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

Thank you for standing by and welcome to Allogene Therapeutics ALPHA3 trial update. [Operator Instructions] Please be aware that today's conference is being recorded. I would now like to turn the call over to Christine Cassiano, Chief Corporate Affairs and Brand Strategy Officer. Ms. Cassiano, please go ahead.

Thank you, operator, and thanks to all of you for joining us on the call this morning. Today, before market open, Allogene issued a press release that provided an update on our ALPHA3 trial. That press release and this webcast are available on our website. Following prepared remarks by Dr. David Chang, President and CEO; and Dr. Zachry Roberts, Executive Vice President of R&D and Chief Medical Officer, we'll open the line for a focused Q&A. While we'll aim to keep the call concise, its a Friday morning, we welcome your questions and appreciate your engagement. During today's call, we will be making certain forward-looking statements. These may include statements regarding the success and timing of our ongoing and planned clinical trials, data presentations, regulatory filings, future research and development efforts, manufacturing capabilities, the safety and efficacy of our product candidates, commercial market forecasts and financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of potential risks can be found in our press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements, and Allogene disclaims any obligation to update these statements. I'll now turn the call over to David.

Thank you, Christine. Today, we are providing an important update on our ALPHA3 study of cema-cel in first-line consolidation for large B-cell lymphoma. We have taken decisive steps that we believe will ultimately improve patient safety, streamline our clinical development path, and potentially support adoption in the long-term for community cancer centers. In close consultation with the ALPHA3 DSMB and Steering Committee, as well as discussion with the FDA, we have elected to move forward with standard fludarabine and cyclophosphamide as sole lymphodepletion regimen in the study. As a result, the FCA arm, which includes ALLO-647 has been closed. This decision follows a Grade 5 adverse events in a patient who had received FCA lymphodepletion. The individual developed a fatal adenoviral hepatitis. While cema-cel was not implicated, the immune suppression associated with ALLO-647, an anti-CD52 monoclonal antibody likely contributed to the outcome. The decision to enroll in a clinical study can be a difficult one and we are grateful for the trust patients place in us in making that decision. This is an outcome we do our utmost to avoid, and we offer our deepest sympathies to the family. Following the event, we conducted an unplanned review of safety and biomarker data. The findings indicate an encouraging MRD conversion and the supportive safety profile in the standard FCM, giving us confidence that our prolonged lymphodepletion is not needed to clear minimum residual disease. From this point forward, the ALPHA3 study will proceed with a streamlined 2-arm trial comparing cema-cel after standard FC lymphodepletion versus observation. The planned futility analysis remains on track for the first half of 2026. Importantly, this represents more than an update to ALPHA3. It signals a strategic evolution in Allogene's approach. For ALPHA3 specifically, we believe that retiring ALLO-647 enhances the safety simplicity and scalability of our trial design, and long-term product vision. More broadly, ALLO-647 is no longer included in any trial open for enrollment or pipeline program. Instead, our efforts are focused on advancing next-generation AlloCAR T product candidates, powered by our Dagger platform technology. Dagger is designed to minimize or even eliminate the need for standard lymphodepletion, something we believe is key to unlocking broader access to CAR-T. That vision is already reflected in programs like ALLO-316 and ALLO-329, where Dagger technology is helping reshaping expectations for solid tumors and autoimmune disease. With that, I will turn it over to Zach.

