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Operator
Hello, and welcome to the Allergy and Therapeutics first quarter 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be aware that today's conference is being recorded. We ask that you limit yourself to one question only. I would now like to turn the conference over to Christine Cassiano, Chief Corporate Affairs and Brand Strategy Officer. You may begin.
Christine Cassiano
Thank you, Operator, and welcome to all who have joined this call. After the market closed today, Allogene issued a press release that provides a business update and financial results for the first quarter of 2024. 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 to as many questions 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 Jeff 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, expanded semacell development, and 2024 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
Thank you, Christine, and welcome to those on the call today. We are excited to speak with you today to discuss how we have continued to strengthen our Allogeneic Cartier leadership position on every front. In January, we announced our Pivot to Focus development, on differentiated and competitive programs that are importantly designed to address unmet needs. In doing so, our future market opportunity dramatically increased. In large B-cell lymphoma alone, moving from the later line into the frontline consolidation meant that the U.S. market opportunity grew from approximately $500 million to more than $6 billion. That change meant something significant. It was time to extend our territory rights to include all of the European Union and the UK from Serbia. We are excited to have executed that vision, and Jeff will provide more details on that agreement on this call. Our team is making great progress in four core programs we outlined in January. We are very proud of the transformative potential of our Pivotal Alpha-3 trial with Semicel which is expected to read out in 2026, leading to potential BLA submission in 2027. This trial is designed to embed semacell as a part of curative first-line regimen and has the potential to change the standard care for patients with large B-cell lymphoma. The last point being something I want to emphasize as that is very rare in oncology. Our Semicell program could also set a new standard for what a CAR T can achieve in relapse, refractory chronic lymphocytic leukemia, or CLL. Differentiation is critical across our core programs. We declared a move into autoimmune space with the goal of resetting the immune system with a single infusion. Allo329, our next generation CD19-CD70 dual CAR, which incorporates our Dagger technology and CRISPR-based gene editing for site-specific integration, is designed to meet the unique needs of patients with autoimmune disease. Our Dagger technology provides a potential path to reducing or eliminating lymphodepletion which we believe may create more development and commercial opportunities for Allo329 in autoimmune indications. Our Allo316 program could be the first to demonstrate the unique potential of a CAR-T and solid tumor. We believe our $15 million California Institute for Regenerative Medicine grant awarded last month validates the remarkable inroads made in our Traverse trial and the therapeutic potential ALO316 has for patients with advanced renal cell carcinoma. This grant funds the completion of the phase one trial. We are grateful for the recognition from the CIRM reviewers of the potential for ALO316 to make a difference for patients. Lastly, we are pleased to have strengthened our cash runway to extend into third quarter 2026. I am very excited by the caliber of investors who participated in this financing and their demonstrated commitment to our mission. In addition, members of our board and executive management, including our executive chair, Ari Veldegrand, Jeff, our CFO, and I have further demonstrated our commitment to AlloGen by participating in this offering. Understandably, many investors are focused on milestones related to our Pivotal Alpha-3 trial, but it is essential to appreciate the multitude of inflection points across all our programs. Later in the call, Zach will review the development milestones across all four core programs. We will continue to focus all our resources on advancing these core programs and believe we are well positioned to change the CAR-Q treatment landscape to benefit patients. I'd like to turn the call over to Jeff to review our announcements today.
