Good morning ladies and gentlemen. Thank you for standing by, and welcome to the Allogene Therapeutics Fourth Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be aware that today’s conference call is being recorded. I would now like to turn the conference over to Christine Cassiano, Chief Communications Officer. Ms. Cassiano, please go ahead.

Thank you, operator and good morning. Before market open today, Allogene issued a press release to provide a corporate update and financial results for the fourth quarter and full-year ended December 31, 2018. This press release is available on our website at www.allogene.com. We will also be discussing our ALLO-501 Phase 1 Clinical trial protocol and have posted on our website a slide which provides an overview of the trial that can be found in the investors section under news and events. We remind listeners that today’s call is being webcast on our website and will be available for replay. Joining me on the call today are Dr. David Chang, President, Chief Executive Officer; and Dr. Eric Schmidt, Chief Financial Officer. During today’s call, we will be making certain forward-looking statements. These may include statements regarding the success and timing of our ongoing and planned clinical trials, regulatory filings, future research and development efforts, manufacturing capabilities and 2019 financial guidance among other things. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ, materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the securities and exchange commission, including our Form 10-Q for the quarter ended September 30, 2018, as well as our upcoming Form 10-K for the year ended December 31, 2018. You are cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligation to update such statements. I’ll now turn the call over to Dr. David Chang.

Thank you, Christine. Good morning and thank you all for joining us today on Allogene’s first quarterly call. We will keep our scripted comments relatively brief as we look forward to any questions you may have on our ALLO-501 ALPHA trial and other business activities. 2018 was a very memorable year for us at Allogene and we are very proud of what our team accomplished in just 10 short months since we began the operations. From building a stellar executive management team to our successful ITO and the IND acceptance for our first clinical candidate, we believe we are making excellent and rapid progress, and we plan to continue on that trajectory. We are 100% focused on bringing allogeneic CAR T or as we refer to them AlloCAR T therapies to market so that all appropriate patients have the opportunity to receive treatment. Every task we undertake at Allogene is aimed at achieving that goal. While we realized that bringing AlloCAR T therapies to patients is a tall order and that many hurdles will need to be overcome before we are successful. We believe Allogene is well-positioned with the people, programs, technologies, and resources to pioneer the development of what we believe is the next frontier in cancer therapy. In our cell therapy experience, we know manufacturing and the strength of the technical operations team can make the difference in successful outcomes for patients or manufacturing products in time for patients. As such, we’ve made this one of our top priorities and will be devoting considerable time and resources to [this area]. Our first step was to hire one of the best people in the industry to lead this effort Dr. Alison Moore. Alison’s vast experience in biological manufacturing and advanced training in Cell Biology are well suited to the…

Thank you, David. The press release we issued today provides an overview of our fourth quarter and year-end financial results. We will be providing additional details in our 10-K, which will be filed with the SEC. Following our equity offerings of 2018, we’re in a strong financial position and are well-capitalized to further advance our clinical development programs and support the manufacturing buildout David mentioned earlier on the call. As of December 31, 2018, Allogene had cash, cash equivalents and investments totaling $721.4 million. In the fourth quarter, our research and development expenses were $18.5 million, which includes $1.3 million of non-cash stock-based compensation expense. For the full-year 2018, research and development expenses were $151.9 million, which includes $109.4 million related to the asset acquisition from Pfizer. The total research and development expense for the year includes $1.7 million of non-cash stock-based compensation expense. General and administrative expenses were $14.5 million for the fourth quarter of 2018, which includes $4.6 million of non-cash stock-based compensation expense. For the full-year 2018, G&A expenses were $41 million, which includes $16.9 million of non-cash stock-based compensation expense. Our net loss for the fourth quarter of 2018 was $30.5 million, or $0.37 per share, including non-cash stock-based compensation expense of $5.9 million. For the full-year 2018, our net loss was $211.5 million or $7.31 per share, including non-cash stock-based compensation expense of $18.6 million. Turning now to financial guidance for 2019. We expect our full-year 2019 net losses to be between $200 million and $210 million. This includes an estimated non-cash stock-based compensation expense of $45 million to $50 million and excludes any impact from potential business development activities. And for those of you modeling Allogene’s financials, please note that while we have 121.5 million shares [outstanding] our GAAP loss per share calculation will exclude those shares that remain subject to vesting conditions. At the beginning of 2019, the number of outstanding that will be excluded from our GAAP loss per share calculation is approximately 25 million. With that operator, I would now like to turn the call over to questions.

