What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 115 added, 64 removed, 501 unchanged (26% of the section changed)

28 unchanged sentences

Preferred stock, $ 0.001 par value:

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

10,000,000 shares authorized as of June 30, 2021 and December 31, 2020;

no shares were issued and outstanding as of June 30, 2021 and December 31, 2020

Common stock, $ 0.001 par value:

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

200,000,000 shares authorized as of June 30, 2021 and December 31, 2020;

142,120,731 and 140,474,305 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 1,774,298 1,725,552

8 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Collaboration revenue - related party $ 44 $ — $ 38,389 $ —

20 unchanged sentences

Shares Amount

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

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

650,656 1 3,213 — — 3,214

Vesting of early exercised common stock

— — 854 — — 854

Stock-based compensation — — 21,134 — — 21,134

Net loss — — — ( 70,936 ) — ( 70,936 )

Net unrealized loss on available-for-sale investments

— — — — ( 233 ) ( 233 )

Balance - June 30, 2021 142,120,731 $ 142 $ 1,774,298 $ ( 750,294 ) $ ( 334 ) $ 1,023,812

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

Shares Amount

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

9 unchanged sentences

— — — — ( 602 ) ( 602 )

Balance - June 30, 2021 142,120,731 $ 142 $ 1,774,298 $ ( 750,294 ) $ ( 334 ) $ 1,023,812

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

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

513,466 1 4,475 — — 4,476

Vesting of early exercised common stock

— — 710 — — 710

Stock-based compensation

— — 16,770 — — 16,770

Employee stock purchase plan — — — — — —

Issuance of common stock from public offering, net of commissions and offering costs of $ 36.8 million

13,457,447 13 595,685 — — 595,698

Net loss — — — ( 60,974 ) — ( 60,974 )

Net unrealized gain on available-for-sale investments

— — — — 220 220

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

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 $ 36.8 million

3 unchanged sentences

— — — — 685 685

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

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

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

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

18 unchanged sentences

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

Proceeds (loss) from sales of investments ( 10 ) 4,877

Proceeds from maturities of investments 484,082 221,633

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 — 595,698

Proceeds from issuance of common stock upon exercise of stock options 7,274 4,780

6 unchanged sentences

Property and equipment purchases in accounts payable and accrued and other current liabilities $ 1,706 $ 8,298

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

Supplemental disclosure:

12 unchanged sentences

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.

The Company had cash and cash equivalents and investments of $ 913.2 million as of June 30, 2021.

Since inception through June 30, 2021, the Company has incurred cumulative net losses of $ 750.3 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.

13 unchanged sentences

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

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.

The condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020, the condensed consolidated statements of stockholders’ equity as of June 30, 2021 and 2020, the condensed consolidated statements of cash flows for the six months ended June 30, 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 and six months ended June 30, 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.

5 unchanged sentences

Significant Accounting Policies

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.

There have been no significant changes to the accounting policies during the three and six months ended June 30, 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 and six months ended June 30, 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 Company’s revenue has been 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.

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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

There were no Level 3 assets or liabilities as of June 30, 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 June 30, 2021 and as of December 31, 2020 are presented in the following tables:

June 30, 2021

Level 1 Level 2 Level 3 Fair Value

19 unchanged sentences

Financial Instruments

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

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of June 30, 2021 and as of December 31, 2020 are presented in the following tables:

June 30, 2021

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

25 unchanged sentences

Total cash equivalents and investments $ 950,806

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

As of June 30, 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 March 31, 2021, unrealized losses on available-for-sale investments are not attributed to credit risk.

As of June 30, 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.

As of June 30, 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.

20 unchanged sentences

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 March 31, 2021 and 2020 respectively.

No milestone or royalty payments were made in the three and six months ended June 30, 2021 or 2020.

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.

24 unchanged sentences

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

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.

For the three and six months ended June 30, 2021, zero and $ 5.0 million, respectively, in costs were incurred related to the achievement of a clinical development milestone under this agreement.

For the three and six months ended June 30, 2020, 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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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 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.

For the three and six months ended June 30, 2021, the Company recorded $ 4.2 million and $ 8.1 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 six months ended June 30, 2020, the Company recorded $ 0.9 million and $ 1.9 million, respectively, of net cost recoveries.

As of June 30, 2021 and December 31, 2020, amounts due from Servier of $ 4.2 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

11 unchanged sentences

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.

The Company did not have a controlling interest in Notch as of June 30, 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.

4 unchanged sentences

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.

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.

For the three and six months ended June 30, 2021, the Company recorded $ 1.8 million and $ 3.1 million, respectively, in collaboration costs as research and development expenses.

For the three and six months ended June 30, 2020, the Company recorded $ 0.4 million and $ 0.7 million, respectively, in collaboration costs as research and development expenses.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

9 unchanged sentences

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

For the three and six months ended June 30, 2021, the Company recorded $ 0.3 million in collaboration costs as research and development expenses.

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

20 unchanged sentences

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 has determined that Allogene Overland is a variable interest entity as of June 30, 2021 and December 31, 2020.

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.

For the three and six months ended June 30, 2021, the Company recognized less than $ 0.1 million and $ 38.4 million, respectively, 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

In August 2018, the Company entered into an operating lease agreement for new office and laboratory space which consists of approximately 68,000 square feet located in South San Francisco, California.

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 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

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

7 unchanged sentences

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.

Restricted cash related to letters of credit due to landlords was $ 5.2 million and $ 4.3 million as of June 30, 2021 and December 31, 2020, respectively.

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Operating lease liabilities

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

2021 2020 2021 2020

Operating lease cost $ 1,853 $ 1,868 $ 3,715 $ 3,736

1 unchanged sentence

Total lease costs $ 2,057 $ 2,267 $ 4,246 $ 4,344

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:

Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2021 was $ 2.4 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 June 30, 2021 were as follows:

Year ending December 31:

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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 8.40 %.

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

The weighted average discount rate used to determine the operating lease liability was 8.42 %.

As of June 30, 2021, the weighted average remaining lease term for our operating leases is 10.05 years.

Other Commitments

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 agreement has a term of 20 years and is expected to commence in the third 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 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.

1 unchanged sentence

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 March 31, 2021.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of June 30, 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 March 31, 2021, the Company had non-cancellable purchase commitments of $ 4.1 million.

As of June 30, 2021, the Company had non-cancellable purchase commitments of $ 4.2 million.

Equity Method Investment

3 unchanged sentences

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.

The Company’s total equity investment in Notch as of June 30, 2021 and December 31, 2020 was $ 18.8 million and $ 3.7 million, respectively, and the Company accounted for the investment using the equity method of accounting.

Allogene Overland Biopharm (CY) Limited

1 unchanged sentence

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.

The Company's total equity investment in Allogene Overland was zero as of June 30, 2021 and December 31, 2020, respectively.

The Company’s equity investment in Allogene Overland as of June 30, 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.

9 unchanged sentences

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

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.

As of June 30, 2021, there were 17,204,935 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Activity

7 unchanged sentences

Forfeited ( 796,708 ) 17.84

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

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 March 31, 2021.

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 .

Balance, June 30, 2021 10,366,610 $ 20.92 8.00 $ 76,532

Exercisable, June 30, 2021 7,325,132 $ 19.49 7.86 $ 60,680

Vested and expected to vest, June 30, 2021 10,366,610 $ 20.92 8.00 $ 76,532

For the six months ended June 30, 2021, the estimated weighted-average grant-date fair value of employee options granted was $ 21.15 per share.

As of June 30, 2021, there was $ 91.3 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, 263 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:

Three Months Ended March 31,

Six Months Ended June 30,

Expected term in years 5.27 - 6.08

Expected volatility 70.20 % - 70.80 %

71.42 % - 72.14 %

Expected risk-free interest rate 0.60 % - 1.16 %

20 unchanged sentences

Forfeited ( 277,965 ) 26.96

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 .

Unvested June 30, 2021 3,121,564 $ 29.28 1.84 $ 81,410

Vested and expected to vest, June 30, 2021 3,121,564 $ 29.28 1.84 $ 81,410

As of June 30, 2021, there was $ 80.6 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, 6 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Research and development $ 10,501 $ 7,979 $ 18,420 $ 14,636

7 unchanged sentences

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

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.

In May 2021, 293,594 options were early exercised, resulting in proceeds of $ 5.3 million.

As of June 30, 2021 and December 31, 2020 there was $ 4.3 million and $ 2.8 million, respectively, recorded in accrued and other liabilities and $ 3.4 million and $ 1.1 million, respectively, 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

Pfizer held 22,032,040 shares of Common Stock based on the Schedule 13D filed on October 22, 2018 with the SEC.

During the second quarter of 2021, the Company sold excess raw materials to Pfizer.

As of June 30, 2021 and December 31, 2020, the Company had an amount receivable from Pfizer of $ 0.1 million and zero , respectively, which was recorded in prepaid expenses and other current assets 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.

During the three and six months ending June 30, 2021, the Company recognized less than $ 0.1 million and $ 38.4 million, respectively, of collaboration revenue from Allogene Overland under this arrangement.

Sublease Agreement

3 unchanged sentences

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 and $ 0.1 million for the three months ended March 31, 2021 and 2020, respectively.

The total right of use asset and associated liability recorded related to this related party lease was zero at June 30, 2021 and $ 0.1 million at December 31, 2020.

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 $ 0.1 million for the three months ended March 31, 2021 and 2020, respectively.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2021, respectively, and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020, respectively.

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

4 unchanged sentences

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 $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

The cost incurred for services provided and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2021, respectively, and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2020, respectively.

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

5 unchanged sentences

Expected shares to be purchased under Employee Stock Purchase Plan 246,637 207,129

Founder's shares of common stock subject to future vesting 6,057,696 12,115,382

Founders' shares of common stock subject to future vesting 4,543,272 10,600,961

Early exercised stock options subject to future vesting 1,395,265 2,364,712

2 unchanged sentences

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