Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Allogene Therapeutics First Quarter 2020 Conference Call. [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 good morning. We appreciate you joining us today and sincerely hope you are all doing well. Before market opened today, Allogene issued a press release that provides a corporate update and financial results for the first quarter ended March 31, 2020. This press release is available on our website at www.allogene.com. 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 and Chief Executive Officer; Dr. Rafael Amado, Executive Vice President of Research and Development and Chief Medical Officer; and Dr. Eric Schmidt, Chief Financial Officer. Please note that we are conducting our call today from different locations, so we appreciate your patience and understanding should we have any technical difficulties. 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 2020 financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. These statements involve 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-K for the year ended December 31, 2019, our Form 8-K filed on March 27, 2020, as well as our upcoming Form 10-Q for the quarter ended March 31, 2020. You are cautioned not to place undue reliance on these forward-looking statements and Allogene disclaims any obligation to update these statements. I will now turn the call over to Dr. David Chang.

Thank you, Christine. Good morning, everyone, and thank you for taking time to join us for our first quarter conference call. It has been just over two months since our last earnings call, but the world seems a different place. We hope you and your loved ones are safe and well. Our sincerest thanks to many of you who have reached out to ask of Arie Belldegrun, after he announced that he has tested positive for COVID-19. We all feel very fortunate that his symptoms were relatively mild, and he has fully recovered. At the same time, we are profoundly sorry about how the current dynamic has claimed so many lives and created hardship for everyone globally. Across our industry, it is inspiring to see the way in which our scientific and regulatory communities have joined together to identify potential treatments and, hopefully, a vaccine. The pharmaceutical and biotech industry are in the business of handling some of the toughest medical challenges. One thing is clear during this time: scientific innovation is our cornerstone and true north. At Allogene, our priorities have been to protect the health of our employees, do our best to support our community, including the patients we serve and those fighting on the front lines, and maintain as much of our business momentum as possible. On prior calls, you have heard us speak about the caliber of talents we are fortunate to have at Allogene. Now more than ever, the ability of our employees to demonstrate our values, to innovate, focus, collaborate and lead matters. We acted quickly to protect our workforce implementing work-from-home policy for the great majority of employees in advance of local and statewide shutdowns. By maintaining a small lab presence directed at critical path activities and relying on the resourcefulness of our…

Thank you, David, and good morning. As David noted, our Phase 1 trial for ALLO-501 has continued to enroll patients, and we’re looking forward to sharing initial data from this ALPHA trial at ASCO on May 29. While the focus of any Phase 1 dose escalation trial is appropriately on safety, we continue to use this trial as an opportunity to optimize clinical and translational outcomes using ALLO-647, our anti-CD T20 bodies that allows us to customize lymphodepletion and provides us with unique differentiation from others in the field. As a reminder, to those less familiar with the conduct of a cell therapy trial, each patient enrolled at a new dose level must be safely treated and followed for the 28-day dose limit in toxicity or DLT window before additional patients in the cohort can be enrolled. Those cohorts can advance to the next when every patient in that cohort has been followed for the 28-day DLT window. In our ALPHA trial, while we awaited clearance to move to higher cell doses, we took the opportunity to backfill patients into lower dose cohorts. As such, we enrolled a total of 11 patients and prospect three-by-three doses escalation portion of the study. Initial data from the cell dose escalation phase of the study, which utilized the initial 39-milligram dose of ALLO-647, was included in our ASCO abstract. Upon completion of the initial cell dose escalation phase, we began to explore higher doses of ALLO-647, namely 90 milligrams. As we continue to enroll patients into this portion of the trial, the ASCO initial data will also include the first set of patients from the trial who received a higher 90-milligram dose of ALLO-647. While we expect to have one-month tumor assessment data on these patients, we, understandably, will only have very limited…

