Q2 2021 Fate Therapeutics Inc Earnings Call

Scott Washko: We plan to initiate a dose expansion cohort in patients with aggressive B-cell lymphomas that have previously been treated with autologous CD19 CAR T-cell therapy. We believe this dose expansion cohort, in particular, addresses a growing market segment with a significant unmet need... Potential fast-to-market development path

Welcome to the fate Therapeutics second quarter, 2000, and Tony 1 financial results Conference call. At this time all participants are in a listen only mode. This Cosby and webcast live on the investors section of fates website at fate Therapeutics dotcom.

As a reminder, today's call's being recorded Oh, and I like to introduce Scott wash called President and CEO of fate Therapeutics you may begin.

Thank you good afternoon, and thanks, everyone for joining us for the fate Therapeutics second quarter 2021 financial results call. Shortly after 4 P. M. Eastern time today, we issued a press release with these results, which can be found on the investors section of our website under press releases. In addition, our force.

Scott Washko: Finally, since FT-516 may be administered in the outpatient setting, with no mandatory hospitalization stage, and given its favorable safety profile observed to date, we also plan to initiate a dose expansion cohort of FT-516 in combination with bendamustine and rituximab and Without Psi Flu Chemotherapy Conditions to explore its use with standard-of-care CD20-targeted regimens in earlier line therapy. In these dose expansion cohorts, we intend to include sites that serve patients in the community setting. We are also pleased with the progress.

And 10-Q for the quarter ended June 32021 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 1095. These statements involve risks and uncertainties that can.

Scott Washko: In our Phase 1 Clinical Trial of FT596, our off-the-shelf, IPSC-derived, car-and-case-cell product candidate designed to target multiple antigens through its CD19-targeted CAR and its high-affinity, non-cleavable CD16-FC receptor. Unlike the FT-516 Phase I study, the FT-596 Phase 1 study is currently assessing a single dose of FT Additionally, since FT596 incorporates a novel IL-15 receptor fusion for cytokine activation,

Cause actual results to differ materially from those and such forward looking statements. Please see the forward looking statement disclaimer on the company's earnings press release issued after the close of market today.

As well as the risk factors included in our form 10-Q for the quarter ended June 32021 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.

Scott Washko: FT596 is being administered without IL-2 cytokine support. The monotherapy arm of the FT-596 Phase I study is intended to evaluate the activity of our novel CD19-targeted CAR contract, which is optimized for NK cell biology and is comprised of an NKG2D transmembrane domain, a 2B4 co-stimulatory domain, and a CD3 zeta signaling. The combination arm is intended to evaluate the potential of FT-596 to target multiple antigens through its CD19 CAR and its high-affinity, non-cleavable CD16FC receptor, an approach that we believe may hold best-in-class potential in addressing tumor heterogeneity and Antigenescape. A total of 20 patients.

Stances.

Joining me on today's call are Dr. Wayne Chu, our senior Vice President of clinical development, and do Lark, Our Chief Financial Officer, and Bob <unk>, Our Chief Research and development Officer today, We will briefly highlight our clinical progress and plans for each of our disease franchise.

As with focus on our Ft, 516, and F. T 596 programs for the treatment of B cell lymphoma.

And our plans to share interim phase 1 clinical data from these programs at our August 19th Investor event.

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

Scott Washko: 10 in each arm have been treated in dose cohorts 1, 2, and 3, at $30, $90, and $300 million cells, respectively. No dose-limiting toxicities have been observed, and dose escalation in both arms is ongoing with enrollment in dose cohort 4 of 900 million cells. As we have cleared the single-dose treatment schedule at 300 million cells in both arms, we are preparing to initiate a two-dose treatment cycle under an amended protocol, with FT596 administered on days 1 and 15 beginning at 300 million cells per dose.

F. T 819 is a first of kind allogeneic off the shelf car T cell therapy that is manufactured from a clonal master induced pluripotent stem cell line.

The clonal Master Ips C line is derived from a single Ips C.

Which is precisely engineered to insert a novel 1 Xx anti CD 19 car construct under the regulation of the T cell receptor alpha constant or Trac locus.

Preclinical studies have shown that this precise configuration on.

Optimizing T cell effector function and.

Anti tumor activity and completely eliminates T cell receptor expression aggregating the risk of graft versus host disease.

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

Unlike the manufacturer of patient and donor derived car T cells, which require batch to batch sourcing and engineering of primary T cells. The use of a clonal master engineered Ips C line serves as a renewable starting cell source and insurers mass production of uniformly and.

Scott Washko: For FT-516, we plan to present duration of response, for the 11 patients treated in dose cohorts two and three of 90 million cells per dose and 300 million cells per dose, respectively. This will provide the first indication as to whether FT-516 can effectively drive durable responses against CD20 positive tumors, including in patients that have progressed on autologous CD19 CAR T-cell therapy for FT-596. We plan to present safety and overall response rates for 10 patients in the monotherapy arm and for 10 patients in the rituximab combination arm, so 20 patients total.

<unk> car T cells, and an efficient and consistent manner.

Our GMP manufacturing run for F. T 819 produced over 25 billion cash.

Car T cells, and a single small scale campaign, representing and implied yield of 250 doses at 100 million cells per dose.

Release testing showed that the drug product as well defined and.

And comprised of greater than 99% CD 45 positive CD 7 positive lymphocytes with greater than 99% car expression.

And the phenotype of F. T 819 exhibits high level expression of the activation marker CD 25, and the trafficking marker <unk> 4.

Scott Washko: As a reminder, the FT596 Phase 1 study is open to patients that have previously been treated with autologous CD19 CAR T-cell therapy. With respect to the monotherapy arm, since FT-596 does not benefit from the addition of rituximab for CD20 targeting, we will look to these first 10 monotherapy patients to assess the potential of our novel CD19-targeted CAR to drive objective responses, especially in those patients that are naive to autologous CD19 CAR T-cell therapy.

And low level of expression of the checkpoint proteins PD, 1 Tim 3 <unk> 4 and lag 3.

In July the first patient was treated with FTA 19, which is the first ever treatment of a patient with an Ips derived T cell product candidate and the patient a 61 year old male with refractory acute lymphoblastic leukemia was treated with a single dose of F. T 819 at night.

<unk> million cells.

The multi center phase 1 clinical trial is assessing dose levels, ranging up to 900 million cells.

Scott Washko: With respect to the combinational... We also consider the first 10 patients to primarily be a test of the CAR constructs potent, rather than a test of the multi-antigen targeting potential of FT5. We were called based on our dose dependency operation, observations from our FT-516 study. We did not see activity of the HNCD-16 construct until a dose of 90 million cells three times once weekly was reached. In other words, a cumulative cell exposure of 270 million FT516 cells.

3 F T 819 dosing regimens are being tested.

F T 819 administered as a single dose.

F T 819 administered as a single dose in combination with IL 2 and.

And F. T 819 administered as fractionated doses on days, 1.3 and 5.

Each dosing regimen is being tested for the treatment of B cell lymphoma, chronic lymphocytic leukemia and acute lymphoblastic leukemia.

The advancement of FTA, and 19 into clinical development ushers in a new era for T cell based cancer immunotherapy with the promise of multiplexed engineered functionality.

Off the shelf availability on.

On demand treatment and greater patient accessibility.

Scott Washko: Therefore, at single-dose levels of 30 million and 90 million FT596 cells, we would not expect the HN-CD16 construct to be a major contributor to efficacy. That said, in the combination arms... We would consider objective responses in patients that have progressed on CD19 CAR T-cell therapy as compelling demonstration of the dual antigen targeting functionality of FT596 and the product candidate's unique ability to address tumor heterogeneity Additionally, patients with clinical benefit after the first FT-596 treatment cycle are eligible to receive a second single-dose treatment cycle with FDA consent, and we plan to present safety and response rates after the second FT-596 treatment cycle.

We've confronted countless obstacles on our 5 year journey to the clinic, including some that seemed insurmountable at the time.

We're certainly excited to have reached this landmark achievement and bringing Ips derived T cells to patients.

I would like to thank the employees of fate therapeutics and our collaborators at Memorial Sloan Kettering Cancer Center, especially Doctor and shell sideline, who began this important work with us back in 2016, when the steps ahead were anything but clear.

Turning to our off the shelf Ips derived NK cell programs.

We are very pleased with the progress and the early clinical data from our Ft, 516, and <unk> 96 programs for the treatment of relapsed refractory B cell lymphoma.

The ongoing phase 1 study of Ft, 516 is assessing up to 2 treatment cycles.

Each cycle, consisting of 3 days of Cy flew chemotherapy conditioning.

A single dose of Rituximab and 3 weekly doses of Ft 516, each with IL 2 cytokine support.

