What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-13 compared with 2024-11-07 · 117 added, 236 removed, 194 unchanged (65% of the section changed)

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

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

Earlier this year, we announced our 2024 Platform Vision under which we are now focusing on four core programs.

We are currently focused on developing cemacabtagene ansegedleucel (cema-cel, previously ALLO-501A) in large B-cell lymphoma (LBCL) and chronic lymphocytic leukemia (CLL).

In June 2024, we initiated a pivotal Phase 2 clinical trial (ALPHA3) for cema-cel as part of a first line (1L) treatment plan for newly diagnosed and treated LBCL patients who are likely to relapse and need further therapy, and we now have almost 30 sites activated.

The design of the ALPHA3 1L consolidation trial builds upon the results demonstrated in the Phase 1 ALPHA2 trial and leverages an investigational diagnostic test developed by Foresight Diagnostics, Inc.

that we believe will identify patients who have achieved remission by standard disease assessment but who have minimal residual disease (MRD) at the completion of 1L chemoimmunotherapy.

The ALPHA3 trial is designed to study the impact of treating MRD positive patients with cema-cel.

The study will randomize approximately 240 patients who achieve a complete response or partial response to 1L therapy, but who are MRD positive.

The patients will be randomized to either consolidation with cema-cel or the current standard of care, which is observation.

The design, with a primary endpoint of event free survival (EFS), will initially include two lymphodepletion arms (one with standard fludarabine and cyclophosphamide plus ALLO-647 and one with standard fludarabine and cyclophosphamide but without ALLO-647).

One lymphodepletion arm will be discontinued following a planned interim analysis in mid-2025 designed to select the most appropriate regimen for this patient population.

ALPHA3 is expected to complete enrollment in the first half of 2026.

Efficacy analyses are expected to occur in 2026, and will include the Independent Data Safety Monitoring Board (IDSMB) interim EFS analysis in the first half of 2026 and the data readout of the primary EFS analysis is expected year-end 2026.

A biologics license application (BLA) submission is targeted for 2027.

In view of the potential of the earlier line ALPHA3 trial, we have deprioritized the third line (3L) LBCL ALPHA2 and EXPAND trials.

We have initiated the Phase 1b cohort of our ALPHA2 trial to evaluate cema-cel following lymphodepletion with fludarabine/cyclophosphamide and ALLO-647 in patients with relapsed/refractory chronic lymphocytic leukemia/small

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lymphocytic lymphoma (CLL/SLL).

We will continue to evaluate clinical development and commercial opportunities for cema-cel in CLL/SLL and will provide an update on this program in early 2025.

We are enrolling a Phase 1 clinical trial (TRAVERSE) of ALLO-316, an allogeneic CAR T cell product candidate targeting CD70, in adult patients with advanced or metastatic clear cell renal cell carcinoma (RCC).

Last year we announced our 2024 Platform Vision under which we are now focusing on three core programs:

ALPHA3, RESOLUTION and TRAVERSE clinical trials.

In June 2024, we initiated a pivotal Phase 2 clinical trial (ALPHA3) evaluating cemacabtagene ansegedleucel (cema-cel, previously ALLO-501A) as part of a first-line (1L) consolidation treatment for patients newly diagnosed with LBCL who, despite initial treatment success, remain at high risk for relapse.

A trial-in-progress poster highlighting ALPHA3 will be presented at the 2025 Annual Meeting of the American Society of Clinical Oncology (ASCO, June 1, 2025).

We now have nearly 50 activated trial sites.

The ALPHA3 trial design builds on Phase 1 results from our ALPHA2 study and leverages an investigational diagnostic developed by Foresight Diagnostics, Inc.

This diagnostic test aims to identify patients who, although in remission according to standard assessments, remain at risk due to minimal residual disease (MRD) following first-line chemoimmunotherapy.

Approximately 240 MRD-positive patients achieving either complete response, or a near-complete partial response for which the current standard of care would be observation, to initial therapy will be randomized to receive cema-cel following one of two different lymphodepletion regimens (standard fludarabine and cyclophosphamide (FC) or standard fludarabine and cyclophosphamide plus ALLO-647 (FCA)) or standard-of-care observation.

The trial's primary endpoint is event-free survival (EFS).

To date, over 250 patients have consented for MRD screening, nearly half in the last three months, with many awaiting completion of 1L treatment.

Following a planned interim analysis designed to test futility and identify the optimal lymphodepletion regimen, one regimen will be discontinued.

While we believe that early learnings and growing operational momentum have positioned us to accelerate enrollment, our initial trial milestone of futility analysis and lymphodepletion regimen selection is now anticipated to occur in the first half of 2026.

At this futility analysis, we forecast at least 12 patients in each arm of the trial will have been

enrolled and followed for MRD measurement.

This adjustment in timing reflects challenges associated with the unforeseen delays due to site resource issues and the adoption of new trial workflows related to identifying and enrolling patients who were expected to complete the initial therapy for LBCL at the completion of R-CHOP or equivalent therapy.

