What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-07 · 182 added, 418 removed, 387 unchanged (61% of the section changed)

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(In thousands, except share and per share amounts)

September 30,

2025 December 31,

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Other long-term assets 1,900 2,325

Equity method investments — 3,645

Total assets $ 507,982 $ 548,710

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Total current liabilities 30,022 35,523

Operating lease liability, noncurrent 85,135 88,346

Lease liability, noncurrent 81,292 83,247

Other long-term liabilities 11,275 7,761

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Preferred stock, $ 0.001 par value:

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

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

10,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

no shares were issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ 0.001 par value:

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

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

400,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

218,598,262 and 212,210,597 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 2,264,687 2,241,879

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

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ALLOGENE THERAPEUTICS, INC.

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(In thousands, except share and per share amounts)

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

2024 2023 2024 2023

Three Months Ended March 31,

Collaboration revenue - related party $ — $ 22

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General and administrative 14,991 17,267

Impairment of long-lived assets

10,728 — 15,717 —

Total operating expenses 65,191 69,526

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Interest and other income, net 5,516 5,433

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

Interest expense ( 150 ) —

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

Other income (expenses), net 92 ( 929 )

Total other income (expense), net 5,458 4,504

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

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ALLOGENE THERAPEUTICS, INC.

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2,158,522 2 ( 2 ) — — —

Vesting of early exercised common stock

Issuance of common stock from ATM offering, net of commissions and offering costs of $ 0.2 million

3,842,282 4 9,998 — — 10,002

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Balance - March 31, 2025 218,598,262 $ 219 $ 2,264,687 $ ( 1,879,556 ) $ 43 $ 385,393

Issuance of common stock upon exercise of stock options and vesting of RSU's 415,483 1 18 — — 19

Stock-based compensation — — 13,559 — — 13,559

Issuance of common stock from ATM offering 250,000 — 1,021 — — 1,021

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

Net loss — — — ( 66,358 ) — ( 66,358 )

Net unrealized gain on available-for-sale investments — — — — 147 147

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

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

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

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

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

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

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

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Common Stock Additional

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Balance - March 31, 2024 170,452,967 $ 170 $ 2,089,357 $ ( 1,627,233 ) $ ( 927 ) $ 461,367

Issuance of common stock from ATM offering, net of commissions and offering costs of $ 1.6 million

20,288,330 20 87,898 — — 87,918

Issuance of common stock upon exercise of stock options and vesting of RSUs 1,105,001 1 1,605 — — 1,606

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

Stock-based compensation — — 16,594 — — 16,594

Net loss — — — ( 79,232 ) — ( 79,232 )

Net unrealized gain on available-for-sale investments — — — — 2,083 2,083

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

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

606,235 1 3,193 — — 3,194

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

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

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

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

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

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

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

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

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ALLOGENE THERAPEUTICS, INC.

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(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

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Depreciation and amortization 3,099 3,555

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

Impairment of long-lived assets 15,717 —

Impairment of equity method investment — 3,000

Net amortization/accretion on investment securities ( 1,306 ) ( 2,797 )

Non-cash rent expense 1,130 1,154

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

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

Share of loss from equity method investments — 929

Changes in operating assets and liabilities:

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Purchases of property and equipment ( 99 ) ( 8 )

Proceeds from sales of investments 5,398 5,623

Proceeds from maturities of investments 56,500 103,272

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Proceeds from issuance of common stock from ATM offering, net of commissions and issuance costs 10,002 —

Proceeds from issuance of common stock from registered offering, net of commissions and issuance costs 105,283 —

Proceeds from CIRM award 3,350 —

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Right-of-use asset obtained in exchange for lease liability $ — $ 2,409

Non-cash deferred revenue included in other long-term liabilities $ 3,079 $ —

Non-cash deferred revenue and other long-term liabilities $ 3,079 $ 3,079

Supplemental disclosure:

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

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ALLOGENE THERAPEUTICS, INC.

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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 TD Securities (U.S.A.) LLC (f/k/a Cowen and Company, LLC) (TD 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 TD Cowen in at-the-market (ATM) offerings.

The aggregate compensation payable to TD Cowen as the Company’s sales agent equals up to 3.0 % of the gross sales price of the shares sold through TD Cowen pursuant to the sales agreement.

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 three months ended March 31, 2025, the Company sold an aggregate of 3,842,282 shares of common stock in ATM offerings resulting in net proceeds of $ 10.0 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 aggregate fee paid 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.

