Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q3 2025 Earnings Call Transcript

Allogene Therapeutics, Inc. (NASDAQ:ALLO) Q3 2025 Earnings Call Transcript November 7, 2025

Operator: Hello, and thank you for standing by. Welcome to Allogene Therapeutics Third Quarter 2025 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.

Christine Cassiano: Thank you, operator, and welcome, everyone, to Allogene’s Third Quarter 2025 Conference Call. After the market closed, Allogene issued a press release that provided a business update and financial results for the third quarter of 2025. This press release and today’s webcast are available on our website. Following our prepared remarks, we will host a Q&A session. We recognize that historically, questions have been multifaceted, but note that we will endeavor to keep this call to under an hour. I’m joined today by 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 our product candidates, commercial market forecast 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 the 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’ll now turn the call over to David.

David Chang: Thank you, Christine. This quarter has been about conviction, conviction in our science in the path we have chosen and in the future we are building for patients. We are aware of the shifting conversation in the field. Every new modality brings excitement and speculation about what the future might hold. But true innovation isn’t about chasing what’s next. It is about delivering what patients need now. And if a platform can safely, effectively and at scale deliver curative therapies, it doesn’t just shape the future. It redefines it. At Allogene, our focus has never wavered. We are advancing the platform we believe is not only essential to making cell therapies accessible and scalable, but one that could fundamentally and the current paradigm and even the one others are still imagining by making the promise of curative onetime off-the-shelf cell therapy a reality today.

And that’s exactly what allogeneic cell therapy represents. It’s not a breach to something else. It is the foundation. Allogeneic technology delivers the scalable backbone needed to democratize access, reduce the overall cost of care and bring transformative and potentially curative treatment to far more patients than ever before. We expect allogeneic therapy to be central across oncology and autoimmune disease because it combines the precision and power of autologous with a flexible, efficient and commercially viable model, no other approach can. Its capacity for multiplex gene engineering allows the creation of future platform products within a single cell, an advance that we believe will be critical for addressing complex cancers, including solid tumors.

This is an incremental progress. It’s a leap forward that reshapes what’s possible. We have done the hard work to make the future real. Our leadership in manufacturing, translational science and clinical development positions Allogene to endure and lead, setting the standard for how cell therapy can be delivered at scale and with impact. Each of our programs, cema-cel, ALLO-329 and ALLO-316 reflects that strategy to make cell therapy scalable, practical, successful and in some cases, curative. At Allogene, we are not waiting for the future of cell therapy. We are creating it with conviction, with data and with a platform built for lasting impact. As we move into next year, we are preparing for what we expect to be a defining moment with pivotal interim data from cema-cel in the ALPHA3 trial in first-line consolidation and proof of concept from ALLO-329 in autoimmune disease, both milestones that we believe will shape the next era of cell therapy.

With that, I’ll now turn it to Zach to share updates on our R&D progress.

Zachary Roberts: Thanks, David. Our programs this quarter continue to demonstrate the conviction David spoke of, conviction in our science and our execution and the discipline required to advance truly innovative medicines. Across ALPHA3, Resolution and Traverse, we’re driving forward a portfolio that spans earlier line lymphoma, autoimmune disease and solid tumors. Each is a distinct challenge, but together a unified demonstration of the strength and versatility of our allogeneic platform. In ALPHA3, our pivotal trial of cema-cel has now been streamlined into a 2-arm randomized study comparing treatment after standard Fc lymphodepletion versus observation. This structure balances efficacy, safety and scalability, which are critical for translating CAR-T therapy into earlier lines of treatment.

We are now at more than 50 active sites across the U.S. and Canada with expansion into Australia and South Korea expected early next year. The planned futility analysis focused on MRD conversion remains on track for the first half of 2026. A positive outcome would not only demonstrate disease modification in earlier line lymphoma, it would also mark a key step toward a potential BLA submission. As we look ahead to the upcoming futility analysis and the questions we often get about what success looks like at this stage, there are 2 key benchmarks worth keeping in mind. The first is the pivotal POLARIX study, and the second is the recent IMvigGor-11 trial in bladder cancer, which is highly analogous to what we’re doing with ALPHA3. The POLARIX study, which evaluated polatuzumab plus chemoimmunotherapy in frontline DLBCL demonstrated a modest 7% improvement in progression-free survival over standard treatment.

