Good day, ladies and gentlemen, and thank you for standing by. Welcome to Allogene Therapeutics' Fourth Quarter and Year-End 2022 Earnings Conference Call. [Operator Instructions]. 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 call. Today, after market closed, Allogene issued a press release that provides a business update and financial results for the fourth quarter and full year 2022. This press release and today's webcast are both available on our website. Following our prepared remarks, we will host a Q&A session. We ask you to limit your questions to one per person, as we will keep this call to an hour and do our best to get to as many as possible. Joining me today are Dr. David Chang, President and Chief Executive Officer; Dr. Zachary Roberts, 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 2023 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 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 thank you to all who have joined our call. 2023 will mark the fifth year since Allogene's inception. Each year, as our organization has matured, our work takes on a greater and greater importance for the patients we aim to serve. Allogene was conceived shortly after the first autologous CAR-T therapies were approved by the FDA. These therapies sparked a new industry and have since advanced to become some of the most potent anticancer agents for several types of hematologic malignancies. But the clinical success achieved by the autologous cell therapies has also heightened its demand, as well as its inherent limitations. As an individualized therapy, the technology is limited by a lack of scalability and timing delivery. Today, it is estimated that 1 out of 10 patients in the U.S. who are indicated for CAR-T therapies are receiving this treatment. We are now facing a crisis, as patient demand far outweighs the ability for autologous therapies to meet the growing needs, thereby constraining the growth of this modality and limiting access for patients. Unfortunately, for patients, time is not a luxury they can afford. Every day matters when your disease is progressing. Yet we continue to hear from physicians that the complexities and delays in manufacturing, are limiting which patients can access CAR T therapy. At Allogene, we have always envisioned a different future for CAR-T, one in which cell products can be produced at scale, just on demand and deliver to all patients they need within days. I believe the data we presented at our R&D Showcase late last year, demonstrates it is no longer a question of if, but when this vision will become a reality. And as we begin our fifth year, I believe the timeliness of when we will be able…

Thank you, David. Before I talk about specific R&D activity, I'd like to share a few thoughts about why I joined Allogene. I think that when you join an organization, it's an opportunity to bring a fresh perspective and regain sight of forest through the trees. So despite knowing many of my new Allogene colleagues for quite some time and having followed the company since inception, I initially carried an outsider's perspective. And when I had the opportunity to join the R&D showcase last November, I was freshly exposed to everything about Allogene, the professionalism of the leadership team, the engagement of its stakeholders, the passion of its investigators. But what really stayed with me on the Uber ride back to the airport, was the transformational clinical data that had been shared. I saw 3 product candidates across 3 different malignancies generating meaningful clinical results in patients who had few other options, and all of this with an allogeneic cell therapy product. For Allogene to have achieved all this in 4 years was no small feat and got me very excited about what might be possible for this organization's future. As an oncologist who used to care for these patients and someone who has been working every single day in cell therapy development for most of the last decade, I knew that results like those that were shared at the showcase don't come around very often. Shortly after the showcase, when I was offered the opportunity to join Allogene as the Head of R&D, I didn't walk, I ran towards the forest. So now as an insider, let's talk about the trees. I've now been at Allogene for about 2 months, and as David has rightly noted, the next critical steps are all about execution. Let's first talk about our…

Thank you, Zach. Let me start by saying something that may be obvious to those of you who have already had the pleasure of meeting Zach, and is certainly evident for those of us who have been working with Zach on a daily basis for the past 2 months. Zach's ability to see the forest is represented by the full breadth of our pipeline that has brought an infectious enthusiasm to Allogene. And at the same time, his ability to help navigate paths forward through the trees has been inspirational to our research and development team. I'm confident that those of you who have yet to meet Zach will be as excited about what he brings to Allogene, as we are. Turning to our finances; as we all weather what continues to be a challenging market, especially for small and mid-cap biotechnology companies, we are very proud of how our team is adjusting and responding to this challenge. We appreciate that having a strong balance sheet is critical to our ability to deliver shareholder value. As you may have been able to discern from the comments by David and Zack, one of the critical elements of our corporate and financial strategy is to efficiently deploy our capital resources to support key programs, toward value-creating milestones. To that end, we continue to evaluate all opportunities to best move our pipeline forward, with a focus on our highest potential candidates. We remain very fortunate to be in a strong financial position, ending the year with $576 million in cash, cash equivalents and investments and no debt. In 2023, we will continue to take important measures designed to prolong our cash runway. In order to achieve this, we are focusing on our most critical activities, including #1, executing on our Phase II CD19…

[Operator Instructions]. Our first question or comment comes from the line of Michael Yee from Jefferies. Standby, Mr. Yee your line is open.

