Autolus(US:AUTL)2022-03-09 16:00markdown PART I [Identity of Directors, Senior Management and Advisers](index=7&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers.) This item is not applicable to the report [Offer Statistics and Expected Timetable](index=7&type=section&id=Item%202.%20Offer%20Statistics%20and%20Expected%20Timetable.) This item is not applicable to the report [Key Information](index=7&type=section&id=Item%203.%20Key%20Information.) This section presents key financial data, capitalization, offer details, and critical risk factors [Selected Financial Data](index=7&type=section&id=A.%20Selected%20financial%20data) This sub-item is reserved and not applicable to the report [Capitalization and Indebtedness](index=7&type=section&id=B.%20Capitalization%20and%20indebtedness) This sub-item is not applicable to the report [Reasons for the Offer and Use of Proceeds](index=7&type=section&id=C.%20Reasons%20for%20the%20offer%20and%20use%20of%20proceeds) This sub-item is not applicable to the report [Risk Factors](index=7&type=section&id=D.%20Risk%20factors) Autolus Therapeutics plc faces significant risks including the impact of the COVID-19 pandemic, a history of substantial losses and expected future losses, the need for additional funding, and challenges in advancing product candidates through clinical development and regulatory approval - Autolus has incurred significant **net losses** since its inception, with an accumulated deficit of **$521.3 million** as of December 31, 2021, and expects to continue incurring **losses** for the foreseeable future[21](index=21&type=chunk)[24](index=24&type=chunk) Net Losses (2019-2021) | Year Ended December 31, | Net Loss (in millions) | | :---------------------- | :--------------------- | | 2021 | $(142.1) | | 2020 | $(142.1) | | 2019 | $(123.8) | - All of Autolus's product candidates are in clinical or preclinical development, with no products approved for commercial sale, making future success highly dependent on successful clinical trials and regulatory approvals[16](index=16&type=chunk)[32](index=32&type=chunk)[39](index=39&type=chunk) - The company's proprietary T cell programming technologies represent emerging approaches to cancer treatment, facing significant challenges in regulatory approval, manufacturing scale-up, and market acceptance[17](index=17&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Adverse side effects, such as cytokine release syndrome (CRS) and neurotoxicity, observed in CAR T cell trials, including obe-cel, could delay or preclude approval and limit commercialization[17](index=17&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The ongoing COVID-19 pandemic has impacted and could continue to materially and adversely affect Autolus's business, including clinical trial enrollment, supply chains, and access to **capital**[15](index=15&type=chunk)[84](index=84&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) - Autolus operates in a rapidly changing and highly competitive industry, facing competition from major pharmaceutical and biotechnology companies with greater resources[19](index=19&type=chunk)[170](index=170&type=chunk)[174](index=174&type=chunk) - The company's ability to obtain and maintain patent protection for its technologies and product candidates is crucial, as insufficient protection could allow competitors to commercialize similar products[20](index=20&type=chunk)[185](index=185&type=chunk)[190](index=190&type=chunk) - As a UK-based company with international operations, Autolus is exposed to economic, political, regulatory, and foreign currency exchange rate risks[93](index=93&type=chunk)[94](index=94&type=chunk) [Information on the Company](index=54&type=section&id=Item%204.%20Information%20on%20the%20Company.) This section details the company's history, business operations, organizational structure, and property assets [History and Development of the Company](index=54&type=section&id=A.%20History%20and%20development%20of%20the%20company) Autolus Therapeutics plc was incorporated in England and Wales in February 2018, re-registering from a private to a public limited company in June 2018, and completed its IPO on Nasdaq under "AUTL" on June 22, 2018 - Autolus Therapeutics plc was incorporated in England and Wales in February 2018 and re-registered as a public limited company on June 18, 2018, completing its IPO on Nasdaq on June 22, 2018[261](index=261&type=chunk) Capital Expenditures (2019-2021) | Year Ended December 31, | | :---------------------- | | 2021 | | 2020 | | 2019 | | **Capital Expenditures (in millions)** | | $8.9 | | $14.7 | | $18.3 | - **Capital expenditures** are expected to increase in the near term to advance research and development programs and expand internal manufacturing capabilities[264](index=264&type=chunk) [Business Overview](index=55&type=section&id=B.