Scott Washko: Finally, we plan to share certain translational observations from both the FT-516 and FT-596 Phase I studies. Now, turning to our other disease areas for a brief update. We are encouraged by the interim phase one clinical data from our FT516 and FT538 programs in relapsed refractory AML that we shared at our investor event in May, which indicated that iPSC-derived NK cells are well-tolerated and can induce objective responses with complete leukemic blast clearance in the bone marrow.

At the Astro Conference in June we presented positive interim phase 1 data where 8 of 11 patients achieved an objective response, including 6 patients that achieved complete response in dose cohorts, 2 and 3 of 90 million cells per dose and 300.

<unk> cells per dose respectively.

Importantly, the 2 patients treated and dose cohort 1 of 30 million cells per dose had progressive disease, suggesting that Si flu rituximab and IL 2 may not be sufficient to induce clinical responses absent clinically revealed relevant.

Scott Washko: Importantly, these compelling clinical outcomes were achieved with iPS-derived NK cells administered off-the-shelf, in the outpatient setting, and without patient matching. This therapeutic paradigm has the potential to efficiently and effectively treat many patients with AML and overcome the significant challenges that have limited the clinical advancement of donor-derived NK cell therapy, which typically requires the use of a transplant-like process where patients are hospitalized, receive intense lympho-depleting chemotherapy, and are administered donor NK cells that are specifically manufactured for and matched to the patient.

Doses of Ft 516.

The observed safety profile of Ft, 516 was favorable and as potentially differentiated from that of T cell based therapies, including T cell engaging <unk> and car T cell therapies.

No ft, 516 related SAE ease or F. T 16 related grade 3 or greater Aes were observed.

And no events of any grade of Crs immune effector cell associated neurotoxicity syndrome, or gvhd were reported.

Scott Washko: Dose escalation for FT516 as monotherapy is ongoing with enrollment in dose cohort 3 at 900 million cells per dose, which we expect to complete during the third quarter. No dose-limiting toxicities have been reported, and treatment with FT516 continues to be well-tolerated. Dose escalation for FT538 as monotherapy is ongoing with enrollment in dose cohort one at 100 million cells per dose. No dose-limiting toxicities have been reported.

Dose escalation and our phase 1 study of Ft, 516 is ongoing with enrollment and dose cohort 4 of 900 million cells per dose.

We are currently planning to initiate multiple dose expansion cohorts to further assess the efficacy of ft 516.

These cohorts include third line diffuse large b cell lymphoma, and third line Follicular lymphoma.

Both and patients that are naive to autologous CD 19 car T cell therapy.

Scott Washko: However, we have not yet cleared Dose Cohort 1. Until recently, our FT538 Phase 1 study was open at a single clinical site only. We have now activated multiple additional sites for the conduct of our FT538 Phase I study, and expect to increase the pace of enrollment with these additional sites now open. Upon clearance of Dose Cohort 1, enrollment will also begin in an investigator-initiated study of FT-538 in combination with DARA-2-MAB for relapsed refractory energy.

Additionally.

Since we observed complete responses in 2 of 4 patients in dose cohorts, 2 and 3 whose disease progressed following on.

<unk> CD 19 car T cell therapy, we plan to initiate a dose expansion cohort in patients with aggressive b cell lymphomas that have previously been treated with autologous CD 19 car T cell therapy.

We believe this dose expansion cohort in particular addresses a growing market segment with a significant on them.

Potential fast to market development path.

Scott Washko: We expect to report additional clinical data from the dose escalation stages of our 516 and 538 Phase I studies in relapsed refractory AML at the American Society of Hematology annual meeting in December. At ASH, we also expect to report the first clinical data from our FT-538 and FT-576 programs in relapsed refractory multiple myeloma. Similar to our approach in lymphoma, we are beginning clinical investigation in multiple myeloma by leveraging our high-affinity, non-cleavable CD16FC receptor, and we are combining FT538, with the CD38-targeted monoclonal antibody DARA2 method, to Maximize Antibody Dependent Cellular Cytotoxicity.

Finally, since ft, 516 may be administered and the outpatient setting with no mandatory hospitalization stays and.

And given its favorable safety profile observed to date.

We also plan to initiate a dose expansion cohort of ft 516 in combination with Bendamustine and Rituximab.

And with outsized flu chemotherapy conditioning.

To explore its use with standard of care CD 20 targeted regimens and earlier lines of therapy.

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

We are also pleased with the progress in our phase 1 clinical trial of Ft 596 are off the shelf Ips derived car NK cell product candidate designed to target multiple antigens through exceeding 19 targeted car and it's high affinity non cleavable.

Scott Washko: We have activated multiple clinical sites for the conduct of our Phase I study, and enrollment in FT538 in combination with DARA will be initiated at 100 million cells per dose upon clearance of dose cohort 1 in the phase 1 study of FT538 in relapsed refractory AM. GMP production is underway for FT576, an off-the-shelf, IPS-derived core and K-cell product candidate designed to target multiple antennas through its high-affinity, non-cleavable CD16FC receptor and its high-avidity BCMA-targeted CAR, an approach that we believe may hold best-in-class potential for the treatment of multiple myeloma.

CD 16 FC receptor.

Unlike the Ft 516 phase 1 study.

The Ft 596 phase 1 study is currently assessing a single dose of <unk> 596.

Additionally, since ft 596 incorporates a novel IL 15 receptor fusion for cytokine activation.

<unk> hundred 96 is being administered without IL 2 cytokine support.

The monotherapy arm of the Ft 596 Phase 1 study is intended to evaluate the activity of our novel CD 19 targeted car construct.

Scott Washko: The Multi-Center Phase I Clinical Trial is designed to assess both single-dose and multi-dose treatment regimens of FT576 as monotherapy and in combination with DARA. The study will initiate upon completion of GMP manufacture and successful release of the drug products. We continue to be pleased with our progress in building a deep pipeline of novel, multiplexed, engineered, IPSC-derived CAR and K-Cell product candidates for solid tumors. We are well positioned to exploit multiple mechanisms where NK cells may be uniquely advantaged, including targeting tumors with acquired resistance to PD-1, PD-L1 blockade resulting from loss of MHC class 1 expression, combining with standard-of-care monoclonal antibodies to maximize CD16-mediated ADCC, and incorporating CARs and other synthetic receptors to directly target cell surface antigens and stress ligands.

Which is optimized for NK cell biology, and is comprised of and NK G. Judy transmembrane domain or 2 before co stimulatory domain and a see through CD 3 zaydis signaling domain.

The combination arm is intended to evaluate the potential of <unk> 96 to target multiple antigens through its CD 19 car and.

And its high affinity non cleavable <unk> FC receptor and.

And approach that we believe may hold best in class potential and addressing tumor heterogeneity.

And antigen escape.

A total of 20 patients 10 in each arm.

Have been treated and dose cohorts, 1.2 and 3.

At 30, 90, and 300 million cells, respectively.

No dose limiting toxicities have been observed.

And dose escalation and both arms is ongoing with enrollment and dose cohort 4 of 900 million cells.

As we have cleared the single dose treatment schedule at 300 million cells and both arms. We are preparing to initiate a 2 dose treatment cycle under and amended protocol with ft 596 administered on days, 1 and 15 beginning at 300.

Scott Washko: In the third quarter, we expect to initiate our Phase I clinical trial of FT-538 in solid tumors. The trial is a multi-arm study and will assess FT-538 in combination with checkpoint inhibitor therapy in patients with resistance to PD-1, PD-L1 blockades and in combination with an array of monoclonal antibodies, including those that target the tumor-associated antigens EGFR, HER2, and PD-L In addition, we intend to submit INDs for three new product candidates over the next 12 months, including FT-536 CAR McGay-McBee, FT-573 CAR B7H3, and our first product candidate under our Janssen collaboration, for which we achieved a pre-clinical milestone in the second quarter.

<unk> million cells per dose.

On August 19, we will host a 90 minute investor event to present interim phase 1 clinical data for our ft, 516, and ft 596 programs in relapsed refractory b cell lymphoma.

During the Investor event, we plan to share the following data.

4 ft 516, we plan to present duration of response for the 11 patients treated in dose cohorts, 2 and 3 of 90 million cells per dose and 300 million cells per dose respectively.

Scott Washko: In the fall, we plan to hold an investor event to further discuss our solid tumor strategy, highlight our multiplexed engineered pipeline, and present phase one clinical data from our FT500 and FT516 studies. I would now like to turn the call over to Ed to highlight our second quarter financial results. Thank you, Scott.

This will provide the first indication as to whether ft 516 can effectively drive durable responses against CD 20 positive tumors, including in patients that have progressed on autologous CD 19 car T cell therapy.

