Autolus Therapeutics (ticker: NASDAQ:AUTL), a biopharmaceutical company specializing in CAR-T therapies, discussed its third-quarter 2024 results and business updates in a recent earnings call. The call featured CEO Dr. Christian Itin, CFO Rob Dolski, and COO Chris Vann. A major point of discussion was the FDA approval of AUCATZYL, a significant development for the treatment of relapsed or refractory Acute Lymphoblastic Leukemia (ALL). The company is expanding its treatment center network and advancing its pipeline with new studies and programs. Despite increased operating expenses and a net loss for the quarter, Autolus reported a substantial cash reserve and anticipates milestone payments and regulatory approvals in the near future.
Key Takeaways
- FDA approval of AUCATZYL, a CAR-T therapy for ALL, without a REMS requirement.
- Onboarding of 60 treatment centers to reach a significant portion of the U.S. ALL patient population.
- AUCATZYL priced at $525,000 based on clinical value and safety profile.
- Expansion of pipeline with studies in pediatric ALL and systemic lupus, and new programs targeting B cells and multiple myeloma.
- Cash and cash equivalents reported at $657.1 million, with an expected $30 million milestone payment from Blackstone (NYSE:BX) and a £10 million payment in Q4.
- Operating expenses and net loss increased compared to the previous year.
- Positive physician feedback on Obe-cel and plans for European commercial rollout.
Company Outlook
- Anticipation of initial data from the Phase 1 SLE trial by end of Q1 2025.
- Updates on pediatric ALL and long-term patient data expected in the second half of 2025.
- Optimism about potential for outpatient administration of obe-cel.
- On track for EU approval by mid-2025.
Bearish Highlights
- Operating expenses for Q3 2024 increased to $67.9 million, up from $42.9 million in Q3 2023.
- Net loss for the quarter reported at $82.1 million, compared to $45.8 million the previous year.
Bullish Highlights
- FDA approval of AUCATZYL without REMS requirement, demonstrating confidence in the therapy's balance of efficacy and safety.
- The establishment of The Nucleus, a commercial manufacturing facility in the UK.
- Enrollment in ongoing studies picked up in September after a slower summer.
Misses
- No specific details provided on the potential to reduce the 16-day vein-to-release time for AUCATZYL.
Q&A Highlights
- The addition of new cohorts in clinical trials, including patients with challenging treatment responses.
- Positive safety profile of AUCATZYL in treating acute leukemia.
- A two-stage European commercial rollout strategy, starting with Germany.
- Potential reduction in vein-to-release time through improvements in sterility testing.
- Anticipated ramp-up in SG&A and R&D expenses in 2025 due to the expansion of the commercial team.
Autolus Therapeutics' Q3 2024 earnings call presented a mixed picture, with significant regulatory successes and promising developments in their pipeline, counterbalanced by increased expenses and net losses. The company's strategic expansion and anticipation of additional regulatory milestones offer a forward-looking perspective for investors and the medical community alike.
InvestingPro Insights
Autolus Therapeutics' recent earnings call paints a picture of a company at a pivotal juncture, with the FDA approval of AUCATZYL marking a significant milestone. This development aligns with the InvestingPro data, which shows a robust revenue growth of 40.22% in the last twelve months as of Q2 2024. This growth trajectory supports one of the InvestingPro Tips, which indicates that analysts anticipate sales growth in the current year.
Despite the positive momentum in product development and regulatory approvals, Autolus faces financial challenges. The company's operating income margin stands at a concerning -1839.25%, reflecting the substantial costs associated with bringing innovative therapies to market. This aligns with another InvestingPro Tip, which notes that the company is quickly burning through cash.
The market seems to be pricing in future potential, as evidenced by the company's market capitalization of $887.69 million, despite current profitability challenges. This is further supported by the InvestingPro Tip highlighting that Autolus is trading at a high revenue valuation multiple.
Investors should note that while Autolus holds more cash than debt on its balance sheet—a positive sign for its near-term financial stability—the company is not profitable over the last twelve months. This financial position underscores the importance of the anticipated milestone payments and potential future revenues from AUCATZYL.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a deeper understanding of Autolus Therapeutics' financial health and market position. In fact, there are 11 additional tips available on InvestingPro, which could be valuable for investors looking to make informed decisions about this dynamic biotech company.