Thank you, Rafael and good morning. In addition to the brief financial overview, I will provide on the call today, you can read additional detail on our first quarter in our press release issued earlier today and in our 10-K, which will be filed with the SEC. We continue to maintain a strong financial position with cash, cash equivalents and investments totaling $553 million as of March 31, 2020. In the first quarter, our research and development expenses were $42 million, which includes $6.6 million of non-cash stock-based compensation expense. General and administrative expenses were $15.6 million for the first quarter of 2020, which includes $7.6 million of non-cash stock-based compensation expense. Our net loss for the first quarter of 2020 was $54.5 million or $0.50 per share, including non-cash stock-based compensation expense of $14.2 million. In an SEC filing in late March, we stated the construction of our GMP cell manufacturing facility in Newark, California had been interrupted due to the COVID-19 pandemic. I am pleased to report that we have been able to reinitiate construction work. While we are continuing to evaluate the situation, we currently do not expect this temporary disruption to significantly affect our plans to bring the manufacturing facility online in 2021. As we have been able to continue with our research and development plans, as well as the build-out of our Newark manufacturing facility, we continue to expect that our full-year 2020 net losses will be between $260 million and $280 million. This includes an estimated non-cash stock-based compensation expense of $70 million to $75 million and excludes any impact from potential business development activities. With that, we will now open the call to your questions.

[Operator instructions] Our first question comes from Salveen Richter with Goldman Sachs. Your line is now open.

Good morning and thanks for taking my question. So with regard to the 501 data that’s going to be presented at ASCO, could you just go over those numbers again? I mean, you talked about preliminary data for the first nine patients and then 11 across the three by three. So how should we think about the totality of data? And with regard to seeing data on patients per cohort up to one month or two months, how do we think about durability here and then comparing your data set versus the autologous programs that we have seen to-date? And I have a follow-up.

–: –:

Yes. And then how should we think about in the context of getting one month to two months of data per cohort? How should we think about durability here and overall, just comparing this to the existing autologous data?

Yes. So durability is another question that we get asked a lot. This is a Phase 1 study that have been carried out, so obviously, the patients who were treated early on will have a longer-term follow-up. But I should really remind that the real question around the durability should be at the cell dose and the lymphodepletion that we finalize for the Phase 2. That will be the real comparison as we go forward. As much of the earlier cell doses were essentially doses exploration, as well as the lymphodepletion that we studied with the 39 milligrams of ALLO-647. I mean, that is the beginning of the lymphodepletion. As you know, we have gone up on the 647 dose to the 90 milligrams. So when you think about all these in the context of the data to be looked at. Yes, some of the early cohort, you’ll have a longer follow-up, the really relevant dose level has been treated sometime this year. So in that case in terms of follow-up, as Rafael has said in his prepared statement, the follow-up will be relatively short. And certainly, we will include one-month data, but that will be the limits of the presentation.

And then David maybe just one follow-up question too with regard to your other programs, can you talk about the lymphodepletion regimen you are using in those programs versus 501 and whether there are other optimization levers you maybe playing with?

Yes. So the way that we think about optimizing as we prepare the 501 program into the Phase 2 and then will be done with the 501A that lacks the Rituxan switch is really the three levers that we can play with. The cell dose lymphodepletion, and we haven’t talked much about it but potentially re-dosing. In terms of lymphodepletion, this is really dealing with the patients’ immune system as we try to keep the immune cells that can potentially lead to early rejection of AlloCAR-T cells somewhat at bay to allow the AlloCAR T cells to expand and persist and carry out anti-tumor activity. So there is a little bit of the patient components, depending on different indications, how they get treated in the first, second line. Obviously, that affects the patient’s overall immune system, so there is a little bit of variability that we have to consider as we think about different indications. But overall, we are doing more than one program at a time. Right now, we are studying both 501 and 715 in non-Hodgkin’s lymphoma and then multiple myeloma and we are trying to leverage the learnings from each study as we try to further narrow down the lymphodepletion. So there is a lot of between the study data comparison as we try to optimize the lymphodepletion. And once we get to the final decision point, we will know whether the lymphodepletion, of course, different indications will be all uniform or there maybe some differences in how we exactly lymphodeplete for different programs.

