Allogene Therapeutics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2024 and 2023 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 100 Consolidated Financial Statements: Consolidated Balance Sheets 102 Consolidated Statements of Operations and Comprehensive Loss 103 Consolidated Statements of Stockholders’ Equity 104 Consolidated Statements of Cash Flows 105 Notes to Consolidated Financial Statements 106 99 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Allogene Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Allogene Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 100 Table of Contents Impairment of Long-Lived Assets Description of the Matter As discussed in Note 5 to the consolidated financial statements, the Company’s long-lived assets are assessed for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When indicators of impairment exist, the Company compares the estimated future undiscounted net cash flows to the carrying amount of the asset group. If the carrying amount of the asset group exceeds the future undiscounted cash flows, an impairment is measured based on the difference between the carrying amount of the asset group and its fair value. Indicators of impairment were identified for the year ended December 31, 2024. As a result the Company recorded an impairment charge of $15.7 million for its right-of-use asset and related leasehold improvements. Auditing the Company’s impairment model was challenging due to the subjective assumption of market rental rates used as an input in determining the fair value of the right-of-use asset and related leasehold improvements. How We Addressed the Matter in Our Audit To test the Company’s accounting for the impairment over the right-of-use asset and related leasehold improvements, our audit procedures included, among others, utilizing our valuation specialists to assist in evaluating the reasonableness of the Company’s valuation methodology and the market rental rate assumption, performing an evaluation of market rental rates by benchmarking to other properties of similar type and within the geographic area, and testing the completeness and accuracy of the significant inputs within the model. /s/ Ernst & Young LLP We have served as the Company's auditor since 2018. San Mateo, California March 13, 2025 101 Table of Contents ALLOGENE THERAPEUTICS, INC. Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 75,218 $ 83,155 Short-term investments 217,258 365,542 Prepaid expenses and other current assets 10,910 10,418 Total current assets 303,386 459,115 Long-term investments 80,673 — Operating lease right-of-use asset 45,205 63,703 Property and equipment, net 86,056 99,478 Deposit placed in escrow 20,773 — Restricted cash 10,292 10,292 Other long-term assets 2,325 6,604 Equity method investments — 3,645 Total assets $ 548,710 $ 642,837 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 5,394 $ 5,897 Accrued and other current liabilities 30,129 31,182 Total current liabilities 35,523 37,079 Lease liability, noncurrent 83,247 88,346 Other long-term liabilities 7,761 5,179 Total liabilities 126,531 130,604 Commitments and Contingencies (Notes 6 and 7) Stockholders’ equity: Preferred stock, $ 0.001 par value: 10,000,000 authorized as of December 31, 2024 and December 31, 2023; no shares were issued and outstanding as of December 31, 2024 and December 31, 2023 — — Common stock, $ 0.001 par value: 400,000,000 shares authorized as of December 31, 2024 and December 31, 2023; and 212,210,597 and 168,642,238 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 212 169 Additional paid-in capital 2,241,879 2,075,252 Accumulated deficit ( 1,819,823 ) ( 1,562,233 ) Accumulated other comprehensive loss ( 89 ) ( 955 ) Total stockholders’ equity 422,179 512,233 Total liabilities and stockholders’ equity $ 548,710 $ 642,837 The accompanying notes are an integral part of these consolidated financial statements. 102 Table of Contents ALLOGENE THERAPEUTICS, INC. Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share amounts) Year Ended December 31, 2024 2023 Collaboration revenue - related party $ 22 $ 95 Operating expenses: Research and development 192,299 242,914 General and administrative 65,205 71,673 Impairment of long-lived asset 15,717 13,245 Total operating expenses 273,221 327,832 Loss from operations ( 273,199 ) ( 327,737 ) Other income (expense), net: Interest and other income, net 20,153 18,307 Interest expense ( 181 ) — Other expenses, net ( 3,920 ) ( 17,835 ) Total other income (expense), net 16,052 472 Loss before income taxes ( 257,147 ) ( 327,265 ) Income tax expense ( 443 ) — Net loss ( 257,590 ) ( 327,265 ) Other comprehensive loss: Net unrealized gain on available-for-sale investments 866 8,971 Net comprehensive loss $ ( 256,724 ) $ ( 318,294 ) Net loss per share, basic and diluted $ ( 1.32 ) $ ( 2.09 ) Weighted-average number of shares used in computing net loss per share, basic and diluted 194,811,756 156,931,778 The accompanying notes are an integral part of these consolidated financial statements. 103 Table of Contents ALLOGENE THERAPEUTICS, INC. Consolidated Statements of Stockholders’ Equity (In thousands, except share and per share data) Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Shares Amount Balance — December 31, 2022 (As Restated) 144,438,304 $ 144 $ 1,911,632 $ ( 1,234,968 ) $ ( 9,926 ) $ 666,882 Issuance of common stock from ATM offering, net of commissions and offering costs of $ 1.7 million 20,894,565 21 91,091 — — 91,112 Issuance of common stock upon exercise of stock options and vesting of RSUs 2,718,410 3 2,084 — — 2,087 Vesting of early exercised common stock — — 1,999 — — 1,999 Stock-based compensation — — 65,951 — — 65,951 Employee stock purchase plan 590,959 1 2,495 — — 2,496 Net loss (As Restated) — — — ( 327,265 ) — ( 327,265 ) Net unrealized gain on available-for-sale investments — — — — 8,971 8,971 Balance — December 31, 2023 168,642,238 169 2,075,252 ( 1,562,233 ) ( 955 ) 512,233 Issuance of common stock from ATM offering, net of commissions and offering costs of $ 0.1 million 2,539,134 2 6,762 — — 6,764 Issuance of common stock from registered offering, net of commissions and offering costs of $ 4.7 million 37,931,035 38 105,245 — — 105,283 Issuance of common stock upon exercise of stock options and vesting of RSUs 2,569,680 2 811 — — 813 Vesting of early exercised common stock — — 532 — — 532 Stock-based compensation — — 51,743 — — 51,743 Employee stock purchase plan 528,510 1 1,534 — — 1,535 Net loss — — — ( 257,590 ) — ( 257,590 ) Net unrealized gain on available-for-sale investments — — — — 866 866 Balance — December 31, 2024 212,210,597 $ 212 $ 2,241,879 $ ( 1,819,823 ) $ ( 89 ) $ 422,179 The accompanying notes are an integral part of these consolidated financial statements. 104 Table of Contents ALLOGENE THERAPEUTICS, INC. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 257,590 ) $ ( 327,265 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 51,743 65,951 Depreciation and amortization 13,639 14,199 Net amortization/accretion on investment securities ( 8,348 ) ( 6,809 ) Impairment of long-lived asset 15,717 13,245 Impairment of equity investment and equity method investment 1,957 7,000 Non-cash rent expense 5,264 6,644 Income tax expense 443 — Non-cash collaboration revenue - related party ( 14 ) ( 63 ) Share of loss from equity method investments 1,688 10,672 Changes in operating assets and liabilities: Deposit placed in escrow ( 20,773 ) — Prepaid expenses and other current assets ( 492 ) 1,086 Other long-term assets 4,279 ( 1,455 ) Accounts payable ( 503 ) ( 7,502 ) Accrued and other current liabilities ( 1,262 ) ( 6,823 ) Operating lease liabilities ( 6,307 ) ( 6,002 ) Other long-term liabilities 259 ( 611 ) Net cash used in operating activities ( 200,300 ) ( 237,733 ) Cash flows from investing activities: Purchases of property and equipment ( 694 ) ( 1,516 ) Proceeds from sales of investments 5,398 5,623 Proceeds from maturities of investments 432,459 597,811 Purchase of investments ( 361,475 ) ( 438,629 ) Net cash provided by investing activities 75,688 163,289 Cash flows from financing activities: Proceeds from issuance of common stock from ATM offering, net of commissions and issuance costs 6,764 91,112 Proceeds from issuance of common stock from public offering, net of commissions and issuance costs 105,283 — Proceeds from issuance of common stock and upon exercise of stock options 813 2,087 Proceeds from issuance of common stock under the employee stock purchase plan 1,535 2,496 Proceeds from CIRM award 2,280 — Net cash provided by financing activities 116,675 95,695 Net increase (decrease) in cash, cash equivalents and restricted cash ( 7,937 ) 21,251 Cash, cash equivalents and restricted cash — beginning of period 93,447 72,196 Cash, cash equivalents and restricted cash — end of period $ 85,510 $ 93,447 Non-cash operating, investing and financing activities: Right-of-use asset obtained in exchange for lease liability $ 2,409 $ — Property and equipment purchases in accounts payable and accrued and other current liabilities $ 64 $ — Non-cash deferred revenue and other long-term liabilities $ 3,079 $ 3,094 Supplemental disclosure: Cash paid for amounts included in the measurement of lease liabilities $ ( 12,505 ) $ ( 12,049 ) The accompanying notes are an integral part of these consolidated financial statements. 105 Table of Contents ALLOGENE THERAPEUTICS, INC. Notes to Consolidated Financial Statements Note 1. Description of Business and Summary of Significant Accounting Policies Allogene Therapeutics, Inc. (the Company or Allogene) was incorporated on November 30, 2017 in the State of Delaware and is headquartered in South San Francisco, California. Allogene is a clinical stage immuno-oncology company pioneering the development of genetically engineered allogeneic T cell product candidates for the treatment of cancer and autoimmune diseases. The Company is developing a pipeline of “off-the-shelf” T cell product candidates that are designed to target and kill cancer cells in patients or eliminate pathogenic autoreactive cells in patients with autoimmune disorders. The Company’s engineered T cells are allogeneic, meaning they are derived from healthy donors for intended use in any patient, rather than from an individual patient for that patient’s use, as in the case of autologous T cells. The Company believes this key difference will enable it to deliver readily available treatments faster, more reliably, at greater scale, and to more patients. Public Offerings In November 2019, the Company entered into a sales agreement with Cowen and Company, LLC (Cowen), as amended on November 2, 2022 and November 2, 2023, under which the Company may from time to time issue and sell shares of its common stock through Cowen in at-the-market (ATM) offerings. The aggregate compensation payable to Cowen as the Company's sales agent equals up to 3.0 % of the gross sales price of the shares sold through Cowen pursuant to the sales agreement. During the year ended December 31, 2023, the Company sold an aggregate of 20,894,565 shares of common stock in ATM offerings resulting in net proceeds of $ 91.1 million. The specified dollar limit on the amount of common stock that may be sold under the sales agreement was removed pursuant to the November 2, 2023 amendment to the sales agreement. During the year ended December 31, 2024, the Company sold an aggregate of 2,539,134 shares of common stock in ATM offerings resulting in net proceeds of $ 6.8 million. Registered Offering On May 13, 2024, the Company entered into (i) an underwriting agreement (Underwriting Agreement) with Goldman Sachs & Co. LLC (Underwriter) and (ii) a Securities Purchase Agreement (Securities Purchase Agreement) with certain members of the Company’s Board of Directors and executive officers or their respective affiliates (Purchasers), pursuant to which the Company sold and issued to the Underwriter and the Purchasers an aggregate of 37,931,035 shares of common stock of the Company at a purchase price of $ 2.90 per share, in a registered offering transaction (Registered Offering) for aggregate gross proceeds of $ 110.0 million, before deducting the underwriting discount and commissions and estimated offering expenses payable by the Company. The Registered Offering closed on May 16, 2024. The aggregate fee payable by the Company to the Underwriter was $ 4.7 million, plus the reimbursement of certain expenses. The Purchasers purchased an aggregate of 1,034,484 shares of common stock of the Company in the Registered Offering. Need for Additional Capital The Company has sustained operating losses and expects to continue to generate operating losses for the foreseeable future. 