Nautilus at 24th Annual Needham: Strategic Growth and Challenges

On Wednesday, 09 April 2025, Nautilus (NASDAQ: AUTL) presented at the 24th Annual Needham Virtual Healthcare Conference, sharing insights into its strategic progress and challenges. The discussion highlighted Nautilus's financial strength and operational milestones, while also addressing hurdles like tariff impacts and manufacturing complexities. The company remains cautiously optimistic about its future.

Key Takeaways

• Nautilus maintains a strong cash position of over $500 million, providing a buffer against market volatility.
• The commercial launch of Ocetsel has been well-received, with over 30 treatment centers activated in the US.
• Challenges include potential tariff impacts and manufacturing complexities tied to patient enrollment.
• The company is preparing for a European launch, focusing initially on Germany and the UK.
• Nautilus is exploring opportunities in the autoimmune space, with initial data from trials to be presented soon.

Financial Results

• Nautilus holds over $500 million in cash, offering resilience in uncertain markets.
• The company will report its Q1 revenue numbers in May, reflecting the initial performance of Ocetsel's commercial launch.
• A disciplined revenue reporting strategy ensures transparency, with figures released only after patient dosing.

Operational Updates

• Ocetsel, the first CAR T program approved without REMS obligation, has been included in NCCN guidelines, aiding payer approval.
• By March, over 30 centers were activated, covering 50-60% of the US patient population, with a goal to reach 60 centers by year-end.
• The European launch strategy focuses on Germany and the UK, with approvals expected in the second half of the year.
• Manufacturing operations are running smoothly, with production starting upon patient enrollment and apheresis.

Future Outlook

• Nautilus is advancing its autoimmune program, evaluating Ocetsel in SLE patients with a fixed dose of 50 million cells.
• Initial data from a six-patient cohort will be presented on April 23rd, focusing on product behavior, adverse events, and clinical markers.
• The autoimmune market presents significant potential, with high medical need and risk of organ impairment.

Q&A Highlights

• Tariffs may have less impact than anticipated, though cross-border processing remains a concern due to staff reductions at the FDA and customs.
• Nautilus emphasizes the importance of regulatory authorities amid industry staffing challenges.

In conclusion, for a comprehensive understanding of Nautilus's strategic direction and challenges, readers are encouraged to refer to the full conference call transcript below.

Full transcript - 24th Annual Needham Virtual Healthcare Conference:

Gil Blum, Senior Biotech Analyst, Needham and Company: Good morning, everyone, and thank you for joining me at the third day of the Needham Healthcare Conference. My name is Gil Blum, and I'm a senior biotech analyst here at Needham and Company covering the immunology and gene therapy subsectors. It is my pleasure to have with me today Christian Eaton, the CEO of Nautilus. As a reminder, any viewers who are watching through our conference portal are able to submit questions via the ask a question box below the video feed window. Christian, I'm actually gonna start with a more general question as it relates to your company and how you view the effect of tariffs.

I know this is a little bit open ended, but whatever commentary you have to provide would be helpful.

Christian Eaton, CEO, Nautilus: Yeah. First of all, thanks for having us in in this turbulent time and certainly a time with a lot of change and uncertainty. I think I'll start out with just mentioning that we're obviously are entering this phase with a very strong balance sheet, and I think that's important. As we learned, you know, as we went through lots of different disruptive, you know, moments, go back to the banking.com crisis, the banking crisis, you went all the way through, in our case, as a UK company through Brexit, COVID, and here we are. So there's a there's you know, these events happen.

It's very important to be in a strong financial position when you enter these, but also be prepared. And the sort of there there's sort of several layers that I think matter here. I think the first thing is is the the tariffs themselves. I think the what's important to understand is that, obviously, there's a you know, different countries have different layers of tariffs right now on a range of products. There's been an exclusion up to, you know, maybe today, maybe at a at another time point of pharmaceuticals, and there is certainly a possibility that tariffs may be imply basically imposed here in pharmaceuticals.

