The list of approved cell therapies is growing every year, and potentially, Autolus Therapeutics plc (NASDAQ:AUTL), the United Kingdom based T-cell specialist could be the next to enter the commercial markets.
As a reminder, "autologous" cell therapies work extraction a patients' cells, transportation to a lab, genetically engineer the cells to be able to target, attack and destroy, certain types of cancerous cells, and then reinfusing them back into the patient. "Allogeneic" cell therapies do similar, but using cells extracted from a donor, rather than the patients themselves.
To date, only autologous therapies have been approved. Chimeric antigen receptor (CAR) T-cell therapies include Novartis' (NVS) Kymriah, Gilead Sciences' (GILD) Yescarta and Tecartus, Bristol Myers Squibb's (BMY) breyanzi and abecma, and Legend Biotech (LEGN)/Johnson & Johnson's (JNJ) carvykti. All of these therapies are approved to treat hematological cancers.
More recently, Iovance's tumor inflitrating lymphocyte (TIL) cell therapy Amtagvi has been approved to treat metastatic melanoma, a solid tumor cancer, Immunity Bio's (IBRX) natural killer (NK) cell therapy approved to treat bladder cancer, and Adaptimmune's (ADAP) Teclera approved to treat metastatic synovial sarcoma.
Outside of oncology, Crispr Therapeutics (CRSP) an Vertex (VRTX) Casgevy is approved to sickle cell disease and transfusion dependent beta thalassemia, as is Bluebird Bio's (BLUE) Lyfgenia.
Autolus' therapy obe-cel is an autologous CAR-T cell therapy. It is indicated to treat relapsed/refractory (r/r) adult B-cell Acute Lymphoblastic Leukemia (B-ALL). Its Prescription Drug User Fee Act (PDUFA) date -- when the Food and Drug Agency (FDA) announces whether it has approved the drug for commercial use, or sends the company a Complete Response Letter (CRL) outlining reasons for rejection -- arrives on November 16th, 2024.
Cell therapies are capable of achieving miraculous results in patients, particularly those with later stage disease, including complete responses that last for years. However, the therapies are arguably not entirely derisked, durability is sometimes a problem, treatment is long and complex. It can involve pre- and post-conditioning regimes that can last for months, and require hospitalization, and they are expensive too -- usually costing >$500k for a course of therapy.
As well as having its Biologics License Application (formally requesting commercial approval) accepted by the FDA, Autolus' Marketing Authorization Application (MAA) has been accepted by the European Medicines Agency (EMA), raising the prospect of the therapy being approved in the two largest pharmaceutical markets globally.
Like Breyanzi, Kymriah, Yescarta, an Tecartus -- which achieved revenues of respectively $364m, $508m, $1.5bn and $370m in 2023 -- obe-cel targets CD-19, an antigen on the surface of B cells and cancers derived from B cells, however only tecartus has approval in B-ALL.
As we can see above, Autolus believes obe-cel's differentiated mechanism of action (MoA) gives it several distinct advantages, such as a shorter half-life, less toxicity, and better persistence. Unlike other cell therapies, obe-cel is administered as two infusions "using a tumor burden-guided dosing schedule."
The data that Autolus hopes will be sufficient to secure commercial approval comes from a Phase 1b/2 trial, which is a little unusual, as normally a Phase 3 "pivotal" study is required. Nevertheless, the data from the "FELIX" study is summarised by Autolus as follows:
The ORR (CR/CRi) in all patients who received obe-cel in the FELIX study was 78% (99/127 patients). At the February 7, 2024, data cut-off date, the majority of ongoing responders showed durable responses. Among the responding patients, at a median follow up of 21.45 months (range: 8.6-41.4), 40% were in ongoing remission without subsequent SCT or other therapy, while 18% proceeded to subsequent SCT while in remission, 5% started new anti-cancer therapy while in remission and 36% relapsed or died. The median event-free survival (EFS) was 11.9 months and median overall survival (OS) was 23.8 months and the estimated 12-month EFS and OS rates were 49.5% and 61.1% respectively.
ORR means objective response rate, i.e., some signs of efficacy, although in this case, responses were either complete remission (CR) or CR with incomplete hematological recovery (CRi). The rate of 78% appears to be superior to the 65% (in 54 evaluable patients) achieved by Tecartus in its ZUMA-3 study, although that data was collected at 12 months -- the median follow-up in the FELIX study data was 21.5 months.
At four years, data released by Gilead in relation to the ZUMA-3 study showed:
a median OS of 25.6 months and a four-year OS rate of 40% (95% CI, 28-52) in all treated patients with a safety profile consistent with that observed in the three-year analysis.
That 40% rate seems to match obe-cel's rate of "ongoing remission without subsequent SCT" (stem cell therapy), although a further 18% who did undergo SCT remained in remission also, the data shows.
