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

All right. Good afternoon from the 40th Annual JPMorgan Healthcare Conference. My name is Cory Kasimov. I'm a senior large cap biotech analyst here. And it's my pleasure to introduce Allogene Therapeutics and CEO, David Chang. [Operator Instructions] So with that, David, thanks as always for joining us today, and let me turn things over to you for an update on Allogene.

Good afternoon, Corey, and thank you very much for having Allogene at this JPM Health Conference and Happy New Year to you all. I'm just going to move straight into the presentation. If you can just move to Slide 2. I just want to emphasize that we will be making forward-looking statements in this presentation, which are subject to risks, as stated in our SEC filing. Moving to the next slide, in Slide 3. This slide really gives a snapshot of Allogene as we create the allogeneic South Turkey playbook. We have full foundational platform, including our proprietary lymphodepletion, our AlloCAR T and also the next-generation platforms such as TurboCAR. And also, we have the iPSC technology that we are working together with our lab collaborator, Notch Therapeutics. And with this full foundational platform, we also have over 300 employees who are dedicated in advancing cell therapy and 5 clinical programs that have treated over 130 patients with our AlloCAR T product candidates. And with a cash position, which stands at $862 million as of the end of third quarter 2022, we are pretty well positioned to continue to advance on the allogeneic cell therapy with a singular focus in only doing the allogeneic cell therapy as the primary goal of Allogene. So if you can move to the next slide, what does allogeneic cell therapy address? Autologous cell therapy has brought a breakthrough potential in cancer treatment by addressing unmet medical need in difficult-to-treat cancer patients. Now for example, the CD19-directed autologous CAR T therapies has shown it has been in the market for the past 5 years, and we have known a lot about this. And with the CD19 auto CAR T therapy, about 1/3 of patients in non-Hodgkin's lymphoma are potentially cured with a single infusion of CAR T therapy. Also, multiple myeloma space, CAR T products are providing a very high response rate that are also durable. And along with that, we are seeing commercial success, the sales of CAR T therapy in non-Hodgkin's lymphoma is expected to surpass $2 billion mark in 2022. With all this, having been involved in the development of auto CAR T therapy, this is something that we knew from the early days. There is a 1 inherent limitation of autologous CAR T, and that has to do with the manufacturing and the logistics of administering auto CAR T therapy. And allogeneic CAR T therapy is trying to address this issue by manufacturing the cell products from healthy donors, which then can be used as an off-the-shelf, ready-to-go therapy in hundreds of patients, thereby improving access, speed and reliability of the product as well as therapy and also reducing the cost of manufacturing. In many ways, we are trying to pave the path to democratizing the cell therapy. Next slide further highlights the importance of the manufacturing. This is Slide 5. From the early days, we have invested heavily in manufacturing that included not just hiring the best people in the field, but also setting up the overall manufacturing infrastructure. And last year, we achieved an important milestone of bringing our state-of-the-art manufacturing facility online and start producing the GMP materials. And I also emphasize another important facet of the manufacturing is our product characterization and quality control, which is a group that we have built, and much of these activities are being done internally at our manufacturing facility. Also important is managing the partners and also having the infrastructure of the supply chain that could ensure that all the core materials are properly made and available for us to manufacture the cells. If you go to the next slide, Slide 6, I just want to sort of highlight before going into our pipelines that an important announcement that we made yesterday to share the news that the FDA has lifted the clinical hold on all our AlloCAR T programs. Some of you may recall that back in October, that we reported a single case of chromosomal abnormality observed in a patient treated in our ALLO-501A Phase I trial. And that led to FDA raising concerns about the relation between the gene editing or the manufacturing to this chromosomal abnormality that was reported. Our investigation into the chromosomal abnormality concluded that this was: 1, isolated event that developed in patient after the cell product was administered; and 2, unrelated to TALEN gene editing or Allogene's manufacturing process; and 3, had no clinical significance. We presented our findings to the FDA, and FDA agreed that we have satisfactorily addressed the concerns and is now allowing us to resume all our clinical trials. This removal of FDA clinical hold puts our attention back to what is critical for us, and that is to advance the pipeline that has potential to change how we treat cancer. Slide 7. This slide highlights our pipeline. 