What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-07 · 223 added, 138 removed, 582 unchanged (38% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2024 December 31,

4 unchanged sentences

Total current assets 304,415 459,115

Long-term investments

Operating lease right-of-use asset 46,313 63,703

10 unchanged sentences

Total current liabilities 32,571 37,079

Lease liability, noncurrent 86,989 88,346

Operating lease liability, noncurrent 85,135 88,346

Other long-term liabilities 7,666 5,179

3 unchanged sentences

Preferred stock, $ 0.001 par value:

10,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

no shares were issued and outstanding as of June 30, 2024 and December 31, 2023

10,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

no shares were issued and outstanding as of September 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value:

400,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

209,049,485 and 168,642,238 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

400,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

209,500,137 and 168,642,238 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,223,265 2,075,252

Accumulated deficit ( 1,759,884 ) ( 1,562,233 )

Accumulated other comprehensive loss ( 780 ) ( 955 )

Accumulated other comprehensive income/(loss) 157 ( 955 )

Total stockholders’ equity 463,748 512,233

1 unchanged sentence

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

Table o f Contents

ALLOGENE THERAPEUTICS, INC.

1 unchanged sentence

(In thousands, except share and per share amounts)

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

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

2024 2023 2024 2023

10 unchanged sentences

6,705 6,205 17,126 12,042

Interest expense ( 100 ) — ( 100 ) —

Other income and (expense), net ( 1,124 ) ( 5,496 ) ( 1,968 ) ( 10,901 )

85 ( 2,470 ) ( 844 ) ( 5,405 )

Total other income (expense), net 5,481 709 15,058 1,141

6 unchanged sentences

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

Table o f Contents

ALLOGENE THERAPEUTICS, INC.

23 unchanged sentences

Balance - June 30, 2024 209,049,485 209 2,209,200 ( 1,693,591 ) ( 780 ) 515,038

Issuance of common stock upon exercise of stock options and vesting of RSU's 181,142 — — — — —

Stock-based compensation 13,387 — — 13,387

Employee stock purchase plan 269,510 1 678 — — 679

Net loss — — — ( 66,293 ) — ( 66,293 )

Net unrealized gain on available-for-sale investments — — — — 937 937

Balance - September 30, 2024 209,500,137 $ 210 $ 2,223,265 $ ( 1,759,884 ) $ 157 $ 463,748

Table o f Contents

Common Stock Additional

25 unchanged sentences

Balance - June 30, 2023 167,133,664 167 2,039,263 ( 1,414,168 ) ( 3,851 ) 621,411

Issuance of common stock from ATM offering, net of offering costs of $ 50.0 thousand

606,235 1 3,193 — — 3,194

Issuance of common stock upon exercise of stock options and vesting of RSUs 204,116 — 326 — — 326

Vesting of early exercised common stock — — 432 — — 432

Stock-based compensation — — 15,354 — — 15,354

Employee stock purchase plan 231,206 — 765 — — 765

Net loss — — — ( 62,287 ) — ( 62,287 )

Net unrealized gain on available-for-sale investments — — — — 1,440 1,440

Balance - September 30, 2023 168,175,221 $ 168 $ 2,059,333 $ ( 1,476,455 ) $ ( 2,411 ) $ 580,635

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

Table o f Contents

ALLOGENE THERAPEUTICS, INC.

1 unchanged sentence

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization 10,406 10,722

Net amortization/accretion on investment securities ( 4,998 ) ( 566 )

Amortization/accretion on investment securities, net ( 6,697 ) ( 3,510 )

Impairment of long-lived assets 15,717 —

Impairment of equity method investment — 3,000

Non-cash rent expense 4,148 4,949

Non-cash collaboration revenue - related party ( 14 ) ( 49 )

Share of loss from equity method investments, net 554 5,370

Share of gain/loss from equity method investments, net 1,688 7,866

Changes in operating assets and liabilities:

4 unchanged sentences

Accrued and other current liabilities ( 4,142 ) ( 7,109 )

Operating lease liabilities ( 4,531 ) ( 4,445 )

Other long-term liabilities 164 ( 615 )

22 unchanged sentences

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

Table o f Contents

ALLOGENE THERAPEUTICS, INC.

16 unchanged sentences

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

The Company had cash and cash equivalents and investments of $ 444.6 million as of June 30, 2024.

Since inception through June 30, 2024, the Company has incurred cumulative net losses of $ 1,693.6 million.

The Company had cash and cash equivalents and investments of $ 403.4 million as of September 30, 2024.

Since inception through September 30, 2024, the Company has incurred cumulative net losses of $ 1,759.9 million.

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

9 unchanged sentences

The subsidiary was dissolved on January 3, 2024.

The condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of

stockholders’ equity as of June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period.

The condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of stockholders’ equity as of September 30, 2024 and 2023, the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three

Table o f Contents

and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024.

1 unchanged sentence

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

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

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

1 unchanged sentence

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three and six months ended June 30, 2024, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with exception of the following.

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2024, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with exception of the following.

California Institute for Regenerative Medicine (CIRM) Award

2 unchanged sentences

Until then such award will be recognized, along with any interest, as a long-term liability upon cash receipt.

Any estimated interest accrued for the CIRM award received is recognized as interest expense in the condensed consolidated statements of operations.

See Note 5 below for more details.

2 unchanged sentences

Recent Accounting Pronouncements Not Yet Adopted

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

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company is currently in the process of evaluating the effects of this pronouncement on its related disclosures.

In December 2023, the FASB issued Accounting Standard Update No.

2023-09, Income taxes (Topic 740), Improvement to income tax disclosures , which enhances the disclosures required for income taxes in the Company’s annual financial statements.

This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company does not plan to adopt this standard early.

The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

Fair Value Measurements

3 unchanged sentences

treasury securities which are classified as Level 1.

