Earnings Call Transcript - ALLO Q1 2026

Operator, Operator

Hello. Thank you for standing by, and welcome to Allogene Therapeutics First Quarter 2026 Conference Call. Please be aware that today's conference call is being recorded. I would now like to turn the call over to Christine Cassiano, Chief Corporate Affairs and Brand Strategy Officer. Ms. Cassiano, please go ahead.

Christine Cassiano, Chief Corporate Affairs and Brand Strategy Officer

Thank you, operator, and welcome, everyone, to Allogene's conference call. After the market closed, Allogene issued a press release that provided a business update and financial results for the first quarter of 2026. This press release and today's webcast are available on our website. Following our prepared remarks, we will host a Q&A session and we will aim to keep the call to under an hour. I'm joined today by Dr. David Chang, President and Chief Executive Officer; Dr. Zachary Roberts, Executive Vice President of Research and Development and Chief Medical Officer; and Geoff Parker, Chief Financial Officer. During today's call, we will be making certain 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, the safety and efficacy of our product candidates, commercial market forecast, potential treatment settings and financial guidance, among other 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 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.

David Chang, President and Chief Executive Officer

Thank you, Christine. As we move through 2026, next-generation cell therapy is shifting from promise to proof. The field is increasingly being defined by differentiated clinical evidence rather than platform ambition alone. At Allogene, our lead program, cema-cel is built around the clear objective to establish a differentiated development path. That strategy is now translating into data that provides support for our approach. Our second program, ALLO-329 in autoimmune indications is built on the same principle of product differentiation, enabled by our understanding of CAR-T design and the biology of allogeneic rejection. While these two programs are at different stages of development, the evidence emerging to date is consistent and aligned with the design principles behind each. Starting with ALPHA3, we have taken an innovative approach of treating patients with cema-cel in the first-line consolidation setting for large B-cell lymphoma with a primary goal of improving the cure rates. A key to achieving this goal is democratizing access by breaking the barriers that have historically limited the use of CAR-T therapy and by enabling cema-cel to be delivered in the outpatient setting. We are very pleased with what we've seen in the recently announced interim futility analysis from the ALPHA3 trial. In this 24-patient analysis, cema-cel achieved a 58.3% MRD clearance rate compared with 16.7% in the observation arm, representing a 41.6% absolute difference. While preliminary, this differential exceeded thresholds of MRD clearance reported in other trials that led to groundbreaking clinical outcomes. We also observed a rapid and substantial reduction in circulating tumor DNA or ctDNA in the cema-cel arm, while the opposite trend was seen in the observation arm where the ctDNA levels increased. Together, these early findings provide evidence consistent with the biological activity of cema-cel in the first-line consolidation setting as we advance ALPHA3 towards the next key milestone, the interim EFS analysis in mid-2027. Importantly, as we consider use in the outpatient community setting, this early biomarker efficacy signal was accompanied by a favorable safety profile. We observed no CRS, ICANS or treatment-related hospitalization, enabling the majority of patients to be managed in the outpatient setting. These results reflect the trial that was designed to lead, not follow. Under Zach's leadership, ALPHA3 was built around MRD testing as a point of intervention rather than passive observation, an approach that moves beyond conventional trial design. We set out to test a forward-looking thesis and these early data reaffirm my conviction that we are not only on the right path, but ahead of the curve. Taken together, we believe these data provide compelling support for a different paradigm, one where cema-cel can be used earlier, made readily available, delivered broadly and potentially integrated into routine care beyond specialized centers. Turning to ALLO-329. The program is progressing through early clinical development in autoimmune indications with the RESOLUTION basket trial advancing efficiently through dose escalation. This progress embodies the same disciplined and forward-looking development approach that underpins ALPHA3. ALLO-329 incorporates the Dagger technology, which is designed to overcome premature rejection of allogeneic CAR T cells. This technology has previously been validated as part of our ALLO-316 program in the metastatic solid tumor setting. However, autoimmune disease represents a fundamentally different clinical context with distinct biology and a different threshold for safety and tolerability. With that in mind, we designed a structured and stepwise clinical approach, beginning at a conservative dose level to establish clear understanding of tolerability before progressing to therapeutic dose levels. Patients treated to date are within this initial dosing range as we evaluate both dose and lymphodepletion strategy. Our focus is on characterizing how the therapy behaves in patients by establishing a tolerability profile that supports continued development while also assessing early signs of activity. Within this framework, we are very pleased with the pace of enrollment and are beginning to observe initial signs of clinical activity, coupled with favorable tolerability. While still early, these findings are highly encouraging and have important implications for the overall dosing paradigm, which includes not only the dose of Dagger-enabled ALLO-329, but also the required lymphodepletion regimen. As the program progresses, we expect continued dose escalation and patient follow-up to further establish the activity, tolerability and mechanistic profile of ALLO-329. We look forward to providing a further update in the fourth quarter. With that, I will turn it over to Zach to walk through the data in more detail.