Welcome to the Fate Therapeutics Second Quarter 2021 Financial Results Conference Call. At this time all participants are in a listen-only mode. This call is being webcast live on the Investors 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..

Thank you. Good afternoon, and thanks everyone for joining us for the Fate Therapeutics second quarter 2021 financial results call. Shortly after 4:00 p.m. Eastern Time today, we issued a press release with these results, which can be found on the Investors section of our website under Press Releases.

In addition, our Form 10-Q for the quarter ended June 30, 2021 was filed shortly thereafter and can be found on the Investors 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 included in our Form 10-Q for the quarter ended June 30, 2021 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 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 today's call are Dr.

Wayne Chu, our Senior Vice President of Clinical development; Ed Dulac, our Chief Financial Officer; and Bob Valamehr, our Chief Research and Development Officer.

Today, we will briefly highlight our clinical progress and plans for each of our disease franchises with focus on our FT516 and FT596 programs for the treatment of B-Cell Lymphoma, and our plans to share interim Phase 1 clinical data from these programs at our August 19 Investor Event.

I would like to begin today's conversation, though, marking what is a landmark achievement in the field of cell-based cancer immunotherapy. Our treatment of the first patient with the first ever off the shelf iPSC-derived T-cell therapy.

FT819 is a first of kind allogeneic off the shelf CAR T-cell therapy that is manufactured from a clonal master induced pluripotent stem cell line.

The clonal master iPSC line is derived from a single iPSC, which is precisely engineered to insert a novel 1XX anti- CD19 CAR construct, under the regulation of the T-cell receptor alpha constant or TRAC locus.

Preclinical studies have shown that this precise configuration optimizes T-cell effector function and anti-tumor activity, and completely eliminates T-cell receptor expression, abrogating the risk of graft-versus-host disease.

Unlike the manufacturer of patient and donor-derived CAR T-cells, which require batch to batch sourcing and engineering of primary T-cells, the use of a clonal master engineered iPSC line serves as a renewable starting cell source, and ensures mass production of uniformly engineered CAR T-cells in an efficient and consistent manner.

Our GMP manufacturing run for FT819 produced over 25 billion CAR T-cells in a single small scale campaign, representing an implied yield of 250 doses at 100 million cells per dose.

Released testing showed that the drug product is well defined and comprised of greater than 99% CD45 positive, CD7 positive lymphocytes with greater than 99% CAR expression.

The phenotype of FT819 exhibits high level expression of the activation marker CD25, and the trafficking marker CXCR4, and low level expression of the checkpoint proteins PD-1, TIM-3, CTLA4, and LAG-3. In July, the first patient was treated with FT819, which is the first ever treatment of a patient with an iPSC-derived T-cell product candidate.

The patient, a 61-year old male with refractory acute lymphoblastic leukemia which treated with a single dose of FT819 at 90 million cells. The multicenter Phase 1 clinical trial is assessing dose levels ranging up to 900 million cells. Three FT819 dosing regimens are being tested. FT819 administered as a single dose.

FT819 administered as a single dose in combination with IL2. And FT819 administered as fractionated doses on days one, three, and five. Each dosing regimen is being tested for the treatment of B-cell lymphoma, chronic lymphocytic leukemia and acute lymphoblastic leukemia.

The advancement of FT819 into clinical development ushers in a new era for T-cell based cancer immunotherapy, with the promise of multiplex engineered functionality, off the shelf availability, on demand treatment, and greater patient accessibility.

We've confronted countless obstacles on our five year journey to the clinic, including some that seemed insurmountable at the time. We're certainly excited to have reached this landmark achievement in bringing iPSC-derived T-cells to patients.

I would like to thank the employees of Fate Therapeutics and our collaborators at Memorial Sloan Kettering Cancer Center, especially Dr. Michel Sadelain, who began this important work with us back in 2016, when the steps ahead were anything but clear. Turning to our off the shelf iPSC-derived NK cell programs.

We are very pleased with the progress and the early clinical data from our FT516 and FT596 programs for the treatment of relapsed refractory B-cell lymphoma.

The ongoing Phase 1 study of FT516 is assessing up to two treatment cycles, each cycle consisting of three days of Cy/Flu chemotherapy conditioning, a single dose of rituximab, and three weekly doses of FT516 each with IL-2 cytokine support.

At the ASCO Conference in June, we presented positive interim Phase 1 data, where eight of 11 patients achieved an objective response, including six patients that achieved complete response in dose cohorts, 2 and 3 of 90 million cells per dose and 300 million cells per dose, respectively.

