of this Report on Form 6-K. 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and the related notes to those statements included as Exhibit 99.1 to this Report on Form 6-K submitted to the Securities and Exchange Commission, or the SEC, on November 5, 2020. We also recommend that you read our discussion and analysis of financial condition and results of operations together with our audited financial statements and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2019 filed with the SEC on March 3, 2020, as amended on June 30, 2020.

We maintain our books and records in pounds sterling, our results are subsequently converted to U.S. dollars and we prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, as issued by the Financial Accounting Standards Board, or FASB. All references in this Report on Form 6-K to "$" are to U.S. dollars and all references to " " are to pounds sterling. Our consolidated statements of operations and cash flows for the nine months ended September 30, 2020 and 2019 have been translated from pounds sterling into U.S. dollars at the rate of 1.00 to $1.2718 and 1.00 to $1.2708, respectively. Our consolidated statement of operations for the three months ended September 30, 2020 and 2019 have been translated from pound sterling into U.S. dollars at the rate of 1.00 to $1.2919 and 1.00 to $1.2301, respectively. Our consolidated balance sheets as of September 30, 2020 and December 31, 2019 have been translated from pounds sterling into U.S. dollars at the rate of 1.00 to $1.2917 and 1.00 to $1.3268, respectively. These translations should not be considered representations that any such amounts have been, could have been or could be converted into U.S. dollars at that or any other exchange rate as of that or any other date.

Unless otherwise indicated or the context otherwise requires, all references to "Autolus," the "Company," "we," "our," "us" or similar terms refer to Autolus Therapeutics plc and its consolidated subsidiaries.

The statements in this discussion regarding our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties set forth in the "Risk Factors" section of our Annual Report and any subsequent reports that we file with the SEC.

We are a biopharmaceutical company developing next-generation programmed T cell therapies for the treatment of cancer. Using our broad suite of proprietary and modular T cell programming technologies, we are engineering precisely targeted, controlled and highly active T cell therapies that are designed to better recognize cancer cells, break down their defense mechanisms and attack and kill these cells. We believe our programmed T cell therapies have the potential to be best-in-class and offer cancer patients substantial benefits over the existing standard of care, including the potential for cure in some patients.

In recent years, we have devoted substantially all of our resources to conducting preclinical studies and clinical trials, raising capital and establishing our intellectual property portfolio. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations to date primarily with proceeds from government grants and sales of our equity securities, including the net proceeds from our initial public offering of American Depository Shares, or ADSs, in June 2018 and follow-on public offerings of our ADSs in April 2019 and January 2020. From our inception in 2014 through September 30, 2020, we have received aggregate net proceeds of $516.1 million from sales of our equity securities. We do not expect to generate significant revenue unless and until we obtain marketing approval for and commercialize one of our product candidates.

Since our inception, we have incurred significant operating losses. For the three and nine months ended September 30, 2020, we incurred a net loss of $37.3 million and $99.2 million, respectively, and had an accumulated deficit of $336.4 million as of September 30, 2020.

We expect to continue to incur significant expenses for the foreseeable future as we advance our product candidates through preclinical and clinical development, seek regulatory approval and pursue commercialization of any approved product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. In addition, we may incur expenses in connection with the in-license or acquisition of additional product candidates. Furthermore, we have incurred and expect to continue to incur, additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our drug candidates or delay our pursuit of potential in-licenses or acquisitions.

As of September 30, 2020, we had cash on hand of $177.7 million. Based on our current clinical development plans, we believe our existing cash and cash equivalents will be able to fund our current and planned operating expenses and capital expenditure requirements through at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect.

On September 18, 2020, the Company entered into an Open Market Sale Agreement ( Sales Agreement ) with Jefferies LLC, under which the Company may, at its option, offer and sell ADSs having an aggregate offering price of up to $100.0 million from time to time through Jefferies, acting as sales agent. Any such sales, made through our sales agent can be made by any method that is deemed an "at-the-market offering" as defined in Rule 415 promulgated under the Securities Act, or in other transactions pursuant to an effective shelf registration statement on Form F-3. The Company agreed to pay Jefferies a commission of 3.0% of the gross proceeds of any sales of ADSs sold pursuant to the Sales Agreement. During the nine months ended September 30, 2020, the Company did not sell any ADSs under the Sales Agreement.

