Galapagos NV

Thank you, Operator, and welcome all to the audio webcast of Galapagos' H1 2023 results. I'm Sophie van Heestel, Investor Relations, representing the reporting team at Galapagos. This recorded webcast is accessible via the Galapagos website homepage and will be available for download and replay later on today. I would like to remind everyone that we will be making forward-looking statements during today's webcast. These forward-looking statements include remarks concerning future developments of the pipeline and our company and possible changes in the industry and competitive environments. Because these forward-looking statements involve risks and uncertainties, Galapagos' actual results may differ materially from the results expressed or implied in these statements. Today's speakers will be Paul Stoffels, CEO, and Ted Huston, CFO and COO. Paul will reflect on the operational highlights and provide an update on our pipeline. Ted will go over the commercial and financial results. You will see a presentation on screen. We estimate that the prepared remarks will take about 25 minutes. Then we'll open it up to Q&A with Paul and Ted, joined by Michele Manto, Chief Commercial Officer, and Daniele D'Ambrosio, Head of Immunology. And with that, I'll now turn over to Paul.

Thank you, Sophie, and thank you all for joining today's webcast. I'm very pleased to introduce to you Tad Houston. Tad joined Galapagos as our new CFO, COO, as of July 1. Over the years, Tad gained experience through several positions in finance, commercial, BD, and operations. He joined us from Kite Pharma, where he was Senior VP Finance and Corporate Operations. And before he was CFO of Livanova, a listed medtech company. That was the CFO of J&J Medical Devices and CFO of Janssen R&D in earlier years. That spent four years in China as the president of Janssen China for Janssen. Ted and I have known each other for quite some time. I worked together with Ted at J&J where he held a number of leadership positions for more than 25 years. And he was instrumental in transformational phase of Janssen Global R&D. It goes without saying that his knowledge of R&D and cell therapy is a perfect fit for our company. We are very excited to have Tad on the board. On today's call, Tad will present the operational and financial section.

Tad, thanks for the introduction, Paul, and it's great to be here. I'm so excited to be joining forces with you again, Paul, and to work together. with the Galapagos team to create value for our stakeholders.