%20Business%20overview) Autolus is a biopharmaceutical company focused on developing next-generation programmed T cell therapies for cancer, utilizing proprietary modular T cell programming technologies to enhance cancer cell recognition and overcome defense mechanisms - Autolus is developing next-generation programmed T cell therapies for cancer, leveraging proprietary modular T cell programming technologies to improve cancer cell recognition and overcome defense mechanisms[265](index=265&type=chunk)[266](index=266&type=chunk) - The clinical-stage pipeline includes five programs targeting hematological cancers (obe-cel, AUTO1/22, AUTO4, AUTO5, AUTO8) and solid tumors (AUTO6NG, AUTO7), with worldwide commercial rights[267](index=267&type=chunk)[301](index=301&type=chunk) - Obe-cel (AUTO1) is a CD19-targeting therapy for adult r/r B-ALL, showing a manageable adverse events profile and encouraging duration of response in Phase 1 trials[268](index=268&type=chunk)[269](index=269&type=chunk)[304](index=304&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk) - AUTO1/22 is a dual-targeting CAR-T (CD19/CD22) for pediatric r/r ALL, designed to reduce antigen negative relapse, with initial Phase 1 clinical data showing high activity and good engraftment[270](index=270&type=chunk)[327](index=327&type=chunk) - AUTO4 is a programmed T cell therapy targeting TRBC1 for peripheral T-cell lymphoma, designed to selectively kill cancerous T cells while preserving healthy T cells, and includes a built-in safety switch[271](index=271&type=chunk)[275](index=275&type=chunk)[328](index=328&type=chunk)[330](index=330&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - AUTO6NG is a next-generation GD2-targeting therapy for neuroblastoma and other GD2-positive solid tumors, incorporating additional programming modules to enhance efficacy, safety, and persistence[271](index=271&type=chunk)[276](index=276&type=chunk)[340](index=340&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk)[346](index=346&type=chunk) - The company's manufacturing strategy focuses on a fully integrated vein-to-vein product delivery cycle using a semi-automated, fully enclosed system, with initial capacity at the Cell and Gene Therapy Catapult in Stevenage, UK, and plans for a new commercial facility[350](index=350&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk) - Autolus's intellectual property portfolio comprises **100 patent families**, including in-licensed rights from UCL Business Ltd. (UCLB) and Noile-Immune Biotech, Inc., covering core constructs, methods of treatment, and manufacturing processes[359](index=359&type=chunk)[360](index=360&type=chunk)[367](index=367&type=chunk) - The company operates in a highly competitive biopharmaceutical industry, facing competition from approved CAR T cell therapies (Novartis, Gilead, BMS) and other cancer treatments, with potential future competition from allogeneic CAR T cell therapies[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[376](index=376&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) - Autolus is subject to extensive government regulation by the FDA, EMA, and other authorities throughout the product development and commercialization lifecycle, including rigorous preclinical and clinical testing, manufacturing compliance (cGMP), and post-approval monitoring[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk)[394](index=394&type=chunk)[403](index=403&type=chunk)[435](index=435&type=chunk)[440](index=440&type=chunk) [Organizational Structure](index=85&type=section&id=C.%20Organizational%20structure) Autolus Therapeutics plc is the parent company, with Autolus Limited as a wholly-owned subsidiary - Autolus Therapeutics plc is the parent company, with Autolus Limited as a wholly-owned subsidiary[464](index=464&type=chunk) - Autolus Inc. (U.S. subsidiary) and Autolus GmbH (German subsidiary) were transferred from Autolus Limited in December 2020[464](index=464&type=chunk) [Property, Plant and Equipment](index=85&type=section&id=D.%20Property%2C%20plant%20and%20equipment) Autolus leases various office, laboratory, and manufacturing spaces in the UK (London, Stevenage, Enfield) and US (Rockville, Maryland) - Autolus's new corporate headquarters are located in London, UK, leasing **32,673 square feet** of office and laboratory space until 2026[465](index=465&type=chunk) - The company subleases an **8,750 square foot** manufacturing suite at the Cell and Gene Therapy Catapult manufacturing center in Stevenage, UK, with the lease scheduled to terminate in September 2023[465](index=465&type=chunk) - A new **70,000 square foot** manufacturing facility is under design and construction in Stevenage, UK, anticipated to create GMP capacity for approximately **2,000 batches** a year initially[469](index=469&type=chunk) - Autolus terminated a lease for **84,264 square feet** of office and manufacturing space in Rockville, Maryland, in March 2021, receiving a one-time termination fee[468](index=468&type=chunk)[1028](index=1028&type=chunk) - The company discontinued the fit-out of a manufacturing facility in Enfield, UK, in December 2019, and subsequently subleased a portion of the facility to third-party tenants in October 2021[466](index=466&type=chunk)[1026](index=1026&type=chunk) [Unresolved Staff Comments](index=86&type=section&id=Item%204A.%20Unresolved%20Staff%20Comments) This item is not applicable to the report [Operating and Financial Review and Prospects](index=86&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects.) This section reviews operating performance, financial liquidity, R&D, market trends, and critical accounting policies [Operating Results](index=86&type=section&id=A.