Jeff
Thank you, David. Let me first start with the press release we just issued announcing our $110 million equity financing. We know that our cash runway is critical. When we announced our pivot earlier this year, we had strong renewed interest from top-tier institutional investors and mutual funds. Based on those conversations, we made the strategic decision to pursue a financing that builds our cash reserves and extends our runway into the second half of 2026, during which time we expect to have the interim efficacy analysis and to complete enrollment of the Alpha-3 trial. In addition, this financing importantly reshapes our investor base. The quality of the investors who were part of this raise, including five of the largest institutional investors in mutual funds, leading healthcare specialists, and select members of our board of directors and management team, is indicative of the depth of interest in our allogeneic CAR T strategy. And we look forward to validating their belief in Allogene as we execute on our goals. Another example that underscores our belief in our programs is our just completed amendment to our agreement with Servier. You may recall that when Allogene was formed, we had only the U.S. rights for semacell under the Servier agreement. The timing for us to obtain these rights now versus a few years ago when they first became available was driven by two important factors. First, the dramatically increased market opportunity now with LBCL frontline consolidation and CLL. And two, the ability to establish future strategic partnerships. Let me start with the market opportunity. Our lead trial for Semicell before our announcement in January was in third-line LBCL. At that time, we estimated a market opportunity of approximately $500 million in that indication. After our announced pivot for this program into first-line consolidation in LBCL and relapsed refractory CLL, our new market opportunity dramatically increased to more than $6 billion in the United States. What we've just negotiated with Servier significantly expands our rights by adding the EU member states and the UK to further increase our market opportunity to more than $9.5 billion. in turn increasing the potential future revenue opportunity for SEMESEL by more than 50%. We now also have the option to add Japan and China at no additional cost when we can demonstrate the resources required to advance SEMESEL in that region. This brings me to point number two, future strategic partnerships. Given the market opportunity and excitement for Semicell in community cancer centers, you might surmise growing interest in a potential partnership. And this excitement will only grow over the next 6 to 12 months as the program is de-risked. We control the only clinically validated allogeneic CD19 CAR-T product positioned to transform how and where CAR-Ts are used in heme malignancies. With this agreement, we have consolidated rights in key commercial markets, making a potential partnership far more attractive. Importantly, we did so at a cost that is minimal compared to the market opportunity for Semicel. The financial terms are quite favorable for Allogene, given the expanded geography. We've agreed to increase our overall regulatory milestones by $25 million, and our obligation on commercial milestones increases by $10 million. Our royalty burden increases modestly, but remains effectively the same in the low-10s to mid-teens in the US, and we have a flat 10% royalty in the EU territory and the UK. Our royalty would also be 10% if we pursue our rights in Japan and China. Let me now turn to our financial update for the first quarter and the impact of our just announced financing. Our cash balance as of the end of Q1 2024 was $397.3 million in cash, cash equivalents, and investments. Pro forma for the financing we announced today, our cash balance will increase to approximately $500 million. Our cash runway now extends into the second half of 2026. Q1 2024 research and development expenses were $52.3 million, which includes $3.8 million in expenses associated with non-cash stock-based compensation. General and administrative expenses in Q1 were $17.3 million, which includes $8.1 million of non-cash stock-based compensation expense. For Q1 2024, our net loss was $65 million, or 38 cents per share, including non-cash stock-based compensation expense of $11.9 million in total. For 2024, we now expect a cash burn of approximately $200 million, a slight increase of $10 million to our prior guidance due to the timing impact of our revised milestone obligations to Servier, offset by expected proceeds from our $15 million CIRM grant related to our ALOE 316 program. We expect full-year 2024 GAAP operating expenses to be approximately $300 million, which includes estimated non-cash stock-based compensation expense of approximately $60 million. This guidance excludes any impact from potential business development activities. I'll now turn the call over to Zach, who will focus his comments on key milestones in our core development programs.
Servier
Thank you, Jeff. As I review key development milestones, I'd like to turn your attention to the new corporate presentation posted in the investor relations section of our website. Approximately one-third of LBCL patients who initially respond to RCHOP will likely relapse. Unfortunately, until recently, there has been no way to know which patients would be cured by frontline RCHOP versus those who would experience a disease recurrence and require treatment in second line or beyond. Because of this inability to give an accurate prognosis after the conclusion of frontline treatment, the standard of care after frontline treatment has for decades been to watch and wait for the disease to relapse. In January, we announced a partnership with Foresight Diagnostics who is developing a novel and potentially practice-changing test for minimal residual disease, or MRD. This investigational test, when administered following completion of frontline treatment for LBCL, has the potential to offer a highly accurate prediction of future disease relapses. We believe this test could provide us with the ability to identify those patients who are most likely to relapse after frontline and to take action to potentially prevent that relapse, namely a consolidation dose of semicell delivered immediately following the discovery of persistent MRD. Alpha-3 is designed with the specific attributes of semicell in mind. First and foremost, it maximizes the allogeneic advantages of Semicell as a one-time, off-the-shelf treatment that can be administered immediately upon discovery of MRD following six cycles of R-CHOP. If