Autolus Therapeutics PLC

NASDAQ:AUTL

Earnings Call Analysis

Autolus Q2 2024 Progress and Financial Health

Autolus Therapeutics is making significant strides with obe-cel, focusing on regulatory reviews in the U.S., Europe, and now the U.K., with a PDUFA date set for November 16th. The company is running two promising Phase 1 trials for pediatric ALL and advanced systemic lupus. Financially, Autolus ended Q2 2024 with $705.9 million in cash, up from $239.6 million last year, despite a rise in net operating expenses to $58.9 million from $44.4 million in Q2 2023. With strong cash reserves, Autolus is well-capitalized to launch obe-cel and advance its pipeline .

Strong Positioning Ahead of Regulatory Approval

During the second quarter earnings call, Autolus Therapeutics emphasized its focus on obtaining regulatory approvals for obe-cel, a treatment for acute lymphoblastic leukemia (ALL). The company is currently on track for its PDUFA target date set for November 16, 2024. Progress with regulatory authorities in the U.S., Europe, and the U.K. has been positive, highlighting the strong positioning of obe-cel in a competitive market.

Promising Clinical Trials Progress

The company reported encouraging developments in its clinical trials, particularly the ongoing Phase 1 trials for obe-cel in pediatric ALL and systemic lupus erythematosus (SLE). The pediatric ALL trial is showing positive momentum, with the potential to deliver strong efficacy data in the near future. Moreover, the latest updates from the pivotal FELIX study indicate a stabilization of both event-free survival and overall survival, suggesting that the treatment could have long-lasting benefits without requiring subsequent therapies like stem cell transplants.

Financial Snapshot and Investment Considerations

Autolus ended the second quarter with cash and cash equivalents totaling approximately $705.9 million, a significant increase from $239.6 million at the end of 2023. However, net losses have also increased to $58.3 million from $45.6 million during the same period last year. The company attributes rising expenses to increased operational and research costs as it prepares for the launch and commercial production of obe-cel, while also investing in its growing pipeline. With its current capital, Autolus is well-positioned for the anticipated launch and pipeline advancement.

Milestones and Future Outlook

Looking ahead, Autolus is committed to a strategic plan that includes a focused launch of obe-cel once approval is secured. The company forecasts the activation of between 30 to 36 treatment centers by approval and aims to expand to about 60 centers within the first year of launch, which could cover up to 70% of the ALL patient population in the U.S. Furthermore, investors can expect updates on clinical data from the SLE study later this year, alongside developments in other trials such as AUTO8 and AUTO6NG.

Expert Leadership Enhancements

In a bid to enhance its operational capabilities, Autolus has strengthened its board with the appointment of new members with expertise in both commercial launches and adjacent medical fields. This strategic move aims to bolster the company's ability to navigate the complexities of regulatory approvals and create a pathway for successful commercialization of its advanced therapies.

Performance Metrics and Competitive Landscape

The call highlighted Autolus's commitment to delivering competitive performance metrics, particularly its goal of achieving a 16-day vein-to-delivery time for its product, which is competitive within the industry. With plans to improve efficiency in manufacturing and logistics, along with favorable preliminary safety data, the company is looking to establish itself as a key player amidst established competitors in the CAR T-cell therapy space.

Earnings Call Transcript 2024-Q2

[Operator]

Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics call to discuss its second quarter 2024 financial results and business updates. As a reminder, this conference call is being recorded. I would now like to turn this conference over to your host, Olivia Manser.

[Olivia Manser, executive]

Thanks, Sean. Good morning or good afternoon, everyone, and thanks for joining us on today's call. With me today are Dr. Christian Itin, our Chief Executive Officer; and Rob Dolski, our Chief Financial Officer.

So on Slide 2, before we begin, I just want to remind you again 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 clinical trials and development and/or regulatory timelines for our product candidates and our expectations regarding our cash runway.

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 our SEC filings, both available on the Investor section of our website.

On Slide 3, you'll see the agenda for today's call. Christian is going to provide an overview of our operational highlights. Rob will then discuss the financial results before handing back to Christian to conclude and take Q&A. So over to you, Christian.

[Christian Itin, executive]

Thanks a lot, Olivia, and welcome, everybody, to our second quarter earnings call. A real pleasure to have you all on.

And I'd like to start on Slide #4 with just a brief summary of the key highlights for the quarter. As you can imagine, we're in the process of going through the various review processes for obe-cel both in the U.S. as well as in Europe, and most recently now also in the U.K. So that's been the primary focus from an operational perspective. I think we're making good progress, and we're on track with all the various interactions that we have with the regulatory authorities.

The PDUFA target date, as you may remember, is November 16th of this year, and we're tracking well towards that timeline.

We've also obviously initiated our currently ongoing 2 Phase 1 clinical trials. One is in pediatric ALL, which is a trial that is moving very nicely. And obviously, we're excited about applying and having obe-cel evaluated in pediatric patients, and that's ongoing, and we'll report obviously in the upcoming periods on that trial. And in addition, the Phase 1 trial with patients that have an advanced-stage relapsed type/refractory stage of systemic lupus, this is the CARLYSLE study. We opened this study in the beginning of the year, and we dosed our first patient in the second quarter, and we continue enrollment in that study as we have projected.

More importantly, as we went through the course of the quarter, we did focus, obviously, very much on the update of the clinical data from our pivotal FELIX study, the Phase 2 study that's underpinning the regulatory filings that we've made with the various authorities.

Importantly, we looked at a number of aspects that we haven't actually explored to the same extent in our prior publications and presentations around the program. One, of course, is to look for the longer-term outcome. And what we do see is that we do start to see a stabilization of both event-free survival as well as overall survival in the -- in the study, and we're starting to see a plateau forming, which is obviously something we've been very keen to evaluate, and we start seeing that now actually stabilize with more follow-up in the study.

What was quite interesting, and I'll show you the data a little later as well, is that quite typically what we have in this particular patient setting is that we actually look to consolidate the effect that it could induce, the particular therapy to induce longer-term outcome. And typically, what you do is you actually have the patients on the go a stem cell transplant when they are in complete remission and ideally MRD-negative, which was the case for all our patients.