5 clinical stage programs, starting with the CAR-T candidates targeting CD19, BCMA, Flt3 and CD70, which positions us extremely well in the space of hematologic cancers. And we have also begun expanding our pipeline into solid tumors with CD70, which is currently being studied as a Phase I in renal cell cancer and also continuing to advance our preclinical candidate such as DLL3 as well as other programs targeting different proteins in the solid tumor space. Now let's go into some of our key programs. Slide 8, this is really talking about our lead program, ALLO-501A, which is directly, which is directly going after CD19. Now let's go into some of our key programs. Slide 8, this is really talking about our lead program, ALLO-501A, which is directly, which is directly going up for CD19. The left of the slide highlights some of the challenges that [indiscernible] manufacturing slots, securing that [indiscernible] manufacturing failures, access and whether the treatment is given as an outpatient. All these are important issues that we are also trying to address as we advance our CD19 program. Where we see the opportunities in CD19 is expanding, which is in the middle, in the third line plus relapsed and refractory setting. Now I've been fortunate to be involved in the development of CD19 or autologous CAR-T therapy. One of the key strategies that we implemented early in 2015, 2016, as we were expanding the autologous CD19 is moving the program into the earlier lines. And I have to say that at ASH last month, there was some data that's presented in the second line as well as even in the frontline setting, where the potential autologous CD19 CAR-T therapy was well exemplified. So from the development of allogeneic perspective, we are seeing from starting point of relapsed/refractory non-Hodgkin's lymphoma, moving into the earlier lines within the non-Hodgkin lymphoma space as well as moving into the other histologies, other lymphoma subtypes that can be addressed with a CD19 allogeneic CAR-T, and that includes all follicular lymphoma, other indolent lymphomas, CLL, mantle cell lymphoma CLL, and that's all within the scope of our overall development [indiscernible] our CD19 program [indiscernible]. And on the next slide, as we advance the program, we are carefully mapping out the key attributes that will make ALLO-501A successful. This slide shows what physicians are looking for based on our internal market research. Efficacy, definitely. They are very interested in the delivery of the cell therapy as well as ancillary logistics, such as lymphodepletion or the requirement of leukapheresis and also the safety. So all these things are being considered as we are trying to optimize our approach to advancing our ALLO-501A program, which is the lead program. The next slide, Slide 10, highlights what we have learned from our allogeneic CD19 program. We have treated over 50 patients with our AlloCAR T programs targeting CD19. What we have learned is: one, we have been able to treat almost all patients who are enrolled in the study; and second, safety and efficacy. Safety, there are some concerns about the allogeneic cell therapies, such as graft versus host disease, which I think, at this point, has been very thoroughly answered. So far, having treated more than 130 patients across all our Allogeneic CAR T programs, we see very limited or almost no risk of the graft versus host disease, and also neurotoxicity, which we call sometimes call as ICANS or cytokine release syndrome, we are seeing them but at much lower incidence than what autologous CAR T therapy has shown at the similar stage of development. When it comes to the efficacy, we get very encouraging results. In the large B-cell lymphoma, we are seeing the overall response rate of 56% and 44% of the complete remission rate. And throughout the development, we have been optimizing not only the cell dose, but the lymphodepletion regimen. And also, we have implemented what we call as a consolidation treatment to enhance the overall effectiveness of the allogeneic CAR T therapy. And as we do that, we are seeing that the initial improved response can be improved with additional dose that we give as a consolidation regimen. And I would also highlight that outside the large T-cell lymphoma with other subtypes such as follicular lymphoma, we are seeing a similar efficacy [indiscernible]. Also very important in cell therapy is the duration of response [indiscernible]. It's what we call as swimmers plot. Each line indicates a patient. And ongoing arrow at the end of a line is indicating whether the response is still ongoing. And so [indiscernible] patients who have achieved a complete remission from ALLO-501A program. And what we are seeing is that out of 14, 10 of the responses are still ongoing. And once those patients passed the 6-month time point, which is highlighted in a solid line, vertical solid line, all these complete remission is ongoing. This is what we have always been looking for, which is can induce a durable complete responses with allogeneic CAR-T in large B-cell lymphoma. And with our data presentation we did last month at ASH, we believe that we have convincingly answered this question. Now Slide 11 goes into comparing result -- our result with that of the autologous CAR-T therapy that is currently marketed. I would caution that this is a cross-trial comparison with all its limitations, and also a comparison is mainly focused on efficacy and safety parameters. Nonetheless, when [indiscernible] the lines in an overall response rate of 64% [indiscernible] and 44% that we are seeing in consolidation. That compares