That result alone underscores how much opportunity remains for meaningful progress and the transformative potential of ALPHA3. While ALPHA3 is the first study of its kind in LBCL, the concept of consolidating remission in patients at high risk of relapse has guided adjuvant trials in solid tumors for decades. Highly sensitive MRD tests are emerging as powerful tools to identify patients at greatest risk of progression. The recent data from the IMvigor 11 trial in bladder cancer is a powerful illustration of this approach. Patients with no evidence of disease after definitive frontline treatment, in this case, surgery, underwent a ctDNA-based MRD test. Those who are ctDNA positive while in remission were randomized to immunotherapy or placebo.

Notably, ctDNA clearance differed by only 11% between arms at cycles 3 or 5, yet both the primary endpoint of disease-free survival and the key secondary endpoint of overall survival were statistically significant, representing a potentially practice-changing advance. While every study is different, the new IMvigor 11 data provides a valuable analog for illustrating the potential impact of this kind of approach. Achieving an approximately 30% delta between cema-cel and observation would represent the largest improvement in lymphoma outcomes since the approval of rituximab. Given these reference points, we believe our study is well positioned to deliver a highly meaningful difference and the potential for a successful trial outcome. Together, these insights reinforce our confidence in the strength of the ALPHA3 program and its potential to meaningfully advance lymphoma treatment.

As we look beyond cema-cel, our Dagger technology continues to demonstrate its value across indications. In the TRAVERSE trial, the Dagger technology enabled ALLO-316 produced durable responses in nearly 1/3 of patients with metastatic kidney cancer and high CD70 expression. These responses following standard Flu/Cy and a single infusion of ALLO-316 highlight the built-in lymphodepletion advantage of the Dagger technology, enabling best-in-class CAR T cell expansion in solid tumors. The TRAVERSE trial provided important insights that helped shape the design of our dual CD19/CD70 construct in autoimmune disease. Rather than repurposing a construct from another indication, we set out to create something truly fit for purpose designed from the start with a long-term application in mind for autoimmune disease and the patients who would be treated.

We were the first to engineer CAR specifically for this setting, pairing dual targeting with our Dagger technology to achieve intrinsic built-in lymphodepletion through selective immune modulation. ALLO-329 is a first-in-class allogeneic CD19, CD70 dual CAR T product designed to target both CD19-positive B cells and CD70-positive activated T cells, which are key drivers of autoimmune disease. This approach is intended to simplify administration, improve tolerability and extend the reach of CAR-T therapy to a much broader patient population. If successful, it could represent a step change in the treatment of immune-mediated diseases. That is what we aim to achieve in the resolution study, our Phase I basket trial in autoimmune disease, which is now enrolling for lupus, myositis and scleroderma.

We expect to report translationally important biomarker and early proof-of-concept data in the first half of 2026. Dave and I spend a great deal of time in the field of investigators. Their enthusiasm remains strong because they see how these studies could fundamentally change the accessibility of cell therapy. By enabling treatment delivery within community networks where most patients receive care, we are aligning with how these institutions operate clinically and economically. This model reduces referral barriers, simplifies logistics and supports sustainable integration of advanced therapies into routine practice. Clinical development is complex. We compete for patients, particularly in autoimmune indications and face both scientific and operational challenges.

But each challenge strengthens our understanding and sharpens our execution. That is the nature of innovation, iterative, demanding and grounded in data. Collectively, our programs underscore that allogeneic CAR T is not an iteration. We believe it is the foundation upon which the next generation of cell therapy will be built. The science continues to advance. The early signals remain strong, and our focus is on turning that progress into real-world impact for patients. With that, I’ll hand the call over to Geoff.

Geoffrey Parker: Thank you, Zach. The operational and scientific progress that David and Zach described is backed by a strong financial foundation and disciplined capital management. Our focus remains on advancing our clinical priorities while maintaining flexibility to capture long-term value for shareholders. As of September 30, 2025, we had $277.1 million in cash, cash equivalents and investments. Our disciplined approach to resource management continues to support a cash runway that extends into the second half of 2027. R&D expenses for the third quarter were $31.2 million, including $2.8 million of noncash stock-based compensation. G&A expenses for Q3 2025 were $13.7 million, including $5.9 million in noncash stock-based compensation.

Net loss for third quarter was $41.4 million or $0.19 per share, including noncash stock-based compensation expense of $8.7 million. We continue to expect 2025 cash burn of approximately $150 million and full year GAAP operating expenses of approximately $230 million, which includes an estimated noncash stock-based compensation expense of approximately $45 million. This guidance excludes any impact from potential business development activities. The impact of our allogeneic platform extends well beyond our disciplined cost structure. By manufacturing product in advance and at scale, we lay the groundwork for a more efficient and sustainable model for the broader health care system. Allogeneic therapies have the potential to meaningfully lower the overall cost of care for cell therapy, expand access beyond specialized centers and make transformative cell therapies available to patients in a way that is both clinically practical and economically viable.

