Galapagos NV Price & Performance (GLPG)

Thank you all for joining us for Galapagos' Galapagos year 2024 Last night, we issued a press release outlining these results. The press release, along with today's webcast presentation, can be found on the Galapagos website. Before we begin, I would like to remind everyone that we will be making forward looking statements on the call. These forward looking statements include remarks concerning future [indiscernible] and the competitive environment. Actual results may differ materially from those indicated by these statements and are accurate only as of the date of this recording, 02/13/2025. Galapagos is not under any obligation to update statements regarding the future, or to conform to these statements in relation to actual results unless required by law. Joining us on today's call from Galapagos' senior management team are Doctor. Paul Stoffels, Chair and Chief Executive Officer and Thad Houston, Chief Operating and Chief Financial Officer. With that introduction, let me now turn the call over to Doctor. Stoffels. Paul? Thank you, Sri, and thank you all for joining us today. 2024 was a productive and transformative year for Galapagos, in which we made significant progress streamlining our business operations and advancing our leadership in cell therapy in oncology.

One of our key accomplishments last year was the progress we made advancing 101. Our flagship CD19 CAR T clinical development program in multiple hard to treat NHL indications. We were particularly pleased to receive FDA's IND Clearance To Begin Clinical Studies In The U. S. And with the compelling new results from the Atalanta study we presented at the American Society of Hematology Annual Meeting in December.

I will discuss those results in greater detail later on this call. Throughout 2024, we focused on building our leadership position in cell therapy where we executed a number of key partnerships and collaborations in support of those goals with companies such as Lonza on a decentralized platform, Thermo Fisher for the development of an ultra rapid PCR sterility test together with My Diagnostics and Axcelos part of Blood Centers of America to broaden our DMU network in The U. S. Separately, in 2024, we also signed an agreement with Adaptimmune for TCR T cell therapy in solid tumors. Finally, we completed the transfer of the Eiselica business to Alpha Sigma, which provided us with savings of approximately €200,000,000 and for which we remain eligible for royalties on European sales. Based on the strong foundation, we are continuing to evolve our strategy for building Galapagos as a global leader in cell therapy. Towards that end, we are excited to start the new year with a focus on accelerating value creation by executing on our plan to separate into two publicly traded entities Galapagos and Spinco Galapagos. Spinco, a newly created Belgian company, will invest to build a pipeline of innovative medicines through transformational transactions with Gilead as a partner.

Galapagos will focus on accelerating global oncology leadership by addressing high unmet medical needs with a decentralized manufacturing platform and with full ownership of all other programs. As many of you know, in 2019, Calabasas entered into a ten year global option license and collaboration agreement or OCA with Gilead. Since that time Gilead, Calabas and the Bio industry as a whole have all evolved.

Both separation Spinnco will assume the Olcott agreement with Gilead. Galapagos will be able to focus on executing its strategy for accelerated growth and sustainable value creation as a leader in the development and innovative manufacturing of cell therapies mission to bring transformational medicines to patients across the world. As such, we will seek partners for our small molecule programs including our TIC2 inhibitor, we will discontinue future small molecule research. By separating into two entities, each company will have tailored strategies and maximize opportunities for growth and impact. We are offering a win win for our shareholders as we can create even more value as independent entities with unique strategies in our respective areas of expertise. Let us now turn to the new and exciting opportunities for Galapagos, as we forge ahead with the development and delivery of life changing cell therapies to address patient needs in oncology. This planned transaction allows Galapagos to focus on leadership in therapies based on the following strong fundamentals: Firstly, we are well capitalized to advance our portfolio and platform toward value creating milestones. Importantly, the termination of the Olga for Galapagos gives us the autonomy to fully invest in and partner our own assets and programs and to realize the rewards of our future achievements.