Thank you, Tad, and happy to work again together and work with the teams. Here you see a slide summarizing our vision and mission statement. At Galapagos, we want to transform patients' outcome to life-changing science and innovation, aiming at bringing more years of life and quality of life. In order to achieve this, we go for groundbreaking science with an entrepreneurial spirit and a collaborative mindset. At the R&D day back in November 22, we introduced a course that we have set out for the company in order to unlock significant value. On this slide, you see a snapshot of how we have been executing on the transformation of the company over the last 18 months. We continued to roll out a commercial organization in Europe for our first product, the iCellicam. In mid-22, we announced the acquisition of CellPoint and AboundBio. propelling us into the space of next-generation CAR-T therapeutics. We refocused the R&D organization on two therapeutic areas, immunology and oncology. And late last year and early this year, we presented encouraging initial safety and efficacy data on the two CD19 CAR-T trials in relapsed refractory NHL and CLL in point-of-care setting with our Cocoon platform. In parallel, we accelerated the discovery portfolio, both in small molecules and biologics. And we also announced and completed the restructuring of our discovery activities. We transitioned the Romainville discovery activities to Novalex in France. Let's move on to our pipeline as it stands today. As mentioned, the pipeline is refocused on two therapeutic areas, immunology and oncology. I will come back on some of the programs in more detail below. In summary, in immunology, unfortunately, the phase three trial in Crohn's disease did not bring us the results we had hoped for. But we have RA and UC on the market with a registrational trial in AXPA out of the gate now. We are progressing our TIK2 in dermatomyositis and SLE and aim to start a patient study with our CD9 CAR T5101 this year in severe refractory lupus. Meanwhile, we are working on multiple exciting preclinical targets that we are eager to push forward if we see a best-in-class potential. In oncology, we made good progress with the CD19 programs. I will come back on that later. We plan to start a BCMA program in multiple myeloma with 5301 after the summer. Meanwhile, with OneBio, as well as via external collaborations that we intend to close, we keep working on next generation CAR T and leverage our point of care cocoon platform for those. Here is a reminder of our progress with TIK2. We initiated the phase two trial in dermatomyositis, and those are first patients with top-line results expected in 2025. We also progressed 367 in a lupus trial, and we opened the first study centers that are in the process of screening patients, and there the top-line results are expected in 2026. Now let's move to oncology. Today, the approved CAR-T products are manufactured through central production, which has several limitations. For example, product needs to be frozen and needs to be shipped. As mentioned with the acquisition of CellPoint last year, we've pivoted into cell therapy with a point-of-care solution, striving for infusion of fresh cells, a fresh cell product with a seven-day vein-to-vein time in a decentralized setting close to the patient. Here, you see a picture of that many of you have seen before of the cocoon point of care solution. We have exclusive license from him for hematology Kansas with loans for the cocoon in the point of care setting, allowing us to invest in that platform and get and give provide global access to two hospitals. The teams are further optimizing the CAR-T production process and automating the quality release testing, simplifying the point-of-care manufacturing onsite. Today, only a small portion of patients that are eligible for CAR-T receive the treatment. High unmet need cancer patient populations that are not helped today would benefit from CAR-T therapy. These are patients with fast-progressing cancers that can be helped by quick access and a seven-day vein-to-vein time, as well as patients with poor prognosis or with cancers for which no standardized treatment strategy is available today. And as mentioned before, within the pool of patients that have been found eligible for CAR-T treatment, we see that today only 10 to 20% receive CAR-T products due to barriers in terms of logistics, manufacturing, limiting access to the products. Our aim is to increase the addressable patient population, leveraging the point-of-care model. Let's move to the progress update on our CD19-CAR-T trials. Here you see the design of the CD19-CAR-T Phase 1-2 trial in relapsed refractory NHL. This is a basket trial recruiting patients with diffuse large B-cell lymphoma. follicular lymphoma, mantle cell lymphoma, and marginal zone lymphoma. Encouraging initial results have been communicated on seven patients with an overall response rate of 86% and a complete response rate in all of the 86% of the overall responders. Only mild icons and CRS were reported, and the median vein-to-vein time for administration was seven days. This quarter, we made an important progress in our phase one trial in NHL. We decided to recruit additional patients to generate larger data sets for specific subpopulations of patients with high unmet medical needs. This allows us to build a robust package in support for a pivotal study. We submitted an abstract to a future scientific conference and plan to provide updated safety and efficacy data on the NHL trial before the year end. The Phase II expansion part of the NHL study is already open, and we are actively dosing the first patients in indolent lymphoma as well as in mantle cell lymphoma in those cohorts. We selected our first U.S.-based point-of-care manufacturing site, and tech transfer activities have started. We are preparing an IND submission, which we'll plan to submit in the first half of 24. Here you see the design of the CD19-based 1-2 trial in relapsed refractory CLL. Earlier this year, we announced encouraging initial results on seven patients with an overall response rate of 100% and a complete response rate of 86%. Advanced CLL, and especially patients with Richter's transformation, remain a high medical need patient subgroup, and as announced earlier this year, are encouraged by the initial safety and efficacy results. No CRS above grade three, and no icons were reported, and the median vein-to-vein time was seven days for this initial patient population. The first half of the year, we made important progress in our CLL clinical trial, and we are now closing to complete the phase one recruitment with the last patient identified. In the first half of 2024, we aimed to initiate the phase two dose expansion part of the study, and we established the recommended phase two dose based on the safety profile efficacy observed. As for our NHL study, we submitted an abstract to a future scientific conference and plan to provide updated safety and efficacy data on the CLL trial before the year ends. Now over to our discovery portfolio. Last year, we implemented a new operating model and R&D strategy with the goal to accelerate innovation and rebuild our product pipeline to achieve shorter time to patients. We build on strong therapeutic area expertise in immunology and added oncology bringing in new top talent and capabilities. Additionally, to complement our internal discovery, we are combining internal and external innovation. We now apply best Best-in-class target approach, going for transformational products in high unmet medical needs. The research teams have performed an internal exercise and identified and selected the set of targets and indications in immunology and oncology. We can now build on both our expertise in small molecules, enter innovative biology discovery platforms with the theme of Abound Bio. For immunology, on the On the cell therapy front, we have nominated the preclinical candidate that is a fully human CD19 CAR-T targeting a unique epitope and with differentiated binding kinetics. And the small molecule teams identified over five targets across several immune indications that fit with our renewed approach and that are currently in different stages of preclinical development. Preclinical development, sorry. The team have about identified over five targets across hematology and solid cancer indications, and multiple differentiated armoring strategies have been set forward alongside a multi-targeting approach. We certainly see an opportunity to leverage our small molecule expertise in oncology, which ties in with our aim to deliver precision medicine. A review of the landscape has been done, and the teams have identified five targets across cancer types. Our aim is, again, to nominate the first clinical candidate from the discovery portfolio in 24. So this concludes my review of R&D with the strategic change we made over the last 12 months. And now I hand it over to Taps.

