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

Good morning. Thanks for joining us for another session at the 42nd JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the senior biotech analysts here at the firm. I'm joined by my associate, [ John Kim ], who is in the audience. On stage, we have Allogene CEO, David Chang. I'll pass the mic to David briefly for a short presentation, followed by a live Q&A. If you're joining us live, you can submit the questions for the team through our conference portal. David, the stage is yours.

Hey Brian, Happy New Year, and thanks for having me on the podium today. And for those who are in the audience, thanks for interest in what we are doing at Allogene. Legal disclaimer, and this is the beginning of the year. And this year, we have made some very important announcement about how we are redirecting our development program. The 4 components of the announcements are: One, advancing our lead program cema-cel, cemacabtagene-cel, in the first-line large B-cell consolidation. And I'll go a little bit more into the details of how we intend to do that and why this is the right time to do that. The second announcement is expanding our cema-cel program into leukemia, CLL, where there appears to be a growing unmet medical need in patients who have previously been exposed to BTK inhibitors as well as BCL2 inhibitors. The third important announcement, and this is a preclinical program that will go into the IND in early 2025, is advancing ALLO-329 into the autoimmune indication. This is a dual CAR construct that can target CD19 as well as activated T cells, which we believe will address the pathogenic B cells and T cells, which are critical components of any autoimmune diseases. And we also provided updates on what we are doing with ALLO-316 in the renal cell cancer, where we're trying to fine-tune the recommended doses that we can advance to the dose expansion as well as potential Phase II indications. One thing that we also like to emphasize is that Allogene has made a lot of investment on the manufacturing infrastructure. And we have a state-of-art manufacturing facility, which we call Cell Forge 1. And we will continue to focus manufacturing of our product candidates at the Cell Forge 1, which we believe is a quite distinct strategic advantage as we advance these multiple programs in the clinical setting. So now let's talk about ALPHA3. This is a very differentiated approach in how we can advance the development candidate into the frontline large B-cell lymphoma. Just in the setting, everybody who's developing drugs in the large B-cell lymphoma wants to move into the frontline setting. But this is also an indication or the setting where the existing treatment R-CHOP, [ pola-B-CHOP ] is really addressing the need effectively. But we believe that this is the right time to advance our cema-cel program into the front line, having demonstrated complete remission and durable responses in the refractory setting where the -- in a much harder to treat refractory setting. And also, we are leveraging with our partner who is developing a very sensitive and specific diagnostic assay. They will identify patients who are destined to progress at the completion of the R-CHOP treatment. We also believe that this is the right approach, offering immediately available therapy. And also, we intend to advance this program focusing on clinical trial sites that represents the community cancer centers, which really opens up the use of CAR T that currently is limited to the tertiary centers. And in terms of the enabling factors is the data that we have generated in the refractory setting. This is a very hard to treat patient population where our studies including the data that we have presented last year's ASCO meeting have shown very convincing complete remission rate. So what's shown here in the red box is FCA90 Alloy. FCA90 represents a lymphodepletion regimen that we are using; Alloy is the manufacturing process that we use to manufacture cema-cel in this program. We have shown the overall response rate of 67% and an impressive complete remission rate of 58%. And the complete remission is also durable. And at 6 months, 42% of treated patients continue to be in complete remission. Also notable is the adverse event profile. It's a small set of data, but cytokine release syndrome and neurotoxicity events, which is well-known adverse events of the CAR T therapy. We haven't seen any great grievance and also the infection related to the treatment is relatively modest at 8%. Just for comparison, we have also listed this slide what the autologous CAR T has shown in the similar patient population. Another thing that's really very innovation that's allowing us to do that is advancement in the in-vitro diagnostic assays. One of the challenges in the frontline large B-cell lymphoma is that the existing standard of care is very effective and trying to develop a drug on top of an effective treatment is a very challenging situation that sometimes requires very large clinical studies. What we are leveraging is the beauty of this in-vitro diagnostic assay. It's a next-gen sequencing that allows identification of minimum residual disease at the completion of the frontline treatment with the 6 cycles of R-CHOP. The assay provides about 500-fold increased sensitivity to