Autolus Therapeutics plc
For the period ended Dec 31, 2024. Filed Mar 20, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 20, 2025
AUTL$1.28+1.6%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-21.
0001730463-24-000048
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-20.
0001730463-25-000019
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 493 previous paragraphs and 532 current paragraphs.
312 unchanged; 161 reworded; 40 added; 19 removed; 1 previous and 19 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Our business is subject to numerous risks. You should carefully consider and evaluate each of the following factors as well as the other information in this Annual Report on Form 10-K, including our financial statements and related notes, in evaluating our business and prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the following risks actually occur, our business and financial results could be harmed. In that case, the trading price our ADSs could decline.
Current report
We are an early commercial-stage biopharmaceutical company and have incurred significant losses since our inception. We expect to continue to incur losses for the foreseeable future.
Current report
•make required milestone, royalty and revenue sharing payments to third parties under license and collaboration agreements;
Current report
•our ability to execute our commercialization strategies for and generate revenue from sales of AUCATZYL and, if approved, our other product candidates;
Current report
Risks Related to the Commercialization of AUCATZYL and Our Other Product Candidates
Current report
•the timing of market introduction of those products compared to competitive products;
Current report
•the continued safety and efficacy of those products;
Current report
•physicians, hospitals, cancer treatment centers, and patients considering our product and product candidates as a safe and effective treatment;
Current report
•the potential and perceived advantages of our product and product candidates over alternative treatments;
Current report
•relative convenience and ease of scheduling and administration, including as compared to alternative treatments and competitive therapies; and
Current report
The incidence and prevalence for target patient populations for AUCATZYL and our other product candidates have not been established with precision. If the market opportunities for AUCATZYL and our other product candidates are smaller than we estimate, our revenue and ability to achieve profitability will be adversely affected, possibly materially.
Current report
The total addressable market opportunity for AUCATZYLand our other product candidates will ultimately depend upon, among other things, acceptance by the medical community and patient access, product pricing and reimbursement as well as expansion into additional markets. The number of patients who may benefit from AUCATZYLor our other future products may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business. We may not be successful in our efforts to identify additional product candidates. Due to our limited resources and access to capital, we must prioritize development of certain product candidates, which may prove to be the wrong choice and may adversely affect our business.
Current report
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of AUCATZYL or any other products that we may develop.
Current report
We face an inherent risk of product liability exposure related to the testing of our product and product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
Current report
•changes in U.S. and non-U.S. regulations and customs, tariffs and trade barriers;
Current report
For example, the U.S. government has threatened to impose new tariffs on imported products from various foreign countries. As we produce our clinical and commercial supply of drug in the United Kingdom, the import of clinical and commercial supply of our products into the United States could be impacted to the extent any such tariffs are imposed and applicable to pharmaceutical products. The impact of such tariffs would be subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become available. Tariffs on our products would increase our cost of importing clinical and commercial product into the United States, which would increase the cost of revenue from sale of therapies and reduce our margins on the sale of our products.
Current report
We expect to continue to expand our development, commercial and regulatory capabilities and have recently developed sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
Current report
We, and the third parties on whom we rely in part for sales, marketing and distribution capabilities, may not be able to effectively market, sell and distribute AUCATZYL or our other product candidates, if approved.
Current report
We have invested, and expect to continue to invest, significant financial and management resources to develop internal our sales, distribution and marketing capabilities, particularly in anticipation of the commercial launch of AUCATZYL. With respect to jurisdictions outside the US, we will need to commit resources to buildings these capabilities prior to any confirmation that obe-cel or our other product candidates will be approved in a territory.
Current report
We utilize a hybrid model that includes in-house and contracted resources in the United States and Europe, and we have engaged third parties and may engage additional third parties to provide these services. We may enter into agreements with third parties to develop our commercial infrastructure for the commercial launch and continued sale of AUCATZYL and any product candidates that receive approval, including to potentially retain, train and deploy a direct sales force, but we have limited experience operating or managing a third-party sales force as a company. There can be no assurance that the capabilities of the third parties will be more effective than an internally developed sales organization. If third parties fail to hire, train, and retain qualified sales personnel, market our product successfully or on a cost-effective basis or otherwise terminates our relationship, our ability to generate revenue will be limited and we will need to identify and retain an alternative organization or develop our own sales and marketing capability. This could involve significant delays and costs, including the diversion of our management’s attention from other activities. We may also need to retain additional consultants or external service providers to assist us in sales, marketing and distribution functions, and may be unsuccessful in retaining such services on acceptable financial terms or at all.
Current report
There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a commercial organization is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Current report
•the inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
Current report
•the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the benefits of prescribing any future product that we may develop;
Current report
Obtaining and maintaining regulatory approval of AUCATZYL or our other product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
Current report
Changes in funding for the FDA or comparable foreign regulatory authorities, the SEC, and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies or authorities from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
Current report
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the FDA and other government agencies on which our operations may rely are subject to the political process, which is inherently fluid and unpredictable.
Current report
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory authorities, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Current report
Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations due to insufficient funding of the SEC and other government agencies or due to a government shutdown that affects the SEC. Similar considerations are applicable in relation to foreign regulatory authorities.
Current report
The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. These actions may include, for example, directives to reduce agency workforce, rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation (“CMMI”) to consider new payment and healthcare models to limit drug spending and eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”), the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
Current report
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad, particularly in light of the recent U.S. presidential and Congressional elections. We expect that additional state and federal health care reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services, which could result in reduced demand for our development candidates or additional pricing pressures, or otherwise adversely impact our operations.
Current report
In light of the fact that the United Kingdom has left the EU, Regulation No 2021/2282 on HTA will not apply in the United Kingdom. However, the UK Medicines and Healthcare products Regulation Agency (“MHRA”) is working with UK HTA bodies and other national organizations, such as the Scottish Medicines Consortium (“SMC”), the National Institute for Health and Care Excellence (“NICE”), and the All-Wales Medicines Strategy Group, to introduce new pathways supporting innovative approaches to the safe, timely and efficient development of medicinal products.
Current report
In light of the entry into application of the CTR on January 31, 2022, we may be required to transition clinical trials for which we have obtained regulatory approvals in accordance with the CTD to the regulatory framework of the CTR. Transition of clinical trials governed by the CTD to the CTR was required for clinical trials which had at least one site active in the EU on January 30, 2025. A transitioning application had to be submitted to the competent authorities of EU Member States through the Clinical Trials Information Systems and related regulatory approval obtained to continue the clinical trial past January 30, 2025. This required financial, technical and human resources.