What was quite surprising to see, and you'll see the data in a short while as well, is that we -- it didn't appear that the consolidation with the stem cell transplant improved the outcomes for the patients, which is very different from the other therapeutic options that are currently available in the space.

We also, I think, had a closer look at the role of persistence into longer-term outcome as well as the impact of bridging therapies and particularly also the use of inotuzumab in patients that have very high tumor burden at time of inclusion, and where we did see a very effective approach here in terms of bridging with inotuzumab.

Now, in terms of the operational side of the business and the governance side, we did strengthen our board. We had Mike Bonney joined as the new chair of the company, and Ravi Rao, who is an expert in autoimmune diseases and inflammatory diseases. So broadening of skill set on the board, and obviously, a sort of the next step in terms of the evolution, both from a movement towards commercialization, which is obviously what I wanted, Bonney's background is obviously very strong, but also an expansion from a medical perspective into adjacent indications outside of oncology, where clearly Ravi Rao's particular experience is extremely valuable.

Now, in addition, obviously, we've been driving through a remarkable amount of growth and maturation of the organization as we're setting up our commercial manufacturing capabilities, getting through first regulatory filings and now keep pushing through that process and are preparing for commercialization. And there is a group of very talented leaders within the company that have really risen to the challenge, and has done a fantastic job and in recognition of their work and their leadership have been promoted to senior vice presidents within the organization. This includes Andrea Braun on the regulatory side; Chris Gray, site head for Stevenage; Markus Gruell on quality; Claudia Mercedes with operations of the -- from the manufacturing technical operations side, and also actually in a broader role than that; and then Dilip Patel, who's looking into market access and obviously, did a fantastic job on that side as well. So great to see this group of leaders really grow up within the organization, and having made substantial contributions that we expect to see a lot of important contributions going forward to the business.

Moving to Slide #6. I would like to just briefly remind you of some of the key data that we did update on at ASCO as well as at the EHA. Both meetings happened during the course of June this year. What we did focus on is, actually look at the totality of the data from the FELIX study. And as you remember, FELIX study has 3 cohorts. By far, the largest cohorts are the patients that have relapsed -- proper relapsed refractory disease with morphological disease, so more than 5% tumor burden. And this is the vast majority of the patients that we have treated.

We have also had 2 small cohorts in addition that we have included in the study, a small cohort for patients that have isolated extramedullary disease, that's typically a cohort that actually gets excluded from clinical trials because of the difficult nature of the disease and the challenges of managing those patients, but also a small cohort of patients that have minimal residual disease, so disease burden below 5%, but [ evolve 10-3 ], so a very relatively narrow corridor of MRD-positive disease.

So that's the group. We actually analyzed the totality of that data. And as you can see, this is a total of 127 infused patients. And what we're starting to see is incredibly encouraging in terms of the patients that actually are in ongoing remission without subsequent stem cell transplant or other therapy. And that is, I think, really important because that 40% of the patients that are actually continue in remission without any need for additional therapy.

We also have this smaller subgroup that I also refer to now, the next slide then, that received a subsequent stem cell transplant. There's 18 patients. They did received this transplant while being in complete remission, not only in complete remission, but also being MRD-negative. So no signs of measurable disease in these patients at the time of transplant. And then obviously, we had also a group of patients that were moving to other therapies or have relapsed and died.

So that's the status with a median follow-up of 21 months, which was the data cut that we were using for the ASCO and EHA presentations.

Moving on Slide #7. We're looking actually at the event-free survival of the patients. And as you can see, the event-free survival, and we're looking here at the 2 curves with and without censoring for stem cell transplant, but both curves, you can see, are stabilizing, and actually are starting to form a plateau, which is very indicative of a substantial portion of these patients remaining in continued remission, which is also extremely encouraging in this very difficult group of patients who have a very aggressive form of disease.

When you see the curve, actually, for patients that had, include the stem cell transplant, that's the green curve. The blue curve are the patients where we censor our patients that went on to stem cell transplant. What you see when you look at those 2 curves is actually a picture, which is the opposite of what you would normally observe in these studies. Normally, we would observe that patients that actually with stem cell transplant would do better, would actually give you a better event-free survival.

What we're seeing here, it looks like inverse, certainly not doing better, possibly doing a bit worse if they actually receive the stem cell transplant after receiving obe-cel.

Now, when we look at the, on Slide #8, at the overall survival, we see a similar picture. Certainly, no evidence that a patient receiving a transplant provided the survival benefit. And so very interesting in the sense that, clearly, the product on its own appears to be able to deliver a longer-term outcome and may actually be able to serve as a stand-alone therapy for a subset of the patients. So these are 2 of the key findings that we were presenting at ASCO and EHA.

We move on to Slide #9. What we're evaluating there on the left-hand side is the impact of the -- of CAR T persistence in event-free survival in the patients. What you can see on the blue curve on the top are patients that have actually ongoing CAR T persistence. And you can see that these tend to do very well, again, with the stabilization of event-free survival.

Patients that lose CAR T presence at 12 months, you can see that's the median curve, the green curve, and patients that would lose CAR T persistence already at 6 months is the red curve are tracking -- is tracking below, indicating that indeed longer persistence of the CAR T cells appears to be associated with a better performance on event-free survival, and just as this other [ surrogate ] to look at sort of the impact, we're looking at B-cell aplasia. And you can see also there the same type of stagger, but less differentiation between the patients. So persistence seems to be a better readout and a more reliable readout if you want to understand the potential impact for longer-term outcome.

Now, in summary, on Slide #10, quick takeaways from this pooled analysis. First of all, 40% of the responders are in ongoing remission without any subsequent therapy. And this is now with a median follow-up of 21.5 months. We clearly see evidence of a plateau forming both in event-free survival as well as in overall survival. And it does not appear that stem cell transplant based consolidation provides an advantage for the patients, and does not appear to improve event-free survival or overall survival, which is certainly an important outcome consistent with the effects we're seeing, but certainly unusual in the field so far. And clearly, we do see an interesting correlation between ongoing persistence and improved event-free survival in these patients.