In addition, based on interest from potential international trial sites, to facilitate the pace of enrollment and support a U.S.

BLA, we plan to expand the trial to international sites including Canada where we anticipate activation in the second quarter of 2025.

As we seek to better understand the effectiveness of our updated enrollment strategies, we are currently not providing guidance regarding the timing of additional milestones beyond the lymphodepletion regimen selection and futility analysis, but will do so following such milestone.

We have completed enrollment in an expansion cohort in a Phase 1b clinical trial (TRAVERSE) of ALLO-316, an allogeneic CAR T cell product candidate targeting CD70, in adult patients with advanced or metastatic clear cell renal cell carcinoma (RCC).

On October 29, 2024, we announced that we had received Regenerative Medicine Advanced Therapy (RMAT) designation for ALLO-316 for adult patients with advanced or metastatic RCC.

We have implemented a protocol amendment that incorporates a diagnostic and treatment algorithm into the study design.

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In November 2024, we provided a data update from patients with CD70 positive RCC, and highlighted that the newly implemented diagnostic and management algorithm appears effective in abating IEC-HS while preserving CAR T efficacy.

Additional data from dose escalation cohorts, as well as a newly opened Phase 1b expansion cohort, will be presented in two upcoming scientific meetings, including the 2024 International Kidney Cancer Symposium (IKCS, November 8, 2024) and the Society for Immunotherapy of Cancer’s (SITC) Annual Meeting (November 9, 2024).

Additional data from dose escalation cohorts, as well as a Phase 1b expansion cohort, was presented at the 2024 International Kidney Cancer Symposium (IKCS, November 8, 2024) and the Society for Immunotherapy of Cancer’s (SITC) Annual Meeting (November 9, 2024).

As of the October 14, 2024, data cutoff, 39 patients had been enrolled in the ongoing Phase 1 trial, of which 26 were confirmed to have CD70 positive RCC and were evaluable for efficacy outcomes.

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The Phase 1b expansion cohort is evaluating safety and efficacy of ALLO-316 at DL2 (80M CAR T cells) following a standard FC500 (fludarabine (30 mg/m2/day) and cyclophosphamide (500 mg/m2/d) for three days) lymphodepletion regimen.

The Phase 1b expansion cohort is expected to ultimately include approximately 20 patients.

Additional data from the Phase 1b expansion cohort is expected to be announced in mid-2025.

Following a single infusion of ALLO-316 in heavily pretreated patients, the trial demonstrated best Overall Response Rate (ORR) of 50% and Confirmed Response Rate of 33% in those patients with CD70 Tumor Proportion Score (TPS) of ≥50% who received DL2.

Patients with a TPS of ≥50% represents the majority of patients with advanced or metastatic RCC.

Of those with a TPS ≥50, 76% (16/21) experienced a reduction in tumor burden.

Two of six (33%) patients with high TPS who received the Phase 1b expansion regimen showed durable responses ongoing at ≥four months.

Response Rates by CD70 Status and Dose

Patients Evaluable for Disease Outcomes a (N=34)

CD70 Positive (N=26) CD70 Negative or Unknown (N=8)

Best overall response, d n/N (%)

High TPS (≥50)

Low TPS (<50)

0/5 (0) 1/8 (13)

0/2 (0) 6/18 (33)

0/3 (0) 3/8 (38)

0/2 (0) 0/8 (0)

Confirmed ORR, e n/N (%)

High TPS (≥50)

Low TPS (<50)

0/5 (0) 1/8 (13)

0/2 (0) 4/18 (22)

0/3 (0) 2/8 (25)

0/2 (0) 0/8 (0)

a Patients evaluable for disease outcome includes those who received ALLO-316 and had at least one tumor assessment.

b Standard fludarabine and cyclophosphamide plus ALLO-647

c Includes FC300 and FC500

d Best overall response across visits did not require confirmation for CR/PR.

e Confirmed overall response of CR/PR required confirmation at the subsequent visit.

The most common all-grade adverse events were cytokine release syndrome (CRS) (with only one grade ≥3), fatigue (59%), neutropenia (56%), decreased white blood cell count (54%), anemia (51%) and nausea (51%).

Immune effector cell-associated neurotoxicity syndrome (ICANS) was minimal at 8% and no graft-versus-host disease (GvHD) occurred.

Most Prevalent TEAEs (>40% Any Grade Incidence) and AESI

Adverse Event, n(%)

All Patients (N=39)

DL2 FC500 (N=11)

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White blood cell count decreased

Thrombocytopenia

AEs of Special interest

Viral infections

Neurotoxicity b

Graft-versus-host disease

TEAE included all AEs that started from the first dose date of study drug in each treatment period up to start of another treatment period, death, or the date prior to initiation of another anti-cancer agent, whichever occurred first.

IEC-HS includes the preferred terms IEC-HS, HLH, Hemophagocytic lymphohistiocytosis, and atypical HLH.

