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Allogene Therapeutics(ALLO) - 2025 Q2 - Quarterly Report

PART I: FINANCIAL INFORMATION Financial Statements The company's unaudited financials show declining assets and ongoing net losses driven by significant R&D spending Condensed Consolidated Balance Sheets Total assets decreased to $470.6 million as of June 30, 2025, reflecting a growing accumulated deficit Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $52,332 | $75,218 | | Total current assets | $282,655 | $303,386 | | Total assets | $470,593 | $548,710 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $31,675 | $35,523 | | Total liabilities | $126,032 | $126,531 | | Accumulated deficit | $(1,930,499) | $(1,819,823) | | Total stockholders' equity | $344,561 | $422,179 | | Total liabilities and stockholders' equity | $470,593 | $548,710 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a reduced net loss of $110.7 million for H1 2025 due to lower operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $40,156 | $50,355 | $90,356 | $102,614 | | General and administrative | $14,281 | $16,087 | $29,272 | $33,354 | | Loss from operations | $(56,819) | $(71,431) | $(122,010) | $(140,935) | | Net loss | $(50,943) | $(66,358) | $(110,676) | $(131,358) | | Net loss per share, basic and diluted | $(0.23) | $(0.35) | $(0.51) | $(0.73) | Condensed Consolidated Statements of Cash Flows Net cash used in operations improved to $92.0 million in H1 2025, offset by cash from investing and financing Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(91,959) | $(119,487) | | Net cash provided by investing activities | $50,011 | $96,746 | | Net cash provided by financing activities | $19,062 | $110,253 | | Net change in cash, cash equivalents and restricted cash | $(22,886) | $87,512 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, a workforce reduction, and a significant clinical trial modification due to an adverse event - The company is a clinical-stage immuno-oncology firm developing 'off-the-shelf' allogeneic T cell product candidates for cancer and autoimmune diseases20 - Management expects that its cash, cash equivalents, and investments of $302.6 million as of June 30, 2025, will be sufficient to fund operations for at least the next 12 months2425 - In May 2025, the company initiated a 28% workforce reduction, recording charges of $4.7 million in Q2 20254546 - In May 2024, the agreement with Servier was amended, expanding the licensed territory for CD19 products and modifying future milestone and royalty payments5859 - Subsequent to the quarter end, the company closed the FCA arm (FC plus ALLO-647) of its ALPHA3 study to enrollment due to a Grade 5 adverse event attributed to ALLO-647110111 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical program priorities, a key trial modification, and an extended cash runway into H2 2027 Overview The company is advancing its CAR T pipeline, highlighted by a pivotal trial modification and a workforce reduction - The company's strategic focus is on three core clinical programs: ALPHA3 (cema-cel), RESOLUTION (ALLO-329), and TRAVERSE (ALLO-316)118 - On August 1, 2025, the company closed the arm testing FC plus ALLO-647 (FCA) in the ALPHA3 trial due to a Grade 5 adverse event attributed to ALLO-647121122 - In May 2025, a workforce reduction of approximately 28% was initiated to reprioritize resources towards clinical programs133 - As of June 30, 2025, the company had $302.6 million in cash, cash equivalents, and investments, with an expected cash runway into the second half of 2027134 Results of Operations Operating expenses decreased 13% in H1 2025, driven by lower R&D and G&A costs, resulting in a reduced net loss Comparison of Operating Results (in thousands) | Line Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Research and development | $90,356 | $102,614 | (12)% | | General and administrative | $29,272 | $33,354 | (12)% | | Impairment of long-lived assets | $2,382 | $4,989 | (52)% | | Total operating expenses | $122,010 | $140,957 | (13)% | | Net Loss | $(110,676) | $(131,358) | (16)% | - The $12.3 million decrease in H1 2025 R&D expenses was driven by a $7.1 million reduction in external development and manufacturing costs and a $2.7 million decrease in personnel-related costs177 Liquidity and Capital Resources With $302.6 million in cash and investments, the company has sufficient liquidity for at least the next 12 months - The company had $302.6 million in cash, cash equivalents, and investments as of June 30, 2025, and believes this is sufficient to fund operations for at least the next 12 months184 - In May 2024, a registered offering generated net proceeds of $105.2 million, and during H1 2025, ATM offerings resulted in net proceeds of $11.5 million185 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(91,959) | $(119,487) | | Net cash provided by investing activities | $50,011 | $96,746 | | Net cash provided by financing activities | $19,062 | $110,253 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks relate to interest rate fluctuations on its investment portfolio and foreign exchange - The company's main market risks are interest rate fluctuations on its $302.6 million cash and investment portfolio and foreign exchange risk from Euro-denominated payments206207 - As of June 30, 2025, the company had $23.5 million in an escrow deposit and minimal current liabilities denominated in foreign currency, primarily related to the Servier agreement208 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective209 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls210 PART II: OTHER INFORMATION Legal Proceedings The company is not currently involved in any material legal proceedings - Management believes there are currently no pending claims or actions that could have a material adverse effect on the company212 Risk Factors Key risks include a history of losses, financing needs, clinical trial uncertainties, and reliance on third parties - The company has a history of net losses ($1.9 billion accumulated deficit as of June 30, 2025) and will require substantial additional financing to continue development225 - The business is highly dependent on the success of its lead product candidates (cema-cel, ALLO-316, ALLO-329), and failure of any could significantly harm the company217248 - A Grade 5 serious adverse event (SAE) in the ALPHA3 trial's FCA arm led to its discontinuation, creating risks of regulatory action, negative perception, and potential liability217263 - There is uncertainty whether the FC lymphodepletion regimen alone (without ALLO-647) will be sufficient for cema-cel's efficacy in the ALPHA3 trial223366 - The company is heavily reliant on partners like Cellectis for TALEN gene-editing technology and Foresight Diagnostics for the MRD assay essential for the ALPHA3 trial223367370 - Reduced manufacturing operations following the May 2025 workforce reduction may limit the ability to support development programs and require a costly ramp-up in the future217302 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period Exhibits This section lists all exhibits filed with the report, including corporate governance and certification documents Signatures The report is duly signed by the Chief Executive Officer and Chief Financial Officer on August 13, 2025