From a safety perspective, obe-cel also appears to have the edge over Tecartus -- according to analysis from Precision Medicine Online, discussing FELX study results presented in June 2023:
in the FELIX study, only 3 percent of patients experienced grade 3 or higher cytokine release syndrome and 7 percent experienced grade 3 or higher ICANS. In the retrospective ROCCA study of real-world outcomes on Tecartus, which was also reported at ASCO on Friday, 6 percent of patients who received Tecartus experienced grade 3 or higher cytokine release syndrome, and 39 percent experienced grade 3 or higher ICANS (Immune effector cell-associated neurotoxicity syndrome).
In summary, my conclusion would be that the FDA is more likely than not to approve obe-cel in November, and ditto the EMA, when its review of Autolus' MAA. The company has its own manufacturing facility in Stevenage, UK, which, I assume, has been inspected by the FDA -- barring any adverse findings, based on efficacy, safety, and chemistry, manufacturing and controls (CMC), I'd call it 70/30 in favour of approval.
As we can deduce from Tecartus' ~$370m of revenues in 2023, r/r B-ALL is not necessarily going to be a lucrative indication for Autolus - the company itself apparently expects peak revenues to be in the region of ~$300m.
I would expect obe-cel, even with its double-dosing regime, to be priced similarly to Tecartus, at ~$450k. It is not just Tecartus obe-cel would be competing with -- Blincyto, an infusion drug developed by Amgen that targets both CD3 and CD19, earned revenues of $861m last year, and it is speculated that obe-cel could offer a more durable response.
Autolus says there are ~8k new cases of adult ALL globally each year, but anticipates the addressable market for obe-cel to be ~3k patients, which translates to a market opportunity of ~$1.5bn.
Recently, the market appears to be nonplussed with Autolus, as the share price has fallen by >25%, to $4 at the time of writing, valuing the company at $1.2bn -- as recently as February, shares traded >$7 per share.
The company IPOed in June 2018, raising $156.5m via the sale of 10,147,059 American Depositary Shares (ADS) representing the same number of ordinary shares, at a price of $17, so there has been little reward for shareholders to date. I don't think the upcoming PDUFA date, even if approval is granted, will have a major impact on the valuation, although I'd speculate we might see a 15% -- 25% uplift.
Autolus has plenty of funding in place for a full launch of obe-cel, revealing a cash position of >$700m as of the end of Q2, and a six-month net loss of $(111m)
Outside obe-cel, Autolus' pipeline has barely broken beyond the Phase 1 clinical study stage, as we can see below:
Nevertheless, I highlight a couple of areas of potential. Firstly, the ability of obe-cel to show in a commercial setting -- and through further data readouts, an update from the FELIX study is due in December, at the ASH conference -- that it is a best-in-class cell therapy.
Cell therapies are becoming increasingly established, with more authorized treatment centers opening, insurers becoming more open to providing reimbursement, and physicians more comfortable recommending treatment to patients.
Establish itself as standard-of-care in B-ALL, superior to blincyto and tecartus, with a best-in-class safety profile, and the multiple label expansion opportunities in play, in Non-Hodgkin's Lymphoma, for example, become more realistic and compelling from a commercial perspective. Autolus' underlying technology, and ability to develop more candidates, perceived as having greater value by Wall Street.
Autolus could become the go-to source of standard-of-care cell therapies, which is an exciting prospect for the company, and there is some initial evidence that this is a realistic prospect.
The second opportunity is within the autoimmune space. Wall Street is expectant -- based on a somewhat obscure study in patients with systemic lupus erthematosus (SLE) that produced some miraculous results -- that cell therapies can succeed in treating autoimmune disease, many of which are B-cell mediated, like many hematological cancers.
Autolus has jumped on the bandwagon and is testing obe-cel in a study in SLE patients, and has promised data before the end of this year. Management was peppered with questions about the study and opportunity on the Q2 earnings call, and if the data are positive, expect to see Autolus' share price double overnight.
A third opportunity is also worth mentioning, and that is the partnerships Autolus has established with three Pharmas of genuine significance -- BioNTech (BNTX) (see my February note for more detail), which has acquired $200m of equity in Autolus, Moderna (MRNA) the messenger-RNA specialist, and Bristol Myers Squibb (BMY). There are milestones on the table from all three partnerships, and while achieving them is not necessarily likely, they remain in play and provide additional catalysts to monitor.
Since my first note on Autolus in July 2020, when I recommended buying the stock, Autolus' shares have fallen in value by >70%, which tells its story around the at times frustratingly slow progress towards a first commercial approval.
Today, however, we may be just a couple of months away from that approval, and by and large, Autolus has achieved most things it has set out to do, including completing a new manufacturing facility.
Bearing in mind Warren Buffett's assertion that when a stock is cheap, it is actually a good thing, so long as you still believe in the overriding investment thesis, I am going to maintain my "Buy" rating on the stock.
Investing in cell therapy companies is tough. Adaptimmune (ADAP), for example, gained no upside momentum from the recent approval of Teclera. However, I still believe Autolus may have a very marketable asset on its hands, demonstrating a competitive efficacy and safety profile, that, if label expansions could be secured, may one day challenge for "blockbuster" status.
Plus, with other catalysts in play, such as the autoimmune study, and partnerships, plus >$700m cash, the company feels sufficiently derisked to keep believing it will become the next commercial cell therapy success story.