%20Operating%20results) Autolus is a clinical-stage biopharmaceutical company with no product sales, incurring significant operating losses since inception (**$142.1M** in 2021 and 2020, **$123.8M** in 2019) - Autolus has incurred significant **net losses** since its inception, with an accumulated deficit of **$521.3 million** as of December 31, 2021[881](index=881&type=chunk) Summary of Operating Results (in thousands) | Metric (in thousands) | 2021 | 2020 | 2019 | | :-------------------- | :---------- | :---------- | :---------- | | Grant Income | $823 | $1,473 | $2,908 | | License Revenue | $1,507 | $242 | $0 | | R&D Expenses | $(134,789) | $(134,888) | $(105,418) | | G&A Expenses | $(31,865) | $(34,972) | $(39,452) | | Net Loss | $(142,096) | $(142,094) | $(123,849) | - Research and development **expenses** remained relatively flat at **$134.8 million** in 2021 compared to **$134.9 million** in 2020, with **cash costs** increasing by **$4.5 million** due to higher compensation, facilities, and consumables, offset by reduced clinical trial costs[511](index=511&type=chunk) - General and administrative **expenses** decreased to **$31.9 million** in 2021 from **$35.0 million** in 2020, primarily due to lower commercial preparation costs, employee compensation, and facilities costs[515](index=515&type=chunk) - In November 2021, Autolus entered into a Strategic Collaboration and Financing agreement with Blackstone, receiving an upfront payment of **$50 million** as part of up to **$150 million** to support CD19 CAR T cell investigational therapy development[474](index=474&type=chunk) - The company sold **17,985,611 ADSs** to Blackstone for **$100 million** gross proceeds and issued a warrant to purchase **3,265,306 ADSs**[480](index=480&type=chunk)[481](index=481&type=chunk) - In January 2021, Autolus restructured its R&D strategy, prioritizing the AUTO1 program, and reduced its workforce by approximately **20%**[485](index=485&type=chunk) [Liquidity and Capital Resources](index=96&type=section&id=B.%20Liquidity%20and%20capital%20resources) Autolus has historically relied on equity sales and strategic financing to fund operations, incurring significant losses and negative cash flows - Autolus has funded operations primarily through equity securities sales (**$750.7 million** net proceeds) and strategic financing (**$49.5 million** aggregate) since inception[535](index=535&type=chunk) - As of December 31, 2021, the company had **$310.3 million** in **cash**, which is believed to be sufficient to fund operating **expenses** and **capital expenditure** requirements for at least the next **12 months**[484](index=484&type=chunk)[535](index=535&type=chunk)[546](index=546&type=chunk) Cash Flow Summary (in thousands) | Metric | 2021 | 2020 | 2019 | | :-------------------------------------- | :------------ | :------------ | :------------ | | Net cash used in operating activities | $(117,861) | $(117,758) | $(101,484) | | Net cash used in investing activities | $(8,857) | $(14,681) | $(18,668) | | Net cash provided by financing activities | $284,063 | $74,415 | $108,863 | | Effect of exchange rate changes | $(754) | $679 | $5,164 | | Net (decrease) increase in cash | $156,591 | $(57,345) | $(6,125) | Cash Denomination (in thousands) | Currency | December 31, 2021 | | :---------------- | :---------------- | | Total cash held | $310,338 | | U.S. dollars | $168,093 | | British sterling | £105,285 | - Future **funding** requirements are substantial and depend on the scope, progress, and **costs** of clinical trials, regulatory approvals, commercialization efforts, and intellectual property protection[547](index=547&type=chunk)[548](index=548&type=chunk) - The company expects to finance future **cash needs** through equity offerings, which may dilute ownership interest, or through collaborations, which may require relinquishing valuable rights[549](index=549&type=chunk) [Research and Development, Patents and Licenses, etc.](index=100&type=section&id=C.%20Research%20and%20development%2C%20patents%20and%20licenses%2C%20etc.) This section refers to detailed information on R&D activities, expenditures, patents, and licenses provided in the "Business Overview" and "Operating Results" sections of the report [Trend Information](index=100&type=section&id=D.%20Trend%20information) This section refers to trend information provided in the "Operating Results" and "Liquidity and Capital Resources" sections of the report [Critical Accounting Estimates](index=100&type=section&id=E.%20Critical%20accounting%20estimates) Autolus's financial statements rely on critical accounting estimates and judgments, particularly for share-based compensation (using Black-Scholes model for options, fair value for restricted shares/RSUs), non-cash interest expense on future royalty sales liability (Blackstone agreement), initial fair value of warrants, and income taxes (deferred tax assets, valuation allowances, R&D tax credits) - Key accounting estimates include share-based compensation, non-cash interest expense on the liability related to the sale of future royalties and sales milestones, initial fair value of warrants, and income taxes[556](index=556&type=chunk)[558](index=558&type=chunk)[565](index=565&type=chunk)[566](index=566&type=chunk)[569](index=569&type=chunk)[880](index=880&type=chunk) - Share-based compensation expense is recognized based on the grant date fair value of awards, using the Black-Scholes option pricing model for options and fair value for restricted share awards[559](index=559&type=chunk)[560](index=560&type=chunk)[901](index=901&type=chunk)[903](index=903&type=chunk) Share Option Valuation Assumptions (Year Ended December 31, 2021) | Assumption | Range | | :-------------------- | :------------------- | | Expected option life | 5.27 to 6.08 years | | Risk-free interest rate | 0.62% to 1.34% | | Expected volatility | 80.05% to 82.03% | | Expected dividend yield | 0% | - The liability related to the sale of future royalties and sales milestones (Blackstone Collaboration Agreement) is amortized using the effective interest rate method, with an imputed rate of approximately **15.80%** as of December 31, 2021[565](index=565&type=chunk)[920](index=920&type=chunk)[1012](index=1012&type=chunk) Blackstone Warrant Valuation Assumptions (November 6, 2021) | Assumption | Value | | :-------------------- | :--------- | | Expected warrant life | 5 years | | Risk-free interest rate | 1.04% | | Expected volatility | 80.23% | | Expected dividend yield | 0% | - Income taxes involve evaluating the realizability of deferred tax **assets** and establishing valuation allowances when future taxable income is uncertain[569](index=569&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk)[921](index=921&type=chunk)[922](index=922&type=chunk)[923](index=923&type=chunk)[925](index=925&type=chunk)[1005](index=1005&type=chunk) [Directors, Senior Management and Employees](index=103&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section outlines the company's leadership, compensation practices, board governance, employee information, and share ownership [Directors and Senior Management](index=103&type=section&id=A.