Fate Therapeutics Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 26, 2024

There are 13 speakers on the call.

Operator

Welcome to the Fate Therapeutics 4th 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 Fate's website atfabetetherapeutics.com. As a reminder, today's call is being recorded. I would now like to introduce Scott Washko, President and CEO of Fate Therapeutics.

Speaker 1

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics Q4 2023 financial results call. Shortly after 4 pm Eastern Time today, we issued a press release with these results, which can be found on the Investors section of our website under Press Releases. In addition, our Form 10 ks for the year ended December 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.

Speaker 1

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 ks for the year ended December 31, 2023 that was filed with the SEC today. Undue reliance should not be placed on forward looking statements, which speak only as of the date they are made as the facts and circumstances underlying these forward looking statements may change. Except as required by law, Fate Therapeutics disclaims any obligation to update these forward looking statements to reflect future information, events or circumstances. Joining me on today's call are Ed Dulach, our Chief Financial Officer and Doctor.

Speaker 1

Bob Valimer, our Chief Research and Development Officer. During today's discussion, we will highlight clinical milestones that we are poised to achieve in 2024 across our off the shelf iPSC derived CAR NK cell and CAR T cell programs. In addition, we will discuss our ongoing initiatives to continue the clinical expansion of our iPSC product platform into autoimmunity. Finally, we will review our financial position, where our operating discipline and strong cash balance have created the opportunity to continue our investment in developing a deep pipeline of highly differentiated preclinical and clinical product candidates with the potential to bring significant therapeutic benefit to patients with cancer and autoimmune diseases. Beginning with FT819, our off the shelf CD19 targeted CAR T cell program.

Speaker 1

I am pleased to announce that the company has been awarded $7,900,000 by the California Institute of Regenerative Medicine to support the conduct of our FT819 Phase 1 clinical trial for the treatment of patients with moderate to severe SLE. In its review of our application, SERM Scientific Working Group unanimously scored our application as having exceptional merit. Notably, FT819 was recognized as offering a novel therapeutic approach for the treatment of SLE with its ready to use supply, which can be administered to patients without apheresis and without premature discontinuation of immunosuppressive therapy. We are currently conducting study start up activities at multiple U. S.

Speaker 1

Clinical sites with patient enrollment set to commence at the first dose level of 360,000,000 cells. The Phase 1 study for the treatment of SLE is designed to evaluate safety, pharmacokinetics and anti B cell activity of a single dose of FT819 administered following a standard 3 day chemotherapy conditioning regimen. And we plan to share initial clinical data from the study in 2024. We also continue to enroll patients in our FT819 Phase I clinical trial for the treatment of relapsedrefractory B cell lymphoma. This landmark study is the first ever clinical investigation of a T cell product candidate manufactured from a clonal master iPSC line.

Speaker 1

We are currently enrolling patients in single dose treatment cohorts at 540,000,000 cells and at 1,000,000,000 cells using a standard 3 day chemotherapy conditioning regimen. Clinical data previously presented by the company from the FT819 Phase 1 study in relapsedrefractory B cell lymphoma showed a favorable safety profile and antitumor activity. Of the first 11 patients treated with a single dose of FT819 at up to 360,000,000 cells, we observed no dose limiting toxicities, no events of any grade of immune effector cell associated neurotoxicity syndrome and mild cytokine release syndrome in only 2 patients. We observed antitumor activity in heavily pretreated patients, including 3 complete responses. And we observed translational data consistent with known T cell biology, with CAR T cell expansion that peaked in the peripheral blood between days 811 and deep suppression of CD19 positive B cells in the peripheral blood through day 30.

Speaker 1

At the American Society of Gene and Cell Therapy Conference to be held in May, we expect to share new data from our FT819 Phase 1 clinical trial for the treatment of relapsedrefractory B cell lymphoma at these higher dose cohorts, as well as new clinical translational data that support the potential clinical benefit of FT819 for the treatment of B cell mediated autoimmune diseases. Turning to our solid tumor clinical initiatives. I am pleased to announce that under our collaboration with Ono Pharmaceutical, we have now initiated our Phase 1 clinical trial of FT8 25 for the treatment of advanced solid tumors. Patient enrollment is currently ongoing at multiple clinical sites at the first dose level of 100,000,000 cells. We believe FTA-twenty five represents an exciting new frontier in the field of cell based cancer immunotherapy.

