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Edited Transcript of FATE earnings conference call or presentation 7-May-19 9:00pm GMT

Q1 2019 Fate Therapeutics Inc Earnings Call

San Diego Jun 5, 2019 (Thomson StreetEvents) -- Edited Transcript of Fate Therapeutics Inc earnings conference call or presentation Tuesday, May 7, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daniel D. Shoemaker

Fate Therapeutics, Inc. - Chief Scientific Officer

* J. Scott Wolchko

Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director

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Conference Call Participants

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* Biren N. Amin

Jefferies LLC, Research Division - MD and Senior Equity Research Analyst

* Daina Michelle Graybosch

Leerink Capital Partners - MD of Immuno-Oncology & Senior Research Analyst

* David Matthew Nierengarten

Wedbush Securities Inc., Research Division - MD & Head of Healthcare of Equity Research

* Edward Andrew Tenthoff

Piper Jaffray Companies, Research Division - MD & Senior Research Analyst

* Nicholas M. Abbott

Wells Fargo Securities, LLC, Research Division - Associate Analyst

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Presentation

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Operator [1]

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Welcome to the Fate Therapeutics First Quarter 2019 Financial Results Conference Call. (Operator Instructions) This call is being webcast live on Investors & 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 Wolchko, President and Chief Executive Officer of Fate therapeutics. Please begin, sir.

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [2]

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Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics first quarter 2019 financial results call. Shortly after 4:00 PM Eastern Time today, we issued a press release with these results, which can be found on the Investors & Media section of our website under Press Releases. In addition, our Form 10-Q for the quarter ended March 31, 2019, was filed shortly thereafter and can be found on the Investors & Media section of our website under, Financial Information.

Before we begin, I'd like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer on the company's earnings press release issued after the close of market today, as well as the risk factors in the company's SEC filings, included in our Form 10-Q for the quarter ended March 31, 2019 that was filed with the SEC today. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, as the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Fate Therapeutics disclaims any obligation to update these forward-looking statements to reflect future information events or circumstances.

Joining me on the call today is Dan -- Dr. Dan Shoemaker, our Chief Scientific Officer. Since 2015, Fate Therapeutics has held true to a bold vision that induced pluripotent stem cell or iPSC technology would serve as the platform for developing and commercializing off the shelf cellular immunotherapies. We foresaw the unmatched potential to use clonal, master iPSC lines as a renewable cell source for the mass production of cell products that are uniformly engineered, extensively characterized, consistently manufactured and delivered on demand to reach more patients. Based on our unwavering commitment to this vision, we have built an industry-leading iPSC product platform supported by deep collaborations with top investigators and leading research centers, numerous peer-reviewed publications and an intellectual property portfolio of over 100 issued patents and 100 pending patent applications. And we have built a robust pipeline of unique and highly differentiated off the shelf NK cell and T-cell product candidates, with the hope of delivering transformational change in patient outcomes.

Our conviction that clonal, master, iPSC lines will serve as the foundation for developing and commercializing cell-based cancer immuno therapies, has been further validated by 3 recent trends emerging in the field. First, we continue to see numerous limitations inherent in patient and donor derived cellular immunotherapy or heterogeneous populations of primary cells are sourced, engineered in large batches and expanded with each manufacturing run, resulting in cell to cell and batch-to-batch variability that can affect product safety and efficacy. In contrast iPSC-derived cell products are homogeneous, each originating from a single engineered iPSC clone that is extensively characterized, precisely selected and repeatedly used for product manufacturer. Second, recently published longitudinal patient outcomes following single administration CAR T cell therapy have convincingly demonstrated that long term durable remissions are most highly correlated with early disease intervention, rapid tumor elimination and the manufactured products' effector function and not necessarily long term CAR T cell persistence. In fact, the anti-tumor effects of a single administration CAR T cell treatment are providing to be short-lived in many patients and relapses now commonly observed, including in patients with persisting CAR T-cells since iPSC-derived cell products can be mass produced at low cost per dose, cryopreserved and delivered on demand. The opportunity exists to administer multiple off the shelf doses of a cell product. This clinical paradigm uniquely enables continuous therapeutic exposure to optimize effector cells over weeks and months, including in combination with established early line therapeutic agents that have complementary and synergistic mechanisms of action such as checkpoint inhibitors and monoclonal antibodies, and consequently this paradigm has the potential to convey more durable responses.