[Operator Instructions] Our first question comes from Salveen Richter with Goldman Sachs.

Good morning. Thanks for taking my questions. Two from me, just could you remind us of the changes to the manufacturing processes with ALLO-501 versus UCART19? And then secondly how many sites are you including in this trial, and how competitive is enrollment from these sites just given the number of CAR T trials in NHL that are ongoing? Thank you.

Good morning, Salveen. Thanks for those two questions. This is David Chang and let me take the – actually let me take both of those questions. In terms of ALLO-501, as we have previously communicated, the molecular construct of ALLO-501 is nearly identical to UCART19, you know what really has changed is the manufacturing process. So, if I can just sidetrack about, you know what happens in the cell manufacturing and for that matter manufacturing in general, there are many different aspects that one has to consider. It’s not just taking the cells into the laboratory and doing a few things and how you have the cell products. The whole issue around the supply chain that you have to take care of, this includes raw materials, viral bacteria's, and any [indiscernible] reagents that goes into the manufacturing and then there is a stepwise manufacturing process that also includes the assays in between, intermediate assays to understand what’s going on during the entire manufacturing process. And then lastly, when you finally produced a material, you have to go through all the release tests and all that. So, we haven't really made what I would consider as a large big change, but incrementally in each of those area we have improved and end result is that manufacturing process is more robust and consistent, and as we have previously said, currently we estimate based on the production volumes that we have already done that we can shed up to about 100 patients from each manufacturing run, and we believe that this yield will continue to go up as we introduce additional improvement to the manufacturing. So, the second question, in the midst of site activation. This is a Phase 1 study that will involve patients in a controlled manner. As we have said, the starting dose of the Phase 1 is approximately 40 million sales per patients and we will do some dose exploration, as well as trying to optimize the lymphodepletion before we embark on the Phase 2 study. We expect the number of sites that we will need will range somewhere between 6 to 8, and so far, our interactions with the investigating site has been extremely positive. We will see once we open up the study and involving patients, but we expect in terms of identifying patients we will be fine. I just say with a little bit of therapy because we haven't actually involved any patience as of today.

Thank you, David.

Our next question comes from Biren Amin with Jefferies.

Hi, guys. Thanks for taking my questions. I guess David, let me just start on ALLO-647, do you need to get that IND clear before you initiate the 501 study?

Biren, good morning. Thanks for that question. The long answer – short answer is, yes; and another short answer is, everything has been taken care of, and in the 501 study we will be using ALLO-647 as a part of the lymphodepletion. So, for those who may not know or ALLO-647 is, this is our own proprietary anti-CD52 antibody. And as we presented the latest update of UCART19 study at ASH 2018, it’s a small set of patients, but what we have learned is that for the AlloCAR T cells to expand you will require more than the conventional Flu/Cy based on lymphodepletion. In patients who only received Flu/Cy we had not seen much cell expansion or the response, whereas patients who received Flu/Cy plus anti-CD52 antibody we have consistently seen both cell expansion, as well as very robust responses.

Okay. And then David as I look at the study design for the ALPHA study and lymphodepletion regimen that you are using, and I compare that to the UCART19 CALM the adult ALL study, I think fludarabine you are using the same regimen as CALM, but for cyclophosphamide I think there is a change, I think using a lower dose of cyclophosphamide on a daily basis. I think, CALM used 500 verses, I think ALPHA is using 300. So, I what to kind of understand the rationale behind that change? And then how should we think about the alemtuzumab dose where CALM used 1 milligram per kilogram and I think you are using 13 milligrams daily for three days?

Great question. Impressed with the [indiscernible] details that you are placing on our study design. There are minor modifications that we are introducing to the lymphodepletion. Some of this is based on what we have learned from others and some of the changes being introduced based on the pharmacokinetic modelling. And at this point, we believe we have enough information to make these minor adjustments notably bringing down the dose of the cyclophosphamide and also bringing down the dose of anti-CD52 antibody. And just to correct, in the study, we will be using our own proprietary anti-CD52 antibody in ALLO-647 and not alemtuzumab. And so, these are sort of the kind of lymphodepletion explorations that we will be doing a little bit and as this is a Phase 1 and as we learn to cell expansion and other sort of efficacy-related outcomes we can certainly adjust some of these lymphodepletion, as well as cell dose is to really optimized what we need to do in our planned Phase 2 study.

Okay. And then maybe just a last question, I think you mentioned the Phase 2 trials for UCART19 would start now and 2020, what – I guess can you provide color on what Servier need to rectify on the manufacturing process to get this back on track?

Yes, we work closely with Servier and try to advise and provide some input into their – both manufacturing, as well as development programs. I mean it is a partnered program. Some of the details it would defer to Servier to comment, and it really has to do the kind of things that I talked earlier in response to Salveen’s question one needs to be done in manufacturing. It is not anything major, but these little things really add up to a lot of different work. For example, if you have to improve an assay you got to develop the assay, validate the assay and then actually start before you can use it, all those things do take time. I think a lot of work is ongoing right now and I feel confident that in 2020 they will be able to move the UCART19 program into Phase 2.

Great. Thank you.

Our next question comes from Cory Kasimov with JPMorgan.

Hi, good morning guys. Thanks for taking my questions. Just a couple of them. First, for 501, with regards to manufacturing can you just kind of update us where you are in terms of doses produced? I mean, do you have enough product at this point for the Phase 1/2 trials or is there still more manufacturing that needs to take place? And then I have a follow-up after that.

Okay. So, good morning Cory. In terms of manufacturing of ALLO-501, we will continue to manufacture additional batches, but as I’ve said, each batch at this point can produce upwards of enough material to trade-up upwards 100 patients. So, in terms of do we have enough material to complete the Phase 1 study of 24 patients, definitely, but we are also planning other things. So, additional production is currently ongoing.

Okay. And then my other question is, what do you expect typical hospital stay to be four patients post cell fusion with a regimen utilizing the anti-CD52 antibody?

Great question. We have not studied ALLO-501 in non-hodgkin lymphoma patients. In terms of hospitalization, there is many different things that factors in, including the disease and the conditions that patients are in. Sometimes the lymphodepletion, which can cause neutropenic can result in hospitalization and, you know which is one of the reasons that we are trying to really optimize the chemotherapy dosing the lymphodepletion. And also, in Phase 1 there are sample collections that require patients to be, even if they are outside our patient needs to come into the hospital pretty frequently. So, the protocol will require a few days of hospitalization as part of the Phase 1 and in terms of exactly how long they will need to stay in the hospital will be determined based on our Phase 1 experience. And we estimate based on what others have seen in non-Hodgkin's lymphoma the hospitalization could be anywhere between 5 days to 14 days.

Okay. Appreciate the information. Thank you.

Our next question comes from Phil Nadeau with Cowen & Company.

Good morning. Thanks for taking my questions. First one on the dose in the trial, you said the starting dose is 40×10 [indiscernible], I think in the calm study that two dose levels that were tested very either [6×10 to the six or 60×10 to the six], are so your 40 starting to assist somewhat in between, how do you arrive on that dose, what’s the rationale for 40 versus one of the doses that Servier tested in CALM?

So, because we have some experience coming from the UCART19 we were trying to come out with a starting dose that is reasonable with a chance of efficacy even in the Phase 1 study and then progressively go up to the higher dose. And as I’ve said, this – we are testing ALLO-501 in an indication that has not been previously tested. So, where will be the optimal dose that we decide for the Phase 2 will depend on what we see during the Phase 1, I think the Phase 1 study.

Got it. That makes sense. And then second, on the dose of the anti-CD52 you are using 13 milligrams per day times three days, I think CALM used 1 mg per kilogram and then in response to Biren’s question you said, you backed off on the anti-CD52 dose a little bit, can you talk how those two doses compare a bit more and then given how important it seems to be for cell expansion, why did you decide to back off on the dose a bit?

