What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-04 compared with 2021-11-04 · 89 added, 100 removed, 144 unchanged (57% of the section changed)

8 unchanged sentences

These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements .

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

We are a clinical-stage immuno-oncology company pioneering the development of genetically engineered allogeneic T cell therapies for the treatment of cancer.

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

Our engineered T cells are allogeneic, meaning they are derived from healthy donors for intended use in any patient, rather than from an individual patient for that patient’s use, as in the case of autologous

We believe this key difference will enable us to deliver readily available treatments faster, more reliably, at greater scale, and to more patients.

We have a deep pipeline of allogeneic chimeric antigen receptor (CAR) T cell product candidates targeting multiple promising antigens in a host of hematological malignancies and solid tumors.

Pursuant to the Exclusive Collaboration and License Agreement with Servier (Servier Agreement), we have exclusive rights to ALLO-501 and ALLO-501A, CAR T cell product candidates targeting CD19, in the United States, while Servier retains exclusive rights for these product candidates for all other countries.

all other countries.

ALLO-501 and ALLO-501A use Cellectis S.A.

(Cellectis) technologies under which Servier holds an exclusive worldwide license from Cellectis.

In October 2021, following a report of a chromosomal abnormality in ALLO-501A CAR T cells in a patient treated in the Phase 1 clinical trial (the ALPHA2 trial) of ALLO-501A, the U.S.

Food and Drug Administration (FDA) placed a hold on the ALPHA2 trial.

The FDA concurrently placed a clinical hold on our other clinical trials, including the Phase 1 clinical trial (the ALPHA trial) of ALLO-501 in patients with relapsed or refractory (R/R) non-Hodgkin lymphoma (NHL), the Phase 1 clinical trial (the UNIVERSAL trial) of ALLO-715 in patients with R/R multiple myeloma, the Phase 1 clinical trial (the IGNITE trial) of ALLO-605 in patients with R/R multiple myeloma and the Phase 1 clinical trial (the TRAVERSE trial) of ALLO-316 in patients with advanced or metastatic clear cell renal cell carcinoma (ccRCC).

We plan to report additional data from the ALPHA, ALPHA2 and UNIVERSAL trials on the patients treated prior to the clinical hold at the American Society of Hematology annual meeting in December 2021.

We are working with the FDA to remove the clinical hold, but at this stage, cannot provide a timeline for any potential resolution and re-commencement of our clinical trials.

In addition, enrollment of patients (prior to the clinical hold) and the ability to conduct patient follow-up has been adversely impacted by the COVID-19 pandemic.

The exact timing of delays and overall impact of the COVID-19 pandemic to our business, preclinical studies and clinical trials is currently unknown, and we are monitoring the pandemic as it continues to rapidly evolve.

We are conducting long-term follow-up in our Phase 1 clinical trial (the ALPHA trial) of ALLO-501 in patients with relapsed or refractory (R/R) non-Hodgkin lymphoma (NHL).

We are also progressing the development of the second-generation version of ALLO-501, known as ALLO-501A.

We have removed rituximab recognition domains in ALLO-501A, which we believe will potentially facilitate treatment of more patients, as rituximab is a typical part of a treatment regimen for a patient with NHL.

We initiated a Phase 1/2 clinical trial for ALLO-501A (the ALPHA2 trial) in the second quarter of 2020.

We plan to seek agreement with the U.S.

Food and Drug Administration (the FDA) to proceed to Phase 2 on matters such as chemistry, manufacturing and controls (CMC), including for the use of ALLO-501A manufactured at our own manufacturing facility, and trial designs to evaluate both ALLO-501A and ALLO-647.

Subject to further patient follow-up and FDA discussion, we plan to proceed to the Phase 2 portion of the trial in adult patients with R/R large B-cell lymphoma in mid-2022.

We are sponsoring two clinical trials in adult patients with R/R multiple myeloma, a Phase 1 clinical trial (the UNIVERSAL trial) of ALLO-715 and a Phase 1 clinical trial (the IGNITE trial) of ALLO-605, our first product candidate to incorporate our TurboCAR technology.

TurboCAR technology allows cytokine signaling to be engineered selectively into CAR T cells and has shown the ability to improve the potency and persistence of the cells and to delay exhaustion of the cells in preclinical models.

We expect to provide an update on our R/R multiple myeloma program by the end of 2022.

We also continue to advance the Phase 1 clinical trial (the TRAVERSE trial) of ALLO-316, an allogeneic CAR T cell product candidate targeting CD70, in adult patients with advanced or metastatic clear cell renal cell carcinoma (ccRCC).

Subject to results from the TRAVERSE trial, we plan to investigate the use of ALLO-316 for other solid tumor and hematologic indications.

Enrollment of patients and the ability to conduct patient follow-up has been adversely impacted by the COVID-19 pandemic.

Since inception, we have had significant operating losses.

Our net losses were $78.2 million and $182.1 million for the three and nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $828.5 million.

As of September 30, 2021, we had $861.7 million in cash and cash equivalents and investments.

Our net losses were $79.9 million for the three months ended March 31, 2022.

As of March 31, 2022, we had an accumulated deficit of $983.2 million.

As of March 31, 2022, we had $733.1 million in cash and cash equivalents and investments.

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

31 unchanged sentences

Overland subsequently assigned the Licensed Agreement to a wholly-owned subsidiary, Allogene Overland BioPharm (HK) Limited (Allogene Overland HK).

On April 1, 2022, Allogene Overland HK assigned the License Agreement to Allogene Overland Biopharm (PRC) Co., Limited.

See Note 6 to our condensed consolidated financial statements included elsewhere in this report for further description of the License Agreement and Share Purchase Agreement with Allogene Overland.

Collaboration and License Agreement with Antion

On January 5, 2022, we entered into an exclusive collaboration and global license agreement (Antion Agreement) with Antion Biosciences SA (Antion) for Antion’s miRNA technology (miCAR), to advance multiplex gene silencing as an additional tool to develop next generation allogeneic CAR T products.

Pursuant to the agreement, Antion will exclusively collaborate with us on oncology products for a defined period.

We will also have exclusive worldwide rights to commercialize products incorporating Antion technology developed during the collaboration.

See Note 6 to our condensed consolidated financial statements included elsewhere in this report for further description of the Antion Agreement.

Components of Results of Operations

As of September 30, 2021, our revenue has been exclusively generated from our collaboration and license agreement with Allogene Overland HK.

See Notes 2 and 6 to our financial statements appearing elsewhere in this Quarterly Report for more information related to our recognition of revenue and the Allogene Overland HK agreement.

As of March 31, 2022, our revenue has been exclusively generated from our collaboration and license agreement with Allogene Overland HK.

See Note 6 to our financial statements appearing elsewhere in this Quarterly Report for more information related to our recognition of revenue and the Allogene Overland HK agreement.

In the future, we may generate revenue from a combination of product sales, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches.

We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, milestone and other payments, and the amount and timing of payments that we receive upon the sale of our products, to the extent any are successfully commercialized.

We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, milestones and other payments, and the amount and timing of payments that we receive upon the sale of our products, to the extent any are successfully commercialized.

If we fail to complete the development of our product candidates in a timely manner or obtain regulatory approval of them, our ability to generate future revenue, and our results of operations and financial position, will be materially adversely affected.

1 unchanged sentence

Research and Development

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

Research and development expenses for the three and nine months ended September 30, 2021 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

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

Research and development expenses for the three months ended March 31, 2022 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

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

9 unchanged sentences

Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when the milestone results are achieved.

We are required to reimburse Servier for 60% of the costs associated with the prior development of UCART19, including for the CALM and PALL clinical trials of UCART19.

We accrue for costs incurred by monitoring the status of the CALM and PALL clinical trials and the invoices received from Servier.

We adjust our accrual as actual costs become known.

We are required to reimburse Servier for 60% of the costs associated with the prior development of UCART19, including for the long-term follow-up of patients in the CALM and PALL clinical trials of UCART19.

We accrue for costs incurred by monitoring the status of clinical trials and the invoices received from Servier.

We adjust our accrual as actual costs

become known.

Servier is required to reimburse us for 40% of the costs associated with the development of ALLO-501 and ALLO-501A.

2 unchanged sentences

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Assuming resolution of the clinical hold, we expect our research and development expenses to increase in the future as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

We expect our research and development expenses to increase in the future as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

The cost of advancing our manufacturing process as well as the cost of manufacturing product candidates for clinical trials are included in our research and development expense.

We also expect to incur increased research

and development expenses as we selectively identify and develop additional product candidates.

We also expect to incur increased research and development expenses as we selectively identify and develop additional product candidates.

However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors that include, but are not limited to, the following:

• the ability to resolve the current clinical hold on our trials or any future clinical hold;

• per patient trial costs;

7 unchanged sentences

• the drop-out or discontinuation rates of patients;

• potential additional safety monitoring or other studies requested by regulatory agencies, including to resolve the clinical hold;

• potential additional safety monitoring or other studies requested by regulatory agencies, including to resolve any future clinical hold;

• the duration of patient follow-up;

5 unchanged sentences

General and administrative expenses consist primarily of salaries and other staff-related costs, including stock-based compensation for options and restricted stock units granted.

Other significant costs include costs relating to facilities and overhead costs, legal fees relating to corporate and patent matters, insurance, investor relations costs, fees for accounting and consulting services, information technology, and other general and administrative costs.

General and administrative costs are expensed as incurred, and we accrue for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from our service providers, and adjusting our accruals as actual costs become known.

We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, potential commercialization of our product candidates and the increased costs of operating as a public company, including additional compliance-related expenses as a result of no longer being an emerging growth company.

These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and increased costs associated with being a public company such as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, insurance and investor relations costs.

associated with being a public company such as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, complying with and advancing environmental, social and governance matters, and insurance and investor relations costs.

Interest and Other Income, Net

Interest and other income, net consists of interest earned on our cash, cash equivalents and investments, as well as investment gains and losses recognized during the period.

Interest and other income, net consists of interest earned on our cash and cash equivalents and investments, as well as investment gains and losses recognized during the period.

Other Expense

1 unchanged sentence

Results of Operations

Comparison of the Three Months Ended September 30, 2021 and 2020

The following sets forth our results of operations for the three months ended September 30, 2021 and 2020 (dollars in thousands):

Three Months Ended September 30, Change

Comparison of the Three Months Ended March 31, 2022 and 2021

The following sets forth our results of operations for the three months ended March 31, 2022 and 2021 (dollars in thousands):

Three Months Ended March 31, Change

2022 2021 $ %

8 unchanged sentences

Other expenses (350) (325) (25) 8 %

Total other income (expense), net (516) 1,843 (2,359) NM

Total other income (expense), net 142 186 (44) (24) %

Net Loss $ (79,850) $ (33,015) $ (46,835) 142 %

1 unchanged sentence

Collaboration revenue - related party

Collaboration revenue was less than $0.1 million and zero for the three months ended September 30, 2021 and 2020, respectively.

Revenue recognized in the three months ended September 30, 2021 was due to delivery of the know-how performance obligations related to the License Agreement entered into with Allogene Overland in December 2020.

Collaboration revenue was less than $0.1 million and $38.3 million for the three months ended March 31, 2022 and 2021, respectively.

The decrease of $38.3 million was due to the revenue recognized related to the license of intellectual property and delivery of the know-how performance obligation, which was delivered in the first quarter of 2021, under the License Agreement entered into with Allogene Overland in December 2020.

Research and Development Expenses

Research and development expenses were $58.7 million and $51.4 million for the three months ended September 30, 2021 and 2020, respectively.

The increase of $7.3 million was driven primarily by an increase in building rent and facilities costs of $2.9 million, an increase in personnel related costs of $2.0 million, of which $1.2 million was stock-based compensation expense, and an increase in external costs relating to the advancement of our product candidates of $1.6 million.

Research and development expenses were $60.2 million and $55.2 million for the three months ended March 31, 2022 and 2021, respectively.

The increase of $5.0 million was driven primarily by an increase in personnel related costs of $6.5 million, of which $3.2 million was stock-based compensation expense, and an increase in facilities costs and depreciation expense of $4.1 million, offset by a $6.7 million decrease in external costs relating to the advancement of our product candidates due to the timing of development activities and manufacturing runs.

General and Administrative Expenses

General and administrative expenses were $19.0 million and $16.6 million for the three months ended September 30, 2021 and 2020, respectively.

General and administrative expenses were $19.9 million and $16.4 million for the three months ended March 31, 2022 and 2021, respectively.

The increase of $3.5 million was primarily due to an increase in personnel related costs of $3.8 million, of which $2.4 million was stock-based compensation expense.

Interest and Other Income, Net

Interest and other income, net was $0.4 million and $2.0 million for the three months ended September 30, 2021 and 2020, respectively.

The decrease of $1.6 million was due to lower interest earned on our cash, cash equivalents and investments.