very favorably to what has been reported with marketed CD19 directed autologous CAR T therapy. I'm not going to go through the individual lines, but when [indiscernible] efficacy is very much on par with what has been seen with the autologous CD19 therapy. Safety, at this point, very similar. But when you actually look at incidence of cytokine release syndrome and neurotoxicity, as we treat more patients, we're getting a sense that overall incidence of these important adverse events are much lower than what has been reported in the autologous CAR T therapy. So where do we stand with our ALLO-501A program? This is on Slide 12. On the left, we sort of highlight the conclusions that we are growing from having treated more than 50 patients with our CD19 program. We have shown a proof-of-concept of the allogeneic CAR T. We have shown -- I haven't spoken much about ALLO-647, but this is our proprietary lymphodepletion strategy. And we have shown the proof of concept that with ALLO-647, we can generate a sufficient window for the AlloCAR T cells to expand and carry out antitumor effect. We have identified or we have come up with a recommended Phase II dose of the ALLO CD19 program. And we have shown the convenience and safety and we have shown the benefits of consolidation. And all important, we have shown that the durability can be successfully achieved with our AlloCAR T programs, even in indications such as large B-cell lymphoma. And also with a sort of lower incidence of neurotoxicity as well as cytokine release syndrome, we are beginning to see a potential to administer allogeneic CAR-T therapy as an outpatient. So we are in a position to advance our CD19 program into the pivotal stage, basically leveraging the data set that we have from having treated more than 50 patients with a CD19 program, also with a deep understanding of gene engineering and cell manufacturing. So our plan is to start the pivotal study by midyear 2022. So now let's move to the next program, which is CD19. I'm just waiting for the ambulance outside to move away. So CD19 -- I'm sorry, the BCMA CAR-T program is for the multiple myeloma indication. This is a pretty large indication where the opportunities, in our view, far exceeds the opportunities that one can create with a CD19 in Non-Hodgkin's lymphoma. And for that reason, from the beginning, we have taken a multipronged approach in multiple myeloma, starting with ALLO-715, which is the first allogeneic CAR-T program to be studied in multiple myeloma. And we have presented this data at last month ASH, and I'm going to go a little bit into that. In addition, we have taken additional approach of using ALLO-715 in combination with the gamma secretase inhibitor, nirogacestat, and also advancing the next-generation BCMA CAR T program, ALLO-605, and this is leveraging so-called TurboCAR technology, and that's already being study in the clinics. And also, we have initiated taking the lessons from our CD19 program and trying to leverage the uniqueness of the allogeneic CAR T therapy where we can use the cell infusion in a consolidation strategy. So this essentially marks the 4 different strategies that we have taken into the multiple myeloma with our BCMA targeting CAR-T programs. Next slide, Slide 14, goes into what we have learned from the ALLO-715 as we have presented updated data at ASH last month. What -- this study, which we call universal study, was studied in heavily pretreated patients with advanced disease and disease characteristics as shown on the left side. And what we are able to conclude is that off-the-shelf AlloCAR T has the potential to address a significant unmet need in patients with rapidly progressing disease. We were able to treat more than 90% of the patients very quickly within 5 days of enrollment to initiation of this treatment that which aviated the need for the bridging therapy. And what we have learned, just like we have learned in the CD19 program, is that overall safety profile is very manageable with no graft versus host disease or grade 3 neurotoxicity, and also very limited cytokine release syndrome at Grade 3 level. And all important efficacy, and this is relatively early from our BCMA program, but what we are seeing is very robust response rate of 71%, with 46% being a very good partial response or better at the cell dose that we are recommending as we think about the Phase II programs in our -- in the BCMA space. And all important, 92% of the very good partial responses have achieved so-called MRD-negative status. And majority of the patients who achieved the response have an ongoing response with a median duration response now standing at 8.3 months and ongoing. So if you can advance to the next slide, which is Slide 15. This is where we are comparing the data that we have presented on ALLO-715 with approved anti-BCMA targeting autologous CAR T product, Abecma. And again, I'm not going to go into the individual lines. We focused on mainly efficacy as well as safety, and we are drawing very similar conclusion that we drew with our CD19 program, which is that Phase I data suggests that overall efficacy and safety profile is very similar to a product that is already in the market. And this also doesn't fully account for other potential benefits of the allogeneic CAR T therapy, such as being able to treat almost everybody who's enrolled in the study without the need for the bridging therapy or without having to deal with