We remain focused on providing broader and faster access to cell therapies with our innovative decentralized manufacturing approach and a goal of seven days vein to vein time. Not only does this bring logistical and cost benefits, but by providing patients with fit cells, we believe we are improving efficacy and safety and offering a solution for many more patients. Especially those patients with a very short life expectancy. We are advancing our cell therapies currently in clinical development which we believe have potential to be best in class through the delivery of fresh and fit cell In addition to our six year expanding the ATALANTTA clinical trial in The U. S. Where we are engaging with leading cancer centers in Boston. Our aim is to start pivotal studies in 2026. To support our ongoing clinical trials and to ensure pivotal readiness, we are expanding our decentralized manufacturing network in The U. S. And Europe. Giving patients direct access to our therapies and limiting logistical constraints. We are also building global partnerships with hospital networks and healthcare organizations to increase access significantly. All of this is being done in a highly cost effective way that takes advantage of our automated closed sterile production system with limited manual work and is designed to improve access and reduce the cost of goods significantly.

We will also look to partner our platform with cell therapy companies leveraging our unique manufacturing platform and network for broader access for example, as we did with Adaptimmune in solid tumors. To support sustainable value creation, we are building a to address some of the limitations of current therapies. By taking advantage of combination targeting and armoring to best treat a range of hematological and solid tumors. Most importantly, our ambition in cell therapy and the plant separation are designed to benefit the patients we serve by both accelerating and expanding our ability to bring new medicines to market. Our decentralized manufacturing was designed to overcome the limitations of current cell therapy manufacturing, which is centralized and bears higher cost burdens, longer production and delivery times and delivering cryopreserved cells. A seven day vein to vein time is designed to provide fresh fit cells which we believe enhance the therapeutic profile by producing highly potent cells that are less exhausted, less toxic and persist longer. We currently have six operational and approved manufacturing sites in several European countries and are actively expanding in Europe and The U. S. With Landmark Bio in Boston operational for Rattalanta. We believe the advantages of our Kokum process make it ideal for near point of care manufacturing given its close system, lean design, user friendly interface, data monitoring capabilities, automation and scalability.

We have a long term strategic collaboration with Lonza for the supply of cocoons and cassettes. We truly are excited by the opportunity ahead for Galapagos to lead in cell therapy drug development and this decentralized manufacturing platform is core to that strategy. Moving forward, Galapagos will focus on unlocking the broad reaching as we advance a robust cell therapy pipeline. In line with our goal to be a more focused and streamlined organization, we are implementing a strategic development approach for our CD19 CAR T portfolio 101, our most advanced asset cleared for clinical development by the FDA and the European regulatory authority. And with the fastest path to market. In order to fully realize that potential, we are accelerating an expanding the 101 into additional aggressive lymphomas such as Richter transformation and in chronic lymphocytic leukemia, where we believe we can drive the greatest impact for patients. Our plan is to move into pivotal studies in 2026 with an aim to have a first approval in 2028. As part of this focused strategy, we are de prioritizing our activities related to GLPG five thousand two hundred and one our second CD19 CAR T candidate, pending the advancement of GLPG5101 in the Richter transformation in chronic lymphocytic leukemia. [indiscernible] In tandem, we are advancing the Phase onetwo study of GLPG 5,301 in multiple myeloma, while also strengthening our early stage pipeline of next generation multi targeting armored cell therapies for hematological and solid tumors.

To ensure long term innovation and value creation, we expect to advance one of these preclinical assets into first in human clinical studies in 2025. Further reinforcing our commitment to delivering transformational candidate for head and neck cancer through our partnership with Adaptimmune. We believe that the combination of fresh, fast and fit has the potential for transformative impact and we can see from the data recently presented at ASH a promising safety and efficacy profile for GRPG-five thousand one hundred and one in patients with mantle cell lymphoma, marginal zone lymphoma, follicle lymphoma and diffuse trans B cell lymphoma. As of April 25, 2024 data cut off, forty nine patients received CD19 CAR T cell therapy infusion and safety results were available for forty five patients and efficacy was available for forty two patients. As you can see, we achieved high overall response and complete response rates. Here we show one hundred percent of patients with refractory patients with refractory relapsed for liquid lymphoma and marginal zone lymphoma and fifty four percent of patients with refractory lapsed and diffuse large B cell lymphoma achieved a complete response. At dose level two, the complete response rate was seventy one percent and the overall response rate eighty six percent for diffuse large B cell lymphoma.

