Hello, thank you for standing by. And welcome to Allogene Therapeutics Second Quarter of 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Please be aware that today's conference call is being recorded. I would now like to turn the call over to Christine Cassiano, Chief Communications Officer. Ms. Cassiano, please go ahead.

Thank you, operator, and welcome to our Q2 call. After market closed, we issued a business update and financial result press release for the second quarter of 2022. This press release and today's webcast are available on our website. We ask you to limit your questions to one per person and we'll do our best to get to as many as possible during the hour. Joining me today are Dr. David Chang, President and Chief Executive Officer; Dr. Rafael Amado, Executive Vice President of Research and Development; 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, data presentations, regulatory filings, future research and development efforts, manufacturing capabilities and 2022 financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of the potential risks can be found in our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements and Allogene disclaims any obligation to update these statements. I'll now turn the call over to David.

Thank you, Christine, and good afternoon. Since our last update, we have continued to make significant progress across our pipeline from our lead CD19 candidate ALLO-501A and our lead BCMA candidate ALLO-715 to our first solid tumor candidate ALLO-316. We believe each of these programs have promising potential and we remain focused on advancing these candidates in a way that will allow us to define, shape and expand the future of cell therapy. This month marks the five year anniversary of the first approval of an autologous CAR T therapy targeting CD19. Since that time, the field has benefited from additional successes. Spectacular data sets reaffirming the treatment benefits coming from one-time infusion, label expansions to earlier lines, as well as to other B cell lymphomas and approval of new CAR T therapies targeting BCMA for multiple myeloma. Yet, one thing that has not changed is the challenges associated with delivery. As recently published in the Journal of Clinical Oncology, real-word access to autologous CAR T remains constrained due to individualized patient manufacturing among other challenges. This study reported that the median waiting time for an FDA-approved CAR T treatment for multiple myeloma patients was six months and that only 25% of patients eventually receive CAR T therapy. While the focus in this study was multiple myeloma, long wait time and supply limitations on cell therapy have also been documented in Non-Hodgkin's lymphoma. Clinicians have been forced into the unfashionable position of needing to choose which of their patients will receive potential life saving therapy. As you may recall from market research, we presented in May, 2021 at our CD19 Forum from over 2000 separate physician appraisals. Efficacy parameters are the single most important consideration in decision making. But importantly, this research foreshadowed the current market crisis by uncovering other…

Thank you, David. Let me first start briefly, as it relates to our plan ALPHA2 Phase 2 pivotal trial of ALLO-501A in third line large B cell lymphoma or LBCL. While the initiation of the trial remains subject to final FDA review, we are confident in our proposed design of this trial and appreciative of the collaboration we have with our investigators. As we analyze all the data across doses and schedules from Phase one portion. Prior to submitting our proposed protocol to the FDA, we undertook an in-depth analysis of our data to determine the best dosing strategy to pursue in the pivotal trial. This included assessment of the depth and durability of clinical responses, analysis of translational data on AlloCAR T cell expansion and persistence feedback from investigators and engagement with regulatory authorities. We look forward to sharing more with you once we have initiated the trial. As you may recall, we are planning to conduct the EXPAND trial to establish the contribution of ALLO-647 to the lymphodepletion regimen. We have also conducted a thorough analysis of ALLO-647 dosing pharmacokinetics, and pharmacodynamics. We believe the use of ALLO-647 is critical to enabling safe and effective lymphodepletion and uniquely able to create the needed window for AlloCAR T expansion and persistence. The wealth of Phase 1 dose ranging data that we have generated across our CD19 program has shown us that ALLO-647 dosing is critical to achieving optimal efficacy and has allowed us to zero in on the preferred dosing regimen. We have shown a strong correlation between serum concentrations of ALLO-647, and the likelihood of clinical response. Our data, as well as those of our partners and competitors differentiate our belief that this trial will not only result in a positive outcome, but also differentiate our platform by…

Thank you, Rafael, and good afternoon, everyone. As David and Rafael have conveyed Allogene is nearing a very important milestone. As we progress on this journey to bring cell therapy to many more patients, we are in the fortune of position of having the financial resources required to persist in advanced toward our goal. We ended the quarter with $686 million in cash, cash equivalents and investments. While we expect our spending to increase in the second half of 2022, we do realize the need to be efficient and thoughtful about how we deploy our resources. We now expect full year GAAP operating expenses to be at the low end of the previous range of $360 million to $390 million. This includes estimated non-cash stock-based compensation expense of $90 million to $100 million and excludes any impact from potential business development activities. Our cash burn for 2022 is expected to be approximately $250 million. Moving to our second quarter financials. In Q2 2022, our research and development expenses were $57.2 million, which includes $13 million of non-cash stock-based compensation expense. General and administrative expenses were $19.5 million for the second quarter of 2022, which includes $9.9 million of non-cash stock-based compensation expense. Our net loss for the second quarter of 2022 was $74.8 million or $0.52 per share, including non-cash stock-based compensation expense of $22.9 million. With that, we will now open the call for your questions.