Thank you.

Thank you. Our next question comes from Biren Amin with Jefferies. Your line is now open.

–:

Okay. Biren, let me take that question because you are asking many different things in the same question. In terms of the simple thing that I want to just clear is that when we were doing dose escalation, the process of dose escalation in the cell therapy study is you treat one patient for each dose level and then make sure that that patient completes the so-called the dose-limiting toxicity window or DLT window, which will take about 28 days. And once a person clears without any safety findings, we open up the dose level for the remainder of the patient. And when the last patient in the dose level is tested again, we wait for 28 days before we clear the dose and move on to the next dose level. And when you start the next dose level, the same process starts again, which means that in terms of patients who can go on the study, especially when you have multiple sites open, can close some logistical issues where patients may become available, but there may not be any slots. We accommodated the site we need, as well as the patients who were eligible to receive treatment by putting those patients in those levels that had already been cleared. And I would say this is a very standard practice in any Phase 1 dose escalation study, just to ensure that the patient and site needs are met during the study. So that’s how we carried out the phase study. And then your second question around the safety and others. these are some of the questions that we get asked. Let me reiterate that the Phase 1 study, the purpose of the Phase1 study was to evaluate the safety of our cell, as well as a lymphodepletion regimen, as well as really testing different than lymphodepletion regimen to make sure that we can allow enough window for the cells to expand and carry out anti-tumor effect. Very important question, but we are so close to the ASCO presentation coming up later this month. And at this point, with all due respect, I would defer some of your questions around the safety and any other things to the actual presentation.

Okay. And if I could have maybe a follow-up on ALPHA2, which is supposed to start imminently, what learnings have you been able to incorporate from the ALPHA study so on cell dose and lymphodepletion I guess has that informed your design for ALPHA2? And then I guess are you able to through translational data, better identify donors for ALPHA2, where you can optimize cell product?

So 501A, just to remind everybody, the one difference between 501 and 501A is the removal of the Rituxan switch, which allows the 501A to be potentially used in a much wider patient population in lymphoma indication. So from that perspective, the sequence of the CAR itself hasn’t really changed. So essentially, that nature of the construct, as well as all the preclinical studies that we have done before we cleared IND, indicates that these two products, 501 and 501A, should behave in almost identical way. However, as you know, what we find in the preclinical studies and what we find in the clinical situation may be a little bit different. And as part of the normal well controlled study conduct and we just want to confirm what we saw in the 501, in the 501A program. So we have previously said that we will conduct an abbreviated Phase 1. And just adding to that, we have also said that in the 501, we tested the cell doses from 40 million to 360 million cells. And at that time, we also said that we do not see the need to test any other cell doses outside the bookend range from 40 to 360 that we have tested, so that’s more or less the range. And certainly, as 501A study gets activated, this quarter, we’ll provide more details on the study design. But let me just stop there. I just want to sort of be cognizant of sort of tiny and release of the information and not being a little bit ahead of it. And then, Biren, can you just remind me the second question that you asked?

Yes, whether on translational data from the ALPHA patients that were treated whether you are able to better identify the donors or optimize cell product for ALPHA2?

–:

Okay, great. Thanks for taking my questions.

Thank you. Our next question comes from Cory Kasimov with JPMorgan. Your line is now open.

Hey, guys. Thanks for taking my questions. This is Matthew on for Cory. So I guess in regard to the ALPHA trial, and I understand that you can’t say much about the details of that from a read-out, but how should we be thinking about how different NHL subtypes enrolled into the study might affect the interpretation of the initial results?