What's also interesting to understand is that within pharmaceuticals, the category of products that tended to be excluded in in tariff schemes in the past, and that those products certainly relate to blood derived products who actually have been tariff free pretty much in any tariff scheme ever imposed. And I think that's important to remember. And clearly, what we do in the CAR T therapy space using autologous cells where we collect the cells from the patients, so that's the patient's blood, gets actually transitioned, which is where the GMP process starts. In this case, if it's a US patient, starts in The US. Cells then get shipped to The UK, get genetically modified, get released.

Final release is completed, typically, when the product actually is in The US and then actually gets returned to the patient. So this is a blood product. And, also, when you look at the customs regulations, even the ones that were on the web that you could see more than a day ago still, would actually describe that blood products, including by talk by technologically modified blood products, would be excluded from tariffs. So that's actually what the old regime was. We don't know what the new regime's gonna be.

We've seen lots of, I think, sets of tariffs that I think were surprising. There were tariffs set on versus countries that hadn't zero tariff on US imports. There were all sorts of, I think, ranges there that, you know, were not as easily understandable, probably. What I would take is the position that I think over time, you know, we will see, I think, more of a differentiated view that I think will settle over time. And we do not we do not expect, even if things may be just very very simple or very simplistic to start out with that they're gonna actually stay that way.

So that's kind of the more kind of sort of the more distant view. Take a step back. Look at this. Look at it as a dynamic that we're sort of watching unfold, that goes from a pretty crude undifferentiated view a differentiated view to a place that ultimately has to make some level of sense. And I think so, coming back to where I started, this may take a bit of time, and one of the key elements there, I think, is you have to have, you have to have the cash buffer to be able to work through that.

Now the second element is that I think it's important to understand when we think about tariffs, what's relevant in that context is customs value. So it's not necessarily the product price in The US, but it's the customs value. And customs value, there's a solid set of regulation describes actually how you arrive at that. Typically, not always, but typically, that relates to the cost of manufacture. And so the base actually is is probably different than what most people were thinking about to begin with.

And that actually allows you to think about it in a way that, also, I think, highlights that there's sort of even if there is tariffs, it's quite likely in many of the scenarios, the impact's gonna be somewhat, palpable, but a bit now may may may not be dramatic. Okay? So that's just something to keep in mind, and I think keeping back of our heads that as we're sort of thinking through, the changes that might come, that there is actually more differentiation there, and there's probably the values that we may think about actually may not necessarily be kind of what really matters here. And then the third thing that I wanna mention is and this is really an experience both out of Brexit, but also out of the COVID experience, but to talk particularly the Brexit experience. One of the fundamental problems in Brexit was from the pharmaceuticals perspective and in more general perspective as well is that we had, I would say, a big risk for disruption at the border because we had a very massive change to the rules that were applied for importation.

And the problem with that is that whenever you have that, you may not have the manpower. It may be unclear on how to process. The paperwork may not be ready. And, in this particular case where we've seen impact on reduction of staff at f d at the FDA, reduction of staff also, or risk of reduction of staff from the customs authorities as well could actually lead to an aggravation in terms of the ability to process materials at the border. So what we're certainly gonna be a lot more focused on than on just on tariffs is certainly making sure that we have a good level of across processing across the border and that we manage that as closely as possible.

That's actually probably the much more imminent risk that I think we're dealing with than the actual monetary risk that a tariff may actually impose. And then the final point I'd make is is what we were seeing, and this was also the, you know, experience from Brexit, was that one of the key things that happened during Brexit was that the regulatory authority in The UK, the MHRA, which had worked very close with the European agency, obviously lost its sort of sister organization because the European agency went to Amsterdam. A lot of talented staff went along with it. And as a consequence, there was a very significant understaffing and loss of experience within the regulatory, authority. The difficulty that, actually, that creates is that your regulation stays the same, but your ability to regulate actually is impaired.

