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Allogene (ALLO) Inks Deal With Arbor Bio for CRISPR Technology

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Allogene Therapeutics (ALLO - Free Report) announced that it has entered into a non-exclusive licensing agreement with privately-held Arbor Biotechnologies to utilize the latter’s proprietary CRISPR gene-editing technology.

Allogene intends to utilize Arbor’s CRISPR technology with its own proprietary platform to develop next-generation allogeneic CAR T (AlloCAR T) therapies targeting autoimmune diseases (AID).

However, neither of the companies disclosed any specific financial terms or considerations pertaining to the above transaction.

Management intends to start a clinical study on its first AlloCAR T therapy in AID indication in early 2025. This is in line with the company’s previous announcement of starting an early-stage clinical study on a new candidate ALLO-329 in lupus/systemic lupus erythematosus indication next year.

Shares of Allogene have jumped 52.7% in the year-to-date period compared with the industry’s 1.1% growth.

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Earlier at the onset of this year, management made major changes to its pipeline when it announced its business plans for 2024 and beyond.

As part of its business update, ALLO announced that it is deprioritizing two pivotal mid-stage studies, namely ALPHA2 and EXPAND, evaluating its CAR-T cell therapy candidate ALLO-501A, now known as cemacabtagene ansegedleucel (cema-cel), in third-line large B cell lymphoma (LBCL).

Allogene will focus on developing cema-cel as a frontline treatment for LBCL patients. In this regard, management initiated start-up activities for the phase II ALPHA3 study evaluating cema-cel as a potential first-line treatment for newly diagnosed and treated LBCL patients, who are likely to relapse and need further therapy.

Management intends to administer cema-cel to those patients who, despite having completed six cycles of R-CHOP, still have minimal residual disease (MRD). Management estimates that nearly 30% of patients who respond to R-CHOP treatment eventually relapse. The company intends to position cema-cel as the standard seventh cycle.

The ALPHA3 study will enroll nearly 230 patients who are MRD-positive at the end of first-line therapy. These patients will then be randomized to either consolidation with cema-cel or the current standard of care (observation). The primary endpoint of the study is event-free survival. The study has also been designed to include two lymphodepletion regimens, one combining standard fludarabine and cyclophosphamide with ALLO-647 and another without ALLO-647.

Though Allogene’s pivot to frontline treatment opens up access to a wider and more lucrative target market, it also delays the company’s plans to bring the product to market by at least a couple of years. With the above changes in ALLO’s business plans and a fresh new study in the works, a potential FDA filing is not expected up until 2026/2027.

Allogene’s business plans also include a planned restructuring of resources in first-quarter 2024. Per management, these activities are being undertaken to reduce the company’s cash burn and extend its cash runway into 2026. It intends to provide guidance for 2024 when it reports fourth-quarter and full-year 2023 earnings on Mar 14.

 

Zacks Rank & Key Picks

Allogene currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the overall healthcare sector include ADMA Biologics (ADMA - Free Report) , ANI Pharmaceuticals (ANIP - Free Report) and GSK plc (GSK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share (EPS) have risen from 22 cents to 30 cents. Meanwhile, during the same period, estimates for 2025 EPS have improved from 32 cents to 50 cents. Year to date, shares of ADMA have risen 37.6%.

Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting once, the average surprise being 85.00%.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPShave risen from $4.06 to $4.40. Meanwhile, during the same period, estimates for 2025 EPS have improved from $4.80 to $5.01. Year to date, shares of ANIP have risen 20.7%.

Earnings of ANI Pharmaceuticals beat estimates in each of the last four quarters, the average surprise being 109.06%.

In the past 60 days, estimates for GSK’s 2024 EPS have risen from $3.87 to $4.03. Meanwhile, during the same period, estimates for 2025 EPS have improved from $4.20 to $4.39. Year to date, shares of GSK have risen 16.8%.

GSK's earnings beat estimates in three of the trailing four quarters while missing the mark once, the average surprise being 7.59%.

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