Thank you, David. As David noted, the decision to close the FCA arm was made as a result of a patient who developed rapid and severe liver inflammation and failure due to systemic adenovirus infection. Adenovirus infection is typically associated with mild and localized symptoms, but in patients with low T cell counts can develop into severe disease. The patient initially presented approximately 7 weeks after receiving cema-cel with mild symptoms, which then rapidly progressed despite aggressive measures. This rapid deterioration was attributed to the prolonged immunosuppression associated with the monoclonal antibody ALLO-647 based-lymphodepletion and not the cell therapy itself. In the wake of that event, we moved swiftly to evaluate safety and biomarker data from the trial to ensure the safety of future study participants, as well as to confirm preliminary evidence of benefit. The findings from this unplanned review, which indicate encouraging MRD conversion and supportive safety profile in the standard FC arm, supported early closure of the FCA arm and progression with the trial as -- with no other changes. While early, the data strengthens our confidence in moving forward with the standard FC lymphodepletion, a regimen that we believe investigators trust and patients can access more safely and conveniently. Since communicating this to investigators, we've received encouraging feedback that streamlining the study quickly in response to this event may bring benefit to the trial. This decision prioritizes patient safety by reducing the risks associated with deep immunosuppression associated with CD52 antibodies, simplifies the trial conduct and gives our patients a simpler regimen, one that aligns more closely with how they want to treat patients in the real world. During this time, prescreening and MRD testing has continued at the encouraging pace we've seen since earlier this year. As of today, our footprint includes over 50 activated sites across the U.S. and Canada, and we are preparing to open additional international sites. We believe the decision we've made in response to this unfortunate event not only puts patient safety first, but also preserves the scientific integrity of ALPHA3, while potentially enhancing its operational strength and real-world relevance. The trial is now uniquely positioned to answer our pivotal clinical question, can a single off-the-shelf CAR T infusion delivered early when the disease burden is low and paired with the trusted lymphodepletion regimen, alter the trajectory of disease for high-risk LBCL patients? We are more confident than ever that the answer to that question is yes. Our commitment to advancing this trial has never been stronger, and our path forward is now better defined, more efficient and more closely aligned with current practice, which ultimately will help us deliver on Allogene's mission to bring the promise of CAR T cells to patients in need. I'll now turn the call back to David.

Before we address your questions, I want to take a moment to underscore what today's update represents for Allogene and for the ALPHA3 program. The actions we have taken reflect a clear and confident path away from ALLO-647, a component that introduced complexity, and towards a trial design that we believe is cleaner, safer, and will align with the needs of both investigators and patients. Importantly, the ALPHA3 protocol retains its statistical integrity and streamlines the regulatory pathway. That gives us the opportunity to reach more patients more quickly, and potentially redefine how care is delivered in the first-line setting. More broadly, this marks a turning point for Allogene's platform strategy. The retirement of ALLO-647 is a strategic decision rooted in a real-world experience. As the field evolves, our approach reflects where clinical practice is headed, not well it has been. In the near term, it sharpens the path forward for the ALPHA3 trial. Looking ahead, it paves the way for our Dagger technology enabled programs, which we believe define the future of allogeneic cell therapy. Of -- the-shelf with reduced or no lymphodepletion, and build for a real word impact at scale. These changes strengthen ALPHA3 and sharpen Allogene's competitive edge with safer regimens, our patient potential and real-world practicality, we are positioning Allogene to lead allogeneic CAR-T into everyday cancer care well beyond the academic setting. We will now open the call for questions.

[Operator Instructions] The first question comes from Michael Yee with Jefferies.

Maybe two questions. One is as you've progressed since the last update, can you talk about how many folks have actually gotten the screening test? And so therefore, what is the actual take rate versus the people who've been signed up? And how does the MRD positivity number look early on? And then what percent are actually getting the [ drug ]? So like what is the flow chart look like? And then the second question is then based on today's announcement, they'll now be randomized 1:1, I guess. And so does that change what you're looking for at the interim in the first half of '26, which I think was based on 36 patients?

Mike, thanks for both questions. In terms of patient screening activity, as Zach has stated in the prepared remarks, it has been extremely active. With that, I will ask Zach to provide more color.

