Allogene Therapeutics, Inc. (ALLO) Earnings Call Transcript

Hello. Thank you for standing by and welcome to Allogene Therapeutics second quarter 2026 conference call. [Operator Instructions] Please be aware that today's conference call 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 welcome everyone to Allogene's conference call. After the market closed, Allogene issued a press release that provided a business update and financial results for the second quarter of 2026. This press release and today's webcast are available on our website. Following brief prepared remarks from Dr. Zachary Roberts, President and Chief Executive Officer, we will open the call for questions. Geoff Parker, Chief Financial Officer, will also join the Q&A. To help us conclude within 45 minutes, we ask that each analyst limit themselves to one question. 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, the potential treatment setting, 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'm going to turn the call over to Zach.

Thanks, Christine, and good afternoon, everyone. This is my first quarterly call as CEO, and it marks the beginning of a new chapter for Allogene, one made possible by the foundation David Chang helped build. David has been my mentor and one of the people who has most shaped how I think about cell therapy and drug development. More than that, he co-founded and built this company, led the field in the generation of clinical data in patients with relapsed cancer, and created the framework we needed to take Allogene into its next chapter. When I joined Allogene, my mandate was clear. Challenge the conventional thinking about how allogeneic CAR-T should be developed. That meant starting with the patient and working backward. Understand what patients and their care teams need, then design products and clinical programs that meet those needs. That work led to a deliberate strategic shift announced in 2024, designing programs and products that leverages features of the allogeneic cell therapy into a clinical advantage. We focused on settings that demand the unique attributes of off-the-shelf CAR T, ready availability, consistent product quality that is independent of the patient's immune status, and crucially, the ability to treat patients locally. Allogeneic CAR T is not a stepping stone between autologous therapy and whatever may come next. It is a distinct platform capable of filling gaps existing modalities cannot and progress across ALPHA3, ALLO-316 and ALLO-329 is beginning to demonstrate those advantages in practice. I will start with ALPHA3 because it is the clearest expression of this strategy. ALPHA3 arose from a simple premise. Can we identify patients at high risk of relapse after first-line treatment and intervene with CAR-T before the disease returns clinically? By treating earlier, the study aims to prevent relapse while avoiding much of the toxicity associated with standard second-line therapies, including autologous CAR-T. The trial is also designed to prove that we can overcome longstanding access barriers by enabling patients to receive CAR-T where they already received their first-line care in the community with the same doctors who gave them their first-line treatment. Testing this required a more precise way to identify patients at high risk of relapse. Standard methods used at diagnosis, such as disease stage and IPI, lack sufficient specificity because many patients classified as high risk by those methods are still cured with R-CHOP. That new tool emerged just weeks before I joined Allogene. When I saw the Foresight now Natera CLARITY data presented at ASH 2022, the design of ALPHA3 came into focus. When ALPHA3 began, MRD in large B-cell lymphoma was viewed largely as an academic research tool. We believed it could become far more a standard marker patient's prognosis and, if properly validated, a new treatment decision point. That view is gaining traction not only in LBCL but across oncology. In May, the FDA approved Tecentriq as adjuvant therapy for patients with bladder cancer who are in radiographic remission but remain MRD positive by circulating tumor DNA. The approval, based on the IMvigor011 study, is the first where patient selection was based solely on a ctDNA MRD test. IMvigor011 closely parallels ALPHA3's design and this approval, as well as a new Category 1 NCCN recommendation, signals a broader shift toward using MRD as a treatment decision trigger rather than waiting for clinical relapse. Fast forward to our first look at data from the ALPHA3 trial in April, the interim futility analysis, which provided an important early test of ALPHA3's hypothesis. Cema-Cel drove rapid MRD clearance in a majority of patients and did so with no treatment-related hospitalizations. Most patients were treated and followed entirely in the outpatient setting. And importantly, Cema-Cel was successfully delivered in community practices with no prior CAR-T experience. Together, those findings support ALPHA3's potential to change the lymphoma landscape by offering CAR-T earlier with less logistical burden and greater access across more treatment settings. At the end of July, the FDA granted both RMAT and Fast Track designations for Cema-Cel in first-line consolidation. These designations are based on two critical points. First, FDA acknowledges that MRD positivity at the end of first-line treatment is an unmet medical need. And second, Cema-Cel has the potential to meet that need. need. We interpret this action by FDA as validation for the ALPHA3 program. Additionally, RMAT