And that actually, I think, is where there's a lot of risk in the process for the industry. And I think we had a piece from Janet Woodcock recently where she commented on that and referred to this as as one of the risks. We actually saw this firsthand, the impact from a UK perspective, and that is probably as much an area to watch out for as I think the risk of tariffs. I'll leave it there, and I'm not gonna get any political. But this is sort of where but I think things that I think are worthwhile keeping in the back of our minds.

Gil Blum, Senior Biotech Analyst, Needham and Company: So maybe to kinda refine your last point. I mean, given you are mostly done with regulatory, debates in in The US, how much of an exposure do you have, outside of new products?

Christian Eaton, CEO, Nautilus: Well, first of all, I think we were lucky because we got approved on November, so we were ahead of all the changes that we've seen since. So that obviously was very lucky in timing and puts us in a strong position. So, well, obviously the launch is underway. You know, we're have we're in the process of of opening centers. We're been beyond 30 at the time of the announcement of the k.

We keep actually rolling forward. So that process is going well, and we're having the support that we need. You know, for the time being, I think the ability to sort of set up new trials and work with the agency on that, I think, has continued to actually work reasonably, but I I think there is palpable stress. So for the time being, no impact for us, which is good. We're good lucky, just from a timing perspective, but it is an area that I think we're watching, and that but I think it was much more a general comment for the industry to be mindful about and for investors to be mindful about, and maybe also vocal about the importance of a regulator when the regulation actually needs to be applied.

Gil Blum, Senior Biotech Analyst, Needham and Company: So maybe to reorient the conversation around the company and its products, just a quick reminder of of your proof product and kind of the overall strategy, for Atlas.

Christian Eaton, CEO, Nautilus: Yeah. So we're we're sort of at a at a very interesting transition we're running through. As I mentioned, we got our lead product or cancel approved November. It was the first CAR T program that got approved without REMS obligation, which is a reflection of the, very positive safety profile that we have seen with the product. And what we also did see and were able to do right on the, very close to the approval, we, got the product, also of the the data that was the underpinning the approval, published in the New England Journal.

And based on that, we're then able to, actually see that the product could get into included in the NCCN guidelines, and we managed to sort of get actually included in the NCCN guidelines, still in December. The importance of that is is that at that point, the product becomes a recommended therapy. And as you actually start your launch, initially, I would say your payers do not yet have your brand new product on their policies, so it's a case by case assessment. And for that, it is very important, obviously, to have, a recommendation that indeed this is a valid therapy. And so the NCCN guideline inclusion was really helpful so that indeed patients could get access, and and in fact, the product could be paid for.

So that was, extremely helpful as we started up. And and we're obviously, as I indicated, we're at about we have more than 30 centers that were activated, at the, March when we communicated the the annual, results for last year, and we keep rolling forward. The 30 centers represent approximately, you know, 50 to 60% of total patient population access in The US through those centers. So it's a very meaningful proportion, of of the centers already. Gonna go to 60 centers by the end of the year, which will give us closer to 90% of the patients' access in The US.

We're well on track on doing that, and I think that dynamic's been really supported by the very positive experience that the physicians are making, the centers are making, and, obviously, the the the fact that that information and that experience start to spread. So I know we're ahead of of your early your quarterly reportings for the first quarter, but is there any additional leading indicators for how

Gil Blum, Senior Biotech Analyst, Needham and Company: the launch is going that you are allowed to provide?

Christian Eaton, CEO, Nautilus: So first of all, obviously, we're the the the launch, I think, has gone as well as we could have hoped for as we went through through the first quarter. We're gonna provide revenue, numbers, at the q one update, which will be in the towards the May. And, obviously, we'll then continue to report, obviously, on open centers or activated centers as well as the actual revenue numbers. We think this is particularly important to sort of be disciplined around that in this space. And the reason for that is is that there is, obviously, a time lag between the patients when you identify them, when you start manufacturing from them until you actually dose them.

The revenue gets recognized when the patients have been dosed. Okay? So that's when you recognize it. It's very tempting to give leading information upfront, but it is also challenging because actually you basically are providing quite often sort of guidance into the following quarter. So it is actually kind of challenging to do that because you might actually be confusing in terms of what the trajectory that you you might sort of in imply with those statements.