Yes. Thanks, Mike and David. So Mike, great question. I think what I heard was how many of the patients who were actually being approached for the study actually undergoing tests? And I would say that, that -- I don't have that exact number, but I would say it's the overwhelming majority, over 90%, I would say, the patients who get invited to undergo the MRD screening test actually end up undergoing the test. As for the next layer, we are -- the number of MRD positive is consistent with what we had modeled, somewhere between sort of 1 in 4, to 1 in 6 in that range, depending on the risk profile of the patient coming in. So all of that is coming in as we have expected and as we have modeled in our current forecast. And as David pointed out, the activity remains very, very high ever since we kind of picked up at the beginning of this year. As for the second question around the change in the number of patients that need to be enrolled, there will be a slight reduction in the number of patients overall that need to be -- need to come into the study because we are closing this FDA arm prior to completing its full cohort. But the analysis remains on track is first half of next year.

The next question comes from Tyler Van Buren with TD Cowen.

I have a couple for you as well. First, It'd be great just to have you elaborate on your confidence that this event is related to ALLO-647, and not cema-cel. It's logical, given that FCA increases lymphodepletion completion versus FC, but is the lack of relation to cema-cel based primarily on the lack of adeno infection, or liver failure with FC and cema-cel? Or are there other factors such as cell persistence of cema-cel versus the 647 antibody that you mentioned? And the second question is, can you elaborate on what encouraging means when referring to the MRD conversion rate as part of the unplanned review?

So I can jump in on that one. Thanks, Tyler. So the first question around our confidence regarding the 647 based LD relatedness, versus any role of cema-cel. I would say that our confidence on that is just about as high as it gets just based on the intended lymphodepletion that is downstream of CD52 monoclonal antibody like alemtuzumab or ALLO-647, and that is primarily directed at the T cells. And in this patient as in others, there was quite a profound suppression of the T cell count in response to that ALLO-647. And it is actually the low T cell count that gives rise to the risk of disseminated adenoviral infection, not anything related to a B-cell-directed cell therapy. Similarly, we have seen the frank disappearance of the cema-cel by the time that this event occurred about 7 weeks after the patient received the cells. So it was -- for all the folks who looked at this data, we were all pretty much unanimously in agreement that this was related to the lymphodepletion regimen. And sorry, Tyler, what was the second question?

Yes. Just elaborate on what encouraging means when referring to the MRD conversion rate?

Yes. So we're not going to get into numbers of patients that we've looked at. But I can -- what I can say is that there was -- at this unplanned analysis, there was -- it looked like equipoise in terms of benefit being derived from this consolidation strategy, particularly as it related to the safety related to the Fc only lymphodepletion arm, which those patients are doing very well from a safety perspective.

And the next question will come from Salveen Richter with Goldman Sachs.

Just two for me here. One is, given the study is now proceeding as a 2-arm study and you're no longer enrolling in the enhanced LD arm, does that have any impact on study timing, like a futility in the early part of first half '26? Or when can we expect the primary EFS analysis in BLA submission? And then secondly, how many patients were enrolled in the enhanced LD arm and how many experienced viral infections, or severe viral infections attributed to 647?

Thanks, Salveen. I'll take this one. So with respect to the first question and does this early closure of FCA lead to a change in the anticipated study milestone timing? The short answer to that question is no. We're still guiding towards an interim futility analysis in the FC arm first half of next year. And we will provide an update around the primary analysis and BLA submission when we get to that time point. So no changes to guidance around the overall timing of the study milestones. And I'm sorry, I didn't jot down the second question, Salveen. Would you mind repeating that one?

Sure. Just how many patients were enrolled in the enhanced arm? And how many experienced viral infections, or severe viral infections, that were attributed to 647?

Yes. So we -- as previously, we won't be sharing sort of specifics around enrollment. But what I can say is that we have did an analysis across our safety database at the timing of this event. And looking at the CD19 experience, we had never seen a case of severe adenoviral infection in ALLO-501 or ALLO-501A. This is the first one we did. There was on previous adenovirus infection, but it was -- it resolved without any lasting impact at all.

And the next question will come from Biren Amin with Piper Sandler.