Two patients developed an inflammatory syndrome prior to the existence of IEC-HS as a term in MedDRA, which has been updated as of September 2023.

a Infection events (62%) were primarily low grade;

the most common was viral infections (33%) with cytomegalovirus infection and COVID-19 (any grade, 18% and 15%;

Grade ≥3, 0% and 5%, respectively).

b Neurotoxicity includes system organ class of nerve system disorders and psychiatric disorders with onset date up to Study Day 30 post ALLO-316 infusion.

Two DLT events of autoimmune hepatitis and cardiogenic shock were reported.

Each event occurred in two separate participants who received FCA (FC300 plus ALLO-647) lymphodepletion and DL2 of ALLO-316.

Three Grade 5 treatment-related adverse events were reported:

1) cardiogenic shock, which was one of the two DLT events;

2) sepsis from multi-drug resistant Klebsiella pneumoniae in a participant who received DL4 of ALLO-316.

This participant had a prior episode of muscle abscess and bacteremia from the same multi-drug resistant Klebsiella and was receiving anakinra and dexamethasone for hyperinflammation;

3) failure to thrive in a participant 16 months after treatment with ALLO-316.

This subject had tumor response of stable disease (SD) at month 12 and no interval scans to evaluate disease status prior to death.

On October 29, 2024, we announced that we had received Regenerative Medicine Advanced Therapy (RMAT) designation for ALLO-316 for adult patients with advanced or metastatic RCC.

We will continue to evaluate the safety and efficacy at the Phase 1b dose level in 2025.

The Phase 1b expansion cohort has now completed enrollment with 20 patients enrolled.

Updated data from the Phase 1b expansion cohort will be presented in an oral presentation at the ASCO 2025 Annual Meeting on June 1, 2025.

We are developing ALLO-329, a next-generation allogeneic CAR T cell product candidate targeting both CD19 and CD70 for the treatment of certain autoimmune diseases (AID).

Inclusion of an anti-CD70 CAR in ALLO-329 incorporates the Dagger® technology, which is designed to reduce or eliminate the need for standard chemotherapy by preventing premature rejection while targeting CD19+ B-cells and CD70+ activated T-cells, both of which play a role in AID.

We plan to file an investigational new drug (IND) application in the first quarter of 2025.

We expect to initiate the Phase 1 trial with ALLO-329 in mid-2025 and have proof-of-concept by year-end 2025.

We are developing an anti-CD52 monoclonal antibody, ALLO-647, which is a proprietary component of our lymphodepletion regimen.

In January 2025, we announced that the FDA has cleared our investigational new drug (IND) application for a Phase 1 rheumatology basket study of ALLO-329 (RESOLUTION trial).

Our RESOLUTION trial will evaluate the safety and efficacy of ALLO-329 across multiple autoimmune diseases, including systemic lupus erythematosus (SLE) (including lupus nephritis), idiopathic inflammatory myopathies (IIM), and systemic sclerosis (SSc).

We expect to initiate the Phase 1 trial with ALLO-329 in mid-2025 and anticipate having proof-of-concept by the first half of 2026 to enable inclusion of both biomarker and clinical data.

On April 27, 2025, we announced that ALLO-329 had received three Fast Track Designations (FTD) from the U.S.

Food and Drug Administration (FDA) for the treatment of adult patients with SLE, IIM, and SSC.

We are developing an anti-CD52 monoclonal antibody, ALLO-647, which is a proprietary component of our oncology lymphodepletion regimen.

ALLO-647 may be able to reduce the likelihood of a patient’s immune system rejecting the engineered allogeneic T cells for a sufficient period of time to enable a window of persistence during which our engineered allogeneic T cells can actively target and destroy cancer cells.

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Patients will be randomized to receive cema-cel and a lymphodepletion regimen with fludarabine and cyclophosphamide either with or without ALLO-647.

In mid-2025, we plan to select the lymphodepletion regimen with which we will complete enrollment in the study (Part B).

While we have additional programs in our pipeline, our development priorities are focused on cema-cel (1L Consolidation), ALLO-316 and ALLO-329.

We will explore opportunities to partner with collaborators on product candidates across our pipeline.

As described above, one of these lymphodepletion arms will be discontinued following a planned interim analysis designed to identify the most appropriate regimen for this patient population.

The selection of the final regimen with which we will complete enrollment in the study (Part B) is now anticipated in the first half of 2026.

While we have additional programs in our pipeline, our clinical development priorities are focused on cema-cel (1L Consolidation), ALLO-316 and ALLO-329.

The development of our other product candidates is currently focused on pre-clinical studies, including studies of BCMA and DLL3 CARs with and without our CD70 Dagger® protein technology, and various manufacturing improvements that may be applicable to such product candidates.

We continue to explore opportunities to partner with collaborators on product candidates across our pipeline.

In May 2024, we entered into an Amendment and Settlement Agreement (the Servier Amendment) under which we expanded the geographic territory for our CD19 license to include the European Union and the United Kingdom.

