What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-05-13 · 145 added, 71 removed, 259 unchanged (45% of the section changed)

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In June 2024, we initiated a pivotal Phase 2 clinical trial (ALPHA3) evaluating cemacabtagene ansegedleucel (cema-cel, previously ALLO-501A) as part of a first-line (1L) consolidation treatment for patients newly diagnosed with large B-cell lymphoma (LBCL) who, despite initial treatment success, remain at high risk for relapse.

The study is currently enrolling across more than 60 sites in North America and is now expanding globally, with site activation and patient screening underway in South Korea and Australia, which global expansion is expected to bring the trial to more than 80 sites worldwide.

The study is currently enrolling at over 80 sites across the United States, Canada, South Korea and Australia.

We are continuing activities to support the potential expansion of ALPHA3 into the European Union, subject to applicable regulatory approvals and operational requirements.

Our expansion of ALPHA3 internationally is expected to bring the trial to approximately 100 sites worldwide.

The ALPHA3 trial design expands on findings from our Phase 1 ALPHA2 study and incorporates an investigational diagnostic developed by Foresight Diagnostics, Inc., which was acquired by Natera, Inc.

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Instead, we will advance our next-generation AlloCAR T product candidates using the proprietary Dagger® Platform Technology, which is designed to minimize or potentially eliminate the need for standard lymphodepletion.

The amended ALPHA3 trial is proceeding as a randomized study with two arms, comparing cema-cel after standard FC lymphodepletion to observation, the current standard of care, and is expected to enroll approximately 220 patients.

Statistical design of the trial and the prespecified study conduct remain the same.

We recently amended the protocol to add a non-randomized observational cohort of approximately 140 MRD-negative patients, who will be followed to further characterize MRD test performance.

We do not expect this observational cohort to impact the enrollment timeline for the existing randomized MRD-positive portion of the trial.

The protocol amendment also expanded the disease subtypes that may qualify patients for enrollment to include transformed follicular lymphoma, transformed marginal zone lymphoma and follicular lymphoma grade 3B.

The statistical design and prespecified conduct of the randomized MRD-positive portion of the trial remain unchanged.

On April 13, 2026, we announced results from the planned interim futility analysis of the first 24 randomized patients to the two ongoing arms in ALPHA3.

At the protocol-defined data cutoff, which was triggered when the 24th patient completed Day 45 MRD assessment, MRD negativity was observed in 58.3% (7/12) of patients in the cema-cel arm compared with 16.7% (2/12) of patients in the observation arm, and ctDNA levels decreased from baseline by a median of 97.7% in the cema-cel arm compared with a median increase of 26.6% in the observation arm.

At the protocol-defined data cutoff, which was triggered when the 24th patient completed Day 45 MRD assessment, MRD negativity was observed in 58.3% (7/12) of patients in the cema-cel arm compared with 16.7% (2/12) of patients in the observation arm, and at the Day 45 post-randomization MRD assessment, ctDNA levels decreased from baseline by a median of 97.7% in the cema-cel arm compared with a median increase of 26.6% in the observation arm.

The primary endpoint of EFS and key secondary endpoints, including progression-free survival and overall survival, remain blinded.

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We believe this early experience supports the potential for cema-cel to be administered in a broader range of treatment settings than autologous CAR T therapies, although these data remain limited and may not be predictive of future outpatient or community-based administration.

We anticipate completing enrollment by the end of 2027, conducting an interim EFS analysis in mid-2027, and conducting the primary EFS analysis in mid-2028.

We anticipate completing enrollment of the randomized MRD-positive portion of ALPHA3 by the end of 2027, conducting an interim EFS analysis in mid-2027, and conducting the primary EFS analysis in mid-2028.

In July 2026, the FDA granted RMAT and Fast Track designations to cema-cel for the ALPHA3 development program as a potential first-line consolidation treatment for patients with large B-cell lymphoma (LBCL).

These designations are intended to facilitate more frequent engagement with the FDA and may support an expedited development and review process if applicable criteria are satisfied.

We are also advancing ALLO-316, and we have completed enrollment of 20 treated patients in an expansion cohort in a Phase 1b clinical trial (TRAVERSE) of ALLO-316, an allogeneic CAR T cell product candidate targeting CD70, in adult patients with advanced or metastatic clear cell renal cell carcinoma (RCC).

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On October 29, 2024, we announced that we had received Regenerative Medicine Advanced Therapy (RMAT) designation for ALLO-316 for adult patients with advanced or metastatic RCC.

