICE. In the EU, we are looking at a country-by-country evaluation. While we aim to get Obe-cel to as many patients as possible, as a small company with limited resources, we also have to be disciplined and make sure to only launch where market access is economically viable. At this stage, we do not expect EU sales in 2025 and 2026. Meanwhile, we continue to engage with physicians and study groups like the German ALL study group to enable ISTs in Europe. In addition, we are broadening our real-world experience in the US with OviCel, which may provide additional support for our market access conversations elsewhere. Moving to slide number six, the Felix data continued to mature very favorably. At EHA, we presented an update with 32.8 months of median follow-up. Importantly, 38% of the responding patients remain in remission without any subsequent treatment. On slide seven, consistent with this finding, we see median duration of response reached 42.6 months. Slide eight then looks at the overall survival, which shows a plateau forming at around 40% with most patients beyond two years of observation. A long-term outcome together with a favorable safety profile is a strong foundation to build on. Where next with OviCel is summarized on slide nine. Our development focus is on expanding the OviCel beyond adult patients with relapsed/refractory ALL. We made good progress with our pediatric study PY1. We expect the Phase I experience to be presented by the year-end and are expanding the study from a Phase I to a Phase I/II study with an intent to expand the age range for our current label. Encouragingly, several of the physicians treating commercial patients expressed an interest in exploring OviCel in frontline consolidation settings. And we expect to see several ISTs active in 2026. We are also excited about our progress in autoimmune diseases. Building on the encouraging initial experience in SLE, we are starting up a Phase II lupus nephritis study with registrational intent. In addition, our Phase I study in progressive multiple sclerosis is open for enrollment now. With that, I'm handing over to Rob for the financial results for the second quarter of 2025. Rob.

Thanks, Christian. And good morning or good afternoon to everyone. It's my pleasure to review our financial results for the second quarter of 2025. In the second quarter, net product revenue for the three months ending June 30, 2025, was $20.9 million compared with $9 million in the first quarter. As Christian noted, we continue to be encouraged by Obe-cel's uptake and strong momentum in the US. Cost of sales in the second quarter totaled $24.4 million. As a reminder, this amount includes the cost of all commercial products delivered to the authorized treatment centers, including product delivered but not yet administered to patients. So again, as a reminder, the sales value of these products not yet recorded as product revenue in the P&L is reflected as deferred revenue on the balance sheet and our deferred revenue balance at the end of Q2 was $2.1 million. Additionally, cost of sales includes any canceled orders in the period, our patient access program product, third-party royalties for certain technologies, as well as idle capacity. As expected, this dynamic will drive cost of sales to be higher at the beginning of the launch as we've experienced versus what we would consider our ultimate target. Our expectation is to see improvement as volumes increase and as we improve efficiencies in our own manufacturing operations. Moving on to research and development, these expenses decreased to $27.4 million for the three months ending June 30, 2025, compared to $36.6 million during the same period in '24. This change was primarily driven by the commercial manufacturing-related employee and infrastructure costs that have shifted out of R&D expense into our cost of sales and inventory. Our selling, general and administrative expenses increased to $30.3 million for the three months ending June 30, 2025, compared to $21.9 million in the same period in '24. This increase was primarily due to salaries and other employee-related costs driven by increased headcount supporting our commercialization activities. Our loss from operations for the three months ending June 30, 2025, was $61.2 million as compared to $58.9 million for the same period in 2024. During the quarter, we also recorded $12.1 million in net interest income and expense. This is primarily driven by a one-time non-cash adjustment to the liability related to the valuation of future royalties and milestones associated with the Blackstone and BioNTech agreements. The valuation assessment incorporated the revised commercial assumptions already discussed by Christian with respect to the EU launch. And finally, net loss was $47.9 million for the three months ending June 30, 2025, reduced from a loss of $58.3 million for the same period in 2024. Our cash, cash equivalents, and marketable securities at Q2 2025 total $454.3 million as compared to $588 million at December 2024. This decrease was primarily driven by net cash use in operating activities and also impacted by a delayed cash receipt of approximately $21.7 million in R&D tax credit that we've expected from the UK HMRC, which was expected to receive during the six months ending June 30, but has been delayed. We continue to believe that with our current cash, cash equivalents, and marketable securities, we are well-capitalized to drive the launch and commercialization of OviCel and to obtain data in the LN pivotal trial as well as the MS Phase I study. I'll now hand back to Christian to wrap things up with a brief outlook on expected milestones for the rest of the year. Christian.

