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Edited Transcript of ALLO.OQ earnings conference call or presentation 5-Nov-19 1:30pm GMT

Q3 2019 Allogene Therapeutics Inc Earnings Call

Nov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Allogene Therapeutics Inc earnings conference call or presentation Tuesday, November 5, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christine Cassiano

Allogene Therapeutics, Inc. - Chief Communications Officer

* David D. Chang

Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director

* Dr. Rafael Amado

* Eric Thomas Schmidt

Allogene Therapeutics, Inc. - CFO

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Conference Call Participants

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* Amanda Louise Murphy

BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst

* Benjamin Jay Burnett

Stifel, Nicolaus & Company, Incorporated, Research Division - Associate

* Biren N. Amin

Jefferies LLC, Research Division - MD and Senior Equity Research Analyst

* Cory William Kasimov

JP Morgan Chase & Co, Research Division - Senior Biotechnology Analyst

* John Newman

* Mark Alan Breidenbach

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Philip M. Nadeau

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* Raju Yashaswi Prasad

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Tony Butler

* Tyler Martin Van Buren

Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, and thank you for standing by, and welcome to Allogene Therapeutics' Third Quarter 2019 Conference Call. (Operator Instructions) Please be advised today's conference will be recorded.

I would now like to turn the conference over to Christine Cassiano, Chief Communications Officer. Ms. Cassiano, you may go ahead.

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Christine Cassiano, Allogene Therapeutics, Inc. - Chief Communications Officer [2]

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Thank you, operator, and good morning. Before market opened today, Allogene issued 2 press releases. One press release discusses an exclusive collaboration with Notch Therapeutic to develop IPSE based AlloCAR therapy and the other provides a corporate update and financial results for the quarter ended September 30, 2019. The press release is available on our website at www.allogene.com. We remind listeners that today's call is being webcast on our website and will be available for replay. Joining me on the call today are Dr. David Chang, President and Chief Executive Officer; Dr. Eric Schmidt, Chief Financial Officer; and Dr. Raphael Amado, Executive Vice President of Research and Development and Chief Medical 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, regulatory filings, future research and development efforts and manufacturing capabilities, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our Form 10-Q for the quarter ended June 30, 2019, as well as our upcoming Form 10-Q for the quarter ended September 30, 2019. You are cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligation to update such statements.

I'll now turn the call over to Dr. David Chang.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [3]

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Good morning, and thanks for joining us on our call today to discuss our third quarter and recent events. As we complete the end of our first full year in operation as a public company, I am very pleased with what we have accomplished at Allogene. While we were able to leverage the great research from on Pfizer to give us a strong foundation we have built Allogene from the ground up by assembling world-class capabilities across all functions. We have successfully progressed 2 AlloCAR T programs into the clinic, advanced pipeline programs toward potential IND and optimize current AlloCAR T manufacturing, while creating next and future generation therapies. We have initiated the build-out of in-house manufacturing capabilities. We have also completed our new headquarters, which now house both the R&D and G&A functions under one roof.

To that end, I would like to thank those who joined us in September for our Open House at our new headquarters. We were pleased to have so many analysts, investors, collaborators and friends of Allogene and join us in celebration and visit our new lab. During the event, I spoke about our journey from company inception to today, where we are now in position to treat patients with refractory hematologic malignancies under 2 active INDs. I believe that the investment Allogene is making in facilities, manufacturing and personnel provide us with the key building blocks to support our next phase of growth as we seek to advance the AlloCAR T therapies to clinical development and toward commercialization. As many of you know our next phase of growth includes the construction of our state-of-the-art manufacturing facility in New York, California.