There were no Level 3 assets or liabilities as of June 30, 2024 and as of December 31, 2023.

Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of June 30, 2024 and as of December 31, 2023 are presented in the following tables:

June 30, 2024

Table o f Contents

There were no Level 3 assets or liabilities as of September 30, 2024 and as of December 31, 2023.

Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of September 30, 2024 and as of December 31, 2023 are presented in the following tables:

September 30, 2024

Level 1 Level 2 Level 3 Fair Value

6 unchanged sentences

agency securities — 72,813 — 72,813

Asset-backed securities

— 9,680 — 9,680

Total financial assets $ 151,203 $ 244,920 $ — $ 396,123

10 unchanged sentences

Financial Instruments

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of June 30, 2024 and as of December 31, 2023 are presented in the following tables:

June 30, 2024

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of September 30, 2024 and as of December 31, 2023 are presented in the following tables:

Table o f Contents

September 30, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

5 unchanged sentences

agency securities 72,617 196 — 72,813

Asset-backed securities

9,669 11 — 9,680

Total cash equivalents and investments $ 395,524 $ 617 $ ( 18 ) $ 396,123

17 unchanged sentences

Total cash equivalents and investments $ 444,078

As of June 30, 2024, the remaining contractual maturities of available-for-sale securities were less than 1 year.

There were no significant realized losses on available-for-sale securities for the three and six months ended June 30, 2024.

Realized losses on available-for-sale securities for the three and six months ended June 30, 2023 were zero and $ 1.0 million, respectively.

As of June 30, 2024, unrealized losses on available-for-sale securities are not attributed to credit risk.

As of September 30, 2024, the remaining contractual maturities of available-for-sale securities were less than 3 years.

There were no significant realized losses on available-for-sale securities for the three and nine months ended September 30, 2024.

Realized losses on available-for-sale securities for the three and nine months ended September 30, 2023 were zero and $ 1.0 million, respectively.

As of September 30, 2024, unrealized losses on available-for-sale securities are not attributed to credit risk.

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

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

As of June 30, 2024 and December 31, 2023, securities with a fair value of $ 17.7 million and $ 48.4 million, respectively, were in a continuous net unrealized loss position for more than 12 months.

As of September 30, 2024 and December 31, 2023, securities with a fair value of zero and $ 48.4 million, respectively, were in a continuous net unrealized loss position for more than 12 months.

To date, the Company has not recorded any impairment charges on available-for-sale securities.

As of June 30, 2024 and December 31, 2023, the Company recognized $ 2.0 million and $ 1.7 million, respectively, of accrued interest receivable from available-for-sale securities within prepaid expenses and other current assets on the condensed consolidated balance sheets.

As of September 30, 2024 and December 31, 2023, the Company recognized $ 2.8 million and $ 1.7 million, respectively, of accrued interest receivable from available-for-sale securities within prepaid expenses and other current assets on the condensed consolidated balance sheets.

Balance Sheet Components

Property and Equipment, Net

Table o f Contents

Property and Equipment consist of the following:

September 30,

2024 December 31,

7 unchanged sentences

Total property and equipment, net $ 88,989 $ 99,478

The Company has determined it operates in a single operating segment and has one reportable segment.

The Company reviews for indicators of impairment on quarterly basis which include the change in how its property is being used.

The Company reviews for indicators of impairment on a quarterly basis which includes the change in how its property is being used.

In June 2024, the Company made a decision to sublease one of its leased buildings in South San Francisco.

The Company vacated and ceased occupancy of this building in June 2024 and currently the Company is actively marketing the leased building for sublease.

In connection with the preparation of these condensed consolidated financial statements, the

Company determined that the change in how this building is being used could indicate impairment.

The Company identified this to be sublet property as a separate asset group for purposes of long-lived asset impairment assessment.

The Company determined that the change in how this building is being used was an indicator of impairment.

The Company identified this to-be-sublet property as a separate asset group.

The Company concluded that the carrying value of this to-be-sublet property asset group was not recoverable and the estimated fair value of this asset group was below its carrying value.

The lower fair value of this asset group was mainly due to the lower estimated sublease income compared to the lease payments in accordance with the initial operating lease agreement and higher discount rate.

The decrease in the fair value of this asset group was mainly due to the lower estimated sublease income based on current commercial rental market conditions compared to the lease payments in accordance with the initial operating lease agreement.

The Company applied a discounted cash flow method to estimate fair value of its right-of-use asset and leasehold improvements.

Based on this analysis, the Company concluded the fair value of the right-of-use asset and leasehold improvements of $ 2.5 million was lower than its net book value of $ 7.5 million.

The Company recognized a pre-tax long-lived asset impairment charge of $ 5.0 million on the right-of-use asset and leasehold improvements for the three and six months ended June 30, 2024.

The determination of the fair value of the Company’s asset group related to the to be sublet property that is currently being marketed for sublease purposes represents a Level 3 nonrecurring fair value measurement.

Calculating the fair value of the asset involves significant estimates and assumptions.

These estimates and assumptions include, among other things, expected sublease rental income of $ 4.0 million and risk-adjusted annual discount rate of 9 %.

Changes in the factors and assumptions used could materially affect the amount of impairment loss recognized in the period the asset was considered impaired.

The Company recognized a long-lived asset impairment charge of $ 5.0 million on the right-of-use asset and leasehold improvements in June 30, 2024.

In September 2024, the Company identified an additional indicator that the carrying value of this to-be-sublet property asset group was not recoverable.

The expected sublease rental income of $ 4.0 million as of June 30, 2024 had decreased to $ 1.9 million as of September 30, 2024.

In addition, the risk-adjusted annual discount rate of 9.0 % as of June 30, 2024 had increased to 9.5 % as of September 30, 2024.

The Company updated its discounted cash flow analysis to estimate fair value of its right-of-use asset and leasehold improvements.

