What changed in this filing

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Item 1. Financial Statements

2021-05-05 compared with 2020-11-04 · 169 added, 205 removed, 396 unchanged (49% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2021 December 31,

7 unchanged sentences

Property and equipment, net 123,146 118,840

Intangible assets, net — 151

Restricted cash 9,449 9,449

6 unchanged sentences

Accrued and other current liabilities 39,735 44,938

Deferred revenue 239 38,992

Total current liabilities 54,849 94,320

Lease liability, noncurrent 50,846 51,349

Lease liability, non-current 51,625 50,809

Other long-term liabilities 2,791 3,083

3 unchanged sentences

Preferred stock, $ 0.001 par value:

10,000,000 shares authorized as of September 30, 2020 and December 31, 2019;

no shares were issued and outstanding as of September 30, 2020 and December 31, 2019

10,000,000 shares authorized as of March 31, 2021 and December 31, 2020;

no shares were issued and outstanding as of March 31, 2021 and December 31, 2020

Common stock, $ 0.001 par value:

200,000,000 shares authorized as of September 30, 2020 and December 31, 2019;

139,755,839 and 124,267,358 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

200,000,000 shares authorized as of March 31, 2021 and December 31, 2020;

141,470,075 and 140,474,305 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital 1,749,097 1,725,552

Accumulated deficit ( 679,358 ) ( 646,343 )

Accumulated other comprehensive income 953 1,145

Accumulated other comprehensive (loss) income ( 101 ) 268

Total stockholders’ equity 1,069,779 1,079,617

5 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Collaboration revenue - related party $ 38,345 $ —

Operating expenses:

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Total other income (expense), net 186 3,203

Loss before income taxes ( 66,197 ) ( 50,702 ) ( 181,651 ) ( 123,740 )

Benefit (expense) from income taxes — ( 33 ) — 176

Net loss ( 33,015 ) ( 54,480 )

8 unchanged sentences

(In thousands, except share amounts)

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (loss) Total Stockholders’ Equity

Shares Amount

Balance - June 30, 2020 139,233,450 $ 139 $ 1,673,026 $ ( 511,576 ) $ 1,830 $ 1,163,419

Balance - December 31, 2020 140,474,305 $ 140 $ 1,725,552 $ ( 646,343 ) $ 268 $ 1,079,617

Issuance of common stock upon exercise of stock options and vesting of RSUs

8 unchanged sentences

— — — — ( 369 ) ( 369 )

Balance - September 30, 2020 139,755,839 $ 140 $ 1,695,411 $ ( 577,773 ) $ 953 $ 1,118,731

Balance - March 31, 2021 141,470,075 $ 141 $ 1,749,097 $ ( 679,358 ) $ ( 101 ) $ 1,069,779

Common Stock Additional

12 unchanged sentences

Employee stock purchase plan 84,565 — 1,438 — — 1,438

Issuance of common stock from public ATM offering, net of commissions and offering costs of $ 0.3 million

570,839 1 14,844 — — 14,845

Issuance of common stock from public offering, net of commissions and offering costs of $ 0.3 million

1 unchanged sentence

Net loss — — — ( 54,480 ) — ( 54,480 )

Net unrealized loss on available-for-sale investments

— — — — ( 192 ) ( 192 )

Balance - September 30, 2020 139,755,839 $ 140 $ 1,695,411 $ ( 577,773 ) $ 953 $ 1,118,731

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALLOGENE THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Shares Amount

Balance - June 30, 2019 121,631,278 $ 122 $ 937,709 $ ( 284,357 ) $ 2,161 $ 655,635

Issuance of common stock upon exercise of stock

200,868 — 467 — — 467

Vesting of early exercised common stock

— — 710 — — 710

Stock-based compensation — — 12,835 — — 12,835

Employee stock purchase plan 63,333 1,099 — 1,099

Net loss — — — ( 50,735 ) — ( 50,735 )

Net unrealized loss on available-for-sale investments

— — — — ( 295 ) ( 295 )

Balance - September 30, 2019 121,895,479 $ 122 $ 952,820 $ ( 335,092 ) $ 1,866 $ 619,716

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Shares Amount

Balance - December 31, 2018 121,482,671 $ 121 $ 914,265 $ ( 211,528 ) $ 306 $ 703,164

Issuance of common stock upon exercise of stock

304,826 1 703 — — 704

Vesting of early exercised common stock

— — 3,880 — — 3,880

Stock-based compensation

— — 32,189 — — 32,189

Employee stock purchase plan

107,982 — 1,783 — — 1,783

— — — ( 123,564 ) — ( 123,564 )

Net unrealized gain on available-for-sale investments

— — — — 465 465

Balance - September 30, 2019 121,895,479 $ 122 $ 952,820 $ ( 335,092 ) $ 1,866 $ 619,716

Balance - March 31, 2020 125,262,537 $ 125 $ 1,055,386 $ ( 450,602 ) $ 1,610 $ 606,519

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

6 unchanged sentences

Non-cash rent expense 2,007 718

Benefit from income taxes — ( 176 )

Share of losses from equity method investments 325 64

4 unchanged sentences

Accrued and other current liabilities ( 4,314 ) ( 3,913 )

Deferred revenue ( 38,753 ) —

Other long-term liabilities ( 292 ) ( 701 )

2 unchanged sentences

Purchases of property and equipment ( 6,461 ) ( 12,253 )

Proceeds from sales of investments 4,877 —

Purchase of stock in equity method investment ( 15,938 ) —

Proceeds from maturities of investments 268,249 120,261

3 unchanged sentences

Proceeds from issuance of common stock from ATM offering, net of commissions and issuance costs — 14,845

Proceeds from issuance of common stock from public offering, net of commissions and issuance costs 595,730 —

Proceeds from issuance of common stock upon exercise of stock options 4,060 303

6 unchanged sentences

Property and equipment purchases in accounts payable and accrued and other current liabilities $ 8,299 $ 4,208

Capitalized cloud computing costs included in accounts payable and accrued and other current liabilities $ 277 $ —

Supplemental disclosure:

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The Company is developing a pipeline of off-the-shelf T cell product candidates that are designed to target and kill cancer cells.