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Thanks, David. I'll start with ALPHA3 and then turn to ALLO-329. ALPHA3 was designed around a clear clinical hypothesis that intervening at the point of molecularly detectable disease before clinical relapse can meaningfully alter the course of disease. When we initiated the study, MRD was emerging as a prognostic tool in LBCL. Our objective was to move MRD beyond risk assessment and into a treatment decision point. Across oncology, we are now seeing the shift approaching a potential breakout moment. A case in point is the IMvigor011 trial, which evaluated Tecentriq in muscle-invasive bladder cancer. In the trial, patients who are in remission but remained MRD positive after the standard first-line procedure of complete surgical resection were randomized to Tecentriq or placebo with Tecentriq demonstrating improvement in both disease-free and overall survival. The results of this trial could establish MRD as a clinically actionable endpoint following standard first-line treatment. If approved for this indication, Tecentriq would become the first therapy for which treatment initiation is guided by an ultrasensitive ctDNA MRD assay rather than clinical progression, a defining moment for the field. Against this backdrop, ALPHA3 is positioned at the forefront of how this new paradigm could evolve in large B-cell lymphoma as the first pivotal trial designed to use MRD positivity as the trigger for CAR-T therapy. The ALPHA3 study is enrolling patients who have responded to first-line therapy but remain MRD positive and therefore, at high risk of relapse. Patients are randomized to treatment with cema-cel or observation. We partnered with Foresight, now a wholly-owned subsidiary of Natera, to utilize their CLARITY MRD assay, enabling a highly sensitive and dynamic view of disease burden over time. This enhanced sensitivity, detecting disease at or even below 1 in a million or 10 to the minus 6 is central to the design of ALPHA3 study and how we interpreted our interim futility data. At the interim analysis, we evaluated the first 24 patients enrolled in the ongoing two arms, a single dose of cema-cel versus observation. We observed a 58.3% MRD clearance rate in the cema-cel arm compared to a 16.7% in the observation arm, representing a 41.6 percentage point absolute difference. We also saw a rapid and substantial reduction in circulating tumor DNA. At the day 45 time point, the median ctDNA level decreased by nearly 98% in the cema-cel arm, while the median ctDNA level increased by more than 26% in the observation arm. The ALPHA3 interim futility analysis rests on the assumption that MRD clearance foreshadows clinical benefit. This hypothesis is supported by a growing body of evidence in various clinical settings, including in LBCL, linking MRD clearance in the range of 25% to 30% with meaningful reductions in EFS events. The magnitude of the difference we just announced exceeds that range. While these external data sets support the relationship between MRD clearance and clinical outcomes, the impact on EFS and durability will ultimately be determined through our planned interim and primary EFS analysis. From a safety and treatment administration perspective, we observed no CRS, ICANS or treatment-related hospitalizations, enabling the majority of patients to be managed entirely in the outpatient setting. We believe this encouraging tolerability profile is a function of treating patients earlier when disease burden is low, which is inherent to the ALPHA3 design. If the safety profile observed in the interim futility analysis bears out in the study overall, it could mark an important shift towards outpatient CAR-T administration and enable cema-cel treatment in community practices where most patients with LBCL receive care. As ALPHA3 progresses, interest in the study is growing. First and foremost, we are seeing robust engagement from existing clinical sites, resulting in high rates of patient screening. At the same time, new sites are expressing significant interest in joining the study, further reinforcing its momentum. From an execution standpoint, the trial continues to scale. We are now enrolling across more than 60 sites with global expansion underway. We recently announced regulatory approval in Australia and South Korea, where site activations and patient screening have begun. We anticipate the Asia Pacific region to expand the study footprint to over 80 sites worldwide. These are not incremental additions. Australia and South Korea offer established clinical research infrastructure, experienced investigators and highly efficient health care systems. This expansion reflects both strong global investigator interest and the operational discipline required to execute at scale. We are also seeing meaningful participation from community cancer centers, which contributed approximately one-third of screening and cema-cel treatments in our interim futility analysis. This is an important early proof point for the feasibility of broader administration as we look to move beyond specialized centers and into broader clinical practice. Let me now turn to ALLO-329, which as a first-in-human Phase I trial has a different objective at this stage of development. The program is supported by robust preclinical data recently published in Nature Communications, supporting the design of ALLO-329. These data demonstrated an optimized CD70 CAR engineered to protect allogeneic CAR T cells from rejection by eliminating alloreactive host T cells. In those studies, co-expression of CD70 and CD19 CARs drove sustained CAR T cell persistence, elimination of pathogenic B cells and activated CD70 positive T cells in humanized SLE models and corresponding reductions in autoantibody production. Importantly, the Dagger technology, which eliminates alloreactive host T cells, has been clinically validated by our third clinical program and first CD70 targeting program, ALLO-316, with recently reported outcome data further supporting the approach and reinforcing our plans to advance the program in the near future. At this stage of development, our focus for ALLO-329 is to define a tolerability profile that supports continued dose escalation while generating early evidence that ALLO-329 can achieve meaningful biological activity in autoimmune disease, consistent with its differentiated dual targeting mechanism. The resolution basket trial, which includes patients with systemic lupus erythematosus with and without nephritis, scleroderma and inflammatory myositis continues to progress through dose escalation. Nine patients have already been treated since the study started enrollment in November 2025, with three patients at dose level 1 of 20 million cells and three patients at dose level 2 of 40 million cells, both following lymphodepletion with cyclophosphamide and three patients at dose level 1 with no lymphodepletion. Importantly, the doses evaluated so far are substantially lower than those being explored in other CAR-T approaches in autoimmune disease, including autologous programs testing approximately 100 million cells and some allogeneic approaches evaluating doses above 1 billion cells. Even at these lower doses of ALLO-329, both with and without cyclophosphamide, investigators have reported signs of clinical activity. While these observations are preliminary and dose exploration continues, investigators have been very encouraged by these early signals, facilitating strong patient interest in participating in the study. This reflects a consistent approach across our programs. In ALPHA3, we designed the study to intervene earlier in disease treatment based on MRD. With ALLO-329, we are applying that same forward-looking discipline to autoimmune disease, prioritizing mechanism, durability, scalability and long-term usability from the outset. As we continue dose escalation and patient follow-up, our goal is to build the data set that integrates clinical activity with mechanistic understanding and supports a path towards durable outcomes. We expect to provide a comprehensive update in the fourth quarter. Across both programs, our focus remains consistent, designing studies with clear hypotheses, executing with discipline and allowing the data to define the role of allogeneic CAR T. With that, I'll turn it over to Geoff.