creates an important opportunity for more frequent and focused engagement as we advance the trial. That engagement will be central to how we move forward. Our objective is clear. Execute the study well, protect its integrity, and work with the FDA toward the most efficient development and regulatory path. As enrollment continues, we expect opportunities in 2027 to update investors on the program, including enrollment progress and potential data such as the planned interim EFS analysis. The timing and scope of these updates will of course be guided by our regulatory discussions and the independent data monitoring committee. In the meantime, we will communicate meaningful operational and regulatory progress. Today we are proud to provide one such operational update. We entered the year with a goal of activating over 80 clinical sites by year end. With strong execution by the team and increased investigator interest following the interim futility analysis, we reached that goal in July. New academic and community-based investigators have asked to join the trial, citing enthusiasm for the initial MRD clearance data and safety profile and growing momentum of MRD testing in lymphoma. As a result, we now expect to have approximately 100 sites active by year end with the significant majority in the United States and additional sites in Canada, Australia, and South Korea. This expansion reflects growing investigator conviction in MRD and the ALPHA3 strategy, supports enrollment momentum, and gives more sites hands-on experience with Cema-Cel's ease of use ahead of a potential commercial launch. Turning to ALLO-316, the publication of the TRAVERSE results in the Journal of Clinical Oncology was an important milestone for the program and the Dagger platform. Solid tumors have been CAR T's hardest test. In patients with CD70 high renal cell carcinoma, ALLO-316 produced a 31% confirmed overall response rate the optimized regimen. At the data cutoff, none of the five confirmed responders had experienced disease progression, with follow-up ranging from eight months to more than 18 months after a single dose of ALLO-316. The data set is small, and the program has faced real safety challenges. We've been direct about both. But consistently, confirmed responses with this degree of durability in a solid tumor are notable. Just as important, the translational work gives us a much clearer view of the underlying biology of these responses using CAR T-cell expansion, persistence, tumor infiltration, and the contribution of Dagger. TRAVERSE also demonstrates how we operate. There were moments when the conventional decision would have been to stop development of ALLO-316. When toxicity emerged, our team brought in outside experts, engaged with the FDA, developed the management algorithm and continued learning. That work gave us a pathway to manage the most serious events while advancing understanding of an increasingly recognized immunotherapy toxicity and allowed us to generate the foundational clinical evidence for our Dagger technology pipeline. We are still far from declaring victory in solid tumors, but these results provide encouragement to keep pushing. They move the field forward and reinforce the principle that is central to allergy. When the biology is sound, we stay focused, learn from the data, and continue advancing the science. That same focus on thoughtful program design brings me to ALLO-329 and the RESOLUTION trial in autoimmune disease, where the core message is execution. Enrollment has moved quickly across cohorts, dose levels, and lymphodepletion strategies, even in a highly competitive field. We believe that momentum reflects a program designed with patients as the focus rather than one that asks them to adapt to the technology. ALLO-329 was designed with Dagger from the outset. Rather than designing another CAR-T product that requires chemotherapy-based lymphodepletion to work, the product is designed to function better when confronted by the biology of allo rejection by targeting the activated host T cells that contribute to it. Our objective is to both identify the optimal dose regimen for ALLO-329 and to understand how its cell dose, lymphodepletion, and Dagger work together. Strong enrollment and execution are keeping us on track to report a clinical and translational update by year end. Across all three programs, the through line is clear. We embrace the features of allogeneic CAR-T as unique strengths and have designed programs to allow us to meet the demands of patients when and where they arise. Over the next 12 months, we expect the value of that work to become increasingly visible, beginning with an ALLO-329 update by year-end and opportunities to update investors on ALPHA3 throughout 2027. Those milestones will help define our progress, but the standard we are working toward is simpler. Innovation only matters if patients can actually access it. We'll now open the call for questions.

[Operator Instructions] Our first question comes from Michael Yee of UBS.

Hey, good afternoon, guys. This is Matt on for Mike. Thank you so much for taking your questions. I wanted to add, I saw you guys added an observational cohort to the ALPHA3 study, and I just wanted to ask about kind of the design of this cohort, maybe what the goal of it is, and kind of the questions you're helping to answer. It looks like it's an MRD negative patient. So just to kind of expand on kind of what the goals are. I'm wondering how we could just show what that observational cohort might be.

