Welcome to Fate Therapeutics Second Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors and Media section of Fate's website at fatetherapeutics.com. As a reminder, today's call is being recorded.

I would now like to introduce Scott Wolchko, President and CEO of Fate Therapeutics. You may begin. .

Regimen A as a monotherapy for patients with relapsed/refractory AML and Regimen B in combination with daratumumab, an FDA-approved anti-CD38 monoclonal antibody, for patients with relapsed/refractory multiple myeloma. We plan to initiate patient enrollment in the FT538 Phase I clinical trial in the fourth quarter of this year.

To support clinical investigation, FT538 drug product was manufactured from a clonal master engineered iPSC cell line, which is renewably used as starting material for routine manufacture of FT538.

The clonal iPSC cell line was made by sourcing cells originally from a healthy donor and reprogramming and engineering the cells to induce pluripotent c using a proprietary non-integrating system and to integrate a bicistronic cassette containing hnCD16 and our IL-15 receptor fusion into the CD38 locus, which resulted in complete disruption of the CD38 gene.

The first batch of our manufacturing campaign, which was conducted at small scale, produced a total of three times 10 to the 11th FT538 NK cells, which were filled into over 300 units of cryopreserved infusion-ready drug product.

Notably, since we rightsized our fill/finish activities to successfully produce drug product for dose escalation only, the campaign was not designed to maximize drug product yield.

We calculated, though, that the potential yield of the cGMP campaign was on the order of 4.5 times 10 to the 12th FT538 NK cells, or approximately 15,000 unit doses at a dose of 300 million cells per unit.

In the second quarter, we also achieved a groundbreaking milestone in the field of cell-based cancer immunotherapy, having filed and cleared with the FDA our IND application for FT819, the world's first off-the-shelf iPSC-derived CAR-T cell therapy.

This achievement fulfills an unprecedented journey we began four years ago under our partnership with Memorial Sloan Kettering, led by Dr. Michel Sadelain, to build upon the revolutionary success of patient-derived CAR-T cell therapy and to bring universal off-the-shelf CAR-T cells to patients.

We designed FT819 to specifically address several limitations associated with the current generation of patient and donor-derived CAR-T cell therapies, incorporating several first-of-kind features into the FT819 master engineered iPSC cell line to improve safety and efficacy.

These include a novel 1 timesx CAR-signaling domain, which has been shown to extend T cell effector function without eliciting exhaustion. Also insertion of the CAR transgene directly into the T-cell receptor alpha constant locus, which has been shown to promote uniform car expression and enhanced T-cell potency.

And of course, complete bialleic disruption of T cell receptor expression for the prevention of graft-versus-host disease, a potentially life threatening complication associated with allogeneic T-cell therapy. Our FT819 clinical trial design is robust and innovative.

The multicenter Phase I clinical trial is designed to assess the safety and activity of FT819 across three types of B-cell malignancies, chronic lymphocytic leukemia, acute lymphoblastic leukemia and non-Hodgkin lymphoma. Notably, each indication will enroll independently, and each indication will evaluate three dose escalating treatment regimens.

Regimen A as a single dose starting at 90 million cells, Regimen B as a single dose starting at 90 million cells with IL-2 cytokine support and Regimen C as three fractionated doses starting at 90 million -- sorry, starting at 30 million cells each.

We plan to initiate patient enrollment in the FT819 Phase I clinical trial in the fourth quarter of this year. At the American Society of Gene and Cell Therapy Virtual Annual Meeting in May, we highlighted one of the most profound advantages of our proprietary iPSC product platform.

Our ability to perform complex genetic engineering, including further engineering of an already established clonal master engineered iPSC line.

Specifically, we demonstrated the use of an already established clonal master cell line, further engineering of that line to introduce additional functional elements, selection of a new engineered iPSC clone, incorporating both the original and the additional functional elements and the creation of a new clonal multiplex engineered iPSC cell line This is an unparalleled fee, one that is uniquely enabled by iPSC cell technology and enables the building of multiplex to engineered cell products of increasing complexity on top of core engineered functionality.

We are applying this approach to rapidly innovate and to efficiently create next-generation product candidates, such as FT576 as well as new product candidates such as FT536.

Specifically for FT576, we presented preclinical data at ASGCT, demonstrating the further engineering of our already established master cell line for FT538, which incorporates three functional elements to enhance innate immunity.

We introduced a fourth functional element, a CAR targeting BCMA, to create a clonal master engineered iPSC line for FT576, our off-the-shelf multi-antigen targeted CAR BCMA NK cell product candidate for multiple myeloma.

Analogous to FT596 in lymphoma, FT576 is uniquely designed to target multiple tumor-associated antigens expressed on multiple myeloma cells for best-in-class potential. We remain on track to submit our IND application for FT576 in the fourth quarter. At ASGCT, we also introduced a new product candidate, FT536.

Built off of the clonal master engineered iPSC line for FT538, FT536 is engineered with a fourth functional element, a CAR targeting the stress inducible cell surface proteins MICA and MICB, which are selectively expressed at high levels on many solid tumors.

While the NK-cell activating receptor, NKG2D, can recognize and engage stress ligands on tumor cells. The shedding of stress ligands is a common escape mechanism deployed by many tumors to avoid NK cell-mediated immunity.

To overcome tumor escape, our novel CAR design uniquely targets a specific region of MICA/MICB, the α3 domain, which has been shown to remain on tumor cells post shedding.

In fact, a recent publication in cancer immunology research by investigators from Dana-Farber Cancer Institute demonstrated that cancers with loss of MHC Class I expression can be effectively targeted with alpha three domain-specific antibodies to restore NK cell-mediated immunity.

We believe the targeting of the α3 domain of MICA/MICB is a novel and exciting pan-tumor targeting strategy, including and especially for certain solid tumors resistant to cytotoxic T-cells.

We are also leveraging our unique ability to build multiplexed engineered cell products of increasing complexity, using already established clonal master engineered iPSC lines with our collaboration partners, including under our newly formed collaboration with Janssen, which brings together Janssen's deep domain expertise in oncology and our industry-leading iPSC cell product platform.

We have successfully launched this collaboration with strong momentum. Janssen has already contributed proprietary antigen-binding domains against one hematologic malignancy target and one solid tumor target, for which we are building novel CAR constructs.

As a first step, we are incorporating these constructs into existing multiplex engineered master iPSC cell lines, which may enable an efficient and accelerated pathway to clinical development for the collaboration's initial product candidates.

In parallel, we continue to drive innovation, including toward the research and development of next-generation features and functionalities and for the scaling of our GMP manufacturing processes to support commercial scale operations, as we seek to bring best-in-class, off-the-shelf CAR NK and CAR-T cell cancer immunotherapies to patients.

Turning to our financial results. Revenue was $5.5 million for the second quarter of 2020 compared to $2.8 million for the same period last year. Revenue in the current quarter was derived from our collaboration with Janssen and ONO Pharmaceutical.

Research and development expenses for the second quarter of 2020 were $26.7 million, compared to $21.6 million for the same period last year.

The increase in our R&D expenses was attributable, primarily to an increase in employee headcount and compensation, including share-based compensation and expenses associated with the facility lease for our new corporate headquarters. G&A expenses for the second quarter of 2020 were $7.5 million compared to $5.3 million for the same period last year.

The increase in our G&A expenses was attributable, primarily to an increase in headcount and employee compensation, including share-based compensation and in legal fees. Total operating expenses for the second quarter of 2020 were $26.9 million, net of non-cash share-based compensation expense of $7.2 million.

The company ended the second quarter of 2020 with $533 million of cash, cash equivalents and investments. Common stock outstanding was 86.8 million shares and preferred convertible stock outstanding was 2.8 million shares, each of which is convertible into five shares of common stock under certain conditions.

I would now like to open-up the call to any questions. Thank you..

[Operator Instructions] Our first question comes from the line of Robyn Karnauskas with Truist Securities. Your line is open..

Hey. Thank you so much for taking my question. And congrats on all the progress. Now that the IND for F538 is approved and you're talking about going into AML and multiple myeloma with -- you've talked about going into multiple myeloma even before. Is it mainly as DARZALEX combinations? And also, you mentioned FT576 with the BCMA CAR.

So from a longer-term vision, how are you thinking about your approach to multiple myeloma using these multiple drugs and the multiple combinations?.

Ladies and gentlemen, please standby. You may proceed..

Sorry about that. .

No worries. .

You may ask your question again..

Thank you. So now that the IND for FT538 is approved and you're talking about going into multiple myeloma, I was just wondering about your strategy given that you also have FT576, which has a BCMA CAR.

Are you -- are you thinking mainly in terms of DARZALEX combination with FT538? What is your big picture strategy for targeting multiple myeloma using multiple drugs and multiple combinations?.

Absolutely. It's a great question. So keep in mind as well, FT538 is also in a clinical study. The one of the arms of the study is also AML and we're very excited about FT538 being in a monotherapy arm in AML, given the three functional elements that we've engineered into FT538 and the potential activity in AML.

As it relates to myeloma, yes, I mean, you touched on it. We're very interested in the potential of FT538 to combine with DARZALEX and enhance the antitumor activity of DARZALEX, but certainly, very analogous to the lymphoma setting.

We do believe, ultimately, that best-in-class potential, potentially, especially in myeloma, is going to require dual antigen targeting.

And so ultimately, the product candidate as we think about it today, for myeloma, if we continue to strive for innovation and best-in-class potential, you have to assume in my mind, in our mind, that dual antigen targeting is going to be very critical.

So as we sit here today, I would tell you, ultimately, the product candidate for multiple myeloma is, in fact, 576. .

Great. And if I can sneak in one more question. So for FT596, can you maybe talk to us about where you are with respect to recruitment and when we can expect a data update? I know you mentioned earlier that you don't want to -- you want to have a substantial number of patients before you present the data.

So when is -- can you provide us with some time lines for when we could see some data from DLBCL?.

Yes, absolutely. So I mean, on this call, we obviously indicated that 596 has progressed into a dose escalation arm in combination with rituximab. I think from my perspective, we've said on the last call, and we've been pretty consistent about this. We're not going to disclose data patient by patient.

We want to have a meaningful dose cohort through escalation to describe data. And we'll give sort of heads up on when we think we're going to disclose that. We will not be doing it on these financial update calls. We will do it in conjunction with medical conferences and accepted abstracts or in conjunction with investor events.

Generally, I would make the comment, I think we will have a tremendous amount of data coming out over the next six, nine, 12 months across the company. I mean, at this point in time, the company has five different products with cleared INDs.

And I think if you total up the number of arms in our studies, we probably have close to 20 different arms that are running or will be launched before the end of this year. .

Great. Thank you so much for taking my question. I will get back in the queue..

Thank you. Our next question comes from the line of Michael Schmidt with Guggenheim Securities. Your line is open..

This is Kelsey on for Michael. Thanks for taking our question. I just have two quick ones. First, while it's too early to tell based on the first patient treated with FT596, I guess we've seen from allogene a similar situation where prior CAR-T nonresponders or suboptimal responders maybe don't respond well to a second cell therapy.

I'm just wondering maybe what your thoughts are on this maybe potential subpopulation of CAR-T resistant patients? And then for FT596 also in terms of the design. I guess there was room to potentially get this amended later on where you could do more than just one treatment.

I guess, what are your thoughts around what needs to be shown? And how many patients do you think you'll need to show us in to get the protocol amendment approved?.

Sure. Sure. Absolutely. So with respect to redosing, the current protocol actually does allow us to work with the FDA at the end of the first treatment cycle to redose patients. And we certainly plan to be doing -- to do that with FT596.

And so as patients progress through the first cycle and come to the end of the first cycle, if we believe there's potential benefit to providing patient with a second dose and the PI and physician -- the PI and the patient support that we're absolutely expecting to work with the FDA to enable additional doses for patients to continue to deliver and hope to deliver additional benefit.

And so that's what we're thinking about redosing. I think our expectation long term, obviously, with the cell therapies we're advancing is that we do believe in multi-dose paradigms, generally speaking. And with all our clinical studies so far, we do have multi-dose treatment cycles, including with FT538.

And so I think a little -- with a little bit of data and working with the FDA, we will formally amend the protocol to enable a multi-dose paradigm with FT596, just like we have with FT500, FT516 and FT538. Sorry.

Your first question was with respect to resistance that we're seeing in the sort of the CD19 world with patients that have previously been treated with therapy. Yes.

I mean I think this is, to a certain extent, a very new and rich area for study, right? There's been, relatively speaking, a very small number of patients that have been treated with CAR19 T-cell therapy. And very few of those patients have been retreated. So this is a rich area for learning.

I think, again, one of the things that we are excited about potentially with 596, because of the dual antigen targeting potential in combination with monoclonal antibody therapy like rituximab, we may have unique and differentiated potential here to come in with a cell therapy in patients that may be very difficult-to-treat with sort of a single antigen targeted approach once patients have relapsed or are refractory.

And so one of the things that, we're interested in looking at least initially in sort of early escalation is -- we're not -- we're certainly not enriching for this, but I suspect we will probably enroll one or two patients in dose escalation with FT596 in combination with rituximab, where the patients may have previously relapsed or been refractory to CD19 targeted therapy.

I think it's actually a real opportunity for us with FT596. I mean, we'll see..

Great. Thank you, Scott..

Thank you. Our next question comes from the line of Daina Graybosch with SVB Leerink. Your line is open..

Awesome. Thank you for the question. You guys have to do like two hours for these calls. There's a lot of content. Congratulations. Two for me. I wonder outside of starting the two programs from Janssen, if their target.

If you have any new learnings or changes from the collaboration that you can share? And then a second question is, with all these programs that's starting the dual targeting with your high affinity non-capable CD16 receptor, I wonder, how you are thinking about and monitoring any risk from IgG competition with such a high affinity receptor? Thanks..

Sure. On the first one with respect to Janssen, I mean, it's obviously early days. We signed the collaboration in April in the midst of COVID. We have had dialogue with them for quite some time. So I think we hit the ground running, so to speak, when we launched that collaboration.

I think we've made really good progress in mapping out not only what we plan on doing just in terms of initial preclinical development in terms of potentially fast-tracking certain product candidates.

But also, including, for instance, how we're thinking about innovation together, what additional features and functionality we want to engineer into product candidates, both on the hematologic malignancy and the solid tumor side. We've also thought about, obviously, and begun initiation with respect to scaling CMC.

And clearly, already thinking about commercial scale manufacturing processes and kicking that off. So it's been a good start. It's early, but it's been a good start to the collaboration. With respect to IgG, I'll let -- Bob's with me here in the room, I'll let Bob comment on that, and then Wayne can feel free to jump in as well..

Sure. Hi. This is Bob. So one of the things about CD16 is the dissociation constant with the antibody is 10 to minus six. So it doesn't stick and stay. And so all the IgGs that you find in your body, in order for them to react with CD16, you need cross-linking. So you need the interaction of the NK-cell with the antibody with the target cell.

And so that is the reason why you don't see serum levels of IgG really interfering with CD16 biology. And that's another reason why CD16 is natural biology, we all have it, and that's why you don't have autoimmunity caused by CD16. And so this is why we're very excited about our CD16 platform.

It allows for a very specific targeting of the cancer cell without eliciting undesired autoimmunity issues. So that's the reason why you don't see competition with serum IgG when it comes to hnCD16..

Very helpful. Thank you..

Wayne, do you have any additional comments on top of that? Wayne, do you have anything you want to add on top of that?.

No, nothing to add from my perspective other than when we administer therapeutic monoclonal antibodies like rituximab, they -- because of the cross-linking phenomenon, we're taking advantage of that, given the expression of the target on the target tumor cells..

I mean -- yes. And just to extrapolate on that, I mean, keep in mind, CD16 is naturally occurring biology. And in fact, the high-affinity receptor, 15% of us are walking around with a high affinity CD16 receptor.

So -- and clearly, in the world of monoclonal antibody therapy, as Wayne has alluded to, across multiple different monoclonal antibodies, whether it be Rituxan, Herceptin or Erbitux, potentially even daratumumab the high -- the patients receiving the high-affinity -- there are patients that have a high affinity CD16 receptor tend to do well with respect to progression-free survival..

Awesome. Thank you..

Sure..

Our next question comes from the line of Mara Goldstein with Mizuho. Your line is open..

Great. Thank you. Just two questions for me. The first, just on 530 and cost, is the cost per dose going to be consistent with that construct as with the others? And then secondarily, on -- I guess it's now FT536 to MICA and MICB. Can you just talk about what are sort of the steps and the timing to go into IND most of that? Thank you..

Sure. So with respect to FT538, FT596 -- 536, I mean and cost of manufacturing. I think the important thing to recognize, which, again, is a bit of a hedge scratcher, but we engineer one-time. Right? We -- the starting material is an engineered master cell line, which at some basic level is just thus starting material for manufacturing.

So clearly we invest a lot of time and energy and preclinical development in making and selecting our master engineered cell line. However, once you do that, you never engineer again. So our manufacturing process, I mean, to be clear, our cGMP manufacturing process does not involve engineering.

And so, the cost to manufacture FT500, as an example, which is non-engineered versus FT538, which has three engineering features in it, it's not substantially different..

Okay. Thank you. And then just on the....

Yes. With respect to FT536 and thinking about IND timing, it's a 2021 IND..

Okay, great. Thank you..

Sure..

Thank you. Our next question comes from the line of Peter Lawson with Barclays. Your line is open..

Thanks Scott. Thanks for taking my question.

Just on the, I guess, the massive potential data five INDs 20, what would we -- or could we see this year? Is that still FT500 sensors that more likely 1Q? And what further data could we see?.

Yes. I mean, obviously, historically, we've presented data at SITC, we presented data at ASH, and we're going to look for opportunities to present data. I mean the one thing I should caveat, to be clear, while we -- our bias is certainly going to wait to have meaningful data with respect to a dose escalation arm.

The reality is that some of our elaboration are obviously very excited what we're doing with respect to, for instance, FT819 and working with Memorial Sloan Kettering for four years on the first iPS-derived CAR-T cell.

If, for instance, Michel Sadelain submits an abstract and wants to talk about the first patient, certainly, we're going to avail ourselves to opportunities like that as well..

Great, and then just on the three dosing fractionated dosing schedule for 819. Just the rationale there..

Sure. I'll turn that over to Wayne. I mean, Wayne spent a tremendous amount of time working with investigators who have historically pioneered and been at the forefront of autologous CAR-19 T therapy, including discussing the potential for fractionated doses and the value of that. So I'll turn it over to Wayne..

Yes, sure. Thanks. So it's a great question. I think that the clinical experience of autologous CD19 CAR-Ts, have really been focused on their administration as a single dose. And we know that with a single dose of cells, especially as you dose escalate. There are issues from a safety perspective with cytokine release syndrome and neurotoxicity.

And I think one of the liabilities with autologous CD19 CAR-T cells, is the fact that the administrational cells is limited to that single dose.

We know from other immunotherapies, specifically some of the T-cell recruiting biospecifics, is that you can actually take advantage of dose and schedule design treatment regimens that not only can maintain efficacy because you are able to deliver meaningful dose levels, but do it in a way that can potentially mitigate toxicity, like reducing the frequency and severity of cytokine release syndrome and neurotoxicity.

In fact, to a certain degree, this was demonstrated with the University of Pennsylvania experience with autologous CD19 CAR T and B-cell ALL, where they demonstrate that if you fractionate or you split a CD19 CAR-T cell dose into three, you actually have evidence of better antitumor activity.

And more importantly, you have better safety as assessed by the frequency and severity of cytokine release syndrome.

And so we wanted to take that concept and explore it in the context of FT819, primarily because the fact that the way FT819 is manufactured, we can actually do this on a very consistent basis such that every patient that's enrolled into that regimen can get a split dose of FT819.

And so what the plan is for the study is to not only test the fractionation of FT819, but essentially fine-tune the individual day doses such that if it turns out that a step fractionated regimen indeed delivers on a better safety profile, while maintaining efficacy, then that can be established as a treatment regimen paradigm for products such as FT819.

.

Got you. Thanks very much guys..

Thank you for the question..

Thank you. Our next question comes from the line of Matt Biegler with Oppenheimer. Your line is open..

Hey guys. Thanks for taking my questions. My first question is on the 596 patient with the partial response. As of the last update, I think the investigators were filing for emergency authorization to re-dose the patient.

Can you just confirm if that patient was re-dosed?.

I can't confirm that on this call. We've not announced that yet. But we have obviously said, historically, that we're going to take opportunities to work with the FDA to re-dose patients to the extent we think additional clinical benefit can be provided and to the extent the physician and treating patients, I think it's the right course.

So, we are very much pro engaging with the FDA to retreat patients. .

Okay. Understood, at least that's right.

And I also want to I wanted to ask you about the motivation behind the recent Baylor collaboration, which you didn't really discuss much on your call today, but for the autoimmune defense receptor technology, so at the ASH presentation last year, it didn't look like there was a lot of host versus graph responses against the IPs at least for FT500.

So, are you envisioning like this technology as a replacement for preconditioning or really, where do you see it fitting in?.

Yes, absolutely. And keep in mind, right; NK-cells and T-cells may behave differently. We don't know that yet, right? So, I agree with you.

I think we're accumulating a substantial amount of data now that suggests that NK-cells may have some degree of immune privilege, based on all the data that we've seen clinically so far, including in 516, with respect to are there antiproduct rejection programs that are emerging. And NK-cells may be uniquely advantaged.

We don't know about T-cells yet. And so quite honestly, we brought this technology in. We first saw this technology over a year ago at ASGCT.

It is super interest technology from my perspective because not only does it solve not only does it serve as a defense mechanism, as you will if you will, but that defense mechanism in the way that those receptors are engineered and designed, they actually, in defending the cells actually also serve to activate the cells.

So it's very, very interesting technology. I think as we think long term, there's different approaches and philosophies as people are thinking about cell-based cancer immunotherapy and other cell therapies outside of cancer immunotherapy. And clearly, I would say two things.

Number one, certainly, in cell-based cancer immunotherapy, people have talked about and do condition patients. And people have talked about wanting to condition patients even more and drive extended periods of, for instance, immunosuppression.

I think long term, especially, if you want to be part of an early line therapy, the idea of heavily conditioning patients and having lengthy times of immunosuppression is absolutely not the direction you want to move in.

And, number two, as you think about moving beyond cell-based cancer immunotherapy and you start thinking about driving long-term durable engraftment of cells are replacing tissue, I think, creative solutions are going to be required to enable that, and this may be one approach to enable it..

Matt, this is Dan. One thing to add to that is, another thing we really like about this technology, it selectively depletes the alloreactive T cells while leaving sort of the good T cells behind, that will provide protection against infections and relapse.

So it's a much more sophisticated strategy, rather than just blowing up the entire T-cell compartment, which certainly will make room for an allogeneic product, but there's also some consequence of that, too. So that's one of the other things that we really like about this idea..

Makes sense. Thanks for the questions, guys..

Thank you. Our next question comes from the line of Debjit Chattopadhyay with H.C. Wainwright. Your line is open..

Hi, guys. Thanks for taking the call. This is Aaron on for Debjit.

So just I had a question about, sort of, what kind of durability you might expect to see from FT596 and the way that you might enhance that and I'm just asking, based on the previous cord blood-derived caring T cells, they seem to have limited potency, which requires almost all the patients undergo another therapy.

But there was very long persistence of the caring T cells due to the IL-15 study support that you guys also have.

So I'm just thinking, do you think that you might see an enhanced potency just from the addition of rituximab? Or do you think that -- are there any other strategies that is possible to incorporate into 1XX the freezed data modifications? What sort of -- what are your thoughts on enhancing the study?.

Yes. I think generally, it's too early to know. I mean, there's a lot of speculation, even just generally even in autologous CAR-T cell therapy, which what leads to deep durable responses. Generally, we subscribe to a position that's single-dose, long-term persistence is not the answer.

There's lots of data to show persisting in the face of persisting cells, relapse occurs. So, clearly, the idea of just giving one dose and thinking that, that one dose is going to lead to durable cures in the majority of patients, to us, is not the right therapeutic paradigm. It's not a therapeutic paradigm that exists anywhere in cancer.

And so from our perspective and the platform we're building, we think uniquely enables the idea that you can give multiple doses. And we think giving multiple doses is the right strategy and the right way to go.

Essentially, giving new cells, every, call it, one, call it every two weeks, once a month, I think, is, in our mind, the best way to drive deep durable responses for cancer..

Okay. Yes, that's something certainly the autologous persists from a dose, so that makes sense. Thanks. Thanks Scott..

Sure..

Thank you. Our next question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open..

Yes. Hi. Thanks, Scott, for taking the questions. I just wanted to circle back on the commentary around the resistance to the approved CD19 CAR T. If you could just elaborate for how -- sort of why you believe those two B-cell lymphoma patients that have been treated with the approved CD19 CAR-T didn't respond to 516 and 596.

Was it just a question of too low dose or perhaps in the FT596 patient needed rituximab as well or maybe the FT596 patient experienced CD19 antigen loss? And would you have any kind of biomarker strategy to help identify patients that failed the approved CD19 CAR-T that could benefit from a 596 or 516? Thanks..

Yes. I mean, they're all super good questions. And we are obviously investing a lot of time in energy and thinking about clinical translation.

And for instance, assessing as we move forward, thinking about assessing, for instance, CD19 expression levels and what may be contributing to, for instance, relapse and whether or not, for instance, another CD19 targeted strategy alone could overcome that relapse. The other thing I would say, to be fair, this is -- these are early days.

And a lot of the data that we're seeing generally, at least with respect to the allogeneic cell therapies, are what I would consider to be lower doses. I mean at least for Fate Therapeutics, I mean, we're talking about NL-1, a single administration of 30 million cells, which by any measure is an incredibly low dose.

I mean it's 1/10 of what you would give in an autologous CAR-T cell setting. So I'm a bit cautious here about speculating on what we may be seeing or whether there's a trend here or not. Clearly, though, it's been challenging early on with respect to plumbing in and trying to retreat CD19 targeted failures.

But I think we -- I think we have a lot to learn, and we actually view it as an opportunity, especially with dual antigen targeting..

Got it. That's very helpful. And then just one housekeeping question. I believe you had submitted an amendment to the FDA to -- after the VLT that you've seen with Rituxan and 516 with the incomplete neutrophil recovery.

Has that amendment been approved? And are you also going to modify rituximab dose in for regimen B with FT596?.

Yes. The answer to both those questions is yes. So with FT516, we admittedly, probably weren't as careful with the protocol as we potentially could have been. But certainly were with FT596 such that FT596 did not require amendment and 516 obviously has now been amended.

And we are, in fact, treating patients in the dose escalation arm with FT516 and rituximab..

Great. Thank you so much..

Sure..

Thank you. Our next question comes from the line of Ben Burnett with Stifel. Your line is open.

This is Kelly Brisa [ph] on for Ben Burnett. Thanks for taking our question. We were just wondering if you could talk a little bit more about the enrollment trends into the FT596 studies. Particularly, should we expect any differences in types of patients enrolled in the monotherapy arm versus the combination arm? Thank you..

Sure. So I would say eligible, all patients are essentially eligible for both arms. So whether it's a 596 monotherapy or 596 in combination with rituximab, there's no real difference with respect to eligibility criteria in either arm..

Thank you..

Thank you. Our next question comes from the line of Biren Amin with Jefferies. Your line is open..

Hi, guys. Thanks for filling me in.

Scott, maybe I'll start with 516, can you provide an update on the combinations with avelumab? And then also, what are your plans in terms of eGFR and HER2 antibodies that you've mentioned previously?.

Sure. So 516 with avelumab, the study is open. We are likely going in a position to treat the first patient with FT516 in avelumab in the third quarter of this year. I think we want to see a little bit of data with avelumab before moving on to other additional monoclonal antibodies in solid tumors.

Keep in mind that as we think about the true solution, one of the true solutions that might have maximal potential in solid tumors maybe a product candidate, for instance, that has the CD16 receptor and can synergize with a monoclonal antibody like FT516, but might also be engineered with additional features and functionality to hit other targets, for instance, as an example, stress ligands with MICA and MICB..

Okay. And then on FT819, can you just talk about the dose ranges you're planning to evaluate? I think you've stated earlier in the call that you're starting at 90 million cells. So what's the -- where does the dose escalation go up to in terms of cell dose in the Phase I trial.

And in the NHL and ALL cohorts, are you allowing for a prior CD19 CAR?.

So on the last question, yes, we don't necessarily exclude prior therapy. It doesn't mean that we won't direct the study to appropriate patients, obviously.

So as we learn more about CD19 relapse and failures and what may or may not be the cause of that in biomarkers, we also -- we obviously have the ability to work with investigators to choose appropriate -- an appropriate profile where we think the product can be effective.

So that -- I mean that's how we're thinking about with FT819 and whether to enroll patients or not with respect to previous experience with CD19 targeted therapy. As it relates to dose, the monotherapy arms or the monotherapy arms start at 90 million cells. The fractionated starts at 30 million.

From 90 million, we're able to escalate to 300, and then step fractionated at 100..

And then what subset of T cells consists within 819? And then I guess, on the IL-2 dosing, are there any read-throughs from FT500 in the dosing with IL-2 there in terms of just influence on cell kinetics and whether you have any read-throughs into how 819 will behave with IL-2?.

No. I think some of our work with cytokines in the T cell space obviously has come from others in the space, for instance, TIL therapy, that are using IL-2 with T cells.

And we do have the ability in a very controlled way because everybody -- all patients are getting the exact same product because it does come from a clonal master cell line as opposed to having tremendous amount of heterogeneity that comes with patient-derived or even donor derived product.

We are able to get a true test of what we think could be interesting PK/PD differences with respect to just a T-cell itself versus a T-cell supported bio cytokine support. With respect to phenotype of the T cells, I'll let Bob talk about that.

I mean, it's obviously something we spend a lot of time over the past four years, optimizing the phenotype with Memorial Sloan Kettering and Michel Sadelain, on the profile of our T cells.

And Bob can talk a little bit about the preclinical work that we've done with 819 and benchmarking it against primary T-cells -- CAR-T cells?.

Sure. Just real quickly since we've been presenting this work in the previous conferences. The product is basically exclusively t lymphocytes that carry the alpha-beta phenotype and gene expression profile also suggests that they're very similar to primary CAR-Ts..

Okay.

And then given you're using, I guess, the subtherapeutic IL-2 dose, what are your thoughts in terms of influence on regulatory T cells and on the NK -- or in this case, 819 on the T cell itself, do you expect that subtherapeutic IL dose would lead to activation of T cells and inhibition of regulatory T cells?.

Yes. So that is actually something that you can discern from our previous studies with NK cells, actually, obviously, because we've given IL-2 in the past with donor either going back years donor NK 100, our donor-derived product, or for instance, with FT500, now combining with IL-2 and FT516 combining with IL-2.

So yes, we are able to get a look on what is going on with endogenous NK cells and T cells within the patient and how they respond to IL-2. I think, as you suggest, we're giving, relatively speaking, very low doses of IL-2.

And so we have not historically seen much impact on that with respect to, for instance, regulatory T-cells, although it's something we're absolutely looking at..

Great. Thanks for taking my questions..

Sure..

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

Hi, guys. Congrats on all the progress. Just a few on FT596 to start with.

Just -- I didn't hear it earlier, but what are the plans for dose escalation for the monotherapy? Where does that dose go? And is there a monotherapy strategy? And then on the Rituxan combo, could you speak to the type of patients that you'll enroll that will make it easier to tease out the incremental contribution of 596 to Rituxan versus what you'd expect for Rituxan retreatment?.

Sure. So on point number two, start there, I mean, the criteria is certainly for enrollment in this study is that the patients will have already failed at least one Rituxan regimen. And so these patients will certainly have seen Rituxan, will certainly have relapsed or been refractory to a Rituxan regimen.

And also in the literature, I think there's pretty clear publications with respect to in patients, for instance, that have failed Rituxan and receiving Rituxan, what does Rituxan look like as a monotherapy to initially benchmark against that. And again, we're not necessarily looking for subtle here, right.

So if you will -- if you would expect to treat patients with a Rituxan regimen, patients that have failed multiple lines of Rituxan regimens, I mean the response rates are very low, and that's certainly not what we're looking here with respect to -- looking for here with respect to FT596 in combination.

We're looking for pretty profound response rates. As it relates to the monotherapy arm and where we can go, as you know, when we initially submitted the protocol, we were giving a choice of dose escalating one of the arms.

And because of the significant benefits that we believe we can bring to patients through dual antigen targeting, we selected initially to dose escalate the 596 arm in combination with rituximab. And once we find the MTD in that arm, we're able to then go back and dose escalate the monotherapy arm.

Now given the fact that we have seen activity in one of the first two patients as a monotherapy, I think that does provide us an avenue to go back to the FDA early and provides, I think, pretty strong support to have a discussion around now amending to dose escalate the monotherapy arm in parallel with the combination one, and that's something we are exploring..

Got it. And then maybe just on the multiplex engineering.

As you increase the complexity, are you seeing any impact on viability or potency of the cells or how do you monitor that to just ensure that you've got as viable and as potent cell population as you increasingly engineer the cells?.

Yes. I mean, it's a great question, and it's one of the massive advantages associated with what we do, because you can check for that, you can completely check for that at multiple points in this entire paradigm, and you can do all of it pre-clinically.

So, for instance, if you, for instance, further engineer a master cell line, you can fully characterize that now newly engineered master cell line, as an example. You can do all kinds of characterization before the product candidate ever sees it patient.

And that includes, to be really clear, taking that newly engineered master cell line and differentiating it into, for instance, the product candidate, and comparing it against, for instance, the already established master cell line.

And so you can do all kinds of really diligent preclinical studies to really validate the engineering, and you can, again, before it ever sees a patient and you're locking it in at the master cell line level for the product, so that every patient is getting it.

There's no heterogeneity here from patient-to-patient, batch-to-batch with respect to engineering, because it's all been locked in at the master cell line level based on extensive preclinical study, including benchmarking against prior versions of that master cell line..

Got it. That's very helpful.

Maybe just finally and quickly, Scott, just on the FT596 patient who responded, did you observe persistence of CAR positive cell in for how long? Or what would you have expected? And then did you monitor for that?.

We're doing -- the patient is pretty fresh, obviously, with respect to history. And so we're doing a lot of clinical translational work, obviously, both on patient one and patient two. I mean, we want to learn as much as possible here. I think, look, generally speaking, 30 million cells, as I said before, is a low dose.

Certainly, when you look at the CAR-T cell therapy land 30 million cells at the low dose, absent ATE one data from Ener, I'm not sure if you would have -- if you take that data set away from the universe, I don't think anyone would necessarily expect 30 million cells to be an optimized or efficacious dose.

So we are certainly looking forward to dose escalation, moving up the ladder and higher doses and combining with rituximab..

Great. Thanks for taking the questions..

Sure..

Thank you. Next question comes from the line of Alethia Young with Cantor Fitzgerald. Your lien is open..

Hey, guys. Thanks for taking my questions, and congrats on all the progress. So I guess, I just wanted one strategic question. I know you have this Johnson collaboration, which seems to be going well.

I mean, how are you thinking about maybe other kind of collaborations, the leverage such a broad platform that you have? And then, I guess, I kind of wanted to just go back and revisit a question very early in the queue about kind of differentiation, in particular, with 576 on the BCMA platform.

Is that kind of like kind of the moon-shot for targeting BCMA, or maybe not the moon-shot, but you're pretty much moving along nicely there. So those are my two questions. Thanks..

Sure. So with respect to 576, let's just start there. Look, I think there's differences that we've seen in just cell-based therapy with lymphoma and myeloma so far. And the data sets in myeloma are emerging are still emerging. So I'll be sort of cautious with my comments in myeloma. But clearly, in lymphoma, we've seen cures.

We've seen cures with CAR-T cell therapies targeting CD19. I'm not sure we've seen that yet in myeloma with BCMA as, at least a single antigen targeting. We'll see what happens when we do dual antigen targeting. And we're not the only ones pursuing dual antigen targeting. But maybe we will drive to deeper durable responses that enable cures in myeloma.

That said, I don't think BCMA is the last target that will emerge in the myeloma space that folks will be excited about. There are other targets beyond BCMA that are certainly emerging, but at least preclinically, look just as exciting, if not more exciting, with respect to as compared to, for instance, BCMA.

I do think, though, in myeloma, especially more than -- hitting more than one antigen is going to be required if you want to drive for cures. I think that's going to be necessary. As it relates to your question with respect to other partnerships, yes, I mean, I agree with you. I mean, we have a very broad platform.

There's a lot of opportunity just in cell-based cancer immunotherapy as well as outside of cell-based cancer immunotherapy. I think iPSC technology is really starting to catch a lot of folks attention with respect to its potential and the unique advantages that come with IPS cell technology, especially as it relates to multiplex engineering.

And so yes, I think there's, I mean, we're super happy, obviously, with the launch of the Janssen collaboration. But I think there's opportunity for more partnerships, absolutely, including beyond cancer immunotherapy..

Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Scott Wolchko for closing remarks..

Terrific. Thank you, everyone, and I appreciate everybody on the East Coast, especially hanging with us through this late hour. Appreciate everybody's participation in today's call and all your continued support and interest of Fate Therapeutics. Be well. Good night..

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day..