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

Good afternoon, everyone. Thank you for joining us for another session at the 41st Annual JPMorgan Healthcare Conference. My name is Brian Cheng. I'm one of the senior biotech analysts here at the firm. Presenting next is Allogene. With us today, we have President and CEO of Allogene, David Chang. I'll turn over the stage to David, and then the presentation will be followed by a Q&A session.

Thank you, Brian, for hosting us, and thank you for those who are in the audience. So I will be making some forward-looking statements, which will be subject to the disclosures we have in the SEC filing. So Allogene is really here to democratize the cell therapy and our mission is for the patients. And we have 6 foundational platforms from AlloCAR T, TurboCAR T, Cloak & Dagger, manufacturing as well as iPSC programs to fuel the innovation. Also, we distinguish ourselves by having treated over 175 patients with AlloCAR T across 4 different programs, which is generating wealth of the data, both clinical as well as translational science data for us to make decisions on different programs that we are advancing. We ended third quarter of last year with $637 million, which gives us enough cash runway to do what we set out to do. In that regard, we are one of the unique companies in the allogeneic CAR T where we have a singular focus of advancing allogeneic CAR T. And with that, we have the industry's first potential pivotal Phase II allogeneic CAR T studies that were initiated already. And now much of the focus of the company is really shifting from pipeline advancement as well as learning about the allogeneic CAR T through various optimization to execution of the pivotal study. With that, I'm pleased to announce that we added Zack Roberts to the management as the Head of R&D. Zack comes with a wealth experience in the cell therapy, especially we have worked together as we advanced many Zuma trials while we were working at Kite Pharma. So he comes with not only the execution, experience, but also knowledge of the field as well as the close contact that he has with the investigators. So this slide is really to highlight what's happening with the CAR T therapy. It has been 5 years since the first approval of CAR T therapy. Now in 2022, not only we are seeing the tremendous clinical benefit also, but also seeing the commercial success. The revenue in 2022 is expected to be over $2.5 billion. And by 2030, the CAR T related revenue is expected to surpass $10 billion. What's also shown on this slide is number of patients that were treated with autologous CAR T in each year. 2022, we expect that to be about 6,600 patients that relative to patient incidents for the approved CAR T indication where their available patient number of 64,000 only represents a little over 10% of the patients receiving the therapy. And as we look to the future, we expect the demand of CAR T to grow as the companies advance the CAR T trials to the earlier lines. However, the bottleneck that exists in the autologous CAR T will limit the access of the therapy to the patients. And the number, the patient who will have access to the CAR T therapy, we expect to remain at about 10%. This is what allogeneic CAR T therapy is really coming here. What's shown here is the difference that exist in the current autologous CAR T therapy, where the treatment is more or less a personalized therapy. That comes from the fact that autologous CAR T, each manufacturing can only treat one patient. And each manufacturing also comes with a complex logistics not only having to manufacture the cells, but also scheduling, leukapheresis the patients and all the ancillary cost and the complexity that comes with a personalized therapy. AlloCAR T is set out to address these issues by advancing the field to pharmaceutical product level where from each manufacturing run, we can produce enough materials to treat hundreds of patients and also by doing that, so eliminating the complexity, the complex logistics of the autologous CAR T therapy. And this is what we set out to do, which is really democratizing the cell therapy, which is really needed to grow this field. The field of redirected cell therapy is also evolving, not just between autologous and allogeneic, but also with the entry of the bispecifics. The way that we see the value proposition of allogeneic CAR T comes from the fact that allogeneic CAR T comes with a high-end efficacy, availability on demand as well as one-time dosing. This is a unique differentiation of the allogeneic CAR T that cannot be done with autologous CAR T or bispecifics. So let me talk a little bit about the response rate, especially the durability of allogeneic CAR T, which has