On our last quarterly call, we announced that Dr. Rafael Amado would be joining our Allogene team. Since he arrived in early September, his leadership of the research and development team and integration with other cross-functional teams have been seamless. Rafael's familiarity in engineered cell therapy allowed him to quickly step into the role of Head of R&D and support us in refining the R&D strategy. I look forward to giving Rafael the opportunity to update you more fully on these efforts later in this call. We are now firmly into the clinical stage of development with lead pipeline programs. We have checked off the last of our stated 2019 program milestones, as we are treating patients with the initiation of our ALLO-715 clinical trial in multiple myeloma and in our ongoing ALLO-501 ALPHA trial in non-Hodgkin's lymphoma.

As we have previously stated, we plan to share the data from the ALLO-501 Phase 1 trial in the first half of 2020. We are committed to rapidly moving our therapies through clinical trials and advancing this nascent field of allogeneic cell therapy to generate viable commercial therapies for patients in need. We can use our first-hand knowledge and growing industry insights of autologous cell therapy to advance allogeneic development. But as we have all learned to appreciate the allogeneic cell therapy is fundamentally different than autologous cell therapy. To that end, our translational team is highly focused on building a robust understanding of the relationship between lymphodepletion and cell expansion and ultimately clinical outcomes, including both safety and efficacy.

Turning your attention to our other news this morning. Our collaboration with Notch Therapeutics is part of our broader long-term strategy to think beyond what can be achieved with currently available technologies underlying the first and second generation CAR T therapies. While we believe our initial AlloCAR T programs derived from cells collected from healthy donors have the potential to revolutionize the field by making CAR T therapy available to many more patients innovation cannot stop there. We are excited to partner with Notch to develop the next generation of AlloCAR T therapies derived from induced pluripotent stem cells or iPSCs. We believe this exclusive worldwide collaboration in and licensing agreement with Notch utilizing Notch's engineered Thymic Niche, iPSCs based platform has the potential to create novel cell-based therapies that future improved efficiency of gene-editing, greater scalability of supply, product homogeneity and more streamlined manufacturing.

Our collaboration with Notch includes exclusive rights to use iPSC technology to develop engineered T cells or natural killer and cell therapies across multiple targets in oncology and other diseases with initial application focused on B-cell malignancies and multiple myeloma. One of the most important aspect of this collaboration is the ability to work with scientific luminaries, Dr. Juan Carlos Zuniga-Pfluckeris and Dr Peter Zandstra, the Founders of Notch Therapeutics. JC and Peter are well known in the iPSC field for their pioneering work in developing techniques for differentiating iPSCs into T-cell and other immune cells. Given our confidence in the team and strategic interest in the technology, we have also acquired a 25% equity position in Notch. Eric will review the financial details from this agreement later in this call.

It is now my pleasure to formally welcome Rafael, who will update you on recent research and development activities.

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Dr. Rafael Amado, [4]

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Thank you, David and good morning to all of you on the call today. In my previous role, I've had the pleasure of speaking with many of you, but today, I'm very happy to be speaking on behalf of Allogene and representing the work that has been underway by an excellent team of people in R&D. While I just recently joined Allogene in September. I was fortunate to have an opportunity to meet some of you at our open house and at various investor events. I thank you for the warm welcome and look forward to many more opportunities to see you in the months and years to come.

Our ALLO-501 ALPHA dose-escalation study continues to accrue as planned. We will also be filing an amendment to the current protocol for the ALPHA trial to further explore the optimal dose and schedule of ALLO-647. ALLO re-dosing of patients and expand enrollment criteria to include patients who have been previously treated with autologous CD19 directed therapy and whose disease have progressed. We are studying a variety of corollary parameters that are informing us about the optimal relationship between the depth looking for repletion, cell dose and clinical outcomes as David mentioned earlier. Indeed, we have made a lot of progress in setting up clinical translational (inaudible) both internally and externally to fully elucidate the optimal conditions that will lead to best outcomes in the Allogeneic setting.