It has a lot to do with the pharmacokinetic modelling. We went through some of the early available information about the pharmacokinetics anti-CD52 antibody, as well as based on some of the modelling that we have done in the preclinical study. And in Phase 1 it is really a study where you can test different, explore different doses. I mean, in my previous experience, when I was running another CD19 CART T program we spent a considerable time trying to optimize the lymphodepletion regimen, and at the end that really was proven to be the right thing to do because once we started the Phase 2 study we were able to stay on the same lymphodepletion, as well as sell those throughout the study that which allowed the study to be completed in a relatively short period of time.

Okay. And, I guess, I'm curious on the conversion. So, for an average 80 kg adult. Are they going to get about half the anti-CD52 on your protocol versus what was used in CALM?

That will be, let’s see. Roughly, maybe slightly less than half. So, it’s about, your estimate is correct.

Okay, great. That's helpful. And then last just a follow-up question on Servier, you mentioned the Phase 2 trial is going to start in 2020, but are they able to enroll patients now, do they expect to enroll any more patients in CALM or PALM during 2019 or are those trials now virtually complete in the next [indiscernible] patients would be in the Phase 2 in 2020?

Yes. Right now, the board comment on studies are active by not enrolling the patients. And in terms of enrolling additional patients in 2019, I mean we need to sort of see how some of the improvement that are currently being investigated [pans out].

Got it. Okay. Thanks for taking my questions and congrats on the progress.

Thank you.

Our next question comes from Mark Breidenbach with Oppenheimer?

Hi, good morning and thanks for taking my questions. Most of them have been answered at this point. Just one more on the lymphodepletion regimen. You mentioned that the possibility of being able to modulate or alter the concentrations or doses of some of the reagents being used in lymphodepletion, but can we assume for the first 24 patients were fixed that the doses that are listed in your side?

Mark. Thanks for that very important question. Phase 1 study, you know right now the design is as detailed in the slide that Christine has shared as part of this earnings call. In terms of our ability to make adjustment and that is just the nature of the Phase 1 protocols. I mean the beauty of doing a Phase 1 study is based on the result, especially around the safety and also, we will be able to assess our expansion roughly quickly. And those will give us an opportunity to make some changes if that is seemed to be – they dispute as needed. And, you know, I would say, you know during this call, I’m really impressed and amazed about the tension to the lymphodepletion. I mean, few years ago, people were sort of very dismissive of lymphodepletion and some not even considering lymphodepletion and all that, but as you know lymphodepletion is the part of any cell therapy. People have shown repeatedly without the lymphodepletion you don’t get much cell expansion. When you from autologous to Allogenic there is additional need to further augment the lymphodepletion and that is really where our ALLO-647 is coming in. And what we have seen is with anti-CD52 antibody we can get a deeper lymphodepletion that can also be more lasting. So, that certainly seems to allow AlloCAR T cells to expand and persist for the desired length of time. So, certainly, we will keep updating you on the progress of Phase 1 study. And as we said in the prepared transcript, we expect that they will be available in 2020.

And would you say that there is any preclinical evidence or otherwise, suggesting you might be able to eventually get away with a CD52 only lymphodepletion regimen and exclude Cy/Flu altogether?

Well, great question. This is, probably, I think you are the first one to have ever asked that question. Let’s say I would not exclude that possibility and let’s stay tuned. We will be looking to some of those elements in many of our planned ongoing study, planned studies not just in the 501 study, but 715 study [indiscernible] will give us another opportunity to look at the lymphodepletion as a way to optimizing the AlloCAR T therapy.

Okay. Thanks for taking the question.

Alright. Thank you.

This concludes the Q&A session. I would now like to turn the call back over to management for any additional comments.

Well, thank you for all your time today. We're very pleased with the progress we have made to date and we would like to especially thank all the employees who make up Allogene. I’ve been amazed about what small group of people can do and had done over such a short-period of time and without them the success we have achieved so far would not have been possible. And we certainly look forward updating you over the next coming months as we advance our planned 2019 milestones, and I thank you for your continued support. Operator, you may now disconnect.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, you may all disconnect and have a wonderful day.