the complex logistics of manufacturing cells at the autologous level. Next slide, Slide 16, is really highlighting additional innovation that we are introducing into the field of anti-BCMA cell therapy and this is -- comes from a TurboCAR technology. And that generation program, ALLO-605, is essentially very similar to ALLO-715, but it has the [indiscernible]. What TurboCAR does is this is a protein, engineered protein, that is designed to selectively provide cytokine signal [indiscernible] is given [indiscernible] cells, and there's no stimulation from [indiscernible] cells [indiscernible] into the system. What we have seen in the preclinical programs that utilizes TurboCAR is that improved engraftment as well as improved persistence and delayed exhaustion. So the opportunity that we are exploring with ALLO-605 is really coming up with a much better therapy that is potentially -- that potential that comes from delaying the exhaustion and [indiscernible]. ALLO-607 program is already in the clinic. And as now that the clinical hold is in our rearview mirror, we are eager to resume enrollment into the ALLO-605 study. Next couple of slides, I'd like to cover what we are doing in the solid tumor slide. So Slide 17, this is really sort of highlighting why solid tumor is so important to Allogene. When you look at the overall unmet medical need in the space of hematologic cancer as well as -- and they compare that to the solid tumor. Understandably, a lot more people are affected by solid tumor, and hence, there is a much greater unmet medical need, and so is the opportunity to develop effective drug in the solid tumor space. When we think about solid tumor, which is on the right panel of the slide, we think about the importance of target selection and validation and also the importance of maintaining so-called T cell fitness. This is really trying to preserve the function of the T cells that can overcome in an immune suppressive microenvironment as well as addressing the need of the CAR T cells to traffic into the tumors. There are many different approaches that we are taking to make sure that these things are happening. The first program that we are moving forward is on the next slide, ALLO-316. This is Slide 18. So ALLO-316 is a chimeric antigen receptor that's targeting CD70. And this program is in Phase I dose escalation in our phase in renal cell carcinoma. But I would say the opportunity of 316 goes well beyond renal cell carcinoma. It extends into some hematologic malignancies, namely AML, but also DLBCL, multiple myeloma and chronic lymphocytic leukemia. And also the opportunities in solid tumor goes beyond renal cell cancer into diseases with high unmet need, such as glioblastoma multiforme and non-small cell lung cancer, head and neck cancer and cervical ovarian cancer. So just like 605 program, we are ready to resume the enrollment into the ALLO-316, and hopefully, we will get some exciting data from the 316 programs. So last slide, 2 more slides, Slide 19 really highlights what we are doing, leveraging on the partnership to bring new technologies, enhance our research capabilities as well as expanding our geographic expansions. In the technology side, we have had ongoing collaboration with Cellectis where we're getting the TALEN gene technology, also collaboration with Notch Therapeutics to explore the potential of iPSC-derived CAR T therapy. And we, this morning, announced our collaboration with Antion Biosciences. This is a collaboration that brings us a technology called micro CAR, miCAR. And this is really micro RNA technology that allows gene silence. And what attracted to us is the ability to do that in a multiplexed way where multiple genes can be accurately and precisely controlled with the miCAR technology. So from the gene engineering perspective, we have lentiviral gene transduction. We have gene editing capability. Now we are adding the gene silencing capability into our toolbox. And I think this will be an important technology as we think about the next-generation approaches. And on the research side, collaboration with MD Anderson, also ongoing collaboration with SpringWorks in the multiple myeloma space. And the global expansion. Servier is our partner on CD19 program outside the United States. And also, we have a joint venture with Overland. Allogene-Overland is a joint venture based in China, covering the Asian territory outside Japan. So this concludes my presentation. And Slide 20, which is the last slide, is really highlighting [indiscernible] see in 2022. And as we have covered the removal of the clinical hold that will put us back on track, that was an important milestone. We are delighted that this is now behind our rearview mirror. And with that, resuming clinical trials across CAR T platform, number of programs had to be passed, and we are in the process of consuming the clinical study. And also all important, initiating the pivotal study in relapsed refractory large B-cell lymphoma, which we're targeting midyear. And also, we are expecting to update our BCMA program, which, as I have covered, we are taking a multipronged approach to come up with the best strategy to address the unmet need in the multiple myeloma space. [indiscernible] is trying to define and be the next revolution in cancer treatment by delivering to patients first AlloCAR T products for blood cancers as well as solid tumors. With that, I thank you for your attention.