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, cash equivalents and investments of $ 373.1 million as of December 31, 2024. Since inception through December 31, 2024, the Company has incurred cumulative net losses of $ 1,819.8 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. The Company intends to raise additional capital through the issuance of equity securities, debt financings or other sources in order to further implement its business plan. However, if such financing is not available at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay the development of its product candidates. The Company expects that its cash and cash equivalents and investments will be sufficient to fund its operations for at least the next 12 months from the date the Company’s Annual Report on Form 10-K is filed with the Securities and Exchange Commission (SEC). Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). 106 Table of Contents In June 2020, the Company formed a wholly-owned, Netherlands-based subsidiary, Allogene Therapeutics, B.V., to help prepare for and assist with the Company's activities in Europe. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Allogene Therapeutics, B.V. All material intercompany balances and transactions have been eliminated during consolidation. The subsidiary was dissolved on January 3, 2024. Reclassification of Prior Period Balances The deferred revenue was reclassified to be included in the accrued and other current liabilities in the balance sheet as of December 31, 2023 to conform to the consolidated balance sheet presentation at December 31, 2024. The presentation of non-cash rent expense and operating lease liabilities in the consolidated statement of cash flow for the year ended December 31, 2023 were reclassified to conform with the consolidated statement of cash flow presentation for the year ended December 31, 2024. These reclassifications have no effect on the reported net income for the years ended December 31, 2024 and 2023. Use of Estimates The preparation of 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 consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying 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, the CIRM award liability 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. Actual results could differ from those estimates. Concentration of Credit and other Risks and Uncertainties Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents and investments. The primary objectives for the Company’s investment portfolio are the preservation of capital and the maintenance of liquidity. The Company does not enter into any investment transaction for trading or speculative purposes. The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, commercial paper, money market instruments, asset-backed securities, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer. The Company maintains cash balances in excess of amounts insured by the FDIC and concentrated within a limited number of financial institutions. The accounts are monitored by management and management believes that the financial institutions are financially sound, and, accordingly, minimal credit risk exists with respect to these financial institutions. As of December 31, 2024 and 2023, the Company has not experienced any significant credit losses in such accounts or investments. The Company is subject to a number of risks common for early-stage biopharmaceutical companies including, but not limited to, the ability to achieve any clinical or commercial success of its product candidates, ability to obtain regulatory approval of its product candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition, dependency on the Company's contract manufacturing organization, and ability to manufacture. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in a single operating segment and has one reportable segment. The Company’s method for measuring profitability on a reportable segment basis is net profit or loss. The Company's CODM does not evaluate operating segments using asset or liability information. Additional significant segment expenses are provided on a quarterly basis to the CODM to support the CODM’s decision making process. Refer to Note 15 for additional information. Cash, Cash Equivalents and Restricted Cash 107 Table of Contents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in bank money market accounts and money market mutual funds. The Company has issued letters of credit under separate lease and other agreements which have been collateralized by restricted cash. This cash is classified as long-term restricted cash on the accompanying consolidated balance sheets based on the terms of the underlying agreements. Investments Investments are available-for-sale and are carried at estimated fair value. The Company’s valuations of marketable securities are generally derived from independent pricing services based upon quoted prices in active markets for similar securities, with prices adjusted for yield and number of days to maturity, or based on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets. Management determines the appropriate classification of its investments in debt securities at the time of purchase and at the end of each reporting period. Investments with original maturities of less than three months at the date of purchase are classified as cash and cash equivalents. Investments with original maturities beyond three months at the date of purchase and which mature at, or less than twelve months from the consolidated balance sheet date are classified as current. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive income. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value considered to be other than temporary, if any, on available-for-sale securities are included in interest and other income, net. The cost of investments sold is based on the specific-identification method. Interest income on investments is included in interest and other income, net. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, generally three to seven years . Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheets and the resulting gain or loss is reflected in other expense. The Company has determined the estimated life of assets to be as follows: 108 Table of Contents Laboratory equipment 5 years Computer equipment and purchased software 3 - 5 years Fixtures and furniture 7 years Leasehold improvements Shorter of lease term or useful life The Company capitalizes implementation costs associated with internal use cloud computing arrangements in alignment with ASC 350-40 internal-use software. Costs incurred in preliminary project stage and post implementation stage are expensed as incurred. Costs incurred during the application development stage of implementation are capitalized in other long-term assets on the consolidated balance sheets. Capitalized implementation costs from cloud computing arrangements are amortized over the term of the cloud-based service arrangement. California Institute for Regenerative Medicine (CIRM) Award Accounting for the CIRM award does not fall under ASC 606, Revenue from Contracts and Customers, as CIRM does not meet the definition of a customer. No income associated with the CIRM award will be recognized until it is confirmed with CIRM that the award does not require repayment. 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 consolidated statements of operations. The Company will not recognize a receivable of future awards until it is approved by CIRM. See Note 5 below for more details. Leases For its long-term operating leases, the Company recognizes a right-of-use asset and a lease liability on its consolidated balance sheets. The lease liability is determined as the present value of future lease payments using an estimated rate of interest that the Company would pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise. Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses on the consolidated statements of operations and comprehensive loss. Variable lease payments include lease operating expenses. The Company elected to exclude from its consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases) and elected to not separate lease components and non-lease components for its long-term real-estate leases. Equity Method Investments The Company uses the equity method of accounting for equity investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company's proportionate share of the net income or loss of these companies is included in other expenses, net in the consolidated statement of operations. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material purchase and sale transactions. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. Variable Interest Entities For entities in which the Company has variable interests, the Company focuses on identifying if one of the entities is the primary beneficiary through having the power to direct the activities that most significantly impact the variable interest 109 Table of Contents entity’s economic performance and having the obligation to absorb losses or the right to receive benefits from the variable interest entity. If the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity will be included in the Company’s consolidated financial statements. The Company did not consolidate any variable interest entities in any of the periods presented because the Company determined that it was not the primary beneficiary. Accrued Research and Development Costs The Company records accrued liabilities for estimated costs of research and development activities conducted by collaboration partners and third-party service providers, which include the conduct of preclinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued and other current liabilities on the consolidated balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its collaboration partners and third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Management makes an assessment of the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s historical operating performance and net losses, the net deferred tax assets have been fully offset by a valuation allowance. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of the provision for income taxes. Stock-Based Compensation The Company measures its stock-based awards granted to employees, consultants and directors based on the estimated fair values of the awards and recognizes the compensation over the requisite service period. The Company uses the Black-Scholes option-pricing model, the lattice option pricing model or Monte Carlo simulation to estimate the fair value of its stock-based awards. Stock-based compensation is recognized using the straight-line method. As the stock compensation expense is based on awards ultimately expected to vest, it is reduced by forfeitures. The Company accounts for forfeitures as they occur. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive shares of common stock. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Shares of common stock subject to repurchase are excluded from the weighted-average shares. Comprehensive Loss Comprehensive loss includes net loss and certain changes in stockholders’ equity that are excluded from net loss. For the years ended December 31, 2024 and 2023, this was comprised of unrealized gains and losses, net of tax, on the Company’s investments. 110 Table of Contents Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. The long-lived assets recoverability test is performed at the asset group level, i.e., the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If this test indicates that the carrying amount of the asset group is not recoverable, an impairment loss is measured as the amount by which the carrying amount of an asset group exceeds its fair value. Any impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the carrying amount of an individual asset shall not be reduced below its fair value. The Company recorded long-lived assets impairment losses of $ 15.7 million and $ 13.2 million for the years ended December 31, 2024 and 2023, respectively (see Note 5). Revenue Recognition The Company’s revenue has been generated through collaboration research and license agreements. The terms of these agreements may contain multiple deliverables which may include (i) grant of licenses, (ii) transfer of know-how, (iii) research and development activities, (iii) clinical manufacturing, and (iv) product supply. The payment terms of these agreements may include nonrefundable upfront fees, payments for research and development activities, payments based upon the achievement of certain milestones, royalty payments based on product sales derived from the collaboration, and payments for supplying product. The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (ASC 808) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of Topic 606, Revenue from Contracts with Customers (ASC 606). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606. For elements of those arrangements that the Company determines should be accounted for under ASC 606, the Company assesses which activities in the collaboration agreements are performance obligations that should be accounted for separately and determines the transaction price of the arrangement, which includes the assessment of the probability of achievement of future milestones and other potential consideration. A performance obligation represents a promise in a contract to transfer a distinct good or service to a customer, which represents a unit of accounting in accordance with ASC 606. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. A portion of the consideration should be allocated to each distinct performance obligation. The total consideration which the Company expects to collect in exchange for the Company’s products is an estimate and may be fixed or variable. 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 transaction price is re-evaluated, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The allocation of the transaction price is performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately. Revenue is recognized when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers. Funds received in advance are recorded as deferred revenue and are recognized as the related performance obligation is satisfied. Research and Development Expenses Research and development costs are expensed as incurred and consist of salaries and benefits, including associated stock-based compensation, and laboratory supplies and facility costs, as well as fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Research and development expenses also include costs incurred for internal and sponsored collaborative research and development activities. Costs associated with co-development activities performed under the various license and collaboration agreements are included in research and development expenses. 111 Table of Contents Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized and then expensed as the related goods are delivered or the services are performed. Note 2. Recent Accounting Guidance Recently Adopted Accounting Pronouncements 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 Company adopted this standard effective January 1, 2024 and applied the disclosure requirements retrospectively to all prior periods presented in the consolidated financial statements. Adoption of the new guidance had no significant impact on the Company's consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 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. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which requires new disclosures to disaggregate prescribed natural expenses underlying any income statement caption. ASU 2024-03 is effective for annual periods in fiscal years beginning after December 15, 2026, and interim periods thereafter. Early adoption is permitted. ASU 2024-03 applies on a prospective basis for periods beginning after the effective date. However, retrospective application to any or all prior periods presented is permitted. The Company is currently assessing the impact ASU 2024-03 will have on the consolidated financial statements and disclosures. Note 3. Fair Value Measurements The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company measures and reports its cash equivalents, restricted cash, and investments at fair value. Money market funds are measured at fair value on a recurring basis using quoted prices and are classified as Level 1. Investments are measured at fair value based on inputs other than quoted prices that are derived from observable market data and are classified as Level 2 inputs, except for investments in U.S. treasury securities which are classified as Level 1. There were no Level 3 assets or liabilities as of December 31, 2024 or 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 December 31, 2024 are presented in the following table: 112 Table of Contents December 31, 2024 Level 1 Level 2 Level 3 Fair Value (in thousands) Financial Assets: Money market funds ¹ $ 65,780 $ — $ — $ 65,780 Commercial Paper — 66,255 — 66,255 Corporate bonds — 82,725 — 82,725 U.S. treasury securities 85,728 — — 85,728 U.S. agency securities — 58,514 — 58,514 Asset-backed securities — 9,700 — 9,700 Total financial assets $ 151,508 $ 217,194 $ — $ 368,702 ¹ Included within cash and cash equivalents on the Company’s consolidated balance sheets 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 December 31, 2023 are presented in the following table: December 31, 2023 Level 1 Level 2 Level 3 Fair Value (in thousands) Financial Assets: Money market funds ¹ $ 78,536 $ — $ — $ 78,536 Corporate bonds — 97,166 — 97,166 U.S. treasury securities 229,516 — — 229,516 U.S. agency securities — 38,860 — 38,860 Total financial assets $ 308,052 $ 136,026 $ — $ 444,078 ¹ Included within cash and cash equivalents on the Company’s consolidated balance sheets The carrying amounts of accounts payable and accrued liabilities approximate their fair values due to their short-term maturities. The Company’s Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly. There were no transfers of assets between the fair value measurement levels during the years ended December 31, 2024 or 2023. Note 4. Investments The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of December 31, 2024 are presented in the following tables: 113 Table of Contents December 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Money market funds $ 65,780 $ — $ — $ 65,780 Commercial paper 66,269 19 ( 34 ) 66,254 Corporate bonds 82,716 53 ( 45 ) 82,724 U.S. treasury securities 85,765 54 ( 91 ) 85,728 U.S. agency securities 58,566 20 ( 70 ) 58,516 Asset-backed securities 9,695 5 — 9,700 Total cash equivalents and investments $ 368,791 $ 151 $ ( 240 ) $ 368,702 Classified as: Cash equivalents $ 70,771 Short-term investments 217,258 Long-term investments 80,673 Total cash equivalents, and investments $ 368,702 The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of December 31, 2023 are presented in the following tables: December 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Money market funds $ 78,536 $ — $ — $ 78,536 Corporate bonds 97,265 113 ( 212 ) 97,166 U.S. treasury securities 229,563 132 ( 179 ) 229,516 U.S. agency securities 39,225 — ( 365 ) 38,860 Total cash equivalents and investments $ 444,589 $ 245 $ ( 756 ) $ 444,078 Classified as: Cash equivalents $ 78,536 Short-term investments 365,542 Long-term investments — Total cash equivalents, and investments $ 444,078 The fair values of available-for-sale debt investments by contractual maturity as of December 31, 2024 and 2023 were as follows: December 31, 2024 2023 (in thousands) Due in 1 year or less $ 222,250 $ 365,542 Due in 1 - 2 years 70,972 — Due in 3 years 9,700 — Instruments not due at a single maturity date 65,780 78,536 Total cash equivalents and investments $ 368,702 $ 444,078 114 Table of Contents There were no significant realized losses on available-for-sale securities for the year ended December 31, 2024. Realized losses on available-for-sale securities for the year ended December 31, 2023 were $ 1.0 million. As of December 31, 2024 and 2023, 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 does not intend to sell these investments and it is more likely than not that the Company will not be required to sell the investment before recovery of its amortized cost basis. 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 December 31, 2024 and 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. The Company has made an accounting policy election not to recognize an allowance for credit losses for accrued interest receivable on available-for-sale securities. As of December 31, 2024 and 2023, the Company recognized $ 1.9 million and $ 1.7 million, respectively, of accrued interest receivable from available-for-sale securities within prepaid expenses and other current assets on the consolidated balance sheets. Note 5. Balance Sheet Components Property and Equipment, Net December 31, 2024 2023 (in thousands) Leasehold improvements $ 108,127 $ 108,621 Laboratory equipment 31,595 33,157 Computer equipment and purchased software 4,658 4,663 Furniture and fixtures 4,214 4,121 Total 148,594 150,562 Less: accumulated depreciation ( 62,538 ) ( 51,084 ) Total property and equipment, net $ 86,056 $ 99,478 Depreciation expense for the years ended December 31, 2024, and 2023 was $ 13.6 million, and $ 14.2 million, respectively. Disposals of property and equipment were $ 0.3 million and less than $ 0.1 million for the years ended December 31, 2024 and 2023, respectively. The Company reviews for indicators of impairment on a quarterly basis which includes the change in how its property is being used. During the year ended December 31, 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 and currently the Company is actively marketing the leased building for sublease. 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 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 performed discounted cash flow analysis to estimate the fair value of its right-of-use asset and leasehold improvements. The key inputs to this valuation were expected sublease rental income of $ 1.9 million through March 2032 and the risk-adjusted annual discount rate of 9.5 %. 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 $ 7.5 million. The Company recognized an aggregate long-lived asset impairment charge of $ 6.2 million on the right-of-use asset and leasehold improvements for the year ended December 31, 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 in January 2025, the Company executed two subleases for the majority of the leased building. 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 %. During the year ended December 31, 2024, the Company revised its valuation based on terms 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 115 Table of Contents 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 year ended December 31, 2024. Accrued Liabilities Accrued liabilities consist of the following: December 31, 2024 2023 (in thousands) Accrued compensation and related benefits $ 12,146 $ 12,665 Accrued research and development expenses 9,402 9,315 Accrued lease liability 7,509 6,775 Unvested shares liability — 532 Other 1,072 1,809 Total accrued and other current liabilities $ 30,129 $ 31,096 Accrued and Other Current Liabilities On January 4, 2024, the Company’s Board of Directors approved a reduction in the Company’s workforce of approximately 22 % of the Company’s employees in connection with the Company’s pipeline prioritization and clinical development strategy. The reduction in workforce was completed by June 30, 2024. During the year ended December 31, 2024, the Company paid approximately $ 3.0 million for severance and other employee benefits. As of December 31, 2024, less than $ 0.1 million of the severance and other employee benefits accrual was included in accrued and other current liabilities on the consolidated balance sheets. CIRM Award 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 TTM 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. In addition, the terms of the award include a co-funding requirement pursuant to which the Company is required to spend up to approximately $ 25.9 million of its own capital to fund the CIRM funded research project. The award was made in accordance with the CIRM Grants Administration Policy for Clinical Stage Projects which may require the award to be repaid by the Company. Under the terms of the CIRM award, the Company is obligated to pay royalties based on a low single digit royalty percentage on net sales of CIRM-funded product candidate. The maximum royalty that the Company may be required to pay to CIRM is equal to nine times the total amount awarded and paid to the Company. After completing the CIRM funded research project and at any time after the award period end date (but no later than the ten-year anniversary of the date of the award), the Company has the right, upon its election, to convert the award into a loan. The terms of conversion into a loan will be determined based on various factors and could result in 80 % to 100 % plus interest at 10 % per annum plus the Secured Overnight Financing Rate of the total award dependent upon the phase of clinical development of the product candidate at the time of the Company's election to be repaid to CIRM. No income associated with the CIRM award will be recognized until it is confirmed with CIRM that the award does not require repayment. Upon cash receipt, the CIRM award and accrued interest will be recognized as other long-term liabilities on the consolidated balance sheets. The Company will not recognize a receivable of future awards until it is approved by CIRM. The Company received $ 2.3 million from CIRM through December 31, 2024 and accounted for the proceeds as a liability within other long-term liabilities on the consolidated balance sheets. During the year ended December 31, 2024, the Company recorded interest expense of $ 0.2 million. As of December 31, 2024, $ 0.2 million of accrued interest was included