Scott Wolchko - President and CEO Dr. Chris Storgard - Chief Medical Officer Dr. Dan Shoemaker - Chief Scientific Officer.

Ren Benjamin - Raymond James Mark Breidenbach - Roth Capital Partners David Nierengarten - Wedbush Securities.

Good day, ladies and gentlemen. Welcome to the Fate Therapeutics Fourth Quarter and Year-End 2016 Financial Results Conference Call. At this time, all participants are in a listen only mode. This call is being webcast live on the Investors & Media section of Fate’s website at fatetherapeutics.com that’s www.fatetherapeutics.com.

As a reminder, today’s conference call is being recorded. I would now like to introduce Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. You have the floor, sir..

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics fourth quarter and year-end 2016 financial results call. Shortly after 4 pm Eastern Time today, we issued a press release with these results, which can be found on the Investors & Media section of our website under Press Releases.

In addition, our Form 10-K for the year-ended December 31, 2016 was filed shortly thereafter and can be found on the Investors & Media section of our website under Financial Information.

Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements.

Please see the forward-looking statement disclaimer on the Company’s earnings press release issued after the close of market today, as well as the risk factors in the Company’s SEC filings, included in our Form 10-K for the year-ended December 31, 2016 that was filed with the SEC today.

Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, as the facts and circumstances underlying these forward-looking statements may change.

Except as required by law, Fate Therapeutics disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. Joining me on the call today are Dr. Chris Storgard, our Chief Medical Officer and Dr. Dan Shoemaker, our Chief Scientific Officer.

I will begin the call by highlighting the significant progress we have made over the past three months and the key milestones we expect to achieve during 2017.

Chris will then discuss the status of our ProTmune PROTECT clinical trial including our plans to release safety and efficacy data from the study’s Phase 1 stage and our near-term clinical development plans for FATE-NK100.

And finally, Dan will review our preclinical development activities in support of our ‘one cell, many patients’ approach to cellular immunotherapy. I will conclude with a review of our financial results for the fourth quarter 2016 before opening the call up to questions and further discussion.

I would like to start today’s discussion by celebrating two clinical development milestones achieved during the past three months and sharing our expected clinical development trajectory and data release plans over the next six months.

First, in January 2017, we announced that the first subject had been treated with ProTmune in our PROTECT study for the prevention of acute graft-versus-host disease. Second, earlier this week, we announced that an investigational new drug application was cleared by the U.S.

Food and Drug Administration to begin clinical testing of FATE-NK100 in advanced AML. Let’s start the discussion with FATE-NK100, our first-in-class adaptive memory natural killer cell product candidate for the treatment of cancer.

Clearing the IND application with the FDA for FATE-NK100 is a significant milestone for both the Company and for the field of NK cell cancer immunotherapy. FATE-NK100 is a first-in-class NK cell product candidate comprised of an activated subpopulation of NK cells, called adaptive memory NK cells.

While there’s clinical precedent for the use of conventional NK cells in cancer immunotherapy, our work with Dr. Jeff Miller at the University of Minnesota has demonstrated that the adaptive memory NK cell subpopulation in particular has unique properties that are critical for cancer immunotherapy.

First, adaptive memory NK cells exhibit multifaceted and significantly enhanced cytotoxicity and can kill tumor cells both directly by selectively destroying cancer cells through the recognition of stress signals commonly expressed across tumor cell types and indirectly by secreting cytokines that ignite an immune response from other cytotoxic cells including T-cells.

Importantly, adaptive memory NK cells have been shown to maintain their inherent ability to lead normal, healthy cells unharmed. Second, one of the key limitations that has challenged the conventional NK cell therapy field is lack of cell persistence. In contrast to conventional NK cells, adaptive memory NK cells display persistence. The work that Dr.

Miller and others have shown that adaptive memory NK cells are long-lived NK cell subpopulations. For instance, in the allogeneic transplant setting, donor-sourced adaptive memory NK cells have been detected at six months post-transplant and their frequency at six months is directly correlated with lower two-year disease relapse.

Third, adaptive memory NK cells are resistant to immune checkpoint pathways, which are key pathways exploited by tumor cells to escape the endogenous immune response.

Preclinical findings recently presented at ASH by the Miller lab showed that adaptive memory NK cells have low levels of both, PD-1 and TIGIT cell surface expression, and are inherently resistant to immunosuppressive factors, commonly found in the tumor micro environment.

With FATE-NK100, we believe we have a truly unique NK cell phenotype, one with enhanced infector function, persistence and resistance to immune checkpoint pathways. And we believe that these properties will translate into improved outcomes in the treatment of cancer.

We expect the first-in-human clinical trial of FATE-NK100 in refractory/relapsed AML to enroll its first subject at the Masonic Cancer Center, University of Minnesota early in the second quarter of 2017.

In previous clinical trials using conventional NK cell therapy in refractory/relapsed AML, the University of Minnesota and other groups have demonstrated safety and reported complete response rates of up to 30%. Importantly, these past clinical trials differ from this first-in-human clinical trial of FATE-NK100 in two key ways.

Number one, these past trials administered a heterogeneous population of NK cells to patients, and did not assess the therapeutic potential of a highly enrich sub-population of adaptive memory NK cells.

And number two, the NK cell dose administered to patients was one log lower than the dose of FATE-NK100 to be administered in this first-in-human study. As such, we believe we have the potential to show clinical proof of concept and therapeutic differentiation with FATE-NK100 in refractory/relapsed AML after treating only a small number of patients.

We expect to share clinical data from this first-in-human clinical trial of FATE-NK100 in refractory/relapsed AML at a scientific conference in the second half of 2017. In the coming months, we plan to aggressively expand our clinical investigation of FATE-NK100 into solid tumors.

We are currently finalizing our protocol with the University of Minnesota to evaluate FATE-NK100 via intraperitoneal delivery in women who recently completed standard salvage therapy for recurrent ovarian cancer. We expect this ovarian cancer study to be open for patient enrollment in mid-2017.

In addition, we plan to file an IND by the end of April 2017 for the clinical investigation of FATE-NK100 in combination with FDA approved monoclonal antibodies including Herceptin and Erbitux.

Following clearance of the IND by the FDA, we plant to initiate a multi-center clinical trial of FATE-NK100 in patients being administered FDA approved monoclonal antibodies for solid tumors. Moving to ProTmune.

We believe our development of a next generation hematopoietic cell graft, one that has been optimized to drive engraftment and prevent acute graft-versus-host disease has the potential to change the field of allogeneic hematopoietic cell transplantation and become standard of care.

We believe ProTmune is uniquely positioned to address the three leading causes of morbidity and mortality associated with allogeneic transplant for hematologic malignancies namely GvHD, severe infections and disease relapsed, and therefore has the potential to significantly improve overall patient survival.

In January 2017, we announced that the first subject had been treated with ProTmune in our PROTECT Phase 1/2 clinical trial for the prevention of acute graft-versus-host disease in adult patients with hematologic malignancies undergoing matched, unrelated donor mobilized peripheral blood transplantation.

We have now opened 10 clinical sites in the U.S. for enrollment in the PROTECT study. The PROTECT Phase 1 stage is intended to assess safety of ProTmune and does so by evaluating neutrophil engraftment and survival at day 30, following transplant. We expect to report Phase 1 safety data including both neutrophil engraftment and survival in mid-2017.

We believe the PROTECT Phase 1 safety stage also has the potential to demonstrate early proof-of-concept for ProTmune since upto 60% of patients experience acute GvHD with most incidences occurring by day 100, following transplant.

We plan to report day 100 efficacy data from the Phase 1 safety stage including the incidence and severity of acute GvHD and survival, once the data is available.

Following a satisfactory assessment of the Phase 1 day 30 safety data by the study’s independent data monitoring committee, we expect to initiate a randomized, controlled and blinded PROTECT Phase 2 efficacy stage in mid-2017.

Before turning the call over to Chris to discuss our clinical activities in more detail, I would like to provide brief update on our ‘one cell many patients’ approach to cellular immunotherapy.

Fate Therapeutics is committed to moving cell therapy away from a therapeutic paradigm that is primarily patient-specific and typically requires harvesting, engineering, expansion and/or reintroduction of the each individual patient’s cells.

In contrast, we believe cell products can be created from clonal pluripotent cell lines that are homogeneous and well-defined, can be dose titrated and delivered in multi-dose regimens and could be readily distributed to thousands of patients in an off-the-shelf manner.

We believe this therapeutic paradigm is now within reach and is enabled by the use of human induced pluripotent cells and specifically by our proprietary iPSC platform.

Similar to master cell lines used for the manufacture of monoclonal antibodies, a single induced pluripotent cell, our one cell has the potential to serve as a renewable cell source for the consistent manufacture of clonal populations of effector cells for the treatment of many patients.

Using master pluripotent cell lines, we’re building a first of kind product pipeline of NK and T-cells for cancer and of CD34 cells for immune disorders. We’re currently engaging the FDA and regulatory authorities outside the U.S. to chart the path to clinical development for this revolutionary approach and our first of kind product candidates.

While it is too earlier in our discussions with these agencies to provide specific details, our near-term mission is to be the first company to advance a cellular immunotherapy derived from a master pluripotent cell line to clinical development in the U.S. We believe this is achievable within the next 12 months. I will now turn the call over to Dr.

Chris Storgard, our Chief Medical Officer, who will provide more detail on our ProTmune PROTECT clinical trial and our near-term clinical development plans for FATE-NK100 for liquid and solid tumors..

Thanks, Scott. These are indeed exciting times. And it’s gratifying to see the level of enthusiasm and engagement we continue to receive from the medical community as we partner with the leading experts to rapidly advance our innovative pipeline into the clinic to bring new options to patients with serious life-threatening disease.

Let me expand a bit on what Scott has already mentioned regarding ProTmune. ProTmune offers a truly unique approach to improving the curative potential of allogeneic hematopoietic cell transplantation. Our therapeutic approach utilizes a peripheral blood stem cell graft obtained from an unrelated HLA matched donor.

The graft is created with small molecules to enhance its biologic properties and therapeutic function, and then these programmed cells are administered to the patient. The patient’s outcome including his or her survival is dependent on the function of the graft.

Following administration, neutrophil engraftment is the first critical milestone toward a curative outcome. And without neutrophil engraftment, the patient will very likely die. With this in mind, it is clear to see how precious this graft is to the patient and to the physician.

And what is still encouraging about this to me is the excitement I see some investigators to participate in our PROTECT study. [Indiscernible] Fate Therapeutics for the potential of ProTmune. As Scott mentioned, we announced into January treatment of the first patient with ProTmune in the PROTECT study.

After the six subject in Phase 1 complete 30 days of follow-up, an independent data monitoring committee or DMC will meet to review and evaluate all of the available safety data. Based on the DMC’s assessments, the PROTECT Phase 2 stage could start after review of these first six subjects.

However, if the DMC feels that experience [ph] with the few more subjects is warranted, the DMC can request further enrollment of upto an additional four patients in the Phase 1 stage.

We expect to start the Phase 2 portion of the study mid-2017, and we are excited because we believe that the PROTECT, once completed, has the potential to support accelerated registration of ProTmune. PROTECT has the type of rigor that FDA expects in the registration enabling study. It is randomized, controlled, stratified and blended.

Both the primary endpoints, the incidence of grade B through D acute GvHD by day 100 and the key secondary endpoint, incidence of CMV reactivation by day 100 are clearly defined and objectively determined by two separate and independent event adjudication committees.

And the statistical analysis plan is also pre-specified and controls for multiple end points. Thus, we are confident that depending on the results, this scientifically rigorous study has the potential to support registration.

I’ll now provide some of the details regarding our clinical plans to develop FATE-NK100, our first-in-class adoptive memory NK cell cancer immunotherapy.

As Scott mentioned, the FDA has given the green light to begin clinical testing of FATE-NK100 at the University of Minnesota, Masonic Cancer Center in relapsed or refractory acute myelogenous leukemia or AML.

This study builds off the experience and compelling activity and served by investigators at the University of Minnesota where upto 30% complete response rates have been observed with the conventional NK cells in subjects with relapsed or refractory AML.

This first-in-human study of intravenously administered FATE-NK100 will evaluate the safety and tolerability of ascending doses in subjects aged 18 to 70.

Specifically the subjects with primary AML whose cells have achieved the complete remission after at least two but no more than four induction attempts with high dose chemotherapy, will be eligible.

We will augment enrollment in subjects with secondary AML from MDS or treatment related malignancies who fail to achieve complete remission after one but no more than three cycles of induction therapy.

Lastly, subjects with relapsed AML who failed to achieve complete remission after one or two cycles of standard reinduction therapy will also be eligible. Since minimal toxicity is expected, an accelerated dose escalation design has been agreed to with the FDA where one patient is enrolled for dose level until a dose limiting toxicity is observed.

The clinical trial is planned to test up to four dose levels of FATE-NK100, storing at one time [indiscernible] cells per kilogram, and then proceeding up to the entire content of the manufactured product. All subjects will receive lymphal conditioning with cyclophosphamide and fludarabine beginning six days prior to FATE-NK100.

And low dose IL-2 will be administered subcutaneously every other day for two weeks for NK cell support. In the event that a dose limiting toxicity is observed, the study will convert to the traditional three plus three design. Enrollment will then expand to a total of 10 patients at the maximum dose level to get a preliminary assessment of efficacy.

Now, efficacy will be assessed by determining the proportion of subjects able to achieve complete remission or complete remission with incomplete platelet recovery at day 42. The rate of minimal residual disease clearance and the leukemia-free survival as well as overall survival at one year will also be evaluated.

Previous studies using conventional NK cells have demonstrated a correlation between complete remission and the persistence of NK cells at two weeks, post-infusion. As such, we will also assess the duration of FATE-NK100 persistence.

Patients who achieve a complete remission, can be concerned for allogeneic transplant independent of the study and follow-up for survival is through year one from the NK cell infusion.

We’re also collaborating with investigators at the University of Minnesota to expand the clinical investigation of FATE-NK100 to women with advanced gynecologic malignancies.

In the next month, we anticipate the University of Minnesota will submit a protocol to the FDA to evaluate the safety and activity of FATE-NK100 in women with advanced ovarian fallopian tube or primary peritoneal cancer.

This is an exciting opportunity to evaluate the persistence and activity of NK cells delivered intraperitonealy directly to the side of the tumor.

Eligible patients are expected to include women who have failed or progressed on approved first and second line therapies and who have recently completed standard of care investigator choice cell based [ph] chemotherapy.

This is very important prognosis population with an expected progression-free survival of less than six months with very high unmet need. The primary objective of this first in human study was intraperitoneal delivery of FATE-NK100 is safety and tolerability.

However, we also anticipate to get clear signals of activity as all subjects must have measurable disease tumor burden by CT or MRI to be eligible to receive FATE-NK100. The anti-tumor activity will be assessed using the established resist tumor response criteria at month one, month two and every month thereafter.

In addition we’ll look at circulating levels of CA125 a soluble marker of tumor burden in this population. FATE-NK100 persistence both in the peritoneal cavity as well as in the peritoneal circulation will be quantified and correlated to patient outcomes.

In distinction from the AML study, the ovarian study is expected to utilize a dose-reduced preparative regimen of cyclophosphamide and fludarabine to facilitate outpatient treatment and avoid any extend in the patient stays.

Similar to the AML study, an accelerated dose escalation designed of one subject per dose level is planned to determine the maximum dose followed by a 10-patient expansion cohort.

Now, before I turn the call over to Dan, I would like to briefly comment on our plan to file an IND to initiate a multi-centric clinical trial of intravenous FATE-NK100 in combination with the FDA approved monoclonal antibodies rituximab and trastuzumab.

This represents a unique clinical opportunity to maximize antibody dependent cellular cytotoxicity or ADCC, and enhance the targeted and specific tumor killing potential of FATE-NK100. In support of this ADCC clinical trial, we are working closely with breast cancer experts George and Doug E.

[ph] were very excited about the potential for NK100 and trastuzumab to impact a broad range of breast cancer patients. Also, the immunotherapy expert Ezra Cohen is very excited about the opportunity of providing FATE-NK100 and cetuximab to improve outcomes in patients with head and neck cancer.

And Dan Von Hoff who is extremely interested in evaluating cetuximab in FATE-NK100 in pancreatic cancer as 90% of pancreatic cancers over express EGFR 1.

And perhaps one of the most intriguing opportunities will be evaluating the tumor killing potential of enhanced ADCC when we combine FATE-NK100 with cetuximab in the large unmet need population of KRAS or NRAS mutant colorectal cancer patients.

The ADCC clinical opportunities are broad; the IND submission is near; and I look forward to sharing more details on our combination program on our next call. I’ll now turn the call over to Dan to discuss our clinical development activities in support of our ‘one cell many patients’ approach to cellular immunotherapy..

Thanks, Chris. As Scott mentioned, our Company is committed to advancing a one cell many patients approach to cellular immunotherapy.

We believe the use of human induced pluripotent cells as master cell line is central to this new era of off the shelf cell therapies and will enable the treatment of many thousands of patients across a wide range of diseases without requiring patient’s source cells.

As a reminder, induced pluripotent cells possess the unique dual properties of self renewal and differentiation potential into all cell types of the body. One of the main advantages of working with pluripotent cell lines is the relative ease of creating immunotherapies that are precisely engineered.

Our revolutionary platform enables us to generate and engineer induced pluripotent present cells and select and extend a single engineered pluripotent cell for the generation of a master engineered pluripotent cell line.

We are using these cell lines in a proprietary differentiation protocols to create our product candidates which we believe have the potential to treatment many patients in an off the shelf manner. Our first product candidate emerging from our iPSC platform is a targeted NK cell cancer immunotherapy.

The NK cells product candidate which we refer to as hnCD16-iNK is created from a master iPSC line engineered to express a novel, high-affinity, non-cleavable CD16 Fc receptor. This novel CD16 Fc receptor contains two unique modifications.

The first, result in increased and continuous expression of CD16 by preventing activation induced shedding and the second increases the binding affinity of CD16 to therapeutic antibodies. Our recent preclinical studies have demonstrated that our hnCD16-iNK cell product candidate exhibits potent and persistent anti-tumor activity.

Specifically, hnCD16-iNK cells exhibit superior antibody dependent cellular cytotoxicity in vitro when combined with rituximab in ovarian cancer and lung carcinoma cell lines that are positive for EGFR expression as compared to conventional NK cells sourced in by their peripheral blood or cord blood.

Furthermore, hnCD16-iNK cells show a dose dependent killing response in combination with rituximab in vitro in a CD20 positive human lymphoblast-derived B-lymphocyte cell line killing assay.

Finally, we’ve also shown that hnCD16-iNK cells augment anti-tumor activity in combination with trastuzumab in vivo, in a HER2 positive ovarian cancer model, as compared to mice treated with trastuzumab alone.

We believe our hnCD16-iNK product candidate may serve as a cornerstone approach to complement standard-of-care monoclonal antibody therapy for the treatment of breast, head and neck, colorectal, certain blood cancers by binding to and effectively killing antibody coded cells.

We look forward to presenting our current preclinical data package at the upcoming 2017 Annual Meeting of the American Association for Cancer Research to be held April 1st through 5th in Washington DC.

While this product candidate exploits NK cells targeting an activation through the CD16 receptor, NK cells also have a repertoire of natural occurring activating receptors that may play an important role in cancer immunotherapy. In January 2017, we entered into a two-year research collaboration with Oslo University Hospital being led by Dr.

Karl-Johan Malmberg who is a world expert on NK biology and influence that care receptors have on the anti-tumor properties of NK cells.

Our specific goals in this collaboration are to identify other NK activating receptors that promote persistence and enhanced anti-tumor potency to engineering these receptors into master pluripotent cell lines and to create new iPSC derived NK product candidates for development.

Finally, I want to spend a better time discussing our strategy for the advancement of ToleraCyte our first-in-class program CD34 cell therapy for autoimmune diseases. Following our positive pre-IND meeting with the FDA towards the end of last year, we’ve continued to make progress towards our first in human clinical trial.

We establish a full scale cGMP-compatible close process to manufacture ToleraCyte and we successfully performed process qualification runs to set the stage for clinical manufacturing.

As part of these clinical stage manufacturing runs, we were able to demonstrate that the enhanced trafficking properties of ToleraCyte were maintained for at least 48 hours following pharmacologic modulation, suggesting that a central manufacture and ship approach may be feasible for this product candidate.

Additionally, to confirm the patient sourced cells have the potential to be effectively programmed, we’ve demonstrated in preclinical studies that CD34 cells from the peripheral blood of T1D patients can robustly respond to ex vivo modulation and observed increases in cell surface CXR4 expression comparable to those in healthy donor peripheral blood cells.

At this time, additional preclinical studies with the investigator group at the University of Florida are continuing in order to support the potential advancement of ToleraCyte into clinical development and setting of T1D.

In parallel to our preclinical studies in T1D, we conducted preclinical studies in other settings of immune system regulation where the induction of immune tolerance has a potential to be disease transformative.

Recent results from these studies have shown that in the experimental autoimmune acceptable encephalomyelitis during model of multiple sclerorsis, a single administration of program cell results in a significant disease protection compared to the treatment with conventional cells.

We’ve also shown that the disease protection is associated with the decreased myelination in the central nervous system and the reduction in infiltration and the function of auto reactive T-cells in the spinal cord.

Importantly, in these preclinical studies we have found that programmed cells are able to induce long-term disease correction while persisting for less than 14 days post administration. This preclinical result now confirms the therapeutic potential of ex vivo program CD34 cells to induce immune tolerance in the setting of autoimmune diseases.

Additionally, while these initial preclinical studies utilized immunologically in our cells, in other words, the programmed cells been administered into the host were sourced from the host.

We now have preclinical data that to us convincingly demonstrates that the mechanism of CD34 immuno-regulation is not dependent on the use of immunologically matched cells and that donor program cells have the capacity to traffic to and to suppress auto reactive T-cells.

We consider this to be a breakthrough finding and one that may also the course of our development strategy for ToleraCyte.

By way of example, we called it an integral part of our iPSC platform for the development of NK and T-cell cancer immunotherapies involve robust and scalable differentiation protocol for creating large quantities of CD34 cells from iPSCs.

As such, the use of a master line to create an immuno-regulatory CD34 cell product candidate for autoimmune disease is inherent within our iPSC platform. In other words, the foundation for an off the shelf ToleraCyte lies right within our iPSC platform today.

And strikingly, our initial preclinical data using immunologically mismatched iPSC derived CD34 cells suggest enhanced levels of immuno-regulatory activity as compared to peripheral blood source CD34 cells. We plan to present preclinical data for off the shelf ToleraCyte product candidate later this year at a scientific conference.

I’ll now turn the call back over to Scott for a review of our fourth quarter 2016 financial results..

Thanks, Dan. Turning to our financial results, for the fourth quarter ended December 31, 2016 Fate Therapeutics reported a net loss of $7.9 million or $0.21 per common share as compared to a net loss of $7.4 million or $0.26 per common share for the same period last year.

Revenue was $1 million for the fourth quarter of 2016 compared to $1.1 for the same period last year. Revenue in both periods was generated from our strategic research collaboration with Juno Therapeutics. Research and development expenses for the fourth quarter of 2016 were $6.2 million compared to $5.4 million for the same period last year.

The increase was primarily related to an increase in clinical development costs including third-party service provider fees in connection with the conduct of our ProTmune PROTECT study. General and administrative expenses for the fourth quarter of 2016 were $2.5 million compared to $2.6 million for the same period last year.

This decrease was primarily related to a decrease in intellectual property related expenses. After adjusting for research funding proceeds from Juno of $500,000 and for stock-based compensation expense of approximately $800,000, total operating expenses for the fourth quarter of 2016 were $7.4 million.

At the end of the fourth quarter of 2016, cash, cash equivalents and short-term investments were $92.1 million; debt outstanding under our facility with Silicon Valley Bank was $10.8 million; common stock outstanding was approximately 41.4 million shares; and preferred, convertible stock outstanding was approximately 2.8 million shares.

Note that one share of preferred stock is convertible into five shares of common stock under certain conditions.

In conclusion, the past 12 months has been a period of significant progress for Fate Therapeutics including advancing two first-in-class product candidates to clinical development and launching our revolutionary induced pluripotent cell platform to enable our one cell many patients approach to cancer immunotherapy.

With over $90 million in cash, and cash equivalents, we’re in a position of financial strength as we look forward to a data-rich 2017 across our two first-in-class clinical programs and continue our drive to become the first company to advance a cancer immunotherapy created from master pluripotent cell line to clinical development.

I would like to thank our employees, collaborators and investigators for their commitment to our mission and to embracing the uncertainty that comes with being first. And with that, I’d like to turn the call over to the operator for any questions..

Ladies and gentlemen, the question-and-answer session is now open. [Operator Instructions] We’ll be taking our first question from the line of Ren Benjamin from Raymond James. Your line is open..

Scott, do you think maybe you can -- maybe we can just start off with the PROTECT study update. Can you give us a sense of how enrollment is now? I think you mentioned that there’re 10 sites that are opened. How many sites do you figure need to opened once the randomized part of the trial begins? And then, maybe as a third question for PROTECT.

You mentioned that the DSMB will look at the first six patients and if they want could ask for another four.

What goes into triggering that decision?.

Sure. I’ll start off and Chris should feel free to jump in. So, with respect to enrollment, I mean we’re not going to get into subject-by-subject enrollment or the clinical data at this time.

As Chris mentioned, I think we believe the strong enthusiasm for PROTECT is supported by our conversations with investigators that we met with at ASH, that was again [indiscernible] key and there are 10 sites open.

I think the one thing that the investigators reminded us is that while we do clearly fit in the standard of care, we’re pioneering a brand new therapeutic paradigm. We’re modulating the cells of the entire graft including the CD34 cell compartment.

And those are the cells that essentially represent life and death of the patient, since the 34 is responsible for reconstituting the entire blood immune system. So, our belief is this is fundamentally why there is a data monitoring committee and it’s why they’re looking at, to one of your questions, what are they looking at.

They are looking at neutrophil engraftment and they are looking at survival at day 30, and that’s fundamentally their purview, when they are making the assessment as to whether we stop at six patients or continue forward with respect to 10 patients. That’s what the DMC is going to fundamentally base their decision on.

With respect to the number of sites. I think I mentioned we are open at 10 sites right now; we are continuing to aggressively open sites based on the meetings we’ve had at ASH, at ASENT with other potential investigators, there is a lot focus in the study and we will keep enrolling -- we will keep opening sites.

I think we will open potentially as many as 16 to 20 sites for the randomized controlled blinded portion of the study..

Got it. And just switching gears to FATE-NK100. Can you talk a little bit about maybe just the basic biology question but what percentage of the endogenous cells are adaptive memory NK cells? And I think you mentioned in the prepared remarks that there is a pre-treatment regimen and then a low dose IL-2 that will be co-administered with the cells.

Was IL-2 ever previously evaluated in the previous studies with the heterogeneous mix, what’s your thoughts behind that?.

Sure, absolutely. I’ll let Dan and Chris both jump in on that. But on short on the IL-2 that -- the IL-2 is used today in most NK cell protocols, following NK cell administration to promote NK cell survival. So, it’s absolutely been used today. But I’ll pass it off to Dan and Chris. .

And regarding the frequency of this population of NK cells, it’s in the low single digits. And so, we believe that this population has not been therapeutically tested to-date, and we are excited about this idea of a highly enriched population of homogenous adaptive memory NK cells..

And regarding the pre-treatment, is there a fludarabine, cyclophosphamide pre-treatment that’s happening here?.

Yes, it is. And actually the preparative regimen as well as the IL-2 is exactly what was used in the prior studies at University of Minnesota where they had observed their 30% complete response rate with over that time to population, which does not as Dan mentioned has a very low percentage of these adaptive memory NK cells.

So, what we are trying to do is as best as we can an apples-to-apples comparison, although not in the same trial, to see what the activity of our enriched NK100 product is..

Thank you. Our next question is from the line of, pardon me if I mispronounce this, Mark Breidenbach from Roth Capital Partners. Your line is open..

Hey, guys. It’s Mark Breidenbach from Roth Capital. Thanks for taking the questions. I also have a question on the PROTECT study and specifically the Phase 1 portion and the DMC review coming on in the first should we say 6 to 10 patients.

With that 30-day review period, are we only going to be assessing neutrophil engraftment or also going to be looking at other adverse events like infection rate or any [indiscernible] diseases that arises in that first 30-day period?.

Yes. So, the DMC will look at all the safety data available. The primary safety concern here as mentioned here is neutrophil engraftment.

So that’s the one that we’re highlighting here, but they’ll also look at all safety, all potential SAEs and that’s why there’s that potential option to enroll few more patients even if we meet the engraftment rate that we’re expecting..

And we would see a readout from that Phase 1 portion at the time that the Company decides to pursue randomized Phase 2 portion?.

We will report the safety assessment which the safety assessment is judged primarily by neutrophil engraftment and survival at day 30 when we progress to the Phase 2; when all patients in the Phase 1 progressed to day 100, we will report out on GvHD and infections..

And the second question on FATE-NK100, specifically the study you’re planning to do combining it with therapeutic antibodies, does that IND process depend on the availability of results from either of the FATE-NK100 monotherapy studies you discussed earlier in the call?.

No..

And maybe a final iPSC platform question for Dan. So, as I’m sure you’re aware, certain methods for inducing pluripotency are associated with -- unfortunately associated with increased genomic chromosomal instability.

Can you give us a sense for what this process -- how this process is different and why we’re confident -- it’s not going to lead to any of these problems, and maybe give us a sense for what insurance is the FDA looking for in terms of guaranteeing safety in an induced pluripotent cell policy for putting it in the humans?.

So, we’ve extensively studied this over the past eight years really since founding the Fate, we have several manuscripts that we published specifically on this topic.

But in the context of that, I would just say that we’ve spent special attention to characterizing GM integrity as a function of the generation of iPSCs as well as the expansion phase and the generation of master cell bank. So, this is something that we pride ourselves on and we’ve invested heavily in over the years.

And we think this is going to be a big part of our preclinical package that we’re going to bring to the FDA that will hopefully instill a significant degree of confidence in them..

Thank you. Our next question comes from the line of David Nierengarten from Wedbush Securities. Your line is open..

I just had a quick one on technology or maybe not so quick, but I’m sure you’re of efforts to add the CD16 coming to T-cells and go about it or go about cell therapy [indiscernible] and oncology.

Are there any preclinical or other studies you can point to that show that your approach is likely to be better?.

I wouldn’t say that -- we’re fond of using CD16 and its natural context and specifically this high affinity non-cleavable form of CD16. We’ve done extensive preclinical characterizations with our engineered NK products in the context of normal NK in the context of CD16.

I’ve not had the opportunity to do direct head-to-head comparisons to some of the chimeric receptors that involve portions of the CD16 receptor machinery.

So, I can’t specifically speak to that other than, I think we have a high degree of confidence that this specific form of CD16 in the context of NK cells was very encouraging in our preclinical models?.

Obviously. As I mentioned, we’ll be presenting that data at a AACR..

Our next question comes from the line of Do Kim from BMO Capital Markets. Your line is open..

I wanted to know have you gotten any feedback from the FDA on hnCD16-iNK?.

Yes. So, this is Scott. So, sure, we’re engaged in discussions right now with both, the FDA as well as the agencies outside the U.S. As I mentioned in my prepared remarks and I guess it’s just too early to comment on those discussions at this point when -- obviously when a plan to move forward becomes more definitive, we will provide more detail.

I did mentioned that I feel very confident in our ability within the next 12 months to move A induced pluripotent cell derived product to clinical development..

And switching to NK100 for the Phase 1 trials.

Based on the previous trials with NK cells, what those cohort do you expect to have as an active dose?.

I think it’s too early to tell that at this point. I mean, we’re starting it onetime, [indiscernible] essentially NK cells per kg and we can go as high as up to one times 10 to 8. I think Jeff typically gave somewhere on the order of two to three times 10 to 7 cells per kg.

So, I think what were looking for and the reason I think the FDA was comfortable with an accelerated dose schedule was essentially based on the safety just seen in the past with NK cells, not the specific cell type, but with NK cells at similar dose levels..

And then also speaking more about safety too, is there any potential safety risk for having a non-cleavable CD16 on the NK cell?.

So, it’s something that obviously we are looking at pre-clinically but to date so far we have not seen any particular safety risks associated with the non-cleavable form of CD16..

And obviously we think there is a tremendous therapeutic benefit associated with the non-cleavable version of the receptor..

Thank you. Our next question comes from the line of Jim Birchenough from Wells Fargo. Your line is open..

This is Nick [ph] for Jim. Congrats on progress, guys. It’s hard to know where to bring. So, starting with NK100, in terms of donor selection, I know you mentioned answer to an early question apples-to-apples but I think recall from ASH that you were going to be selecting CMV positive patients.

Just taking into account any clear mismatch, are the donors that you are expecting to be NK cells, are they going to be the same donors that would be used in the transplant? And then I have a follow-up?.

Sure, absolutely. The donors that we are selecting for the FATE-NK100 studies are CMV seropositive donors, but we’re not selecting based on cure mismatch..

And then, I think I recall it was a question about cryo preservation at the ASH presentation and this is challenging in the NK cell world.

Can you just come cryo preservation and what the steps would be to expand that beyond Minnesota?.

We’re exploring this extensively pre-clinically right now, not in a position to give any specific details other than, this is something that we’re working on. And we’re obviously building up all the work that Jeff and his colleagues have done over the past decade..

And then just moving onto the monoclonal antibody, why don’t you exacerbate toxicity, and is this just a numbers game in terms of the number of antibody molecules versus the number of NK cells/CD16 molecules on those NK cells?.

So, that could very well play out, that it could be a numbers game, we’re going to find that out when we get to the clinic. There has been combination studies with an NK cell product, autologous [ph] product with trastuzumab in blood cancer patients and that was very well tolerated with no toxicities.

So that gives us confidence that we should be able to safely combine the monoclonals but obviously the Phase 1 is what we’re looking at for the safety and tolerability as we move forward..

And then have you done a survey of all of the approved monoclonal antibodies with either the induced pluripotent or just the active memory NK cells, and any sort of lessons that are coming out from that as you’ve done a comprehensive survey?.

I wouldn’t say we’ve done a comprehensive survey but we’ve certainly tested probably up to five different FDA approved monoclonal antibodies.

And at least to-date all the data that we see suggests that whether it’d FATE-NK100 or our high-affinity, non-cleavable engineered CD16 iNK cell that we see very encouraging efficacy data across the different classes of monoclonal antibodies..

Thank you. Our next question comes from the line of from Ren Benjamin from Raymond James. Your line is open..

Just on the NK100 study, can you just help us determine or think about what a go, no go decision would look like? And I think in the past you’ve mentioned a 30% rate is what you’re showing for?.

Yes. I mean that’s exactly what we would look for. It would certainly have to meet the benchmark that Jeff has seen today. I think we absolutely believe that is achievable. If you recall all the preclinical data that we’ve generated with respect to FATE-NK100 has been benchmarked directly against the product that Jeff uses today in the clinic.

And obviously the data package for FATE-NK100 is out there publicly in different presentations, and we think it has demonstrated significantly enhanced cytotoxicity across multiple different elements of killing..

And when we think about the number of patients, is it pretty much as the once the dose is determined and expansion of about 10s or about 30% CR and about 10 patients, 10-15 patients?.

Yes. It’s relatively small study I think we expect that we will rapidly accelerate the dose curve. And then at that top dose we expand the term..

Okay, and then just one final one from me and that is more of a high level question. Because you have the FATE-NK100 product and then behind it, call it the 12 months behind it the induced for stem cell product.

And how you envision both existing in the marketplace or does one cannibalize the other? Have you guys started thinking about that or is it really just going to be dependent on kind of the data as it comes out?.

I think it’s too early to tell. I mean, we’re going to learn a lot with FATE-NK100. I think we fundamentally believe FATE-NK100 can be a standalone product based on all the preclinical data we’ve seen to-date as well as our discussions with Jeff and others in the NK cell field.

I think one of the advantages of using a pluripotent cell obviously is -- and you understand this obviously is that just putting a high affinity non-cleavable CD16 receptor into it a iPSC backbone is just the first step that you can take with that iPSC backbone in terms of developing NK and T-cell products.

So, I think you should think about our iPSC platform as truly a platform where lots of different NK and T-cell products can emerge. But, given what iPSCs represent, they do truly represent the potential to deliver cells in a way that can match traditional pharmacology. You can do dose titration, you can get multiple dose regiment.

So, I think the paradigm ultimately is going to be very different with -- that is enabled by an iPSC approach..

Okay, and we have been talking about the NKs the whole time but obviously as you mentioned this could be expanded to T-cells.

What’s kind of the status of the Sloan Kettering relationship and maybe with the Juno relationship as well?.

Sure. We’ve spent a lot of time talking about the Sloan Kettering relationship today. It’s progressing really nicely. I suspect we will provide an update on that collaboration probably in the let’s just called the summer time frame.

But, we are really excited by the data that we’re seeing very early on in the collaboration with respect to now being able to take iPSCs and generate both CD4 and CD8 T-cells in a pretty efficient differentiation protocol. And with respect to Juno, I’m a little sensitive about just commenting on Juno generally.

I mean, we believe we’re doing – we’re making tremendous progress under the relationship.

We’re generating data packages with respect to small molecule modulators that we think are important, certainly for CAR T-cells, Juno’s CAR T-cells but were obviously interested with respect to using those NK cells as well as our IPS derived NK cells and T-cells.

But fundamentally Juno is the driver of that collaboration and it is up to Juno to select small molecules to incorporate into their products..

[Operator Instructions] I’m see no other questions in the queue at this time. So I’d like to turn the call back over to management for closing remarks..

Perfect. Thank you, everyone for hanging in there with us today. It was little bit longer than our normal call, so much appreciate it, look forward to speaking with you again in the near future. Thank you..

Ladies and gentlemen, thank you again for your participation in today’s conference. This does conclude the program. You may now disconnect at this time. Everyone have a great day..