Geoffrey Parker, Chief Financial Officer

Thank you, Zach. As we execute against our key clinical milestones in 2026, we remain focused on maintaining a strong financial position that supports continued progress across our portfolio. As of March 31, we had $266.9 million in cash, cash equivalents and investments. In April, we strengthened that position through a public offering that generated approximately $200.4 million in gross proceeds, extending our cash runway into the first quarter of 2029. R&D expenses for the first quarter were $32 million, including $2.7 million of noncash stock-based compensation, reflecting continued investment in our clinical programs. G&A expenses for the first quarter were $14.1 million, including $5.6 million in noncash stock-based compensation. Net loss for the first quarter was $42.6 million or $0.18 per share, including noncash stock-based compensation expense of $8.3 million. Based upon our current forecast for the overall timing of the ALPHA3 program, we are modestly increasing our guidance for operating cash expense in 2026 from approximately $150 million to $165 million. GAAP operating expenses are also expected to slightly increase from approximately $210 million to $225 million, including estimated noncash stock-based compensation expense of approximately $35 million. These estimates exclude any impact from potential business development activities. Overall, we believe we are well positioned to execute on our strategy with the capital and flexibility needed to reach our next set of milestones. We'll now open the call for questions.

Operator, Operator

And our first question comes from Michael Yee of UBS.