In data presented on June 1, 2025, at the ASCO 2025 Annual Meeting, ALLO-316 demonstrated a confirmed overall response rate (ORR) of 31% in patients with high CD70 expression (TPS ≥50%), with 44% achieving at least a 30% reduction in tumor burden.

Four out of five confirmed responders continue to maintain their responses, including one patient in sustained remission exceeding 12 months.

The median duration of response (mDOR) has not yet been reached, underscoring the potential for long-term disease control.

In results from the Phase 1 TRAVERSE trial published in the Journal of Clinical Oncology on July 14, 2026, based on a November 3, 2025 data cutoff, ALLO-316 demonstrated a confirmed overall response rate (ORR) of 25.0% (five of 20 patients;

95% confidence interval, 8.7% to 49.1%) in the Phase 1b cohort and 31.3% (five of 16 patients;

95% confidence interval, 11.0% to 58.7%) in patients with high CD70 expression (TPS ≥50%).

Seven of the 20 Phase 1b patients, or 35.0%, achieved a greater than 30% reduction in target-lesion size from baseline.

No responses were observed among the four Phase 1b patients with CD70 TPS below 50%.

The median duration of response was not estimable (95% confidence interval, 6.9 months to not estimable), and no progression events had occurred among responders after a minimum follow-up of eight months.

The median overall survival was 15.2 months in the overall Phase 1b population and was not estimable in the CD70-high subgroup.

We have implemented a diagnostic and treatment algorithm designed to mitigate treatment-associated immune effector cell-associated hemophagocytic lymphohistiocytosis-like syndrome (IEC-HS) while preserving CAR T efficacy.

We continue to believe this approach has proven effective by enabling early intervention and effective management, resulting in a safety profile consistent with standard lymphodepletion and active CAR T treatment.

In the Phase 1b safety population, IEC-HS was reported in eight of 22 patients, or 36.4%, including two patients, or 9.1%, with Grade 3 or higher events.

No Grade 5 IEC-HS events occurred.

Cytokine release syndrome was reported in 68.2% of patients, with no Grade 3 or higher events;

immune effector cell-associated neurotoxicity syndrome was reported in 18.2%, with no Grade 3 or

higher events;

and no graft-versus-host disease occurred.

The publication reported that IEC-HS was largely controlled in the final 20 patients enrolled following implementation of diagnostic criteria and the tailored treatment algorithm.

No Grade 5 treatment-related adverse events occurred in the Phase 1b cohort.

In July 2025, we held an RMAT meeting with the FDA regarding next steps for the ALLO-316 development program, and we believe we have reached alignment with the FDA on the design of a registration trial for adult patients with advanced or metastatic RCC.

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On April 7, 2025, we announced that ALLO-329 had received three Fast Track Designations from the FDA for the treatment of adult patients with SLE, IIM, and SSc.

The RESOLUTION trial is evaluating ALLO-329 under multiple treatment approaches, including administration following cyclophosphamide-based

lymphodepletion, with the option of adding fludarabine permitted under the protocol, and administration in a separate arm without lymphodepletion.

As of May 2026, nine patients have been treated, including six patients across Dose Level 1 (20 million cells) and Dose Level 2 (40 million cells) following lymphodepletion with cyclophosphamide and three patients at Dose Level 1 with no lymphodepletion.

Initial observations at these early dose levels have shown signs of clinical activity and favorable tolerability.

Dose escalation and lymphodepletion optimization are ongoing, and we expect to provide an additional clinical and translational data update in late 2026.

The RESOLUTION trial is evaluating ALLO-329 under multiple treatment approaches, including administration following cyclophosphamide-based lymphodepletion, with the option of adding fludarabine permitted under the protocol, and administration in a separate arm without lymphodepletion.

We recently activated the optional fludarabine and cyclophosphamide lymphodepletion dose-escalation arm to further assess the role of fludarabine in the autoimmune indications being studied and to accommodate ongoing patient demand for participation in the trial.

We provided an enrollment update in May 2026, and enrollment continues to progress.

Dose escalation and lymphodepletion optimization are ongoing, and we expect to provide a clinical and translational data update in late 2026.

In April 2026, Nature Communications published preclinical data supporting the design of ALLO-329 and our CD70 Dagger® technology.