And we've seen that be, you know, quite challenging, I think, in terms of those communications and for some other cell therapies in the space, and we wouldn't wanna do that. So we'll stick to the centers that are actually active and the actual revenues that are actually recorded, in our financials.

Gil Blum, Senior Biotech Analyst, Needham and Company: So we we've had quite a few conversations with KOLs in the space, specifically for for relapsed refractory ALL and major academical centers, and they've been extremely supportive suggesting that they're considering switching all of their patients. What anecdotal feedback have you had, if any, on your commercial launch?

Christian Eaton, CEO, Nautilus: So first off, I think it was great, you know, for you to actually get that feedback, because that I think that's a very nice way of sort of corroborating and getting a feel for for how it productively received. It certainly mirrors kind of what we're seeing and what we're hearing, the interactions we're having. Obviously, we're very close to the centers that we're active in. You know, the way you commercialize these products is actually by providing a series of of services to the centers. So that is very engaged.

It is personal. It's not just a personalized therapy at the level of the patient, but it's also in terms of the delivery itself. So we're very close to the centers, and we're looking to be, obviously, as helpful as we can be and as supportive as we can be. And so that's kind of where where we are, and, I think it's sort of what you're articulating kind of mirrors kind of what we're hearing. And, you know, we're building on that momentum and looking forward to, you know, seeing that we can have a a very positive impact on patients going forward.

Gil Blum, Senior Biotech Analyst, Needham and Company: What would you say is your largest investment, and capital as it relates to the launch?

Christian Eaton, CEO, Nautilus: Obviously, there's a lot of the investment actually sort of in setting up the infrastructure part. So, obviously, a big part of that was the manufacturing infrastructure. The logistics associated with it, that was a major investment, obviously, that and probably the single biggest investment that we we made. When we then think on the on the commercial launch side, it's quite an involved process to actually get the center to to the point where the center actually can be accredited. And that's a very, you know, extended process.

Typically takes a few months, can take up to a year depending on the the complexity on the on the negotiation side or the legal side of the contracts. But that's actually a process that's quite involved, and that's where I think a significant part of investment goes in. And then, you know, there's obviously, you know, the communication part, medical affairs part, which going forward, it was just a key area of activity to sort of create awareness for the product and and sort of a shared, strong understanding of, how to best use the product.

Gil Blum, Senior Biotech Analyst, Needham and Company: And could you also remind us the timelines for approval in Europe, and what what is your strategy for a UK EU launch?

Christian Eaton, CEO, Nautilus: Right. So we did file, with the, European agency, in at the end of the first quarter last year, and we did file in The UK in July. So we're in the process in quite advanced stages of the of the review process. We would expect that approvals would get through in the second half of this year. And then, obviously, in any one of the European countries, you also have to go typically through a process to actually secure your price and and and then actually move forward.

That's certainly the case in The UK where you go through a price assessment and a value assessment of your product. And that's a very defined process, which we're kind of working through in terms of the value dossiers and the the various steps you're gonna run through. And in from a European perspective, our initial focus is going to be on Germany with a goal to sort of be in a position to launch in Germany early next year. So it's the approval, and then there's usually a set of additional kind of steps you have to go through. So Germany would expect early next year, and the The UK, we're hopeful that we're gonna be properly launching second half of this year.

Gil Blum, Senior Biotech Analyst, Needham and Company: Yeah. I do wanna spend a minute also on the product profile itself. So Ocetsel is the first approved CAR T without a REMS protocol. Just to help people understand what that means in the clinical practice.

Christian Eaton, CEO, Nautilus: Right. So so the REMS a REMS protocol basically gets included in in a label or as an obligation with an approval, if you have a particular set of adverse events that you'd like to actually develop a better understanding for in a larger patient number. And so typically, REMS programs are set up or certainly were set up, in T cell engaging approaches as well as in CAR T approaches, to better understand the impact and long term impact of, cytokine release syndrome, but also neurological toxicities. We had seen that after I think it was about ten years after the launch of Blincyto, the REMS program for Blincyto came to an end. There's enough data collected, enough understanding developed about the consequences of those adverse events.