Michael Yee, Analyst (UBS)

Congrats on the progress to date and the updated autoimmune color. Maybe two quick ones. One is, can you talk a little bit more specifically about some of the initial signs of activity or B-cell reductions? What does that mean? And to what degree maybe there are differences in B-cell reductions for the lymphodepletion cohort compared to any of the different cohorts with different lymphodepletion? And if I may get a question on, obviously, the lead DLBCL program. Since the announcement of your MRD negativity interim, how have you seen perhaps enrollment engagement and feedback and things of that nature? Maybe just talk a little bit about how things have progressed since that positive interim.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Mike, this is Zach here. Thanks for the questions. So on the 329 question, we'll be saving the details pertinent to your question until the Q4 update other than to say that the encouraging signs that we referred to are coming from the cohorts that we've highlighted, both with and without lymphodepletion. So we will be continuing to enroll patients according to the protocol design with and without cyclophosphamide and expect to show a more complete update in Q4. But so far, so good, and we're really thrilled with the patients coming into the study very briskly. The second question around has the interim analysis results stimulated increased activity in ALPHA3, I will say that they have. In these early days, these first couple of weeks since the announcement went out, that has come in the form of new sites coming and asking to participate in ALPHA3, even sites that said early on that they didn't have room in their portfolio before the interim data was available. Now they're coming back and saying that they really do want to participate. So that kind of qualitative change is already underway. We will be watching very carefully for a quantitative uptick in the screening and enrollment pace; except to say that that has been going very well in the last few months. So we're optimistic. But so far, we're pretty happy with the way things are going.

Operator, Operator

And our next question comes from Tyler Van Buren of TD Cowen.

Tyler Van Buren, Analyst (TD Cowen)

Congrats on the progress. I have a couple of 329 questions as well. Since you mentioned favorable tolerability, can you discuss conceptually what sort of safety profile you hope to achieve with ALLO-329 over the long term? And then with respect to the update in the fourth quarter, can you give us any sense of what that might entail and kind of help put goalposts around what we should expect with that update?

David Chang, President and Chief Executive Officer

Tyler, thanks for those questions. The safety profile in autoimmune indications, I mean, we want this to be as clean as one can get to. I think that's really the patient population that we're dealing with. We have seen in the ALPHA3 study, even in oncology in the right clinical setting, CAR-T therapy can be well tolerated. That's the kind of profile that we are trying to mirror where the treatment can be given as an outpatient and patient can be managed as an outpatient. So that's really the safety profile that we're looking for. And so far, after completing both 20 million and 40 million cell dose levels with cyclophosphamide lymphodepletion, I feel very encouraged that if the safety profile holds out, this can be a very interesting finding. With respect to your second question about how to set up the expectations for the fourth quarter: so far, let's keep in mind in terms of the pace of enrollment that Zach had talked about. We dosed the first patient back in November of last year. So within six months, in a dose escalation study where we have to wait about a month after the first patient is dosed before we can fill up the rest of the cohort even with that kind of preset barriers in how fast we can enroll, we enrolled nine patients. That is a pretty remarkable level of support that we are getting from various physicians involved in the autoimmune trial. So we are highly encouraged. In autoimmune disease, the way that the clinical responses are being measured is different than in oncology. But when the investigators are calling us and telling us that they are seeing responses they would not have expected to see in any setting, I view that as highly encouraging early signs.

Operator, Operator

And our next question comes from Biren Amin of Piper Sandler.

Biren Amin, Analyst (Piper Sandler)

Maybe just to stay on ALLO-329. Given you're reporting data in Q4, should we expect data across the 20 million and 40 million cell doses in the fourth quarter? Or could we get higher cell doses? So that's the first question. Second question, what would be the patient composition across SLE, myositis and scleroderma in the Q4 update? And then lastly, on the trial itself, recently in April, I think there was a change that was recorded on clinicaltrials.gov where you increased target enrollment to 66 patients from 54 patients. Could you maybe just talk about that change and what drove that?