With that, what I'd like to do is actually move to sort of more the operational side, and sort of getting to commercial launch readiness, and move to Slide #12. As you remember, we sort of have been already very active in the preparatory steps to get ready for commercialization for quite an extended period of time already. And a lot of that obviously was really focused on a key area of activities. Clearly, it's creating awareness around the medical affairs activities, as you would expect, building the value stories for the market access of the product. But then what's very involved is certainly the onboarding of the treatment centers. And that onboarding process is very involved, not only from a company, but also from a center perspective. That's a real effort that actually has to be put in, that goes across quite a wide range of activities that we need to sort of integrate in, whether it's related to apheresis to the actual delivery of the product, the handling of the product at the center as well as additional support that we're looking to provide both [indiscernible] to patients as well.

So it's quite an involved process, including everything related to the cell journey, from the collection of the cells at the center to the manufacturing process and back, and the IT systems required to really be able to track the product to ensure that we are -- have a very clear chain of identity throughout the entirety of the process. So a very substantial amount of work that's ongoing there.

We're on track to have between 30 and 36 centers ready for activation by the time of an approval, and are going to move, once we're getting to that point, would expect to be within the first year of launch at a level of about 60 centers onboarded and active with the product. So we're moving here in a very significant way as well as at a significant number of centers even for the initial start-up phase.

Now what we're particularly focusing on and where we are at this point in time is really looking at the integration of the workings and testing, frankly, of all the systems required to deliver the product. So there's a lot of activity going on and making sure that all the interfaces are working between the different processes, the different systems. And that's a very involved process that we're actually engaged in, in this -- in the third quarter and leading into the fourth quarter, to make sure that all elements required to deliver this therapy are fully operational and tested out, and actually have achieved the level of robustness required for a commercial operation.

Now on the next slide, just a brief view on kind of where we are and what some of those activities are that we actually need to think about at the time point when we actually do get to an approval. Obviously, we talked about the path there on the prior slide. We eventually get to a point where, hopefully, around the target date, we do receive an approval for the product. Once that happens, there are several activities that need to take place on our side, and driven from the company side is really kind of the activities that are defined by the label itself. And there are certain aspects of training and activity that only can actually be finalized and gone through at the time when the label is fully set and determined. And that actually has to do with a set of trainings that are -- that have to be consistent, obviously, with the approved label, as well as obviously administering a REMS strategy and training that needs to actually be implemented at that point in time. So those are elements that, from a company perspective, you'll be able to complete once the -- once an approval is in.

Now the centers themselves need to run through quite a range of activities at that point in time, that really make sure that they're internally ready to be able to actually manage this type of a therapy, both from an administrative perspective as well as from an actual physical operational perspective. And you see quite a set of those activities that sort of will actually have to be worked through on the center and the inside of the center, and you can see that on the right-hand side, spelled out in a bit more detail.

Now when we think about what that means from an overall timing perspective, you can see the blue curve or blue arrow up there. It's actually -- it's quite a range of time that we actually see where -- from that timepoint where the center actually can't get activated until it actually would enroll the first patient, and we will see certainly a variability among centers in terms of the time it will take to be onboard as the enrolling patients.

To look at that in a bit more detail, we will go to the next slide, and just look at sort of the -- sort of in a relatively simple way of what are some of those key activities and timelines. So completing the site accreditation, we expect will take anywhere from 2 to 12 weeks with the centers that we have prepared for the -- for the onboarding process where they're now from the timepoint where you can actually initiate the site activation will have take anywhere between 2 and 12 weeks. Obviously patient screening and leukapheresis scheduled and having that completed, anywhere from 1 to 2 weeks at that point in time. And then obviously the anticipated vein to delivery time of 16 days.

So when you think about that, and you think about a target date, PDUFA target date is middle of November and as well as for the year-end holidays, it is reasonable to assume that the first patient dosed will be happening in the early part of 2025, if we're operating on those timelines. So I think that sort of, I think, hopefully gives you a sense for what it means to start up, and what are sort of reasonable assumptions around when to expect kind of first patients dosed, and then obviously would gear up from here as we go through the course of the year.

Now with that, what I'd like to do is switch gears and just briefly talk about sort of the obe-cel product family on Slide 16, franchise opportunity. This is a slide you've seen before. Also we continue to work not only on the current activity in -- on the adult ALL side, but also working on the pediatric side as well as the autoimmune side with obe-cel. And we continue to actually work on AUTO1/22 as well as AUTO8. AUTO1/22, mostly on the pediatric ALL side, where we do additional work with the UCLH and GOSH, our partners for that program for a long period of time.

And we also, obviously with AUTO8, continue to work on the multiple myeloma side, but we're also looking to sort of extend the opportunity for that program going forward as well. And we'll update you as we go forward and initiate next studies with that program when that actually happens.

So with that, just a quick word on the environment on the autoimmune side of this space that many of you have watched very carefully. We had one major conference that happened in Q2, which is the EULAR conference. Interesting dataset presented during the course of the conference.

I think what we're starting to see is some differences that appear between programs. Still early days in terms of understanding what is contributing to some of the differences that are being observed, to what extent are those product driven, to what extent are those [ effect ] variability in the patients that are being treated. But certainly very interesting development that we're seeing, but also -- overall, I think also very nice collaboration of the initial observations that we have seen with [indiscernible] Erlangen that indeed there is very profound impact that can be had in those patients using CAR T approaches.

When we look at the next slide, just to remind you, obviously, that we have a program that has a remarkable set of similarity in terms of the clinical properties to the program that's used in Erlangen, we have -- but also, not only do we have a high degree of similarity in terms of the efficacy, the persistence on the pediatric ALL side where we can compare the programs directly, but also, obviously, we do have a very substantial amount of safety data, and which obviously is an area where we can see differentiation to the program in Erlangen, but also obviously the differentiation to any of the other CAR T programs that are currently commercially available. And what you see is just a summary there on the right, on the table, on the various key outcomes that we have seen across the various studies that we've conducted with obe-cel, and I think give you a very good view on the level of activity that we're seeing and the ability to achieve those levels of activity with a very attractive safety profile.

