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

Hello. Thank you for standing by for this conference call. [Operator Instructions] Thank you. 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 thanks to all of you for joining today on short notice. After the market closed today, Allogene issued a press release that provides a clinical update on our AlloCAR T program. The press release and today's webcast are both available on our website. Today's call will be led by Dr. David Chang, our President and Chief Executive Officer. During the Q&A, he'll be joined by Dr. Rafael Amado, Executive Vice President of Research and Development and Chief Medical Officer; and Dr. Eric Schmidt, Chief Financial Officer. We will do our best to get to as many questions as possible. As such, we ask you to limit questions to one per person so we can get to as many as possible. During today's call, we will be making certain forward-looking statements. These may include statements regarding the timing and ability to advance our clinical trials and regulatory matters, 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 most recent 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. We recently issued a press release indicating that the FDA has placed a clinical hold on all our AlloCAR T clinical programs based on a single patient case in the ALPHA2 trial. While this is disappointing for Allogene, the field as well as many of our stakeholders, I want to reinforce our conviction in the opportunity ahead. Between myself and Rafael alone, we have more than 15 years of experience in developing engineered cell therapies. Although this new and exciting field of innovation is unchartered, we know we are forging the way in allogeneic cell therapy as we strongly believe it will be the next therapeutic option for patients. In the same way some of us encountered and addressed challenges with bringing one of the first autologous CAR T therapies to market, we feel confident that we will do the same here at Allogene with allogeneic CAR T products. The data generated from ALPHA trial supports a favorable clinical profile for ALLO-501A in patients with large B cell lymphoma, which underlies our mission to provide allogeneic CAR T therapies faster and more reliably to patients suffering from some of the most difficult-to-treat cancers. We also recognize that today's news elicits a lot of scientific questions that have yet to be answered. Our team is working diligently to address these questions, and we are committed to communicating updates in a timely fashion. While we are not in position to provide a lot of answers today, we are working through this with a clear intention and the commitment to support the overall development of allogeneic CAR T therapies for cancer. So let me provide some background on this clinical hold. We reported information to the FDA on a patient with Stage 4 transformed follicular lymphoma and c-myc rearrangement, whose cancer was refractory to 2 prior lines of immunochemotherapy and additional radiation therapy. The patient was not able to receive an autologous CD19 CAR-T therapy due to manufacturing failure associated with inadequate expansion of CAR T cells. Following infusion of ALLO-501A, the patient experienced Grade 1 CRS and Grade 2 ICANS, which required a course of high-dose steroid therapy. The patient subsequently developed progressive pancytopenia, and bone marrow biopsy showed aplastic anemia and the presence of ALLO-501A CAR T cells with a chromosomal abnormality. Early translational data showed that the CAR T cells expanded, peaking on day 28, and was undergoing contraction thereafter. The patient had a partial response to ALLO-501A and subsequently underwent allogeneic stem cell transplantation. Prolonged cytopenia requiring rescue stem cell transplantation has been reported in autologous CAR T therapies. An investigation is underway to further characterize observed abnormality, including any clinical relevance, evidence of clonal expansion or potential relationship to gene editing. As we work with FDA to resolve this situation, the FDA continues in parallel to actively review the end of Phase I material submitted in anticipation for an ALLO-501A pivotal Phase II trial. I want to reiterate that patient safety is our highest priority, and we are committed to working closely with the FDA to evaluate any potential clinical implications from this single-patient report to determine next steps for advancing ALLO-501A and our clinical programs. Importantly, Allogene has dosed more than 100 patients with its gene-edited AlloCAR T product. We believe the data generated from ALPHA trial supports a favorable clinical profile for ALLO-501A in patients with large B cell lymphoma and look forward to presenting updated data later this year. We are grateful for the partnership with the patient community, clinical investigators, our Scientific Advisory Board and the FDA as we work diligently toward understanding any clinical significance of these findings to support the ongoing development of allogeneic CAR T therapy for cancer. I would like to take the opportunity to thank our employees, our partners, our trial participants and our clinical investigators for their continued hard work to advance our AlloCAR T products. We are privileged to be at the forefront of an incredibly innovative and important, albeit a complex field, as we look forward to continuing to work with the FDA to promote our efforts. We could not be more proud of the work accomplished each day by our team members who are committed to bringing the first allogeneic CAR T therapy to the many patients in need. We will open the call for questions.

[Operator Instructions] And your first question comes from the line of Salveen Richter from Goldman Sachs.

Did you find the chromosomal abnormality in the manufacturing lot that was dosed for this patient or in other lots?

Yes. So the question about whether this was seen in the manufacturing lot or other lots, our lot, before they are released, undergo extensive and, I should say, state-of-the-art release testing that includes assessing any kind of chromosomal anomalies. So certainly, all the lots that were used in the clinical trials passed the release test. But given the finding, we are investigating every possibilities that could have contributed to the observed finding in this single patient.

And your next question comes from the line of Marc Frahm from Cowen & Company.