Third, multifunctional elements such as the concurrent targeting of more than 1 tumor-associated antigen are rapidly being embedded into cell-based cancer immuno therapies to further enhance the clinical activity of effector cells. While this is promising, the complexity of product design and manufacturing is significantly increased, in contrast, we believe multiple functional elements can be more effectively evaluated using clonal, master iPSC lines where distinct functional configurations can be systemically introduced -- systematically introduced, extensively characterized and assessed for safety and activity and where the clonal, master iPSC line with the quote unquote, winning multifunctional configuration can be used as the renewable cell source for repeated manufacturer of the homogeneous cell product.

These past several months have been particularly inspiring for the company, as our multi-year journey to bring iPSC-derived cellular immunotherapy to patients with cancer is now being realized. In February, we initiated a landmark clinical trial of the first ever iPSC-derived cell product, cleared for clinical investigation in the US. FT500 is a universal off the shelf NK cell cancer immunotherapy derived from a clonal master iPSC line. In preparation for the clinical investigation of FT500, hundreds of doses of FT500 were manufactured in a single GMP campaign. Each dose was cryopreserved in an infusion ready bag. The cryopreserved cell product was validated against stringent post-thaw release specifications, including identity, purity, viability and potency. And FT500 was shipped to participate in clinical sites for off-the-shelf use as a thaw and directly infused cell product. FT500 is currently being investigated in an open label, multi-dose Phase I clinical trial for the treatment of advanced solid tumors. This study is designed to assess the safety and activity of 3 once weekly doses of FT500 as a mono-therapy and in combination with one of 3 FDA approved checkpoint inhibitor therapies; nivo, pembro and atezo and patients whose tumors failed to respond or progressed following initial response with the prior checkpoint inhibitor therapy.

Patients who are clinically stable following the first cycle of FT500 treatment are eligible to receive a second treatment cycle of 3 additional once weekly doses of FT500. Despite the clinical benefit conferred by approved checkpoint inhibitor therapy against a variety of tumor types, these therapies are not curative and in most cases, patients either fail to respond or progress on therapy. One common mechanism of resistance to checkpoint inhibitor therapy is associated with the loss of function mutations, in genes critical for antigen presentation, such as beta-2-microglobulin, which results in loss of MHC Class 1 expression.

Since NK cells have the inherent capability to recognize and directly kill tumor cells with these mutations, we believe FT500 represents a novel therapeutic strategy to potentially overcome checkpoint inhibitor resistance. Last week at the American Society of Gene and Cell Therapy Conference, we introduced -- we announced that 3 patients with advanced solid tumors have now been treated with multiple doses of FT500 at the first dose level of 100 million cells per dose in the study's mono-therapy arm. All 3 patients received 3 once weekly doses of FT500 in an outpatient setting in the first treatment cycle, which was well-tolerated with no dose limiting toxicities or serious adverse events reported during the initial 28-day observation period.

In accordance with the clinical protocol, all 3 patients advanced to a second multi-dose treatment cycle of FT500, which again has also been well tolerated, with no dose limiting toxicities or serious adverse events reported to date.

We are particularly encouraged with these initial clinical observations as this clinical trial of FT500 is one of the first studies where multiple doses of a universal off the shelf cell therapy had been administered to patients. As I previously mentioned. It has now been shown that persistence of a single administrated therapy is not sufficient to prevent relapse nor is long term persistence correlate with patient survival. This is explained in part by the reduction of effector cell function over time in vivo, which is most often caused by the exhaustion and energy of the persisting cells. Consequently, we believe a multi dose therapeutic course that enables repeat delivery of optimized effector cells over a period of weeks to months will ultimately lead to deeper and more durable responses as compared to single administration therapy.

At this time we have open patient enrollment at the second dose level of 300 million cells per dose of FT500 in the monotherapy arm. In addition, we have open patient enrollment at the first dose level of 100 million cells per dose of FT500 in the checkpoint inhibitor combination arm. In addition to achieving these important clinical milestones with FT500, we continue to advance FT516, our second product candidate emerging from our iPSC product platform toward first patient enrollment. FT516 is a universal off the shelf targeted NK cell product candidate, derived from a clonal master iPSC line, engineered to express a novel, high affinity non-cleavable CD16 or hnCD16 Fc receptor. To our knowledge, FT516 is the first ever cell product derived from a genetically engineered, pluripotent stem cell, cleared for clinical testing worldwide. CD16 is naturally expressed on NK cells and mediates antibody dependent cellular cytotoxicity or ADCC, a potent anti-tumor mechanism by which NK cells recognize find and kill antibody coated cancer cells.

Consequently, ADCC is dependent on NK cells, maintaining active levels of CD16 surface expression. The expression of CD16 though on NK cells, endogenous NK cells has been shown to undergo considerable down-regulation in cancer patients, which can significantly limit anti-tumor activity. Additionally, CD16 naturally occurs in 2 variance, either with 158V high or 158F low affinity for the Fc domain of IgG1 antibodies. Numerous clinical studies with FDA approved tumor targeting antibodies including rituximab, trastuzumab and cetuximab have demonstrated that patients' homozygous for the CD16 high affinity variant which only occurs in about 15% of patients have significantly improved clinical outcomes.

FT516 incorporates a novel hnCD16 Fc receptor, which maintains active levels of surface expression of the high affinity variant to augment binding to tumor targeted antibodies for enhanced ADCC. At the 2019 American Association for Cancer Research Conference in April, the company presented preclinical data using a B-cell lymphoma line, showing that approximately 70% of peripheral blood NK cells lost CD16 expression upon co-culture with rituximab, while CD16 expression on FT516 remained intact and active. These differences resulted in a significant anti-tumor benefit with FT516 in vivo, where in a human lymphoma cancer model, mice treated with peripheral blood NK cells and rituximab had a median survival time of only 39 days as compared to mice treated with FT516 and rituximab where the median survival time had not been reached at day 100.

Our therapeutic objective with FT516 is to improve each patient outcomes in the 80% of patients that inherently have lower levels of ADCC due to expression of the CD16 low affinity variant. At this time, a cGMP production run for FT516 has been completed and the final product release testing is ongoing. The company intends to clinically investigate FT516 for the treatment of relapsed refractory hematologic malignancies, including in combination with certain FDA approved monoclonal antibody therapies. We expect to open the FT516 study for patient enrollment in mid-2019.

At the 2019 American Association for Cancer Research in April, we presented new preclinical data on FTE 596, the third product candidate emerging from our iPSC product platform. FT596 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 3 distinct functional modalities, of potent CAR targeting CD19, that is specifically designed to augment NK cell activity, a novel hnCD16 Fc receptor for enhanced ADCC and a unique IL-15 receptor fusion for improved NK cell proliferative capacity and functional avidity. Moreover, FT596 naturally expresses other activating receptors such as NKG2D to provide additional capacity to recognize and kill cancer cells.

While multiple groups are developing autologous and allogeneic CAR T-cells that target a single tumor-associated antigen, we believe the next wave of innovation in cell-based cancer immunotherapy will utilize concurrent targeting of multiple tumor-associated antigens. Clinical, experience with the first generation CAR T-cells, both in the case of single antigen targeted CAR T-cells against CD19 in leukemia and lymphoma and against BCMA in 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, amongst the earliest identified mechanisms of relapse is down-regulation or loss of the target antigen from the tumor cell surface.

To mitigate these limitations, next generation cancer immuno therapies are incorporating multi-targeted antigen strategies to reduce the risk of disease relapse due to target antigen escape. FT596 is on the forefront of this next wave of cell-based cancer immuno therapies that are specifically designed to engage multiple antigens. In preclinical studies, we have shown that the concurrent activation of the CAR19 and hnCD16 targeting modalities of FT596 exerts synergistic anti-tumor activity. In a cellular cytotoxicity assay designed to model CD19 antigen escape, FT956 combined with rituximab was able to effectively eliminate leukemia and lymphoma cancer cells that were positive for CD19 antigen expression as well as cancer cells that were negative for CD19 antigen expression, supporting the premise that multi-antigen engagement of CD19 and CD20 may elicit a deeper and more durable response.

I'm pleased to announce that the generation of the clonal master iPSC bank for FT596 has now been completed. The clonal master iPSC bank is derived from a single iPSC clone, that was specifically selected based on a series of critical attributes, including preferential, genomic, integration sites of the engineered elements, maintenance of genomic stability, demonstration of highly efficient and reproducible production of the NK cell product candidate and robust, post-cryo viability and multipurpose functional activity of the product candidate.

Currently, IND enabling activities including a completion of manufacturing pilot runs for FT596 are being conducted at Fate. We continue to remain on track for a mid-year submission of the IND application for FT596. Our intent is to clinically investigate FT596 as a monotherapy and in combination with monoclonal antibodies therapy in patients with advanced B-cell lymphomas.

We also continue to be very pleased with our progress we are making under our exclusive iPSC-derived T cell collaboration with Memorial Sloan-Kettering, led by Dr. Michel Sadelain for the development of universal off the shelf TCR-less CAR T-cell product candidate. Based on the latest preclinical data emerging from the Sadelain Lab pertaining to CAR T-cell biology, we continue to believe that our FT819 product candidate incorporates best in class components and design attributes for CAR T-cell products. Dr. Sadelain recently published in the Journal of Nature that directing a CD19 specific CAR to the T cell receptor alpha constant or TRAC Locus, enhances T cell potency and that these TRAC targeted CAR T-cells vastly outperform conventionally generated CAR-T cells in a mouse model of acute lymphoblastic leukemia. Additionally, Dr. Sadelain has shown in published work described in the Journal of Nature Medicine that CAR designs utilizing a 1XX CD28 zeta variant result in CAR T cells with potent activity and increased resistance to exhaustion as compared to conventional CD28 and 41BB CAR constructs in preclinical models.

We have now demonstrated that the production of clonal master engineered iPSC lines having integration of a 1XX CAR targeting CD19 into the TRAC Locus, with complete elimination of T-cell receptor expression to avoid graft-versus-host disease. Additionally, we have demonstrated our unique ability to screen thousands of iPSC clones to identify and select for those with the desired on-target edits and a void of off-target edits and translocations. Final selection of the single iPSC clone for generation of the clonal master iPSC bank for FT819 is ongoing.

Finally, we continue to focus on building the organizational talent and capabilities required to realize our bold vision. The build-out of our in-house GMP manufacturing facility continues on schedule and we expect to initiate in-house GMP manufacture in the fall of 2019 for clinical supply of our off-the-shelf iPSC derived cell product candidates. Also, we announced a number of important leadership additions, including the appointment of Dr. Sarah Cooley as Senior Vice President, Clinical Translation, Dr. Wayne Chu as Vice President, Clinical Development and Dr. Karin Jooss as member of our Board of Directors. I am pleased with these and many other additions to the Fate team. I want to thank both existing and new Fate team members for their outstanding execution and unwavering commitment to delivering transformational change in patient outcomes.

Turning to our financial results. For the first quarter ended March 31 2019, Fate Therapeutics incurred a net loss of $19.8 million or $0.30 per common share as compared to a net loss of $14.1 million or $0.27 per common share for the same period last year. Revenue was $2.6 million for the first quarter of 2019, compared to $1 million for the first quarter of 2018. Revenue was derived from the company's collaborations with Ono Pharmaceutical and Juno Therapeutics. Note that the 4-year research term under the Juno agreement concluded as scheduled, on May 4, 2019. And as a result, no additional revenue is expected to be recognized from Juno following the expiration of the agreement.

Research and development expenses for the first quarter of 2019 were $17.7 million compared to $11.5 million for the same period last year. The increase in our R&D expense 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, third party expenses associated with the preclinical and clinical development of the company's product pipeline and equipment, materials and supplies associated with the preclinical and clinical development of the company's product pipeline. G&A expenses for the first quarter of 2019 were $5.4 million compared to $3.6 million for the same period last year. The increase in our G&A expenses was primarily attributable to an increase in employee compensation, including share-based compensation. Total operating expenses were $23.1 million for the first quarter of 2019.

After adjusting for non-cash stock-based compensation expense of approximately $3.9 million and quarterly cash research payments from Juno Therapeutics of $500,000, our total adjusted operating expenses were $18.7 million for the first quarter of 2019. At the end of the first quarter of 2019, cash and cash equivalents were approximately $183 million. Common stock outstanding was 65.1 million shares and preferred convertible stock outstanding was 2.8 million shares, each of which is convertible into 5 shares of common stock under certain conditions.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from David Nierengarten of Wedbush. Your line is open.

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David Matthew Nierengarten, Wedbush Securities Inc., Research Division - MD & Head of Healthcare of Equity Research [2]

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I have a couple of questions. First, if you, you mentioned, I believe, unless I missed something, the combination or using 2 different antibodies with a 516 and CD16 construct, have you looked at sequentially as a tumor preclinically gained resistance adding the second antibody in later, if that's possible and then the second part of that is, as you open the study of 516 plus, approved antibodies, is there any potential or investigator ability to do that in the natural -- in patients, if they weren't to lose sensitivity or CD20 or CD19 antigens? Would you be able to treat the patient with the next antibody, so I'll say, along with NK 516?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [3]

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Sure. So you're touching on something that is absolutely fascinating and speaks to the versatility of the CD16 receptor. Last question first, so clinically, well, clinical protocol currently allows for the administration of a single monoclonal antibody, to engage the CD16 receptor and so, you would not for instance under the clinical protocol as currently written have the ability to, for instance give a first let's pick it CD20 -- anti-CD20 monoclonal antibody and then treat with a second monoclonal antibody. That is something that is very interesting clinically what is not part of the existing first generation clinical protocol, if you will. Pre-clinically, as you can imagine, we have absolutely looked at scenarios where you can utilize a product candidate like FT516 and combine with either sequentially or concurrently multiple different antibodies and you have the ability to hit multiple different antigens by leveraging multiple different antibodies. It is one of the most powerful features of the CD16 receptor.

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David Matthew Nierengarten, Wedbush Securities Inc., Research Division - MD & Head of Healthcare of Equity Research [4]

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And I guess maybe the quick follow-up would be, have you seen differences in activity or response rates in, at least the animal models with sequential or concurrent administration?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [5]

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Yes, so I'm not going to speak to that on this call. It's something that we will be presenting data around that because it is something that is very exciting and unique to the CD16 receptor.

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Operator [6]

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And our next question comes from Edward Tenthoff of Piper Jaffray. Your line is open.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [7]

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So, Scott thanks for the update, really fantastic stuff and really getting exciting. I wanted to ask, kind of a high-level question. And as we get these iterative knock-ins knock-outs where does this ultimately go? Do we have first and even second generation NK and/or CAR T- products that maybe evolved as a cancer evolves, is this something where maybe we have something for different types of hematologic cancers and something for different types of solid tumors, where do you ultimately see this technology evolving?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [8]

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Yes, I think --- and I think this speaks more broadly than just Fate's technology, but I do think the ability to, for instance, give multiple doses and hit multiple antigens and potentially actually secrete pharmaceutical elements is ultimately where this field will go. Cells obviously have the ability to engage specific targets, but these cells that we and others are developing have the ability to serve as factories, if you will and secrete elements, other elements non-targeting elements that absolutely can have an anti-cancer role and deliver additional functionality. So I do think ultimately -- and we are getting there quite frankly with FT596, a version of what we just talked about with David, with respect to FT516 where you can combine FT516 with multiple different monoclonal antibodies to deliver more multi functionality, but 596 has now actually embedded multi functionality into the actual product candidate. We have 3 different functional features in that product candidate. And so I do believe the world of cell therapy is going towards directionality, where there will be multiple pieces of anti-tumor functionality embedded into these product candidates. And so for us, one of the things we're mostly interested in like for instance CD16 is being able to embed functionality into the backbone of cells that provide a tremendous amount of versatility.

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Daniel D. Shoemaker, Fate Therapeutics, Inc. - Chief Scientific Officer [9]

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Yes. And Ted, this is Dan. And just -- to keep in mind that we're already at 3 edits with 596 and I think one of the differentiating aspects about this platform is because there's a cell line on the front end, it really opens the door to these complex multi-step editing procedures that is going to allow us to go to 5, 6, 7 edits. And I think when you try and imagine those types of genetic engineering strategies performed on batches of cells, it really becomes challenging and nearly impossible. So I think this is one of the major strengths of our platform that we're already realizing and we'll take advantage of even more so as we move forward.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [10]

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Very, very interesting, very enticing. One quick question, is it possible to tease out activity, i.e. NKG2D versus CD19 versus therapeutic antibody or do you even care at the end of the day, this one response. Thanks so much for answering the questions.

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Daniel D. Shoemaker, Fate Therapeutics, Inc. - Chief Scientific Officer [11]

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Yes, so again building on something Dan said, you actually can tease out the individual functional elements by using essentially think of an iPSC cell as almost like a Lego where you can build the first piece of functionality in lock in that cell line use that cell line to add now the second piece of functionality, lock in that cell line and now add in a third piece of functionality and lock in that cell line and so now I have 3 generations, all originating from the, from the original master cell line or you can race those product candidates against each other and really tease out the individual component functionality, it's actually what we do, do.

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [12]

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Yes and pre-clinically, you can't really address each of the functional elements individually. I think I take your point when you go to the clinic, it's -- you really have the benefit of all of them working together and it's hard to know who is exactly doing what other than you have a multifaceted attack.

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Operator [13]

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And our next question comes from Biren Amin of Jefferies, your line is open.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [14]

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Scott, so on the 596 program which is CD19 targeted CAR NK, what tumor type are you going to go into? I read the press release, clearly you're expecting interim data by the end of the year. So just trying to understand which tumor settings you'd go into for that program.

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [15]

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So I think in the press release, we said that we would have initial clinical data around 596, but we're looking at 596 initially looking towards lymphomas.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [16]

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Got it and is there any read through on the 500 program. So I guess for 500, are you staggering patient enrollment to follow safety and if so can you use that data set and apply it to 550 and 596 to potentially expedite clinical enrollments?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [17]

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So really interesting suggestion, I can't speak to that yet, although I think our hope, but obviously the experience we're building with first products like FT500 or 516 will be viewed potentially favorably. Given that there is human experience with some of those elements. So obviously FT500 is the first iPSC derived NK cell product, F516 will introduce a CD16 targeting element and 596 will also incorporate that targeting element. So we have certainly not pressure tested whether or not we can accelerate clinical development, but I do think the way our product candidates are rolling out, you are seeing additional functionality being built into the next generation product, that is appearing in earlier generations.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [18]

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Got it. And I guess, the other question I had is on 500, when can we get efficacy data from this program? You've treated 3 patients you're going onto combination. Is this something that we could expect at the SITC Meeting later this year?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [19]

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Yes, I think our objective would be able to provide a fuller clinical update. Clearly, we will continue to provide updates along the way on progress in safety and biomarker observations. But yes, we are targeting a full clinical update on the program around the SITC ASH timeframe, certainly.

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Operator [20]

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And our next question comes from Daina Graybosch of SCB Leerink. Your line is open.

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Daina Michelle Graybosch, Leerink Capital Partners - MD of Immuno-Oncology & Senior Research Analyst [21]

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A couple of questions. The first one is around the lymphodepletion. I know you said that FT500 is in the outpatients. I wonder if you could talk more about the conditioning regimen. If you think it limits you to certain healthy patient population, whether you need to repeat it before it cycle and whether that could limit the number of cycles you give?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [22]

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Sure. I mean, I can speak to it, Daniel speak to it, too. So if you remember back to our NK100 experience, which is a donor derived cell therapy that is ongoing in multiple Phase 1 studies. One of the benefits of the NK100 experience is, we are looking at multiple different conditioning regimens, ranging from complete lymphodepletion in the AML, to very light lympho conditioning in the solid tumor study. If I recall correctly the dimension study has 2 days of Cy and one day of Flu, actually. And then so it's very, it's very much outpatient in that setting. So we're learning a lot from the different conditioning regimens and how those conditioning regimens are for instance releasing cytokines, which may be important to the cell therapy that were being delivered. The clinical studies that we're conducting with the FT500 series of products, we are providing conditioning and I think the FT500 study is 2 days of Cy, 2 days of Flu, we are providing conditioning at the beginning of the first cycle, so not at the beginning of each dose, but at the beginning of the cycle.

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Daniel D. Shoemaker, Fate Therapeutics, Inc. - Chief Scientific Officer [23]

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And again, as Scott said, this is an interesting balance we're trying to get creating the optimal environment for our adoptively transferred cells. But we're also trying to keep in mind that one of the goals is to engage an adaptive immune response from the patients and so I think finding this balance is going to be the key and we are doing extensive biomarker analysis of both the response of the patients' immune system, as well as the persistence of our iPSC derived products in addition to sort of the cytokine environment that we think is playing a critical role. So it's really going to be a balance of these factors that is going to drive the optimal conditioning regimen and it's probably going to be slightly different for different disease indications. And this is -- it will be something that we track carefully moving forward. But as your -- coupled with your comment, respect your comment with respect to limitation, keep in mind NK100, the NK100 experience, we have given multiple doses. We've given at least, we've given 2 doses to multiple patients and each dose in that instance was preceded by a new cycle of conditioning and so the degree of conditioning we're giving, which is very light lympho conditioning, I don't view as being limiting in any way to a multi-cycle paradigm.

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Daina Michelle Graybosch, Leerink Capital Partners - MD of Immuno-Oncology & Senior Research Analyst [24]

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And then -- thank you. And one more theoretical question in line with from that the other analysts have asked you, around the multi-functional elements and totally appreciate that you guys with the induced pluripotent stem cell platform are uniquely positioned, I think you said to do 5, 6, 7, 8, 9 different edits --

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [25]

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Dan said that.

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Daina Michelle Graybosch, Leerink Capital Partners - MD of Immuno-Oncology & Senior Research Analyst [26]

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And I think that, that lead to -- so this lead to potentially to a really rapid cycle of product development to take something from tech. How are you thinking about versions and will --ultimately will be the commercial product?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [27]

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Yes, so I think it's a great question and I think this is something that we certainly face given the robustness of our platform and it is faced by the industry. You're seeing first generation CAR T cell products that are targeting into single antigen potentially being rapidly displaced by product candidates that can hit multiple antigens. And so, this is a really interesting sort of dynamic that is going on right now in the world of cell therapy. I think we are going to think very thoughtful about evolving our product candidates, I would say the product candidates that we are developing 500, 516 and quite frankly 596 are -- at the end of the day are truly our therapeutic strategy is truly very different patient populations. So I don't necessarily envision 505, 516 and 596 converging into a single product candidate. Although some of them, for instance, the CD16 receptor is in 2 product candidates, but each product candidate is really being developed individually, although, we are absolutely learning from the benefits that we can gain from the other product candidates in our platform. Absolutely. I think there's 2 different ways that I sort of think about the product candidates we're developing, there are backbone features, if you will, that you could imagine might be in every single product candidate. And then there are tumor specific or cancer specific features that maybe incorporated to go after a specific type of cancer and again, I think, we are uniquely positioned to incorporate both those types of functional elements.

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Operator [28]

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And our next question comes from Jim Birchenough with Wells Fargo. Your line is open.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [29]

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It's Nick in for Jim this afternoon and Scott, there are lots, lots of progress. First question is, and this may be a moving target, but what is the shelf life of your iPSC derived products?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [30]

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Yes, so it's an awesome question and so, what -- we will be clear. Shelf life, do you mean how long we can keep a product stable and cryopreserved or do you mean, the shelf, for instance the durability within a patient?

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [31]

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No, no the -- the former.

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [32]

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The former? Oh, So for instance, as an example, we've had master cell lines, including on the research side, but certainly now on the clinical side that had been on stability tests, testing for multiple months now, in the case of FT500, but if you go back and you look at master cell lines that we created quite frankly 4, 5 years ago, and cryopreserved, we see absolute stability and functionality post-thaw. So that's not something I am overly sort of concerned about, being able to maintain a master cell line or even a product candidate in a cryopreserved state and then maintain high degree of viability and functionality post-thaw. I guess the other -- the thing I would point to that exists out there in the world, as you know, core blood units, as an example, are stored cryopreserved for 15 years, 10, 15 years and are highly effective post-cryo thaw.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [33]

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Okay. And then for 596 and 819, is the SCFP being used for the CARs fully human for those products? And if so, how does they compare to FMC63?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [34]

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It's not, we've not discussed the design specifically. It's not fully human.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [35]

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Okay. And then for 516, is this undergoing product release? And if you can hopefully file the IND by middle of the year, you're a long way along. Do you require some sort of functional readout of CD16 so these extra engineering steps that you're putting in, do you have to do release testing that proves what you've done has the functionality you want?

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [36]

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So, I'm not going to comment on what our specific release criteria are for individual product candidates. I will say that we do, do absolutely potency testing on post-cryo thawed products, both for viability and potency, and as you know, Nick, I mean, it is challenging in the world of cell therapy to maintain a high degree of viability and potency after a product has been cryopreserved. And I think one of the major accomplishments that we've been able to achieve which often goes overlooked but it's critical to an off-the-shelf paradigm is being able to effectively cryopreserve cells and then have them be very viable and potent post-thaw. Our release conditions mandated, obviously, by regulatory authorities is that we demonstrate the high degree of viability and potency post-thaw.

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Operator [37]

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Thank you. And I have no other questions in the queue. I'd like to turn the call back over to Mr. Scott Wolchko for closing remarks.

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J. Scott Wolchko, Fate Therapeutics, Inc. - Founder, CEO, CFO, President, Treasurer, Secretary & Director [38]

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Great. Thank you so much, for everybody, for participating in today's call, and we look forward to speaking with you shortly over the next coming months.

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Operator [39]

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Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Everyone have a wonderful day.