Analyst Conference Summary

biotechnology

conference date: November 8, 2023
for quarter ending: September 30, 2023 (third quarter, Q3)

Forward-looking statements

Overview: In early clinical trials.

Basic data (GAAP):

Revenue was $2 million, up sequentially from $1 million, and down from $15 million year-earlier. All revenue was from collaborations.

GAAP net income was negative $45 million, up sequentially from negative $53 million, and up from negative $83 million year-earlier.

GAAP EPS, diluted, was negative $0.46, up sequentially from negative $0.54, and up from negative $0.86 year-earlier.

Guidance:

Cash expected to be above $300 million at end of year 2023 with a runway into 2025.

Conference Highlights:

Scott Wolchko, President and CEO of Fate Therapeutics, said: "We achieved several key milestones for our iPSC product platform in oncology and autoimmunity, creating additional opportunities to generate new clinical data across multiple programs during 2024. We have initiated patient enrollment in our Phase 1 study of FT522, our ADR-armed, CD19-targeted CAR NK cell program, where we intend to assess FT522 with and without conditioning chemotherapy in patients with B-cell lymphoma. In addition, our IND application was cleared by the FDA for FT825/ONO-8250 in solid tumors under our collaboration with ONO Pharmaceutical, which multiplexed-engineered CAR T-cell program incorporates seven synthetic controls of cell function including a novel cancer-specific binding domain targeting HER2. Finally, I am pleased to announce the expansion of our iPSC product platform into autoimmunity with the clearance by the FDA of our IND application for FT819, our off-the-shelf, CD19-targeted CAR T-cell program, in systemic lupus erythematosus" Believes has cash to reach key inflection points. Reduced cash burn to extend runway.

Believes cell therapy can be used to engineer immunotherapies, starting with FT819.

The cash and equivalents balance ended the quarter $350 million, down sequentially from $385 million.

In Q3 2023 Fate started Phase 1 for FT522, following a May FDA clearance. FT522 is an off-the-shelf, multiplexed-engineered, induced pluripotent stem cell (iPSC)-derived natural killer (NK) cell product candidate that incorporates five synthetic controls of cell function. It is armed with Fate's proprietary alloimmune defense receptor (ADR) technology, which is comprised of a synthetic engineered receptor targeting 4-1BB and is designed to promote anti-tumor activity without requiring administration of intensive conditioning chemotherapy to patients. Will be tried with both chemo conditioning and without. Believes will initially enroll heavily pretreated B-cell lymphoma patients.

FT819 began enrolling patients in Q2 2023 for B-cell lymphoma and chronic lymphocytic leukemia. In Q3 expanded into systemic lupus erythmatosus. FT819 is a T-cell product candidate manufactured from a clonal master iPSC line. FT819 incorporates several novel synthetic controls of cell function, including the integration of a novel CD19-targeted 1XX CAR construct into the T-cell receptor alpha constant (TRAC) locus, which is intended to promote uniform CAR expression, enhance T-cell potency, and prevent graft-versus-host disease.

The FT576 program is in Phase 1 for multiple myeloma.

FT825, or ONO-8250, in partnership with Ono for HER2-positive solid tumors, had its IND submitted in 2H 2023 and cleared by the FDA in Q4. Plan is to test both as a monotherapy and combined with cetuximab.

Operating expense of $53 million consisted of $34 milion for R&D; $19 million for SG&A. Operating income negative $51 million. Interest income $5 million. Change in fair value of milestones $1 million. Other income $0.4 million.

Q&A selective summary:

FT522 boundary for preconditioning? Data will be driven by responses. We want to understand the PK profile. Potential is for no conditioning.

FT825, just combo with cetuximab? We will consider other combinations as well.

CD19 CART landscape? Super competitive landscape, but multiple opportunities for off-the-shelf therapies.

Upcoming value creation events, within 12 months? Proof of concept with 522, especially with no conditioning. 825 if success with solid tumors. Autoimmunity depletion with 819.

825 in HER2 tumors benchmarks? Criteria for enrollment is broad, including high and low HER2 expressers.

FT819, rational for starting with lupus? Strong clinical precedent for CD19 and strong community interest.

Could study FT522 as an immunotherapy, nothing specific yet.

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