[Operator Instructions] Your first questions from the line of Tyler Van Buren with Cowen. Please go ahead.

Hey guys, good afternoon, and thank you very much for all the updates. My question is just as you think about the ongoing durability and CR rate for ALLO-501A and the comparison to autologous CAR T. Can you discuss your confidence in the data at six months relative to autologous and a likelihood of those responses being durable?

All right. Tyler, this is Dave Chang. Thank you for the call. I think you are asking probably one of the most important question. And as we’ve been saying, we have the utmost confidence that six-month benchmarking is a good prediction of what is to be happen in the longer-term follow-up. So with that, let me ask Rafael to elaborate a little bit.

Yes. That Tyler, this is really very well-established fact in the autologous setting the six months CR predicts for long-term durability of response and even cures. The question was, is that going to be the same in the allogeneic setting and what I can say is that, we are really recapitulating what the autologous setting has been seen with the lymphodepletion that we use and the strategy that we use. So we’re pretty confident that this six-month CR, which is in the order of 30% to 40% predicts for similar percentage of long-term durability or response.

Your next question is from the line of Salveen Richter with Goldman Sachs. Please go ahead.

Good afternoon. Thanks for taking my question. Could you just talk about how your thinking about utilization of 501A given the move of autologous product earlier line setting?

Hey Salveen, David Chang. Let me defer to Rafael to elaborate what our plans are on with a 501A certainly our focus right now is studying the pivotal study in the third line, but we are definitely eyeing into the earlier lines.

Yes, it’s a great question. Because products are moving into second line clearly. But I think one fact that sometimes just ignore is that a lot of patients that had – that could only receive products prior to the approvals in second line and third line were receiving salvage therapy to be able to get into the third line space. So it’s unclear to what extent the second line will be a quantum leap difference from the status that there was before. I mean, clearly some patients will go straight to second line. But what we know is that there’s a great percentage of patients that are eligible for treatment that don’t get treatment. And what we hear from investigators is that there’s not going to be any shortage of patients that are refractory, not just to two lines of regimens, but even more that could come into not just our studies, but eventually when the product is approved into treatment with an allogeneic cell therapy. Having said that, we have plans to move our product into second line and this is something that we are thinking about and projecting to get started sometimes towards the end of this year, early next year.

Your next question is from the line of Michael Yee with Jefferies. Please go ahead.

Hey, thanks for the question and thanks for the updates. Looking ahead to BCMA and the development of myeloma, you made some comments about planning for the next step. So maybe you could talk a little bit about what the bar is to have made that decision, given the existing therapies that are out there, obviously, analogous to what everyone’s asking on CD19. There was already a bar here with BCMA and look at the labels and what the confidence is that you can be at least as good and how you’re thinking about the landscape there. Thank you.

Hi, Mike. Great question. Our intent is to provide overall update of the BCMA program at the year end. But as we have made comments in the prepared remarks, we are looking into – how to best speed up the program, especially with the confidence that we are getting with the ALLO-715 single dose treatment, where we have the most data. And obviously, we are following the data for longer term durability, especially the duration of response, but as we have previously presented at ASH 2021 already by then, the data was looking in a pretty comparable to what one of the approved autologous CAR T therapy, specifically ABECMA has shown. It has a little bit of gap compared to CARVYKTI, but on the other hand you’re talking about allogeneic off-the-shelf product that can be made readily available to the patient. And we’ve been told by the investigator for quite some time and certainly I think that noise has amplified quite a bit over the last few months when it comes to the availability of the autologous CAR T therapy. As we have made comments, we are learning that the limited availability is essentially taking away the opportunity for the patients who could benefit from the autologous CAR T therapy not getting the therapy. So obviously, this is a window that we have and I think window will last for some time. And which is one of the reasons that we are trying to find a way to accelerate our ALLO-715 program.

