Allogene Therapeutics Inc

NASDAQ:ALLO

Earnings Call Transcript 2023-Q1

[Operator]

Hello and thank you for standing by. And welcome to the Allogene Therapeutics First Quarter 2020 Conference Call. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]

Please be aware that today’s conference call is being recorded. I would now like to turn the call over to Christine Cassiano, Chief Communications Officer. Ms. Cassiano, please go ahead.

[Christine Cassiano, Chief Communications Officer]

Thank you, Operator, and welcome to our call. Today, after market closed, Allogene issued a press release that provides a business update and financial results for the first quarter of 2023. This press release and today’s webcast are both available on our website. Following our prepared remarks, we will host a Q&A session. We ask you to limit your questions to one per person as we will keep this call to an hour and do our best to get in as many as possible.

Joining me today are Dr. David Chang, President and Chief Executive Officer; Dr. Zachary Roberts, Executive Vice President of Research and Development and Chief Medical Officer; and Dr. Eric Schmidt, Chief Financial Officer.

During today’s call we will be making forward-looking statements. These may include statements regarding the success and timing of our ongoing and planned clinical trials, data presentations, regulatory filings, future research and development efforts, manufacturing capabilities and 2023 financial guidance, among certain things.

These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of potential risks can be found in our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements and Allogene disclaims any obligation to update these statements.

I’ll now turn the call over to David.

[Dr. David Chang, President and CEO]

Thank you, Christine, and in many thanks to all of you for joining today’s call. When we launched Allogene in May 2018, we understood that our mission to reinforce a new generation of CAR T products was an important one.

Like other industry pioneers, we knew that along our journey, we might face many obstacles that our progress would be marked by several first-in-class milestones and that a scientific approach to decision-making would guide us on the best path to success.

Most of all, we knew that our compass has to be standard on doing right for patients. This is why each year on the company’s founding university we celebrate Patient Day at Allogene. This year, we will honor to have two patients join us live at our headquarters, one who received ALLO-501 for the treatment of relapsed/refractory non-Hodgkin’s lymphoma and one who received ALLO-715 for relapsed/refractory multiple myeloma, each of whom continues in long-term response. They both spoke eloquently of their own journey with cancer, their decision to place their trust in Allogene and the impact that our AlloCAR T product candidates have had on their lives.

Why do I mention this? We often get questions about our stock price weakness. Yes, the market is challenging. Yes, cell therapy stocks are temporarily out of favor. And yes, many of us in the industry find it frustrating that progress is not always rewarded in real time. But during times like this, it helps to remember that best marker of success is not necessarily a stock price, rather it is the impact companies in our sector are having on patients.

We at Allogene not only have the confidence in the clinical data sets that we have delivered, but know that we are on the right path by having look into the eyes of patients who are with us today because of our investigational products. The two patients I met earlier this week are living proof of Allogene’s success.

As we hear their stories, we also hear the growing rumble of this content around the inability of autologous CAR T therapies to satisfy patient demand. By 2030, it is estimated that 300,000 patients with lymphoma or myeloma will be eligible for an autologous CAR T therapy as it moves to earlier lines. Only a few on estimated 10% will be able to receive treatment, yet achieving even that goal will require 30,000 individual manufacturing ones.

Last year, based on the reported sales, 6,000 to 7,000 runs were required, which along strained the system. We are keenly aware that shareholder interest is best served by bringing AlloCAR T products to the market as soon as possible, but the real sense of urgency that we feel originates from many patients who are on the sidelines today waiting their turn.

In contrast to autologous cell therapies, patients in our trials don’t have to wait on the sidelines. They are able to start treatment within days of enrollment and without the need of undergoing bridging therapy, which often comes with marginal benefit, but with toxicities.

Treatment consists of a onetime infusion of cells, free of hassle and inconvenience of having to return to the clinic for treatment again and again, and would ask the cumulative toxicities that often comes with lengthy chronic therapy. AlloCAR T is unique in its ability to potentially provide a onetime off-the-shelf product capable of achieving long-term remissions.

As we march towards our goal of a BLA submission for ALLO-501A upon completion of the ALPHA2 trial and evaluate manufacturing process across our BCMA candidates to achieve optimal clinical performance, I am particularly excited to welcome Tim Moore to Allogene as our new Chief Technical Officer.

Tim was my colleague at Kite and he was trusted to deliver CAR T products for every patient we enrolled in clinical studies and post-approval. As the Executive Vice President of Technical Operations, he oversaw the global development of the most commercially successful Autolus CAR T manufacturing processes in the industry.