Thank you, Paul. I will provide an operational financial update for our first TAP results, and then I'll open the call for Q&A. We had another soft quarter in Q2 for Jacellica. with the sales coming in at 28 million euro or 54 million euro for the first half of 2023. We see a number of headwinds for Giselec with the slowdown of the JAK class, reflecting the impact of the Article 20 outcome and label change, increased competition in UC and the effect of the myths in Crohn's disease as a third indication. We are evaluating various strategic options for Giseleca and more information will follow later this year. As a result of the slower growth in sales for the first half of 2023, we have lowered our 2023 net sales guidance to 100 to 120 million euro for the year. A few words on our cash position. Our cash and cash equivalents reached 3.9 billion Euro at the end of Q2 2023. Our operational cash burn for the first half of 2023 reached 224 million Euro. Although the second quarter burn is higher compared to Q1, we are confirming our full year cash burn range of 380 to 420 million Euro. The higher burn in Q2 is partly due to a prepayment for future services from Novalex as part of the collaboration agreement with Novalex in Q1. Also for our cash balance at the end of the year, we anticipate a positive contribution from interest income offsetting the higher burn rate in Q2. And we expect approximately 3% return on our outstanding cash balance. Finally, we continue to be disciplined and remain focused on managing our resources effectively while we continue to pursue opportunities to drive value and growth. Going to our P&L, we reported a net profit of 28 million euro in the first half of 2023, in part driven by higher revenue, recognition for Phil Gottlieb, Collaboration revenues increased mainly due to revenue recognition related to the collaboration agreement with Gilead for the philgotinib development amounting to €155 million in the first six months of 2023 compared to €115 million in the same period last year. This increase is primarily driven by a positive catch-up of revenue explained by a decrease in the total estimated remaining cost to complete the philgotinib development. This was a consequence of the top line results from the phase three diversity trial for government in Crohn's disease and our decision not to submit a marketing authorization application in Europe. The revenue recognition for the platform is stable quarter over quarter at 115 million Euro year to date. Gisellica sales were 54 million Euro in the first half of 2023, And we received a sales milestone of 1 million euro and 3 million euro in royalties for Giselec a year to date. We also saw a reduction in total operating expenses of 50 million euro or down 13% versus prior year due to lower R&D expense in Q2 primarily due to a prior year impairment and a decrease in subcontracting costs due to portfolio rationalization as well as lower sales and marketing expenses in Q2. And we also received higher interest income in the first half of 2023. Before we move on to the outlook for 2023, a small word on our BD approach. I want to highlight that BD is key to our vision to create shareholder value. M&A is essential to our success, and we have a clear M&A roadmap. and we will deploy capital to broaden and strengthen our portfolio. Let's look ahead with the outlook for the remainder of 2023. It's important to note that our next progress update on 5101 and 5102 in NHL and CLL will be in Q4 2023. We hope to confirm the encouraging safety and efficacy data on a larger patient pool and present more durability data to further validate our point of care approach with the Cocoon platform. Also in oncology, we aim to make regulatory progress with an IND submission for a CD19 in the first half of 2024. The CTA for BCMA candidate 5301 has been approved, and we aim to initiate the trial this year. We also submitted the CTA for a CD195101 in refractory SLE. We also plan several trial initiations. We recently dosed the first patient in AXPA with ilgotinib, and the first patient in dermatomyotosis with 3667. The lupus trial with 3667 has been initiated, and we hope to dose the first patient soon. We also aim to kick off another trial in severe lupus patients with the CD19 CAR T this year. We'll also execute on the NHL and CLL expansion cohorts with the CD19 programs and start the phase 1B multiple myeloma with BCA CAR T 5301. As we continue to execute on our company's transformation, we are focused on accelerating our early stage pipeline, building on our renewed discovery portfolio. We continue to broaden our late stage pipeline, pushing forward our internal programs and scouting for new business development opportunities. We aim to execute on our plans in oncology, progressing our CAR T programs, and expanding our footprint with our KUKUM platform. Following the changing market dynamics and revised sales guidance for Giseleca, we are evaluating strategic options for Giseleca. And we commit to stay disciplined in our use of cash to focus our investments to maximize value. Thank you all for your support and your interest in Galapagos. And now let's open the line up for Q&A.