COVID-19 Business Update

With the global spread of the ongoing coronavirus 2019, or COVID-19, pandemic, we established a cross-functional task force and have implemented business continuity plans designed to address and mitigate its impact on our employees and business. While we have not experienced any significant financial impact to date, the overall disruption caused by the COVID-19 pandemic on global healthcare systems, and the other risks and uncertainties associated with the pandemic, could cause our business, financial condition, results of operations and growth prospects to be materially adversely affected.

In March 2020, our global workforce transitioned to working remotely with the exception of clinical trial related activities that required laboratory-based activity or manufacturing. We implemented protocols and procedures to ensure the safety of our employees working on site, including requirement to wear personal protective equipment, temperature checks at entry and offered COVID-19 testing for any employee with symptoms or at suspected risk of exposure to virus. In June 2020, we began the implementation of our workplace re-entry plan, based on a phased approach that is principles-based and local in design, with a focus on continuity of patient treatment and working to bring its workforce back on-site safely. We have also implemented policies to control and limit office and lab access in line with social distancing guidelines and for contact tracing if needed.

We continue to track COVID-19 developments in Europe and the United States closely for their potential impact on our clinical trial sites, logistics and supply chain to ensure we can continue to maintain clinical trial conduct and data integrity. As the patients in our clinical trials are severely immune suppressed as a consequence of their underlying disease and the treatment they receive in the trials, we are also monitoring other transmissible infectious diseases, including influenza.

Clinical Development

With respect to clinical development, we continue to implement risk-based approaches in accordance with FDA and EMA COVID-19 guidance, which includes virtual and remote patient visits and monitoring where possible, while prioritizing patient safety, maintaining trial continuity and preserving data integrity. We have experienced, and expect to continue to experience, a disruption or delay in our ability to initiate trial sites and or enroll and assess patients in several of our clinical programs as a result of the ongoing COVID-19 pandemic.

Currently, our Phase 1 2 clinical trial of AUTO3 in relapsed or refractory diffuse large B-cell lymphoma, or r r DLBCL, has not been significantly impacted by the COVID-19 pandemic and patient enrollment remains on track. We have experienced a delay in patient enrollment for our ongoing Phase 1 clinical trial of AUTO4 in peripheral T-cell lymphoma targeting TRBC1. This trial is being conducted in the United Kingdom and in Spain. These countries have been more impacted by the COVID-19 pandemic, resulting in suspended patient enrollment for a time period. As a consequence, we now expect first data from this Phase 1 clinical trial to be available in the first half of 2021 instead of the fourth quarter of 2020.

Our preclinical programs have been minimally impacted, and we continue to expect our AUTO5, AUTO6NG and AUTO7 programs to enter clinical development in 2021. Our initial clinical studies with AUTO1NG in pediatric ALL and AUTO8 in multiple myeloma remain on track to begin towards the end of 2020 and first half of 2021, respectively.

While not currently impacted, we could foresee an impact on our ability to supply study drug, report trial results, or interact with regulators, ethics committees or other important agencies due to limitations in regulatory authority employee resources or otherwise. In addition, we rely on contract research organizations, or CROs, or other third parties to assist us with clinical trials, and we cannot guarantee that they will continue to perform their contractual duties in a timely and satisfactory manner as a result of the COVID-19 pandemic. If the COVID-19 pandemic continues and persists for an extended period of time, we could experience further disruptions to our clinical development timelines, which would adversely affect our business, financial condition, results of operations and growth prospects.

Components of Our Results of Operations

Grant income consists of proceeds from government research grants used to perform specific research and development activities. We recognize grant income over the period in which we recognize the related costs covered under the terms and conditions of the grant. We have received grants from the U.K. government, which are repayable under certain circumstances, including breach or noncompliance with the terms of the grant. For grants with refund provisions, we review the grant to determine the likelihood of repayment. If the likelihood of repayment of the grant is determined to be remote, then the grant is recognized as grant income. We have concluded that the likelihood of any repayment events included in our current grants is remote.

We account for our revenue pursuant to the provisions of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").

We have no products approved for commercial sale and has not generated any revenue from commercial product sales to date. The total revenue to date has been generated principally from a license agreement with an investee company of one our affiliates. The terms of the agreement includes a non-refundable license fee, payments based upon achievement of clinical development and regulatory objectives, and royalties on product sales.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreements, we perform the following steps (i) identification of the promised goods or services in the contract (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract (iii) measurement of the transaction price, including the constraint on variable consideration (iv) allocation of the transaction price to the performance obligations based on estimated selling prices and (v) recognition of revenue when (or as) the we satisfy each performance obligation.

License Fees and Multiple Element Arrangements

If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, upfront fees allocated to the license at such time as the license is transferred to the licensee and the licensee is able to use, and benefit from, the license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligations to determine whether the combined performance obligations are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Appropriate methods of measuring progress include output methods and input methods. In determining the appropriate method for measuring progress, we consider the nature of service that we promise to transfer to the customer. When we decide on a method of measurement, we will apply that single method of measuring progress for each performance obligation satisfied over time and will apply that method consistently to similar performance obligations and in similar circumstances.

Contingent Research Milestone Payments

ASC Topic 606 constrains the amount of variable consideration included in the transaction price in that either all, or a portion, of an amount of variable consideration should be included in the transaction price. The variable consideration amount should be included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The assessment of whether variable consideration should be constrained is largely a qualitative one that has two elements the likelihood of a change in estimate, and the magnitude thereof. Variable consideration is not constrained if the potential reversal of cumulative revenue recognized is not significant, for example.

If the consideration in a contract includes a variable amount, we will estimate the amount of consideration in exchange for transfer of promised goods or services. The consideration also can vary if our entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event. We consider contingent research milestone payments to fall under the scope of variable consideration, which should be estimated for revenue recognition purposes at the inception of the contract and reassessed ongoing at the end of each reporting period.

We assess whether contingent research milestones should be considered variable consideration that should be constrained and thus not part of the transaction price. This includes an assessment of the probability that all or some of the milestone revenue could be reversed when the uncertainty around whether or not the achievement of each milestone is resolved, and the amount of reversal could be significant.

GAAP provides factors to consider when assessing whether variable consideration should be constrained. All of the factors should be considered, and no factor is determinate. We consider all relevant factors.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Research and Development Expenses

Research and development expenses consist of costs incurred in connection with the research and development of our product candidates, which are partially offset by U.K. research and development expenditure tax credits provided by Her Majesty's Revenue Customs, or HMRC. We expense research and development costs as incurred. These expenses include

expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services

manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials

employee-related expenses, including salaries, related benefits, travel and share-based compensation expense for employees engaged in research and development functions

expenses incurred for outsourced professional scientific development services

costs for laboratory materials and supplies used to support our research activities

allocated facilities costs, depreciation and other expenses, which include rent and utilities and

upfront, milestone and management fees for maintaining licenses under our third-party licensing agreements.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers.

Our direct research and development expenses are tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants and CROs in connection with our preclinical development, manufacturing and clinical development activities. Our direct research and development expenses by program also include fees incurred under license agreements. We do not allocate employee costs or facility expenses, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to oversee research and development as well as for managing our preclinical development, process development, manufacturing and clinical development activities.

The following tables provide additional detail on our research and development expenses

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase substantially over the next few years as we increase personnel costs, initiate and conduct additional clinical trials and prepare regulatory filings related to our product candidates. We also expect to incur additional expenses related to milestone, royalty payments and maintenance fees payable to third parties with whom we have entered into license agreements to acquire the rights related to our product candidates.

The successful development and commercialization of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of any of our product candidates or when, if ever, material net cash inflows may commence from sales of any of our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with development and commercialization activities, including the uncertainty of

the scope, progress, outcome and costs of our clinical trials and other research and development activities, including establishing an appropriate safety profile with IND enabling studies

successful patient enrollment in, and the initiation and completion of, clinical trials

the timing, receipt and terms of any marketing approvals from applicable regulatory authorities

establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers

development and timely delivery of commercial-grade drug formulations that can be used in our clinical trials and for commercial manufacturing

obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights

significant and changing government regulation

launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others

maintaining a continued acceptable safety profile of the product candidates following approval and

significant competition and rapidly changing technologies within the biopharmaceutical industry.

We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. Any changes in the outcome of any of these variables with respect to the development of our product candidates in clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if a regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate. Commercialization of our product candidates will take several years and millions of dollars in development costs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits, travel and share-based compensation expense for personnel in executive, finance, legal and administrative functions. General and administrative expenses also include allocated facility-related costs, patent filing and prosecution costs and professional fees for marketing, insurance, legal, consulting, accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support the planned development of our product candidates. We anticipate continued increased costs associated with being a public company listed in the U.S., including accounting, audit, legal, regulatory and compliance expenses associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer insurance premiums, and higher investor and public relations costs.