%20Directors%20and%20senior%20management) Autolus's senior management team includes Christian Itin (CEO), Andrew Oakley (CFO, resigning March 31, 2022), Martin Pulé (CSO), Christopher Vann (COO), David Brochu (CTO), Edgar Braendle (CDO), and Brent Rice (CCO) - Key senior management includes Christian Itin (CEO), Andrew Oakley (CFO, resigning March 31, 2022), Martin Pulé (CSO), Christopher Vann (COO), David Brochu (CTO), Edgar Braendle (CDO), and Brent Rice (CCO)[579](index=579&type=chunk)[580](index=580&type=chunk)[583](index=583&type=chunk)[584](index=584&type=chunk)[585](index=585&type=chunk)[586](index=586&type=chunk)[587](index=587&type=chunk)[588](index=588&type=chunk) - The board of directors consists of **ten members**, with **nine** determined to be independent under Nasdaq rules[642](index=642&type=chunk) - The board of directors is divided into three classes (Class I, II, III) with staggered three-year terms[643](index=643&type=chunk) [Compensation](index=107&type=section&id=B.%20Compensation) Compensation for directors and senior management includes base salary, annual bonus, personal benefits, pension plans, and long-term incentives (equity awards) - Aggregate **compensation** for senior management in 2021 was **$11.3 million**, with **$2,700** set aside for pension benefits[614](index=614&type=chunk) Director Compensation (Year Ended December 31, 2021, in pounds sterling) | Name | Salary/Fees | Annual Bonus | Pension Benefit | All Other Compensation | Total | | :-------------------- | :---------- | :----------- | :-------------- | :--------------------- | :------------ | | Christian Itin, Ph.D. | £401,700 | £204,067 | — | £1,370,874 | £1,976,641 | | John Johnson | £14,773 | — | — | £50,639 | £65,412 | | Cynthia Butitta | £40,500 | — | — | £60,101 | £100,601 | | Jay Backstrom, M.D. | £38,500 | — | — | £109,958 | £148,458 | | John Berriman | £47,455 | — | — | £54,293 | £101,748 | | Joseph Anderson, Ph.D.| £39,000 | — | — | £49,744 | £88,744 | | Kapil Dhingra, M.D. | £45,500 | — | — | £54,293 | £99,793 | | Linda Bain | £45,000 | — | — | £67,777 | £112,777 | | Martin Murphy, Ph.D. | £39,500 | — | — | £49,744 | £89,244 | | William Young, Ph.D. | £4,432 | — | — | £13,007 | £17,439 | - Non-executive directors receive annual **cash retainers** for board and committee service, ranging from **£3,000** to **£50,000**, and are eligible for equity awards (share options)[607](index=607&type=chunk)[609](index=609&type=chunk)[610](index=610&type=chunk) - The 2018 Equity Incentive Plan allows for the grant of equity-based awards, with **11,443,279 ordinary shares** available for issuance as of December 31, 2021[627](index=627&type=chunk)[629](index=629&type=chunk)[964](index=964&type=chunk) - As of December 31, 2021, total unrecognized compensation expense for unvested share options was **$10.8 million** (expected to be recognized over **3.26 years**) and for unvested RSUs was **$1.0 million** (expected over **1.76 years**)[970](index=970&type=chunk)[979](index=979&type=chunk) [Board Practices](index=114&type=section&id=C.%20Board%20practices) The board of directors has ten members, with nine independent directors, and is divided into three classes with staggered three-year terms - The board of directors has **ten members**, with **nine** independent directors, and is divided into three classes with staggered three-year terms[642](index=642&type=chunk)[643](index=643&type=chunk) - The board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Research and Development[645](index=645&type=chunk) - As a foreign private issuer, Autolus relies on English corporate law for certain governance aspects, which differ from Nasdaq rules, including exemptions from requirements for independent director executive sessions and shareholder approval for certain security issuances[243](index=243&type=chunk)[246](index=246&type=chunk)[830](index=830&type=chunk)[831](index=831&type=chunk) - Ms. Bain is designated as an "audit committee financial expert" and all audit committee members are independent under Nasdaq and Exchange Act rules[646](index=646&type=chunk)[824](index=824&type=chunk) [Employees](index=116&type=section&id=D.%20Employees) As of December 31, 2021, Autolus had **324 full-time employees**, a decrease from **376** in 2020, with **273** engaged in R&D activities Employee Headcount by Function and Geography (as of December 31) | Function/Geography | 2021 | 2020 | 2019 | | :----------------- | :--- | :--- | :--- | | **Function:** | | | | | Administrative | 51 | 59 | 43 | | Research & development | 273 | 317 | 247 | | **Total** | **324**| **376**| **290**| | **Geography:** | | | | | United Kingdom | 295 | 340 | 251 | | Germany & Switzerland | 4 | 2 | 6 | | United States | 25 | 34 | 33 | - The company's human capital objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, with equity incentive plans serving as a primary tool[652](index=652&type=chunk) [Share Ownership](index=117&type=section&id=E.