Now the study on Slide 19, the CARLYSLE study, our Phase 1 study in SLE. As I indicated, the study obviously, start-up happened in the -- during the latter part Q1 and into Q2, first patient dosed in Q2, and we're continuing to enroll in the study. We're planning 6 patients at a 50 million cell dose level, which obviously is a level that we know to be highly active in pediatric ALL giving us molecular complete responses, and also a level of those that is also highly active in the adult patient population where, as a reminder, we're using as little as 10 million cells to induce complete remissions in patients with high tumor burden in that setting.

So overall, I think we're at a very interesting stage. We're starting to sort of get first insights from a data perspective, and we'll obviously continue to collect that data with a plan to have an additional update on clinical data late in the year.

Now, other pipeline programs on Slide 21. As you remember, there's a number of other programs we're working on. I think with regards to AUTO8, I already indicated that we're looking at potentially expanding the program into additional indications. So that's something that's ongoing, and we'll update certainly by the end of the year, early next year on sort of the trajectory we're going to be on.

And then, just as a quick highlight because we haven't actually talked about that in while is AUTO6NG. That program also obviously is enrolling patients, and first patient actually has been treated as well in the second quarter as part of the progress that we were making during the quarter.

So overall, progressing well, and we also expect additional publications to come out during the second half of the year related to our clinical programs that we've been conducting.

With that, I'd like to hand over to Rob, who will lead you through the financial results.

[Robert Dolski, executive]

Thanks, Christian, and good morning or good afternoon to everyone. It's my pleasure to review our financial results for the second quarter of 2024.

So I am on Slide 23, where we see at the top, cash and cash equivalents at the end of June 2024 totaled $705.9 million, that's compared to $239.6 million at the end of last year, December 31st.

Our total net operating expenses for the 3 months ended June 30, 2024, were $58.9 million as compared to $44.4 million for the same period in 2023. For research and development, these expenses increased from $33.2 million to $36.6 million for the 3 months ending June 30, 2024, compared to the same period in 2023.

This change was primarily driven by increases in operating costs related to our new manufacturing facility, employee salaries and related costs and obe-cel clinical trial and manufacturing costs. These were partially offset by a more favorable U.K. R&D tax credit reimbursement for the period as well.

General and administrative expenses increased from $11.1 million to $21.9 million for the 3 months ending June 30, 2024, compared to the same period last year. This increase was primarily due to salaries and other employment-related costs, driven by increased headcount supporting our overall pre-commercialization activities.

And finally, for the company, net loss was $58.3 million for the 3 months ended June 30th compared to $45.6 million for the same period in 2023.

Autolus estimates that with its current cash and cash equivalents, we are well capitalized to drive the full launch and commercialization of obe-cel in relapsed/refractory adult ALL as well as to advance its pipeline development plans, including runway to data in the first pivotal study of obe-cel in autoimmune disease.

I'll now hand things back to Christian to wrap up with a brief outlook on milestones. Christian?

Okay. Let me -- I'll jump in here. We're waiting for Christian.

Maybe moving to Slide 25, just again to hit on some of the anticipated milestones through the year-end. We've got the target action date on the FDA side with the PDUFA, as Christian mentioned, that's November 16, 2024. And we'll have updates certainly at the end of ASH. You've seen some of those with the ASCO data and EHA, that will be further advanced and presented towards the end of the year. And then as Christian mentioned, on the SLE Phase 1 study, we expect initial data from that program later in the year.

[Christian Itin, executive]

So Rob, thanks a lot for jumping in. My headset was basically giving up. So what I actually wanted to say in addition to the news flow is really that we're going to be obviously laser focused on getting the program through the registration to first approval, and getting the launch of the brand with the product. That will be the primary focus of the company. Looking forward to the data update, absolutely, but operationally, that is what we're really going to be having our eye on, and we're looking forward to keeping you updated on the progress there.

And now, we're happy to actually go into Q&A.

[Operator]

[Operator Instructions] And our first question comes from Gil Blum with Needham & Company.

[Gil Blum, analyst]

So first one, as it relates to the launch, I'm sensing here maybe something of a rolling launch. Would we see sites coming on over time, basically?

[Christian Itin, executive]

Hello, Gil. That's actually not what it is. What we're trying to do is just explain that the actual activation at the centers is ultimately a decision of, frankly, a process that's governed by the centers. And the timeline that we're seeing anywhere from about 2 weeks to 12 weeks is pretty much what we've seen across the space with centers that are ready to actually get activated and then the actual time of activation. A lot of time, it is actually also driven in the centers by, frankly, patients that are in need of therapy, and that usually actually accelerates the process and the final stretch of the activation.

This is not a rolling launch by any stretch of imagination. Being able to be out of the gate, you have 30 to 36 centers ready to activate at that point, which has been all the internal part of the centers. That compares very favorably to almost all launches that actually have been done in our space.

And could you go from there to 60 centers within a year will give us more than 90% access -- patient access in this indication, which is obviously a very good rapid build, much more rapid than, I think, we've seen across the competitive programs.

[Gil Blum, analyst]

And maybe moving to the autoimmune data. So probably the top question is, what level of data disclosures should we expect at the center, talking mostly on safety? Or will there be some follow-up to suggest efficacy as well?

[Christian Itin, executive]

I think that most of the update will clearly be on safety and short-term impact or shorter-term impact of the therapy. As I indicated, we treated the first patient in Q2. So that gives you the max of observation time that you will have. And obviously, the rest of the patients will be at a shorter time period than obviously a Q2 to end of the year timeline. So there's going to be initial data that will indicate activity, but obviously, will not be a substantial amount of follow-up for most of the patients.

[Gil Blum, analyst]

And maybe a bit of in-the-weeds question. So we saw data updates for CAR Ts that include 4-1BB costim versus CD28 costim, and historically, people have talked about how CD28 tends to have very high ramp-up in sales, but also leads to maybe higher toxicities, and 4-1BB can lead to really long aplasia. Maybe there are AID, autoimmune indications that are more amenable to one versus the other, kind of probing your thoughts here.

[Christian Itin, executive]

So what you're basically referring to is that the costimulatory domain has sort of an impact on the initial activity that we see of the cell, in particularly the cell expansion of the CAR T cells that we're seeing. And that historically has been generically true that most programs would show a faster onset of proliferation of the CAR Ts with the CD28, is somewhat slower in 4-1BB. But then 4-1BB would give you longer persistence, and the CD28 typically gives you very little persistence. And that also then has an impact obviously on the longer-term B-cell aplasia [indiscernible] frankly, in one case, you have no activation, in the other case, you have activation.

