Allogene Therapeutics Inc ALLO has announced a shift in its clinical trials, triggering a 15.49% drop in its stock price. The company has decided to deprioritize ongoing third line Phase 2 ALPHA2 and EXPAND trials of cema-cel (ALLO-501A) and instead focus on a potentially pivotal trial (ALPHA3) evaluating cema-cel as a consolidation therapy in large B-cell lymphoma (LBCL) patients in the first-line setting who are minimal residual disease positive (MRD+) following R-CHOP. This strategic change, together with the halting of ongoing enrolment and initiation of a new ALPHA2 cohort, signified a shift in investor sentiment.
Allogene’s decision to initiate a new ALPHA2 cohort of 12 patients to evaluate cema-cel in patients with chronic lymphocytic leukemia (CLL) and expand its pipeline into autoimmune diseases using ALLO-329, coupled with its extended cash runway, were initially met with optimism.
However, the market reaction reflects concerns about any potential delays in reaching key clinical milestones, as the company prepares to start the Phase I trial of ALLO-329 in autoimmune disease. Simultaneously, Allogene announced a partnership with Foresight Diagnostics, which may have been perceived as a distraction.
The company’s strategic decision enticed positive responses from financial analysts. William Blair analyzed the move as a strategic leap that could position Allogene ahead of competitors in autologous and allogeneic CD19 CAR-T therapies, expanding its potential market significantly. The reiteration of an Outperform rating by William Blair served as a vote of confidence amid the stock downturn.
Allogene’s shares’ decline reflects a wavering market sentiment, signaling concerns about the company’s adjustments to its clinical trials and its expansion into autoimmune diseases. Investors will now watch closely how Allogene navigates these strategic shifts and whether they deliver the anticipated growth. The question remains: Can Allogene reassure its investors and regain the stock market’s favor?