Public Offerings

In November 2019, the Company entered into a sales agreement with Cowen and Company, LLC (Cowen), under which the Company may from time to time issue and sell shares of its common stock through Cowen in at-the-market (ATM) offerings for an aggregate offering price of up to $ 250.0 million.

The aggregate compensation payable to Cowen as the Company's sales agent equals up to 3.0 % of the gross sales price of the shares sold through it pursuant to the sales agreement.

In January 2020, the Company sold an aggregate of 570,839 shares of common stock in ATM offerings resulting in net proceeds of $ 14.8 million.

In June 2020, the Company sold 13,457,447 shares of its common stock, which included 1,755,319 shares sold pursuant to the full exercise of the underwriters' option to purchase additional shares, in an underwritten public offering at a price of $ 47.00 per share, which resulted in gross proceeds of approximately $ 632.5 million.

Net proceeds to the Company after deducting the underwriting discounts and commissions and other expenses were approximately $ 595.7 million.

Need for Additional Capital

The Company has sustained operating losses and expects to continue to generate operating losses for the foreseeable future.

The Company’s ultimate success depends on the outcome of its research and development activities.

The Company had cash and cash equivalents and investments of $ 1.0 billion as of September 30, 2020.

Since inception through September 30, 2020, the Company has incurred cumulative net losses of $ 577.8 million.

The Company’s ultimate success depends on the outcome of its research and development activities as well as the ability to commercialize the Company's product candidates.

The Company had cash and cash equivalents and investments of $ 964.2 million as of March 31, 2021.

Since inception through March 31, 2021, the Company has incurred cumulative net losses of $ 679.4 million.

Management expects to incur additional losses in the future to fund its operations and conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan.

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The Company expects that its cash and cash equivalents and investments will be sufficient to fund its operations for a period of at least one year from the date the accompanying unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (SEC).

In March 2020, the World Health Organization declared the global novel coronavirus disease (COVID-19) outbreak a pandemic.

The Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 pandemic will have on its financial condition and operations, including ongoing and planned clinical trials.

The Company cannot at this time predict the specific extent, duration, or full impact that the ongoing COVID-19 pandemic will have on its financial condition and operations, including ongoing and planned clinical trials.

The impact of the COVID-19 pandemic on the financial performance of the Company will depend on future developments, including the duration and spread of the pandemic and related governmental advisories and restrictions.

These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain.

If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected.

If business conditions, financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected.

Summary of Significant Accounting Policies

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In the Company’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results of operations and cash flows for the periods presented have been included.

In June 2020, the Company formed a wholly-owned Netherlands-based subsidiary, Allogene Therapeutics, B.V., to help prepare for and assist with the Company's activities in Europe.

The condensed

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All material intercompany balances and transactions have been eliminated during consolidation.

The condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the condensed consolidated statements of stockholders’ equity as of September 30, 2020 and 2019, the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, or for any other future annual or interim period.

The condensed consolidated balance sheet as of March 31, 2021, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020, the condensed consolidated statements of stockholders’ equity as of March 31, 2021 and 2020, the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or for any other future annual or interim period.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2021.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include but are not limited to the fair value of stock options, income tax uncertainties, and certain accruals.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include but are not limited to the fair value of stock options, fair value of investments, income tax uncertainties, and certain accruals.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

1 unchanged sentence

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2020, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with the exception of the recently adopted accounting pronouncements in the section below.

There have been no significant changes to the accounting policies during the three months ended March 31, 2021, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with the exception of revenue recognition related to the collaboration revenue recognized in the three months ended March 31, 2021 and the recently adopted accounting pronouncements in the section below.

Revenue Recognition

The Company’s revenue may be generated through collaboration research and license agreements.

The terms of these agreements may contain multiple deliverables which may include (i) grant of licenses, (ii) transfer of know-how, (iii) research and development activities, (iii) clinical manufacturing and, (iv) product supply.

The payment terms of these agreements may include nonrefundable upfront fees, payments for research and development activities, payments based upon the achievement of certain milestones, royalty payments based on product sales derived from the collaboration, and payments for supplying product.

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (ASC 808) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of Topic 606, Revenue from Contracts with Customers (ASC 606).

For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606.

For elements of those arrangements that the Company determines should be accounted for under ASC 606, the Company assesses which activities in the collaboration agreements are performance obligations that should be accounted for separately and determine the transaction price of the arrangement, which includes the assessment of the probability of achievement of future milestones and other potential consideration.

A performance obligation represents a promise in a contract to transfer a distinct good or service to a customer, which represents a unit of accounting in accordance with ASC 606.

A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract.

The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service.

A portion of the consideration should be allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The total consideration which the Company expects to collect in exchange for the Company’s products is an estimate and may be fixed or variable.

