What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-04 compared with 2021-08-04 · 99 added, 84 removed, 532 unchanged (26% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2021 December 31,

23 unchanged sentences

Preferred stock, $ 0.001 par value:

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

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

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

Common stock, $ 0.001 par value:

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

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

142,439,829 and 140,474,305 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 1,798,678 1,725,552

8 unchanged sentences

(In thousands, except share and per share amounts)

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

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

2021 2020 2021 2020

10 unchanged sentences

Net loss ( 78,186 ) ( 66,197 ) ( 182,137 ) ( 181,651 )

Other comprehensive income:

Net unrealized gain (loss) on available-for-sale investments ( 233 ) 220 ( 602 ) 685

Other comprehensive loss:

Net unrealized loss on available-for-sale investments ( 64 ) ( 877 ) ( 666 ) ( 192 )

Net comprehensive loss $ ( 78,250 ) $ ( 67,074 ) $ ( 182,803 ) $ ( 181,843 )

7 unchanged sentences

Shares Amount

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

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

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

3 unchanged sentences

Stock-based compensation — — 20,856 — — 20,856

Employee stock purchase plan

89,180 — 1,632 — — 1,632

Net loss — — — ( 78,186 ) — ( 78,186 )

1 unchanged sentence

— — — — ( 64 ) ( 64 )

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

Balance - September 30, 2021 142,439,829 $ 142 $ 1,798,678 $ ( 828,480 ) $ ( 398 ) $ 969,942

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

11 unchanged sentences

— — — — ( 666 ) ( 666 )

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

Balance - September 30, 2021 142,439,829 $ 142 $ 1,798,678 $ ( 828,480 ) $ ( 398 ) $ 969,942

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

8 unchanged sentences

Shares Amount

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

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

5 unchanged sentences

Employee stock purchase plan 90,577 — 1,406 — — 1,406

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 — — — ( 66,197 ) — ( 66,197 )

Net unrealized gain on available-for-sale investments

Net unrealized loss on available-for-sale investments

— — — — ( 877 ) ( 877 )

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

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

Common Stock Additional

17 unchanged sentences

Net loss — — — ( 181,651 ) — ( 181,651 )

Net unrealized gain on available-for-sale investments

Net unrealized loss on available-for-sale investments

— — — — ( 192 ) ( 192 )

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

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.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

42 unchanged sentences

(the Company or Allogene) was incorporated on November 30, 2017 in the State of Delaware and is headquartered in South San Francisco, California.

Allogene is a clinical-stage immuno-oncology company pioneering the development and commercialization of genetically engineered allogeneic T cell therapies for the treatment of cancer.

Allogene is an immuno-oncology company pioneering the development and commercialization of genetically engineered allogeneic T cell therapies for the treatment of cancer.

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

2 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 $ 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.

The Company had cash and cash equivalents and investments of $ 861.7 million as of September 30, 2021.

Since inception through September 30, 2021, the Company has incurred cumulative net losses of $ 828.5 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.

2 unchanged sentences

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).

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 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.

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.

8 unchanged sentences

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

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.

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

There have been no significant changes to the accounting policies during the three and nine months ended September 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 nine months ended September 30, 2021 and the recently adopted accounting pronouncements in the section below.

Revenue Recognition

30 unchanged sentences

treasury securities which are classified as Level 1.

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

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

September 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 June 30, 2021 and as of December 31, 2020 are presented in the following tables:

June 30, 2021

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

September 30, 2021

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

25 unchanged sentences

Total cash equivalents and investments $ 950,806

As of June 30, 2021, the remaining contractual maturities of available-for-sale securities were less than 3 years.

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

As of September 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 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.

As of September 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.

2 unchanged sentences

Property and Equipment consist of the following:

September 30,

2021 December 31,

(In thousands)

Construction in progress $ 75,593 $ 68,944

Leasehold improvements 108,179 31,518

Laboratory equipment 28,225 23,810

Computers equipment and purchased software 4,359 4,088

Computer equipment and purchased software 4,380 4,088

Furniture and fixtures 3,929 3,388

Construction in progress 289 68,944

Total 145,002 131,748

9 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 and six months ended June 30, 2021 or 2020.

No milestone or royalty payments were made in the three and nine months ended September 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 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.

For the three and nine months ended September 30, 2021, $ 5.0 million and $ 10.0 million, respectively, in costs were incurred related to the achievement of clinical development milestones under this agreement.

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.

License and Collaboration Agreement with Servier

18 unchanged sentences

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 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.

For the three and nine months ended September 30, 2021, the Company recorded $ 5.1 million and $ 13.2 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, 2020, the Company recorded $ 4.1 million and $ 5.9 million, respectively, of net cost recoveries.

As of September 30, 2021 and December 31, 2020, amounts due from Servier of $ 9.3 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

On November 1, 2019, the Company entered into a Collaboration and License Agreement (the Notch Agreement) with Notch Therapeutics Inc.

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

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

8 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 June 30, 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 September 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 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.