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

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

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

The Company had cash, cash equivalents and investments of $ 335.5 million as of March 31, 2025.

Since inception through March 31, 2025, the Company has incurred cumulative net losses of $ 1,879.6 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.

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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 accompanying unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (SEC).

The Company expects that its cash, cash equivalents and investments will be sufficient to fund its operations for at least the next 12 months from the date the accompanying unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (SEC).

Summary of Significant Accounting Policies

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The subsidiary was dissolved on January 3, 2024.

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

The results of operations for the three

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

The condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of stockholders’ equity as of March 31, 2025 and 2024, the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any other future annual or interim period.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025.

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Significant Accounting Policies

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

California Institute for Regenerative Medicine (CIRM) Award

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 condensed consolidated statements of operations.

See Note 5 below for more details.

There have been no significant changes to the accounting policies during the three months ended March 31, 2025, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report.

Recently Adopted Accounting Pronouncements

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Recent Accounting Pronouncements Not Yet Adopted

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

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

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

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

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

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

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

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.

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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.

Fair Value Measurements

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treasury securities which are classified as Level 1.

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

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

September 30, 2024

There were no Level 3 assets or liabilities as of March 31, 2025 and as of December 31, 2024.

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 March 31, 2025 and as of December 31, 2024 are presented in the following tables:

March 31, 2025

Level 1 Level 2 Level 3 Fair Value

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Asset-backed securities — 9,718 — 9,718

— 9,680 — 9,680

Total financial assets $ 123,979 $ 207,250 $ — $ 331,229

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Money market funds (1) $ 65,780 $ — $ — $ 65,780

Commercial paper — 66,255 — 66,255

Corporate bonds — 82,725 — 82,725

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agency securities — 58,514 — 58,514

Asset-backed securities — 9,700 — 9,700

Total financial assets $ 151,508 $ 217,194 $ — $ 368,702

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Financial Instruments

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

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September 30, 2024

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of March 31, 2025 and as of December 31, 2024 are presented in the following tables:

March 31, 2025

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

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Asset-backed securities 9,720 — ( 2 ) 9,718

9,669 11 — 9,680

Total cash equivalents and investments $ 331,186 $ 141 $ ( 98 ) $ 331,229

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Money market funds $ 65,780 $ — $ — $ 65,780

Commercial paper 66,269 19 ( 34 ) 66,254

Corporate bonds 82,716 53 ( 45 ) 82,724

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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

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Total cash equivalents and investments $ 368,702

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

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

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

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

As of March 31, 2025, the remaining contractual maturities of available-for-sale securities were less than 3 years.

There were no significant realized losses on available-for-sale securities for the three months ended March 31, 2025 and 2024.

As of March 31, 2025, unrealized losses on available-for-sale securities are not attributed to credit risk.

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

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

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

As of March 31, 2025 and December 31, 2024, no securities were in a continuous net unrealized loss position for more than 12 months.

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

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

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 March 31, 2025 and December 31, 2024, the Company recognized $ 2.3 million and $ 1.9 million, respectively, of accrued interest receivable from available-for-sale securities within prepaid expenses and other current assets on the condensed consolidated balance sheets.

Balance Sheet Components

Property and Equipment, Net

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Property and Equipment consist of the following:

September 30,

2025 December 31,

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Total property and equipment, net $ 82,992 $ 86,056

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Accrued and Other Current Liabilities

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

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

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

California Institute for Regenerative Medicine (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).

Upon treatment of 20 patients, the Company met the primary study objectives of the ALLO-316 Phase 1b study plan supported by CIRM and was able to successfully complete the study plan on time and under budget without further enrollment.

As a result, the Company updated the study plan and requested a reduction in its co-funding responsibility and adjustments to the remaining milestone payments to align with the updated research plan.

On April 28, 2025, the terms of the award were amended and the total award amount was adjusted to up to $ 9.2 million.

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.

In addition, the terms of the award and amended award include a co-funding requirement pursuant to which the Company is required to spend up to approximately $ 15.7 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.

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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 Company’s balance sheet.

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

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

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

Upon cash receipt, the CIRM award and accrued interest will be recognized as other long-term liabilities on the condensed consolidated balance sheets.

The Company will not recognize a receivable of future awards until it is approved by CIRM.

The Company received $ 5.6 million from CIRM through March 31, 2025 and accounted for the proceeds as a liability within other long-term liabilities on the condensed consolidated balance sheets.