The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods.

The transaction price is re-evaluated, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The allocation of the transaction price is performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately.

Revenue is recognized when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers.

Funds received in advance are recorded as deferred revenue and are recognized as the related performance obligation is satisfied.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses:

Measurement of Credit Losses on Financial Instruments and also issued subsequent amendments to the initial guidance:

ASU 2018-19, ASU 2019-04, ASU 2019-05, and ASU 2019-11.

The standard requires measurement and recognition of expected credit losses for financial assets by requiring an allowance to be recorded as an offset to the amortized cost of such assets.

For available-for-sale debt securities, expected credit losses should be estimated when the fair value of the debt securities is below their associated amortized costs.

This standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted beginning the first quarter of 2019.

The Company’s financial instruments that are in the scope of ASU 2016-13 include, but are not limited to, other receivables and available-for-sale debt securities.

The Company adopted this standard on January 1, 2020 and applied the modified retrospective approach.

Adoption of the new guidance had no significant impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued Accounting Standards Update No.

2018-15, Intangibles – Goodwill and other – Internal-Use Software (Subtopic 350-40) , which amended its guidance for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement.

The guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted.

The Company adopted this standard on January 1, 2020, on a prospective basis for applicable implementation costs.

Adoption of the new guidance had no significant impact on the Company’s consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606 , which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer.

In addition, Topic 808 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction.

The Company adopted this standard on January 1, 2020.

Adoption of the new guidance had no significant impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued Accounting Standards Update No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (ASU 2019-12) , which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

This guidance will be effective for the Company in the first quarter of 2021 on a prospective basis, and early adoption is permitted.

The Company early adopted this standard as of January 1, 2020 on a prospective basis in accordance with ASC 250, Accounting Changes and Error Corrections.

The adoption resulted in the Company no longer needing to determine the tax effect from unrealized gains on available for sale securities, which previously had been disclosed in the condensed consolidated statement of operations as a benefit from income taxes.

The impact of the adoption in the three and nine months ended September 30, 2020 is that the benefit from income taxes in the condensed consolidated statement of operations and comprehensive loss is zero for both periods compared to recognition of a zero and $ 0.2 million tax benefit for the three and nine months ended September 30, 2019, respectively.

Recent Accounting Pronouncements Not Yet Adopted

In January 2020, the FASB issued Accounting Standard Update No.

2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323) , which clarifies the interactions between Topics 321 and 323 in applying or discontinuing the equity method of accounting for investments.

This guidance will be effective for the Company in the first quarter of 2021, and early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

This guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

The Company adopted this standard on January 1, 2021 on a prospective basis.

Adoption of the new guidance had no significant impact on the Company's condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

The Company continues to monitor new accounting pronouncements issued by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the Company's condensed consolidated financial statements.

Fair Value Measurements

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Money market funds are measured at fair value on a recurring basis using quoted prices and are classified as Level 1.

Investments are measured at fair value based on inputs other than quoted prices that are derived from observable market data and are classified as Level 2 inputs except for investments in U.S treasury securities which are classified as Level 1.

There were no Level 3 assets or liabilities as of September 30, 2020 and as of December 31, 2019.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of September 30, 2020 and as of December 31, 2019 are presented in the following tables:

September 30, 2020

Investments are measured at fair value based on inputs other than quoted prices that are derived from observable market data and are classified as Level 2 inputs, except for investments in U.S.

treasury securities which are classified as Level 1.

There were no Level 3 assets or liabilities as of March 31, 2021 and as of December 31, 2020.

Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of March 31, 2021 and as of December 31, 2020 are presented in the following tables:

March 31, 2021

Level 1 Level 2 Level 3 Fair Value

12 unchanged sentences

Money market funds (1) $ 102,039 $ — $ — $ 102,039

Commercial paper — 58,975 — 58,975

Corporate bonds — 262,757 — 262,757

1 unchanged sentence

agency securities — 80,039 — 80,039

Certificates of deposit — 1,000 — 1,000

Total financial assets $ 549,035 $ 401,771 $ — $ 950,806

1 unchanged sentence

Financial Instruments

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of September 30, 2020 and as of December 31, 2019 are presented in the following tables:

September 30, 2020

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of March 31, 2021 and as of December 31, 2020 are presented in the following tables:

March 31, 2021

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

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Money market funds $ 102,039 $ — $ — $ 102,039

Commercial paper 58,969 8 ( 2 ) 58,975

Corporate bonds 262,349 444 ( 36 ) 262,757

1 unchanged sentence

agency securities 80,012 30 ( 3 ) 80,039

Certificates of deposit 1,000 — — 1,000

Total cash equivalents and investments $ 950,095 $ 764 $ ( 53 ) $ 950,806

4 unchanged sentences

Total cash equivalents and investments $ 950,806

As of September 30, 2020, the remaining contractual maturities of available-for-sale securities were less than 3 years.

As of March 31, 2021, the remaining contractual maturities of available-for-sale securities were less than 3 years.

There have been no significant realized losses on available-for-sale securities for the periods presented.

As of September 30, 2020, unrealized losses on available-for-sale investments are not attributed to credit risk.

As of March 31, 2021, unrealized losses on available-for-sale investments are not attributed to credit risk.

The Company believes that it is more likely than not that investments in an unrealized loss position will be held until maturity and all interest and principal will be received.