Comparison of the Nine Months Ended September 30, 2021 and 2020

The following sets forth our results of operations for the nine months ended September 30, 2021 and 2020 (dollars in thousands):

Nine Months Ended September 30, Change

2021 2020 $ %

Collaboration revenue - related party $ 38,438 $ — $ 38,438 NM

Operating expenses:

Research and development 166,193 140,759 25,434 18 %

General and administrative 54,144 48,122 6,022 13 %

Total operating expenses 220,337 188,881 31,456 17 %

Loss from operations (181,899) (188,881) 6,982 (4) %

Other income (expense), net:

Interest and other income, net 1,528 7,606 (6,078) (80) %

Other expenses (1,766) (376) (1,390) 370 %

Total other income (expense), net (238) 7,230 (7,468) NM

Net Loss $ (182,137) $ (181,651) $ (486) — %

NM - Not meaningful

Collaboration revenue - related party

Collaboration revenue was $38.4 million and zero for the nine months ended September 30, 2021 and 2020, respectively.

Revenue recognized in the nine months ended September 30, 2021 was related to grant of license and delivery of the know-how performance obligations related to the License Agreement entered into with Allogene Overland in December 2020.

Research and Development Expenses

Research and development expenses were $166.2 million and $140.8 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase of $25.4 million was driven primarily by an increase in personnel related costs of $15.0 million, of which $5.0 million was stock-based compensation expense, an increase in building rent and facilities costs of $6.1 million, and an increase in external costs relating to the advancement of our product candidates of $3.2 million.

General and Administrative Expenses

General and administrative expenses were $54.1 million and $48.1 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase of $6.0 million was primarily due to an increase in personnel related costs of $6.4 million, of which $4.9 million was stock-based compensation expense, offset by a decrease in building rent and facilities costs of $0.9 million.

Interest and Other Income, Net

Interest and other income, net was $1.5 million and $7.6 million for the nine months ended September 30, 2021 and 2020, respectively.

The decrease of $6.1 million was due to lower interest earned on our cash, cash equivalents and investments.

Liquidity, Capital Resources and Plan of Operations

Interest and other income, net was $0.5 million for the three months ended March 31, 2022 and 2021.

Liquidity and Capital Resources

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

As of September 30, 2021, we had $861.7 million in cash and cash equivalents and investments.

As of March 31, 2022, we had $733.1 million in cash and cash equivalents and investments.

We anticipate that the aggregate of our current cash and cash equivalents and investments available for operations will enable us to maintain our operations for a period of at least one year from the date this Quarterly Report on Form 10-Q is filed with the SEC.

In connection with our IPO in 2018, we sold an aggregate of 20,700,000 shares of our

common stock (inclusive of 2,700,000 shares of common stock pursuant to the over-allotment option granted to the underwriters) at a price of $18.00 per share and received approximately $343.3 million in net proceeds.

Our operations have been financed primarily by net proceeds from the sale and issuance of our convertible preferred stock, the issuance of convertible promissory notes, net proceeds from our IPO, our at-the-market (ATM) offerings, our June 2020 underwritten public offering, and upfront cash payment of $40.0 million received in December 2020 pursuant to our License Agreement with Allogene Overland.

In connection with our IPO in 2018, we sold an aggregate of 20,700,000 shares of our common stock (inclusive of 2,700,000 shares of common stock pursuant to the over-allotment option granted to the underwriters) at a price of $18.00 per share and received approximately $343.3 million in net proceeds.

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

During the year ended December 31, 2020, we sold an aggregate of 848,663 shares of common stock in ATM offerings resulting in net proceeds of $26.2 million.

During the nine months ended September 30, 2021, we did not sell any shares of common stock in ATM offerings.

As of September 30, 2021, $167.3 million remains available for sale under the sales agreement with Cowen.

As of March 31, 2022, $167.3 million remains available for sale under the sales agreement with Cowen.

In June 2020, we sold 13,457,447 shares of our 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 net proceeds of approximately $595.7 million after deducting the underwriting discounts and commissions and other expenses.

Our primary use of cash is for operating expenses, which consist primarily of clinical manufacturing and research and development expenditures related to our lead product candidates, other research efforts, and to a lesser extent, general and administrative expenditures.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Our product candidates are still in the early stages of clinical and preclinical development and the outcome of these efforts is uncertain.

Accordingly, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements.

If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.

If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we are unable to raise capital when needed, we will need to delay, reduce or terminate planned activities to reduce costs.

Doing so will likely harm our ability to execute our business plans.

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

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

5 unchanged sentences

Operating Activities

During the nine months ended September 30, 2021, cash used in operating activities of $139.4 million was attributable to a net loss of $182.1 million, partially offset by non-cash charges of $74.7 million and an increase of $32.0 million in our net operating assets and liabilities.

The non-cash charges consisted primarily of stock-based compensation expense of $58.8 million, depreciation of $6.2 million, net amortization and accretion on investment securities of $5.4 million, non-cash rent expense of $2.6 million, and our share of equity investments' net losses for the period of $1.8 million.

The change in operating assets and liabilities was primarily due to a $38.6 million decrease in deferred revenue, a $2.2 million increase in prepaid expenses and other current assets, and a $1.0 million increase in other long-term assets, offset by a $6.4 million decrease in accrued and other current liabilities, a $2.1 million increase in other long-term liabilities, and a $1.3 million increase in accounts payable.

During the three months ended March 31, 2022, cash used in operating activities of $68.2 million was attributable to a net loss of $79.9 million, partially offset by non-cash charges of $31.6 million and an increase of $20.0 million in our net operating assets and liabilities.

The non-cash charges consisted primarily of stock-based compensation expense of $22.3 million, our share of equity investments' net losses for the period of $3.8 million, depreciation of $3.7 million, net amortization and accretion on investment securities of $1.3 million, and non-cash rent expense of $0.5 million.

The change in operating assets and liabilities was primarily due to a $9.0 million decrease in accrued and other current liabilities, a $6.7 million increase in prepaid expenses and other current assets, and a $3.1 million increase in other long-term assets, offset by a $0.6 million decrease in other long-term liabilities, and a $0.5 million decrease in accounts payable.

Investing Activities

During the nine months ended September 30, 2021, net cash provided by investing activities of $134.4 million was related to cash provided by investment maturities of $645.9 million, offset by cash used in purchases of investments of $474.8 million, cash used in the purchase of property and equipment of $20.7 million, and cash used in the purchase of stock in equity method investment of $15.9 million.

During the three months ended March 31, 2022, net cash used in investing activities of $22.4 million was related to cash used in purchases of investments of $89.2 million and cash used in the purchase of property and equipment of $1.9 million, offset by cash provided by investment maturities of $68.7 million.

Financing Activities

During the nine months ended September 30, 2021, cash provided by financing activities of $11.6 million was related to $8.0 million of cash provided by the issuance of common stock upon exercise of stock options and $3.6 million of cash provided by the sale of common stock through our employee stock purchase plan.

Contractual Obligations and Commitments

For our contractual obligations and commitments as of December 31, 2020, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligation and Commitments” in our Annual Report.

During the three months ended March 31, 2022, cash provided by financing activities of $1.8 million was related to $1.5 million of cash provided by the sale of common stock through our employee stock purchase plan and $0.3 million of cash provided by the issuance of common stock upon exercise of stock options.

Material Cash Commitments and Requirements

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses and other current liabilities.

Our product candidates are still in the early stages of clinical and preclinical development and the outcome of these efforts is uncertain.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity or debt financings and collaboration and license arrangements.

If, and when, we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.

If we are unable to raise capital when needed, we will need to delay, reduce or terminate planned activities to reduce costs.

Doing so will likely harm our ability to execute our business plans.

Our commitments primarily consist of obligations under our agreements with Pfizer, Cellectis, Servier and Notch.

1 unchanged sentence

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

As of September 30, 2021, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

For additional information regarding our agreements, see “—Our Research and Development and License Agreements” above.

As of March 31, 2022, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

For additional information regarding our agreements, see Note 6 to our condensed consolidated financial statements included elsewhere in this report.

Additionally, we have entered into agreements with third-party contract manufacturers for the manufacture and processing of certain of our product candidates for clinical testing purposes, and we have entered and will enter into other contracts in the normal course of business with contract research organizations for clinical trials and other vendors for other services and products for operating purposes.

These agreements generally provide for termination or cancellation, other than for costs already incurred.

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

As of March 31, 2022, the Company had non-cancellable purchase commitments of $2.8 million.

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

We 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, we have 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.

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

We are 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.

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.

In July 2020, we 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 our manufacturing facility in Newark, California.

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

The agreement has a term of 20 years and is expected to commence in the second half of 2022.

We are obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term.

2 unchanged sentences

We also have a Change in Control and Severance Plan that require the funding of specific payments, if certain events occur, such as a change of control and the termination of employment without cause.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules.

Critical Accounting Policies and Significant Judgments and Estimates

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles.

6 unchanged sentences

Recent Accounting Pronouncements

Please refer to Note 2 to our unaudited condensed consolidated financial statements appearing under Part 1, Item 1 of this report for a discussion of new accounting standards and updates that may impact us.

There have been no new accounting pronouncements issued or effective that are expected to have a material impact on our unaudited condensed financial statements.

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 2. Management’s Discussion and Analysis