Full transcript - Autolus Therapeutics Ltd (AUTL) Q3 2024:
Operator: Hello, ladies and gentlemen, and welcome to the Autolus Therapeutics Call to discuss its Third Quarter 2024 Financial Results and Business Updates. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn this conference over to your host, Olivia Manser. Please go ahead.
Olivia Manser: Thanks, Jacinda. Good morning or good afternoon, everyone, and thanks for joining us on our Q3 2024 call today. With me today are Dr. Christian Itin, our Chief Executive Officer; Rob Dolski, our Chief Financial Officer; and Chris Vann, our Chief Operating Officer. And so on to slide 2 our disclaimers. As a reminder, 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 expected timing for the commercial launch of AUCATZYL, Autolus manufacturing sales and marketing plans for AUCATZYL, including potential refinements at The Nucleus, the market potential for AUCATZYL, and the status of clinical trials and development and/or regulatory timelines for obe-cel 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 our SEC filings, which are available on the Investor section of our website. On slide 3, we have the agenda. As usual Christian is going to give you an overview of our operational highlights, Rob will discuss the financial results, and we will then conclude with upcoming milestones and closing remarks and move on to Q&A. As I mentioned we have Chris Vann, our Chief Operating Officer also available for Q&A today. So with that I will hand over to Christian.
Christian Itin: Welcome everybody to our Q3 update. Obviously, the big news has been the approval of AUCATZYL, which came in at the end of business day last week on Friday. Obviously, a huge step for the company but I think also a very important step within the ALL field, providing patients with an additional option in the lapsed or refractory setting. What was very interesting to see, and I think important with regards to AUCATZYL is that this is the first CAR-T program that was actually approved without a requirement for a REMS program by the FDA. And I believe this is, obviously, linked to the unusual mechanism of action that we have to combine the high level of activity together with a low level of immunological toxicity and together with the tumor burdened guidance dosing that we have implemented for the program, really provides a program that puts the physician in control of the therapy. We believe that's going to be very important to expand the CAR-T use in the ALL indication. So very excited about where we are. Obviously this has been a long journey and fantastic to be here and as you can imagine, a lot of activity at the company obviously to really get the program off and running and the product into the hands of physicians as we go through the next few weeks. So with that, I'd like to move to slide number 5 and just talk about some of the key elements that really drive the launch and are critical for the success of the launch. The first part is to actually deliver these types of therapies, the CAR-T therapies, you require actually quite a number of elements that have to be in place. The first one is that the centers, obviously, have to be ready and authorized to be able to deliver this type of a therapy and that process is very involved. It takes a substantial amount of time. In fact, we started the onboarding process of the centers more than a year ago. We have currently about 60 centers at various stages of the onboarding process and 30 of those centers are ready to be activated now. This gives us an opportunity to really launch from a broad base. Those 30 centers actually reach about 60% of the patients in the US with relapsed or refractory ALL. As we go through the course of 2025 then, we're going to add the additional 30 centers and with that should be able to reach approximately 90% of the target population. So very involved process and obviously an area that requires not only, obviously, a lot of interaction, training and support, but also a series of systems that have to be put in place to be able to deliver the product and support the centers appropriately. Now the other aspect, which is very important, of course, for CAR-T therapies is that we have a personalized therapy. And so the manufacturing process, the reliability around it, the robustness of that manufacturing as well as the turnaround time are critical. And as you know, we have decided or have decided to build our own commercial manufacturing facility, which we call the Nucleus located here in Stevenage in the UK. And this facility allows us to actually support the patients in this indication. The capacity that we have earmarked for the ALL patients is approximately 2,000 products a year. That will correspond to about two-third of the patients that are in relapsed or refractory stage of their disease in the US or in Europe. We also target an attractive into release time of 16 days, which will obviously be improved over time, but it gives us a very robust platform to work from. And as we had conducted the pivotal study through the pandemic and also, frankly, built the facility through the pandemic, we have been able to pressure test pretty much every aspect of the product delivery route that we're going through, whether this is logistics, whether this is cell handling, whether this is the actual manufacturing process itself. Now what's important to make this happen is that you have a very strong, experienced, dedicated team to actually have a successful launch. And the experience really comes from several sides. On the one hand, on the commercial team side, we have a lot of our team members who have actually, in the past, launched CAR-T products. But we also have team members that have been in prior launches in the ALL field, which gives us both the CAR-T experience within the team as well as an indication experience and relationships to the centers, which are very important. We're building on a strong scientific