Alpha-3 is successful, Semicell could become the standard seventh cycle of frontline treatment available to all eligible patients with MRD. Additionally, Alpha-3 builds on the growing understanding that administering CAR-T therapies to patients with low disease burden can improve safety and efficacy outcomes. Semicel's Phase I safety profile with low rates of CRS and ICANS already permits its use in the outpatient setting in relapsed refractory patients and may further improve in patients with no radiological evidence of disease. The outcome of this pivotal trial could allow Semicel to be embedded in the frontline setting where autologous therapies are far less feasible. Consolidating response following an MRD-positive result post-RCHOP requires immediate and definitive action to prevent an impending relapse. Relapses tend to happen quickly after completion of RCHOP, in many cases within weeks to a few months, making the speed to treatment a critical factor in the success of a consolidation strategy like Alpha-3. Semicell treatment could begin within days following MRD test results. As we have seen, Autologous CAR-Ts have had difficulty penetrating community cancer centers and accessing earlier line patients. Use of semicell won't rely on the complex logistics that have hindered CAR-T adoption, nor will there be a reliance on referrals as the intent is for CAR-T to be available in these community cancer centers. These doctors have been waiting for an allogeneic like semicell to use CAR-T in their centers. We believe autologous CAR-Ts, bispecifics, or any other treatment modality cannot reproduce the differentiated attributes of semacell. You can see what this journey looks like across modalities on slide eight. Slide 14 provides greater granularity regarding what to expect during the Alpha-3 pivotal trial. Startup activities for Alpha-3 are well underway and are nearing completion at several sites. In fact, we have completed the selection of nearly all clinical trial sites that include community-based cancer centers. The study will randomize approximately 240 patients who are MRD positive at the end of frontline therapy to either consolidation with semicell or the current standard of care, which is observation with serial clinic visits, blood draws, and CT scans. With a primary endpoint of event-free survival, the design will initially include two treatment arms that differ in the lymphodepletion regimen used. One arm will feature standard fludarabine and cyclophosphamide plus allo-647, and the other fludarabine and cyclophosphamide alone without allo-647. The first indication of how the trial is proceeding will be when we announce the selection of the lymphodepletion regimen, we will continue to the end of the trial. That announcement is expected in mid-2025. The next study milestones will come less than a year later. First, we expect to complete enrollment in the first half of 2026. And second, because the prognosis of patients who are MRD positive at the end of frontline therapy is quite poor, study events are expected to come in quickly, so we expect to perform efficacy analyses in 2026 as well. This will include an independent data safety monitoring board interim efficacy analysis in first half of 2026, and the data readout of the primary EFS analysis in second half of 2026. If the trial is successful, We expect to follow these data readouts with a biologic license application or BLA submission targeted for 2027. The outcome of this pivotal trial could allow semacell to improve cure rates and become the only treatment approved for the consolidation of frontline treatment, potentially reducing the need for CAR T in the later lines and simplifying the decision for frontline treatment. Knowing an effective consolidation option exists could abrogate the need for complex regimens of five, six, or even more agents in newly diagnosed patients. On slide 19, we briefly look at the next key milestones for the Alpha-2 CLL cohort. There is strong scientific rationale to believe that an allocarty product derived from healthy donor cells could create a clinically meaningful advance for these late-stage patients with a one-time dose and simpler administration and logistics. The phase one cohort will include 12 patients treated with semicell and is now enrolling patients. We expect to complete phase one trial enrollment and have an initial data readout by the end of this year. Based on the outcome of this trial, we would expect to move into a pivotal phase two trial in 2025. The bar for this trial is modest, given that an autologous CAR T therapy was recently approved with an overall response rate of 45% and a complete response rate of 20% in patients who received infusions at the target dose. Considering all those who underwent leukapheresis, the response rate and the complete response rate fell to 37% and 14% respectively. Importantly, for an off-the-shelf CAR T product candidate like Semicel, virtually all enrolled patients who have met all trial criteria are expected to receive infusions. I want to turn your attention to slide 27 in our autoimmune program next. Allo329 is our wholly-owned, next-generation, site-specific integration-based, dual-targeting CD19-CD70 AlloCAR-T. Our design is centered on both scalability and reducing or even eliminating lymphodepletion, which we believe is absolutely critical for rapid clinical development and future commercial success. We are currently working on our IND-enabling manufacturing process and analytic assay development. We expect to file an IND in Q1 2025 and begin enrolling that trial in the first half of 2025. As a result, we expect to have proof of concept in this trial by the end of 2025. We recognize that highest clinical proof of concept is in lupus, but as we have noted earlier, we also recognize the importance of differentiation, so we are considering other indications with unmet need. Lastly, slide 30 reviews our Phase I Traverse Trial Timeline for allo316. This quarter, we plan to detail what we believe to be a fundamental discovery, the algorithm that may mitigate the treatment-associated hyperinflammatory response without compromising the CAR-T function needed to eradicate solid tumors. The manuscript is currently undergoing peer review. A phase one data update from approximately 20 patients with CD70 positive renal cell carcinoma is planned by year end 2024. In totality, and as shown on slide 32, we have meaningful data flow between now and through 2026 that will demonstrate the potential of our programs. We look forward to answering any additional questions you have on our pipeline during the Q&A. We'll now open the call for questions.