been questioned for a number of years. What's shown here is the swing of plot. So each lane represents a one patient experience. Here, we have 14 patients who achieved complete remission in our Phase I studies. At the initial data cut in 2021, 10 of the 14 patients were in complete remission. When we did a follow-up study a year later, so this is essentially a data cut in October 2022. What we are seeing is out of those 10 patients in response, 9 continue to be in complete remission and most of them, in fact, all of them having surpassed the 12-month time point. I think this is really highlighting the fact that allogeneic CAR T can bring the same level of efficacy that changed the field brought up by the autologous CAR T. What's enabling that remarkable efficacy, we believe, is the proprietary ALLO-647 based lymphodepletion. What's shown here is the relationship between ALLO-647 exposure and the likelihood of response showing on the right. In the clinical study, Phase I study, we have tested 3 different doses of ALLO-647. As ALLO-647 goes up to the higher level, the exposure goes up and so does the likelihood of the response. And this is actually the regimen, lymphodepletion regimen that we will be using forward in the pivotal studies that are ongoing. So what does that translate in terms of the overall pipeline? We have a wealth of different programs covering both hematologic cancers as well as solid tumors. Starting with the hematology cancer, we have CD19 program, ALLO-501A, which is entering a pivotal study, its ALPHA2 study. And the second study, EXPAND study that is designed to demonstrate the contribution of ALLO-647 as the critical lymphodepletion components. Both of these potential pivotal studies that will allow the approval of ALLO-501A as well as ALLO-647. And I'll talk a little bit more in details about those 2 studies. In addition, we are in the planning phase for the early line study, which we have named as ALPHA3, and we will communicate the plans towards the end of the year. We also have the next-generation CD19 program that will potentially take the field to a different level. Following CD19, we have programs in the BCMA for multiple myeloma. The lead program is ALLO-715. And the second one that is being investigated is ALLO-605 that utilizes the terrible domain as a way to enhance the activity of the CAR T. We also have additional program targeting CD70 as well as FLT3 for potential indications in T-cell leukemia and lymphoma and acute myelogenous leukemia. On the bottom is shown the solid tumor programs, starting with CD70, ALLO-316. This is already in the clinics, being studied in the renal cell cancer. And we have additional programs in the preclinical phase, targeting DLL3 as DLL3 and Claudin 18.2. So I'm going to walk through each of the 3 key programs; ALLO-501A in non-Hodgkin lymphoma, ALLO-715 in multiple myeloma and ALLO-316 in renal cell cancer. Starting with ALLO-501A. What has been done over the last 2.5 years is really optimizing the parameters to best utilize ALLO-501A in the allogeneic CAR T setting. That included exploring the lymphodepletion regimen, which led for us to conclude the best regimen is FC plus 90 milligrams of ALLO-647. We also explored the cell dosing as well as different manufacturing process. All that's leading is summarized on the right side, where with ALLO-501 or 501A, manufacture with Alloy process producing overall response rate of 67%, with a 58% complete remission rate using the FCA90 as a lymphodepletion regimen. And also, in this case, 50% of the treated patients remain CR at both 6 and 12 months. And all this is coming with a manageable safety profile, no dose-limiting toxicity, graft-versus-host disease or neurotoxicity. And also the incidence of cytokine release syndrome is only at the low grade. Now how does this compare with what has been reported with autologous CAR-T is shown here. Walking each column, what is shown is all the patients that we have treated with the Alloy manufacturing process and next to it is a subset of those patients who have been lymphodepleted using FCA90 and receiving 120 million cells of ALLO-501A. Next to that is 3 data sets coming from approved autologous cell therapy, KYMRIAH, YESCARTA and BREYANZI. Going from top to bottom, when you look at the overall response rate, complete remission rate, who are complete remission at 6 months, which is a very important landmark analysis. What is being seen with ALLO-501A is very comparable to what has been reported with autologous CAR T. Safety profile is also very similar. And I would argue, if anything, the rate of cytokine release syndrome and neurotoxicity events is on the lower end of what has been repeated with autologous CAR T. And so does the infection rate, Grade 3 plus infection rate, we have seen between 8% and 15%, whereas in the autologous CAR T studies, reported rate ranges somewhere in the 20% range. Another important point that I want to make in this slide is the number of patients who are enrolled in the study who are able to receive the treatment. In our study, essentially all enrolled patients, all but one patient who are able to receive the treatment, whereas in autologous due to the manufacturing and manufacturing delays, the number of patients who can actually receive the intended treatment range between lower end of 64% to the high end of 91%. This is really what differentiates autologous CAR T from allogeneic. We have looked at the data in a somewhat different way following the Kaplan-Meier curve. So this is looking to see when the patient progresses. This is a little bit of a busy slide because 3 Kaplan-Meier curves representing autologous CAR T therapy data, overlaid with what we are seeing with our AlloCAR T program. Despite the complexity, one clear picture is that Kaplan-Meier curve of allogeneic CAR-T therapy is overlapping what has been reported with autologous CAR T. So at this point, we believe our program is sufficiently derisked with a high likelihood of reproducing the tremendous efficacy that has been seen with autologous CAR T therapy. So the planned pivotal studies are outlined here. The first one is ALPHA2 study. This is a single-arm study that will use FCA90 as a lymphodepleting regimen. Everybody will receive a single dose of ALLO-501A using the primary endpoint of objective response rate and complete remission rate. We intend to target approximately 100 patients to demonstrate clinical benefit of allogeneic CAR T study with ALPHA2 study. The second study that's shown below is EXPAND study where we intend to demonstrate the contribution of ALLO-647 to lymphodepletion in a formal way in a controlled study, so that to enable the labeling of ALLO-647 as a proprietary lymphodepleting regimen. That study will be using progression-free survival as the primary endpoint. Moving to the next program is ALLO-715. To-date, this is the only allogeneic CAR T program that has shown clinical benefit in multiple myeloma. We have shown the proof of concept, showing the feasibility of advancing a CAR T program, allogeneic CAR T program targeting BCMA. And also, we are in the process of preparing for Phase II, which can potentially be a pivotal study. What we have seen in this program is a single infusion of 320 million CAR T positive cells, with a lymphodepletion, we call FCA60 can result in objective response rate of 67% with a 42% of very good partial response or better. Also, the program has shown manageable safety profile, again, no graft-versus-host disease, low-grade neurotoxicity and also low-grade cytokine release syndrome. As in the case of CD19 program, ALLO-715, again demonstrated that with allogeneic CAR-T program, we can treat essentially all patients without need of breaching therapy or having the patients wait for the manufacturing of the CAR T. The comparison of 715 data with approved therapies targeting BCMA is summarized here. ALLO-715, giving the objective response rate, 67%, very good response rate of 42% or better, and the CRO, a stringent CR rate of 17%. I would argue in this small data set of 12 patients that compares very favorably with what has been seen with the bispecific T-cell engager, Tecvayli as well as one of the autologous BCMA CAR T, Abecma. It falls a little bit behind the Carvykti as we have been highlighting. However, we believe that there is an enough opportunity for us to consider potentially advancing 715 into the pivotal stage. And this is one of the top priorities that the company as we're beginning 2023. ALLO-316 is our first program and also the first allogeneic CAR T program that has gone into the solid tumor. We advanced this program into the renal cell cancer indications based on the existing unmet medical need in the renal cell cancer, especially those who have already received anti-angiogenesis therapy together with immune checkpoint inhibitors. And also the solid tumor targeting CD70 has an opportunity to improve the clinical outcome by the patient selection based on the CD70 expression. This study enrolled as a dose escalating Phase I study, initially using FCA as the lymphodepleting regimen. And based on some of the cell expansion as well as efficacy data that we have seen, we also added additional lymphodepletion regimen that doesn't involve ALLO-647, so those who are FCA and FC. We have treated 17 patients altogether in this study, and most patients enrolled in the studies or patients who have previously treated with checkpoint inhibitor and the VEGF inhibitor for advanced or metastatic renal cell carcinoma. What we have seen in this early study, out of 17 patients who are evaluable for efficacy is, one, pretty significant disease control. And also in the CD70 positive demonstrated the patients who are demonstrated to be CD70 positive, objective response rate of 33%. And also, we have seen that response rate appears to be higher on those patients who have so-called high H-Score for the CD70 expression. H-Score is really immuno-history chemistry-based scores that tells you the intensity of CD70 expression as well as a percentage of tumor cells that are expressing CD70. An example of the responses that we are seeing is shown in this slide. One patient, the patient history, metastatic renal cell cancer involving lungs and also refractory to checkpoint blockade and anti-angiogenesis inhibitor. This is one of the first patients treated with FCA lymphodepleting regimen and treated with a 40 million CAR T positive cells. And what is shown here is the tumor size reduction reaching partial response by month one and continuing to have a regression of tumor through month 6, showing not only the response, but also the durability of response that can be achieved with the allogeneic CAR T cells targeting CD70. Another thing that makes us very excited about ALLO-316 is the extent as well as the duration of the CAR T persistence in the blood. What we believe is contributing to this extraordinary cell expansion is a unique property of the CD70 what we have named as a Dagger that enables our ALLO-316 CAR T cells to be somewhat immune from allo rejection by the patients' immune cells. Illustrating that point, this is really if you look at the right side of the panel, what the CAR T is really designed to do is destroying the cancer cells. But the unique characteristics of CD70 targeting CAR is that in addition to going after CD70 expressed in tumor cells, it can go after T cells that are expressing CD70, and that includes allo-reactive T cells. In all, this allows the ALLO-316 to be less likely to be rejected by the patient immune system and that we believe is contributing to the extraordinary cell expansion and persistence, as I've shown in the previous slide. To the point that we are considering this approach as a next-generation allogeneic platform in the future products that our research team is advancing. What's behind all this pipeline is our fully integrated operations technology organization that can handle not only process and analytic assay development, but also product characterization, manufacturing as well as supply chain management. We have our own manufacturing facility called Cell Forge 1 where we believe at full capacity, that facility alone can produce enough materials to treat over 20,000 patients. That is a lot different than what the autologous manufacturing can achieve. So looking into the future of Allogene, where we are is with the CD19 as the best and first-in-class profile entering into the pivotal phase in the third line, large B cell lymphoma, this will certainly move into the earlier line. Behind that is a BCMA targeting program that we are trying to poise into the potential pivotal study start in near future and also trying to pay the allogeneic CAR-T into the solid tumor using ALLO-316, as I have just shown the data in the renal cell cancer. So in 2023, what are the key events that we are foreseeing. First half, initiation of the EXPAND study in support of potential approval of ALLO-647 in the third line setting and making a decision on our 715 potential pivotal Phase II study in refractory multiple myeloma in the second half, also updating the Phase I data on ALLO-316 in the second half in the refractory renal cell carcinoma and completing the Phase III readiness for the earlier line study of ALLO-501A in the second half. And we also project that we will update the long-term follow-up of the Phase I patients treated with ALLO-501A in the second half of this year. A lot is happening. But in 2023, Allogene as a company will have a singular focus on executing the 2 pivotal study that we have initiated. We are projecting those studies to complete the enrollment in the first half of 2022, which we hope will pave the path towards the BLA and approval of first allogeneic CAR T therapy in the CD19 space. And with that, I thank you for your attention. And before going to that, and I just want to end my presentation by reiterating our mission, which is shown on this slide, create and lead the next revolution in cancer treatment by delivering to patients the first ALLO CAR-T products for blood cancers and solid tumors and our activities really highlights how we are working towards accomplishing this mission. Thank you.