This is Jenna on for Mike. We wanted to catch up on CD19. What are you seeing in terms of the enrollment for the pivotal trial? And do you have any feedback to share from investigators? And just real quick on multiple myeloma, do you have any latest thinking on the franchise and when might we see some data from the Turbo CAR program?

Hi Jenna, this is David Chang. I'm going to pass the question to Zach and going with the spirit of one question, we will just answer the first question.

Thanks, David. So the enrollment in the ALPHA2 study is continuing according to plan. We are continuing to expand the number of sites that are open to enrollment, and we'll be expanding outside of the U.S. into additional geographies over the course of the year. As far as investigator feedback goes, I recently had an opportunity to catch up with several investigators at the Tandem Meeting in Orlando, and enthusiasm is extremely high for the trial in general and for enrollment.

Our next question or comment comes from the line of Tyler Van Buren from Cowen.

Given the prioritization of the earlier line large B-cell lymphoma trial for ALLO-501A, can you elaborate on the rationale behind that decision and discuss the potential design and timeline of the trial? In particular, I'm curious to know if it's expected to be identical to the YESCARTA second-line ZUMA-7 trial or if there might be some differences?

Hi Tyler. For a second thought that you had moved your position to Goldman. In terms of how we are thinking about the earlier line, I mean, obviously, we see this as an opportunity. We have a very compelling data in the 2-plus lines, where we are already doing a pivotal study. And in terms of what is the sweet spot, to which we can sort of advance the program to the earlier line, that's very much in discussion. What you're referring to as a transparent eligible large B-cell lymphoma, obviously, that is one of the opportunities, but we are also exploring a different path towards maybe a different population or maybe even to an earlier line.

Our next question or comment comes from the line of Salveen Richter from Goldman Sachs.

This is on for Salveen. On the potentially pivotal trial in multiple myeloma, where do you stand on regulatory discussions? And I guess whether that trial would be pivotal? And then could you also comment on transitioning to ?

All right. Let me take that question, and I'm just going to answer the multiple myeloma question. In terms of multiple myeloma, before going into that, 2023 for us is really the year of focus. And where we are putting all our attention is, ALLO-501A ALPHA2 study, based on the compelling data we have and also the study that we are conducting, is potentially a pivotal study. So for all the obvious reasons, priority is ALPHA2 study. And along with that, as we have just talked about, moving the program to the earlier lines that becomes kind of the important option that we want to exercise as early as possible. We'll be talking about the study design with the investigators and hopefully, if all goes well, potentially start the earlier line study by 2024. Now that brings to your question about the multiple myeloma -- where we stand right now, is that given the need for us to prioritize, we're going to -- we are thinking that the pivotal -- potential pivotal study for the multiple myeloma will not be 2023. It will be pushed out to -- more likely 2024. During which time, we will continue to engage the regulatory bodies for potential feedback, as well as looking at the manufacturing process, in order to make sure that we can optimize the process as best we can, across different assets that we have, whether it's 715 or ALLO-605.

Our next question comment comes from the line of Brian Cheng from JPMorgan.

It's good to see that you're on track to complete enrollment for ALPHA2 in the first half of '24. Do you need some patients to be dosed with the Alloy process manufacturing process before filing for approval? And any updates on getting the Alloy process in?

Brian, I'm going to ask Zach to respond to your question.

Brian, so the Alloy is currently...

I think his question was alloy process.

Yes. The alloy process. Yes, sorry about that. I got confused. So yes, the alloy process is the process that we're taking forward in the -- in both of the pivotal trials for ALLO-501A. These are -- this is the manufacturing process that we discussed at length at the RDS. And the one that we believe is the most appropriate to take forward into the pivotal study. So all of the patients dosed in both XPAND and ALPHA2 will be dosed with the alloy process. Sorry about that.

Our next question or comment comes from the line of Mark Breidenbach from Oppenheimer.

