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

Great. Good afternoon, everyone. Thanks so much for joining us. I'm Salveen Richter, biotechnology analyst at Goldman Sachs, and we're really pleased to have the Allogene team here with us. So we have David Chang, President, CEO and Co-Founder as well as Eric Schmidt, CFO. And maybe to start here, Eric, given the news today, maybe I just want to walk through just provide us some of your thoughts.

As you're referring to -- so Salveen, as you know, I -- we at Allogene announced my resignation today from the company, and that was with very mixed feelings as you can imagine, I've been an Allogene for 5 years, and I've had the pleasure of working with David and Ari and Christine and many others to create what I really think is a preeminent cell therapy company. And -- in doing so, out of joy, I've been traveling back and forth, East Coast, West Coast and doing so very regularly. And of course, with that travel, there are some stresses, but we've persevered and again, created, I think, what is going to be an extremely successful company. And obviously, the only thing that can take me away from this job, which I've truly loved and these people, which I truly love is some issues that I need to deal with at home. So family first, as I know, you know very, very well, given our long history together, and there are certain sacrifices we need to make for our family, but you can't take that too far.

Maybe to start here. David, do you want to provide just a high-level overview of where we are here in the field of allogeneic CAR-Ts. We know where autologous stands at this point with allogeneic, it's been a question of optimization and kind of getting to that right situation on the initial tissue targets and then moving beyond. So where do you think this field is today?

When I think about this year, I mean, it has been 5 years since we set the journey to advanced allogeneic I think there's a lot more clarity about what's happening in the allogeneic CAR-T space. The data really supports that allogeneic CAR-T provides the long-term durability. And we highlighted recent updates to our Phase I CD19 program at ASCO, and we will plan to do another update at EHA and Lugano meeting. But when we look at the data together with the cell expansion data, which we're also highlighting, allogeneic CAR-T is bringing the efficacy on par with what autologous have shown and also safety profile, if anything, looks slightly favorable than what the autologous have shown. Obviously, this is a cross-trial comparison. And when you look at that kind of the data, analyze in the -- with a modified intent to treat. So we gave the autologous CAR-T credit for patients who are not able to receive the treatment because of the dropout while they are waiting for the manufacturing. Even with that, it looks very favorable. Now that together coming with the benefit of being off the shelf, being ready to treat the patients without any bridging therapy. And in our study, the median time to start of the treatment is about 2 to 3 days, which is really translate to scheduling the clinic schedules and things like that more than anything else. So we do believe that there is a strong value proposition coming from the allogeneic. So another thing that we have been talking about for a little bit, but we are getting increasingly excited is the potential of allogeneic CAR-T therapy to move into solid tumors. I'm referring to our ALLO-316 CD70 program that we have shown proof of concept. Not only the clinical proof of concept, the cell expansion data that we are seeing with ALLO-316, our CD70 program is really quite striking. So taking a step back with all the noise around the cell therapy that everyone is experiencing in recent days. But when I look at where the allogeneic field is going, I would say that there's a lot more clarity. And for us, it's really executing the lead program, which is in the pivotal stage and getting across the finish line.

Maybe let's start with your lead program, the CD19 program here. That's targeting large B-cell lymphoma, and it's in a pivotal Phase II at this point. Can you just describe at this point where you think the commercial opportunity lies? Is it still what you thought in the beginning that you had to just have a profile that was in line? Or do you think that differentiation on one aspect is required, which you are on the safety side? And then if that profile holds where you get -- I mean, help us understand where you get positioned? Is it just the patients who -- the 10% or so patients who can't wait for therapy? Or has it just become a much broader kind of overlay?

Yes. I think that's a really fantastic question. I mean, ultimately, you asked a question -- if you asked a question to any clinicians about you have a product that is readily available and you don't have to grow the complex logistics of scheduling the patients for leukophoresis or waiting for what will amount to be more or less about a month before the autologous -- [indiscernible] products are manufactured. And then starting the treatment. And during that time, you have to deal with uncertainty and you also -- you have to use some kind of bridging therapy to make sure that the patient's disease does not get out of control. That versus you have a product that can be infused within days after you make the decision to make the treatment. I think as prior practicing oncologists in the academic setting. When I think about those things, and this is also the comments that we constantly get from the KOLs. I mean, that is really a very differentiated value proposition. I think there's a lot more that we have to do. And in addition to where we are, which is the third line setting, our intent is move the ALLO-501A into the earlier line as quickly as possible. And when you think about the earlier line, the value proposition even gets up higher. So that's why earlier this year, we made it very clear that part of the goal this year is to finalize the study design for the earlier lines and then trying to get the study started as soon as possible sometime in 2024. And we are continuing to work towards that path.