communication. You've seen us present over a series of medical conferences over the last 18 months and obviously, more data to come at the ASH meeting coming up within a few weeks' time. And we're also gearing up to obviously presenting and publishing the results in a peer-reviewed journal as well, which I think will be the next important step on sharing the information of this important trial. We also have been focused very much as we were setting up our systems and thought through the processes and how we engage with the centers to ensure that the way the centers can engage with us is as simple and straightforward as possible, moving as much work away from the center onto our side so that the centers actually can focus on what they need to focus on, which is treating the patients and we're taking, obviously, the role and support to support both the centers, the reimbursement process as well as the patients in the overall process. We've set the price for the product at $525,000. This is based on very extensive work on the value of the product, the clinical evidence, the differentiated safety profile and also making sure that it is a price level that actually would allow us and allow the product to achieve broad coverage and with that access for patients. With that, I'd like to go to Slide number 6. On Slide number 6, just a few points of additional updates of activities that happened during the third quarter. Obviously, as you can imagine, the primary focus in the third quarter was really to get launch ready. And that actually has been certainly where the vast majority of the organization was focused on. Now while we were doing that, obviously, with a focus to launching in the U.S., we're also heavily engaged in the interactions with the regulatory authorities in Europe as well as the MHRA in the UK as we're working through the submissions that we have made to those -- to both of those authorities for obe-cel. We've also published or presented additional data from the FELIX study. One data set was at the Society of Hematologic Oncology, which was in August and where we're really looking at the rationale and the impact of the tumor burden guided dosing. And then in October, after the Q3 period, we also were presenting at the Lymphoma Leukemia Myeloma Congress. And what we're really looking at was the impact of stem cell transplant after obe-cel use as well as the impact of reducing tumor burden prior to lymphodepletion on outcomes. Now, very important also on the operational side, we had an excellent new team member join us, Matthias Will, as the Chief Development Officer. And obviously, we continue to obviously, expand both the commercial team, as well as obviously driving the onboarding of the treatment centers. With that we're going to slide number 7. This is just a brief outlook of what we're planning to present at ASH. There are four abstracts that were selected for either poster or oral presentation. The first one is looking at the impact of the depth of remission on outcome. You remember, we already looked at the impact of persistence on outcome, which was the core theme for the presentation at ASCO this year. This now looks at the other key aspect, which is the ability to get very deep remissions. And as I'm sure, you'll not be surprised, obviously, the opportunity to have both a deep molecular remission and putting long-term pressure on the leukemia we believe both of those are relevant to induce long-term outcomes in this very challenging patient population. The second question that, we're looking at is, really look at the impact of bridging therapies on both the performance of obe-cel, as well as the outcome that we're seeing for patients. And the third area is looking at a very practical aspect from a clinical perspective, which is the healthcare resource utilization and costs associated with managing, both cytokine release syndrome and ICANS. Those are obviously events that do require a lot of care, a lot of oversight for the respective patient and they tie resources. And certainly, for some of those events, can tie resources for quite long periods of time. And we're looking at that impact and the impact of obviously having a product that has minimized both CRS and ICANS from a practical perspective as you're looking at it from a clinic perspective here. And then finally, we're looking at the impact on outcomes and what are factors that are impacting outcomes that we're seeing in the patients. We have obviously already talked about the importance of the tumor burden at lymphodepletion. This was a core focus of the ASH presentation last year in 2023. What we're now looking at is actually whether there are any parameters that we can actually identify up front at the time of screening the patient that would actually give us a sense of how this patient will fare on an obe-cel therapy. So that's going to be one of the key questions that will be looked at in the fourth presentation. So that kind of wraps up my actual update for the quarter. And I will now actually move over to just a quick outlook on the activities with obe-cel moving to slide number 9. This is a slide that you've seen before and it just highlights the fact that we're obviously -- are developing obe-cel not in isolation, as an individual product solely focused on ALL, but that we're also -- obviously, are looking to explore the broader utility of the program. You're obviously aware of that we're conducting a study in pediatric patients with ALL, but we're also conducting a study in patients that have systemic lupus and that study is obviously ongoing as well. We're looking to broaden those activities as we go through the course of next year. And building on the properties that we have seen with obe-cel we devised, two additional programs. AUTO1/22 a dual targeting approach is really designed to sort of capture the B cells very deeply and minimize the ability of either leukemic or lymphoma cells to escape recognition by the CD19 