The Servier Amendment also grants us an option to further expand the 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.

We estimate that the expansion of our license for the CD19 Products to the European Union and United Kingdom will substantially increase our market opportunity in 1L consolidation

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LBCL and R/R/ CLL from more than $6.0 billion in the U.S.

alone to more than $9.5 billion across the U.S., European Union and United Kingdom, in turn increasing the potential future revenue opportunity for cema-cel by more than 50%.

Amendment also grants us an option to further expand the 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.

In the coming months, we plan to seek scientific advice from European and UK regulatory authorities to assist us with finalizing our regulatory strategy for the EU and the UK.

Additionally, in February 2025, we entered into an Amended and Restated Strategic Collaboration Agreement with Foresight Diagnostics which expands our collaboration to enable the development of Foresight Diagnostics’ MRD assay in the EU, UK, Canada and Australia in support of Allogene’s clinical development of cema-cel.

In May 2025, we initiated a workforce reduction of approximately 28% of our employees (the “Workforce Reduction”) in connection with a reduction in manufacturing operations and a reprioritization of resources to focus on our ongoing clinical programs.

We believe we currently hold sufficient inventory of cema-cel, ALLO-329, and ALLO-316 to meet our near-term clinical needs, including completing our current ALPHA3, RESOLUTION and TRAVERSE trials.

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 expect that the majority of the Workforce Reduction charges will be incurred in the second quarter of 2025 and that the Workforce Reduction will be substantially completed by the end of the second quarter of 2025.

We may also incur other charges, including cash expenditures, not currently contemplated due to events that may occur as a result of, or are associated with, the Workforce Reduction.

Since inception, we have had significant operating losses.

Our net losses were $66.3 million and $197.7 million for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024, we had an accumulated deficit of $1.8 billion.

As of September 30, 2024, we had $403.4 million in cash and cash equivalents and investments and we expect our cash runway to fund operations into 2026.

Our net loss was $59.7 million for the three months ended March 31, 2025.

As of March 31, 2025, we had an accumulated deficit of $1.9 billion.

As of March 31, 2025, we had $335.5 million in cash and cash equivalents and investments and we expect our cash runway to fund operations into the second half of 2027.

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

Our Licenses and Collaboration Agreements

Our License and Collaboration Agreements

Below is a summary of the key terms for certain of our licenses and collaboration agreements.

For a more detailed description of these agreements, see Note 6 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

For a more detailed description of these agreements, see Note 6 to our consolidated financial statements included in our Annual Report.

Asset Contribution Agreement with Pfizer

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In April 2018, Pfizer assigned the agreement to us pursuant to the Pfizer Agreement.

In March 2019, we terminated the agreement with Cellectis and entered into a new license agreement with Cellectis.

In March 2019, we terminated the agreement with Cellectis and entered into a new license agreement with Cellectis (the Cellectis Agreement).

Under the Cellectis Agreement, Cellectis granted us 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.

Exclusive License Agreement with Servier

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In May 2024, we entered into an Amendment and Settlement Agreement (the Servier Amendment) with Servier under which we:

(1) expanded our territory under the Original Servier Agreement to include the European Union and the United Kingdom, and provides for an option to further expand our territory to include China and Japan, (2) waived certain of our rights to elect to convert certain of our license rights to a worldwide license, (3) revised our future milestone payments to coincide with Servier’s milestone payments to Cellectis under the Servier-Cellectis Agreement, (4) agreed to pre-pay a future €20 million milestone payment into an escrow account, and (5) increased the United States tiered royalty rates to a range from the low tens to the mid teen percentages, and agreed to an ex-U.S.

low tens to the mid teen percentages, and agreed to an ex-U.S.

royalty rate of 10%.

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If the option is exercised, we will have a minimum funding commitment for the overall development program.

If Notch subsequently out-

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licenses any of the Released Targets, we 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.

If Notch subsequently out-licenses any of the Released Targets (whether through an out-license, partnership, sale, or other transaction), we 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 January 2025, Notch announced that securing additional investment and/or additional partners to take their research forward remains challenging, and therefore they significantly reduced their workforce to preserve cash and provide the time to explore alternate paths forward.

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.

Strategic Alliance with The University of Texas MD Anderson Cancer Center

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

License Agreement with Allogene Overland Biopharm (PRC) Co., Limited

License Agreement with Overland Therapeutics, Inc.

On December 14, 2020, we entered into a License Agreement with Allogene Overland Biopharm (CY) Limited (Allogene Overland) (the License Agreement), a joint venture established by us and Overland Pharmaceuticals (CY) Inc.

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

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

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

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

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Strategic Collaboration Agreement with Foresight Diagnostics

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On January 3, 2024, we entered into a Strategic Collaboration Agreement (the Foresight Agreement) with Foresight Diagnostics, Inc.