David Chang, President and Chief Executive Officer

Yes, Biren, as to your first question, I'm also realizing that was Tyler's last question, which I did not fully answer. So in the fourth quarter, obviously, at this point, we have completed 20 million and 40 million, and we are continuing the dose escalation. By the fourth quarter update, included patients will be more than just 20 million and 40 million. We're hoping that we can include certainly the next dose level and possibly even a higher dose depending on how the pace of enrollment is maintained. And also, when I'm talking about the cell dose levels, certainly, I'm talking about both with and without cyclophosphamide. And Zach, maybe you can cover the patient composition.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Yes. So Biren, we're seeing patients come from all of the indications that I listed previously. So lupus, inflammatory myopathies and scleroderma. It's still too early to say whether the early signs of efficacy that we are seeing are segregated to one patient group or another. So we're not going to be making any changes to the basket-style design of the protocol. As we continue to enroll patients, we expect a mix and that mix will be presented in Q4. And then the clinicaltrials.gov change that occurred, I actually have to say I don't know why we made that administrative change. It's an administrative change; sometimes we have to go through and we have to make little clerical changes to clinicaltrials.gov. There's not been any changes to the study design that would have warranted a substantive change.

Operator, Operator

And our next question comes from Salveen Richter of Goldman Sachs.

Salveen Richter, Analyst (Goldman Sachs)

For cema-cel, could you speak to the feedback you're hearing from the community practices to date post the recent data? And then for the ongoing ALLO-329 resolution study, can you expand upon progress on site activation and patient enrollment and how that's playing out just given some competition in the field for other autoimmune CAR-T programs?

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Salveen, it's Zach. So as far as how the community practices are reacting to the interim data from cema-cel, I would echo what I said a moment ago that the feedback has been really overwhelmingly and uniformly positive. Just to give another little anecdote on that, in the couple of days after that announcement was made that same week, we were on the phone with a couple of large community network practices that have already a couple of sites on the study seeking to expand their footprint within their practices and add additional sites. So we believe that the interim analysis data is being viewed by the community practices and academic practices alike as potentially something very, very interesting and promising.

David Chang, President and Chief Executive Officer

And also, I would say it makes a lot of sense. When you think about this, it's giving the community physicians something to offer to patients rather than referring them to tertiary cell therapy centers. And during the course of treating patients, they are realizing that treatment is relatively hassle-free. What we have shared with the interim futility findings is the early safety profile was very clean, which also makes managing patients after the CAR-T infusion extremely smooth. These are definitely early findings, but these are the things that I believe are driving community physicians' interest in participating in the ALPHA3 study.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

And then your second question, Salveen, about site activation and enrollment in 329. We are approaching the target number of sites that we sought to activate for ALLO-329. I can't say exactly what the number is on clinicaltrials.gov, but we expect that to be completed here very shortly within the next few weeks, maybe a couple of months. That's gone very well. We've actually ended up getting quite a bit more traction even in that competitive space that you highlighted. We've got some really excellent marquee sites already listed on clinicaltrials.gov and a few more in the can, ready to come out. They are really being super productive on the patient screening and enrollment as we highlighted previously. So we could not be happier with how ALLO-329 is going operationally.

David Chang, President and Chief Executive Officer

And the mixture of the patients in this basket study is actually excellent.

Operator, Operator

And our next question comes from Samantha Semenkow of Citi.

Samantha Semenkow, Analyst (Citi)

Another one on 329. I'm wondering if you could just talk a little bit about your thoughts on dosing going forward. You mentioned some early clinical signals that you're seeing in these first nine patients. I'm wondering, do you think the 20 million dose is too low or subtherapeutic? Curious your thoughts there. And how are you thinking about dosing going forward? Are there any adjustments you're planning to make to the dose escalation?

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Sam, so with respect to the question around the doses that we've tried so far, in the tenet of a Phase I dose escalation study, you're really gated by safety. And I want to echo what David said a moment ago that safety is paramount here. We want to make sure that we maintain the safety profile that would make this therapy attractive to patients and doctors with autoimmune disease. And so we're going to keep going up until we start to bump up against the toxicity that we think would be prohibitive. So whether you call it subtherapeutic or room to go, I'm more of a room-to-go type of person. We're going to keep dose escalating. At this point, we do not see a need to make any adjustments to the protocol; we still have some doses to go up. We're hopeful that we'll start to see really compelling activity here in the next dose or the dose after that, and we can maintain that safety profile. So look forward to that Q4 update.

Operator, Operator

And our next question comes from Roger Song of Jefferies.

Analyst (on behalf of Roger Song), Analyst (Jefferies)

I have two. So one is, can you just give us some more color on what your current cash runway covers? And then my second question is on ALLO-329. Can you tell us more about the decision factors that are driving the optionality for the fludarabine addition? I know you mentioned the option of adding this. Can you just explain the gating factors for why we add or why we don't?