And sorry for this news. When you look in the bone marrow biopsy, do all the ALLO-501 cells that are -- 501A cells that are present have the abnormality? Or is it just some of them in that case? What percent? And are you able to detect it in that circulating samples when you talk about expansion and contraction?

Yes. This is Rafael. In the karyotyping analysis, it's a fraction of cells that are detected with this abnormality. The CAR T cells peaked and then started to contract. And obviously, that includes subpopulation. But we need to look more carefully with molecular assays to really know the kinetics of the clone in question.

Okay. And are you able to say what the abnormality that's being detected? Is it at the site of the integration of the lentivirus? Is it involving -- is it similar to where you were cutting with the talon? Just where is it located in the genome?

Yes, Mark. This is David Chang. Let me answer that question. We know the chromosome location. It's chromosome 14. Other than that, in terms of where the changes occurred is currently under investigation.

And your next question comes from Michael Yee from Jefferies.

We had 2 related questions, so maybe that counts as one. But the first was, what, in your opinion, is the ultimate clinical ramification of what would happen and what could happen here, given the chromosomal abnormality? And then can you talk about what happened? Because I thought the cells would eventually go away. So maybe just talk about -- a little bit about the clinical implications and what would come about from this, that would be concerning, given the risk benefit of the actual drug.

Yes. Mike, let me try to answer the question. This is still very early, and I will not be able to answer all the questions. We are trying to understand, first of all, whether this is a clinically relevant finding. Obviously, this is an observation that has been made. And our approach is trying to better characterize what exactly happened to the chromosome, and that may require some additional investigation. And as previously asked by Salveen, we are also looking to see when the -- this change may have occurred. So those are some of the ongoing investigations. And let me also reiterate, this is a single case report out of more than 100 patients that we have tried. And this is not something that we normally look for because most patients do recover, and CAR T cells disappear from the patient's body. So there is many unknown questions, and we are working diligently to answer these questions.

Yes. The next question comes from the line of Jason Gerberry.

I guess I'm just trying to get my head around -- it seems like there's potentially a lot of compounding variables here. Patients got higher immune chemotherapy, radiation, high-dose steroid, potentially got conditioned for autologous CAR T but didn't get that autologous CAR T. So just wondering if you can provide any context for some of these confounding variables and how you're going to adjudicate that.

Yes. I mean there are a lot of factors that could have contributed to cytopenia. All these patients are heavily pretreated, as you know. And as David remarked, they couldn't make the [ graft ], which means the lymphocyte count was low, and other [ lineages ] were also low. So whether or not that contributed to the overall cytopenia, it's really speculation. But in general, patients that are heavily pretreated that had been associated with cytopenias in the past. The cytopenias are seen in the autologous setting. This has been looked at, and there are [ series ] that have been published. It's actually in every label of every approved product. And there's been instances where rescue with bone marrow transplantation has been required. And so it's not really, unfortunately, that uncommon to observe this complication.

And your next question comes from the line of Michael Schmidt.

I guess, Amado, when you go about your clinical and your investigation into this, I guess what are possible or hypothetical explanations that -- for that chromosomal abnormality that you will look into? And what do you think you will need to do eventually to potentially move the clinical hold?

Yes. So Michael, that's a great question. Let me just sort of talk about our -- some internal working hypothesis. I mean, obviously, when you encounter problems like this, we have to be methodical, and we have to make a science-driven approach about finding out how this happens. Having said that, one has to understand that there has been several number of publications, in fact, with that -- with the use of gene-editing nucleases. Chromosomal structural changes can occur. These changes include simple things as non-homologous end-joining as well as large chromosome deletions, sometimes translocations or inversions. So that is one -- the investigation that we are doing. And the second one, and I think this is something that not many in the field appreciate, but T cells, as they undergo rapid expansion, it has been well documented that they acquire changes that includes mutations or deletions or inversions. And certainly, CAR T cells, as they encounter antigens, they can undergo a pretty rapid expansion. So there are these 2 different sort of somewhat different hypotheses, and that is currently our main focus of investigation.

Very helpful. And then I guess do you have a time line or an FDA meeting coming up? And how should we think about ultimately the resolution of this?

So that's -- this is a very dynamic period. I mean, certainly, we are communicating the information as we are learning from what FDA has told us. We need to better understand FDA's questions, and hopefully, with that, we will better understand what needs to be done to come out of the clinical hold.

And your next question comes from the line of Luca Issi of RBC Capital.

Great. So maybe wondering if you have done any RNA-seq analysis on the sample. Wonder if you can provide any color on whether the chromosomal abnormality actually has led to any change in the transcriptome of the cell. And then maybe bigger picture, obviously, you're doing an extensive investigation. In my mind, worst-case scenario is that you see some evidence of clonal expansion. Wondering if you can articulate what would be the best-case scenario out of this analysis.

Yes. Luca, this is a great question. And as you can imagine, there's a whole host of assays that are taking place and others that will take place once we have interactions with FDA. So we want to sort of reserve any sort of opinion on results of assays or what types of assays we're doing until we actually have a dialogue with FDA and know exactly how to address their concerns. So please stay tuned. Apologies, I can't really answer your question fully, but we will give you information as soon as we have them.