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

On February 19, 2025, we entered into an Amended and Restated Strategic Collaboration Agreement with Foresight Diagnostics which expands our collaboration to include the development of Foresight Diagnostics’ MRD assay for use with cema-cel as part of a possible EU and/or UK clinical development program, and as part of an expansion of ALPHA3 to Canadian and Australian clinical trial sites in support of our U.S.

clinical development program.

In total, we have agreed to fund approximately $37.3 million in MRD assay development costs, milestone payments for U.S., and certain international regulatory submissions and assay utilization costs to process clinical samples.

Components of Results of Operations

As of September 30, 2024, our revenue has been exclusively generated from the License Agreement with Allogene Overland PRC.

See Note 6 to our financial statements appearing elsewhere in this Quarterly Report for more information related to our recognition of revenue and the License Agreement.

As of March 31, 2025, our revenue has been exclusively generated from the License Agreement with Overland Therapeutics.

See Note 6 to our consolidated financial statements appearing in our Annual Report for more information related to our recognition of revenue and the License Agreement.

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

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

Research and development expenses for the three and nine months ended September 30, 2024 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

Research and development expenses for the three months ended March 31, 2025 included costs associated with our clinical and preclinical stage pipeline candidates and research into newer technologies.

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

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

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

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• the number of sites included in the trials;

• the number of patients we are required to screen with eligibility tests (e.g.

MRD assays) in order to reach our enrollment targets;

• the countries in which the trials are conducted;

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Because our product candidates are still in clinical and preclinical development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of product candidates or whether, or when, we may achieve profitability.

We do not track most of our external research and development expenses by programs or product candidates because most of our external research and development expenses could be used for different programs or product candidates.

General and Administrative

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

We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, potential commercialization of our product candidates and operating as a public company.

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

Other Income (Expense), Net:

Interest and Other Income, Net

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

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

Interest Expense

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Interest expense related to the California Institute of Regenerative Medicine (CIRM) award is accrued upon cash receipt.

Other Income and Expense, Net

Other income and expense, net consist of non-operating income and expenses, including our share of equity investments’ net losses for the period.

Other Income (Expenses), net

Other income (expenses), net, consist of non-operating income and expenses, including primarily our share of net losses for the period from, and impairment of, our equity method investments and impairment of our equity investments.

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

The following sets forth our results of operations for the three months ended September 30, 2024 and 2023 (dollars in thousands):

Three Months Ended

September 30, Change

2024 2023 $ %

Collaboration revenue - related party $ — $ 22 $ (22) (100) %

Operating expenses:

Research and development 44,713 45,977 (1,264) (3) %

General and administrative 16,333 17,041 (708) (4) %

Impairment of long-lived assets

10,728 — 10,728 100 %

Total operating expenses 71,774 63,018 8,756 14 %

Loss from operations (71,774) (62,996) (8,778) 14 %

Other income (expense), net:

Interest and other income, net 6,705 6,205 500 8 %

Interest expense (100) — (100) 100 %

Other income and expense, net

(1,124) (5,496) 4,372 (80) %

Total other income (expense), net 5,481 709 4,772 673 %

Net Loss (66,293) (62,287) (4,006) 6 %

Collaboration revenue - related party

Collaboration revenue recognized for the three months ended September 30, 2023 was mainly due to participation in the joint steering committee performance obligation related to the License Agreement with Allogene Overland PRC.

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the periods presented:

Three Months Ended September 30,

2024 2023 Change

Personnel $ 19,699 $ 26,170 $ (6,471)

Development costs 12,469 6,494 5,975

Facilities and depreciation 10,381 11,104 (723)

Other 2,164 2,209 (45)

Total research and development expenses 44,713 45,977 (1,264)

Our research and development expenses included $22.5 million of internal expenses and $22.2 million of external expenses for the three months ended September 30, 2024.

Our research and development expenses included $28.1 million of internal expenses and $17.9 million of external expenses for the three months ended September 30, 2023.

Research and development expenses were $44.7 million and $46.0 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease of $1.3 million was driven primarily by a decrease in personnel related costs of $6.5

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million, including $1.8 million related to a decrease in stock-based compensation expense, and a decrease in facilities and depreciation expense of $0.7 million, partially offset by the increase in external costs of $6.0 million relating to the advancement of our product candidates due to the timing of development activities and manufacturing runs.

General and Administrative Expenses

General and administrative expenses were $16.3 million and $17.0 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease of $0.7 million was primarily due to a decrease in personnel related costs of $0.6 million, including $0.2 million related to a decrease in stock-based compensation expense.

Impairment of long-lived asset

In September 2024, we identified additional impairments as the carrying values of to-be-sublet property asset groups were not recoverable due to current market conditions.

We revised the valuations of the assets within these groups based on a non-binding letter of intent with a potential subtenant for a portion of one of the buildings within one of the asset groups and based on new market data for both asset groups.

For the three months ended September 30, 2024, we recorded long-lived asset impairment charge of $10.7 million.

No such expense was recorded for the three months ended September 30, 2023.