%20Share%20ownership) This section refers to information on share ownership of directors and senior management provided in the "Major Shareholders" and "Compensation" sections [Major Shareholders and Related Party Transactions](index=117&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies major shareholders, related party dealings, and expert interests [Major Shareholders](index=117&type=section&id=A.%20Major%20shareholders) As of March 1, 2022, major shareholders include Syncona Portfolio Limited (**21.5%**), BXLS V - Autobahn L.P (**23.4%**), and PPF Capital Partners Fund B.V. (**16.1%**) Major Shareholders (as of March 1, 2022) | Name of Beneficial Owner | Number of Ordinary Shares Beneficially Owned () | Percent of Ordinary Shares Beneficially Owned (%) | | :--------------------------------- | :----------------------------------------------- | :------------------------------------------------ | | Syncona Portfolio Limited | 19,527,162 | 21.5% | | PPF Capital Partners Fund B.V. | 14,612,275 | 16.1% | | BXLS V - Autobahn L.P | 21,250,917 | 23.4% | | All directors and senior management as a group | 23,939,410 | 25.7% | - The combined beneficial ownership of senior management, directors, and **5% or greater shareholders** (approximately **61%**) allows them to control or significantly influence matters submitted to shareholders[223](index=223&type=chunk) [Related Party Transactions](index=119&type=section&id=B.%20Related%20party%20transactions) Autolus has engaged in significant related party transactions, including equity purchases by major shareholders (Syncona Portfolio Limited, Blackstone) in public and private offerings - In November 2021, Autolus entered into a Strategic Collaboration and Financing Agreement with Blackstone, providing up to **$150 million** in strategic financing and **$100 million** in equity, granting Blackstone a security interest in certain **assets** and imposing negative covenants[671](index=671&type=chunk)[672](index=672&type=chunk)[758](index=758&type=chunk)[760](index=760&type=chunk)[761](index=761&type=chunk) - Syncona Portfolio Limited, a major shareholder, participated in Autolus's public offerings in April 2019, January 2020, and February 2021, purchasing significant amounts of ADSs[668](index=668&type=chunk)[669](index=669&type=chunk)[671](index=671&type=chunk)[1051](index=1051&type=chunk) - A license agreement with an investee company of Syncona Portfolio Limited generated **$242,000** in license **revenue** for Autolus in 2020[670](index=670&type=chunk)[1052](index=1052&type=chunk) - Autolus has adopted a related person transaction policy for identifying, reviewing, and approving transactions exceeding **$120,000** involving executive officers, directors, or **5%+ beneficial owners**[662](index=662&type=chunk) [Interests of Experts and Counsel](index=120&type=section&id=C.%20Interests%20of%20experts%20and%20counsel) This item is not applicable to the report [Financial Information](index=120&type=section&id=Item%208.%20Financial%20Information.) This section presents consolidated financial statements and reports significant changes [Consolidated Statements and Other Financial Information](index=120&type=section&id=A.%20Consolidated%20statements%20and%20other%20financial%20information) Autolus's consolidated financial statements are included in the Annual Report - Autolus has never declared or paid a dividend and intends to retain all available funds and future earnings to fund business development and growth[676](index=676&type=chunk) - Under English law, dividend payments are contingent on having sufficient distributable reserves (accumulated realized profits exceeding accumulated realized losses) on a non-consolidated basis[676](index=676&type=chunk)[697](index=697&type=chunk) - The company is not currently a party to any material legal proceedings[677](index=677&type=chunk)[1042](index=1042&type=chunk) [Significant Changes](index=120&type=section&id=B.%20Significant%20changes) This item is not applicable to the report [The Offer and Listing](index=120&type=section&id=Item%209.%20The%20Offer%20and%20Listing.) This section details the company's offer and listing information, distribution plan, and market presence [Offer and Listing Details](index=120&type=section&id=A.%20Offer%20and%20listing%20details) Autolus's American Depositary Shares (ADSs) began trading on the Nasdaq Global Select Market under the symbol "AUTL" on June 22, 2018 - Autolus ADSs have been trading on the Nasdaq Global Select Market under the symbol "AUTL" since June 22, 2018[678](index=678&type=chunk)[679](index=679&type=chunk) [Plan of Distribution](index=120&type=section&id=B.%20Plan%20of%20distribution) This item is not applicable to the report [Markets](index=120&type=section&id=C.%20Markets) Autolus ADSs are listed on the Nasdaq Global Select Market under the symbol "AUTL" - Autolus ADSs are listed on the Nasdaq Global Select Market under the symbol "AUTL"[679](index=679&type=chunk) - The company's ordinary shares are not listed on any exchange[679](index=679&type=chunk) [Selling Shareholders](index=120&type=section&id=D.%20Selling%20shareholders) This item is not applicable to the report [Additional Information](index=121&type=section&id=Item%2010.%20Additional%20Information.) This section provides details on share capital, corporate governance documents, material contracts, exchange controls, and taxation [Share Capital](index=121&type=section&id=A.%20Share%20capital) This item is not applicable to the report [Memorandum and Articles of Association](index=121&type=section&id=B.