And how do you move earlier line in the context of being used maybe in some cases, refractory to the autologous?

So earlier line, I mean, there are many different ways to think about it. I mean the CAR-T, autologous CAR-T all studied in the refractory [ 2 ] plus line setting. So that means patients have had to receive at least 2 prior lines of treatment for their lymphoma. And the autologous CAR-T since then has moved to the second line. The earlier is really somewhere between first and second line or in that setting. So here, there are various different things that we can entertain. The field is evolving. I mean, the concept of MRD-positive disease. I mean this is an area where drugs like BLINCYTO has a very success in going after MRD-positive disease. That concept is also beginning to emerge in the B-cell lymphoma, something that we can leverage. And also the fact that, especially in earlier lines, where there is more urgency to treat the patient being able to offer the product right away. I think that's also a very differentiated benefit that we can offer. So stay tuned about how -- as we finalize the study design and as we talk more about what our intent is to really get to early lines.

You initiated the pivotal trial back in October and began enrollment in the fourth quarter. Just help us understand where you stand on enrollment and site activation and trial progression? And are there any headwinds that we should be aware of?

Yes. I mean it comes of site activation activity that is going very well, and it's almost done. I mean, I think the one -- the additional layer of site activation that we are looking to for in the next few months is so far, we have carried out all the clinical studies in the U.S. Part of the plan was as we expanded the study and the patient requirement in the pivotal study, we would expand outside the U.S. So we are waiting for the ex U.S. sites to open up. As for the enrollment, we're not going to provide any play-by-play updates on how the enrollment is going. But we are currently projecting that the study will complete the enrollment in the first half of 2024.

Got it. And would that be the point in which we see -- well, when would we see data? Would we still [ slate ] data in 2024? Or would it be...

Yes. I mean in terms of what people care about, the initial response rate -- if that is important, that's the data that could be available within a month or 2 after study completes enrollment. But probably the more important and what we consider as a BLA-enabling data. That's where you follow the patients for at least 6 months, and that will be available towards end of 2024.

The updated presentation at ASCO recently included longer-term follow-up data from the Phase I trial. And we saw 12 patients who were treated with the Phase II regimen with a median follow-up of 23.1 months. What was the reason for presenting data from this specific subset of patients? And then how do you think about just the overall disclosure there when you think of complete response levels?

Yes. In terms of what we presented is 4 patients with a large B-cell lymphoma who are being treated -- who have been treated in the Phase I with the same regimen that we're using in the pivotal study. So obviously, we have treated a lot more patients than that. But that 12 patient, we felt was most relevant from the technical perspective of predicting what may happen in the pivotal study. So we keep highlighting. Obviously, the response rate and complete remission rate is something that we have talked about before, and that hasn't changed. But it's really the attention to the durability, which has been the central question in the allogeneic CAR-T. I mean there is still large skepticism about whether allogeneic CAR-T can provide the durability of response that matches up to the autologous CAR T. So we felt compelled that we need to continue to educate the investors, analysts as well as the field that allogeneic CAR-T can provide the durability, and that's exactly what we have done. In addition, what we also included in the ASCO presentation is the immune cell reconstitution, how that's the recovery of the neutrophils, how that's the recovery of the lymphocytes and other immune cells after allogeneic CAR-T. And I would say the data is more or less very similar to what has been reported in the autologous CAR-T. So there are many different things. And I think these are important scientific as well as a clinical question. We felt that providing that kind of data and having it out for the KOLs and investors and investigators was important. And the reception to the data was extremely positive.

When you look at the durability here in the context of CD19, how do you think about it kind of translating to different tumor types?

Yes. That's an interesting question. I mean I don't think that's something to be seen by indication -- by indication. I mean what we have learned over the years is what happens in ALL is slightly different than what happens in large B-cell lymphoma. And even in lymphoma, what happens in large B-cell lymphoma is slightly different than the follicular lymphoma, which is same B-cell non-Hodgkin lymphoma. So there are some differences. And I think that difference is really coming from the underlying disease itself, not how CAR T cells are behaving differently. So rather than jumping and speculating too much, I think it really has to be data driven. But in the allogeneic field so far, we have tested ALLO-501A that is directed against CD19 and then also ALLO-715, which is directed against BCMA. And even in ALLO-715, we see very similar -- the durability once the patient gets to the complete response, especially if they're MRD negative, if the durability is quite striking. And the solid tumor is a wide open question. We are seeing dose escalation. So that answer probably is better to be sort of provided some time later as we have more data.

And help us understand the trial design for the Phase III second-line trial, how that would be conducted?

Yes. So potentially back to CD19. And so the study that we are doing right now is a third line study. That study is a single-arm study. We'll be looking at complete remission and duration of response. What you're asking is the next study, the earlier lines. The precedent here is that it will be a randomized study comparing against standard of care.

You have a second pivotal trial call EXPAND that's looking at the combination of 647, which your anti-CD52 to the lymphodepletion regimen. Can you just give us some color on what's playing out with the sites and your confidence and enrollment at this point?

Yes. So the second study is really to demonstrate the contribution of CD52 antibody that we are using as a part of lymphodepletion. So the study design is randomizing patients to those who just get chemotherapy baseline depletion versus chemotherapy plus ALLO-647, and everybody gets ALLO-501A. There is enough evidence that without anti-CD52 antibody, you will get early rejection of allogeneic CAR-T, which translates to not having a [indiscernible] cell expansion or the efficacy. So the confidence on that technically is very high. In terms of enrolling the patients, I mean there are people who know our data very well. They themselves are asking questions about, you know what, I don't feel comfortable risking half of my patients being randomized to FC. I think it's really the right question. But then there are other more sort of, I would say, that there is a fundamental question that needs to be answered here, and I want to participate in this study. So that study, the activation like the first study is going well. It got started a little bit later. It's a new study versus previous study that plus the transitioning from Phase I to Phase II in a seamless manner. But the EXPAND study was totally new studies. So activation got a little bit delayed, but now the activation as well as the patient screening is ongoing. So from the study perspective, I mean, it's a much smaller study than the ALPHA2, which is the pivotal study. This study, we'll be enrolling 70 patients. Essentially, we are targeting to enroll 35 patients to each arm of the randomized study.

And on the back of this, how would you incorporate it into your other studies outside of CD19.

So in other studies.

Think BCMA or....

BCMA, I think the -- so far, we have grown, and this is something that we are seeing consistently across different programs. CD52 antibody is very different with the allogeneic platform that we are using. And CD52 antibody is what's differentiating us being able to show the long-term durability, whereas other allogeneic approach so far has not shown the kind of durability that we have shown. So in terms of other studies, I think it's a little bit up to how we engage the regulatory agencies about. For every program, do we have to do in the second study? Personally, I don't think so. And -- but at least for once, we're going to show good evidence that anti-CD52 antibody makes a big difference.

Fast forward, say, everything works out well according to how you're kind of planning these, I guess, the cadence of these studies. When do you think you could have this CAR T on the market for CD19-directed tumors?

So I think at this point, with the trial completion and BLA-enabling data availability, which I've said -- which is towards the end of 2024. And when you consider review time and everything, potentially late 2025, maybe 2026 in that time frame. So we're not that far away from having the allogeneic CAR-T product in the market.

I'm just going to pivot before we go back to the portfolio, but I think you've talked about large biopharma interest in this field. And clearly, we've been seeing success that's happening with autologous. So as you're executing on this front, how are you thinking strategically about where biopharma thinks about allogeneic fitting in the [indiscernible] on the forward and then your interest in having partners on the forward too.