All right. Thank you, David. We'll move on to Q&A now. [Operator Instructions]. So I guess, David, obviously, you want to start with the clinical hold here. And maybe what are your key learnings from the overall process that you've been through over the last couple of months with this?

Yes. So I mean the context of the clinical hold is that we rely on gene engineering and gene editing. And particularly when gene editing is used, one of the big concerns -- theoretical concern that existed was when you introduce a break in the DNA, can it change the chromosome structure? That was a theoretical concern that we actually saw in an isolated single patient. And concern there was, is this gene editing-related? I mean I would say that 99%, if not 100% of people out there, were expecting that this should be related to gene editing. And this is something that I give a lot of credit to our research and development team as well as translational science team as well as manufacturing, they delved into this issue extensively, came up with a different -- totally different hypothesis that in the field of cell and gene therapy using living cells. And let's not assume that this is due to the gene editing. So with that mindset, we started the investigation into this. And as we delved into the details, we found out that gene editing had nothing to do with the chromosome change that was detected in this patient. And if anything, this change was due to a naturally occurring T cell gene arrangement that happens in T cells or B cells. So the lessons from this, I think, is 2 important one. One, keep all the -- don't assume anything, very important lesson. And then two, make sure that you have the right team. I mean, I'm so grateful of the caliber of the team at Allogene that really dwelled into this issue to complete the investigation in relatively short period of 8 months to respond to the FDA to get the clinical hold lifted. And I cannot underestimate the value of having a strong team that can navigate through the unknowns. And certainly in the cell and gene therapy, which is a relatively nascent field, we will encounter similar findings in the future. And what will differentiate a successful outcome to something that can drag out that right along is the team that you have.