I have a question on the Dagger platform actually. I guess I'm wondering if this is something that's going to be mostly reserved for solid tumor programs or if this could be eventually deployed across the entire pipeline? And kind of what are its limits in your view? Is this something that is going to supersede the Turbo CAR approach or maybe even supersede lymphodepletion, as we think about it today, given what we've seen so far from the TRAVERSE study. Any comments you can offer would be appreciated?

Thanks very much for that question. It's an excellent one. And I think you -- it really defines how we're thinking about Dagger. So as you rightly point out, the expansion data that we saw in the early data from the TRAVERSE study, do support that there is a mechanism by which the Dagger technology is promoting the expansion and persistence of these cells. Additionally, we recently shared preclinical data showing that, when we combine a CD70 CAR that possesses the Dagger capability with other antitumor CARs such as CD19, we actually do see the benefit of both the killing of the alloreactive host T cells, but also enhancement of the killing activity of the CAR in general, by including dual targeting capability. So I think that we consider these as hints as the potential expansion of this Dagger technology into additional CAR T products going forward. Now whether this will replace the Turbo approach or not, I think that these 2 technologies are complementary, and we are doing lots of work both in the clinic as well as preclinically to try to explore where these 2 technologies may be deployed, both in heme and solid tumors.

Our next question or comment comes from the line of Michael Schmidt from Guggenheim Partners.

This is Paul on for Michael. Just one on 501A. How are you currently thinking about the ex U.S. opportunity for the program? And then what do you need to see to opt into the ex-U.S. rights for 501A?

Yes, I'll take that. This is Eric. Thanks for the question. As you know, historically, Servier had held the ex U.S. rights, and we were codeveloping the product of ALLO-501A with Servier on a global basis. As of September of last year, Servier opted out of that co-development plan and provided us the option to opt into the ex U.S. rights. We have yet to pick up that option, and we believe that we have the potential to pick up that option in the future. Our decision and whether we exercise the option or not will obviously be based on a number of factors, some financials, some developmental. So stay tuned. We hope to provide you with an update on that in the future.

Our next question or comment comes from the line of John Newman from Canaccord Genuity.

So just had a question about the patient enrollment for the pivotal studies for 501. Just wondered if you could talk about some of the ways that you are ensuring that you're getting sort of patients that are optimally suited for CAR-T treatment? I think there's some concern, not a whole lot of that some positions may sort of -- for whatever reason, not want to put patients that they would normally put on an autologous therapy, on your achievement. Also, I noticed in the press release, patients may receive treatment in the outpatient setting at the investigator's discretion. Just curious if you can talk about exactly how that's going to be different, if it's going to be sort of full outpatient or sort of a combination between what we think of as outpatient and inpatient?

John, this is Zach again. So I'll take the second question first about outpatients. So one of the things that we've benefited from is quite a lot of experience out there in the investigator community, in dosing patients with autologous CAR T cells in an outpatient setting. And so a lot of the infrastructure that is required to see if we handle this and for bone marrow transplant for that matter, has already been established. So our investigators on a patient-by-patient basis are enthusiastic about potentially leveraging the existing infrastructure that they have built for autologous therapies for our trial as well. And then as far as the first question goes, I think investigators know very well which patients are best suited for CAR T cells in general. And our products have quite a number of benefits compared to autologous products that we've gone into great detail about previously. But that said, the investigators do know that not -- that they're not selecting patients that would not be eligible for autologous CAR T cells for our trial. That is universally not the case. They know very well which patients are likely to derive benefit from this modality and they choose those patients appropriately.

Our next question comment comes from the line of Reni Benjamin from JMP Securities.

I'd love to just get some more color on the manufacturing tweaks that are taking place, especially for like 605 and 715. Is it just about switching that process to the Alloy process, or is it a completely different process sort of like soup to nuts? And when do you think you might actually start resuming enrollment with the new process?

Reni, let me take that question. What we have learned over the years is, as we've been saying all along, manufacturing process makes a big difference -- and as we gather not just the information from the manufactured products, we do have benefits of having taking those products into the clinics. And this is really the opportunity to interrogate, not just the clinical data, but the translational data to really understand how the manufacturing plays out, when the product goes into the clinics. So that is sort of of the knowledge that we have, and our process development team is using that knowledge to improve the manufacturing process and trying to optimize the product, beyond what we have already done with the Alloy process. So the focus right now is really, as Zach had mentioned in his prepared statement, on the 605 and 715 and for the time line of reintroducing those products back into the clinics, we are probably looking at some time in 2024.