Current report
It is currently unclear to what extent the UK will seek to align its regulations with the EU in the future. The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation). On January 17, 2022, the UK Medicines and Healthcare products Regulatory Agency, or MHRA, launched an eight-week consultation on reframing the UK legislation for clinical trials. The UK Government published its response to the consultation on March 21, 2023 confirming that it would bring forward changes to the legislation and such changes were laid in parliament on December 12, 2024. These resulting legislative amendments will, if implemented in their current form, bring the UK into closer alignment with the CTR. Failure of the UK to closely align its regulations with the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries and/or make it harder to seek a marketing authorization for the Company's product candidates on the basis of clinical trials conducted in the United Kingdom.
Current report
In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation and on April 10, 2024, the Parliament adopted its related position. The proposed revisions remain to be agreed and adopted by the European Council. Moreover, on December 1, 2024, a new European Commission took office. The proposal could, therefore, still be subject to revisions. If adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a number of changes to the regulatory framework governing medicinal products, including a decrease in data and market exclusivity opportunities for our product candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, our development plans may be impacted.
Current report
We previously identified material weaknesses in our internal control over financial reporting. If we experience additional material weaknesses or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately report our financial condition or results of operations.
Current report
In addition, in connection with our review procedures for the three months ended March 31, 2024, we identified an additional material weakness due to an insufficiency of controls over complex accounting transactions. The lack of controls did not allow us to identify, understand and evaluate the impact of certain key judgments that arose during the three months ended March 31, 2024 related to the BioNTech Agreements. Our process, as designed, was inadequate to deal with the complexity of the accounting for the transaction and did not allow for an effective and timely evaluation of these matters and their impact on our financial statements. We have taken steps to remediate the material weakness by (i) implementing structured project plans and project monitoring techniques; (ii) the use of summary outputs allowing for earlier review of key judgements, estimates and other factors which impact the financial statements; and (iii) enhancing our review process, and controls including building in more time to allow for its effective operation and iv) assessing resourcing needs and capabilities. This material weakness was remediated at December 31, 2024, but there can be no assurance that we will not identify further control deficiencies in this area.
Current report
Our existing trademarks and any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.
Current report
•our failure to successfully execute our commercialization strategy with respect to AUCATZYL;
Current report
•actions or announcements by third-party or government payors with respect to coverage and reimbursement of AUCATZYL;
Current report
We have been advised by HMRC that the sale of our obe-cel CAR T therapy to U.K. customers in the future will be considered an exempt supply from a U.K. VAT perspective. Consequently, Autolus Limited has reassessed and commenced restricting the amount of U.K. VAT it reclaims. The restriction is based on an estimate of our U.K. market turnover as a percentage of global turnover. We currently expect revenue from U.K. customers to only represent a small proportion of our overall activity. If the proportion of revenue from U.K. customers increases this would further restrict the amount of U.K. input VAT which we are able to recover.
Removed paragraphs (19)
Previous report
An investment in our ADSs involves a high degree of risk. You should carefully consider the risks and uncertainties described below, and all other information appearing elsewhere in this Annual Report, including our consolidated financial statements and the related notes hereto, before making an investment decision regarding our securities. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects.
Previous report
We have incurred significant losses in every year since our inception. We expect to continue to incur losses over the next several years and may never achieve or maintain profitability.
Previous report
•make required milestone and royalty payments to UCLB or other third parties, under license agreements pursuant to which we were granted some of our intellectual property rights;
Previous report
•make required sales milestone and royalty payments to BXLS V Autobahn LP (“Blackstone”) under our collaboration and financing agreement relating to obe-cel, our lead product, and other collaboration products for B cell malignancies;
Previous report
•make required milestone payments to Miltenyi under our sublicense agreement relating to certain proprietary technologies incorporated in certain of our manufacturing processes;
Previous report
•make required revenue share interest payments to BioNTech relating to obe-cel under our license and option agreement;
Previous report
We are a clinical-stage biopharmaceutical company with a limited operating history. As an organization, we have not demonstrated an ability to successfully obtain regulatory approvals, manufacture our product candidates at commercial scale or arrange for a third party to do so on our behalf, conduct sales and marketing activities necessary for successful commercialization, or obtain reimbursement in the countries of sale. We may encounter unforeseen expenses, difficulties, complications, and delays in achieving our business objectives. Our limited history as an operating company makes any assessment of our future success or viability subject to significant uncertainty. If we do not address these risks successfully or are unable to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities, then our business will suffer.
Previous report
In connection with the Collaboration Agreement, Blackstone was granted a security interest in substantially all of our assets. The Collaboration Agreement also contains negative covenants that restrict us from (a) granting liens on certain of our assets, including liens on the intellectual property relating to the Collaboration Products, except for certain permitted liens, (b) making distributions or dividends, except for certain permitted distributions, (c) entering into development or commercialization license transactions with respect to the Collaboration Products, except that we are permitted to enter into any such development or commercialization license transactions with certain pharmaceutical companies, including those companies that have annual sales in excess of an agreed threshold, (d) consummating certain change in control transactions, (e) selling royalties or entering into similar financials transactions involving the sale of revenues or royalties, or (f) acquiring subsidiaries without joining such subsidiary as a party to the Blackstone Collaboration Agreement. These restrictions could inhibit our ability to pursue our business strategies and may limit our ability to, among other things, incur secured indebtedness, encumber assets, pay dividends or make other distributions to holders of our capital stock, license-out the Collaboration Products, complete mergers or acquisitions, or sell royalties.
Previous report
As it relates to marketing authorizations, Great Britain has a separate regulatory submission process, approval process and a separate national marketing authorization. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission. For example, the scope of a marketing authorization for a medicinal product granted by the European Commission or by the competent authorities of EU Member States no longer encompasses Great Britain (England, Scotland and Wales). In these circumstances, a separate marketing authorization granted by the UK competent authorities is required to place medicinal products on the market in Great Britain. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission.
Previous report
We will need to manage the size of our organization, and we may experience difficulties.
Previous report
We are subject to stringent and evolving U.S. and foreign laws, regulations and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
Previous report
The CSRD and ESRS require certain mandatory disclosures, as well as disclosures of certain “material” sustainability matters in the company’s own operations, those of their subsidiaries and those of their value chain. The identification of material sustainability matters requires a “double materiality” assessment. This means that in-scope entities will have to assess both financial materiality, which are sustainability matters which generate risks or opportunities that affect, or could reasonably be expected to affect, the company’s financial position, financial performance, cash flows, access to finance or cost of capital over the short-, medium- or long-term, and impact materiality, which are the company’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- and long-term.). Sustainability matters are material if they satisfy one or both of these materiality tests.