Speaker 1

The multiplex engineered iPS drive CAR T cell program incorporates a constellation of anti tumor mechanisms that are designed to harness the potential of both innate and adaptive immunity and to overcome the unique challenges in treating solid tumors. These novel synthetic controls include a CXCR2 receptor to promote self trafficking, a chimeric TGF beta receptor to redirect immunosuppressive signals in the tumor microenvironment, a high affinity non cleavable CD16 receptor to promote antibody dependent cellular cytotoxicity and a novel cancer specific HER2 targeted antigen binding domain, which has exhibited unique and differentiated activity from that of trastuzumab. In preclinical models, FTA25 has exhibited similar potency with greater specificity toward HER2 expressing malignant cells compared to trastuzumab and has shown robust anti tumor activity in vitro against HER2 low expressing tumor cells. The STA-two fifty five Phase 1 study is designed to assess the safety, pharmacokinetics and activity as monotherapy and in combination with monoclonal antibody therapy in patients with advanced solid tumors, including cancers where HER2 targeted therapies are approved as well as cancers where HER2 targeting has recently shown promising clinical activity such as endometrial, ovarian and cervical cancers. The dose escalation schema for the Phase 1 study includes 2 treatment regimens.

Speaker 1

Regimen A or the monotherapy arm consists of a standard 3 day preconditioning regimen and a single dose of FT-eight twenty five as monotherapy. Eligibility includes patients with advanced HER2 expressing solid tumors. Regimen B or the combination arm consists of a standard 3 day preconditioning regimen and a single dose of FTA-twenty five in combination with cetuximab, where we seek to additionally exploit innate immunity by leveraging the product candidates high affinity non cleavable CD16 receptor to target EGFR expressed on solid tumor cells. Enrollment into regimen B will commence at the first dose level of 100,000,000 cells upon clearance of dose limiting toxicities at this first dose level of regimen A. Turning to our NK cell programs.

Speaker 1

FT-five twenty two is our off the shelf CD19 targeted CAR NK cell program and is the 1st product candidate emerging from our iPSC product platform that incorporates our proprietary alloimmune defense receptor technology, which is designed to reduce or eliminate the need for administration of intense chemotherapy conditioning to patients receiving cell therapies. Today, conditioning patients with intense chemotherapy is a necessary component of the treatment course for cell based cancer immunotherapy, including for both autologous and allogeneic cell therapies. Conditioning chemotherapy induces toxicities, limits patient access and prevents combination with standard of care immunotherapies widely used in the community based settings. FT-five twenty two incorporates a synthetic engineered receptor targeting 4 1BB expressed on alloreactive immune cells. In preclinical studies, we have shown that the engagement of ADR armed CAR NK cells with allo reactive immune cells mitigated rejection, promoted NK cell proliferation and increased anti tumor activity.

Speaker 1

These preclinical data suggest that 5/22 has the potential to drive clinical responses without administration of intense conditioning chemotherapy to patients. Our ongoing multicenter Phase 1 clinical trial of FT-five twenty two in patients with relapsedrefractory B cell lymphoma includes 2 regimens. Regimen A or the conditioning arm, which consists of 3 days of standard conditioning chemotherapy, one dose of rituximab and 3 doses of FT-five twenty two. Regimen B or the no conditioning arm consists of one dose of rituximab and 3 doses of FT-five twenty two without conditioning chemotherapy. Enrollment into regimen A is ongoing at the first dose level of 300,000,000 cells per dose and upon clearance of dose limiting toxicities at this first dose level, enrollment into regimen B or the no conditioning arm will commence at this first dose level of 300,000,000 cells.

Speaker 1

Each regimen may proceed with dose escalation independently. We believe we have the opportunity to establish clinical proof of concept for our ADR technology and for our FT-five twenty two program without conditioning chemotherapy early in dose escalation. We will look to provide initial clinical data from our FT-five twenty two program in the second half of twenty twenty four. We also continue to enroll patients in our multicenter Phase I clinical trial of FT596, our BCMA targeted CAR NK cell product candidate for the treatment of relapsedrefractorymultiple myeloma. The study is currently accruing patients in 3 dose treatment cohorts as monotherapy as well as in combination with CD38 targeted monoclonal antibody.

Speaker 1

At 1,000,000,000 cells per dose with no dose limiting toxicities and no reports of any grade of CRS or eye cancer. The study is currently enrolling patients at 2,500,000,000 cells per dose. Any further clinical development of FT596 for the treatment of multiple myeloma will be determined by the company based on safety and activity at these higher dose levels. As we advance these clinical programs, we remain committed to pursuing new therapeutic opportunities in autoimmunity or early clinical data with autologous CD19 targeted CAR T cell therapy has shown profound clinical benefit. We believe there is very strong value for our iPSC product platform and off the shelf iPSC derived cellular immunotherapies in autoimmunity, where a relatively short lived cell can deeply eradicate an aberrant B cell population and enable rapid reconstitution of a healthy immune system and where safety, patient convenience and accessibility cost and scale will be key differentiating factors.