Our next question or comment comes from the line of Luca Issi from RBC Capital Management.

Congrats on the progress. Just a quick one maybe on CD19. How should we think about timing of actually data readout for the pivotal for CD19? Obviously, the single-arm trial is larger, but has ORRs primary endpoint, while the randomized trial is smaller, but has PFS as primary end point, which will take a longer time to read out. How will these factors offset each other? Would it be fair for us to assume that both trials will read out, early 2025?

So what we've guided to is, completion of enrollment in the first half of 2024. And as far as data availability goes, we are targeting to have data available for both ALPHA2 and EXPAND at roughly the same time.

Our next question or comment comes from the line of Asthika Goonewardene from Truist.

Just want to go back on the BCMA program quick. I just want to confirm that the manufacturing optimization of 605 is still ongoing? And then related to that, can you make the decision to choose which of these products you may want to actually take it to a pivotal study? We've seen some data with 715. We haven't seen a whole lot with 605. David and team, I just want to know, about how many patients' worth of data would you want to see with this now optimized 605 before you make that decision?

So many layers of questions there. Let me first start with the 605. We have 3 very small number of patients, and as we have previously stated back in November of last year, we already started looking at the manufacturing process of 605. And now as Zach has said, we are also reviewing, since we're not moving forward with the 715 program into the pivotal for prioritization reasons, we have an opportunity to sort of further review the manufacturing process of 715. So in a way, we are looking at the manufacturing process of both 715 and 605 concurrently, to come up with, what we believe is more of an optimal manufacturing process. So the process optimization is exactly what we are talking about. And as I've said, we are probably looking sometime in 2024 to reintroduce products back into the clinic. In terms of whether we will go with both or choose one, I think that's a little bit too early and stay tuned.

Our next question or comment comes from the line of Jack Allen from RW Baird.

I know there's been a lot of discussion about the longer-term catalyst surrounding Allogene, but I was hoping you could dive a little bit more into what we should expect throughout the course of 2023? Do you expect to provide updated data from the CD19 program, and any additional comments on the Alloy manufacturing process? And any thoughts there would be great.

Jack, it's Eric. Thanks for your question. Yes, we do intend to present updated datasets on both our CD19 programs, as well as our CD70 program in renal cell carcinoma. So those would be the anticipated updates that we've already signed up for. There could be additional updates from other programs, if and when we choose. But those are the 2 milestones that we want you to have at the top of your list. And certainly, as we go through the course of the year, there could be other updates as well, including on the alloy manufacturing process and the improvements we're making to the BCMA programs.

Our next question or comment comes from the line of Kalpit Patel from B. Riley Financials.

Just one follow-up on the BCMA manufacturing process improvements. I guess, does the process improvements imply that you're not enrolling any more patients into the 605 trial? Or is that still ongoing?

Kalpit, we actually sat back at the showcase event in November, that we had paused enrollment in the 605 study as we work toward an improved manufacturing process for that construct. So that is correct. We are not currently enrolling in the 605 Phase I study.

Our next question or comment comes from the line of David Dai from SMBC.

I have a question on ALLO-316, [indiscernible] CAR T. Could you perhaps give some additional color on the CD expression profile of these CD70-positive patients? What's the CD70 entity? And could you express some of these [Technical Difficulty] patients? And a very significant question on T Cell profile with the depth of response?

So David, this is Dave Chang. You were breaking up a little bit, but I think the question was centered around CD70 expression in ALLO-316 program. In the R&D Showcase, we highlighted approximately 15 patients that we have treated to-date with ALLO-316 program. And what we have seen was, CD70 expression does make a big difference, and the responses that we have seen, and there were 3 out of 9 patients who have achieved an objective tumor response. And all those cases occurred in the CD70 positive population. And we are also looking at the level of CD70 expression, to further optimize the patient selection, but that is an ongoing process.

Our next question or comment comes from the line of Jason Gerberry from Bank of America.