During the three months ended March 31, 2025, the Company recorded interest expense of $ 0.2 million.

As of March 31, 2025, $ 0.3 million of accrued interest was included in other long-term liabilities.

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 three and nine months ended September 30, 2024 or 2023.

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

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.

In April 2018, the Company entered into an Asset Contribution Agreement (the Pfizer Agreement) with Pfizer pursuant to which the Company acquired certain assets and assumed certain liabilities from Pfizer, including agreements with Cellectis S.A.

(Cellectis) and Servier as described below, and other 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 payments upon the achievement of certain sales and regulatory milestones and pay royalties on certain net sales pursuant to the Pfizer Agreement

as further described in Note 6 to our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 13, 2025 (Annual Report).

For the three months ended March 31, 2025 and 2024, no milestones were achieved and no royalty payments were made.

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.

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

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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, 2015, 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’s material breach of the representations, warranties or covenants set forth in the Cellectis Agreement.

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 condensed consolidated statements of operations.

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

On March 8, 2019, the Company entered into a License Agreement (the Cellectis Agreement) with Cellectis and terminated the Original Cellectis Agreement.

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 B-cell maturation antigen (BCMA), CD70, Claudin 18.2, DLL3 and FLT3 (the Allogene Targets), for human oncologic therapeutic, diagnostic, prophylactic and prognostic purposes.

The Company is required to make payments upon the achievement of certain development and sales milestones and pay royalties on certain net sales pursuant to the Cellectis Agreement as further described in Note 6 to our Annual Report.

For the three months ended March 31, 2025 and 2024, no milestones were achieved.

Exclusive License Agreement with Servier

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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.

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).

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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.

Additionally, the Company agreed to waive certain of its rights under the Original Servier Agreement to elect a conversion of its license to the products directed against CD19, including UCART19, ALLO-501 and cemacabtagene ansegedleucel (cema-cel, previously ALLO-501A) (collectively, 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.

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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:

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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.

The Company is obligated to pay to Servier royalties on annual net sales of any licensed products that are commercialized by the Company that is directed at CD19.

As of March 31, 2025, the Company recorded € 20.0 million as deposit placed in escrow in the condensed 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.

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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

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to Cellectis.

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

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

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

For the three months ended March 31, 2025 and 2024, no milestones were achieved.

Research Collaboration and License Agreement with Notch Therapeutics

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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.

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

Notch is also entitled to receive tiered royalties in the mid to high single digit range on Allogene’s sales of licensed products, subject to certain reductions, for a term, on a country-by-country and product-by-product basis,

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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.

Pursuant to the Notch Agreement, the Company made certain investments in Notch’s capital stock as further described in Note 6 to our Annual Report.

On January 25, 2024, the Company entered into an Amended and Restated Collaboration and License Agreement (the Amended Notch Agreement) with Notch.

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

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

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

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

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

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

On March 31, 2025, we entered into a Second Amendment to Amended and Restated Collaboration and License Agreement (Second Amended Notch Agreement) with Notch in connection with F.

Hoffmann-La Roche AG’s (Roche) acquisition of Notch.

Under the Second Amended Notch Agreement, the definitions of certain terms were clarified, certain time periods for completing the transfer of certain technology were extended, and the scope of Allogene’s exclusive rights were clarified.

The Company is required to make payments upon the achievement of certain research, development, regulatory and commercial milestones and pay royalties on certain sales pursuant to the Notch Agreement as further described in Note 6 to our Annual Report.

For the three months ended March 31, 2025 and 2024, the Company recognized its share of Notch’s net loss of zero and $ 0.9 million, respectively, under the other income (expense), net caption within the condensed consolidated statements of operations.

For the three months ended March 31, 2025 and 2024, no milestones were achieved.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

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

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

Under the terms of the agreement, the Company has committed up to $ 15.0 million of funding for the duration of the agreement, of which $ 9.0 million remains.

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

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

For the three months ended March 31, 2025 and 2024, the Company recorded $ 0.4 million and less than $ 0.1 million, respectively, in collaboration costs as research and development expenses.

Investment in and License Agreement with Overland Therapeutics, Inc.

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

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

(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-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).

Pursuant to the Share Purchase Agreement, the Company and Overland acquired Seed Preferred Shares of Allogene Overland representing 49 % and 51 %, respectively, of Allogene Overland’s outstanding stock.

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

(Overland U.S.).

Overland U.S.

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 U.S.

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.

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(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 Allogene Overland.

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

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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.