The Company believes that an allowance for credit losses is unnecessary because the unrealized losses on certain of the Company’s marketable securities are due to market factors.

As of March 31, 2021 and December 31, 2020, securities with a fair value of zero and $ 5.0 million respectively, were in a net unrealized loss position for more than 12 months.

To date, the Company has not recorded any impairment charges on marketable securities.

Balance Sheets Components

Property and Equipment

Balance Sheet Components

Property and Equipment, Net

Property and Equipment consist of the following:

September 30,

2021 December 31,

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The Company is required to make milestone payments upon successful completion of regulatory and sales milestones on a target-by-target basis for the targets including CD19 and B-cell maturation antigen (BCMA), covered by the Pfizer Agreement.

The aggregate potential milestone payments upon successful completion of various regulatory milestones in the United States and the European Union are $ 30.0

million or $ 60.0 million, depending on the target, with aggregate potential regulatory and development milestones of up to $ 840.0 million, provided that the Company is not obligated to pay a milestone for regulatory approval in the European Union for an anti-CD19 allogeneic CAR T cell product, to the extent Servier has commercial rights to such territory.

The aggregate potential milestone payments upon successful completion of various regulatory milestones in the United States and the European Union are $ 30.0 million or $ 60.0 million, depending on the target, with aggregate potential regulatory and development milestones of up to $ 840.0 million, provided that the Company is not obligated to pay a milestone for regulatory approval in the European Union for an anti-CD19 allogeneic CAR T cell product, to the extent Servier has commercial rights to such territory.

The aggregate potential milestone payments upon reaching certain annual net sales thresholds in North America, Europe, Asia, Australia and Oceania (the Territory) for a certain number of targets covered by the Pfizer Agreement are $ 325.0 million per target.

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In October 2019, the Territory was expanded to all countries in the world.

No milestone or royalty payments were made in the three months ended September 30, 2020 and 2019 respectively.

No milestone or royalty payments were made in the three months ended March 31, 2021 and 2020 respectively.

Pfizer is also eligible to receive, on a product-by-product and country-by-country basis, royalties in single-digit percentages on annual net sales for products covered by the Pfizer Agreement or that use certain Pfizer intellectual property and for which an investigational new drug application (IND) is first filed on or before April 6, 2023.

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Pursuant to the Cellectis Agreement, Cellectis granted to the Company an exclusive, worldwide, royalty-bearing license, on a target-by-target basis, with sublicensing rights under certain conditions, under certain of Cellectis’s intellectual property, including its TALEN and electroporation technology, to make, use, sell, import, and otherwise exploit and commercialize CAR T products directed at certain targets, including BCMA, FLT3, DLL3 and CD70 (the Allogene Targets), for human oncologic therapeutic, diagnostic, prophylactic and prognostic purposes.

In addition, certain Cellectis intellectual property rights granted by Cellectis to the Company and to Servier pursuant to the Exclusive License and Collaboration Agreement by and between Servier and Pfizer, dated October 30, 2016, which Pfizer assigned to the Company in April 2018, will survive the termination of the Original Cellectis Agreement.

In addition, certain Cellectis intellectual property rights granted by Cellectis to the Company and to Servier pursuant to the Exclusive License and Collaboration Agreement by and between

Servier and Pfizer, dated October 30, 2016, which Pfizer assigned to the Company in April 2018, will survive the termination of the Original Cellectis Agreement.

Pursuant to the Cellectis Agreement, the Company granted Cellectis a non-exclusive, worldwide, royalty-free, perpetual and irrevocable license, with sublicensing rights under certain conditions, under certain of the Company's intellectual property, to make, use, sell, import and otherwise commercialize CAR T products directed at certain targets (the Cellectis Targets).

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All costs the Company incurred in connection with this agreement were recognized as research and development expenses.

For the three and nine months ended September 30, 2020, zero costs were incurred related to the achievement of a clinical development milestone under this agreement.

For the three and nine months ended September 30, 2019, $ 5.0 million of costs were incurred related to the achievement of a clinical development milestone under this agreement.

For the three months ended March 31, 2021 and March 31, 2020, $ 5.0 million and zero costs were incurred related to the achievement of a clinical development milestone under this agreement.

License and Collaboration Agreement with Servier

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The Servier Agreement provides for aggregate potential payments by the Company to Servier of up to $ 137.5 million upon successful completion of various regulatory milestones, and aggregate potential payments by the Company to Servier of up to $ 78.0 million upon successful completion of various sales milestones.

Similarly, Servier is required to make milestone payments upon successful completion of regulatory and sales milestones for products directed at the Allogene-target

covered by the Servier Agreement that achieves such milestones.

Similarly, Servier is required to make milestone payments upon successful completion of regulatory and sales milestones for products directed at the Allogene-target covered by the Servier Agreement that achieves such milestones.

The total potential payments that Servier is obligated to make to the Company under the Servier Agreement upon successful completion of regulatory and sales milestones are $ 42.0 million and € 70.5 million ($ 82.7 million), respectively.

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Unless earlier terminated in accordance with the Servier Agreement, the Servier Agreement will continue, on a licensed product-by-licensed product and country-by-country basis, until the Servier Royalty Term with respect to the sale of such licensed product in such country expires.

For the three and nine months ended September 30, 2020, the Company recorded $ 4.1 million and $ 5.9 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

For the three and nine months ended September 30, 2019, the Company recorded $ 1.5 million and $ 4.5 million, respectively, of costs as research and development expenses.