Speaker 1

We believe our FT819 CAR T cell program and our FT522 CAR NK cell program have the potential to durably deplete a patient's pathogenic immune cells, drive immune reset and meaningfully improve quality of life across a wide spectrum of autoimmune diseases. As we look forward into 2024, we expect to expand our clinical investigation of FT819 in autoimmunity to include treatment of additional diseases beyond SLE. Additionally, we also plan to submit an investigational new drug application for FT-five twenty two in autoimmunity, where we think the potential to reduce chemotherapy conditioning and to target and deplete B cells, plasma cells and auto reactive T cells offers a highly differentiated therapeutic profile across a broad range of autoimmune diseases. I would now like to turn the call over to Ed to review our financial results for the Q4.

Speaker 2

Thank you, Scott, and good afternoon. Fate Therapeutics is in a solid financial position to advance our pipeline. Our cash, cash equivalents and investments at the end of the 4th quarter were approximately $316,000,000 In the 4th quarter, our revenue declined to $1,700,000 compared to $44,400,000 for the same period last year. As described previously, our revenue is now derived exclusively from our collaboration with Ono Pharmaceutical and specifically reflects research funding associated with the development of a second product candidate against an undisclosed target in solid tumors. Research and development expenses for the quarter decreased more than 60% from the same period last year to $31,800,000 The decline in our R and D expenses was attributable primarily to a decrease in salaries and benefits, including share based compensation expense following the company's restructuring in the Q1 of 2023 and from lower clinical trial costs and lower demand for R and D materials and equipment.

Speaker 2

We also benefited from $2,000,000 of contra R and D expense in the quarter in connection with our clinical development of FT-eight twenty five with Ono. As a reminder, after opting into a co development and co commercialization arrangement for FT-eight twenty five in the U. S. And Europe with Ono in the Q4 of 2022, we account for that program's reimbursable expenses as an offset within our research and development costs. General and administrative expenses for the 4th quarter decreased by 17% from the same period last year to $17,900,000 The decline in our G and A expenses was attributable primarily to a decrease in salaries and benefits, including share based compensation expense.

Speaker 2

Total operating expenses for the 4th quarter declined 54% from the same period last year to $49,800,000 which includes $9,500,000 in non cash share based compensation expense. 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 milestones set forth in our amended license agreement with Memorial Sloan Kettering Cancer Center, which triggered a first milestone payment to MSK in 2021. 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 $700,000 on a quarterly basis. In the Q4, we recorded a non cash $645,000 non operating loss associated with the change in fair value.

Speaker 2

Our net loss for the Q4 was $44,100,000 or $0.45 per share. Finally, in what could be considered a challenging year in 2023 for the company, I wanted to recognize the resilience and collective efforts of our employees. Our cross functional teams were able to respond to challenges, advance key clinical programs and discover next generation technologies and did so with efficiency. Our full year GAAP operating expenses of $254,000,000 compared favorably to our guidance range of 265 $1,000,000 to $285,000,000 enabling us to finish the year with more than $300,000,000 on our balance sheet. I would now like to open the call for questions.

Operator

Our first question comes from the line of Michael Yee of Jefferies. Your question please, Michael.

Speaker 3

Hey, guys. Good afternoon and thank you for all the update. I'm in your backyard in San Diego. Quick question for you on 8/19 and your ongoing lupus program. Can you affirm whether you're about to treat a patient, will treat a patient and whether you would have data on some of those patients by the end of the year or around there?

Speaker 3

And is there any doubt in your mind, Scott, that those results should basically replicate autologous and how you expect or what you would expect there to differentiate? Thank you.

Speaker 1

Sure. On the first point with respect to where exactly are we in this study, so we are working today with FT819 in the lupus study with multiple different sites on start study startup. And I think we are well positioned to treat the first patient in the coming weeks based on interactions that we've had with multiple sites. As a company, we are committed to providing a clinical update with FT819 in lupus. While I certainly am not in the business of predicting patient outcomes for novel therapies especially.

Speaker 1

I think we are encouraged based on what we've seen with respect to 819 and its resemblance to autologous CAR T cell therapy at least with respect to how the product performs in patients from a translational perspective. As we've sort of highlighted in the past with FT819, we've seen a really clean safety profile through multiple dose levels. We have seen what you would consider to be a traditional CAR T cell expansion where we've seen cells peak in the peripheral blood between days 811. We have seen persistence of a single dose of FT819 stretching out into the 2nd and third week, day 15. And we've seen B cell suppression that has extended out throughout the 1st 30 day cycle.

Speaker 1

So with respect to how 819 is behaving in patients in vivo, we're really excited about that and think we have the potential to replicate what's been seen in a relatively small number of patients with autologous CAR T cell therapy.

Speaker 3

Thank you guys.

Operator

Thank you. Our next question comes from the line of Yigal Nochomovitz of Citigroup. Your question please, Yigal.

Speaker 4

Yes. Hi, Scott and team. Thank you for taking the question. What evidence do you have so far with respect to 819, not only clearing the plasma cells, but also getting into the tissue component, specifically the germinal centers where there are tissue resident B cells that perhaps may need to be wiped out as well. How do the how well do the iPSCs fare there in terms of trafficking into that component?

Speaker 4

Thanks.

Speaker 1

Yes. I think while we can't necessarily speak to all secondary and tertiary tissues, I think it's important on this point to note that FT819 clearly has reached based on responses that we've generated in the hematologic malignancy setting, specifically B cell lymphoma. We certainly have been able to reach tissues that are harboring CD19 positive cancer cells. So we've absolutely seen, just based on responses and CT scans, we've seen FT819 traffic out of the blood, reach tumor cells that are outside of the blood and clear pockets of CD19 positive tumors. And so based on that, while we can't be certain that based on clinical data to date in oncology that FT819 is reaching some of these some all of the tissues that may be harboring bad acting B cells.

Speaker 1

We are enthused by what we've seen in the oncology studying with FT819's ability to traffic outside of the blood and reach secondary and tertiary tissue where tumor cells have been located.

Speaker 4

Okay, thanks. And then the other question is just sort of more strategic. I believe the IND for lupus has been open for about half a year, maybe 6 or 7 months. And as you know, it's obviously a super competitive space. In fact, there was one other company that decided to not pursue their CD19 in SLE.

Speaker 4

I'm just wondering, just sticking with it, I'm just wondering to what extent you're going to look at other indications for ATN-nineteen and whether you would accelerate those plans given the competitive nature of this lupus space? Yes, fair question. Totally committed to FT819 in autoimmunity.

Speaker 1

I think one of the advantages that we have, compared to others is that keep in mind, we did have we do have a study up and running obviously with FT819 in oncology. So we've been able to work successfully with several different oncology centers that are running FT819 and partner essentially the oncologist with the rheumatologist to gain momentum in starting the study. So we do think we are in a unique position given that we have a tremendous amount of oncology experience with FT819. We have relationships with key PIs on the oncology side and that has enabled us to, I think, successfully partner with the rheumatologists. We also keep in mind, I mean, one of the great things about an off the shelf cell therapy is that we have product in inventory.

Speaker 1

And so we are once we get these studies up and running, we don't have manufacturing risk. We have product that's already been manufactured and can rapidly begin to intervene and treat patients, which we're super excited about. I think thirdly, absolutely acknowledging very competitive space. And as I said in my prepared remarks, absolutely looking to expand the IND of 819 into additional indications in autoimmunity.

Speaker 4

And just one more super quick on the dose for autoimmune. Is it how did you pick the dose? Is it you going with the same as the oncology or did you make any adjustment?

Speaker 1

So we start we've gone through dose escalation and it's one of the reasons we continue to do a dose escalation on the oncology side is because we do think in the autoimmunity space, safety is absolutely going to be at a premium. At the time that we had submitted the IND to the FDA, we had cleared 360,000,000 cells at that dose level in oncology. We have seen throughout the study in B cell lymphoma what appears to be dose dependent expansion of FT819, including reaching peaks of expansion that continue to increase with dose level based on the safety profile that we've seen to date, which has been very clean, we're comfortable starting at 360,000,000 cells. We clearly have the ability to continue to dose escalate in the autoimmunity study as well as dose deescalate if that were necessary.

Speaker 4

Okay. Thanks Scott. Sure.

Operator

Thank you. Our next question comes from the line of Tara Bancroft of TD Cowen. Please go ahead, Tara.

Speaker 5

Hi. Good afternoon, guys. So I was wondering if you could tell us more about what it would take for you to choose FT-eight nineteen versus 522 for autoimmune disorders going forward or if you are planning on pursuing both for the long term? Thanks.

Speaker 1

As best we sit here today and as much as I can sort of speculate on the long term, I think we plan on pursuing both. I think one of the things we're really excited about with respect to 5/22 is the fact that that cell has been engineered and includes ADR technology. I think, while we're all excited about autoimmunity, the reality is that patients today in autoimmunity, at least to date to my knowledge, have all been treated with intense chemotherapy conditioning. I think we might all agree that that's probably not the right way to maximize reach and treatment of patients with autoimmune diseases. And so one of the things we're really excited about is 5/22 is understanding whether or not we can deliver, for instance, a cell therapy without chemotherapy conditioning.

Speaker 1

I think that would be a significant breakthrough in the field, especially in thinking about treating patients with autoimmunity, essentially being able to decouple the requirement to administer intense chemotherapy conditioning to a patient and being able to deliver a cell therapy that could be delivered off the shelf and could achieve the same level or similar levels of B cell reset without the conditioning. So 522, we're super excited about that and the ADR technology. I think the other element that we're excited about with respect to 5 22, it's obviously an NK cell. There are regimens throughout autoimmunity where monoclonal antibodies are utilized. It's a CD19 targeted program.

Speaker 1

We have the potential to combine with monoclonal antibody therapy, including monoclonal antibodies that have the ability to target more of a plasma cell. So reaching into the early B cells through CD19 as well as stretching into the plasma cell compartment potentially in combination with a monoclonal antibody. I think it's potentially very differentiating for 522. So we're excited about both product candidates.

Speaker 5

All right, great. Thank you. I agree. 5/22 is very exciting. Thanks guys.

Speaker 4

Thanks.

Operator

Thank you. Our next question comes from the line of Tazeen Ahmad of Bank of America.

Speaker 6

Hi, guys. Thanks for taking my questions. Just some simple ones on timing, and maybe just a little bit on bar for efficacy. So for 576 in multiple myeloma, what level of data are you expecting to generate? And what level of efficacy should we be looking for there?

Speaker 6

And then I have a follow-up.

Speaker 1

Sure. So obviously the multiple myeloma space is very crowded and we've seen remarkable results with the autologous programs. I think from our perspective, as we think about 576, I think 576 needs to have a therapeutic profile, which is similar to what's been achieved with T cell engagers. So we are talking about high response rates, and certainly complete response rates, that are significant. So for us to continue the program with 576, I think it's really important that we see relatively high response rates, including complete response rates.

Speaker 1

The durability profile will obviously take time to play out, but that's how we're thinking about 576 currently today.

Speaker 6

Okay. And just to give a little bit more of a bracket, what type of response rates should we be thinking of in a range?

Speaker 1

Yes. I think what we've seen with the T cell engagers is the T cell engagers response rates are probably north of 60% with respect to ORR and CR rates that are in the 40% range.

Speaker 6

Okay, got it. And then

Speaker 1

Durability is obviously important too as T cell engagers like cell therapies have seen longer term progression for your survival that's certainly over a year.

Speaker 6

Okay. And then quickly, when should we expect to see data for FT222 in relapsed and refractory cells?

Speaker 1

I'm sorry, did you see FT522? Yes. Yes, FT-five twenty two, I think we have the potential with 522 to show early proof of concept with the monotherapy arm or sorry, sorry, in the arm without conditioning chemotherapy. So the way the study works is the first three patients are treated with CyFlu. In the 5/22 study, this is at a dose of 3x300000000 cells.

Speaker 1

As soon as we clear that dose level, 2 things can happen. We can dose escalate the CyFlu arm to 3x900000000 cells. Importantly though, we also open the no conditioning arm. And so patient 4, for example, could be in the no conditioning arm. That would open at 3x300000000 cells.

Speaker 1

So we do believe that in short order we have the potential to show proof of concept with 5/22 early clinical proof of concept with 5/22 without conditioning chemotherapy. And we're looking to provide a data update in the second half of twenty twenty four.

Speaker 6

And will you say that you've confirmed no DLTs at the regimen A low dose before you give us the update?

Speaker 1

I think we'll probably give an update as we progress the study.

Speaker 7

Okay. Thank you.

Speaker 1

Sure.

Operator

Thank you. Our next question comes from the line of Taina Graybosch of Leerink Partners.

Speaker 8

Hi, thanks for the question. I wanted in the intent of understanding when you and probably others will have a more substantial number of lupus treated patients. I wonder if you can talk through the challenges you faced in this last 6 months specifically getting these sites up and running? You already spoke about rheumatologists collaborating with oncologists. And are there any challenges that you expect to continue that will make just enrolling these lupus studies difficult or any challenges that you think are more of a study startup challenge and you already see them overcoming?

Speaker 8

And then maybe to sort of sum it up, like when can we see a cohort in phase with 819 or 522 of something like 15 or 20 patients?

Speaker 1

Yes. So, look, I think all of us need to take a step back and recognize, right? So most autoimmunity patients and most physicians that treat patients in the autoimmunity field are not familiar with cell therapies. So as I mentioned, I think an advantage for us in study startup has been, although certainly there are challenges in pioneering a brand new field and I mean that's just generally for the community here that's advancing cell therapies. We're all pioneering a brand new field in autoimmunity.