Interest and Other Income, Net

Interest and other income, net was $6.7 million and $6.2 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $0.5 million was primarily due to foreign exchange rate gain as a result of strengthening U.S.

dollar against other currencies.

Interest Expense

Interest expense was related to the CIRM award proceeds received for the three months ended September 30, 2024.

No such interest expense was recorded for the three months ended September 30, 2023.

Other Income and Expense, Net

Other expense, net was $1.1 million and $5.5 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease in other expense of $4.4 million was primarily due to a decrease in the share of net losses in our equity method investments and impairment charge of $3.0 million for our equity method investments during the three months ended September 30, 2023.

Comparison of the Nine Months Ended September 30, 2024 and 2023

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The following sets forth our results of operations for the nine months ended September 30, 2024 and 2023 (dollars in thousands):

Nine Months Ended

September 30, Change

Comparison of the Three Months Ended March 31, 2025 and 2024

The following sets forth our results of operations for the three months ended March 31, 2025 and 2024 (dollars in thousands):

Three Months Ended March 31, Change

2025 2024 $ %

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General and administrative 14,991 17,267 (2,276) (13) %

Impairment of long-lived assets

15,717 — 15,717 100 %

Total operating expenses 65,191 69,526 (4,335) (6) %

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Interest expense (150) — (150) (100) %

Other income and expense, net

(1,968) (10,901) 8,933 (82) %

Other income (expenses), net 92 (929) 1,021 (110) %

Total other income (expense), net 5,458 4,504 954 21 %

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Collaboration revenue - related party

Collaboration revenue recognized for the nine months ended September 30, 2024 and 2023 was mainly due to participation in the joint steering committee performance obligation related to the License Agreement with Allogene Overland PRC.

Revenue recognized for the three months ended March 31, 2024 was mainly due to participation in the joint steering committee performance obligation related to the License Agreement entered into with Overland Therapeutics on December 14, 2020.

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 Change

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Total research and development expenses $ 50,200 $ 52,259 $ (2,059)

Our research and development expenses included $70.1 million of internal expenses and $77.3 million of external expenses for the nine months ended September 30, 2024.

Our research and development expenses included $94.4 million of internal expenses and $93.8 million of external expenses for the nine months ended September 30, 2023.

Research and development expenses were $147.3 million and $188.3 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease of $40.9 million was driven primarily by a decrease in personnel related costs of $28.3 million, including $10.2 million related to a decrease in stock-based compensation expense, external costs of $8.4 million relating to the advancement of our product candidates due to the timing of development activities and manufacturing runs, and facilities, depreciation, and other expense of $4.2 million.

Our research and development expenses included $24.1 million of internal expenses and $26.1 million of external expenses for the three months ended March 31, 2025.

Of the $26.1 million of external expenses for the three months ended March 31, 2025, $6.2 million was related to our cema-cel program.

Our research and development expenses included $25.5 million of internal expenses and $26.8 million of external expenses for the three months ended March 31, 2024.

Research and development expenses were $50.2 million and $52.3 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease of $2.1 million was driven primarily by a decrease in personnel related costs of $1.2 million and facilities and depreciation costs of $0.8 million attributable to the completion of useful life for certain machinery and equipment.

General and Administrative Expenses

General and administrative expenses were $49.7 million and $54.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease of $4.8 million was primarily due to a decrease in personnel related costs of $3.9 million, including $1.7 million related to a decrease in stock-based compensation expense.

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Impairment of long-lived asset

In June 2024, we recorded long-lived asset impairment charge of $5.0 million.

In September 2024, we identified additional impairments as the carrying value of this to-be-sublet property asset group was not recoverable due to current market conditions.

We revised the valuation of this asset group based on new market data.

In September 30, 2024, we recorded an additional long-lived asset impairment charge of $1.2 million.

Previously, in December 2023, we made a decision to sublease one of our other leased buildings in South San Francisco.

In September 2024, we identified additional impairments as the carrying value of to-be-sublet property asset group was not recoverable due to current market conditions.

We revised the valuations of this asset group based on a non-binding letter of intent with a potential subtenant for a portion of the building included in this asset group and based on new market data.

In September, we recorded long-lived asset impairment charge of $9.5 million.

During the nine months ended September 30, 2024, we recognized total impairment charge of $15.7 million.

No such expense was recorded for the nine months ended September 30, 2023.

General and administrative expenses were $15.0 million and $17.3 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease of $2.3 million was primarily due to a decrease in personnel related costs of $1.4 million, including $1.0 million related to a decrease in stock-based compensation expense, and other expenses of $0.6 million, attributable to decreases in legal and consulting expenses.

Interest and Other Income, Net

Interest and other income, net was $17.1 million and $12.0 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $5.1 million was primarily due to higher yields and a corresponding increase in the interest earned on our cash, cash equivalents and investments.

Interest and other income, net was $5.5 million and $5.4 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $0.1 million was due to net gain of foreign exchange and additional sublease income, partially offset by a lower interest earned on our cash, cash equivalents and investments.