receptor by having a second receptor, present seeing a second antigen, and with that having an ability to minimize the chances for escape. This program as you may remember is part of the option agreement that we have with BioNTech (NASDAQ:BNTX). Secondly, the AUTO8 program, which is also a dual targeting program looking at both CD19 and BCMA. And this program, obviously, we've shown initial data in multiple myeloma patients, but we're also looking for additional uses that go beyond multiple myeloma for this program and we'll update you also as we go into the first half of next year. Finally, just on slide number 10, obviously, we're just ahead of the ACR meeting which will take place in just a few days now and we're obviously going to look for a lot of the updates that we're seeing in the field of what type of impact and what level of impact can we see removing the B-cell compartment deeply in particular removing the CD19 compartment which also includes the plasma blasts. And one of the areas that we certainly have been watching carefully as we went through the course of this year is the range of patients that are being treated and the impact that you can see understanding there's going to be a tension between the inflammatory part of the process which these therapies do impact directly and the actual damage that the tissue actually may already have encountered the fibrosis that patients may already have picked up which obviously is the second component of the disease. And we're looking at the relationship between those two and we're looking at the various outcomes obviously for the various modalities as we go forward. From our own perspective, we're obviously very keen on this approach. We think the product has a unique positioning in the space also now with the approval for the product, but also having now commercial manufacturing available to the product which is certainly a standalone feature at this point in time in the field and building obviously on the excellent safety profile that we've seen in what certainly is the most challenging disease population to work with in ALL. So we're looking forward to updating you on the Phase 1 part of the systemic lupus program with a first update towards the end of Q1 and then obviously a longer-term update in the second half of next year and also looking forward to sort of talking to you about the broadening of our activities from an indication perspective as well which we're really excited about. But today is the focus on the approval, the focus on getting the launch off the ground and obviously a fantastic place to be and really looking forward to seeing that we can have a real impact in the lives of the ALL patients that we're looking to support here. With that, I'm actually moving to slide 11 and I'm handing over to Rob.
Rob Dolski: Thanks, Christian and good morning or good afternoon to everyone. It's my pleasure to review our financial results for the third quarter of 2024. So moving forward on to slide 12, our cash and cash equivalents at September 30, 2024, totaled $657.1 million as compared to $239.6 million at the end of December 2023. Total (EPA:TTEF) net operating expenses for the three months ending September 30, 2024 were $67.9 million as compared to $42.9 million for the same period in 2023. Breaking that down for our research and development expenses these increased from $32.3 million to $40.3 million for the three months ending September 30, 2024 compared to that same period in 2023. This change was primarily driven by increases in R&D employee salaries and related costs and Obe-cel clinical trial and manufacturing costs. These were partially offset by a decrease in professional fees and general facility costs. Moving on to our G&A, general and administrative expenses increased from $10.6 million to $27.3 million for the three months ending September 30, 2024 compared to that same period in 2023. This increase was primarily due to salaries and other employment-related costs driven by increased headcounts supporting pre-commercialization and launch readiness activities. And finally, net loss was $82.1 million for the three months ending September 30, 2024 compared to $45.8 million for the same period in 2023. With the recent approval of AUCATZYL in the US, I'd also like to note two financial milestones that will be triggered in Q4. As a result of the FDA approval, Autolus will receive a $30 million milestone payment from Blackstone based on the terms of the Blackstone collaboration agreement. In addition, the company will make a regulatory milestone payment of £10 million in accordance with our UCLB license agreement. These are both referred to in more detail under our subsequent events section of Form 10-Q for the third quarter. 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, plans, which include providing runway and data into the first pivotal study of obe-cel in autoimmune disease. I'll now hand back to Christian to wrap up with a brief outlook on expected milestones. Christian?
Christian Itin: Thanks, Rob. As already discussed obviously, the next key event is going to be the ASH annual meeting at the beginning of December. Looking forward to obviously updating you on the four presentations that I walked you through before. We're then obviously looking for initial data from the Phase 1 SLE trial by the end of the first quarter and then have additional data from both the pediatric ALL, as well as the longer-term observation of the Phase 1 patients in the second half of the year. We're obviously looking forward to adding additional clinical activity as we go through the course of the year and we'll update you in a separate communication. With that I think we're at the point where we're happy to take questions. Jacinda, please start the Q&A
Operator: Thank you. At this time we will conduct a question-and-answer session [Operator Instructions] Our first question comes from James Shin of Deutsche Bank (ETR:DBKGn). Your line is open.