So, Matt, thanks for that question. I think your question underlies in the fact that within the large cell lymphoma or so-called aggressive non-Hodgkin’s lymphoma, there are two sort of differences. And the one, patients who have early progression after transplantation or patients who are refractory to the last line of chemotherapy. So, I mean, there are some differences. But I think over a period of time, we are learning that especially when it comes to the initial responses, there isn’t that much difference. And I should just also add that in our Phase 1 study, given the learnings that’s coming from the autologous CAR-T therapy, we also included not just relapsed/refractory large cell lymphoma but also the patients with so-called indolent lymphoma who have relapsed after multiple lines of therapy. So there will be some patients, who belong in that subtypes of non-Hodgkin’s lymphoma. But keep in mind, the purpose of Phase 1 is, as I previously said, safety, lymphodepletion and early lines of efficacy. But from that perspective, I don’t think there will be much impact on the patient’s tumor subtypes in terms of our ability to analyze this key information.

Great. That’s super helpful. And then I guess in terms of the nine patients that will get into abstracts, should we expect to get any re-dosing data?

Re-dosing is an amendment that we made later on the study. And as we have said in the prepared statement, the data cutoff for the abstract was January, and that is before the amendment came in effect. So there won’t be any re-dosing in the first instance. There won’t be any re-dosing information in the abstract.

Okay, got it. That’s helpful, too. And then I guess just maybe one last question for me, just thinking about this more from a high level, but how do you think the COVID-19 pandemic will change CAR T clinical development in the near to medium term?

–: –: –:

That’s helpful. Thanks for taking my questions.

Thanks for that.

Thank you. [Operator instructions] Our next question comes from Marc Frahm with Cowen & Company. Your line is now open.

–: –: –:

So let me understand the question. So are you sort of asking whether the patient population will shift because of the COVID pandemic?

Well, because of the pandemic or also just your initial population, should we think about those maybe being more follicular patients that might be able to be off rituximab early on, but then maybe later, you’re getting more very high burden, very sick patients later now as COVID is kind of impacting enrollment in the broader CAR T space?

Yes. So I mean, in Phase 1, our experience in terms of enrolling very limited number of patients, it doesn’t give you much larger view of whether there will be differences in the patient population. But as I’ve said, the benefits of autologous CAR T, I think it’s becoming apparent, not just on the diffuse life cell lymphoma but also in other indolent subtypes as well. So from that perspective, the shifting of the patient population, if it occurs, I don’t really see that becoming an issue, but this is also a topic that could be addressed by the study design. We’re doing Phase 1 study. Obviously, in the Phase 1 study, we want to get as much information as possible. But as we move toward small pivotal study, especially with the current plan of conducting a pivotal study as a single-arm study with a limited number of patients, that’s in the range of 70 to 100, there will be some further refinement of patient population. So we can interpret the data properly from a single-arm study.

–:

–:

Thank you.

Thank you. Your next question comes from Mark Breidenbach with Oppenheimer. Your line is now open.

Hey, good morning, guys. And I’ll try and break with the trend here and actually limit myself to one question. Very quick one maybe directed at Rafael. I’m wondering if you’re expecting substantial variability in baseline levels of rituximab in the ALPHA trial patients and will this be a parameter that will be reported as part of the ASCO dataset? Thank you.

–:

That’s very helpful. Thanks for taking the question.

Thank you. Our next question comes from Alexander Duncan with Piper Sandler. Your line is now open.

Hey, glad to hear everyone is doing well, and thanks for the questions. First, a quick follow-up on previous questions, at ASCO, will you be providing lot information on which manufacturing runs from which each ALPHA patient was treated? Then on the TurboCAR strategy, could you explain the thought process behind advancing the first clinical candidate in myeloma as a follow-on to 715 as opposed to ALLO-316 in renal or even develop a TurboCAR candidate as the lead program in RCC given the potential for this technology in solid tumors? Thanks so much.

So Alex, let me take the first question, and I’ll ask Rafael to answer the second question. In terms of lot inflammation, I think, as I previously said, we’re getting very close to ASCO. So probably it’s best to defer to the actual presentation. Rafael, second question?

Yes. I mean, we are really excited about the TurboCAR technology. What we’ve seen in the preclinical work really tells us that the sales can remain less exhausted or unexhausted for a long period of time. They can divide. They can proliferate upon encountering antigen, so we think that it has a lot of promise. And of course, it’s going to be tested first in the BCMA. It may have a lot of promise in solid tumors. And indeed, we are working on the optimal TurboCAR’s. As the technology allows us to use different cytokines, different gates if you will to trigger the cytokine signal, so we are at the moment working on what would be the optimal one to insert into our programs, particularly CD70 and DLL 3. The initial IND will be without it, but I do not expect that one containing upside [indiscernible] will lag much behind. And it will all depend, obviously, on what we signed pre-clinically, but we’re pretty excited with the potential of durable CARs in solid tumors.

Thank you. Our next question comes from John Newman with Canaccord. Your line is now open.

Hi there. Good morning and thanks for taking my question. So my question is regarding ALLO-647. And I’m just curious, going forward here, will you have the opportunity to test dosing ALLO-647 on its own as a lymphodepletion agent, perhaps, after the initial lymphodepletion in combination with chemotherapy. Just curious if that’s a strategy that you’re considering here going forward. Thanks.

–:

Thank you.

Thank you. Our next question comes from Michael Schmidt with Guggenheim. Your line is now open.

Hey, guys. Thanks for taking my questions. Just one more on ALLO-501, I know that the main focus here is on optimizing lymphodepletion. But I guess, David, what gives you comfort that you actually have some of the right cell dose at this point and that you don’t need further around dosing work on that front?

Yes. So in terms of lymphodepletion, I mean, one of the things that we can look at very early on is the reduction in the absolute lymphocyte count, as well as time before the T cells or NK cells or B-cell starts coming back. I mean, that’s essentially the definition of the lymphodepletion and duration of lymphodepletion or time to the cell recovery that we have been talking about. So from that aspect, we can get pretty early read on how different changes that we introduced into the lymphodepletion can actually translate into what we are looking for. In terms of how to put that into context of cell dose, that’s a great question. The cell therapy is a very sort of dynamic therapy in many ways. We learned that during the conduct of autologous CAR T therapy. Essentially, how the cells expand is a multifactorial process, the quality of the cells, the antigen density, target density or the tumor burden in patients, as well as the lymphodepletion that allows the homeostatic changes of the cytokines and promote the cell expansion. So there are many different things that we are looking at. That’s one of the reasons that we emphasize looking at translational parameters to make this decision. And this is something that we have some experiences in optimizing and deciding and moving forward and all that experience that comes from having worked on autologous CAR T will also factor in as we lock in the final two parameters, namely the lymphodepletion regimen and the cell dose. The cell dose as you said, the dose range has been defined between 40 and 360. And certainly, that’s the range that we are playing with right now.

Okay. Thanks. And then just a high-level question about the strategy longer-term in multiple myeloma, I think you now have at least three programs that you’re working on, 715, the gamma secretase inhibitor combination and then also ALLO-605, I guess how should we think about the strategy here? Are you planning on moving several programs over in parallel? Or are you, for example, planning to pick one of those programs for a pivotal study after comparing Phase 1 data across those programs?

–:

–:

Great. Thank you so much.

Thank you. Our next question comes from Tony Butler with ROTH Capital Partners. Your line is now open.

Thanks very much. Just two brief questions. The first, I want to stick with the same theme, please, on the notion of an inducible cytokine receptor CAR T construct, it’s obviously incredibly clever. But it strikes me that the goal here was really to see could you actually fight through the TME and be able to have some durability in the tumor microenvironment. And in theory, you wouldn’t necessarily do that with the BCMA binder. Or am I incorrect in that assumption? Part B to that question actually is around safety and it addresses the notion of, I could see why it would be safer than simply systemically delivering cytokines. But do you think it’s safer than, for example, one of the other 715 constructs? How do you think about safety there? And then finally, it strikes me that you’re happy with nine milligrams in for the anti-CD52 antibody or 647. Am I correct or do you need to move to say 120 to really be satisfied that you’re getting the appropriate lymphodepletion with that compound at that dose?