Edward J. Dulac: Turning to our financial results, revenue was $13.4 million for the second quarter of 2021, compared to $5.5 million for the same period last year. Revenue in the current quarter was derived from our collaborations with Janssen and Ono Pharmaceuticals. Research and development expenses for the second quarter of 2021 were $48 million, compared to $26.7 million for the same period last year. The increase in our R&D expenses was attributable primarily to an increase in employee headcount and compensation, including share-based compensation, and in expenses associated with third-party professional consultants and equipment and materials.

For Ft 596, we plan to present safety and overall response rates for 10 patients and the monotherapy arm and for 10 patients and the Rituximab combination arm. So 20 patients total.

As a reminder, the ft 596 phase 1 study is open to patients that have previously been treated with autologous CD 19 car T cell therapy.

With respect to the monotherapy arm.

Ft 596 does not benefit from the addition of Rituximab for CD 20 targeting.

We will look to these first 10 mono therapy patients to assess the potential of our novel CD 19 targeted car to drive objective responses, especially in those patients that are naive to autologous CD 19 car T cell therapy.

Edward J. Dulac: General and administrative expenses for the second quarter of 2021 were $12.2 million, compared to $7.5 million for the same period last year. The increase in our G&A expenses was attributable primarily to...

With respect to the combination arm. We also consider the first 10 patients to primarily via test of the car construct potency.

Edward J. Dulac: This is primarily due to an increase in headcount and employee compensation, including share-based compensation. Total operating expenses for the second quarter of 2021 were $46.9 million, net of $13.3 million in non-cash, share-based compensation expenses. In the second quarter, we recorded a non-cash $8.7 million non-operating expense associated with the fair value of contingent milestone payments under our IPSC-derived CAR T-cell collaboration with Memorial Sloan Kettering. In the event that a certain clinical milestone is achieved with an IPSC-derived CAR T-cell product candidate, up to three milestone payments may be owed to MSK based on

Rather than a test of the multi antigen targeting potential of ft 596.

Call based on our dose dependency operations observations from our Ft 516 study.

We did not see activity.

Of the H and CD 16 car, sorry, <unk> 16 construct until a dose of 90 million cells..3 times..1 Sleekly weekly was reached in other words, a cumulative sell exposure of 270 million ft $5.

<unk> sells therefore at single dose levels of $30 million and 90 million ft 596 cells, we would not expect the H and CD 16 construct to be a major contributor to efficacy that said in the.

Edward J. Dulac: The following are the subsequent trading values of the company's common stock, ranging from $50 to $150 per share. These milestone payments, in the aggregate, total up to $75 million, and no amounts have been paid as of yet.

<unk>, we would consider objective responses in patients that have progressed on CD 19 car T cell therapy as compelling demonstration of the dual antigen targeting functionality of ft, 596, and the product candidates unique ability to address.

Edward J. Dulac: as of the second quarter of 2021 to MSK. We will remeasure this liability, currently valued in the aggregate at $55.7 million on a quarterly basis, and changes in the fair value will be recorded in our earnings as a non-operating income or expense.

S tumor heterogeneity and antigen escape.

Edward J. Dulac: Note that in July, with the treatment of the first patient with FT-819, the clinical milestone was achieved, and the first milestone payment of $20 million is owed to MSK.

Additionally, patients with clinical benefit after the first ft 596 treatment cycle are eligible to receive a second single dose treatment cycle with FDA consent.

Edward J. Dulac: The company ended the second quarter of 2021 with $845 million in cash, cash equivalents, and investments. Common stock outstanding was 94 million shares, and preferred convertible stock outstanding was 2.8 million shares, each of which is convertible into five shares of common stock under certain conditions.

And we plan to present safety and response rates after the second ft, $5.96 treatment cycle.

Finally, we plan to share certain translational observations from both the ft 516, and Ft 596 phase 1 studies.

Turning to our other disease areas for a brief update we are encouraged by the interim phase 1 clinical data from our ft, 516, and FTE $5.38 programs and relapsed refractory AML that we shared at our Investor event in May which indicated that Ips derived and.

Operator: And with that, I would now like to open the call to questions. Thank you. If you have a question...

Operator: Thank you. If you have a question at this time, please press the stars and the 1 key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key.

K cells are well tolerated and can induce objective responses with complete leukemic blast clearance in the bone marrow.

Yigal Dov Nochomovitz: And our first question comes from Yigal Nochomovitz from Citigroup. Please go ahead. All right, great. Thank you very much.

Importantly, these compelling clinical outcomes were achieved with Ips derived NK cells administered off the shelf in the outpatient setting and.

Yigal Dov Nochomovitz: Hi Scott, and thanks for taking the questions. Could you just clarify something about your high-level development strategy? Is it the correct assumption that you plan...

And without patient matching.

This therapeutic paradigm has the potential to efficiently and effectively treat many patients with AML and overcome the significant challenges that have limited the clinical advancement of donor derived NK cell therapy, which.

Yigal Dov Nochomovitz: and to select FT-516 or FT-596.

Yigal Dov Nochomovitz: FT-596 for late-stage studies in B-cell lymphoma, and if so, are you more likely to select 596 for advanced development in BCL, given the additional engineered features in 596?

Which typically requires use of Trent a transplant like process, where patients are hospitalized receive intense lymphoma depleting chemotherapy and are administered donor NK cells that are specifically manufactured for and matched to the patient.

Scott Washko: So I certainly believe FT596 is a best-in-class product candidate for reasons that we've described in B-cell lymphoma, given it has multi-antigen targeting potential and can overcome, for instance, heterogeneity and antigen escape. That said, we're very pleased with the data we're seeing so far with FT516. And we think there may be some unique opportunities, for instance, as I alluded to, down the line of CAR T-cell therapy, where we may be able to move very quickly on a path toward the market with FT516.

Dose escalation for Ft, 516 program as monotherapy is ongoing with enrollment and dose cohort 3 at 900 million cells per dose, which we expect to complete during the third quarter.

No dose limiting toxicities have been reported and treatment with ft 516 continues to be well tolerated.

Scott Washko: We will continue to be guided by the data from both studies as we refine and further develop our development strategy. But right now, I would say yes. FT596, I think, is a best-in-class product candidate. For FT516, I think there are unique opportunities where we can move quickly, including downline CAR T-cell therapy.

Dose escalation for Ft, 538 program as monotherapy is ongoing with enrollment and dose cohort 1 at 100 million cells per dose.

No dose limiting toxicities have been reported.

However, we have not yet cleared dose cohort 1.

Until recently, our Ft 538 Phase 1 study was open and a single clinical site only we have now activated multiple additional sites for conduct of our ft $5.38 phase 1 study and expect to increase the pace of enrollment with these additional sites now.

Scott Washko: Thanks. And then on that point about the new cohort that you're planning to initiate for 5.1.6 and patients previous

Yigal Dov Nochomovitz: https://www.yigalnochomovitz.com

Scott Washko: for their enrollment. I think

Scott Washko: They could, as currently contemplated, progress or actually fail.

Open.

Upon clearance of dose cohort 1 enrollment will also initiate in the investigator initiated study of <unk> $5.38 in combination with Dara 2 mab for relapsed refractory AML.

Scott Washko: Okay, great, thank you.

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

Michael Schmidt: Hey, it's Scott. Thanks for taking my class.

We expect to report additional clinical data from the dose escalation stages of our $5.16, and $5.38 phase 1 studies in relapsed refractory AML at the American Society of Hematology annual meeting in December.

Michael Schmidt: Congratulations on all the progress and the detailed pipeline update. I just had a clarification regarding your FT-596 update and future plans for that product in lymphoma. Could you clarify how many of these 20 patients that you're planning to present on have received a second dose? And then, second to that, you are switching over now to a two-dose treatment protocol in the study. I guess, what is your confidence level that two doses is sufficient to generate a durable response?

At Ash, we also expect to report the first clinical data from our FTE $5.38, and ft, $5, 7 and 6 programs in relapsed refractory multiple myeloma.

Similar to our approach in lymphoma, we are beginning clinical investigation and multiple myeloma by leveraging our high affinity non cleavable <unk> FC receptor and we are combining ft 538, with the CD 38 targeted monoclonal antibody Dara to map.

Michael Schmidt: We generate durable responses and also maximize the potential additive effect of rituximab.

Scott Washko: That's a tough question to answer 10 days in advance of data disclosure. So with respect to the number of patients that have been administered a second dose, I mean, we'll provide that data as part of the update. I will say that we have administered a second cycle with FDA consent to monotherapy patients as well as combination patients. I think I'll leave that first. I'll leave it at that.