This work is being done in close collaboration with the research and the process development teams that will supply the key properties of the Allograft associated with optimal pharmacodynamic and clinical properties. We initiated our ALLO-715 Universal clinical trial during Q3 and we are actively accruing and treating patients. We are developing ALLO-715, our anti-BCMA allogeneic CAR T therapy for the treatment of relapsed refractory multiple myeloma patients. We continue to get many questions about ALLO-715 universal trial, so I'd like to briefly remind you of its design. The Phase 1 study is designed to assess the safety and tolerability of increasing dose levels of ALLO-715 with the goal of identifying an optimal dose of ALLO-715 for a potential Phase II study, which could be a pivotal study for a BLA submission.

As do the AlloCAR T CD19 studies. This trial will also utilize our ALLO-647. Our proprietary anti-CD52 monoclonal antibody as part of selling for depletion regimens. In the main portion of the study, we plan to enroll up to 24 patients with relapsed-refractory multiple myeloma who have failed at least 3 prior lines of therapy in our dose-escalation 3 plus 3 trial design. The universal study designed to allow for exploration of additional cohorts to assess a potential milder for depletion regimen or the chemotherapy components, specifically through therapy and Cyclophosphamide will be step-wise removed.

As we look ahead, we will be assessing endpoints such as safety, tolerability, cell expansion and anti-tumor activity as key determinants of success for ALLO-715 with the various mean for depletion regimens. We anticipate sharing a first look at the data from this trial by the end of 2020. We're also pleased to announce that (inaudible) our development partners on UCART19 continue to expect moving the pediatric and adult trials in ALL into Phase 2 in 2020.

We remain very excited about the strategic direction and progress of our research and clinical programs. We're uniquely fortunate to have access to what I believe is one of the very best scientific advisory boards in the industry. And my first Scientific Advisory Board meeting at Allogene and showcase pioneering science in the allogeneic cell therapy space and what's one of the most productive SADs that I have ever attended. This expansive meeting sort feedback on our pipeline, the design of our trials and the innovations that are the focus of our research team including new products and innovative technology to address hematological malignancies and solid tumors. We have already highlighted some of the work we are pursuing, including research collaboration with Stanford University signed in September. Under this collaboration, Allogene in partnership with researchers Dr. Robert Waymouth, Dr. Paul Wender and Dr. Ronald Levy will investigate a novel nucleic acid delivery system to more effectively, safely, and flexibly deliver RNA or DNA in the lymphocytes, including T-cells, to allow efficient genetic engineering. I am also very excited by the internal innovation that our teams have pursuing. The validation on guidance would we see from our [SAV] is invaluable and we look forward to unveiling more projects from our research efforts over the next year.

I will now like to turn the call over to Eric.

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Eric Thomas Schmidt, Allogene Therapeutics, Inc. - CFO [5]

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Thank you, Raphael. I will provide a brief overview of Allogene's financials. Additional detail on our third quarter financial results can be found in our press release issued earlier today and in our 10-Q, which will be filed with the SEC. We remain strong financially with cash, cash equivalents and investments totaling $601.9 million as of September 30th, 2019. In the third quarter, our research and development expenses were $40.0 million, which includes $5.5 million of non-cash stock-based compensation expense. R&D expense in Q3 also includes a $5 million milestone payment to our partner Cellectis, which is associated with the initiation of the universal study on ALLO-175.

General and administrative expenses were $15.0 million for the third quarter of 2019, which includes a $7.3 million non-cash stock-based compensation expense. Our net loss for the third quarter of 2019 was $15.7 million or $0.50 per share, including non-cash stock-based compensation expense of $12.8 million. As we've noted in previous quarters, we continue to invest heavily in our clinical programs and advancing the build out of our manufacturing capabilities, as well as hiring across functions with now 190 full-time employees.

We have also been highly focused on executing strategic business development agreements. As noted earlier in this call, we are very excited about our exclusive collaboration with Notch and the ability to develop next-generation iPSC-based allogeneic therapies. Under the terms of the agreement, Allogene will provide an upfront payment of $10 million research funding over the collaboration term and a preferred equity investment of $5 million, in return for a 25% equity position in Notch. Preclinical research will be conducted by Notch under the direction of a joint development committee. Allogene and will lead the clinical development and commercialization of all candidates that may come out of the collaboration and will retain worldwide rights to any potential candidates.