More importantly, he successfully navigated the complex CMC processes for the BLA submission of YESCARTA that led to an on-time approval of YESCARTA and Kite’s commercial manufacturing facility. He is a true pioneer who define operational strategy to reduce manufacturing risk and mitigate supply chain challenges inherent to engineered cell therapy.

His joining Allogene is a recognition that the only way to deliver CAR T at scale and in a timely manner is through an allogeneic approach. Of course, to get to a BLA, we need to execute on clinical development, which is Zach Roberts main focus.

With that in mind, I now turn the call over to Zach for an update on our R&D activities.

[Dr. Zachary Roberts]

Thank you, David. When Allogene began this journey, the biggest question faced in the field was whether or not the safety and efficacy of an allogeneic product to be comparable to approved autologous CAR T therapies, and in particular, whether AlloCAR T achieve the longer term remissions that is a hallmark of cell therapy.

While data from our ongoing Phase II trials will be required for confirmation, we strongly believe that the available data from the Phase I ALPHA and APLHA2 trials establish the feasibility of this new modality.

The unique experience and track record we have across our teams derived from previous success developing autologous CAR T therapies that led to approvals in late- and earlier-line disease gives us the confidence in our approach in clinical data.

When you combine that history with the nearly 200 patients we have treated with our AlloCAR T investigational products, including nearly 50 patients alone with LBCL, we are in an unparalleled position when it comes to depth of understanding.

Our experience now extends even further with the addition of Tim to our team. I doubt there are any better position to ensure that our capabilities and product sciences scale successfully with our advances in the clinic.

Another important benefit of our experience in the field is our longstanding relationships with investigators. We recently held a meeting with many of our Phase II investigators as we progress enrollment of the ALPHA2 trial and begin enrolling patients in the EXPAND trial.

As our clinical safety and efficacy data continue to mature, the more excited our investigators are of the potential of allogeneic CAR T. In an effort to increase awareness of our programs to an even broader set of physicians, we are very pleased to be presenting updated Phase I data from our trials with ALLO-501 and ALLO-501A at the upcoming American Society of Clinical Oncology Annual Meeting in Chicago.

While the field of allogeneic CAR T has been marked by inconsistent data sets, especially as they relate to durability of response, we believe the data we presented at our R&D showcase late last year demonstrate that our CD19 AlloCAR T product candidates have the potential to provide durability and that is on par with autologous therapies. We believe we have succeeded where many have fallen short by virtue of being able to control premature CAR T-cell rejection.

Our platform is enabled by ALLO-647, our anti-CD52 monoclonal antibody that permits an extended window of CAR T cell expansion and persistence. What ALLO-647 does cannot be reproduced even with high doses of chemotherapy that might be associated with severe toxicity.

I’m pleased to report that we have recently initiated the Phase II EXPAND trial designed to support the licensure of ALLO-647 as a lymphodepleting agent for ALLO-501A in LBCL. This study is designed to demonstrate the superiority of ALLO-647 containing lymphodepletion regimens over a regimen of full site alone [ph].

The preponderance of data we’ve already presented from our CD19 program point to improved clinical performance with ALLO-647 in terms of depth and durability of response. And our safety data to-date are generally comparable to that of autologous CAR Ts.

We’ve not observed GvHD or severe ICANs at relatively low rates of CRS and our rate and severity of cytopenias and infections are in line with what has been reported for autologous CAR T. Based on our emerging product profile, you can understand why we remain very confident in the potential outcome of both of our ongoing Phase II trials.

I’d like to next turn your attention to our ALLO-316 program, where we recently had an oral presentation of our interim Phase I data in renal cell carcinoma at the clinical trials plenary session of the American Association of Cancer Research Annual Meeting.

Clear cell renal cell carcinoma is the most common form of kidney cancer. The unmet need in patients with metastatic or advanced disease who have progressed on standard-of-care therapies, tyrosine kinase inhibitors and immune checkpoint inhibitors is high.

Once patients have progressed on these two classes of drugs, there are limited options. In fact, it’s estimated that 90% of patients with advanced or metastatic RCC will die from their disease within five years.

The data we presented at AACR showed that ALLO-316 has the potential to make a difference for patients with RCC whose disease progressed on TKIs and immune checkpoint inhibitors. Initial results from the dose escalation portion of the trial showed that a single infusion of ALLO-316 demonstrated antitumor activity in patients with CD70 expressing tumors, providing a 100% disease control rate, meaning tumor shrank or remained stable over a certain time period.