Interest Expense

Interest expense was related to the CIRM award proceeds received for the nine months ended September 30, 2024.

No such interest expense was recorded for the nine months ended September 30, 2023.

Other Income and Expense, Net

Other expense, net was $2.0 million and $10.9 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease in other expense of $8.9 million was primarily due to a decrease in the share of net losses in our equity method investments and impairment charge of $3.0 million for our equity method investments during the nine months ended September 30, 2023.

Interest expense was related to the CIRM award proceeds received for the three months ended March 31, 2025.

No such interest expense was recorded for the three months ended March 31, 2024.

Other Income (Expenses), Net

For the three months ended March 31, 2025 and 2024, we recorded other income of $0.1 million and other income (expenses), net of $0.9 million, respectively.

The increase in other income (expenses), net, of $1.0 million was primarily due to a decrease in the share of net losses in our equity method investments.

Liquidity and Capital Resources

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

As of September 30, 2024, we had $403.4 million in cash and cash equivalents and investments.

We anticipate that the aggregate of our current cash and cash equivalents and investments available for operations will be sufficient to fund our operations for at least the next 12 months from the date this Quarterly Report is filed with the SEC.

Our operations have been financed primarily by net proceeds from the sale and issuance of our convertible preferred stock, the issuance of convertible promissory notes, net proceeds from our IPO, our at-the-market (ATM) offerings, our June 2020 underwritten public offering, our May 2024 registered offering, and an upfront cash payment of $40.0 million received in December 2020 pursuant to our License Agreement with Allogene Overland PRC.

In November 2019, we entered into a sales agreement with Cowen and Company, LLC (Cowen), as amended on November 2, 2022 and November 2, 2023, under which we may from time to time issue and sell shares of our common stock through Cowen in ATM offerings.

During the nine months ended September 30, 2024, we sold an aggregate of 250,000 shares of our common stock in ATM offerings resulting in net proceeds of $1.0 million.

The specified dollar limit on the amount of common stock that may be sold under the sales agreement was removed pursuant to the November 2, 2023 amendment to the sales agreement.

As of March 31, 2025, we had $335.5 million in cash, cash equivalents and investments.

We believe that the aggregate of our current cash, cash equivalents and investments available for operations will be sufficient to fund our operations for at least the next 12 months from the date this Quarterly Report is filed with the SEC.

Our operations have been financed primarily by net proceeds from the sale and issuance of our convertible preferred stock, the issuance of convertible promissory notes, net proceeds from our IPO, our at-the-market (ATM) offerings, our June 2020 underwritten public offering, upfront cash payment of $40.0 million received in December 2020 pursuant to our License Agreement with Overland Therapeutics, and our May 2024 registered offering.

In May 2024, we completed an underwritten offering pursuant to which we issued and sold 37,931,035 shares of our common stock.

We received net proceeds of $105.2 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

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In November 2019, we 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 we may from time to time issue and sell shares of our common stock through TD Cowen in ATM offerings.

During the three months ended March 31, 2025, we sold an aggregate of 3,842,282 in ATM offerings resulting in net proceeds of $10.0 million.

The specified dollar limit on the amount of common stock that may be sold under the sales agreement was removed pursuant to the November 2, 2023 amendment to the sales agreement.

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

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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Operating Activities

During the nine months ended September 30, 2024, cash used in operating activities of $163.6 million was attributable to a net loss of $197.7 million and a decrease of $30.1 million in our net operating assets and liabilities, partially offset by non-cash charges of $64.1 million.

The non-cash charges consisted primarily of stock-based compensation expense of $38.9 million, impairment of long-lived assets of 15.7 million, depreciation of $10.4 million, non-cash rent expense of $4.1 million, and our share of equity investments’ net losses for the period of $1.7 million, partially offset by net amortization and accretion on investment securities of $6.7 million.

The change in operating assets and liabilities was primarily due to deposit placed in escrow related to the Servier Amendment of $22.3 million, decrease in operating lease liabilities of $4.5 million, decrease in accrued and other current liabilities of $4.1 million, increase in prepaid expenses and other current assets of $2.3 million, and decrease in accounts payable of $0.5 million, partially offset by decrease in other long-term assets of $3.6 million.

During the nine months ended September 30, 2023, cash used in operating activities of $184.0 million was attributable to a net loss of $241.5 million and a decrease of $16.2 million in our net operating assets and liabilities, partially offset by non-cash charges of $73.7 million.

The non-cash charges consisted primarily of stock-based compensation expense of $50.7 million, depreciation of $10.7 million, our share of equity investments' net losses for the period of $7.9 million, non-cash rent expense of $4.9 million, and impairment of equity method investment of $3.0 million, partially offset by net amortization and accretion on investment securities of $3.5 million.