Previous report
We have identified a material weakness in our internal control over financial reporting. If our remediation of the material weakness is not effective or if we fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial information or comply with Section 404 of the Sarbanes-Oxley Act of 2002 could be impaired, which could have a material adverse effect on our business and the trading price of our ADSs.
Previous report
In addition, our competitors with development-stage programs may obtain marketing approval from the FDA, the European Commission or other comparable regulatory authorities for their product candidates more rapidly than we do, and they could establish a strong market position before we are able to enter the market.
Previous report
The IRA enacted in the United States introduced, among other changes, a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations (which the U.S. Treasury indicated may also apply to certain stock redemptions by a foreign corporation funded (or deemed funded) by certain United States affiliates. In addition, effective in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174.
Previous report
The SME Program has been particularly beneficial to us, as under such program the trading losses that arise from our qualifying R&D activities can be surrendered for a cash rebate of up to 33.35% of qualifying expenditure incurred prior to April 1, 2023 and decreasing to 18.6% after April 1, 2023. Additionally, the U.K Government enacted further changes to the SME regime on March 4, 2024 which include the introduction of a new rate for R&D intensive companies of 27% (which we may qualify for) and comes into effect for expenditures incurred after April 1, 2024. Qualifying expenditures largely comprise employment costs for research staff, consumables, outsourced contract research organization costs and utilities costs incurred as part of research projects for which we do not receive income. A large proportion of costs in relation to our pipeline research, clinical trials management and manufacturing development activities, all of which are being carried out by our subsidiary Autolus Limited, are eligible for inclusion within these tax credit cash rebate claims.
Previous report
Under the RDEC Program, tax credits for qualifying R&D expenditure incurred prior to April 1, 2023 are granted at a headline rate of 13% and can generate cash rebates of up to 10.5% of qualifying R&D expenditure. The headline rate of RDEC increased to 20% on April 1, 2023 and can generate cash rebates of up to 15% on qualifying R&D expenditure incurred from this date.
Previous report
Amendments to the current SME and RDEC programs that are contained in the Finance Bill currently proceeding through the UK Parliament will take effect from periods on or after April 1, 2024 and will (i) (unless limited exceptions apply) introduce restrictions on the tax relief that can be claimed for expenditure incurred on sub-contracted R&D activities or externally provided workers, where such sub-contracted activities are not carried out in the UK or such workers are not subject to UK payroll taxes, and (ii) merge the SME Program and the RDEC Program into a single scheme which would generate net cash benefit of up to 15% of the qualifying expenditure for profit making companies and up to 16.2% for loss making companies. We currently meet the conditions of the SME regime, but also can make claims under the RDEC regime to the extent that our projects are grant funded. In addition, it is also expected that we will meet the conditions of the R&D intensive scheme and would be able to make claims under merged SME R&D intensive regime. We may not be able to continue in the future to qualify as a small or medium-sized enterprise under the SME program, based on size criteria concerning employee headcount, turnover and gross assets. If we cease to qualify under the SME regime, we may make a claim under the RDEC regime for periods ending December 31, 2024 or the merged R&D regime from period ending December 31, 2025. It should be noted, however, that the types of qualifying expenditure in respect of which we may make claims under the RDEC regime are more restricted than under the SME regime (for example, it may be the case that certain subcontracted costs in respect of which claims may be made under the SME regime do not qualify for relief under the RDEC regime).
Previous report
To date, Autolus Limited has recovered all of the VAT incurred on its expenditure in the UK on the basis of having an intention to solely make taxable supplies. In recent months we have been working with our advisers in relation to the appropriate VAT treatment that should be applied in the UK in relation to Autolus Limited's primary income stream. Our advisors are still finalizing their understanding of the full facts which underpin our CAR T therapy and will provide a more conclusive VAT opinion in due course but it has been mentioned during initial discussion that some products which include human blood can be exempt from a UK VAT perspective. If the conclusion is that this activity is exempt from a UK VAT perspective, this may result in a retrospective restriction in terms of VAT recovered on a proportion of our UK expenditure (with this restriction likely being based on the UK market turnover as a percentage of global turnover). We currently expect revenue from UK customers to only represent a small proportion of our overall activity.
Reworded paragraphs (161)
Previous wording
We are a clinical-stage biopharmaceutical company with a limited operating history, and we have incurred significant net losses since our inception in 2014. We have incurred losses of $208.4 million,$148.8 million and $142.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of$878.6 million. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including ADSs, licensing and collaboration arrangements and strategic financing.
Current wording
We are an early commercial-stage biopharmaceutical company with a limited operating history, and we have incurred significant net losses since our inception in 2014. We have incurred losses of $220.7 million and $208.4 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $1,099.2 million. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including ADSs, licensing and collaboration arrangements and strategic financing.
Previous wording
We currently have no products approved for commercial sale, and while we have generated revenue from licensing, we are devoting substantially all of our financial resources and efforts to research and development of our programmed T cell product candidates and T cell programming technologies, as well as to building out our commercial and manufacturing infrastructure. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront operating and capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable.
Current wording
We currently have one product, AUCATZYL (obe-cel), approved for commercial sale, and while we have generated revenue from licensing, we are devoting substantially all of our financial resources and efforts to manufacturing and commercializing AUCATZYL and for the research and development of our other programmed T cell product candidates and T cell programming technologies. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront operating and capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable.
Previous wording
The FDA has accepted our BLA for obe-cel for patients with relapsed/refractory (r/r) Adult B-Cell ALL, and has set a target PDUFA action date of November 16, 2024. Should the FDA not grant us marketing approval, we are unsuccessful in our commercialization efforts or the market does not accept our product, we may not generate revenue. We expect that it could take several years until any of our other product candidates receive marketing approval and are commercialized, and we may never be successful in obtaining marketing approval and commercializing any of our product candidates, including obe-cel. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. These net losses will adversely impact our shareholders’ equity and net assets and may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:
Current wording
Should we be unsuccessful in our commercialization efforts for AUCATZYL or if the rates of market acceptance do not meet our expectations, we may not generate sufficient revenue. We expect that it could take several years until any of our other product candidates receive marketing approval and are commercialized, and we may never be successful in obtaining marketing approval and commercializing any of our other product candidates, including obe-cel in additional indications or territories. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. These net losses will adversely impact our shareholders’ equity and net assets and may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:
Previous wording
•establish sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval;
Current wording
•expand our sales, marketing and distribution infrastructure to commercialize AUCATZYL/obe-cel and any other product candidate for which we may obtain regulatory approval;
Previous wording
•continue to scale up internal and external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization;
Current wording
•continue to scale up internal and external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for commercialization of AUCATZYL and clinical trials of our other product candidates;
Previous wording
•add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts;
Current wording
•add clinical, operational, financial and management information systems and personnel, including personnel to support the commercial development of AUCATZYL, as well as our other product development and future commercialization efforts;
Previous wording
To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our product candidates, preparing a satisfactory filing package for regulatory authorities, obtaining regulatory approval, manufacturing, marketing and selling any products for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
Current wording
To become and remain profitable, we must succeed in commercializing AUCATZYL and developing and eventually commercializing other products that generate significant revenue. This will require us to be successful in a range of challenging activities, including marketing and selling AUCATZYL and any future products for which we may obtain regulatory approval, completing preclinical studies and clinical trials of our product candidates, preparing a satisfactory filing package for regulatory authorities, obtaining regulatory approval, manufacturing, marketing and selling any products for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
Previous wording
We will need additional funding to complete the development of our product candidates, which may not be available on acceptable terms, if at all.