In the 10 patients whose tumors are known to express CD70, the overall response rate was 30%, including three partial responses, meaning the size of the tumors were reduced by at least 30%. The longest partial response lasted to month eight. This is remarkable given that we’re still in the dose escalation phase of the study with most patients being treated with relatively low doses, 40 million or 80 million total AlloCAR T cells.

As in our CD19 program, the safety profile of ALLO-316 to-date appears generally consistent with what is seen with autologous CAR T cell therapies. With all 19 patients in the Phase I study, including nine who did not have CD70 expressing tumors or had CD70 expression unknown, there was a single case of Grade 3 CRS neurotoxicity, which is now defined more broadly with generally low grade and reversible with most events being fatigue or headache. There were no cases of GvHD or ICANS. Infections occurred in eight patients and included four cases of Grade 3 or higher infection.

Grade 3 or higher prolonged cytopenia was observed in three patients. One dose limiting toxicity of Grade 3 autoimmune hepatitis was reported. This event, which has been resolved, may have been confounded by prior use of the checkpoint inhibitor.

One feature of ALLO-316 that we are particularly excited about is the expansion of persistence of ALLO-316, which we believe compares favorably with what has been reported for autologous CAR T therapies.

ALLO-316 was engineered so the anti-CD70 CAR can exhibit an additional function beyond cancer cell killing, avoidance of premature rejection by the host immune system. Because CD70 is expressed on activated T cells, there is a potential for ALLO-316 to target and eradicate alloreactive T cells in addition to CD70-positive cancer cells.

This unique feature of ALLO-316 highlighted in the TRAVERSE translational data shared at AACR is the basis of our proprietary Dagger technology that now has become the foundation of our next-generation anti-retection approach.

Dagger technology is designed to prevent early rejection of AlloCAR T cells by suppressing host immune cells, thereby supporting CAR T cell expansion and enabling a prolonged window of persistence.

We are excited by the possibility to deploy Dagger alongside CARs directed at other antigen targets in the same cell for the purpose of creating a novel allogeneic CAR T platform for a suite of next-generation products that are less dependent on traditional chemotherapy-based lymphodepletion.

I will now turn the call over to Eric.

[Dr. Eric Schmidt, Chief Financial Officer]

Thank you, Zach, and good afternoon, everyone. While the market environment for biotech companies continues to present challenges, one thing remains certain, success will ultimately be driven by a combination of scientific innovation, experience and financial stewardship.

Our scientific innovation is proving itself in the clinic. The experience of the Allogene team has never been a doubt, and in fact, the addition of Tim as our CTO has only added to our strength. And lastly, we are proud that we have been and continue to be very thoughtful about how we deploy our resources.

Our balance sheet remains strong as we ended the quarter with $514 million in cash, cash equivalents and investments. We also continue to execute cost savings measures directed at preserving our balance sheet strength. We believe these efforts have extended our cash runway into Q2 of 2025, long enough to complete our pivotal trials for ALLO-501A and prepare for a potential BLA submission.

In the first quarter of 2023, our research and development expenses were $80.2 million, which includes $9.2 million of non-cash stock-based compensation expense. General and administrative expenses were $18.9 million for the first quarter of 2023, which includes $9.6 million of non-cash stock-based compensation expense. Our net loss for the first quarter of 2023 was $98.7 million or $0.68 per share, including non-cash stock-based compensation expense of $18.8 million.

We now expect a decrease in cash, cash equivalents and investments of approximately $230 million in 2023. We expect that our full year 2023 GAAP operating expenses to be approximately $340 million, which includes estimated non-cash stock-based compensation expense of approximately $80 million. This guidance excludes any impact from potential business development activities.

With that, we will now open the call for your questions.

[Operator]

Thank you. [Operator Instructions] Our first question will come from Tyler Van Buren of TD Cowen. Your line is open. Mr. Van Buren, please unmute.

[Tyler Van Buren, TD Cowen]

Okay. I’m here. Yeah. Thanks. Congrats on the progress, guys. Thanks for taking the question. As we think about the ASCO update and what we should expect, can you just help frame that a little further. We’ve seen good durability, obviously, with the early patients and the majority of Alloy patients have made it past 12 months. So the focus at ASCO on the single-dose FCA90 alloy patients and will all 12 be past 12 months at the time of cut off right just before ASCO?

