Autolus Therapeutics (NASDAQ:AUTL) Q3 2020 Earnings Call

0:01 Hello ladies and gentlemen and welcome to the On the List Therapeutics third quarter 2020 financial results conference call. As a reminder this conference call is being recorded. I would now like to send the conference over to your host Dr. Lucinda Crabtree, Vice President of Investor Relations. Please go ahead. Thank you Brandy. Good morning or good afternoon everyone and thank you for taking part in today's call on the financial results and operational highlights for the third quarter 2020. I am Lucinda Crabtree, Vice President of Investor Relations. With me today are Dr. Christian Itin, our Chairman and Chief Executive Officer, and Andrew Oakley, our Chief Financial Officer. Before we begin, I would like to remind you that during today's call, our discussion will contain forward-looking statements.

0:46 All statements other than statements of historical facts on this call are forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. including those discussed in the section titled Risk Factors in our annual report on Form 20F filed with the Securities and Exchange Commission on March 3rd 2020 which can be accessed on the EDGAR database at www.sec.gov and in subsequent filings we make with the SEC from time to time. The forward-looking statements on this call reflect the company's views as of today November 5th 2020 regarding future events and should not be relied upon as representing the speakers or the company's views as of any subsequent date.

1:32 While the company may elect to update these forward-looking statements at some future point, the company specifically disclaims any obligation to do so even if the company's views change. These forward-looking statements should not be relied upon as representing the company's views as of any date subsequent to today. Please be advised that today's call is being recorded and webcast. On slide three, you'll see the agenda for today. and it is as follows. Christian will provide a brief introduction and that will be followed by our operational highlights for the third quarter of 2020. Andrew will next discuss the company's financial results and then Christian will conclude with upcoming milestones and other concluding comments and of course we will welcome your questions following our remarks. So with that I'd like to turn the call over to Christian.

2:20 Thank you Lucinda and good morning to all of you and thank you for joining us. I'm pleased to review our progress for the third quarter 2020. Before summarizing our program update on slide five, I would like to briefly address the evolving COVID-19 situation and its potential impact on our operations. At our last financial update call in August, we had entered into a more stable period post the first COVID-19 peak in April May, and our programs have remained on track throughout the third quarter. However, building in September and accelerating through October and into November, We have seen a substantial increase in infection rates in Europe and in the US. And with a few weeks lag, increases in hospitalization and ICU occupation rates followed. In reaction, restrictions on public life have increased across all of Europe end of October.

3:10 From a company perspective, what helped us involve patients through the first peak of the pandemic was the concentration of cases in few geographic areas in the US. During that period, most of our US clinical trial sites were not impacted. Going into winter now, with an already broad spread of infections across the entire country, the risk for trial disruptions in the US has increased. We will follow the situation closely, and if need be, may have to adjust patient enrollment into our trials. That said, we're working hard with our supply chain and logistics teams, as well as our centers, to ensure uninterrupted supply of essential goods and services for our operations. This includes timely continental and transatlantic deliveries of leukophoresates and final products to ultimately ensure timelines remain on track.

4:00 As always, our key focus is on patient safety and ensuring data integrity in our trials. While to date our lead programs, Order 1 and Order 3, have not been significantly impacted, We did experience a delay in patient enrollment for our ongoing Phase 1 clinical trial with Auto4 earlier this year. However, for now, the situation has stabilized, and we continue to expect initial data from this Phase 1 study to be available in 2021. With respect to our preclinical programs, these have so far been minimally impacted, and we continue to expect Auto5 and our solid tumor programs, Auto6NG and Auto7, to enter clinical development in 2021. Our first clinical study with Auto-1-22 in pediatric ALL remains on track to begin in the fourth quarter and Auto-8 in multiple myeloma is due to start in the first half of next year. So moving to our corporate highlights and starting with our clinical programs on slide six, we've had a busy quarter across our portfolio with positive data update at ESMO for Auto-3.

5:00 With respect to Auto-1, as you know, we commenced enrollment of patients with relapsed refractory adult acute lymphoblastic leukemia. into our potential pivotal phase 1b2 auto 1 program and are targeting to have data by the end of next year. As indicated before, timelines will be contingent on the involving COVID-19 situation. Finally, updates on the Alexander study for auto 3 and the oil car 19 study for auto 1 have been accepted for oral presentations at ASH. We're planning to host an analyst call following the release of the presentations at ASH. We will update you on the details in the coming weeks. Moving to slide 7. I would like to briefly recap on our LEAP program Order 1 in adult ALL. Order 1 is designed to combine three key features required for a standalone therapy in adult ALL. First, a very high level of anti-leukemic activity to cope with the rapid growth of the leukemic cells in the bone marrow.