Your next question from Mark Breidenbach of Oppenheimer.

David, I'm just wondering if you're seeing any potential need to revisit the notion of a suicide switch technology with your -- the AlloCAR cells sort of like what you had built into the ALLO-501 version before switching to ALLO-501A, if you see value in potentially reintroducing that sort of technology into the rest of your product line.

Mark, let me take that question. I mean suicide switch always has been a consideration with any CAR T therapy/from the early days of autologous CAR T therapy. I mean I think in the CD19, the question around the usefulness of suicide switch, I think, that has been never really shown to be necessary for the CD19. And so with that background, in terms of what else we will be doing, I just want you to understand that this is very early sort of stages of investigation, and we will follow up with additional communications and thoughts as we better understand what's going on with this case.

Your next question from Raju Prasad of William Blair.

I think the hold is across all trials. Can you just give us a sense of the -- maybe just broad sense of the release criteria that you have underway? And is it similar across all trials? Or are there specific differences under each criteria?

Raj, let me take that question. I mean, at this point, it's too early for us to comment about how FDA are thinking. It was a bit of a surprise that they placed a clinical hold on all our clinical trials, but we have to find that out from the FDA. Sorry that I can't give you any more clarity on that -- answers to that question.

And your next question from Ben Burnett of Stifel.

I wanted to follow up on an earlier question just around the notion of the suicide switch and getting rid of product if needed. I guess when this was discovered, like what was the clinical course of action? And were steroids given? And I guess if they were, were they affected by clearing the product?

As we said in the prepared statement, there was cell expansion. And after it peaked on day 28, it was contracting, as frequently seen in the CAR T cell expansion profile. And essentially, the observation is made on very limited number of T cells from the bone marrow biopsy that was initiated by the investigator. So that's what we know, and we will let you know more as we better characterize the kinetics of the cell expansion. Is there a next question?

Yes. Next question from Asthika Goonewardene of [ ENE ].

This is [ Bill ]. I'm on for Asthika. I'm sorry about the unfortunate news. I had a question regarding the day 28 expansion. Could you remind me if that's typically seen? Or is that within the range of the mean? Or do you think this chromosomal abnormality could have contributed to a drifting away from the range, the normal -- normally seen?

Yes. This is within the normal range of cell expansion that we are accustomed to seeing in our product. And in fact, I would say this is very similar and representative of 4-1BB containing Chimeric Antigen Receptor construct.

Next question from Dane -- our next question from Dane Leone of Raymond James.

Obviously, the patient care is the most important thing here. So I just had 2 questions. One, is there any at least initial evidence in terms of the disruption around the chromosome for the TCR knockout on chromosome 14? And then the second question would be, can you just clarify a little bit more what is initially the concern around the clinical linkage here, given the patient probably had fairly degraded bone marrow ahead of ever receiving the therapy [indiscernible] therapy? Is there some sort of evidence that we've seen that the CAR T positive cells that were put into the patient are somehow attacking the bone marrow or some other phenomenon that would give us pause for clinical concern here? I think we're all kind of struggling with that linkage right now.

Yes. In terms of the reason for bone marrow biopsy, our understanding was that was done to evaluate pancytopenia that was observed in this particular case and, I would say, that routine clinical investigation when somebody has a lower blood count. So I don't know whether I can add anything more. In terms of the first question, just -- can you just remind me again on the first question you had, Dane?

Yes. Just if the edit -- the space around the edit presumably on chromosome 14 for the TCR knockout, is that in any relation -- spatial relation due to chromosomal [ abnormality ] itself?

At this point, we do not have enough information on where the changes occurred on the chromosome. I mean that's part of our initial attempt to find out the change -- where the chromosome flipping occurred. And once we have that, we will have a much better understanding. But stay tuned. We are working feverishly to answer some of these questions.

And our last question from Kalpit Patel of B. Riley.

This is [ Yuan ] for Kalpit. So for the reported pancytopenia, is it treatable through stem cell transplantation? And our second question is that -- so for this abnormal T cells we observe here, is there a way to eliminate them like using chemo or maybe another line of treatment?

So if I understand correctly, your first question was where transplantation is a treatment for aplastic anemia, which is -- the answer to that is yes. There are medical treatments, and then there are transplantation treatments. And the caring physician -- the physician that's caring for this person has chosen to do a bone marrow transplantation. With regards to the second question, can you please repeat it?

Yes. So is there a way to eliminate this observed abnormal T cells?

I see. Yes. Thanks for that. As we've been saying several times, the cells have contracted, and they are becoming barely detectable. But the patient has already undergone conditioning for the bone marrow transplantation. So those cells are probably eliminated with the conditioning that is given to transplant the patient.

And that concludes our question-and-answer session. I would like to turn the conference back over to management for any additional comments.

Yes. This is David Chang. Thanks for joining us today. As I said, we believe we have a tremendous opportunity to deliver a first-in-class therapy for patients. Our team is working tirelessly, and we are committed to communicating with transparency as we have more information to share. 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.