And what it basically means for the centers is that you actually have to record these events in a separate database. Now a lot of the a lot of the centers also factor JC accredited, and, actually, in the context of those accreditations already collect a lot of that information. So they ended up having to sort of basically have two different databases to record information in. So in a very practical perspective, it meant a lot of added work or additional work for the centers to actually carry And be able to actually have a product that actually doesn't require that extra burden for the centers is obviously very beneficial because, you know, all these centers tend to be short staffed. You know, you wanna be able to actually focus the time of your of your nurses and physicians to be spent helping and managing the patients rather than actually, you know, working on administrative tasks.

Gil Blum, Senior Biotech Analyst, Needham and Company: Another feature of of the treatment of relapsed refractory ALL, that came up from our conversations with experts is that, a lot of times it's used for consolidation. Actually, almost off almost off label, not not exactly off label, but the physicians have been defining relapse differently. How how have you seen this in practice, and how do you think that shifts over time? Are are physicians gonna look at true refractory patients, MRD positive patients?

Christian Eaton, CEO, Nautilus: So I'll I'll answer the question from two two different perspectives. The first one is the perspective of the label. So the label describes, relapsed and refractory patients. This is what the label describes, and that's sort of the the group of patients that are included. What we have studied in the context of the Felix study is the majority of the patients were patients that had more than 5% tumor burden at the time of inclusion.

We also had a separate cohort that looked at patients that had minimal residual disease or disease burden that was below 5% tumor burden, which is a separate part of the cohort. And there was also a group of patients that had isolated extramedullary disease, in essence, a relapse of the disease outside the bone marrow, which happens actually, unfortunately, not infrequently in these patients, and it's typically a sign for a very difficult to treat indication or disease. So that's what the label describes. Now clinical practice is that what we've learned with ALL is that the that the the relapse, obviously, tends to start in the marrow, and you gradually go through, obviously, the divisions of the of the tumor cells, and you gradually build more and more mass in in the marrow. The original way of determining the tumor burden was actually by microscopy.

So you literally look at a a bone marrow sample, and you count the cells by eye. And the the blast you count is basically a morphological signature that you look for. You can sort of reasonably, reliably actually determine 5% of the cells to be of the morphology that you would also associate with the leukemia. That was sort of basically think about it as the resolution by eye that you could actually get to. Now that means that, of course, there's already a lot of tumor burden in the patients, and at that point, if you keep, obviously, going through the rapid cell division cycles, you could go very quickly from, you know, five or ten percent to ninety percent tumor burden.

And at that point, obviously, the patients become incredibly difficult to control. They have a lot of adverse events related to the disease. So there's a lot of push in the field to actually go for patients and identify patients that are earlier in their relapse, so when you have a lot a slower number of cells. And there are different methods used for that. There's flow cytometry used for that.

There is PCR based methodologies used or NGS methodologies used. They give you sensitivities that go one in ten thousand, one in a hundred thousand, one in a million that it can actually cells you can detect. What we know from all of the data over the last twenty years is that patients that have signs of this early minimal residual disease, so measurements of of cells at this very low level invariably do relapse. So it just takes longer because there's more cell divisions to run through. What we also did learn is that if we treat the patients at that point in time, we have a much higher probability of actually getting a long term outcome because, frankly, there's less cells to kill.

There's a higher probability we get them all than if we have a situation where there are 90% of all cells in the marrow are tumor cells, and they're kinda spreading all over the body, and it's kinda hard to get all of them and get them completely eliminated. So the concept of consolidation is one where you treat with an initial therapy, get to a meaningful response, and then basically have a second step in the treatment that cleans out whatever is left. And that's the consolidation. The way that that's done typically is could be actually in different types of ways. It could be with a stem cell transplant, or it could be with a T cell engager or an ADC or a CAR T.

And so that's a modality that's used quite a lot, and I think it's been very successful particularly in a frontline setting where you had initially removed the tumor and then consolidate. So as we are as we have the product approved today, our label does not include frontline consolidation. That's not what it is. But there is a lot of interest to explore that in investigator sponsored studies, and we're looking forward to seeing some of those studies, I think, get off the ground hopefully by the end of this year and then onwards to start exploring the opportunity here and the ability of our product, which has shown extremely high levels of activity and ability to deliver long term outcomes in patients that have low disease burden. That's the patients that actually have the highest probability of long term outcome.

And actually use that principle and start exploring that at least initially and investigate responses started studies in the frontline setting. So it's the trajectory, I think, that ultimately we'd like to see the product go. And there's certainly a lot of interest to explore that in in sort of a controlled in a controlled setting.

Gil Blum, Senior Biotech Analyst, Needham and Company: Excellent. I do wanna spend the significant portion of the rest of our time here on the autoimmune portion of the story given that the results are coming up soon. So maybe a good place to start. It's a pretty competitive environment, quite a few of these out there. What gives you confidence that that opicel has has a better profile, and chance of successor?

Christian Eaton, CEO, Nautilus: Well, one of the things that obviously is is very attractive from our perspective is the fact that we're operating with a product that has achieved an approval. None of the products currently have evaluation actually have actually have achieved approval anywhere else. So with the with the only approved product that actually is being evaluated in these approaches. So that's the first observation. The importance of that is not only that there's a lot of safety data available, but we also do know that we have a remarkable profile from an efficacy perspective, extremely deep responses that we could obviously evaluate with very, very sensitive methods in ALL, combined with an attractive safety profile.

And I think both of those matter because you need a deep cut in the compartment to actually get to a place where you, hopefully get to a long term outcome in autoimmune disease and have sort of a reset. And on the other hand, you need to actually have a safe product, because clearly these patients are have a lot of comorbidities as well, and these are not oncology patients, and they're typically not treated in an environment quite as what we're used to in the hematology setting. So starts with, actually, this is a product that has a real reality, has a label, has a production base, is commercially present. Now what obviously, what stands out for the product is that when we look at patients that either have low disease burden in ALL or have non Hodgkin's lymphoma, the patients do have a very good safety profile. They didn't have high grade CRS, and they have no neurological toxicities.

That's a great profile to start out with. So that's the starting point. We're evaluating now the product in, patients, with SLE, and we're gonna treat those patients with a fixed dose of fifty million cells. That is basically derived from the dose that we're using in children in pediatric ALL, and that's also was the rationale and the way that the original data was generated at the University of Erlangen in the space was also actually delineating their dose finding. They used they started with a product that they used in pediatric patients.

We compared our data actually to theirs to their data, and, obviously, do have a very attractive profile also compared to their product. And then, actually, obviously, in kids, you know, having a body weight based dosing because you have a wide range of very young kids up to, obviously, very large kids with very large bodies. And so you need variability there, but as an adult treatment, you don't want that. You want simplicity. You want a single dose.

You want a a dose. You just don't have to actually go out and calculate what you should be using. So this is the rationale for the fixed dose, which is also true, obviously, what we're using for the adult patients as well, which is also fixed dose. So we're gonna evaluate that, and we're gonna be presenting kind of a first view of that data, initial data at our r and d event on the April 23 in New York and, you know, obviously, opportunity to join us there at the Yale Club as well as, obviously, look at the data and get an understanding of where we're headed through the webcast as well.

Gil Blum, Senior Biotech Analyst, Needham and Company: Okay. So maybe focusing on on this first look at the data for the investors and the crowd. Anything you know, what should they be expecting, number of patients, follow-up, that sort of thing?

Christian Eaton, CEO, Nautilus: Right. So the initial cohort is six patients, fifty million cell dose, all dosed. We're gonna have, obviously, varying degrees of follow-up. We have a few months or or more than six months. In one patient, we have two or three patients in a range of about three months plus a follow-up, and then we have patients that are just beyond one month at this point in time.

So what we can see and what we'll be able to look at is actually first the behavior of the product. That's kind of the expansion of the product, the persistence, which gives us, I think, a very good feel for the consistency of the product. The second area is, of course, adverse events. You know, we've seen quite frequently in in those patients with other programs, CRS or even ICANN. So I think safety signals do matter.

And then we can obviously look at readouts for pharmacodynamic markers as well as clinical markers in these patients and how they fare over time. So I think it will give a good impression, a good feel for what the product profile is. And then, obviously, one of the key things that we're looking to do, is then actually discuss the path forward, and the opportunity here to really move to a potential pivotal study, which I think is gonna be important and I think will give direction as well as I think should address, think, sort of an idea around timelines, etcetera as well. What we wanna do and embed this in is really articulating, have external speakers who will talk about what good looks like in those respective indications, which has been a real challenge. I think for a lot of people, you know, it's been a challenge for us being a hematologist, you know, most of the background that we have within the company.

So what does good look like in these settings? And I think that should be helpful also for investors and analysts. And then, obviously, also have an ability to sort of get a better understanding of the actual medical need and what does it mean for these patients, and what are the right patients to think about using this type of a therapeutic modality. So those are kind of the areas of focus for the meeting, and I was sort of looking forward to seeing hopefully many of you at the at that event.

Gil Blum, Senior Biotech Analyst, Needham and Company: So so maybe I'm preempting with this next question. Where do you view the the main market potential for a product like yours?

Christian Eaton, CEO, Nautilus: Well, the way I I would look at it is so first of all, the product, I think, has multiple opportunities from an indication perspective, both obviously in the hematology space as well as the autoimmune space. When I think more specifically about the autoimmune space, I think what's interest what's attractive about it is areas where you have a high medical need, a pretty big risk that a patient may have an organ impairment over some period of time and a shortened overall survival as a consequence of that. And I think that's clearly where we'd like to focus on. So we're looking at the sort of more refractory type of patients, but obviously patients that still have evidence of an inflammatory process that's ongoing. And I think that's sort of the the sweet spot, I think, that you'd be looking for in any of the indications, autoimmune indications you might think about.

And so that's those are kind of the key areas, I think, and key kind of elements of focus that I think we wanna we want to sort of look at. The opportunity, I think, in each one of those is pretty significant, because, you know, if you're looking at even in SLE or lupus nephritis, that complex, I mean, you start with about a total of about four hundred thousand patients in The US. So even if you take we start with that and you go to the refractory population, you're still talking about 20, maybe 30,000 patients. So it's still very sizable, very meaningful, and an opportunity to have a meaningful impact, obviously, for these patients which have, you know, very dire outlook otherwise. So I think that's kind of the the the opportunity there.

When I think about the opportunity on the hematology side, I think it's really focused on driving long term outcomes for patients and ultimately, increased cure rates. And I think that has to be the focus of this type of a therapy and the positioning of the therapy as well. And this is obviously clearly what drove us in ALL, but it's also applicable outside of ALL.

Gil Blum, Senior Biotech Analyst, Needham and Company: And, another comment that we've heard from a lot of our companies in the cell therapy autoimmune space is enrollment challenges, both from competing programs, but also just, you know, the logistics of getting oncologists and rheumatologists to talk to each other. How have you guys been, circumventing these challenges?

Christian Eaton, CEO, Nautilus: Yeah. I mean, any new modality that we introduce into into an area like rheumatology has sort of an inertia initially, and I think that's part of what you're hearing from those commentaries. I think what's important for us and what Joe says is is sort of a really helpful starting point is that we're gonna be in, in The US, we're gonna be present in most of the relevant centers, commercially present. The product actually is known to the hematologists. There's experience with the product.