Thanks so much, Paul and Ted. That concludes the presentation portion of today's audio conference call. I would now like to ask the operator to open up the line for Q&A.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. We will now take the first question. From the line of Brian Abrahams from RBC, please go ahead.

Hi, this is Joe. I'm for Brian. Thank you for taking our question. Can you elaborate more on the strategic options you're considering for Giseleca? And I guess you mentioned that you'll be looking at subgroups for your CD19 CAR-Ts. Can you also talk a little more about these subgroup analyses, please? Thank you.

Yeah, that's why don't you take the 1st? Yeah, I'll follow up. Yeah. So we are adapting obviously to this changing market dynamics in the environment and obviously taking our responsibility as a company to ensure that we're creating long term value. We are going to do this strategic evaluation of various scenarios and options for just Celica. as quickly as possible and we anticipate coming with an outcome of that assessment in the coming months and we can provide an update at that point in time so we can't provide any further details at this call yeah and for the uh the subgroups um we have uh as I said indicated in the call several

several indications within the NHL, within the NHL, and we are missing a few patients in some of the subgroups to have a complete response comparing to the competitors, as well as for submission with the FDA, with the regulatory authorities. And that's why we are, have continued to recruit until we have in each of the subgroups, the patients we need. So, and that will happen in the next few weeks to two months or so, and we'll have an update on that in, in, in,

in before the year end um got it that was very helpful thank you um if i could ask a follow-up um on ind filing for the in the first half of next year for uh car t cells um can you also comment on the level of engagement with the fta um ahead of the filing and so um if you could um Just talk about some of the requirements for the filing. And can you share with us your latest strategy there, any specific regions of focus, and how you're thinking about prepping the potential clinical sites ahead of the filing? Thank you.

The most important critical step for us is to have a clinical trial production center ready, which has to be submitted with the IND. There we have done an extensive evaluation of centers, and the first tech transfer to the U.S. site is active. And so that is determining the timing of our submission for the IND. Before that, we had a very good engagement in a pre-IND meeting with the FDA on all the aspects we need to start clinical trial. And so what I just told you was having the first center validated on U.S. ground, on U.S. soil, is the critical step. And that's why we indicate that we'll submit our IND first half of next year. But since the first one is ongoing, I think that we'll be quite optimistic in the course of the early months in the next year. So that's where we are. Obviously, we are trying to focus closer by home at the moment, so we started at the East Coast, and we'll reach out later to all the parts of the U.S., but that's where we start the first scan of potential centers. And as we speak, that's ongoing. Multiple centers are in discussion and contract discussions. Great. Thanks so much.