Operator
Thank you. Ladies and gentlemen, as a reminder to ask the questions please press star 11 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 11 again. Please limit yourself to one question only. Please stand by while we compile the Q&A roster. Our first question comes from the line of Michael Yee with Jefferies. Your line is open.
Michael Yee
Hey, guys. Congrats on all the progress and, yes, consolidation of everything. I think it speaks to the bullish nature of how you guys are looking at things. I guess I know you want to keep it to one question. I guess it's a two-parter. On the phase three that you're enrolling in consolidation, can you explain your visibility on enrollment sites, patient numbers? I know that was always a question for the later line studies, but also would be a meaningful question for these studies, given some of the sites we've talked to are still trying to understand the protocol and the design of the study as you'd be breaking new ground. So I want to understand your confidence on that. And then part two of that is what is the difference between the interim analysis and the full primary EFS analysis? Thank you.
Servier
Thanks, Michael. This is Zach. Good questions. So with respect to the first question, which I'll sort of relate to feasibility, what we will, what we can share is that the interest in this program has been quite marked, both from academic as well as community-based oncology centers. We expect to have approximately 50 clinical trial sites open in the United States. That will be a blend of community practices and tertiary care academic centers. And almost all of those sites have been selected. And we are on pace to activate our first batch of sites by middle of this year to enable trial enrollment. So I would say that the enthusiasm from these clinical trial sites has been very, very high. Your second question around the difference between the interim and primary analyses in 2026 and first half and second half respectively relates to the number of EFS events that we will be assessing at the interim and the primary analysis.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Tyler Van Buren with TV Cohen. Your line is open.
TV Cohen
Hey, guys. Thanks for that, and congrats on all the progress. So I believe the likelihood of the Alpha-3 trial succeeding is super high, frankly. So do patients appreciate the risk of being MRD-positive after RCHOP, or why wouldn't they choose to undergo this therapy and enroll in the trial?
Servier
Thanks, Tyler. I don't think that the concept of MRD has made its way into sort of the general consciousness of the patient population yet. We do think that that is coming and will probably come quickly. That's not the case for the investigators who have signed up for the trial. They all see the potential for this assay and its potential ability to change practice. With respect to an individual patient and doctor conversation about whether to enroll in the study, we believe that this study will be highly attractive to the patients because they'll be looking for an MRD negative result to tell them that they're likely cured of their malignancy. Now, for those patients who are MRD positive, We also can't really understand why a patient wouldn't at that point jump at the chance to receive a dose of semicell in consolidation for all the reasons that we've detailed. Importantly, there are no approved therapies right now available for patients who are in remission at the end of frontline but remain MRD positive. We believe that this will be a fairly significant competitive advantage for us during the enrollment and at the time of potential launch.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Salvin Richter with Goldman Sachs. Your line is open.
Salvin Richter
Good afternoon. Thanks for taking my question. Into the semacell data and CLL and to your end, could you just help us understand what you would view as a positive outcome here and where the clinical bar currently lies?
Servier
Thanks, Salvin. We think that the bar here is still quite low, as a matter of fact, and the unmet need here is only growing in this relapse refractory CLL population. As we mentioned during the prepared remarks, recent autologous CAR-T product was approved on a fairly modest response rate and complete response rate. Importantly, we believe that the patients who derive benefit tend to do so fairly quickly following an infusion of CAR-T cells. Fast-forwarding now to the end of this year, as we mentioned, we're enrolling the Phase 1 cohort now, and we expect to have that data shared at the end of this year. Now, of course, there will be limited follow-up on those patients. However, we should be able to have response rate and some modest follow-up on some of those patients at least. So we expect that this data will be helpful for us as we're planning to make that go-no-go decision for Pivotal next year.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Rennie Benjamin with Citizens JMP. The line is open.
spk13
Hey, thanks for taking the questions and congratulations on all the progress, especially getting the rights back. And that's my question mainly. Are you ready to move forward with semicell commercialization in Europe by yourself or Do you really feel that this is something that must be done with a partner? And I guess just related to that, in terms of manufacturing, is this something that you could do from here in the States and ship out? Or do you feel that you would have to create a manufacturing facility in Europe? Thanks.
