Allogene Therapeutics, Inc. — 2021 Form 10-K Summary
Business context and reporting period
Allogene is a clinical-stage immuno-oncology company developing engineered, donor-derived “off-the-shelf” CAR T-cell therapies for cancer. This 10-K covers the fiscal year ended December 31, 2021; the filing does not provide standalone fourth-quarter financial results. The company had no approved products and no product sales.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Collaboration revenue | $38.5 million | None |
| Research and development expense | $220.2 million | $193.0 million |
| General and administrative expense | $74.1 million | $65.3 million |
| Operating loss | $255.8 million | $258.2 million |
| Net loss | $257.0 million | $250.2 million |
| Net loss per share, basic and diluted | $1.89 | $2.08 |
| Net cash used in operating activities | $184.8 million | $115.1 million |
The $38.5 million of 2021 revenue was recognized under the license agreement with Allogene Overland, primarily upon delivery of intellectual property and know-how; it was not product revenue. Gross margin is not a meaningful indicator for this pre-commercial company, and the filing does not report a product margin.
At year-end, cash, cash equivalents and investments totaled $809.5 million, down from $950.8 million a year earlier. Current assets were $471.3 million and current liabilities $48.2 million. Management said available cash and investments were expected to fund operations for at least 12 months from the filing date. The company reported no debt; it did report $73.1 million of operating lease liabilities, including current and noncurrent amounts.
Investing activities provided $163.7 million, largely reflecting investment maturities, while financing activities provided $12.0 million. Capital expenditures were $21.4 million. The company reported an accumulated deficit of $903.3 million and expects continued losses and rising research and development and general and administrative costs.
Material changes versus the prior comparable period
- Revenue rose from zero to $38.5 million, reflecting recognition of the Allogene Overland license and know-how obligation.
- Research and development expense increased $27.2 million, primarily from personnel and facility costs; external product-development costs declined with the timing of process-development activity and manufacturing runs.
- General and administrative expense increased $8.8 million, primarily due to personnel-related costs.
- Net loss widened by $6.8 million. Operating loss improved slightly because of the collaboration revenue, but lower interest and other income and higher other expense more than offset that improvement.
- Operating cash use increased by $69.7 million, including the impact of a $38.6 million decrease in deferred revenue.
Outlook, clinical developments and key risks
- Management planned, subject to further patient follow-up and FDA discussions, to advance ALLO-501A into the Phase 2 portion of ALPHA2 in mid-2022. It also planned an ALLO-647 registration study in mid-2022, subject to ALPHA2 progress, and expected to update the BCMA program by year-end 2022.
- The FDA placed the company’s clinical trials on hold in October 2021 after a chromosomal abnormality was observed in an ALPHA2 patient. The investigation found it unrelated to TALEN gene editing or manufacturing and without clinical significance; the FDA lifted the hold in January 2022.
- Interim trial results were preliminary. In ALPHA, ALLO-501’s reported overall response rate was 75% among 40 efficacy-evaluable patients. In ALPHA2, ALLO-501A’s response rate was 48% among 25 efficacy-evaluable patients. In UNIVERSAL, ALLO-715’s response rate was 71% in the highlighted 24-patient dose/lymphodepletion cohort; that study reported three Grade 5 infections among 43 patients evaluable for safety. Longer follow-up and final analyses could change these results.
- Principal risks include clinical failure or safety events, patient-enrollment and COVID-19 disruption, manufacturing scale-up and comparability requirements, dependence on third-party manufacturers and licensed TALEN technology, competition, and the need for substantial additional financing. The company cited no committed source of future capital.
- Notable obligations include contingent development, regulatory and sales milestones and potential royalties under license and collaboration agreements; their timing and likelihood were not estimable. Non-cancellable purchase commitments were $3.7 million. A five-year MD Anderson collaboration carries up to $15.0 million of contingent funding commitments.
- The company reported effective disclosure controls and internal control over financial reporting, with unqualified audit opinions on its financial statements and internal controls.
Important facts for investors to verify
- Whether cash burn and development spending remain consistent with the stated liquidity runway, and when additional financing may be needed.
- Updated, adequately followed clinical efficacy and safety data, especially infection-related deaths, cytopenias, response durability and outcomes after the clinical hold.
- FDA requirements and timing for ALPHA2 Phase 2, ALLO-647 evaluation and use of product manufactured at the Newark facility.
- Whether manufacturing comparability, capacity, donor-cell supply and external vendor performance support planned trials.
- The terms and potential economics of collaboration revenue, milestone obligations and royalties, including those involving Allogene Overland, Servier, Pfizer, Cellectis and Notch.