in other long-term liabilities. In February 2025, the Company met an additional operational milestone and received an additional award of $ 3.4 million from CIRM. 116 Table of Contents Note 6. License and Collaboration Agreements Asset Contribution Agreement with Pfizer In April 2018, the Company entered into an Asset Contribution Agreement (the Pfizer Agreement) with Pfizer pursuant to which the Company acquired certain assets, including certain contracts and intellectual property for the development and administration of chimeric antigen receptor (CAR) T cells for the treatment of cancer. The Company is required to make milestone payments upon successful completion of regulatory and sales milestones on a target-by-target basis for the targets including CD19 and B-cell maturation antigen (BCMA), covered by the Pfizer Agreement. The aggregate potential milestone payments upon successful completion of various regulatory milestones in the United States and the European Union are $ 30.0 million or $ 60.0 million, depending on the target, with aggregate potential regulatory and development milestones of up to $ 840.0 million. The aggregate potential milestone payments upon reaching certain annual net sales thresholds in North America, Europe, Asia, Australia and Oceania (the Territory) for a certain number of targets covered by the Pfizer Agreement are $ 325.0 million per target. The sales milestones in the foregoing sentence are payable on a country-by-country basis until the last to expire of any Pfizer Royalty Term, as described below, for any product in such country in the Territory. In October 2019, the Territory was expanded to all countries in the world. No milestone or royalty payments were made in the years ended December 31, 2024 and 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. The Company’s royalty obligation with respect to a given product in a given country begins upon the first sale of such product in such country and ends on the later of (i) expiration of the last claim of any applicable patent or (ii) 12 years from the first sale of such product in such country. Research Collaboration and License Agreement with Cellectis As part of the Pfizer Agreement, Pfizer assigned to the Company a Research Collaboration and License Agreement (the Original Cellectis Agreement) with Cellectis S.A. (Cellectis). On March 8, 2019, the Company entered into a License Agreement (the Cellectis Agreement) with Cellectis. 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. 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. In addition, certain Cellectis intellectual property rights granted by Cellectis to the Company and to Servier pursuant to the Exclusive License and Collaboration Agreement by and between Servier and Pfizer, dated October 30, 2016, which Pfizer assigned to the Company in April 2018, will survive the termination of the Original Cellectis Agreement. Pursuant to the Cellectis Agreement, the Company granted Cellectis a non-exclusive, worldwide, royalty-free, perpetual and irrevocable license, with sublicensing rights under certain conditions, under certain of the Company's intellectual property, to make, use, sell, import and otherwise commercialize CAR T products directed at certain targets (the Cellectis Targets). The Cellectis Agreement provides for development and sales milestone payments by the Company of up to $ 185.0 million per product that is directed against an Allogene Target, with aggregate potential development and sales milestone payments totaling up to $ 2.8 billion. Cellectis is also eligible to receive tiered royalties on annual worldwide net sales of any products that are commercialized by the Company that contain or incorporate, are made using or are claimed or covered by, Cellectis intellectual property licensed to the Company under the Cellectis Agreement (the Allogene Products), at rates in the high single-digit percentages. Such royalties may be reduced, on a licensed product-by-licensed product and country-by-country basis, for generic entry and for payments due under licenses of third-party patents. Pursuant to the Cellectis Agreement, and subject to certain exceptions, the Company is required to indemnify Cellectis against all third-party claims related to the development, manufacturing, commercialization or use of any Allogene Product or arising out of the Company’s material breach of the representations, warranties or covenants set forth in the Cellectis Agreement, and Cellectis is required, subject to certain exceptions, to indemnify the Company against all third party claims related to the development, manufacturing, commercialization or use of CAR T products directed at Cellectis Targets or arising out of Cellectis’ material breach of the representations, warranties or covenants set forth in the Cellectis Agreement. 117 Table of Contents 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; 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. Depending on the Cellectis Target, the Company has a right of first refusal or right of first negotiation to purchase or license from Cellectis rights to develop and commercialize products against such Cellectis Targets. Under the Cellectis Agreement, the Company has certain diligence obligations to progress the development of CAR T product candidates and to commercialize one CAR T product per Allogene Target in one major market country where the Company has received regulatory approval. If the Company materially breaches any of its diligence obligations and fails to cure within 90 days, then with respect to certain targets, such target will cease to be an Allogene Target and instead will become a Cellectis Target. Unless earlier terminated in accordance with its terms, the Cellectis Agreement will expire on a product-by-product and country-by-country basis, upon expiration of all royalty payment obligations with respect to such licensed product in such country. The Company has the right to terminate the Cellectis Agreement at will upon 60 days’ prior written notice, either in its entirety or on a target-by-target basis. Either party may terminate the Cellectis Agreement, in its entirety or on a target-by-target basis, upon 90 days’ prior written notice in the event of the other party’s uncured material breach. The Cellectis Agreement may also be terminated by the Company upon written notice at any time in the event that Cellectis becomes bankrupt or insolvent or upon written notice within 60 days of a consummation of a change of control of Cellectis. All costs the Company incurred in connection with this agreement were recognized as research and development expenses in the consolidated statement of operations. For the years ended December 31, 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. In October 2019, the Company agreed to waive its rights to the one additional target. Under the Original Servier Agreement, the Company has an exclusive license to develop, manufacture and commercialize licensed products directed against CD19, including UCART19, ALLO-501 and cemacabtagene ansegedleucel (cema-cel, previously ALLO-501A) (collectively, CD19 Products) in the field of anti-tumor adoptive immunotherapy in the United States, with an exclusive option to obtain the same rights for additional product candidates in the United States and, if Servier does not elect to pursue development or commercialization of those product candidates in certain markets outside of the United States pursuant to its license, outside of the United States as well. The Company is not required to make any additional payments to Servier to exercise an option. 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 (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. The Company was also granted an option to further extend its licensed territory to include China and Japan upon the objective showing of sufficient resources to develop licensed products in those countries, which could be met through the Company entering into a strategic partnership covering those countries. Additionally, the Company agreed to waive certain of its rights under the Original Servier Agreement to elect a conversion of its license to the CD19 Products to a worldwide license. 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 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 118 Table of Contents (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. 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. 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 obligations to Cellectis. 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. The Company transferred € 20.0 million into an escrow account in connection with a potential future milestone payment, which is included in the remaining € 60.0 million in milestone payments referenced above for the initial indication for cema-cel. Such milestone payment will be triggered, if at all, upon the occurrence of one of these events: (1) the Company doses the first subject in its first phase 3 clinical study for a CD19 CAR T product that is a licensed product under the Servier Agreement, (2) the Company submits a phase 2 clinical study for a licensed product to the U.S. Food and Drug Administration or the European Medicines Agency, and such phase 2 clinical study is accepted for regulatory approval as a pivotal study, or (3) a final and definitive decision of a tribunal or court finding that under the Servier-Cellectis Agreement the milestone has occurred and the € 20.0 million payment is due to Cellectis. As of December 31, 2024, the Company recorded € 20.0 million as deposit placed in escrow in the consolidated balance sheets. The Company is obligated to pay to Servier royalties on annual net sales of any licensed products that are commercialized by the Company that are directed at CD19. Such royalties include tiered royalties on annual net sales in the United States and a flat royalty on annual net sales in territories outside the United States. The United States royalty rates are in a range from the low tens to the mid teen percentages, and the ex-U.S. royalty rate is 10 %. Such royalties may be reduced for interchangeable drug entry, expiration of patent rights and amounts paid pursuant to licenses of third-party patents. This royalty obligation begins upon the first commercial sale of such product in a given country and ends after the later of a defined number of years or the expiration of the last to expire licensed patent covering the product in such country. The net effect of the Servier Amendment is that the Company’s royalty rate in the United States for the first half of the first tier of net sales was increased by a low single digit percentage as compared to the Original Servier Agreement. 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. 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. The parties agreed that co-development performed by the Company and Servier under the Servier Agreement, including all development performed by Servier and for product candidates that the Company was co-developing with Servier (for which specified development costs were split under the Original Servier Agreement with the Company responsible for 60 % and Servier responsible for 40 %), including the CD19 Products, ceased as of December 15, 2022, and that all development costs incurred by either party after that date shall be borne solely by such party. The parties agreed to waive any and all outstanding claims that were asserted relating to alleged violations of the Original Servier Agreement, including all claims that such party was entitled to various payments or refunds from the other party under the Original Servier Agreement, and any and all claims that either party now has or may have in the future related to such outstanding claims, and mutual releases with respect to such claims were granted. The Company will recognize expense related to the revised milestones and royalties when payments become probable. There was no gain or loss related to the expanded license territories and ceased Servier co-development. For the year ended December 31, 2024 and 2023, the Company recorded $ 5.4 million and zero in research and development expenses upon achievement of a regulatory milestone, respectively. 