Thanks, everyone, for joining us for our fireside chat. We're going to start the fireside chat now. I think we have runners on the floor, if you guys have any questions. And I'll start off with a few. The key question that I've been getting from investors is really about differentiation of your platform, right? Just based on where you stand today, you have data from CD19 program in DLBCL. You also have data in multiple myeloma now. Where do you see the key differentiation is? And let's say, 3 years from now, your sales force is in a doctor office, what would their main message be and say, hey, this is clearly different than what autologous therapies out there and this is why you should use our product.

Great question. I mean a lot of times, that kind of discussion really becomes the evidence-based discussion. What I've shown with the Phase I study, obviously, we have need to produce the result in the pivotal study is that single infusion of allogeneic CAR T cells can reproduce the clinical benefit that has seen with autologous CAR-T. And this is a product that is available on-demand. They will simplify all the logistical complexity that you have to deal with when prescribing the autologous CAR T. So the same level of efficacy, the convenience and even without going anything else, being a clinician myself and having to deal with this kind of situation, I think, is a really winning proposition. Having said that, my back one is R&D and certainly, we are building up our commercial team and as we build a commercial team with the surveys and additional analysis, we will refine that core message. But I think we have enough materials there to start.

Okay. And in the indications that you're shooting for, there are a couple therapies that could be in the market before you, which is -- one of them is bispecific and the autologous cell therapies are also moving into earlier line. How do you think where your product fits in into the evolving landscape by the time you get to the market?

Our primary focus right now is really eyeing this cell therapy field that's being created by autologous CAR T. As one of my slides has shown, the CAR T is already at $2.5 billion, and it's expected to grow over $10 billion within next 10 years. So with that, if we can come up with a product, with a value proposition that this is a lot easier to administer to patients because it's off the shelf and it can reproduce the kind of efficacy that you have seen in the cell therapy. I think that is a very strong argument. Having said that, we are not ignoring the bispecifics. But on the other hand, when you look at the number of addressable patients in the non-Hodgkin lymphoma, that's about 150,000 patients. And when you also add multiple myeloma on top of that, you're talking about potentially reaching a number that goes to about 300,000. That kind of number allows multiple products to co-exist. And at some point, physicians will come up with how to best utilize bispecific versus CAR T therapy to maximize the benefit for the patient. Our intent is make sure that allogeneic CAR T has a good use in there.

So that's a good segue to our next question as to, your pivotal Phase II is ongoing for DLBCL. Is there any specific factor or nuance that investors should know that maybe potentially will get you a boost in terms of the market size that allow you to say your product is potentially better than what others have shown.

Yes. I mean I think the market size increase, I mean, obviously, right now, what I see with autologous is the growth of the field is limited by the manufacturing bandwidth as well as the complexity of the administration of the drug. So allogeneic by the nature is intent to address those 2 issues. After shaft on-demand therapy that doesn't require patients to be waiting for the cell manufacturing to complete. And also, there's all these complex logistics, including leukapheresis to generate the starting material, which is how you produce autologous CAR T. I mean I think all those things will -- from my perspective, I think that's what's really needed for the field to grow and the CAR T to reach [locations].

What's the plan with the ALPHA3? And is there anything that you would like to incorporate in that study to allow you to target the earlier line setting?

Yes. So earlier line for CD19 in non-Hodgkin lymphoma is either the second line or potentially high-risk frontline. And there's already approval of autologous CAR T in the second line, and we are thinking this very carefully. And this is a situation that I've learned over many years of doing clinical research. We will come up with a plan, but at the same time, we have to validate the plan with key opinion leaders and investigators to finalize. And also our new Head of R&D, he is one person who really championed all the CD19 programs at Kite to move into the earlier line soon. So we have a secret weapon behind what we intend to do.

Okay. And maybe just one more on CD19. Any updates on the supply from Cell Forge 1 facility? When can that be potentially incorporated into the pivotal study and any remaining gating factors that allow you to push that into the pivotal trial?

Yes. So you're asking the question around, we using the Alloy process, which is currently being manufactured by the CDMO. And our intent is to bring the manufacturing into more under our control. And it can be done in various different ways, but one of the plans include bringing the manufacturing. So it usually is a tech transfer. I mean it will be the same equipment, same critical supplies that gets used. And this is something that we have already done with other products and our [indiscernible] team has a lot of experience in bringing in. So it's something that we can do relatively easily, and some plans are already underway.

Okay. Maybe switching gears to BCMA. You have 2 programs ongoing. They have shown data in multiple myeloma. What's the next step? And what could we expect in terms of data flow in the next 12 months?

Right now, with the lead program, 715, I think we have investigated many different parameters like lymphodepletion as well as cell dose. Another one that we are carefully reviewing is whether there's any opportunity to tweak the manufacturing to make the cells work a little bit better. So that's an ongoing work. And on top of that, as we have previously announced, we are engaging the regulatory agencies to understand a path of approval. So that discussion will occur. And that's probably one of the sort of the facets of how we will make a decision.

How does the tweak of the manufacturing play into your regulatory discussion?