Analyst Conference Summary

biotechnology

conference date: February 26, 2024
for quarter ending: December 31, 2023 (fourth quarter, Q4)

Forward-looking statements

Overview: In early clinical trials.

Basic data (GAAP):

Revenue was $1.7 million, down sequentially from $2 million, and way down from $44.4 million year-earlier. All revenue was from collaborations.

GAAP net income was negative $44.1 million, up sequentially from negative $45 million, and up from negative $56.4 million year-earlier.

GAAP EPS, diluted, was negative $0.45, up sequentially from negative $0.46, and up from negative $0.58 year-earlier.

Guidance:

none

Conference Highlights:

Scott Wolchko, President and CEO of Fate Therapeutics, said: "We have started the year with strong momentum across our iPSC product platform in oncology and autoimmunity, including the award of a grant by the California Institute of Regenerative Medicine to support Phase 1 clinical investigation of our off-the-shelf FT819 CAR T-cell program in systemic lupus erythematosus. We have also treated the first patient with FT522, our off-the-shelf CAR NK cell program targeting CD19+ B cells, which is our first product candidate to incorporate our proprietary Alloimmune Defense Receptor technology that is designed to reduce or eliminate the need for administration of intense chemotherapy conditioning to patients. In addition, we have initiated the Phase 1 study of our FT825 / ONO-8250 CAR T-cell program in solid tumors, which incorporates seven synthetic controls of cell function including a novel cancer-specific binding domain targeting HER2. We are well positioned to generate initial clinical data across these off-the-shelf programs during 2024"

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

The cash and equivalents balance ended the quarter $316 million, down sequentially from $350 million. Expenses for 2023 were less than prior guidance.

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. Currently (Q1 2024) enrolling Regimen A, three doses at 300 million cells per dose. Expects some data in 2H 2024. Also expects to submit an IND for FT522 for autoimmune disease.

FT819 in Q4 2023 continued enrolling Phase 1 patients for B-cell lymphoma and chronic lymphocytic leukemia. Was awarded $8 million by CIRM in Q1 2024. Will share more data in May 2024. In Q3 had 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. Dose escalation continued.

FT825, or ONO-8250, in partnership with Ono for HER2-positive solid tumors, had its IND submitted in 2H 2023. Dosing started in January 2024. Plan is to test both as a monotherapy and combined with cetuximab.

Also in partnership with Ono, a second undisclosed potential therapy in preclinical development.

Operating expense of $50 million consisted of $32 milion for R&D; $18 million for SG&A. Operating income negative $48 million. Interest income $4 million. Change in fair value of milestones $1 million. Other income $0.2 million.

Q&A selective summary:

819 lupus program? We are working with sites on startup, could treat the first patient in the coming weeks. Believes dosing in other indications is a good indicator for lupus.

819 evidence for reaching germinal centers? We can't speak to all secondary tissues, but in B-cell lymphoma we have been able to reach tissues harboring cancer cells.

Competition in lupus space? Fair question. Committing to 819 in autoimmunity. We know it is a very competitive space. Also looking to expand 819 into other autoimmune indications.

819 v. 522 for immune disorders? Plan is to pursue both. 522 includes ADR technology. Would like to treat patients without intense chemotherapy conditioning. That would be a breakthrough in the field.

576 data timeline? Multiple myeoloma space is crowded. It needs a therapeutic profile with high complete response rates. Durability profile takes longer. T-cell engager response rates are in the 60% range.

Can ADR be added to 819? We can add ADR to multiple lines of therapy.

We are looking at potentially a broad range of immune diseases for 522. We will look at a variety of conditioning regimens for autoimmune indications.

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