Based on this analysis, the Company concluded the fair value of the right-of-use asset and leasehold improvements of $ 1.2 million was lower than its net book value of $ 2.4 million.

The Company recognized an additional long-lived asset impairment charge of $ 1.2 million on the right-of-use asset and leasehold improvements for the three months ended September 30, 2024 and recognized in aggregate long-lived asset impairment charges of $ 6.2 million on the right-of-use asset and leasehold improvements for the nine months ended September 30, 2024.

Previously, in December 2023, the Company made a decision to sublease one of its other leased buildings in South San Francisco.

The Company had vacated and ceased occupancy of this building in December 2023 and the Company is currently actively marketing the leased building for sublease.

During the year ended December 31, 2023, the Company recognized long-lived asset impairment charge of $ 13.2 million on the right-of-use asset by applying a discounted cash flow method to estimate fair value of its right-of-use asset.

The key inputs to this valuation were expected sublease rental income of $ 22.7 million through March 31, 2032 and annual discount rate of 9.0 %.

In September 30, 2024, the Company revised its valuation based on a non-binding letter of intent with a subtenant for a portion of the building and new market data.

The expected sublease rental income based on the revised valuation was $ 4.7 million through March 31, 2032 and the annual discount rate did not change.

The Company concluded the fair value of the right-of-use asset of $ 3.1 million was lower than its book value of $ 12.6 million and recognized an additional long-lived asset impairment charge of $ 9.5 million on the right-of-use asset for the three and nine months ended September 30, 2024.

The determination of the fair values of the Company’s asset groups related to the to-be-sublet properties that are currently being marketed for sublease purposes represent Level 3 nonrecurring fair value measurements.

Calculating the fair value of these assets involve significant estimates and assumptions.

These estimates and assumptions include, among other things, expected sublease rental income and risk-adjusted annual discount rate.

Changes in the factors and assumptions used could materially affect the amount of impairment loss recognized in the period an asset was considered impaired.

Accrued and Other Current Liabilities

1 unchanged sentence

The reduction in workforce was completed by June 30, 2024.

During the six months ended June 30, 2024, the Company paid approximately $ 2.8 million for severance and other employee benefits.

As of June 30, 2024, $ 0.3 million of the severance and other employee benefits accrual was included in accrued and other current liabilities on the condensed consolidated balance sheet.

On April 26 2024, the Company was awarded $ 15.0 million from CIRM to support the clinical development of ALLO-316, an AlloCAR T TM investigational product targeting CD70 in development for the treatment of advanced or metastatic renal cell carcinoma (RCC).

During the nine months ended September 30, 2024, the Company paid approximately $ 2.9 million for severance and other employee benefits.

Table o f Contents

September 30, 2024, $ 0.2 million of the severance and other employee benefits accrual was included in accrued and other current liabilities on the condensed consolidated balance sheet.

On April 26, 2024, the Company was awarded up to $ 15.0 million from CIRM to support the clinical development of ALLO-316, an AlloCAR T TM investigational product targeting CD70 in development for the treatment of advanced or metastatic renal cell carcinoma (RCC).

Pursuant to terms of the award, the disbursements are tied to the achievement of specified operational milestones.

7 unchanged sentences

Upon cash receipt, the CIRM award and accrued interest will be recognized as other long-term liabilities on the Company’s balance sheet.

The Company received $ 2.3 million from CIRM through June 30, 2024 and accounted for the proceeds as a liability within other long-term liabilities on the condensed consolidated balance sheet.

The Company received $ 2.3 million from CIRM through September 30, 2024 and accounted for the proceeds as a liability within other long-term liabilities on the condensed consolidated balance sheet.

During the three and nine months ended September 30, 2024, the Company recorded interest expense of $ 0.1 million.

As of September 30, 2024, $ 0.1 million of accrued interest was included in other long-term liabilities.

License and Collaboration Agreements

6 unchanged sentences

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

No milestone or royalty payments were made in the three and six months ended June 30, 2024 or 2023.

No milestone or royalty payments were made in the three and nine months ended September 30, 2024 or 2023.

Pfizer is also eligible to receive, on a product-by-product and country-by-country basis, royalties in single-digit percentages on annual net sales for products covered by the Pfizer Agreement.

4 unchanged sentences

In connection with the execution of the Cellectis Agreement, on March 8, 2019, the Company and Cellectis also entered into a letter agreement (the Letter Agreement), pursuant to which the Company and Cellectis agreed to terminate the Original Cellectis Agreement.

The Original Cellectis Agreement included a research collaboration to conduct discovery and pre-clinical development activities to generate CAR T cells directed at targets selected by each party, which was completed in June 2018.

The Original Cellectis Agreement included a research

Table o f Contents

collaboration to conduct discovery and pre-clinical development activities to generate CAR T cells directed at targets selected by each party, which was completed in June 2018.

Pursuant to the Cellectis Agreement, Cellectis granted to the Company an exclusive, worldwide, royalty-bearing license, on a target-by-target basis, with sublicensing rights under certain conditions, under certain of Cellectis’s intellectual property, including its TALEN and electroporation technology, to make, use, sell, import, and otherwise exploit and commercialize CAR T products directed at certain targets, including BCMA, CD70, Claudin 18.2, DLL3 and FLT3 (the Allogene Targets), for human oncologic therapeutic, diagnostic, prophylactic and prognostic purposes.

6 unchanged sentences

The royalties are payable, on a licensed-product-by-licensed-product and country-by-country basis, until the later of (i) the expiration of the last to expire of the licensed patents covering such product;

(ii) the loss of regulatory exclusivity

afforded such product in such country, and (iii) the tenth anniversary of the date of the first commercial sale of such product in such country;

(ii) the loss of regulatory exclusivity afforded such product in such country, and (iii) the tenth anniversary of the date of the first commercial sale of such product in such country;

however, in no event shall such royalties be payable, with respect to a particular licensed product, past the twentieth anniversary of the first commercial sale for such product.