Notch would be eligible to receive future payments upon achievement of certain research, development and commercial milestones, as well as tiered royalties. Including the expenses associated with the Notch transaction, we remain in a position to reiterate our 2019 net loss guidance. Full year net losses are expected to be between $200 million and $210 million. This includes an estimated non-cash stock-based compensation expense of $45 million to $50 million.

With that brief review of our financials, we will now open the call for your question.

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Questions and Answers

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Operator [1]

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(Operator Instructions). Our first question comes from Biren Amin with Jefferies. Your line is now open.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [2]

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Hi, thanks for taking my questions and congrats on all the progress. Maybe if I could just start with ALLO-501. Can you just talk a little bit about how many patients you would have at the time of data in first half 2020, David? And I guess, based on that analysis, what would be potential next steps?

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [3]

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Biren, we'll be happy to answer those questions. And I'm going to direct your questions to Dr. Rafael Amado.

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Dr. Rafael Amado, [4]

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Yes, hi, Biren, it's progressing quite well as planned. We decided that our first presentation would be one contain enough information to be able to evaluate the allogeneic approach and we will continue guiding to the same timing, which is the first half of this year. Our expectation is that we will have enough patients to be able to make statements about efficacy, safety, and corollary parameters.

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Operator [5]

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Thank you. Our next question comes from Phil Nadeau with Cowen & Company. Your line is now open.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [6]

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Good morning, thanks for taking my question. My question is also on the ALLO-501 ALPHA trial. During your prepared remarks, you mentioned a couple of times that you were working to figure out how the depth of lympho-depletion affects cell expansion. In fact from the ALPHA trial, you mentioned that you're going to change the dosing schedule 647. Can we read into those comments that you've decided to investigate these changes because of what you've seen in the initial patients? And I guess specifically, what dosing schedule change are you contemplating for 647 and what are you trying to accomplish? Thanks.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [7]

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Phil, good morning. Let me take that question. This is David Chang. So, some of the questions about the things that we are looking at, I mean, this is a Phase I study and we always viewed the Phase I study to really test the unknowns, as well as to confirm some of the assumptions that went into the design of the Phase I. And in Phase I, as we have talked about in our flexibility of the key, because there are so many different questions that we want to ask and at the end, the goal of Phase I is coming up with the right sources and schedule that will enable us to move into the Phase II and progress on the Phase II as quickly as possible. So, a lot of times in Phase I, from the beginning sometime starts with a lot of flexibility in the case of ALLO-501 ALPHA study, given that it is our first clinical study as a company, we elected to go with a very simple protocol and take the opportunity to amend the studies as it goes. So, none of these things that we are talking about is a reflection of what we are seeing, but it is all part of the original plan that we had.

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Operator [8]

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Thank you. Our next question comes from Cory Kasimov with JPMorgan. Your line is now open.

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Cory William Kasimov, JP Morgan Chase & Co, Research Division - Senior Biotechnology Analyst [9]

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Hi, this is Gavin on for Cory. Just wanted to get your thoughts on the Notch deal, what drove the decision there? Was it clinical or preclinical data? And any thoughts on the timing, why did you decide to do the deal now? Thanks.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [10]

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Yes, this is David Chang. Let me take that. I think we have talked about how we are thinking about the CAR T therapy in general several times. This is a field that sided from the (inaudible) and now we are trying to advance that into the Allogene using the healthy donor. We also have talked numerous times about where that future may lie and as we advanced allogeneic CAR T therapy, and we believe that eventually using the iPSC-derived renewable cell source has a potential to really fine-tune the gene engineering, as well as making the manufacturing more scalable. So, you may say, why now. I think this is something that we always have to be somewhat opportunistic. And, some of the reasons that drove us to this deal is our belief that the scientific founders of Notch, this is Dr. JC Zúñiga-Pflücker and Dr. Peter Zandstra, this two scientific founders really define the differentiation of iPSC into the T-cells. And so far, the platform that they are bringing, the E&P platform or the Notch engineer niche really provides us a serum free, cell-free based synthetic platform that allows the differentiation iPSC on functioning T-cells. That's really what drove us to get into this deal, scientific founders, what they have and what we believe to be a scalable and potentially more GMP-amenable manufacturing process.