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 119 Table of Contents directed at certain CAR targets for initial application in non-Hodgkin lymphoma, acute lymphoblastic leukemia and multiple myeloma. In addition, Notch has granted Allogene an option to add certain specified targets to its exclusive license in exchange for an agreed per-target option fee. The Notch Agreement includes a research collaboration to conduct research and pre-clinical development activities to generate engineered cells directed to Allogene’s exclusive targets, which will be conducted in accordance with an agreed research plan and budget under the oversight of a joint development committee. Allogene will reimburse Notch’s costs incurred in accordance with such plan and budget. Currently, there is no outstanding research plan or budget under the Notch Agreement. The term of the research collaboration will expire upon the earlier of (i) the fifth anniversary of the date of the Notch Agreement, (ii) at Allogene’s election, following the joint development committee’s determination that for each exclusive target, Notch has met certain success criteria, or (iii) the joint development committee’s determination that the research collaboration cannot be reasonably pursued against any exclusive target due to technical infeasibility or safety issues. In connection with the execution of the Notch Agreement, Allogene made an upfront payment to Notch of $ 10.0 million in return for a license to access Notch's technology in order to conduct research pursuant to the Notch Agreement. In addition, Allogene made a $ 5.0 million investment in Notch’s series seed convertible preferred stock, resulting in Allogene having a 25 % ownership interest in Notch’s outstanding capital stock on a fully diluted basis immediately following the investment. In connection with this investment, an Allogene representative served on the Notch Board of Directors. In February 2021, the Company made an additional $ 15.9 million investment in Notch's Series A preferred stock. In October 2021, the Company made an additional $ 1.8 million investment in Notch's common stock. Immediately following this transaction, the Company's share in Notch was 23 % on a voting interest basis. On May 17, 2024, Notch closed a Series B preferred stock financing with a combination of new and existing investors (Notch Series B Financing). The Company did not participate in the Notch Series B Financing but received Series B preferred stock as part of its anti-dilution rights. Immediately following this transaction, the Company’s share in Notch was 13 %. In connection with the Notch Series B Financing, the Company waived its right to appoint one member of the Notch board of directors, but retained board observation rights. The Company no longer has any significant influence over Notch and as a result of the decrease in ownership and influence, accounted for its investment in Notch as an equity investment measured at cost less any impairment effective May 17, 2024. Under the Notch Agreement, Notch will be eligible to receive up to $ 7.3 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. 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. Following such expiration, Allogene’s license with respect to such product and country shall be perpetual, irrevocable, fully paid up and royalty-free. Allogene may terminate the Collaboration Agreement in whole or on a product-by-product basis upon ninety days ’ prior written notice to Notch. Either party may also terminate the Collaboration Agreement with written notice upon material breach by the other party, if such breach has not been cured within a defined period of receiving such notice, or in the event of the other party’s insolvency. On January 25, 2024, the Company entered into an Amended and Restated Collaboration and License Agreement (the Amended Notch Agreement) with Notch. The Amended Notch Agreement amends and restates the Notch Agreement. Under the Amended Notch Agreement, the Company has relinquished its exclusive rights to all original CAR targets (the Released Targets) except for one CAR target, and has agreed to limit its option right to only one additional CAR target. If the option is exercised, the Company will have a minimum funding commitment for the overall development program. If Notch subsequently out-licenses any of the Released Targets (whether through an out-license, partnership, sale, or other transaction), the Company will be entitled to receive a percentage of upfront and/or milestone payments associated therewith up to a set cap of $ 30.0 million, and will be entitled to a low, single-digit royalty on net sales of products containing a Released Target. 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 December 31, 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 120 Table of Contents the royalties the Company is obliged to pay to Notch under our Notch intellectual property license should the Company commercialize a licensed product. In January 2025, Notch announced that securing additional investment and/or additional partners to take their research forward remains challenging, and therefore they significantly reduced their workforce to preserve cash and provide the time to explore alternate paths forward. For the years ended December 31, 2024 and 2023, the Company recorded zero and $ 1.8 million, respectively, in collaboration costs as research and development expenses. No milestones were achieved for the years ended December 31, 2024 and 2023. For the year ended December 31, 2024, the Company recorded $ 2.0 million in other expenses, net as impairment loss on its equity investment in Notch. For the year ended December 31, 2023, the Company recorded $ 3.0 million in other expenses, net as impairment loss on its equity method investment in Notch. Strategic Alliance with The University of Texas MD Anderson Cancer Center On October 6, 2020, the Company entered into a strategic five-year collaboration agreement with The University of Texas MD Anderson Cancer Center (MD Anderson) for the preclinical and clinical investigation of allogeneic CAR T cell product candidates. The Company and MD Anderson are collaborating on the design and conduct of preclinical and clinical studies with oversight from a joint steering committee. Under the terms of the agreement, the Company has committed up to $ 15.0 million of funding for the duration of the agreement. Payment of this funding is contingent on mutual agreement to study orders in order for any study to be included under the alliance. 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 is committed to make further payments to MD Anderson each year upon the anniversary of the agreement effective date through the duration of the agreement term, however, if MD Anderson has sufficient funds to continue the agreed-upon research projects, the Company may defer the additional payment to a later date. These costs are expensed to research and development as MD Anderson renders the services under the strategic alliance. The agreement may be terminated by either party for material breach by the other party. Individual studies may be terminated for, among other things, material breach, health and safety concerns or where the institutional review board, the review board at the clinical site with oversight of the clinical study, requests termination of any study. Where any legal or regulatory authorization is finally withdrawn or terminated, the relevant study will also terminate automatically. For the years ended December 31, 2024 and 2023, the Company recorded $ 1.6 million and $ 0.9 million, respectively, in collaboration costs under this agreement as research and development expenses. Investment in and License Agreement with Overland Therapeutics, Inc. Allogene Overland, later renamed Overland Therapeutics Inc. (Overland Therapeutics), was initially established as a joint venture by the Company and Overland Pharmaceuticals (CY) Inc. (Overland) 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- 121 Table of Contents 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. (Overland US). Overland US includes certain research and development, clinical, and general and administrative staff, as well as select cell therapy assets, including its lead program, OL-101, an autologous GPRC5D-BCMA bispecific dual targeting CAR T for refractory multiple myeloma. Upon completion of the closing of the share exchange, Overland US became a wholly owned subsidiary of Allogene Overland, Overland’s ownership increased to 82 % and the Company’s ownership decreased to 18 %. Under a separate agreement between Overland and HH BioPharma Holdings Ltd. (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). 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. In order to determine the transaction price, the Company evaluated all the consideration to be received over the duration of the contract. Fixed consideration exists in the form of the upfront payment and Seed Preferred Shares in Overland Therapeutics. 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. Milestone fees were constrained and not included in the transaction price due to the uncertainties of research and development. The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company estimated the fair value of the shares of Seed Preferred Stock at $ 79.0 million, using probability adjusted future cash infusions based on the upfront and certain quarterly cash payments of $ 117.0 million committed by Overland. The probability for the future quarterly cash payments of 65 % was developed based on consideration of the Company's expectations for future cash infusions from Overland and was applied on a cumulative basis for each quarterly payment. The present value of the future quarterly cash payments was estimated using 11.9 % annual discount rate. The fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement. 122 Table of Contents The Company determined that the initial transaction price consists of the upfront payment of $ 40.0 million and noncash consideration of $ 79.0 million received in the form of the shares of Seed Preferred Stock. The allocation of the transaction price is performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately . The initial transaction price of $ 119.0 million was allocated as follows: (i) $ 114.0 million to the license of intellectual property and know-how, which was recognized upon grant of license and delivery of know-how in the consolidated financial statements for the year ended December 31, 2021 when the know-how was delivered; (ii) $ 2.3 million to the manufacturing license, related know-how and support, which will be recognized as services are delivered; (iii) $ 2.1 million to the know-how developed in future periods, which will be recognized as services are delivered, and (iv) $ 0.6 million to participation in the joint steering committee, which will be recognized over time as the services are delivered. Funds received in advance are recorded as deferred revenue and will be recognized as the performance obligations are satisfied. 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 December 31, 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 December 31, 2024 and 2023. The Company does not have the power to direct the activities which most significantly affect Overland Therapeutics’ economic performance. Accordingly, the Company did not consolidate Overland Therapeutics because the Company determined that it was not the primary beneficiary. After the Organizational Restructuring, the Company has 20 % voting rights of Overland Therapeutics’ board of directors. The Company concluded that it has significant influence over Overland Therapeutics and continued to account for its investment in Overland Therapeutics as an equity method investment. 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 was zero as of December 31, 2024 and 2023 (see Note 8). For the years ended December 31, 2024 and 2023, the Company recognized less than $ 0.1 million of collaboration revenue. Collaboration and License Agreement with Antion On January 5, 2022, the Company entered into an exclusive collaboration and global license agreement (Antion Collaboration and License Agreement) with Antion Biosciences SA (Antion) for Antion’s miRNA technology (miCAR), to advance multiplex gene silencing as an additional tool to develop next generation allogeneic CAR T products. Pursuant to the agreement, Antion will exclusively collaborate with the Company on oncology products for a defined period. The Company will also have exclusive worldwide rights to commercialize products incorporating Antion technology developed during the collaboration. The Antion Collaboration and License Agreement includes an exclusive research collaboration to conduct research and development of the use of Antion’s proprietary technologies to produce certain products for a defined period, which will be conducted in accordance with an agreed research plan and budget under the oversight of a joint steering committee. The Company will reimburse Antion's costs incurred in accordance with such plan and budget. In connection with the execution of the Antion Collaboration and License Agreement, the Company made an upfront payment to Antion of $ 3.5 million in return for a license to access Antion's technology in order to conduct research pursuant to the agreement. The upfront payment was fully recognized as research and development expense as the license had no foreseeable alternative future use. In addition, the Company made a $ 3.0 million investment in Antion's preferred stock. The Company accounts for its investment in Antion's preferred stock as an equity investment measured at cost less any impairment. In connection with this investment, a Company representative was appointed to Antion’s Board of Directors. In July 2023, the Company and Antion entered into an amendment to the Antion Collaboration and License Agreement. Under the terms of this amendment, Antion's exclusivity obligation relating to the collaboration was terminated; however, Antion agreed to certain restrictions on its ability to pursue products directed against specific targets. Also, in lieu of the Company's prior obligation to make a $ 3.0 million investment in Antion following the completion of certain milestones, the Company agreed to make a $ 2.0 million investment in Antion's preferred stock and acquired warrants to purchase an additional $ 3.0 million of Antion's preferred stock. Under the Antion Collaboration and License Agreement, Antion will be eligible to receive up to $ 35.3 million for four products upon achievement of certain development and regulatory milestones. For each additional product, Antion will be 123 Table of Contents eligible to receive $ 2.0 million upon achievement of a regulatory milestone. 