David
So, Ran, this is Dave Chang. Let me answer that question. We are extremely excited to gain rights to European Union and UK. I mean, this is really big and increases the market potential of the semacells significantly. The two questions that you're asking, you know, the EU, you know, how ready we are. I mean, we just signed a deal. Give us a little bit of chance. I mean, this is something that we have done. in our previous experiences to place the clinical study and also prepare for regulatory filing and also for commercialization. But right now, the ink is drying, so give us a little bit of time before we outline how we plan to expand in Europe. And as Jeff has also mentioned, this is also what I believe as an opportunity for partnerships. which we believe can bring a significant upside to how much and how fast we can expand the program in Europe. The second question, that's a relatively simple one. I mean, we have our own manufacturing facility, Cell Forge One, across the bay. That's the San Francisco Bay. And that facility, from the beginning, was designed to meet the clinical as well as the commercial regulatory requirement for both U.S. and Europe. And yes, you are absolutely right. We can manufacture the product there and ship it to Europe for clinical studies.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Luca Isai with RBC Capital. Your line is open.
Luca Isai
Oh, great. Thanks so much for taking my question. Congrats on the progress. Maybe a quick one for you, Zach. Keith talked about the powering assumption in Alpha 3. I think your prior corporate deck actually flagged eight months as the expected median EFS for the control arm, but I no longer see that in your new deck. Anything to read into that? And also, how are you thinking about the median EFS for the active arm, given you actually never tested that product in that setting? Any call there? Much appreciated. Thanks so much.
Servier
Thanks, Luca. So, we haven't gone into details around the powering assumptions that we made for the overall study design. As you'll note, the sample sizes has remained consistent, 110 patients versus 110. As far as the timing of the EFS events on the control arm, so eight months that we had previously featured really was counting from the initiation of RCHOP. And actually, it's probably somewhere between four to eight months, which will actually unfold in the context of the study. And that's based on a fair amount of published literature for patients treated with RCHOP. The second question.
David
What we expect on the control treatment arm.
Servier
Yes. So as far as what we control for the, what we're anticipating for the treatment arm. So again, this is going to get back to the powering assumptions, which we haven't guided to publicly. However, What we can say is that the experience that we have from the phase one program suggests that patients who achieve a CR tend to do very well and they tend to stay in CR. That's point number one. And point number two, I'll again refer to the growing body of literature to suggest that treatment with CAR T cells at relative low disease burdens does tend to lead to better efficacy outcomes. So while we don't have any hands-on experience in the MRD-positive patient population, there is quite a bit of evidence to suggest that this actually will work quite well and we'll be able to improve EFS significantly over the control arm.
David
And look, let me just add on by saying that this study is well-powered for EFS event as well as PFS. And I would just ask you to look at the the sample size, you know, how big the study was in the second line setting of the Yaskata and Brianzi that led to a successful outcome and essentially, you know, bringing forward a treatment that changed the practice.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Astika with Truis. Your line is open.
spk11
Thanks for taking my questions, and I'll also offer my congratulations on saving the rights of Semicell from Servier and the financing that you just announced. I'm going to spin off on Tyler's question, and I share the same enthusiasm he does as well for Alpha 3, but I'm going to also ask, given the confidence you're going to have in the active arm, what's going to compel a patient to stay on the control arm once they know that they're on the control arm there. And then if I can squeeze another quick one in. In CLL, how much persistence is needed? We know with LBCL, upfront tuber killing is what's really important. What do we know about CLL right now in terms of how much persistence is really needed?