5:56 Second, very long persistence to put long-term pressure on the leukemia and get to a transformational outcome. And third, a tolerable safety profile, which is particularly important for elderly patients. In terms of the market opportunity within the US and the top five European countries, approximately 3,000 patients every year reach the end of their treatment options, having failed chemotherapy and stem cell transplant, and often also Blinitumab or Inutuzumab, therefore requiring other options. Slide eight. From our phase one experience, we see that OtterOne is about two times as active as Blinitumab, the standard of care for these patients, while maintaining a comparable safety profile. At EHA, we could show first patients who reached 18 months in molecular complete remission without receiving a transplant.

6:46 Data at ASH will provide a longer follow-up. Currently, there are no CAR-key therapies approved for adult ALL, and we think we have a very significant opportunity with limited competitive pressure in this high medical need setting. So based on this data, turning to slide nine, we have started enrollment into the pivotal program, Auto-1 AL1, in adult ALL. As a reminder, the study has a phase 1b running and the pivotal program comprises a single arm study of approximately 100 relapsed refractory patients. The primary endpoint is complete remission rate and secondary endpoints include molecular complete remission rates, event-free survival, and duration of response. We're targeting data by the end of 21, assuming no COVID disruptions to clinical trial conduct.

7:34 Finally, on slide 10, I wanted to highlight the broader potential of the Auto1 franchise. In collaboration with our academic partners at UCL, we're exploring Auto1 across other B-cell malignancies. Exploratory studies include primary CNS lymphoma with a planned study starting Q4 this year, as well as obviously Auto1-22 in pediatric ALL. Let's now turn to slide 11, where I would like to switch gears and talk about Auto3, a program that is designed for the treatment of patients with diffuse large B-cell lymphoma. DLBCL is the largest NHL indication with approximately 10,000 patients in last line setting with a very high medical need. Two CAR-T products are approved, Trescart and Chemariah, plus Lysazel or otherwise known as JCAR17 is pending approval.

8:22 Auto3 is a dual targeting CAR-T product designed to minimize the risks of relapse due to antigen loss. In addition to the unique molecular design of Auto3, we're also using a short cover of Pembrolizumab to counteract PD-L1 mediated checkpoint inhibition as a second potential cause of relapse. On slides 12 and 13, as reported at ESMO, other three showed a high level of complete remissions combined with very favorable safety profile. Across all those cohorts, the overall response rate was 68% and the CRA was 54%. Both cytokine release syndrome and neurotoxicity rates are low across the study. In patients achieving a complete remission and despite robust CAR T expansion, No patient had experienced any neurotoxicity or high-grade cytokine release syndrome.

9:10 Turning to slide 14. Combining a high level of clinical activity with a good safety profile is particularly important in diffuse large B-cell lymphoma as the vast majority of patients are treated outside of centers of excellence and mostly in outpatient setting. In contrast, over 70% of all patients receiving CAR-T products in 2019 were treated in only 17% of the accredited Centers of Excellence certified to administer these therapies. This concentration on such small number of centers illustrates how very under-penetrated the DLDCL market is with CAR T therapies. Also, Medicare patients make up a large portion of the DLDCL patients. However, less than 13% of patients treated are on Medicare due to the reimbursement challenges in the Part A side. All in all, you can see this creates a significant opportunity for Auto3 to provide a solution here. So let's turn to slide 15.

10:04 As a reminder, the Alexandra Expansion Court is designed to further assess the feasibility of Auto III use in the outpatient setting. As I've mentioned, we expect to provide efficacy and safety data from patients treated in our outpatient court at ASH, as well as an update across the completed other cohorts. Turning to slide number 16. As we have discussed, Auto3 is a first-in-class CD19-CD22 dual-targeting car designed to combine a high level of clinical activity with a good safety profile for potential use across all settings of care. Finally, on slide 17, I would like to remind you of the broader pipeline of the Next Generation programs we're proud to be developing at the company. Most of the programs are set to move into first clinical trials in 2021.

