Fate Therapeutics Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 9, 2024

There are 10 speakers on the call.

Operator

Welcome to the Fate Therapeutics First Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen only mode. This call is being webcast live on the Investors section of Fate's website at fatetherapeutics.com. As a reminder, today's call is also being recorded. I would now like to turn I would now like to introduce Scott Walsko, President and CEO of Fate Therapeutics.

Operator

Please go ahead.

Speaker 1

Thank you. Good afternoon, and thanks, everyone, for joining us for the Fate Therapeutics' Q1 2024 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, 2024 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, 2024 that was filed with the SEC today. Undue reliance should not be placed on forward looking statements, which speak only as of the date they are made as facts and circumstances underlying these forward looking statements may change.

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 Ed Dulach, our Chief Financial Officer and Doctor. Bob Balimer, our Chief Research and Development Officer. We will focus today's remarks on the data presented today at the American Society of Gene and Cell Therapy Annual Meeting for our off the shelf FT819 CAR T cell and FT522 CAR NK cell programs and discuss key program initiatives that we are pursuing to achieve therapeutic differentiation and improve patient outcomes. In addition, we will highlight clinical readouts that we are projecting to achieve in 2024 across our iPSC product pipeline for the treatment of cancer and autoimmune diseases.

Speaker 1

Finally, we will review our financial position, where our Q1 capital raise and strong cash balance have created operating runway into the second half of twenty twenty six. Beginning with FT819, our off the shelf CD19 targeted CAR T cell program. Today, at the ASGCT Annual Meeting, we presented translational data from our FT819 Phase 1 study in relapsedrefractory B cell malignancies, which show that a single dose of FT819 exhibited multiple mechanisms of action implicated in generating an immune reset in patients with B cell mediated autoimmune diseases. The translational data supporting these mechanisms included rapid, deep and sustained CD19 positive B cell depletion in the peripheral blood, patient case studies of primary, secondary and tertiary tissue tissue and patient case studies of plasma cell depletion and B cell reconstitution with recovery of naive B cells and little to no recovery of activated memory B cells or plasma blasts. Notably, we also presented patient case studies demonstrating rapid, deep and sustained B cell depletion accompanied by clinical responses without the use of fludarabine as a conditioning agent.

Speaker 1

Collectively, we believe these data support the disease modifying potential of FT819 for patients with B cell mediated autoimmune diseases. To that end, I am pleased to announce that the first lupus patient has been treated in our Phase 1 autoimmunity study of FDA 19. This first patient, a 27 year old woman with refractory disease despite having previously been treated with multiple standard of care therapies, received conditioning chemotherapy, followed by a single dose of FT819 at 360,000,000 cells. The patient was discharged after a 3 day hospitalization stay without any notable adverse events. At ASGCT today, we also presented promising data from a first of kind translational assay using a sample of the patient's blood obtained prior to administration of conditioning chemotherapy, where we observed rapid and potent depletion of the patients CD19 positive B cells in an ex vivo cytotoxicity assay with FT819.

Speaker 1

It is worthwhile to note that treatment of this first patient occurred within weeks of site activation. We believe this patient experience exemplifies the potential of an off the shelf cell therapy to overcome challenges that may hinder autologous cell therapies in reaching patients with autoimmune diseases, including the need for apheresis, complex manufacturing and treatment logistics and extended patient hospitalization. Furthermore, since we have observed deep B cell depletion and clinical responses without the use of fludarabine as a conditioning agent in our Phase 1 study of FT819 for B cell malignancies, We believe FT819 may have disease modifying potential in autoimmunity using alternative conditioning regimens. We plan to amend the current clinical protocol for our Phase 1 autoimmunity study in the Q2 of 2024 to enable FT819 administration with single agent cytotoxin at the same dose used by rheumatologists for treatment of patients with autoimmune disease. We believe that an off the shelf add on of FT819 to commonly used treatment regimens may contribute to a highly differentiating patient experience.

Speaker 1

Dose escalation in our FT819 Phase 1 study in relapsedrefractory B cell malignancies has now completed, where 43 patients were treated with a single dose of FT819 at up to 1,000,000,000 cells without HLA matching. We observed clinical responses, including complete responses in heavily pretreated patients with aggressive disease, including in relapsedrefractory large B cell lymphoma patients that were previously treated with autologous CD19 targeted CAR T cell therapy. The safety and tolerability profile of FT819 was favorable with no dose limiting toxicities, no events of any grade of ICANS or graft versus host disease and low incidence of only low grade CRS. We believe the established clinical safety and tolerability profile of FT819 is differentiated and may also be of significant import for treatment of patients with autoimmune diseases. At this time, we intend to focus all further clinical development of FT819 exclusively in autoimmunity.

Speaker 1

Today, at the ASGCT Annual Meeting, we also presented data from our FT-five twenty two off the shelf CD19 targeted CAR NK cell program, which is the first product candidate emerging from our iPSC product platform that incorporates alloimmune defense receptor technology. Today, the treatment course for administration of cell based immunotherapies, including both autologous and allogeneic cell therapies, requires conditioning patients with chemotherapy. Conditioning chemotherapy can induce toxicities, prevent combination with standard of care treatments widely used in the community based settings and limit patient access and reach. ADR technology incorporated into 522 is designed to enable effective treatment without administration of conditioning chemotherapy to patients, which we believe has the potential to redefine the cell therapy treatment paradigm. We have previously presented preclinical data using cancer cell lines demonstrating that the co culture of ADR armed CAR NK cells with allo reactive T cells promotes NK cell proliferation, enhances NK cell persistence and increases antitumor activity, indicating that arming with ADR technology has the potential to enable effector cell function in the presence of an alloreactive system.

Speaker 1

Today at the ASGCT Annual Meeting, we reported preclinical data using SLE diseased cells. In a novel rechallenge assay using peripheral blood mononuclear cells from an unmatched SLE donor, FT-five twenty two uniquely drove rapid and deep depletion of CD19 positive donor B cells, eliminated alloreactive donor T cells and maintained functional persistence with the ability to kill additional CD19 positive donor B cells upon rechallenge. In addition, we also presented initial translational data from the first two patients treated in our ongoing Phase 1 study of FT-five twenty two in relapsedrefractory B cell lymphoma. These data show enhanced persistence of 522 in the periphery compared to clinical data observed with FT596, our prior generation CD19 targeted CAR NK cell without ADR technology. Importantly, these data also show rapid, deep and sustained B cell depletion in the periphery throughout the 1 month treatment cycle.

Speaker 1

We intend to submit an IND application to the FDA in the middle of 2024 to expand our clinical investigation of FT-five twenty two for treatment of various B cell mediated autoimmune diseases, including without administration of conditioning chemotherapy to patients. I'm also pleased to report that the first three patients in the conditioning arm of our Phase 1 study of FT-five thousand two hundred and twenty four relapsed refractory B cell lymphoma have now completed safety assessment without any dose limiting toxicities. And there were no events of any grade of CRS, iCAMS or GvHD. Dose escalation is now ongoing at 900,000,000 cells per dose. In addition, patient enrollment has now been initiated in the no conditioning arm at 300,000,000 cells per dose.

Speaker 1

And we are poised to clinically assess the safety and activity of our ADR armed FT-five twenty two CAR NK cell program without administration of conditioning chemotherapy to patients. Turning to our solid tumor initiatives. I'm also pleased to announce that under our collaboration with Ono Pharmaceutical, we have recently treated the first patient in our Phase 1 study of FTA25. Designed using the company's iPSC product platform, we believe FT825 represents an exciting new frontier in the field of cell based cancer immunotherapy. The multiplex engineered iPS derived CAR T cell program incorporates a constellation of synthetic anti tumor mechanisms that are designed to harness the potential of both innate and adaptive immunity and to overcome unique challenges in treating solid tumors.

Speaker 1

These mechanisms include a CXCR2 receptor to promote cell trafficking, a chimeric TGF beta receptor to redirect immunosuppressive signals in the tumor microenvironment, a high affinity non cleavable CD16A receptor to promote antibody dependent cellular cytotoxicity and a novel cancer specific HER2 targeted antigen binding domain, which has shown differentiated activity from that of trastuzumab in preclinical studies, including against HER2 low expressing tumor cells. The first patient in the Phase 1 study was diagnosed with HER2 positive gastroesophageal junction adenocarcinoma had progressed after receiving multiple lines of treatment, including her 2 targeted therapies and was administered standard conditioning chemotherapy followed by a single dose of FTA25 as monotherapy at 100,000,000 cells. As we consider our strategic direction, we believe there is a strong value proposition for our iPSC product platform and off the shelf cell therapies in autoimmunity or patient safety, convenience and accessibility as well as cost and scale may be key differentiating factors. We believe our ADR technology can enable effective treatment with cell therapy without requiring administration of conditioning chemotherapy to patients, which has the potential to redefine the cell therapy treatment paradigm and patient experience for cancer and autoimmunity. And we believe our multiplex engineered iPSC derived CAR T cell platform can deliver multiple synthetic mechanisms of antitumor activity with the potential to overcome unique challenges in treating solid tumors.

Speaker 1

As we look ahead into the second half of twenty twenty four, we are well positioned to reach and report on 5 key clinical milestones across our iPSC product pipeline for cancer and autoimmune diseases. Number 1, we seek to demonstrate the disease transforming potential of FT819 in B cell mediated autoimmune diseases. Specifically, we expect to readout initial Phase 1 clinical data for the first three to five patients treated with FT819 for moderate to severe SLA. Number 2, we seek to administer FT819 without fludarabine and instead with commonly used treatment regimens for autoimmune diseases. Specifically, we intend to amend the current IND for our FT819 Phase 1 autoimmunity study to include administration with single agent cytoxin and expect to readout initial patient clinical data.