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 years ended December 31, 2024 and 2023, the Company recorded zero and $ 1.8 million, respectively, in research and development expenses related to the upfront payment and collaboration costs. For the years ended December 31, 2024 and 2023, the Company recorded zero and $ 0.4 million, respectively, in research and development expenses related to the achievement of a milestone under the Antion Collaboration and License Agreement. For the years ended December 31, 2024 and 2023, the Company recorded zero and $ 4.0 million, respectively, in other expenses, net as impairment loss on its equity investment in Antion. Strategic Collaboration Agreement with Foresight Diagnostics On January 3, 2024, the Company entered into a Strategic Collaboration Agreement with Foresight Diagnostics, Inc. (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. 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. Under the Foresight Agreement, 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. On February 19, 2025, the Company entered into an Amended and Restated Strategic Collaboration Agreement with Foresight Diagnostics which expands our collaboration to include the development of Foresight Diagnostics’ MRD assay as a companion diagnostic for use with cema-cel as part of a possible EU and/or UK clinical development program, and as part of an expansion of ALPHA3 to Canadian and Australian clinical trial sites in support of our US clinical development program. In total, we have agreed to fund approximately $ 37.3 million in MRD assay development costs, milestone payments for U.S., and certain international regulatory submissions and assay utilization costs to process clinical samples, all in addition to the financial commitments under the Foresight Agreement. For the year ended December 31, 2024, the Company recorded $ 3.5 million of research and development expenses related to clinical trials start readiness milestones. Note 7. Commitments and Contingencies Leases In August 2018, the Company entered into an operating lease agreement (HQ Lease) for office and laboratory space which consists of approximately 68,000 square feet located in South San Francisco, California. The lease term was 127 months beginning August 2018 through February 2029 with an option to extend the term for seven years which was not reasonably assured of exercise. The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances through December 31, 2020. The rent payments began on March 1, 2019 after an abatement period. In December 2021, the Company amended its lease agreement to lease an additional 47,566 square feet of office and laboratory space in South San Francisco, California, as part of the same building as the Company’s current headquarters. The lease term commenced in April 2022 and is for a period of 120 months. The rent payments for the expansion premises began in August 2022 after an abatement period. The lease term for the existing premises was also extended and the lease for both the existing and expansion premises will expire on March 31, 2032 with an option to extend the term for eight years which is not reasonably assured of exercise. In October 2018, the Company entered into an operating lease agreement for office and laboratory space which consists of 14,943 square feet located in South San Francisco, California. The lease term was 124 months beginning November 2018 through February 2029, with an option to extend the term for another seven years which was not reasonably assured of exercise. The Company has made certain tenant improvements, including the upgrading of current office and laboratory space with a lease incentive allowance of $ 0.8 million. Rent payments began in November 2018. In December 2021, the Company amended its lease agreement to extend the term of the lease to be co-terminus with the HQ Lease. The lease term will expire on March 31, 2032 with an option to extend the term for eight years which is not reasonably assured of exercise. 124 Table of Contents In February 2019, the Company entered into a lease agreement for approximately 118,000 square feet of space to develop a cell therapy manufacturing facility in Newark, California. The lease term is 188 months and began in November 2020. Upon certain conditions, the Company has two ten-year options to extend the lease, both of which are not reasonably assured of exercise. The Company has received $ 3.0 million of tenant improvement allowances for costs related to the design and construction of certain Company improvements. In February 2023, the Company entered into a sublease with Bellco Capital Advisors Inc. (Bellco) for 2,218 square feet of office space in Los Angeles, California. The sublease term is 115 months, subject to certain early termination rights. The sublease commenced on January 1, 2024. The Company maintains letters of credit for the benefit of landlords which is disclosed as restricted cash in the consolidated balance sheets. Restricted cash related to letters of credit due to landlords was $ 6.0 million as of December 31, 2024 and 2023. The balance sheet classification of our lease liabilities were as follows (in thousands): December 31, 2024 December 31, 2023 Operating lease liabilities Current portion included in accrued and other current liabilities $ 7,509 $ 6,775 Long-term portion of lease liabilities 83,247 88,346 Total operating lease liabilities $ 90,756 $ 95,121 The components of lease costs for operating leases, which were recognized in operating expenses, were as follows (in thousands): Year Ended December 31, 2024 2023 Operating lease cost $ 11,468 $ 12,711 Variable lease cost 3,105 3,102 Total lease costs $ 14,573 $ 15,813 Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2024 was $ 12.5 million and was included in net cash used in operating activities in the Company's consolidated statements of cash flows. The undiscounted future non-cancellable lease payments under the Company's operating leases as of December 31, 2024 is as follows: Year ending December 31: (in thousands) 2025 $ 12,921 2026 13,164 2027 13,613 2028 14,078 2029 and thereafter 65,390 Total undiscounted lease payments 119,166 Less: Present value adjustment ( 28,410 ) Total $ 90,756 Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company uses its estimated incremental borrowing rate. The weighted average discount rate used to determine the operating lease liability was 6.26 %. As of December 31, 2024, the weighted average remaining lease term for our operating leases is 8.11 years. The Company did no t incur any significant rent expense for short-term leases for the years ended December 31, 2024 and 2023, respectively. Certain lease agreements require the Company to return designated areas of leased space to its original condition upon termination of the lease agreement. At the inception of such leases, the Company records an asset retirement obligation and a 125 Table of Contents corresponding capital asset in an amount equal to the estimated fair value of the obligation. To determine the fair value of the obligation, the Company estimates the cost for a third-party to perform the restoration work. In subsequent periods, for each asset retirement obligation, the Company records interest expense to accrete the asset retirement obligation liability to full value and depreciate each capitalized asset retirement obligation asset, both over the term of the associated lease agreement. Asset retirement obligations were $ 0.7 million and $ 0.6 million as of December 31, 2024 and 2023, respectively. Other Commitments Solar Power Purchase and Energy Services Agreement In July 2020, the Company entered into a Solar Power Purchase and Energy Services Agreement for the installation and operation of a solar photovoltaic generating system and battery energy storage system at the Company's cell therapy manufacturing facility in Newark, California. The agreement has a term of 20 years and commenced in September 2022. The Company is obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term. Termination of the agreement by the Company will result in a termination payment due of approximately $ 4.3 million. In connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $ 4.3 million which is recorded as restricted cash in the consolidated balance sheets as of December 31, 2024 and 2023. License Agreements for Intellectual Property The Company has entered into certain license agreements for intellectual property which is used as part of its development and manufacturing processes. Each of these respective agreements are generally cancellable by the Company. 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 December 31, 2024. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown, because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification In accordance with the Company’s amended and restated certificate of incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving in such capacity. There have been no claims to date, and the Company has a directors and officers liability insurance policy that may enable it to recover a portion of any amounts paid for future claims. Note 8. Equity Investments and Equity Method Investments Notch Therapeutics In conjunction with the execution of the Notch Agreement (see Note 6), the Company also entered into a Share Purchase Agreement with the Company acquiring shares of Notch’s Series Seed convertible preferred stock for a total investment cost of $ 5.1 million which includes transaction costs of $ 0.1 million, resulting in a 25 % ownership interest in Notch. In February 2021, the Company made a $ 15.9 million investment in Notch's Series A preferred stock. Immediately following this transaction, the Company's share in Notch was 20.7 % on a voting interest basis. In October 2021, the Company made an additional $ 1.8 million investment in Notch's common stock. Immediately following this transaction, the Company's share in Notch was 23.0 % on a voting interest basis. On May 17, 2024, Notch closed the Notch Series B Financing which caused the Company’s share in Notch to decrease to 13 % immediately following this transaction. 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 December 31, 2024 was zero . 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 year to date period through May 17, 2024, the Company 126 Table of Contents recognized its share of Notch’s net loss of $ 1.7 million under the other expenses, net caption within the consolidated statements of operations. For the year ended December 31, 2023, the Company recognized its share of Notch’s net loss of $ 6.2 million under the other expenses, net caption within the consolidated statements of operations. As of December 31, 2024, the Company's equity investment in Notch was categorized as Level 3 within the fair value hierarchy. During the years ended December 31, 2024 and 2023, the Company recognized $ 2.0 million and $ 3.0 million, respectively, of impairment loss under the other expenses, net caption within the consolidated statements of operations. Overland Therapeutics, Inc. In conjunction with the execution of the License Agreement with Allogene Overland (see Note 6), the Company also entered into the Share Purchase Agreement and a Shareholders’ Agreement with the joint venture company acquiring shares of Allogene Overland’s Seed Preferred Shares representing a 49 % ownership interest in exchange for entering into a License Agreement. Upon completion of the Organizational Restructuring, Overland’s ownership in Allogene Overland increased to 82 % and the Company’s ownership decreased to 18 %. 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 December 31, 2024 and 2023 was zero and the Company accounted for the investment using the equity method of accounting. For the year ended December 31, 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 expenses, net caption within the consolidated statement of operations. During the year ended December 31, 2023, the Company recognized its share of Overland Therapeutics' net loss of $ 4.5 million under the other expenses, net caption within the consolidated statement of operations. Note 9. Stockholders’ Equity Preferred Stock Pursuant to the Amended and Restated Certificate of Incorporation filed on October 15, 2018, as amended, the Company is authorized to issue a total of 10,000,000 shares of preferred stock, of which no shares were issued and outstanding at December 31, 2024 and 2023. Common Stock Pursuant to the Certificate of Amendment of Amended and Restated Certificate of Incorporation filed on June 17, 2022, the Company is authorized to issue a total of 400,000,000 shares of common stock, of which 212,210,597 and 168,642,238 shares were issued and outstanding at December 31, 2024 and 2023, respectively. Common stockholders are entitled to dividends if and when declared by the Company’s Board of Directors subject to the prior rights of the preferred stockholders. As of December 31, 2024 and 2023, no dividends on common stock had been declared by the Company’s Board of Directors. Note 10. Stock-Based Compensation 2018 Equity Incentive Plan In June 2018, the Company adopted its 2018 Equity Incentive Plan (Prior 2018 Plan). The Prior 2018 Plan provided for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Company’s Board of Directors and consultants of the Company under terms and provisions established by the Company’s Board of Directors. In September 2018, the Board of Directors adopted a new amended and restated 2018 Equity Incentive Plan as a successor to and continuation of the Prior 2018 Plan, which became effective in October 2018 (the 2018 Plan), which authorized additional shares for issuance and provided for an automatic annual increase to the number of shares issuable under the 2018 Plan by an amount equal to 5 % of the total number of shares of common stock outstanding on December 31 st of the preceding calendar year. The term of any stock option granted under the 2018 Plan cannot exceed 10 years. The Company generally grants stock-based awards with service conditions only. Options granted typically vest over a four-year period but may be granted with different vesting terms. Restricted Stock Units granted typically vest annually over a four-year period but may be granted with different vesting terms. Options shall not have an exercise price less than 100 % of the fair market value of the Company’s common stock on the grant date. If the individual possesses more than 10 % of the combined voting power of all classes of stock of the Company, the exercise price 127 Table of Contents shall not be less than 110 % of the fair market value of a common share of stock on the date of grant. This requirement is applicable to incentive stock options only. As of December 31, 2024 and 2023, there were 8,838,676 and 6,468,650 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards. Stock Option Exchange Program On June 21, 2022, the Company commenced an offer to exchange certain eligible options held by eligible employees of the Company for new options (the Exchange Offer). The Exchange Offer expired on July 19, 2022. Pursuant to the Exchange Offer, 199 eligible holders elected to exchange, and the Company accepted for cancellation, eligible options to purchase an aggregate of 3,666,600 shares of the Company’s common stock, representing approximately 93.5 % of the total shares of common stock underlying the eligible options. On July 19, 2022, immediately following the expiration of the Exchange Offer, the Company granted new options to purchase 3,666,600 shares of common stock, pursuant to the terms of the Exchange Offer and the 2018 Plan. The exercise price of the new options granted pursuant to the Exchange Offer was $ 13.31 per share, which was the closing price of the common stock on the Nasdaq Global Select Market on the grant date of the new options. The new options are subject to a new three-year vesting schedule, vesting in equal annual installments over the vesting term. Each new option has a maximum term of seven years . The exchange of stock options was treated as a modification for accounting purposes. The incremental expense of $ 5.2 million for the modified options was calculated using a lattice option pricing model. The incremental expense and the unamortized expense remaining on the exchanged options as of the modification date are being recognized over the new three-year service period. Stock Option Activity The following summarizes option activity under the 2018 Plan: Outstanding Options Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contract Term Aggregate Intrinsic Value (in years) (in thousands) Balance, December 31, 2023 21,812,946 $ 9.93 7.53 $ 662 Options granted 6,211,389 3.08 8.69 Options exercised ( 357,993 ) 2.27 $ 597 Options forfeited ( 3,481,458 ) 10.93 Balance, December 31, 2024 24,184,884 $ 8.14 7.53 $ 1 Exercisable, December 31, 2024 17,673,060 $ 9.63 7.11 $ — Vested and expected to vest, December 31, 2024 24,184,884 $ 8.14 7.53 $ — The aggregate intrinsic values of options exercised, 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 December 31, 2024. The aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 was $ 0.6 million and $ 2.3 million, respectively. During the years ended December 31, 2024 and 2023, the estimated weighted-average grant-date fair value of employee options granted was $ 2.05 per share and $ 3.33 per share, respectively. As of December 31, 2024 and 2023, there was $ 35.5 million and $ 58.1 million, respectively, of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.85 years and 2.42 years, respectively. 128 Table of Contents 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: Year Ended December 31, 2024 2023 Fair value of common stock $ 1.40 - $ 3.32 $ 2.72 - $ 7.23 Expected term in years 5.02 - 6.25 5.27 - 6.08 Expected volatility 72.85 % - 74.09 % 73.18 % - 74.10 % Expected risk-free interest rate 3.42 % - 4.32 % 3.45 % - 4.61 % Expected dividend 0 % 0 % The Black-Scholes option-pricing model and the lattice option pricing model require the use of subjective assumptions which determine the fair value of stock-based awards. These assumptions include: Fair value of common stock — For all grants subsequent to the Company’s IPO in October 2018, the fair value of common stock was determined by taking the closing price per share of common stock per Nasdaq. Expected term — The expected term represents the period that stock-based awards are expected to be outstanding. The expected term for option grants is determined using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the stock-based awards. Expected volatility — Prior to November 2024, the Company used an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future stock price trends as the Company does not have sufficient trading history for its common stock. For grants subsequent to October 2024, the Company uses an average historical stock price volatility of its common stock as it accumulated sufficient historical stock price data. Risk-free interest rate —The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Expected dividend —The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero . Expected exercise barrier - The modified options are assumed to be exercised upon vesting and when the ratio of stock market price to exercise price reaches 2.57 , or expiration, whichever is earlier. Restricted Stock Unit Activity The following summarizes restricted stock unit activity under the 2018 Plan: Outstanding Restricted Stock Units Restricted Stock Units Weighted- Average Grant Date Fair Value per Share Weighted Average Remaining Vesting Life Aggregate Intrinsic Value (in years) (in thousands) Unvested December 31, 2023 12,180,471 $ 6.68 2.00 $ 39,099 Granted 5,625,325 3.94 1.24 Vested ( 2,168,832 ) 9.48 Forfeited ( 2,293,171 ) 7.82 Unvested December 31, 2024 13,343,793 $ 4.87 1.58 $ 28,422 Vested and expected to vest, December 31, 2024 13,343,793 $ 4.87 1.58 $ 28,422 For the year ended December 31, 2024, the Company granted 35,000 performance-based restricted stock units to certain executive officers and other employees pursuant to the 2018 Plan. These awards are subject to the holders' continuous 129 Table of Contents service to the Company through each applicable vesting event. Through December 31, 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 in the year ended December 31, 2024. The Company recognized $ 2.4 million and $ 2.2 million in stock-based compensation expense related to the restricted units with a market condition for the years ended December 31, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023, total fair value of vested restricted stock units, performance based restricted stock units and restricted stock units with a market condition as of their grant dates was $ 20.6 million, and $ 33.3 million, respectively. As of December 31, 2024 and 2023, there was $ 33.7 million and $ 50.7 million, respectively, of unrecognized stock-based compensation which is expected to be recognized over a weighted average period of 2.10 years and 2.36 years, respectively. Employee Stock Purchase Plan In October 2018, the stockholders approved the 2018 Employee Stock Purchase Plan (ESPP), which initially reserved 1,160,000 shares of the Company's common stock for employee purchases under terms and provisions established by the Board of Directors. Effective January 1, 2024 and 2023, the number of shares authorized under the ESPP for employee purchases increased by 1,686,422 and 1,444,383 shares, respectively. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. Under the current offering adopted pursuant to the ESPP, each offering period is approximately 24 months, which is generally divided into four purchase periods of approximately six months . Employees are eligible to participate if they are employed by the Company. Under the ESPP, employees may purchase common stock through payroll deductions at a price equal to 85 % of the lower of the fair market value of common stock on the first trading day of each offering period or on the purchase date. The ESPP provides for consecutive, overlapping 24 -month offering periods. The offering periods are scheduled to start on the first trading day on or after March 16 or September 16 of each year, except for the first offering period which commenced on October 11, 2018, the first trading day after the effective date of the Company’s registration statement. Contributions under the ESPP are limited to a maximum of 15 % of an employee’s eligible compensation. The fair values of the rights granted under the ESPP were calculated using the following assumptions: Year ended December 31, 2024 2023 Expected term (in years) 0.50 – 2.00 0.50 – 2.00 Volatility 76.16 % – 88.69 % 67.32 % – 85.05 % Risk-free interest rate 3.49 % – 5.25 % 4.05 % – 5.35 % Dividend yield 0 % 0 % Stock-based compensation expense The following table presents stock-based compensation expense by award type that was recorded as research development and general and administrative expense in its consolidated statements of operations and comprehensive loss: Year Ended December 31, 2024 2023 Stock options $ 27,817 $ 34,350 Restricted stock units, performance based restricted stock units and restricted stock units with a market condition 21,997 28,497 Employee stock purchase plan 1,929 3,104 Total stock-based compensation expense $ 51,743 $ 65,951 Note 11. Related Party Transactions Collaboration Revenue and Equity Method Investment 130 Table of Contents In December 2020, the Company entered into the License Agreement with Overland Therapeutics, a corporate joint venture entity and related party (see Note 6). The License Agreement was subsequently assigned to a wholly owned subsidiary of Allogene Overland, Allogene Overland HK. On April 1, 2022, Allogene Overland HK assigned the License Agreement to Allogene Overland Biopharm (PRC) Co., Limited. On May 24, 2024, the License Agreement was amended. Consulting Agreements In June 2018, the Company entered into a services agreement with Two River Consulting LLC (Two River) a firm affiliated with the Company’s President and Chief Executive Officer, the Company’s Executive Chair of the board of directors, and a director of the Company to provide various managerial, clinical development, administrative, accounting and financial services to the Company. In December 2023, the service agreement between the Company and Two River was terminated. The cost incurred for services provided under this agreement was $ 0.3 million for the year ended December 31, 2023. In August 2018, the Company entered into a consulting agreement with Bellco Capital LLC (Bellco). Pursuant to the consulting agreement, Bellco provides certain services for the Company, which are performed by Dr. Belldegrun, the Company's executive chair, and inc lude without limitation, providing advice and analysis with respect to the Company’s business, business strategy and potential opportunities in the field of allogeneic CAR T cell therapy and any other aspect of the CAR T cell therapy business as the Company may agree. In consideration for these services, the Company paid Bellco $ 38,583 per month in arrears commencing January 2021 and $ 40,217 per month in arrears commencing January 2022. The Company may also, at its discretion, pay Bellco an annual performance award in an amount up to 60 % of the aggregate compensation payable to Bellco in a calendar year. The Company also reimburses Bellco 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 $ 0.7 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively. As of both December 31, 2024 and 2023, amount due to Bellco of $ 0.2 million was recorded in accrued and other current liabilities in the accompanying consolidated balance sheets. Sublease Agreements In December 2018, the Company entered into a sublease with Bellco Capital LLC for 1,293 square feet of office space in Los Angeles, California for a three year term. On April 1, 2020, Bellco assumed all rights, title, interests and obligations under the sublease from Bellco Capital LLC. In November 2021, the sublease was extended to June 30, 2025. The sublease was amended, effective in July 2022, to move to a nearby location, with office space of 737 square feet. The Company’s executive chairman, Arie Belldegrun, M.D., is a trustee of the Belldegrun Family Trust, which controls Bellco. In 2023, the Company exercised its early termination right under the sublease agreement and the sublease was terminated effective December 31, 2023. In February 2023, the Company entered into a new subleased agreement with Bellco for 2,218 square feet of office space in Los Angeles, California, from Bellco. The sublease term is 115 months, subject to certain early termination rights. The sublease commenced on January 1, 2024. The total right of use asset and associated liability recorded related to this related party lease was $ 2.2 million and $ 2.5 million, respectively, as of December 31, 2024. The Company paid approximately $ 0.2 million towards its share of the security deposit. For the year ended December 31, 2024, the Company recorded $ 0.3 million of rent expense related to this lease. Note 12. 401(k) Plan In April 2018, the Company began to sponsor a 401(k) retirement savings plan for the benefit of its employees. All employees are eligible to participate, provided they meet the requirements of the plan. The Company made contributions to the plan for eligible participants, and recorded contribution expenses of $ 1.9 million and $ 2.5 million for the years ended December 31, 2024 and 2023, respectively. Note 13. Income Taxes The Company has incurred net operating losses for all the periods presented. The Company has not reflected any benefit of such net operating loss carryforwards in the accompanying consolidated financial statements. The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. 131 Table of Contents The Company's income tax expense consists of the following: Year Ended December 31, 2024 2023 (in thousands) Current: Federal — — State — — — — Deferred: Federal 443 — State — — 443 — Provision (benefit) for income taxes $ 443 $ — Reconciliation of the benefit for income taxes calculated at the statutory rate to our benefit for income taxes is as follows: Year Ended December 31, 2024 2023 (in thousands) Tax benefit at federal statutory rate $ ( 54,001 ) $ ( 68,725 ) State taxes, net of federal benefit 1,954 ( 21,610 ) Stock-based compensation 9,413 11,442 Research tax credits ( 2,793 ) ( 3,873 ) Change in valuation allowance 45,661 82,526 Other 209 240 Benefit for incomes taxes $ 443 $ — Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. 132 Table of Contents Significant components of our deferred tax assets and liabilities are as follows: Year Ended December 31, 2024 2023 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 243,798 $ 211,124 Tax credit carryforwards 37,108 32,826 Intangibles 10,757 14,524 Accrued expenses 2,710 3,039 Lease liabilities 22,085 26,358 Stock based compensation 21,871 25,350 Investments 26,009 28,735 Capitalized R&D 89,090 73,492 Other 2,396 2,189 Total deferred tax assets 455,824 417,637 Deferred tax liabilities: Right of use leased assets ( 11,000 ) ( 17,652 ) Other ( 36 ) ( 301 ) Total deferred tax liabilities ( 11,036 ) ( 17,953 ) Net deferred tax assets 444,788 399,684 Valuation allowance ( 444,788 ) ( 399,684 ) Net deferred tax assets $ — $ — Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Due to the lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $ 45.2 million and $ 80.1 million during the years ended December 31, 2024 and 2023, respectively. The following table sets forth the Company's federal and state NOL carryforwards and federal research and development tax credits as of December 31, 2024: Amount Expiration (in thousands) Net operating losses, federal $ 833,401 Indefinite Net operating losses, federal $ 2 2037 Net operating losses, state $ 986,041 2037-2044 Tax credits, federal $ 31,038 2038-2044 Tax credits, state $ 23,999 Indefinite California Competes Tax credits, state $ 9,000 2026 -2028 Current federal and California tax laws include substantial restrictions on the utilization of NOLs and tax credit carryforwards in the event of an ownership change of a corporation. Accordingly, the Company's ability to utilize NOLs and tax credit carryforwards may be limited as a result of such ownership changes. Such a limitation could result in the expiration of carryforwards before they are utilized. Effective June 27, 2024 California's Senate Bill 167 (SB 167) introduced pivotal tax changes, including the suspension of NOLs for businesses earning over $1 million and a cap on business tax credits at $5 million. In addition, on June 29, 2024 Senate Bill 175 (SB 175) introduced an allowance for refunds on a range of tax credits—including, for the first time, the R&D credit. SB 167, which contains several tax measures, includes provisions that retroactively suspend California net operating losses (NOL) and limit the use of business tax credits for tax years beginning on and after January 1, 2024, and before January 1, 2027. SB 175 states that for taxable years beginning on or after January 1, 2024, and before January 1, 2027, taxpayers can 133 Table of Contents receive a refundable credit equal to 20% of the qualified credits that could have been taken if the $5 million limitation under SB 167 had not been imposed. The Company evaluated the impact of SB 167 and determined that the legislation did not materially impact the Company’s income tax provision for the year ended December 31, 2024. We apply the provisions of ASC Topic 740 to account for uncertain income tax positions . A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2024 2023 (in thousands) Balance at beginning of the year: $ 18,895 $ 14,570 Additions based on tax positions related to current year 3,120 4,325 Additions to tax position of prior year — — Reductions to tax position of prior years — — Lapse of the applicable statute of limitations — — Balance at end of the year $ 22,015 $ 18,895 It is the Company’s policy to include penalties and interest expense related to income taxes as a component of interest and other income, net, as necessary. As of December 31, 2024 and 2023, there were no accrued interest and penalties related to uncertain tax positions. The reversal of the uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets. Unrecognized tax benefits may change during the next 12 months for items that arise in the ordinary course of business. We are subject to examination by U.S. federal or state tax authorities for all years since inception. Note 14. Net Loss and Net Loss Per Share The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2024 2023 Numerator: Net loss $ ( 257,590 ) $ ( 327,265 ) Denominator: Weighted average common shares outstanding 194,811,756 156,931,778 Net loss per share, basic and diluted $ ( 1.32 ) $ ( 2.09 ) Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive securities would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: Year Ended December 31, 2024 2023 Stock options to purchase common stock 24,184,884 21,812,946 Restricted stock units subject to vesting 13,343,793 12,180,471 Expected shares purchased under Employee Stock Purchase Plan 1,913,748 2,168,264 Early exercised stock options subject to future vesting — 29,180 Total 39,442,425 36,190,861 Note 15. Segment Reporting 134 Table of Contents The Company has one reportable segment related to developing and commercializing genetically engineered allogeneic T cell product candidates for the treatment of cancer and autoimmune diseases. The segment derives its current revenues from research and development collaborations. The CEO, as the CODM, manages and allocates resources for the Company's operations at a consolidated company basis by assessing how to best deploy available resources across functions and research and development projects. The CEO uses consolidated, single-segment financial information for purposes of evaluating performance, planning and forecasting future period financial results, and allocating resources. The table below is the summary of the segment profit or loss information, including the significant segment expenses (in thousands): Years Ended December 31, 2024 2023 Collaboration revenue - related party $ 22 $ 95 Significant operating expenses: Cema-cel 36,369 43,225 All other development costs 23,937 24,463 Payroll 70,862 87,854 Facilities & IT-related spend 31,727 33,674 Supporting external spend 27,337 43,248 Other operating expenses 82,989 95,368 Total operating expenses 273,221 327,832 Other income (Expense), net 16,052 472 Loss before income taxes ( 257,147 ) ( 327,265 ) Benefit (expense) from income taxes ( 443 ) — Net loss ( 257,590 ) ( 327,265 ) Cema-Cel includes external development and clinical trial costs related to ALPHA3, ALPHA2, CLL, and ALLO-501 programs. All other development costs include external development and clinical trial costs related to ALLO-329, ALLO-316, ALLO-647, BCMA, and other programs. Supporting external spend includes professional services, research and development lab supplies and other supporting activities related to the research and development and other business operations. Other operating expenses is primarily related to non-cash expenses such as stock-based compensation, impairment, and depreciation and amortization. The measure of segment assets is reported on the consolidated balance sheets as total assets. Primarily, all revenue generated and all long-lived assets are maintained in the United States. Note 16. Subsequent Events On December 13, 2024, the Company entered into a sublease agreement for approximately 21,793 square feet of office space in one of its leased buildings in South San Francisco. The sublease commenced on January 1, 2025, and the sublease term is 24 months, which will expire on December 31, 2026. The Company will receive approximately $ 0.7 million in base rent payments over the sublease term. On January 1, 2025, the Company entered into an additional sublease agreement for approximately 24,218 square feet of office and laboratory space in one of its leased buildings in South San Francisco. The sublease commenced on February 1, 2025, and the sublease term is 24 months, which will expire on January 31, 2027. The Company will receive approximately $ 1.6 million in base rent payments over the sublease term. On February 19, 2025, the Company entered into an Amended and Restated Strategic Collaboration Agreement with Foresight Diagnostics which expands our collaboration to include the development of Foresight Diagnostics’ MRD assay as a companion diagnostic for use with cema-cel as part of a possible EU and/or UK clinical development program, and as part of an expansion of ALPHA3 to Canadian and Australian clinical trial sites in support of our US clinical development program. As part of this amendment, we have agreed to fund approximately $ 37.3 million in MRD assay development costs, milestone payments for U.S., and certain international regulatory submissions and assay utilization costs to process clinical samples, all in addition to the financial commitments under the Foresight Agreement. On February 3, 2025, the Company received an additional award of $ 3.4 million from CIRM for achieving a specified operational milestone related to the clinical development of ALLO-316. 135 Table of Contents Subsequent to the year ended December 31, 2024, the Company sold an aggregate of 3,842,282 shares of common stock in ATM offerings resulting in net proceeds of $ 10.0 million. 136 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.