Current wording
We will need additional funding to successfully commercialize AUCATZYL and to complete the development of and commercialize our other product candidates, which may not be available on acceptable terms, if at all.
Previous wording
We will require substantial additional funding to meet our financial needs and to pursue our business objectives. If we are unable to raise capital when needed, we could be forced to delay, reduce or altogether cease our product development programs or commercialization efforts.
Current wording
Unless and until we are able to successfully commercialize AUCATZYL and achieve significant revenue from sales, we will require substantial additional funding to meet our financial needs and to pursue our business objectives. If we are unable to raise capital when needed, we could be forced to delay, reduce or altogether cease our product development programs or commercialization efforts.
Previous wording
Since our inception, we have devoted substantially all of our resources to fund the operating expenses and capital expenditure requirements associated with the research and development of our product candidates. These programs are described in greater detail in the “Business” section of this Annual Report. Our current funding may only be sufficient to fund obe-cel through initial commercial launch, assuming certain timelines on successful regulatory approval, and we will need to raise additional capital to reach profitability as well as to complete the development and commercialization of our other programmed T cell product candidates, and in connection with our continuing operations, strategy and other planned activities. Our future capital requirements will depend on many factors, including:
Current wording
Since our inception, we have devoted substantially all of our resources to fund the operating expenses and capital expenditure requirements associated with the research and development of AUCATZYL and our other product candidates. Even once we begin to generate revenue from sales of AUCATZYL, we will need to raise additional capital to reach profitability as well as to complete the development and commercialization of our other programmed T cell product candidates, and in connection with our continuing operations, strategy and other planned activities. Our future capital requirements will depend on many factors, including:
Previous wording
•the timing and amounts of any milestone or royalty payments we may be required to make under current or future license or collaboration agreements;
Current wording
•the timing and amounts of any milestone, royalty payments or revenue sharing payments we may be required to make under current or future license or collaboration agreements;
Previous wording
•the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;
Current wording
•the costs and timing of commercialization activities, including product manufacturing, marketing, sales and distribution, for any future product candidates for which we receive marketing approval;
Previous wording
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our product revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available until late 2024 at the earliest, in the case of our existing lead program and, with respect to other pipeline programs, for up to several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Current wording
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, AUCATZYL, or our other product candidates, if approved, may not achieve commercial success. Our product revenues in the near term will be derived primarily from sales of AUCATZYL in the US, as we that we do not expect to generate material revenues from obe-cel in other jurisdictions or from other pipeline programs, for up to several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Previous wording
In November 2021, we entered into a collaboration agreement with Blackstone (the “Blackstone Collaboration Agreement”) pursuant to which Blackstone has agreed to pay us up to $150 million to support the continued development and, following approval, commercialization of obe-cel and next-generation product candidates (obe-cel and such next-generation products, collectively, the “Collaboration Products”) in exchange for our agreement to make substantial payments to Blackstone following approval of such products. These payments include a single-digit percentage payment on worldwide net sales of (i) the Collaboration Products in any indication and (ii) AUTO3 for the treatment of B-cell leukemias and lymphomas, by us and any of our licensees, as well as sales milestone payments relating to such net sales. Such payments to Blackstone could increase our cash requirements and could impair our liquidity. As of December 31, 2023, Blackstone has paid $120 million to us under the terms of the Blackstone Collaboration Agreement.
Current wording
In November 2021, we entered into a collaboration agreement with Blackstone (the “Blackstone Collaboration Agreement”) pursuant to which Blackstone agreed to pay us up to $150 million to support the continued development and commercialization of AUCATZYL/obe-cel and next-generation product candidates (collectively, the “Collaboration Products”) in exchange for our agreement to make substantial payments to Blackstone following approval of such Collaboration Products. These payments include a single-digit percentage payment on worldwide net sales of (i) the Collaboration Products in any indication and (ii) AUTO3 for the treatment of B-cell leukemias and lymphomas, by us and any of our licensees, as well as sales milestone payments relating to such net sales. Such payments to Blackstone could increase our cash requirements and could impair our liquidity. As of December 31, 2024, Blackstone has paid us the full $150 million under the terms of the Blackstone Collaboration Agreement, including the final payment of $30 million in the fourth quarter of 2024 following regulatory approval of AUCATZYL.
Previous wording
Under the BioNTech License Agreement with BioNTech entered into in February 2024, we have agreed to pay BioNTech a low single-digit percentage of annual net revenue of obe-cel which may be increased up to a mid-single digit percentage in exchange for milestone payments of up to $100 million in the aggregate on achievement of certain regulatory events for specific new indications upon BioNTech's election. Such payments to BioNTech could increase our cash requirements and could impair our liquidity.
Current wording
Under the BioNTech License Agreement with BioNTech entered into in February 2024, we also agreed to pay BioNTech a low single-digit percentage of annual net revenue of AUCATZYL/obe-cel, which may be increased up to a mid-single digit percentage, in exchange for milestone payments of up to $100 million in the aggregate on achievement of certain regulatory events for specific new indications upon BioNTech's election. Such payments to BioNTech could increase our cash requirements and could impair our liquidity.
Previous wording
Even if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
Current wording
AUCATZYL and any other product candidates, if approved, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, thereby limiting our potential to generate revenue.