Speaker 1

Number 3, we seek to demonstrate the potential of our proprietary ADR technology to enable effective treatment of patients without administration of conditioning chemotherapy. Specifically, we expect to read out the first five no conditioning patients treated with 5/22 in our Phase 1 study for B cell lymphoma. Number 4, we seek to broadly investigate 5/22 without conditioning chemotherapy for treatment of various B cell mediated autoimmune diseases. Specifically, we expect to submit an IND application and subject to IND allowance by the FDA, initiate patient enrollment in a Phase 1 multi indication study of 5/22 for autoimmunity. And finally, we seek to establish initial clinical proof of concept for our multiplex engineered iPS derived CAR T cell platform in treating solid tumors.

Speaker 1

Specifically, we expect to read out the first 3 to 5 patients treated with FT825 in our Phase 1 study for advanced solid tumors. I would now like to turn the call over to Ed to review our financial results for the Q1.

Speaker 2

Thank you, Scott, and good afternoon. Fate Therapeutics is in a strong financial position to advance our pipeline of iPSC derived CAR T and CAR NK cell programs for autoimmune diseases and cancer. With the addition of net proceeds from the company's $80,000,000 underwritten offering of common stock and $20,000,000 concurrent private placement of prefunded warrants in March, Our cash, cash equivalents and investments at the end of the Q1 were approximately $391,000,000 In the Q1, our reported revenue of $1,900,000 was consistent with the prior two quarters and reflects the research funding associated with the development of a second product candidate against an undisclosed target in solid tumors under our collaboration with Ono Pharmaceutical. As a reminder, after opting into a U. S.

Speaker 2

And European co development and co commercialization arrangement with Ono for FT825 in the Q4 of 2022, we account for that program's reimbursable expenses as an offset within our research and development costs. We recognized $800,000 of contra R and D expense in the quarter. Research and development expenses for the Q1 were $32,100,000 essentially flat versus the Q4 of last year. Our expenditures in R and D were driven primarily by salaries and benefits, including share based compensation and from clinical trial costs and demand for R and D materials. General and administrative expenses for the Q1 increased sequentially by 16% to $20,900,000 The increase in our G and A expenses was attributable primarily to increases in legal related fees.

Speaker 2

Total operating expenses for the Q1 increased by 7% relative to the Q4 of 2023 to $53,000,000 which included $11,000,000 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 $2,700,000 on a quarterly basis. In the Q1, we recorded a non cash $1,400,000 non operating loss associated with the change in fair value.

Speaker 2

Our net loss for the quarter was $48,000,000 or $0.47 per share. Finally, as we consider the investments we plan to make this year, we expect our GAAP operating expenses, which includes non cash items such as stock compensation expense and depreciation for the full year to be between $215,000,000 $1,000,000 $230,000,000 and that we will end the year with more than $270,000,000 in cash and cash equivalents and investments. I would now like to open the call for questions.

Operator

The first question comes from Michael Yee with Jefferies. Please go ahead.

Speaker 1

Thank you.

Speaker 3

We had a 2 part question. Congrats on all the progress, Scott. On the autoimmune study that is enrolling, I know that was a bit slow to get off, but it sounds like you're going to have some good momentum in report patients. Can you just talk a little bit about how the plan to also allow single agent cytoxin would impact things and how you think about what that would show and how that would impact the design of the study? And then the second question is related to 5/22.

Speaker 3

I think it's exciting you're now in the 2nd cohort without lymphodepletion. Can you just talk about the results that you might see there and how you would read through into what you see there into the idea for autoimmune as well? Thank you.

Speaker 1

Sure. So with in the autoimmunity study with FT819, the current study as designed has 2 different alternatives for conditioning. There is a standard 3 day conditioning cycle of CyFlu, which is commonly used in the oncology setting. So I believe it's 500 milligrams per meter squared times 3 days for cyclophosphamide and 30 milligrams per meter squared times 3 days for ludarabine. We also have a second in the current study, we also have a second conditioning regimen that is permitted.

Speaker 1

The second conditioning regimen is a bendamustine based conditioning regimen. And that is a 2 day treatment regimen with bendamustine. What we're contemplating doing, and this is based on data we presented today, we believe we have good proof of concept in our FT819 oncology study. So this is the study in B cell malignancies where several of our patients in that study received bendamustine as a conditioning agent. So they did not receive CyFlu, they received the benda based conditioning regimen in the oncology study.