Geoffrey Parker, Chief Financial Officer

This is Geoff. On the cash runway, as we discussed in the script, our current cash runway based on the addition of the capital added and the recent financing, the approximately $200 million financing, takes us into the first quarter of 2029. During that time, we intend to complete the ALPHA3 study. As you know, we anticipate finishing enrollment at the end of 2027. We anticipate an interim analysis on EFS in mid-2027, primary analysis in mid-2028 with the filing of the BLA as quickly as possible based on the results of those interim or final analyses. So it really is focused on covering ALPHA3 as well as completing this Phase I RESOLUTION study for ALLO-329, as we indicated, having the comprehensive data set in the fourth quarter of this year.

David Chang, President and Chief Executive Officer

Let me take the question on the optionality of fludarabine. I think this is just how we try to make the protocol as flexible as possible without a predefined idea about when to kick in this optionality. It's really looking at the data and then making the decision. Right now, based on the data, our primary focus is continuing the dose escalation.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

I'll just add one other piece of color on that. In part, this would be driven by the demand to come into the study. By opening additional cohorts, it would allow us to enroll more patients and to allow patients into the trial. So that is another factor that could come into it. But nothing has changed at all about our belief in the potential of this approach. We are continuing with that primary goal.

Operator, Operator

And our next question comes from Matthew Phipps of William Blair.

Matthew Phipps, Analyst (William Blair)

It's going to be on ALLO-329 as well. There's obviously been a lot made about B-cell reset after CAR-T with CD19. I was wondering if from your experience with ALLO-316, what the T cell repopulation might have looked like after treatment if you looked at that? And I guess, do you expect maybe some ability to have an immune autoreactive T cell reset following 329 treatment when you have the data on that by Q4?

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

Matt, great question, really insightful and I think right on point in terms of our understanding of the mechanism of action of ALLO-329. We are really focused on how the B cell and the T cell repertoires will change and whether we achieve a reset as defined as just absolute B cells going all the way down to zero or whether there's some editing of the repertoire on both the B cell and the T cell side. Obviously, with B cells we expect the chances of those cells going very low or to zero to be higher because we're targeting a pan B-cell marker. In the case of CD70, only a subset are going to be CD70 positive. There will be a population of alloreactive cells that we expect to be depleted through the Dagger effect. There are also CD70 positive pathogenic T cells, so clonal populations with specific TCRs that also express CD70. That has actually been one of the main reasons we designed 329 the way we did: to target and reduce that clone or set of clones that may be driving the pathogenesis. We will be analyzing the T cell repertoire as part of the ALLO-329 study. If we have something to share in Q4, we'll share it.

Operator, Operator

And our next question comes from Jack Allen of Baird.

Jack Allen, Analyst (Baird)

Congrats on the progress. I'll keep the theme going with the 329 question to start, and then I have one on cema-cel as well. On 329, I was just hoping you could provide some additional color as it relates to how many dose levels you could escalate in and what the next step up might be? I guess, logically, it looks like 60 million would be a realistic target for the next dose, but how high could you go in that trial? And then on cema-cel, I just wanted to ask about the interim EFS look in mid-2027 and any additional color you can provide around the powering there.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

So Jack, great question. The next dose level that we're going to be looking at is not 60 million, it's actually 80 million cells. That cohort is enrolling now following screening and then the next cohort is close behind. I'm going to hold off on saying exactly how many cell doses we plan to go up to, and we'll reveal that at Q4 because I do think that we'll be in that zone by the time we give that update. So stay tuned. But 80 million is the next dose cohort that we're working on now. As far as cema-cel, we talked quite a bit about this. We have not gone into specific detail publicly on the exact alpha allocation, but the method we use is an O'Brien-Fleming spending function. That will give you some general understanding of the fraction of alpha that's allocated to the interim analysis. I will reiterate that the results of the interim analysis 1 do give us the possibility of having a positive outcome in the subsequent interim, and that is something we are looking forward to and, of course, working to enroll the study and deliver on those timelines.

Operator, Operator

And our next question comes from John Newman of Canaccord Genuity.

John Newman, Analyst (Canaccord Genuity)

Also have one on ALLO-329. The question is, do you expect that the Dagger technology that's targeting CD70 positive T cells could actually give you differential efficacy in some of the cohorts that you're enrolling versus lupus, for example, scleroderma and myositis where it's sort of theorized that there's more T cell activity?