So you mentioned that you would need fewer patients for the ALPHA3 trial. Can you maybe quantify what your new target enrollment numbers are? I think the prior target enrollment was around 240 patients all in for the trial? And then second question, given the futility is coming up in first half '26, can you maybe just talk about what you're hoping to see with that analysis? How many patients will you need to conduct the futility? And then what's the bar for futility? Basically comparable MRD conversion to -- with cema-cel to the control arm to hit futility? Or is it -- would the cema-cel arm have to be something worse than the control arm to hit futility?

So thanks, Biren. So with respect to first question, how many fewer patients overall. So we are not making any updates right now to the total number of patients that are required. The -- as David and I both mentioned in the prepared remarks, the overall statistical design of the study is unchanged with this -- the elimination of this FCA arm. So it will just go forward as a 1:1. The hypothesis testing is going to be performed in the same number of patients, 110 versus 110. There will -- as I mentioned in a previous answer, there will be some -- a handful of fewer patients overall, but it's not such a large amount that would require us to update the overall target number of patients as approximately 240. As far as the second question goes, so we had previously disclosed that the futility analysis would be performed on 12 patients in each of the 3 arms. That analysis will be performed now on just the 2 ongoing arms, FC and the observation arms. And as far for the ballpark for futility, we haven't specifically called that out. But suffice it to say, we are going to be looking for an improvement in MRD clearance, compared to the observation, arm based on what we know from the MRD test performance characteristics, virtually none of the patients who are in the observation arm are expected to spontaneously clear their MRD, whereas we are, as pointed out, seeing an encouraging rate of MRD conversion in those patients who received the FC lymphodepletion plus cema-cel.

And our next question will come from Brian Cheng with JPMorgan.

Maybe just first, just from your early look at the MRD conversion rate, what is the conversion delta that you're seeing between the FCA arm and the FC arm? We're curious on the efficacy that you might not be capturing when you're moving forward [ without ] 647? And then second is, was there any pausing in the enrollment of the study? If there was, how long was the pause? And how could that potentially impact the pace of enrollment and also your time line towards the trial completion of enrollment?

Okay. Thanks, Brian. So the first question, what is the conversion delta between FC and FCA? I won't give you a specific number, and I'll even say that I think that we were quite pleased to see that those outcomes were highly similar. So we do feel like we're in a good place, as we pointed out in our prepared remarks. We are confident about the potential for FC plus cema-cel to make a difference here. So that's why we're carrying forward with the agreement to the DSMB steering committee, et cetera. As far as the timing of enrollment, so we have continued to screen MRD patients throughout this entire process and the numbers continue to remain high. There is an adjustment to the protocol that is required, and that is underway now. We expect this to have little to no impact in the timing of the analysis because the amendment is so targeted just to allow us to cease enrollment in the FCA arm, and patients are continuing to undergo prescreening during this period. So if they turn MRD positive, they will be able to come into the study at the point in the future. So we don't expect an impact to the timing of the analysis.

And the next question will come from Sami Corwin with William Blair.

I was curious if the patient in question was treated at a community center or an academic center? And then given the turnover at FDA and CBER, I was wondering if you could elaborate a little bit more on your engagement with FDA and how their responsiveness has been?

Sami, let me give Zach a break and chime in here. So in terms of the patient, that patient was treated in a community-based cancer center, essentially receiving the treatment more or less as an outpatient. But we do not believe that had any impact on the outcome. I think this kind of a rare event could have happened at -- whether the patient was treated in the community or academic cancer centers. So we don't see that as a major difference in the outcome. In terms of -- I'm doing the same thing that Zack is doing. Can you just repeat the second question?

Yes. Yes. Given the volatility of FDA and the recent turnover at CBER, if you could just elaborate on your engagements there?

Yes. I know that there has been a lot of comments on what's going on at the FDA. But I have to say our experience with the agency has been very productive and timely. We were quite eager to update the FDA about what's going on and our planned changes to the study, essentially dropping the FC arm. I would say the discussion occurred within days after we requested the meeting. So this was relatively very quick and a pretty collaborative and productive outcome.

And the next question will come from Jack Allen with Baird.

I know a number have been asked already, but maybe I'll just piggyback on Sami's question around the discussions with the FDA. Are there any ongoing discussions with the FDA? Any outstanding matters as it relates to implementing the amendments necessary for the study to go forward here? Trying to quantify if there's any additional risk as it relates to regulatory in the near term?

Yes. Always a great question, Jack. I would say that at this point, there is relatively no outstanding issues with the agency. So the feedback from the FDA has been very clear, and we are moving forward as Zach has outlined with randomizing patients to 1:1.

And the next question will come from Matthew Biegler with Oppenheimer.

Sorry to hear about this. Has there been any collateral damage in terms of getting patients to commit to screening now with this event? I understand it probably happened recently. But what are your -- I guess, some of your early impressions in terms of recruitment, or at least what you talked to your investigators about their ability to screen patients?

Zach, do you want to take this question?

Sure. Thanks, Matt. So I can say that we've seen no evidence thus far of any dip in MRD screening activity. Quite the contrary, we continue to see a lot of interest, even post the disclosure to our investigators of this event. I think that there was broad agreements across our investigative pool that we took the right action here by addressing this emergent safety imbalance between the two arms and closing FCA. I think actually, there was -- there is probably a chunk of our investigators who are excited that they won't have to worry about the 647 molecule anymore. That did add quite a bit of complexity on the lymphodepletion infusion days, very long days in the chair for the patients. And because of the enhanced lymphodepletion, it did put patients at somewhat higher risk of infectious complications. So having that off the table in many cases, I think, is going to streamline the conversation that investigators are having with patients knowing that they're not going to be potentially randomized to the FCA arm.

And the next question will come from Asthika Goonewardene with Truist.

This is Karina for Asthika. Have you guys observed any differences in CAR T expansion and persistence between the 2 lymphodepletion measurements? If you can share information on that? And then second question is what inspection protocols do you have in place for ALPHA3 study? And do you anticipate changing those going forward?

Karina, can you repeat the second question?

Yes. Second question is what infection protocols do you have in place for ALPHA3? And would you do you anticipate changes going forward?

Okay. Zach, do you want to take both questions?

Yes, I can take them both. So thanks, Karina. So we -- I won't talk about any additional biomarker data today other than what we've already shared. So you'll have to wait until a future update around to look at the CAR-T expansion here. The second question around infectious protocols and prophylaxis. So we actually have a very robust set of protocols of infection prophylaxis detailed within the study protocol and investigator brochure. This patient was compliant with all of those. It bears pointing out that adenovirus is a rare but known potential complication in cell therapy, predominantly in bone marrow transplantation setting where the conditioning regimens do rely on alemtuzumab. And even in those particular clinical settings where the risk is a little bit higher there is consensus among the guideline setters in transplant to not prophylax for adenovirus and to just monitor for that infection. So this patient was being very well cared for by the physician team at the center where he was. And this was an event that was really probably nothing could have been done, whether he was careful at that site, or even at a at a major academic center. These rare events come on and they come on quickly and sometimes you just don't have time to react.

And the next question will come from Samantha Semenkow with Citi.

I just have two questions following up on some others prior in the call. Just on the MRD conversion rates you're seeing for the FC arm, is that approaching what you're hoping to see in the futility analysis? I'm just trying to get a feel for how close that rate is to what would move the study forward when we see the futility analysis in the first half? And then secondly, I just wanted to clarify that the unplanned analysis. Does that impact the statistical power of any planned future analyses in the study?

Samantha. So let me take both of those excellent questions. I mean in terms of what we know about the MRD conversion. As we have said, this was an unplanned analysis and it was very limited. Having said that, as Zack has indicated, we saw very little difference in the MRD conversion between FC and FCA. And in terms of the futility boundary that we have prespecified for the upcoming analysis next year. I would say that, that analysis, I think our focus will be more on the safety analysis. I mean I think in terms of the MRD conversion rate, what we saw gives us a high level of confidence that the futility boundary will be met. So I hope that answers the question.

And [indiscernible] Samantha asked the second question, David, around altering power, and I can quickly answer that one. There is no impact to the study powering based on this unplanned analysis.

The next question will come from Reni Benjamin with Citizens.

Maybe two for me. One, what kind of biomarkers outside of, say, CAR T expansion, and MRD conversions for evaluators? And then second, with the closure of the FCA arm, which is the arm that I assumed at least would be the one moving forward. Can you tell me maybe why, or help me understand why the statistical powering assumptions for the interim and final analysis hasn't changed? Because I thought way back when, when we were running the Alpha-1 studies, I thought we had already answered this question that FDA was a better, deeper lymphodepleting regimen, or am I not remembering correctly?

Reni, Dave Chang here. Again, great questions. In terms of the important distinction that I think everybody has to sort of grasp is that the patient population of ALPHA3 study. These are patients with minimum residual disease only. So the target density, there is no bulky disease that the patient has, and also patients who are just coming out of the frontline R-CHOP regimen. So they don't have many B cells in the body. So from that perspective, we had to rethink about what's really needed to eliminate MRD only disease. And one of the hypothesis that we had set on early on is, yes, FCA is where we have the data coming from the relapsed/refractory setting where patients have bulky disease. But the patient population of ALPHA3 is a different patient population. And we felt that there was a reasonable possibility that lighter lymphodepletion with FC may be sufficient. And so far, the biomarker data indicates that indeed is the case. With respect to the first question around what else have we looked at in the unplanned analysis? MRD conversion was our primary focus, but things that were related to safety suppression of T cells and the recovery of T cells after the treatment, and all those were sort of compared between the FC and FCA.

And the last question will come from Luca Issi with RBC.

This is Lisa on for Luca. Maybe just circling back on a prior question on the FDA, but asked a bit more directly. Is there any risk that the FDA could put this on a formal clinical hold, or clinical pause? Or is that not being contemplated by the agency at this moment? Any color here would be much appreciated.

Yes. I mean I have a little bit of reluctance in sort of trying to represent the FDA. But in our conversation, that risk, I would say, I'm not concerned about that.

Got it. And maybe just a follow-up. Do you consider using lower doses of anti-CD52 as the path forward?

Definitely, that was one of the earlier considerations, but especially given that we are dealing with MRD only disease, and also in the frontline setting, where we consider the benefit/risk profile has to be a lot different than in the relapsed/refractory setting. That's what led to the decision of dropping the ALLO-647 relatively quickly and decisively. And what's really helped us to make the decision was what we saw in the MRD conversion in patients were treated with FC.

And maybe I can just add one final point to that. I mean I think when we designed the study, all of us, well myself included, I can certainly speak for myself. I was hoping that FC would win out over FCA. It's is an easier regimen to give. It's -- IT has fewer lasting effects on the patient's immune system. And the hypothesis that we don't need the same degree of expansion and persistence to eradicate microscopic disease may be very hopeful that this would be the regimen that we would end up selecting. Of course, we would have loved to have this patient not experience this Grade 5 event and get to the planned analysis as we had laid out. But all the same, we are seeing encouraging conversion with the FC. So we are very optimistic that this could, in the end, be the place that we had hoped to land from the outset.

This does conclude our question-and-answer session. I would like to turn the conference back over to management for any additional comments.

Hey, everybody. Thank you again for your time and thoughtful questions. We appreciate your continued interest in Allogene and ALPHA3 program. We look forward to keeping you updated as we advance this important trial and continue executing on our vision to transform access to CAR T therapy. With that, thank you, everybody.

Thank you, ladies and gentlemen. Thank you for participating in today's conference. This does conclude the program, and you may now log off and disconnect.