Well, I think, Salveen, there's no doubt we have too much on our plate right now. For a small company, we focused -- leading the focus and executing on our pivotal programs and our CD70 program and hoping to keep the BCMA program moving forward, too. That's where we've been spending our resources. But beyond the programs that you've already highlighted, we've got a lot more in the hopper, especially in solid tumors, where we're really excited by our first CD70 data in renal cell carcinoma, good proof of concept there, and so much more than we could do with other androgen targets. We've talked about DLL3 and Claudin 18.2. So -- right now, we're capacity constrained. And as a result, we are open for business and if partners can help us grow this pie and accelerate these programs, we'll be all ears to that. I think depending on the pharmaceutical company you talk to, some are in cell therapy, some are not yet in cell therapy. I believe the pool that's in cell therapy is growing and probably growing because of the success of products that you just mentioned. It's very, very clear based on the autologous products that these are probably the most potent anticancer agents we've ever seen and that they're moving forward into earlier lines of development and they're being very successful there. And of course, commercially, we now have quite a bit of success with the first blockbuster cell therapies as well. So I do think there's increased interest in the space. Obviously, as David referenced earlier, we still have a lot of wood to chop in allogeneic cell therapy to move the field forward. But you build it, and they will come. That's the mantra in pharma. And I can't imagine it will be anything different with cell therapy.

Let's jump to the CD70 program. So we saw some initial proof of concept that looked pretty exciting. Just help us walk us through where you're going from here with the program. And how we should think about the next update that I believe is by year-end?

I mean in that program, we generated initial proof of concept very early on, even when essentially [indiscernible] with the starting cell dose level, which was only 40 million cells. Like any other clinical experience, I mean our intent is complete the planned dose escalation. We want to know a full range of efficacy as well as safety profile. And also one thing that we are doing in that study and this -- I'll come back to it. It has -- really has to do with the unique biology of CD70 target in a [ CAR T ]. And there is an opportunity to sort of start paring down the lymphodepletion -- so study started using chemotherapy plus anti-CD52 antibody. And also anti-CD52 antibody at very low dose. With some initial result, we opened another arm that took out the [ anti-CD52 ] antibody altogether. So we're using [indiscernible] lymphodepletion and that's part of the initial -- the Phase I where we want to sort of fix the lymphodepletion as well as cell dose that we want to move forward with. So that's the goal. And our current plan is enrollment on that study is really at brisk and we will update, hopefully, completion of the dose escalation phase towards the end of this year and then provide more clarity on which direction that we want to take the program.

And I think you were screening patients for CD70 positivity and -- just help us understand how that's helping you in the context of figuring out which patients may be better responders here.

So renal cell cancer, if you look at the available data, much of which is based on the RNA expression level. CD70 could be positive in 90% to 100% of the patients. As you start actually looking at the protein level, the number goes down. And what we have learned during the initial phase of the study, where we enrolled the patients without checking their CD70 level. But as we had a chance to go back and look at their CD70 level, what we found was that patients -- there are patients who are CD70 negative. And those patients, there is really no evidence, strong evidence of clinical activity. So what we have done is introducing in vitro diagnostic screening assay that will allow us to test the patient's tumor before the treatment and if they're CD70 negative, they will be excluded from the study.

Is the screen and the ability to identify them pretty consistent at this point? Were there any hurdles in kind of implementing this in a commercial situation?

So for the [ CDs ] in the renal cell, I mean for those who may not know this, in vitro diagnostic assay has to be the indication specific in terms of validation that has been analytically validated with the samples. And in terms of screening ability, it is an investigational screening assay, but the intent is that as we advance the CD70 in renal cell, the diagnostic assay will be also advanced so that we can use that to select the patients if the product goes to the market.

Is there a minimal level of expression that's required here?

That is -- at this point, we know that if the CD70, the expression is negative. It doesn't seem to work and scientifically and biologically, that makes a lot of sense. What is the minimum level that you require, that is something that we will establish as we get more patient experience.

So we will get an understanding of this through the upcoming data set?

We'll have a much better understanding of how much -- we will have much better understanding as we treat more patients.

Perfect. At the R&D Day, you introduced us to the Dagger technology. Can you discuss what it is and how you're incorporating it within your pipeline and in combination with some 647?