Previous wording
Even if we obtain approvals from the FDA, the European Commission or other comparable regulatory authorities and are able to initiate commercialization of our clinical-stage product candidates or any other product candidates we develop, the product candidate may not achieve market acceptance among physicians, patients, hospitals, including pharmacy directors, and third-party payors and, ultimately, may not be commercially successful. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. FDA’s investigation into secondary malignancies associated with CAR T cell therapies and other similar actions could result in increased government regulation, unfavorable public perception and publicity, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:
Current wording
AUCATZYL and any other product candidates, if approved, may not achieve market acceptance among physicians, patients, hospitals, including pharmacy directors, and third-party payors and, ultimately, may not be commercially successful. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. FDA’s investigation into secondary malignancies associated with CAR T cell therapies and other similar actions could result in increased government regulation, unfavorable public perception and publicity, stricter labeling requirements for AUCATZYL and those product candidates that are approved, and a decrease in demand for AUCATZYL or any such product candidates. The degree of market acceptance of AUCATZYL, and any other product candidates, if approved for commercial sale, will depend on a number of factors, including:
Previous wording
•the amount of upfront costs or training required for physicians to administer our product candidates;
Current wording
•the amount of upfront costs or training required for physicians to administer our product and product candidates;
Previous wording
•the willingness of patients to pay out-of-pocket in the absence of comprehensive coverage and adequate reimbursement by third-party payors and government authorities;
Current wording
•the willingness and ability of patients to pay out-of-pocket in the absence of comprehensive coverage and adequate reimbursement by third-party payors and government authorities;
Previous wording
Our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of our products, if approved, may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our product candidates. Because we expect sales of our product candidates, if approved, to generate substantially all of our product revenue for the foreseeable future, the failure of our product candidates to find market acceptance would harm our business and could require us to seek additional financing.
Current wording
Our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of AUCATZYL and our other product candidates, if approved, may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our product candidates. Because we expect sales of AUCATZYL and any future products, if approved, to generate substantially all of our product revenue for the foreseeable future, the failure of those products to find market acceptance would harm our business and could require us to seek additional financing.
Previous wording
In addition, although we are not utilizing embryonic stem cells or replication competent vectors, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure of such trials to demonstrate that these therapies are safe and effective, may limit market acceptance our product candidates. If our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue.
Current wording
In addition, although we are not utilizing embryonic stem cells or replication competent vectors, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure of such trials to demonstrate that these therapies are safe and effective, may limit market acceptance our product candidates.
Previous wording
If we are unable to establish sales, marketing and distribution capabilities for our product candidates, or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing our product candidates, if and when they are approved.
Current wording
If we are unable to fully develop our sales, marketing and distribution capability on our own , or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing AUCATZYL, or our other product candidates, if and when approved.
Previous wording
We currently plan to build our global commercialization capabilities internally so we are able to commercialize obe-cel or any other product candidate, subject to obtaining regulatory approval. To achieve commercial success for any product candidate for which we may obtain marketing approval, we will need to build a sales and marketing organization and establish logistics and distribution processes to commercialize and deliver our product candidates to patients and healthcare providers. The development of sales, marketing and distribution capabilities will require substantial resources, will be time-consuming and could delay any product launch.
Current wording
We have spent significant resources to build our global commercialization capabilities in anticipation of the commercial launch of AUCATZYL. To achieve commercial success for AUCATZYL or any other product candidate for which we may obtain marketing approval, we will need to maintain a sales and marketing organization and establish logistics and distribution processes to commercialize and deliver our product candidates to patients and healthcare providers. The development of sales, marketing and distribution capabilities has required and will continue to require substantial resources, will be time-consuming and could delay any product launch. We currently have limited resources compared to some of our competitors, and the continued development of our own commercial organization to market our medicines and any additional medicines we may acquire will be expensive and time-consuming. In addition, not all members of our sales force have promoted medicines fortreatment ofadult r/r B-ALL prior to the launch of AUCATZYL. We have spent and will continue to expend significant time and resources to train our sales force to be able to educate physicians on the benefits of prescribing and pharmacists dispensing AUCATZYL. Furthermore, we must train our sales force to ensure that a consistent and appropriate message about AUCATZYL is being delivered to our potential customers. We may experience turnover of the sales representatives that we hired or will hire, requiring us to train new sales representatives. If we are unable to effectively train our sales force and equip them with effective materials, including medical and sales literature to help them inform and educate physicians about the benefits of AUCATZYL and its proper administration and label indication, as well as our patient assistance programs, our efforts to successfully commercialize AUCATZYL could jeopardize, which could have a material adverse effect on our financial condition, share price and operations.
Previous wording
If we are unable or decide not to establish internal sales, marketing and distribution capabilities, in any territory, we would have to pursue collaborative arrangements regarding the sales and marketing of our products. However, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us, or if we are able to do so, that they would be effective and successful in commercializing our products. Our product revenues and our profitability, if any, would likely to be lower than if we were to sell, market and distribute any product candidates that we develop ourselves. In addition, we would have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively.
Current wording
If we are unable or decide not to establish internal sales, marketing and distribution capabilities, in any territory, we would have to pursue collaborative arrangements regarding the sales and marketing of our products. However, we may not be successful in entering into arrangements with third parties to sell, market and distribute AUCATZYL/obe-cel or our other product candidates or may be unable to do so on terms that are favorable to us, or if we are able to do so, that they would be effective and successful in commercializing our products. Our product revenues and our profitability, if any, would likely be lower than if we were to sell, market and distribute AUCATZYL/obe-cel and any other product candidates that we develop ourselves. In addition, we would have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market AUCATZYL/obe-cel and any of our other product candidates effectively.
Previous wording
Due to their promising clinical therapeutic effect in clinical exploratory trials, engineered T cell therapies, redirected T cell therapies in general and antibody-drug conjugates are being pursued by multiple biotechnology and pharmaceutical companies, including Novartis AG (“Novartis”), Gilead Sciences, Inc. (“Gilead”), Bristol-Myers Squibb (“BMS”), Janssen Biotech Inc., Bluebird bio, Inc. (“Bluebird bio”), Roche Holding AG, Seattle Genetics, and Amgen Inc. Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, more effectively marketed and sold or less costly than any product candidates that we may develop, which could render our product candidates non-competitive and obsolete.
Current wording
Due to their promising clinical therapeutic effect in clinical exploratory trials, engineered T cell therapies, redirected T cell therapies in general and antibody-drug conjugates are being pursued by multiple biotechnology and pharmaceutical companies, including Novartis AG (“Novartis”), Gilead Sciences, Inc. (“Gilead”), Bristol-Myers Squibb (“BMS”), and Janssen Biotech Inc. Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, more effectively marketed and sold or less costly than any product candidates that we may develop, which could render our product candidates non-competitive and obsolete.
Previous wording
We are developing our lead program, obe-cel, a CD19-targeting programmed T cell product candidate for the treatment of adult ALL. Novartis, Gilead and BMS have received marketing approval for anti-CD19 CAR T cell therapies. Gilead's therapy was approved for the treatment of adult ALL in October 2021. Obe-cel is expected to compete directly with these companies and therapies. In addition, some companies, such as Cellectis, Inc., Les Laboratoires Servier SAS and Allogene Therapeutics Inc., are pursuing allogenic T cell products that could compete with our programmed T cell product candidates.
Current wording
We have received marketing approval from the FDA for AUCATZYL for the treatment of adult r/r B-ALL. Novartis, Gilead and BMS have also received marketing approval for anti-CD19 CAR T cell therapies. Gilead's therapy was approved for the treatment of adult ALL in October 2021. AUCATZYL is expected to compete directly with these companies and therapies. In addition, some companies, such as Cellectis, Inc., Les Laboratoires Servier SAS, Allogene Therapeutics Inc., Lyell Immunopharma, Cargo Therapeutics and Crispr Therapeutics AG are pursuing allogenic T cell products that could compete with our programmed T cell product candidates.
Previous wording
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical study sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Current wording
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Previous wording
Coverage and adequate reimbursement may not be available for our current or any future product candidates, which could make it difficult for us to sell profitably, if approved.
Current wording
Coverage and adequate reimbursement may not be available for AUCATZYL or our current or any future product candidates, which could make it difficult for us to sell profitably, if approved.
Previous wording
Market acceptance and sales of any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors in the United States often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy. We may incur significant costs to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates, in addition to the costs required to obtain FDA approvals. Our product candidates may not be considered medically necessary or cost-effective.
Current wording
Market acceptance and sales of our product and any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors in the United States often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for our product or any product candidates that we develop, once approved, will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy. We may incur significant costs to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product, and product candidates, once approved, in addition to the costs required to obtain FDA approvals. Our product and product candidates, once approved, may not be considered medically necessary or cost-effective by third-party payors.
Previous wording
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Even if favorable coverage and reimbursement status is attained for one or more product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current and any future product candidates that we develop.
Current wording
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for our product or any product candidates and, if reimbursement is available, what the level of reimbursement will be. Even if favorable coverage and reimbursement status is attained for our product or any product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current and any future product candidates that we develop.
Previous wording
Additionally, we are developing a proprietary diagnostic test for use with certain of our product candidates. We will be required to obtain coverage and reimbursement for this test separate and apart from the coverage and reimbursement we seek for our product candidates, if approved. There is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for this proprietary diagnostic test for reasons similar to those applicable to our product candidates.
Current wording
Additionally, we are developing a proprietary diagnostic test for use with our product and certain of our product candidates. We will be required to obtain coverage and reimbursement for this test separate and apart from the coverage and reimbursement we seek for our products and product candidates, if approved. There is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for this proprietary diagnostic test for reasons similar to those applicable to our product and product candidates, if approved.
Previous wording
We currently hold £10.0 million in product liability insurance coverage in the aggregate, with a per incident limit of £10.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
Current wording
We currently hold £10 million in product liability insurance coverage in the aggregate, with a per incident limit of £10 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
Previous wording
All of our product candidates are in clinical development or in preclinical development. If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.
Current wording
Our product candidates are in clinical development or in preclinical development. If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.
Previous wording
We have established clinical proof-of-concept for only one of our product candidates. There is no assurance that our current or any other future clinical trials of our product candidates will be successful or will generate positive clinical data, and we may not receive marketing approval from the FDA, or other regulatory agencies, including the European Commission, for any of our product candidates. In order to commence a clinical trial in the United States, we must submit an IND to the FDA and have the IND application go into effect. Trials in the United States must be conducted pursuant to an active IND. An investigator may not administer a drug candidate to human subjects until the IND goes into effect. Similar requirements apply to our conduct of trials in the UK and EU. We are sponsoring active, recruiting clinical trials for two of our product candidates, obe-cel (AUTO1), and AUTO4. We are also collaborating with our academic partner UCL to support clinical trials sponsored by them of our product candidates (obe-cel, AUTO1/22, AUTO6NG and AUTO8). In addition, patients who have received an investigational product developed by us will be evaluated for long-term safety and disease response in a long-term follow-up protocol. There can be no assurance that the FDA, the competent authorities of EU Member States or other regulatory agencies will permit any future clinical trial application to go into effect in a timely manner or at all.
Current wording
Other than AUCATZYL, the rest of our product pipeline is in clinical or preclinical development. We have established clinical proof-of-concept for only one of our products, AUCATZYL, which recently received FDA approval inr/r B-ALL. There is no assurance that our current or any other future clinical trials of our product candidates will be successful or will generate positive clinical data. Although we received marketing approval from the FDA for AUCATZYL in the US, and have submitted MAAs to the MHRA and EMA, we may not be successful in receiving marketing approval from these regulatory agencies, including the European Commission, for obe-cel or for any of our other product candidates. In order to commence a clinical trial in the United States, we must submit an IND to the FDA and have the IND application go into effect. Trials in the United States must be conducted pursuant to an active IND. An investigator may not administer a drug candidate to human subjects until the IND goes into effect. Similar requirements apply to our conduct of trials in the U.K. and EU. We are sponsoring active, recruiting clinical trials for obe-cel in additional indications and AUTO4. We are also collaborating with our academic partner UCL to support clinical trials sponsored by them of obe-cel in additional indications, AUTO1/22, AUTO6NG and AUTO8. In addition, patients who have received an investigational product developed by us will be evaluated for long-term safety and disease response in a long-term follow-up protocol. There can be no assurance that the FDA, the competent authorities of EU Member States or other regulatory agencies will permit any future clinical trial application to go into effect for our product candidates in a timely manner or at all.
Previous wording
Many of these factors are beyond our control, including the time needed to adequately complete clinical testing and the regulatory submission process. It is possible that none of our product candidates will ever obtain regulatory approval, even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, or any other factors impacting the successful development of biopharmaceutical products, we could experience significant delays or an inability to successfully develop our product candidates, which would materially harm our business.
Current wording
Many of these factors are beyond our control, including the time needed to adequately complete clinical testing and the regulatory submission process. It is possible that none of our other product candidates will ever obtain regulatory approval, even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, or any other factors impacting the successful development of biopharmaceutical products, we could experience significant delays or an inability to successfully develop our product candidates, which would materially harm our business.
