Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q1 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Christine Cassiano - CCO David Chang - President and CEO Rafael Amado - EVP-Research and Development and CMO Eric Schmidt - CFO Conference Call Participants Salveen Richter - Goldman Sachs Marc Frahm - Cowen & Company Kelly Shi - Jefferies Michael Schmidt - Guggenheim John Newman - Canaccord Cory Kasimov - J.P. Morgan Luca Issi - RBC Capital Mark Breidenbach - Oppenheimer Ben Burnett - Stif ...

Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q3 2020 Earnings Conference Call November 4, 2020 8:30 AM ET Company Participants Christine Cassiano – Chief Communications Officer David Chang – President and Chief Executive Officer Rafael Amado – Executive Vice President-Research and Development and Chief Medical Officer Eric Schmidt – Chief Financial Officer Conference Call Participants Marc Frahm – Cowen Salveen Richter – Goldman Sachs Brian Ayman – Jefferies Tyler Van Buren – Piper Sandler John Newman – Canacc ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Numbe ...

Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q2 2020 Earnings Conference Call August 5, 2020 8:30 AM ET Company Participants Christine Cassiano – Chief Communications Officer David Chang – President and Chief Executive Officer Rafael Amado – Executive Vice President-Research and Development and Chief Medical Officer Eric Schmidt – Chief Financial Officer Conference Call Participants Phil Nadeau – Cowen and Company Andrea Tan – Goldman Sachs Biren Amin – Jefferies Gavin Scott – JPMorgan Tyler Van Buren – Piper ...

PART I: FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Allogene Therapeutics reported a **$115.5 million** net loss for H1 2020, with cash and investments growing to **$1.1 billion** primarily from a **$595.7 million** public offering [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$1.26 billion** as of June 30, 2020, driven by a **$1.11 billion** rise in cash and investments, with stockholders' equity reaching **$1.16 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $280,379 | $175,126 | | Total current assets | $909,577 | $544,576 | | Total assets | $1,258,544 | $717,802 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $40,895 | $33,079 | | Total liabilities | $95,125 | $88,779 | | Total stockholders' equity | $1,163,419 | $629,023 | | Total liabilities and stockholders' equity | $1,258,544 | $717,802 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss increased to **$115.5 million** for the six months ended June 30, 2020, from **$72.8 million** in 2019, driven by higher **$89.3 million** research and development expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $47,296 | $31,774 | $89,337 | $55,177 | | General and administrative | $15,862 | $14,187 | $31,502 | $27,245 | | Loss from operations | $(63,158) | $(45,961) | $(120,839) | $(82,422) | | Net loss | $(60,974) | $(41,243) | $(115,454) | $(72,829) | | Net loss per share | $(0.53) | $(0.41) | $(1.03) | $(0.74) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was **$67.5 million** for H1 2020, while financing activities provided **$616.8 million** from a public offering, resulting in a **$105.3 million** net cash increase Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(67,530) | $(55,148) | | Net cash (used in) provided by investing activities | $(443,978) | $77,380 | | Net cash provided by financing activities | $616,761 | $920 | | Net change in cash, cash equivalents and restricted cash | $105,253 | $23,152 | - Financing activities were significantly boosted by **$595.7 million** in net proceeds from a public offering and **$14.8 million** from an ATM offering during the first half of 2020[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant financing activities, key license agreements, lease commitments, and increased stock-based compensation - In June 2020, the company sold 13,457,447 shares of common stock in a public offering, resulting in net proceeds of approximately **$595.7 million**[19](index=19&type=chunk) - The company has key license agreements with Pfizer, Cellectis, Servier, and Notch, which involve potential aggregate milestone payments of up to **$840.0 million** (Pfizer) and **$2.8 billion** (Cellectis), plus royalties[44](index=44&type=chunk)[49](index=49&type=chunk) - The company has significant lease commitments, including for a new cell therapy manufacturing facility in Newark, California. As of June 30, 2020, total undiscounted future lease payments were **$90.5 million**[74](index=74&type=chunk)[77](index=77&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | Research & Development | General & Administrative | Total | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2020** | $7,979 | $8,791 | $16,770 | | **Three Months Ended June 30, 2019** | $4,747 | $6,740 | $11,487 | | **Six Months Ended June 30, 2020** | $14,636 | $16,349 | $30,985 | | **Six Months Ended June 30, 2019** | $7,478 | $11,876 | $19,354 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses clinical progress, financial results, and liquidity, noting COVID-19 impacts, increased net loss from higher expenses, and sufficient cash for future operations - The company is a clinical-stage immuno-oncology company developing a pipeline of off-the-shelf allogeneic T cell product candidates. Key programs include ALLO-501A for Non-Hodgkin Lymphoma (NHL) and ALLO-715 for multiple myeloma[108](index=108&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - The COVID-19 pandemic has adversely impacted the business by affecting patient enrollment in clinical trials and causing interruptions in the construction of the Newark, California manufacturing facility[112](index=112&type=chunk) Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $47,296 | $31,774 | $15,522 | 49% | | General and administrative | $15,862 | $14,187 | $1,675 | 12% | | **Total operating expenses** | **$63,158** | **$45,961** | **$17,197** | **37%** | - As of June 30, 2020, the company had **$1.1 billion** in cash, cash equivalents, and investments, and believes this is sufficient to fund operations for at least one year from the filing date[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate risk on **$1.1 billion** in investments and foreign exchange risk from Euro-denominated payments, with a 10% change in either not materially affecting financials - The company is exposed to interest rate risk on its **$1.1 billion** in cash, cash equivalents, and available-for-sale securities as of June 30, 2020[165](index=165&type=chunk) - Foreign exchange risk exists due to collaboration payments with Servier being denominated in Euros. As of June 30, 2020, the company had **$0.8 million** of receivables denominated in foreign currency[166](index=166&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2020, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of the end of the period covered by the report, the company's disclosure controls and procedures were effective[167](index=167&type=chunk) - No changes in internal control over financial reporting were identified during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, internal controls[168](index=168&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its operations, financial condition, or cash flows - Management believes there are currently no pending claims or actions against the company that could have a material adverse effect on its financial condition[170](index=170&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include limited operating history, accumulated net losses of **$511.6 million**, reliance on partners, COVID-19 impacts on trials and manufacturing, potential for undesirable side effects, and regulatory uncertainties - The company has a limited operating history, has incurred net losses since inception (accumulated deficit of **$511.6 million** as of June 30, 2020), and expects to incur substantial future losses[172](index=172&type=chunk)[174](index=174&type=chunk) - The COVID-19 pandemic is adversely impacting the business by halting or delaying clinical trial enrollment, interrupting supply chains, and delaying construction of the manufacturing facility[179](index=179&type=chunk)[180](index=180&type=chunk) - The business is heavily reliant on partners, particularly Cellectis for its TALEN gene-editing technology, which is critical for manufacturing allogeneic T cell product candidates[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - Product candidates may cause undesirable side effects, such as cytokine release syndrome (CRS), neurotoxicity, and graft-versus-host disease (GvHD), which could halt clinical development or prevent regulatory approval[193](index=193&type=chunk) - The company is building its own manufacturing facility but currently relies on CMOs and faces risks related to scaling up production, process control, and securing specialty raw materials[228](index=228&type=chunk)[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's October 2018 IPO generated **$343.3 million** in net proceeds, with **$95.8 million** used by June 30, 2020, and remaining funds allocated for clinical development and manufacturing facility construction - The company's IPO in October 2018 generated net proceeds of approximately **$343.3 million**[398](index=398&type=chunk) - Through June 30, 2020, the company has used **$95.8 million** of the IPO proceeds, with the remainder intended to fund clinical development and the build-out of its manufacturing facility[399](index=399&type=chunk) [Item 3. Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[400](index=400&type=chunk) [Item 4. Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[400](index=400&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[400](index=400&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, a lease amendment, and required officer certifications - The report includes standard corporate governance documents, a second amendment to a lease agreement, and required officer certifications as exhibits[402](index=402&type=chunk)