Importantly, the two patients treated in dose cohort 1 of 30 million cells per dose had progressive disease, suggesting that Cy/Flu, rituximab, and IL-2 may not be sufficient to induce clinical responses, absent clinically relevant doses of FT516.

The observed safety profile of FT516 was favorable, and is potentially differentiated from that of T-cell based therapies, including T-cell engagers and CAR T-cell therapies. No FT516 related SAEs, or FT516 related grade 3 or greater AEs were observed.

And no events of any grade of CRS immune effector cell associated neurotoxicity syndrome, or GvHD were reported. Dose escalation in our Phase 1 study of FT516 is ongoing, with enrollment in dose cohort 4 of 900 million cells per dose. We are currently planning to initiate multiple dose expansion cohorts to further assess the efficacy of FT516.

These cohorts include third line diffuse large B-cell lymphoma, and third line follicular lymphoma, both in patients that are naive to autologous CD19 CAR T-cell therapy.

Additionally, since we observed complete responses in two or four patients in dose cohorts 2 and 3, whose disease progressed following autologous CD19 CAR T-cell therapy, we plan to initiate a dose expansion cohort in patients with aggressive B-cell lymphomas that have previously been treated with autologous CD19 Car T-cell therapy.

We believe this dose expansion cohort in particular, addresses a growing market segment with a significant unmet need, and may offer a potential fast to market development path.

Finally, since FT516 may be administered in the outpatient setting, with no mandatory hospitalization stays, and given its favorable safety profile observed today, we also plan to initiate a dose expansion cohort of FT516 in combination with bendamustine and rituximab, and without Cy/Flu chemotherapy conditioning, to explore its use with standard-of-care, CD20 targeted regimens in earlier line therapy.

In these dose expansion cohorts, we intend to include sites that serve patients in the community setting.

We are also pleased with the progress in our Phase 1 clinical trial of FT596, our off the shelf iPSC-derived CAR NK cell product candidate, designed to target multiple antigens through its CD19 targeted CAR, and its high affinity non-cleavable CD16 Fc receptor.

Unlike the FT516 Phase 1 study, the FT596 Phase 1 study is currently assessing a single dose of FT596. Additionally, since FT596 incorporates a novel IL-15 receptor fusion for cytokine activation, FT596 is being administered without IL-2 cytokines support.

The monotherapy arm of the FT596 Phase 1 study is intended to evaluate the activity of our novel CD19 targeted CAR construct, which is optimized for NK cell biology, and is comprised of an NKG2D transmembrane domain, a 2B4 co-stimulatory domain, and a CD3-zeta signaling domain.

The combination arm is intended to evaluate the potential of FT596 to target multiple antigens through its CD19 CAR, and its high affinity non-cleavable CD16 Fc receptor, an approach that we believe may hold best-in-class potential in addressing tumor heterogeneity, and antigen escape.

A total of 20 patients, 10 in each arm, have been treated in dose cohorts, 1, 2 and 3 at 30, 90 and 300 million cells, respectively. No dose limiting toxicities have been observed. And dose escalation in both arms is ongoing, with enrollment in dose cohort 4 of 900 million cells.

As we have cleared the single dose treatment schedule at 300 million cells in both arms, we are preparing to initiate a two dose treatment cycle under an amended protocol, with FT596 administered on days one and 15, beginning at 300 million cells per dose.

On August 19, we will host a 90 minute investor event to present interim Phase 1 clinical data for our FT516 and FT596 programs in relapsed refractory B-cell lymphoma. During the investor event, we plan to share the following data.

For FT516, we plan to present duration of response for the 11 patients treated in dose cohorts 2 and 3 of 90 million cells per dose, and 300 million cells per dose, respectively.

This will provide the first indication as to whether FT516 can effectively drive durable responses against CD20 positive tumors, including in patients that have progressed on autologous CD19 CAR T-cell therapy.

For FT596, we plan to present safety and overall response rates for 10 patients in the monotherapy arm, and for 10 patients in the rituximab combination arm, so 20 patients total. As a reminder, the FT596 Phase 1 study is open to patients that have previously been treated with autologous CD19 CAR T-cell therapy.

With respect to the monotherapy arm, since FT596 does not benefit from the addition of rituximab for CD20 targeting, we will look to these first 10 monotherapy patients to assess the potential of our novel CD19 targeted CAR to drive objective responses, especially in those patients that are naive to autologous CD19 CAR T-cell therapy.

With respect to the combination arm, we also consider the first 10 patients to primarily be at test of the CAR constructs potency, rather than a test of the multi antigen targeting potential of FT596.

Recall, based on our dose dependency observations from our FT516 study, we did not see activity of the hnCD16 construct until a dose of 90 million cells, three times once sleekly was reached, in other words, a cumulative cell exposure of 270 million FT516 cells.

Therefore, at single dose levels of 30 million and 90 million FT596 cells, we would not expect the hnCD16 construct to be a major contributor to efficacy.

That said, in the combination arm, we would consider objective responses in patients that have progressed on CD19 CAR T-cell therapy as compelling demonstration of the dual antigen targeting functionality of FT596, and the product candidates unique ability to address tumor heterogeneity, and antigen escape.

Additionally, patients with clinical benefit after the first FT596 treatment cycle are eligible to receive a second single dose treatment cycle with FDA consent. And we plan to present safety and response rates after the second FT596 treatment cycle.

Finally, we plan to share certain translational observations from both the FT516 and FT596 Phase 1 studies.

Turning to our other disease areas for brief update, we are encouraged by the interim Phase 1 clinical data from our FT516 and FT538 programs in relapsed refractory AML that we shared at our investor event in May, which indicated that iPSC-derived NK cells are well-tolerated and can induce objective responses with complete leukemic blast clearance in the bone marrow.

Importantly, these compelling clinical outcomes were achieved with iPSC-derived NK cells administered off the shelf, in the outpatient setting, and without patient matching.

This therapeutic paradigm has the potential to efficiently and effectively treat many patients with AML, and overcome the significant challenges that have limited the clinical advancement of donor-derived NK cell therapy, which typically requires use of a transplant like process, where patients are hospitalized, receive intense lympho depleting chemotherapy, and are administered donor NK cells that are specifically manufactured for and matched to the patient.

Dose escalation for FT516 program as monotherapy is ongoing with enrollment in dose cohort 3 at 900 million cells per dose, which we expect to complete during the third quarter. No dose limiting toxicities have been reported and treatment with FT516 continues to be well-tolerated.

Dose escalation for FT538 program as monotherapy is ongoing, with enrollment in dose cohort 1 at 100 million cells per dose. No dose limiting toxicities have been reported. However, we have not yet cleared dose cohort 1. Until recently, our FT538 Phase 1 study was open at a single clinical site only.

We have now activated multiple additional sites for conduct of our FT538 Phase 1 study and expect to increase the pace of enrollment with these additional sites now open. Upon clearance of dose cohort 1, enrollment will also initiate in the investigator initiated study of FT538 in combination with daratumumab for relapsed refractory AML.

We expect to report additional clinical data from the dose escalation stages of our 516 and 538 Phase 1 studies in relapsed refractory AML at the American Society of Hematology Annual meeting in December. At ASH, we also expect to report the first clinical data from our FT538 and FT576 programs in relapsed refractory multiple myeloma.

Similar to our approach in lymphoma, we are beginning clinical investigation in multiple myeloma by leveraging our high affinity non-cleavable CD16 Fc receptor, and we are combining FT538 with the CD38 targeted monoclonal antibody daratumumab to maximize antibody dependent cellular cytotoxicity.

We have activated multiple clinical sites for conduct of our Phase 1 study and enrollment of FT538 in combination with Dara will be initiated at 100 million cells per dose upon clearance of dose cohort 1 in the Phase 1 study of FT538 in relapsed refractory AML.

GMP production is underway for FT576, our off the shelf iPSC-derived CAR NK cell product candidate designed to target multiple antigens through its high affinity non-cleavable CD16 fc receptor, and its high avidity BCMA targeted CAR, an approach that we believe may hold best-in-class potential for the treatment of multiple myeloma.

The multicenter Phase 1 clinical trial is designed to assess both single dose and multi dose treatment regimens of FT576, as monotherapy and in combination with Dara. The study will initiate upon completion of GMP manufacturer, and successful release of drug product.

We continue to be pleased with our progress in building a deep pipeline of novel multiplexed engineered iPSC-derived CAR NK cell product candidates for solid tumors.

We are well-positioned to exploit multiple mechanisms, where NK cells may be uniquely advantaged, including targeting tumors with acquired resistance to PD-1 PDL-1 blockade, resulting from loss of MHC class 1 expression, combining with standard-of-care monoclonal antibodies to maximize CD16 mediated ADCC and incorporating CARs and other synthetic receptors to directly target cell surface antigens and stress ligands.

In the third quarter, we expect to initiate our Phase 1 clinical trial of FT538 in solid tumors.

The trial is a multi-arm study, and will assess FT538 in combination with checkpoint inhibitor therapy in patients with resistance to PD-1 PDL-1 blockade, and in combination with an array of monoclonal antibodies, including those that target the tumor associated antigens, EGFR, HER2 and PDL-1.

In addition, we intend to submit INDs for three new product candidates over the next 12-months, including FT536 CAR-MICA/ MICA, FT573, CAR-B7H3, and our first product candidate under our Janssen collaboration, for which we achieved a preclinical milestone in the second quarter.

In the fall, we plan to hold an investor event to further discuss our solid tumor strategy, highlighting our multiplexed engineered pipeline, and presenting Phase 1 clinical data from our FT500 and FT516 studies. I would now like to turn the call over to Ed to highlight our second quarter financial results..

Thank you, Scott. Turning to our financial results, revenue was $13.4 million for the second quarter of 2021, compared to $5.5 million for the same period last year. Revenue in the current quarter was derived from our collaborations with Janssen and Ono Pharmaceutical.

Research and development expenses for the second quarter of 2021 were $48 million, compared to $26.7 million for the same period last year.

The increase in our R&D expenses was attributable primarily to an increase in employee headcount in compensation, including share-based compensation, and expenses associated with third-party professional consultants, and equipment and materials.

General and administrative expenses for the second quarter of 2021 were $12.2 million, compared to $7.5 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.

Total operating expenses for the second quarter of 2021 were $46.9 million net of $13.3 million in non-cash share-based compensation expense.

In the second quarter, we recorded a non-cash $8.7 million non-operating expense associated with the fair value of contingent milestone payments under our iPSC-derived CAR T-cell collaboration with Memorial Sloan Kettering.

In the event, a certain clinical milestone is achieved with an iPSC-derived CAR T-cell product candidate, up to three milestone payments may be owed to MSK, based on subsequent trading values of the company's common stock, ranging from $50 to $150 per share.

These milestone payments in the aggregate totaled up to $75 million, and no amounts have been paid as of the second quarter of 2021 to MSK. We will re measure this liability, currently valued in the aggregate at $55.7 million on a quarterly basis, and changes in the fair value will be recorded in our earnings as a non-operating income or expense.

Note that in July, with the treatment of the first patient with FT819, the clinical milestone was achieved, and the first milestone payment in the amount of $20 million is owed to MSK. The company ended the second quarter of 2021 with $845 million of cash, cash equivalents and investments.

Common stock outstanding was 94 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. And with that, I would now like to open the call up to questions..

Thank you. [Operator Instructions] And our first question comes from Yigal Nochomovitz from Citigroup. Please go ahead..

Hi, great. Thank you very much. Hi, Scott, and thanks for taking the questions.

Could you just clarify something about your high level development strategy? Is it the correct assumption that you plan to select FT516 or FT596 the late-stage studies in B-cell lymphoma? And if so, are you more likely to select 596 for advanced development in BCL, given the additional engineered features in 596? Thanks..

Sure. So, I certainly believe FT596 is a best-in-class product candidate for reasons that we've described in B-cell lymphoma given it has multi-antigen targeting potential, and can overcome for instance, heterogeneity and antigen escape. That said, we're very pleased with the data we're seeing so far with FT516.

And we think there may be some unique opportunities. For instance, as I alluded to down line of CAR The-cell therapy, where we may be able to move very quickly on a path towards market with FT516. We will continue to be guided by the data from both studies as we refine and further develop our development strategy.

But right now, I would say yes, FT596, I think is best-in-class product candidate. FT516 I think there's unique opportunities where we can move quickly, including down line CAR T-cell therapy..

Thanks. And then on that point about the new cohort that you're planning to initiate for 516 in patients previously treated with autologous CAR T.

Are you stipulating that those patients have not responded to prior autologous CAR T? Or just their prior response in autologous CAR T not relevant to their enrollment?.

They could, as currently contemplated, progressed or actually failed..

Okay, great. Thank you..

Sure..

Our next question comes from Michael Schmidt from Guggenheim. Please go ahead..

Hey, Scott, thanks for taking my questions. Congrats on all the progress and the detailed pipeline update. I just had a clarification regarding your FT596 update and future plans for that product and lymphoma.

Could you clarify how many of these 20 patients that you're planning to present on have received a second dose? And then second to that, you are switching over now to a two dose treatment protocol in the study.

I guess what is your confidence level that two doses is sufficient to generate durable responses and also maximize the potential additive effect of rituximab?.

That's a tough question to answer, 10 days in advance of a data disclosure. So with respect to who number of patients that have achieved have been administered a second dose. We will provide that data as part of the update. I will say that we have administered a second cycle with FDA consent to monotherapy patients as well as combination patients.

I think I'll leave that first. I'll leave it at that. With respect to the single versus the two dose treatment regimen, we're going to run the experiment. I mean, I think the reality is we are now looking at response rates at single dose at 300 million cells, we will escalate as we already have to 900 million cells single dose.

We will likely backfill patients at 300 million and 900 million to get a meaningful cohort of single dose patients. And we will compare that to the cohort at 30 at 300 million and 900 million under the two dose treatment.

So I think, if you think about it at some basic level, we're going to get a cohort of say, 12 to 20 patients, looking at single dose, and 12 to 20 patients, looking at two doses at the highest dose levels and make a decision from there..

But it sounds like you're not leaning towards a six dose regimen like you have implemented in 516.

Is that correct?.

That's correct..

Okay, super helpful. And then another question just on development strategy now with 819 in CD19 CAR T program in the clinic.

I guess, how do you think about positioning that longer-term relative to the 596 product candidate in terms of development strategy?.

Yeah, I think it's too early to know. I mean, we're just starting with T-cells. I do think, clearly NK cells to-date, I do think have a differentiated safety profile so far. Obviously, we have not necessarily seen from Fate Therapeutics or any other company, response rates at higher dose levels as well as the durability of those responses.

So, I think it's too early in our development lifecycle of both FT516 and FT596 to think about how we will advance these different product candidates how an NK cell will compare with a T-cell.

That said, I've always said and it won't surprise me in the next let's call 18-months if there may be an investigator initiated study where an NK cell is combined with a T-cell. And I think to-date, we're the only company that has the unique potential to exploit both innate and adaptive immunity in an off the shelf setting..

Great. Thanks for the answers, Scott. Really appreciate it..

Sure..

Our next question comes from Alethia Young from Cantor Fitzgerald. Please go ahead..

Hey, guys. Thanks for taking my questions. Maybe just two for me. One, this is the big picture you have so many products, and I know you were kind of talking about late-stage, maybe 516 cell CAR T.

How do you think about - do all the products need to be blockbusters? Or, is there kind of a strategy behind some being best in the market and some being blockbusters, since you kind of have like a building platform? And then I guess my second question is, can you just talk a little bit about like, kind of how if we think we'll have enough duration, by the time we get to ASH, the kind of make heads or tails of some of the activities here? Thanks..

Sure. So I'll start with the second question. Yeah, at Ash, I think we will have even significantly longer duration of response with FT516 certainly. And I think we'll get our first meaningful view of duration of response with respect to 596.

So I think ASH is going to provide us a lot of really good information with respect to both 516 and 596 durability of response, including understanding with 596 monotherapy versus combination. We may not necessarily be at a point to tease out single dose versus two doses, with respect to duration of response.

As it relates to your first question, look, we're going to be really opportunistic. I've said it before, I think FT516 and its performance to-date has surprised us pleasantly. We saw significant response rates at 90 million and 300 million cells, including patients down line, a CAR T cell therapy, I think that was a fairly unique observation.

And I think it does provide a potentially very fast path to market. And even though I believe 596 is a best-in-class product candidate, I think the FT516 opportunity is there, and we want to move quickly with it and take advantage of that..

Great. Thank you..

Our next question comes from Michael Yee from Jefferies. Please go ahead..

Hi, thanks. Appreciate the question. Scott, thanks for the updates. I wanted to understand some of your comments, I guess, on 516 and 596 this data update coming up.

How you would contextualize the data in CRH for 516, versus what we would see for 596? How to think about those two from a CRE perspective? And most importantly, you just commented about durability much more clear at ASH, but I would like to understand in the handful of patients who will get [indiscernible], how should we contextualize durability? Thank you..

Okay. So durability, we will absolutely provide an update on durability of response with respect to the FT516 study, to be very clear about that. With respect to FT596, we are not far enough along to have a meaningful discussion with respect to durability of response.

We will clearly provide response rates on 10 patients in monotherapy and 10 patients in combination. With respect to thinking about FT516 versus 596, I think it's an interesting first observation because at one level, the FT516 study is essentially about the potency if you will of the hnCD16 CAR construct.

The FT596 study, while there is a combination arm I don't think we're getting much tailwind yet in the combination arm from hnCD16 receptor because of the low doses, I mean the single dose schedule. So I do think the 596 study at some basic level at these lower doses is a test of CAR potency.

And so I think at some basic level at this early stage of comparison, we're looking at FT516 at one level, assessing the potency of hnCD16. With FT596, we're assessing the potency of the CAR construct.

And obviously we would love to be able to see potency from both those mechanisms of action, because I think that would feed in to essentially, the premise that we have a best-in-class dual antigen targeted product candidate, where both targeting mechanisms have the potential to drive meaningful responses..

Perfect.

And to clarify your comment on durability, do you believe or I'd say the street seems to believe that allogeneic CAR T durability that's out there in the public domain is somewhat of the front runner in terms of having data? Do you believe that you want to be better than that, in addition to the fact that you have an improved safety profile? Thank you..

I clearly think that we need to compete on therapeutic profile. Absolutely. I've said this at a high level. Look, I do think safety can be a differentiator. But at the end of the day, I think you got to compete on therapeutic profile, which obviously is driven primarily by response rates and durability of response.

I've said this sort of flippantly before, like, the patient doesn't care where the cells came from. You have to deliver the patient the best product..

Okay. Thank you. That's clear..

Our next question comes from Daina Graybosch from SVB Leerink. Please go ahead..

Hi. Thank you for the question. Two from me.

I wonder if you could talk about why you decided to do in the two dose regimen of 596 doses, two doses in the first cycle, rather than doing one dose in two cycle, as you initially did with this FDA approval? And the second question is, when should we expect to see more pharmacokinetic data from 516 and 596, in non-Hodgkin lymphoma, both peripheral blood and tumor and over time?.

So we'll provide a translational update from 516 and 596, certainly at the investor event, and we'll continue to do that at ASH when we have additional discussions with 516 and 596 with respect to the lymphoma franchise.

As it relates to why two doses in one cycle, and I think that just comes back to the fact that at the end of the day, we believe NK cells relative to T-cells are shorter lived. We also believe that I'll use the phrase the kill window, if you will, to really drive deep durable responses occurs in the first 30 to 45-days.

And we certainly want to assent of basically maximize the therapeutic availability during that 30 to 45-day window. So our view is certainly that especially with NK cells, and the shorter life cycle is to provide more than one dose in this case, two doses during the first 30-day window and compare that for instance, with the single dose cycle..

Helpful. Thank you..

Our next question comes from Ben Burnett from Stifel. Please go ahead..

Hey, thank you very much. I have to ask, so I want to ask about the FT596 academic study, which I believe is at the University of Minnesota in the adjuvant setting.

What's the status here? And I guess, do you have a sense for when this might reach a point of maturity in terms of having enough data to present publicly?.

Yeah, sure. Enrolling patients, I didn't provide an update on it. As you alluded to, it's an investigator initiated study at the University of Minnesota. Still enrolling patients, absolutely.

Probably provide an update, I suspect probably not at ASH, given how crowded ASH will be with our updates, but maybe in the first quarter, for instance, at the TCT Conference as an example..

Okay, excellent. And then just one quick question on 819, I apologies if I missed this.

But the program that you outlined the clinical program is this and specifically patients that are naive to CD19 CAR T?.

With 819, no. So patients can have previously received CAR 19 cell therapy..

Okay. Thank you very much. Appreciate it..

Sure..

Our next question comes from Peter Lawson from Barclays. Please go ahead..

Hey, thanks for taking my questions.

Just the data update we get on the 19, how we patients could we see in that post CAR T cell setting?.

Let's wait for the data. Let's wait for the discussion. As an example we had in 516, we had four of 11 patients who were post CAR T cell therapy, I believe. Similar range, probably something in that range..

Perfect. Thank you.

And then how many patients do you think you'll need to try and file in a post CAR T cell setting?.

I think it would be pure speculation for me to give you a number. I think what our plan is, and we'll discuss more of this at our investor event is to complete dose escalation for 516, and pursue our MAT Designation to have those conversations..

Thank you.

And then just as we think about the solid tumor readout, do you think 516 or 500 could be a viable long-term product in solid tumors? Or, should we really be kind of focused around I guess, 536 of other constructs in solid tumor?.

No.

I think 560 - I think 500 and 516 in the solid tumor setting at some basic level are proof-of-concepts, understanding sort of translational learnings and incorporating those into certainly 538 and then even more complex engineered cell therapies that have direct targeting, like the three products, I alluded to FT536, FT573, and the first Janssen product candidate.

So I think the true test in solid tumors at the end of the day, while I think we can absolutely gain learnings from 500 and 516, I think the true test and to maximize patient benefit is certainly with a multiplexed engineered cell therapy in solid tumors..

So that update in the middle of the year or 3Q would be more focused around kind of biomarker work as opposed to PIs [ph] deeper?.

Yeah, I mean, to put it in context, so I don't think we're curing solid tumors with a non-engineered NK cell..

Got you. Thank you so much..

Sure..

Our next question comes from Matt Biegler from Oppenheimer. Please go ahead..

Hey, Scott, can you hear me?.

I can. Thank you..

Okay. Great. Thanks for the question. I actually want to piggyback on that last question, just about the overall solid tumor strategy.

Given where your market cap is now, I'm just kind of curious how important is success in solid tumors for your platform? And maybe if you could just point to any data, and it can be more broadly amongst the NK cell therapy space, that kind of gives you confidence that you can find success, or at least proof-of-concept in solid tumors? I think if I remember back to the year old Apollo study, there was at least one partial response.

So any color if you could give? Thanks..

Yeah, actually, that was one of the references I was going to give you. I mean, when we were advancing and you've been following Fate long enough to remember, when we were advancing actually a donor-derived NK cell therapy which was partnered with the University of Minnesota.

You have to go back now two or three years for this, we did run a very interesting study in solid tumors, specifically patients with recurrent ovarian cancer. And it was single dose where donor-derived NK cell products, I think, delivered at close to maybe a billion cells, and it was delivered locally, with IL-2.

And in fact, in that small cohort of patients, I think six patients - there were several patients that had stable disease for a meaningful period of time. So duration of disease control was meaningful. And in fact, yes, you are remembering correctly, one of the patients actually did achieve a partial response.

So I do think there is precedent, clearly where NK cells in certain areas, may be advantaged, certain mechanisms that we do want to exploit. We've talked about in the past, for instance, patients that have progressed on checkpoint inhibitor therapy, where tumor mutations drive down regulation of MHC class 1.

It's a perfect setting for NK cell to potentially have unique activity compared to a T-cell as there's loss of function with respect to antigen presentation.

Clearly, we believe CD16 is an important receptor and can synergize with monoclonal antibody therapy, and we think that's supported by data that's been seen with respect to in the solid tumor setting in monoclonal antibodies. Folks walking around with a high affinity CD16 flavor do better in outcomes with monoclonal antibody therapy in solid tumors.

So I think there's certainly proof-of-concept out there, but yeah, clearly, we are pioneering NK cell therapy in solid tumors. It's an important initiative to us. It's supported by investment in a significant pipeline. We've declared two product candidates already that are multiplexed engineered with CARs, in addition of 538, MICA/ MICB and CAR-B7H3.

And I would say, under our collaboration both with Janssen and Ono, product candidates were developing against solid tumors..

Yeah. That's exciting. Congrats on the progress, guys..

Thank you..

Our next question comes from Mara Goldstein from Mizuho. Please go ahead..

Great. Thanks so much. Hey, Scott, I wanted to revisit something that you said around sort of candidate multiplexed candidates and seeing activity as a function of duration of treatment.

And can you talk a little bit more about that? And what the kinetics behind that are?.

Yeah, I mean, ultimately, look, I don't think durable disease control is going to be necessary - is going to be sort of carry the day in solid tumors. I think ultimately, it's about responses and driving responses. And so, I think that's how we have to assess ourselves at the end of the day, it's about responses and driving responses..

Okay.

And then also, I'm just - with the MICA/MICB from that perspective, where's the opportunity for therapeutic differentiation there?.

Several different areas. We'll talk a lot more about this obviously, at our solid tumor day. I mean, I can turn it over to either Bob or Wayne to talk about the unique potential of MICA/MICB. But obviously, it's a pan tumor targeting strategy, if you will. Many tumors significantly up regulate stress ligands, specifically the MICA/MICB protein.

And one of the main mechanisms actually of NK cell evasion, I mean people have talked about mechanisms of T-cell evasion, but one of the main mechanisms of NK cell evasion in solid tumors is shedding of the MICA/MICB stress proteins.

And so we always like the idea of targeting stress ligands, but really wanted an approach that could overcome the mechanisms of NK cell resistance, which is why the MICA our specific MICA/MICB binding domain hits the alpha 3 region and is able to bind and kill even after MICA/ MICB have been shed from the surface of a tumor..

Okay. All right. Thanks, Scott. Appreciate it..

Sure..

And our next question comes from Robyn Karnauskas from Truist Securities. Please go ahead..

Hey, guys. Thank you so much for taking my question. This is Kripa on for Robyn. Congrats on treating the first patient with your CAR T-cell a year long wait after the IND was approved? So I have a question about that.

So can you talk a little bit about what sort of safety concerns do you have? These cells, you talked about how these T-cells don't exhaust because of their differentiated design. And also, I think you mentioned that 819 is a product comprised only of PDA cells.

So how do you monitor these patients for CRS and neurotoxicity? And also, given that it took a year from IND clearance to first patient treated, can you talk a little bit about what the key hurdles were, and what lessons you've learned for future iPSC-based T-cell therapies in the pipeline? Thank you..

Yeah, sure. So, I think we're going into this expecting that 819 is going to bring us squarely into T-cell land. And what I mean by that is obviously, with respect to CAR T-cell therapies, CRS is a concern. ICANS is a concern, neurotoxicity certainly.

And so I think we are thinking with respect to 819 that absolutely, that if 819 is truly a T-cell and we believe it is, that we will potentially face many of the challenges that have confronted the autologous and allogeneic CAR T-cell space.

I think one of the things that we've done in this study interestingly is there's been some work done with autologous CAR T-cell therapy, to suggest that lower dosing and multiple doses over a shorter period of time, potentially can drive responses, but mitigate some of the risks associated with CRS and neurotoxicity.

And that's why one of the arms of our studies of this 819 study is actually the fractionated dose arm, where essentially you give a third of the dose a third of the dose, and a third of the dose spread out over a five day period.

So that's one of the ways we're thinking about trying to optimize the potential of an iPSC-derived T-cell therapy compared to, for instance, the autologous world, as an example. With respect to your question of manufacturer, it was really unique, it was a unique situation. The reality was, we had kicked off the manufacturing campaign for 819.

And we had completed that, and that campaign was ongoing. And we are constantly investing in process development improvements, including scalability and consistency of product.

And at the end of the day, while we were doing that first manufacturing run, we did discover and have some innovative developments, where we wanted to more, I would say slightly, but in some important areas, modify the manufacturing of 819.

And so what we decided to do since we did not treat the first patient, we decided to incorporate that into the manufacturing process, rerun the manufacturing process and then ultimately release the product.

So it's a pretty unique circumstance where there was a development, in-process development that we felt was important enough, and given we hadn't treated the first patient, we elected the wait..

Great. Thank you. Very helpful. And just a follow-up question on AML.

Are we still on track for readout around ASH timeframe? Will we see the updated data from 516 and 538?.

Correct, at ASH..

Do you think - you'd mentioned I think the earlier data readout that 538 is - preclinical study is more potent than 516.

Do you think you'll have enough data this year to make a decision about which one to take forward in AML?.

Yeah, if we're not there quite at ASH, I think we'll be there shortly thereafter. And sort of, my expectation today, again, largely based on preclinical data, that FT530 it's going to be the product candidate we're going to pick moving forward in AML..

Okay. Great. Thank you..

But, I'm happy to be surprised again with 516..

And our next question comes from Nick Abbott from Wells Fargo. Please go ahead..

Thank you. Scott, compliments on a clear, comprehensive update today. Unfortunately, my questions probably will neither be as clear not as comprehensive. But first one relates 819, you've discussed this a little bit, but you've designed a very broad and aggressive program. So this is clearly not just establishing proof-of-concept.

So do you believe you can show superiority with currently in development or approved off the shelf - in development off the shelf products? Or, you established just a broad reference range for your own internal development of next gen products? And then I have a follow on? Thanks..

Yeah, I think from my perspective, look, I think and I've said this before, I think that the patient-derived CAR T-cell products have delivered revolutionary results for patients. And certainly, there are logistical challenges. Certainly, there are clinical complexities associated with the patient-derived products.

But the results are fairly remarkable. And when I think about FT819, that's the bar. Quite honestly, I think that's the bar with 596 as well. That's the reality of what's out there. There are three CAR 19 products now approved.

And I think, they're obviously being shepherded by very large, established pharmaceutical companies and they will continue to invest in bringing those terrific solutions to patients. So the burden is on us, if you will, to continue to be able to compete with that therapeutic profile.

We think there's a lot of advantages to be really clear, with an off the shelf iPSC-derived strategy, a lot of advantages. But like I sort of alluded to before, look, at the end of the day, the patient doesn't care where the cells came from, you have to have a terrific therapeutic profile..

Sure. Thanks. And then just in relation to the new manufacturing facility.

Can you talk about how that facility couldn't be used? I mean, for example, could you be making thousands of doses for a single product and simultaneously hundreds of doses of one or more products for cell trials?.

Yeah, absolutely. I mean, we didn't give an update here, we'll probably give an update on the next call. We're right on schedule. We're actually in the midst of moving and occupying that headquarters. It's a 50,000 foot GMP footprint. We absolutely - I think in there maybe 12 different GMP suites.

And so certainly, we have the capacity to manufacture multiple different product candidates at large scale. And we do think we potentially could launch at least initially, commercially from that facility..

Great. Thanks, Scott..

It likely with continued success, it likely won't be our only manufacturing facility. But certainly, I think it provides us tremendous opportunity to advance multiple product candidates in parallel and accommodates initial launch commercial launch..

And we have no further questions at this time. I will turn the call over back to Scott Wolchko..

Perfect. Thank you. Thanks, everyone, for participating in today's call and all the great questions. Definitely look forward to reconvening here, I think probably maybe two weeks from today, and providing a fulsome update on the FT516 and 596 programs in lymphoma. Thank you very much. Be well..

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day..