Yes. I'm glad that you brought up the Dagger technology. It's a fascinating concept. So CD70 CAR, it recognized CD70 as a target. And CD70 is expressed in renal cell cancer. It is also expressed in certain lymphocytes. And especially B cells or T cells that are activated, they upregulate CD70. What that sort of translates is in the allogeneic CAR-T, one of the hurdles that we had to overcome so far is making sure the allogeneic CAR-T is not rejected by the patient's immune system. With a CD70 CAR in an early indication that we have -- I mean, we have enough laboratory experience. I'm talking about the clinical experience such as seeing the CAR-T expansion. What appears to be happening is our ALLO-316 CD70 CAR is able to go after activated T cells. And these are activated alloreactive T cells that are trying to destroy the allogeneic CAR T cells, but they are eliminating those cells while leaving nonactivated T cells alone. And I think that is what's really contributing to this very unique cell expansion profile that we're seeing with the ALLO-316. Nobody has shown anything like this. This is really differentiating from how one think about how to protect the allogeneic CAR T cells from the immune rejection. So the concept has now advanced internally where we are putting CD70 CAR together with another [ CAR ] thereby protecting the entire CAR T cells. And that's what we call as a Dagger. And we have shown preclinically that it works with CD19 as well as other target directed CARs. So it really is becoming a platform technologies. And preclinical group, the research is really preparing to generate all the next-generation construct that is using -- that is based on the Dagger technology. So why is this interesting is that, one, you will be able to control the ALLO rejection much better. And also there is opportunity to pare down the lymphodepletion, which can open up the use of the CAR T more broadly especially as you think about earlier lines in the community setting or potentially even outside oncology.

And just pivoting to multiple myeloma. Just remind us here on where the strategy lies now. As you think about further optimizing, what are these levers you're playing with? And when will we have an understanding of where that's ending up?

Yes. So we -- the multiple myeloma, we have ALLO-715 that has shown a proof of concept. About a little less than a year ago, we decided to pass the program to review the manufacturing process for potential improvement. Essentially looking for manufacturing process and looking for improvement, that is done. Now the discussion that we are having is multiple myeloma, especially BCMA-targeting therapy is getting very crowded. Is that the right resource that we should be sort of putting into the BCMA program. But should we simply think about this as a potential partnering opportunity. So that's what's going on in program and could go into the clinic sooner than what we had initially planned, but I think there is a bigger discussion that we have to have before making -- finalizing what to do with that.

Got it. And is the manufacturing optimization or changes alone enough to get you to the profile you want to get to? Or are you thinking about TurboCAR or any kind of other aspects?

So here, the profile that in the multiple myeloma, especially in BCMA is, well, there are 2 approved products. Carvykti, which is pretty remarkable CAR-T program with efficacy that is really nobody outside has been able to produce that kind of efficacy and then Abecma. In our Phase I study of 715, what we have shown is that our profile is more close to Abecma rather than Carvykti. So with the manufacturing process, can we push it up to Carvykti. Preclinically, it looks good, but ultimately, that's a clinical question. So I think before just jumping into and running the study, we want to be very thoughtful about how to make that determination. And I think there is a -- in a pretty reasonable sort of thought process behind the [indiscernible], well, maybe this is better to think about finding a partner.

Maybe just to pull on that thread. So between capital allocation and partnerships, how are you -- I guess, how are you allocating across everything, your 3 programs, your technologies at this point?

So right now, the pivotal study is #1 priority. And if anything, there is a growing need as we think about the earlier lines. Number 2 probably is a solid tumor. And solid tumor at this point, CD70 program, we can continue to do so. But as we talked about, there is a need to expand that into different directions based on the preclinical data. It's based on the clinical data that we have generated. And then there is a very attractive targets where the CAR construct is ready to go move forward, DLL3 and Claudin 18.2 that Eric has mentioned. Again, we're not able to fully resource that. So right now, our main focus is let's just make sure that CD19 program is fully resourced and let's keep the CD70 going until we either raise money or we enter into the partnership that will allow us to really spend more effort on the other tumor programs.

Any questions from the audience?

As you think about moving CD19 into earlier lines, what type of profile do you think would be competitive in that setting? And what is the bar?

So in the earlier lines, I mean I think safety does matter a little bit more than in the late stage. I mean so far, the safety profile that we see in the third-line setting, it looks very favorable. So I think there is a lot of plus side. In terms of the efficacy, I mean, obviously, the efficacy, the better it is, much easier. But you're talking essentially in a randomized study, being able to come better than the standard of care.

Well, with that, thank you so much. And Eric, you're going to be very missed in the context of Allogene, and we look forward to continuing to work with you.

Thank you, Sal. It's been a pleasure.

Clearly, Eric will be missed, but he's not going anywhere. And thank you very much.

Thank you, David.