Servier
Thanks, Aspika. So coming back to the question on the patients who get randomized to the control arm. there's a couple of reasons that they would stay on the control arm. Putting my sort of patient hat on, I think it's going to be quite reassuring for them to know that they're being followed very closely in the context of a clinical trial, at least as closely as they would be followed per standard of care, and often because the focus on getting patients into the clinic and so forth is so much higher in the context of a clinical trial, probably even closer follow-up. So if I'm a patient knowing that I'm getting the standard of care but I'm going to be watched like a hawk, I think we'll go a long way to reassuring patients. And then I'll reiterate that even if those patients decide to discontinue on the clinical trial, it's not as though they can find a physician who is going to treat them for their MRD disease. They're still gonna have to wait for a relapse. There are no approved therapies for patients who are in remission with LBCL currently. With the second question on CLL around persistence, I think the evidence is still developing there, and I think we have to sort of not dive too deep into that rabbit hole. We do know that these cells need to be around for a period of time. We have been able to show in the context of LBCL that our cells can stay around for quite a number of months, in some cases six months and beyond. So we do, with our current FCA-based lymphodepletion regimen, we create a nice window of persistence for these cells to get in there and eradicate tumor.
David
And let me just add on that one comment, which I would like to make. Since the questions about how well this study will enroll and how the patients will behave once they are enrolled in the study, I mean, at this point, Yes, we have not studied the study, but the study was designed with a significant input from the KOLs, both academic-based KOLs as well as the community-based KOLs. And their opinion was unanimous about the design of the study, the randomized design, as well as how to handle the control arm. I think in terms of how the investigators will support the conduct of study, which we are relying a lot, given the enthusiasm that they have expressed, that's where we have a lot of comfort level about the projections that we are making about the study enrollment cadence.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Brian Chen with JP Morgan. Your line is open.
Brian Chen
Hey, guys. Thanks for taking our question. On autoimmune, there's that question of whether lymphodepletion is essential in optimizing CAR T expansion. Can you tell us your perspective on the likelihood of completely eliminating lymphodepletion? What are some of the key factors in bringing that to reality? Thanks.
David
Yeah, Brian, let me take on that question. You know, again, as we have said, ALO329, the program that we are advancing in autoimmune, IND is planned for the first quarter of 2025, and we are hoping to get the initial proof of concept communicated by the year end. The question of whether the lymphodepletion is needed or not, this is something that we have thought through very carefully Looking at the data that we have from allo5018, this is our CD19 allogeneic CAR-T program, as well as allo316, which is a CD70 CAR-T program where we have treated a number of patients with a renal cell carcinoma. So combining those data together and looking at all the translational data that we have seen is very clear. When you have the dagger technology, allogeneic CAR T cells expand remarkably well. And we know that in terms of how CAR T behaves depends very much on the expansion capability of the CAR T cells. So that's information number one. Number two information is what we believe is necessary to reset the immune system in patients with autoimmune disorders. We do not. And also, this is the view of many KOLs as well. Nobody believes persistence is required. One common theme is the depth of the depletion, initial depletion, that's important. But when we put all the information that we have together, we believe allo329 will expand well. And with that, we will achieve the deep depletion of B cells and activated T cells And we believe that is critical to reset the immune system.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Sammy Corrin with William Blair. Your line is open.
Sammy Corrin
Hey there. Thanks for taking my question and congrats on the progress. I was wondering if you could clarify how many of the 240 or so patients being enrolled in Alpha-3 will be enrolled initially in the three arms versus after the interim analyses and lymphodepletion selection. And then just kind of curious why you decided not to look at MRD negativity as a secondary endpoint in that trial, just considering it does seem to be predictive of a long-term remission. Thanks.
Servier
Thanks, Sammy. Great questions. So, you know, we haven't really gone into detail around how many patients are going to be enrolled in that three-way randomization. However, we have said that the hypothesis testing sort of control arm versus treatment arm will take place on approximately 110 patients in each arm. So, that can give you a little bit of an idea of how many additional patients we may need to enroll. It's a relative, it's a fraction of the overall enrollment. And that number was selected to give us that right blend of statistical power to make the decision well informed on safety and efficacy and translational outcomes, but yet not enroll a large number of patients who would then go on to receive an LD regimen that is not carried forward for the duration of enrollment. As far as the question on secondary endpoint for MRD, We will be examining this MRD clearance as an exploratory endpoint. However, it probably didn't make a lot of sense to do it as a key secondary endpoint, given that we were using the very same test to select the patients for enrollment in the first place. We are quite excited by the potential future for MRD clearance as a key endpoint in clinical trials. But we thought it best to stick to the traditional endpoints like EFS for this phase two trial.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Jack Allen with Bayer. Your line is open.