As of September 30, 2020, amounts due from Servier of $ 3.1 million were recorded in other current assets in the accompanying condensed consolidated balance sheets.

As of December 31, 2019, amounts due to Servier of $ 2.2 million were recorded in accrued and other current liabilities in the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2021 and 2020, the Company recorded $ 3.9 million and $ 1.0 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

As of March 31, 2021 and December 31, 2020, amounts due from Servier of $ 4.5 million and $ 3.8 million, respectively, were recorded in other current assets in the accompanying condensed consolidated balance sheets.

Research Collaboration and License Agreement with Notch

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In connection with this investment, David Chang, M.D., Ph.D., the Company's President, Chief Executive Officer and Board member, was appointed to Notch’s Board of Directors.

In February 2021, the Company made an additional $ 15.9 million investment in Notch's Series A preferred stock.

Immediately following this transaction, the Company's share in Notch was 20.7 % on a voting interest basis.

The Company did not have a controlling interest in Notch as of March 31, 2021, and continued to account for its investment in Notch as an equity method investment.

Under the Notch Agreement, Notch will be eligible to receive up to $ 7.25 million upon achieving certain agreed research milestones, up to $ 4.0 million per exclusive target upon achieving certain pre-clinical development milestones, and up to $ 283.0 million per exclusive target and cell type (i.e., T cell or NK cell) upon achieving certain clinical, regulatory and commercial milestones.

Notch is also entitled to receive tiered royalties in the mid to high single digit range on Allogene’s sales of licensed products, subject to certain reductions, for a term, on a country-by-country and product-by-product basis, commencing on first commercial sale of such product in such country and continuing until the latest of (i) the date upon which there is no valid claim of the licensed patents in such country of sale that covers such product, (ii) the expiration of applicable

data or other regulatory exclusivity in such country of sale or (iii) a defined period from the first commercial sale of such product in such country.

The terms of the Notch Agreement will continue on a product-by-product and country-by-country basis until Allogene’s payment obligations with respect to such product in such country have expired.

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Either party may also terminate the Collaboration Agreement with written notice upon material breach by the other party, if such breach has not been cured within a defined period of receiving such notice, or in the event of the other party’s insolvency.

The Company has determined that Notch continues to be a variable interest entity as of September 30, 2020.

The Company does not have the power to direct the activities which most significantly affect Notch's economic performance.

Accordingly, for the three and nine months ended September 30, 2020, the Company did not consolidate Notch because the Company determined that it was not the primary beneficiary.

For the three and nine months ended September 30, 2020, the Company recorded $ 1.2 million and $ 2.0 million, respectively, in collaboration costs as research and development expenses.

For the three months ended March 31, 2021 and 2020, the Company recorded $ 1.2 million and $ 0.3 million, respectively, in collaboration costs as research and development expenses.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

On October 6, 2020, the Company entered into a strategic five-year collaboration agreement with The University of Texas MD Anderson Cancer Center (MD Anderson) for the preclinical and clinical investigation of allogeneic CAR T cell product candidates.

The Company and MD Anderson are collaborating on the design and conduct of preclinical and clinical studies with oversight from a joint steering committee.

Under the terms of the agreement, the Company has committed up to $ 15.0 million of funding for the duration of the agreement.

Payment of this funding is contingent on mutual agreement to study orders in order for any study to be included under the alliance.

The Company made an upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2020.

The Company is obligated to make further payments to MD Anderson each year upon the anniversary of the agreement effective date through the duration of the agreement term.

These costs are expensed to research and development as MD Anderson renders the services under the strategic alliance.

The agreement may be terminated by either party for material breach by the other party.

Individual studies may be terminated for, among other things, material breach, health and safety concerns or where the institutional review board, the review board at the clinical site with oversight of the clinical study, requests termination of any study.

Where any legal or regulatory authorization is finally withdrawn or terminated, the relevant study will also terminate automatically.

Joint Venture and License Agreement with Allogene Overland Biopharm (CY) Limited

On December 14, 2020, the Company entered into a License Agreement with Allogene Overland Biopharm (CY) Limited (Allogene Overland), a joint venture established by the Company and Overland Pharmaceuticals (CY) Inc.

(Overland), pursuant to a Share Purchase Agreement, dated December 14, 2020, for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore (the JV Territory).

Pursuant to the Share Purchase Agreement, the Company acquired Seed Preferred Shares in Allogene Overland representing 49 % of Allogene Overland's outstanding stock as partial consideration for the License Agreement, and Overland acquired Seed Preferred Shares representing 51 % of Allogene Overland's outstanding stock for $ 117.0 million in upfront and certain quarterly cash payments, to support operations of Allogene Overland.

As of December 31, 2020, the Company and Overland are the sole equity holders in Allogene Overland.

The Company received $ 40 million from Allogene Overland as partial consideration for the License Agreement.

Pursuant to the License Agreement, the Company granted Allogene Overland an exclusive license to develop, manufacture and commercialize certain allogeneic CAR T cell candidates directed at four targets, BCMA, CD70, FLT3, and DLL3, in the JV Territory.

As consideration, the Company would also be entitled to additional regulatory milestone payments of up to $ 40.0 million and, subject to certain conditions, tiered low-to-mid single-digit sales royalties.

Promises that the Company concluded were distinct performance obligations in the License Agreement included:

(1) the license of intellectual property and delivery of know-how, (2) the manufacturing license, related know-how and support, (3) if and when available know-how developed in future periods, and (4) participation in the joint steering committee.