Your next question is from the line of Michael Schmidt with Guggenheim. Please go ahead.

Hey, this is Kelsey on for Michael. Thanks for taking our questions. I guess, first for the CD19 update later this year. I guess, can you just clarify what regimen the additional patients from ALPHA2 would’ve been treated with? And then secondly, I guess, what else needs to be done or shown to the FDA with respect to Cell Forge 1 before it can kind of be used as the main facility for the pivotal study. And then can you just remind us of the capacity expectations for Cell Forge 1? Thanks so much.

Yes. Kelsey, this is Rafael. I’ll talk about the dose regimens that we’re treating patients with. This study has been going on for over three years and we’re fortunate to actually have a very large data set, both with monotherapy across multiple cell doses, as well as lymphodepletion regimens and a lot of translational data that we can mine ourselves as well as together with investigators and experts in the field to try to understand what the optimal lymphodepletion regimen will be. Obviously, we have designed the trial and submitted it for review to FDA. So we already have chosen a lymphodepletion regimen, and we will make that available once the study is approved, when we have green light from regulators to get it started. Until theṇ, we continue to treat patients in the Phase 1 study, and I think that’s really important first to keep the investigators engaged, but most importantly to be able to make the product available to patients in need. So stay tuned with regards to the final lymphodepletion regimen. I think with regards to Cell Forge 1, it is incredibly expensive, the activity level that took place as well as the package that needed to be submitted to FDA, both with regards to comparability, as well as the methodology for validation of the release assets – assays. And all of that package has been submitted to FDA is on the review and it included a lot of details and a lot of runs showing comparability between the two previous sites, as well as the optimization of the process. So without going into further detail, just to remark on the fact that it was an enormous amount of work, and we’re really very proud of the organization that was able to get this done on a timely fashion and put it really in front of regulators for them to review it. And we’re awaiting their response at the moment. And then with regards to capacity maybe I’ll pass it on to Eric to comment.

Yes. Thanks, Kelsey. We’ve talked in the past about having the capacity to dose from Cell Forge 1 alone up to 20,000 patients worth of material from that facility in a given year. So that would be at full scale up and full capacity.

Your next question is from the line of Ren Benjamin with JMP Securities. Please go ahead.

Hey, good afternoon, guys. Thanks for taking the questions. Can you talk a little bit about the go/no-go criteria you utilized when evaluating the combination with nirogacestat and how many patients did you evaluate before making the decision? Thanks.

Hi, Ren. This is Rafael. Thanks for the question. We believe that we actually did the right trial within the trial, if you will, of nirogacestat. And as you know, very clearly the hypothesis was that we would get less soluble BCMA and higher BCMA in the expression in the plasma cells and lead to better outcomes. We use a cell dose as well as lymphodepletion that we knew was active and a dose of nirogacestat that we knew was active in desmoid tumors, which is where the lead indication of this product is. So we treated a number of patients and sufficient number of patients to make comparisons with ALLO-715 by itself. And I think the off shot of it, as I said in the prepare remarks is that, we did see activity, but in terms of increasing benefit risk that wasn’t really a clear distinction. And so just to the root of your question, what I would say is that we treated sufficient patients to be able to make, I think a sound conclusion. Now having said that the patients haven't been followed long enough for us to make a final determination, but the data that we have so far suggests that there isn't really an advantage over 715 alone to continue to test the product. So I think that's what I would say about this experiment. We're really happy that it was conducted and that the decision was made.

Your next question is from the line of Jason Gerberry with Bank of America. Please go ahead.

Hey guys. Thanks for taking my questions. Apologies if I missed this, but when you think ahead to the BCMA decision fourth quarter, just given the overall market size is much bigger than CD19, and the supply challenges are so notable. Does this make the bar for advancement sort of worst autologous approach or like a bispecific and not shooting for like a legend like bar? And then, just the investment being made in Cell Forge just wanted to confirm, I would assume that there's a presumed synergy to having multiple of the CAR T programs in in-house and not partnering off one or the other. But just if you could confirm that that would be great.