Of evaluable patients achieving complete response, eighty percent were minimal residual disease negative and remained in complete response at the time of data cutoff. And we are seeing very reassuring safety data with low levels of [indiscernible] This translates to less patients in need of intensive care less time in hospital and more time at home with family. Not only are we seeing strong data around the response rates, but we are also seeing that those response rates are durable. Across Phase one, Phase two, 32 of thirty seven or eighty six percent of responding patients had an ongoing response at the time of last assessment or end of study. Of the 15, mineral residual disease evaluable patients with a complete response, twelve patients are eighty percent achieved mineral residual disease negativity and remained incomplete response and data cut off. The median study follow-up was three point three months for follicular lymphoma and diffuse large B cell lymphoma with a range of zero point nine to twenty one point two months. And four point four months for mantle cell lymphoma with a range of one to twenty four point four months. 101 showed an encouraging safety profile with the majority of higher than or equal to Grade three events being hematological.

Ninety six percent of patients, forty seven or forty nine, received an infusion with fresh CD19 CAR T cell therapy of which ninety one point five percent, forty three out of forty seven, achieved a vein to vein time of seven days eliminating the need for bridging therapy. Of note, strong and consistent in vivo CAR T expansion levels and products consisting of stem like early memory phenotype T cells were observed in all doses tested. The summary of these data underscore our enthusiasm for going all in on 101, a flagship CD19 program. Our new strategy positions us to build on the clinical success we have seen thus far. Turning now to our small molecule programs in immunology. Where our most advanced candidate is our TIC2 inhibitor GLPG-three sixty six Preclinical and first in human clinical data showed GLPG three thousand six hundred and sixty seven to be a selective and potent inhibitor of TIC2 resulting in near complete inhibition of type one interferon signaling for a twenty four hour cycle, which is supportive of a once daily administration. We intentionally selected SLE and DM as our first indications because type one interferon plays a key role in both diseases.

Our Phase II program offers an attractive partnership opportunity. I'm pleased to report that we recently completed screening in the SLE Phase three enabling clinical study ahead of schedule. And anticipate top line results for GLPG3 thousand six hundred and sixty seven in SLE NDM in the first half of 2026. Beyond SLED NDM, TIC2 inhibition offers potential in several other autoimmune indications further expanding its market opportunity. Our bold new strategy is focused on advancing our cell therapy leadership. As such, we are seeking to partner a promising small molecule portfolio which was built on more than twenty years of research and where we have identified more than five programs in both oncology and immunology. The continued unmet medical need in a number of immune mediated diseases offers a significant market opportunity. And should make our programs an attractive opportunity for companies already operating in immunology. As you can see on this slide, we have an exciting year ahead with the potential to a achieve a number of value driving catalysts. Moving ahead, with our focus in cell therapy, Patient recruitment is ongoing in Europe with leading cancer centers in BOST activating following U. S. FDA IND application clearance of five-one hundred and one.

We continue to build out our immune network and are focused on building the infrastructure and attracting talent to support the start of registrational studies with GLPG-five 101 in 2026. As well as our plant global expansion. Our aim is to complete the Phase three enabling study with ARTIK2 inhibitor in SLE NDM while seeking partnerships. We progress our early stage next generation cell therapy pipeline in hematological and solid tumors including OzaCell. With that overview, let me turn the call over to my colleague, Ted Houston, for an overview of the exciting transaction we Thanks, Paul. We remain very excited by the opportunities we can create by separating Galapagos into two entities, Paul has reviewed the benefits for Galapagos as an independent company that can now fully own its programs and platform. Now let's look at how we plan to create value from SpinCo. Unfortunately, the capital markets have been tight over this time period leaving many companies struggling for financing. For companies with capital to deploy such as SpinCo, we believe that this creates multiple opportunities to build value. Here you can see the initial actions that are planned for setting up Spinco for success. We expect to complete the separation around mid year for SpinCo and to prepare for listing on Euronext and NASDAQ.