For the three and nine months ended September 30, 2021, the Company recorded $ 0.8 million and $ 3.9 million, respectively, in collaboration costs as research and development expenses.

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.

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.

For the three and nine months ended September 30, 2021, the Company recorded $ 0.4 million and $ 0.8 million in collaboration costs as research and development expenses.

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

6 unchanged sentences

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.

Subsequent to entering into the License Agreement, Allogene Overland assigned the License Agreement to a wholly-owned subsidiary, Allogene Overland BioPharm (HK) Limited.

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

12 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 June 30, 2021 and December 31, 2020.

The Company has determined that Allogene Overland is a variable interest entity as of September 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 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.

For the three and nine months ended September 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

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.

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 June 30, 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 June 30, 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 September 30, 2021 and December 31, 2020, respectively.

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Operating lease liabilities

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

2021 2020 2021 2020

2 unchanged sentences

Total lease costs $ 2,301 $ 2,198 $ 6,547 $ 6,504

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:

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2021 was $ 4.1 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, 2021 were as follows:

Year ending December 31:

9 unchanged sentences

The weighted average discount rate used to determine the operating lease liability was 8.43 %.

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

As of September 30, 2021, the weighted average remaining lease term for our operating leases is 9.86 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 third quarter of 2021.

The agreement has a term of 20 years and is expected to commence in the fourth 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 June 30, 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 June 30, 2021.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of September 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 June 30, 2021, the Company had non-cancellable purchase commitments of $ 4.2 million.

As of September 30, 2021, the Company had non-cancellable purchase commitments of $ 2.9 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 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.

The Company’s total equity investment in Notch as of September 30, 2021 and December 31, 2020 was $ 17.9 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 .

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 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.

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

The Company’s equity investment in Allogene Overland as of September 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 June 30, 2021, there were 17,204,935 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

As of September 30, 2021, there were 16,937,335 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Activity

7 unchanged sentences

Forfeited ( 1,145,057 ) 19.81

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

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 June 30, 2021.

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 .

Balance, September 30, 2021 10,109,169 $ 21.10 7.83 $ 70,846

Exercisable, September 30, 2021 7,517,410 $ 19.73 7.69 $ 59,485

Vested and expected to vest, September 30, 2021 10,109,169 $ 21.10 7.83 $ 70,846

For the nine months ended September 30, 2021, the estimated weighted-average grant-date fair value of employee options granted was $ 20.31 per share.

As of September 30, 2021, there was $ 81.9 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, 205 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:

Six Months Ended June 30,

Nine Months Ended September 30,

Expected term in years 5.27 - 6.10

23 unchanged sentences

Forfeited ( 451,033 ) 27.27

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 .

Unvested September 30, 2021 3,393,604 $ 28.70 1.76 $ 87,216

Vested and expected to vest, September 30, 2021 3,393,604 $ 28.70 1.76 $ 87,216

As of September 30, 2021, there was $ 82.8 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2 years, 327 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 June 30, Six Months Ended June 30,

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

2021 2020 2021 2020

9 unchanged sentences

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.

As of September 30, 2021 and December 31, 2020 there was $ 3.6 million and $ 2.8 million, respectively, recorded in accrued and other liabilities and $ 3.0 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.

PF Equity Holdings 2 B.V.

held 22,032,040 shares of Common Stock based on the Schedule 13D/A filed on September 17, 2021 with the SEC.

According to the Schedule 13D/A filing, PF Equity Holdings 2 B.V.

is a wholly-owned subsidiary of Pfizer formed for the purpose of holding certain assets owned or controlled by Pfizer or its direct or indirect subsidiaries.

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.

As of September 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 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.

The license agreement was subsequently assigned to a wholly-owned subsidiary of Allogene Overland, Allogene Overland BioPharm (HK) Limited.

During the three and nine months ending September 30, 2021, the Company recognized less than $ 0.1 million and $ 38.4 million, respectively, of collaboration revenue 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 zero at June 30, 2021 and $ 0.1 million at December 31, 2020.

The total right of use asset and associated liability recorded related to this related party lease was zero at September 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 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 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, clinical development, administrative, accounting and financial services to the Company.

The costs incurred for services provided under this agreement were $ 0.2 million and $ 0.4 million for the three and nine months ended September 30, 2021, respectively, and $ 0.1 million and $ 0.3 million for the three and nine months ended September 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 $ 0.4 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 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, 2021, respectively, and $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively.

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

2 unchanged sentences

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 10,109,169 10,783,633

5 unchanged sentences

Subsequent Events

In October 2021, the Company made an additional $ 1.8 million investment in Notch's common stock.

Immediately following this transaction, the Company's share in Notch was 23.0 % on a voting interest basis.

In October 2021, the U.S.

Food and Drug Administration (FDA) placed a hold on the Company's clinical trials.

At this stage, the Company cannot assess the likely timing to complete the clinical hold review process with the FDA, and for the clinical hold to be removed.

If the Company is unable to resolve the clinical hold in a timely manner, its results of operations, financial position and prospects as a company, will be materially adversely affected.

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