Jason, let me take your first question about the product profile that we're shooting for in myeloma and the market size. Yes, this is a tremendously large market by most estimates. There are over 50,000 patients in the U.S. alone with refractory multiple myeloma. So, clearly there is a need to produce cell therapy at much greater scale that than is currently available and to treat many more patients with this modality. In terms of our profile with ALLO-715, I think it's pretty clear that what we're targeting here is first-in-class off the shelf therapy that can be dosed on demand over a defined treatment interval. This would obviously be a high potency product with an accessible safety profile and would enable patients to truly get away from their disease hopefully for extended period of time. We think this profile could be unique and thus far, we haven't seen any other product with a similar profile and certainly highly attracted to patients. You referenced Carvykti and certainly the efficacy of that product is extraordinary. And for that matter a backbone baby the second most potent product ever developed for myeloma patients. But in the real world, unfortunately neither of these therapies are going to be relevant to the patients who can't get access. So, that's our primary thrust to make sure that many more patients can access cell therapy and benefit from its potency.

Your next question is from the line of Mark Breidenbach with Oppenheimer. Please go ahead.

Good afternoon and thanks for taking the question. Just wondering if exploring a pivotal study for the BCMA program implies that you've got a formal Type B meeting with the FDA scheduled for later this year. And I'm also wondering how we should be interpreting that you're thinking about advancing 715 into a pivotal trial before showing this data from 605 or from consolidation dosing with 715. Thanks. Any color you can give on that?

Yes. Mark let me take that question. As some of you may know, in the BCMA from the beginning, we have taken a relatively broad approach, not just the 715 as a single infusion, but also the combination with a gamma secretase inhibitor that Rafael has just covered. We also tested a next-generation and that study is still ongoing. And the last one that we added is the exploration with the consolidation, where we plan to give two doses in a very tight interval, hoping that that would improve the overall outcome. I would say, some of the studies are ongoing, but in drug development, time is of essence. And also we believe that currently there is a great opportunity as Eric has just covered and the target product profile that we have set out. And the data that we are seeing in the 715 program is very promising. So that's really the genesis of our interest in exploring, moving the 715 program into the pivotal. And what needs to be done, as we have learned during the 501A experience is pretty extensive. Not only we have to take care of the CMC issues, we have to take care of the protocol, and this is where we feel that the fact that we have the control of the manufacturing at the CF1, will be a plus. And in fact, I think that's going to add in terms of quite a bit about how fast we can move. And as that activity is going on, certainly the regulatory discussion will have to occur. The timing of regulatory discussion, we do not go into that. But 715 currently has the RMAT designation, which would allow us a much, hopefully, quick regulatory interaction than what we have experienced with 501A.

Your next question is from the line of David Dai with SMBC. Please go ahead.

Great. Thank you for taking my questions. So one question on the 605, the BCMA CAR T program. Could you just remind us what dose level you currently escalating the patients at? And then could you just provide some color in terms of when should we expect an update from that program?

Yes, so this Rafael. So 605 is currently in dose escalation as you know. We are going to explore doses that we know that have been active in 715 and we are very close to achieving those doses. And then after that, we will also explore various lymph depletion regimens, just like we did with 605 – sorry, with 715 as well as with 501 and 501A. So there will still be a little bit of time before we completed dose escalation and we get a good picture of what this next-generation product can do compared to 715. So it may take us more time than the rest of the year. So it is possible that the next update or the first update that you may see with 605 maybe next year, rather than at the end of this year.

Your next question is from the line of John Newman with Canaccord. Please go ahead.

Hi guys. Thanks for taking my question. Just curious, in terms of the potential design for the pivotal study for 501A, do you expect that you would exclude patients previously treated with other CD19 targeted therapies? And then second question I had regarding the 715 program. Just curious if we might see some consolidation data at the end of this year, the press release mentioned single agent, but just not sure if the consolidation data might come this year, maybe 2023? Thanks.

Yes. So the answer to the first question is that the pivotal doctor trial will exclude patients that are previously treated with CD19 directed therapy. I think that's a way for us to be able to establish our genetic benefit risk in the setting where the autologous products were developed. And so, that decision has been made. That we have retreated patients in the past, and we've seen some activity before, but for the purpose of the pivotal trial, these patients would be excluded. And then the 715 consolidation data is ongoing. I believe that in order to present sufficient durability, we may need to wait until early next year. But that cohort will finish relatively soon. And it depends on what we see, but most likely my projection is that will probably cross into next year.

Your next question is from the line of Luca Issi with RBC Capital. Please go ahead.

Great. Thanks so much for taking my question. I think it was mentioned a couple of times during the call, a little bit of a gap versus CARVYKTI on efficacy and appreciate all the benefit of a AlloCAR T versus Auto, but is it possible that the FDA will initially ask you to run a pivotal trial for BCMA post AutoCAR T in studying AutoCAR-T naive, any color that would be great?