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

John, great question. And the answer is yes. Not just within these rheumatologic disorders, where T cells are known to play a role, but there are many other therapeutic areas that are thought to be more dependent on T cell biology. For example, multiple sclerosis and type 1 diabetes are thought to be primarily driven by pathogenic T cells. So not only within this initial set do we think we could have differential efficacy, but we also believe it gives us a plausible pathway into other therapeutic areas where T cells play a larger role than a straight CD19 product.

Operator, Operator

And our next question comes from Reni Benjamin of Citizens.

Reni Benjamin, Analyst (Citizens)

Maybe just starting off with the interim analysis. Now that you've been able to sit on the data with the futility analysis, do you feel that this delta that you're seeing increases the chances of a successful interim mid-2027 versus what you were thinking when you first started the study? And if so, does it make sense to potentially modify the trial design to allocate a little bit more alpha and increase your chances of success there? And then regarding 329, as we kind of look at the landscape, look at autologous therapies and bispecifics, can you maybe just guide us as to what is the clinical efficacy and safety benchmarks you're hoping to hit so that you can move this program forward? And does this program move forward ideally with a partner? Or do you think you do this on your own?

David Chang, President and Chief Executive Officer

Reni, on the interim EFS analysis, after looking at the MRD clearance differential, we believe the probability of success or the powering for the interim analysis has increased. We designed the study to demonstrate a hazard ratio of 0.5, but the MRD clearance, as we extrapolate based on the existing data, leads us to a potential hazard ratio being much lower than 0.5. If that turns out to be true as we continue to enroll the study, the probability of the interim analysis leading to statistical significance is meaningfully higher. We'll just have to wait and see. Regarding amending the protocol to reallocate alpha, I don't think that is needed at this point. I think the best course is sticking with the original study plan.

Zachary Roberts, Executive Vice President, Research and Development and Chief Medical Officer

On where ALLO-329 fits in the evolving landscape: we feel really good about that. The front-line landscape has been focused on increasing intensity of regimens and evaluating bispecific-based regimens that add complexity and toxicity to newly diagnosed regimens. We feel that an MRD-positive result at the end of frontline treatment could trigger a cema-cel infusion in a consolidation setting, and importantly, cema-cel could be administered even in centers that may not engage fully in frontline bispecific regimens because of the complexity and toxicity. So we believe ALPHA3 is well positioned and somewhat insulated from that competition in early lines.

David Chang, President and Chief Executive Officer

On ALLO-329 specifically, the profile we are looking for is something that can be administered and managed in the outpatient setting, with the nature of CAR-T being a one-time treatment and the possibility of redosing several years down the line if symptoms were to recur. That profile should remain competitive compared with other emerging modalities targeting T cell biology in autoimmune indications.

Operator, Operator

And our next question comes from Lut Ming Cheng of JPMorgan.

Lut Ming Cheng, Analyst (JPMorgan)

Just a quick one from us. Can you talk about the rationale of updating the autoimmune RESOLUTION data update from June to fourth quarter? Is that decision data-driven? Or are there other considerations?

David Chang, President and Chief Executive Officer

Brian, let me take the question. Our intent is to provide a data update in a very meaningful way. In terms of the maturity of the data and what we have now, enrollment is very robust, and we are seeing interesting signs of clinical activity. We intentionally started the study at very conservative doses to ensure patient safety. As we dose escalate, we are moving to dose levels that in other programs we've seen activity, such as 80 million or 120 million cells. By the fourth quarter update, we'll have patients treated at doses that may be more in the active range, and we will have more to discuss in Q4.

Operator, Operator

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

David Chang, President and Chief Executive Officer

All right. Thank you. We said at the onset that this will be a year of defining proof and the ALPHA3 interim analysis represents an important first step. The signal we see today must be validated through EFS, but it provides early support for a fundamentally different approach to CAR-T, one that is earlier, more accessible and potentially scalable. Our focus now is execution: completing ALPHA3 enrollment, advancing ALLO-329 through dose escalation and continuing to generate the data needed to define the role of allogeneic CAR T across oncology and autoimmune disease. We believe we are well positioned to do that. Thank you for your continued support. Operator, you may now disconnect.

Operator, Operator

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may log off and disconnect.