Thank you. We would like to kindly ask participants to ask one question per person. We will now take the next question from the line of Emily Fields from Barclays. Please go ahead.

Hi, thanks for taking my question. I wasn't listening if she just said to ask one or two, but just on the Gisellica point, I was just wondering if While you're going through this review, will you be making any changes to the commercial promotion of the product? I saw that you're initiating the AXPA Phase 3 study, so any changes on the R&D side while this review is ongoing or anything operational that would change? And if I could just slip in one more, just... Any initial color you could provide on the small molecule discovery program in oncology, would this maybe move into solid tumors, or would you expect this to be in hemlock? Any color you can provide would be great. Thank you.

So, regarding J. Selick and the promotion, you know, of course, we are going to be evaluating and doing a deep dive analysis, a very thoughtful analysis, market by market, and understanding kind of, you know, how we can maximize the the potential value of the asset, also looking at just the resources and obviously supporting the current promotion of the product and just seeing how we can further optimize that. And we'll come back with more details after we do this assessment.

Yeah, and your comment on expo, it will be going until we conclude on the options, what we do going forward. And on oncology, we both are working in solid and hematological oncology, and we'll use one of the next meetings to give you further detail on the different targets, the different fields, and we'll bring in head of research for having that discussion or having that presentation so wait for an update there for one of the next meetings where we will come back thank you thank you thank you we will now take the next question from the line of jason jeffrey from bank of america please go ahead

Hi, guys. Thank you for taking my question. Mine was just, as you look to move the BCMA CAR T program into the clinic, just curious, sort of as you've evolved with the CD19 program and optimized the manufacturing process, how portable is that to new antigen-directed BCMAs, or I guess CAR Ts, in terms of the process? Are there meaningful changes, or Is there a lot that you can leverage as you move into new CAR-T programs? Thanks.

Yeah, that's a very good question. And we can leverage the entire package empire system. We have done the validation of the BCMA on volunteer sample, on volunteer blood, which is done. And now we are starting the initiation of the study to do on patients, on patient blood. It is like... It's like very transferable, and so far with good validation for the BCMA. Of course, then you work on disease material in the next phase, and so we'll be able to confirm that in our next report. But we see no issues on transferring the process. It's a very simple process, automated process, where, of course, the vector is different. The cell growth has to be studied, but so far so good. We see no issues in scaling up the PCMA. And, of course, what we did with CDN19, we observed in the clinical trials a very good efficacy and safety profile because of the way we produce cells and the seven days vein to vein, fresh vein to vein. It's very difficult to dissect what is the cause of the good efficacy, good safety, but we observe that it works. And that's now the next phase for BCMA. We'll do the same. We do a study, evaluate, and we'll look at the results before making commitments to go forward with the full development. Okay. Thank you. Thank you.

Thank you. We will now take the next question. From the line of Mike Woods from Morgan Stanley, please go ahead.

Hey, guys. Thanks for taking the question. Maybe just a quick follow-up on Giseleca. Just, you know, given you're starting the strategic review, can you give us a sense of, you know, when you might be able to provide some final decisions there? Thanks.

Yeah. Thanks, Mike. We are actively working on this. The process is ongoing. I think it's going to know we'll have an outcome of that assessment in the in the coming months and we can provide an update then i'm obviously new on board and uh here in just over a month so of course we're uh you know all working very hard to do a very thoughtful assessment

That did a deep dive on the whole organization, commercial organization, the operations in last month and now ready to engage in next steps. It will take some time and like that is saying next few months or a couple of months will bring clarity and an outcome. Thank you.

Thank you. We will now take the next question. From the line of Brian from Jefferies, please go ahead.