Speaker 1

We presented the data on those patients specifically today. We saw very deep B cell depletion in the periphery, which was maintained through the 30 day treatment cycle. And importantly, we saw clinical responses with the bendamustine treatment conditioning cycle or conditioning regimen. So we did not use so in that regimen we're not using fludarabine. So we saw activity with FT819 without fludarabine.

Speaker 1

And so that gives us confidence that we can amend the IND to add on to a cytoxin only regimen. We believe we can accomplish that efficiently through an amendment to the IND, essentially adding a third conditioning regimen for patients. And so the study would provide physicians choice of CyFlu conditioning, bendamustine conditioning or single agent cytoxine conditioning. And again, since cytoxine cytoxins and bendamustine are in the same class of molecule and given the activity we've seen in the oncology study, we feel confident in FT819's ability to perform in a cytotoxin only regimen without severity. Long answer, but I hope that was clear.

Speaker 3

Yes. Very nice. And then the read through from oncology because you're in the cohort D without

Speaker 1

conditioning. Yes. So with respect to 522, so with 5/22, obviously, we have a long history with NK cells. We have started this study with CyFlu conditioning. It provides us the opportunity to do some direct comparison with 522 based on historical data sets that we have generated with FT596, our prior generation product.

Speaker 1

We presented data today where we believe in early small numbers of patients obviously. We think we're seeing some differentiated activity with respect to persistence, which we're excited about. And so we are very excited now to essentially begin our clinical experiment with 5/22 or clinical experience with 5/22 with no conditioning. Pre clinically, and I'll let Bob talk about it, we've done a tremendous amount of work with 5/22 preclinically in allogeneic systems, both using cancer cell lines as well as now using donor SLE cells. And we presented the donor SLE preclinical data today.

Speaker 1

I'll let Bob talk about that because I think it does demonstrate the potential of 522 to essentially thrive in an allogeneic disease system. Thanks, Scott. So just to talk about preclinical and also answer some of your questions about how the clinical data will play out for autoimmune. So in the pre clinically, as Scott mentioned, having the ADR technology in 5/22 allows us to actually show activity and persistence even when there is an intact PBMC compartment. So in a petri dish, we try to mimic what's happening in the patient setting by having the PBMCs and there are all different types of cells from PBMC.

Speaker 1

And we show that with 522, you can actually show functional persistence and this is very unique to the ADR technology because if you have NK cells without ADR or autologous CAR T, you won't get this observation. And this observation is very specific because we can co culture 522 with PBMCs and show that we can target because there's a CAR19 in 522 to B cells in PBMC. However, we don't see an allo reaction that's induced by the T cell compartment. Even though these cells have an intact HLA expression on their surface, our product, we are able to hold off the allo reaction because we target form B positive population, which is the final stage of an activated cell. So we are able to hold off on that.

Speaker 1

And we can maintain activity through functional persistence because when we rechallenge the 522 co culture with additional PBMCs, we can continue targeting the B cell compartment and maintain functional persistence. This is not seen with AutoCAR T. This is not seen with NK cells. Moving to the clinical experience, I think one of the things that we're very excited about with our ability to translational on the 522, no side flu arm, we're going to be able to look at ctDNA and see how the disease is modulated with each dose of 522 in an intact patient immune compartment and also look at the entire disease decrease over the treatment cycle. That's going to give us a hint of 5:2 activity without side fluid conditioning.

Speaker 1

We'll also look at the endogenous immune compartment and see how that's modulated and also look at the PK in an intact immune compartment with very sensitive assay. So we'll hopefully see a lot of activity there and be able to parlay that into autoimmune disease. Yes, perfect. Thank you guys. Thanks.

Operator

The next question comes from Yigal Nochomovitz with Citi. Please go ahead.

Speaker 4

Hi, Tim. This is Amin on for Yigal. Thank you for taking our questions. We had a couple. First on FT819, you mentioned patient case studies have shown secondary and tertiary tissue trafficking and infiltration.

Speaker 4

Are you doing tissue biopsies here?

Speaker 1

Sure. No, I could so we do show a primary, secondary and tertiary activity. For the primary, we show that we have persistence in the bone marrow and that correlates with reduction and elimination of CLL positive cells. And this is based on full cytometry. So we show persistence and infiltration in the bone marrow and clearance of disease.

Speaker 1

In our secondary for the lymphoid, we have biopsies, the lymphoid tissues, we have biopsies there and we can show that the population is reduced. And for tertiary, the example we use in our presentation is liver and PET score, which correlates to PK. So we're able to through different methods, whether it's direct detection of cells or proxy detection of cells be able to show that we are able to have activity in both primary, secondary and tertiary tissues.

Speaker 4

Okay, great. That makes sense. And then second question is more of a general question. Given you're planning to file an IND for FT-five twenty two for autoimmune, how should we think about the expectations on efficacy here? Are you hoping to see efficacy on par with CAR Ts?

Speaker 4

Or is that the main focus is more like removing or lowering the preconditioning burden, maybe a little bit of a cost on efficacy?

Speaker 1

Yes. I think as we're going into this study, we acknowledge efficacy is really important. I think at the end of the day, what's been really exciting about cell therapy here in autoimmunity is the fact that again, this is coming out of the German study, single dose of CAR T cell therapy has been able to generate an immune reset in patients that have had disease and refractory disease for a significant period of time. And that's been quite remarkable. And I think folks are very excited about that.

Speaker 1

And I think, with respect to autoimmunity, efficacy is certainly going to be important. And we need to acknowledge that at some basic level, we need to be able to compete on efficacy. That said, autoimmunity is a very different setting than oncology. And I think safety is certainly going to be at a premium, with respect to autoimmunity. I think one of the challenges that has already confronted the field is that CyFlu conditioning may not be well accepted by patients in the field of autoimmunity.

Speaker 1

And so I think safety is going to be critical. I think alternative regimens where you can add on to standard of care treatments is going to be critical. I think reaching patients where when they live and breathe, which is not at the academic CAR T cell centers is going to be critical. And so I think there are a multitude of elements here that are going to be important in autoimmunity that are different than on be be very appealing for these patients.

Speaker 4

Okay, got it. Great. Thank you very much for taking our questions.

Operator

The next question comes from Dana Graybosch with Leerink Partners. Please go ahead.

Speaker 5

Hi. So this is Jeff on for Dana. So we have two questions. And the first was around competitive landscape. There was some recently published encouraging data with the 1st gen CD19 by blinatumumab.

Speaker 5

What was your view of that data? And how are you thinking about T cell engager competition overall for autoimmunancies, given that the modality addresses many of the same challenges of AutoCAR T that your off the shelf programs do? And then looking at kind of BCMA and your plans for a next gen program there, do you expect to use the ADR modality there? And is that sufficient? Or are you looking at other edits?

Speaker 5

And what do you think BCMA adds that you wouldn't already achieve with your CD19 program? Thank you.

Speaker 1

Yes. So on your sort of general question around CD19 engagers, I think we're approaching the autoimmunity space, eyes wide open with respect to the disruptive potential of CD19 engagers. And ultimately, as we're thinking about the development of the autoimmunity space, we recognize the benefits that can be brought to patients potentially in differentiating potential of the CD19 engager. We've obviously seen that play out in oncology. And as we think about it, we were thinking about essentially our target product profile, going directly up against what the value proposition of the T cell engager.

Speaker 1

And hence, that's how you will hear us obviously talk about and we've talked about on the call today, how important we think it is to move away from CyFlu, to add on to standard of care treatments, to reach patients in the community setting, to minimize hospitalization, and to prioritize safety and efficacy. So I think we're going into this recognizing that T cell engagers will play an important role in treating patients with autoimmunity and developing target product profiles directly head to head against those. As it relates to BCMA, I think just generally and this is not a comment specifically to BCMA, but I think we're very excited about the ADR technology both with respect to its first assessment with 522 clinically. But I think and I'll let Bob talk to it and correct me if I'm wrong, but I think any product candidate you're going to see emerge from Fate Therapeutics from this point forward will incorporate ADR technology. We absolutely believe that conditioning chemotherapy, intense conditioning chemotherapy is a headwind the field of cell therapy and we need to move beyond that.

Speaker 1

And we're excited to do that. We're excited to pioneer that. And we think we've put a tremendous amount of work both respect to research and innovation on how to achieve a new cell therapy treatment paradigm with off the shelf cell therapy.

Speaker 5

Great. Thank you. Actually just a quick follow-up in the mitigating lymphodepletion. How does bendamustine only compare to cyclophosphamide only in terms of relative potency? And would you expect the same degree of CAR T, FT8.9 expansion in vivo in the same level of potency as you kind of saw with the bendamustine examples?

Speaker 5

Thank you.

Speaker 1

Yes. I think it's there's some data on this, right? There's some data out there that certainly combines in the field of oncology and CAR T cell therapy that has done work comparing thigh flu conditioning to bendamustine. And I think, generally speaking, it's been demonstrated that bendamustine can be an effective alternative treatment conditioning regimen for CAR T cell therapy. Bendamustine is in the same chemical class as cyclophosphamide.

Speaker 1

We do have experience, as I mentioned, with bendamustine as a standalone conditioning agent without fludarabine. And so, we're fairly confident, that, our programs can FGA19 can perform with cyclophosphamide.

Speaker 5

Great. Thanks for taking our questions.

Operator

The next question The next question comes from Mike Ulz with Morgan Stanley. Please go ahead.

Speaker 2

Hi, this is Rohit on for Mike. Thanks for taking our questions.

Speaker 5

Can you

Speaker 2

just talk about what you've seen with the 1st lupus patient treated with FT819? And how safety compares to what's been seen in the autologous CD19 therapies? And then can you also talk about what other autoimmune diseases you would consider expanding to? Thank you.

Speaker 1

Yes. I think I'll limit my comments to what we disclosed to date. The patient is still in the first instance patient. It still is in the 30 day ELT assessment window. I can absolutely say that patients was discharged after 3 days of hospitalization.

Speaker 1

So it was a 3 day hospitalization stay. It was uneventful and there were no notable adverse events. The patient does still remain though in the 30 day DLT assessment window. With respect to expansion into other indications in autoimmunity, we are doing a fair bit of work assessing that opportunity. Obviously, one of the elements of assessment is looking where others have established and this is primarily coming out of the German study, but also in the field of allogeneic stem cell transplant, looking at where other B cell there's been success with other B cell mediated diseases with either transplant or out of the German group in the early, seminal data sets.

Speaker 1

I think I'll leave it at that.

Speaker 2

Thank you.

Operator

The next question comes from Leigh Watsik with Cantor Fitzgerald. Please go ahead.

Speaker 6

Hey, good afternoon. Thanks for taking the questions. Maybe just follow-up on what other indications that you might go into and this is specific for 522. I know, sorry, you mentioned that you're looking at multiple autoimmune diseases. So just wondering, since it's quite crowded in the lupus space, so just wondering what are other indications that you might be considering such as RA?

Speaker 6

And how do you think about 522 setting with 819 in terms of which types of patients to go after?

Speaker 1

Sure. At this point, we are doing a lot of work. I'm not going to disclose our strategy at this point in time. We are obviously doing a lot of work in thinking about our expansion strategy in autoimmunity. We are looking at areas where there have been clinical precedent with cell therapies, whether that be in transplant or out of the first data sets that are being generated, both out of Germany as well as the initial sort of company initiatives or company programs.

Speaker 1

So not prepared to disclose today how we think about expanding our FT819 IND into additional indications or the initial multi indication study that we plan to submit 4,522.

Speaker 6

Okay. And then maybe just wondering if you can just comment on your expectation for the patient enrollment in A19 study. It seems like you can dose the patients fairly quickly. And then it seems like you're going to amend the protocol to allow some alternative conditioning regimen. So do you think that might drive sort of the traction with the site investigators?

Speaker 1

Yes. So specifically, we have guided to 3 to 5 patient an update on 3 to 5 patients in the 8/19 study by the end of this year. We've also guided to and we've discussed it on the call that we are looking to utilize cytoxin only as a third potential regimen for treating patients, so CyFlu or BenDA or Cytoxan only. We do think that, and I think there's been discussion about this that CyFlu potentially is a barrier to treating patients with autoimmunity. These patients aren't oncology patients.

Speaker 1

They don't deserve to be treated like oncology patients. And so I do think moving away from CyFlu as a conditioning regimen

Speaker 7

Thank you.

Operator

The next question comes from Cara Bancroft with TD Cohen. Please go ahead.

Speaker 5

Hi there. This is Greg speaking on behalf of Tara. I'm wondering if you can give us any timeline for when we can expect clinical data in lupus for 819?

Speaker 1

Sure. In the prepared remarks, we've guided to an update on the first three to five patients with FT8-nineteen in SLE by the end of this year.

Speaker 5

Okay, great. Thank

Operator

you. The next question comes from Ben Burnett with Stifel. Please go ahead.

Speaker 7

Hi, this is Carolina Ivanio Ventoso on for Ben Burnett. Thank you for taking our question and congratulations on all your progress. On the ex vivo data for FT819 on the pretreatment sample from the SLE patient. What do the ET ratios shown imply about the necessary dose and cell expansion that you would need to achieve to get that deep B cell depletion at the end of the CARF in vivo in the SLE patient?

Speaker 1

I'm happy to answer that question and I'll use some math here. So please forgive me, if I start getting a little hypothetical. But so what we show in the data is that at 2:one ET ratio, we effectively eliminated all B cells that were in the PBMC compartment from the patient. If you were to think about the disease burden in autoimmune units, specifically SLE, we anticipate somewhere around 100,000,000 to 300,000,000 disease B cells residing within a patient. So if we're effectively clearing around almost all cells at 2:one, but pretty much over 95% at 1:one, Our current dose at 260,000,000 falls right smack in the middle of an effective dose that we see in vitro.

Speaker 1

So to answer your question specifically, we're eliminating all B cells at 2:one and over 90% at 1:one. And that should give us confidence that the current dose is basically on par to match that in the patient setting at 360,000,000. Dollars

Speaker 7

Okay, very helpful. Thank you.

Speaker 4

You're welcome.

Operator

The next question comes from Peter Lawson with Barclays. Please go ahead.

Speaker 8

Hi, this is Alex on for Peter. Thank you for taking the question. Just wondering if you could maybe just recap the data a little bit, the ASGCT data when you look at the preclinical and translational data for 819 versus 522, so the CAR program versus the NK cell program, any notable differences you see in terms of tissue distribution, B cell depletion or B cell reconstitution?

Speaker 1

Sure. I can answer that question. So FDA-eight nineteen and FT-five twenty two obviously are very different. FT-five twenty two not only has the ADR technology,

Speaker 2

but also has the IL-fifteen

Speaker 1

receptor fusion. So preclinically, we see a very good biodistribution with FT-five twenty two because it very much doesn't need antigen for expansion, doesn't need cytokine for expansion. So we see very good biodistribution. Obviously, it has the ability to be combined with a monoclonal antibody. So we see that as well, either we enhance activity against a specific cell, like for example, targeting CD19 and CD20 at the same time or going after other cell types that have eliminated the CD19 expression and are only expressing, for example, CD38.

Speaker 1

So that multi antigen perspective also comes in through with FT-five twenty two. With FT-eight nineteen having a 1XX CAR in the track locus is a very potent, CAR product. And so we see that when we go head to head against AutoCAR T in preclinical studies. So we see very potent activity with FT819, as I mentioned earlier as well. So those are the main differences in terms of behavior of these cells.

Speaker 1

We have a product that's ADR that does any conditioning and can go multi antigen targeting and another product that's very potent against CD19. And I think one of

Speaker 2

the comments I would just add on to

Speaker 1

that is FT819 with respect to its manufactured phenotype has high expression of CXCR4. And so we've seen very good sort of homing and trafficking and infiltration of secondary and tertiary tissue and preclinical studies. That's a good point.

Speaker 8

Okay. Thank you. And I guess does that have any implications for which type of indications you could target in the autoimmune setting? Thank you.

Speaker 1

Yes. I mean, it's something we're looking at. I mean, we are still doing work on thinking about exactly how to expand and what indications are going to be prioritized with 819 and 522. We are prepared and now we are preparing to expand the 819 IND to consider additional indications. And obviously, we've discussed filing a multi indication IND for 522.

Speaker 1

So a lot of work going on. Stay tuned there on that front.

Operator

The next question comes from Yanan Zhu with Wells Fargo Securities. Please go ahead.

Speaker 5

Great. Thanks for taking our questions. To follow-up on a prior question about the bispecific literature recent literature, just wondering do you have a view on the depth of B cell depletion a bispecific antibody can achieve compared with cellular therapy? And do you foresee for the bispecific, if it becomes a modality, would it be a repeat administration at certain time interval? Could that be viable or competitive with cellular therapy?

Speaker 5

And lastly for 819, do you foresee the potential possibility of additional doses at a certain time interval and whether that could be part of the product profile and whether you might even be considering looking at that in a current study? Thanks.

Speaker 1

Sure. So forgive me, I am not an expert on the bispecific engagers. And so I can't talk in an informative way about the depth of B cell depletion that's been seen or achieved with the B cell engagers. Obviously, in the setting of oncology, the T cell engagers have generated complete responses. So again, we are going into the field of autoimmunity, recognizing that T cell engagers can be an attractive modality and have the potential to drive an immune reset.

Speaker 1

Whether that's achievable, what the duration of that looks like, what side effect of profile of that looks like, how many doses, all that's TBD. We're very early, I think, just generally in the field of autoimmunity. That said, I think one of the potential strengths of an engager is that it can be multi dosed. And I do think from our standpoint, as a company, we've always discussed the fact that an off the shelf cell therapy, we do think has multi dosing potential. I think multi dosing potential can be hindered by CyFlu conditioning.

Speaker 1

Hence, as we've discussed, we think it's important to think about both 819 and 522 being developed as add on strategies to standard regimens that are used today to treat patients in the community setting with autoimmune disease. And I think you will see us continue to move in that direction where we are thinking about delivering and dosing cell therapies as if they were a monoclonal antibody.

Speaker 5

Got it. Very helpful. Thank you.

Operator

The next question comes from Bill Moggen with Canaccord Genuity. Please go ahead.

Speaker 2

Hi, thanks for taking the question. So to follow-up on this morning's 8/19 data, all the PK obviously was positive, but thinking about translating that from an oncology patient to an autoimmune patient when antigen dependent expansion is a key part of the PK of a CAR T cell therapy. I'm just wondering how you think about being able to translate from that from one population to the next.

Speaker 1

Yes. I think there's a lot we don't know with respect to how the two diseases are going to translate. I think what we have certainly seen with the PK is that we have seen CD19 mediated expansion that is dose dependent. Certainly, the mechanism of action or one of the key mechanisms of action in autoimmunity is being able to recognize and target and eliminate CD19 positive B cells. So I don't necessarily presume that actually the PK profiles are necessarily going to be the same in oncology versus autoimmunity.

Speaker 1

I think at the end of the day, what's obviously critical is the kinetics and depth of B cell depletion.

Operator

Thank you. The next question comes from Ethan Markowski with Needham and Company. Please go ahead.

Speaker 9

Yes. Hi, this is Ethan on for Gil Bloom. Thank you for taking our question. So I'm just looking at the charts in the ASGCT data and I think you guys clearly show that FT-five twenty two demonstrates deeper B cell depletion than FTF96. But it looks like FT819 graph, at least the bar graph in depletion is very similar to FT596 with some cells kind of coming back up in the mid to end of the cycle.

Speaker 9

So I was wondering first how important this complete response is and if some cells coming back at the end is clinically relevant. And then also just from a cost savings perspective, I know you're no longer planning to move forward in multiple myeloma and D cell lymphoma. Just wondering if that has any impact in a positive way on near term R and D spend? Thank you for taking our question.

Speaker 1

Yes. So on the last question with respect to clinical development in multiple myeloma, obviously, there are patient costs associated with clinical development. We are while we are not advancing 576 into dose expansion, we are in multiple myeloma. We are certainly expanding development in autoimmunity. And so in terms of changing cash burn, I don't think we're thinking about that as enhancing or savings or reducing burn.

Speaker 1

We're certainly investing in oil. As it relates to B cell depletion, I think keep in mind with both 819 as well as 522, we are seeing very, very low levels of cells in many instances, and I'll let Bob talk about it, below, lower limit of sort of detection. And so when we start getting into very, very low levels, you start to get into sort of can have a discussion about whether it is significant or not. And I don't believe, at least we think, that we're seeing different levels of depletion with 819 versus 522. I'll let Bob comment on that.

Speaker 1

I will say just to be really clear, the 819 dataset is over a much larger dataset of patients. I think we used 23 patients with B cell lymphoma for that data set. Some of those patients had relatively high B cell counts going into the study. In fact, we noted that there were certain patients that had super physiological levels of B cell counts that we were able to deplete with FT8-nineteen. The 522 dataset is, I think only on 2 patients and their B cell counts generally were lower at baseline compared to the totality of the 8 19 patients.

Speaker 1

I think I'll let Bob talk on that, but I think generally speaking what we've seen with respect to B cell reconstitution from the SHET data is B cell reconstitution actually can happen as, for instance, as early as the 3rd or 4th week and can happen as late as 4 months. But I'll let Bob sort of finish up on that if I missed anything. No, I think you well covered it. When discussing 819, as Scott mentioned, that was a large number of patients. But it's all pretty much in line with showing very good B cell depletion over the treatment cycle and B cell recovery was seen in some of the patients.

Speaker 1

Now keep in mind, this is oncology. So what's coming back up could be a

Speaker 2

lymphoma cell

Speaker 1

or something. So we're in a much more aggressive stage than what Shed showed. But as Scott mentioned, what Shed showed us that B cells do come back from 30 days to 180 days. So every patient treated all 15 in Shed's data had, I believe day 180 full recovery of B cells. So 819 is very much in line with what SHED showed.

Speaker 1

Now with 522 you're bringing up a very good point. And I think part of that has to do with the fact that it's being combined with Rituxan. So this is a kind of the 1, 2 punch that we're seeing. Again, 2 patients, I'm not going to sit here and speculate too much on it, but you are seeing the power of CAR plus H and CD16 in these settings. And I think both programs are data has been so far very encouraging.

Speaker 2

And Ethan, I'll just pick up on Scott's comments qualitatively. I agree the mix of the business will change through the course of the year. But if you look at the Q1, we had roughly $52,000,000 $53,000,000 in GAAP operating expenses and about $37,000,000 in cash burn. That's been pretty consistent for the last couple of quarters. So even though we have 1 or 2 programs winding down, the hope is that now that we have first patient dosed and we're beginning to clear dose levels in certain programs, that's going to pick up throughout the year.

Speaker 2

So I expect that those numbers I just quoted, the $53,000,000 on the GAAP operating expense and the $37,000,000 $38,000,000 on the cash burn effective cash burn for the quarter to remain fairly consistent. I'm more than happy to invest behind these clinical programs. So if that takes up to, call it, circa $40,000,000 on a cash burn basis, but we feel pretty good about where we are. Just the mix of the business will evolve, that's a pretty good number to work with for the rest of the year.

Speaker 9

Thank you. Very helpful.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Scott Walshko for any closing remarks.

Speaker 1

Thank you. Thank you for everyone today for all your good questions on the ASGCT data. Appreciate all the input and thought and speak to you soon. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Earnings Conference Call
Fate Therapeutics Q1 2024
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