Previous wording
We have concentrated our research and development efforts on our T cell technology platform using our expertise in disease biology and cell programming, and our future success is highly dependent on the successful development and manufacture of our programmed T cell product candidates. We do not currently have any approved or commercialized products. Some of our product candidates employ a dual-targeting mechanism. By targeting two separate antigens on the cancer cell surface, we believe these product candidates have the potential to improve durability of treatment response and reduce the frequency of cancer relapse as compared to other currently available single-targeting T cell therapies. AUTO4, our product candidate for the treatment of T cell lymphoma, employs a novel approach tokilling malignant T cells that aims to preserve approximately half of the normal, healthy T cells. Some of our product candidates include a “safety switch” that is designed to allow for the elimination of the engineered T cells if a patient experiences severe adverse side effects from the treatment. However, this “safety switch” technology has not been activated to date in our clinical studies, and we do not know whether it would have the intended effect if used. Additionally, as with other targeted therapies, off-tumor or off-target activity could delay development or require us to re-engineer or abandon a particular product candidate. Because programmed T cell therapies represent a relatively new field of cellular immunotherapy and cancer treatment and autoimmune diseases generally, developing and commercializing our product candidates subjects us to a number of risks and challenges, including:
Current wording
We have concentrated our research and development efforts on our T cell technology platform using our expertise in disease biology and cell programming, and our future success is highly dependent on the successful development and manufacture of our programmed T cell product candidates. Some of our product candidates employ a dual-targeting mechanism. By targeting two separate antigens on the cancer cell surface, we believe these product candidates have the potential to improve durability of treatment response and reduce the frequency of cancer relapse as compared to other currently available single-targeting T cell therapies. AUTO4, our product candidate for the treatment of T cell lymphoma, employs a novel approach tokilling malignant T cells that aims to preserve approximately half of the normal, healthy T cells. Some of our product candidates include a “safety switch” that is designed to allow for the elimination of the engineered T cells if a patient experiences severe adverse side effects from the treatment. However, this “safety switch” technology has not been activated to date in our clinical studies, and we do not know whether it would have the intended effect if used. Additionally, as with other targeted therapies, off-tumor or off-target activity could delay development or require us to re-engineer or abandon a particular product candidate. Because programmed T cell therapies represent a relatively new field of cellular immunotherapy and cancer treatment and autoimmune diseases generally, developing and commercializing our product candidates subjects us to a number of risks and challenges, including:
Previous wording
Our future success is highly dependent on the regulatory approval of our current clinical-stage programmed T cell product candidates and our preclinical programs. All of our product candidates will require significant clinical or preclinical testing before we can seek regulatory approval for and launch a product commercially.
Current wording
Our future success is highly dependent on the regulatory approval of our other clinical-stage programmed T cell product candidates and our preclinical programs. Our product candidates will require significant clinical or preclinical testing before we can seek regulatory approval for and launch a product commercially.
Previous wording
We do not have any products that have gained regulatory approval. Our business is substantially dependent on our ability to obtain regulatory approval for, and, if approved, to successfully commercialize our programmed T cell product candidates. We cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA; similarly, we cannot commercialize product candidates in countries outside of the United States without obtaining regulatory approval from comparable regulatory authorities in relevant jurisdictions, such as the European Commission in the EU (granted on the basis of a positive opinion from the CHMP of the EMA). Additionally, to file for licensure in any jurisdiction outside of the UK we must first receive GMP certification from the MHRA. Before obtaining regulatory approvals for the commercial sale of any product candidate for a particular indication, if approved, we must demonstrate with substantial evidence gathered in preclinical and clinical studies, that the product candidate is safe and effective for that indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate. The obe-cel Regenerative Medicine Advanced Therapy (“RMAT”) designation was submitted to FDA in February 2022 and was granted in April 2022. Similarly, in the UK, Autolus utilized the MHRA Innovative Licensing and Access Pathway (“ILAP”) and applied for ‘Innovative Passport’ designation (“Innovation Passport”) which aims to accelerate the timeline to regulatory approval. The UK ILAP designation in r/r adult B-ALL was granted in June 2021. Additionally, EMA PRIME designation in r/r B-ALL was obtained in March 2021. Moreover, Orphan Designation in B-ALL was granted by the FDA in November 2019 and by the European Commission in March 2022. To date, we have had only limited interaction with the FDA, MHRA, the EMA and the European Commission, regarding our product candidates. Prior to seeking approval for any of our product candidates, we will need to confer with the FDA, MHRA, the EMA and other regulatory authorities regarding the design of our clinical trials and the type and amount of clinical data necessary to seek and gain approval for our product candidates.
Current wording
Although we have received FDA approval for AUCATZYL in r/r B-ALL, our business remains substantially dependent on our ability to successfully obtain regulatory approval for, and, if approved, to successfully commercialize our other programmed T cell product candidates. We cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA; similarly, we cannot commercialize product candidates in countries outside of the United States without obtaining regulatory approval from comparable regulatory authorities in relevant jurisdictions, such as the European Commission in the EU (granted on the basis of a positive opinion from the CHMP of the EMA). Additionally, to file for licensure in any jurisdiction outside of the U.K. we must first receive GMP certification from the MHRA. Before obtaining regulatory approvals for the commercial sale of any product candidate for a particular indication, if approved, we must demonstrate with substantial evidence gathered in preclinical and clinical studies, that the product candidate is safe and effective for that indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate. The obe-cel Regenerative Medicine Advanced Therapy (“RMAT”) designation was submitted to FDA in February 2022 and was granted in April 2022. Similarly, in the U.K., Autolus utilized the MHRA Innovative Licensing and Access Pathway (“ILAP”) and applied for ‘Innovative Passport’ designation (“Innovation Passport”) which aims to accelerate the timeline to regulatory approval. The U.K. ILAP designation in r/r B-ALL was granted in June 2021 and we submitted an MAA to the MHRA at the end of July 2024. Additionally, EMA PRIME designation in r/r B-ALL was obtained in March 2021 and we submitted an MAA to the EMA, which was accepted in April 2024. Moreover, Orphan Designation in B-ALL was granted by the FDA in November 2019 and by the European Commission in March 2022. Prior to seeking approval for any of our other product candidates, we will need to confer with the FDA, MHRA, the EMA and other regulatory authorities regarding the design of our clinical trials and the type and amount of clinical data necessary to seek and gain approval for our product candidates.
Previous wording
The time required to obtain approval by the FDA, MHRA, the European Commission and other regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. It is possible that none of our existing product candidates or any future product candidates will ever obtain regulatory approval.
Current wording
The time required to obtain approval by the FDA, MHRA, the European Commission and other regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. It is possible that none of our other existing product candidates or any future product candidates will ever obtain regulatory approval.