Speaker 1

And yes, there's going to be challenges in study startup that we're all going to face and need to overcome. I think one of the advantages for us has been the fact that we are an oncology company. We do have good relationships with multiple centers and PIs that on the oncology side that have been conducting the 8/19 study and they have been advocates and ambassadors for us in partnering with their rheumatologist cohorts. I think while it's always prudent to be cautious, we are dealing with CAR T cell therapies. There are patient staggers that are mandated by the FDA.

Speaker 1

So all of us, the reality is, are only going to be able to go so fast in enrolling patients and that includes based on the way I think most of the protocols are structured in autoimmunity that involve 28 day patient staggers oftentimes. So I think we're all excited about the potential in autoimmunity. We're all moving forward at a brisk pace. There are certainly at least with respect to autologous CAR T cell therapies, some safety concerns that have been raised generally in the field by the FDA. You're well aware of what's occurred recently with respect to the concern specifically around T cell malignancies.

Speaker 1

We don't think on the iPS derived cell therapy side, we have that same risk profile that would come from an autologous program given the fact that we engineer a single iPSC, fully characterize it and can understand exactly fully characterize all the integrity of engineering. So look, we're committed to providing an update on the 819 study in autoimmunity this year. But I think we're all going to have to be patient as the field begins to take off. We're all pioneering a brand new field.

Speaker 8

Yes. Maybe one follow-up. Once you get a center up and running and have rheumatologists on board and ready to enroll patients, do the enrollment criteria, do they set a new barrier for finding the right patients? And how do you anticipate doing that?

Speaker 1

I think the enrollment look, there are unfortunately, I mean, we're talking about in many instances where these autoimmune diseases are pretty severe and have had devastating consequences on patients' lives. And so I do think there is the enrollment criteria once up and running. I think the enrollment criteria is supportive of enrolling patients. The brisk of it the sort of the pace of enrollment though, to be clear, is governed a bit by these 28 day staggers that are often mandated by the FDA.

Speaker 9

Got it. Okay. Thanks, Scott.

Operator

Sure. Thank you. Our next question comes from the line of Mike Ulz of Morgan Stanley. Your question please, Mike.

Speaker 10

Hey, guys. Thanks for taking the question. Maybe just a follow-up on 5/22, Scott. So you mentioned sharing the data potentially in the second half of this year. Just curious if you would expect to have Cohort B data at that time as well, which is without conditioning?

Speaker 10

And then maybe just secondly, assuming ADR technology is validated, is that something you could easily add to 8/19 or are there notable challenges there? Thank you.

Speaker 1

Sure. Yes, the data update that we're looking to provide in the second half of twenty twenty four would certainly include cohort of patients or cohorts of patients with no side flu conditioning. Obviously, we think that is a significant milestone for the field of cell therapy being able to deliver a cell therapy and allow it to thrive without conditioning chemotherapy. So super excited about that, pushing on that very hard and favoring actually regimen B in terms of thinking about enrollment and the implications for that as we think about our platform and how to reach patients without conditioning. I think as we look at 5/22, building ADR technology into our platform, while we have not spent a lot of time talking about it publicly, we have ADR technology embedded into multiple different iPS cell lines, including on the T cell side.

Speaker 10

Got it. Thank you.

Speaker 11

Yes.

Operator

Thank you. Our next question comes from the line of Peter Lawson of Barclays.

Speaker 12

Great. Thanks so much. Just a follow-up on 522 in autoimmune disorders, kind of as firstly what autoimmune disorders you're thinking about, well that could also include SLE and would you start without conditioning with 522?

Speaker 1

So with 522, we're not going to get into the specific strategy that we're pursuing for the IND. But with respect to 5/22, we do think and are excited about a broader set of B cell mediated autoimmune diseases that certainly could include SLE. We're not by any means ruling SLE out. But there's certainly a whole host of autoimmune diseases that are B cell mediated, including autoimmune diseases where the plasma cell compartment may play a more significant role and that we could potentially reach in combination with monoclonal antibody therapy. I suspect sitting here today, we are absolutely going to be very excited about exploring FT-five twenty two in a sort of a broad set of potential indications.

Speaker 1

And I think while I think we will learn quite a bit from the oncology study, it won't surprise me if we file the initial IND where there is multiple different conditioning regimens that we could look at. One of them may be CyFlu given the precedent that exists. But there are certainly other regimens that we can think about adding on to that exist in autoimmunity. I think the real opportunity at the end of the day is to reach autoimmunity patients, think about what regimens they're receiving today in their daily lives and whether or not adding a cell therapy without CyFlu could substantially change their lives by promoting an immune reset.

Speaker 12

Got you. Thank you. And then quick question for Ed, just on kind of any guidance around SG and A and R and D just considering it declined significantly year over year. Just curious what the run rate is for the 24?

Speaker 2

Yes, Peter, we're not providing guidance today. But I think if you look back at the last few quarters and I tend to want to look at this on a cash operating expense basis. But if you look at cash operating expenses in the Q3, I think they were about $37,000,000 a very similar number about $35,000,000 in the 4th quarter. I think that's a reasonable baseline to carry into at least the first half of twenty twenty four. And as the prepared remarks have indicated, we obviously have essentially 5 ongoing programs, 819 in oncology, 819 emerging in autoimmunity, 522, 825 across a couple of different indications.

Speaker 2

So the second half burn rate, I think, is a good indicator of what at least the first half of twenty twenty four. But as we have indicated, we are at the higher dose levels of both FT596 in myeloma and FT819 in oncology and we'll have a go, no go decision sometime later this year. So there may be some puts and takes to the extent our data allows us to continue related development. We'll provide the appropriate guidance at that time. But for the time being that $35,000,000 to $40,000,000 per quarter is a reasonable run rate to assume in the first half of twenty twenty four.

Speaker 12

Great. Thanks so much.

Operator

Thank you. Our next question comes from the line of Ben Burnett of Stifel. Your question please, Ben.

Speaker 9

Hi, good afternoon. This is Carolina Albanese on for Ben Burnett. Thank you for taking our question. For 8/19 in autoimmune disease, there is this aspect that autoimmune disease patients have a stronger immune system than cancer patients, which may drive a more energetic rejection of the allogeneic CAR T cells. What's your perspective on this?

Speaker 9

And do you think a more intense interdepletion regimen may end up being required at least for 8/19 to ensure that a sufficient B cell depletion can occur?

Speaker 1

Yes. Based on the data that we've seen on the oncology side, I think we're very comfortable. And as you probably are aware, we've continued with the standard CyFlu conditioning regimen that's been used in treating patients with autoimmunity as well as the conditioning regimen that's used with autologous CAR T cell therapy. Like I mentioned, based on the translational data that we have seen, we've seen FT819 behave similarly to their autologous counterparts. We've seen dose dependent expansion.

Speaker 1

We've seen peaks in expansion that are similar to your autologous counterparts. We've seen persistence that's lasted for several weeks with respect to the product candidate. And we've seen B cell suppression that extends out to at least 30 days. So given all that, I think we're really comfortable with the profile that we've seen with FT819 on oncology and we're very excited about its potential in autoimmunity where at least the data that exists in patients treated to date, primarily out of the group in Germany, has suggested that a short lived cell, in their case an autologous program, but that an autologous cell is acting very rapidly. The kinetics of depletion are occurring quickly.

Speaker 1

And that is actually important at some level for the cell to ultimately clear the patient as opposed to being long lived so that the B cell compartment can come back and trigger the immune reset. So in the setting of autoimmunity, we believe based on the autologous data that's been generated to date that a short lived cell can have profound impact,

Speaker 2

Understood. Thank you.

Speaker 1

Thank you. Thank you. Thank you. Thank you. Thank you.

Speaker 1

Thank you. Thank you.

Speaker 9

Understood. Thank you.

Operator

Thank you. Our next question please standby for next question. Our next question comes from the line of Andrea Tan of Goldman Sachs. Your question please, Andrea.

Speaker 7

Hi. This is Talani Usman on for Andrea Tan. Thank you for taking our questions. Firstly, could you please answer the considerations for FT819 in B cell malignancies? And then for 576 in multiple myeloma and the profile, you're looking to see at the higher doses to warrant further development relative to the autologous and allogeneic CAR T therapies?

Speaker 1

Yes. I think I touched on that for multiple myeloma already. I think the profile for an allogeneic cell therapy where products are approved needs to be similar to the value proposition therapeutic value proposition that's provided by engagers. So in lymphoma side and as well as in the myeloma side, I think the appropriate benchmark is looking at the T cell engagers that are approved and being developed.

Speaker 7

Perfect. Thank you. And then secondly for SEK522, just how are you thinking about the results in efficacy that you'd be willing to give up to achieve better safety and tolerability through the exclusion of the chemotherapy conditioning?

Speaker 1

I think that's something we're absolutely going to look at. I mean, I think the reality of this is as we look at the autoimmunity space, people can have an opinion on this, but I don't think the vast majority of autoimmunity patients are going to be treated or reached at specialized academic centers that treat oncology patients. So I think it's going to be absolutely critical in the field of autoimmunity that we reach patients where they live and breathe in the community and that these patients are treated without intense chemotherapy conditioning. And I think that's going to be critical for the autoimmunity space.

Speaker 7

Thank you.

Operator

Thank you. Our next question comes from the line of Yanan Zhu of Wells Fargo Securities. Your question please, Yanan.

Speaker 11

Great. Thanks for taking our questions. The first I was wondering, this is a follow-up to the earlier question about tissue specificity. I was just wondering whether treating SLE would require the CAR T cells to traffic to additional tissues compared with treating B cell malignancies? Do you have any thoughts on that?

Speaker 11

And whether iPSCs derived T cells could also traffic to those additional tissue if there is such tissue? And my other question is about the patient population you plan to enroll in SLE study? I was wondering whether these will be patients refractory to biologics and other treatments or could milder patients be enrolled as well? And lastly, I was just wondering if there any competitive dynamic for patient enrollment, just given how many clinical trials will be ongoing at the same time in SLE. Do you think it could be there could be some competition for enrolling patients?

Speaker 11

Thank you.

Speaker 1

Yes. So just let's start with patients, the patients to be treated. Yes. So these are patients with active SLE moderate to severe disease, will have had to have multiple lines of therapy already. So I think the criteria of patients that we're looking to enroll, I think, is similar to those that have been treated to date, out of the group in Germany with the autologous counterparts.

Speaker 1

So this moderate to severe active disease. I think certainly it's a competitive landscape. There are over 10 autologous CAR T cell programs that are beginning to move into autoimmunity. I think an off the shelf cell therapy program, even if at the same center as an autologous counterpart, certainly has some unique and distinct advantages. We don't have to leukapheres a patient.

Speaker 1

Certainly, we don't have to take a patient prematurely off immunosuppressive therapy. We have product that is in inventory and can rapidly sort of intervene and treat patients. As we begin to show continue to show safety and activity, I think with our off the shelf program, there is the potential to reach patients outside of the academic medical centers more into the community. You've certainly seen us do that with NK Cells where our protocols do not require hospitalization, patients can be treated outpatient in an infusion center and we can reach into the community. I think ultimately that will be a requirement to treat patients in autoimmunity and serve those patients well.

Speaker 1

And so we're excited about sort of the differentiation the differentiated profile of an off the shelf cell therapy, including indirect comparison to their autologous counterparts, which I think provide some there's some real constraints on how an autologous cell can be delivered to patients today with autoimmunity.

Speaker 11

Very helpful. And the question about whether SLE might involve additional tissue specificity?

Speaker 1

Yes. So without a doubt, I think there are bad acting B cells that are sitting within secondary and tertiary tissue. I guess my comment on that, I made comments about that earlier with respect to certainly we've seen from a clinical setting 819 rich tumor cells that are in the secondary tertiary tissues and deplete CD19 positive tumor cells. I'd also note that we've done a significant amount of work with CAR NK versus CAR T cells preclinically. And we're very confident in essentially the homing and trafficking and infiltration potential of our T cell programs, iPS derived CAR T cell programs.

Speaker 1

And again, that's based on some significant models we've done on the solid tumor side.

Speaker 11

Got it. Thanks for the answers. Sure.

Operator

Thank you. Our next question comes from the line of Gil Blum of Needham and Company. Please go ahead, Gil.

Speaker 10

Yes. Hi. This is Ethan on for Gil. Thank you for taking our questions. I'm just wondering in your view if there are any clinical results, let's say, in B cell lymphoma that would potentially gate FT-five twenty two from moving forward into autoimmune indications?

Speaker 10

And then, for second question, I might have just missed this, but are you still expecting to have data for FT596 in multiple myeloma in the first half of this year? Thank you. Yes.

Speaker 1

For 576, we'll give an update when we complete the dose cohort at 2,500,000,000 cells times 3 doses. And so we're looking at both regimen A as a monotherapy and regimen B in combination with CD38 targeted mAb. When we complete that cohort, with respect to responses, we'll give an update on the 1,000,000,000 cell cohort as well as the 2 point 5,000,000,000 cell cohort. I suspect that'll be sometime in the middle of this year, based on where we are currently in that study. As it relates to NK cells moving into autoimmunity or FT-five twenty two specifically, Certainly excited by the potential for NK cells in autoimmunity.

Speaker 1

As I sort of mentioned before, we've seen, including with multi dose regimens, super clean safety profiles across our entire class of NK cell therapies, whether that be in hematologic malignancies or solid tumors. We've been able to deliver NK cells in the outpatient setting, in the community. And so I think that bodes very well for our potential to differentiate and reach patients with autoimmunity outside of the academic medical centers.

Speaker 12

Thank you.

Operator

Thank you. I would now like to turn the conference back to Scott Walshko for closing remarks. Sir?

Speaker 1

Thank you. And thank you everyone for all your great questions today. Look forward to seeing you in the near future. Be well.

Operator

This concludes today's conference call. Thank you for participating.

Powered by Quartr
Earnings Conference Call
Fate Therapeutics Q4 2023
00:00 / 00:00