What I think is worthwhile remembering certainly for obe-cel is that actually the peak expansion that we're seeing with our product exceeds that of the CD28 CAR. Okay. So the story certainly is a bit more complex than just costimulation. So we actually see -- have an excess level of -- in terms of maximal expansion of the CAR Ts, which are beyond what the CD28 CARs were able to do, and that combines, in addition, with a very long position. So that gives you a very, I think, unique set of properties that we do have with obe-cel that is quite different from the rest of the commercially available CAR T programs.

Now in terms of the type of activity you may need depending on the indication, that's an interesting question. And I think I will probably answer it from the position of what is the mechanism of action. And the mechanism of action, obviously, that we have is the removal of B-cell, CD19-positive cells and also plasmablast.

In the case of autoimmune disease, what you have to get rid of typically are clones that of cells that actually drive the autoreactive antibodies. And so you need to actually have a complete depletion of those cells if you want to get to reset a disease, and that, I think, sort of should be the expected outcome for CAR T therapy, which is obviously [indiscernible] therapy for this type of disease.

So that mechanism is shared across the board. And I think what you need to ask them is what are the properties that you need to have to achieve that goal. And in my view, what you need to have is, because it's a cell-based mechanism, you obviously need to have an ability to actually have proper cell-cell engagements. In other words, your CAR T-cells have to find those particular cells that drive autoimmunity and then actually have to be able to take them out. Because it's a cell-based process, you need to go through cell migration, distribution, et cetera, to do that, and you need to get all of those cells eliminated to have that delivery to drive [indiscernible] reaction. And that means there is a certain amount of time required to actually do that.

What we do not know is, we do not know what's the minimal amount of time to actually achieve that goal. What we do know is that the time that actually the program has in the Erlangen study was sufficient to do that. So the importance of the message that I was looking to give before in the prepared remarks was our product actually shares all of those properties in terms of presence, [indiscernible] B-cell compartments and sufficient persistence to actually achieve that goal, shares that with the [ LRM ] program, but has a better safety profile. So that's I think the way I would answer the question.

How short you can go, that's frankly, I think that none of us knows at this point because we haven't seen enough data from other programs with different profiles from the Erlangen product, to get a feel whether something else might also work. But what we do know is that, that profile that we had seen in Erlangen does work.

[Operator]

And our next question comes from Asthika with Truist.

[Asthika Goonewardene, analyst]

So congrats on the progress as well, Christian. I'm going to add on to Gil's questions on the centers here, and then maybe ask something related here. Among the 60 centers targeted, how many centers require an approval in hand to even begin the qualification process? And just to give us some color here, all in, how long does it take for a center to become an [ ADP ] including the whole qualification process and site activation requirement? And then I've got a couple of quick follow-ups.

[Christian Itin, executive]

So there's sort of 2 steps to that. First of all, the center has to be, obviously, interested to actually onboard the product. That's the first hurdle we have to take. We had remarkable success in having the centers interested in actually taking the product onboard. It's the very bullish guidance that we're giving of 30 to 36 centers waiting to be activated at the time of approval. So that's a very significant involvement. Just to put that in numbers, that is -- those -- the centers do cover about 65% to 70% of the ALL population in the U.S. So that's the magnitude we're talking about. And that's right out of the gate. So that's the level of interest to actually even engage, that's the first key thing.

The second is, you need to actually go through all the preparatory steps so that you can get -- when you get to it, I believe, can actually activate the center. That can take anywhere from 6 to 12 months. So that is a very involved process that has a lot to do on the IT side. There's contractual pieces that we have to put in place and so on. So it's a very involved process and typically takes in that order of magnitude about 6 to 12 months. This is why we've been working on this for an extended period of time.

Many of the centers that we expect to get ready for activation after an approval is in, are already now in the onboarding process, just to be clear. So that's a continuous process. And most of these centers actually are in our ongoing in terms of process already at this stage. So those are kind of the key things.

But then the final bit is, obviously, we can go with these 30, 36 centers as far as we want to go, but there are, I would say, final steps do require the actual label in hand. And that is sort of the final step that actually get you to that -- into that, between 2 weeks and 12 weeks max time to actually get the centers fully activated and enrolling patients. So that's sort of that stretch.

And obviously, the vast majority of the centers we're working with, obviously, have made a decision to actually put all the work into the onboarding process ahead of actually having the label in the hand. There's some obviously that would -- actually want to wait until the label is there, was sort of actually engaged in more higher workload of the activity later on. But those obviously will be beyond 36 centers, and will be at that end. But the overall majority of the centers actually have been remarkably engaged and willing to actually proactively work on the activation.

[Asthika Goonewardene, analyst]

Then maybe bigger picture. With the recent deal with BioNTech and [indiscernible], you've got a good, nice pot of cash that you can kind of dispense for the clinical development here. We see a lot of -- obviously, we have a lot of prioritization done for commercializing obe-cel as well as doing the autoimmune study. Maybe you can -- it's a good time to also revisit, what comes next? What's next on your really higher on the priority list after these 2 top priority items?

[Christian Itin, executive]

Right. So look, we're very keen, obviously, on sort of committed to the next pivotal study. So this is very much a workflow that is in full swing at the company. Obviously, at the same time, we would not want to distract from what we need to do now, which is a very heavy lift for any organization going through the first time through an approval and to launch. So we want to be mindful that the one hand that we're having the focus required to execute and execute with what we hope to be an [indiscernible] class launch. At the same time, obviously, we're preparing for that significant engagement into the next pivotal study. So that's what we're working on. And we'll update from a public perspective at the right time about that. But that's, obviously, where there's a lot of activity in.

We're also very excited about the interaction we're having with BioNTech. It's really a great chemistry between the teams, a lot of good engagement and broader discussions that are going on. And I think that sort of obviously has sort of key activity that is obviously doesn't have yet that level of visibility in terms of news flow, but it's an area we're very excited about and I think will create additional opportunities as well that are not necessarily visible at this point from an overall company perspective.