Jack Allen
Great. Thanks so much. Congratulations to the team on all the progress. I wanted to ask about Self-Borged 1. Are you planning on producing the material for Alpha 3 from Cell Forge 1 and Alpha 2 for the CLL patients? And then as we look out on Alpha 3 and the acquisition of global rights for IL-501A, could Alpha 3 become a global study in your view, or are you really committed to running that solely in the U.S.?
David
Jack, both are great questions. The Cell Forge 1, you know, this is our GMP facility. And that is fully operational, and it's producing GMP materials that are necessary for us to conduct both CLL and Op3 study. In terms of what we do with the clinical supply, I mean, that's something that we don't go into the details. And the second question, Jack, can you just remind us the second question? Okay.
Jack Allen
Yeah, I was asking about the requisition, right? Sounds like someone's.
David
Yeah. So, yeah, the, you know, in terms of right that we have obtained from, you know, Serbia is right to Europe and the UK. And obviously with that, we are very interested in expanding the clinical trial footprint. as we prepare about commercializing in these extended territories. So on that, as I said, we just signed the deal. So I would ask you to stay tuned. We'll provide more information on what we are doing in those territories in future time.
Operator
Thank you. Will you stand by for our next question? Our next question comes from the line of John Newman with Canaccord. Your line is open.
John Newman
Hi, guys. I'd like to add my congrats on all the progress as well. I had a question about L329 in the autoimmune setting. Some of your competitors are rolling studies in the autoimmune area, but they're including dermatomyositis patients or they're running separate studies. My question is, are you considering including those patients in your study, and might there actually be an interesting filing strategy there, given that he's an orphaned deceased. Thanks.
Servier
Thanks, John. I think I'll ask you to stay tuned for further details on the clinical development plan as we kind of get a little bit closer to the IND submission. As we mentioned in the prepared remarks, we're going to be looking carefully at the existing proof of concept out there, but also looking for opportunities for differentiation in the development plan. So please stay tuned.
David
And John, let me just add on. I mean, ALLO 329 is a very exciting program. There's a lot of interest. And once we obtain the proof of concept, this is also a program that can expand into many different indications in autoimmune space. That includes not only the indications where CAR T has proven, you know, initial proof of concept, but also indications where the T cell component may play a bigger role. As a reminder, you know, one of the key innovation and differentiation that we introduced into ALO329 is, you know, having a dual CD70, CD19, and the CD70 component has the ability to bring the dagger biology, as we have just talked about, but also address the activated T cells, which we believe has a pretty important role in the pathogenesis of autoimmunity.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Kalpit Patel with B. Rowley. Your line is open.
Kalpit Patel
Yeah, hey, thanks for taking the question.
spk09
This is sort of related to an earlier question, but do you think you'll need multiple doses of allo-329 initially to get that profound B-cell depletion that we have seen with autocar T's in autoimmune diseases since you're planning to reduce the dose of or the use of lymphodepletion?
David
Let me take that question. We are not. We are planning to rely on single infusion to maximize the benefit of allo-329.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Samantha with Citi. Your line is open.
spk07
Hi, thanks very much for taking the questions. Just on LO329, given you have the dual targeting approach, how are you thinking about the potential onset of the treatment-associated hyperinflammatory response that you've observed in the Traverse study with the diagnosis? diagnostic and treatment algorithm that you developed, is that applicable to the autoimmune population as well? And can you just characterize a bit how you think this side effect might be viewed by rheumatologists? Thank you. Yes.
David
Samantha, you know, great question. Let me take that question. You know, we have, you know, extensively reviewed the data that we have generated with the, you know, Allo 316 program where we are, you know, we have seen, you know, remarkable, you know, the cell expansion after infusion. And like any CAR-T, when there's a great cell expansion, there is hyper-inflammatory response that follows. That's really the pharmacodynamic effect of allopathy tonight, which we intend to leverage heavily. How we see it is, you know, to address those questions, is one way to do it is, you know, not go up on the high, you know, cell dose. And, you know, when we think about the autoimmune space, you know, this is a pretty large indication. And the scalability of the cell therapy is, we view as a very critical issue. So, this is a situation where, you know, ALLO329, from the manufacturing perspective and others, you know, can provide, you know, the number of patients that can meet the demand of autoimmune space. So, if anything, the expansion capability that may come with the ALO329 will be leveraged to increase the capacity with which we can expand the autoimmune programs with ALO329.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Kelsey Goodwin with Guggenheim. Your line is open.