To maximize antibody dependent cellular cytotoxicity.

We have activated multiple clinical sites for conduct of our phase 1 study.

And enrollment of up to $5.38, and combination with Dara will be initiated at 100 million cells per dose upon clearance of dose cohort 1 and the phase 1 study of <unk> $5.38 in relapse refractory AML.

Scott Washko: With respect to the single versus the two dose treatment regimen, we're going to run the experiment. I mean, I think the reality is we are now looking at response rates at single doses, at 300 million cells. We will escalate, as we already have, to 900 million cells per single dose. We will likely backfill patients at 300 million and 900 million to get a meaningful cohort of single-dose patients. And we will compare that to the cohort at $300 million and $900 million under the... 2-dose treatment.

GMP production is underway for ft, 5.7 and 6 are off the shelf Ips derived car NK cell product candidate designed to target multiple antigens through its high affinity non cleavable <unk> FC receptor and its high avidity vs CMA targeted car.

And approach that we believe may hold best in class potential for the treatment of multiple myeloma.

The multi center phase 1 clinical trial is designed to assess both single dose and multi dose treatment regimens of ft, 5.7 and 6 as monotherapy and in combination with Dara.

The study will initiate upon completion of GMP manufacture and successful release of drug product.

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

We continue to be pleased with our progress in building a deep pipeline of novel Multiplexed engineered.

<unk> derived car NK cell product candidates for solid tumors.

Michael Schmidt: But it sounds like you're not leaning towards...

We are well positioned to exploit multiple mechanisms, where NK cells may be uniquely advantaged, including targeting tumors with acquired resistance to PD, 1 PDL, 1 blockade, resulting from loss of MHC class 1 expression.

Michael Schmidt: As a six-dose regimen like you have implemented in 5G.

Scott Washko: and 516 Study, is that correct?

Scott Washko: Okay, super helpful. And then another question just on development strategy now with 819, the CB19 CAR-T program in the clinic. I guess, how do you think about positioning that longer term?

Combining with standard of care monoclonal antibodies to maximize CD 16 mediated ADC.

Michael Schmidt: http://www.youtube.com or the link in the description below.

And incorporating cars and other synthetic receptors to directly target cell surface antigens and stress ligands and.

Scott Washko: Yeah, I think it's too early to know. We're just starting with t-cells. I do think, however, clearly NK-Self to date has a differentiated safety profile so far. Obviously, we have not necessarily seen from Fate Therapeutics or any other company response rates at higher dose levels as well as the durability of those responses. So, you know, I think it's too early in our development life cycle for both FT-516 and FT-596 to think about how we will advance these different product candidates, or how an NK cell will compare with a T cell.

And the third quarter, we expect to initiate our phase 1 clinical trial of <unk> $5.38, and solid tumors. The trial is a multi arm study and we will assess ft, $5.38, and combination with checkpoint inhibitor therapy and patients with resistance to PD, 1 PD lone blockade.

And in combination with an array of monoclonal antibodies, including those that target the tumor associated antigens Egfr her 2 and PDL 1.

In addition, we intend to submit <unk> for 3 new product candidates over the next 12 months, including FTE 536, Kerr Mcgee Mcbee ft, 5.7 and 3 car <unk> III.

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

And our first product candidate under our Janssen collaboration for which we achieved a preclinical milestone in the second quarter.

In the fall we plan to hold an investor event to further discuss our solid tumor strategy.

Highlighting our multiplexed engineered pipeline and presenting phase 1 clinical data from our ft, 500, and Ft 516 studies.

Scott Washko: Great, thanks for the answers, Scott. I really appreciate it. Sure, sure.

Alicia Young: Our next question comes from Alicia Young from Cancer Fitzgerald. Please go ahead.

I would now like to turn the call over to Ed to highlight our second quarter financial results.

Alicia Young: Hey guys, thanks for taking the time to answer my questions. Maybe just two for me. One, this is a big picture. You have so many products, and I know you were kind of talking about late stage, maybe 5.16, failed CAR T. How do you think about that? Do all the products need to be blockbusters, or is there kind of a strategy behind some being fast to market and some being blockbusters, since you kind of have a building platform?

Thank you Scott turning to our financial results revenue was $13.4 million for the second quarter of 2021 compared to $5.5 million for the same period last year.

Revenue and the current quarter was derived from our collaborations with Janssen and Ono pharmaceutical.

Alicia Young: And then I guess my second question is, can you just talk a little bit about how you think we'll have enough duration by the time we get to Ash, you know, to kind of make heads or tails of some of the activity here? Sure. So I'll start with the second question.

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

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

Scott Washko: Sure. So I'll start with the second question.

Scott Washko: Yeah, I mean, at ASH, I think we will have even a significantly longer duration of response with FT516, certainly. And I think we'll get our first meaningful view of duration of response with respect to 596. So I think ASH is going to provide us with a lot of really good information with respect to both 516 and 596 durability of response, including understanding 596 monotherapy versus combination. We may not necessarily be at a point to tease out single dose versus two doses with respect to duration of response. As it relates to your first question, look, we're going to be really opportunistic. I've said it before.

General and administration administrative expenses for the second quarter of 2021 were $12.2 million compared to $7.5 million for the same period last year the.

The increase and our G&A expenses was attributable primarily to an increase and head count and employee compensation, including share based compensation.

Total operating expenses for the second quarter of 2021 were $46.9 million net of $13.3 million and noncash share based compensation expense.

Scott Washko: I think FT516 and its performance to date have surprised us pleasantly. You know, we saw significant response rates at 90 million and 300 million cells, including patients down the line of CAR T-cell therapy. I think that was a fairly unique observation, and I think it does provide a potentially very fast path to market. And even though I believe 596 is a best-in-class product candidate, I think the FT516 opportunity is there, and we want to move quickly with it and take advantage of that.

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

In the event a certain clinical milestone is achieved with an Ips derived car T cell product candidate and up to 3 milestone payments may be owed to Mfk based on subsequent trading values of the company's common stock ranging from 50 to $150 per share.

Michael Jonathan Yee: Our next question comes from Michael Yee from Jeffreys. Please go ahead.

Michael Jonathan Yee: Hi, thanks. I appreciate the question, Scott. Thanks for the updates. I wanted to understand some of your comments, I guess, on 516 and 596, about this data update coming up, how you would contextualize

These milestone payments in the aggregate total up to $75 million and no amounts have been paid as of the second quarter of 2021 to M. S. K.

We will re measure this liability currently valued in the aggregate at $55.7 million on a quarterly basis and changes in the fair value will be recorded in our earnings as a non operating income or expense.

Michael Jonathan Yee: the data in CRH for 5.1.6 versus what we would see for 5.9.6, how to think about those two from a CRH perspective. And most importantly, you've just commented on durability being much clearer at ASH, but I would like to understand in the handful of patients we'll get here coming up, how should we contextualize durability? Thank you.

Note that in July with the treatment of the first patient with ft, 8 and 19, the clinical milestone was achieved and the first milestone payment and the amount of $20 million is owed to M. S. K.

Scott Washko: Okay, so durability. We will absolutely provide an update on durability of response with respect to the FT-516 study, to be very clear about that. With respect to FT-596, we are not far enough along to have a meaningful discussion with respect to durability of response. We will clearly provide response rates for 10 patients on monotherapy and 10 patients in combination.

The company ended the second quarter of 2021 with $845 million of cash cash equivalents and investments.

Common stock outstanding was 94 million shares and preferred convertible stock outstanding was $2.8 million shares each of which is convertible into 5 shares of common stock under certain conditions.

And with that I would now like to open the call up to questions.

Scott Washko: With respect to thinking about FT-516 versus 596... I think it's an interesting first observation because, at one level, the FT-516 study is essentially about the potency, if you will, of the HN-CD16 car construct. The FT596 study, while there is a combination arm, I don't think we're getting much tailwind yet in the combination arm from the HNCD16 receptor because of the low doses and the single dose schedule. So I do think the 596 study, at some basic level, at these lower doses, is a test of car potency.

Thank you and we have a question at this time. Please press the Star then the 1 key on your Touchtone telephone and there.

Question has been answered or you wish to remove yourself from the queue. Please press the pound key.

And our first question comes from Yoga and local markets from Citigroup. Please go ahead.

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

Could you just clarify something about your high level development strategy is that the correct assumption that you plan to select ft 516.

<unk> Ft 596, late stage studies, and B cell lymphoma, and if so are you more likely to select $5.96 for advanced development and Bcl given the additional engineered features and $5.96.

Scott Washko: And so I think at some basic level, at this early stage of comparison, we're looking at FT516 at one level, assessing the potency of HNCD16, and with FT596, we're assessing the potency of the CAR construct. And obviously, we would love to be able to see potency from both those mechanisms of action because I think that would feed in to essentially the premise that we have a best-in-class, dual-antigen-targeted product candidate, where both targeting mechanisms have the potential to drive meaningful responses. And to clarify your comment on durability, do you believe, or let's differentiate, the street seems to believe that allogeneic CAR-T...

Sure.

So I certainly believe ft 596 of the best in class product candidate for reasons that we've described and B cell lymphoma, given and it has multi antigen targeting potential and can overcome for instance, heterogeneity and antigen escape.

That said, we are very pleased with the data we're seeing so far with ft 516, and we think there may be some unique opportunities for instance, as I alluded to down line of car T cell therapy, where we may be able to move very quickly on a path towards market.

With Ft 516.

Michael Jonathan Yee: https://www.youtube.com.uk I clearly think that we need to compete on therapeutic profiles. Absolutely. I've said this at a high level. Look, I do think safety can be a differentiator, but at the end of the day, I think you've got to compete on the therapeutic profile, which obviously is driven primarily by response rates and durability of response. I mean, I've said this sort of flippantly before, like, you know, the patient doesn't care where the cells came from. You have to deliver the patient the best. Okay, thank you. That's clear. Our next question comes from Daina Graybosch from SVV, Wierink. Please go ahead. Hi, thank you for the question; there are two for me.

We will continue to be guided by the data from both studies in as we refine and develop further develop our development strategy, but right now I would say yes.

<unk> hundred 96, I think is best in class product candidate Ft 516, I think there is unique opportunities, where we can move quickly including down line of car T cell therapy.

Thanks, and then on that point about the new cohort that you're planning to initiate and for $5.6 on patients previously treated with <unk> car T.

<unk> that those patients had to have not responded to prior autologous car T or for just the prior response on.

Hello, This is car T and not not relevant to their enrollment.

They could as currently contemplated progressed or actually failed.

Okay, great. Thank you.

Sure.

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

Daina Michelle Graybosch: I wonder if you could talk about why?

Hey, it's Scott Thanks for taking my questions and congrats on all the progress and the detailed pipeline update.

Daina Michelle Graybosch: why you decided to do in the two-dose regimen of 596.

Just had a clarification regarding your ft 5.9 states.

Daina Michelle Graybosch: https://www.cdc.gov.au

Date, and future plans for that product and lymphoma could you clarify how many of these 20 patients that you are planning to present on have we received a second dose.

Daina Michelle Graybosch: The second question is when should we expect to see more pharmacokinetic data from 566?

Daina Michelle Graybosch: 516 and 596 in Anhan.

And then second to that.

You are switching over now to a 2 dose treatment protocol and the study.

Scott Washko: and non-Hodgkin's lymphoma, both peripheral blood and tumor, and over time. So we'll provide a translational update from 5.16 and 5.96, certainly at the investor event, and we'll continue to do that at ASH when we have additional discussions with 5.16 and 5.96, with respect to the lymphoma franchise. As it relates to... Why? [inaudible] We also believe that...

And what is your confidence level debt to deal with this is sufficient to generate durable responses and also maximize the potential of additive and fast of Rituximab.

Yes.

A tough question and answer 10 days in advance of a data disclosure.

So with respect to the number of patients that have achieved.

I have been administered a second dose.

I will provide that data as part of the update I will say that we have.

Administered a second cycle with FDA consent.

Scott Washko: I'll use the phrase the kill window, if you will, to really drive deep, durable responses occurs in the first 30 to 45 days. And we certainly want to basically maximize the therapeutic availability during that 30-45 day window. So our view is certainly that, especially within K-cells and the shorter life cycle, it is to provide more than one dose, in this case, two doses, during the first 30-day window. And compare that, for instance, with the single dose cycle.

2 mono therapy patients as well as combination patients I think I'll leave that first.

I'll leave it at that.

With respect to the single versus the 2 dose treatment regimen, we're going to run the experiment I mean I think the reality is we are now looking at response rates at single dose.

At 300 million cells, we will escalate.

As we already have 2.900 million cells single dose.

We will likely backfill patients at $300 million and $900 million to get a meaningful cohort of single dose patients and.

Ben Burnett: Our next question comes from Ben Burnett from Stiefel. Please go ahead.

And we will compare that to the cohort at 30 at $300 million and $900 million under the.

Ben Burnett: Hey, thank you very much.

Ben Burnett: So I want to ask about the FT-596 academic study, which I believe is at the University of Minnesota, in the adjuvant setting. What's the status here, and I guess do you have a sense for when this might reach a point of maturity in terms of having enough data to present publicly? Yeah. Sure.

2 dose treatment, so I think.

If you think about it at some basic level, we're going to get a cohort of say <unk>.

12 to 20 patients looking at single dose and 12% to 20 patients looking at 2 doses at the highest dose levels.

Scott Washko: Enrolling patients. I didn't provide an update on it. As you alluded to, it's an investigator-initiated study at the University of Minnesota. Still enrolling patients, absolutely. Probably provide an update, I suspect probably not at ASH, given how crowded ASH will be with our updates, but maybe in the first quarter, for instance, at the TCT conference, as an example.

And can make a decision and make a decision and make a decision from there.

But it sounds like youre not leaning towards a.

Fixed dose regimen, and like you have implemented and 5.1 and 6 study is that correct.

That's correct.

Okay Super helpful. And then another question just on development strategy now with <unk>.

1.9 and debt CD 19 car T program and the clinic I guess, how do you think about positioning that along with Tom and relative to the $5.96 product candidates in terms of development strategy.

Ben Burnett: And then just one quick question on 819. Apologies if I missed this, but the program that you outlined, the clinical program, is this in specifically patients that are naive to CD19 CAR-T? With 819, no. So patients can have previously received CAR-19 cell therapy.

Yeah, I think it's too early to know I mean.

We're just starting with T cells I do think.

Clearly NK cells to date I do think have a differentiated safety profile so far.

Scott Washko: Okay. Okay. Thank you very much. I appreciate it.

Obviously, we have not necessarily seen from fate therapeutics or any other company.

Peter Richard Lawson: Our next question comes from Peter Lawson from Barclays. Please go ahead. Thanks for taking my question.

Response rates at higher dose levels as well as the durability of those responses. So I think it's too early in our development lifecycle of both ft, 516, and ft $5.96 to think about how we will.

Peter Richard Lawson: Thanks for taking my questions. Just the data update we get on the 19th, how many patients could we... We've seen that with post-CAR T-cells. Let's wait for the data. Let's wait for the discussion.

Advance these different product candidates, how and NK cell will compare with a T cell that said I've always said and it won't surprise me and the next let's call. It 18 months, if there may be and investigator initiated study, where and NK cell is combined with a T cell and I think to day.

Peter Richard Lawson: Okay, I mean, as an example, in 516, we had four of 11 patients were post CAR T cell therapy, I believe. Similar range, probably, something in that range. Perfect, thank you. And then, how many patients do you think you'll need to try and file in a postcard to yourself? I think it would be pure speculation for me to give you a number. I think what our plan is, and we'll discuss more of this at our investor event, is to complete dose escalation 4, 5, 16, and pursue our MAT designation to have those conversations. Thank you. And then, just as we think about the solid human, readout. Do you think 516?

And we're the only company that has the unique potential to exploit both on knee and adaptive immunity.

And off the shelf setting.

Great. Thanks for the answers Scott really appreciate it sure sure.

Sure.

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

Hey, guys. Thanks for taking my questions, maybe just 2 for me.

And this is a big picture and you have so many products and I just and I know you were kind of talking about late stage, maybe 516 failed car T. How do you think about that and do all the products need to be blockbusters or is there kind of a strategy behind some being passed the marker and sunbeam and blockbuster since you've got on like a building platform and then I guess my my second question is can you just talk a little bit about like.

Peter Richard Lawson: So, 500 could be a viable long-term product in solid tumors, or should we really be kind of focused on...

Scott Washko: I guess 536 or other constructs in solid tumors. Yeah, no, I think 516. I think 500 and 516 in the solid tumor setting at some basic level are proof of concepts, understanding sort of translational learnings and incorporating those into certainly 538 and then even more complex engineered cell therapies that have direct targeting like the three products I alluded to, FT536, FT573, and the first chance in product counseling. So I think the true test in solid tumors, at the end of the day, while I think we can absolutely gain learnings from 500 and 516, I think the true test to maximize patient benefit is certainly with a multiplexed engineered cell therapy in solid tumors. So that update in the middle of the year, or 3Q, would be more focused around...

Kind of.

If we think we'll have enough duration by the time, we get to as you know the time to make head details of some of the activity and there. Thanks.