Yes, Luca, this is David Chang. I do not want to speculate on behalf of the FDA. But if you think about what we are doing with the ALLO-501A, we are going into the same third line patient population that the AutoCAR T [ph] have a currently label in. So the discussions on the multiple myeloma that's coming up, but our current expectation is that the FDA position would not have significantly shifted over last few months from how they've been advising us about the 501A pivotal society design.

Your next question is from the line of Raju Prasad with William Blair. Please go ahead.

Thanks for taking the question. Just regarding Cell Forge 1, can you just give us a sense of where the CMC is at now compared to where you anticipated a potential commercial launch and just what – how many aspects of the manufacturing process are still relying on CDMOs, is it vectors or something of that nature versus what you'd anticipate kind of at a commercial launch? Thanks.

Hi Raju. I mean, great question. I mean, CMC issues are obviously very hot ticket item current days, and it's also very complex issues. But let me simplify. In terms of CF1 that's our state of art manufacturing facility that we plan to going forward, not just produce the clinical materials, but also convert that facility for the launch of the product, up on the approval. So it's really designed as a multi-purpose manufacturing facility, and that facility is already operational, and we are making the clinical grade materials. In terms of what is needed. It's probably too much information to go into the details. But our plan is used at facility for the cell manufacturing and going forward, we will continue to rely on CDMOs for the viral vector manufacturing.

Your next question is from the line of Asthika Goonewardene with Truist Securities. Please go ahead.

What is the capacity currently? Hello?

Yes, please go ahead.

Oh, sorry. Yes, so I want to know what the current capacity of Cell Forge 1 is? And also how long would it take to get up to the 20,000 per year anticipated?

Let me take the question. I mean, that facility at full capacity, we have said, we'll produce 20,000 ALLO-501A. Current capacity is really based on our need and certainly the capacity far exceeds what we need to support all our ongoing clinical programs. So this is really one of the best manufacturing facility that I have dealt with and we are very happy that it will not only meet our current need, but it will meet our future need for foreseeable years.

Your next question is from the line of Kalpit Patel with B. Riley Securities. Please go ahead.

Yeah. Hey good afternoon. And thanks for taking the question. You noted that you're waiting on FDA clearance for the Alpha 2 study. But have you received a thumbs up for the EXPAND study already, or is that guidance also expected along with the clearance of the Alpha 2 study. And if you have received clearance, are you able to disclose any additional details for the design of that trial?

Yes. In terms of, Kalpit, the question about two pivotal study that we plan to do. One is [indiscernible] single arm study that we plan to demonstrate that benefit risk of ALL0-501 and the second EXPAND study is to on that where we will demonstrate the contribution of ALLO-647 in the lymphodepletion. Right now our focus is getting the 501a single arm study up. We believe that that is on the critical path, and that's what we are waiting for. As for 647 we already have had discussions and we expect that study to be initiated after we start the ALLO-501A study.

Your next question is from the line of Jack Allen with Baird. Please go ahead.

Hi, thank you so much for taking the question and congratulations to the team on the progress. I was hoping you might be able to speak to any color as it relates to the data you shared with the FDA to secure the RMAT designation in June for ALLO-501A, did the FDA see any updated durability data and any comments you can make us as it relates to that conversation would be great? Thank you so much.

Yes. Thanks, Jack. This is Rafael. Great question. We got first RMAT designation with 715 and then with 501A as you may know. We submitted data that was updated obviously from the last presentation and it was across doses and schedules and lymphodepletion regimens. FDA really was interested in obviously, the response, the durability of response interested on long-term durability. But importantly, interested in how many patients actually received the product versus how many patients were enrolled. And what was the time between enrollment and received of the product and also whether or not they received bridging therapy. So this questions really speak to, I think the interest of the agency on the allogeneic technology which we believe you something of interest to regulators. And I can say that we have received similar questions in the past with 715. So I think we – I think you reiterated the benefit of the allogeneic technology both in the eyes of clinicians, investigators, but also regulators. Thank you. That concludes our question-to-answer session. I would like to turn the conference back over to management for any additional comments.

Thank you, I want to end the call by thanking you for joining us today and your ongoing support. As we pay new roles in the development of allogeneic CAR T products. We very much look forward to what lies ahead for the rest of the year and updating you our progress. Operator, you may now disconnect.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now log off and disconnect.