7 unchanged sentences

All costs the Company incurred in connection with this agreement were recognized as research and development expenses in the condensed consolidated statements of operations.

For the three and six months ended June 30, 2024 and 2023, no clinical development milestones were achieved.

For the three and nine months ended September 30, 2024 and 2023, no clinical development milestones were achieved.

Exclusive License Agreement with Servier

As part of the Pfizer Agreement, Pfizer assigned to the Company an Exclusive License Agreement (the Original Servier Agreement), with Les Laboratoires Servier SAS and Institut de Recherches Internationales Servier SAS (collectively, Servier) to develop, manufacture and commercialize certain allogeneic anti-CD19 CAR T cell product candidates, including UCART19, in the United States with the option to obtain the rights over additional anti-CD19 product candidates and for allogeneic CAR T cell product candidates directed against one additional target.

Table o f Contents

Servier) to develop, manufacture and commercialize certain allogeneic anti-CD19 CAR T cell product candidates, including UCART19, in the United States with the option to obtain the rights over additional anti-CD19 product candidates and for allogeneic CAR T cell product candidates directed against one additional target.

In October 2019, the Company agreed to waive its rights to the one additional target.

2 unchanged sentences

If the Company opts-in to another product candidate, Servier has the right to obtain rights to such product candidate outside the United States and to share development costs for such product candidate.

On May 10, 2024, the Company and Servier entered into an Amendment and Settlement Agreement with Servier (the Servier Amendment) which restructured the parties’ relationship under the Original Servier Agreement (as amended, the Servier Agreement).

On May 10, 2024, the Company and Servier entered into an Amendment and Settlement Agreement (the Servier Amendment) which restructured the parties’ relationship under the Original Servier Agreement (as amended, the Servier Agreement).

The Company’s licensed territory was expanded to include the European Union and the United Kingdom.

2 unchanged sentences

Under the Servier Agreement, the Company is required to use commercially reasonable efforts to develop, manufacture and commercialize a CD19 Product.

Under the Servier Agreement, Servier sublicenses to the Company certain rights which Servier licenses from Cellectis pursuant to a first development and commercialization agreement, dated February 7, 2014, by and between Cellectis and Servier (as amended, the Servier-Cellectis Agreement).

Under the Servier Agreement, Servier sublicenses to the Company certain rights which Servier licenses from Cellectis pursuant to a License, Development and Commercialization Agreement by and between Cellectis and Servier, dated February 7, 2014, as amended by Amendment No.

1 to the License, Development and Commercialization Agreement, dated March 4, 2020 (as amended, the Servier-Cellectis Agreement).

As amended by the Servier Amendment, all of the Company’s future milestone payments (regulatory and sales) under the Original Servier Agreement were modified to be the same as, and to coincide with, Servier’s milestone payments to Cellectis that are required under the Servier-Cellectis Agreement.

Agreement provides for aggregate potential milestone payments by the Company to Servier of up to € 75.0 million upon successful completion of various regulatory milestones and first commercial sale milestones in the United States, European Union and the United Kingdom for the initial indication of each licensed product, of which € 60.0 million remains for the initial indication for cema-cel, with additional payments of € 55.0 million, due for each subsequent indication, of which € 50.0 million remains for the first subsequent indication for cema-cel, and aggregate potential payments by the Company to Servier of up to € 80.0 million upon achievement of certain net sales milestones for each licensed product.

Should Servier’s rights and obligations under the Servier-Cellectis Agreement be assigned to the Company, these milestone payments would terminate, and the Company would assume Servier’s milestone payment obligation to Cellectis.

The Servier Agreement provides for aggregate potential milestone payments by the Company to Servier of up to € 75.0 million upon successful completion of various regulatory milestones and first commercial sale milestones in the United States, European Union and the United Kingdom for the initial indication of each licensed product, of which € 60.0 million remains for the initial indication for cema-cel, with additional payments of € 55.0 million, due for each subsequent indication, of which € 50.0 million remains for the first subsequent indication for cema-cel, and aggregate potential payments by the Company to Servier of up to € 80.0 million upon achievement of certain net sales milestones for each licensed product.

In the absence of any such assignment, Servier will remain responsible for making milestone payments that may be due to Cellectis under the Servier-Cellectis Agreement.

11 unchanged sentences

Should Servier’s rights and obligations under the Servier-Cellectis Agreement be assigned to the Company, each tier of royalty rates in the United States to Servier would be reduced by 10 %, the ex-U.S.

royalties to Servier would terminate, and the Company would assume Servier’s royalty obligations to Cellectis.

royalties to Servier would terminate, and the Company would assume Servier’s royalty obligations

Table o f Contents

to Cellectis.

In the absence of any such assignment, Servier will remain responsible for making royalty payments that may be due to Cellectis under the Servier-Cellectis Agreement.

3 unchanged sentences

There was no gain or loss related to the expanded license territories and ceased Servier co-development.

For the three and six months ended June 30, 2024 and 2023, the Company recorded $ 5.4 million and zero , respectively, in research and development expenses upon achievement of a regulatory milestone.

As of June 30, 2024, the Company recorded € 20.0 million as deposit placed in escrow in the condensed consolidated balance sheets.

For the three and nine months ended September 30, 2024, the Company recorded zero and $ 5.4 million, respectively, in research and development expenses upon achievement of a regulatory milestone.

For the three and nine months ended September 30, 2023, the Company recorded $ 0.1 million and $ 0.4 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

As of September 30, 2024, the Company recorded € 20.0 million as deposit placed in escrow in the condensed consolidated balance sheets.

Research Collaboration and License Agreement with Notch Therapeutics

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

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

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

14 unchanged sentences

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

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

Table o f Contents

commencing on first commercial sale of such product in such country and continuing until the latest of (i) the date upon which there is no valid claim of the licensed patents in such country of sale that covers such product, (ii) the expiration of applicable data or other regulatory exclusivity in such country of sale or (iii) a defined period from the first commercial sale of such product in such country.

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

8 unchanged sentences

In addition, with respect to the Company’s previous equity investment in Notch, the Amended Notch Agreement grants the Company certain anti-dilution protections up to certain limits for certain pre-IPO equity financings.

As of June 30, 2024, no Released Targets were out-licensed by Notch.

As of September 30, 2024, no Released Targets were out-licensed by Notch.

On May 17, 2024, in connection with the Notch Series B Financing the Company waived certain of its anti-dilution rights in exchange for a low single digit percentage reduction in the royalty rate for the royalties the Company is obliged to pay to Notch under our Notch intellectual property license should the Company commercialize a licensed product.

For the three and six months ended June 30, 2024, the Company recorded zero collaboration costs.

For the three and six months ended June 30, 2023, the Company recorded $ 0.8 million and $ 1.8 million, respectively, in collaboration costs as research and development expenses.

No milestones were achieved by Notch for the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024, the Company's equity investment in Notch was $ 2.0 million (see Note 8).

For the three and nine months ended September 30, 2024, the Company recorded zero collaboration costs.

For the three and nine months ended September 30, 2023, the Compan y recorded zero and $ 1.8 million, respective ly, in collaboration costs as research and development expenses.

For the three and nine months ended September 30, 2023, the Company recorded $ 3.0 million in other expenses as impairment loss on its equity method investment in Notch.

No milestones were achieved by Notch for the three and nine months ended September 30, 2024 and 2023.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

3 unchanged sentences

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

The Company made an upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2020 and made an additional upfront payment of $ 3.0 million to MD Anderson in the year ended December 31, 2023.

The Company made an advance payment of $ 3.0 million to MD Anderson in the year ended December 31, 2020 and made an additional advance payment of $ 3.0 million to MD Anderson in the year ended December 31, 2023.

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

3 unchanged sentences

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

For the three and six months ended June 30, 2024, the Company recorded $ 0.3 million in collaboration costs as research and development expenses.

For the three and six months ended June 30, 2023, the Company recorded $ 0.6 million and $ 1.0 million, respectively, in collaboration costs as research and development expenses.

For the three and nine months ended September 30, 2024, the Company recorded $ 0.8 million and $ 1.1 million, respectively, in collaboration costs as research and development expenses.

For the three and nine months ended September 30, 2023, the Company recorded $ 0.2 million and $ 1.2 million, respectively, in collaboration costs as research and development expenses.

Investment in and License Agreement with Overland Therapeutics, Inc.

On May 24, 2024, the Company, Overland Pharmaceuticals (CY) inc.

(Overland), and Allogene Overland Biopharm (CY) Limited (Allogene Overland) entered into a Share Exchange Agreement (Share Exchange Agreement) pursuant to which Overland’s cell therapy business merged into Allogene Overland (the Organizational Restructuring).

Allogene Overland Biopharm (CY) Limited (Allogene Overland), later renamed Overland Therapeutics Inc.

(Overland Therapeutics), was initially established as a joint venture by the Company and Overland Pharmaceuticals (CY) Inc.

Table o f Contents

pursuant to a Share Purchase Agreement (Share Purchase Agreement), dated December 14, 2020.

Concurrently, on December 14, 2020, the Company entered into a License Agreement (License Agreement) with Allogene Overland for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore (the JV Territory).

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

The Company received $ 40.0 million from Allogene Overland as partial consideration for the License Agreement.

Until the Organizational Restructuring (as defined below), the Company and Overland were the sole equity holders in Allogene Overland.

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

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

Subsequent to entering into the License Agreement, Allogene Overland assigned the License 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 (Allogene Overland PRC).

On May 24, 2024, the Company, Overland, and Allogene Overland entered into a Share Exchange Agreement (Share Exchange Agreement) pursuant to which Overland’s cell therapy business merged into Allogene Overland (the Organizational Restructuring).

Under the Share Exchange Agreement, Allogene Overland acquired from Overland a 100 % equity interest in Overland Pharmaceuticals (US) Inc.

4 unchanged sentences

(HBP) executed on May 24, 2024, Overland distributed all Series Seed Preferred Shares of Allogene Overland held by Overland to HBP and HBP has assumed all rights and obligations attached to such shares and all rights and obligations of Overland under the Share Exchange Agreement.

In connection with the Organizational Restructuring, on May 24, 2024, the Company and Allogene Overland PRC, entered into a First Amendment to the License Agreement (the License Amendment) to amend and supplement certain provisions of the License Agreement.

Under the License Amendment, the Company continues to grant Allogene Overland PRC an exclusive license to develop, manufacture, and commercialize the Licensed Products in the JV Territory, with the Company retaining exclusive rights to the Licensed Products outside the JV Territory, and the royalty obligations to the Company were amended to a flat mid single-digit royalty on net sales in the JV Territory that are no longer subject to reductions.

The License Amendment also provides the Company with additional rights to terminate the License Agreement in its entirety or with respect to the relevant Overland Licensed Products if Allogene Overland PRC fails to initiate manufacturing technology transfer with respect to an Overland Licensed Product as agreed in the License Amendment, or if HBP commits a funding default or a material breach of its representations, warranties, or covenants under the Share Exchange Agreement.

The License Amendment also provides that the License Agreement will terminate automatically if the Company’s ownership in Allogene Overland falls below 7.5 % (other than due to the Company’s sale of the shares of Allogene Overland), unless at that time Allogene Overland PRC and the Company have mutually agreed on the manufacturing technology transfer plan for the Overland Licensed Products and Allogene Overland PRC elects to continue the license for such Overland Licensed Products with increased milestones and royalties.

Under the License Amendment terms such increased milestones and royalties consist of up to $ 115.0 million in milestone payments for each Overland Licensed Product and tiered mid single-digit to low double-digit royalties on net sales in the JV Territory.

As part of the Organizational Restructuring, Allogene Overland was renamed Overland Therapeutics Inc.

(Overland Therapeutics).

On December 14, 2020, the Company entered into a License Agreement (License Agreement) with Allogene Overland, a joint venture established by the Company and Overland, pursuant to a Share Purchase Agreement (Share Purchase Agreement), dated December 14, 2020, for the purpose of developing, manufacturing and commercializing certain allogeneic CAR T cell therapies for patients in greater China, Taiwan, South Korea and Singapore (the JV Territory).

As of May 24, 2024, the Company and Overland were the sole equity holders in Allogene Overland.

The Company received $ 40.0 million from Allogene Overland as partial consideration for the License Agreement.

Subsequent to entering into the License Agreement, Allogene Overland assigned the License 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 (Allogene Overland PRC).

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

Based on the License Agreement, promises that the Company concluded were distinct performance obligations included:

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

2 unchanged sentences

Regulatory milestones and royalties were considered variable consideration.

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

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

Table o f Contents

may occur in future periods.

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

11 unchanged sentences

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

The Company determined that the remaining transaction price based on the License Amendment was $ 4.6 million and it was allocated as follows:

Based on the License Amendment, the Company determined that the remaining transaction price was $ 4.6 million and it was allocated as follows:

(i) $ 1.9 million to the manufacturing license, related know-how and support, which will be recognized as services are delivered and (ii) $ 2.7 million to the know-how developed in future periods, which will be recognized as services are delivered.

As of June 30, 2024, $ 4.6 million of deferred revenue was recorded in other long-term liabilities.

The Company determined that Overland Therapeutics is a variable interest entity as of June 30, 2024 and December 31, 2023.

As of September 30, 2024, $ 4.6 million of deferred revenue was recorded in other long-term liabilities.

The Company determined that Overland Therapeutics is a variable interest entity as of September 30, 2024 and December 31, 2023.

The Company does not have the power to direct the activities which most significantly affect Overland Therapeutics’ economic performance.

3 unchanged sentences

In connection with the Organizational Restructuring, the Company recorded an increase in its equity method investment in Overland Therapeutics and corresponding gain of $ 1.1 million.

The Company’s total equity investment in Overland Therapeutics as of June 30, 2024 and December 31, 2023 was $ 1.1 million and zero , respectively (see Note 8).

For the three and six months ended June 30, 2024 and 2023, the Company recognized less than $ 0.1 million of collaboration revenue.

The Company’s total equity investment in Overland Therapeutics was zero as of September 30, 2024 and December 31, 2023 (see Note 8).

For the three and nine months ended September 30, 2024 and 2023, the Company recognized less than $ 0.1 million of collaboration revenue.

Collaboration and License Agreement with Antion

9 unchanged sentences

In connection with this investment, a Company representative was appointed to Antion’s Board of Directors.

Table o f Contents

In July 2023, the Company and Antion entered into an amendment to the Antion Collaboration and License Agreement.

5 unchanged sentences

Antion is also entitled to receive a low single-digit royalty on the Company’s sales of licensed products, subject to certain reductions.

For the three and six months ended June 30, 2024, the Company recorded zero research and development expenses related to collaboration costs.

For the three and six months ended June 30, 2023, the Company recorded $ 1.3 million and $ 1.8 million, respectively, in research and development expenses related to collaboration costs.

As of June 30, 2024 and December 31, 2023, the Company’s total equity investment in Antion was zero .

For the three and nine months ended September 30, 2024, the Company recorded zero research and development expenses related to collaboration costs.

For the three and nine months ended September 30, 2023, the Company recorded zero and $ 1.8 million, respectively, in research and development expenses related to collaboration costs.

As of September 30, 2024 and December 31, 2023, the Company’s total equity investment in Antion was zero .

Strategic Collaboration Agreement with Foresight Diagnostics

1 unchanged sentence

(Foresight Diagnostics) (the Foresight Agreement).

Pursuant to the Foresight Agreement, the parties have agreed to collaborate

on a non-exclusive basis in the development of Foresight Diagnostics’ minimal residual disease (MRD) assay based on their PhasED-Seq Circulating Tumor DNA Platform as an in vitro diagnostic to identify the MRD+ patient population to be enrolled in the Company’s ALPHA3 trial of cema-cel, for treatment of large B cell lymphoma.

Pursuant to the Foresight Agreement, the parties have agreed to collaborate on a non-exclusive basis in the development of Foresight Diagnostics’ minimal residual disease (MRD) assay based on their PhasED-Seq Circulating Tumor DNA Platform as an in vitro diagnostic to identify the MRD+ patient population to be enrolled in the Company’s ALPHA3 trial of cema-cel, for treatment of large B cell lymphoma.

Under the Foresight Agreement, the Company has agreed to use its commercially reasonable efforts to obtain regulatory approval of cema-cel, and Foresight Diagnostics has agreed to use its commercially reasonable efforts to obtain regulatory approval of its MRD assay for use as an in vitro diagnostic with cema-cel.

The Company has agreed to fund approximately $ 26.2 million in MRD assay development costs, milestone payments for regulatory submissions and assay utilization to process clinical samples.

For the three and six months ended June 30, 2024, the Company recorded $ 1.7 million and $ 2.2 million, respectively, of research and development expenses related to clinical trials start readiness milestone.

For the three and nine months ended September 30, 2024, the Company record ed $ 0.5 million and $ 2.7 million, respectively, of research and development expenses related to clinical trials start readiness milestones.

Commitments and Contingencies

17 unchanged sentences

The Company has received $ 3.0 million of tenant improvement allowances for costs related to the design and construction of certain Company improvements.

Table o f Contents

In February 2023, the Company entered into a sublease with Bellco Capital Advisors Inc.