In the coming months, during the separation, Spinco will point a seasoned executive team and independent non executive directors with proven track records in biotech, company building and strategic transaction execution. A prospectus will be made publicly available at least one month prior to the spin off. Are to receive Spinco shares on a pro rata basis proportional to their ownership of Galapagos shares. Turning now to our financial results. For our full year 2024, financial results, our total revenues were €276,000,000 which includes €35,000,000 of supply revenues related to GYCELLICA and €241,000,000 in collaboration revenues.

Research and development expenses were €335,000,000 which CAR T. G and A and sales and marketing expenses were flat to €134,000,000 We had a net profit for the year of €74,000,000 driven by €185,000,000 from fair value adjustments currency exchange and interest income as well as the net profit from discontinuing operations, which includes a gain of €53,000,000 or on the sale of the Gicellica business, Alpha Sigma. Now looking at our balance sheet. We ended 2024 with approximately €3,300,000,000 in cash Our cash burn for 2024 was €374,000,000 Excluding business development or cash burn, was €293,000,000 which is within our guidance range of €280,000,000 to €320,000,000 Upon separation, Galapagos will be capitalized with approximately €500,000,000 in cash, which is expected to provide runway to 2028 as our normalized cash burn is projected to be in the range of €175,000,000 to €225,000,000 SpinCo is expected upon separation to be capitalized with approximately €2,450,000,000 Following the separation, Galapagos will be focused on accelerating the development of our flagship CD19 CAR T program through our innovative decentralized manufacturing platform. Our aim is to start pivotal studies in 2026 aiming for a first approval in 2028. We will continue to develop next gen cell therapy and solid tumors.

We plan to initiate clinical development of a novel CAR T candidate 2025. We will also develop a worldwide decentralized manufacturing network for the delivery of our cell therapy. Importantly, we will have the autonomy to partner our decentralized manufacturing platform and network as well as our differentiated cell therapy pipeline. With this focused strategy, we are also implementing a significant restructuring to realign our footprint and to reduce our cash burn. Turning to the opportunities we have by creating SpinCo. Where we are equally excited by its potential to create value by focusing on building a pipeline of innovative medicines through transformational transactions. We are forming SpinCo with sufficient resources to pursue high quality assets fund development and to invest in its portfolio. If Gilead decides to opt in to spin Co programs under the OCA, then Spin Co will be able to leverage Gilead's strong expertise and late stage development and commercial capabilities in key therapeutic areas. The SpinCo Board will have a majority of independent directors and will be led by an Importantly, Gilead is committed to negotiating in good faith amendments to the Olka on a transaction by transaction basis to achieve positive value for SpinCo and all of its shareholders.

We have an exciting year ahead as we advance our clinical programs in early stage pipeline of next generation cell therapies in a number of important cancer indications and with the launch of our newly created SpinCo.

Throughout the coming year, we expect to achieve a number value creating milestones that will further our commitment to transforming patient outcomes through life changing science, and innovation. Thank you once again for your time today and for your continued interest in support of our mission. Operator, we are now ready to open the call for questions.

Thank you. And now we're going to take our first question. And it comes from the line of Shandong from UBS. Your line is open. Please ask your question. Hi. Thank you very much. Thank you very much for taking my question.

And this is regarding to 5101 and also 5201. Thank you very much for the very useful data review for 5101 and that makes sense of why you want to expand that. But just wondering, given you are also deprioritizing 5201, just wondering if you could remind us what's the difference between the two CD19 construct for for those two CAR Ts? And just wondering why are you if you could maybe elaborate a bit more why you are deprioritizing 5201?

Thank you very Paul Stoffel here. Let me explain. We were running 52015101 in parallel for clinical trials in Phase onetwo. And we saw excellent efficacy and safety for both of them. And we think and we believe very much that this is driven by fresh cells, high content memory cells, which do the job there to make that kind of outcome But the main reason then is for us to simplify is that building a DMU, a decentralized manufacturing network in the world for running two CD19s, is quite quite steep. And so by not duplicating the product transfer and validation about all the Demusrios setting up, we could focus much more on accelerating our pipeline on our main asset And so adding the CLL and the registrational formation to the 5,101 will accelerate it, the two indications most likely to the market And that's why reprioritizing the two indications on the 5,101 We have already the agreement of the FDA on the Richterrand transformation. That's already done. We are completing work the CLL to also include that in the IND. To kick that off as soon as possible in The U. S. So it is really accelerating by simplifying and really believing that the fresh cells do the job in making the difference in this CD19 space.