With important clinical catalysts on the horizon and a solid financial foundation, we remain confident in our ability to execute and deliver on the opportunities ahead. We will now open the call for questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Salveen Richter with Goldman Sachs.

Salveen Richter: For the futility analysis in the first half of next year, could you see any data beyond MRD conversion? And can you just expand on the 30% bar that you commented on? And then just remind us how enrollment is progressing for ALPHA3 and whether you’ve seen any changes post discontinuation of the FCA LD arm earlier in the year?

Zachary Roberts: Salveen, this is Zach. I’ll go ahead and answer that one. So for the first part of your question, will we be sharing anything additional besides the MRD conversion. At this time, we plan to really focus on the MRD conversion. This is not an interim analysis in which we intend to allocate alpha. So we really are looking at this MRD conversion and not any of the primary endpoints for efficacy. As far as the 30% bar that we mentioned in the prepared remarks, I think we went into some detail as to why we think that, that would be a pretty significant win for cema-cel in that trial with the benchmarks of the POLARIX data showing a 7% improvement in PFS in frontline lymphoma and then sort of looping in some recent data that was published from an analogous trial in bladder cancer, showing an 11% MRD clearance in that clinical context, yet still having a significant primary endpoint win on disease-free survival as well as an overall survival win there.

So we think that 30% would be a pretty strong showing for cema-cel as it pertains to the MRD clearance rate. And then I think the third part of your question, Salveen, was around enrollment. And we’ll say — I’ll reiterate here that we’re on track for our — the interim analysis, the futility analysis in the first half of next year. As far as impact of the study conduct change when we had the grade 5 event over the summer and went to a 2 arm as instead of a 3 arm, I think the general view of the investigators is that they are pleased to be working with a regimen that they consider a standard in CAR-T and not having to use an additional component with the CD52 antibody. So it appears as though that has had a slight uptick in terms of the patient screening for this trial.

Operator: Our next question comes from the line of Tyler Van Buren with TD Cowen.

Tyler Van Buren: This is Sam on for Tyler. Just for the over 50 U.S. and Canada active sites, what percent of these have made it through that initial internal setup period and are now able to start actively enrolling patients?

Zachary Roberts: Sam, this is Zach again. We have gotten a lot better at forecasting how long that internal setup takes as well as sort of incorporating that into our time lines. So I would say that of the over 50 that are active, it’s going to be close to all of them that are open to enrollment. Only the most recently activated sites might still have a few remaining things that they need to do before they switch on. But for the most part, all 50 of those 50-plus are actively screening and enrolling patients.

Operator: Our next question comes from the line of Jack Allen with Baird.

Jack Allen: Congrats to the team on the progress made over the course of the quarter. I guess I’ll ask one on the autoimmune program with 329. It seems like that’s starting to get off the ground here, and you’re going to have an update in the first half of next year. I just wanted to hear any updated thoughts you have around the size and breadth of the data set we should expect next year from that program.

David Chang: Chad, this is David Chang. Let me take that question, giving Zach a little bit of break. In terms of the scope of that data communication, as we have previously said, there will be a handful of patients where we can show biomarker as well as the early clinical responses. So that’s the extent of it. And frankly, what we have seen with autologous programs is a handful of patients are sufficient to really understand what’s going on with the CAR-T therapy. So we are hoping that the initial communication early first half of next year will be a very meaningful communication.

Operator: Our next question comes from the line of Sami Corin with William Blair.

Samantha Corwin: On the progress I’m curious how many patients have consented for MRD testing now in ALPHA3 and if you’re seeing the expected rate of MRD positivity that you initially theorized you’d see?

Zachary Roberts: Sami, it’s Zach. So I don’t think we have — since we made that update earlier this year around the number of patients who had consented, we haven’t really been providing kind of regular updates on that. I can say, generally speaking, that the pace of consenting has at least held steady since that early part of the year. So we’re really growing numbers. And as far as the MRD positive rate goes, it is holding steady to our assumptions.

Operator: Our next question comes from the line of with Asthika from Truist.

Karina Rabayeva: This is Karina. So Caribou recently reported that their allogeneic CAR T product derived from younger donors demonstrated improved durability. Have you observed similar associations in your experience?

David Chang: Carina, let me take that question. Yes, we follow Caribou and in terms of their recent announcement of the result looks pretty encouraging. But in terms of the material, I mean this is something that we have been following pretty closely, and we have a good way to identify the exciting materials that will result in very potent and consistent products.

Operator: Our next question comes from the line of Samantha Semenkow from Citi.

Samantha Lynn Semenkow: Another one on the autoimmune program. I’m wondering, there’s some recent data in the autologous space in pemphigus where there was no lymphodepletion in that trial that showed some pretty encouraging results. I’m wondering if there’s any read-through that you can take into your program. Obviously, you have the CD70 CAR as well. But I’m curious if this increases your optimism on showing pretty robust efficacy without lymphodepletion.

David Chang: Samantha, Dave here. Thanks for that great question. I have to say that what we are seeing in both autologous CAR-T therapy, so obviously, autologous and allogeneic, there are different issues. But what we have seen just gives us even higher confidence that ALLO-329. This is CD19 dual CAR that has built-in lymphodepleting capability that ALLO-329 in the low-volume setting, such as in the autoimmune disease setting where it targets essentially the resident B cells and activated T cells, it will work well without the lymphodepletion. Obviously, we have to show that. And just as a reminder, in the ongoing study, we will be testing 2 different cohorts, one with a reduced lymphodepletion. So this is just with the cyclophosphamide alone. And the second cohort will be without any lymphodepletion.

Operator: Our next question comes from the line of John Newman with Canaccord.

John Newman: So David, given that 329 is pretty unique in that it targets both B cells and activated T cells, I’m wondering, in the initial data readout, will you be able to get a look at the phenotype of the remaining T cells, just to see if perhaps there’s anything left after you hopefully wipe out all the CD70-positive T cells.

David Chang: John, I think that’s definitely something that we are looking — we will be looking at, but I think it will be — now that’s also going into very nuanced questions about how the CD70 is working. I mean we certainly have looked at the fraction of CD70 positive versus CD70 negative T cells. And keep in mind, most plascent T cells are CD70 negative and are not affected by ALLO-329. And there’s a real benefit of just eliminating activated T cells and activated T cells here potentially those that are contributing to the autoimmune disease itself as well as our reactive T cells. So in terms of how much data we will be sharing when we announce the proof-of-concept data in the first half of 2026, — let me not go too much into that, but the question is really very relevant, and we will certainly be looking at CD70 positive and CD70 negative fractures.

Operator: Our next question comes from the line of Clara Dong with Jefferies — our next question comes from the line of Reni Benjamin with Citizens Bank.

Reni Benjamin: Also for ALLO-329, — when you talk about the biomarker data, David, are there any in particular that would alert you to achieving a B-cell reset? And when we get those results, will the results be robust enough that it can help you, help us as an analyst and decide which indications you might move forward with?

David Chang: Yes. Great question. I mean there are 2 parts to your question. One is whether the biomarker data will give us a lot of insight about how AL-329 is working. Having seen most of the data that’s coming out in this space from a CAR T, I do believe that the biomarker data will be very meaningful. But also, we intend to show some early clinical responses depending on how long the patient has been followed up. So when we communicate the proof-of-concept data in the first half of 2026, it will be more than just a biomarker. There will be early sort of clinical responses that may corroborate with what we see in the biomarker data. The second question to me is probably the most fascinating one. And if anything, I believe that we have probably very broad indications that we can potentially consider.

The fact that 329 targets both CD19 and CD70 really allows us to not just think about those autoimmune disorders that are heavily B cell driven, but also autoimmune diseases that are very T cell dependent or has a big T cell component. So essentially from the rheumatology indications to neurology indications such as multiple sclerosis or even metabolic indications such as type 1 diabetes, and it could be considered. So stay tuned.

Operator: Our next question comes from the line of Brian Chen with JP Morgan.

Lut Ming Cheng: This is Ron on for Brian. Can you talk about your level of confidence in the MRD conversion to event-free survival? And then when you said around 30% MRD conversion as the bar, can you clarify a bit on the time point that is going to be meaningful for LBCL? And then how soon dosing do you think we can reach that level of conversion? Zach, do you want to take that question?

Zachary Roberts: Yes, I can take that question. So Ron, I may need to have you repeat 1 or 2 of them. But I think the first question was how confident are we in the prognostic value of MRD conversion as it relates to the study endpoints, I would say we’re pretty confident, high confidence actually, given everything that we know about the performance of this assay after frontline, which was recently published in JCO as well as after CAR-T has been shown at ASH a couple of years in a row. The test seems to be pretty good and actually correlating with long-term outcomes. Can you repeat the next 2 questions? I heard the second one, but I didn’t hear the third one.