James Shin: Hey, good morning, guys. Just a couple questions. Is obe-cel's EU approval still on track for mid-25 or could this be slightly pulled forward? And then secondly, looking ahead there's some real-world data showing, Tecartus can be administered in the outpatient setting and I noticed obe-cel has a longer CRS onset. It's like day nine versus Tecartus is day five. So wouldn't it be more favorable to outpatient administration? Thank you.
Christian Itin: Hi, James. First of all, thanks for joining. On the EU process, we're on track and we expect the timeline to get us into the middle of next year. And as well as when we look at the UK timing, we expect to be that very similar in terms of the overall time point for hopefully, an approval in both of those jurisdictions. So that's the first I think the first observation. I think what's fundamental is that the safety profile of obe-cel, obviously allows you to manage this product with a lot less effort than I think many other products that have sort of been generated in the past. And one of the opportunities is particularly for patients that have low disease burden that you can consider administrating this product in a hospital outpatient setting. Now obviously, this will require experience like with any new therapy, similar as it had back in the day for Blincyto and had for other programs. And as I think, the physicians and healthcare providers get more experience with the product I think we're going to see more and more use in a hospital outpatient setting for these types of therapies. And obviously, the safety profile that we have with obe-cel sets it up in a remarkably good way to sort of actually look at this as a real opportunity.
Operator: Our next question comes from Asthika Goonewardene at Truist. Your line is open.
Unidentified Analyst: Hi, this is Karina [ph] for Asthika. I have two questions. First one is the FDA focused the label's efficacy to patients with higher blast count. Could you expand on the baseline characteristics that might suggest obe-cel's superior efficacy? And just like comparing the two FDA labels, it appears that patients in the FELIX study were a decade older and had higher incidence of extramedullary disease. How would you account for these differences? And second question is with your team achieving one of the highest reduction efficiencies in the industry at 72%, how are you maintaining a low out-of-spec rate in a commercial setting? How confident are you in this? Thank you.
Christian Itin: Okay, thanks for joining, Karina. So the first question was related to the activity and the activity also in patients with higher disease burden. What we had shown in the more detailed analysis that we had actually discussed at ASCO 2023, was that patients that were below the 75% tumor burden at lymphodepletion reached a ORR that was in the range of 85% 86%, so clearly indicating that we do have a very high-level of activity in patients at that level. Only when patients actually were had more than 75% tumor burden at lymphodepletion, which meant, basically that these patients were bridging insensitivity for refractory. That pool of patients you would see actually a drop in the ORR, somewhere into the range of the 60% range. So that's sort of the relationship between tumor burden and outcome. One of the important elements that we had obviously done with this study is that, we did not only confine the study to the morphological cohort of patients, but we added two additional cohorts. One was a minimal residual disease cohort and the other cohort were patients that had isolated extramedullary disease which tend to actually be patients that are typically excluded from clinical trials, because they're notoriously difficult to treat and they tend to perform actually very poorly on clinical trials. As you can see in our overall results and we've obviously shown the data as also an integrated data set as well, we do see that the data actually looks good across all these risk categories of patients. And I think that -- including a wide range of age, we did have a median-age in the study that was about 10 years older than what you would have picked up in other studies in the field before. So in of itself indicating a very challenging population and further highlighted by the fact that as you could see when you looked at the label, that obviously on the morphological cohort out of 112 patients, 11 patients actually passed away before there was any chance to actually dose them which is very unusual. Normally that's something you don't see. You don't see patients actually pass away before you could treat. So it's a very, very difficult population that we had in the trial. And with that, I would say it gives us a lot of confidence both, from an efficacy perspective that the data is very, very robust, but also from a safety perspective. So those are probably a few observations there. With regards to the out-of-spec rate, you're correct. We do have a very good level of transaction efficiency that we see in our product. Specifications are really set, based on the clinical experience and the manufacturing experience you had during clinical trials. And obviously, those were obviously the goalposts that were used to actually set the specifications. So given that obviously where we have specifications that very nicely track our clinical performance and clinical data, we have a high degree of confidence that we're going to be very reliable from a manufacturing perspective with low out-of-spec rates.
