Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q3 2023 Earnings Call Transcript
Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q3 2023 Earnings Call Transcript November 2, 2023
Allogene Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.37, expectations were $-0.53.
Operator: Hello, and thank you for standing by. Welcome to the Allogene Therapeutics Third Quarter 2023 Conference Call. After the speakers’ presentation, there will be a question-and-answer session. [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.
Christine Cassiano: Thank you, operator, and welcome to our call. Today, after market closed, Allogene issued a press release that provides a business update and financial results for the third quarter of 2023. This press release and today’s webcast are both available on our website. Following our prepared remarks, we will host a Q&A session. We ask you to limit your questions to one per person as we will keep this call to an hour and do our best to get to as many questions as possible. Joining me today are Dr. David Chang, President and Chief Executive Officer; Dr. Zachary Roberts, Executive Vice President of Research and Development and Chief Medical Officer; and Geoff Parker, Chief Financial Officer. 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 any of our product candidate, and 2023 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 earnings press release and the 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.
David Chang: Thank you, Christine, and welcome to all listening to our call today. The last few weeks have been exciting in the field of cell therapy. From an uptake in AlloCAR T cells in the release of abstract this morning for the upcoming American Society of Hematology Meeting to witnessing the potential of CAR T therapy beyond [ph] oncology. It is clear that we are just at the beginning of what’s possible for patients with this modality. While indications outside of oncology have been the focus of the field as of late, something we are keeping a keen eye on. I will focus our call today on CAR T oncology. Throughout the decades, cancer therapies have come in great waves. Cytotoxic chemotherapy was the first wave spending most of the 20 century as fundamental discoveries in blood cancers gave wave to increasingly sophisticated combination therapies that could be used against solid tumors.
The second wave was monoclonal antibodies, a scientific breakthrough that even today continues to fuel innovation with follow on technology platforms. I would argue that this wave also includes antibody drug conjugates by specific antibodies and by specific T-cell engagers. The third wave has been a more gradual emergence of targeted therapies in today’s omics era. Pathways that govern the behavior of our cells have been delineated, paving way to precisely interdict disease. We are now at the beginning of a fourth grade wave, the era of engineered cell therapy. The enablement of synthetic biology to harness the power of immune cells is now peaceful through the convergence of knowledge of cellular pathways and technological breakthroughs in gene editing and cell engineering.
But this fourth grade wave can only be fully unlocked when industry makes CAR T accessible to all eligible patients. This was an important topic during recent discussions at both the Future Summit hosted by STAT as well as at the American Society for Transplantation and Cellular Therapy sponsored AcCELLerate Forum on a panel moderated by Dr. Peter Marks, Director of the Center for Biologics Evaluation and Research, and Dr. Marcelo Pasquini of the Center for International Blood and Marrow Transplant Research. At Allogene, we believe that the key to unlocking this potential is allogeneic CAR T. And if you will, creating the Konami code for cell therapy. For those who know video games, the Konami code was originally a simple sequence of buttons that would give a full set of power ups to make testing easier for developers.
The modern day concept of this code is no longer just about making a game easier. Rather, it is now unlocking hidden expert modes enabling expansion of the game, and that is exactly how we are thinking about our platform. It is creating the Konami code for allogeneic cell therapy. A code that can be applied not just in the industries first potentially pivotal trial of an allogeneic CAR T product. But in other harder modes such as earlier line trials, solid tumors, not oncology indications and next generation products. And we look forward to the month ahead where certain scientific aspects of this code will come to light, unlocking new opportunities and broadening patient access to the fourth grade wave. Before I turn the call over to Zach to give a brief overview of what will be presented at the Society for Immunotherapy of Cancer and what to expect at ASH.
I would also like to take the opportunity to officially welcome new member of our leadership team to his first Allogene quarterly call, Geoff Parker. In this especially challenging market, Geoff’s extensive experience in biotechnology across all aspects of finance and business development strategy will be the tremendous value to Allogene as we advance our critical pipeline assets and explore new opportunities. I’m confident he’ll be instrumental to our success as we navigate the next chapter. I would now like to turn the call over to Zach.
Zachary Roberts: Thank you, David. While we focus on execution of our potentially pivotal ALPHA 2 global trial with Alloy 501A and relapsed refractory large B-cell lymphoma. Our 2023 data readouts have been designed to answer foundational questions that support the viability of an allogeneic CAR T product. Over the summer at the American Society of Clinical Oncology Annual Meeting, the European Hematology Association Congress and the International Conference on Malignant Lymphoma in Lugano. We shared the long-term durability data from our Phase 1 trials. That answered one of the most important questions in the field. Can an off-the-shelf CD19 CART product candidate demonstrate durability comparable to an autologous CAR T therapy in large B-cell lymphoma?
In CAR T, the best surrogate for duration of response is a six-month CR rate. Based on the data from patients who received our Phase 2 regimen during the Phase 1 trial, we have now shown that our six-month CR rate is comparable to what has been reported in the pivotal studies of Kymriah, Yescarta, and Breyanzi. In all of these presentations, our safety analysis included all 33 CAR T naive LBCL patients who received Alloy product. Treatment was generally well tolerated with no cases of Grade 3 or higher CRS and no cases of ICANS, or GvHD. Cytopenias and infections were manageable and comparable to the experience with autologous CAR T therapies in patients with relapsed/refractory LBCL. We showed patients neutrophil and lymphocyte counts beginning to recover within the first month of infusion and achieving baseline levels with kinetics similar to autologous cell therapies, comparability of immune reconstitution in patients receiving investigational ALLO-501A to those who receive autologous products yields important insight into our comparable infection rate.