10:50 The first is our Auto1-22 dual-targeting program Building on the Strong Pediatric Data for Order 1 and Addressing CD19 Antigen Loss-Driven Relapse in Pediatric ALL. With that, I will turn over the call to Andrew for a third quarter 2020 financial update. Andrew? Thanks, Christian, and good morning or good afternoon. So we're on slide 19, and it's my pleasure to review our financial results for the third quarter to September 30, 2020. So starting with our cash position, unrestricted cash at the end of the quarter totaled $177.7 million and that compares with $212 million at the end of June of this year. Net total operating expenses for the three months ending 30 September 2020 were $42.7 million and that is net of grant income of $400,000 and also licensed revenues of $200,000. That compares to net operating expenses of $35.6 million, net a grant income of $300,000 for the same period in 2019.

11:56 Research and development expenses increased to $33.5 million for the three months ended 30 September, from $27.3 million for the same period last year. Cash costs which exclude depreciation and amortization as well as share based compensation increased to 30 million dollars from 21.6 million dollars. The increase in research and development cash costs of 8.4 million dollars consisted primarily of an increase in compensation and employment related costs that's net of actually lower travel costs as a result of the the ongoing pandemic of 1.5 million dollars and that's due to an increase in employee headcount to support the advancement of our product candidates in clinical development.

12:48 Secondly, an increase of $3.6 million in project expenses as a consequence of the advancement of our clinical portfolio and that includes research and process development manufacturing activities necessary to prepare, activate and monitor clinical trial programs. Thirdly, an increase of $2.1 million in facility costs related to the commencement of a lease for a manufacturing facility and the continued scaling of our manufacturing operations. And fourthly, an increase of $1.4 million in IT infrastructure and support for information systems that's related to the conduct of clinical trials. And fifth, an increase of $0.8 million related to cell logistics, and finally an increase of $0.4 million in license fees which is offset by decreases in material purchases of $1.3 million.

13:44 Non-cash costs decreased to $3.5 million for the three months ending 30 September from $5.7 million for the three months ending 30 September 2019. This decrease is primarily related to share-based compensation expense that's included in research and development expenses, which decreased by $2.5 million as a result of the lower fair value of stock options recognised in the period. And this was offset by a $300,000 increase in depreciation. General and administrative expenses increased to $9.8 million for the three months ended 30 September. from $7.7 million from $5.6 million for the corresponding period last year.

14:31 There was an increase firstly of $1 million in commercial activities, an increase of $700,000 in patent and legal fees and audit fees and other costs that as a result of being a public company and thirdly an increase of $300,000 in compensation and employment related costs due to an increase of headcount. Non-cash costs decreased to $2.1 million for the three months ended 30 September 2020 and that's from $3 million for the corresponding period last year.

15:19 That decrease is also attributed to a share-based compensation expense as a result of the lower fair value of stock options recognized during the period. Interest income decreased by $0.5 million for the three months ended 30th September 2020 due to lower interest rates on cash that's held on deposit. Other expense income decreased by $5.8 million for the three months ending 30 September from other income of $3.3 million for the three months September 30, 2019 to another expense of $2.5 million. This is primarily due to a decrease of $7.1 million with regard to the weakening of the US dollar exchange rate relative to the pound during the three-month period.

16:10 and this is offset by lease termination gains of $1.3 million. Income tax benefit increased to $7.9 million for the three months ending 30 September 2020 from $4.6 million for the same period last June and this is due to increased research and development credits. As research and development credits grew at a faster rate than our net loss before income tax, this led to a higher effective tax rate attributable to these losses. Research and development credits are obtained at a maximum rate of 33.35% of our qualifying research and development expenses, and the increase in the net credit was primarily attributable to an increase in eligible research and development expenses.

16:57 Finally, net loss attributable to ordinary shareholders was $37.3 million for the three months ending 30 September 2020. and that compares to a loss of $27.2 million for the same period last year. The basic and diluted net loss per ordinary share for the three-month period of this year is 72 cents compared to a basic and diluted net loss per ordinary share of 61 cents for the three-month period ending 30 September 2019. and consistent with previous guidance, the company still anticipates that cash on hand provides a runway into 2022. And with that, I will now hand the call back to Christian to give you a brief outlook on expected milestones. Christian.