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The Servier Amendment also grants us an option to further expand the licensed territory to include China and Japan upon the objective showing of sufficient resources to develop licensed products in those countries, which could be met through the Company entering into a strategic partnership covering those countries.

Additionally, in February 2025, we entered into an Amended and Restated Strategic Collaboration Agreement with Foresight Diagnostics (which was acquired by Natera in December 2025 and continues to operate as a standalone subsidiary), which expands our collaboration to enable the development of Foresight Diagnostics’ MRD assay in the EU, UK, Canada and Australia in support of our clinical development of cema-cel.

In May 2025, we initiated a workforce reduction of approximately 28% of our employees (Workforce Reduction) in connection with a reduction in manufacturing operations and a reprioritization of resources to focus on our ongoing clinical programs.

We believe we currently hold sufficient inventory of cema-cel, ALLO-329, and ALLO-316 to meet our near-term clinical needs, including completing our current ALPHA3, RESOLUTION and TRAVERSE trials.

The Workforce Reduction was substantially completed in the second quarter of 2025, and we estimate that we incurred approximately $3.3 million in cash-based expenses related to employee severance payments, benefits and related costs in connection with the Workforce Reduction.

We may also incur other charges, including cash expenditures, not currently contemplated due to events that may occur as a result of, or are associated with, the Workforce Reduction.

The Workforce Reduction was substantially completed in the second quarter of 2025, and we incurred $3.2 million in cash-based expenses related to employee severance payments, benefits and related costs in connection with the Workforce Reduction.

Following our April 2026 announcement of ALPHA3 interim results and Public Offering, we have increased hiring activities to support our manufacturing, clinical development and BLA-readiness efforts.

On May 28, 2026, we announced a planned leadership change.

David Chang, M.D., Ph.D.

transitioned from his role as President and Chief Executive Officer effective June 30, 2026 and continues to serve on our Board of Directors as a non-employee director.

Zachary Roberts, M.D., Ph.D., previously our Executive Vice President, Research & Development and Chief Medical Officer, was appointed President and Chief Executive Officer and appointed to our Board of Directors, effective July 1, 2026.

Roberts will also continue as Chief Medical Officer on an interim basis.

Since inception, we have had significant operating losses.

Our net loss was $42.6 million for the three months ended March 31, 2026.

As of March 31, 2026, we had an accumulated deficit of $2.1 billion.

As of March 31, 2026, we had $266.9 million in cash and cash equivalents and investments, before giving effect to $187.9 million in net proceeds from our April 2026 Public Offering.

We expect our cash runway, including such net proceeds, to fund operations into the first quarter of 2029.

Our net loss was $42.7 million and $85.3 million for the three and six months ended June 30, 2026, respectively.

As of June 30, 2026, we had an accumulated deficit of $2.1 billion.

As of June 30, 2026, we had $423.6 million in cash and cash equivalents and investments.

We expect our cash runway, including the net proceeds from the April 2026 Public Offering, to fund operations into the first quarter of 2029.

We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses and general and administrative expenses will continue to increase.

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In April 2018, we entered into an Asset Contribution Agreement (the Pfizer Agreement) with Pfizer pursuant to which we acquired certain assets and assumed certain liabilities from Pfizer, including agreements with Cellectis S.A.

(Cellectis) and

Servier as described below, and other intellectual property for the development and administration of CAR T cells for the treatment of cancer.

(Cellectis) and Servier as described below, and other intellectual property for the development and administration of CAR T cells for the treatment of cancer.

Research Collaboration and License Agreement with Cellectis

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(Notch), pursuant to which Notch granted us an exclusive, worldwide, royalty-bearing, sublicensable license under certain of Notch’s intellectual property to develop, make, use, sell, import, and otherwise commercialize therapeutic gene-edited T cell and/or natural killer cell products from induced pluripotent stem cells directed at certain CAR targets for initial application in NHL, B-cell precursor acute lymphoblastic leukemia (ALL) and multiple myeloma.

In addition, Notch has granted us an option to add certain specified targets to our exclusive license in exchange for an agreed upon per-target option fee.

In addition, Notch had granted us an option to add certain specified targets to our exclusive license in exchange for an agreed upon per-target option fee.

On January 25, 2024, we entered into an Amended and Restated Collaboration and License Agreement (the Amended Notch Agreement) with Notch.

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(HBP) executed on May 24, 2024, Overland distributed all Series Seed Preferred Shares of Allogene Overland held by Overland to HBP and HBP has assumed all rights and obligations attached to such shares and all rights and obligations of Overland under the Share Exchange Agreement.