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Operator [11]

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Thank you. Our next question comes from Tyler Van Buren with Piper Jaffray. Your line is now open.

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Tyler Martin Van Buren, Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst [12]

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Hey, good morning guys, congratulations on all the progress during the quarter. Just had another question regarding an amendment, those discussed in the prepared remarks with you. This decision to include patients who were previously treated with CD-19, what resulted in that change? Is there any observations preclinically or clinically that you're willing to talk about?

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Dr. Rafael Amado, [13]

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Yes, hi, this is Rafael. As we progress in this study, we've been thinking about ways to for perpetually path the allogeneic approach in other settings. So, as you know, Non-Hodgkin Lymphoma, although the outcomes are excellent for patients that are out of other options, there is still 2/3 of patients that have benefit and there are patients that progress quickly or don't respond within the first three months and many of those patients actually have [four graphs]. Although they need a release requirement, the T cells are exhausted or they don't have the right phenotype, and we thought that provided that the base tumor was still CD-19 positive and that the (inaudible) used before had a different single chain as [V-allogeneic] approach in these stations would make sense. It would be all sorts of patients, but also more importantly, a proof of concept to whether allogeneic therapy can work in patients that failed autologous CAR T therapy, which is I think something that would be of great benefit to the field. That was the rationale behind it and particularly knowing that this is a sizable patient population, that once they failed autologous CAR T, they have very few options.

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Operator [14]

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Thank you. Our next question comes from Amanda Murphy with BTIG. Your line is now open.

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Amanda Louise Murphy, BTIG, LLC, Research Division - MD & Senior Biotechnology Equity Analyst [15]

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Hi, good morning. I had a question on 501 as well. Curious, I don't know if you've been able to talk to the centers and get a sense -- today you said that you do get complete responses. How are the physicians thinking about transplants in this setting? Do you have any sense of (inaudible) transplants or? Trying to see how long the CAR T, or the ability of the CAR T, can last.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [16]

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Yes, hi, Amanda, this is David. Let me take your question. Good morning. So, as we do the study, we have to act very closely with the investigators and some of the amendment that we have talked about, that also factors in the investigating interest and advice that we are getting from them. As Rafael just talked about the inclusion of the patients who had previously received CD-19, it reflects the growing interest in the field, as identifying the previously treated patients who previously received CD19 CAR-T [Callidus] treatment and have not responded. So, we are definitely interested in sort of going with the investigator and pursuing that avenue. With respect to the other things, I would say the support of the investigator and the rate of enrollment, I think this is very much proceeding according to the plan and I cannot be happier with how we are progressing with the clinical studies. I know that many of you are asking questions about what we are seeing in the clinical study, and this one, we're going to really maintain the position that we have been maintaining over last three quarters, which is that we would like to really provide a meaningful update in due time, and we project as we have stated in the prepared statement, to be in the first half of 2020.

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Operator [17]

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Thank you. Our next question comes from Mark Breidenbach with Oppenheimer. Your line is now open.