Thank you. Now we're going to take our next question. And the question comes from the line of Phil Nadeau from TD Cohen. Your line is open. Please ask your question. Good morning. Thanks for taking our question. Just follow-up on the last one and then another question on the separation. Just in terms of 5,101 versus 5,201, were there any differences in terms of manufacturing process or characteristics between the two programs. That's first question. And then second, in terms of the separation transaction, what is rate limiting at this point? Is it hiring of that management team or are there other logistical or legal steps that are really gating? Thanks.

Giovanchetti Oncology.

In answer to your first question, terms of the issues regarding manufacturing, they are the same. The fundamentals of fresh sells in, fresh product out, seven day vein to vein resulting in a superior product. The vectors are different, but however, the basis of our decision was made on the very significant and compelling data from five-one hundred and one and the issue regarding [indiscernible] With regard to the second question, Tateman?

Yes.

No, this is Thad Houston here. I think clearly, we are in the process of a number of different elements related to the separation. Larry could also add to that. Including the hiring of a management team. And that process is underway. Obviously, there's a number of different legal steps as well. Sure. So Valeria, So I think with any listing on NASDAQ, and on Euronext, we're preparing diligently for the listing and that will be subject to the review of FSMA and SEC. And in addition, prior to the spin off, the spin and separation will be subject to the shareholders approval at an extraordinary general meeting of shareholders that would take place in midyear with with the required approval being obtained, we can be listing few days thereafter.

Of course, the fact that the non core OTL Board is working very hard to recruit seasoned CEO and several executives as well as an independent non executive director team for the board. So that is actually ongoing. And we plan to have several people on board by the time we spin off. Perfect. Thanks for taking our questions.

Thanks, Tom. Thank you.

Now we'll go and take our next question. And the question comes from the line of Brian Abrahams from RBC Capital Markets. Your line is open. Please ask your question.

Thanks very much. Good morning and good afternoon. Thanks for taking my questions. Maybe another one on 5201. Can you just help us understand, I guess, how far along you guys were on the IND filing process when you made the decision to prioritize 05/2001 and I guess what gives you the most confidence that 05/2001 will look similar to the promising data you generated from 05/2001 and CLL? And then secondly, just wondering if you could give us the latest update on the types of assets that the SpinCo may be looking for? Thanks.

Yes, why we are confident that the 05/5200 are pretty similar? We see similar efficacy, safety activity. Also the expansion if we do the the manufacturing and then the administration in the expansion, we see a very significant expansion happening in the patients similar to the five thousand one hundred and one So and with the five thousand two hundred and one. So that's where we don't think the vector is doing the drive of the difference. The vector won't make the difference. We are comfortable that the way we make the cells is going to drive the difference. And the main reason to do this is to to, as I said earlier, is to align on a simplification of the immune network where going we are required by the authorities to do a validation and doing equivalent studies between all of the immuno immune sites in the world. If you do that, it's a cumbersome and very work intensive process. Running two processes next to each other's in the same DMUs means we have to double that and that would delay the overall progress of our company if had to parallel process those at this moment in time. In a significant way across the world.

We are running in Europe two already in parallel. That is the 05/2001 and the 05/2001, the the BCMA target in Europe adding a third one to the net [indiscernible] into pivotal studies as we want to start those next year. And that's why we concluded to for optimization and efficiency, let's focus on one key CD9 then do the PCMA in early stage and learn whether it is competitive product. But on third, also start focusing on our mix generation assets, which are in progress and maybe John can talk a little bit more about that just to highlight a few things about that because that's also important in our portfolio why we make this prioritization. John? Thanks, Paul. My name is John Mellors. I'm Head of Cell Therapy Discovery and Early Development at Galapagos, and I'm pleased to Let the audience know that we are working very hard around the clock to develop next generation CAR T cell therapies that include multi targeting of cancer associated antigens and arming to prevent suppression of CAR T cells by the cancer microenvironment.

We have four main objectives in NHL and myeloma in lung cancer and in ovarian cancer. And our first product has been approved for clinical development and we'll enter proof of concept studies by the end of the year. And that's a multi targeting CAR T for NHL and ALL. For myeloma, we intend to target the space that follows BCMA targeting therapy. And for lung cancer, we are targeting a validated clinical target plus an additional target. And for ovarian cancer, two targets in combination. And let me just emphasize that each of these indications are high on medical needs and we believe we can have an impact and by impact, I mean more frequent responses, deeper responses and longer duration of with our arming and multi targeting strategy. Thank you.

And just confirming here that the first assets is is internally ready to get into into clinical trials and that is being prepared as John was saying before the year end. So I think that's also one of our big objectives for the year. Is progressing the first asset of our next generation into the clinic.

Yes. Brian, let me take this stat here of the spinco question. First of all, I want to say that we're really excited about the creation of SpinCo. SpinCo will clearly have more greater flexibility and access to acquire assets with significant potential without having the need to fit in the Galapagos strategy. So there's a lot more broad opportunities to do deals. And of course, partnering with Gilead and working closely with them with a well capitalized organization that can really compete for the highest quality targets across the biotech space. And the types of assets I think we're identifying or clearly to find a pipeline of innovative medicines that really have the potential to treat diseases with significant unmet need across any different types of indications with a focus on virology, immunology and oncology.

Thank you.

Thank you.

Now we're going to take our next question. And it comes from the line of Faisal Khorshid from Leerink Partners. Your line is open, please, after question.

Good morning guys. Thanks for taking the call. I just wanted to ask as you're kind of preparing for pivotal development, on 05/2001, can you talk a little bit about what the potential indication and kind of trial strategy looks like there? And then also as a potential approval could be a few years away now, what does The U. S.-based manufacturing footprint look like And what is your progress towards getting that into place? Thank you. Yes. Thank you very much, Juveen Ciete.

Again, with regard to the indication [indiscernible] regarding the ATLANTA study in the indications of mantle cell, mantle zone lymphoma as well as NHL. We intend to expand that into a number of other indications Burkitt's lymphoma, particular, primary CNS lymphoma as well as high risk diffuse large B cell lymphoma. So areas where the unmet need is significant and where the seven day vein to vein time fresh cells in fresh product out have significant contributions to the the outcome for patients. We will be led by the data that we see in our Phase two and clearly, we will communicate more comprehensively as the data emerges. But our tenants are really significant unmet need that benefit from our [indiscernible] And on the manufacturing side, we have obviously decentralized manufacturing structure. So it's it's a model where of course we want to have validated sites like we have our initial site with Landmark Buy on the Boston area.

So it can cover the Boston area. Major hospitals, which we're also partnering with. But we're also looking to have regional sites in kind of high density areas throughout The U. S. East Coast, West Coast, South And North Of The U. S. And so trying to get the right coverage as we go adding sites by site. Like we said, Paul in his remarks, we had Blood Centers of America, for example, with West Coast coverage as one site and continuing that those over time.

To start with, first of all, we need target on the high where the high density of oncologists are in these very specialty areas. And then for commercial, we'll broaden out into other sites as we want cover the whole of The U. S. But we at this moment, all of our TMUs are focused on getting the maximum number of patients in indications in the indications we are looking for. So there's like a two step where complete the studies, they can be sites already for commercial when we can start, but we'll work further over the year to determine where all the sites will be.

Got it. Thank you. And are the regulatory requirements different between having these manufacturing sites with the clinical trial as opposed to for commercial use?

Well, there are some additional requirements for Pivotal, which we are preparing for, and we are comfortable that we are ready for that by next year when we start the clinical trials. Today, it's a very high standard. We have to meet of course because we provide biological source and human cells. And so there is not much difference but it all has to do in the end with also further automating the quality release testing and further demonstrating comparability and equivalents across a different site. So as we go we will strengthen that. But today, we already meet a fairly high level of requirement close to commercial.

Got it. Thanks for taking my questions.

Thank you. And now we're going to take our next question. And the question comes from the line of Judah Frome from Morgan Stanley. Your line is open. Please ask your question.

Yes.

Hi. Thanks for taking the question. Just curious if you could share any indication of interest from potential external partners for manufacture [indiscernible] Point? Or is that something that you haven't necessarily have conversations on yet?

Yes, we have a inbound questions from external partners to get on our platform. Of course, we are making sure that we are first build up ready ready to go with all our clinical trials. But example, the collaboration with Adaptimmune started on with the interest on their platform PCR T, if you produce it on our platform, has the same similar kind of features as as when we do with the CAR Ts for the hematological testing. And there, we are progressing with Adaptimmune to next stage. And starting clinicals. I think eighteen, twenty four months from now. But that is one of the examples, but we have multiple other which we are evaluating. And there are two things there for us. It's one, we can partner on the platform, but we can also strategically partner partnering on co development with partners. And that would be our main interest is looking at people who are interested to have two. Where we can access, where we can strategically partner on the on the drug, on the cell therapy combined with the platform. So and our teams are very active in having those discussions.

And just wanted to add in addition to this is the fact that as a cell therapy leader, we lead also at hematology and oncology in these partnerships.

Example, Adaptimmune is a head and neck indication solid tumor indication.

With significant unmet need and that is the form of the collaborations that we're having as well.

I think it's really exciting for us to also look at this post separation and have the flexibility to partner with many different types of companies that have maybe manufacturing limitations or just capacity constraints or don't have the capital to potentially invest and having a unique differentiated platform that we have.

And there's one particular region in the world, which is very underserved and then that's Asia. And so there we get requests from governments as well from CDMOs to partner on the platform. Further off. But you see the fact that we have a scalable decentralized manufacturing capacity or capability with Cocoons and good results, it is very attractive for other parts of the world, including those regions who don't have access and still have very high medical needs in this space.

Okay. Thanks.

Thank you.

Now we'll proceed with the next question.

And it comes from the line of Jason Gerberly from Bank of America Securities. Your line is open. Please ask your question. Hey, this is Chi on for Jason.

Thanks for taking our questions. A quick question on 5301. So based on the press release, it looks to me that you're taking a harder look and whether you will walk onto advanced 5,301 further in development in multiple myeloma Is it because of the competitive dynamics in the BCMA CAR T space or complexity of setting up a DMG network for a second CAR T or a bit of Maybe can you talk about the analysis that you specifically looking at in the Phase one study on the PAPILIO study And what criteria you want to see 5,301 meets order for you to advance the asset in the pivotal trial? And if I may ask quick follow-up on the indication pursuit plan for 50,101. Are you prioritizing when or two of the indications at use as you think about capital preservation in 2026 and beyond? Thanks so much.

Thank you very much, DuVinchette again. I'll take the first part of the question.

With regard to the Papillio study, it is very clear what the competitive environment actually looks like with regard to the incumbents. So we know what parameters we need to beat or be equivalent to in both safety and efficacy.

And so that is very clear. And really our determination will be based on the benefit risk ratio and the safety and efficacy in particular. I have to add that we are making very good progress with the Papillio study.

Clearly, we're recruiting well and we will share data at an upcoming hematology conference The internal determination will be based on how competitive we are with the incumbents, but [indiscernible] Yes. And with regard to the we'll wait to determine for the DMUs there on where the first data are and the expansion of that and the expansion to parts of the world. For 05/2001, you asked on the prior with the KOLs we talk in the clinics and they see this high unmet medical need NHL indications. All those indications we are listed. The majority of are interested to all of the KOLs we work with today. And that is that's where we don't prioritize at the moment the indications. We give access to the physicians to participate with the patients in these expansion cohorts which we are making. And that gives us the insight later this year on what will take as priorities going into the pivotal studies in for registration. But so far, these indications we list on the slide you have seen during the presentation. Those are all open or one by one they will all be open. For inclusion and that our specialty centers but most of the people are interested in the majority of the bonds we have there.

Thanks so much. Thank you. Now we're going to take our next question.

And the question comes from the line of Sean McCatune from Raymond James.

Your line Hi, guys. Thanks for the question. So for the 2028 cash runway guidance, can you speak to maybe what milestones programs and potentially further efficiency measures are contemplated within that guidance? Thank you.

Yes, this is Thad here. No, good question. So we look ahead, obviously, we're going through a pretty significant restructuring of the business that Paul mentioned as well. Reducing our overall headcount by about 40% focusing in cell therapy and we brought our burn rate down from excluding business development from $293,000,000 in 2024 to a range what we're saying of about $175,000,000 to $225,000,000 per year. We can certainly work towards the lower end of that range depending on some of the choices. We initially invest kind of move down over time, but then we'll have the clinical investment that will pick up. And so that's why we give kind of this range. We're saying the range is kind of taking us to 2028 because that's assuming midyear with approximately $500,000,000 at separation. So we do see that we'll have a runway there. We also have a number of milestones and key inflection points, obviously, going into pivotal in 2026. Obviously, completing the pivotal studies for 05/2001 We'll also see the readouts on 5301. We'll have 5701. And as also mentioned, we'll have some of our internal next generation platforms going into the clinic. And we anticipate to have a multiple number of programs between now and 2028 that went to the clinic.

And in addition, we're also looking to do potentially partnership deals on the platform and we see tremendous opportunity there. So there's a number of key milestones and a number of really exciting things that will help us get to that 2028 first launch hopefully.

Thank you. We'll go and take our next question. I just had one on the ATLANTE-one study in The U. S. When do you expect to dose the first patient? And maybe can you please provide some insight behind the small delay there?

Yes. Jievan here again. Thank you very much for the question. In Europe, the patient recruitment is ongoing with The U. S. Clearly with the FDA IND application secured and also the inclusion of the leading cancer centers in Boston being engaged We're working really pretty hard towards enrolling the first patient into the study. We So we're very confident that we will be able to recruit the patient imminently. There are clearly some procedural and operational components in the final stages of starting the trial that we are working towards, but we're very confident that we will have our first patient very soon.

Thank you.

And now we're going to take our next question. And the question comes from the line of Sebastian Van der Schott from [indiscernible] Hey, good morning team. Thanks for taking my questions. I was hoping that you could expand on the differences between the decentralized and centralized manufacturing. But then from the standpoint of the regulator, Compared to previous CAR T trials in the registrational setting, do you expect any differences in terms of patient number or follow-up to demonstrate consistency between the different number of the DMUs? Well, I start with your last remark. Because we run comparative and validation trials on the different DMUs. We come with the same product out of that manufacturing site. Like large companies do. We do the same type of validation where large companies do that centrally in their sites. We do that across sites and we follow the principle of split samples where we validate that across different DMUs and validate that all of these DMUs function the same. So we have to comply with the high standards of central manufacturing in order to deliver these CAR T cells. And that's where we don't assume any different indications from different regions in the world.

We go for one one we go for indication by indication combining U. S. And European patients.

Yes. Just to add generally though, I mean, we have significant benefits for our decentralized [indiscernible] regulatory pathway Paul mentioned it has to be applied, but I think the delivery of fresh cells, we obviously see this unique clinical benefit, but there's also a number of logistical benefits and cost benefits that we also see with our delivery in our model.

Okay. Thank you. And if I may, just one more question. Regarding the deal terms of U. S. L. Could you remind us of those deal terms? And then you also mentioned that you are looking for similar partnerships in the future. Can you expand on that?

Yes. So we did the Ouzacel deal where we essentially have an off [indiscernible] hundred million option, lease initial payment. But we have the option to go up to three different indications, including ovarian and some others. And we're essentially we're testing the product on the Cocoon, and the platform and then where we could opt in and basically take over the the commercialization and development rights.

Okay, got it. Thank you so much.

Thank you. Thank you. There are no further questions for today. I would now like to hand the conference over to your speaker, Sri Ramaswamy for any closing remarks.

Again, thank you all for joining us today. The team will be in Boston presenting at the TD Cohen Health Care Conference on Tuesday, March 4 at 01:50 p. M. Eastern Time and the following week, we'll be in Miami participating at the Barclays Healthcare Conference. Please reach out if you're interested in connecting with us in person at these events. Have a wonderful day and we look forward to seeing some of you in March.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.