In connection with the Organizational Restructuring, on May 24, 2024, we and Allogene Overland PRC entered into a First Amendment to Exclusive License Agreement (the License Amendment) to amend and supplement certain provisions of the License Agreement.

Under the License Amendment, we continue to grant Allogene Overland PRC an exclusive license to develop, manufacture, and commercialize the Overland Licensed Products in the Territory, with us retaining exclusive rights to the Overland Licensed Products outside the JV Territory, and the royalty obligations to us were amended to a flat mid single-digit royalty on net sales in the JV Territory that are no longer subject to reductions as previously provided.

The License Amendment also provides us with additional rights to terminate the License Agreement in its entirety or with respect to the relevant Overland Licensed Product(s) if Allogene Overland PRC fails to initiate manufacturing technology transfer with respect to an Overland Licensed Product as agreed in the License Amendment, or if HBP commits a funding default or a material breach of its representations, warranties, or covenants under the Share Exchange Agreement.

The License Amendment also provides that the License Agreement will terminate automatically if our ownership in Allogene Overland falls below 7.5% (other than due to our sale of the shares of Allogene Overland), unless at that time we and Allogene Overland PRC have mutually agreed on the manufacturing technology transfer plan for the Overland Licensed Product(s) and Allogene Overland PRC elects to continue the license for such Overland Licensed Product(s) with increased milestones and royalties.

Under the License Amendment terms such increased milestones and royalties consist of up to $115 million in milestone payments for each Overland Licensed Product and tiered mid single-digit to low double-digit royalties on net sales in the JV Territory.

As part of the Organizational Restructuring, Allogene Overland was renamed to Overland Therapeutics Inc.

In connection with the Organizational Restructuring, on May 24, 2024, we and Allogene Overland PRC entered into a First Amendment to the License Agreement (the License Amendment) to amend and supplement certain provisions of the License Agreement.

Under the License Amendment, we continued to grant Allogene Overland PRC an exclusive license to develop, manufacture, and commercialize the Overland Licensed Products in the JV Territory, with us retaining exclusive rights to the Overland Licensed Products outside the JV Territory, and the royalty obligations to us were amended to a flat mid single-digit royalty on net sales in the JV Territory that are no longer subject to reductions as previously provided.

The License Amendment also provided us with additional rights to terminate the License Agreement in its entirety or with respect to the relevant Overland Licensed Product(s) if Allogene Overland PRC fails to initiate manufacturing technology transfer with respect to an Overland Licensed Product as agreed in the License Amendment, or if HBP commits a funding default or a material breach of its representations, warranties, or covenants under the Share Exchange Agreement.

The License Amendment also provided that the License Agreement will terminate automatically if our ownership in Allogene Overland falls below 7.5% (other than due to our sale of the shares of Allogene Overland), unless at that time we and Allogene Overland PRC have mutually agreed on the manufacturing technology transfer plan for the Overland Licensed Product(s) and Allogene Overland PRC elects to continue the license for such Overland Licensed Product(s) with increased milestones and royalties.

License Amendment terms such increased milestones and royalties consisted of up to $115 million in milestone payments for each Overland Licensed Product and tiered mid single-digit to low double-digit royalties on net sales in the JV Territory.

As part of the Organizational Restructuring, Allogene Overland was renamed Overland Therapeutics Inc.

(Overland Therapeutics).

Subsequent to March 31, 2026, on May 12, 2026, we entered into a termination agreement with Overland Therapeutics (SH) Co.

On May 12, 2026, we entered into a termination agreement with Overland Therapeutics (SH) Co.

and Overland Therapeutics Inc., pursuant to which the License Agreement was terminated in its entirety.

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In December 2025, Foresight Diagnostics was acquired by Natera and continues to operate as a standalone subsidiary.

Pursuant to the Foresight Agreement, the parties have agreed to collaborate on a non-exclusive basis in the development of Foresight Diagnostics’ CLARITY TM MRD assay as an in vitro diagnostic to identify the MRD+ patient population to be enrolled in our ALPHA3 trial of cemacabtagene ansegedleucel, or cema-cel (previously known as ALLO-501A) for treatment of LBCL.

Under the Foresight Agreement, we have agreed to use commercially reasonable efforts to obtain regulatory approval of cema-cel, and Foresight Diagnostics has agreed to use commercially reasonable efforts to obtain regulatory approval of an MRD assay for use as an in vitro diagnostic with cema-cel.