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

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

The Company determined that Overland Therapeutics is a variable interest entity as of March 31, 2025 and 2024.

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.

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 September 30, 2024 and December 31, 2023 (see Note 8).

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

In connection with the Organizational Restructuring in May 2024, 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 March 31, 2025 and 2024.

For the three months ended March 31, 2025 and 2024, the Company recognized zero and less than $ 0.1 million of collaboration revenue, respectively.

As of March 31, 2025, $ 4.6 million of deferred revenue was recorded in other long-term liabilities.

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.

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

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

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

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

The Company is required to make payments upon the achievement of certain development and regulatory milestones and pay royalties on certain sales pursuant to the Antion Collaboration and License Agreement as further described in Note 6 to our Annual Report.

As of March 31, 2025 and December 31, 2024, the Company’s total equity investment in Antion was zero .

Strategic Collaboration Agreement with Foresight Diagnostics

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(Foresight Diagnostics) (the Foresight Agreement).

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

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

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

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

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

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 its collaboration to include the development of Foresight Diagnostics’ MRD assay 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 the U.S.

clinical development program.

In total, the Company 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 three months ended March 31, 2025 and 2024, the Company recorded $ 1.3 million and $ 0.5 million, respectively, in clinical trials start readiness milestones as research and development expenses.

As of March 31, 2025 and December 31, 2024, $ 0.4 million and zero in research and development expenses, respectively, were recorded in accrued and other liabilities.

Commitments and Contingencies

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.

The lease term commenced in April

The rent payments for the expansion premises began in August 2022.

The lease term 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.

The lease term will expire March 31, 2032 with an option to extend the term for eight years which is not reasonably assured of exercise.

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.

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The lease term will expire on July 31, 2036 with two ten-year options to extend the lease, both of which are not reasonably assured of exercise.

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

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

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

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

September 30, 2024 December 31, 2023

Restricted cash related to letters of credit due to landlords was $ 6.0 million as of March 31, 2025 and December 31, 2024.

The balance sheet classification of the Company’s lease liabilities were as follows (in thousands):

March 31, 2025 December 31, 2024

Operating lease liabilities

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Operating lease cost $ 2,525 $ 3,020

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Total lease costs $ 3,081 $ 3,887

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

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

The undiscounted future non-cancellable lease payments under the Company’s operating leases as of March 31, 2025 were as follows:

Year ending December 31:

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The weighted average discount rate used to determine the operating lease liability was 6.26 %.

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

As of March 31, 2025, the weighted average remaining lease term for the Company’s operating leases is 7.88 years.

In December 2024 and January 2025, the Company entered into non-cancelable agreements under which it subleased approximately 46,011 square feet of its HQ Lease to two unaffiliated companies.

During the three months ended March 31, 2025, the Company recognized $ 0.4 million in sublease income under the interest and other income, net caption within the condensed consolidated statements of operations.

Other Commitments

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

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

In connection with the agreement, the Company maintains a letter of credit for the benefit of the service provider in the amount of $ 4.3 million which is recorded as restricted cash in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.

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

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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 September 30, 2024.

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

These agreements generally allow for cancellation with notice.

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

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 13.0 % 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 September 30, 2024 was $ 2.0 million.

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

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

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

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

No impairment loss was recorded in 2024.

Overland Therapeutics, Inc.

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 was zero as of September 30, 2024 and December 31, 2023, and the Company accounted for the investment using the equity method of accounting.

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

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

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

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The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of March 31, 2025.

Stock-Based Compensation

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 31st 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 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 September 30, 2024, there were 9,508,639 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Exchange Program

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.

As of March 31, 2025, there were 5,197,910 shares reserved by the Company under the 2018 Equity Incentive Plan (the 2018 Plan) for the future issuance of equity awards.

Stock Option Activity

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Options granted 7,992,474 1.94 9.61

Options exercised ( 357,993 ) 2.27 $ 597

Options forfeited ( 644,558 ) 4.70

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

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

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

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

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

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

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

Nine Months Ended September 30,

Expected term in years 5.02 - 6.12

Expected volatility 72.85 % - 73.97 %

73.18 % - 73.85 %

Expected risk-free interest rate 3.42 % - 4.32 %

3.45 % - 4.30 %

Expected dividend 0 %

Balance, March 31, 2025 31,532,800 $ 6.64 7.69 $ —

Exercisable, March 31, 2025 19,294,982 $ 9.05 6.72 $ —

Vested and expected to vest, March 31, 2025 31,532,800 $ 6.64 7.69 $ —

Restricted Stock Unit Activity

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Forfeited ( 768,788 ) 4.30

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

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

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

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

Unvested March 31, 2025 18,079,422 $ 3.46 2.86 $ 26,396

Vested and expected to vest, March 31, 2025 18,079,422 $ 3.46 2.86 $ 26,396

As of March 31, 2025, the Company had 4,710,441 outstanding performance-based restricted stock units, including 2,301,528 performance-based restricted stock units granted in the quarter ended March 31, 2025.