Thanks a lot, Rob. So this gets me to kind of the outlook for the remainder of the year. The two data releases that we're planning, the first one is the updated data from our Phase I in SLE patients, which we expect to provide the update at the ACR meeting in October. And then we're aiming to provide a review of the Phase I data of our pediatric ALL experience towards the end of the year. When we look at the clinical trial conduct, we expect first patients to be dosed for our lupus nephritis Phase II study, our MS Phase I study, and the AUTO8 study in amyloidosis, which is also expected to dose the first patient in the second half of the year. So a lot of progress and I think driving towards a very attractive dynamic on the launch, but also driving hard towards an expanded use of OviCel beyond the relapsed/refractory adult ALL opportunity. And with that, I think we're in a great spot for the second half of the year. I'm happy for you to actually join us for the Q&A session. Thank you.

Thank you, ladies and gentlemen. If your question has been answered, you wish to remove yourself from the queue, please press star one one again. We will pause for a moment while we compile our Q&A roster. Our first question comes from James Shin with Deutsche Bank. Your line is open.

Good morning, guys. Thank you for the question. First question is for Christian on the Germany launch. Was this originally a green light, call it, but flipped to hold based on pricing and reimbursement changes from, say, the MSN undercurrent? And then I guess the second one for Rob is once the split reimbursement is, I guess, absorbed or embedded by the hospitals, is enrollment and sales expected to accelerate or like what's the recognition pattern or cadence thereafter? Thank you.

Thanks a lot for joining James. So what I think is important to understand in terms of the market access process in Europe in general, is that the methodologies that are being used for market access are designed to use data from randomized controlled studies. And that has been a challenge, I think, for many of the CAR T programs and cell and gene therapy programs in general, which are based typically are placed in rare diseases initially typically based on single-arm studies. So that's a methodological challenge that we do have across the board and across all of the assessing agencies and bodies. So that's, I think, the first observation. So there is a disjointedness and with that an element of a judgment call required. The second is clearly that we have to make sure that we are navigating, I think, the various processes such that we do get to play an outcome that is economically reasonable for us and doable for us. What we have seen in the past is that, for certain products were launched below their actual production prices, which obviously is not a good precedent and doesn't really, I think, support a sustained business. And as a consequence, we've seen a substantial proportion of cell and gene therapy products actually not being launched in Europe. There's something like eight out of 18 that were not launched. So that's it, that's the backdrop. So we're gonna do this very methodically gonna go through country by country and are gonna navigating that. What is important to understand as well is obviously in the current environment that there is a number of countries actually do publish the actual negotiated prices and you were pointing to MFN, and you can imagine that also creates obviously a possible tension that may or may not be helpful in the process. So we're gonna take a very disciplined approach. We're gonna engage with the respective countries and we're gonna work through the process, but we're also, we'll certainly make sure that we're gonna get to the right outcomes before launching, which is why we're sort of putting to a longer timeline before we realize any sales in Europe. And with that, I'm handing over to Rob.

Yeah, hi James. Your question on the revenue recognition. So just to maybe clarify the specifics here. So we moved from the first quarter where all recognized was recognized on the first administration of OviCel to a fifty-fifty split between the first administration and the second administration. At the time, we also called out that obviously this is only for a portion of patients, CMS outpatients, and the time between those two time points was per the label about ten days plus or minus two days I think in the field we've seen about nine days thus far. So the specific implementation of the revenue recognition change, we said at the time was going to have a very little impact and we kind of see that as this quarter has even played out. The adjustments that Christian referred to certainly that the centers had to make more on the administrative side and then in turn impacting some of the registrations that were happening in that timeframe. We really expect those to resolve themselves kind of a full quarter basis by Q4, but we will see some of that certainly in Q2 and probably early in Q3.

Thank you.

One moment for our next question. Our next question comes from Matt Phipps with William Blair. Your line is open.

Hi. Thanks for taking my question and all the updates today. I guess, Robert, quickly then, what happens if a patient only gets the first infusion? I realize this doesn't happen very often, but is there just an eventual time where you can recognize the rest of that? And then just thinking ahead, I'm sure no guidance here, but do you think you can become you can gross profit positive sometime by the end of this year or next year? Just wondering if how we think about kind of that getting over that fixed cost and getting to kind of capacity levels where you think we at least get to a gross profit level? Thank you.

For joining, I'll take first the first question and hand over to Rob. So when you have the first infusion and only the first infusion, which is actually extremely rare because obviously the only reason why that second infusion wasn't happen is the patient would have an adverse event reaction that wouldn't allow you to actually do second dose. And you remember from our clinical experience, that is exceedingly rare. And in fact, we do see this very, very rarely in the commercial setting. If that happens, then only the first infusion will be recognized. If the second is not administered, that will not be recognized. So with that, I'm handing over to Rob to address the fixed cost questions.

Yeah, Matt. So on the gross margin front, certainly we saw as you looked quarter to quarter from Q4 even last year where we had to recognize some idle capacity costs and then into Q1 and Q2 certainly trending the right way in terms of that number getting closer to break even. It's really a volume story for this year and so what we've been very focused on is making sure the product is available and we wanna really make sure there's no limitations to the launch. We do expect as certainly the second half of the year will play out and we continue to see volume increases that that'll continue moving in the right direction. No specific timing in terms of guidance and you know kind of when something will flip but we certainly expect in the second half to continue in that direction.

Thank you. One moment for our next question. Our next question comes from Gil Blum with Needham and Company. Your line is open.

Good morning, everyone, congrats on a strong quarter. Maybe a quick question here as it relates to kind of how is the product being received by the community in The US. Do you have some anecdotal feedback and maybe already some level of reorders? And I have a follow-up.

Well, thanks a lot for joining, Gil. The reception has been very, very positive. What we're seeing is and what we have pointed out in the past is obviously that the safety profile and the manageability was really something that was immediately experienceable and that's been incredibly helpful. And we believe it's one of the key reasons also why we had early, very early on, we started to see actually reorders at the centers for the product. And that actually is developing very nicely across the centers that are active, commercially active at this point. So this looks very positive and I think has a very nice reinforcing impact. And I think it's in line with frankly, prior experience. What we now see obviously, as we go to the middle of the year is that we start, the physicians start to see the outcome, not just the immediate manageability of the product, but also the outcome in their patients. And we think that's gonna be sort of a second push as we go into the second part of the year. And certainly the Felix data that we update that we presented at strongly, think point in that direction with the long-term plateau that we're seeing in the data and the survival data. And obviously a lot of the patients not requiring additional therapy, which is obviously resonating very well. So we're really pleased with what we're seeing, the dynamic and the feedback we're getting from the product, the experience, but also the experience obviously that the centers have with our commercial team and the reliability on the supply side, on the production side, which I think are really important to sort of actually have a be a real partner, frankly, for these physicians and patients in this space.

Thank you for that. And can you provide any additional color regarding your negotiations with NICE?

So the process is obviously a very regulated process where there's obviously a query for quite a substantial amount of information and health economic assessments that we sort of provide and provide the data behind that. And then it is a process that actually involves to quite an extent the treating physicians with experience with the product and experience with the indication, but also the patients themselves, which do actually have a voice in this process. So there is a dynamic there where there's the company provides information, but we're actually not actively negotiating in that process, in particular interaction with NICE, but it's a process that's actually within that body with obviously information requested from us, but then also support from the physician and patient community. And so this is ongoing. We went through a first step. There is a second step now that we're running through and we'll need to see where we get to. And then there's additional different paths that you can take from there on forward. So we're in the midst of this. So this is also a time point where it's very difficult to sort of give a view on where it may go and we'll need to see kind of how it develops. But overall, you know, very strong support from the physicians and the patients for the product, which is obviously consistent with the experience that we had with OviCel or Obe-cel in the UK. And I would say many of the patients that we have treated in our clinical trials were UK patients. So, there is a strong amount of experience, also firsthand experience available, which we believe is helpful.

Thank you for taking our questions.

Thanks a lot, Gil.

One moment for our next question. Our next question comes from Asthika Goonewardene with Truist. Your line is open.

Hey, guys. Good morning. I'll echo my congrats on the strong Obe-cel launch here that's panning out. A couple of quick financial questions and operational questions, then I got something more bigger picture. So to start with on the you've added about a dozen or so ATCs since your Q1 earnings. Can you maybe walk us through the plan for bringing on more centers by your end? And is there sort of like a training period as you bring on a new center that would make us kind of think about how productive these centers are as they come on? And then the other quick financial question is, can you quantify the impact of out of spec products in your COGS?

Okay, I'll take the ATC question first and then hand off to Rob on the OS question. So, did add, obviously, you're correct, we added about 12 ATCs that are now active, and we're gonna continue obviously to add to the end of the year. We expect to be at 60 plus by the end of the year. So that progresses very nicely. When we look at the centers, obviously the way that we have weighted the centers was to really look at those centers that have larger patient flows and often actually already have experience very early on and then kept adding to that. So you start actually with what do you think the centers are that will have a relatively high patient flow, and then gradually actually fill out the network of centers to make sure that patients have a good reach and also wouldn't have too much of a distance to access the therapy. And that's kind of what we're in. So we're at this point in time, we keep on expanding into a geography that we haven't been present in, which we believe is important to make sure we're serving the breadth of the US very well. And we're making good progress on that. And with that also, I think we have an ability to make sure that the therapy actually becomes truly accessible for the vast majority of patients in the US. So this is when you look at the, you can look at the ADC locator and you see, we have a very significant amount of centers, basically almost in a U shaped form, from Chicago all the way up through the Midwest down to the South and back up again to way up to the West. And there's clearly additional centers that we're opening up in between to make sure that we actually have a very good distribution there. So that's sort of the way we're looking at that and really a clear focus is to make sure that there is access in a reasonable distance. And with that, I think having an attractive network of clinics available for the patients to access. So with that, I think Rob, just to follow-up on the OS question and potential impact overall.

Yep, sure. Thanks Asthika for the question. So let me first comment when you think about out of spec and kind of financially where things land, there's actually two places where this can go and so it's important to understand what drives that. So in certain situations we do have an out of spec protocol that the site can choose to put the patient onto and if the patient does receive the dose even though it's out of spec under that out of spec protocol it actually lands in our R&D expense. What lands in cost of sales is out of spec product that is not administered under that protocol effectively like a scrap charge that goes through across the sales. So it's very hard to predict where patients will land in those two buckets, but it's fair to say that our experience to date overall in terms of our out of spec rates have been very aligned with the Felix study. And we said in the past that that's gonna land somewhere between a five to 10% kind of range in terms of the experience and to date what we've seen in the commercial launch.

Great. Thanks, guys. And then just a bigger picture question on Europe here on the European rollout. If you decide to launch in a specific country, let's say in the UK, would you expect patients to travel from neighboring countries to receive therapy? Have you seen this happening with other CAR Ts launches in Europe? And maybe you can talk a little bit about the profile of Obe-cel that might permit this to take place.

It's a really good question and something we've been looking into. So first of all, what we're seeing from a UK perspective is that there is a certain amount of medical tourism towards the UK for patients to get access. Typically that medical tourism is coming from outside the EU to the UK, but there is a level of that. When we look within the EU, what we do see is that there is cross-border treatments that we certainly would see in a lot of the, particularly the border regions where the infrastructure may not be evenly distributed across the border. Some of you know that I'm a Swiss national, I grew up close to Basel, which is very close to obviously Germany and France, literally bordering on both countries. And it's quite typical that if there are complex cases, children with complex issues or adults with complex issues that they might actually coming from the surrounding areas within Germany or France into the university hospital in Basel across the border to be treated there. And there are also movements the other way if the speciality actually is on the other side of the border. So that actually does happen. And it is probably at this point difficult to quantify, but it clearly is not unusual to actually see that. To what extent that would be applicable for patients with acute leukemia, I do not know, but what we do know, and this is my old experience developing BLINCYTO, we had patients from quite a wide range of countries and certainly during clinical trials to access trials in Germany and try and looking for treatment in Germany. And we also see that on the, there's also some of that on the commercial side as well. So it is very much, I think it's a possibility and I think it's an area we're looking more into. Obviously this has a lot to do with the nature of the insurance and the payers set up and obviously getting clearance from the payers, which typically for certain emergencies that's clearly happening. And we're looking into to what extent and what breadth this would be applicable here as well. But it is not unusual to see complex therapies to be accessed across the border.

Thanks guys.

One moment for our next question. Our next question comes from Kelly Shi with Jefferies. Your line is open.

Congrats on the progress and thanks for taking my questions. As you're now expanded to 46 treatment centers across the US, Curious if could share learnings, if the early adopters and also with reordering comes from also a high volume centers of Takeda, so all you actually see a different pattern. And also for Germany and the UK, one could we anticipate first revenue recording and also have a follow-up? Thanks.

Okay, very good. Thanks for joining, Kelly. You're right, it's very interesting when we look at our centers in the US, we look at the use pattern across the centers. We have a range of centers that have quite exceeded our expectations in terms of the patients that they treated. And part of that expectation on our side was actually prior knowledge of the level of use of CAR T in this indication in the past. And clearly that looks changed in a good number of centers. So that's been very encouraging. We're also seeing centers where there are multiple physicians actually administering the product, which is another key metric that we're looking at. So, not only have one physician at a center prescribed, but actually getting the use of the product more broadly distributed across all of the prescribing physicians for this indication. That's a dynamic we're following very carefully. And I think it's one of the key areas that we're gonna be focusing on for our centers. It's important to understand that most of the patients are in fact being or expect that most of the patients with the relapsed/refractory disease are going to be treated at those give or take 60 centers that we're targeting now. And that gives you clearly a very significant opportunity to focus from a commercial perspective and really build on the relationships, the connections, the experience at the center to actually keep expanding the use so that we are sort of getting to a place where the patients that are eligible for the therapy and can benefit from the therapy actually get access to it. So the dynamic I think we're seeing is very remarkable. Repeat use is one of the key things we're looking at. We're seeing a very nice adoption of repeat use across all our centers and we're really monitoring that very carefully and it's supporting that process. So this has been very, I think very interesting and the high volume centers have been phenomenal to see kind of the level of engagement and patient flow that resulted from that. And we're clearly building on that and we're sort of gonna take the learnings from those centers also into the other centers. And then with regards to the UK and Germany, obviously those are two different processes from a patient access perspective. We're in the midst of the current process in the UK and I hope that over the next few months, we can actually get to a resolution there. And then actually, if positive, we would expect to be able to launch in the probably early part end of this year, early part of next year, but it is contingent on obviously getting a reasonable outcome that is economically viable for us. And so that's kind of what we're working towards. And in Germany, we're certainly want to sort of have more engagement on the physician, the patient side, but also with the respective regulatory bodies in Germany. And at the same time, we're looking for more data to also become available over time from the experience, the real-world experience in the US, which we hope would also actually be supportive for these conversations. So at this point, we're not guiding to sales in Germany because it ultimately is dependent on where we're gonna end up in those negotiations. But we're also looking at other European countries and we may change the order of access within Europe based on where we are and what we know at this point.

Super helpful. Thanks so much. And also for autoimmune, curious for the SAR presentation in Q4, what other data points could be included beyond what has been presented in the past? And also, could you share some additional color? Maybe do you have other ongoing translational studies, maybe to tell us more on like a B cell dynamic, or maybe some of the correlation to patient baseline characteristics to guide future development in autoimmune space? Thank you.

Yeah, very good questions. Thanks, Kelly. So, with regards to the data at ACR, obviously the key update will be related to the longer follow-up of the six patients that we had reported on at the R&D event earlier in Q2. And I think that will give us a good idea of kind of how the product overall actually is performing because we're gonna have six plus months of follow-up with all the patients. So I think that will be, I think probably the key part of the follow-up. We actually did enroll more patients on the study. So there is also gonna be earlier data from those patients that will be included. And I think that's obviously one of the key areas. We've been looking very carefully at a lot of different parameters for these patients to develop a good understanding of the pharmacodynamics, both of the product, but also and how we're impacting potential disease stations, etcetera. So those are datasets that we're also pulling together and we're gonna be looking at. We're looking at a range of, obviously I've been evaluating a range of indications. Obviously the first one that we sort of decided to move on is lupus nephritis. That's clearly where we're gonna double down on. And I mentioned the fact that we're obviously we're opening that study and we're making really good progress there and expect to have patients treated still this year. And that gives us, I think will give us a very nice momentum in that study also considering it's a very compact study, will give us a shot to also frankly be first in class in that indication. And then secondly, we're obviously very interested in seeing the performance of the product in the progressive MS patients. And there's gonna be also a lot of analysis that will be done in those patients, translational type of analysis to understand the impact of the mechanism of action, etcetera, in addition to obviously the actual clinical readouts and the imaging readouts that we're gonna be taking from those patients. So there's quite a lot going on there and there's also obviously additional work that we're doing to look into additional indications options, but obviously for now, very much focused on the indications I just went through. Thank you.

Thank you. One moment for our next question. Our next question comes from Simon Baker with Rothschild and Company Redburn.

Thank you for taking my questions. Two, if I may, please. Firstly, Christian, just going back to the European launch outlook. For, shall we say, traditional drug launches, there's a fairly established routine of going Germany first because you can set your price and then it gets adjusted and then work your way through the countries ultimately receiving towards the end reimbursement in France. Clearly that's not the same in cell therapy. I wonder if you could just highlight any areas where there is a markedly different process of seeking reimbursement which affects the order of countries in which you will seek to launch? And then secondly, going back to the UK, at the same time that NICE was saying no to Obe-cel, the MHRA introduced the world's first framework for point of care manufacture of cell therapies including CAR T. I just wanted to get your perspectives on the pertinence of that to Autolus Therapeutics plc and if any other regulators in the world are looking at similar approaches? Thanks so much.

Yes, good question. So the first one is around kind of sequence of launch in Europe. You're correct, for many of more traditional therapies, the sequence of launch tends to be Germany, the least traditionally be to Germany and then you kinda walk through kinda a series of countries to sort of ultimately get the majority of them. That started to actually change somewhat. Obviously Germany is still the single biggest market, but in terms of market access, not necessarily the most attractive country in Europe. So that's, I think that's, and that we're talking sort of pre the current administration. That's certainly been true. When we look at the current administration, I think there are a few things to keep in mind. First of all, the most favorite nation process obviously is one that actually reference prices in various territories. Now there are two types of prices that tend to be quoted. One is a list price, the other one is discounted price. Now different countries actually deal with that in different ways. Some countries publish list prices, but not negotiated prices. Some countries publish negotiated prices. And you can imagine in the current environment where there's a lot of uncertainty around what processes are, frankly, what are the rules, what's gonna be applicable and so on and so forth. That creates, I think a lot of questions for frankly, all pharmaceutical companies looking at launching in Europe because depending on where you are, what you agreed to, etcetera, you may actually have discrepancy to the US price at which point you might actually be having an exposure that may or may not be reasonable to take. So that's one generally across the board, I think something that I think every pharmaceutical company needs to look at, needs to think about because it's a very significant level of uncertainty and very unclear set of rules that ultimately may apply or may not apply. So that's sort of one area to look at. The second part is that, and this has been one of the real challenges in the cell and gene therapy space is that the methodology to actually calculate the prices and sort of provide market access at has been designed for very different type of products and very different types of clinical data. When you look at the cell and gene therapy space, most of the indications we're developing in, we're developing in very high medical need settings in smaller indications, and we're going for very high treatment effects. The reason what that does is allows us to actually develop and which is what all regulators agree with, to develop with single-arm clinical trials for approval and demonstrating very clear cut clinical benefit and risk benefit profile in those indications. And we see that across the board. There's a huge disconnect between the view that we have with the regulators and the methodology that we're seeing for market access, which are all based on classical randomized controlled studies that then also assume you can do a direct comparison to a similar product and quite often. And so that's typically then obviously difficult. You haven't seen CAR T therapies that are being compared in a single trial. And we're not gonna see that going forward. That's not actually doable. So what's then happening is your next best thing is you've got to kind of compare against some form of standard of care, which varies widely of what that actually is considered to be. And then in the absence of a actual direct comparison and randomized controlled data to your product creates the situation that the model doesn't actually allow you to quantify because the model doesn't can handle the data. And so as a consequence, you get a benefit, which is acknowledged, but it cannot be quantified. And hence it's called a non-quantifiable benefit, which is an oxymoron in English. It kind of works in German where some of those concepts came from. So the problem that that creates is a very significant disconnect that actually the system is not set up to value that. And on top of that, have not in the UK, but for most of Europe, a disconnect between how healthcare actually and healthcare costs are looked at. You have obviously a very significant component that are infrastructure related. These are your hospitals, your staffing, your basic operation, etcetera, which is a huge chunk of the cost in any healthcare system. Well, in most European countries that is covered by taxes and it's opaque, not actually not transparent, not visible to the public, what that actually costs. What then actually is sort of going into the assessment is in essence what's leftover. And that's mostly the therapeutic diagnostic costs and some very specific procedures. And that's actually what's carried by the payers. That disconnect is very, very significant and creates a problem because then if you wanna have a full value assessment, you cannot actually properly do that because obviously a big chunk as an example of a one-off therapy that gives you curative outcome as a hypothetical example, that has a huge impact on your infrastructure bit and not using, not actually utilizing that infrastructure. That's not covered. That's not part of the model. And hence we do have a huge disconnect in the view of value. And that's where the fundamental disconnect is in the various systems. And that is sort of why this is more of an actual process to go through and why it leads to kind of quite different types of outcomes and different assessments. So those are, I think a few points there to consider, which are just very different, significant differences in the underlying methodology and the way that frankly healthcare is being paid for.

Great. Thank you.

One moment for our next question. Our next question comes from Yanan Zhu with Wells Fargo.

Hi. This is Jeff on for Yanan. Thanks for taking our questions. For the Obe-cel launch in the US, can you provide any detail on how many patients were treated in the second quarter and year to date? And then second question on the longer-term SLE readout at ACR in late October. It was mentioned that additional patients have been enrolled beyond the initial six. How many patients do you anticipate including in the readout? I believe there were a total of 12 to be dosed in phase one. Have all 12 been treated and were any of them adolescent? Thanks.

Yeah, very good question. So first of all, we have not guided on the number of patients, but you can actually backtrack the numbers, I think reasonably well from knowing the cost of the therapy, but we haven't given a detailed number there. But I think you get very close just by backtracking. The second is related to the number of SLE patients. We obviously continue to dose patients. We had a small cohort at an elevated dose level of 100 million, and we have expanded the trial to include three adolescent patients. We do not expect given the timing for the data cut to actually have adolescent patients in the analysis. The focus will be on the adult patients and we'll sort of give an up-to-date view on the experience with the 50 million and probably initial experience on 100 million.

Got it. Thank you very much.

Thank you. One moment for our next question. Our next question comes from Max Dahl with Goldman Sachs. Your line is open.

Hi. This is Max for Rajan Sharma. Thank you for taking my question. First one is, could you comment on what proportion of your centers are now operational and enrolling patients? And how should we think about the revenue momentum and trajectory? Is the growth between 1Q and 2Q a good run rate for the full year? And the second question is about the lupus Phase II trial. Could you talk us through when we could see data from this trial and what you see as the bar for success? Thank you.

Yes. So thanks for joining, Max. So the momentum obviously we're seeing has been very positive first half of the year. As we indicated, we do see an impact from the resolution decision on the pricing because it had an impact on the centers to sort of adjust their actual internal policy and procedures. And during that process, some of the centers were actually not enrolling patients or have to slow down enrollment of patients. So that has an impact because that obviously then goes through given the time it takes to their manufacturer release and actually ultimately treat the patient. So we're expecting to have an impact in the current quarter. We expect to be outside of any impact related to CMS, the CMS decision in the fourth quarter. So that's kind of where we are. So we're kind of obviously have a very good first half. I think we had a very good second quarter and we think we're gonna actually overall have a very positive continuation in the second half of the year, but we're not gonna, at this point can give you sort of more guidance than that. With regards to the centers that are active, so out of the 46 centers you see on the access page, the vast majority of those patients actually have treated obviously their patients. There's obviously some very new ones that are actually starting now to actually have are now ready and are ready to actually receive patients. So those are obviously in the process of actually getting their first patient, but the vast majority of the centers that you see on the ADC locator actually have been already treating patients and many of them actually have treated multiple patients. And then the question related to the lupus nephritis study and when to expect data, I think that is premature at this point in time. We have indicated, I think the regulatory hurdle that the trial is basically designed to sort of take. And as we discussed in the Q&A session at the R&D event, there's obviously a regulatory hurdle, but there was also an expectation that we're probably gonna exceed or would like to set that level to be exceeded. But in terms of data, that is too early to tell. We're starting the study up. We haven't enrolled a single patient at this point. We expect to have enrolled patients by the end of the year. So, this is premature to actually give guidance on the timeline for enrollment and data. Thank you.

I'm not showing any further questions at this time. I'd like to turn the call back to Christian for any further remarks.

Well, first of all, thanks a lot for joining. I would say a great quarter. We're keeping you updated. Obviously, as we go through the third quarter here. We're very pleased with the dynamic we're seeing and the reception of the product. Keep pushing and we certainly keep pushing our clinical trials and are looking forward to sort of looking for ways to actually making the product available to a larger number of patients beyond adult ALL. And we'll obviously show first data in that regard towards the end of the year, both on the SLE side as well as the pediatric ALL side. With that, I'd like to thank you for joining and wish you a great summer. Thank you.

Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.