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Mark Alan Breidenbach, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [18]

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Hey, good morning. Let me ask two-part question, if I can. First of all, do you think that the exploratory lympho-depletion regimens that are being amended into the ALPHA protocol are going to be very similar to what's being tested in universal? Or do you think that the two protocols will diverge from each other in terms of lympho-depletion regimen? And the second part of the question really is focusing on the Notch-collaboration. It sounds like Notch's core technology focuses on program differentiation of iPSCs in the T-cells and maybe NK-cells as well. But I'm wondering if they also have a proprietary methodology for iPSC induction. And if so, can you just quickly comment on how that avoids threading on some of the existing IP that's out there, from not just competitors? Thank you.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [19]

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Mark, let me take both of those questions, the first question about some of the exploration that we are doing in the 501 study with respect to the lymphodepletion. I mean this is one of the key areas of the Allogeneic. Handle, do proper lymphodepletion. They will control the rejection of our AlloCAR-T, which is something that has to be overcome for any Allogenic CAR T therapy to work. We are using essentially what is viewed as the selective biological lymphodepleting agent, our ALLO-647 which really gives us many different ways to think about the lymphodepletion. Some of that we have outlined as we have pointed out in our ALLO-715 universal study. In the 501 study, we are testing it exactly how we are doing it. I don't think it's -- this is the right place to go into, but conceptually both programs will test and review different modifications that we can do with ALLO-647. So some of the key things that we are hearing is really around the use of this biological selective lymphodepleting agent.

The second question around what's really unique about the notch. I think there are many different aspects as I've said. We always think about in any partnership people behind the partner and Notch Therapeutics, as I've said, we believe in the scientific founders who really created field iPSC differentiation into the T-cells. Along with that, as I've said their platform, ETN platform provides serum-free, cell-free and a synthetic method of differentiating iPSC used to the T-cells, and I think this is where the real -- the attraction of the Notch collaboration lies. Being able to differentiate iPSCs into T-cells in a scalable way and eventually eying towards manufacturing goals in sufficient quantity and quality to conduct clinical studies and hopefully at someday looking towards commercializing iPSC outright cell therapies.

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Eric Thomas Schmidt, Allogene Therapeutics, Inc. - CFO [20]

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And Mark, this is Eric. On the iPSC side, as you can appreciate, we're not going to be discussing patent matters. But we have a strong legal team here who's performed much due diligence on this bench.

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Operator [21]

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(Operator Instructions) Our next question comes from Raju Prasad with William Blair. Your line is now open.

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Raju Yashaswi Prasad, William Blair & Company L.L.C., Research Division - Senior Research Analyst [22]

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Thanks for taking my question and congrats on the progress. I guess maybe just a follow-up on preconditioning. Can you just provide a little bit of color on maybe how you're thinking about which assays you're putting kind of higher in the hierarchy when making the decisions? Is it more other activity base or and base? And then when you're thinking about changing the regimens, would it be more along the lines of reducing flu/cy before you touch 647? I'm just trying to get a sense of how you're thinking about changing the regimens if you do, and what will guide that. Thanks.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [23]

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Okay. Raj, thanks for that question. Seems like a lot of questions about the protocol amendment that we are making. As I've said, the protocol amendment, this is something that we have probably been discussing from some time, and in fact we have indicated in previous communications that we will be making some adjustment to the protocol to test different hypotheses. So this is really driven from that and not necessarily based on the clinical data that we have seen and we going to stay stayed relatively silent about clinical data that's coming out of our ALLO-501 study. But I will say that to one of your questions. Our main focus of adjusting the lymphodepletion is really centered around maximizing the potential benefit of ALLO-647. As you know, this is our proprietary lymphodepletion agent. It is unique and differentiated from what's out there and the fact that we can provide a selectively lymphodepletion. We believe that this is a potentially significant differentiating factor in our strategy. So obviously we want to maximize that aspect of ALLO-647. And that underlies some of the actions and different things that we planned to test in the ongoing ALPHA study.

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Operator [24]

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Thank you. Our next question comes from John Newman with Canaccord. Your line is now open.

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John Newman, [25]

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Hey, good morning guys. Thanks for taking the question. Excess me, just curious, sorry to ask another question about the amendment, but just curious, if you will be instituting the changes regarding lymphodepletion going forward or if you will be adding some additional patients to the study in order to maintain the current protocol and way of doing things as well as investigate some potential changes to see how those turn out? Thank you.