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Fixed consideration exists in the form of the upfront payment.

Regulatory milestones and royalties were considered variable consideration.

The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods.

Milestone fees were constrained and not included in the transaction price due to the uncertainties of research and development.

The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The shares of Series Seed Preferred Stock were accounted for as part of the Company’s joint venture and equity method accounting upon formation of the joint venture, and as such, were excluded from the transaction price.

The Company determined that the initial transaction price consists of the upfront payment of $ 40.0 million.

The transaction price allocated to the license of intellectual property and delivery of know-how will be recognized upon grant of license and delivery of know-how.

The transaction price allocated to (i) the manufacturing license, related know-how and support services, (ii) if and when available know-how developed in future periods, and (iii) participation in the joint steering committee, will be recognized over time as the services are delivered.

Funds received in advance are recorded as deferred revenue and will be recognized as the performance obligations are satisfied.

The Company has determined that Allogene Overland is a variable interest entity as of March 31, 2021 and December 31, 2020, respectively.

The Company does not have the power to independently direct the activities which most significantly affect Allogene Overland's economic performance.

Accordingly the Company did not consolidate Allogene Overland because the Company determined that it was not the primary beneficiary.

For the three months ended March 31, 2021 the Company recognized $ 38.3 million of collaboration revenue, primarily related to the license of intellectual property and delivery of the know-how performance obligation which was delivered in the first quarter of 2021.

Commitments and Contingencies

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The lease term is 127 months beginning August 2018 through February 2029 with an option to extend the term for another seven years which is not reasonably assured of exercise.

The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances up to September 30, 2020.

The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances.

The rent payments began on March 1, 2019 after an abatement period.

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In February 2019, the Company entered into a lease agreement for approximately 118,000 square feet of space to develop a cell therapy manufacturing facility in Newark, California.

The lease has a term of 188 months and is expected to commence in November 2020.

Upon certain conditions, the Company has two ten-year options to extend the lease which are not reasonably assured of exercise.

The Company is entitled to a tenant improvement allowance of $ 2.9 million for costs related to the design and construction of certain Company improvements.

The Company maintained letters of credit for the benefit of landlords which is disclosed as restricted cash in the condensed consolidated balance sheet.

Restricted cash related to letters of credit due to landlords was $ 5.2 million and $ 4.3 million as of September 30, 2020 and December 31, 2019, respectively.

The lease has a term of 188 months and commenced in November 2020.

Upon certain conditions, the Company has two ten-year options to extend the lease, both of which are not reasonably assured of exercise.

The Company is entitled to a tenant improvement allowance of $ 2.9 million for costs related to the design and construction of certain Company improvements and has received $ 2.7 million of tenant improvement allowances up to March 31, 2021.

The Company maintains letters of credit for the benefit of landlords which is disclosed as restricted cash in the condensed consolidated balance sheets.

Restricted cash related to letters of credit due to landlords was $ 5.2 million and $ 4.3 million as of March 31, 2021 and December 31, 2020, respectively.

The balance sheet classification of our lease liabilities were as follows (in thousands):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Operating lease liabilities

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Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Operating lease cost $ 1,862 $ 1,868

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Total lease costs $ 2,189 $ 2,078

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2020 was $ 4.2 million and was included in net cash used in operating activities in our condensed consolidated statements of cash flows.

The undiscounted future lease payments under the lease agreements as of September 30, 2020 were as follows (in thousands):

Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2021 was $ 1.0 million and was included in net cash used in operating activities in our condensed consolidated statements of cash flows.

The undiscounted future lease payments under the lease agreements as of March 31, 2021 were as follows:

Year ending December 31:

(in thousands)

2021 (remaining 9 months) $ 5,044

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In determining the present value of lease payments, we use our estimated incremental borrowing rate.

The weighted average discount rate used to determine the operating lease liability was 8.36 %.

As of September 30, 2020, the weighted average remaining lease term for our operating leases is 10.41 years.

The weighted average

discount rate used to determine the operating lease liability was 8.40 %.

As of March 31, 2021, the weighted average remaining lease term for our operating leases is 10.22 years.

Other Commitments

In July 2020, the Company entered into a Solar Power Purchase and Energy Services Agreement with Onyx Development Group LLC (Onyx) for the installation and operation of a solar photovoltaic generating system and battery energy storage system at the Company's cell therapy manufacturing facility in Newark, California.

The agreement has a term of 20 years and is expected to commence in the first quarter of 2021.

In July 2020, the Company entered into a Solar Power Purchase and Energy Services Agreement for the installation and operation of a solar photovoltaic generating system and battery energy storage system at the Company's cell therapy manufacturing facility in Newark, California.

The agreement has a term of 20 years and is expected to commence in the second quarter of 2021.

The Company is obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term.

Termination of the agreement by the Company will result in a termination payment due of approximately $ 4.3 million.

In connection with the agreement, the Company maintains a letter of credit for the benefit of Onyx in the amount of $ 4.3 million which is disclosed as restricted cash in the condensed consolidated balance sheet as of September 30, 2020.

In connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $ 4.3 million which is disclosed as restricted cash in the condensed consolidated balance sheet as of March 31, 2021.

The Company has entered into certain license agreements for intellectual property which is used as part of our development and manufacturing processes.

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These agreements require payment of annual license fees and may include conditional milestone payments for achievement of specific research, clinical and commercial events, and royalty payments.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of September 30, 2020.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of March 31, 2021.