[Dr. David Chang, President and CEO]

Tyler, good afternoon. Thanks for that question. This is David Chang. Certainly, we will be updating providing the data at ASCO. And one thing that we are really trying to do is, have our data be in front of the investigator and the KOLs. Previously, we have shared the information, but that was in a corporate presentation setting.

And as we are expanding the clinical studies, it has become very apparent to us that much of the information that we have communicated to our investors who are not readily available or have been made not to the academic community, clinical community. So the purpose of the ASCO presentation is to ensure that KOLs and our investigators and their teams have a chance to see our data in peer-reviewed format.

[Dr. Eric Schmidt, Chief Financial Officer]

And Tyler, this is Eric. Just in terms of the specific details, we’re going to have to wait until ASCO or the conference itself. We don’t want to preempt the conference organizers. I do want to remind everyone that we stopped enrolling patients in the Phase I study when we began the Phase II program, so there won’t be additional patients. But, yes, we’ll have additional follow-up on patients previously treated as you presumed, and obviously, we’re just keen to share this update in the medical forum, as David mentioned.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Salveen Richter of Goldman Sachs. Your line is open.

[Matt Borsch, Goldman Sachs]

Hey. Thanks. This is Matt on for Salveen. Could you guys give us any more details on the progress of the pivotal ALPHA2 trial in particular? Have you begun treating patients and when could we expect initial data? Thank you.

[Dr. David Chang, President and CEO]

Yeah. Thanks for that question. So the study is open to enrollment and it is progressing as expected. And our guidance remains the same that we expect to complete enrollment in the first half of next year and we expect a Phase II readout by the end of next year.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Michael Yee of Jefferies. Your line is open.

[Michael Yee, Jefferies]

Hey, guys. Good afternoon and thanks for the update. We had one question and a follow-up. On the enrollment of ALPHA2 and also the EXPAND trial. Could you comment on how you think about the types of patients that are getting enrolled in ALPHA2? And even specifically, the EXPAND trial given that’s actually a randomized study, where the control arm doesn’t necessarily get to 647. And if you think about how efficacy would be on that, the types of patients that would actually enroll in that trial. And the reason I ask about this is just, obviously, leading to the confidence around the timing, alluding to the prior question, as well as, obviously, other options that are out there for people in a competitive environment. So that’s a complicated but I think important first question. And then the follow-up is on myeloma, could you comment on how you’re thinking about the timing of the next update there as it relates to the manufacturing and what we’re sort of waiting for, when we could get some disclosures at this year? Thank you, guys.

[Dr. David Chang, President and CEO]

Thanks, Michael. So on -- in the case of the first question, so the patients that we’re enrolling to the trials are patients that are -- would have been considered eligible for the original autologous CAR T studies.

So these are patients who are in third line who -- whose disease is progressing, but otherwise sort of are fit and well enough to meet the eligibility criteria. So we do not expect to be measurably different in the patients that we treat and either EXPAND or ALPHA2 from the target population that was studied in the autologous CAR T world.

On the second question around myeloma. So as we’ve guided previously, we are focused on reviewing the manufacturing process used for ALLO-715 and 605. We expect that to be the focus of this -- the remaining months of this year and potentially resuming dosing in 2024.

[Operator]

Thank you One moment please for our next question. Our next question will come from Michael Schmidt of Guggenheim Partners. Your line is open.

[Unidentified Analyst]

Hi. Good afternoon. This is Ed [ph] on for Michael. Thanks for taking our questions. Congrats on the progress on initiating EXPAND. How do you plan to allocate patients to ALPHA2 and Expand so that the two studies won’t compete each other in terms of patient enrollment? And then can you talk about the powering assumption for EXPAND or what level of PFS separation you expect to see from the two arms? Thank you.

[Dr. David Chang, President and CEO]

So in terms of competing for enrollment into the two studies, ALPHA2 and EXPAND, we have addressed this largely operationally through the sites that we intend to open for the two programs. They are not overlapping. So if you’ve got one CD19 program from Allogene open at your center, it’s going to be either ALPHA2 or EXPAND. So that is the primary mechanism by which we’re doing that.

As far as the powering assumptions, we’ve not gone into the details of the study design there and won’t be doing so today. But rest assured that with the sample size of 35 in each arm, we do believe that there will be a significant difference between the two arms.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Mark Breidenbach of OpCo. Your line is open.