But we wanted to dig deeper and address outstanding questions posed as it relates to the safety profile of ALLO-647, our investigational anti-CD52 monoclonal antibody when using conjunction with standard low-dose FluCy. That will be the focus at this year's annual meeting of the American Society of Hematology. At ASH we will have a comprehensive safety review of all 85 patients treated in the Phase 1 ALPHA and ALPHA2 Studies in LBCL and follicular lymphoma to characterize the overall safety profile when ALLO-647 is added to standard Lymphodepletion. Because of the risk of allorejection by the patient's immune system, creating the necessary window of persistence for an allogeneic CAR T likely require an enhanced approach to lymphodepletion. Different approaches have been used in other allogeneic clinical trials including high dose chemotherapy that might be associated with severe toxicity.
The results of our trials reinforce our belief that in the LBCL patient population, our unique and proprietary lymphodepletion regimen can set the right conditions for our cell products to induce deep and durable remissions while keeping the safety in-line with approved autologous CAR T therapies. Our nuanced understanding of lymphodepletion based on the breadth of our trials has fueled our early stage research. This weekend we look forward to poster presentations at the Society for Immunotherapy of Cancer annual meeting highlighting our next generation Cloak and Dagger Technologies designed to help Enhance Engraftment, Expansion and Persistence of AlloCAR T Cells. In LBCL, while we continue to be pleased with the overall profile demonstrated in our trials, we fully recognize evolving practice patterns with autologous CAR T therapies moving into second line.
Our CD19 program strategy contemplated this challenge and we are tackling this on two fronts. The first strategy is in the Phase 2 clinical trial execution and we've focused on increasing the global footprint of our trials. ALPHA2 is now open to enrollment in the U.S., Canada, Europe and Australia. Our Phase 2 EXPAND trial designed to demonstrate the superiority of an ALLO-647 containing lymphodepletion regimen over a regimen of FluCy alone is open to enrollment in the United States and Europe. The second strategy lies in the design of an earlier line trial and how we ultimately think this market will evolve. We are all very excited about our intended approach, when all aspects are locked we look forward to sharing with you more about this trial and believe it will address many questions you have about our overall approach to treating LBCL.
Lastly, I'd be remiss if I didn't talk a bit about our Phase 1 TRAVERSE trial with ALLO-316. We do not take lightly the responsibility we carry to demonstrate the potential of an AlloCAR T in solid tumors. As such we have taken a very deliberate approach and are proud of the way in which we are conducting this trial. We've continued to gain incredible insights for CAR T and solid tumors that we hope will advance this trial into a potentially pivotal phase and even more importantly provide another option for patients with advanced or metastatic renal cell carcinoma. The importance of such data to our investors and the medical community at large cannot be understated, so we will now target our next update for an academic forum in early 2024. I will now turn the call over to Geoff.
Geoff Parker: Thank you, Zach, and good afternoon everyone. In my first few weeks as part of Allogene, I've had the chance to speak now with a handful of our covering analysts and I look forward to getting to know all of our analysts and investors over the next few months and years to come. In these early conversations, the number one question I get is why did I join Allogene? For me, there is a simple answer. I've been in this industry for over 30 years, and I firmly believe that this is one of the best management teams I've ever encountered. As a quick note regarding my background, I worked at Goldman Sachs from 1986 to 2009 in investment banking, ultimately running the West Coast Healthcare Banking practice for the last ten years of my tenure at the firm.
Following my time at Goldman Sachs, in 2009, I decided to move to the company side to serve as a CFO as well as to serve as a Board Member with a number of healthcare companies, which I have now done for the last 14 years. Fast forward to this past summer when I received a call from David, I was immediately intrigued by the opportunity to be a part of this team and to play a role in fulfilling the promise of how allogeneic CAR T products could address the access gap to this important modality. Let me now turn to another of Allogene's strengths. Our balance sheet in a careful way in which we manage our resources. We ended the third quarter with $497.7 million in cash, cash equivalents and investments. As noted on our last quarterly call, based on current assumptions, we expect our cash runway to fund operations into the second half of 2025.
In the third quarter of 2023, our research and development expenses were $46 million, which includes $6.7 million of non-cash stock-based compensation expense. General and administrative expenses were $17 million for the third quarter of 2023, which includes $8.6 million of non-cash stock-based compensation expense. Our net loss for the third quarter of 2023 was $61.3 million or $0.37 per share including non-cash stock-based compensation expense of $15.4 million. We continue to expect a decrease in cash, cash equivalents and investments of approximately $230 million for the full year 2023 and full year 2023 GAAP operating expenses to be approximately $340 million, which includes estimated non-cash stock-based compensation expense of approximately $80 million.
This guidance excludes any impact from potential business development activities. With that, we will now open the call for your questions.
Operator: Thank you. [Operator Instructions] And our first question is going to come from the line of Michael Yee with Jefferies. Your line is open. Please go ahead.
See also 20 Most Valuable Video Game Companies in the World and 10 Stocks That Will Skyrocket.
To continue reading the Q&A session, please click here.