So I'm excited about those next steps, but first things first, get the approval, get the launch off the ground, get into the next pivotal study, and then we're going to move from there. But very excited about kind of what the end of the year and then also the next year will bring.

[Operator]

Our next question comes from Kelly Shi with Jefferies.

[Dingding Shi, analyst]

As we are very close to the first launch for Autolus, curious, just a quick question, maybe like it's too early to comment on the price of obe-cel. But I'm curious if the split dosing regimen would add additional cost compared to single dose obe-cel therapy?

[Christian Itin, executive]

Hello, Kelly, really good question. The -- so first of all, obviously, on price, you're right, that would be too early to actually give any specific guidance. I think we can only remind the CAR price levels that we see with Tecartus, which is around $462,000 in the U.S., and Kymriah, which is around $582,000. There is an overlap -- there's obviously an age range. We have -- FELIX study was from 18 years onwards. When you look at the labels for the 2 commercial products, one obviously goes up to 25 years, which is Kymriah, and the second one, Tecartus, goes above 25 and older. So that's sort of the range that's currently in the market. And I think we can't give more guidance than that and just actually basically point to the reference prices that we have here in the space.

In terms of the cost or the added cost related to dosing, what we do, obviously, with obe-cel is we do a tumor burden adjusted dosing. And that actually has proven to give us an enormous amount of robustness in terms of the safety data, which is driven on the one hand of the design, but also takes into account also tumor burden. And remember, these are very, particularly the older patients tend to be frail patients, and a lot of these patients certainly caused a lot of issues with early CAR T programs, lead to actually treatment-related mortality. We've seen that in some of the real-world data as well that being a real issue. And as you may remember, our median age in the study actually was about 10 years older than some of the other studies that were done in the space. So -- and despite, we did that whole thing through the pandemic, which just aggravated a lot of the safety-related challenges further. So those things that we have in combination with obviously the product profile gives us a very substantially improved safety profile.

The primary cost that actually you see for the delivery of CAR T is not the delivery itself. It's not the administration because that's pretty uneventful. That's literally an infusion [indiscernible] and that tend to be very short infusions we're talking, maybe 50 minutes or something like that. So it's a very short infusion. That doesn't actually add a significant amount of burden.

What actually adds burden and what really drives cost is related to the management of the patients when they actually do experience high-grade CRS or they experience high-grade ICANS. And in fact, the ICANS are almost worse because they tend to take a substantially longer period of time to actually get under control, and obviously, often are associated also with long-term steroid use, and the combination can lead to sepsis and treatment-related mortality. So that's where the real cost actually comes in.

To be able to reduce the number of events massively, but also shorten the recovery time, which is both elements we've seen with obe-cel and the FELIX study, actually reduces massively the cost, and is actually one of the key attractive elements for onboarding the product, which is that the product actually will be less intense to manage. Because it's less intense to manage, actually, the profitability goes up for the centers. And that actually is one of the key drivers that, from a financial perspective, is attractive for the centers, why the onboarding also is growing as well as it does, and what is obviously recognized not just as a clinical improvement as well as the longer-term outcome, but also an immediate financial improvement that I think is visible at the [indiscernible] within the centers that we're engaging in.

[Dingding Shi, analyst]

And I also have a follow-up on autoimmune, follow your comments from opening remark. So although we saw better tolerability of CD19 CAR T-cell therapy autoimmune indications when compared to hem/onc trials from Dr. [indiscernible] pioneer work, we started seeing newer talks from other ongoing trials in lupus. So curious if you could share your insights, if the patient baseline difference is more like a dominating factor or CAR design or maybe other reasons regarding the impact on safety?

And also another important question here is how obe-cel achieved much better neurotox control in the hem/oncology indications, generally speaking, and also whether this is transferable to autoimmune trials in your opinion?

[Christian Itin, executive]

Yes. Very good question, Kelly. So the -- what we're also seeing is -- in general, what we're seeing is that there's several parameters that drive immunological toxicity, and this is both actually CRS and neurotox. And the parameters on the one hand are the number of target cells that have to be taken and have to be removed. Obviously, that defines the number of CAR T-cells that get activated and with that depending on the design of the CAR T-cells gives you a base level of activity, potential cytokine release and also the risk of [ marginal ] toxicity. So that is one element. So it's the number of cells.

Now, when we look at the autoimmune indication, we do not expect to see significant variation in terms of the number of cells that have to be removed. These are patients that have overall normal immune system. They have -- are lucky in the sense that they have individual clones that recognize structures in the body and drive autoimmunity as a consequence of it. But it is not a proliferative disease as we would see in lymphoma or leukemia.

So we see a pretty steady level -- pretty much a normal level of B-cells and plasmablast that need to be removed. So that sort of basically becomes a cost -- well, then actually it becomes a variable, and that's the second element that can drive toxicity, it's really the design of the CAR T product.

The 2 key components there, we already talked and I think Asthika was mentioning that before, which is the costimulatory elements and the impact that the costimulatory elements can have. They do have an impact in terms of how quickly the cell proliferate and at the time of cytokine release, they can actually do, that's an element that is sort of in part coming from the costimulatory domain. But what we have proven with obe-cel is really that the primary driver and probably the most important parameter that we're dealing with is actually the way that the CAR T-cells physically engages with the target cell.

And what you do remember about the design of obe-cel is what we're looking to do with obe-cel is create a product that behaves as physiological as possible, while obviously being a chimeric antigen receptor, trying to be as close to a normal T-cell engagement. And what's characteristic for a normal T-cell engagement is that the engagement is short-lived. So T-cell actually recognizes the target cell, [indiscernible] delivers the [indiscernible] which drives the cell react or mitotic process in the target cell, and then actually disengage [indiscernible] we talking minutes in terms of engagement, max.

And that short engagement is really characteristic of a normal physiological engagement. And it is that engagement that actually is clearly different for the first generation of CD19 CAR T programs in the space, but also will be to promote the products currently being developed or reviewed and that is that the -- most of those designs use antibodies fragments to CD19 that are high affinity in nature, which means they have a pass on rate and a very slow off rate. And net, if you then think about [indiscernible] of CARs on the side of a CAR T-cell, [indiscernible] CD19 molecules of the target cell is basically an enormous amount of high affinity interactions between the cells and very, very long interactions between them.

