Allogene Therapeutics, Inc 10-Q for FY2022 Q3

Allogene Therapeutics, Inc. (ALLO)

10-Q 2022-11-02 For: 2022-09-30

Added on April 06, 2026

About this 10-Q

Allogene Therapeutics, Inc filed this 10-Q on November 2, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $49K; unchanged from $49K a year earlier
Net loss: $83.15M; compared with a net loss of $78.19M a year earlier
Diluted EPS: -$0.58; compared with -$0.57 a year earlier

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Delaware						82-3562771
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


		Page no.
PART I: FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	73
Signatures		74


	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	74,357	$	173,314
Short-term investments	477,872		283,988
Prepaid expenses and other current assets	16,832		14,021
Total current assets	569,061		471,323
Long-term investments	85,108		352,179
Operating lease right-of-use asset	85,245		58,030
Property and equipment, net	114,442		122,990
Restricted cash	10,292		10,292
Other long-term assets	9,378		5,815
Equity method investment	14,046		18,005
Total assets	$	887,572	$	1,038,634
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	11,045	$	10,255
Accrued and other current liabilities	36,938		37,496
Deferred revenue	889		423
Total current liabilities	48,872		48,174
Lease liability, non-current	96,706		69,929
Other long-term liabilities	2,033		4,125
Total liabilities	147,611		122,228
Commitments and Contingencies (Notes 6 and 7)
Stockholders’ equity:
Preferred stock, $0.001 par value: 10,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares were issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value: 400,000,000 shares authorized as of September 30, 2022 and 200,000,000 shares authorized as of December 31, 2021; 144,031,588 and 142,623,065 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	144		142
Additional paid-in capital	1,893,908		1,822,179
Accumulated deficit	(1,141,133)		(903,348)
Accumulated other comprehensive loss	(12,958)		(2,567)
Total stockholders’ equity	739,961		916,406
Total liabilities and stockholders’ equity	$	887,572	$	1,038,634


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Collaboration revenue - related party	$	49	$	49	$	196	$	38,438
Operating expenses:
Research and development	63,641		58,720		180,968		166,193
General and administrative	18,897		18,999		58,303		54,144
Total operating expenses	82,538		77,719		239,271		220,337
Loss from operations	(82,489)		(77,670)		(239,075)		(181,899)
Other income (expense), net:
Interest and other income, net	1,002		393		1,809		1,528
Other expenses	(1,661)		(909)		(519)		(1,766)
Total other income (expense), net	(659)		(516)		1,290		(238)
Net loss	(83,148)		(78,186)		(237,785)		(182,137)
Other comprehensive loss:
Net unrealized loss on available-for-sale investments	(1,486)		(64)		(10,391)		(666)
Net comprehensive loss	$	(84,634)	$	(78,250)	$	(248,176)	$	(182,803)
Net loss per share, basic and diluted	$	(0.58)	$	(0.57)	$	(1.67)	$	(1.35)
Weighted-average number of shares used in computing net loss per share, basic and diluted	143,661,721		137,025,698		142,809,469		134,690,310


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance - December 31, 2021	142,623,065	$	142	$	1,822,179	$	(903,348)	$	(2,567)	$	916,406
Issuance of common stock upon exercise of stock options and vesting of RSUs	715,961	1		282		—		—		283
Vesting of early exercised common stock	—	—		1,228		—		—		1,228
Stock-based compensation	—	—		22,315		—		—		22,315
Employee stock purchase plan	230,876	—		1,530		—		—		1,530
Net loss	—	—		—		(79,850)		—		(79,850)
Net unrealized loss on available-for-sale investments	—	—		—		—		(6,682)		(6,682)
Balance - March 31, 2022	143,569,902	143		1,847,534		(983,198)		(9,249)		855,230
Issuance of common stock upon exercise of stock options and vesting of RSUs	153,269	1		24		—		—		25
Vesting of early exercised common stock	—	—		813		—		—		813
Stock-based compensation	—	—		22,891		—		—		22,891
Employee stock purchase plan	—	—		—		—		—		—
Net loss	—	—		—		(74,787)		—		(74,787)
Net unrealized loss on available-for-sale investments	—	—		—		—		(2,223)		(2,223)
Balance - June 30, 2022	143,723,171	144		1,871,262		(1,057,985)		(11,472)		801,949
Issuance of common stock upon exercise of stock options and vesting of RSUs	177,678	—		135		—		—		135
Vesting of early exercised common stock	—	—		432		—		—		432
Stock-based compensation	—	—		21,148		—		—		21,148
Employee stock purchase plan	130,739	—		931		—		—		931
Net loss	—	—		—		(83,148)		—		(83,148)
Net unrealized loss on available-for-sale investments	—	—		—		—		(1,486)		(1,486)
Balance - September 30, 2022	144,031,588	$	144	$	1,893,908	$	(1,141,133)	$	(12,958)	$	739,961


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			N/A
(Former name, former address and former fiscal year, if changed since last report)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount
Balance - December 31, 2020	140,474,305	$	140	$	1,725,552	$	(646,343)	$	268	$	1,079,617
Issuance of common stock upon exercise of stock options and vesting of RSUs	897,744	1		4,059		—		—		4,060
Vesting of early exercised common stock	—	—		710		—		—		710
Stock-based compensation	—	—		16,792		—		—		16,792
Employee stock purchase plan	98,026	—		1,984		—		—		1,984
Net loss	—	—		—		(33,015)		—		(33,015)
Net unrealized loss on available-for-sale investments	—	—		—		—		(369)		(369)
Balance - March 31, 2021	141,470,075	$	141	$	1,749,097	$	(679,358)	$	(101)	$	1,069,779
Issuance of common stock upon exercise of stock options and vesting of RSUs	650,656	1		3,213		—		—		3,214
Vesting of early exercised common stock	—	—		854		—		—		854
Stock-based compensation	—	—		21,134		—		—		21,134
Employee stock purchase plan	—	—		—		—		—		—
Net loss	—	—		—		(70,936)		—		(70,936)
Net unrealized loss on available-for-sale investments	—	—		—		—		(233)		(233)
Balance - June 30, 2021	142,120,731	$	142	$	1,774,298	$	(750,294)	$	(334)	$	1,023,812
Issuance of common stock upon exercise of stock options and vesting of RSUs	229,918	—		750		—		—		750
Vesting of early exercised common stock	—	—		1,142		—		—		1,142
Stock-based compensation	—	—		20,856		—		—		20,856
Employee stock purchase plan	89,180	—		1,632		—		—		1,632
Net loss	—	—		—		(78,186)		—		(78,186)
Net unrealized loss on available-for-sale investments	—	—		—		—		(64)		(64)
Balance - September 30, 2021	142,439,829	$	142	$	1,798,678	$	(828,480)	$	(398)	$	969,942


	September 30, 2022
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Financial Assets:
Money market funds (1)	$	19,225	$	—	$	—	$	19,225
Commercial paper	—		17,987		—		17,987
Corporate bonds	—		168,517		—		168,517
U.S. treasury securities	332,334		—		—		332,334
U.S. agency securities	—		44,142		—		44,142
Total financial assets	$	351,559	$	230,646	$	—	$	582,205


	December 31, 2021
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Financial Assets:
Money market funds (1)	$	115,867	$	—	$	—	$	115,867
Commercial paper	—		58,976		—		58,976
Corporate bonds	—		223,474		—		223,474
U.S. treasury securities	303,016		—		—		303,016
U.S. agency securities	—		50,701		—		50,701
Total financial assets	$	418,883	$	333,151	$	—	$	752,034


	September 30, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
Money market funds	$	19,225	$	—	$	—	$	19,225
Commercial paper	17,995		—		(8)		17,987
Corporate bonds	172,278		—		(3,761)		168,517
U.S. treasury securities	339,145		1		(6,812)		332,334
U.S. agency securities	46,076		—		(1,934)		44,142
Total cash equivalents and investments	$	594,719	$	1	$	(12,515)	$	582,205

Classified as:
Cash equivalents							$	19,225
Short-term investments							477,872
Long-term investments							85,108
Total cash equivalents and investments							$	582,205


	September 30, 2022		December 31, 2021
Operating lease liabilities
Current portion included in accrued and other current liabilities	$	5,831	$	3,200
Long-term portion of lease liabilities	96,706		69,929
Total operating lease liabilities	$	102,537	$	73,129


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease cost	$	3,177	$	1,853	$	8,476	$	5,568
Variable lease cost	616		448		1,468		979
Total lease costs	$	3,793	$	2,301	$	9,944	$	6,547


Year ending December 31:	(In thousands)
2022 (remaining 6 months)	$	2,943
2023	12,065
2024	12,464
2025	12,636
2026	12,819
2027 and thereafter	90,492
Total undiscounted lease payments	143,419
Less: Present value adjustment	(40,882)
Total	$	102,537


	September 30, 2022		December 31, 2021
	(In thousands)
Leasehold improvements	$	108,412	$	108,353
Laboratory equipment	31,443		29,666
Computer equipment and purchased software	5,033		4,373
Furniture and fixtures	3,976		3,920
Construction in progress	166		39
Total	149,030		146,351
Less: accumulated depreciation	(34,588)		(23,361)
Total property and equipment, net	$	114,442	$	122,990


	Outstanding Options
	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contract Term	Aggregate Intrinsic Value
				(in years)	(in thousands)
Balance, December 31, 2021	10,239,167	$	21.10	7.68	$	26,223
Granted	8,627,428	9.64
Exercised	(174,451)	2.33
Forfeited	(569,697)	24.41
Cancelled under the Option Exchange	(3,666,600)	26.82
Granted under the Option Exchange	3,666,600	13.31
Balance, September 30, 2022	18,122,447	$	12.99	8.05	$	25,996
Exercisable, September 30, 2022	13,657,219	$	13.04	8.29	$	24,715
Vested and expected to vest, September 30, 2022	18,122,447	$	12.99	8.05	$	25,996


	Nine Months Ended September 30,
	2022	2021
Expected term in years	5.25 - 6.08	5.27 - 6.08
Expected volatility	70.82% - 73.39%	69.73% - 70.80%
Expected risk-free interest rate	1.61% - 3.49%	0.60% - 1.16%
Expected dividend	0%	0%


	Outstanding Restricted Stock Units
	Restricted Stock Units	Weighted- Average Grant Date Fair Value per Share		Weighted Average Remaining Vesting Life	Aggregate Intrinsic Value
				(in years)	(in thousands)
Unvested December 31, 2021	4,261,108	$	26.37	1.72	$	63,576
Granted	3,316,499	9.74		1.89
Vested	(991,967)	27.90
Forfeited	(476,970)	22.24
Unvested September 30, 2022	6,108,670	$	17.41	1.70	$	65,974
Vested and expected to vest, September 30, 2022	6,108,670	$	17.41	1.70	$	65,974


	September 30,
	2022	2021
Stock options to purchase common stock	18,122,447	10,109,169
Restricted stock units subject to vesting	6,108,670	3,393,604
Expected shares to be purchased under Employee Stock Purchase Plan	750,317	276,253
Founders' shares of common stock subject to future vesting	—	3,028,848
Early exercised stock options subject to future vesting	162,532	1,057,793
Total	25,143,966	17,865,667


	Three Months Ended September 30,				Change
	2022		2021		$		%
Collaboration revenue - related party	$	49	$	49	$	—	—	%
Operating expenses:
Research and development	63,641		58,720		4,921		8	%
General and administrative	18,897		18,999		(102)		(1)	%
Total operating expenses	82,538		77,719		4,819		6	%
Loss from operations	(82,489)		(77,670)		(4,819)		6	%
Other income (expense), net:
Interest and other income, net	1,002		393		609		155	%
Other expenses	(1,661)		(909)		(752)		83	%
Total other income (expense), net	(659)		(516)		(143)		28	%
Net Loss	$	(83,148)	$	(78,186)	$	(4,962)	6	%


Exhibit number						Description of document

3.1						Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38693), filed with the SEC on October 15, 2018).

3.2						Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38693), filed with the SEC on June 17, 2022)

3.3						Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-38693), filed with the SEC on October 15, 2018).

4.1						Reference is made to Exhibits 3.1, 3.2 and 3.3.

4.2						Form of Common Stock Certificate of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-227333), filed with the SEC on October 2, 2018).

4.3						Investors Rights Agreement, dated April 6, 2018, as amended September 5, 2018, by and among the Registrant and certain of its stockholders (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-227333), filed with the SEC on September 14, 2018).

31.1						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1						Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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104						The cover page from the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL.


Date: November 2, 2022	By:	/s/ David Chang
		David Chang, M.D., Ph.D.
		Chief Executive Officer (Principal Executive Officer)

Date: November 2, 2022	By:	/s/ Eric Schmidt
		Eric Schmidt, Ph.D.
		Chief Financial Officer (Principal Financial and Accounting Officer)


Date: November 2, 2022			/s/ David Chang
			David Chang, M.D., Ph.D. President and Chief Executive Officer (Principal Executive Officer)


Date: November 2, 2022			/s/ Eric Schmidt
			Eric Schmidt, Ph.D. Chief Financial Officer (Principal Financial and Accounting Officer)