17:51 Thanks, Andrew. Let me conclude this part of the management discussion with a review of the upcoming milestones that news flow through the remainder of 2020 and in 2021. Let's move to slide 21. As we look at the rest of 2020 and into 2021, there are multiple clinical milestones and opportunities for value creation. Our chief and most imminent operational focus will be on continuing enrollment and dosing of patients in the potential pivotal phase 1B2 trial for Auto-1 in adult ALL. We expect to report clinical data on the Auto-3 Alexander trial at the forthcoming ASH meeting and to further update from the Auto-1 All-CAR-19 study. all the four data updated in PTCL is planned for 2021. In Q4 2020, we'll also look to progress auto 122, our next generation program for ALL into phase one clinical study in the pediatric setting together with our academic partner, UCL. In the first half of next year, we expect our next generation multiple myeloma program auto eight to enter the clinic.

18:50 And we also expect to progress in the same timeframe our first allergen eight program into a first exploratory trial with our academic partners. In 21, we will look to progress a number of other preclinical candidates to a point of Phase I readiness, including Auto V and our solid tumor programs Auto VI-MG and Auto VII, all of which we have recently updated you on at AACR. In conclusion, on slide 22, I'd like to recap the major messages from today's call. Auto I, our first pivotal program started in Q2 as planned. Given the positive safety and efficacy profile today, we believe Thank you very much. Thank you. At this time, I'd like to inform everyone, in order to ask a question, please press star 1 on your telephone keypad.

20:00 To withdraw your question, press the pound key. Your first question comes from the line of Jim Birkenhoff of Wells Fargo. Hi, guys. Thanks for listening to the call, and congrats on all the progress. I guess a couple from me. Just first, starting with auto 3, Christian, could you maybe remind us of your view on what profile would support outpatient use? Is there a certain time course to fever? A certain level of CRS, an ability to discern CRS from other causes of fever. Just as we go into ASH, just interested in your perspective on what would support an outpatient offering. Jim, thanks a lot for joining and thanks for the question. I think the most important aspect of the outpatient court is that we're replicating the safety profile that we have seen in our inpatient population.

20:49 because obviously that would give us a lot of confidence around the management of the patients and the consistency of the data in both in the outpatient setting compared to our current experience with the program. And that is ultimately the most important element. For those patients that will, for those patients experiencing an admission, obviously we're interested to understand the time of admission but then also the duration of the admission. to understand actually what's driving that and what the impact is in the setting. So those are the key parameters that we're looking for, and really the core is to really make sure and be clear that we can replicate the data that we have seen before in the outpatient setting, which is really the foundation for the program to be positioned in the outpatient setting.

21:43 great that's helpful and maybe just maybe for yourself and Andrew as well just on comments around the supply chain as we go through COVID it sounded like any disruption if there would be any would be around transport of the cells but are there other points of risk to the supply chain that you see and maybe update us on progress towards expanding the manufacturing and both in terms of Ability to supply the market and maybe diversifying across countries? Yeah, it's a very good question. Obviously, the infections can actually have impact at several levels. What we have seen in spring is that we have centers that were basically at the, frankly, at some of the epicenters at the time of the epidemic, particularly New York City. but also in London actually got to a point where they could no longer admit patients.

22:43 They could not continue to care for patients. In New York it was relatively short. It was a few weeks. In London actually it stretched substantially longer than that. So there is a risk that the centers that get overwhelmed or the areas that get overwhelmed with infections get to a place where they basically can no longer care for patients. that have need of transplant and that have need of a CAR T therapy. So that is sort of the extreme end of the range of issues that you can run into that literally the centers cannot continue to operate. And that certainly did happen in spring. As I mentioned, the way we could actually mitigate that risk and still continue to enroll was that we had other centers, particularly in the south of the US, actually were not impacted at all.

23:31 And we could continue to enroll in those centers. So that's really managing and navigating basically the hotspots. Now obviously as I indicated in my remarks, the situation is a bit more complex at this point from that perspective because we don't have just individual hotspots. We have a much more spread distribution of the infections and we have to see how the centers will cope. On the positive side, obviously a lot of the centers have learned enormous amount about the patient management and with that are I think in a much better position to cope with the infections and with the patients coming in. So that's one level. The second level is really around the logistics aspects and one of the things that we have seen certainly in spring and we're clearly seeing it across Europe at this point but also in the transatlantic routes is a massive reduction in available planes that are actually on a regular basis actually shoving back and forth.

24:39 The level of reduction we've seen across the Atlantic at the first peak of the pandemic was in the single digit range of what normal actually volume would be. That obviously has an impact on the number of flights that you have between destinations and with that OSAD logistics becomes a much more Thank you very much. I think we've been able to navigate the pandemic in a remarkable good way with an enormous effort of our team on the manufacturing side to continue to operate and actually maintain and sustain a robust operation throughout the entire period. And that's obviously all those principles we developed and all the processes we developed to sort of be able to do that are actually continue to operate.

26:00 and certainly will continue to operate through the upcoming months as we get into probably into way the second quarter of next year. And so from that perspective, I think we've been able to cope well. But, you know, there are certainly risks if there is a very high frequency of infections that would actually occur in the area where we are manufacturing, that that could eventually have an impact on frankly the workforce. that's something that's hard to predict at this point I think we've been able to manage that very well last time around and obviously we do everything and we apply everything we learn to make sure that we continue to do that in terms of diversification of manufacturing base that is obviously something that we're working on in a longer time frame and obviously our planning to build up operations certainly for commercial supply in the US but in the short term and to deal with the current environment we will not be able to sort of have a second Thanks for taking the questions and looking forward to the update at ASH.

27:13 Excellent. Thanks a lot. Appreciate it. Your next question comes from the line of Chad Messer of Needham and Company. Good morning, everyone. This is Gil for Chad and congrats on the progress and thanks for taking our questions. Just a quick one on, so we spoke about the data that's going to be presented to DASH from the outpatient cohort. Is there any guidance about how many months post treatment of these patients will be reported at? We haven't specifically guided on that, but what we obviously did do is we communicated that that cohort started after ASCO.

28:01 So it is actually a limited follow-up that we have on those patients, and we will not have the full data set for ASH as we're still actually managing patients and are finishing the dosing of the cohort. All right. And On your other programs of the solid tumor and autoids, should we expect any additional preclinical presentations to be coming on in the next few months? Well, I think there's opportunity for the conferences next year to present additional information as well as opportunity for basically publication of Non-clinical data in peer-reviewed journals as well.

28:50 I think both opportunities are there for the upcoming months and throughout frankly 2021. Thank you. And kind of lastly here, do you guys have any thoughts about the difficulties that we're seeing with some of the allogeneic programs that are currently ongoing and how would that contrast with the programs you have planned? I think it's very difficult to answer that, Gail. I mean, we've obviously also seen what everybody else has seen. You know, it's information on a small number of patients. I think it's really hard to interpret. And I think we just have to see what the data releases actually are at the conference.

29:36 And I think at that point, I think everyone will have a better understanding of what the challenges are that the companies are dealing with. It's difficult to read at this point. All right, that makes sense. Thank you for the update and we look forward to hearing more information at ASH and kind of progress on auto-free. Thank you. Excellent. Thanks, Lockheel. Bye-bye. Your next question comes from Gabriel Fung of Mizuho Securities. Hello, Christine, and thanks for taking the question. The first question here is that is there any chance that we could receive any more updates from CAR-PAL assessing Auto-1 in pediatric ALL and are there any learnings here that you have transferred to the next gen trial that you just started?

30:29 We're not going to have an update obviously on CAR-PAL at ASH but obviously a significant part of the data has been published in the Nature Medicine paper. I think the key learning from The CARPEL study has been sort of several-fold. The first is, obviously the product has a very significant level of clinical activity, very high molecular complete remission rate. Combined with a good safety, we didn't have high-grade cytokine release syndrome in the kids, which is very different from the experience with other programs. And we had exceptional persistence. Actually, last year we could show that we can actually see circulating CAR T cells after three years after dosing and those in numbers that allow you to actually analyze them by facts and understand kind of what the composition of the product is after three years.

31:21 So very unusual profile but what we also did see that for those patients that were unfortunate enough to relapse that actually 80% of those kids had relapsed with CD19 negative disease. and so what we're aiming to do with the Auto1-22 program is building on these exceptional properties of Auto1 with this very unusual level of persistence and add to that an optimized CD22 chimeric antigen receptor so that we can actually minimize the risk of antigen loss-driven relapse in those children. So those are, I think, in a nutshell, I think are the key learnings that we have from the study and frankly what informed The design of the next generation version of the product repeats.

32:11 Great, thanks. And another question here on Auto 5. And what in particular are you looking for in the Auto 4 interim that would prompt the green light for the Auto 5 clinical trial? Well, we're obviously working through the non-clinical work for Auto 5. Obviously, we didn't start at the same time with the two programs. We had Auto 4 first and then We're engineering the Auto5 and we share some of the information, particularly around the way we generated the particular binder for Auto5 at the ACR meeting in the middle of the year. So that program is actually running at this point, not dependent on the progress of the Auto4 program, but we're looking to catch up as much as we can with the Auto5 program.

33:00 Awesome, thanks. And just one really quick last one. On the allogeneic program, I'm just wondering, would you be able to disclose what the source of the cells would be there? Thank you. We will do that when the study is up and running and we're introducing the study at that point in time. Okay, good, thanks. Okay, all right. Thank you very much. Your next question comes from the line of Matt Phipps of William Blair. Hi, good morning. It's Hunter on for Matt. I was just wondering if you could give us an idea of how many patients we'll see data for here coming at ASH and then any color on what the next steps will be for Auto 3 coming out the other side of ASH.

33:49 Yes, well, thanks a lot, Drew, for joining. With regards to the update, obviously, that we're going to give at ASH, it obviously is over and above what we have presented at ESMO, where we presented the recommended phase 2 dose cohort with a bit longer follow-up as well. What we're doing now, what we've done since, is obviously enroll patients into the outpatient cohort, and we're going to have somewhere in the range of about 10 to 15 patients' worth of data over and above of what we have been able to present at ESMO. and then with regards to kind of the path into next year, obviously one of the key decisions is going to be based on that data is then actually the design of the next study and I will inform on that at the appropriate time.

34:40 Okay, thanks. Thank you. Your next question comes from Greg Savanavey of Goldman Sachs. Hey, good morning, good afternoon. Thanks for taking my questions. I've just got a couple. One, I noticed the latest update on auto eight of that study was moved to the first half of next year. Just wonder if that's just COVID related, logistics related, anything else beyond that. My second question has to do, you know, competitive landscape and DLDCL. We just saw J&J and GenMap take a bispecific CD3, CD20. into a phase three for refractory DL-BCL. And so I would love to get your thoughts on, if not that particular program, but CD3, CD20 bispecifics in DL-BCL. And then my third question actually is for Andrew.

35:35 Andrew, you've got a lot of programs that are moving into the clinic in 2021. Some study starts in the fourth quarter of this year. So as we're thinking about R&D, and while I don't anticipate you giving formal guidance for 2021, but can you just give us a sense of kind of R&D spend from this point going forward versus what we've seen previously? Thanks. Thanks, Craig. Appreciate it. So the first question was related to auto aid. That program we initially expected to be able to get going before the end of the year. That will happen now beginning of next year. is in part related to kind of the impact that COVID had middle of the year at our academic partner and took a few weeks basically we're lost in the process and I think we're in a good place now in terms of catching up time.

36:35 So not a significant change from where we look at the program. The second question related to the bispecifics and T cell engagers in particular case CD20, CD3 T-cell engagement services, a whole series of programs, GenMap, you got Regeneron, you got Tenantech, you got others as well. I think what we've seen across all of these programs is that sort of single agent activity in the range of about 20% CR rate that then actually were combined with other modalities to sort of increase the activity. I think what we see is clearly activity. The durability, I think, is still something that we need to see. In fact, there's more information required.

37:20 But it's an active therapeutic modality. There's no question about it. But it also seems to be not quite at the level in terms of activity of what we can see with the autologous CAR-T programs. So a relevant modality, a modality that also is in competition with the CD19 ADCs as well that are also moving into the space. all having very similar types of outcomes and I think there's going to be a range of opportunities in that range of activity. As far as we can tell at this point there is a difference and still quite significant level of difference in terms of the outcome if we compare to the autologous CAR T programs at this stage. And then the final question was related to the R&D expenses.

38:11 I think one of the important things is, as you'll see with our earlier pipeline, is that we're collaborating quite extensively with academic institutions to run the early part of those trials. It actually allows us to manage the R&D expenses in quite a significant way so that the key investments that we're making by sort of a vast margin are going into the late-stage trials. Maybe, Andrew, you want to continue that. Yeah, no, I can, Christian. But I think you've hit sort of the nail on the head there, which is the use of academic programs to manage expenditure through the early part of these studies.

38:56 So R&D expenses will obviously increase, but there's an element that we've seen through 19 and 20 that's sort of an establishment sort of cost particularly in terms of the manufacturing side of things that effectively then as that sort of comes down obviously the trial expenditure sort of goes up so there will be an increase sort of through particularly sort of the middle of next year in terms of when you look at Q2, Q3 then it probably starts to come down a little bit in Q4 so We're still confident that the statements that we make in terms of cash runway will have cash into 2022.

39:46 And our final question comes from Kelly Shive, Jefferies. Hi, thank you for taking my questions. I will continue the question regarding the our patient setting cohort. And what type of data would support a pivotal trial? For example, do you set a threshold on certain proportion of patients for readmission or getting into ICU? And also it's a related question regarding the toxin profile of auto-sweat. Do you see the pattern of CRS or neurotoxic occurrence is differentiated from other CD19 CAR-Ts? For example, have you observed the lay-down site for CRS and the neurotox?

40:31 And also, what's the immediate duration of each tox signal? Thank you. Thanks, Kelly. Thanks for the questions. In terms of the outpatient court, as I indicated to Jim's question as well, is really to demonstrate that we can replicate the adverse event profile from safety profile that we've seen in the inpatient cohort as well so that we can basically show that the behavior of the product is the same whether we're treating the patient inpatient or outpatient, we see the same manifestations. Now, one of the important things with regards to the toxicity profile of the program is that when we look at patients that are responding to CAR T therapy, so getting to complete remission, Those patients tend to have a lot of CAR T expansion and that is actually where you see with most other programs a significant level of adverse events directly related to the CAR T expansion and the activity of the CARs in those patients.

41:31 Surprisingly, that is actually not what we're seeing. When we look at those patients that are actually achieving a CR, we don't see actually that they develop neurotoxicity. They have no neurotoxicity that we have observed and they also have limited cytokine release. They have no high-grade cytokine release that we've observed so far. And that, I think, is important because it gives us a profile that is actually quite remarkable in terms of the CAR T-mediated adverse events. Obviously, these patients do have all sorts of adverse events that are disease-related, but those are obviously shared across any therapeutic modality you'd be applying to these patients. So when it comes to the specific CAR T-related adverse events, we believe that our profile is remarkably good and give us a lot of opportunity and room.

42:21 And so from an outpatient perspective, obviously we want to see that replicated. Obviously, if there are admissions, we're obviously interested in what are the reasons for those, the duration of it. But also, obviously, what is important is get an understanding whether those patients need it any form of intense intense management and clearly that is sort of the key challenge when you think about these patients out when they have to get admitted if you actually have to have ICU access that is actually a much more significant burden on the respective institution than if you just actually have to do an antibiotic or a prophylaxis just to manage patients and be sure that there is no infection ongoing. so I think those are the parameters that we're looking at and obviously we want to see that in fact we can replicate the adverse event profile but also that if there are reasons for admission that those admissions actually are relatively short and also do not require ICU intervention.

43:24 Thank you Christian, very helpful. May I have a follow-up question that regarding As the CAR-T space actually, the competition in CAR-T space actually hitting up, especially in the salvage settings, do you have a plan to moving auto one, auto three into earlier lines of therapy? I think with every, you know, oncology indication, I think you'll start at the back end of the disease and you work your way up towards the earlier lines of therapy. and that is certainly what we would intend to do both in the ALL setting but also in the OBCL setting. But the first thing to establish is establish yourself in the last line setting and then actually move from there. Obviously as you go up into early lines of therapy, you're also at that point you're moving and basically have to demonstrate activity and profile against the established standard of care. So the nature of the trials start to look different and the time it takes to conduct the trials also tends to increase.

44:25 Thank you very much. Looking forward to your ASH update. Thanks a lot, Kelly. There are no further questions at this time. I would now like to turn the call back over to Christian Itin, CEO, for any additional or closing comments. Thank you very much. Thanks all for joining. We appreciate this is an incredibly busy season, particularly with the overlay of the ASH abstract coming out and a lot of them released quite a bit early. So we appreciate you taking time for the presentation today and we'll give you an update obviously when we get to ASH. Thank you very much. Bye-bye.

45:10 Thank you. That does conclude today's conference call. You may now disconnect.