Kelsey Goodwin
Oh, hey. Thanks for taking my question, and congrats on all the progress. For 316, I guess maybe could you just remind us the efficacy benchmark in RCC and what you'd need to see at the end of the year in order to advance this program further? Thank you.
Servier
Thanks, Kelsey. So, the relapse refractory RCC outcomes are still quite poor. There's been a recent approval there. However, it didn't really. make much headway in terms of response rate or durability response over existing third-line agents approved here. So we think that that bar is still quite low. Some of the response rates, somewhere around 20% is the benchmark that we're looking at from the literature. And as you recall, and when we shared data back at AECR last year, We were above that with a 30% response rate in patients whose tumors were known to express CD70. So we're pretty encouraged by that early sign of efficacy.
Operator
Thank you. Will you stand by for our next question? Our next question comes from the line of Laura Prendergast with Raymond James. Your line is open. Hey, guys. Thanks for taking all the questions.
Laura Prendergast
One for me, just thinking about barriers for the community center, you know, readiness for and MRD testing versus what you might see at the academic center. Any barriers you anticipate there?
Servier
Thanks, Laura, for that question. I'll start by saying that to the contrary, actually, what we're finding is these centers that we're approaching, these community centers, even those without hands-on CAR T experience are extremely well-equipped to run this trial. And that's because these docs have been giving bispecifics to patients now for several months for this indication, of course, bispecifics for other indications as well. And so the toxicity profiles and the unique adverse events that T cell directed therapies share across different modalities, I think, has given both us and these docs confidence that they'll be able to handle the patients that are treated on this trial. Of course, there is another category of barrier that I think has kept these centers from jumping into CAR T over the last decade, and that is a lot of the operational and logistical barriers that they just have not been willing to undertake at their centers. Because Semicell is off the shelf, it's shipped on demand, and in many cases can be administered as an outpatient, all of those logistical and operational barriers that these centers face go away. And so, in fact, what we have found is actually quite an open and enthusiastic set of partners, even in those who don't have direct hands-on CAR T experience.
Operator
Thank you. Please stand by for our next question. Our next question comes from the line of Ben Burnett with Stifel.
Ben Burnett
Your line is open. Hi, good afternoon. This is Carolina for Ben Burnett. Thank you for taking our question. First, in the Alpha-3 trial, will you do a second MRD assessment after lymphodepletion but before the administration of semacell? And then, separately, given that allo316 and allo329 are based on the data technology, would it be fair to look at the clinical update from the TRAVERSE trial later this year as a window for the initial safety expected with allo329? Thank you.
Servier
Thanks, Carolina. So, the first question, you know, we tend to avoid going into specifics around the timing of the assessments that we'll be performing in the clinical trial. I will say that, you know, the dynamics of MRD, generally speaking, are such that it does not tend to be a test that will turn negative in the matter of five days because, you know, the tumor is still still there and not likely to be cleared in that short window of time. So, the utility of such an assessment would be questionable. The second question that you asked was around whether the efficacy update that we share later this year from Traverse will offer a window to potential efficacy or outcomes in 329. I'll say that we looked very carefully at the biology of 316 in the Traverse trial as we were designing Allo329 specifically for an AID population. And we believe very strongly in the Dagger biology and the ability to propel these cells to good engraftment and persistence. I wouldn't go much farther than that. I think the requirements for cell persistence are different in AID versus oncology. This is a dual targeting car versus a single targeting car. So I think there's sufficient differences in construct design and patient population that I don't think it's going to be all that instructive for us to scrutinize the 316 results and read into 329.
Operator
Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to management for any additional comments.
David
Yeah, thank you, Alfredo. We are very proud of how we continue to strengthen Allogene on all fronts and making sure we remain competitive today and in the future. We will continue to focus all our resources on advancing our core program. And with today's announced financing, we are well positioned to extend the cash runway into important data readout. More importantly, we believe we are well positioned to change the CAR T treatment landscape for the benefit of patients. Our thanks to you for joining us on the call today and our sincerest gratitude to our investors for your continued support. Operator, you may now disconnect.
Operator
Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.
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