Yes, Tony, good morning. I will ask Rafael to answer the questions on the TurboCAR. Great questions, I mean, certainly, we see a lot of promise at this autonomous cytokine signaling that we introduced to TurboCAR, but I mean, there are many interesting questions that you have for us. So, Rafael?

Yes. Tony, it’s nice to hear your voice. There are a lot of clever questions as David has mentioned, BCMA, I think, is a really interesting targeting with which to test TurboCARs. I realized that in May, solid tumors may also benefit from this technology. But what we’re looking for is a brisker, more rapid and robust anti-tumor effect upfront. We know this is allogeneic CAR T therapy. So eventually, the cells will be rejected. So we want the cells while they are exerting anti-tumor activity to be fitter and younger to replicate when they see antigen and to do it in a manner that it doesn’t affect the surrounding sales. In terms of safety, that obviously needs to be proven, but this product has never been in humans, and we are doing all our preclinical toxicology work toward an IND next year. There could be issues having to do with cell growth, autonomous cell growth, but we don’t believe that that’s going to be an issue. But other than that, as you know, there is no soluble cytokine at all with the system, which is very unique. And to my knowledge, there aren’t any other systems where the actual cytokine is actually not released from the selling question. And in terms of the dose, I’m not sure I fully understood your question that there is a chance that using TurboCARs may allow us to lower the lymphodepletion or perhaps to lower the dose level, those are hypotheticals, and I don’t want to go into hypotheticals much more. But in theory, that is a possibility, if these are much more important cells. So I hope this gives you a flavor of how we’re thinking and answers your question.

Rafael thanks very much.

Thank you.

Thank you. And our final question comes from Asthika Goonewardene with SunTrust. Your line is now open.

–:

That’s an outstanding question, and it’s one that we are exploring in terms of our corollary studies. We follow very closely TV, NK cells, and all I would say at this point is that the longer we can keep the T cells suppressed, the better. And our goal is to strike the balance between the length of lymphodepletion, which obviously can lead to viral reactivation and other toxicities and the ability for the allogeneic CAR T cells to expand. But certainly, I think the statement that you made about longer than 14 days, may actually be true in that we may need to have the cells suppressed a little longer. So that’s in part the reason for doing a Phase 1 study is really to look at all these parameters, cell dose lymphodepletion, not just with ALLO-647 but with chemotherapy, what role did each one of these elements play in the supression? What happens when they come back? What happens with the pharmacokinetics of 647 with regards to T-cell resurgence to an NK resurgence and so we’re in the midst of that and exploring the very question that you just asked and hope to have that answer by the end of the Phase 1 study.

Excellent. And then I have to ask a question about the upcoming data at ASCO. I hope you don’t mind. Did you guys have time to look at and then do the analysis to provide some color on the memory phenotypes of the CAR T cells on infusion and at peak expansion?

Yes. I’ll take that question. I mean, the answer is yes, it’s part of the panel that we do, both in the endogenous cells, as well as the cells that are administered. And obviously, at the moment, it’s a Phase 1 study with a limited number of patients. And as David said before, to make conclusions in this space, one would have to test multiple graphs on multiple sources of exogenous cells to be able to make those comparisons. But certainly, it is a really important question, and we just need more time and more experimentation to be able to answer it.

Got it. And finally the backfill am I right in assuming that – I completely agree. You guys see that it might not be driven by toxicity and just more opportunistic here. But would you have backfilled maybe the lowest dose, i.e., the 40 million or was that backfill more in that 160 million dose level?

I think the proximity of the ASCO presentation is such that I prefer to wait and let you see for yourself the data.

Got it, okay. Thank you so much for the call today. Appreciate it.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the call back over to David Chang for any closing remarks.

Thank you for joining us on the call today and your continued support of Allogene in what we know will be an exciting year for allogeneic cell therapy. We look forward to speaking with you again soon, and we look forward ahead to ASCO. Operator, you may now disconnect.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.