[Mark Breidenbach, OpCo]

Hey. Good afternoon, guys. Thanks for taking our question. Just to kind of set expectations on next date from the TRAVERSE study, can we kind of expect dose level 3 and dose level 4 cohorts to enroll similar numbers of patients as we saw in the first two cohorts. And I guess I’m wondering if we should be expecting data from those later this year and if they’re also all going to be selected for based on CD70 positivity and receive FCA conditioning. I know some of the patients in dose level 1 and dose level 2 cohorts did not receive FCA conditioning. Thanks for taking those questions.

[Dr. David Chang, President and CEO]

So as we’ve mentioned in the past, the dose escalation is indeed ongoing, we do expect to enroll patients to both FC and FCA arms in at least dose level 3 and potentially dose level 4. And as far as data updates go, we are expecting to be able to share data in the second half of this year and we’ll decide when to share those updates according to when we’ve got a reasonable number of patients and some decent follow-up. So it’s a meaningful update.

[Operator]

Thank you. One moment for our next question. Our next question will come from Jack Allen of Baird. Your line is open.

[Jack Allen, Baird]

Great. Thank you so much and congratulations to the team on all the progress made over the quarter. A bit of an abstract question, but I do get a number of inquiries from investors surrounding the one late progressor from the FCA90 Alloy treatment cohort of the ALPHA1, ALPHA2 study. I was wondering if you had any additional thoughts as it relates to why that may be occurring with allogeneic cell therapy and any scientific context you can provide around that patient?

[Dr. David Chang, President and CEO]

Hi, Jack. Let me take on that question. Even in the autologous CAR T therapy setting, late progression happens and we don’t view what happened to that patient to be a unique event to the allogeneic CAR T. I think during the course of CAR T we are learning a lot. Yes, we get patients who stay very stable after six months or so, but the late progression is known to occur.

[Operator]

Thank you One moment please for our next question. Our next question will come from Brian Cheng of JPMorgan. Your line is open.

[Brian Cheng, JPMorgan]

Hey, guys. Thanks for taking my questions. Just going back to your earlier comments related to Dagger technology. Are you planning to push out Dagger in specific liquid and solid tumor indications? And I don’t know whether you have any early view on your strategy today with the next steps and how does that fit into your current plan? Thank you.

[Dr. David Chang, President and CEO]

Brian, that’s a great question. Dagger technology, as we review more data, we get more excited about what we’re seeing with the Dagger. And not only we are able to transfer the Dagger to another CAR as we have presented earlier this year in a scientific forum, we see this really as potentially in a next-generation platform.

Now, with that, where -- how do we prioritize different targets with the next generation. That’s a great question. And it’s something that we can do across both heme targets, as well as solid tumor targets.

We will be making those decisions, but as we are talking, our research team is essentially generating the next-generation construct. They will be ready to go into the clinic once we make a strategic choice of which ones to go forward first.

[Operator]

Thank you. And one moment for our next question. Our next question will come from John Newman of Canaccord Genuity. Your line is open.

[John Newman, Canaccord Genuity]

Hi, there team. Thanks for taking my question. So I think it’s interesting, last year you showed us data at your R&D showcase that suggested progression-free survival on your CD19 product is basically equivalent to autologous CAR T. You’ve also commented previously that the percentage of patients that are actually receiving autologous CAR T is actually quite low. I wondered if you could discuss just for a moment the impact that enrolling patients from the community could have here. Just thinking that there’s got to be some reason why these patients are actually not receiving autologous CAR T. I’m just wondering if it’s because they’re not suitable or perhaps they just don’t have access to these larger centers? Thanks.

[Dr. Zachary Roberts]

Thanks for that question. So we find there’s enough patients out there with relapsed and refractory diffuse large B-cell lymphoma and they’re all kind of being treated in different places. And often, where we find patients are from, as you said, the community who are being treated with standard frontline combination chemotherapy and then you have a short remission and then progress.

And then they get started on something before they referred to a tertiary care center where CAR T is available. And it’s often those patients who are coming in with a relapse after that frontline having received a couple of doses of additional therapy with still disease present.

So we are looking for these patients. They come from a variety of different places and that’s just one example of the types. But in general, as I said earlier on the call, these patients are very much similar to the patients that were treated in the early days with autologous therapies.

[Operator]

Thank you. One moment for our next question. Our next question will come from Kalpit Patel of B. Riley. Your line is open.

[Kalpit Patel, B. Riley]

Yeah. Hey. Good afternoon. Thanks for taking the question. Maybe one more on the Dagger technology. As you continue to sort of explore 316, do you think that you may be able to incorporate re-dosing of the AlloCAR Ts without traditional flu cy and the anti-CD52 antibody given the use of or the benefit of Dagger?

[Dr. David Chang, President and CEO]

So that’s a really great question. Thank you for asking it. In fact, it really kind of drills down on exactly what we’re so excited about with the Dagger technology. So as we saw at AACR, we do see very nice expansion, in fact, very impressive expansion with Fc alone. So this does give us the confidence that, that Dagger effect is real in patients.

And so it does open the possibility that potentially we could introduce a consolidation strategy where we dose patients shortly after their initial infusion or even as we demonstrated at AACR potentially later on following a period of durable stable disease or a partial remission. And then your question around whether we would need standard lymphodepletion is a great one and it’s one that we will be considering as we move through the study.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Asthika Goonewardene of Truist. Your line is open.

[Asthika Goonewardene, Truist]

Hey, guys. Thanks for taking the question. I just wanted to go back to what’s coming up at ASCO. Maybe if you can talk to us a little bit about kind of what kind of translational data and additional new data do you think we’ll be seeing in the presentation deck? Just want to get a better sense of what you want to be showing through the potential PIs in the prescriber community there. And then as we get more of a feel for how multiple myeloma patients are being treated with autologous CAR T or at least those lucky enough to actually get a manufacturing slot and get a product. Has your idea of what your allogeneic CAR T for multiple myeloma evolve? Thanks.

[Dr. David Chang, President and CEO]

Yeah. Asthika, this is Dave Chang. In terms of the ASCO presentation, we -- other than what is shown in the abstract, we will be curtailing the comments out of respect for the organizers. But as we have said, we have started enrolling into the Phase I. So it’s the same patient as we have previously communicated at the RDS. And obviously, we will have a little longer term follow-up on these patients.

And the second question, since I didn’t really answer your first question, I’m going to answer your second question. On the multiple myeloma, yes, I mean, we are monitoring the situation and the number of the patients who are actually getting autologous CAR T still continues to be limited by the manufacturing in a flat limits.

So here, I mean, with our ALLO-715, which we have previously communicated, what we saw is a durable response that certainly shows autologous CAR T with ALLO-715 works in multiple myeloma.

What we are doing is reviewing the manufacturing to look for an opportunity to increase the potency so that we can be closer to what CAR T has been able to achieve. The current data we have set and we have made it pretty clear as we are communicating.

We do not think we can get up to the CAR T level unless we do something on the manufacturing to improve the potency and that’s exactly what we are doing. And our plan, if everything goes well, is to reintroduce ALLO-715 into the clinic in 2024.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Reni Benjamin of JMP Securities. Your line is open.

[Reni Benjamin, JMP Securities]

Hey, guys. Thanks for taking the question. As we think about ALLO-316 from the data that we saw at AACR, we saw one unconfirmed PR and two confirmed PRs. Has that one unconfirmed PR subsequently been confirmed, because it -- when you talk about that 30% rise, I assume it has been confirmed. I didn’t know from the data if that person had been re-dosed or if any re-dosing is happening in this particular study. And I guess just related to that, there were two additional patients from the November update to the AACR update, is that kind of the cadence of enrollment we should be expecting as we get set up for the second half of this year and expect an update from the TRAVERSE study? Thanks.

[Dr. Zachary Roberts]

Okay. This is Zach. So the -- just back to the first question. So the detail that you’re seeking is actually in the swim lane plot. So the two patients that did have confirmed PRs were confirmed as per RECIST and that third patient with the unconfirmed did have a period of partial remission before the tumor did grow a slight amount that put that patient out of the sort of RECIST PR definition and that the scan was came just after that occurred.

So we weren’t unable to confirm that remission per RECIST, but there was a period of durable reduction in tumor burden over 30% consistent with RECIST. We did retreat two patients. Again, that data is in the swim lane plot and you can go review those and both of those patients did experience a period of disease control following the retreatment.

Finally, the question on the cadence of enrollment. So as we’ve discussed, the protocol was amended recently to only allow patients with tumors who -- whose expression of CD70 is known to be positive into the trial and so that protocol amendment did take some time to work through the system. But I’m pleased to report that the majority of centers now have that protocol amendment in hand and we are seeing a significant increase in the pace of enrollment.

[Operator]

Thank you. One moment please for our next question. Our next question comes from Jason Gerberry of Bank of America Securities. Your line is open.

[Jason Gerberry, Bank of America Securities]

Hey, guys. Thanks for taking my question. Just a follow-up on the BCMA front. If you get the potency to where you feel like you need to be from a competitive standpoint, just curious how open you guys are to partnership like others on the autologous side have explored from a cost-sharing perspective or do you feel like with the allogeneic approach development to marketability wouldn’t be as cost prohibitive as the autologous counterparts. And if I could squeeze a follow-up in, when would you expect the complete enrollment of the EXPAND study? Thanks.

[Dr. David Chang, President and CEO]

Okay. Let me -- on the BCMA, in terms the question around the partnership, which is really what we’re getting into. A year or two years ago, we would not have taken this approach. But right now, at Allogene, we have three clinically validated programs that we are not fully able to invest.

Earlier this year, we made a very strategic choice to focus on the execution of the pivotal study in non-Hodgkin’s lymphoma with ALLO-501A. And both BCMA and 316, we are trying to advance that with somewhat limited resource.

In that situation, we are definitely looking into opportunity to bring in a partner who are committed in advancing the allogeneic CAR T and together and hoping to accelerate programs such as BCMA, where we not only have the lead program that has shown the proof-of-concept, but also the potential to bring the next generation technologies such as the one that includes the Dagger technology or the Turbo CAR, which we have not been able to complete the Phase I study yet.

[Dr. Zachary Roberts]

On the EXPAND trial, Jason, we just recently enrolled or sorry, recently initiated that trial. So it’s a little bit too early to say how enrollment is proceeding at this point in time, but it’s still our goal to have the results from the EXPAND study at roughly at the same time we have the results from the ALPHA2 trial.

[Operator]

Thank you. One moment please for the next question. Our next question will come from William Pickering of Bernstein. Your line is open.

[William Pickering, Bernstein]

Hi. Thank you for taking my questions. I want to confirm I heard you correctly earlier in the call that you expect to read out the pivotal trial before the end of 2024 and is the duration of follow-up that will be reported in that sufficient to file? And if I may, on the partnership comments you just made, David, is that specific to BCMA or is 316 also in scope for that? Thank you.

[Dr. David Chang, President and CEO]

Maybe just on the ALPHA2 time lines. I appreciate the question, William. Yeah. I mean, obviously, data readouts will depend on how quickly we’re able to enroll the study and we still have some work to do there. So we can’t be particularly exact at this point. But year-end-ish of 2024 is a good time line to think about.

[Dr. Zachary Roberts]

Yeah. The second question around the partnership. We are not specific to one particular program, given that we have what we consider as three viable programs, partnering on one of them, certainly, we’re not going to partner on all three of them, but partnering on one or two will allow us to advance the overall, not just those two, but all three programs in a more accelerated way. And at the end, I mean, the real goal of the partnering is trying to maintain the momentum and move as quickly as possible.

[Operator]

Thank you. One moment please for our next question. Our next question will come from Luca Issi of RBC Capital. Your line is open.

[Luca Issi, RBC Capital]

Oh! Great. Thank you for taking my question. Maybe a quick one. You’re lowering your cash flow guidance for the year, I think, about $20 million, if I’m not mistaken. So I wonder if [Technical Difficulty]

[Dr. David Chang, President and CEO]

Operator, are you there.

[Operator]

Mr. Luca. Mr. Luca, are you completed. It sounds like your line went mute, could you please unmute your line.

[Dr. David Chang, President and CEO]

Operator, maybe we can get him back in the queue. Let’s move on.

[Operator]

Okay. One moment. And one moment for our next question. Okay. Our next question will come from Sami Corwin of William Blair. Your line is open.

[Sami Corwin, William Blair]

Hi, there. Thanks for taking my questions. I have a couple on the EXPAND trial. I noticed that in your 10-Q, it stated that a couple of the clinical trial sites have declined to participate, because of its randomized design. So I guess I was curious if that sentiment or hesitation was also echoed by patients and if this will impact enrollment in the trial at all. Also, when can we expect data from that trial and if that trial ends up not being statistically significant, would you still submit a BLA for ALLO-501A with just using cy flu? Thank you.

[Dr. David Chang, President and CEO]

Thanks, Sami. Some terrific questions there. So I’ll start with the last one. So we’re going to run ALPHA2 the way that we’re treating patients and we’re very confident in that study’s ability to demonstrate a benefit for patients who meet the eligibility criteria.

With respect to how EXPAND is enrolling and what that eventual outcome may look like. We’re having a lot of conversations with sites. We find that there are some sites who decline for any number of reasons, but we do have quite a lot of interest from other sites.

So there are many out there who see the value and the scientific merit of this trial and so we’re obviously very excited to participate with those studies -- with those investigators in those sites. As far as the data availability goes, as Eric mentioned, previously, we are targeting data availability from EXPAND at roughly the same time as ALPHA2.

[Operator]

Thank you One moment please for the next question. And we have a question again from Mr. Luca Issi of RBC Capital. Your line is open.

[Luca Issi, RBC Capital]

Oh! Great. Can you guys see me okay?

[Dr. David Chang, President and CEO]

We can.

[Luca Issi, RBC Capital]

Great. So maybe a quick one, Eric. You’re lowering your cash burn guidance for the year by $20 million. So if I’m not mistaken, so I’m wondering if you can expand on where some of those savings are coming from? And then second on CD70, in the past, you’ve spoken about tumor types beyond renal cell carcinoma either as monotherapy or combination with checkpoint and is that...

[Dr. David Chang, President and CEO]

Luca, we’re losing you again. Let me answer your first question and I’m not sure we heard your second. But with regard to our cash burn guidance for 2023, that’s correct. We’ve lowered our cash burn target from $250 million to $230 million. We continue to just be very, very mindful of everything that we spend our resources on.

You can imagine that any dollar spend going down to relatively low dollar amounts, gets the second look these days given the nature of the capital markets raising environment and our need to focus on our highest priority items. So across the Board, we’ve investigated all of our spend and we’ve been able to tighten our belts a little bit.

[Dr. Zachary Roberts]

And the second question, I think, was really related to what else are we going to do with CD70 program besides the renal cell cancer. As we have previously talked about, the potential of using CD70 outside renal cell cancer in such as CD70 positive solid tumors or hematologic malignancies where CD70 expression is not to be pretty high. That includes T cell leukemia lymphoma, as well as large B-cell lymphoma.

And then the third thing, which is testing allogeneic CAR T together with immune checkpoint inhibitor. All those are still under consideration. The goal this year is really trying to get to the lymphodepletion, as well as cell dose where we can start expanding the cohort to those different considerations that we just discussed.

[Operator]

Thank you. And one moment please for our next question. Our next question will come from Ben Burnett of Stifel. Your line is open.

[Ben Burnett, Stifel]

Excellent. Thank you very much. I guess also a question regarding the ALLO-316 program following up on an earlier question about CD70 positivity. You disclosed some, I think, interesting results showing a correlation or a trend of greater tumor reduction with higher CD70 expression. I think that was referred to maybe as an H-Score. So I guess given this, have you defined what level of CD70 expression constitutes as sort of positive in this case, like, CD70-positive, is it just anything with any amount of CD70 expression, is there a certain threshold that you’re looking for and if so, would that threshold be used to select patients?

[Dr. David Chang, President and CEO]

And great question. I think your question give us a few months, we will be able to provide more answers. Right now essentially with a selection of the patients using the sort of the investigation in vitro diagnostic assay is to ensure that we do not involve any CD negative renal cell carcinoma patients with CD negative renal cell carcinoma. The checkpoint will be further defined as we gain more clinical experience.

[Operator]

Thank you.

[Dr. Zachary Roberts]

I’ll add one point to that because you did reference the H-Score. I think one of the other aspects of that particular figure that we shared at AACR was that it really does show that this is likely an on-target effect.

So we -- any time you’re giving lymphodepletion, there’s a question of whether that might be playing a role. But the fact that we did see preliminary evidence that the higher the expression of CD70 the deeper the response gave us a lot of enthusiasm that this is a truly active agent in this disease.

[Operator]

Thank you. That concludes our question-and-answer session. I would like to turn the conference back over to management for any additional comments.

[Dr. David Chang, President and CEO]

Well, thank you, and thank you for joining the call today. We continue to believe that our success across multiple clinical programs, ability to attract top tier talent and financial stewardship to weather the challenging external market environment paves the way towards to bringing a new generation of CAR T products to patients and we look forward to seeing you next at ASCO. Operator, you may now disconnect.

[Operator]

Thank you. This concludes today’s conference call. Thank you all for participating. You may now disconnect and have a pleasant day.