Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics Second Quarter 2021 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, Business Strategy. Please go ahead.

Thank you. 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 second quarter of 2021. I'm Lucinda Crabtree, Vice President of Business Planning and Strategy. With me today are Dr. Christian Itin, our 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 4, 2021, which can be accessed on the EDGAR database at www.sec.gov and in subsequent filings that we make with the SEC from time to time. The forward-looking statements on this call reflect the Company's views as of today, August 5, 2021, 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. So on Slide 3, you'll 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 second quarter of 2021. Andrew will discuss the Company's financial results, and then Christian will conclude with upcoming milestones and any 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, Lucy, and welcome, everybody, to our second quarter call. First off, I'd like to briefly go back to kind of where we started also the Q1 call, which is to have a quick look at the state of the COVID epidemic that we're going through and the impact it will have or has on our business. As you may remember, we did guide in Q1 that we were hopeful that by the middle of the year, we should reach a level of stabilization due to increased levels of vaccination, but also a substantial number of people actually having recovered from COVID infection, that we should get into an overall more stable environment so that the fluctuations that we see in terms of the cycles of COVID or the waves of COVID should actually start to just ebb and get us to a place where we have overall more stability and a more predictable environment for our patients that were obviously enrolling into our trials. And we also did guide that we're expecting to be able to actually ramp up enrollment by middle of this year. We are very pleased to say that indeed what we were hoping for actually is a reality today. I think we do have reached now between vaccinated people as well as people who've recovered from infection, at a level of about 70% in the U.S. and the same actually in the UK and that gives us actually a base level of stability that, I think, is very helpful in terms of the conduct of the clinical studies. Now, we obviously all have seen the impact of the Delta variant, but we also do see very nicely that indeed while there are surges in certain places that in fact, they seem to be curved…

Thanks, Christian, and good morning or good afternoon to everyone. I think if we can move to Slide 19. It's my pleasure to review our financial results for second quarter through June 30, 2021. So starting with our cash position, cash and cash equivalents at the 30th of June totaled $216.4 million as compared to $239 million at the end of the first quarter, end of March. Worth noting that during the three months ending 30th of June 2021, the company issued an aggregate of 2,069,466 ADSs under the ATM program for net proceeds after underwriting discounts and operating expenses of $14.3 million. Turning to the P&L. Total net operating expenses for the three months, 30th of June, 2021, were $37.7 million. This is net of grant income and license revenues of $1.6 million. So you'll see there an upfront from the Moderna collaboration. This compared to net operating expenses of $39.5 million, net of grant income of just $300,000 for the same period in 2020. Research and development expenses increased to $32.1 million this quarter compared to $31.3 million for the same period last year. It's worth noting that cash costs, which exclude depreciation and amortization as well as share-based comp, increased to $29.2 million from $26.5 million. Overall, this increase in R&D cash costs of $2.7 million consisted primarily of an increase in compensation and employment-related costs of $0.7 million, which includes some of the severance payments that relate to the reduction in workforce that we undertook in the first quarter of this year, and that was offset by a reduction in employment costs, obviously, due to a decrease in the headcount from the program. Secondly, an increase of $1 million in facilities costs is related to continued sort of scaling of the manufacturing operations. Thirdly, an increase…

All right. Well, thank you very much, Andrew. We're going to Slide 21. I believe we're going to be headed into an exciting second half for this year with quite a significant line of activities, particularly towards the end of the year. When we look at obe-cel and AUTO1/22, we expect obviously, first of all, primary operational focus is on the execution of the pivotal study. I think it's worthwhile to mention that the FELIX study is one of the very few pivotal studies in adult ALL with a new agent of any kind, first off. Secondly, it's one of the very few pivotal studies that are ongoing with a new product in the cell therapy, in the CAR-T space, in particular. We are reiterating our guidance to have the data during the course of next year. And when we then look into the AUTO1/22, pediatric ALL activity, we expect to give an update at the end of this year, as well an update on the additional non-Hodgkin's indications from the ALLCAR study as well at the end of this year. The primary CNS lymphoma activities, we expect will probably be a data release early next year. And I think that gives us then actually between those various indications start to give us a very good view on the overall profile of the product across not only ALL, but the range of CD19 positive hematological malignancies. AUTO4, we obviously are continuing to dose escalate that program. We expect interim data during the first half of next year, present at one of the upcoming conferences in that period. AUTO6NG is scheduled to enter the clinic in the first half of next year, and we're running this program in collaboration with our academic partners, and we're seeing good progress, and we're excited to, obviously, get this patient – get this product back into patients and see the impact of the improvements over and above the AUTO6 program. The cash balance, as Andrew pointed out, is approximately $216 million at the end of June with a cash runway into the first half of 2023. With that, I think we're through with the formal presentation, and we're happy to take questions.

Thank you, sir. [Operator Instructions] I show our first question comes from the line of Matt Phipps from William Blair. Please go ahead.

Good morning guys. Good morning or good afternoon. Thanks for taking my questions. I guess first on AUTO4 and AUTO5. Could you just talk about what pushed it back to first half of next year? It's obviously been a program of interest for investors, and yet we've been a while since we've hoping to see data?

Absolutely. Well, first of, thanks for joining Matt. What we did see with AUTO4 and AUTO5 is still, obviously, as we're going through the first half of the year, impact on the centers. We're now through that, which is very good. And we expect to be sort of enrolling at the predicted rate. But that was certainly something that we're still have to work through, and we're still sort of going to – getting into the second quarter and a bit longer than frankly we were hoping it would.

Okay, thanks. And then on the FELIX study, I guess, similarly, it sounds like COVID impact has abated. Do you think it's later this year that you can provide – you can narrow that 2022 guidance, maybe the first half, mid-year or second half?

Well, let me be specific. The guidance hasn't changed, okay. So we're expecting the primary endpoint to be available middle of next year, and the time-dependent endpoints being available at the end of next year. So that's the guidance that we've been giving consistently, and that is unchanged. There is no impact on the FELIX study.

Lastly, Bristol's, at least it seems to have a strong out of the gate quarter with Breyanzi and there's definitely some physician talk of the safety profile being differentiated and kind of driving more utilization. Does that give you more confidence in broadening the scope of AUTO1 development even in some of these competitive indications?

Well, first off, obviously, it's consistent with, I think, what we've been talking about on our side as well, and obviously consistent within investigator feedback that we've been hearing. What we're very encouraged by is the fact that, obviously, the non-Hodgkin's – early Hodgkin's data give us also a very clear indication that obe-cel has a very attractive safety profile in non-Hodgkin's as well. I think that bodes very well. So as we had indicated, I wanted to get an overview on the other indications to get a good feel for the competitive profile that we have in each one of those indications, and then we'll pick the one that looks strongest at that point.

All right. Thanks, Christian.

Thanks, Matt.

Thank you.

Thank you. I show next question comes from the line of Eric Joseph from JPMorgan. Please go ahead.

Hi, good morning. This is Rahul on for Eric. And thanks for taking our questions. Firstly, with respect to the Moderna collaboration, can you share some color on the economics of the deal and the type of indications that may be exposed within the broader field or within immuno-oncology? And also like, is there a timeline associated with the collection of targets indication, I guess? And when should we expect more news flow on that front? And then my second question is in relation to the ZUMA-7 readout. With the Escada like moving upstream in use, how do you think about the competitive positioning of AUTO3 or AUTO1 in DLBCL, and does this in any way impact your thinking about the future of clinical development strategy in DLBCL?

All right. Well, thanks a lot for joining. Appreciate it. So first question is to the Moderna Option and License Agreement. So the binders that we're looking at are in the broader immuno-oncology field. We haven't actually narrowed that down in terms of our public statements. But, obviously, are enabling for approaches that are sort of fit within the technology that Moderna is using on the mRNA side. So it is, I think, important to understand, this is technology that sort of is outside, or basically will be applied outside of the core applications that we're using on the CAR-T side. And, obviously, are sort of a very nice additional utility and revenue stream we can build up. The compensation itself has obviously elements of option exercise fees as well as development milestones, commercial milestones and royalties. So classical structure, but we haven't guided around the amounts related to that compensation. But it is a standard structure around the normal development progress and derisking in the program going forward. Second question related to kind of the activities that we do see in the field, moving CAR-T therapy from the last line setting in DLBCL into earlier lines of setting. And we've seen the data from more than one program at this stage. I think what is very encouraging and also what we think have been expecting in the field is that, as you move up the line, you do actually start to see attractive outcomes, including, obviously, indirect comparison to stem cell transplants. But indeed, the activity looks more attractive on the CAR-T side compared to the stem cell transplant outcomes. So I think that is a trend that I think we'll be seeing across the indications, and that will certainly be taken into account as we're sort of thinking about our strategy in the non-Hodgkin settings on the path we're going to take with our respective programs.

That’s very helpful. Thank you.

Thank you.

Thanks for joining.

Thank you. I show our next question comes from the line of Asthika Goonewardene from Truist. Please go ahead.

Hi, guys. Good morning, good afternoon. Thanks for taking my questions. So we have a Tecartus regulatory decision coming up. Christian, I'm sure you guys have done – are doing some primary research to see how physicians viewed the profile and how that compares to obe-cel. I wondered if you could share some of that feedback with us? I've got a few more follow-ups after that?

Right. So first of all thanks Asthika for joining and thanks for the question. I think if you think back around the communication that we put out and the analyst call that we did around the EHA meeting, we did actually sort of look at – compare, contrast data to the extent that, that was sort of appropriate to do. I think what is clear is that, obviously, the profile of the product indicates clearly an improvement for the patients – with all the ALL patients, and I think that is a good thing. What we do see is, and we've seen consistently through the various presentations and publications of data is, as I had indicated in the slide before as well, a significant level of toxicity that's associated with the treatment of the patients, that's certainly is challenging to manage. About 40% of the patients required vasopressors. So you can assume that at least that proportion of the patient was likely to actually have to be managed in an ICU. So it's an intense patient management that's required. And there is clearly some time gained. When you look at the overall data, it does not look like there is a stabilization of the responses over time, if you look at inventory, survival, et cetera. But there is clearly a gain in time. So, overall, I think progress for the patients. But I think, when I think from our product's perspective and the data that we have to date from the program, we believe we have an attractive set of data that should allow us to differentiate in this particular disease setting.

Perfect. Thanks, Christian. I'm wondering, could you then also give us maybe some guidance on the number of patients we can expect for the AUTO4 update in the first half of 2022?

So what we're rolling in – the nature of the study with AUTO4 is a classical dose escalation study, so we expect that we're going to have probably in the range of approximately 10 patients at the time of presentation, something in that order.

Got it. And then lastly, we're looking forward to seeing the AUTO7 study start in the first half of 2022 as well. But we've seen some unfortunate events for another PSMA directed CAR-T in similar setting. I'm not sure if Martin is on the line or you can channel you're inner margin here. But maybe you can tell us what gives you some – what do you think is driving that incidence of macrophage activation syndrome and those other toxicities with the competing PSMA CAR-T? And would you need to manage for that with AUTO7, or are you confident that, that might be something that you're not going to share?

So first off, obviously, there's very little known about what actually happened in that dataset. And I think we need to wait for the actual publication or the presentation at the medical conference to understand to kind of what the actual data is. I think at this point, it's pretty much referenced to a press release to my knowledge. So that's difficult to judge at this point in time. I think what we can judge – first of all, what we can do from a reference to our own design, one of the key things or elements that we have in our own design is actually the use of off switch. It's an ability to stop the activity of the CAR-T, should that be necessary. So that's one of the measures that's been in the program from the get-go. Now, what is interesting, I think, is probably two additional data points in sort of the wider PSMA field. First is the program from Novartis with the radiolabelled PSMA antibody, which obviously has hit the primary endpoint in the Phase III trial and has had a good overall safety profile as was sort of communicated earlier in the year. So clearly, an ability to target PSMA with a very potent mechanism of action. In addition, Amgen is moving forward what was prior the AMG 160 program, which is a PSMA BiTE. So again, redirecting T cells to PSMA expressing cells. That program obviously, has had some of the data presented and is now clearly moving forward also in combination with a range of products that are used in the hormone refractory prostate cancer space. So there are at least two programs with – one, the T cell program and the other one, a very high activity program against PSMA, which do not seem to have the type of adverse events that sort of have been anecdotally described. So from that perspective, I don't think we have the knowledge at this point, whether this is a target issue or whether it is another issue, and I think we have to wait for the release of the data.

Great. Thanks for taking my question guys.

Thank you.

Thank you. Our next question comes from the line of Chad Messer from Needham & Company. Please go ahead.

Great. Thanks for taking our questions. A couple from us. But let me start out with an acknowledgment and congratulations of the Moderna deal, obviously, not the key focus and value driver right now, but I think a nice validation of the differentiated work you're doing on CAR-T enabling technologies. So maybe just start with the ASH from the ALLCAR extensions in the high-grade NHLs to CLL, maybe set the stage on what we should look for there, and how are those indications different from what we've seen before?

Thanks for joining Chad. So the indications that we're obviously exploring in the AllCAR extension are, obviously, what we already updated on our patients that have follicular lymphoma as sort of the primary disease, patients that do have mantle cell lymphoma. And then on the high-grade side, you would be looking at DLBCL. And then in addition to those three, we're also looking at patients with CLL. So these are all – all of those are small exploratory cohorts and we expect to report on all of those. Whether they're all fully enrolled or not, I think we'll see as we get closer to the end of the year. But I think we will get a very good sense, overall for the activity of the product across the range of indications.

Great. Thanks. I was also curious if you could maybe briefly talk a little bit more about the recent Nature publication which talks about stem cell memory T cells as perhaps being part of a mechanism for durability. Not really familiar with these stem cell memory T cells. Is this something there's a particular marker for, or is this a well-known or relatively new phenomenon? Maybe just a couple of words on that.

Right. So one of the remarkable things that we were seeing in the original AUTO1 or obe-cel work that was done on the pediatric patients was that we had observed this exceptional persistence in the children, and we did see persistence of three years and longer and in fact, had an ability to actually take blood samples from the kids and actually analyze the composition of CAR-Ts by flow. We could do that because the levels of CAR-T cells in circulation were high and that actually allowed us to have actually sufficient material to really do a proper analysis of what's the composition of cells that we're seeing and what is it that we see that's driving it. We could also then actually look at patients and at the products that could actually – in children that actually did have responses in children that we did not have responses. And the subset of T cells or the differentiation that you mentioned just before, with the stem cell like characteristic, seem to be present in those kids that actually did have a proper expansion and a response to the disease. But it seemed to be absent in the kids actually that did not respond. So it is something that I think – it's an interesting observation. We, obviously, would like to corroborate that in a larger data set. But I think it is interesting, because it may point to a certain differentiation state of the cells that seemed to be associated with outcome. And I think that needs to be obviously further investigated and further corroborated. But I think it may give a start to give us a sense of some of the drivers that may actually give us a good indication about the ultimate quality of the product. So I think that's kind of what we were – what the paper was about, and was basically putting forward as an observation, hypothesis that, obviously, needs to be corroborated going forward in larger data sets.

Great. Thanks. Helpful. And maybe just a quick one for Andrew. In your comments on the P&L, you attributed the $1.5 million fee to something. I didn't catch that?

I suggested that the license income for the quarter included the upfront – an upfront payments from Moderna.

Okay. That made into 2Q. All right. Thank you.

Yes, it did make it into 2Q, yes.

Thank you. I show our last question comes from the line of Kelly Shi from Jefferies. Please go ahead.

Thank you for taking my questions. I have a question on Autolus fully closed the semi-automated manufacturing process. I remember for ALLCAR19 programming adult ALL, improved result rates have been observed in the patients treated with the cell products from this optimized manufacturing process. I wonder if this additional benefit also translated to better event-free survival at 24 months. I don't know if you have done stratified analysis on that. And also for the extension trial and other upcoming trials, are you also using this manufacturing process to drive better efficacy? And lastly, is there any impact on cost of goods sold from this fully closed manufacturing process? Thank you.

Thanks a lot Kelly. Very good questions. So as you pointed out, when the exploration of obe-cel in the adult patients started, the first few patients were treated with product that was generated, frankly, by hand using classical cell culture, similar to actually the way Kymriah was manufactured. The majority of the patients, however, were then manufactured using the enclosed system that we're also using, obviously, from a commercial perspective, and obviously, it's the basis for the pivotal study as well as the basis, frankly, for all the other programs that we had run in the past, but also running at this point in time. So when we look at the potential impact, so what you were referring to is that, obviously, it looked – when you looked at these initial patients in the ALLCAR study, that the patients that were actually manufactured with the commercial manufacturing process, they look a tad better than the patients that were initially manufactured by hand. That is true. It does look different. The question is whether this is a true difference in the – related to manufacturing or whether it was an overhang on patients that just didn't have a place to go and were just basically kept, or managed to just about getting into the trial. That is difficult to discern. Looking at the individual contributions and EFS actually gets very tricky, because we just don't have enough patients that were actually manufactured by hand. So that analysis becomes very difficult to do, because literally just – you don't have enough patients to follow. By eye, you would assume that they probably did it tad worse, because also, obviously some of these patients did not respond. So there is potential impact. But whether it's causal or not, I think that's not an…

Thank you very much, Christian.

Thanks a lot, Kelly.

Thank you. That concludes our Q&A session. At this time, I'd like to turn the call back over to Mr. Christian Itin, CEO, for closing comments.

Well, thank you very much for joining. Thanks for all the questions. We're looking forward to, obviously, keeping you updated. Hope you get a bit of a summer break, and then we'll get back together at the latest, obviously, when we're getting into the September swing and back on the normal circuit. All right. Well, thank you very much. Have a great day, and we'll speak soon.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Good day.