Thank you. So 23 guard cut for Joselica, but what about the peak sales target of $400 million? I don't think that's baked in label restriction just yet, so should we be expecting further cuts there? Yeah. Yep. Sorry. Go ahead, Brian. I'm sorry to interrupt. I was going to squeeze in a cheeky second. How confident are you in then being able to get a car key to the market by 26, 27, as previously stated, given push timeline?

Yeah, I'll take the first part on the Jacellica. I mean, obviously, you know, the higher sales number 400 million is probably, you know, given kind of where we are with sales trends, probably, you know, not likely. So, we want to do also a thorough assessment of the sales potential and revise our models and forecasts, and then obviously come back when we do this assessment and look at the overall business case.

Yeah, Brian, on the timing of the CAR-T to market, it will depend on how we choose our indications. As we have shown in the first seven patients and then the patients within that on rifted transformation, we see a very strong effect and a very high medical need. And we are deciding, as we go already based on on the on the basket study, and then the broader activity on where should we focus to really address a very high unmet medical needs in order to get this accelerated recruitment, but also accelerated development part. And so, for now. while we said target around 27 it's it's it's 26 late 26 27 that still would be possible if we get breakthrough designation and have a very high unmedical need to be addressed um but to be decided when when we move for the pivotal study and uh and discussions with the regulatory authority The demand is very, very high. So what we see in our clinical trial, especially in these indications, people flock to the clinical trials to get in, especially in the high medical needs. So hopefully we can, with broadening the centers in the world, including in the U.S., recruit fast and have a very strong observation. That's what we hope. As we see in the Phase I-II study, if we see the same observation in the pivotal study, we can still reach this time frame. So thank you for the question. Thank you.

Thank you. We will now take the next question. From the line of Xian Deng from UBS, please go ahead.

Hi, this is Xian from UBS. Thank you for taking my question. Maybe just for one question for Tad, please. Now, this is your first appearance as the new CFO. So, just wondering if you could share some of your thoughts on the first impression of Galapagos. What's your overall strategy here? I mean, of course, you have the Celica commercialization, you have internal R&D, and you have, of course, M&A. So, just wondering, what do you like the most? Where do you want to change? Will you accelerate M&A? So, yeah, any thoughts, that would be great. Thank you.

Thank you so much for your question. Yeah, I'm just incredibly excited and honored to be part of this team. I think obviously working together with Paul again, and we've been through, uh, transformations in the past, and certainly we think that there's a tremendous, I believe there's a tremendous opportunity for us to really drive an innovative approach to, um, you know, bringing, um, you know, life-saving therapies to patients in, in, in Galapagos. And I think we're doing some things that the other players are not doing. that I think is really exciting. Of course, I have CAR T experience and oncology experience, I think can also be beneficial in terms of what could be done with point of care. And I also am just so excited to think about what are the possibilities for us to really allocate resources to do business development deals to further innovate and to make a difference for patients. It's not easy, of course. I mean, there's a lot to do, but that's also the opportunity that we have. It's not also lost on me where our valuations are, and I just see that there's a tremendous opportunity to change that.

Thank you.

Thank you.

Thank you. We will now take the next question. from the line of Phil Nadeau from TD Cohen. Please go ahead.

Good morning. Thanks for taking our question. We wanted to ask about the program of moving your CD19 into autoimmune diseases and particularly lupus. Given the size of the market, those programs have created a lot of excitement for some other companies. Can you talk about the timeline of your investigations in SLE When could that trial start? When could we see data? And then maybe more generally, what's the value proposition for point of care in a more slow-moving disease like lupus? Thank you.

Yeah, the status is that we submitted in Europe our clinical trial application, so we'll wait for the outcome in the discussion, and we hope and trust that we can start the study later this year. What is attractive as a complement to our CAR-T network is that Of course, the hematologist, they do the, the hematologist is the physician who treats the patient. But in this intervention, the hematologist is doing the application. And that's where this goes very well together with the point of care incentives where we have, in the centers where we have today our point of care, CAR-T, they're already asking where they can participate. So they see the benefit of the manufacturing on site. Um, that also again, um, yes, will we see benefit from a fresh approach? Um, the current approach with which airline use was a fresh style approach done produced locally. So, what, what are we going to see from the approach we are going to do in the clinical trial center? So, I think there's the benefit of the, the complementarity on the sites where, where this is done. as well as the approach we have taken and the center who has been the first patient has taken to their approach on treating patients. Will we see better results or different results? Of course, to be determined, but I think before the year end, we'll be significantly on recruiting in this trial.

Perfect, thank you.

Thank you. One moment, please. We will now take the next question from the line of Dane Leone from Raymond James. Please go ahead.

Thank you for taking the questions and congratulations on all the progress. You know, kind of a consistent question for me that I hear from a lot of investors. You still have a sizable portfolio. cash balance to draw down on for more meaningful external asset acquisitions. And on kind of counterbalancing that, you still are retaining quite a high R&D burn rate, even with Gisellica activities maybe winding down a bit or continuing to wind down a bit. How are you thinking about balancing that out going forward and perhaps even into 2024 if you could entertain that far into the future? Are we still expecting to do something more meaningful on the business development front, perhaps away from cell therapy and more into traditional I&I? Or what we kind of see on the table from your team today is probably going to be the core area to build out. hone from, and we should expect maybe more bolt-on acquisitions to supplement, you know, the activities that are already ongoing internally. And what can we get that cash burn down to, you know, now that we are winding these larger INI studies down with filcotinib, well, ramping up maybe more targeted studies with the cell therapy platform? Thank you.

Yeah, first let me start and that will follow up. First, we absolutely just don't focus. We do not focus only on CAR T. The reason we stepped into CAR T, we were able to bring two teams together. With a bound and cell point, which accelerated this in ecology and we are there now, since thirteen months, thirteen months ago, no ecology. We were able with two teams, bringing them in. The teams, the capabilities and the products to do our, where we are today. It allows us to have a false time to market in the next four or five years. And that was the main reason to enter oncology via the big door and go fast in transformational therapies. In parallel, I can tell you our BD teams have been evaluating many options, which are not in the CAR-T space, complementary with some of the capabilities we have in the company, but also considering other fields. But we have a very high bar for bringing products in. Either they come as a product with a strong team, and that typically would be an acquisition, or they come in as a strong product. But the product is the core here. Where you have to have address a differentiate a higher medical need and where we can reach the market with a differentiated product. That is the definition for us to do a good. And then, secondly, it has to be a global deal. Yeah, we can, we could consider, or we can consider local deals in Europe, but that's not value creating enough for the money we spent. So we. always will try to go global deals, highly differentiated products in a very high unmet medical need. That's the criteria. And we hold all our BD discussions we do against that. So that's how we tackle BD. And I hope we can bring significant deals in the next 18 months working on that.

Yeah. And addressing the cash burn. I mean, it's clear that actions have been taken this past year to reduce the cash burn from even the prior year operationally We're going to continue to be very disciplined and focusing on managing our resources effectively to really continue to drive the long-term value and also growth and finding those opportunities. Also, as Paul mentioned, the deals are really going to fit our M&A strategy and At the same time, I think that we are seeing some benefits in interest rates that also help our interest income, as well as we're going to make good portfolio decisions and allocate resources appropriately.

Thank you. As a reminder, if you wish to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. That's star 1-1 if you wish to ask a question. We will now take our next question from the line of Sebastian van der Schot from Van Lanskot Kampen. Please go ahead.

Great, thank you. Hi, Tim. Thank you for taking my questions. I just wanted to ask regarding the delay in the IND filing towards H124. Can you maybe go into the fact that you are still discussing why the IND had not come off the ground? And then also quickly talk about the different city, 19 cars and also 1 specifically for out immune disease. Can you maybe highlight what the differences are between the disease and oncology that would require a difference in 19 car. Thank you.

Yeah, first on the IND, we had the pre-IND discussion. And so to submit the IND, the FDA required to have a site validated on US soil. And that takes some time as we need to transfer technology, first install the technology, transfer the technology, validate. And that will take us up till the end of the year. At that moment, we can submit an IND when that validation is done. And that is the basic reason why getting to a contract getting to a centers on and have that done took maybe somewhat longer than expected but basically the ind requirement was the most important one that it brings it over the year end the difference on the cd19 car there is no clear insight what type of cd19 car will work best yeah the airline used the miltany car fee which is very well known. We are using a different CAR T for ours, which one developed ourselves, one we licensed in. So we'll use one of our two CAR Ts to go into the SRE, but it's not clear which ones will work. They will have to experimental be proven that they work. So it's very difficult to predict what safety and efficacy will be for the different products. So that's all I can say at this moment on that.

Okay, got it. Thank you. And maybe then I can squeeze in a last question and I'm also the last in the queue. You mentioned for non-Hodgkin's lymphoma that you are already in dose expansion. Does it also mean that we will get results from the dose expansion by year end and that you can maybe prepare for a study in 2024 for phase two in non-Hodgkin's lymphoma?

The non-options in Linforma is divided into different buckets, as I described it in my talk. Two of them are in expansion. We'll present all of the data later this year, but we'll make a decision based on the highest medical need and the most urgent clinical benefit we can deliver as the first indication we will bring forward. And that's where the diffuse large B cell is still one which we have to recruit additional patients in. And that will do in the next. Yeah. So you will see all the data we'll have in that abstract, which is submitted and available and will become available hopefully at an upcoming call. Very clear. Thank you, Paul.

Thank you.

Thank you. Once again, as a reminder, please press star 1 and 1 if you wish to ask a question. And we will now take the next question from Jacob McHale from KVC Securities. Please go ahead.

Hi there, and thanks for taking my question. I have one just regarding the ATLANTA1 trial. You mentioned that you will include more patients of certain subpopulations. Does that mean that the planned trial size of 45 patients will not be larger? And if so, how many patients have been recruited so far and how many additional patients do you plan to recruit? And I have a follow-up later on as well on the IND that will be filed in the US for the CD19 CAR T. Do you also plan to file an IND for the BCMA CAR T as well? And what is the expected timeline for that?

Okay, I have very difficult to understand the first part of your question. You should repeat that. But we can stand on the IND for the BCMA. Yes, we'll file that. At the moment, we have our dose finding study done in Europe. So that will take some time. And that's not for this year, of course. That will take another several months before that will be done. The first part of the question I missed. Yes, sure.

So just the planned trial size for the Atlantilin trial is 45 patients. I'm just curious if that's still the same, or is that going to be increased?

Yeah, it is in that range. The dose finding was indicated as about 15 patients, and then the expansion dose was about 30. So the total size of the population is about 45. It depends a little bit how many patients will be in which of the subgroups in the, in the study and we, we won't stop recruiting patients until we close this study. So, we'll, we'll, we'll, we will be around that number at the end of the year.

Okay, thank you. And I just have 1 more question actually also on the for the U. S. Will those trials be an extension of the phase 2 trials? Or would you expect that in the US you will go into a larger trial that builds on the data set generated in Europe?

Yeah, it's a lot. We want to use the data we have generated in Europe to start a pivotal study in the US and Europe. And so in parallel, we'll submit an IMD as well as go to the European authorities to do a clinical trial in Europe in order to get to a pivotal study. and get to the outcome. I see. Okay. Thank you.

Thank you. There are no further questions at this time. I would like to hand back over to the speakers for final remarks.

Thank you very much, operator. That concludes today's earnings call. Please feel free to reach out to the IR team if you still have questions. Our next financial results call will be our Q3 2022 results on November 3rd. Thank you all for participating and have a great rest of your day.

Thank you all for participating. Have a good day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.