Thank you so much. Matt, thanks for the question. So it's pretty straightforward. We added this cohort to help provide context for the overall results of ALPHA3 looking at the MRD-positive patients. Of course, those are the ones that we randomized now into ALPHA3, so having a paired MRD-negative cohort using essentially the same patient population as this is coming into ALPHA3 itself, will give that ability to compare outcomes in the observational cohort of the MRD positive patients as ALPHA3 with the MRD negative patients as well. So really it will give us the ability to further characterize the test itself in a prospective manner.

Our next question comes from Tyler Van Buren of TD Cowen.

Congratulations on your first call as CEO, Zach, and I appreciate the efficient prepared remarks. I guess given the acceleration of site activation by six months, is it possible that the interim EFS analysis could occur earlier than the guided mid-2027 timeline?

Thanks for the question, Tyler, and thanks for the congratulations. It's a thrill to be CEO and it's an honor. So getting to your question, so we are currently maintaining guidance that the EFS should occur at roughly the same time as previously guided. We are just moving to try to accelerate the enrollment of the study and of course working very hard to bring on as many sites for the reasons stated in the prepared remarks. But at this time we're not making any adjustments to the expectation of data availability.

Our next question comes from Salveen Richter of Goldman Sachs.

Hey, this is Mark on for Salveen. Thanks so much for taking our question and congrats on the progress. It was good to see the enrollment for ALPHA3 post the interim data. Could you give us a breakdown of enrollment cadence across academic versus community sites? Is the expectation still that it's going to be 1/3 community and 2/3 academic and what feedback are you hearing from the community physicians?

Without getting too specific here, I would say that the interest continues to be very high and growing in both the academic corners as well as the community corners. I would say that, that the surge of interest that we did see after the interim data really was pretty balanced between the two. We had some pretty big names centers reach out to try to join. And then we've got quite a number of community practices that also ask to join. So as far as how the patients break down in terms of where they come from, we actually have, I don't know if we've stated previously that it's about a third is expected. That's what we did see in the interim futility analysis. analysis, which was a very great outcome for us. I think that if we can maintain that or even bring it closer to parity in the final analysis, that would be something that we would be interested in doing. And that really does, I think, capture the last part of your question, which I believe was around what we're hearing from the various docs about the program. I think everything that we heard early on when we launched the study and even before that when we were just talking about it with sites is that the community practices view this as really the best and first true opportunity to access CAR-T for their patient populations. And the academicians, on the other hand, you know, are very excited about, you know, cutting edge technologies, serving their patients in ways that improve the benefit-risk profile, ideally preventing relapse, which everybody universally agrees is a bad outcome. So, across the board, we continue to hear very strong conviction that this strategy is excellent for patients, and then from the community practices specifically, enthusiasm around gaining access to CAR T, which has been out of their reach from the beginning.

Our next question comes from Samantha Semenkow of Citi.

Zach, let me add my congratulations on your first call as CEO. So just another one on ALPHA3. As we look forward to the interim EFS analysis mid-next year. Just wondering how we should think about that analysis in terms of the potential for overwhelming benefit to be demonstrated. If the interim MRD assessment that we saw is repeatable for with more patients. How likely is that to translate into a stat-sig benefit on EFS at the interim analysis? Thank you.

Thanks, Samantha, and it's a great question. So, as we went into some detail when we released the data in April, the strong MRD clearance data that we observed we did think was quite positive and gave us some very positive views on the potential outcome of the study, either at the interim EFS or at the primary analysis. We also detailed that because of the way that we've allocated the alpha between those two EFS analyses, that it would require overwhelming efficacy to achieve statistical significance at the midway point there at the EFS, the interim EFS analysis. You know, we can't really go into further detail around, you know, whether about how we're thinking about the likelihood of that statistical significance, except I will reiterate that prior studies such as the, the TRANSFORM study of Breyanzi illustrated that a 24% MRD clearance differential between the CAR T and the transplant arm translated into a greater than 60% improvement in the EFS between those two arms. So a very, very positive outcome there on a comparatively lesser differential in the MRD clearance rate. So we remain very excited about the potential for a positive outcome here, but going into any further detail around how that might play out at the EFS analysis that is currently planned for middle of next year. I don't want to get too far ahead of myself on that one.

Thank you. And our next question comes from Matt Phipps of William Blair.

Hey team, this is Josh on for Matt. Thanks for taking my question and congrats on such a good quarter. So I had a question on the RESOLUTION readout as it approaches. We were wondering what kind of data and the level of granularity that we should expect from the readout later this year.