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Dr. Rafael Amado, [26]

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So this is Rafael and I'm not entirely sure I understood the point that if -- I think you were asking whether we are going to continue enrolling with making these changes or investigate these changes in 647 perhaps in earlier cohorts. I don't want to go into all the details of how we're going to do this, but essentially, just to reiterate what David said. This is a Phase 1 study. The first thing that it was designed for is to design -- to study cell dosing. The choice of ALLO-641 was actually the lowest possible dose. As you may know there different doses of the anonymous product which is (inaudible). So it's only fitting that in a Phase 1 study before you are going to the launch of Phase II study, you want to optimize both cell dosing and lymphodepletion in both for the maximum benefit and the least amount of toxicity. So in order to do that, obviously, we do have some patients treated and the study has accrued a plan and we found this was the time to make the amendment. Is not something that wasn't unplanned and we'll be rolling out and we don't anticipate going back to very early doses when it rolls out. So I think that hopefully answers your question. And if it doesn't just please ask me to clarify.

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Operator [27]

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Thank you. Our next question comes from Michael Schmidt with Guggenheim Securities. Your line is now open.

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Unidentified Analyst [28]

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Hey, this is [Chelsea] on for Michael. Thanks for taking our question. There's obviously been kind of a high bar set by anti-BCMA front runners and we've seen two anti-BCMA clinical-stage assets now suspended due to the competitive market. I guess what do you think the bar is for 715 then maybe does this bar defer between auto-verse ALLO CAR T approaches given kind of the advantages and disadvantages. Thank you.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [29]

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[Chelsea], thanks for the question. This is David. And I'll answer that. We feel, based on what we know from the scientific preclinical experiments and how we perceive the ALLO CAR T should be working in the clinics. Our baseline assumption is that allogeneic approach should provide about the same level of safety and efficacy as what color is CAR T. That is based on a payout on a treated basis. So from that perspective that's our baseline expectation. Obviously, we will have to see in the clinical studies. There are certain things that could lead to a better efficacy. We haven't really backed that into our baseline assumption.

I would, however, add that one of the limitations of current ALLO therapy is patients who cannot wait to receive the CAR T therapy. If you go back and review the registrational studies in the CD-19 ALLO CAR T space that led to approval of Kymriah and Yescarta 10% to 30% of the patients who enrolled in that clinical studies are unable to receive the cells because they simply cannot wait till their cells are being manufactured and obviously as we go into the Allogeneic our model basically would say that the cells can be really be made available to the patients once the decision is made to treat the patients with the CAR T. And I think that could potentially lead to more patients being treated. And if we look at the data based on intent to treat, I think there are several potential improvement in the efficacy simply from their logistical aspect that the allogeneic CAR T cells have to provide.

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Operator [30]

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Thank you. Our next question comes from Ben Burnett with Stifel. Your line is now open. Ben if your line is muted please unmute.

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Benjamin Jay Burnett, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [31]

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Thank you. Apologies. Good morning and congrats on the progress. I also had a question on the competitive landscape. So there is a CD-19 program from precision Biosciences and they've message that they could have data potentially within the window that you've talked about releasing ALLO-501 data. And I guess I wanted to ask, can you talk to some of the more technological details that differentiates ALLO-501 from precision Biosciences CD 19 CAR T-candidate. Thanks so much.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [32]

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So we are aware of precision Biosciences and what they're doing and what they have set and I think this is all good for the field. I mean, obviously, but we have seen tremendous growth in the Allogeneic feels over the last year, year and a half since we created Allogene and I think this is really telling what the interest of the clinicians and the field in advancing the South therapy from to the allergenic. As you know there are some subtle differences in how different companies are making as there allogeneic approach and I think this is in at the end just going to accelerate the creation of allogeneic cell feels as we learn from each other and from different approaches that we're taking. We remain very confident in the approach that we're taking. And as we have said our approach is based on the UCART 19 which has triggered a number of patients in the ALR setting. And when I review the data, the genetic engineering that controls the graft versus host disease and also allows the cell expansion and provide the early efficacy in the UCAR T 19 studies. These are the key things that are essential to make sure that the approach is viable and I think that is one of the strength that we are taking forward as we advance ALLO-501 and ALLO-715 program.

