Allogene Therapeutics, Inc. (ALLO) Earnings Call Transcript & Summary

Okay. Great. Well, welcome, everybody, to the Allogene Therapeutics fireside chat. I am Vikram Purohit. I'm one of the Morgan Stanley biotech analysts. And before we get started, I have to read a brief disclosure. So please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. With that, I would like to welcome Eric Schmidt, CFO of Allogene. Eric, welcome.

Thank you very much, Vikram. Thank you, Morgan Stanley for hosting.

Sure. Thank you for being here. So I thought the best place to start to level set for those that may not be fully familiar with the Allogene story is just a brief recap of some of the key developments from the past couple of months and what you think are some of the key aspects such on for the platform? And then also a quick recap of some of the upcoming inflection points, and then we can dive deeper from there.

That's great. First, before I begin, I should state our own disclosures. For a full discussion of risk factors [indiscernible] please see our most recent SEC filings. [indiscernible] forward-looking and other statements. In terms of Allogene, our company, as the name suggests, we're all about allogeneic cell therapy. We are looking to take the, I'd say, considerable benefits of cell therapy that move in [indiscernible] and hopefully make those therapies [indiscernible] might be able to [indiscernible] those therapies are very transformative, and their ability to improve upon [indiscernible] I would still say years after the initial [indiscernible]. We're not provide [indiscernible] we think with allogeneic cell therapy [indiscernible] meaningfully improve on speed, cost to [indiscernible]. To help [indiscernible] any of your listeners may know the spinoff from the Pfizer team. That spinoff was designed to accelerate our platform and pipeline of [indiscernible] with different [indiscernible] Allogene as a platform in the allogeneic space. But today, we have about 150 employees. We're all entirely focused on this cell therapy concept and clinical development, [indiscernible] INDs we filed later in the year. We're building out our own [indiscernible] facility in California that scale to [indiscernible]. And in terms of our financial [indiscernible] resource over [ $1 billion ] [indiscernible] about our milestone for 2020. So far the biggest bet for us was based on additional concept of what we call [indiscernible]. We were able to [indiscernible] the initial data from the Phase I study as [indiscernible] June and [indiscernible] platform we're using and [indiscernible].

Great, appreciate it. That's probably a great place to just kind of go into a recap of that data set. What you thought some of the key questions were going in to the ASCO data? And then what you think were some of the key lessons learned? And what the path forward is for 501?

Sure. So for those of you who are less familiar with our program, this was a typical Phase I dose escalation study with a focus on, obviously, safety, number one; two, identifying an appropriate dose of cells that might have activity; and three, hoping to see some early signs of efficacy. And I think we accomplished, honestly, all three. It's also not trivial to manufacture these cells, and we were able to use a single manufacturing run to treat all 23 patients, I believe, that were enrolled in the first phase of the Phase I study. So in terms of a little bit more detail, some of the finding, we started the study with a 3 x 3 dose escalation, looking at 3 different doses of ALLO-501, 40 million cells, 120 million cells and 360 million cells. And I think we saw activity across those cell doses. The initial dose escalation was done at a dose of anti-CD52 antibody that was a little bit lower than we're using today. It was 39 milligrams of anti-CD52 antibody, a molecule we call ALLO-647. And we deploy that molecule ALLO-647 in order to keep the host immune system at bay for at least a period of time. ALLO-647 is a lymphodepletive therapy, and it enables CAR cells to be free of premature rejection by the host while they expand and proliferate and go about their anti-cancer activity. So we started the study with a low dose of ALLO-647. We also dose escalated up that component of therapy up to 90 milligrams. We believe that's a more optimized therapy. We're able to see a deeper response rate at the 90-milligram dose than we were able to show with the lower dose. Take the CR rate in patients who are autologously naive was 4 out of 6. So very good initial findings, something that we're quite proud of. We also showed that all cell doses and both doses of ALLO-647 were well tolerated. In particular, we didn't see any graft-versus-host disease, which is a meaningful concern with any allogeneic cell therapy. And in addition, we saw manageable rates of CRS, CNS toxicity and also manageable rates of infection. So we feel just, generally, very good about the results we have shown. I think the one box that we have yet to check off is durability of the effect. The follow-up times were quite short at the time of the ASCO meeting, out of necessity. We're still in the midst of treating patients through this dose escalation phase study. So we're looking forward to either late this year or early next, providing an update from the study to better assess the durability of the response.

Understood. And have you commented on how many patients or what time frame of durability you could expect to hear about with the next update?

We're giving ourselves a little bit of flexibility because, in particular, we're interested in this higher dose ALLO-647 cohort, the 90-milligram cohort. As I mentioned at the time of the ASCO meeting, we had just 6 patients treated who are autologous naive CAR T patients, patients we intend to study in the future. And I think, again, 4 of those 6 were in responses of the ASCO meeting. So certainly, we'd like to follow-up those patients for assessment of longer durability, but also we're keen to continue to treat additional patients in that cohort and, of course, follow those additional patients over time, too. So we're committed to presenting a meaningful data set, but we certainly want to make sure it is a meaningful data set. And again, whether that happens late this year or early next, is still work in progress.

Got it. And could you also talk a bit about 501A, what the difference of 501A is as a construct versus 501 and how recruitment is progressing for the ALPHA2 study with 501A?

Yes. Thanks very much for bringing that up, Vikram. So for those of you, again, who are a little less familiar with Allogene, 501A is for [indiscernible] and 501 [indiscernible] rituximab [indiscernible] makes therapy [indiscernible]. And in order for them to [indiscernible] we've engineered [indiscernible] to improve [indiscernible] we've removed [indiscernible] 501A that's fully meaningful difference between [indiscernible] one can be able [indiscernible] might [ have to feed ]. So our intention is to [indiscernible] with a study that deploys 501A [indiscernible]. In order to do that, we do have to reconfirm some of [indiscernible] 501 [indiscernible] we began what we call the ALPHA2 study with 501A earlier this year [indiscernible] we're now in [indiscernible] dose escalating 1A and hopefully reconfirming the benefit [indiscernible]. And after we complete that [indiscernible].

And you mentioned manufacturing opening commentary on 501. How is manufacturing 501 differ from 501A? And have there been any product-specific issues you've seen with 501A so far?

Okay. So in terms of manufacturing, as we noted, the molecular difference between these 2 products is very modest. 501A simply does not include the rituximab off switch that 501 has. Otherwise, it's the same basic lentivirus backbone and the same basic manufacturing protocol. There are some tweaks between the 2 protocols that have been done to optimize the process. And these are two separate INDs. So I don't want to tell you the cell therapies themselves are identical. It's not possible in cell therapy. But in a basic sense, the manufacturing protocols for each are quite similar. And I think in a basic sense, we've got great success manufacturing both 501 and 501A at scale. So I think we're well situated with regard to the manufacturing. It's something that Allogene really prides itself upon and to build substantial resources, too. In terms of your other question about how the Phase Ia study is progressing. We've noted that 501A cleared its initial lowest dose cohort of 40 million cells. And as of our Q2 earnings call in August, we noted that we were conducting the second dose cohort in terms of how that trial is progressing. But we haven't provided specific update on efficacy or safety study. I think it's premature to do so. Again, we'd be committing to providing a meaningful update once we treated a meaningful number of patients. And my guess is that it will be more likely a first half of 2021 event.

Understood. And apologies if you already said this in your response to a previous question, but I believe there was some static on the line. So I think a lot of people on the line weren't able to hear this part of your response. But could you touch on where you think the path forward would be for 501A? What do you think you need to show the FDA for a path to approval? And how do you think the data with 501 could be leveraged in an eventual path forward for 501A?

Yes. So really maybe to take your second question first. We do need to repeat the Phase I dose escalation with 501A. And that's both a curse and blessing. It's a curse in that we have to take the time to do that dose escalation and hopefully confirm the findings. But it's a blessing in that it does give us even more time to continue to experiment and optimize with 501. And we like to use that time productively to further tweak and enhance, hopefully, the product profile of 501 and apply those learnings to 501A. So right now, our 501A study is ongoing, as we talked about earlier, Vikram, not just with regard to treating more patients at the higher ALLO-647 dose, but also with regard to exploring things like retreatment and other variables. So we hope that when the time comes, we'd be able to apply those learnings to 501A and hope to -- hopefully design a trial that exploits the benefits of an allogeneic or off-the-shelf therapy. We have not yet had FDA discussions on the design of such a study. Obviously, that's something that has to happen before we launch into a pivotal program. But certainly, we would expect that a pivotal program in lymphoma would look similar to what we've seen from others in the field, both other cell therapies as well as other non-cell-based approaches to lymphoma. I think the most recent approval in NHL came from Karyopharm, selexnor (sic) [ selinexor ]. It was just a couple of months ago. And they were able to gain approval on a single-arm study of treating, I think, fewer than 100 patients. So certainly, that would be our preferred route forward to have a single-arm trial of fairly modest size.

Okay. Great. So maybe with that, we should move on to 715, excuse me. So there's some initial data for 715 expected in 4Q '20. Maybe you could talk a bit about that construct and what we could see with that update there?