Now those long interactions do not actually help the kill, that already happens within a minute or so, but what they do is they drive an overactivation of the CAR T-cell. That overactivation drives the cytokine release as well as actually drives exhaustion of the cells. And ultimately is being a contributing in a very significant way to toxicity, and that toxicity is unrelated and unnecessary to get the activity.

And so what we designed with obe-cel is really obe-cel product that has the ability to be specific, but disengage rapidly after delivering the kill, and we do that by having about 100-fold faster off rate from the target than any of the other products out there. And that gives us a very different behavior of the CAR T-cell, and fundamentally changes the toxicity profile.

That difference is -- will be relevant in any setting, and will give you a substantially better safety profile in any setting you would actually apply the [indiscernible].

[Operator]

And our next question comes from James Shin with Deutsche Bank.

[James Shin, analyst]

I had a question on the onboarding activity, the range of 2 to 12 weeks for accreditation. Are the sites that would fall into the 2-week range centers that have existing CAR T programs and those that fall in the 12-week range are centers that are CAR-T naive? That's question #1, and I have a follow-up.

[Christian Itin, executive]

Okay. Hello, James. Good way of thinking about it. It's suggested that that could be the case, but I don't think actually that's true. I think it has a lot more to do with the workflow at the centers. There are currently probably [ 45 ] programs for many of the centers that they're onboarding. So that's a very involved process for many of the centers. So there's a capacity component. And I think ultimately it will be very much driven by the patient need as well. So I think that's going to be a big driver of actually how quickly that final stretch on the activation will occur. So I think there's a lot more to do with that. Most of these centers obviously are active CAR T centers. We're talking about the top centers in the U.S., which frankly, all of them have -- tend to have multiple CAR T programs already on board.

[James Shin, analyst]

And then on the P&L side. Are we pretty much at full commercial run rate for the commercial activities, on the flip side, that is?

[Robert Dolski, executive]

Hello, James, it's Rob. Yes, so we are still going to be building towards the end of the year. We haven't fully built out the team yet in the U.S. So I wouldn't necessarily project kind of a flat run rate from Q2.

[Operator]

And our next question comes from Matthew Phipps with William Blair.

[Matthew Phipps, analyst]

Following on a little bit with what Kelly asked on earlier, but with Cabaletta reporting a Grade 4 ICANS this morning from their lupus trial, they -- so they're implementing some protocol modifications, including some seizure prophylaxis. I'm wondering if that's something that you guys have used or thought about using? And then I realize you are very early in your trial for autoimmune, but maybe you can just give any kind of comment on how the safety profile is reflecting the kind of FELIX and other experience with obe-cel so far?

[Christian Itin, executive]

Yes. Good to have you all, Matt, and thanks for the question. So I think probably the best surrogate here, also we're -- as I indicated, we're early on in our Phase 1 study, so not seeing something in that early stage, isn't really -- sort of give you a clearcut answer. So I think the better part of looking at -- the better way of looking at it is really in the ALLCAR19, it's actually a part of the study where we had about 40 patients with various forms of non-Hodgkin lymphoma. And what we did observe in those patients is that without prophylaxis -- prophylaxis, so just normal conditioning and dosing, and prophylaxis -- also no steroid prophylaxis and no seizure prophylaxis in these patients. We actually did not observe neurological toxicities in these patients. So we didn't observe ICANS in these patients, which I think is giving us a lot of confidence around the overall product property. And similarly, obviously, patients with low disease burden in ALL also had a very limited neurological activity and in fact no [indiscernible] in those settings.

So overall, I think product profile is obviously what was really different here for obe-cel. And what we know from our product is that -- clearly that we do have a different behavior in the proceeding. And we're, based the Non-Hodgkin's data, which is probably a good way of sort of comparing, although we do have, obviously, localized high tumor burden in these patients. There's not a lot of bone marrow burden is tend be very low or normal, and normal circulating B-cells that in that setting, obviously, we have not seen a lot of toxicity in the patients. So it gives us a lot of confidence that we are obviously in a good space. But it's early days in autoimmune, and I think there's a lot to be learned.

[Matthew Phipps, analyst]

One quick follow-up. I don't think you discussed this. So -- but when do we get an announcement on, I guess, the next autoimmune disease beyond lupus that you guys might explore?

[Christian Itin, executive]

I think we're -- obviously, we're going to go through kind of the launch process. I think kind of the next trajectory and update, we're probably going to provide in Q1 in terms of next steps, and that's sort of what we're working towards. But at this point, we're keeping the focus where we think we need to be, which is really on getting through the regulatory process and getting into -- way into the launch before diverting in a broader way the work in focus.

[Operator]

Our next question comes from Yanan Zhu with Wells Fargo.

[Yanan Zhu, analyst]

On the autoimmune side, I was wondering, you mentioned 3 centers are enrolling in U.K. and Spain. I'm just wondering, are all these centers also FELIX centers? And have you enrolled patients -- SLE patients at all of the 3 centers?

The other question related to autoimmune is, I'm wondering about your thoughts on the recent cell publication regarding allogeneic CAR T and demonstrating some efficacy in some autoimmune indications. Like as you look into that data, what is the learnings and takeaways with the -- regarding the prospects of AlloCAR T in autoimmune?

[Christian Itin, executive]

Thanks, Yanan. First off, with regards to the centers, the answer is all 3 centers have been FELIX centers. So there's experience in all centers, and they're all enrolling. So that's, I think, the first part of the question.

The second part of the question would be related to just different modalities. That could be giving you deep remission, the deep responses in the B-cell and pass on Ras compartment. Obviously there's sort of 3 basic categories that is sort of under investigation. You have autologous CAR T cells, which is what we talked about mostly on the call; we have allogeneic CAR T cells, which is what the question is; and then also we have bispecific T-cell engagers, which are sort of the 3 categories of [indiscernible] cell-mediated approaches to B-cell compartment.