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Operator [33]

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Thank you. Our next question comes from Tony Butler with ROTH Capital Partners. Your line is now open.

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Tony Butler, [34]

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Thanks very much. But first of all, I actually applaud the amendment. So the question really goes through the differences between Universal and ALPHA and what learnings you may be able to capture as you vary 645 with (inaudible) do you think would be reasonable to assume that with each different patient population it becomes an entirely new experiment with the combination if you will? If I may, just a follow-up on Notch. A part of that deal, but do you actually are you convinced that iPSC derived T-cells are actually not T-cell and postures put in fact can be sufficiently educated in order to behave like normal human T cells that is to kill appropriate tumors? Thanks very much.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [35]

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Okay. So Tony thanks for that question. Especially, I'm going to take the second question and I'm going to refer to Rafael for the first question. So on the iPSC the question that you're asking to me is one of the most important question. Can you generate functioning T-cells? And one of the unique advantages of the cell base, especially the ones that's using the T-cells ability upon recognition of the target to expand and with the increased number -- that's where the real efficacy, the depth of the response that we get with the CAR T, that is what I believe in. And as I've said, the ETN platform, which is proprietary to Notch, that we had exclusive license for the indications that we are going after, they have shown that using that platform they can generate functioning T-cells. You may think, well that everybody can do that. That's not true. I mean this is one of the areas that is really not fully answered in the iPSC, whether you can generate functioning T-cells.

So, when we were doing due diligence and having to discussions with the Founders of Notch Therapeutics and when they showed this data, that's what's really like a-ha moment, besides their track record, the fact that they have a propriety reagent. And that is really, in my view, amenable for large-scale manufacturing. Also, the data that shows that they can differentiate iPSCs through the functioning T-cells, that's really what drove us to jump into this research collaboration.

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Dr. Rafael Amado, [36]

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Hi, Tony. This is to your first question about the similarities and differences between UNIVERSAL and the ALPHA study. What I would say is that, as you know, the UNIVERSAL study A is earlier. And so, we have less data that we have for ALPHA naturally, and B is a different disease and obviously to maximize [penetration] risk, US design already with the idea of trying to get the optimal lympho-depletion and anti-CD52 to try to reduce a lot of activity with the minimal potential toxicity. They are also studied for their alone and David and I mentioned before, as we move with doses it's now time to look at the lympho-depletion again with the same objective. I think to the point that you are making, it is possible to different studies for the Phase II lympho-depleting condition in regimen may be different because of the different diseases. And that's really what we want to do, is to march along very carefully during this phase I of these two trials, so that when we start the Phase II studies we have the maximum potential to derive the greatest benefit risk. As we see more patients and we see what happens in the ALPHA study, we may also make modifications UNIVERSAL, but that is still speculative and time will tell and we will update you in the future.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [37]

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Tony, by the way, this is David again. Thanks for recognizing that protocol amendment is something that is really in a [warranty] share. I'm somewhat surprised with the number of questions on the protocol amendment, having been in this field and having been involved in so many different Phase I studies. I mean, every Phase I studies that I have been involved in, we'll have anywhere between five to 10 amendment during the course of the Phase I. I know that all of you have a lot of questions about why we're doing the protocol amendment, but I see it as small on-par and as a routine that one has to do, as a part of the Phase I study.

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Operator [38]

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Thank you. That concludes today's question-and-answer session. I would now like to turn the call back over to management for any additional comments.

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David D. Chang, Allogene Therapeutics, Inc. - Co-Founder, President, CEO & Director [39]

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Well, thank you for joining us on the call today and thank you for your ongoing support of Allogene as we progress our clinical programs. We will look forward to seeing many of you at ASH and other conferences as we close 2019. Operator, you may now disconnect.

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Operator [40]

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