3 unchanged sentences

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

Restricted cash related to letters of credit due to landlords was $ 6.0 million as of June 30, 2024 and December 31, 2023.

Restricted cash related to letters of credit due to landlords was $ 6.0 million as of September 30, 2024 and December 31, 2023.

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Operating lease liabilities

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Total lease costs $ 3,734 $ 3,767 $ 11,140 $ 11,486

Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2024 was $ 6.2 million and was included in net cash used in operating activities in the Company's condensed consolidated statements of cash flows.

The undiscounted future non-cancellable lease payments under the Company's operating leases as of June 30, 2024 were as follows:

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2024 was $ 9.3 million and was included in net cash used in operating activities in the Company's condensed consolidated statements of cash flows.

The undiscounted future non-cancellable lease payments under the Company's operating leases as of September 30, 2024 were as follows:

Year ending December 31:

8 unchanged sentences

The weighted average discount rate used to determine the operating lease liability was 6.25 %.

As of June 30, 2024, the weighted average remaining lease term for our operating leases is 8.58 years.

As of September 30, 2024, the weighted average remaining lease term for our operating leases is 8.35 years.

Other Commitments

3 unchanged sentences

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

In connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $ 4.3 million which is recorded as restricted cash in the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023.

Table o f Contents

connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $ 4.3 million which is recorded as restricted cash in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.

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

1 unchanged sentence

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

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of June 30, 2024.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of September 30, 2024.

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

These agreements generally allow for cancellation with notice.

As of June 30, 2024, the Company had non-cancellable purchase commitments of $ 0.7 million.

Equity Method Investments

As of September 30, 2024, the Company had non-cancellable purchase commitments of $ 2.3 million.

Equity Investments and Equity Method Investments

Notch Therapeutics

6 unchanged sentences

Accordingly, effective May 17, 2024, the Company started to account for its investment in Notch as an equity investment measured at cost less impairment.

The Company’s total equity investment in Notch as of June 30, 2024 was $ 2.0 million.

The Company’s total equity investment in Notch as of September 30, 2024 was $ 2.0 million.

The Company’s total equity investment in Notch as of December 31, 2023 was $ 3.6 million and the Company accounted for the investment using the equity method of accounting.

For the quarter to date and year to date periods through May 17, 2024, the Company recognized its share of Notch’s net loss of $ 0.8 million and $ 1.7 million, respectively, under the other income and expense, net caption within the condensed consolidated statements of operations.

For the three and six months ended June 30, 2023, the Company recognized its share of Notch’s net loss of $ 1.2 million and $ 2.9 million, respectively, under the other income and expense, net caption within the condensed consolidated statements of operations.

For the quarter to date and year to date periods through May 17, 2024, the Company recognized its share of Notch’s net loss of zero and $ 1.7 million, respectively, under the other income and expense, net caption within the condensed consolidated statements of operations.

For the three and nine months ended September 30, 2023, the Company recognized its share of Notch’s net loss of $ 1.5 million and $ 4.5 million, respectively, under the other income and expense, net caption within the condensed consolidated statements of operations.

During the three and nine months ended September 30, 2023, the Company recognized $ 3.0 million of impairment loss under the other expenses caption within the condensed consolidated statements of operations.

No impairment loss was recorded in 2024.

Overland Therapeutics, Inc.

2 unchanged sentences

As part of the Organizational Restructuring, Overland distributed all Series Seed Preferred Shares of Allogene Overland held by Overland to HBP and Allogene Overland was renamed to Overland Therapeutics.

The Company’s total equity investment in Overland Therapeutics as of June 30, 2024 and December 31, 2023 was $ 1.1 million and zero , respectively, and the Company accounted for the investment using the equity method of accounting.

For the three and six months ended June 30, 2024, the Company recognized its gain from the Organizational Restructuring of $ 1.1 million under the other income and expense, net caption within the condensed consolidated statements of operations.

For the three and six months ended June 30, 2023, the Company recognized its share of Overland Therapeutics’ net loss of $ 1.2 million and $ 2.5 million, respectively, under the other income and expense, net caption within the condensed consolidated statement of operations.

The Company’s total equity investment in Overland Therapeutics was zero as of September 30, 2024 and December 31, 2023, and the Company accounted for the investment using the equity method of accounting.

For the three months ended September 30, 2024, the Company recognized its share of Overland Therapeutics' net loss of $ 1.1 million under the other income and expense, net caption within the condensed consolidated statements of operations.

For the nine months ended September 30, 2024, the Company recognized its gain from the Organizational Restructuring of $ 1.1 million which was offset by its share of Overland Therapeutics' net loss of $ 1.1 million under the other income and expense, net caption within the condensed consolidated statement of operations.

For the three and nine months ended September 30, 2023, the Company recognized its share of Overland Therapeutics’ net loss of $ 1.0 million and $ 3.4 million, respectively, under the other income and expense, net caption within the condensed consolidated statement of operations.

Table o f Contents

Stock-Based Compensation

9 unchanged sentences

This requirement is applicable to incentive stock options only.

As of June 30, 2024, there were 9,817,735 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

As of September 30, 2024, there were 9,508,639 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Exchange Program

18 unchanged sentences

Options forfeited ( 3,394,248 ) 10.93

Balance, June 30, 2024 24,022,246 $ 8.29 7.90 $ 22

Exercisable, June 30, 2024 16,834,976 $ 9.74 7.52 $ 19

Vested and expected to vest, June 30, 2024 24,022,246 $ 8.29 7.90 $ 22

The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on the Nasdaq Global Select Market on June 30, 2024.

For the six months ended June 30, 2024, the estimated weighted-average grant-date fair value of employee options granted was $ 2.08 per share.

As of June 30, 2024, there was $ 48.2 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.2 years.

Balance, September 30, 2024 23,955,369 $ 8.22 7.75 $ 576

Exercisable, September 30, 2024 17,409,307 $ 9.75 7.32 $ 258

Vested and expected to vest, September 30, 2024 23,955,369 $ 8.22 7.75 $ 576

Table o f Contents

For the nine months ended September 30, 2024, the estimated weighted-average grant-date fair value of employee options granted was $ 2.07 per share.

As of September 30, 2024, there was $ 41.7 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.0 years.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Expected term in years 5.02 - 6.12

14 unchanged sentences

Forfeited ( 2,199,686 ) 7.92

Unvested June 30, 2024 13,123,414 $ 5.32 1.76 $ 30,578

Vested and expected to vest, June 30, 2024 13,123,414 $ 5.32 1.76 $ 30,578

As of June 30, 2024, there was $ 44.4 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.3 years.

As of June 30, 2024, the Company had 2,403,260 outstanding performance-based restricted stock units and 1,814,134 outstanding restricted stock units with a market condition granted to certain executive officers and other employees pursuant to the 2018 Plan, including 4,347 performance-based restricted stock units granted in the quarter ended June 30, 2024.

Unvested September 30, 2024 13,275,517 $ 5.06 1.57 $ 37,171

Vested and expected to vest, September 30, 2024 13,275,517 $ 5.06 1.57 $ 37,171

As of September 30, 2024, there was $ 38.4 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.2 years.

As of September 30, 2024, the Company had 2,433,913 outstanding performance-based restricted stock units and 1,814,134 outstanding restricted stock units with a market condition granted to certain executive officers and other employees pursuant to the 2018 Plan, including 30,653 performance-based restricted stock units granted in the quarter ended September 30, 2024.

These awards are subject to the holders’ continuous service to the Company through each applicable vesting event.

Through June 30, 2024, the Company believes that the achievement of the requisite performance conditions for these awards are not probable.

As a result, no compensation expense has been recognized related to the performance-based restricted stock units for the three and six months ended June 30, 2024 and 2023.

The Company recognized $ 0.7 million and $ 1.4 million in stock-based compensation expense related to the restricted stock units with a market condition for the three and six months ended June 30, 2024, respectively.

The Company recognized $ 0.8 million and $ 0.9 million in stock-based compensation expense related to the restricted stock units with market condition for the three and six months ended June 30, 2023, respectively.

Through September 30, 2024, the Company believes that the achievement of the requisite performance conditions for these awards are not probable.

As a result, no compensation expense has been recognized related to the performance-based restricted stock units for the three and nine months ended September 30, 2024 and 2023.

The Company recognized $ 0.7 million and $ 2.2 million in stock-based compensation expense related to the restricted stock units with a market condition for the three and nine months ended September 30, 2024, respectively.

The Company recognized $ 0.5 million and $ 1.5 million in stock-based compensation expense related to the restricted stock units with market condition for the three and nine months ended September 30, 2023, respectively.

Stock-based compensation expense

For the three and six months ended June 30, 2024, the Company recorded $ 13.6 million and $ 25.5 million, respectively, of stock-based compensation expense related to stock options, restricted stock units and employee stock purchase plans as research and development and general and administrative expense in its condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2023, the Company recorded $ 16.6 million and $ 35.4 million, respectively, of stock-based compensation expense related to stock options, restricted stock units and employee stock purchase plans as research and development and general and administrative expense in its condensed consolidated statements of operations and comprehensive loss.

For the three and nine months ended September 30, 2024, the Company recorded $ 13.4 million and $ 38.9 million, respectively, of stock-based compensation expense related to stock options, restricted stock units and employee stock purchase plans as research and development and general and administrative expense in its condensed consolidated statements of operations and comprehensive loss.

For the three and nine months ended September 30, 2023, the Company recorded $ 15.4 million and $ 50.7 million, respectively, of stock-based compensation expense related to stock options, restricted stock units and

Table o f Contents

employee stock purchase plans as research and development and general and administrative expense in its condensed consolidated statements of operations and comprehensive loss.

Related Party Transactions

4 unchanged sentences

On May 24, 2024, the License Agreement was amended.

During the three months ended June 30, 2024 and 2023, the Company recognized zero and less than $ 0.1 million of collaboration revenue under this arrangement, respectively.

During the six months ended June 30, 2024 and 2023, the Company recognized less than $ 0.1 million of collaboration revenue under this arrangement.

During the three months ended September 30, 2024 and 2023, the Company recognized zero and less than $ 0.1 million of collaboration revenue under this arrangement, respectively.

During the nine months ended September 30, 2024 and 2023, the Company recognized less than $ 0.1 million of collaboration revenue under this arrangement.

Sublease Agreement

8 unchanged sentences

The sublease commenced on January 1, 2024.

The total right of use asset and associated lease liability recorded related to this related party lease was $ 2.5 million as of June 30, 2024.

For the three and six months ended June 30, 2024, the Company recorded $ 0.1 million and $ 0.2 million of rent expense related to this lease, respectively.

The total right of use asset and associated lease liability recorded related to this related party lease was $ 2.3 million as of September 30, 2024.

For the three and nine months ended September 30, 2024, the Company recorded $ 0.1 million and $ 0.3 million of rent expense related to this lease, respectively.

Consulting Agreements

1 unchanged sentence

In December 2023, the service agreement between the Company and Two River was terminated.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2023, respectively.

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

4 unchanged sentences

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

The costs incurred for services provided, bonus, and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2024, respectively, and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2023, respectively.

The costs incurred for services provided, bonus, and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2024, respectively, and $ 0.3 million and $ 0.7 million for the three and nine months ended September 30, 2023, respectively.

Table o f Contents

The Company has a history of losses and expects to record a loss in 2024.

2 unchanged sentences

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

September 30,

Stock options to purchase common stock 23,955,369 21,989,462

3 unchanged sentences

Total 38,371,459 35,507,093

Table o f Contents

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

What changed 10-Q

Item 1. Financial Statements