And I think that's an important part because it means that there are physicians who can talk about actual their own experience with the product when they talk to their colleagues on the rheumatology side, and they're also talking to patients. So I think that confidence, that experience, that confidence, knowing the commercial product, I think is gonna be really important. The second step, as you point out, is that as we're sort of thinking about conducting these clinical trials, it's really a collaboration between the rheumatologists who are caring for these patients and the hematologists that deliver the therapy. So you need to foster collaboration between the two, and that is really important to do. And we've seen that, you know, as soon as that started to sort of occur, they actually you got a very nice momentum in the study.

And and I think that's obviously what's one of the nice things about where we are with the product and, you know, being present in a large number of centers in The US, across The US, and also in The UK as well and preparing for in in Germany as well gives us a foundation which is obviously very nicely differentiated and, I think allows us to build on that experience and enthusiasm from the hematologist to then actually rub off on the rheumatologist and also, frankly, give reassurance to the patients, for this very different type of therapy.

Gil Blum, Senior Biotech Analyst, Needham and Company: We only have a few more minutes left, so I'll remind the audience so they can, write in a question if they have one. But I do wanna ask at least another one on on the commercial manufacturing. What do you consider the key challenge, if any, in your manufacturing supply chain?

Christian Eaton, CEO, Nautilus: Well, I think, one of the things that is obviously very interesting is when you're in this space is that and different from any other therapeutic modality, you don't start with an inventory. Because normally, you start with an inventory. You have a year's worth of material, drug supply you can deliver. So, actually, drug supply is reasonably relaxed because it's dissociated from the treatment of the patients. What's very different here is actually your first patient that signs on, that gets apheres, that's when your factory starts actually running.

That's when you get everything in motion. You up to that point, you're prepared. At that point, you start running. So what's been very interesting is obviously kind of just a start up and get into the steady rhythm, Give you a flavor, the the operation that we're running is a two shift operation, seven days a week, so it's a real industrial process. And so we're at the play at at this point, we're at a at a at a place where, frankly, these processes are humming and are are are running, obviously, as you would hope for.

But as you can imagine, the first few weeks getting to that state where things are starting to run smoothly, obviously, you know, takes a few steps. But we're at a great place now, and the team's doing a fantastic job actually supplying. And, you know, we're it's definitely one of the important things is having made that investment in people, in infrastructure, and capabilities that I think is absolutely critical for us to execute.

Gil Blum, Senior Biotech Analyst, Needham and Company: And I do wanna end with what you kinda started with just to remind everyone the company's cash position and runway.

Christian Eaton, CEO, Nautilus: Yeah. So, obviously, we we're we're we're good way north of 500,000,000 in cash with the company, and that gives us obviously an ability to, I think, get through a pretty turbulent type of period that we think we're going through. We're obviously starting to generate revenue. We'll give you a first number at our q one, report coming up in May, And that also is gonna be a key element here in our in terms of the overall cash position of the company going forward. And I think we'll start to give, I think, a good sense of how this is actually moving.

And, you know, I think we're in a great spot and looking forward to keep you updated and are looking forward to deliver really as important outcomes for patients here.

Gil Blum, Senior Biotech Analyst, Needham and Company: Maybe as a last last message, you know, turbulent times in the capital markets. So what is your message to investors who who who are probably pretty frenetic right now?

Christian Eaton, CEO, Nautilus: Well, first of all, you know, I think I'm not gonna tell you what you need to do because, frankly, that's the business that you guys are all in. So you know a lot more about it. What I just know coming looking at it from the operating side is, you know, you want on the one hand, you wanna be prepared, but you also don't wanna be rash. You wanna understand your options. And I think in a lot of downturns and a lot of asymmetric situations that I think we have given on the a lot of the SMIC cap names where there's a lot more upside than there is downside and a lot of companies as ours sitting on a lot of cash, I think there is also great amount of opportunity here.

And so I think one to navigate, and they'll be interesting. I'm pretty sure there's gonna be people who make some courageous calls and gonna do really well out of this environment that we're currently

Gil Blum, Senior Biotech Analyst, Needham and Company: Excellent. Thank you very much for attending today, Christian. Thank you very much. Much appreciated having us.

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