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clinical development program.

We subsequently amended the agreement to add a workplan supporting clinical trial readiness activities for the expansion of ALPHA3 into South Korea.

In total, we have agreed to fund approximately $37.3 million in MRD assay development costs, milestone payments for U.S., and certain international regulatory submissions and assay utilization costs to process clinical samples.

Components of Results of Operations

From inception to March 31, 2026, our revenue has been exclusively generated from the License Agreement with Overland Therapeutics.

From inception to June 30, 2026, our revenue has been exclusively generated from the License Agreement with Overland Therapeutics.

Refer to Note 6 to our consolidated financial statements appearing in our Annual Report for more information related to the License Agreement.

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To date, our research and development expenses have related primarily to discovery efforts, preclinical and clinical development, and manufacturing of our product candidates.

Research and development expenses for the three months ended March 31, 2026 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

Research and development expenses for the three and six months ended June 30, 2026 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

The most significant research and development expenses for the year to date relate to costs incurred for the development of our most advanced product candidates and include:

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following sets forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands, except percentage amounts):

Three Months Ended March 31, Change

Comparison of the Three Months Ended June 30, 2026 and 2025

The following sets forth our results of operations for the three months ended June 30, 2026 and 2025 (in thousands, except percentage amounts):

Three Months Ended

June 30, Change

2026 2025 $ %

Collaboration revenue - related party $ 4,640 $ — $ 4,640 N/A

Operating expenses:

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General and administrative 20,839 14,281 6,558 46 %

Impairment of long-lived assets — 2,382 (2,382) (100) %

Total operating expenses 51,560 56,819 (5,259) (9) %

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The following table shows the primary components of our research and development expenses for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30,

2026 2025 Change

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Total research and development expenses $ 30,721 $ 40,156 $ (9,435)

Our research and development expenses included $16.4 million of internal expenses and $15.6 million of external expenses for the three months ended March 31, 2026.

Of the $15.6 million of external expenses for the three months ended March 31, 2026, $7.7 million was related to our cema-cel program.

Our research and development expenses included $24.1 million of internal expenses and $26.1 million of external expenses for the three months ended March 31, 2025.

Of the $26.1 million of external expenses for the three months ended March 31, 2025, $6.2 million was related to our cema-cel program.

Research and development expenses were $32.0 million and $50.2 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $18.2 million was driven primarily by a decrease in development costs of $8.1 million related to the advancement of our product candidates due to the timing of development activities and manufacturing runs, a decrease in personnel related costs of $7.5 million, including a decrease in stock-based compensation expense of $2.3 million, and facilities and depreciation costs of $1.9 million.

Our research and development expenses included $14.8 million of internal expenses and $15.9 million of external expenses for the three months ended June 30, 2026.

Of the $15.9 million of external expenses for the three months ended June 30, 2026, $7.0 million was related to our cema-cel program.

Our research and development expenses included $20.4 million of internal expenses and $19.7 million of external expenses for the three months ended June 30, 2025.

Of the $19.7 million of external expenses for the three months ended June 30, 2025, $6.9 million was related to our cema-cel program.

Research and development expenses were $30.7 million and $40.2 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease of $9.4 million was driven primarily by a decrease in development costs of $2.2 million related to the advancement of our product candidates due to the timing of development activities and manufacturing runs, personnel related costs of $5.3 million, including a decrease of $3.1 million in severance expense related to the Workforce Reduction, facilities and depreciation costs of $1.2 million, and other expenses primarily related to outside services.

General and Administrative Expenses

General and administrative expenses were $14.1 million and $15.0 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $0.9 million was primarily due to a decrease in personnel related costs of $1.7 million, including $1.6 million related to a decrease in stock-based compensation expense, partially offset by an increase in other expenses of $0.8 million, attributable to corporate communications.

General and administrative expenses were $20.8 million and $14.3 million for the three months ended June 30, 2026 and 2025, respectively.

The increase of $6.6 million was primarily due to an increase in personnel related costs of $5.8 million, attributable to leadership transition costs related to stock compensation expense of $6.1 million and severance costs of $1.6

million, partially offset by other personnel decrease of stock compensation expense of $1.9 million, and an increase in other expenses of $0.8 million primarily related to outside services.

Impairment of Long-Lived Asset

During the three months ended June 30, 2025, we recorded a long-lived asset impairment charge of $1.0 million related to subleasing one of our leased buildings in South San Francisco.

In addition, during three months ended June 30, 2025, we recorded equipment impairment of $1.3 million in conjunction with the Workforce Reduction.

Interest and Other Income, Net

Interest and other income, net was $3.6 million and $5.5 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $1.9 million was due to lower interest earned on our cash, cash equivalents and investments and net gain on foreign exchange translation, partially offset by sublease income.

Interest and other income, net was $4.6 million and $6.2 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease of $1.5 million was due to lower net gain on foreign exchange translation, partially offset by higher interest income earned on our cash, cash equivalents and investments.

Interest Expense

Interest expense was related to the CIRM award proceeds received for the three months ended March 31, 2026 and 2025.

Interest expense was related to the CIRM award proceeds received for the three months ended June 30, 2026 and 2025.

Other Income (Expenses), Net

For the three months ended March 31, 2026 and 2025, we recorded other income of $0.2 million and $0.1 million, respectively.

For the three months ended June 30, 2026 and 2025, we recorded other expenses of $0.1 million and less than $0.1 million, respectively.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following sets forth our results of operations for the six months ended June 30, 2026 and 2025 (in thousands, except percentage amounts):

Six Months Ended

June 30, Change

2026 2025 $ %

Collaboration revenue - related party $ 4,640 $ — $ 4,640 N/A

Operating expenses:

Research and development 62,724 90,356 (27,632) (31) %

General and administrative 34,928 29,272 5,656 19 %

Impairment of long-lived assets — 2,382 (2,382) (100) %

Total operating expenses 97,652 122,010 (24,358) (20) %

Loss from operations (93,012) (122,010) 28,998 (24) %

Other income (expenses), net:

Interest and other income, net 8,220 11,703 (3,483) (30) %

Interest expense (643) (418) (225) 54 %

Other income (expenses), net 151 49 102 208 %

Total other income (expenses), net 7,728 11,334 (3,606) (32) %

Net loss $ (85,284) $ (110,676) $ 25,392 (23) %

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the periods presented:

Six Months Ended June 30,

2026 2025 Change

Personnel $ 26,371 $ 39,179 $ (12,808)

Development costs 17,776 28,025 (10,249)

Facilities and depreciation 16,157 19,258 (3,101)

Other 2,420 3,894 (1,474)

Total research and development expenses $ 62,724 $ 90,356 $ (27,632)

Our research and development expenses included $31.3 million of internal expenses and $31.5 million of external expenses for the six months ended June 30, 2026.

Of the $31.5 million of external expenses for the six months ended June 30, 2026, $14.6 million was related to our cema-cel program.

Our research and development expenses included $44.6 million of internal expenses and $45.8 million of external expenses for the six months ended June 30, 2025.

Of the $45.8 million of external expenses for the six months ended June 30, 2025, $13.1 million was related to our cema-cel program.

Research and development expenses were $62.7 million and $90.4 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease of $27.6 million was driven primarily by a decrease in development costs of $10.2 million related to the advancement of our product candidates due to the timing of development activities and manufacturing runs, a decrease in personnel related costs of $12.8 million, including decreases of $7.2 million in salaries and benefits, $3.1 million in severance expense related to the Workforce Reduction, and stock-based compensation expense of $2.5 million, facilities and depreciation costs of $3.1 million and other expenses of $1.5 million related to outside services.

General and Administrative Expenses

General and administrative expenses were $34.9 million and $29.3 million for the six months ended June 30, 2026 and 2025, respectively.

The increase of $5.7 million was primarily due to an increase in personnel related costs of $4.0 million, attributable to leadership transition costs related to stock compensation expense of $6.1 million and severance costs $1.6 million, partially offset by other personnel decrease of stock compensation expense of $3.7 million, and an increase in other expenses of $1.7 million related to corporate communications, outside services and facilities.

Impairment of Long-Lived Asset

During the six months ended June 30, 2025, we recorded a long-lived asset impairment charge of $1.0 million related to subleasing one of our leased buildings in South San Francisco.

In addition, during six months ended June 30, 2025, we recorded equipment impairment of $1.3 million in conjunction with the Workforce Reduction.

Interest and Other Income, Net

Interest and other income, net was $8.2 million and $11.7 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease of $3.5 million was due to lower net gain on foreign exchange translation and interest earned on our cash, cash equivalents and investments.

Interest Expense

Interest expense was related to the CIRM award proceeds received for the six months ended June 30, 2026 and 2025.

Other Income (Expenses), Net

For the six months ended June 30, 2026 and 2025, we recorded other income of $0.2 million and less than $0.1 million, respectively.

Liquidity and Capital Resources

To date, we have incurred significant net losses and negative cash flows from operations.

As of March 31, 2026, before giving effect to our April 2026 Public Offering, we had $266.9 million in cash, cash equivalents and investments.

In April 2026, we received net proceeds of approximately $187.9 million from the underwritten public offering described below.

We believe that the aggregate of our current cash, cash equivalents and investments available for operations, together with such net proceeds, will be sufficient to fund our operations for at least the next 12 months from the date this Quarterly Report is filed with the SEC.

As of June 30, 2026, we had $423.6 million in cash, cash equivalents and investments.

We believe that the aggregate of our current cash, cash equivalents and investments available for operations will be sufficient to fund our operations for at least the next 12 months from the date this Quarterly Report is filed with the SEC.

Our operations have been financed primarily through equity financings and license arrangements.

During the three months ended March 31, 2026, we sold an aggregate of 12,476,533 shares of common stock in ATM offerings resulting in net proceeds of $20.7 million.

The specified dollar limit on the amount of common stock that may be sold under the sales agreement was removed pursuant to the November 2, 2023 amendment to the sales agreement.

In connection with our April 2026 Public Offering (described below), we suspended our ATM offerings until a new prospectus or prospectus supplement is filed with the SEC.

During the six months ended June 30, 2026, we sold an aggregate of 12,476,533 shares of common stock in ATM offerings resulting in net proceeds of $20.7 million.

Although the sales agreement does not specify an aggregate dollar limit on sales, sales under the agreement may be made only pursuant to an effective registration statement and an applicable prospectus supplement.

On June 22, 2026, we filed a prospectus supplement under our effective shelf registration statement relating to the offer and sale of shares of our common stock having an aggregate offering price of up to $135.0 million pursuant to the sales agreement.

We did not sell any shares under the June 2026 prospectus supplement through June 30, 2026.

As of June 30, 2026, shares of our common stock having an aggregate offering price of up to $135.0 million remained available for sale under the June 2026 prospectus supplement, subject to market conditions, the terms and conditions of the sales agreement and applicable law.

In April 2026, we closed an underwritten public offering (April 2026 Public Offering) in which we sold 100,200,000 shares of our common stock at a public offering price of $2.00 per share, including 12,700,000 additional shares sold pursuant to the underwriters’ partial exercise of their option to purchase additional shares.

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The following table summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

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Operating Activities

During the three months ended March 31, 2026, cash used in operating activities of $12.9 million was attributable to a net loss of $42.6 million, partially offset by an increase of $18.4 million in our net operating assets and liabilities and non-cash charges of $11.3 million.

The change in operating assets and liabilities was primarily due to a decrease in deposit in escrow of $23.5 million, a decrease in prepaid expense and other current assets of $1.1 million, an increase in accounts payable of $0.7 million and an increase in other long-term liabilities of $0.3 million, partially offset by a decrease in accrued and other current liabilities of $5.1 million and a decrease in operating lease liabilities of $2.2 million.

The non-cash charges consisted primarily

of stock-based compensation expense of $8.3 million, depreciation of $2.9 million and non-cash rent expense of $1.1 million, partially offset by net amortization and accretion on investment securities of $0.9 million.

During the three months ended March 31, 2025, cash used in operating activities of $52.9 million was attributable to a net loss of $59.7 million and a decrease of $8.3 million in our net operating assets and liabilities, partially offset by non-cash charges of $15.1 million.

The non-cash charges consisted primarily of stock-based compensation expense of $12.2 million, depreciation of $3.1 million, and non-cash rent expense of $1.1 million, partially offset by net amortization and accretion on investment securities of $1.3 million.

The change in operating assets and liabilities was primarily due to decrease in accrued and other current liabilities of $5.2 million, decrease in operating lease liabilities of $1.8 million, increase in deposit in escrow of $0.9 million and increase in prepaid expense and other current assets of $0.6 million, partially offset by decrease in other long-term assets of $0.4 million.

During the six months ended June 30, 2026, cash used in operating activities of $44.9 million was attributable to a net loss of $85.3 million, partially offset by non-cash charges of $21.5 million and an increase of $18.8 million in our net operating assets and liabilities.

The non-cash charges consisted primarily of stock-based compensation expense of $20.7 million, depreciation of $5.5 million and non-cash rent expense of $2.1 million, partially offset by non-cash collaboration revenue - related party of $4.6 million and net amortization and accretion on investment securities of $2.2 million.

The change in operating assets and liabilities was primarily due to a decrease in deposit in escrow of $23.5 million, an increase in accounts payable of $1.7 million, an increase in other long-term liabilities of $0.7 million and a decrease in prepaid expense and other current assets of $0.1 million, partially offset by a decrease in operating lease liabilities of $4.2 million and a decrease in accrued and other current liabilities of $2.8 million.

During the six months ended June 30, 2025, cash used in operating activities of $92.0 million was attributable to a net loss of $110.7 million and a decrease of $10.5 million in our net operating assets and liabilities, partially offset by non-cash charges of $29.2 million.

The non-cash charges consisted primarily of stock-based compensation expense of $20.9 million, depreciation of $6.2 million, impairment of long-lived assets of $2.4 million and non-cash rent expense of $2.3 million, partially offset by net amortization and accretion on investment securities of $2.5 million.

The change in operating assets and liabilities was primarily due to a decrease in operating lease liabilities of $3.8 million, a decrease in accrued and other current liabilities of $3.5 million, an increase in deposit in escrow of $2.7 million and an increase in other long-term assets of $1.5 million, partially offset by a decrease in prepaid expense and other current assets of $1.2 million.

Investing Activities

During the three months ended March 31, 2026, net cash used in investing activities of $29.6 million was related to cash used in the purchase of investments of $101.7 million, partially offset by cash provided by investment maturities of $72.1 million.

During the three months ended March 31, 2025, net cash provided by investing activities of $6.2 million was related to cash provided by investment maturities of $56.5 million, partially offset by cash used in the purchase of investments of $50.2 million.

During the six months ended June 30, 2026, net cash used in investing activities of $177.1 million was related to cash used in the purchase of investments of $285.4 million, partially offset by cash provided by investment maturities of $108.4 million.

During the six months ended June 30, 2025, net cash provided by investing activities of $50.0 million was related to cash provided by investment maturities of $110.3 million, partially offset by cash used in the purchase of investments of $60.1 million.

Financing Activities

During the three months ended March 31, 2026, cash provided by financing activities of $21.1 million was related to cash provided by net proceeds from the issuance of common stock through ATM transactions of $20.7 million and the sale of common stock through our employee stock purchase plan of $0.5 million.

During the three months ended March 31, 2025, cash provided by financing activities of $14.0 million was related to cash provided by net proceeds from the issuance of common stock through ATM transactions of $10.0 million, proceeds from the CIRM award of $3.4 million and the sale of common stock through our employee stock purchase plan of $0.6 million.

During the six months ended June 30, 2026, cash provided by financing activities of $209.0 million was related to cash net proceeds of $187.9 million from the issuance of common stock through our April 2026 registered offering, net proceeds from the issuance of common stock through ATM transactions of $20.7 million and the sale of common stock through our employee stock purchase plan of $0.5 million.

During the six months ended June 30, 2025, cash provided by financing activities of $19.1 million was related to cash provided by net proceeds from the issuance of common stock through ATM transactions of $11.5 million, proceeds from the CIRM award of $6.9 million and the sale of common stock through our employee stock purchase plan of $0.6 million.

Material Cash Commitments and Requirements

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The payment obligations under the license agreements are contingent upon future events such as our achievement of specified development, regulatory and/or commercial milestones and we will be required to make development milestone payments and royalty payments in connection with the sale of products developed under these agreements.

As of March 31, 2026, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

As of June 30, 2026, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

For additional information regarding our agreements, see Note 6 to our consolidated financial statements included in our Annual Report.

Our operating lease obligations primarily consist of lease payments on our research, lab and office facilities in South San Francisco, California, as well as lease payments on our cell manufacturing facility in Newark, California (CF1).

additional information regarding our lease obligations, see Note 7 to our condensed financial statements included elsewhere in this Quarterly Report.

For additional information regarding our lease obligations, see Note 7 to our condensed financial statements included elsewhere in this Quarterly Report.

On October 6, 2020, we announced we entered into a strategic five-year collaboration agreement with MD Anderson for the preclinical and clinical investigation of allogeneic CAR T cell product candidates.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis