Q2 2019 Earnings Call

Operator: BF-WATCH TV 2021 Welcome to the Fate Therapeutics Second Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Welcome to the fate Therapeutics second quarter 2019 financial results Conference call. At this time all participants are in a listen only mode. This call is being webcast live on the investors and media section of fates website at fate Therapeutics Dot com.

Operator: This call is being webcast live on the Investors and Media section of Fate's website at fatetherapeutics.com. As a reminder, today's call is being recorded. I would now like to introduce Scott Walshko, President and CEO of Fate Therapeutics. Thank you. Good afternoon, and thanks, everyone, for joining us for the Fate Therapeutics second quarter 2019 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 and media section of our website under the press release. In addition, our Form 10-Q for the quarter ended June 30, 2019, was filed shortly thereafter and can be found on the Investors & Media 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 could cause actual results to differ materially from those in such forward-looking statements.

As a reminder, today's call is being recorded I would now like to introduce Scott Wolchko, Wolchko, President and CEO of fate therapeutics.

Thank you.

Good afternoon, and thanks, everyone for joining us for the fate Therapeutics second quarter 2019 financial results call. Shortly after four PM Eastern time today, we issued a press release with these results, which can be found on the investors and media section of our website under press releases.

In addition, our Form 10-Q for the quarter ended June 32019 was filed shortly thereafter and can be found on the investors and media 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 could cause actual results to differ materially from those in such forward looking statements. Please see the forward looking statement disclaimer on the Companys earnings press release issued after the close of market today as well as the risk factors in the Companys SEC filings included in our Form 10-Q for the quarter ended June 32019 that was filed with the SEC today.

Scott Walshko: Please see the forward-looking statement disclaimer in the company's earnings press release issued after the close of market today, as well as the risk factors in the company's SEC filings included in our Form 10-Q for the quarter ended June 30, 2019, that was filed with the SEC. Undue reliance should not be placed on forward-looking statements which speak only as of the date they are made, as the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Fate Therapeutics disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. Joining me on today's call is Dr. Dan Shoemaker, our Chief Scientific Officer, in February 2019. Fate Therapeutics initiated the first ever clinical trial in the United States of a cell therapy derived from an induced pluripotent stem cell, or iPSC.

Undue reliance should not be placed on forward looking statements, which speak only as of the date. They are made as the facts and circumstances underlying these forward looking statements may change.

Except as required by law fate therapeutics disclaims any obligation to update these forward looking statements to reflect future information events or circumstances.

Joining me on today's call is Dr., Dan Shoemaker, our Chief Scientific officer.

In February 2019 fate therapeutics initiated the first ever clinical trial in the United States have a cell therapy derived from an induced pluripotent stem cell or IPO messy.

Scott Walshko: The clinical trial is a landmark study in the field of cell therapy and is the first to evaluate the safety and tolerability of a brand new class of iPSC-derived cell products. And it is the first to investigate a novel treatment paradigm where an IPS-derived cell product is administered to a patient in multiple, multi-dose treatment cycles. FT500 is the first in this brand new class of cell products to begin clinical investigation in the United States. FT500 is a universal, off-the-shelf, NK cell cancer immunotherapy derived from a clonal master iPSC line. The use of a clonal master iPSC line for the manufacture of a cell product has the potential to overcome numerous limitations inherent in patient and donor-sourced cell therapy, which require the repeated sourcing and engineering of cells batch by batch for manufacturing. In contrast, Clonal Master iPSC lines are a renewable self-source for manufacturing cell products that are well-defined and uniform in composition, can be mass-produced at a significant scale in a cost-effective manner, and can be delivered on-demand.

The clinical trial is a landmark study in the field of cell therapy.

It is the first to evaluate the safety and Tolerability of a brand new class of IP FC derived cell products.

And it is the first to investigate a novel treatment paradigm.

Or an IPO is derived cell product is administered to a patient in multiple multi dose treatment cycles.

F. T 500 is the first in this brand new class of sell products to begin clinical investigation in the United States.

F. T 500 is a universal off the shelf NK cell cancer immunotherapy derived from a colonial master IPO C line.

The use of a clone old Master IP FC line for the manufacturer to sell product has the potential to overcome numerous limitations inherent in patient and donor source cell therapy.

Which require the repeated sourcing and engineering of cells batch by batch for manufacture.

In contrast, colonial Master IP FC lines, our renewable cell source for manufacturing cell products, which are well defined and uniform and composition can be mass produced at significant scale in a cost effective manner and can be delivered on demand to patients.

Scott Walshko: We believe the emerging class of IPS-derived cell products has the potential to revolutionize the field of cell therapy. In this first-ever clinical trial, we are investigating the feasibility of administering FT500 on a multi-dose, multi-cycle treatment schedule. Most patient and donor-sourced cell therapies, including CAR T-cell therapy, Our Single Administration Treatment. And the therapeutic benefit conveyed to patients can too often be short-lived.

We believe the emerging class of IP has derived cell products has the potential to revolutionize the field of cell therapy.

In this first ever clinical trial, we are investigating the feasibility of administering ft 500 on a multi dose multi cycle treatment schedule.

Most patient and donor source cell therapies, including car T cell therapies are single administration treatments and the therapeutic benefit conveyed to patients can too often be short lived.

Scott Walshko: Since iPS-derived cell products can be mass-produced at a low cost per dose, cryopreserved, and delivered on demand, the opportunity exists for repeat dosing. And such a multi-dose, multi-cycle treatment paradigm may uniquely provide patients with continuous therapeutic exposure over weeks and months to optimized cell products. In the field of cell-based cancer immunotherapy, we believe such a multi-dose, multi-cycle treatment paradigm has the potential to convey more durable responses, including in combination with established therapeutic agents that have complementary and synergistic mechanisms of action.

Since IPO is derived cell products can be mass produced at low cost per dose cryopreserved and delivered on demand the opportunity exists for repeat dosing.

And such a multi dose multi cycle treatment paradigm may uniquely provide patients with continuous therapeutic exposure over weeks and months to optimize to sell products.

In the field of cell based cancer immunotherapy, we believe such a multi dose multi cycle treatment paradigm has the potential to convey more durable responses, including in combination with established therapeutic agents that have complementary and synergistic mechanisms of action.

The F. HTI 500 clinical trial is an open label dose escalating phase one clinical trial for the treatment of advanced solid tumors in patients who have failed all approved therapies.

Scott Walshko: The FT500 clinical trial is an open-label, dose-escalating, phase 1 clinical trial for the treatment of advanced solid tumors in patients who have failed all approved therapies. The study is designed to assess the safety and activity of three once-weekly doses of FT500 as monotherapy and in combination with checkpoint inhibitor therapy in patients whose tumors failed to respond or progressed following initial response on checkpoint inhibitor therapy. Patients who are clinically stable following the first cycle of FT500 treatment are eligible to receive a second treatment cycle of three additional once-weekly doses. In May 2019, at the American Society of Gene and Cell Therapy, we announced that the first three patients were treated with FT500 at the first dose level of 100 million cells per dose in the study's monotherapy.

The study is designed to assess the safety and activity of three once weekly doses of S&P 500, as a monotherapy.

And as a combination with checkpoint inhibitor therapy in patients, whose tumors failed to respond or progressed. Following initial response on checkpoint inhibitor therapy.

Patients were clinically stable following the first cycle of S&P 500 treatment are eligible to receive a second treatment cycle of three additional once weekly doses.

In May 2019 at the American Society of Gene and cell therapy, we announced that the first three patients were treated with ft 500 at the first dose level of 100 million cells per dose in the studies monotherapy arm.

All three patients each received three once weekly doses of Ft 500 in an outpatient setting in the first treatment cycle, which was well tolerated with no dose limiting toxicities and no ft 500 related serious adverse events. All three patients were eligible to receive a second multi dose treatment cycle of ft 500 at 100 million cells per dose.

Scott Walshko: All three patients each received three once-weekly doses of FT500 in an outpatient setting in the first treatment cycle, which was well tolerated with no dose-limiting toxicities and no FT500-related serious adverse events. All three patients were eligible to receive a second multi-dose treatment cycle of FT500 at 100 million cells per dose. I am pleased to announce that we have now treated six additional patients with FT500. Three of these patients were treated with FT500 at the second dose level of 300 million cells per dose in the study's monotherapy. And three of these patients were treated with FT500 at the first dose level of 100 million cells per dose in the study's combination arm with immune checkpoint inhibitors. All six additional patients each received three once-weekly doses of FT500 in an outpatient setting in the first treatment cycle. In each of these six additional patients, FT500 was well-tolerated with no dose-limiting toxicities and no FT500-related serious adverse events. Therefore, all six additional patients were eligible to receive a second multi-dose treatment set. To date, no dose-limiting toxicities and no FT500-related serious adverse events have been reported by investigators in patients receiving FT500. We are very encouraged by these initial safety observations.

I am pleased to announce that we have now treated six additional patients with S&P 500.

Three of these patients were treated with S&P 500 at the second dose level of 300 million cells per dose in the studies monotherapy arm.

And three of these patients were treated with ft 500 at the first dose level of 100 million cells per dose in the studies combination arm with immune checkpoint inhibitor.

All six additional patients each receive three once weekly doses of ft 500 in an outpatient setting in the first treatment cycle.

In each of these six additional patients S&P 500 was well tolerated with no dose limiting toxicities and no f. HTI 500, a related serious adverse events.

All six additional patients were eligible to receive a second multi dose treatment cycle.

To date, no dose limiting toxicities and no f. HTI 500 related serious adverse events have been reported by investigators in patients receiving FTC 500.

We are very encouraged by these initial safety observations given that 5500 is the first in a brand new class of IP has derived cell products and Efc 500 is being ministered on a multi dose multi cycle treatment schedule.

Scott Walshko: Given that FT500 is the first in a brand new class of IPS-derived cell products, and FT500 is being administered on a multi-dose, multi-cycle treatment schedule, to further demonstrate the potential of iPS-derived cell products administered on this cycle, we are conducting a robust assessment of the patient's immunological profile over the course of FT500 treatment as an integral part of our clinical development program. This assessment includes profiling the patient's immune cells, including activation of CD8 T-cells and K-cells and regulatory T-cells, measuring changes in the patient's cytokine levels, and evaluating FT500 dose durability, including the potential for anti-cell immunogenicity mediated by the patient's T-cells or B-cells.

To further demonstrate the potential of Ipi, yes derived cell products administered on this cycle. We are conducting a robust assessment of the patients immunological profile over the course of EFT HTI 500 treatment as an integral part of our clinical development program.

This assessment includes profiling, the patient's immune cells, including activation of CD, a T cells, and K cells and regulatory T cells.

Measuring changes in the patient cytokine levels.

And evaluating F T 500 dose durability.

Including the potential for anti cell immunogenicity mediated by the patients T cells or b cells.

We expect to provide an update on the 5500 study, including safety immunological activity and to efficacy data in the second half of 2019.

Scott Walshko: We expect to provide an update on the FT500 study, including safety, immunological activity, and efficacy data in the second half of 2019. I am also pleased to announce that we are now initiating clinical investigation of FT516. Our universal, off-the-shelf, targeted NK-Cell product candidate derived from a ClonalMaster IPSC line engineered to express a novel, high-affinity, non-cleavable CD16 or HN-CD16-FC receptor.

I'm also pleased to announce that we are now initiating clinical investigation of S&P 516.

Our universal off the shelf targeted NK cell product candidate derived from a colonial master IPO C line.

Engineered to express a novel high affinity non cleavable, CD 16, or HSN Cdsixteen FC receptor.

Ft Fysixteen is the first sell product in the world derived from a colonial master engineered FC line to be cleared for clinical investigation and is our second product candidate emerging from our proprietary IP FC product platform.

Scott Walshko: FT516 is the first cell product in the world derived from a clonal master-engineered IPSC line to be cleared for clinical investigation, and this is our second product candidate emerging from our proprietary IPSC product platform. We have completed CGMP production and final product release testing of FT6516 for clinical initiation, starting with a single cryopreserved vial from a clonal master-engineered IPSC bank. Hundreds of doses of FT-516 were manufactured in a single GMP campaign. The cell product was cryo-preserved in an infusion-ready bag, and the cryo-preserved cell product was tested against stringent post-thaw specifications, including Identity, Purity, Viability, and Functional Activities.

We have completed cgmp production and final product release testing of Ft, six fysixteen for clinical initiation.

Starting with a single Cryopreserved vile from a clone or master engineered FC Bank hundreds of doses of Ft 516 were manufactured in a single GMP campaign.

The cell product was cryopreserved in an infusion ready bag.

And the Cryopreserved cell product was tested against stringent post thought specifications, including identity purity viability and functional activity.

The FC Fysixteen clinical trial is an open label dose escalating phase one clinical trial in which FC Fysixteen is being investigated as a monotherapy for the treatment of relapsed refractory acute myeloid leukemia.

Scott Walshko: The FT-516 clinical trial is an open-label, dose-escalating, phase 1 clinical trial in which FT-516 is being investigated as a monotherapy for the treatment of relapsed refractory acute myeloid leukemia and in combination with CD20-directed monoclonal antibody therapy for the treatment of relapsed refractory B-cell lymphoma. The study is designed to assess the safety and Patients who are clinically stable following the first treatment cycle are eligible to receive a second treatment cycle of three additional once-weekly doses.

And as a combination with CD 20, directed monoclonal antibody therapy for the treatment of relapsed refractory b cell lymphoma.

The study is designed to assess the safety and activity of three once weekly doses of ft Fysixteen.

Patients who are clinically stable following the first treatment cycle are eligible to receive a second treatment cycle of three additional once weekly doses.

Both arms of the study will enroll concurrently across three planned dose levels of $900 million.

Scott Walshko: Both arms of the study will enroll concurrently, across three planned dose levels of 900 million, 300 million, Sorry, 90 million, 300 million, and 900 million cells per dose. Specific to combination with CD20-directed monoclonal antibody therapy, dose escalation will include an initial enrollment of a single patient at 30 million cells per dose. We are currently working with five clinical sites in the United States to initiate patient enrollment.

300 million.

Sorry, 90 million 300 million and 900 million cells per dose.

Specific to combination with Cdtwenty directed monoclonal antibody therapy.

Dose escalation will include an initial enrollment of a single patient at 30 million cells per dose. We are currently working with five clinical sites in the United States to initiate patient enrollment.

We believe there is compelling clinical precedent to support the therapeutic benefit of F. T 516.

Scott Walshko: We believe there is compelling clinical precedent to support the therapeutic benefit of FT560. Additionally, we believe there are well-established clinical benchmarks against which we can assess the safety and efficacy of FT5C in the setting of relapsed refractory AML. Hundreds of patients have been treated with donor-derived NK cell therapy, and notably, donor-derived NK cells have not been associated with cytokine release syndrome or

Additionally, we believe there are well established clinical benchmarks against which we can assess the safety and efficacy of ft 516.

In the setting of relapsed refractory AML.

Hundreds of patients have been treated with donor derived NK cell therapy.

Notably donor derived NK cells have not been associated with cytokine release syndrome or graft versus host disease.

Scott Walshko: Additionally, leukemic blasts in the bone marrow have been shown to be particularly susceptible to direct NK cell-mediated killing, with complete remission rates ranging from 20% to 35% having been reported in investigator-initiated studies. We plan to perform a post-treatment bone marrow biopsy following the third dose of FT-516 in the first treatment cycle to gain additional insights into FT-516X. Additionally, numerous clinical studies of FDA-approved tumor-targeting monoclonal antibody therapy have demonstrated the importance of antibody-dependent cellular cytotoxicity, or ADCC, a potent anti-tumor mechanism by which NK cells expressing CD16 recognize, bind, and kill antibody-coded cancer. Clinical studies have also shown that patients homozygous for the CD16 High Affinity Variant 158D, which is present only in about Consequently, because FT516 incorporates a novel HNCD16 FC receptor, which maintains active levels of surface expression of the CD16 High Affinity Variant 158V, we expect FT516 to augment binding to tumor-targeted antibodies for enhanced ADCC, as a benchmark for enhanced ADCC in patients with relapsed refractory B-cell lymphoma.

Additionally, leukemic blast in the bone marrow have been shown to be particularly susceptible to direct NK cell mediated killing.

With complete remission rates, ranging from 20% to 35% having been reported in investigator initiated studies.

We plan to perform post treatment bone marrow biopsies following the third dose of Ft 516 in the first treatment cycle to gain additional insights into ft fysixteen activity.

Additionally, numerous clinical studies of FDI approved tumor targeting monoclonal antibody therapy have demonstrated the importance of antibody dependent cellular cytotoxicity or ADCC, a potent anti tumor mechanism by which NK cells expressing cdsixteen recognized bind and kill antibody coated cancer cells.

Clinical studies have also shown that patients homozygous for the CD 16 high affinity variant Onefifty eight D, which is present only in about 15% of all patients have significantly improved clinical outcomes following treatment with monoclonal antibody therapy.

Consequently, because ft Fysixteen incorporates a novel agent CD 16 FC receptor, which maintains active levels of surface expression of the CD 16 high affinity variant 150 a D.

We expect to F.T. fysixteen to augment binding to tumor targeted antibodies for enhanced ADCC.

As a benchmark for enhanced ADCC in patients with relapsed refractory b cell lymphoma, Cdtwenty and directed monoclonal antibody therapies have demonstrated single agent complete response rates of approximately 5% and overall response rates of approximately 30%.

Scott Walshko: CD20-directed monoclonal antibody therapies have demonstrated single-agent complete response rates of approximately 5% and overall response rates of approximately 30%. We expect to provide an update on the FT516 study, including safety, immunological activity, and efficacy data from the first patients in the second half of 2019. The next wave of cell-based cancer immunotherapy is that we are moving toward clinical development, are specifically designed to engage multiple tumor-associated antibodies. However, clinical experience with first-generation patient-derived CAR T-cells, both in the case of single antigen-targeted CAR T-cells against CD19 in leukemia and lymphoma and against BCMA and myeloma, has clearly demonstrated that not all patients respond, and Among the earliest identified mechanisms of relapse are downregulation or loss of target antigen from the tumor cell.

We expect to provide an update on the ft, Fysixteen study, including safety immunological activity and efficacy data from the first patients in the second half of 2019.

The next wave of cell based cancer Immunotherapies that we're moving toward clinical development.

Are specifically designed to engage multiple tumor associated antigens.

Clinical experience with first generation patient derive car T cells. Both in the case of single antigen targeted car T cells against Cdnineteen inland Kimi in lymphoma.

And against VCM and myeloma.

Have clearly demonstrated that not all patients respond and even for those patients that initially respond durability of response remains a significant limitation of therapy.

Among the earliest identified mechanisms of relapse is down regulation or loss of target antigen from the tumor cells.

Scott Walshko: To mitigate this limitation, next-generation cancer immunotherapies are incorporating strategies to simultaneously target more than one antibody and reduce the risk of disease relapse due to antigen escape. I am pleased to announce that, within the last 30 days, we submitted an investigational new drug application to the U.S. Food and Drug Administration for FT-596. The third product candidate emerging from our proprietary IPSC product platform, FT-596 is the company's first universal off-the-shelf CAR NK cell product candidate and is derived from a clonal master IPSC line engineered with three distinct functional modalities. A potent Car Targeting CD19, A novel HNCD16 receptor for engagement of additional tumor-associated antigens in combination with monoclonal antibody therapy, and a unique IL-15 receptor fusion for improved NK cell proliferative capacity and functional avidity.

To mitigate this limitation next generation cancer, immunotherapies or incorporating strategies to simultaneously target more than one antigen and reduce the risk of disease relapse due to antigen escape.

I am pleased to announce that within the last 30 days, we submitted an investigational new drug application to the us.

Food and drug administration for F. T 596, the third product candidate emerging from our proprietary IP see product platform.

Ft Fivenine six is the company's first universal off the shelf car NK cell product candidate.

And is derived from a colonial master IP FC line engineered with three distinct functional modelo cities.

A potent car targeting cdnineteen.

A novel H and CD 16 receptor for engagement of additional tumor associated antigens in combination with monoclonal antibody therapy.

And a unique IL 15 receptor fusion for improved NK cell proliferative capacity and functional infinity.

Moreover, F. T 596 naturally expresses other activating receptors such as NKTR two D to convey additional innate immune function in recognizing and killer, killing cancer cells.

Scott Walshko: Moreover, FT-596 naturally expresses other activating receptors, such as NKG2D, to convey additional innate immune function in recognizing and killing cancer. We believe that FT-596 has the potential to significantly disrupt the autologous and allogeneic CAR-19 T-cell landscape and to be a best-in-class cell-based cancer immunotherapy for the treatment of B-cell malignancy. FT-596 is a universal off-the-shelf cell product candidate. It is specifically designed to engage multiple tumor-associated antibodies, and it has the potential to be delivered in multiple doses over multiple treatment cycles. Furthermore, supportive clinical data of CAR-19 and K-cells have been reported by investigators from MD Anderson, who administered core blood-derived CAR-19NK cells to patients with B-cell malignancy and showed 30-day clinical response rates comparable to currently approved CAR-19 T-cell therapies with a substantially improved safety profile. The clinical protocol submitted to the FDA for FT596 was developed in consultation with clinical investigators at several leading CAR T-cell medical centers We intend to investigate FT-596 as monotherapy and in combination with CD20-directed monoclonal antibody therapy for the treatment of relapsed refractory B-cell lymphomas and advanced chronic lymphocytic leukemia.

We believe that T 596 has the potential to significantly disrupt the autologous and allogeneic car 19 T cell landscape.

And to be a best in class cell based cancer immunotherapy for the treatment of B cell malignancies.

F. T 596 is a universal off the shelf cell product candidate.

It is specifically designed to engage multiple tumor associated antigens and it has the potential to be delivered in multiple doses over multiple treatment cycles. Furthermore, supportive clinical data of car 19, NK cells have been reported by investigators from MD, Anderson, which administered cord blood derived car 19, NK cells to patients with B cell malignancies.

And showed 30 day clinical response rates comparable to currently approved car 19 T cell therapies with a substantially improved safety profile.

The clinical protocol submitted to the FDA for Ft. Fivenine six was developed in consultation with clinical investigators at several leading car T cell medical centers.

We intend to investigate ft fivenine six as a monotherapy.

And as a combination with CD 20, directed monoclonal antibody therapy for the treatment of relapsed refractory b cell lymphomas and advanced chronic lymphocytic leukemia.

We plan to administer ft, 596, using a multi dose multi cycle treatments schedule.

Scott Walshko: We plan to administer FT-596 using a multi-dose, multi-cycle treatment schedule and to conduct initial response assessments at the conclusion of each treatment cycle. Additionally, alongside the clinical development of our IPS-derived NK cell cancer immunotherapy franchise, we continue to assert our leadership position in the research and development of off-the-shelf CAR T-cell therapy under our exclusive IPS-derived T-cell collaboration with Memorial Sloan Kettering led by Our first universal off-the-shelf CAR T-cell product candidate, FT819, is derived from a clonal master-engineered iPSC line with complete elimination of T-cell receptor expression and insertion of a CAR-targeting CD19 into the T-cell receptor alpha locus.

And to conduct additional additions to conduct initial response assessments at the conclusion of each treatment cycle.

Alongside the clinical development of our IP EPS derived NK cell cancer immunotherapy franchise, we continue to assert our leadership position in the research and development of off the shelf car T cell therapy under our exclusive IP EPS derived T cell collaboration with Memorial Sloan Kettering led by Dr. Michelle sideline.

Our first universal off the shelf car T cell product candidate Ft, 819 is derived from a clone all master engineered IPO C line, having complete elimination of T cell receptor expression and insertion of a car targeting CD 19 into the T cell receptor Alpha locus.

We believe the Ft 819 incorporates best in class components and design attributes for car T cell products, including the use of a novel one Xx car construct discovered by Dr. satellite.

Scott Walshko: We believe FT-819 incorporates best-in-class components and design attributes for CAR T-cell therapy, including the use of a novel 1XX car construct discovered by Dr. Satterthwaite. We have now initiated technology transfer of our GMP-compliant differentiation protocols to the production team at Memorial Sloan Kettering for the initiation of pilot manufacturing in support of an investigational new drug application submission. We have also renewed the company's exclusive collaboration with Dr. Satterlein for the research and development of IPS-derived T cell product candidates for an additional three years. Additionally, I am pleased to note that the U.S. Patent and Trademark Office recently granted to the company a patent foundational to off-the-shelf IPS-derived CAR T-cell therapy. U.S. Patent Number 10287606, entitled Genomic Engineering of Pluripotent Cells, covers the composition of IPSCs having a car construct encoded into the track locus and an endogenous TCR-alpha gene knocked out. The complete elimination of the endogenous TCR gene is critical in allogeneic CAR T-cell therapy to ensure the prevention of graft-versus-host disease, a life-threatening disease that can occur when donor T-cells attack a patient's healthy tissue.

We have now initiated technology transfer of our GMP compliant differentiation protocols to the production team at Memorial Sloan Kettering for initiation of pilot manufacturing in support of an investigational new drug application submission.

We have also renewed the company's exclusive collaboration with Dr. satellite for the research and development of IP EPS derived T cell product candidates for an additional three years.

Additionally, I am pleased to note that the us patent and trademark office recently granted to the company a patent foundational to off the shelf IP EPS derived car T cell therapy.

US patent number 10 to 876, so six entitled Genomic Engineering of pluripotent cells covers compositions of IP FCS having a car construct encoded into the track locus and an indigenous TCR Alpha gene knockdown.

The complete elimination of the endogenous TCR gene is critical in allogeneic car T cell therapy to ensure the prevention of graft versus host disease, a life threatening disease that can occur when donor T cells attack a patients healthy tissue.

Importantly, the car construct encoded into the track locus is not limited to a specific tumor associated antigen.

Scott Walshko: Importantly, the car construct encoded into the track location is not limited to a specific tumor-associated antibody. Finally, I want to thank the manufacturing, regulatory, and quality teams at Fate Therapeutics, which have expanded significantly over the past 12 months as our proprietary iPSC product platform has advanced into clinical development. In addition to their instrumental role in the on-time submission of our FT596IND, the launch of our in-house GMP manufacturing facility remains on schedule, and we anticipate initiation of in-house GMP production in the fall of 2019 for clinical supply of our off-the-shelf IPS-derived cell product. Turning to our financial results, for the second quarter ended June 30, 2019, Fate Therapeutics incurred a net loss of $23.5 million, or $0.36 per common share, as compared to a net loss of $19.7 million, or $0.37 per common share, for the same period last year. Revenue was $2.8 million for the second quarter of 2019 compared to $1 million for the second quarter of 2018.

Finally, I want to thank the manufacturing regulatory and quality teams at fate therapeutics, which have expanded significantly over the past 12 months as our proprietary IP FC product platform has advanced into clinical development.

In addition to their instrumental role in the Ontime submission of our F. T 596, I Indeed, the launch of our in House GMP manufacturing facility remains on schedule and we anticipate initiation of in house GMP production in the fall of 2019 for clinical supply of our off the shelf IP EPS derived cell product candidates.

Turning to our financial results for the second quarter ended June 32019 fate therapeutics incurred a net loss of $23.5 million or 36 cents per common share as compared to a net loss of $19.7 million or 37 cents per common share for the same period last year.

Revenue was $2.8 million for the second quarter of 2019 compared to $1 million for the second quarter of 2018.

Scott Walshko: Revenue was primarily derived from the company's collaboration with Ono Pharmaceuticals. Research and development expenses for the second quarter of 2019 were $21.6 million, compared to $16.8 million for the same period last year. The increase in our R&D expenses was primarily attributable to an increase in employee compensation, including share-based compensation associated with the growth in headcount to support the advancement of the company's product pipeline, expenses associated with the clinical development and manufacture of the company's product candidates, and expenses associated with the conduct of our research activities under our collaboration with Ono Pharmaceuticals. G&A expenses for the second quarter of 2019 were $5.3 million, compared to $3.8 The increase in our G&A expenses was primarily attributable to an increase in employee compensation, including share-based compensation.

Revenue was primarily derived from the company's collaboration with Ono pharmaceutical.

Research and development expenses for the second quarter of 2019 were $21.6 million compared to $16.8 million for the same period last year.

The increase in our R&D expenses was primarily was primarily attributable to an increase in employee compensation, including share based compensation associated with the growth in headcount to support the advancement of the Companys product pipeline.

Expenses associated with the clinical development and manufacture of the company's product candidates and expenses associated with the conduct of our research activities under our collaboration with Ono Pharmaceuticals.

GNS expenses for the second quarter of 2019 were $5.3 million compared to $3.8 million for the same period last year.

The increase in our DNA expenses was primarily attributable to an increase in employee compensation, including share based compensation.

Our total operating expenses were $22.5 million for the second quarter of 2019 net of noncash stock based compensation expense of approximately $4.4 million.

Scott Walshko: Our total operating expenses were $22.5 million for the second quarter of 2019, net of non-cash stock-based compensation expense of approximately $4.4 million. At the end of the second quarter of 2019, cash, cash equivalents, and short-term investments were $162 million. Common stock outstanding was 65.3 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.

At the end of the second quarter of 2019 cash cash equivalents and short term investments were $162 million.

Common stock outstanding was 65.3 million shares and preferred convertible stock outstanding was 2.8 million shares each of which is convertible into five shares of common stock under certain conditions.

And with that I'd like to open the call up to any questions.

Operator: And with that, I'd like to open the call up to any questions. At this time, I would like to remind everyone that if you would like to ask a question, press star 1 on your telephone keypad. We'll pause for just a moment to compile the questions, and our first question will come from Althea Young with Kenter.

At this time I would like to remind everyone that if you would like to ask a question.

Star one on your telephone keypad now, we'll pause for just a moment to compile acuity roster.

The first question will come from Althea Young with Cantor. Please go ahead.

Hey, guys. Thanks for taking my question Congrats on all the progress throughout the quarter.

Althea Young: Hey guys, thanks for taking my question, and congrats on all the progress throughout the quarter. I just wanted to talk a little bit more about, as we head into data readouts for FT500 and 516, you know, what you guys think about what are the key core learnings there. I mean, you talked a little bit about safety and the immunologic learnings, but I also just wanted to talk about is there any expectation that we should think about as far as any efficacy could be seen in FT516? So, with respect to the questions, I'll answer with respect to FT500 versus FT516 because we have slightly different expectations with respect to the initial clinical readout. FT500 is the first product candidate.

I just wanted to talk a little bit more about as we head into data read out traffic 500 in Fysixteen. How you guys think about what are the key core learnings. There I mean, you talk a little bit safety and Sammy now Immulogic learnings, but also just want to talk about is there any expectation that we should think about as far as any efficacy can be seen in ft fysixteen. Thanks.

So with with respect to the questions I'll ask it I'll answer with respect to Ft 500 versus FC Fysixteen, because we had slightly different expectations with respect to the release of initial clinical read outs.

After 500 is the first product candidate obviously, it's an on engineered NK cell and we are studying XT 500 ended pet in patients with advanced solid tumors in the salvage setting we're primarily looking at the 5500 study at this early stage of patient enrollment with respect to safety and looking at the immunological response of the patient receiving the cells. So we're really looking at the FDA 501st patient experience really as safety with respect to Ft 516 ft. Fysixteen now obviously has been engineered it's an engineered product candidate and its been engineered with a high affinity non cleavable CD 16 receptor and importantly, we are taking EFSEC fysixteen into a clinical setting where we actually believe very strong clinical proof of concept for an NK cell and in particular cdsixteen engagement as I discussed in the AML setting obviously theres.

Scott Walshko: Obviously, it's an unengineered NK cell, and we are studying FT500 in patients with advanced solid tumors in the salvage setting. We are primarily looking at the FT500 study at this early stage of patient enrollment with respect to safety and looking at the immunological response of the patient receiving the cells. So we're really looking at the FT500 first patient experience really as safety. With respect to FT516, FT516 now, obviously, has been engineered.

Scott Walshko: It's an engineered product candidate, and it's been engineered with a high affinity non-cleavable CD16 receptor. And importantly, we're taking FT516 into a clinical setting where we actually believe there is strong clinical proof of concept for an NK cell, and in particular, CD16 engagement. As I discussed in the AML setting, obviously, there have been hundreds of patients who have received donor-derived NK cells, and there have been clinical responses that have been seen. Additionally, there are all kinds of clinical data with monoclonal antibody therapy to underscore the importance of CD16 engagement and the role of NK cell-mediated killing.

Been hundreds of patients who have received donor derived NK cell and there's been clinical responses that have been seen. Additionally, theres all kinds of clinical data with monoclonal antibody therapy to underscore the importance of CD 16 engagement and the role of NK cell mediated, killing and so I would say in the 500 study with these first few patients through dose escalation, we're primarily looking at safety and proof of principle with respect to an IP us derived cell therapy being given over multiple doses and multiple cycles with NP five six team. We're now moving in into the clinic with an engineered cell therapy, where there is strong clinical precedent with respect to the indications that we are initially pursuing.

Scott Walshko: And so I would say in this 500th study with these first few patients through dose escalation, we're primarily looking at safety and proof of principle with respect to an IPS-derived cell therapy being given over multiple doses and multiple cycles. With FT516, we're now moving into the clinic with an engineered cell therapy where there is strong clinical precedent with respect to the indications that we were initially targeting. And can I ask a follow-up question: with 516, do you think that there's the potential to see any kind of efficacy, or do you think that, you know, you may need to dose higher or maybe use a different product? No, I think certainly in the setting of AML and in the setting of combination with monoclonal antibody therapy, there's absolutely the opportunity to see efficacy with FT516. Great, thanks. The next question is from Yigal Nochomovitz of Citigroup. Please go ahead. Hi, this is Vic John on behalf of Yigal.

And can I ask a follow up and 516 do you think that there's potential to save any kind of efficacy.

Or do you think that that you may need to those higher maybe is a different.

Product.

No I think certainly in the setting of AML and in the setting of combination with monoclonal antibody therapy, theres, absolutely opportunity to see efficacy with ft Fysixteen.

Great. Thank you.

The next question is from Yigal Nochomovitz with Citigroup. Please go ahead.

Hi, This is for John for you guys. Thanks for taking our question I was wondering if you could comment on the comment further on the profile overall, I mean few 500 monotherapy and combination arms.

Vic John: Thanks for taking our question. I was wondering if you could comment further on the AE profile overall on the FT500 monotherapy and combination arm. Sure, I think, you know, we've mentioned that, for instance, to date, there have been no dose-limiting toxicities that have been observed with FT500, both as monotherapy and in combination with checkpoint inhibitors. That includes patients that have been treated at the 300 million dose level in the monotherapy arm, as well as patients treated at the 100 million dose level in the combination arm. The FAE profiles, in total, not related to FT500, have been quite modest.

Sure I think we've mentioned that for instance to date there has been no dose limiting toxicities that have been insert it observed with ft 500, both as a monotherapy as well as in combination with checkpoint inhibitor.

That includes patients that have been treated at the 300 million dose level in the monotherapy arm as well as patients treated at the 100 million dose level in the combination arm.

The A.E.S.A. profiles in total not related to F. T 500 have been quite modest.

Okay. Thank you and a follow up from us have the patient from the FTC 500 trial consented to the second treatment cycles.

Scott Walshko: Okay, thank you, and a follow-up question from us: have the patients in the FT500 trial consented to the second treatment cycle yet? Yes, as part of the clinical protocol, patients that are clinically stable at the end of the first treatment cycle are eligible to receive a second treatment cycle, and we have several patients in both arms that are in flight. If you recall, if you recall in the first, dose level at a hundred million cells in the monotherapy arm. All three patients progressed through the first as well as the second treatment cycle with no DLTs and no SAEs. Okay, great. Thanks. And one last one from us.

Yes, as part of the clinical protocol patients that are clinically stable.

At the end of the first treatment cycle are eligible to receive a second treatment cycle and we have several locations in both arms that are in flight.

If you recall if you if you recall in the first dose level at a 100 million cells in the monotherapy arm.

All three patients progressed through the first as well as the second treatment cycle with no dlts fees and no essays.

Okay, great. Thanks, and one last one from us could you.

Scott Walshko: Could you be more quantitative on the cost savings for the doses of FT-516 which you've manufactured? Thanks. Sure, I would say in our early clinical manufacturing run. We are conducting these manufacturing runs to ensure success, as opposed to drive for scale. I have said publicly, both for FT500 and this is also true of FT516, that our clinical manufacturing campaigns have cost less than $1 million per campaign, and we have yielded doses of about 300 doses per campaign. So roughly, again, driving for success, not necessarily for scale, we've been able to produce product for less than $5,000 per day. Okay, thank you very much. The next question is from Michael Schmidt with Guggenheim. Please go ahead. Hi. This is Kelsey Goodwin on for Michael.

To be more quantitative on the cost savings for the doses, the S&P 506, which youve managed manufactured thanks.

Sure I would say in our early clinical manufacturing runs.

We are conducting these manufacturing runs to ensure success as opposed to drive for scale.

I have said publicly both for 5500 and this is also true of Ft 516.

That our clinical manufacturing campaigns have cost less than $1 million per campaign.

And we have yielded doses of about 300 doses per campaign, so roughly again driving for success not necessarily for scale, we've been able to produce product for less than $5000 per dose.

Okay. Thank you very much.

The next question is from Michael Schmidt with Guggenheim. Please go ahead.

Hi, This is kelcy going on for Michael Thanks for taking our questions and two from us.

Kelsey Beatrice Goodwin: Thanks for taking our questions. Here are two from us. First, I guess, how has your partnership strategy evolved now that you're in clinical trials and maybe kind of more specifically towards the ONO collaboration? Maybe how are you thinking about maximizing that longer term? And then separately, in terms of the new manufacturing facility, can you just remind us of the capacity and kind of the quality assurance and control burden associated with IPSC versus, say, aloe and autosil therapies? Thank you. Sure. With respect to partnerships, you know, quite frankly, the company's partnership strategy has not really changed.

First I guess how has your partnership strategy evolved now that you're in clinical trials and maybe more specifically towards the Ono collaboration maybe how are you thinking about maximizing that longer term and then separately in terms of the new manufacturing facility can you just remind us of the capacity and kind of the quality assurance and control burden associated with PSC versus maybe aloe and auto cell therapies. Thank you.

Sure.

With respect to partnerships quite frankly, the company's partnership strategy has has has not really changed I mean, we think we have.

Scott Walshko: I mean, we think we have a terrific backbone with respect to the development of off-the-shelf cancer immunotherapies. We think it's unrivaled with respect to our approach as compared to patient or even donor-derived approaches to cell-based cancer immunotherapies. I have said publicly that I think we are building the leading cell-based cancer immunotherapy company, and I will stand by that. I think where we are looking for help in developing product candidates is in partnering with companies that are leaders in discovering and developing novel engagement strategies.

Terrific backbone with respect to the development of off the shelf cancer Immunotherapies, We think it's unrivaled with respect to our approach as compared to patient or even donor derived.

Approaches to cell based cancer Immunotherapies I mean, I have said publicly that I think we are building the leading cell based cancer immunotherapy company and I will stand by that I think where we are looking for help in developing product candidates are impart in partnering with companies better leaders in developing and discovering and developing novel engagement strategies. So for instance, we think we have the best IP us sell backbone. We think we're developing the best technologies with respect to how those cell therapies perform in a human being however, we are looking to partner with larger pharmaceutical companies that can bring and contribute to that.

Scott Walshko: So, for instance, we think we have the best IPS cell backbone. We think we're developing the best technologies with respect to how those cell therapies perform in a human being. However, you know, we are looking to partner with larger pharmaceutical companies that can bring and contribute to novel targets for which we can direct our cell therapies. And so the idea that, you know, there are pharmaceutical companies out there that are experts in developing monoclonal antibody therapies or discovering new antigens to target where they have the capacity to contribute binding domains which we can incorporate into our CAR product candidates, those are the types of partnerships we are very interested in doing and are With respect to our GMP manufacturing capabilities, you know, we are in the process of getting final compliance with respect to launching the facility, final validation, and compliance of the facility.

Novel targets for which we can direct our cell therapies against and so the idea that there are pharmaceutical companies out there that are experts in developing monoclonal antibody therapies are discovering new antigens to target where they have the capacity to contribute binding domains, which we can incorporate into our car product candidates. They are the types of partnerships. We are very interested in doing and are actually driving forward.

With respect to our GMP manufacturing capabilities.

We are in the process of getting final compliance with respect to launching the facility final validation and compliance to the facility. We do and we have got we've done based on the work that we've done to date and a differentiation protocols and looking at pilot manufacturing manufacturing runs. We certainly believe that we have the opportunity to parallel process multiple product candidates.

Scott Walshko: We do, and we have done, based on the work that we've done to date and the differentiation protocols and looking at pilot manufacturing runs, we certainly believe that we have the opportunity to parallel process multiple product candidates, and we think we have the capacity to produce anywhere between 500 to 1,000 doses per month. Okay, great. Thank you. Sure. The next question is from Ted Tintoff with Piper Jeffery.

And we think we have the capacity to produce anywhere between 500 to a 1000 doses per month.

Okay, great. Thank you.

Sure.

The next question is from Ted Tenthoff with Piper Jaffray. Please go ahead.

Ted Tintoff: Great, thanks, Scott. I'm still a little shocked at the 5,000 per dose number. I think that's a real wake-up call to the entire industry, so I'm excited to come visit and see the new facility. I guess a question that I've sort of asked before, and I'm just gonna ask again and kind of see if there's any update in your thinking.

Great. Thanks, Scott from so a little shocked at the 5000 per dose Melbourne and think they're for real wakeup call for the entire industry. So from a credit to come visit and who the new facility.

Just a question of what our performance.

I'm going to ask the damage recovery, we are presenting an uptick in your thinking.

Her own.

So.

Some products become more sophisticated and there's the duration.

Scott Walshko: As cell products become more sophisticated, and there's iteration, you know, at a high level, how should we think about these cell products ultimately being commercialized and ultimately fitting into the treatment paradigm? I think there's a huge differentiation with this repeat treatment. And it really, you know, will change how cell therapies are used. But I'm wondering how the different profiles of these products may fit in with different diseases. Thanks.

At a high level, how should we think about crews so products or permanently to commercialize them ultimately fitting into the treatment paradigm has incurred through distributor in Phoenix or.

Really.

Real true suburban premiers, but I'm wondering how the different profiles of products for them with preferences.

Sure.

Scott Walshko: Sure. I mean, we started with what some might consider an overly conservative approach where we started with an unengineered product candidate, FT-500. We've built in a single modality into 516.

I mean, we we have started with what some might consider an overly conservative approach, where we started with an on engineered product candidate F. T 5500, we've built in a single mode Dalbeattie into 516. However, as you probably are aware from our pipeline and using ft 596, as the third product candidate. We certainly believe using engineering IP ourselves gives you use the unique capability to engineer in multiple different pieces of functional modalities into an IPO sell backbone.

Scott Walshko: However, as you probably are aware from our pipeline and using FT-596 as the third product candidate, we certainly believe engineering IPS cells gives you the unique capability to engineer in multiple different pieces of functional modalities into an IPS cell backbone. FT-596 obviously is a candidate that has three different pieces of functionality engineered into it. We've talked about FT-538 as a product candidate, which will again have four different pieces of functionality engineered into it. And so, we do have a platform that lends itself to rapid innovation.

FC 596, obviously is a product candidate that has three different pieces of functional functionality engineered into it we've talked about FC Fivethirty eight as a product candidate, which which again now we'll have four different pieces of functionality engineered into it.

And so we do have a platform that lends itself to rapid innovation and I think one of the things that we're very cognizant of is how we are innovating and pushing our product candidates forward in a fairly aggressive way. We think it's important to show clinical proof of concept safety and clinical proof of concept with our first generation product candidates like ft 500, like at 516, but I certainly believe that the future does involve the delivery of highly engineered cell based cancer immunotherapy in order to drive deep durable responses and now that we have our first two product candidates in clinical studies I think you will start to see us be very aggressive.

Scott Walshko: And I think one of the things that we're very cognizant of is how we are innovating and pushing our product candidates forward in a fairly aggressive way. We think it's important to show clinical proof of safety and clinical proof of concept with our first-generation product candidates like FT-500 and FT-516. But I certainly believe that the future does involve the delivery of highly engineered cell-based cancer immunotherapies in order to drive deep, durable responses. And now that we have our first two product candidates in clinical studies, I think you will start to see us be very aggressive in how we're evolving our pipeline, including the number of edits that we're incorporating into our IPSC backbone. Very cool, and I was appreciative of the safety update. That's really a nice start for FT500. Is there a limit to the number of edits that you can make?

In how we're evolving our pipeline, including the number of edits that we are incorporating into our IP FC backbone.

Very core and our interpretation of the safety update that quarterly alike.

Mice for up to 500 is there a limit to the number of edit to make obviously there is a.

Scott Walshko: Obviously, there is an accuracy rate for each, and that's probably improved over time, but what is the limit to how many characteristics you could knock in, knock out, and engineer, and so on? Yeah, I think one of the things we're sort of, you know, testing those limits today, quite frankly, under our ONO collaboration, where we are looking at, you know, certainly five and six edits within an IPSC backbone. And we're actively doing that today at the research level. I think one of the unique things about an IPSC approach is that you can start with, for instance, a master cell bank. And that master cell bank may already be qualified. And it may already, for the sake of argument, have two or three edits incorporated into it, right?

Accuracy rate too new to most probably approval or target.

What is the the limit to how many.

Characteristics, we could mark in Macau and generic solos.

Yeah, I think one of the things I mean, we're sort of testing those limits today quite frankly under our Ono collaboration where we are looking at certainly five and six edits.

Within an IP FC backbone and were actively doing that today.

At a research level I think one of the unique things about an IPO EPCI approach is that you can start with for instance, we for instance, you can start with the Master cell bank and that Master cell Bank may already be qualified and it may already for the sake of argument have two or three at its incorporated into it.

Scott Walshko: And so that master cell bank can be tested; it can be validated. And quite frankly, now, if you want to make a new product candidate, instead of going back to ground zero and starting from the beginning and reprogramming and editing from scratch. You can actually take an existing master cell bank, which may have three edits in it, and then incorporate two or three more edits into that bank and create essentially a new bank. So there is the ability not only to go back to the beginning and then restart the process, if you will, and introduce four, five, six edits, but we can also build off of master cell banks that have already been edited to incorporate new features and functionality. And quite frankly, that is one of the really massive and exciting benefits associated with starting with a clonal master IPS cell line. You can essentially validate and characterize the edits that are already made, the bank is already made, and then you can build functionality on top of that.

Right and so that master cell bank can be tested it can be validated and quite frankly now if you want to make a new product candidate instead of going back to ground zero and starting from the beginning and reprogramming editing from scratch you can actually take an existing master cell bank, which may have three edits in it and then incorporate two or three more edits into that into that bank and create essentially a new bank. So there is the ability not only just to go back to the beginning and then restart the process. If you will and introduce 456 edits, but we can also build off of master cell banks that have already been edited to incorporate new features and functionality and quite frankly that that is one of the really massive and exciting benefits associated with starting with a colonial master cell line.

You can essentially validate and characterize the edits that are already made the bank has already made and then you can build functionality on top of that.

Very cool great. Thank you so much Scott.

Scott Walshko: Very cool. Great update. Thank you so much, Scott. Sure. The next question is from Matthew Biegler on behalf of Oppenheimer.

Sure.

The next question is from Matthew Biegler with Oppenheimer. Please go ahead.

Matthew Cornell Biegler: Please go ahead. Hey guys, thanks for taking my questions; congrats on the progress. So I had two questions on dose, first for FT500 and 516; these upper limits on the cell dose, 300 and 900, respectively, are still quite a bit lower than what we've seen in other trials of adoptive therapy. And I'm just wondering if there's a reason why you wouldn't want to explore higher doses in those trials. That's my first question.

Hi, guys. Thanks for taking my questions. Congrats on the progress. So I had two questions on dose first for Ft 500 in Fysixteen. These upper limit on the cell dose 309 hundred respectively.

Philip quite quite a bit lower than what we've seen in other trials of adoptive NK cell therapies.

And I'm just wondering if there is a reason why you wouldn't want to explore higher doses in those trials. That's my first question and second one is on Ft. Fivenine six sites I think I heard you mentioned that you'd be exploring a multi dose regimen.

Scott Walshko: And the second one is on FT596, I think I heard you mention, exploring a multi-dose regimen, and which is obviously different than what the cord blood-derived NK product from, the rationale behind that. Sure. Yeah, I think, you know, one of the things that we are excited about and that, you know, a limitation of donor-derived NK cell therapy in the past has essentially been a single-dose paradigm. And we've seen in the past, including, quite frankly, in work that's been done with some of our collaborators at the University of Minnesota, as well as in MD Anderson data, that, you know, investigators have driven to a maximum dose because they're limited, for instance, in that they're only administering a single dose.

And which is obviously different than what the cord blood derived NK product from MD Anderson is using so just curious the rationale behind that thanks.

Sure.

Yeah, I think one of the things and I'll touch on.

Answering both your questions.

In my response.

I think one of the things that we are excited about and net.

A limitation of donor derived NK cell therapy in the past has essentially been a single dose paradigm.

And we've seen in the past.

Including quite frankly.

In work that's been done with some of our collaborators at the University of Minnesota as well as the MD Anderson data that investigators have driven to a maximum dose because they're limited for instance in that they're only administering a single dose.

And ultimately what we're interested in creating is a PK PD profile. If you will that extends not just for a couple of days, but can extend over weeks and potentially months and we think that potentially that that will require a different dosing schedule in terms of the absolute number of cells that are delivered I think from our perspective again, you may see someone may put forth that were being a bit conservative on dose, but really as we're thinking about this we know we do have the ability to push dose. We know we have the ability at least so far we believe we have the ability to give multiple doses. So we certainly have the potential to scale dose.

Scott Walshko: And ultimately, what we're interested in creating is a PK PD profile, if you will, that extends not just for a couple days but can extend over weeks and potentially months. And we think that, potentially, that will require a different dosing schedule in terms of the absolute number of cells that are delivered. I think from our perspective, again, you know, you may, someone may put forward that we're being a bit conservative on dose.

Scott Walshko: But really, as we're thinking about this, we know we do have the ability to push doses. We know we have the ability, at least so far, we believe we have the ability to give multiple doses. So we certainly have the potential to scale the dose. But I would also say, to be fair, most donor-derived NK cells have not been engineered, and they've been given as monotherapy. Clearly, part of the strategy we're pursuing with FT-516 and FT-596 is now to give multiple doses over multiple cycles in combination with other agents, and that's a paradigm that has not really been explored with donor-derived cell therapy, and therefore lower doses may be much more appropriate, especially given when given in multiple doses, may be much more appropriate in that setting. Obviously, it's something that we will look at; The next question will come from Byron Amin with Jeffreys. Yeah, hi Scott.

I would also say to be fair most donor derived NK cells have not been engineered and they've been given as a monotherapy.

Clearly part of the strategy, we're pursuing with Ft 516, and 50 596 is now to give multiple doses over multiple cycles in combination with other agents and that's a paradigm that has not really been explored with donor derived cell therapy, and therefore, lower doses may be much more appropriate for especially given when given in multiple doses may be much more appropriate in that setting.

Got it obviously, we obviously, it's something that we will look at we're doing dose escalation and we have the potential to push dose.

Okay.

The next question will come from Biren Amin with Jefferies. Please go ahead.

Yeah, Hi, Scott Thanks for taking my questions and apologies for the background noise.

Byron Amin: Thanks for taking my questions and apologies for the background noise. So, Scott, I just want to get your perspectives on your plans for 500 in the longer term. Would you move this forward in certain solomons? And if so, when would we get a go-no-go decision?

So I'm sorry, I just want to get your perspective on your plans for five hundreds longer term would you move this forward in certain solid tumors and if so when would we get a go no go decision.

Or should we look at the 500 has a de risking.

Scott Walshko: Or should we look at the 500 as a de-risking event from a platform standpoint in terms of safety? So I would look at it as a de-risking event in terms of safety. That said, I do think there is a subset of populations, a subset of patients in this study, which we could potentially enrich for that potentially has the potential to lead to efficacy. We are not enriching for that subset yet today, although I would expect us to begin to drive towards that in the near future. The particular subset of patients that I am interested in, and I think NK cells, at least preclinically, there's interesting proof of concept here, are patients that have failed checkpoint inhibitors, where, for instance, the reason for failure is the tumor has mutated in such a way that there is very low to null expression of MHC class 1.

From a platform standpoint in terms of safety.

So I would look at it as a de risking event in terms of safety that said I do think there is a subset of populations are subset of patients in this study, which we could have potentially enrich for that you have the potential to lead to efficacy. We are not enriching for that subset yet today, although I would expect us to begin to drive towards that in the new year future. The particular subset of patients that I am interested in and I think NK cells at least Preclinically theres interesting proof of concept here are patients that have failed checkpoint inhibitor.

Where for instance, the reason of failure is the tumor has mutated in such a way that there is very low to no expression of MHC class one.

Scott Walshko: This occurs in about 30 to 40 percent of patients that fail checkpoint inhibitor therapy. The mechanism of resistance is certain mutations in the tumor whereby MHC class one is significantly down-regulated. Those types of tumors will not be recognized by T-cells; there's no antigen presentation. However, those types of tumors can be exquisitely recognized and potentially killed by NK cells, and scientists have shown that pre-clinically. And so that subset of patients with FT500, I am very interested in looking into and exploring that particular subset of patients further, and I suspect we will begin to enrich for that subset of patients in the near future with FT500. Initially, the FT-500 experience was a big basket study, both in the monotherapy arm and the checkpoint inhibitor therapy arm, where we're driving towards safety and proving the multi-dose, multi-cycle So just to follow up on your response. Is there a diagnostic assay that you can enroll patients with MHC1 downregulation? Yes, you can absolutely biopsy tumors in advance with respect to MHC class 1 expression levels.

That occurs in about 30% to 40% of patients that failed checkpoint inhibitor therapy.

The mechanism of resistance is our certain mutations in the tumor whereby MHC class one is significantly down regulated those types of tumors will not be recognized by T cells. There is no antigen presentation.

However, those types of tumors can be exquisitely recognized and potentially killed by NK cells and.

Folks have shown that pre clinically and so that subset of patients with up to 500, I'm very interested in looking and exploring the at that that particular subset of patients further and I suspect we will begin to enrich for that subset of patients in the near future with S&P 500.

Initially the FC 500 experience is a big basket study both in the monotherapy arm and the checkpoint inhibitor therapy arm, we're we're driving towards safety and proving the multi dose multi cycle treatment paradigm.

So just a follow up on your response is there a diagnostic assay that can.

You can enroll for patients with NFC, one down regulation.

Yes, you can absolutely biopsy tumors in advance.

With respect to MHC class, one expression levels, it's actually being done by certain investigators in the checkpoint inhibitor space to determine whether or not actually a checkpoint inhibitor should be administered to those patients.

Scott Walshko: It's actually being done by certain investigators in the checkpoint inhibitor space to determine whether or not a checkpoint inhibitor should be administered to those patients. And then just a question on 516. I think previously the company planned to evaluate it in combination with elotuzumab and multiple myeloma. So is that still on plan to enroll this cohort? No; we decided not to enroll that cohort. And one of the reasons for that is, you know, quite frankly, focusing on the resources and directing the product candidates and the portfolio of our product candidates in a way that we think is most efficient and efficacious.

Got it and then just a question on plastic theme.

I think previously the company.

Planned to evaluate in combination with elotuzumab in multiple myeloma.

Yes, it is still our plan to enroll this cohort.

No, we decided not to enroll that cohort and one of the reasons for that is quite frankly, focusing on their resources in directing the product candidates and the pro and the portfolio of our product candidates in a way that we thought were we think is most efficient and efficacious. So for example, as you know we are developing a product candidate called ft. Fivethirty eight FC Fivethirty eight as a product candidate that we will likely file Eni and de on in the coming what's called the next six months.

Scott Walshko: So for example, as you know, we are developing a product candidate called FT-538. FT-538 is a product candidate that we will likely file an IND on in the coming, let's call it the next six months. FT538, in particular, has been designed for the myeloma space. FT538, we've actually knocked out, in a master cell line, the ability of an IPS-derived NK cells to express CD38. And so therefore, we think FT538 can be given in combination and synergistically with daratumab for the myeloma space. So in analyzing our entire pipeline, in thinking about how to be most efficient in development, and thinking about how to target our product candidates into indications where we think that product candidate has the best chance of success from an efficacy standpoint, we looked at attacking the myeloma space with FT538. Great.

FC Fivethirty eight particular in particular has been designed for the myeloma space Ft, Fivethirty eight weve actually knocked out into him in a master cell line. The ability of an end of an IPO derived NK cells to express cdthirty eight and so therefore, we think ft. Fivethirty eight can be given in combination and synergistically with daratumumab for the myeloma space. So in analyzing our entire pipeline in thinking about how to be most efficient in development and thinking about how to target our product candidates into indications, where we think that product candidate has the best chance of success from an efficacy standpoint, we looked at attacking the myeloma space with ft Fivethirty eight.

Great. Thank you.

Scott Walshko: Thank you. Sure. The next question is from Mara Goldstein with Mizuho. Please go ahead.

Sure.

The next question is from Mara Goldstein with Mizuho. Please go ahead.

Great. Thanks.

Mara Goldstein: Great, thank you. Just to follow up first on the downregulation of MHC, is there specific prevalence in tumor types for that, in either specific tumors or organ systems or tissues that we should be aware of? Sure, there's, you know, I can send you some papers offline and we can look at that, but yes, in the lung cancer space, so when you look at the checkpoint inhibitor data that's coming out of both lung cancer and melanoma, anywhere between probably 25 to 30 percent of, 20 to 35 percent of patients that, for instance, have failed checkpoint inhibitor, when they've looked at that, those particular patients and their particular tumors, and they've looked at, for instance, MHC class 1 expression levels and mutations, for instance, B2M mutations, about 30 percent of the patients that fail therapy in those two settings for lung and melanoma have significant down regulation of MHC class 1.

Hello, Rob on the down regulation our American.

It was good.

[laughter] prevalence and tumor type for that in either specific tumors or organ systems or tissue that we should be aware.

Sure. There's I can send you some papers offline and we can look at that but yes in the lung cancer space. So when you look at the checkpoint inhibitor data that's coming out of lump of lung cancer melanoma anywhere between probably 25% to 30% of paid 20% to 35% of patients that for instance has failed checkpoint inhibitor when they've looked at that those particular patients in their particular tumors and they've looked at for instance, MHC class one expression levels and mutations for instance between mutations about 30% of the patients that fail therapy in those particular in those two settings for long in melanoma have significant down regulation of MHC class warm.

Mara Goldstein: Okay, and if I could just ask about FT500, the checkpoint failures in the trial, how should we think about that in terms of the percentage of patients who have been, that you've enrolled so far are checkpoint failures? Yeah, so far, on the call, if I was not clear, we've enrolled three patients in the checkpoint inhibitor combination arm. All three patients were enrolled and treated at the 100 million dose level, and those patients cleared the first treatment cycle with no DLT and no SAE, and those patients are in flight in the second treatment cycle. Okay, and if I could just ask one other question, as it relates to the differences, obviously, between FT-500, which is non-engineered, and FT-516, which is engineered, are there any differences in safety protocols to be aware of between those two programs?

Yes, so so far I on the call. If I was not clear weve enrolled three patients in the checkpoint inhibitor combination arm. All three patients received a 100 that were enrolled and treated at the 100 million dose level and those patients cleared the first treatment cycle with no DLP and no SH E and we have patients those patients are in flight in in the second treatment cycle, Okay, and if I could just ask one other question as it relates to the difference is obviously between exercise 100, which is non engineering asking hectic sandwiches engineered are there any differences and because of the protocol could be anywhere between those two programs.

I mean, there are different indications, obviously ones advanced solid tumors and one is in hematologic hematologic malignancy setting, but in terms of safety no I mean generally the safety profile that we are looking looking for with those product candidates is very similar.

Okay. All right. Thanks, very much appreciate it sure sure.

Scott Walshko: I mean, there are different indications, obviously. One is for advanced solid tumors, and one is for hematologic malignancies. But in terms of safety, no, I mean, generally, you know, the safety profile that we are looking for with those product candidates is very similar. Okay. All right. Thanks very much. I appreciate it.

The next question is from Jim Birchenough with Wells Fargo. Please go ahead.

Hi, Good afternoon incident, Nick on for Tim So.

So congratulations to you and your team on a.

Outstanding quarter.

Mrs Breakthrough center breakthrough therapy. This is a breakthrough paradigm for sure.

So on 500, it now you haven't.

Experience of repeat dosing receipts on repeat cycles.

Scott Walshko: Sure. The next question is from Jim Bertchanow with Wells Fargo. Please go ahead. Well, good afternoon. It's Nick on for Jim this afternoon.

Can you comment on cell expansion is it similar to what you reported full for NK 100.

Sure, Yes, absolutely I mean this gets if it gets into the I made a comment about like us looking very closely at sort of the minute. The immunological profile that we're seeing in patients. So this is I mean, we're going very deep with respect to our assessment.

Jim Bertchanow: Scott, congratulations to you and your team on an outstanding quarter. This is breakthrough, not breakthrough therapy; this is a breakthrough paradigm for sure. So on 500, now you have experience of repeat dosing and repeat cycles. Can you comment on cell expansion? Is it similar to what you have reported for NK100?

Of the 5500 product and we will do this for ft fysixteen of the product once its delivered to the patient and were looking directly at tracking not just the cells that are administered but obviously the patients response to those cells and so we're looking that we're looking at that across multiple different.

Scott Walshko: Sure, yeah, absolutely. I made a comment about us looking very closely at the immunological profile that we're seeing in patients. So this is, I mean, we are going very deep with respect to our assessment of the FT500 product, and we will do this for FT516, of the product once it's delivered to the patient. And we're looking directly at tracking not just the cells that are administered but also the patient's response to those cells. And so we're looking at that across multiple different mechanisms of assessment, looking at, for instance, cytokine levels, looking at whether, for instance, there's anti-cell immunogenicity raised against the cells that are being delivered. And so one of the things that we are very focused on, obviously, is the durability of the dose.

Mechanisms of assessment.

Looking at for instance, cytokine levels looking at whether for instance, there's anti cell immunogenicity raised against the cells that are being delivered and so one of the things that we are very focused on obviously is that the durability of the dosing historically donor derived NK cells. When given last about seven days. That's what you would normally expect for an NK cell an NK cell has a very different behavior than for instance, a T cell, we would not necessarily expect an NK cell to rapidly expand in vivo like a T cell, it's sort of not what NK cells do the half life of an NK cell in vivo, it's typically different than a T cell their turnover of endogenous NK cells as much shorter.

Then what you would see with respect to a T cell. So it is one of the reasons that we for instance are giving NK cells in multiple doses and being separated by about seven days, because we would expect the natural turnover been NK cell on engineered for their half life to be about seven days were so therefore, we are giving a dose every seven days I mean, one of the things that we're really interested though in looking at is of course, we are given this is what we intend to be a universal cell product.

Scott Walshko: And historically, donor-derived NK cells, when given, you know, last about seven days. That's what you would normally expect for an NK cell. An NK cell has a very different behavior than, for instance, a T cell. We would not necessarily expect an NK cell to rapidly expand in vivo like a T cell. It's sort of not what NK cells do. The half-life of an NK cell in vivo is typically different from that of a T cell. Their turnover of endogenous NK cells is much shorter than what you would see with respect to a T cell.

And so we are looking essentially at what we believe to be is the durability of for instance, the first dose versus the third dose versus the six dose with respect to the patients response to those cells really this idea of being able to promote a multi dose multi cycle treatment paradigm. We think is going to be super important in the cell based cancer immunotherapy space to drive deep durable responses. The single administration paradigm. We just think it's significantly limited if you give a single dose even if it's a persisting car T cell for the sake of argument. If you give that dose and you go fish the sells out from the patient 14, 20 130 days later the functionality of that persisting cell is substantially different than the functionality on day, one when administered to the patient and so we do believe that paradigm, where you are giving essentially multiple day one.

Scott Walshko: So it is one of the reasons that we, for instance, are giving NK cells in multi-doses separated by about seven days. Because we would expect, you know, the natural turnover of an NK cell, unengineered, for their half-life to be about seven days. So therefore, we're giving a dose every seven days.

Scott Walshko: I mean, one of the things that we're really interested in looking at is, of course, we are giving this what we intend to be a universal cell product. And so we are looking essentially at what we believe to be the durability of, for instance, the first dose versus the third dose versus the sixth dose with respect to the patient's response to those cells. Really, this idea of being able to promote a multi-dose, multi-cycle treatment paradigm is going to be super important in the cell-based cancer immunotherapy space to drive deep, durable responses, because the single administration paradigm is significantly limited.

Experiences is ultimately going to prove out as the preferred paradigm to drive deep durable responses.

And we want to demonstrate that that paradigm in fact is safe and well tolerated not just from a clinical perspective, but looking at the patients response to those cells cell doses.

Scott Walshko: If you give a single dose, even if it's a persisting CAR T cell for the sake of argument, if you give that dose and you go fish the cells out of the patient 14, 21, 30 days later, the functionality of that persisting cell is substantially different from the functionality on day one when it is administered to the patient. And so we do believe a paradigm where you are giving essentially multiple day one experiences is ultimately going to prove out as the preferred paradigm to drive deep, durable responses. And we want to demonstrate that that paradigm, in fact, is safe and well tolerated, not just from a clinical perspective but by looking at the patient's response to those cell doses. Okay, thank you.

Thank you so for NK 100, you've reported that the second dose.

So you had greater expansion that analysis. So I guess I'm do you have data in house now that tells you that Youre high PSC NK cells.

For repeat dosing of behaving similarly to the NK 100 cells.

I mean, we're doing we're doing a lot of that analysis right now and it's it's part of what you should expect will be a significant feature of our.

Presentations in the second half of 2019, what all essentially called the immunological activity of ourselves.

Okay and then the first NK 100 carriers you during that to a close or you are going to continue those studies.

Scott Walshko: So for NK100, you've reported that the second dose actually had greater expansion than the first dose. So I guess I'm, do you have data in-house now that tells you that your iPSC NK cells for repeat dosing are behaving similarly to the NK100 cells? I mean, we're doing a lot of that analysis right now, and it's part of what you should expect will be a significant feature of our presentations in the second half of 2019, what I'll essentially call the immunological activity of ourselves. Okay, and then as far as NK100 goes, are you drawing that to a close, or are you going to continue those studies?

Yes, I think I've said this before I think.

With respect to the AML in the ovarian studies of NK 100, we will likely wind those down by the end of 2019.

In the solid tumor study, we will continue to look to keep that going and potentially.

Target enrollment of those NK 100 patients towards the patient population that we've talked about with respect to MHC class one low expression levels to get the best read on how to move F. T. 500 forward, we think 10-K 100 in that particular setting.

Scott Walshko: Yeah, I think, and I've said this before, I think with respect to the AML and the ovarian studies of NK100, we will likely wind those down by the end of 2019. In the solid tumor study, we will continue to look to keep that going and potentially, target enrollment of those NK100 patients towards the patient population that we've talked about with respect to MHC class 1 low expression levels to get the best read on how to move FT500 forward. We think NK100 in that particular setting is a good proxy and a good learning playground for FT500.

Good proxy and a good learning playground for Ft 500.

Sure that makes sense and then just a loss on scope with NK 100 year Hannah.

Different intense disciplined for depletion regimens and I can't recall, whether youre doing repeated lymphodepletion between the cycles, but given a competitor just reported some lymphodepletion related deaths can you just quickly update us on lymphodepletion as it varies between these different.

Tumors, you're studying and also whether you intend to give lymphodepletion malden months. Thank you.

Scott Walshko: Sure, that makes sense. And then just the last one, Scott, within K100 you had a... with different intensities of lymphodepletion regimens. And I can't recall whether you're doing repeated lymphodepletion between the cycles, but given a competitor just reported some lymphodepletion-related deaths, can you just quickly update us on lymphodepletion as it varies, perhaps, between these different... tumors you're studying and also whether you intend to give it more than once. Thank you. Sure. So, I'll start with FT500. So, I mean, and I'll just be really precise with my language. We're not lymphodepleting any patients with FT500. FT-516 or FT-596.

Sure so.

I'll start with Ft 500, so I mean, obviously really precise with my with my language were not lymphoma depleting any patients with ft 500.

55, 16, or 55, Ninesix, we are giving a conditioning regimen, but the conditioning regimen is essentially an outpatient conditioning regimen.

It consists of Cy flu and it's a relatively low dose of say flu than what you would normally give two lymphoma deplete a patient.

Any NK 100, setting we had actually three different conditioning regimens. The AML setting of NK 100, we in fact did lymphoma deplete.

In the ovarian setting and in the advanced solid tumor setting we used lymphoma conditioning and loom co conditioning regimens. We used are similar to the ones, we're using with ft 500 ft, Fysixteen as well as active Fivenine sex.

Scott Walshko: We are giving a conditioning regimen, but the conditioning regimen is essentially an outpatient conditioning regimen. It consists of CyFlu, and it's a relatively low dose of CyFlu than what you would normally give to lymphodeplete a patient. In the NK100 setting, we actually had three different conditioning regimens. In the AML setting of NK100, we actually did lympho-deplete. In the ovarian setting and in the advanced solid tumor setting, we have used lymphoconditioning.

So and so the paradigm that we are pursuing is a paradigm where conditioning can be given safely in an outpatient setting.

And you can get that multiple times.

Our it were actually only planning on giving that at the beginning of a treatment cycle.

Okay. Thank you very much.

Sure.

The final question is from Dana Gray Bosh with SVB Leerink. Please go ahead.

Hi, Thank you. Thanks, Scott I have two questions and I guess to ask them separately. The first is you mentioned several times the investigator initiated trials with NK cells and am now and looking at that they typically used capital identical allogeneic NK cells and a lot of the authors concluded that cure mismatch was necessary for their efficacy I Wonder if you can talk more to the NK cell phenotype for ft, Fysixteen, specifically to their current ligands. If the current ligands are educating your process and for what percentage of patients do you expect the current mismatch or killing through the Kerr.

Scott Walshko: And the lymphoconditioning regimens we used are similar to the ones we're using with FT500 and FT500, as well as FT5. So the paradigm that we are pursuing is a paradigm where conditioning can be given safely in an outpatient setting, and you can get that multiple times. But we're actually only planning on giving that at the beginning of a treatment cycle. Okay, thank you very much.

Daina Michelle Graybosch: Sure. And the final question is from Daina Graybosch with SVB, LaRinc. Please go ahead.

Scott Walshko: I have two questions, and I guess I'll ask them separately. The first is, you mentioned several times that the investigator initiated trials with NK cells in AML, and looking at that, they typically used haploidentical allogeneic NK cells, and a lot of the authors concluded that cure mismatch was necessary for their efficacy. I wonder if you can talk more about the NK cell phenotype for FT-516, specifically about their CUR ligands if the CUR ligands are educated in your process, and for what percentage of patients do you expect a CUR mismatch or killing through the CUR lack of self action? Yeah, so it's a great question, and a lot of the work we're actually doing in our collaboration I mean, there's been a lot of work that's been done in this area, and I would agree with you that some investigators have concluded that cure mismatch is important with respect to patient outcomes. But there's been just as much work done by investigators that I think would challenge that assumption.

Lack of self.

Action.

Yes, so it's a great question and it's a lot of a lot of the work we're actually doing under our collaboration with Kalay member is investigating the importance of cure mismatch and its role in killing I mean, there's been a lot of work that's been done in this area and I would agree with you. Some investigators have concluded that cure mismatch is important with respect to patient outcomes.

There has been just as much work done by investigators that I think would challenge that assumption. So this is something that we're certainly looking at with respect to cure mismatch in the ability to drive patient responses. Its Kelly Malburg one of our collaborators is probably.

One of the most to steamed investigators it with respect to looking at here ligands and their importance in response and so some something we're certainly looking at on a go forward basis as part of our research and potentially to incorporate it into our clinical studies.

And the profile the phenotype of yourself do you have currently again im itself.

Daina Michelle Graybosch: So this is something that we're certainly looking at with respect to cure mismatch and the ability to drive patient responses. It's, you know, Calais Malmberg, one of our collaborators, is probably one of the most esteemed investigators with respect to looking at cure ligands and their importance in response. And so it's something we are certainly looking at on a go-forward basis as part of our research and potentially to incorporate it into our clinical studies. And the profile, the phenotype of your cells, do you have curligans on the cells? No, we don't. Thank you. And then the second question is sort of on a different track.

No we don't.

Okay.

Thank you and then the second question sort of on a different track. We've seen recent announcements of other induced pluripotent stem cell companies coming forward I think century therapeutics out of Bayer on Versant, and Sara which was a step up with Takeda I Wonder if you can speak to how your platform compared to these competitors.

I'll try and be kind.

So I on I mean in all honesty I can't speak to their platforms I'm not aware of.

What their platforms are in much detail at all.

My understanding of their platforms in their approach to IPO cell technology. It. They are still very early in development compared to fate Therapeutics. Obviously, we just filed our third R&D for an IP has derived cell therapy I will tell you generally I expect there to be multiple different approaches to IP us drive cell therapy, I think one of the differentiating features of our platform will essentially be the clonality of Curry of for instance, a master cell bank, we fundamentally believe that getting down to a single cell level with respect to engineering analysis preclinical essentially competition of of essentially racing loans against each other and selecting that single clone from which you create your master cell bank.

Daina Michelle Graybosch: We've seen recent announcements of other important stem cell companies coming forward. I think Century Therapeutics out of Bayer and Versant and Tucera, which was a step up with Takeda. I wonder if you can speak to how your platform compares to these competitors. I'll try and be kind. So, in all honesty, I can't speak to their platforms. I'm not aware of what their platforms are in much detail at all.

Scott Walshko: From my understanding of their platforms and their approach to iPS cell technology, they're still very early in development compared to Fate Therapeutics. Obviously, we've just filed our third IND for an iPS-derived cell therapy. I will tell you, generally, I expect there to be multiple different approaches to iPS-derived cell therapy.

That is very important I mean, when we create a master cell bank, we commonly compare for instance, 2030 40 clones that have already been selected from starting populations of 500, 600, 700 clones and so we systematically get down to a smaller set of clones that we actually think our advantaged and then we take that a step further and we race those clones against each other and I can tell you that that step where you race clones against each other is absolutely super critical in figuring out essentially what clone you want to use to create your master cell bank because that master cell bank is intended to serve as the basis for production throughout their lifecycle of your entire product and so the know how intellectual property experience.

Scott Walshko: I think one of the differentiating features of our platform will essentially be the clonality of, for instance, a master cell bank. We fundamentally believe that getting down to a single cell level with respect to engineering analysis, preclinical competition of essentially racing clones against each other, and selecting that single clone from which you create your master cell bank. That is very important. I mean, when we create a master cell bank, we commonly compare, for instance, 20, 30, 40 clones that have already been selected from starting populations of 500, 600, 700 clones. And so we systematically get down to a smaller set of clones that we actually think are advantaged. And then we take that a step further, and we race those clones against each other.

Human resources technology that all goes into selecting that single clone is absolutely critical and I do actually believe given we're pioneering this that that will become a regulatory hurdle in advancing ipi cell technology.

Scott Walshko: And I can tell you that that step where you race clones against each other is absolutely super critical in figuring out essentially what clone you want to use to create your master cell bank, because that master cell bank is intended to serve as the basis for production throughout the life cycle of your entire product. And so the know-how, intellectual property experience, human resources, and technology that all go into selecting that single clone are absolutely critical.

Awesome, great. Thank you very much.

And at this time are there any closing comments.

Thank you everyone for attending today's call look forward to speaking with you shortly in the near future and giving you more updates on our IP is derived.

Scott Walshko: And I do actually believe, given we're pioneering this, that that will become a regulatory hurdle in advancing IPS cell technology. Great. Thank you very much. And at this time, are there any closing remarks, Thank you, everyone, for attending today's call. I look forward to speaking with you shortly in the near future and giving you more updates on our IPS-derived NKNT cell franchises. Thank you. Ladies and gentlemen, thank you for participating in today's conference call.

NK and T cell franchises. Thank you.

Ladies and gentlemen, thank you for participating in today's conference call you may now disconnect.