Previous wording
The FDA, the EMA or the European Commission, or a comparable regulatory authority may require more information, including additional preclinical or clinical data to support approval, including data that would require us to perform additional clinical trials or modify our manufacturing processes, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program. If we change our manufacturing processes or manufacturing facilities, we may be required to conduct additional clinical trials or other studies, which also could delay or prevent approval of our product candidates. If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer indications than we request (including failing to approve the most commercially promising indications) or for different indications from those obtained in other territories, may limit indications, may grant approval contingent on the performance of costly post-marketing clinical trials or other post-marketing commitments, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Furthermore, the indication granted by health authorities may vary from region to region, which may impair our commercialization plans. Finally, even with licensures in the relevant regions we initially do not have production redundancy. Due to this, we are at higher risk of supply disruptions to regional factors that could impair our supply chains. Examples of this include an expanded conflict in Eastern Europe and severe volcanic activity in Iceland, either of which has the potential to disrupt international air traffic for weeks.
Current wording
The FDA, the EMA or the European Commission, or a comparable regulatory authority may require more information, including additional preclinical or clinical data to support approval, including data that would require us to perform additional clinical trials or modify our manufacturing processes, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program. If we change our manufacturing processes or manufacturing facilities, we may be required to conduct additional clinical trials or other studies, which also could delay or prevent approval of our product candidates. If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer indications than we request (including failing to approve the most commercially promising indications) or for different indications from those obtained in other territories, may limit indications, may grant approval contingent on the performance of costly post-marketing clinical trials or other post-marketing commitments, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Furthermore, the indication granted by health authorities may vary from region to region, which may impair our commercialization plans. Finally, even with licensures in the relevant regions we initially do not have production redundancy. Due to this, we are at higher risk of supply disruptions to regional factors that could impair our supply chains.
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Rearranged current paragraphs (19)
Current report — wording carried from elsewhere
The implementation of this plan is subject to many risks. For example, the establishment of a cell-therapy manufacturing facility is a complex endeavor requiring knowledgeable individuals. Creating an internal manufacturing infrastructure will rely upon finding personnel with an appropriate background and training to staff and operate the facility. Should we be unable to find these individuals, we may need to rely on external contractors or train additional personnel to fill the needed roles. There are a small number of individuals with experience in cell therapy and the competition for these individuals is high.
Current report — wording carried from elsewhere
However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the U.K. must be retested and re-released when entering the EU market for commercial use.
Current report — wording carried from elsewhere
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
Current report — wording carried from elsewhere
The related legislative landscape in the EU has been evolving rapidly. For example, the EU adopted an ESG reporting rule, EU Directive No 2464/2022 on Corporate Sustainability Reporting (“CSRD”) that entered into force on January 5, 2023. The CSRD introduces new mandatory reporting obligations for in-scope companies that require the publication of fulsome audited ESG disclosures, including disclosures under the EU Taxonomy Regulation 2020/852.
Current report — wording carried from elsewhere
We also do not have supply contracts with many of these suppliers, and may not be able to obtain supply contracts with them on acceptable terms or at all. Accordingly, we may not be able to obtain key materials and equipment to support clinical or commercial manufacturing.
Current report — wording carried from elsewhere
If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenue or the profitability to us from these revenue streams is likely to be lower than if we were to market and sell any product candidates that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell and market our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing our product candidates.
Current report — wording carried from elsewhere
In addition, we cannot control the amount and timing of resources our collaborators may devote to our product candidates. They may separately pursue competing products, therapeutic approaches or technologies to develop treatments for the diseases targeted by us. Competing products, either developed by the collaborators or to which the collaborators have rights, may result in the withdrawal of support for our product candidates. Even if our collaborators continue their contributions to the strategic collaborations, they may nevertheless determine not to actively pursue the development or commercialization of any resulting products.
Current report — wording carried from elsewhere
Additionally, if our collaborators pursue different clinical or regulatory strategies with their product candidates based on similar technology as used in our product candidates, adverse events with their product candidates could negatively affect our product candidates. Any of these developments could harm our product development efforts.
Current report — wording carried from elsewhere
Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If any of our product candidates receives marketing approval, the accompanying label may limit its approved use, which could limit sales of the product.
Current report — wording carried from elsewhere
Even though we have been granted marketing approval by the FDA for AUCATZYL, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulatory requirements for manufacturing processes, labeling, packaging, distribution, adverse event reporting, pharmacovigilance oversight, storage, advertising, promotion, sampling, and recordkeeping, including the potential requirements to implement a REMS program in the United States or comparable foreign strategies, or similar schemes in other countries, or to conduct costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. We must also comply with requirements concerning advertising and promotion for AUCATZYL/obe-cel and for any of our other product candidates for which we obtain marketing approval. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling.
Current report — wording carried from elsewhere
Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct.
Current report — wording carried from elsewhere
The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.
Current report — wording carried from elsewhere
Legislators, policymakers and healthcare insurance funds in the EU and the United Kingdom may continue to propose and implement cost-containing measures to keep healthcare costs down, particularly due to the financial strain that the COVID-19 pandemic placed on national healthcare systems of European countries. These measures could include limitations on the prices we would be able to charge for product candidates that we may successfully develop and for which we may obtain regulatory approval or the level of reimbursement available for these products from governmental authorities or third-party payors. Further, an increasing number of EU and other foreign countries use prices for medicinal products established in other countries as “reference prices” to help determine the price of the product in their own territory. Consequently, a downward trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere. Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. If we are unable to maintain favorable pricing and reimbursement status in EU Member States for product candidates that we may successfully develop and for which we may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected. Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. If we are unable to maintain favorable pricing and reimbursement status in EU Member States for product candidates that we may successfully develop and for which we may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.
Current report — wording carried from elsewhere
Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities, or other potential claims or litigation. Ineffective internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ADSs.
Current report — wording carried from elsewhere
There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our technology or product candidates, including interference proceedings before the USPTO. Intellectual property disputes arise in a number of areas including with respect to patents, use of other proprietary rights and the contractual terms of license arrangements. Third parties may assert claims against us based on existing or future intellectual property rights and claims may also come from competitors against whom our own patent portfolio may have no deterrent effect. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. Other parties may allege that our product candidates or the use of our technologies infringes patent claims or other intellectual property rights held by them or that we are employing their proprietary technology without authorization.
Current report — wording carried from elsewhere
In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our ADSs.
Current report — wording carried from elsewhere
Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
Current report — wording carried from elsewhere
If we are a PFIC for any taxable year during which a U.S. holder holds our ADSs, the U.S. holder may be subject to adverse tax consequences regardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements.
Current report — wording carried from elsewhere
We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates in the United States or elsewhere.