Autolus Therapeutics: Near-Term Catalyst And Several Bio Deals Could Shift Momentum – AUTL

Autolus Therapeutics (NASDAQ:AUTL) is a great speculative biotech play to look into. The reason why I state that is because there is a major catalyst which is approaching. There is going to be the release of data from the pivotal FELIX phase 2 clinical study using obe-cel for the treatment of patients with relapsed/refractory Acute Lymphoblastic Leukemia (ALL) in Q4 of 2022. Should this trial meet on the primary endpoint of the study, then the company expects to be able to file a Biologics Licensing Application (BLA) to the FDA by the end of 2023. However, investors will not only be left with that particular catalyst, because before then Autolus expects to present data from the pivotal FELIX study at a medical conference in mid-2023. What investors/traders can look forward to in the short-term would be several presentations which will be shown at the upcoming American Society of Hematology (ASH) Annual Meeting being held on December 10th -13th of 2022. One of the presentations will include the use of obe-cel in a poster presentation for the treatment of patients with B-cell Acute lymphoblastic Leukemia (ALL) and B-cell Non-Hodgkin’s Lymphoma (NHL) patients as well. Obe-cel has been shown to work in several studies with a pretty good safety profile. Again, positive data in the ongoing pivotal phase 2 FELIX study, will mean the potential for a BLA filing of Obe-cel.

Obe-Cel Proof Of Action In Patients With Acute Lymphoblastic Leukemia

The main programs in Autolus’ pipeline would be the use of obe-cel, which is being explored in the ongoing pivotal phase 2 FELIX study. In this trial, obe-cel is being used to treat patients with relapsed/refractory Acute Lymphoblastic Leukemia. Acute Lymphoblastic Leukemia (ALL) is a disease of the blood and bone marrow and without patients being treated it spreads rapidly. Not only that, but in addition there is no clear cause of why it occurs. Even though this cancer starts out in the bone marrow, it can spread to other parts of the body. Such other parts of the body it can spread to are the lymph nodes, central nervous system (CNS) and even the testes. The damaged cells coming from the bone marrow become leukemic cells and thus turn into leukemic lymphoblasts. This is a major problem, because they block the production of normal cells. With that said, there is a reduction in the amount of healthy blood cells such as:

• Red blood cells
• White cells
• Platelets

Reduced amounts of red blood cells lead to anemia, which causes shortness of breath and fatigue. A reduction in white blood cells, leads to neutropenia, which in essence means the immune system can’t do well to fight off infections. A low number of platelets leads to thrombocytopenia, which can cause bleeding and easy bruising with no cause.

Why is it necessary to get another treatment out there like obe-cel? Well, that is because investigators have attempted to combine chemotherapies to treat patients with relapsed/refractory B-cell Acute Lymphoblastic Leukemias (r/r B-cell ALL) with not much success. There is a CD19-directed CAR-T cell product known as Kymriah, however, it only targets the pediatric population. That is, B-ALL patients who are age 25 and younger after having failed 2 prior lines of therapy, or after failure or intolerance of a second-generation tyrosine kinase inhibitor (TKI). Whereas, Autolus Therapeutics is going after the adult patient population with B-ALL instead. In addition, there is another FDA approved drug by the name of Tecartus, which is also a CD19-directed CAR-T cell therapy for use in adult patients with relapsed/refractory B-ALL, including after the first relapse. The hope is that obe-cel can become another great available option for adults with B-ALL. Better in what way? Well, it all boils down to the uniqueness of obe-cel. That is, two key areas of improvements which are as follows:

• Lower affinity for CD-19 than other CAR T products – this means CAR T cell over-activation ad exhaustion don’t occur – In essence, this has the potential to allow obe-cel to work for an extended period of time
• Lower half-life – thus potential to bring down toxicity associated with CAR T cells – As an example, obe-cel has a half-life of 9.8 second, whereas Kymriah has a half-life of 21 minutes

To recap, lower affinity binding would allow the release of CAR T-cells rapidly for lower toxicity, such as a reduce amount of cytokine release syndrome (CRS) events. Secondly, such a binding method would also limit T-cell exhaustion, which allows obe-cel to work for an extended period of time.

Such a long duration of response was shown from a prior phase 1 clinical study, whereby obe-cel was given to relapsed/refractory B-ALL patients who were the age of 16 and older. Of course, before they received treatment with obe-cel, each patient had to undergo lymphodepletion. This was lymphodepletion with 30 mg/m² of intravenous fludarabine over 3 days and a single 60-mg/kg dose of cyclophosphamide. I believe an important number to track on duration response (DOR) would be the event-free survival (EFS) rate of 68.3% at month 24. Then, overall survival rate (OSS) at month 24 was 58%. Lastly, about 85% of patients with a response, achieved minimal residual disease (MRD)-negative complete response (CR) at month 1 and 70% experienced an ongoing MRD-negative complete response at month 3. The bottom-line from the clinical data is that EFS rate is expected to be roughly about 1 year for the patients who take obe-cel, which is what should be seen from CAR-T therapies. This data is pretty good, considering that patients who entered the study had taken on average about 3 prior lines of therapy. If long-term data can also continue to prove longer duration of response of obe-cel in this r/r adult B-ALL population, then it will be considered a successful therapy.