Additionally, if we believe a regulatory approval of one of our product candidates appears likely, we would anticipate an increase in payroll and third party expense as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidate.

Other Income (Expense)

Other income consists primarily of interest income earned on our cash balances held at commercial banks and foreign currency transaction gains (losses). In 2020, other income also included gains recognized on termination of a sublease and lease incentive.

We are subject to corporate taxation in the United Kingdom and in the United States. Due to the nature of our business, we have generated losses since inception. Our income tax benefit recognized represents the sum of the research and development tax credits recoverable in the United Kingdom and income tax payable in the United States.

As a company that carries out extensive research and development activities, we benefit from the U.K. research and development tax credit regime under the scheme for small or medium-sized enterprises, or SMEs, and also claim a Research and Development Expenditure Credit, or RDEC, to the extent that our projects are grant funded. Under the SME regime, we are able to surrender some of our trading losses that arise from our qualifying research and development activities for a cash rebate of up to 33.35% of such qualifying research and development expenditure. The net tax benefit of the RDEC reflected in our financial statements for the three and nine months ended September 30, 2020 was 9.7% following the enactment of Finance Act 2020 on July 22, 2020 the benefit increased to 10.5%. We meet the conditions of the SME regime, but also can make claims under the RDEC regime to the extent that our projects are grant funded. Qualifying expenditures largely comprise employment costs for research staff, consumables, outsourced CRO costs and utilities costs incurred as part of research projects, and do not equate directly to our reported research and development expenses. Certain subcontracted qualifying research and development expenditures are eligible for a cash rebate of up to 21.67%. A large portion of costs relating to our research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.

We may not be able to continue to claim research and development tax credits under the SME regime in the future because we may no longer qualify. However, we should continue to be able to make claims under the RDEC regime.

Un-surrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to 5.0 million plus an incremental 50% of U.K. taxable profits. After accounting for tax credits receivable, we had accumulated tax losses for carry forward in the United Kingdom of $163.3 million as of September 30, 2020. The Company carries a $0.4 million deferred tax asset balance related to the U.S. entity. We have recorded a valuation allowance against the net deferred tax asset where the recoverability due to future taxable profits is unknown.

In the event we generate revenues in the future, we may benefit from the new U.K. "patent box" regime that allows profits attributable to revenues from patents or patented products to be taxed at an effective rate of 10%.

Value Added Tax, or VAT, is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC.

Results of Operations

Comparison of Three Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended September 30, 2020 and 2019 (in thousands)

Grant income slightly increased to $0.4 million for the three months ended September 30, 2020 from $0.3 million for the three months ended September 30, 2019. The $0.1 million increase was due to an increase in reimbursable expenditures in the three months ended September 30, 2020.

The $0.2 million of license revenue relates to the grant of a license in the three months ended September 30, 2020.

Research and Development Expenses

Research and development expenses increased to $33.5 million for the three months ended September 30, 2020 from $27.3 million for the three months ended September 30, 2019. Cash costs, which exclude depreciation and amortization as well as share-based compensation, increased to $30.0 million from $21.6 million. The increase in research and development cash costs of $8.4 million consisted primarily of (i) an increase in compensation and employment related costs, net of lower travel costs as a result of the ongoing pandemic, of $1.5 million due to an increase in employee headcount to support the advancement of our product candidates in clinical development, (ii) an increase of $3.6 million in project expenses as a consequence of the advancement of our clinical portfolio which includes research and process development and manufacturing activities necessary to prepare, activate, and monitor clinical trial programs, (iii) an increase of $2.1 million in facilities costs related to the commencement of a lease for a manufacturing facility and the continued scaling of manufacturing operations, and (iv) an increase of $1.4 million in IT infrastructure and support for information systems related to the conduct of clinical trials, (v) an increase of $0.8 million related to cell logistics and (vi) and increase of $0.4 million in legal and professional fees, which is offset by decreases in materials purchases of $1.3 million.

Non-cash costs decreased to $3.5 million for the three months ended September 30, 2020 from $5.7 million for the three months ended September 30, 2019. The decrease is primarily related to share-based compensation expense included in research and development expenses, which decreased by $2.5 million as a result of a lower fair value of stock options recognized in the period, offset by a $0.3 million increase in depreciation.

General and Administrative Expenses

General and administrative expenses increased to $9.8 million for the three months ended September 30, 2020 from $8.6 million for the three months ended September 30, 2019. Cash costs, which exclude depreciation expense as well as share-based expense compensation increased to $7.7 million from $5.6 million. There was an increase of (i) $1.0 million in commercial activities, (ii) an increase of $0.7 million in patent legal fees, audit fees, and costs incurred as a result of being a public company, and (iii) an increase of $0.3 million in compensation and employment related costs due to an increase in headcount, net of lower travel costs.

Non-cash costs decreased to $2.1 million for the three months ended September 30, 2020 from $3.0 million for the three months ended September 30, 2019. The decrease is attributed to share-based compensation expense as a result of the lower fair value of stock options recognized during the period.

Interest income decreased by $0.5 million for three months ended September 30, 2020 due to lower interest rates for cash held on deposit.

Other (Expense) Income

Other (expense) income decreased by $5.8 million for the three months ended September 30, 2020 from other income of $3.3 million for the three months ended September 30, 2019 to other expense of $2.5 million primarily due to a decrease of $7.1 million with regard to weakening of the U.S. dollar exchange rate relative to the pound sterling during the three months ended September 30, 2020 as compared to the three months ended September 30, 2019, offset by lease termination gains of $1.3 million.

Income tax benefit increased to $7.9 million for the three months ended September 30, 2020 from $4.6 million for the three months ended September 30, 2019 due to increased research and development credits. As research and development credits grew at a faster rate than our net loss before income tax, this led to a higher effective tax rate. Research and development credits are obtained at a maximum rate of 33.35% of our qualifying research and development expenses, and the increase in the net credit was primarily attributable to an increase in our eligible research and development expenses.

Comparison of Nine Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the nine months ended September 30, 2020 and 2019 (in thousands)

Grant income decreased to $1.1 million for the nine months ended September 30, 2020 compared to $2.6 million for the nine months ended September 30, 2019. The decrease in grant income of $1.5 million was related to a decrease in reimbursable expenditures related to a one-time grant completed in the nine months ended September 30, 2019 submitted to the U.K. government as part of the reimbursement terms of government research grants used to perform specific research and development activities. This grant no longer existed in the nine months ended September 30, 2020.

The $0.2 million of license revenue relates to the grant of a license in the nine months ended September 30, 2020.

Research and Development Expenses

Research and development expenses increased to $96.2 million for the nine months ended September 30, 2020 from $76.1 million for the nine months ended September 30, 2019. Cash costs, which exclude depreciation and amortization as well as share-based compensation, increased to $82.2 million from $59.4 million. The increase in research and development cash costs of $22.8 million consisted primarily of (i) an increase of $5.5 million in compensation and employment related costs, net of lower travel costs as described above, due to an increase in employee headcount to support the advancement of our product candidates in clinical development, (ii) an increase of $10.2 million in project expenses as a consequence of the advancement of our clinical portfolio which includes research and process development and manufacturing activities necessary to prepare, activate, and monitor clinical trial programs, (iii) an increase of $3.7 million in facilities costs related to the commencement of a lease for an additional manufacturing suite and the continued scaling of manufacturing operations, (iv) an increase of $3.1 million in IT infrastructure and support for information systems related to the conduct of clinical trials, (v) an increase of $0.4 million related to legal fees, (vi) an increase of $0.4 million related to an option to negotiate a future license, and (vii) an increase of $1.1 million related to cell logistics, which is offset by a reduction in materials purchases of $1.6 million.

Non-cash costs decreased to $14.0 million for the nine months ended September 30, 2020 from $16.8 million for the nine months ended September 30, 2019. The decrease is primarily related to share-based compensation expense included in research and development expenses, which decreased by $3.4 million as a result of lower fair value of stock options recognized in the period, which was offset by an increase of $0.6 million in depreciation.

General and Administrative Expenses

General and administrative expenses decreased to $26.0 million for the nine months ended September 30, 2020 from $29.5 million for the nine months ended September 30, 2019. Cash costs, which exclude depreciation expense as well as share-based expense compensation increased to $20.2 million from $19.2 million. There was an increase of $1.2 million of legal fees related to intellectual property and D O insurance costs. The increase in general and administrative expenses for the nine months ended September 30, 2020 was offset by a decrease of $0.2 million in general office expenses.

Non-cash costs decreased to $5.8 million for the nine months ended September 30, 2020 from $10.3 million for the nine months ended September 30, 2019. The decrease is attributed to share-based compensation expense as a result of the lower fair value of stock options recognized during the period.