I wanted to -- maybe, David, just get your thoughts on the Galapagos point-of-care manufacturing model, just as a competitive, I guess, approach given your key to the value proposition for 501A is the shortening of the at any time. They claim to kind of have a 7-day period. Ultimately, there's like 2 to 5 days that may transpire between getting 501A ultimately from time of treatment decisions. So overall, just maybe less curious to get your perspective on that as a competitive approach? And then for my follow-up, just on the BCMA update, just given the likely shift to earlier lines here with the KarMMa-3 and updates, that's going to make for just an elevated bar and changing landscape. So as you guys think about longer-term, reentering the competitive mix, is it an elevated bar ultimately? I'm just kind of curious how you guys think about sort of the evolution into earlier lines and how that will play into your future development?

All right. So 2 questions there. Let me take the Galapagos, as well as the point-of-care manufacturing. When I was at Kite, as we're looking at the future of cell therapy, I mean, certainly, the ease of autologous manufacturing, which there were many opportunities, could play a role. But when we sort of think about from the allogeneic angle, the benefit that allogeneic product provides is more than just to gain time. You're talking about patients not heading to undergo leukapheresis, not having to be very carefully subjected to the manufacturing site availability and leukapheresis slot availability, and also manufactured product and meeting the specification, which as we have learned, as more and more autologous CAR T products are coming online, all these things does play a role. And also, I think nowadays, everybody is aware, the lentiviral availability that also plays a role in the manufacturing of CAR-T. In our case, manufacturing of one lot, allows treatment of many patients. So yes, it's great to see the progress being made, in sort of different ways of manufacturing autologous CAR-T. But I think the allogeneic benefits still far outweighs what the autologous manufacturing can do, even with the point-of-care manufacturing. And the BCMA with earlier line, I'm going to answer that question as well. Right now, I think the BCMA autologous CAR T, the main problem is that of access. I mean the access problem will not go away near term. And we believe that the profile that we have with 715, if we can even slightly improve the response rate beyond what we already have, and we already have the durability that's matching up with one of the proof of autologous CAR T products. I think we will remain quite competitive in the BCMA space.

Our next question or comment comes from the line of Raju Prasad from William Blair.

On the 316 program, you mentioned CD70 levels and the potential for going into liquid tumors. Just wondering if you could provide a little more color on that. I think there was a paper recently on kind of EGFR relapsed patients showing CD70 positive or CD70 as a marker. Just kind of curious of your thoughts on that as well and if that kind of crossed your play, as far as potential indications to look at?

Thanks Raju, for the question. So CD70, we think, is a great target for a number of reasons, including its wide distribution on a number of different malignancies. So we think of this really in terms of solid tumors versus heme malignancy. We picked RCC, because its prevalence of CD70 expression is very high. As you pointed out, I think the field is learning more and more about additional solid tumors and subsets thereof, where CD70 may also be expressed. And of course, we saw that same report that you did and are looking into that carefully. On the heme malignancy side, obviously, T-cell malignancies, lymphomas and leukemias are well described as having high expression of CD70. That's also found on myeloid malignancies like AML and also in Diffuse large B-cell lymphoma, a substantial fraction of those patients express CD70. So I think there's a lot of options for us, as we continue to execute in the renal cell carcinoma space for us to consider expanding in additional avenues.

Our next question or comment comes from the line of Tony Butler from E.F. Hutton Group.

Sorry about the confusion. This is about CD70. I want to -- what you can share with us about the current status of the assay development, whether it's internal validation versus getting validation from CLIA, the potential timing of when you hope to be able to deploy this for patient selection and whether the next CD70 program update will contain the possible number of patients who have been prospectively selected for the expression?

Yes. So this is Dave Chang. Let me just answer the question about the status of diagnostic assay. So we have developed and validated diagnostic assay to be used in the renal cell cancer patients. And in fact, the assay has already been deployed to select the patients in the 316 study. So as is the case with any kind of in vitro diagnostic assay that's being used for patients in different indications, additional validation has to be done and those -- all those work are ongoing. As I said, as Zach has said, the CD70 program, we have many different opportunities, and it remains as one of the most exciting programs that we're dealing with right now.

Thank you. I'm showing no additional questions in the queue at this time. I would like to turn the conference back over to management for any additional comments.

Thank you again for joining the call today. We can tell from all of this call, we are most enthused ever about the opportunity before us. We are excited about the role we are planning to change the future of CAR T for patients and open up the floodgates to access. We look forward to sharing our continued progress with you throughout the year. 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.