Sure. So I'll start with the second question, Yes, I mean.

And at Ash I think we will have.

Even significantly longer duration of response with Ft, 516, and certainly and I think we'll get our first meaningful view of duration of response with respect to 596. So I think ash is going to provide us a lot of really good information with respect to both $5.16, and 596 durability of response, including understand.

<unk>.

On the 596 monotherapy versus combination we may not necessarily be it a point to tease out the single dose versus 2 doses with respect to duration of response.

Peter Richard Lawson: of Biomarker work as opposed to PRs and deep... Yeah, yeah, I mean, yeah, I mean to put it in context, I don't think...

As it relates to your first question look we're going to be really opportunistic I've said it before I think ft 516, and its performance to date has surprised us pleasantly.

Peter Richard Lawson: Gotcha. Okay. Thank you so much. Sure.

We saw significant response rates at $90 million and 300 million cells, including patients down line of car T cell therapy, I think that was a fairly unique observation and I think it does provider potentially very fast path to market and.

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

Matthew Cornell Biegler: I actually want to piggyback on that last question, just about the overall solid tumor strategy. You know, given where your market cap is now, I'm, I'm kind of curious how important success in solid tumors is for your platform, and maybe if you could just point to any data, it can be more broadly used amongst the NK cell therapy space. That kind of gives you confidence that you can find success, or at least proof of concept, in solid tumors. I think, if I remember back to the year-old Apollo study, there was at least one partial response. So, any help you could give? Yeah.

Even though I believe 596 is a best in class product candidate and I think the ft 516 opportunity is there and we want to move quickly with it and take advantage of that.

Great. Thank you.

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

Hi, Thanks I appreciate the question Scott Thanks for the updates.

I wanted to understand some of your comments I guess on $501.6 and $5.96, this data update coming up.

Scott Washko: Yeah, no, actually; that was one of the references I was going to give you. I mean, when we were advancing, and you've been following Fate long enough to remember, when we were advancing actually a donor-derived NK cell therapy, which was partnered with the University of Minnesota, and you have to go back now, you know, two or three years for this, we did run a very interesting study in solid tumors, specifically patients with recurrent ovarian cancer.

How are you.

And what contextualize the data and CRH for 516 versus what we would see for $5.96, how do you think about those 2 from a CRA perspective and.

Most importantly, you just commented about durability much more clear at ash, but I would like to understand and the handful of patients who will get you are coming up how should we contextualize durability. Thank you.

Scott Washko: And we, it was a single dose of a donor-derived NK cell product, I think delivered at close to maybe a billion cells, and it was delivered locally with IL-2. And in fact, in that small cohort of patients, I think six patients, there were several patients that had stable disease for a meaningful period of time, so duration of disease control was meaningful. And in fact, yes, you are remembering correctly, one of the patients actually did achieve a partial response.

Okay. So durability, we will absolutely provide and update on durability of response with respect to the Ft 516 study.

To be very clear about that.

With respect to Ft 596, we are not far enough along to.

So you have a meaningful discussion with respect to durability of response, we will clearly provide response rates on 10 patients in monotherapy and 10 patients in combination.

Scott Washko: So I do think there is precedent, clearly, where NK cells in certain areas may be advantaged, certain mechanisms that we do want to exploit. We've talked about in the past, for instance, patients that have progressed on checkpoint inhibitor therapy, where tumor mutations drive down the regulation of MHC class 1. It's a perfect setting for an NK cell to potentially have unique activity compared to a T cell as, you know, there's loss of function with respect to antigen presentation.

With respect to thinking about ft 516 versus 596.

I think it's an interesting first observation because at 1 level.

The Ft 516 study is essentially about the potency if you will of the H and CD 16 car construct.

The Ft 596 study, while there is a combination arm I don't think were getting much tailwind yet in the combination arm from $5 <unk> from the <unk> CD 16 receptor because of the dose the low doses and the single dose schedule and so I do think the 596 study at some basic law.

Scott Washko: Clearly, we believe CD16 is an important receptor and can synergize with monoclonal antibody therapy, and we think that's supported by data that's been seen with respect to, in the solid tumor setting and monoclonal antibodies. You know, folks walking around with the high affinity CD16 flavor do better with outcomes with monoclonal antibody therapy in solid tumors. So I think there's certainly, you know...

At these lower doses is it is a test of car potency and so I think at some basic level at this early stage of comparison, we're looking at Ft 516 at 1 level.

Matthew Cornell Biegler: There's a lot of proof of concept out there, but yeah, clearly we are pioneering NK cell therapy in solid tumors. It's an important initiative for us. It's supported by investment in a significant pipeline. We've declared two product candidates already that are multiplexed engineered with CARs, in addition to 538, McA, McB, and B7H3. You know, in our collaborations, both with Janssen and Ono, the product candidates we're developing are against solid tumors. Yeah.

Assessing its the potency of <unk> 16 with Ft 596, we're assessing the potency of the car construct and obviously, we would love to be able to see potency from both those mechanisms of action because I think that would feed in to essentially the premise that we have a best in class dual antigen targeted.

Product candidate.

Both mechanism targeting mechanisms have the potential to drive meaningful responses.

Matthew Cornell Biegler: Yeah, that's exciting. Congrats on the progress, guys.

And to clarify your comment on durability do you believe or to penetrate the street seems to believe that allogeneic car T. Durability, that's out there and the public domain is somewhat of the front runner on in terms of having data do you believe that you want to be better than that in addition to the fact that you have and improved safety profile.

Mara Goldstein: Our next question comes from Mara Goldstein from Missy Hope. Please go ahead. Great. Thanks so much. Hey, Scott, I wanted to revisit something that you said around sort of

Mara Goldstein: multiplex candidates and, you know, seeing activity.

Thank you.

And I clearly I clearly think.

And that we need to compete on therapeutic profile.

Mara Goldstein: as a function of the duration of treatment. And could you talk a little bit?

Absolutely.

Scott Washko: And can you talk a little bit more about that and what the kinetics behind that are?

I've said this at a high level look I do think safety can be a differentiator, but at the end of the day I think you got to compete on therapeutic profile, which obviously is driven primarily by response rates and durability of response I mean, I've said this sort of flippantly before like the patient doesn't care, where the sales came from you have to deliver the patient the best product.

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

Okay. Thank you that's clear.

Scott Washko: Okay, and then also, I'm just wondering, from that perspective, where is the opportunity for, you know, therapeutic differentiation there?

Our next question comes from Dana Great Boss from SBB Leerink. Please go ahead.

Hi, Thank you for the question 2 for me I Wonder if you could talk about why you decided to do and the 2 dose regimen and a 596.

Scott Washko: Several different areas. I mean, we'll talk a lot more about this, obviously, at our Solid Tumor Day. I mean, I can turn it over to either Bob or Wayne to talk about the unique potential of MYC-A-MYC-B. But obviously, it's a pan-tumor targeting strategy, if you will. Many tumors significantly up-regulate stress ligands, specifically the MYC-A-MYC-B protein. And one of the main mechanisms of NK cell evasion, I mean, people have talked about mechanisms of T cell evasion, but one of the main mechanisms of NK cell evasion in solid tumors is shedding of the MYC-A and MYC-B stress proteins.

Doses.

And at 2 doses and the first cycle rather than doing 1 dose 2 cycle.

As you initially debt if this FDA approval and the second question is when should we expect to see more pharmacokinetic data and <unk> 16, and pipeline and 6 and non Hodgkin's lymphoma, both peripheral blood and tumor and overtime.

So we will provide a translational update from 516 and 596 certainly at the Investor event, and we will continue to do that at Ash. When we have additional discussions with 516 and $5.96.

And with respect to Poland.

Scott Washko: And so we always liked the idea of targeting stress ligands but really wanted an approach that could overcome the mechanisms of NK cell resistance, which is why our specific MycA-MycB binding domain hits the alpha 3 region and is able to bind and kill even after Mick A and Mick B have been shed from the surface of existence.

Pull them from a franchise.

As it relates to.

Why.

2 doses and 1 cycle and I think that just comes back to the fact that at the end of the day, we believe NK cells relative to <unk> T cells are shorter lived.

We also believe that.

I'll use the phrase the kill window, if you will to really drive deep durable responses occurs and the first 30 to 45 days and we certainly want to basically maximize the therapeutic availability during that 30% to 45 day window.

Robin Karnoskis: Alright. Thanks, Scott. I appreciate it. Sure. And our next question comes from Robin Karnoskis from Truist Securities. Please go ahead. Hey guys, thank you so much for taking my questions. This is Kirpan for Robin. Congratulations on treating...

So our view is certainly that especially with NK cells and the shorter life cycle is to provide.

More than 1 dose in this case 2 doses during the first 30 day window and compare that for instance, with the single dose cycle.

Helpful. Thank you.

Robin Karnoskis: So... A year-long wait after the IND was approved, so I have a question about that. So, can you talk a little bit about, you know, what sort of safety concerns do you have?

Our next.

Comes from Ben Burnett from Stifel. Please go ahead.

Alright, Thank you very much.

I have to ask so I wanted to ask about the FTE $5.96 academic study, which I believe is at the University of Minnesota, and the adjuvant setting.

Robin Karnoskis: you know, these fellows who talked about how these.

Robin Karnoskis: T-cells don't exhaust because of their differentiated design, and also, I think you mentioned that 819 is a product comprised only of CD8 cells, so

What's the status here and I guess do you have a sense for when the.

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

This might reach a point of maturity in terms of having enough data to present publicly yeah.

Sure and enrolling patients and provide an update on it as you alluded to it's an investigator initiated study.

The University of Minnesota still enrolling patients absolutely.

Probably provide an update on <unk>.

Suspect probably not at ash, given how crowded ash will be with our updates, but maybe in the first quarter for instance.

Scott Washko: So I think we're going into this expecting that 819 is going to bring us squarely into T cell land. And what I mean by that is, obviously, with respect to CAR T cell therapies, CRS is a concern. ICANN is a concern. Neurotoxicity, certainly.

TCT conference as an example.

Okay excellent and then just 1 quick question on 809, and I apologize if I missed this but the program that you outlined the clinical program is this and specifically patients that are naive to CD 19 car T.

With 819 no so.

Patients can have previously received car 19 cell therapy.

Scott Washko: And so I think we are thinking with respect to 819, that absolutely, if 819 is truly a T cell, and we believe it is, that we will potentially face many of the challenges that have confronted the autologous and allogeneic CAR T-cell space. I think one of the things that we've done in this study, interestingly, is there's been some work done with autologous CAR T-cell therapy to suggest that lower doses and multiple doses over a shorter period of time potentially can drive responses but mitigate some of the risks associated with CRS and neurotoxicity.

Okay. Okay. Thank you very much I appreciate it.

Sure.

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

And thanks for taking my questions.

The data update and we get on the 19th how many patients could we could we see and that post car T cell setting.

On.

Let's wait for the data, let's wait for the discussion.

Okay.

As an exact as an example, we had in 2016, we had 4 of 11 patients were post car T cell therapy I believe.

Similar range, probably something in that range.

Perfect. Thank you and then how many patients you think youll need to try and file and post car T cell setting.

Scott Washko: And that's why one of the arms of our studies, in this 819 study, is actually the fractionated dose arm, where essentially you give a third of the dose, a third of the dose, and a third of the dose spread out over a five-day period. So that's one of the ways we're thinking about trying to optimize the potential of an IPS-derived T-cell therapy compared to, for instance, the autologous world.

Yes.

Net.

I think.

It would be pure speculation for me to give you a number.

And what our plan is and we'll discuss more of this at our Investor event is to complete dose escalation for <unk> 16, and pursue our mat designation to have those conversations.

Thank you and then just as we think about the solid achievement.

Scott Washko: With respect to your question of manufacture, you know, it was a unique situation. The reality was, we had kicked off a manufacturing campaign for 819. And we had completed that, and that campaign was ongoing. And we are constantly investing in process development improvements, including scalability and consistency of product. And at the end of the day, while we were doing that first manufacturing run, we did discover and have some innovative developments where we wanted to, I would say, slightly, but in some important areas, modify the 819.

Readout.

Do you think 5 months at Tso 500 could be a viable long term product and solid tumors or should we really be kind of focused around I guess 3 of the <unk> and solid share yes.

I think 516, I think $505.16 in the solid tumor setting at some basic level are proof of concepts understanding sort of.

Translational learnings and incorporating those into certainly $5.38, and then even more complex engineered cell therapies that have direct targeting like the 3 products I alluded to ft, 536, FTE $5.73, and the first Janssen product candidate.

Got you so I think the truth.

Scott Washko: And so what we decided to do, since we did not treat the first patient, we decided to incorporate that into the manufacturing process, rerun the manufacturing process, and then ultimately release the product. So this was a pretty unique circumstance where there was a development, an in-process development that we felt was important enough, and given we hadn't treated the first patient, we elected to wait.

The truth I think the true test and solid tumors at the end of the day, while I think we can absolutely gain learnings from 550, <unk> I think the true test and to maximize patient benefit is certainly with a multiplexed engineered cell therapy and solid tumors.

That update and the middle of the year <unk> would be more focused around kind of biomarker work as opposed to <unk>.

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

Robin Karnoskis: Great, thank you. Very helpful. And just a follow-up...

Got you okay. Thank you so much.

Robin Karnoskis: I have a question on AML. Are we still on track for readout around the ASH timeframe?

Sure.

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

Scott Washko: https://www.youtube.com Correct. Do you think, you know, you mentioned at the earlier data readout that 538 is, in preclinical studies, more potent than 516. Do you think you'll have enough data this year to make a decision about which one to take forward in AML?

Hey, Scott can you hear me.

We I can thank you okay, great. Thanks for that question and I actually I want to piggyback on that last question and just about the overall solid tumor strategy.

Given where your market cap is now on.

And kind of curious how important and success and solid tumors for your platform and and maybe if you could just point to any data and it can be more broadly amongst the NK cell therapy space and.

Scott Washko: Yeah, if we're not quite there at ASH, I think we'll be there shortly thereafter and sort of, you know, my expectation today, again, largely based on preclinical data, that FT538 is going to be the product candidate we pick moving forward in AML.

And that gives you confidence that you can find success or at least proof of concept and solid tumors I think if I remember back to the year old Apollo study there is at least 1 partial response.

Scott Washko: Okay, great. Thank you.

And yes, you could do thanks, Yeah and now actually.

Scott Washko: But, you know, I'm happy to be surprised again with 516.

And that's that was 1 of the references I was going to give you I mean, when we were advancing and you've been following fate long enough to remember when we were advancing actually a donor derived NK cell therapy, with which was partnered with the University of Minnesota and you have to go back now 2 or 3 years for this we did run a very interesting study.

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

Nick Abbott: Thank you. Scott, compliments on a clear, comprehensive update today. Unfortunately, my questions probably will neither be as clear nor as comprehensive. But the first one relates to 819, and you've discussed this a little bit, but you've designed a very broad and aggressive program, so this is clearly not just establishing proof of concept. So do you believe you can show superiority with, you know, currently in development or approved off the shelves? Sorry, In Development Off the Shelf, Florida. Or, you know, establish just a broad reference range for your own internal development of next-gen products? And I have a follow-on question. Thanks.

In solid tumors, specifically patients with recurrent ovarian cancer and we it was a single dose.

That donor derived NK cell product I think delivered at close to maybe 1 billion cells and it was delivered locally.

And with IL, 2 and in fact and that small cohort of patients I think 6 patients. There were several patients that had stable disease for a meaningful period of time, so duration of disease control is meaningful and in fact, yes, you are remember and correctly 1 of the patients actually did achieve a partial response.

Scott Washko: Yeah, I think from my perspective, look, I think, and I've said this before, I think that the patient-derived CAR T-cell products have delivered revolutionary results for patients. And certainly, there are logistical challenges. Certainly, there are clinical complexities associated with patient-derived products, but the results are fairly remarkable. And when I think about FT819, that's the bar. Quite honestly, I think that's the bar with 596 as well. That's the reality of what's out there.

And so I do think there is precedent.

Clearly, we're NK cells and certain.

Areas may be advantaged certain mechanisms that we do want to exploit we've talked about in the past for instance patients that have progressed on checkpoint inhibitor therapy, where tumor mutations drive down regulation of MHC class 1, it's a perfect setting for and NK cell to.

We have unique activity compared to a T cell is there's loss of function with respect to antigen presentation.

Clearly, we believe <unk> 16 is an important receptor and can synergize with monoclonal antibody therapy, and we think that supported by data that's been seen with respect to in the solid tumor setting and monoclonal antibodies folks walking around with a high affinity CD 16 flavor do better in outcomes with monoclonal antibody.

Scott Washko: There are three CAR-19 products now approved, and I think they're obviously being shepherded by very large, established pharmaceutical companies, and they will continue to invest in bringing those terrific solutions to patients. So, the burden's on us, if you will, to continue to be able to compete with that therapeutic profile. We think there are a lot of advantages, to be really clear, with an off-the-shelf, IPS-derived strategy. But, like I sort of alluded to before, look, at the end of the day, the patient doesn't care where the cells came from. You have to have a terrific therapeutic profile.

Therapy and solid tumors, so I think theres certainly.

Proof of concept out there, but yes, clearly we are pioneering NK cell therapy in solid tumors. It's an important initiative to us it's supported by.

Investment and a significant pipeline we've declared 2 product candidates already that our multiplexed engineered with cars and addition of $5.38.

Nick Abbott: And then just in relation to the new manufacturing facility, I mean, can you talk about how that facility couldn't be used? I mean, for example, could you be making thousands of doses of a single product and simultaneously hundreds of doses of one or more products for a similar trial? Yeah, absolutely.

Mkay Mcbee, and B 783, and I would say under our collaboration both with Janssen and Ono product candidates. We are developing are against solid tumors.

Yes.

And that's exciting congrats on the progress guys.

Scott Washko: Yeah, absolutely. I mean, we didn't give an update here. We'll probably give an update on the next call. We're right on schedule.

Thank you.

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

Scott Washko: We're actually in the midst of moving and occupying that headquarters. It's a 50,000-foot GMP footprint. I think there are maybe 12 different GMP suites. And so certainly, we have the capacity to manufacture multiple different product candidates at a large scale, and we do think we could potentially launch multiple different products candidates from that facility. With continued success, it likely won't be our only manufacturing facility, but certainly, I think it provides us a tremendous opportunity to advance multiple product candidates in parallel and accommodates initial launch, and commercial launch.

Great. Thanks, so much hey, Scott to revisit something that you said around.

And candidate and multiplex candidates and.

No.

And activity.

As a function of duration of treatment and can you talk a little bit more about that and what the kinetics behind that are.

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

Okay and then also on.

Well the Mecca mcbee.

And from that perspective, where is the opportunity for.

Therapeutic differentiation there.

Several several different areas.

Operator: And we have no further questions at this time. I will turn the call over to Scott Washko. Perfect.

And I will.

We'll talk a lot more about this obviously at our solid tumor day, I mean, I can turn it over to.

Scott Washko: Perfect. Perfect.

Scott Washko: Thank you. Thank you everyone for participating in today's call and all the great questions. Definitely look forward to reconvening here, I think probably maybe two weeks from today, and providing a fulsome update on the FT 516 and 596 programs in lymphoma. Thank you very much. Be well.

Either Bob or Wayne to talk about the unique potential of MC and mcbee, but obviously, it's a it's a pan tumor targeting strategy. If you will.

And many tumors significantly up regulate stress ligand, specifically, the MC and mcbee protein.

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

And 1 of the main mechanisms actually of NK cell of Asia.

People talked about mechanisms of T cell invasion, but 1 of the main mechanisms of encase elevation in solid tumors is shedding of the MC and make the stress proteins and.

So we always liked the idea of targeting stress ligands.

<unk> really wanted and approach that could overcome the mechanisms of NK cell resistance, which work, which is why the <unk> are specific Mickey and make be binding domain hits.

The Alpha 3 region.

And is able to bind and kill.

Even after.

MC and <unk> have been shed from the surface of the tumor.

Okay.

Alright, Thanks, Scott and I appreciate it.

Sure.

And our next question comes from Robyn Karnataka from Trust Securities. Please go ahead.

Hey, guys. Thank you so much for taking my question does this coupon on for Robyn.

Congrats on.

Treating the first patient with your car T cells.

Uh huh.

Our year long wait after the IND.

Yes.

I have a question about that so can you talk a little bit about.

And what sort of safety concerns do you have this out you talked about.

These T cells don't exhaust because of their differentiated design and also I think you mentioned that <unk> 19 is a product comprised only of CDA cells. So how do you monitor these patients for Crs and neurotoxicity.

And also.

Given that it took a year from IMD clear and deforestation free debt can you talk a little bit about what the key holidays, where and what lessons you've learned for future IPC base.

On T cell therapies and pipeline.

Thank you.

Yeah sure so.

I think we're going into this that being that IP at 8 and 19.

Is going to bring us squarely into T cell land Hum and what I mean by that is obviously.

With respect to car T cell therapies.

RFS is a concern.

Cans is a concern.

Neurotoxicity, certainly and so I think we are thinking with respect to 2019 that absolutely.

Debt, if 819 is truly a T cell and we believe it is that we will potentially face many of the challenges that have confronted the autologous and allogeneic car T cell space I think 1 of the things that we've done in this study.

Interestingly is theres been some work done with autologous car T cell therapy to suggest that lower dosing and.

And multiple doses over a shorter period of time potentially can.

Drive.

And the responses, but mitigate some of the risks associated with Crs and neurotoxicity and that's why 1 of the arms of our studies of <unk> thousand 19 study is actually the fractionated dose arm, where essentially you give a third of the dose a third of the dose and a third of that.

Dose spread out over a 5 day period. So that's 1 of the ways, we're thinking about trying to optimize the potential of and Ips derived T cell therapy compared to for instance, the autologous world as an example.

With respect to your question of manufacturer. It was really unique it was a unique situation.

The reality was we had kicked off and manufacturing campaign for 2019.

And we had completed that and.

And that campaign was ongoing and.

And we are constantly investing in process development improvements, including scale ability and consistency of product.

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

<unk> the manufacturer of <unk> thousand 19, and so what we decided to do since we did not treat the first patient, we and we decided to incorporate that into the manufacturing process rerun. The manufacturing process and then ultimately released the product.

So it was a very it was a pretty it was a.

It was a pretty unique circumstance, where there was a development and in process development that we felt was important enough and given we had and treat the treated the first patient.

And we elected to wait.

Great. Thank you very helpful and.

Just a follow up question on AML.

And now are we still on track.

Read out around ash timeframe.

And then just the updated data from <unk> 38, correct.

Correct correct at Ash.

And you think you had mentioned I think on the earlier.

Data read out debt.

And 78 is in preclinical studies more potent than 516.

And you think you'll have enough data this year and can make a decision about which 1 to take forward and AMR.

Yes, if we're not if we're not there quite at Ash I think we'll be there shortly thereafter and sort of my expectation today again, largely based on preclinical data.

On that Ft, 538 is going to be the product candidate, we're going to pick on moving forward and AML.

Okay, great. Thank you.

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

Sure.

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

Thank you Scott compliments on a clear comprehensive update today.

And im pushing my questions probably.

And I have to be cleared and most comprehensive but.

First 1 relates to 819.

And you've discussed this a little bit, but you've designed a very broad and aggressive programs.

This is clearly not just establishing proof of concept.

And do you believe you can show superiority.

Yes.

Currently in development all approved off the shelves.

And development of off the shelf.

Products.

Or.

Establishing a broad reference range for your own internal development of Nexgen products and have a follow on thanks.

Yes, I think from my perspective look I think and I've said this before I think that.

On the patient derived car T cell products have delivered revolutionary results for patients.

And certainly there are logistical challenges certainly there are clinical complexities associated with the patient derived products.

But the results are fairly remarkable and when I think about FTA 19 debt.

And that's the bar.

Quite honestly I think that's the bar with with 596 as well.

That's the reality of what's out there there.

And there are 3.3 car 19 products now approved.

And.

And I think.

They're obviously being shepherded by very large established pharmaceutical companies and they will continue to invest in and bringing those terrific solutions to patients.

So the the burdens on us if you will to continue to be able to compete with debt therapeutic profile. We think theres a lot of advantages to be really clear with and off the shelf Ips derived strategy a lot of advantages, but like I sort of alluded to before look at the end of the day, the patient doesn't care where the.

Came from you have to have a terrific therapeutic profile.

Sure Thanks and.

And then just in relation to the new manufacturing facility.

And can you talk about on how that facility couldnt be used I mean for example could you be making thousands of doses for single product and simultaneously hundreds of doses.

And on mobile.

Yes.

Yes.

Yeah, absolutely I mean, it's we didn't give an update here, we'll probably give an update on the next call.

We're <unk>.

Right on schedule were actually in the midst of moving and occupying that headquarters.

It's a 50000 foot GMP footprint.

And we absolutely I think I think in there and maybe 12 different GMP suites, and so certainly we have the capacity to manufacture multiple different product candidates at large scale and we do think we potentially could launch.

At least initially commercially from that facility.

Great. Thanks, Scott.

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

And we have no further questions at this time I will turn the call over back to Scott Washco perfect perfect. Thank you. Thanks, everyone for participating on today's call and all the great questions definitely look forward to reconvene and here I think probably maybe 2 weeks from today and providing a fulsome update.

On the Ft, 516, and 596 programs and our lymphoma.

Thank you very much be well.

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

Okay.

And.

And then.

Okay.

And then.

Yes.

And then.

Yes.

And.

Thank you.

Okay.

[music].