other currently existing assays such as clonoSEQ or CapSeQ. Also impressive is that when the patient who are tested negative by this MRD assay, when you follow those patients, essentially none of those patients have a recurrence. However, if you test positive, those patients -- approximately 90% of the patients do progress within the first 3 years of the follow-up. And when you look at the red curve, which represents the patients who tested positive to MRD, the rate of recurrence is relatively quick. You see a very sharp drop in first few months after completion of the R-CHOP treatment. And when we estimate the median time to progression, it's coming to somewhere between 6 to 12 months. So this -- what this allows us to do is really we're looking at how we can think about the treatment in the frontline setting. What's shown as a first-line treatment on the left is the current standard of care. Once the diagnosis is made, patient undergoes 6 cycles of R-CHOP. Majority of these patients have a favorable outcome. There are some patients who progress through the R-CHOP and they go straight into the second line. But among those patients who have a favorable response, when you follow them long term, the outcome is quite different. 2/3 of the patients or 60% of the original patients continue to have the remission. In essence, they are cured and they do not need any additional treatment. The other 30%, while you consider them to be having a complete remission or a very good partial response, when you follow those people, they recur. And these are the patients that the MRD assay that we are working with our partner, Foresight Diagnostics, is allowing us to identify. So what really -- that results is focusing the first-line treatment with a cema-cel in this patient population that are destined to have a disease relapse. And the plan is to start enrolling patients into this potential pivotal study in the middle of 2024. Activities already underway. The initial plan is to randomize patients 1:1:1 into 3 different arms. One is the observation. This will be the standard of care, which is essentially watch and wait, where you follow the patients with periodic radiographic scans to see how their disease is doing. The other 2 is a treatment arm. 2 arms are different by the use of different lymphodepletion regimen, but they both get -- both arms gets the cema-cel treatment afterwards. We intend to enroll a small subset of overall study into this initial 3-arm design with a plan to select the lymphodepletion, which we project to occur in the first half of 2025. From that point on, the study will proceed as a 1:1 randomization into observation and selective lymphodepletion. The way that we foresee how we're going to select the lymphodepletion is based on the conversion of MRD positive, which is the enrolling patients and treated patients, to MRD-negative state as well as some safety considerations. The primary analysis endpoint that we'll be using at the end of the study is event-free survival by the blinded independent central review as well as using the secondary endpoints of progression-free survival as well as overall survival. The study intend to have approximately 110 patients into the key observation in the treatment arm. And we will provide further updates as we start the study in the middle of 2024. Study is designed as a seamless and very efficient design, which will accelerate both enrollment as well as the data readout. Now what that's allowing us to do is really looking at the LBCL population and the patients that could be addressable with this approach. When you look at the U.S., there will be about 34,000 first-line drug-treated patients and approximately 30% of those patients will progress after the frontline R-CHOP treatment. We believe that patients who will progress can be identified by this MRD assay and the data supports that assumption. And we estimate that about 75% of the patients will undergo the testing. That leads to a potential 7,700 patients who could be treated with cema-cel if pending the data outcome, representing approximately $3 billion of revenue potential. And why does it matter? I mean this is really what we see as a paradigm shifting in how we think about development of allogeneic CAR T, thinking differently, not just following the development of autologous cell therapy, but really leveraging the advantages of the allogeneic. What's shown on the left is the growth of autologous cell therapy in the non-Hodgkin's lymphoma. Third line alone had a revenue of about $500 million. When the second line approval came in, there was a very rapid adoption, but the most of the growth was happening in the second line, and there was no -- very limited growth in the third line and we expect that pattern to continue through 2032. When the frontline approval pending the outcome of ALPHA3 study, approach of using cema-cel in the consolidation is available, we expect that most of the use of the CAR T in the large B cell will occur in the frontline consolidation setting. Now let me talk about the second program, CLL. CLL, approximately 7 to 10 years ago when BTK inhibitors and BCL2 inhibitors were introduced to the standard of care, that was essentially considered as a cured disease where there was no development opportunities. Investigators at the time was advising us to, CLL, I don't really see a development opportunity with a CAR T. Ten years later, as these patients who are not cured with a BTK inhibitor or a B-cell inhibitor treatment progress, the same investigators are coming to us saying that there is a need for more effective treatment in CLL patients after BTK inhibitor and after BCL2 inhibitor therapy. So there is a growing need. And we believe that this need can be particularly well addressed with allogeneic CAR T that does not depend patients on T cells, which are in a very immuno-suppressed environment. And the studies have shown the patient-derived T cells from the CLL patients do not function well. Those problems can be addressed by using the allogeneic cell products manufactured from the healthy donors. The market opportunity in the CLL, we foresee to be approximately $3 billion, and I'll go a little bit more into how we come to that estimate. The study design, we are also leveraging our current clinical trial footprint, where the same sites that we are using for the treatment of non-Hodgkin's lymphoma because the physicians are also treating the CLL patients. We will introduce another arm into our ongoing ALPHA2 study to really efficiently move into the CLL. And our plan is start enrolling CLL patients in the first quarter of this year, which can potentially lead to the readout of the Phase I data by the end of this year. Pending on the outcome of the data, we plan to advance the program into Phase II, which can be a potentially pivotal study. In terms of the patient estimate is listed here, there are approximately 22,000 patients who are treated for CLL in the first-line setting. The second-line number as well as third-line numbers are also included here. The target patient population is third-line who have received both BTK inhibitors and BCL2 inhibitors or second-line patients with high-risk features who have received BTK inhibitors, and that leads to a total of 7,500 addressable patient number per year leading to a market potential of $3 billion. Now something that we've been alluding for some time is what we're going to do in the autoimmune indications. I think many of you are aware with the data coming with a CAR T in autoimmune disease indications, which is really tantalizing. The autoimmune drug development has been really driven by being able to modify the disease and stop the progression of the disease. What the CAR T has shown is a paradigm shift in how you can manage the patients with autoimmune, not just modifying the disease but resetting the immune system so that onetime trick can provide a long-term -- put the patient into the long-term remission. This is really tantalizing and that can really -- data that can really expand the use of CAR T in different indications. We believe that ALLO-329 provides the right product attributes. As I've said previously, ALLO-329 is a dual CAR targeting CD19 as well as CD70, which endows the product to go after both pathogenic B cells as well as T cells. Another unique feature of the ALLO-329 comes from the fact that it has a CD70 component, which has an intrinsic lymphodepleting ability, which allows allogeneic CAR T cells to expand well, as well as potentially reducing the lymphodepletion requirement, which we consider to be one of the biggest barrier of advancing the CAR T into the autoimmune indications. So let me talk little bit about this unique features of ALLO-329, which comes from our CD70 program that's already being studied in the renal cell cancer. What's shown on the left is -- I'm a bit of a science geek, so I have to show the flow diagram. But this really illustrates that the CD70 CAR can go after activated T cells. Probably more important is what's shown on the right side, which is looking at the CAR T expansion kinetics. What's shown in #1 and #2 is administering ALLO-316 in patients with renal cell cancer with 2 different lymphodepletion both of which gives a much better cell expansion than what we have observed in other allogeneic CAR T. And this is attributed uniquely to the Dagger effect that comes from the CD70. What the kinetics on 1 and 2 also shows is that cell expansion is a little bit better, especially when it comes to persistence when we use the lymphodepletion of FC that contains also ALLO-647. But even without ALLO-647, which is shown as #1 FC lymphodepletion alone, we get very robust cell expansion, a couple logs of magnitude better than what we have seen with ALLO-501A. And this is the unique biology of the Dagger technology. So as you know, the autoimmune indications, much focus is in the lupus nephritis where much of the data has become available. But when you think about autoimmune indications, where autoantibodies play a big role, the indications now starts looking much broadly and that includes myositis. And there's also some CAR T data suggesting that it works in myositis, systemic sclerosis, multiple sclerosis, myasthenia gravis. What's captured here is the indications that are potentially addressed by CAR T therapy, whether it's targeting CD19 and probably better when you're targeting both CD19 and CD70. And what we believe the unique attribute that ALLO-329 can bring is, one, single infusion that allows the resetting of the immune system that has already been shown with autologous CAR T and we can make an inference based on what our ALL0-501A program has done in the non-Hodgkin's lymphoma, we believe that we can do the same. Now the unique attributes of the allogeneic approach is it's the off-the-shelf on-demand. We have shown that. It provides the scalability and economics where we can manufacture the cells in large-scale and much more cost-effective way. It also allows the ability to manipulate the genes in a more complex gene engineering approach in narrowing the CAR T cells to do more than one thing as we have shown with the dual CAR approach. Probably equally important in this setting is the need to bring the therapy to the outpatient setting as well as being able to investigate ability to have the same kind of immune resetting outcome with a simpler lymphodepletion. And we believe the Dagger component of ALLO-329 brings this possibility. And our plan is to advance this program. Currently, we are involved in the IND-enabling manufacturing process and analytic assay development. We plan to submit for the IND to initiate the clinical study in autoimmune indication in the first half of 2025 and pending the pace of the patient enrollment, potential clinical proof of concept could be available by the year-end 2025. And the last thing that I want to talk about is what we are doing in the renal cell cancer. We have ALLO-316 that we have been studying in renal cell cancer. This is a solid tumor, which remains one of the still yet to be untapped opportunities with a CAR T. We believe the time is right. I think there is a growing evidence that going after a single target with the chimeric antigen receptor approach can provide durable remission in some patients with solid tumors. And we also believe that 316 program provides a very unique opportunity as we have shown in the early data where we have seen approximately 30% response rate in patients with a CD70-positive renal cell cancer. And also, as I've shown in the previous slide, with ALLO-316 we can achieve exceptional cell expansion and persistence, which we believe is critical to effectively manage the solid tumor. So this is a program ALLO-316 is a very active molecule. And what we are doing is in a Phase I study, continuing to refine the lymphodepletion and cell dose trying to find the right therapeutic index. And we definitely have seen some hyperinflammatory responses after in patients who received ALLO-316 and we have developed the treatment algorithm that we are currently testing in the clinic. So giving some more details about what we have seen in 316 is on this slide. As I've said, in the CD70-positive tumor, we see approximately 30% response rate in a patient pool of 10 patients, small number but very tantalizing data. And also impressive is what is shown on the bottom, a radiographic image of a patient with a large renal cell tumor that's shown as a bright irregular shaped spot. I don't know whether I have a pointer and on the -- in the primary tumor on the left side of the kidney. And the subsequent radiographic imaging done on day 28 and day 56 shows the significant reduction in the size of that tumor. I just want to highlight this particular case, because in renal cell cancer, most checkpoint inhibitors do not give that kind of dramatic tumor reduction in the primary tumor. And I think this really highlights the potential of what we can do with ALLO-316 in CD70-positive renal cell cancer. So next step for the TRAVERSE step is we will be updating what the safety algorithm that we have introduced to the ongoing study in the second quarter of this year. And towards the year-end, we will provide more comprehensive updates on the Phase I study. And hopefully by then, we expect that the lymphodepletion and cell dose to be more finely refined. The manufacturing facility, I think this is some of the key differentiation for any company that's in the CAR T space or the cell therapy space. We have the state-of-the-art manufacturing facility that is fully operational. Not only that, we have a team of manufacturing operators that can do the process development as well as analytic assay development, which is key to advancing the programs into the clinics. And we will continue to leverage this -- our unique ability to do all of that plus having our own manufacturing facility as we expand our clinical programs. So I have sort of talked about a lot of different events that is to occur throughout the year, but this slide really summarizes the data flow throughout 2024 and extending into the 2025. Most important activity for us in 2024 is starting the ALPHA3 study, enrolling the patients which we expect to occur in the midyear -- middle of this year. And also at the same time, as I've talked about, we will be initiating enrollment of cema-cel into the CLL patients in the first quarter with the expected data readout from the Phase I study by the year-end. And also at the end, we'll be providing update on our solid tumor program of ALLO-316. And 2025 gets even more exciting as we will provide more updates on what's happening with ALPHA3, which will be -- include the selection of the lymphodepletion as well as advancing our autoimmune program ALLO-329 into the clinics. So with that, I very much appreciate your attention to the presentation. And I'm going to invite our Head of R&D, Zach Roberts, to the front to address -- answer any questions that you may have.

Great. We'll begin the Q&A session. For those of you who are in the audience, if you have any questions, you can raise your hand. We have a runner on the floor. For those joining us virtually, you can submit questions on the portal. So I'll kick off with a couple of questions. Just the last couple of days, you had really significant changes across your R&D portfolio. Maybe just one is when you think about the -- how long has it been when you start thinking about this pivot to the frontline consolidation setting. I know that you have started the ALPHA2 in the third-line for quite some time, I think back in late 2022. What really drove that strategy change? And I guess, why does it make sense to do it now?

Yes, I can answer that question, and I'm going to also ask Zach to further expand on that. He really has been the mastermind behind the frontline strategy. When we started the third-line study, we are already thinking about what is our path to the early-line large B-cell lymphoma. And that thinking process has been going on for some time. What's really enabling us to do that such a bold move is really many different things coming in together. Our continued following of the patients who are treated in the refractory setting and seeing the durability of response that we are seeing and growing confidence that allogeneic CAR T works just as well as autologous CAR T in the refractory setting. That's number 1. Number 2 is really the development of essentially the availability of the MRD assay because our strategy is really centered on offering the cema-cel treatment to only those patients who needs the treatment and that MRD assay allows to do that. And with that, we formulate different options and consider pros and cons and come to our study design. And throughout that, we were constantly getting inputs from KOLs. Not just the KOLs from the tertiary centers where the CAR T therapy is given, but also the clinical investigators and clinicians who take care of the patients in the community-based cancer treatment centers. And then last thing that we had to at least get some feedback was the regulatory interaction with FDA. Zach, do you want to sort of add to that?

Yes. I would just add a couple of points. At the beginning of this conversation as we first were beginning to understand this new MRD test and speaking with those KOLs about what kind of an impact that test alone could have on the practice of care for these LBCL patients, it became quite obvious to us that this would open an opportunity for us to run a clinical study, again, focusing specifically on those patients who need additional care because right now we -- there's no way for us to know which patients are going to need more care and which are not. So what this test is allowing us to do is essentially see into the future and really focus that consolidation strategy on those patients. So as that concept began to take shape in our minds and through conversations with regulators, it became quite obvious that this is going to be a potentially practice-changing opportunity for us. And so we really just took the idea and continued to push it, and here we are.

Almost uniform feedback from the KOLs and every clinician that we have spoken with and said, this is the right study, and this is the right approach with allogeneic CAR T. So stay tuned.

Any questions from the audience? I guess conceptually, when you think about the first line, I think there are 2 parts in it. Is that -- I think -- how are you thinking about the receptivity around you're asking patients who are in complete remission after R-CHOP, 6 cycles of R-CHOP to go on Cy/Flu and also, well, plus 647 and then also 501A. How receptive are they -- are KOLs in terms of getting that piece in? Because today, we're -- doctors are somewhat hand-waving around testing MRD after patients are in remission in R-CHOP. So can you kind of address those 2 points?

Yes. I mean, great question. I mean you have spoken -- I'm going to ask Zach to respond to both of those questions. I mean I have to say that I've been involved in the clinical development for many years but I have never encountered this kind of positive interactions with the investigators, where they are just as eager as we are to be involved in the study and really in a way take the whole management of the frontline large B-cell lymphoma in a different direction.