Lut Ming Cheng: Yes, of course. Sorry. When you said the bar you said of 30% MRD conversion, can you clarify a bit on the time point that’s going to be meaningful for LBCL? And then how soon after dosing do you think we can reach that level?

Zachary Roberts: I see. Okay. So yes, the 30% that we’ve been talking about, I think we’ve provided some context already on this call why we picked that number. I mean another way to look at that is that’s equivalent or maybe even slightly better than what rituximab brought when it was added to CHOP. So if the MRD conversion is roughly predictive of clinical endpoints, as I just described, I think it is, that would be a pretty significant win. Some might even call a home run. As far as the time point goes, we haven’t gone into detail around what exactly — what time we’re drawing these MRD results. But what I can say is that is a pretty dynamic test, meaning that it goes up fast and it goes down fast. And so we are able to assess MRD relatively soon after the CAR-T is infused. Again, we haven’t specified exactly what that time point is. But we are pretty confident that the time point that we selected is going to be predictive for the clinical outcomes.

Operator: Our next question comes from the line of Luca Issin with RBC Capital Markets.

Luca Issi: This is Catia on for Luca. Congrats on the progress this quarter. And if I can push on the last question on the timing of analysis for MRD. Is the futility study for stopping the trial as MRD is below your bar of 30%. And I think you mentioned the last time the 30% MRD bar is partially based on other autologous CAR-Ts objective response rate. And correct me here, if I’m not understanding this correctly, but that is from a potentially much longer follow-up. So is there a chance that you see insufficient MRD at your futility analysis first half next year, but we’ll probably just have to give it more time. Any color there much appreciated.

David Chang: Yes. Let me take that question. I think there are some questions still around what would look good for the study. And in terms of the MRD conversion, which is the primary — the reference point that we will be looking at the futility analysis, I think we are very well grounded with the assumptions that we are making, and that assumption is supported from many different angles, the data that’s coming from the autologous CAR T therapy as well as more new data coming from other MRD-based studies. So we feel very comfortable about how we will be conducting the futility analysis in the first half of next year.

Operator: Our next question comes from the line of Robert Burns with H.C. Wainwright.

Robert Burns: This is Katie on for Rob. My question is more about your — if you have any more recent interactions with the FDA and if you feel like the kind of move towards greater flexibility in CAR-T oversight might give you some accelerated pathways or reduce some friction for you guys to get to market.

David Chang: Yes. We have a lot of ongoing communications with FDA. And so far, it has been very timely and very productive. And the question that you are raising, it is a very interesting one. I mean, I think we will have to see when the time comes, but all the indications that we can make from what FDA has said is that a single-arm approach with CAR-T therapy, that path is still wide open. And FDA is carefully reviewing the other side of the BLA requirement, what is needed on the CMC side. So we view this to be very positive for what we are doing.

Operator: Our next question comes from the line of Clara Dong with Jefferies.

Unknown Analyst: [Technical Difficulty] I apologize for technical issues. And just one question from me. How are you controlling for variability in the MRD assay sensitivity, if any, across different sites? And what steps are you taking to ensure consistency in MRD conversion assessment for the futility analysis?

Zachary Roberts: Claire, that’s an easy one. The MRD test is all being done centrally by Foresight Diagnostics. So all the sites are doing is collecting the samples and then sending them into the central lab. So we don’t expect there to be any kind of technical variability in the test performance.

Operator: Ladies and gentlemen, that concludes our question-and-answer session. I would now like to turn the conference back over to David for any additional comments.

David Chang: Thank you, operator. Let me close out by saying that everything we have built over the past 7.5 years has led to what’s ahead in 2026. There are many ideas about where cell therapy is headed, but progress depends on staying focused on what is real and achievable. At Allogene, we kept our focus on building therapies that are scalable, reproducible and ready for patients. In the first half of 2026, we expect 2 major milestones, interim futility data from ALPHA3 with stem-cell in first-line consolidation and proof-of-concept results from ALLO-329 in autoimmune disease. These will not be theoretical advances. If successful, they will mark true clinical validation of the allogeneic platform, shaping our company’s trajectory and building broader confidence in the potential of allogeneic CAR T therapy.

The opportunity ahead is significant. We are entering 2026 with conviction, clarity and momentum and are excited for what the coming months may hold. Operator, you may now disconnect.

Operator: Thank you. Ladies and gentlemen, thank you for your participation in today’s conference. That does conclude the program, and you may now log off and disconnect.