The change in operating assets and liabilities was primarily due to decrease in accounts payable of $7.2 million, decrease in accrued and other current liabilities of $7.1 million, decrease in operating lease liabilities of $4.4 million, decrease in other long-term liabilities of $0.6 million, and increase in other long-term asset of $0.4 million, partially offset by decrease in prepaid expenses and other current assets of $3.6 million.

During the three months ended March 31, 2025, cash used in operating activities of $52.9 million was attributable to a net loss of $59.7 million, a decrease of $8.3 million in our net operating assets and liabilities, partially offset by non-cash charges of $15.1 million.

The non-cash charges consisted primarily of stock-based compensation expense of $12.2 million, depreciation of $3.1 million, and non-cash rent expense of $1.1 million, partially offset by net amortization and accretion on investment securities of $1.3 million.

The change in operating assets and liabilities was primarily due to decrease in accrued and other current liabilities of $5.2 million, decrease in operating lease liabilities of $1.8 million, increase in deposit in escrow of

$0.9 million and increase in prepaid expense and other current assets of $0.6 million, partially offset by decrease in other long-term assets of $0.4 million.

During the three months ended March 31, 2024, cash used in operating activities of $55.9 million was attributable to a net loss of $65.0 million, a decrease of $5.7 million in our net operating assets and liabilities, partially offset by non-cash charges of $14.8 million.

The non-cash charges consisted primarily of stock-based compensation expense of $11.9 million, depreciation of $3.6 million, non-cash rent expense of $1.2 million, and our share of equity investments’ net losses for the period of $0.9 million, partially offset by net amortization and accretion on investment securities of $2.8 million.

The change in operating assets and liabilities was primarily due to a decrease in accrued and other current liabilities of $5.7 million and operating lease liabilities of $1.2 million, partially offset by a $1.4 million decrease in other long-term assets.

Investing Activities

During the nine months ended September 30, 2024, net cash provided by investing activities of $20.8 million was related to cash provided by investment maturities of $330.3 million and cash provided by investment sales of $5.4 million, partially offset by cash used in the purchase of investments of $314.5 million.

During the nine months ended September 30, 2023 , net cash provided by investing activities of $95.8 million was related to cash provided by investment maturities of $461.5 million and cash provided by investment sales of $5.6 million , partially offset by cash used in purchases of investments of $369.9 million and cash used in the purchase of property and equipment of $1.3 million .

During the three months ended March 31, 2025, net cash provided by investing activities of $6.2 million was related to cash provided by investment maturities of $56.5 million, partially offset by cash used in the purchase of investments of $50.2 million.

During the three months ended March 31, 2024, net cash provided by investing activities of $22.1 million was related to cash provided by investment maturities of $103.3 million, partially offset by cash used in the purchase of investments of $81.1 million.

Financing Activities

During the nine months ended September 30, 2024, cash provided by financing activities of $110.9 million was related to $105.3 million in net proceeds from the issuance of common stock through our May 2024 registered offering, $2.3 million of cash provided from the CIRM award, $1.5 million of cash provided by the sale of common stock through our employee stock purchase plan, $1.0 million of net proceeds from the issuance of common stock through ATM transactions, and $0.8 million of cash provided by the issuance of common stock upon exercise of stock options.

During the nine months ended September 30, 2023 , cash provided by financing activities of $95.5 million was related to $91.1 million in net proceeds from the issuance of common stock through ATM transactions, $2.5 million of cash provided by the sale of common stock through our employee stock purchase plan, and $1.9 million of cash provided by the issuance of common stock upon exercise of stock options.

During the three months ended March 31, 2025, cash provided by financing activities of $14.0 million was related to cash provided by net proceeds from the issuance of common stock through ATM transactions of $10.0 million, proceeds from the CIRM award of $3.4 million and the sale of common stock through our employee stock purchase plan of $0.6 million.

During the three months ended March 31, 2024, cash provided by financing activities of $1.7 million was related to $0.9 million of cash provided by the sale of common stock through our employee stock purchase plan and $0.8 million of cash provided by the issuance of common stock upon exercise of stock options.

Material Cash Commitments and Requirements

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

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

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

Under these agreements we are required to make milestone payments upon successful completion of certain regulatory and sales milestones on a target-by-target and country-by-country basis.

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

As of September 30, 2024, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

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

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

Under these agreements we are required to make milestone payments upon successful completion of certain development, regulatory and/or sales milestones on a target-by-target and country-by-country basis.

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

As of March 31, 2025, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

For additional information regarding our agreements, see Note 6 to our consolidated financial statements included in our Annual Report.

Our operating lease obligations primarily consist of lease payments on our research, lab and office facilities in South San Francisco, California, as well as lease payments on our cell manufacturing facility in Newark, California.

For additional information regarding our lease obligations, see Note 7 to our condensed consolidated financial statements included elsewhere in this report.

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

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

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

For additional

information regarding our lease obligations, see Note 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report.

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

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

We made an 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 October 2023.

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

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

We are 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, we may defer the additional payment to a later date.

The agreement may be terminated by either party for material breach by the other party.

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Critical Accounting Policies and Estimates

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis