Fate Therapeutics Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 3, 2023

There are 9 speakers on the call.

Operator

Welcome to the Faith Therapeutics First Quarter 2023 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 Faith's website at faiththerapeutics.com. As a reminder, today's call is being recorded. I would now like to introduce Scott Walsko, President and CEO of Fate Therapeutics.

Speaker 1

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics' Q1 2023 financial results call. Shortly after 4 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.

Speaker 1

In addition, our Form 10 Q for the quarter ended March 31, 2023 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 March 31, 2023 that was filed with the SEC today. Undue reliance should not be placed on forward looking statements, which speak only as the date they are made as the facts and circumstances underlying these forward looking statements may change.

Speaker 1

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 Doctor. Wayne Chu, Our Chief Medical Officer Ed Dylak, our Chief Financial Officer and Doctor. Bob Balliner, our Chief Research and Development Officer. We will focus today's discussion on the impact of our strategic pipeline prioritization and corporate restructuring, Including the unwinding of our collaboration with Janssen, our significant reduction in operating expenses and the extension of our cash runway into the second half of twenty twenty five.

Speaker 1

In addition, we will highlight our sharpened clinical focus For FT596 BCMA targeted CAR NK cell program in multiple myeloma and our FT819 CD19 targeted CAR T cell program in B cell malignancies. Finally, we will share our progress in advancing our Key 2023 program initiatives for our off the shelf iPSC derived CAR NK and CAR T cell product pipeline, including under our collaboration with Ono Pharmaceutical. The Q1 of 2023 It was a challenging period of transition for the company. The quarter was marked by the termination of our collaboration with Janssen, where we completed an orderly wind down of all collaboration activities. This included discontinuing all research And preclinical development of collaboration candidates, halting ongoing GMP manufacturing campaigns in support of clinical development And withdrawing an IND application that had been allowed by the FDA for a first collaboration product.

Speaker 1

As of the Q1's end, we were no longer incurring any costs in connection with the Janssen collaboration and all amounts owed by Janssen to Fate have now been fully paid. We also completed a strategic review of our iPSC Innovative and differentiated CAR NK cell and CAR T cell product candidates with the potential to address large unmet clinical needs. As a result, we decided to discontinue further development of our FT516, FT596, FT538 and FT596 NK cell programs. While we are committed to minimizing all operating costs Across these discontinued programs, there are a number of patients that have been treated in our FT516 And FT596 Phase 1 studies for relapsedrefractory B cell lymphoma that remain on study and in response. We have decided to continue post treatment follow-up for these patients for up to 1 year to assess duration of response.

Speaker 1

As such, we expect clinical trial costs associated with our FT516 and FT596 programs to dissipate over the remainder of 2023. As a consequence of the termination of our Janssen collaboration and our strategic Pipeline prioritization, we significantly reduced our workforce. In early January, we reduced our headcount by over 60% to approximately 220 employees, which we expect to remain flat at least through the remainder of 2023. In addition, we substantially curtailed our support of investigator initiated clinical studies and sharpened the scope of our sponsored research agreements. Finally, we are working to reduce our overhead costs and consolidate our operations at our corporate headquarters.

Speaker 1

With the implementation of this restructuring, we are well positioned to achieve key milestones across our programs with a cash runway that extends into the second half of twenty twenty five. Before we review our progress in advancing our key 2023 program initiatives, I would like to turn the call over to Ed to elaborate on our financial results for the Q1 of 2023. Thank you, Scott, and good afternoon. Fate Therapeutics is in a strong financial position to achieve key inflection points across its pipeline. Our cash, cash equivalents and investments at the end of the Q1 were approximately $413,000,000 This amount did not include an additional $14,000,000 in collaboration receivables, of which we received $12,500,000 from Janssen in the 2nd quarter.

Speaker 1

In the Q1 of this year, our revenue increased significantly to $59,000,000 compared to $18,400,000 for the same period last year. Most of our revenue in the quarter or $58,600,000 Was derived from 3 non recurring sources, dollars 41,200,000 in deferred revenue recognition Related to our former collaboration with Janssen, dollars 11,100,000 associated with Janssen wind down activities And $6,200,000 of R and D expense reimbursement under our ongoing collaboration with Ono related to the completion of preclinical activities for FT825. Research and development expenses for the quarter Decreased by $6,500,000 to $65,600,000 The decrease in our R and D expenses Was attributable primarily to the termination of the Janssen collaboration, a decrease in share based compensation expense and from lower demand for R and D Supplies and Materials. General and administrative expenses For the Q1 increased by $1,200,000 to $21,900,000 The increase in our G and A expenses was attributable primarily to an increase in legal related fees. Total operating expenses for the Q1 were $87,600,000 which includes $12,900,000 of severance and other employee termination related expenses as well as $11,000,000 Note that in connection with the development of our off the shelf iPSC derived CAR T cell product candidate FT819, we previously achieved the clinical milestone Set forth in our amended license agreement with Memorial Sloan Kettering Cancer Center, which triggered a first milestone payment to MFK in 2021.

Speaker 1

Up to 2 additional milestone payments may be owed to MSK based on subsequent trading values of the company's common stock, ranging from $100 to $150 per share. We assess the fair value of these contingent milestone payments currently valued at $2,100,000 on a quarterly basis. In the Q1, we recorded a non cash $1,700,000 non operating benefit associated with the change in fair value. Our net loss for the Q1 was $18,900,000 or $0.19 per share. As we consider the remainder of this year, I want to highlight a few important factors that change the profile of the company's P and L.

Speaker 1

First, the company's revenue will be derived almost exclusively from our collaboration with Ono and specifically for research funding in connection with the development of a second product candidate against an undisclosed target in solid tumors. We expect this amount to total about $800,000 per quarter through the Q3 of 2024. 2nd, as a result of our decision in the Q4 of last year to opt into a co development And co commercialization arrangement with Ono for FT825 in the U. S. And Europe, Ono's portion of the program's expenses to be reimbursed to Fate, which were previously captured as revenue, Will now be recognized as an offset to our research and development expense.

Speaker 1

3rd, While the company did implement its restructuring in the Q1, we expect the cost reductions and additional operating leverage To begin to materialize in the Q2, with additional benefits to accrue throughout the year as we complete the wind down of our discontinued programs. Finally, we expect our GAAP operating expenses for the full year to be between 265 and $285,000,000 and that we will end the year with more than $300,000,000 in cash and investments. I would now like to turn the call back over to Scott to discuss our key 2023 program initiatives. Thanks, Ed. After staring down some significant challenges in the Q1 of 2023, we have emerged with a renewed sense of energy, commitment And drive to bring off the shelf iPS derived cellular immunotherapy to patients with cancer and autoimmune disorders.

Speaker 1

We remain confident that our proprietary iPSC product platform is uniquely suited to create highly differentiated product candidates That incorporate novel synthetic controls of cell function, deliver multiple mechanisms of action to maximize clinical efficacy and maintain a safety profile that permits broad accessibility to patients, including in a community based setting. During the 1st few months of this year, we have made great strides in positioning the company to reach key inflection points across our programs. The treatment landscape for multiple myeloma remains highly fragmented with the vast majority of patients receiving multiple lines of combination regimens in community based settings throughout the course of treatment. FT596 is our off the shelf BCMA targeted CAR NK cell program for multiple myeloma that is uniquely designed to be administered with CD38 targeted monoclonal antibody therapy, which is widely used in combination regimens across lines of therapy. We believe the off the shelf combination of FT596 and CD38 targeted monoclonal antibody therapy may offer an attractive and differentiated therapeutic proposition By enabling antibodies dependent cellular cytotoxicity, multi antigen targeting of myeloma cells and patient reach in the community based settings.

Speaker 1

We have previously reported interim Phase 1 clinical data Of the combination from the 1st single dose treatment cohort at 100,000,000 cells, which showed a favorable safety profile and clinical activity. Additionally, translational data from the cohort indicated rapid and selective depletion Combination may create a favorable immunity constitution profile to extend FT596 functional persistence. As we continue to recruit patients in the dose escalation stage of our Phase 1 study, we have prioritized enrollment of FT596 in combination with CD38 targeted monoclonal antibody therapy. We are currently enrolling a 2 dose treatment cohort at 300,000,000 cells per dose and upon clearance, we expect to open and assess A 3 dose treatment cohort at 1,000,000,000 cells per dose. In the area of B cell lymphoma, where autologous CAR T cell therapy has shown remarkable efficacy.

Speaker 1

The vast majority of patients do not receive autologous CAR T cell therapy for numerous reasons, whether due to logistical barriers, disease aggressiveness requiring immediate intervention or inability to combine with standard of care immuno chemotherapies that are commonly administered in community based settings. FT-five twenty two is our off the shelf CD19 targeted CAR NK cell program for B cell lymphoma that incorporates 5 novel synthetic controls of cell function designed to increase NK cell potency, Enhance functional persistence and reduce or eliminate the need to administer intense conditioning chemotherapy to patients. Notably, FT-five twenty two is the 1st product candidate to incorporate our proprietary alloimmune defense receptor For ADR technology, which is designed to target 4 1BB expressing post immune cells And induce NK cell activation. We have previously presented preclinical data Demonstrating that AD armed, ADR armed iPS derived CAR NK cells exhibit potent antitumor activity In the presence of alloreactive T cells and we believe there is a significant opportunity for FT-five twenty two To be seamlessly combined with standard of care immunotherapies widely used in community based settings, including for the treatment of patients with newly diagnosed disease. I am pleased to announce We have recently submitted an investigational new drug application to the FDA to initiate clinical investigation of FT-five twenty two.

Speaker 1

The proposed clinical schema is designed to assess a 3 dose treatment schedule In combination with CD targeted monoclonal antibody therapy, including without administration of intensive conditioning chemotherapy to patients. We believe we are well positioned to initiate patient enrollment at a therapeutically relevant dose and dose schedule in the second half of twenty twenty three. We also continue to recruit patients into our landmark Phase 1 study of FT819, Our off the shelf iPSC derived CD19 targeted CAR T cell product candidate for B cell malignancies. FTA19 incorporates several first of kind features, including the integration of a novel 1XX CAR construct into the TRAC locus, which is intended to promote uniform CAR expression, balance T cell activation and exhaustion and prevent graft versus host disease. We have previously reported interim Phase 1 clinical data, which showed a favorable safety profile And demonstrated responses in heavily pretreated patients, including in patients who are not eligible for or who have previously failed autologous CD19 targeted CAR T cell therapy.

Speaker 1

The Phase 1 study is currently enrolling patients in a single dose treatment cohort at 540,000,000 cells in B cell lymphoma. And we plan to initiate a dose expansion cohort in the middle of 2023. We also continue to enroll patients in a single dose treatment cohort at 180,000,000 cells in chronic lymphocytic leukemia, A disease that remains incurable and for which utilization of autologous CAR T cell therapy is limited due to the inherent dysfunction within the patient's immune system. We're excited to expand our iPSC derived CAR T cell product platform to solid tumors, Where effective therapeutic solutions may need to address cell trafficking, the immunosuppressive tumor microenvironment And tumor heterogeneity. We believe our multiplex to iPS derived CAR T cell product platform is designed to Specifically overcome these challenges and enable the safe and effective treatment of solid tumors.

Speaker 1

Under our collaboration with Ono, We are currently conducting IND enabling activities for FT825-eight thousand two hundred and fifty, A multiplex engineered iPSC derived CAR T cell product candidate targeting human epidural growth factor 2 or HER2 expressing solid tumors. The product candidate incorporates 7 novel synthetic controls designed to enhance effector cell function, including by promoting cell traffic into the tumor site, redirecting immunosuppressive signals in the tumor microenvironment and supporting T cell activation without eliciting exhaustion. In addition, we are currently engaged with the Ono clinical development team and are jointly developing our clinical strategy for FT8-two thousand five hundred and eighty eight-two fifty. We remain on track Finally, I'm excited to report that we have engaged multiple key opinion leaders and investigators Who have expressed keen interest in utilizing off the shelf cell therapy for the treatment of severe autoimmune disorders, where there is a significant need for therapeutic solutions that can effectively reset patients' immune system and meaningfully improve patients' quality of life. In preclinical models, we are currently assessing the potential of FT819 to selectively target and durably deplete pathogenic B cells as well as for the potential of FT-five twenty two As monotherapy and in combination with CD20 and CD38 targeted monoclonal antibodies To selectively target and durably deplete pathogenic B cell, plasma cells and auto reactive T cells.

Speaker 1

We believe the value proposition for an off the shelf cell therapy in autoimmune disease is compelling. Unlike autologous CAR T cell therapies, off the shelf cell therapies avoid the need to taper a patient's immunosuppressive Additionally, As many autoimmune diseases are marked by moderate to severe disease flares, which require timely intervention, The potential to treat on demand with an off the shelf cell therapy is a significant therapeutic advantage. We are currently working to extend our iPSC product platform into autoimmunity in 2023 And we look forward to sharing our development plans and strategy as we generate additional preclinical data and further advance our 1st off the shelf product candidate toward clinical development. Before we close, I would like to sincerely thank our employees whose patience and perseverance have allowed us to emerge through this transition period with a strong foundation, a sharpened clinical focus and multiple pathways for value creation over the next 12 months. I would now like to open up the call to any questions.

Operator

Thank you. And our first question comes from Tyler Van Buren with Cowen. Please go ahead.

Speaker 2

Hi, guys. This is Tara on for Tyler today. And so congrats on the progress so far. It's great to see you guys Doing well these days. And so I guess my question is around the trial that could be starting in the second half.

Speaker 2

So I was hoping you could tell us more about your agreed upon study design and potentially what's left to do prior to initiation. And then regarding the study design, what cohorts do you plan to pursue? Like will it be a high dose of over a 1,000,000,000 cells or will you start much lower, and kind of what you expect to see there? Thanks.

Speaker 1

So just to clarify, are you referring to the FT-five twenty two study?

Speaker 2

Yes, yes, that one. Yes, sorry.

Speaker 1

Okay. Thank you. Thank you. So Happy to go through this and I'll let Wayne walk through this. Keep in mind, this is a draft clinical schema and so we'll discuss it in proposed format.

Speaker 1

Yes. So, that's a good question. And Annette, the study design scheme for FT-five twenty two reflects our past experience with other NK cell therapies and we're leveraging that experience. With other NK cell therapies and we're leveraging that experience to propose a schema whereby we administer multiple doses of FT-five twenty two in combination with rituximab, on a dosing schedule, whereby Following a round of conditioning chemotherapy, we give up to 3 doses of FT-five twenty two on a fairly compressed dose schedule On Phase 1, 4 and 8, and then we give up to 2 treatment cycles overall. So in similar to our Prior NK cell trials where patients can give up to a total of 6 doses of a cell product, we intend to do the same with FT-five twenty two.

Speaker 1

And as Scott mentioned, we intend to look at the administration of 5/22 With and without conditioning chemotherapy, so our Phase 1 dose escalation scheme reflects

Speaker 2

Okay. Thank you so much. Look forward to seeing that.

Operator

Sure. Thank you. One moment for our next question please. And it comes from the line of Yigal Nochomovitz with Citi. Please go ahead.

Speaker 3

Hi, team. This is Ashik Mubarak on for Yigal. Thanks for taking my questions. Just building on the last one, it sounds like your plan for FT-five twenty two is Combined with rituximab in earlier line or maybe in frontline BCLs, I guess can you give us a little clarity on why you think you can sort of move straight into In early line setting with this combo, maybe why are you getting away without having to go into later lines first and without having to show So monotherapy activity, that'd be very helpful. Thanks.

Speaker 1

Yes. Just to be clear, we are not starting with frontline patients. We do think that the potential regimen in the combination of 522 and rituximab And seamlessly plug into regimens that are used in the frontline, for instance, like our CHOP and with 596 historically, We've explored the potential to combine with, for instance, standard care regimens like R CHOP in frontline or early line patients. However, we expect to start in patients that have at least have progressed on at least one line of therapy, And specifically, eutuximab

Speaker 3

regimen. Got it. That's very helpful. If I could ask one on FT596, you've talked quite a bit about the sort of combinability with the anti CD38 Anybody, so I'm just thinking a couple of steps ahead towards maybe future pivotal or registrational development. Do you think it's necessary to have to show contribution of parts for the combo?

Speaker 3

And how are you thinking about the contribution of dertimumab, Especially within the context of patients that may have already cycled through the CD38 antibody. Thanks.

Speaker 1

Sure. I think I can talk about this from at least some experience with FDA interaction that we've had with 596 And rituximab in the past. So long as we think that we're down line of A regimen for instance where rituximab is used in the patient for instance in that setting previously had experience with CD20 On monoclonal antibody therapy, we don't necessarily think you have to show contribution of the parts through a clinical study associated with rituximab. Keep in mind that for instance in the lymphoma setting, we are not giving rituximab on a standard dose or dose schedule. We're not giving brituximab at least to start in combination with, a standard brituximab regimen.

Speaker 1

So we are a bit afield from what we would consider sort of a standard rituximab protocol, if you will, at least in our initial clinical As well as potentially in some of the areas that we would look to develop registration studies. I do think there is so long as there is clinical data that is out in the field that you can benchmark to With respect to what monotherapy activity might look like with those monoclonal antibodies in specific lines of patients, Like I said, I don't think you would necessarily have to run a study where you saw which showed discrete Contribution of parts. I mean, quite frankly, the FDA even gave us feedback in B cell lymphoma that arguably, can you keep in mind The prior protocol we combined with a single dose of rituximab. The FDA acknowledged that some level be unethical to give a patient single dose of rituximab.

Speaker 3

Very helpful. Thanks very much.

Operator

Thank you. One moment for our next question please. And it comes from the line of Talzin Asmat with Bank of America. Please proceed.

Speaker 4

Hi, good afternoon guys and thank you for taking my question. Just maybe a couple of points of clarification if I could Scott for Either ST-five seventy six or for 819, should we be expecting any updates at some of the And then, 4,576 again, Do you have any sense of how many more dosing cohorts you'd want to complete before progressing into the Phase 2?

Speaker 1

Sure. Fair question. So for the clinical programs 576 and 819, not committing to provide a Clinical update at ASH this year. I do think both programs are well positioned where we can provide a clinical update within the next 12 months, But not necessarily this year at ASH. So I wouldn't I'm not prepared to commit to an update at ASH for those clinical programs.

Speaker 1

With respect to 576, look, I think we're looking forward to starting the 3 dose schedule at 1,000,000,000 cells. We think at 3 doses and a 1,000,000,000 cells in combination with Dara, It does have the opportunity to provide what we at least our preclinical models would suggest significant clinical activity. And I think that Those cohort, if you will, that we plan to enroll in the beginning of the middle of this year, second half of this year will provide us a really good guide as to where we think we are with that program and the go forward strategy.

Speaker 2

Okay. Thank you.

Operator

Thank you. One moment for our next question please. And it comes from the line of Mara Goldstein with Mizuho. Please proceed.

Speaker 5

Great. Thanks so much for taking the questions. Just on 522 in autoimmune disease, what as you think about the clinical program, I'm curious around What you're thinking would be appropriate sort of translational markers to really understand, the therapeutic window there? And then I just had a question on cash and Just the difference between sort of the guidance for OpEx and the cash balance at the end of the year, is that just a GAAP to non GAAP translation? Or Is there something else we should expect visavisome type of top line payment?

Speaker 1

I'll let Ed Deal with the latter, but I think the Q1 was obviously really heavy and contributing to the annual guidance. But I'll let Ed go through that in some detail. Go ahead.

Speaker 4

Great. Thank you

Speaker 5

so much.

Speaker 1

Yes. Hi, Mara. As I try to Indicate in my prepared remarks, there's a number of one time items, particularly in the Q1 that impact sort of GAAP and cash somewhat differently. So clearly, the termination of the Janssen collaboration required us to record a lot of deferred revenue, both in the form of the upfront payment that we received at the that collaboration back in 2020 as well as milestones, particular one that we achieved in the Q2 of last year. So from a GAAP basis, there's a lot of revenue that's flowing through the P and L statement.

Speaker 1

That largely will clear itself up after This quarter and you'll see a more predictable run rate beginning in the Q2 and through the rest of this year. On a cash basis, we have received All cash associated with termination. We received early in the second quarter the amounts associated with Wind down of the Janssen collaboration, so that was received in the Q2. So you'll see that impacting our balance there. And then going forward again, it will be very clean.

Speaker 1

So I think most of the delta between GAAP expenses and cash The function of the Q1 activity that we outlined at the onset of this call.

Speaker 2

Thanks, Heather. Appreciate the color.

Speaker 1

And then with respect to FT-five twenty two, I mean, Obviously, there's been some really exciting clinical data with autologous CD19 targeted therapy in certain severe autoimmune diseases. We're certainly We looked at that and KOLs and investigators we've talked to have certainly looked at that data with Intrigue. We have obviously Been able to run certain preclinical models where, for instance, we have sourced peripheral blood from disease patients and we've looked at, for instance, the activity of 892-five twenty 2 plus or minus monoclonal antibody and compare that to autologous sorry, what in this case would be healthy CAR T cell therapy, donor derived healthy CAR T cell therapy in those models with respect to clearance, for instance, durable clearance, for instance, of B cell We also have some translational data from some of our studies with 596 with for instance 596 where some of those patients actually did have Functional B cell compartments at outset and we've seen durable depletion of that compartment.

Operator

Thank you. One moment for our next question. And it comes from Mike Ulz with Morgan Stanley. Please proceed.

Speaker 6

Yes. Hey, guys. Thanks for taking the question. Maybe just 1 on 5Q2, you mentioned Scott being able to start at a sort of clinically relevant dose, That's your plan, but just curious if you could see FDA pushing back on that and maybe having to start at a lower dose than planned?

Speaker 1

Yes. I mean, I think, look, we're going into this understanding that there is a Fundamentally new and potent feature within 5/22, obviously the ADR functionality, which is Obviously, we've seen we're excited about ADR because we think it allows the cell to function in the background of a competitive and allo competitive environment. But we also recognize that ADR is a potentiating signal and fundamentally does activate the cell To provide increased NK cell potency. And so we're going into this with based on what we've seen with FT516 and FT596, We certainly are proposing to start with a 3 dose schedule. Certainly, it's obviously historically different than what we have I'd go through with 596, but we are proposing starting with a 3 dose schedule.

Speaker 1

And we are proposing starting at a dose level That is of 300,000,000 cells per dose. And clearly with 516 and 596, we saw activity At 300,000,000 cells per dose, including single dose. So we think 3x300 is a reasonable place to start from a proposal perspective with the FDA.

Speaker 6

Got it. Thank you.

Operator

Thank you. One moment for our next question, please. Any comments from the line of Peter Lawson with Barclays. Please proceed.

Speaker 4

Hi. This is Shay Feeney on for Peter Lawson. Thanks for taking our question. And maybe just to start a quick clarification around 819 and 576. You mentioned maybe data in the next 12 months, but not likely, Ash.

Speaker 4

Should we be thinking this might be an investor update around year end 2023 or more likely you'd want to save it for a medical meeting in 2024? And then secondly, how should we be thinking about balancing development efforts For CAR T versus CAR NK and if there's any, how that might evolve over the coming year or so, whether there may be more increasing interest in CAR T? Thank you.

Speaker 1

Sure. No, I'm not prepared today to commit to when our clinical updates would be around 819 or 576. Obviously, we'll continue to enroll patients and as we generate what I consider to be meaningful and complete data sets that guide our path forward In a more definitive way, happy to share the data at that time. I think we will be able to provide that guidance within the next 12 months. Whether we're able to do that by the end of this year, TBD, I think it's unlikely, but certainly within the next 12 months.

Speaker 1

With respect to the balance of NK Cells and T Cells, I'm not sure we necessarily think of our portfolio that Way, whether in competing NK versus T, I think we evaluate each of our programs On an individual basis and that the value that they can bring to patients and create for the company. We absolutely are strong believers In NK cells, we think NK cells provide wonderful activity in combination and synergize with monoclonal antibody therapy. They've obviously proven very safe and effective. The combiability seems to be unmatched. And we do think an MK cell can reach into Compute community based settings in combination with standard of care immuno chemotherapy regimens.

Speaker 1

With respect to T cells, Our first T cell program is a solid tumor. It's obviously hematological malignancies and solid tumor. We've done a lot of work with NK cells and T cells in solid tumors. I think as we continue to build out our solid tumor pipeline, we will likely continue to develop and advance

Operator

Xia, does that answer your question?

Speaker 2

Yes. Thank you so much. Thank you.

Operator

Thank you. And one moment for our next question. And it comes from the line of Michael Yee with Jefferies. Please proceed.

Speaker 4

Hi, this is Jenna on for Mike. Thanks for taking our question. On 522, what gives you confidence the ADR technology could Potentially replace CyFlu. What kind of evidence have you seen preclinically to support that hypothesis? And does that mean you could potentially read those patients?

Speaker 4

Thank you.

Speaker 1

Sure. I think in the interest of time, I'm happy to send you The entirety of our ASH presentation and poster on our ADR technology, where we've done substantial work In allogeneic models studying plus or minus ADR in the background of T cell constructs With respect to their ability to functionally persist, increased activity In the background of Allogeneic models. I mean, Bob, you can even talk to it, but I'm happy to send you the post. There was an entire presentation at ASH-one ADR Technology. Yes, maybe you can follow-up after the post picture.

Speaker 4

And does that mean you could potentially re dose patients if you don't give some chemo?

Speaker 1

Yes. We already re dose patients with NK cells.

Speaker 4

Thank you.

Operator

Thank you. One moment for our next question, please. And it comes from the line of Daina Graybosch with SVB Securities. Please proceed.

Speaker 2

Great. Thank you for the questions. I wonder if you could speak to the path, both steps and timing to bring FT-five twenty two to autoimmune disease. In particular, do you anticipate any unique FDA requirements that differ from those in oncology? And with that in mind, how long till we might get some initial proof of concept data?

Speaker 1

Yes. Dane, I'm happy to talk about this in more detail. I don't think we're prepared to talk about it as a company. I gave in my Regarding remarks, I said we're happy to share more information as we generate more preclinical data both with 819 and 522. I will say, I do think, for instance, 819 as an example, we have clinical experience.

Speaker 1

We have safety data with 819 and it does have to date, a pretty favorable safety profile. So I think one of the pathways forward, as you can imagine with 819 is given there's clinical data, there's a safety package, there's a history there. I do think it could be a fairly straight line with respect to expanding the 819 into autoimmunity. With respect to 5/22, to be fair, we don't have clinical experience yet. And so it may a A pathway into our autoimmunity with 522 may require some and we may require for our own benefit, And some initial safety data before we'd be willing to pull the trigger on advancing 5/22 into patients.

Speaker 1

We do think we can generate that initial safety data as we As we mentioned, begin dosing patients with 5/22 in the second half of this year.

Speaker 2

Right. Thank you.

Operator

Sure. Thank you. One moment for our next question. And it comes from the line of Andrea Tan with Goldman Sachs. Please proceed.

Speaker 4

Hi, everyone. Thank you for taking my question. Scott or maybe Wayne, just curious if you're thinking on the approach with FT-five seventy Has changed at all given the strength of the CARTTITUDE 4 data? And then can you also remind us how your novel binder differs from that in the CARBIC D construct? And maybe just based on the early data from ASH, how de risked do you think that is?

Speaker 1

Sure. I guess, I think the obviously, the data that we've seen with Janssen autologous CAR T cell product has been quite remarkable. I'm sure We will all be wowed at EHA with the data set. I think at the end of the day, the reality is in myeloma, there will be continue to be Multiple lines of therapy that patients will experience throughout their care. I think that will continue to mark myeloma.

Speaker 1

It's Fragment, it's complex. Most patients are treated in community based settings as part of monoclonal antibody based regimens in many cases. And I don't really expect that to change. I don't think the vast majority of patients We'll be cured with autologous CAR T cell therapy. There will continue to be lots of patients treated pre and post autologous CAR T cell therapy.

Speaker 1

With respect to our binding domain, maybe I'll turn it over to Bob and you can talk a little bit about our binding domain. Sure. Similar to Vejune's binder, Our binder for BCMA has a very good specific activity in terms of high affinity in targeting the antigen BCMA. In the 2018 molecular therapy paper, it was shown that we can target cells that have the order of 100 antigens per cell as opposed to most BCMA binders where they target about 1,000 or over 1,000 antigens per cell. So we have good affinity, good off rate.

Speaker 1

So we're very excited and confident about our BCMA binder itself specifically.

Speaker 4

Great. Thanks so much.

Operator

Thank you. One moment for our next question. It comes from the line of Ben Burnett with Stifel. Please proceed.

Speaker 7

Hi, good afternoon. This is Carolina Hi, Vanessa Dentoso on for Ben Burnett. Thank you for taking our question. I was wondering, Scott, if you could provide more Color on your comment that combination regimen prolongs the functional persistence of ST-five seventy six and if you also could quantify the observed

Speaker 1

Sure. I mean, actually, I'll let Bob talk to that. It's obviously comes from translational data in the study, But I'll let Bob speak to that with respect to the impact that Dara has with respect to their patient's immune reconstitution profile And how that potentially creates a favorable environment for an extension of persistence? Sounds like Scott already answered it, So by adding the additional factors to ritumumab, we're able to suppress the reconstitution of CD38 positive cells. So this is majority of the NK cells and a subset of the T cells that activated most likely the albuminactive T cells.

Speaker 1

So inherently, the favorable condition that Scott is talking about is associated with maintaining space and cytokine availability over the During that 30 day period, adult and beyond the sites will on its own bring. So now you have the cell therapy that's in a more favorable space or environment, Which leads to enhanced persistent.

Speaker 7

Okay. Very interesting. If probably I missed these, but Have you called out any of the autoimmune diseases that you think will be suitable For, your cell therapies?

Speaker 1

We've not done that yet, no.

Speaker 7

Okay. Thank you. Much appreciated.

Speaker 1

Sorry, we've not done that publicly.

Speaker 7

Right. Yes. Okay. Thank you. Understood.

Speaker 1

Sure.

Operator

Thank you. One moment for our next question. It comes from the line of Yanan Xu with Wells Fargo. Please proceed.

Speaker 8

Thanks for taking our questions. A few questions on FT522. The IND has been submitted. I'm just wondering, has it been accepted? And if not yet, Do you anticipate any potential questions from the agency?

Speaker 8

And the other question is on the study design, Because there seems like there are a few moving parts with or without lymphodepletion, And I'm not sure whether with or without CD20 is also a perimeter. So With all that said, would this be have more like a sequential design with lymphodepletion 1st and then evaluate node input depletion or would it be more like a parallel design? And I have a couple of follow ups

Speaker 1

Okay. So again, I'll speak in terms of it's a proposed clinical schema. The proposed clinical schema, it starts at multi dose and at multi dose at 300,000,000 cells per dose. That's the proposed clinical schema. The initial patient cohort would be with CyFlu.

Speaker 1

The clearance of that cohort, that initial patient cohort would allow for 2 things. Number 1, continued dose escalation with CyFlu, as well as number 2, The opening of a second arm where that second arm would not have side fluid conditioning And that second arm could then independently operate and dose escalate. That's the proposed scheme.

Speaker 8

Very helpful. And then I'm wondering A key question or a key question of interest is how could this inform whether the ADR Worked as intended. Could you share some potential biomarkers That you might be looking at to vet that? And also when might we see the data on that? I'm assuming it's probably before we have the data for the clinical efficacy.

Speaker 8

So yes, any Thoughts on that? Thank you.

Speaker 1

So certainly not going to commit to data disclosures on FT-five twenty two, given the stage of where we are with that program at this point in time. I think Bob can Rainy can talk about sort of Biomarkers associated with that, but obviously we are comparing in this study in some respects head to head plus or minus 5:22 Plus rituximab plus or minus CyFlu. So I think there's a whole host of translational data that we will be able that will help us elucidate The impact of the ADR contract. I don't know if you will make specific comments or anything. I mean, some of the obvious biomarkers will be up PK, with CyFlu and without CyFlu, this is a very interesting study, Guy, and I'm very excited about some of the data that will be coming in.

Speaker 1

For example, with CyFlu, you will get the constitution around the 2nd week. This will have ADR in place. So we will be For a boost in activity over the course of the 30 day treatment cycle, something that we Wouldn't be possible without ADR as it constitutes. On the other side, without Cytooth, first of all, we're looking for We're going to look for response, of course, but we also will be looking for persistence in a very saturated system filled with patients and cells. So A lot of exciting things to look for, a lot of markers, let's say the 4MBB expression, CD38 expression, CD20 expression.

Speaker 1

And just tracking the cells basically persistence over the multiple dosing application over the course of the 1st 2 weeks thereafter. Only thing I would add is that from a clinical endpoint perspective, clearly, the most Definitive evidence that the ADR is working is demonstration of an objective response in patients who are treated FT-five twenty two plus rituximab without conditioning chemotherapy. I think we're all aware that sometimes data interpretation may be difficult because Fluudarabine and cephaloposphamide impart some degree of antitumor activity. If you are able to see objective responses without that, That's pretty clear evidence that the ADR is working at least in terms of facilitating antitumor activity with FT-five twenty two.

Speaker 8

Got it. Very helpful. If I may have a quick final question, I'm just a little Curious, by using 4 MBB as a CAR target, you probably also limit The for NBV expression on the NK cells themselves, on the current NK cells themselves, Would that impair NK function in any way?

Speaker 1

Yes, it's a good question. We've looked at it. Obviously, we're not we're confident there is no impairment, and we're not going to discuss it beyond that.

Speaker 8

Got it. Thank you for taking all the questions.

Operator

Thank you. And one moment for our next question. And it comes from Matthew Biegler from Oppenheimer. Please proceed.

Speaker 1

Great. Thanks, guys. This is Matt Hagen on for Matt. Thanks for squeezing us in. Just curious if you could speak to or expand on maybe why you think The ADR technology could be a superior approach versus some of the other approaches out there for mean cloaking like HLA knockouts, for example, things like that.

Speaker 1

Thanks. I'll turn that over to Bob, and I'll start by asking Bob to limit his response to at most 2 minutes because it's going for an hour. My response is very biased, so take everything from that perspective. As we've talked about it in previous calls, we obviously appreciate how other folks are trying to move forward with their Stealth Technologies, but All the other technologies in our opinion are inferior because while they avoid one situation and they embark on another For example, Class 1 deletion results in obviously missing cells and the target on the back of the cells For NK cell recognition and elimination, we also have seen that the same cells also impedes effects of function. So A lot of negative things come when we knock out HLA Class 1.

Speaker 1

But when you do so, you also have to think about missing stuff. As I mentioned, you expressed things such as HLAE. That's not a very broad approach because a lot of the NK cells have NKG2C, which is an activating receptor upon engagement with HLA E. So We're actually provoking a stronger attack. Things like CD47 in our hands do not overcome the challenge of licking cells because So alpha is not expressed on 8 K, so for us, ADR is the most comprehensive approach to replace 5 fleet Or other strategies have come up short in trying to get rid of all the parameters that SIFU brings to the table.

Speaker 1

ADR, in our opinion, is the only one They can surely be replaced nicely. And I think the other thing that I would add is obviously a lot of these knockout strategies, if you will, over expression Strategies are, I would call them sort of single mechanistic with respect to intent. They're intended to hide the cell, which again may add value, I'm not suggesting that. But the ADR technology importantly is intended to also Activate the cell. It is a potentiation signal.

Speaker 1

As you mentioned, it is a CAR construct. And we do think in the field of allogeneic cell therapy, continuing to be able to potentiate these cells It is an important ingredient to being able to boost efficacy. Got it. Very cool. Thanks guys.

Speaker 1

Sure.

Operator

Thank you. One moment for our next question. It comes from the line of Jack Allen with Baird. Please go ahead.

Speaker 6

Hi, this is Benjamin Paluch dialing in for Jack. Thanks for taking the question. On 5.22, wondering if you had any additional commentary as it relates to potential autoimmune conditions That you would be considering for development beyond BCL. We're aware of a CD19 CAR T investigator led study for treating Lupus, wondering if you had any thoughts on other studies that could provide proof of concept for a similar approach using NK cells? Thanks.

Speaker 1

Yes, we do. We have quite a few we have quite a bit of feedback from KOLs and some investigators with respect to Multiple different severe autoimmune diseases, we are not going to comment on this those on this call at this time. As I mentioned in our prepared remarks, we're happy to provide at the appropriate time

Operator

Does that answer your question, sir?

Speaker 1

Yes, all

Operator

I will turn the call back to Scott Walshko for closing remarks.

Speaker 1

Great. Thank you all for your participation in today's call. Appreciate all the big questions. Look forward to speaking to all of you soon. You're welcome.

Operator

Thank you. And this concludes today's conference call. Thank you for participating and you may now disconnect.

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Earnings Conference Call
Fate Therapeutics Q1 2023
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