Operator: Our next question -- our next question comes from Matthew Phipps at William Blair. Your line is open.
Matthew Phipps: Hi Chris. Thanks for taking my call. I was wondering, if you had any general timelines or thoughts around opening up baskets for additional autoimmune indications. I know you've talked about progressive and mass, but maybe just anything else that you're thinking in general timing there.
Christian Itin: Yeah. So those are -- obviously, it's an area we're very actively I've been looking into and obviously are moving forward. I would hope that we're -- as we go through the course of next year that we're going to see obviously additional trials go up. And we'll obviously update you, as we go through the first quarter what the trials are that we're going to be activating and the timing around them. But obviously very much in front and center for the development organization to advance our activities on the autoimmune side, and also push obviously the currently ongoing trials as well.
Matthew Phipps: Thanks. And just one quick follow-up, as you're looking to enroll this as a lead trial, do you feel that the biggest gating factor is patient identification or finding capacity at the centers to conduct the procedure?
Christian Itin: Yeah. We don't see a capacity issue at the centers. We did see -- we had a slowdown in enrollment in the summer months, which tend to get a bit slower in Europe. We were enrolling both in the UK and in Spain. But as we're getting into September and then on forward actually the rate picked up nicely. And we don't think that there is actually a limitation there. So we've actually seen very nice levels of engagement. A lot of it is also the physicians getting familiar with the approach and the product. And we're seeing that actually starting to have an impact as well a positive impact. So that's where we are. So we're very much back where we expect it to be. We don't think there are actually restrictions or limitations in terms of capacity at the centers.
Matthew Phipps: Great. Thanks, Christian.
Christian Itin: Thanks a lot, Matt.
Operator: Our next question comes from Sebastiaan van der Schoot at VLK.
Sebastiaan van der Schoot: Hi team. Thank you for taking my questions. First one is on the 30 centers that are already onboarded and ready to be activated. Can you just clarify whether this onboarding also includes the centers' own internal processes and that they can now directly order AUCATZYL? And then can you also provide some insight into how many of these centers have been involved in the FELIX study? And then on the SLE data, can you provide some insights into how many patients and when they were enrolled over the past year? Thank you.
Christian Itin: Yes. So, first off, in terms of the centers, it's a two-stage process the actual completion of the onboarding. There is a large amount of the activities that you can actually do before you actually have your label in place. And those activities were all completed for these 30 centers ahead of the actual approval date. But then once you have the label, there is a number of steps that the centers have to go through. There's a final training that has to be done from the company perspective. That's actually done very quickly. And then the product now being obviously an approved product has to get onto the respective formularies within the centers and be sort of integrated within the administrative processes at the centers. And that can only be triggered with a product having received approval before and you cannot actually also do those steps. So the process actually that we're talking about now is really those final administrative processes that have to be completed at the level of the center. And once that's completed, the center is activated and then the center can actually enroll its first patient. So the process also like with any administrative process is extremely helped if there is an immediate need to act. And obviously, the need to act in many of these centers are going to be patients that actually are in need of therapy and are eligible for a CAR-T therapy. And that's obviously what's going to be a key driver to actually expedite the activation process at the centers. So that's kind of where we are. So the 30 centers are going through that activation final steps and we expect a good number of them to be actually activated very quickly. And then there is a small a certain amount of centers will take maybe a few weeks longer. But that process is already is running full steam. And our team has been all over this process to make sure we get these centers online as quickly as possible. And then the question related to the SLE study. Obviously, the study got started up in the first half of the year. We indicated that we had enrolled the first patient in the course of the second quarter, which meant that the patient got dosed during the course of the second quarter. And then most of the additional patients, obviously, were enrolled in the second half and will be enrolled also in the second half of the year with enrollment expected to be completed in the early part of Q1.
Sebastiaan van der Schoot: Okay. Great. Thank you so much Christian.
Christian Itin: Thanks a lot.
Operator: Our next question comes from Kelly Shi at Jefferies.
Hanze Zu: Hi. This is a Hanze Zu on for Kelly. I just have two questions here. One is can you discuss any kind of feedback you're receiving from physicians regarding Ticardis versus Obe-cel from clinical trials and what kind of implications on your launch projection? And I have a follow-up. Thanks.
Christian Itin: Yes. I think with the interactions that we're having with the physicians obviously has been very intense. The product profile for Obe-cel, obviously, has been very well received. Not only by those physicians who were part of the Obe-cel FELIX study, which obviously were physicians in the US in 24 centers, but also obviously, a lot of the ALL physicians that we have been speaking to over the last few months. And also, we've walked through the data of a key activity that the medical affairs team has been engaged in. So, it's very good reception for the product. I think there is an appreciation of the differentiation of the profile. I think there's very much an appreciation, of having a product that is easier to manage, less toxicity. And with that, can actually be much more easily integrated from a clinical practice perspective, and a handling perspective at the centers. I think that's going to be important. I think that's also immediately experienceable for the physicians. And we believe will be a key driver for the uptake of the product. But also, provide an opportunity to go into centers that are currently are not yet using CAR-T and the ALL space. Use it elsewhere, but might not yet use it in ALL to actually have them expand the offering for ALL patients including, a CAR-T product in the future. So, that's I think, where a lot of that I think is resonating. And very encouraged with the feedback. And we're looking forward to obviously, additional interactions that we're going to have leading up into ASH. And then obviously, at ASH itself, with the additional updates which I think provide a lot of important information for treating physicians. Also, for decision-making and understanding the profile even more deeply.
Hanze Zu: Thank you. And my next question is a follow-up on SLE. Can you give more colors on the patient numbers, dose levels and what kind of data you're going to disclose in first quarter versus the second half? And what kind of read-throughs to SLE trials, from the safety data you got in adult ALL, especially on the neurotox? Thank you.
Christian Itin: Yeah. So the SLE trial that we have set up, is really designed to confirm a fixed-dose level of 50 million cells, as a single dose for SLE patients. That's sort of the primary purpose. We're enrolling six patients. We have an ability to enroll additional patients, over and above. But the initial cohort is six patients. What we're looking to in this cohort is obviously, we're looking for the impact on the inflammatory component of the process. That's the primary purpose of this trial. We will have initial data in Q1, which obviously gives us information about the initial behavior of the product, initial activity. And what we're going to get in the second half of the year, is the longer-term follow-up, which we believe will be important to understand also how these patients are doing, once the B cells start to recover, which is sort of at the back end of the treatment and one of the key things to sort of understand, whether indeed there was a proper reset of the B cell compartment. So those are the key parameters that we're going to be looking at, and the differentiation between the earlier and the later time point for data release. In terms of the safety profile, obviously, the fundamental difference that we're seeing with the product is on the acute leukemia side, it's certainly in the safety profile that it's immediately visible. And that is obviously, also where the original program that was tested at the Erlangen site obviously was close to KYMRIAH, was initially given in pediatric patients where the original data set came from and the safety data came from. It also was the experience that defined the dose level that was used, the patients that were managed, and the age group that was selected for compassionate use, which is where a lot of the early data has been coming from. What we do know is, that our product obviously stacks up very, very well from a safety perspective against that program, and that gives us a lot of confidence that indeed we have the right product ,with the right profile for these patients. With regards to neurological toxicity, obviously the neurological toxicity we're seeing, in adult patients as well as in pediatric patients is very low. But we also do see that when we move outside of ALL, and go into non-Hodgkin's lymphoma, we have no neurological toxicity observed in those patients. And that gives us again a lot of confidence that indeed the product has a very good profile for this patient population.
Operator: Our next question comes from Gil Blum at Needham & Company.
Gil Blum: Hey, good morning, and congrats again on the approval. Just a quick one from us. Can you remind us what your strategy is in Europe as it relates to commercial rollout? Thank you.
Christian Itin: Yeah, in Europe you have a two-stage type of process. One is the regulatory process, which is centralized and goes to the European agency. Once you actually go through that process and you receive an approval that's a regulatory approval for the entire EU. But you then actually have to secure the reimbursement in each one of the countries separately, because the healthcare systems are different and they're separated from each other. And that means that you have a country-by-country launch. Typically you would look at Germany as one of the first countries to launch in and then you would actually go from there. But it's really on a country-by-country basis that you have to negotiate a reimbursement and access. And that's kind of the process that we'll be walking through. And, obviously, as we go through we'll certainly keep you updated on the progress and on the jurisdictions that we're choosing to go into. But that's the general approach that you take from a European launch perspective. So it's a country-by-country approach that you will have to take to really get the product launched.
Gil Blum: Thank you.
Christian Itin: Okay. I think, we can move on.
Operator: Our last question comes from Jacob Mekhael at KBC Securities.
Jacob Mekhael: Hi, there, and thanks for taking my question. I had a question about the Phase 1 trial for obe-cel in the pediatric ALL setting. I'm just curious, if you can just give us your view on your potential differentiation compared to prior there, and how does this sit with your plans for AUTO1/22, which you previously also tested in the same setting? And then I also have a follow-up on the 16-day vein-to-release time. You've mentioned previously that there's potential for that to go even lower. Could you maybe quantify how low you could potentially go?
Christian Itin: So first of all thanks for joining Jacob. The first question relates to the Phase 1 study in pediatric patients. The question answers, the two answers. The first one is when you aim to get an approval or a label for adult patients in ALL, you will also typically have an obligation to develop in children and show the activity of the profile of your product in children as well. So there's a regulatory obligation and you negotiate what that trial would look like with the regulators. This is true for the FDA. It's true for the European Agency. It's true for the MHRA. So there's an element, which is an obligation. The second is the question is around the opportunity and differentiation. Obviously at this point in time there's a single product approved for children, which obviously has had a huge impact for many children over the last eight years or so. But there's also I think important to actually have optionality for patients, so that’s one of the physicians. So that's one of the elements that I think we're evaluating in pediatrics to see whether indeed it makes sense to position any obe-cel also in the pediatric setting from a commercial perspective. One of the features that we obviously have with the product is a high level of consistency in the product. And, obviously, the data that we have in the pediatric patients has been very attractive both from an activity persistent long-term outcome, as well as safety perspective. So that's an assessment that we're going to make once we have the full data set in. But I think there is likely also an opportunity there and we'll need to evaluate as we have more data from the study on how we see that opportunity versus frankly other indications that we can go into. And then the second question was related to the vented release time of 16 days. One of the key drivers that we have from a time perspective is actually the release process. It's the testing. The longest part of the test actually relates to the sterility testing. And any change in technology or approach you can take to simplify shorten or shorten the sterility test, would also have a major impact on the turnaround time. We're looking at anywhere from two to three days up to probably a five-day difference in the turnaround time. So it has a very significant impact. At the same time, you basically have to prove a negative. So in other words, you have obviously very few events, sterility events, because you're operating in a clean room environment a highly controlled environment. And so, the technical challenge is to demonstrate the negative and that's also why this will take some time with some of the additional technology we're evaluating to have sufficient data to statistically actually demonstrate that indeed a shorter approach -- a timed approach would actually give you the right level of outcome compared to the standard plate-based testing which is sort of the standard methodology that is still used in the space. Okay thank you. I think we lost you there, Jacob.
Jacob Mekhael: Can you hear me now or not?
Operator: Yes, Jacob.
Christian Itin: Now, we can. Yeah now, you're back.
Jacob Mekhael: Yeah. Okay sorry, my line was probably cutting off. I just wanted to hear about your expectations on your SGNA and R&D course in 2025.
Christian Itin: Okay Rob, I think that's one for you.
Rob Dolski: Yeah, hi Jacob. Thanks for the question. We haven't given formal guidance in terms of expense and runway into 2025. If you look certainly at the quarter-over-quarter changes for this year, you see especially on the SGNA side a ramp noted in the remarks, really driven by the build-out of the commercial team and the launch readiness activities. That team in general in the US is fairly established as we kind of exit Q3 going into Q4. Recall there are a second wave of centers that are going to be coming in as well next week or next year growing from the 30 to 60. So there are some modest growth that goes along with that continued expansion. But for the most part, the team is fairly established as we kind of end the year here.
Jacob Mekhael: Okay. Thank you.
Operator: This concludes the question-and-answer session. I would now like to turn it back to Christian for closing remarks.
Christian Itin: Thanks a lot, Jacinda. First of all, thanks a lot for joining everybody. This is obviously the second call in a row. So appreciate you coming in. Looking forward to seeing you at ASH hopefully at the upcoming conference. And I can only say that we're obviously hugely excited kind of where we are. Looking forward to obviously drive a launch with as much enthusiasm and energy that we can muster. And I think we're going to be in for a very attractive very interesting end of the year and 2025. Thanks a lot for joining and hopefully see you soon.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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