Okay. That makes a lot of sense. So I mean given this is really, in many ways, an unfortunate and unlucky, isolated incident, there's no way of saying it can't happen again, but you've been able to rule out it having anything to do with your procedures and your processes basically a way to sum it up, right?

Yes. I mean, unexpected findings will be always part of our -- what we do. I mean we will most likely have other unexpected findings. And I think the entire field of cell and gene therapy will continue to have unexpected findings as we discover something new. I mean nobody has done this, and this is all new things that are going on. And here, it's really the approach to address the questions when you find something new. I think that is an important thing. And another important thing, and this is out through our interaction with the FDA, and hopefully, FDA and I think the lifting of our clinical hold without any strings, I think that sort of signals that FDA now has much better appreciation of how to regulate cell and gene therapy space when this kind of unexpected findings occur.

Okay. But safe to -- you're not anticipating any potential changes to what your protocol would have otherwise looked like or implementing CMC changes? Like the regulators aren't asking you to do anything differently, are they?

Yes. I mean there are essentially no conditions. I mean we will be resuming the clinical studies, and we'll be using the clinical lots that we had already on our hand. And so manufacturing process doesn't need to be changed. Release criteria doesn't change beyond what we are already doing. And also in terms of ensuring the patient safety, we will have to amend the informed consent to appropriately inform the patients and investigators. But there is nothing beyond that we are doing that we are not already doing.

Okay. And then obviously, frustrating development for the company, but can you talk about how Allogene maintained kind of the momentum you had built up during this pause, particularly when we think about the competitive nature of this space. So that now that the hold is done, everything kind of picks right back up?

I mean having to pass the clinical programs for 3 months was very painful. And -- but on the other hand, what was probably very gratifying as a CEO was how the company -- I mean, I'm talking about every member of the company came together to address this important issue. And from the beginning, we were definitely thinking about what this means to the -- to Allogene because that was affecting us, but we knew a broader implication of chromosome changes in companies who are using the gene-editing technology. So we understood much more the implications of what we have seen. And hopefully -- and that really brought a lot of employees even much more focused on the importance of these findings and trying to get to the bottom of it. And I think that really led to us being able to conclude the investigation within a relatively short period of time.

Okay. An investor question in the portal speaks to your recently announced deals. Specifically, how do you see the technology from the Antion collaboration being applied to Allogene's pipeline programs going forward? What is the best application of it that you foresee?

I think this is really a next-generation approach that goes beyond gene editing. I mean you are talking about gene silencing that can be done in a multiplexed way. So 1 area that we are interested in applying this technology as we advance the solid tumor programs. As my wheel chart highlighted, I think there are many things that needs to be addressed as we try to optimize the product characteristics in solid tumor, overcoming exhaustion, overcoming -- being able to make cells trafficked into the tumor. I think all these are the sort of the question marks, things that people -- that experts believe need to be addressed, as we advance the program in solid tumor. And I think the Antion technology give us a real answer to address all those issues. And another area is as an allogeneic cell therapy-focused company, we are also interested in the next-generation allogeneic platform and how to make the cells work better as an allogeneic cell therapy. And we also see a great opportunity of using Antion's technology for that.

Okay. And so as we think about your pivotal program that's starting midyear for CD19, from a trial design standpoint, I mean, relatively straightforward when thinking about this relative to the auto CAR studies that came before it. And will you -- will there be consolidation therapy for all patients in the trial?

Yes. I mean I think straightforward, relatively straightforward, I mean, that's really in a simplistic way. I mean, there are many things that we have to consider, but we have a great team. But in terms of the study, we foresee that as a single-arm study that uses the overall response rate as the primary endpoint, I think that is the crux of the study design. And then also overlaying that is patient eligibility and other things. And we have a team led by Dr. Rafael Amado, who's addressing all these issues before we start the pivotal study.

Okay. And then 1 quick question, we're down to less than a minute, on the multiple myeloma front. You're obviously evaluating multiple strategies there. TurboCAR has always been one a lot of people are interested in. Would you expect to use consolidation dosing with TurboCAR as well?

Yes. That option is definitely open. We have not gone to that point. I mean if you think about it, we have 2 different products, 715 and 605, the TurboCAR product and each one can potentially either leverage the combination approach with gamma secretase inhibitor, and each one we can use as a consolidation. I think this is a step-by-step way that we will explore the full potential. What is very encouraging is what we are seeing with the 715 as a single infusion therapy. The fact that it's coming close to one of the approved -- there's only 1, Abecma, I think that's really a good sign, good indication that we have a lot of room to improve with the additional approaches that we are making.

Okay. Terrific. Well, with that, we are out of time. Thank you for spending the time with us. Good to see you guys off this hold, and best of luck with continued progress this year.