The Company enters into contracts in the normal course of business that includes arrangements with clinical research organizations, vendors for preclinical research and vendors for manufacturing.

These agreements generally allow for cancellation with notice.

As of September 30, 2020, the Company had non-cancellable purchase commitments of $ 3.9 million.

As of March 31, 2021, the Company had non-cancellable purchase commitments of $ 4.1 million.

Equity Method Investment

Notch Therapeutics

In conjunction with the execution of the Notch Agreement (see Note 6), the Company also entered into a Share Purchase Agreement with the Company acquiring shares of Notch’s Series Seed convertible preferred stock for a total investment cost of $ 5.1 million which includes transaction costs of $ 0.1 million, resulting in a 25 % ownership interest in Notch.

The Company’s total equity investment in Notch as of September 30, 2020 and December 31, 2019 was $ 4.5 million and $ 4.9 million, respectively, and the Company accounted for the investment using the equity method of accounting.

In February 2021, the Company made a $ 15.9 million investment in Notch's Series A preferred stock.

Immediately following this transaction, the Company's share in Notch was 20.7 % on a voting interest basis.

The Company’s total equity investment in Notch as of March 31, 2021 and December 31, 2020 was $ 19.4 million and $ 3.7 million, respectively, and the Company accounted for the investment using the equity method of accounting.

Allogene Overland Biopharm (CY) Limited

In conjunction with the execution of the License Agreement with Allogene Overland (see Note 6), the Company also entered into a Share Purchase Agreement and Shareholders' Agreement with the joint venture company under which it acquired shares of Allogene Overland’s Seed Preferred Shares representing a 49 % ownership interest as partial consideration for entering into a License Agreement which had a carrying value of zero .

The Company accounts for its investment in Allogene Overland as an equity method investment at carrying value.

The Company's total equity investment in Allogene Overland was zero as of March 31, 2021 and December 31, 2020, respectively.

The Company’s equity investment in Allogene Overland as of March 31, 2021 and December 31, 2020 had a zero carryover basis.

Therefore, the Company did not account for its share of losses incurred by Allogene Overland.

See Note 6 for further details.

Stock-Based Compensation

In June 2018, the Company adopted the 2018 Equity Incentive Plan (2018 Plan).

The 2018 Plan provided for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Company’s Board of Directors and consultants of the Company under terms and provisions established by the Company’s Board of Directors.

In October 2018, the Board of Directors approved an amendment and restatement of the 2018 Plan, increasing the shares of common stock issuable under the 2018 Plan as well as allowing for an automatic annual increase to the shares issuance under the 2018 Plan to the amount equal to 5 % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year.

In June 2018, the Company adopted its 2018 Equity Incentive Plan (Prior 2018 Plan).

The Prior 2018 Plan provided for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Company’s Board of Directors and consultants of the Company under terms and provisions established by the Company’s Board of Directors.

In September 2018, the Board of Directors adopted a new amended and restated 2018 Equity Incentive Plan as a successor to and continuation of the Prior 2018 Plan, which became effective in October 2018 (the 2018 Plan), which authorized additional shares for issuance and provided for an automatic annual increase to the number of shares issuable under the 2018 Plan by an amount equal to 5 % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year.

The term of any stock option granted under the 2018 Plan cannot exceed 10 years.

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Restricted Stock Units granted typically vest annually over a four-year period but may be granted with different vesting terms.

As of September 30, 2020, there were 12,321,515 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

As of March 31, 2021, there were 17,212,410 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Activity

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Forfeited ( 496,070 ) 15.36

Balance, September 30, 2020 10,783,633 $ 17.12 8.50 $ 223,554

Exercisable, September 30, 2020 6,476,316 $ 14.98 8.41 $ 147,320

Vested and expected to vest, September 30, 2020 10,783,633 $ 17.12 8.50 $ 223,554

The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on the Nasdaq Global Select Market on September 30, 2020.

For the nine months ended September 30, 2020, the estimated weighted-average grant-date fair value of employee options granted was $ 21.35 per share.

As of September 30, 2020, there was $ 87.7 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2 years, 273 days .

Balance, March 31, 2021 11,107,162 $ 20.57 8.23 $ 166,162

Exercisable, March 31, 2021 7,423,034 $ 19.15 8.19 $ 120,201

Vested and expected to vest, March 31, 2021 11,107,162 $ 20.57 8.23 $ 166,162

For the three months ended March 31, 2021, the estimated weighted-average grant-date fair value of employee options granted was $ 21.41 per share.

As of March 31, 2021, there was $ 102.9 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2 years, 332 days .

The fair value of employee, consultant and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

Nine Months Ended September 30,

Three Months Ended March 31,

Expected term in years 6.06 - 6.08

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Forfeited ( 140,218 ) 25.53

Unvested September 30, 2020 2,517,294 $ 25.86 1.87 $ 94,927

Vested and expected to vest, September 30, 2020 2,517,294 $ 25.86 1.87 $ 94,927

As of September 30, 2020, there was $ 55.1 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3 years, 4 days .

Unvested March 31, 2021 3,053,413 $ 29.47 2.01 $ 107,785

Vested and expected to vest, March 31, 2021 3,053,413 $ 29.47 2.01 $ 107,785

As of March 31, 2021, there was $ 82.0 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3 years, 88 days .