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

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

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

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

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

Through March 31, 2025, 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 quarters ended March 31, 2025 and 2024.

As of March 31, 2025, the Company had 1,814,134 outstanding restricted stock units with a market condition to certain executive officers and other employees pursuant to the 2018 Plan.

The Company recognized less than $ 0.1 million and $ 0.7 million in stock-based compensation expense related to the restricted stock units with a market condition for the three months ended March 31, 2025 and 2024, respectively.

Stock-based compensation expense

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

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

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

For the three months ended March 31, 2025 and 2024, the following table presents stock-based compensation expense related to stock options, restricted stock units and employee stock purchase plans that was recorded as research and development and general and administrative expense in its condensed consolidated statements of operations and comprehensive loss:

Three Months Ended

Research and development $ 5,040 $ 3,827

General and administrative 7,135 8,097

Total stock-based compensation $ 12,175 $ 11,924

Related Party Transactions

Collaboration Revenue and Equity Method Investment

In December 2020, the Company entered into the License Agreement with Allogene Overland, a corporate joint venture entity and related party (see Note 6).

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 PRC.

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.

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

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

Sublease Agreement

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 December 2018, the Company entered into a sublease with Bellco Capital LLC (Bellco) 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.

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., FACS, 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 sublease agreement with Bellco for 2,218 square feet of office space in Los Angeles, California.

The Company’s executive chairman, Arie Belldegrun, M.D., is a trustee of the Belldegrun Family Trust, which controls 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 lease liability recorded related to this related party lease was $ 2.3 million as of September 30, 2024.

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

The total right of use asset and associated lease liability recorded related to this related party lease were $ 2.2 million and $ 2.4 million, respectively, as of March 31, 2025.

The Company paid approximately $ 0.2 million towards its share of the security deposit.

For each of the three months ended March 31, 2025 and 2024, the Company recorded $ 0.1 million of rent expense related to this lease.

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

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

Pursuant to the consulting agreement, Bellco Capital LLC provides certain services for the Company, which are performed by Dr.

In August 2018, the Company entered into a consulting agreement with 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 Capital LLC $ 40,217 per month in arrears commencing January 2022.

The Company may also, at its discretion, pay Bellco Capital LLC an annual performance award in an amount up to 60 % of the aggregate compensation payable to Bellco Capital LLC in a calendar year.

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

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

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In consideration for these services, the Company paid Bellco $ 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 $ 0.2 million for each of the three months ended March 31, 2025 and 2024.

The Company has a history of losses and expects to record a loss in 2025.

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

September 30,

Stock options to purchase common stock 31,532,800 24,025,416

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Expected shares to be purchased under Employee Stock Purchase Plan 1,809,262 1,077,525

Early exercised stock options subject to future vesting — 58,360

Total 51,421,484 38,712,332

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Segment Reporting

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 March 31,

Collaboration revenue - related party $ — $ 22

Significant operating expenses:

Cema-cel 6,222 12,414

All other development costs 10,390 5,523

Payroll 19,601 22,078

Facilities & IT-related spend 7,319 8,034

Supporting external spend 5,846 5,420

Other operating expenses 15,813 16,057

Total operating expenses 65,191 69,526

Other income (expense), net 5,458 4,504

Net loss ( 59,733 ) ( 65,000 )

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.

Subsequent Events

On May 12, 2025, the Company’s Board of Directors approved an approximately 28 % reduction in the Company’s employee workforce in connection with a reduction in manufacturing operations and a reprioritization of resources to focus on the Company’s clinical programs.

We estimate that we will incur approximately $ 3.3 million in cash-based expenses related to employee severance payments, benefits and related costs in connection with the workforce reduction.

We anticipate that the majority of the workforce reduction charges will be incurred in the second quarter of 2025 and that the reduction in workforce will be substantially completed by the end of the second quarter of 2025.

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

What changed 10-Q

Item 1. Financial Statements