%20Memorandum%20and%20articles%20of%20association) Autolus is an English public limited company, re-registered in June 2018, with its articles of association authorizing directors to allot shares up to **$8,400 nominal value** for five years (expiring June 2023) and disapplying preemptive rights for the same period - Autolus Therapeutics plc is a public limited company incorporated under the laws of England and Wales, re-registered on June 18, 2018[681](index=681&type=chunk)[682](index=682&type=chunk) - The board of directors is authorized to allot new ordinary shares up to a maximum aggregate nominal amount of **$8,400** for a period of **five years**, expiring on June 26, 2023[683](index=683&type=chunk)[709](index=709&type=chunk) - Preemptive rights for **cash issues** of shares are disapplied for a period of **five years** from June 26, 2018, requiring renewal upon expiration[693](index=693&type=chunk)[710](index=710&type=chunk) - As of February 28, 2022, issued share capital includes **90,907,941 ordinary shares**, **34,425 deferred shares**, **88,893,548 B deferred shares**, and **1 C deferred share**[684](index=684&type=chunk) - The articles of association designate the U.S. federal district courts as the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act[259](index=259&type=chunk)[724](index=724&type=chunk) - English law differs from Delaware law in areas such as director removal, board vacancies, annual general meetings, preemptive rights, and director liability, which may affect shareholder rights and protections[730](index=730&type=chunk)[731](index=731&type=chunk)[732](index=732&type=chunk)[738](index=738&type=chunk)[740](index=740&type=chunk)[743](index=743&type=chunk) [Material Contracts](index=137&type=section&id=C.%20Material%20contracts) Autolus has several material contracts, including underwriting agreements for public offerings, an Open Market Sale Agreement with Jefferies for ATM offerings, an exclusive license agreement with UCL Business Ltd. (UCLB) for T cell programming modules, and the Blackstone Agreements (Collaboration and Financing, Securities Purchase, Warrant, Registration Rights) from November 2021 - Autolus has entered into underwriting agreements for its public offerings in April 2019, January 2020, and February 2021[752](index=752&type=chunk)[753](index=753&type=chunk) - An Open Market Sale Agreement with Jefferies LLC allows Autolus to issue and sell up to **$100 million** worth of ADSs through an at-the-market offering[756](index=756&type=chunk) - The company holds an exclusive license agreement with UCL Business Ltd. (UCLB) for T cell programming modules in cancer therapy and diagnosis, amended multiple times to include additional rights and technologies[757](index=757&type=chunk) - In November 2021, Autolus entered into the Blackstone Agreements, including a Strategic Collaboration and Financing Agreement (up to **$150M** for CD19 CAR T cell development), a Securities Purchase Agreement (**$100M** in equity), and a Warrant Agreement (for **3,265,306 ADSs**)[758](index=758&type=chunk) - The Blackstone Collaboration Agreement grants Blackstone a security interest in Autolus's intellectual property and **assets** related to Collaboration Products and includes negative covenants restricting certain corporate actions[760](index=760&type=chunk)[761](index=761&type=chunk) [Exchange Controls](index=139&type=section&id=D.%20Exchange%20controls) There are no governmental laws or regulations in the United Kingdom that restrict the import/export of capital or remittance of dividends/payments by Autolus to non-resident holders of its ordinary shares or ADSs, other than withholding tax requirements - No governmental laws, decrees, regulations, or other legislation in the United Kingdom affect the import or export of **capital** or the remittance of dividends, interest, or other payments to non-resident holders of Autolus's ordinary shares or ADSs, other than withholding tax requirements[764](index=764&type=chunk) [Taxation](index=140&type=section&id=E.%20Taxation) This section outlines material U.S. federal income tax consequences for U.S. Holders of ADSs, including potential Passive Foreign Investment Company (PFIC) status, which could lead to adverse tax consequences - U.S. Holders of ADSs may be subject to adverse U.S. federal income tax consequences if Autolus is classified as a Passive Foreign Investment Company (PFIC), including ineligibility for preferred tax rates and interest charges on deferred taxes[231](index=231&type=chunk)[771](index=771&type=chunk)[775](index=775&type=chunk) - Autolus does not believe it was a PFIC for 2021 and does not expect to be for 2022, but PFIC status is a fact-intensive annual determination with no assurances[232](index=232&type=chunk)[772](index=772&type=chunk) - Dividends paid by Autolus are not subject to U.K. withholding tax[795](index=795&type=chunk)[797](index=797&type=chunk) - Disposal of ADSs by U.K. Holders may incur U.K. **capital gains tax** at rates of **10% or 20%**, depending on the individual's income tax band[799](index=799&type=chunk) - U.K. stamp duty or Stamp Duty Reserve Tax (SDRT) at **0.5%** generally applies to transfers of ordinary shares, with a higher rate of **1.5%** for transfers to depositary receipt systems like DTC, unless an exemption applies[803](index=803&type=chunk)[804](index=804&type=chunk)[805](index=805&type=chunk) [Dividends and Paying Agents](index=146&type=section&id=F.%20Dividends%20and%20paying%20agents) This item is not applicable to the report [Statement by Experts](index=146&type=section&id=G.%20Statement%20by%20experts) This item is not applicable to the report [Documents on Display](index=146&type=section&id=H.%20Documents%20on%20display) Autolus is subject to SEC information reporting requirements for foreign private issuers and files reports with the SEC - Autolus is subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers and files reports with the SEC[807](index=807&type=chunk) - As a foreign private issuer, Autolus is exempt from certain proxy statement rules and Section 16 insider reporting and short-swing profit recovery provisions[807](index=807&type=chunk) - The company's corporate website is www.autolus.com, but information on the website is not part of, nor incorporated by reference into, the Annual Report[262](index=262&type=chunk)[808](index=808&type=chunk) [Subsidiary Information](index=147&type=section&id=I.%20Subsidiary%20information) This item is not applicable to the report [Quantitative and Qualitative Disclosures About Market Risk](index=147&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Autolus is exposed to market risks primarily from interest rate fluctuations and foreign currency exchange rates - Autolus is exposed to interest rate risk due to significant **cash holdings** (**$310.3 million** in 2021, **$153.3 million** in 2020) invested in interest-bearing accounts[809](index=809&type=chunk)[810](index=810&type=chunk) - The company faces foreign currency exchange risk because its functional currency is pounds sterling while its reporting currency is U.S. dollars, leading to translation adjustments and transaction gains/losses[94](index=94&type=chunk)[811](index=811&type=chunk)[812](index=812&type=chunk) - Autolus recorded foreign exchange **losses** of **$2.3 million** in 2021 and **$0.2 million** in 2020, and a gain of **$4.6 million** in 2019[811](index=811&type=chunk) - The company does not currently engage in currency hedging activities but may do so in the future to manage foreign currency fluctuations[814](index=814&type=chunk) [Description of Securities Other Than Equity Securities](index=148&type=section&id=Item%2012.%20Description%20of%20Securities%20Other%20Than%20Equity%20Securities.) This section describes non-equity securities, including debt, warrants, and American Depositary Shares [Debt Securities](index=148&type=section&id=A.%20Debt%20securities) This item is not applicable to the report [Warrants and Rights](index=148&type=section&id=B.%20Warrants%20and%20rights) This item is not applicable to the report [Other Securities](index=148&type=section&id=C.%20Other%20securities) This item is not applicable to the report [American Depositary Shares](index=148&type=section&id=D.%20American%20Depositary%20Shares) Autolus's American Depositary Shares (ADSs) are registered and delivered by Citibank, N.A., with each ADS representing one ordinary share - Citibank, N.A. serves as the Depositary bank for Autolus's American Depositary Shares (ADSs), with each ADS representing one ordinary share[815](index=815&type=chunk) ADS Fees and Charges | Service | Fee (per ADS) | | :------------------------------------------ | :------------ | | Issuance of ADSs | Up to $0.05 | | Cancellation of ADSs | Up to $0.05 | | Distribution of cash dividends | Up to $0.05 | | Distribution of ADSs (share dividends, etc.) | Up to $0.05 | | Distribution of other securities | Up to $0.05 | | ADS Services | Up to $0.05 | - ADS holders are also responsible for taxes, governmental charges, registration **fees**, and **expenses** incurred by the Depositary for currency conversion and compliance with regulatory requirements[816](index=816&type=chunk)[817](index=817&type=chunk) PART II [Defaults, Dividend Arrearages and Delinquencies](index=150&type=section&id=Item%2013.%20Defaults%2C%20Dividend%20Arrearages%20and%20Delinquencies.) This item is not applicable to the report [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=150&type=section&id=Item%2014.%20Material%20Modifications%20to%20the%20Rights%20of%20Security%20Holders%20and%20Use%20of%20Proceeds.) This item is not applicable to the report [Controls and Procedures](index=150&type=section&id=Item%2015.%20Controls%20and%20Procedures.) This section details the company's disclosure controls, management's internal control report, and any changes [Disclosure Controls and Procedures](index=150&type=section&id=A.%20Disclosure%20Controls%20and%20Procedures.) Autolus's management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures as of December 31, 2021, and concluded they were effective in ensuring timely and accurate disclosure of required information - Autolus's disclosure controls and procedures were evaluated by management, including the CEO and CFO, and concluded to be effective as of December 31, 2021[820](index=820&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=151&type=section&id=B.%20Management%27s%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting.) Management assessed the effectiveness of internal control over financial reporting as of December 31, 2021, based on the COSO framework, and concluded it was effective - Management concluded that Autolus's internal control over financial reporting was effective as of December 31, 2021, based on the COSO framework[821](index=821&type=chunk) [Attestation Report of the Registered Public Accounting Firm](index=151&type=section&id=C.%20Attestation%20Report%20of%20the%20Registered%20Public%20Accounting%20Firm.) The Annual Report does not include an attestation report from the registered public accounting firm on internal control over financial reporting, as Autolus qualifies as an "emerging growth company" under the JOBS Act and is exempt from this requirement - The Annual Report does not include an attestation report from the registered public accounting firm on internal control over financial reporting due to Autolus's status as an "emerging growth company" under the JOBS Act[822](index=822&type=chunk) [Changes in Internal Control Over Financial Reporting](index=151&type=section&id=D.%20Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting.) There were no changes in internal control over financial reporting during the period covered by this Annual Report that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting - No material changes in internal control over financial reporting occurred during the period covered by this Annual Report[823](index=823&type=chunk) [Reserved](index=151&type=section&id=Item%2016.%20%5BReserved%5D) This item is reserved [Audit Committee Financial Expert](index=151&type=section&id=Item%2016A.%20Audit%20committee%20financial%20expert) Ms. Bain has been identified as an "audit committee financial expert" and possesses the requisite financial sophistication, meeting independence criteria under SEC rules and Nasdaq listing standards - Ms. Bain has been determined to be an "audit committee financial expert" as defined by SEC rules and possesses the requisite financial sophistication under Nasdaq rules[824](index=824&type=chunk) - Ms. Bain is independent as defined in Rule 10A-3 under the Exchange Act and under Nasdaq listing standards[824](index=824&type=chunk) [Code of Ethics](index=151&type=section&id=Item%2016B.%20Code%20of%20ethics) Autolus has adopted a Code of Business Conduct and Ethics applicable to all of its employees, officers, and directors, publicly available on its website - Autolus has adopted a Code of Business Conduct and Ethics applicable to all employees, officers, and directors[825](index=825&type=chunk) - The Code of Ethics is available on the company's website, and any amendments or waivers for principal executive, financial, or accounting officers will be disclosed as required by SEC rules[825](index=825&type=chunk) [Principal Accountant Fees and Services](index=151&type=section&id=Item%2016C.%20Principal%20accountant%20fees%20and%20services) Ernst & Young LLP has served as Autolus's independent registered public accountant since September 2017 - Ernst & Young LLP has been Autolus's independent registered public accountant since September 2017[826](index=826&type=chunk) Aggregate Fees for Services by Ernst & Young LLP (in thousands) | Fee Type | 2021 | 2020 | | :------------------ | :-------- | :-------- | | Audit fees | $903 | $697 | | Audit-related fees | $155 | $247 | | Total | $1,058 | $944 | - The audit committee reviews and pre-approves the scope and **cost** of all audit and permissible non-audit services provided by the independent auditors[827](index=827&type=chunk) [Exemptions from the Listing Standards for Audit Committees](index=152&type=section&id=Item%2016D.%20Exemptions%20from%20the%20listing%20standards%20for%20audit%20committees) This item is not applicable to the report [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=152&type=section&id=Item%2016E%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers.) This item is not applicable to the report [Changes in Registrant's Certifying Accountant](index=152&type=section&id=Item%2016F.%20Changes%20in%20registrant%27s%20certifying%20accountant) This item is not applicable to the report [Corporate Governance](index=152&type=section&id=Item%2016G.%20Corporate%20governance) As a foreign private issuer, Autolus relies on home country (U.K.) corporate governance practices, which differ from Nasdaq standards - As a "foreign private issuer," Autolus relies on home country (U.K.) corporate governance requirements, which allows for exemptions from certain Nasdaq corporate governance standards[830](index=830&type=chunk) - Exemptions include not filing quarterly reports on Form 10-Q, exemption from Section 16 insider reporting rules, and differing requirements for compensation committee independence and director nominations[830](index=830&type=chunk) - Autolus intends to follow U.K. corporate governance practices for quorum requirements at shareholder meetings and independent director executive sessions, which differ from Nasdaq rules[831](index=831&type=chunk) [Mine Safety Disclosure](index=152&type=section&id=Item%2016H.%20Mine%20safety%20disclosure) This item is not applicable to the report PART III [Financial Statements](index=153&type=section&id=Item%2017.%20Financial%20Statements.) The consolidated financial statements are appended at the end of this Annual Report, starting on page F-1 - The consolidated financial statements are included starting on page F-1 of this Annual Report[834](index=834&type=chunk) [Financial Statements](index=153&type=section&id=Item%2018.%20Financial%20Statements.) This item is not applicable as the financial statements are provided under Item 17 [Exhibits](index=153&type=section&id=Item%2019.%20Exhibits.) This section lists all exhibits filed as part of the Annual Report on Form 20-F, including Articles of Association, Deposit Agreement, Registration Rights Agreements, License Agreements, Supply Agreements, Equity Incentive Plans, and certifications - Key exhibits include the Articles of Association, Deposit Agreement, Registration Rights Agreements, Warrant issued to BXLS V – Autobahn L.P., Collaboration and Financing Agreement with BXLS V — Autobahn L.P., Securities Purchase Agreement with BXLS V – Autobahn L.P., License Agreement with UCL Business Ltd., Supply Agreement with Miltenyi Biotec GmbH, and the 2018 Equity Incentive Plan[835](index=835&type=chunk)[838](index=838&type=chunk)[839](index=839&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer are also included as exhibits[839](index=839&type=chunk)