Total stock-based compensation related to stock options, restricted stock units, employee stock purchase plan and vesting of the founders’ common stock was as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Research and development $ 7,920 $ 6,657

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Early Exercised Options

The Company allows certain of its employees and its directors to exercise options granted under the 2018 Plan prior to vesting.

The Company allows certain of its employees and its directors to exercise options granted under the Prior 2018 Plan and the 2018 Plan prior to vesting.

The shares related to early exercised stock options are subject to the Company’s lapsing repurchase right upon termination of employment or service on the Company’s board of directors at the lesser of the original purchase price or fair market value at the time of repurchase.

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The proceeds are reclassified to paid-in capital as the repurchase right lapses.

As of September 30, 2020 and December 31, 2019 there was $ 2.8 million and $ 2.8 million recorded in accrued and other liabilities and $ 1.8 million and $ 3.9 million recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

underlying shares are shown as outstanding in the condensed consolidated financial statements since the exercise date but the shares which are subject to future vesting conditions are not included in the calculation of earnings per share.

As of March 31, 2021 and December 31, 2020 there was $ 2.8 million and $ 2.8 million recorded in accrued and other liabilities and $ 0.4 million and $ 1.1 million recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

The underlying shares are shown as outstanding in the condensed consolidated financial statements since the exercise date but the shares which are subject to future vesting conditions are not included in the calculation of earnings per share.

Related Party Transactions

As of September 30, 2020, Pfizer held 22,032,040 shares of Common Stock and had appointed one member to the Company’s board of directors.

In April 2018, the Company and Pfizer entered into a transition services agreement (the Pfizer TSA) for Pfizer to provide professional services to the Company related to research and development, project management, and other administrative functions.

In September 2019, the Company and Pfizer terminated the Pfizer TSA.

For the three and nine months ended September 30, 2020, the costs incurred under the Pfizer TSA were zero .

For the three and nine months ended September 30, 2019, the costs incurred under the Pfizer TSA were $ 0.7 million and $ 4.9 million, respectively.

The Company also purchased certain lab supplies from Pfizer in connection with its research and development activities.

For the three and nine months ended September 30, 2020, the total lab supplies and services purchased from Pfizer were zero .

For the three and nine months ended September 30, 2019, the total lab supplies and services purchased from Pfizer were zero and $ 1.1 million, respectively.

As of September 30, 2020 and December 31, 2019, the Company had an amount payable to Pfizer of zero and $ 0.1 million, respectively, which was recorded in the accrued and other current liabilities on the accompanying condensed consolidated balance sheets.

Collaboration Revenue

In December 2020, the Company entered into a license agreement with Allogene Overland, a corporate joint venture entity and related party (see Note 6).

During the three months ending March 31, 2021, the Company recognized $ 38.3 million of collaboration revenue from Allogene Overland under this arrangement.

Sublease Agreement

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The Company’s executive chairman, Arie Belldegrun, M.D., FACS, is a trustee of the Belldegrun Family Trust, which controls Bellco Capital Advisors Inc.

The total right of use asset and associated liability recorded related to this related party lease was $ 0.1 million at September 30, 2020 and $ 0.1 million and $ 0.2 million, respectively, at December 31, 2019.

In February 2019, the Company subleased 2,180 square feet of its office space in New York, New York, to ByHeart, Inc.

(ByHeart), formerly known as Second Science, Inc.

ByHeart is a development-stage infant formula company.

Certain of the Company’s board members and executive officers have beneficial ownership in ByHeart and two serve on the board of directors of ByHeart.

In September 2019, the Company entered into an amendment to the sublease agreement and increased the subleased space to 2,907 square feet.

Sublease income for the three and nine months ended September 30, 2020 were $ 0.1 million and $ 0.3 million, respectively, and was recognized as other income.

Sublease income for the three and nine months ended September 30, 2019 was $ 0.1 million and $ 0.2 million, respectively.

The total right of use asset and associated liability recorded related to this related party lease was $ 0.1 million and $ 0.1 million for the three months ended March 31, 2021 and 2020, respectively.

Consulting Agreements

In June 2018, the Company entered into a services agreement with Two River Consulting LLC (Two River) a firm affiliated with the Company’s President and Chief Executive Officer, the Company’s Executive Chairman of the board of directors, and a director of the Company to provide various managerial, administrative, accounting and financial services to the Company.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2020, respectively, and $ 0.2 million and $ 0.5 million for the three and nine months ended September 30, 2019, respectively.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.1 million for the three months ended March 31, 2021 and 2020, respectively.

In August 2018, the Company entered into a consulting agreement with Bellco.

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The Company also reimburses Bellco for out of pocket expenses incurred in performing the services.

The cost incurred for services provided and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively, and $ 0.1 million and $ 0.4 million for the three and nine months ended September 30, 2019, respectively.

The cost incurred for services provided and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

The Company has a history of losses, and expects to record a loss in 2021.

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The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the period presented due to their anti-dilutive effect:

September 30,

Stock options to purchase common stock 11,107,162 11,627,389

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Subsequent Events

On October 6, 2020, the Company entered into a strategic five-year collaboration agreement with The University of Texas MD Anderson Cancer Center ("MD Anderson") for the preclinical and clinical investigation of allogeneic CAR T cell product candidates.

Under the terms of the agreement, the Company and MD Anderson plan to collaborate on the design and conduct of preclinical and clinical studies with oversight from a joint steering committee.

The Company has committed up to $ 15.0 million of funding for the duration of the agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements