What changed in this filing

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Item 1A. Risk Factors

2024-08-07 compared with 2024-05-13 · 94 added, 90 removed, 1227 unchanged (13% of the section changed)

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• If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

• We may fail to successfully manufacture our product candidates, operate our own manufacturing facility, or obtain regulatory approval to utilize or commercialize from our manufacturing facility or at a contract development and manufacturing organizations (CDMO), which could adversely affect our clinical trials and the commercial viability of our product candidates.

• We may fail to successfully manufacture our product candidates, operate our own manufacturing facility, or obtain regulatory approval to utilize or commercialize from our manufacturing facility or at a contract development and manufacturing organization (CDMO), which could adversely affect our clinical trials and the commercial viability of our product candidates.

• We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

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For the year ended December 31, 2023, we reported a net loss of $327.3 million.

For the three months ended March 31, 2024, we reported a net loss of $65.0 million.

As of March 31, 2024, we had an accumulated deficit of $1.6 billion.

For the six months ended June 30, 2024, we reported a net loss of $131.4 million.

As of June 30, 2024, we had an accumulated deficit of $1.7 billion.

We expect to incur significant expenditures for the foreseeable future, and we expect these expenditures to increase as we continue our research and development of, and seek regulatory approvals for, product candidates based on our engineered allogeneic T cell platform.

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Further, if approved, we will require significant additional capital in order to launch and commercialize our product candidates.

As of March 31, 2024, we had $397.3 million in cash and cash equivalents and investments.

As of June 30, 2024, we had $444.6 million in cash and cash equivalents and investments.

Changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.

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As a result, we may be unable to use all or a material portion of our net operating loss carryforwards and other tax attributes, which could adversely affect our future cash flows.

For example, California imposed limits on the usability of California state net operating losses to offset taxable income in tax years beginning after 2023 and before 2027.

Risks Related to Our Business and Industry

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We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial facilities or partners, which may prevent us from completing our clinical studies or commercializing our products on a timely or profitable basis, if at all.

For instance, it will take additional time and expense to transfer any product manufacturing to our own manufacturing facility for cell products (CF1), which may be further delayed if we are unable to meet regulatory conditions.

In addition, since we are in the early stages of clinical development, we do not know all the doses to be evaluated in pivotal trials or, if approved, commercially.

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For example, in our TRAVERSE trial we are advancing ALLO-316 against a target, CD70.

ALLO-316 may have limited efficacy, even accounting for the selection of patients with CD70 positive tumors, or have off-target toxicities.

ALLO-316 may have limited efficacy, even accounting

for the selection of patients with CD70 positive tumors, or have off-target toxicities.

Since CD70 is found on activated T and other immune cells, ALLO-316 may also cause fratricide resulting in the loss of ALLO-316 cells, either during the ALLO-316 manufacturing process or after ALLO-316 is administered to patients, or may deplete host T or other immune cells.

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For instance, allogeneic product candidates may result in graft-versus-host disease (GvHD) or chromosomal abnormalities not experienced with autologous products.

Additionally, any Phase 2 trial results, such as in the ALPHA3 trial, may not be representative of Phase 1 results, which were based on limited patients and a patient population in an advanced stage or LBCL, and such Phase 2 trial results may not be accepted by the FDA as pivotal and sufficient for cema-cel approval, and additional trials may be required to establish that cema-cel is safe and effective.

Even if we collect promising initial clinical data of our product candidates, longer-term data may reveal new adverse events or responses that are not durable.

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For instance, we observed a chromosomal abnormality that led to a previous clinical hold on our clinical trials.

While our investigation concluded that the chromosomal abnormality had no clinical significance and was unrelated to our manufacturing process, our oncology manufacturing process includes gene engineering by using lentivirus and TALEN nucleases that may in the future cause insertion, deletion, or chromosomal translocation that may result in allogeneic CAR T cells to proliferate uncontrollably and adverse events.

While our investigation concluded that the chromosomal abnormality had no clinical significance and was unrelated to our manufacturing process, our manufacturing processes include gene engineering by using viral vectors and genomic nucleases that may in the future cause insertion, deletion, or chromosomal translocation that may result in allogeneic CAR T cells to proliferate uncontrollably and adverse events.

In addition, we have observed liver enzyme elevations, including one adverse event – autoimmune hepatitis – that qualified as a dose-limiting toxicity in our TRAVERSE trial.

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In addition, for any trials that may be completed, we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval.

For example, FDA may determine that results from our Phase 2 ALPHA3 trial are not sufficient to establish that cema-cel is safe and effective, and FDA may require additional trials.

To the extent that the results of the trials are not satisfactory to the FDA or comparable foreign regulatory authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.

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It is possible that such results will not continue or may not be repeated in any clinical trial of our product candidates.

For instance, our Phase 2 ALPHA3 trial design is based in part on Phase 1 data from a limited number of patients treated with various doses of ALLO-501 or cema-cel manufactured using the Alloy process, and the larger Phase 2 ALPHA3 trial, which we anticipate may include both cema-cel manufactured internally at CF1 and cema-cel manufactured at a contract manufacturer, may not be consistent with the Phase 1 results.

For instance, our Phase 2 ALPHA3 trial design is based in part on Phase 1 data from a limited number of patients treated with various doses of ALLO-501 or cema-cel manufactured using the Alloy process, and the larger Phase 2 ALPHA3 trial, which we anticipate will only include cema-cel manufactured internally at CF1, but may ultimately also include cema-cel manufactured at a contract manufacturer, may not be consistent with the Phase 1 results.

Furthermore, because ALPHA3 will include a different patient population versus our Phase 1 ALPHA2 trial, i.e., patients having MRD after front-line treatment versus patients with radiographically measurable disease after a minimum of two prior lines of treatment, it is possible that cema-cel may behave differently in terms of expansion, persistence and the ability to eradicate residual disease.

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In addition, we have an open IND for ALLO-647, which is being used as part of lymphodepletion in all our clinical trials.

Any regulatory issues related to ALLO-647 or to the development of ALLO-647, if it is used as part of a lymphodepletion regimen in a clinical study, could delay such study and delay the development of our allogeneic CAR T cell product candidates and significantly affect our business.

Any regulatory issues related to ALLO-647 or to the development of ALLO-647, if it is used as part of a

lymphodepletion regimen in a clinical study, could delay such study and delay the development of our allogeneic CAR T cell product candidates and significantly affect our business.

We may encounter substantial delays in our clinical trials, or may not be able to conduct our trials on the timelines we expect.*

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as a result of a new safety finding that presents uncertain or unreasonable risk to clinical trial participants;

a negative finding from an inspection of our clinical study operations or study sites;

a negative finding from an inspection of our or our collaborator’s clinical study operations or our study sites;

developments on trials conducted by competitors for related technology that raises FDA or other comparable foreign regulatory authority concerns about risk to patients of the technology broadly;

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We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons.

For example, as we progress the ALPHA2 CLL cohort, ALPHA3 and TRAVERSE trials, we may face enrollment challenges, including an unwillingness of sites to participate, the exclusion of patients with certain disease characteristics or the ineligibility of patients that have received prior autologous CAR T therapies, which continue to gain adoption.

For example, as we progress the ALPHA2 CLL cohort, ALPHA3 and TRAVERSE trials, we may face enrollment challenges, including an unwillingness of sites or patients to participate, the exclusion of patients with certain disease characteristics or the ineligibility of patients that have received prior autologous CAR T therapies, which continue to gain adoption.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients.

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Until we complete our clinical trials, we cannot be sure that the manufacturing processes employed by us or the technologies that we incorporate for manufacturing will result in consistent T cell production that will be safe and effective.

We operate a manufacturing facility located in Newark, California that is designed to support our clinical trials and potential commercial production and worldwide distribution of allogeneic CAR T cell products for blood cancers and solid tumors.

Introducing any product manufactured at our manufacturing facility into an ongoing clinical trial would be subject to FDA review, and may result in increased costs and delays in conducting such trial, submitting a biologics license application (BLA) and/or gaining FDA or other comparable foreign regulatory authority approval.

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The commercial dose and treatment regimen may affect our ability to scale and will affect our cost per dose.

For instance, because our anti-BCMA product candidates may require a higher dose than ALLO-501A, it is possible that it may be more difficult to scale production of our anti-BCMA product candidates to meet demand.

For instance, because our anti-BCMA product candidates may require a higher dose than cema-cel, it is possible that it may be more difficult to scale production of our anti-BCMA product candidates to meet demand.

As a result, we may never be able to develop a commercially viable product.

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• business interruptions resulting from future health epidemics or pandemics, or natural or man-made disasters, including earthquakes, tsunamis, fires or other medical epidemics, or geo-political actions, including war and terrorism.

These and other risks associated with our collaborations with Servier and Cellectis, each based in France, our collaboration with Notch, based in Canada, and our joint venture for China, Taiwan, South Korea and Singapore with Overland Pharmaceuticals (CY) Inc., may materially adversely affect our ability to attain or maintain profitable operations.

These and other risks associated with our collaborations with Servier and Cellectis, each based in France, our collaboration with Notch, based in Canada, and our joint venture for China, Taiwan, South Korea and Singapore with HBP, may materially adversely affect our ability to attain or maintain profitable operations.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

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We may acquire other businesses, products or technologies as well as pursue joint ventures or investments in complementary businesses.

The success of our strategic transactions, including our acquisition of CAR T cell assets from Pfizer, licenses with Cellectis, Servier, Notch, Antion, our strategic collaboration with Foresight Diagnostics, and our joint venture with Overland Pharmaceuticals (CY) Inc.

and any future strategic transactions depends on the risks and uncertainties involved including:

• technical difficulties associated with advancing partnered programs;

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Additionally, foreign acquisitions and joint ventures are subject to additional risks, including those related to integration of operations across different cultures and languages, currency risks, potentially adverse tax consequences of overseas operations and the particular economic, political and regulatory risks associated with specific countries.

For instance, our joint venture with Overland Pharmaceuticals (CY) Inc.

has faced challenges relating to the regulatory and competitive environment in China for allogeneic CAR T products, as well as challenges within the capital markets for financing allogeneic CAR T development.

Our joint venture may face manufacturing difficulties, such as from changes in raw materials or processes

due to local regulations, or delivering our licensed product candidates in China, Taiwan, South Korea or Singapore, which could prevent any development or commercialization of our licensed product candidates in the region.

For instance, our joint venture with HBP has faced challenges relating to the regulatory and competitive environment in China for allogeneic CAR T products, as well as challenges within the capital markets for financing allogeneic CAR T development.

Our joint venture may face manufacturing difficulties, such as from changes in raw materials or processes due to local regulations, or

delivering our licensed product candidates in China, Taiwan, South Korea or Singapore, which could prevent any development or commercialization of our licensed product candidates in the region.

The joint venture will also require significant operational and financial support in the future by us or third parties, and any future financing of the joint venture would increase our expenses or dilute our ownership in the joint venture.

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We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service credential stuffing attacks, credential harvesting, adware, ransomware, supply chain attacks, personnel misconduct or error, attacks enhanced or facilitated by AI, and other similar threats.

Our information technology systems and data may also be subject to failure or disruption from software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, telecommunications failures, natural disasters such as earthquakes, fires, and floods, and other similar issues.

Our information technology systems and data, and those of the third parties with whom we work, may also be subject to failure or disruption from software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, telecommunications failures, natural disasters such as earthquakes, fires, and floods, and other similar issues.

In particular, severe ransomware attacks are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruptions to our clinical trials, loss of data (including data related to clinical trials), significant expense to restore data or systems, reputational loss and the diversion of funds.

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A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to manufacture or deliver our product candidates.

We may expend significant resources, or modify our business activities and operations, including our clinical trial activities, in an effort to protect against security incidents.

We may expend significant resources (including financial), or modify our business activities and operations, including our clinical trial activities, in an effort to protect against security incidents or to detect, investigate, mitigate, contain and remediate a security incident.

Certain data privacy and security obligations may require us to implement and maintain specific security measures or use industry-standard or reasonable security measures to protect our information technology systems and sensitive information.

Although we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

Although we have implemented security measures designed to protect against, mitigate, and remediate security incidents, there can be no assurance that these measures will be effective.

We have experienced attempts to compromise our information technology systems or otherwise cause a security incident, but, to our knowledge, such attempts have been unsuccessful.

In addition, from time to time, our vendors inform us of security incidents.

To date, our review of such incidents as reported to us did not reveal material information being lost, Allogene-specific security vulnerabilities or provide any useful information or insight into our systems or environment.

To date, we have not determined that such incidents as reported to us were material.

However, we may not have all information related to such incidents and future incidents could have an adverse impact on our business.

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We may, however, be unable to detect and remediate vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred, meaning that such vulnerabilities could be exploited.

Unremediated high risk or critical vulnerabilities pose material risks to our business they may be exploited and could result in a security incident.

Unremediated high risk or critical vulnerabilities pose material risks to our business that may be exploited and could result in a security incident.

Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.

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In addition, as many of our employees work from home at least part of the time and utilize network connections outside our premises, including while at home, or in transit, this poses increased risks to our information technology systems and data.

Applicable data protection laws, privacy policies, data protection obligations and public company disclosure obligations may require us to notify relevant stakeholders, including affected individuals, regulators and investors, of certain security incidents, or to implement other requirements, such as providing credit monitoring.

Applicable data protection laws, privacy policies, data protection obligations and public company disclosure obligations may require us, or we may choose, to notify relevant stakeholders, including affected individuals, regulators and investors, of certain security incidents, or to implement other requirements, such as providing credit monitoring.

Such disclosures and compliance with such requirements are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

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In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act) and other similar laws (e.g., wiretapping laws).

For example, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, imposes requirements relating to the privacy, security and

transmission of individually identifiable health information.

For example, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health

Act (HITECH), and their respective implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA as well as their covered subcontractors.

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In our ALPHA2 trial, we observed a chromosomal abnormality, and the FDA placed our clinical trials on hold following this observation.

While our investigation concluded that gene editing was not responsible for the chromosomal abnormality and the hold was resolved, we may discover future abnormalities caused by gene editing or other factors that would impact our development plans.

While our investigation concluded that gene editing was not responsible for the chromosomal abnormality and the hold was resolved, we may discover future abnormalities caused by gene editing or other

factors that would impact our development plans.

The gene editing of our product candidates may also not be successful in limiting the risk of GvHD or premature rejection by the patient.

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Servier’s discontinuation of its involvement in the development of CD19 Products and Servier's disputes with Cellectis, or future disputes with us, may have adverse consequences.*

On September 15, 2022, Servier sent a notice of discontinuation (Discontinuation) of its involvement in the development of CD19, including the CD19 Products pursuant to the Servier Agreement.

Additionally, in December 2022, Servier sent us a notice for material breach due to our purported refusal to allow an audit of certain manufacturing costs under our cost share arrangement.

We subsequently agreed to a review of our manufacturing costs of CD19 Products.

In July 2023, Servier sent us a second notice for material breach alleging that we overcharged Servier based on Servier and its accounting firm’s review of costs eligible for cost-sharing under the Servier Agreement.

In May 2024 we entered into the Servier Amendment which we believe resolves all current disputes with Servier including those raised in Servier’s December 2022 and July 2023 correspondence, and which includes mutual waivers and releases with respect to such disputes.

In addition, under the Servier Amendment Servier agreed to expand our licensed territory under the Servier Agreement to include the European Union and the United Kingdom, and granted us an option, under certain circumstances, to expand the territory further to include China (including Hong Kong) and Japan.

Although we have resolved all current disputes with Servier, there can be no assurance that we will not have future disputes with Servier regarding our respective rights and obligations under our agreements and any future dispute could jeopardize our CD19 Products license, the loss of which would have a significant adverse impact on our business, financial condition, and prospects.

On September 15, 2022, Servier sent a notice of discontinuation (Discontinuation) of its involvement in the development of CD19, including the CD19 Products pursuant to the Original Servier Agreement.

Under the Servier Agreement, Servier sublicenses to us certain rights it has licensed from Cellectis relating to Cellectis’ TALEN gene editing technology pursuant to the Servier-Cellectis Agreement.

In its Form 20-F filed in April 2024 with the SEC, Cellectis states that it does not believe that:

In May 2024 we entered into the Servier Amendment which made various amendments to the Original Servier Agreement, and expanded our licensed territory thereunder to include the European Union and the United Kingdom, and also granted us an option, under certain circumstances, to expand the territory further to include China (including Hong Kong) and Japan.

Although we believe that we and Servier are both in full compliance of our respective obligations under the Servier Agreement, there can be no assurance that we will not have future disputes with Servier regarding our respective rights and obligations under our agreements and any future dispute could jeopardize our CD19 Products license, the loss of which would have a significant adverse impact on our business, financial condition, and prospects.

In April 2024 Cellectis filed a Form 20-F with the SEC, stating that Cellectis does not believe that:

(1) the Servier-Cellectis Agreement permits Servier to grant a world-wide sub-license to us;

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Additionally, our experimental lymphodepletion regimens may show different safety profiles when paired with different allogeneic CAR T product candidates such that regimens deemed safe with one CAR T product candidate may be determined to be associated with unacceptable toxicity when combined with another CAR T candidate or with the same candidate in a different patient population.

If observed, these differences may require additional

clinical exploration and may cause delays in the execution or termination of development campaigns.

If observed, these differences may require additional clinical exploration and may cause delays in the execution or termination of development campaigns.

See the section entitled "Business—Product Pipeline and Development Strategy" included in our Annual Report for information on safety events.

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While we utilize CF1 for clinical manufacturing of our product candidates, we may continue to use CDMOs from time to time to manufacture product candidates in the United States while we manage all other aspects of the supply, including planning, CDMO oversight, disposition and distribution logistics.

For example, in the past, Servier was responsible for

UCART19 manufacturing, and experienced UCART19 supply issues that limited its ability to recruit new patients.

For example, in the past, Servier was responsible for UCART19 manufacturing, and experienced UCART19 supply issues that limited its ability to recruit new patients.

There can be no assurance that we will not experience supply or manufacturing issues in the future.

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Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials.

We and our suppliers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials, and there is a risk of contamination or injury resulting from medical or hazardous materials.

We and our suppliers are subject to federal, state and local laws and regulations in the United

States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials, and there is a risk of contamination or injury resulting from medical or hazardous materials.

For instance, we have had and may continue to have environmental notice of violations at our manufacturing facility.

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We do not have any insurance for liabilities arising from medical or hazardous materials.

In addition, we have previously shipped certain materials to our joint venture with Overland Pharmaceuticals (CY) Inc.

in China and may do so again in the future.

In addition, we have previously shipped certain materials to Allogene Overland PRC in China and may do so in the future to its successor entity.

Any violation by our joint venture in the use, manufacture, storage, handling and disposal under foreign law may subject us to additional liability.

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ATMPs include gene therapy products as well as somatic cell therapy products and tissue engineered products.

In this regard, on May 28, 2014, the EMA issued a recommendation that UCART19 be considered a gene therapy product under Regulation (EC) No 1394/2007 on ATMPs.

In this regard, on May 28, 2014, the EMA issued a recommendation that

UCART19 be considered a gene therapy product under Regulation (EC) No 1394/2007 on ATMPs.

We cannot conclude that our product candidates will receive a similar recommendation.

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In addition, the FDA is requiring us to demonstrate the overall contribution of ALLO-647 to the benefit to risk ratio of the lymphodepletion regimen for cema-cel.

We plan to assess ALLO-647 through part one of the ALPHA3 trail.

We plan to assess ALLO-647 through part one of the ALPHA3 trial.

Some clinical trial sites may elect not to participate, and we cannot be certain when or whether we will be able to successfully enroll the ALPHA3 trial in a timely manner or that the outcome of this study will support FDA approval of both cema-cel and ALLO-647.

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Companion diagnostics are developed in conjunction with clinical programs for the associated product and are subject to regulation as medical devices by the FDA and comparable foreign regulatory authorities, and, to date, the FDA has generally required premarket approval of companion diagnostics for cancer therapies.

Generally, when a companion diagnostic is essential to the safe and effective use of a therapeutic product, the FDA requires that the companion diagnostic be approved before, or concurrent with, approval of the therapeutic product and before a product can be commercialized.

Generally, when a companion diagnostic is essential to the safe and effective use of a therapeutic product, the FDA requires that the companion diagnostic be approved concurrent with approval of the therapeutic product and before a product can be commercialized.

In the EEA, companion diagnostics are deemed to be in vitro diagnostic medical devices (IVDs) and are governed by Regulation 2017/746 (IVDR).

IVDs, including companion diagnostics, must conform with the general safety and performance requirements (GSPR)

Compliance with these requirements is a prerequisite to be able to affix the CE mark to devices, without which they cannot be marketed or sold in the EEA.

To demonstrate compliance with the GSPR laid down in Annex I to the IVDR, and obtain the right to affix the CE mark, IVD manufacturers must conduct a conformity assessment procedure, which varies according to the type of IVD and its classification.

Companion diagnostics must undergo a conformity assessment by a Notified Body.

If the related medicinal product has, or is in the process of, been authorised through the centralized procedure for the authorization of medicinal products, the notified body will, before it can issue a CE Certificate of Conformity, be required to seek a scientific opinion from the EMA on the suitability of the companion diagnostic for use in relation to the medicinal product concerned.

For medicinal products that have or are in the process of authorisation through any other route provided in European Union legislation, the Notified Body must seek the opinion of the national competent authority of an EU Member State.

The approval of a companion diagnostic as part of the therapeutic product’s labeling limits the use of the therapeutic product to only those patients who are determined to have MRD that the companion diagnostic was developed to detect.

IVDs, including companion diagnostics, must conform with the general safety and performance requirements (GSPR) of the IVDR by December 2028.

If the FDA, or a comparable foreign regulatory authority, requires approval (or certification or clearance) of a companion diagnostic for any of our product candidates, whether before or after the product candidate obtains marketing approval, we and/or third-party collaborators may encounter difficulties in developing and obtaining approval (or clearance, or certification) for these companion diagnostics.

Any delay or failure by us or third-party collaborators to develop or obtain regulatory approval (or clearance, or certification) of a companion diagnostic could delay or prevent approval or continued marketing of our related product candidates.

Any delay or failure by us or third-party collaborators to develop or obtain

regulatory approval (or clearance, or certification) of a companion diagnostic could delay or prevent approval or continued marketing of our related product candidates.

We, or our collaborators, may also experience delays in developing a sustainable, reproducible, and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our product candidates, if approved, on a timely or profitable basis, if at all.

Our ALPHA3 trial design requires the use of Foresight Diagnostics’ PhasED-Seq ™ Circulating Tumor DNA Platform as a companion diagnostic for cema-cel.

Foresight Diagnostics intends to file an IDE with the FDA seeking approval of PhasEd-Seq as a companion diagnostic.

There can be no assurance that Foresight Diagnostic will timely file its IDE, or that the FDA will approve Foresight Diagnostics’ IDE, which could significantly delay the start of our ALPHA3 trial.

Additionally, Foresight Diagnostics has not sought approval of PhasEd-Seq in the EU, and there can be no assurance that Foresight Diagnostics will be able to do so in a timely manner, or at all, to support approval of cema-cel in the EU.

Furthermore, in order to commercialize cema-cel based on the outcome of our ALPHA3 trial, the Foresight Diagnostics’ MRD assay must be approved by regulatory agencies as a companion diagnostic test.

Although the Foresight CLARITY ™ Investigational Use Only (IUO) MRD test, powered by PhasED-Seq, has received IDE approval from the FDA allowing PhasEd-Seq to be used as part of the ALPHA3 trial, there can be no assurance that Foresight Diagnostic will be able to obtain the necessary regulatory approvals to support ALPHA3 clinical trial sites outside the US, or that we would be able to manage logistical challenges associated with timely international shipment of patient samples to Foresight’s US facility for testing, all of which could delay the expansion of our ALPHA3 trial to trial sites outside the US.

Furthermore, in order to commercialize cema-cel based on the outcome of our ALPHA3 trial, the Foresight Diagnostics’ MRD assay must be approved by regulatory agencies, and in some jurisdictions approved as a companion diagnostic test.

A delay or failure by Foresight Diagnostics to obtain regulatory approval may delay the commercialization of cema-cel, if approved based on the outcome of our ALPHA3 trial.

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In addition, given the novel nature of gene-editing and cell therapy technologies, governments may place import, export or other restrictions in order to retain control or limit the use of the technologies.

For instance, any limits on exporting certain of our technology to China may adversely affect Allogene Overland, a joint venture established by us and Overland Pharmaceuticals (CY) Inc.

For instance, any limits on exporting certain of our technology to China may adversely affect Overland Therapeutics, a joint venture between us and HBP.

Increased negative public opinion or more restrictive government regulations either in the United States or internationally, would have a negative effect on our business or financial condition and may delay or impair the development and commercialization of our product candidates or demand for such product candidates.

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We believe that any of the product candidates we develop that is approved in the United States as a biological product under a BLA should qualify for the 12-year period of exclusivity.

However, there is a risk that this exclusivity could be

shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.

However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.

Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

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Data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the innovator’s data to assess an application for marketing authorization for a generic or a biosimilar for eight years from the date of authorization of the innovative product, after which an application may be made for authorization of a generic or biosimilar, and the innovator’s data may be referenced.

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the European Union until 10 years have elapsed from the initial marketing authorization of the reference product in the EU.

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its

product in the European Union until 10 years have elapsed from the initial marketing authorization of the reference product in the EU.

The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

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While we have internal efforts directed at ESG matters and preparations for any increased required future disclosures, we may be perceived to be not acting responsibly in connection with these matters, which could negatively impact us.

Moreover, the SEC has recently proposed, and may continue to propose, certain mandated ESG reporting requirements, such as the SEC’s proposed rules designed to enhance and standardize climate-related disclosures, which, if finally approved, would significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders deem to negatively impact our reputation or that harm our stock price.

Moreover, the SEC recently finalized rules designed to enhance and standardize climate-related disclosures.

These climate disclosure rules have been challenged in court and the SEC has issued an order staying their implementation pending the outcome of judicial review.

These new climate-related disclosures, if required, may significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders deem to negatively impact our reputation or that harm our stock price.

In addition, we currently do not report our environmental emissions, and lack of reporting could result in certain investors declining to invest in our common stock.

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To the extent these licensors fail to meet their obligations under their license agreements, which we are not in control of, we may lose the benefits of our license agreements with these licensors.

For instance, Cellectis has challenged and may in the future challenge certain performance by Servier, such as its development of products licensed under the Cellectis-Servier Agreement in ALL, and any failure by those parties to resolve such matters may have an adverse impact

In the future, we may also enter into additional license agreements that are material to the development of our product candidates.

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• the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.

For example, we previously had a dispute with Servier regarding our respective rights and obligations under the Servier Agreement.

In May 2024, we entered into the Servier Amendment with Servier which amended the Servier Agreement and resolved all pending disputes between us and Servier.

There can be no assurance that further disputes with Servier will not arise or that we would be able to amicably settle any such further disputes.

If other disputes arise over intellectual property that we have licensed, or license in the future, it could prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, and we may be unable to successfully develop and commercialize the affected product candidates.

For example, previously we and Servier had different interpretations regarding the respective parties’ respective rights and obligations under the Original Servier Agreement.

In May 2024, we entered into the Servier Amendment which clarified each parties rights and obligations.

There can be no assurance that further contract interpretation issues will not arise or that we would be able to amicably resolve such issues.

If other issues arise over intellectual property that we have licensed, or license in the future, it could prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, and we may be unable to successfully develop and commercialize the affected product candidates.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license, as we are for intellectual property that we own, which are described below.

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Composition of matter patents for biological and pharmaceutical products such as CAR-based product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use.

by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries.

We cannot be certain that the claims in our pending patent applications covering compositions of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office (USPTO) or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries.

Method of use patents protect the use of a product for the specified method.

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The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries.

Even if the patents do successfully issue, third parties may challenge the patentability, validity, enforceability or scope thereof, for example through inter partes review (IPR), post-grant review or ex parte reexamination before the USPTO, or oppositions and other comparable proceedings in foreign jurisdictions, which may result in such patents being cancelled, narrowed, invalidated or held unenforceable.

Even if the patents do

successfully issue, third parties may challenge the patentability, validity, enforceability or scope thereof, for example through inter partes review (IPR), post-grant review or ex parte reexamination before the USPTO, or oppositions and other comparable proceedings in foreign jurisdictions, which may result in such patents being cancelled, narrowed, invalidated or held unenforceable.

Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing their products to avoid being covered by our claims.

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Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.

For example, we have and may continue to transfer technology to Allogene Overland or its affiliates in certain developing countries, and we cannot be certain that we or Allogene Overland or any of its affiliates will be able to protect or enforce any proprietary rights in these countries.

For example, we have and may continue to transfer technology to Overland Therapeutics or its affiliates in certain developing countries, and we cannot be certain that we or Overland Therapeutics or any of its affiliates will be able to protect or enforce any proprietary rights in these countries.

As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.

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and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates.

As the biotechnology and pharmaceutical

industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.

Third parties may assert that we infringe their patents or are otherwise employing their proprietary technology without authorization and may sue us.

We are aware of several U.S.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.

Third parties may assert that we or our collaboration partners infringe their patents or are otherwise employing their proprietary technology without authorization and may sue us and/or our collaboration partners.

For example, in July 2024 Roche Molecular Systems, Inc.

and Roche Sequencing Solutions, Inc.

(collectively, Roche) filed lawsuits in Federal District Courts in California and Delaware against Foresight Diagnostics Inc.

(Foresight Diagnostics), who is our collaboration partner, as well as Stanford University and three of Foresight’s founders, alleging misappropriation of trade secrets, unfair competition and breach of contract relating to Foresight Diagnostics’ PhasED-Seq Circulating Tumor DNA Platform which is being used as part of our ALPHA3 clinical trial to identify MRD+ patients.

As part of the lawsuit, Roche seeks to obtain ownership of certain

Stanford patents covering PhasED-Seq that are licensed to Foresight Diagnostics.

Foresight has stated that it believes that Roche’s allegations are meritless and that it intends to vigorously defend against the case.

If Roche obtains a preliminary injunction or prevails in its lawsuits, we may be required to seek alternative means for gaining access to the PhasED-Seq MRD assay or find an alternative MRD assay to use in the ALPHA3 trial, either of which may not be available to us on commercially reasonable terms or at all, and/or could significantly delay or prevent the completion of the trial or our plans to commercialize cema-cel as part of a 1L consolidation strategy, if approved, which could materially adversely affect our business, operating results and financial condition.

In addition, we are aware of several U.S.

patents held by third parties that may be considered by those third parties to be relevant to cell-based therapies.

Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement.

If and when any of our product candidates is approved by the FDA, third parties may then seek to enforce their patents by filing a patent infringement lawsuit against us.

If and when any of our product candidates is approved by the FDA, third parties may then seek to enforce their patents by filing a patent infringement lawsuit against us or our collaboration partners.

Patents issued in the United States by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof.

We may not be able to prove in litigation that any patent enforced against us is invalid.

We may not be able to prove in litigation that any patent enforced against us or one of our collaboration partners is invalid.

Additionally, there may be third-party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates.

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If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.

Parties who may make claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates.

Parties who may make claims against us or our collaboration partners may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates.

Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business and may impact our reputation.

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Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

In that event, we may be required to expend significant time and resources to develop or license replacement technology.

In that event, we may be required to

expend significant time and resources to develop or license replacement technology.

We may need to cease use of the compositions or methods covered by such third-party intellectual property rights.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates.

established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.

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Although various extensions may be available, the life of a patent, and the protection it affords, is limited.

Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic medications.

Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be

open to competition from biosimilar or generic medications.

In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution.

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Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.

Competitors may use our technologies in jurisdictions where we have not obtained patent

protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.

These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries where Allogene Overland or its affiliates may do business, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us or Allogene Overland or any of its affiliates to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

The legal systems of certain countries, particularly certain developing countries where Overland Therapeutics or its affiliates may do business, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us or Overland Therapeutics or any of its affiliates to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.

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We plan to continue to implement new ERP modules, which we also expect will require significant resources.

Any failure to maintain or implement new or improved internal controls related to our ERP system or otherwise could result in material weaknesses, result in material misstatements in our consolidated financial statements and cause us to fail to meet our reporting obligations.

statements and cause us to fail to meet our reporting obligations.

This could cause us to lose public confidence and could cause the trading price of our common stock to decline.

For so long as we remain a non-accelerated filer, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-

An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not.

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As described elsewhere in this Quarterly Report, we have identified a material weakness in our internal control over financial reporting.

As a result of this material weakness, our management has concluded that our internal control over financial reporting was not effective as of March 31, 2024.

As a result of this material weakness, our management has concluded that our internal control over financial reporting was not effective as of June 30, 2024.

For a discussion of management’s consideration of the material weakness identified, see Part I Item 4:

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In response to the Russian invasion, the United States and certain other countries imposed significant sanctions and trade actions against Russia and could impose further sanctions, trade restrictions, and other retaliatory actions.

While we cannot predict the broader consequences, these conflicts and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

While we cannot predict the broader consequences, these conflicts and retaliatory and counter-retaliatory actions could

materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.

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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 1A. Risk Factors