What we do know at this point is obviously that with the autologous programs that we do get very deep responses. If you look at, obviously, the original data in [indiscernible] I think indicative that we can get the transformational outcomes, what we know in pediatric ALL or in adult ALL is we can get extremely deep responses, giving MRD-negative at the level of beyond the [indiscernible] has been tested and the outcome of the test is get patients with long-term remission in those settings, which obviously is what we have seen with our products and what we've seen with Kymriah in pediatric ALL as well. So clearly, those are probably the most [indiscernible] tests you can run to evaluate the activity of these products.

We do know that the other main programs can make a cut into the compartment. To date, all the data we have on the oncology side is indicative of the fact that cut isn't as steep or as consistent. And I think that is certainly going to be true, I think, also in the autoimmune setting.

But you do expect that when you do make a cut in the compartment, that you see an impact. And even if you do them, even if much less of a cut as we've seen in the [indiscernible] with Blincyto in the trials that were published earlier in the year, you could see that actually at least temporarily, you could actually have a reduction of B-cell [indiscernible] in those patients and see an improvement -- a clinical improvement in those patients. And these appear to be actually sustainable, but you would see an improvement.

So I think what we've seen so far is consistent, I think, with what we know, what these products can do. The fundamental question is going to be, is there going to be a differentiation between [indiscernible] allogeneic programs, and do either one of that is actually getting to a place where you can get sustained outcome. And I think we just don't know at this point in time. I think we have a pretty good feel that if all of those programs, if any will have probably the best chance that that lead you into a transformational outcome. I think that's sort of where we are at this point. Also it'd be interesting to see how these other programs evolve overtime, and we, certainly, will be carefully launching the space.

[Yanan Zhu, analyst]

On the oncology side, I was just wondering your confidence about delivering the 16-day vein to delivery time and also your sense of manufacturing failure rate, and how do these compare with Tecartus? Because that's something, when we talk to some experts, these aspects of reliable delivery seems to be one of the factors that could drive the shift from one product to the other.

[Christian Itin, executive]

Yes. Really good question. So this is a patient population we're in where you need to deliver -- you need the therapy to actually be delivered. These patients don't have extra time. There's not a redo typically possible. So you have to have very high levels of reliability of the delivery.

What we're able to show in our clinical study, if you compare to the clinical studies with each other and, remind you, we did ours during the pandemic with lots of limitations. We actually have a higher [indiscernible]. We actually have a higher level of [indiscernible] that was seen in the prior study, about 84%. And that clearly was a very good outcome overall on [indiscernible].

So we can show -- we can look at it from that perspective. We can look at it from the perspective of the [indiscernible] range, which is around 6% in the FELIX study, which is very low. And we're at 21 days across the FELIX study, and one of the things that we have included and implemented during the course of the FELIX study is instead faster analytical methods that would allow -- that actually allowed us to accelerate the release of the product. So a big chunk of the time you actually have the delivery time, is not your manufacturer, but be it actually the analytical testing to sort of achieve the release.

And then the final part is related to the logistics. And one of the things that we think were implemented for the commercial delivery, this part of the collaboration, the deal that we have with Cardinal Health is that we are shipping product before the release is completed to the [ UNS ] so that the product is already close to the site, on our custody, and will then actually be released once the product release is through. But what that does is this basically takes that element of the turnaround time out of the equation. So between the logistics element as well as faster analytics where we're able to cut about 6 days out of the arranged delivery time. And so what we're guiding is currently 16 days at time of launch with an opportunity to reduce, and that time is pretty much in line with what the best competitor data looks like today.

[Operator]

Our next question comes from Sebastiaan van der Schoot with Van Lanschot Kempen.

[Unknown Analyst]

This is [indiscernible] on behalf of Sebastiaan. Congrats on the progress. So I was wondering whether you could provide your thoughts or some insight on the recent approval of Blincyto in the consolidation phase of the multiphase chemotherapy of the first-line ALL. So what do you anticipate the effect will be on the number of patients in the relapsed/refractory setting of this disease?

[Christian Itin, executive]

Thanks a lot for joining. Pleasure to have you on. So this is a question related to the recent approval of Blincyto and the frontline consolidation. Obviously, this is data that sort of have been, first of all, known about quite a while, and presented over the last 2 to 3 years, both in consolidation of both MRD-positive as well as patients -- as well as patients that are -- gone through the initial induction and initial consolidation with [indiscernible].

What's been very interesting about that part of the data is that, when you look at the data a bit more carefully, you realize there's a subset of patients that appear to benefit, there's another subset that does not appear to benefit from that consolidation. And the group that did not appear to benefit actual were patients that were a bit older. And that's a very interesting kind of observation. And I think this is something that I think we're going to need some follow-up and, I think, better understanding. But it was, clearly, certain patients that did actually benefit, whereas others actually did not benefit at all.

And so that's, I think, interesting just when you look at that part of it, at that part of the data. Overall, we think that most of the impact actually of the study has already been pretty much in the space given that the data actually is well known, it was a [indiscernible] study, so there's a large number of centers involved. There's a lot of patients that actually will be managed in sort of using Blincyto in the frontline setting. And in fact then it also states, and you can see that also when you look at the trajectory of Blincyto sales is that, clearly, the sale upswing actually went ahead of the approvals, although it was driven off exactly that data that was driving and actually ultimately was the basis for the approval.

So we think most of that is actually baked in, and we do not expect to actually have a major impact of the relapsed/refractory setting. And -- but certainly, would expect that there is some delay of some of the patients actually becoming refractory, so buying some time, but we also believe that a lot of that actually already starts to be realized and many of these patients actually start to get back to the point of relapse given that the consolidation has actually been used for an extended period of time, certainly in the U.S.

[Operator]

And this concludes the question-and-answer session. I would now like to turn it back to Christian for closing remarks.

[Christian Itin, executive]

Well, thank you very much for joining. Really a pleasure to have you all along. I'm looking forward to keeping you updated. And obviously, as we said, we're all focused on getting to the final stretch, and hopefully get to approval later in the year, and be in a position where we can get this product to patients, which is really something that we've been working towards for many years now, and I think it'd be fantastic to be able to transition as we get to the end of the year to that stage.

Thank you very much, and looking forward to keeping you updated.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.