The ongoing phase 2 FELIX study, using obe-cel for the treatment of patients with r/r B-ALL, will be important in reaffirming the data observed from the prior phase 1 study. About 185 patients are expected to be recruited into this particular study. The primary endpoint is going to look at the objective response rate (ORR). Secondary endpoints to be looked at will include:

• Progression-free survival (PFS)
• Overall-survival (OS)
• Safety
• Duration of response (DOR)

Hopefully, the primary endpoint of the study will be met. It is expected that Autolus will release results from the pivotal phase 2 FELIX study in Q4 of 2022. If the trial ends up being positive, meaning the primary endpoint is met, then that would allow the biotech to be able to file for regulatory approval of obe-cel for the treatment of patients with r/r B-ALL by the end of 2023. However, it also intends to present the final data from this phase 2 FELIX study at a medical conference in mid-2023 as well.

Financials

According to the 6-K SEC Filing, Autolus Therapeutics had $163.1 million in cash as of September 30, 2022. However, post this date, it received approximately $19.1 million in relation to its 2021 U.K. research and development tax credit claim. I wouldn’t worry too much about this biotech needing to raise any additional cash in the near-term. Why do I make that claim? Well, because it made a deal with Blackstone back in 2021. This deal brings about a total transaction amount of $250 million. Some has already been paid out and the rest is contingent upon Autolus meeting specific milestones. The cash on hand, plus the milestone payments expected from Blackstone, will allow the biotech to fund its operations into 2024.

Risks To Business

There are several risks that investors should be aware of before investing in Autolus Therapeutics. The biggest risk to consider would be the upcoming release of results from the phase 2 FELIX study, which is using obe-cel for the treatment of adults with r/r B-ALL. These results are expected to be released in Q4 of 2022 and there is no guarantee that the primary endpoint of this study will be met. A failure in this pivotal study would mean that a BLA filing for obe-cel will not occur for this patient population. In addition, it is highly unlikely that the release of such failed data at a medical conference in mid-2023 would do much to help out the stock price. A second risk to consider would be the release of the updated results expected at the upcoming December 2022 ASH medical conference. This will include three poster presentations of updated data from obe-cel, AUTO1/22 and AUTO4 at this medical conference. The hope is that data from these poster presentations will be positive, but there is no guarantee that the market will view this data in a positive manner. A final risk to consider would be that with respect to the current cash position that Autolus has on hand. The reason why is because the Blackstone deal, which was established in 2021 for financing, is contingent upon several milestones being met. If such milestones are not met, then the biotech would not be entitled to receive this cash. In that instance, it would be forced to raise cash by other ways such as selling shares of its common stock, debt financing, or by several other methods.

Conclusion

The final conclusion is that Autolus Therapeutics is a great speculative biotech play to look into. The reason why I say that is because it has several catalysts for traders/investors to look forward too. The biggest catalyst of them all would be the release of updated results from the pivotal phase 2 FELIX study, which is using obe-cel for the treatment of patients with relapsed/refractory B-cell Acute Lymphoblastic Leukemia (B-ALL). These results are expected any day now in Q4 of 2022. If the primary endpoint is met, then that would allow it to move forward to file a Biologics Licensing Application (BLA) to the FDA by the end of 2023. In addition, it would create another catalyst opportunity, in which updated results would be released from this same pivotal study in mid-2023. Not only that, but Autolus has two nice licensing deals in place with big pharmaceutical companies. One pharmaceutical company is Moderna (MRNA) and the other is Bristol-Myers Squibb (BMY). With respect to the Bristol-Myers Squibb deal, the goal is to incorporate Autolus’ proprietary RQR8 safety switch technology. Under the terms of the deal, Autolus is entitled to receive an upfront payment for a set of initial cell therapy programs being advanced forward. There is potential for near-term exercise option fees and development milestone payments. In addition, Autolus would be entitled to receive royalties on net sales for products that reach the market. Why the switch? The safety switch incorporates the use of Caspase 9 (rapaCasp9) using rapamycin as the key molecule to turn off T-cell activation, which is crucial to halting a therapy if it is causing severe adverse events. That’s just one technology in play, Moderna licensed Autolus’ proprietary binders in another deal. The goal is to use these binders which have been developed to selectively bind to their respective targets. It is believed that selective binding using T-cell therapies against oncology targets may provide a safer/superior treatment. Both of these deals are not large ones, but they do offer proof that Autolus does indeed have some good technologies in place. Based on the release of results from the pivotal phase 2 FELIX study using obe-cel against r/r B-cell ALL in Q4 of 2022, plus several other possible catalysts expected in 2023, these are the reasons why I believe that Autolus Therapeutics is a great speculative biotech play to look into.