FATE Fate Therapeutics

Scott Wolchko President and CEO
Chris Storgard Chief Medical Officer
Dan Shoemaker Chief Scientific Officer
David Nierengarten Wedbush Securities
Do Kim BMO Capital Markets
ED White H.C. Wainwright
Call transcript
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Welcome to Fate Therapeutics Third Quarter 2017 Financial Results Conference Call. [Operator Instructions]. I would now like to introduce Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics.

Scott Wolchko

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics third quarter 2017 financial results call. our Eastern results, we on which & section PM release a the X Releases. Media these Press with can of after Time issued today, press Investors Shortly under website be found

In addition, second June the can XXXX XX, under Investors and for & filed thereafter of found quarter Financial our shortly website ended was be Form our XX-Q the on Media section Information.

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

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properties that observed will persistence. and to of FATE-NKXXX we studies. report first cell clinical the the safety of biomarkers key we of into including and surface [indiscernible] activity in to FATE-NKXXX enhanced these anti-tumour subjects CDXX, of gain in-vitro the initial Day dose expression preclinical of to in will look We few product cell Voyage have potency properties insights X and At escalation unique stage demonstrate and functionality

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Chris Storgard

Thanks, Scott.

clinical three Over months progress on programs. made the have our noteworthy we past

update advancements. you me of Let these on some

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Dan Shoemaker

cell Thanks, an emerging proprietary are off our exciting FATE-NKXXX start I I off-the-shelf will clonal cell immunotherapy derived cancer provide from from product Chris. update a several master NK product that shelf which the iPSC is candidates of our now platform. the line. will iPSC with product

over the quarter this quarter and we've made As Scott progress of IND past we to mentioned first the achieving towards track remain on file landmark significant important a with in goal. the FDA XXXX

planned material generated qualified have clonal for generating a cell fully First, human characterized This study. master clonal we and iPSC as a for master iPSC successfully cell line starting now or serves in first line. FT-XXX

report differentiation process transfer over product the against cell for our purity the end million production of background manufacturing I'm in the now FT-XXX to final in iPSC human art iPSC panel drug sensitive of X.XX in FT-XXX NK protocol pilot This a MCT NK scale contain for release pleased characterization completed has highly of not assay to first any that confirming also Second, driven generation a the of cells. run and studies molecular did contaminants cell run which FT-XXX single cytokine iPSC rigorous cells. for demonstrate final derived using scale state the the MCT manufacturing a including cytotoxicity molecule performing to test compatible a product preparation conventional potency. is passed and end enhanced test can molecular the clinical a and have completed drug included first end on where cancer we product studies. the Pre-clinical GMT our relative compliant for continued lines cellular full at to to detect k-cells a in small GMP successfully of manufacturing of facility. therapeutics

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Scott Wolchko

Dan. Thanks,

of of development our primarily million. period per or million compared our development to preclinical as fees was for from for $XXX,XXX employee of an million expenses for $XX.X XX, for based increase million in of in as approximately and XXXX of compared compensation employee for same stock Turning $X.X Company’s compensation a of operating period funding associated XXXX quarter research million net $XXX,XXX, with periods immunotherapy with support adjusting service related third million including a the increase Revenue per the research the After results both and Fate to space. of same proceeds of primarily quarter for office Common well facility each were million. the investments equivalents $X.X cellular cost related expansion increase the collaboration convertible expense in administrative net $XX.X quarter reported with of The financial associated and period cash and of short-term and our of for $XX Juno quarter to were were which stock to and express million preferred collaborators. off-the-shelf well XXXX, shares, the September quarter X.X and XX.X approximately was under my clinical for thanks the outstanding into the General numerous Fate NKXXX expenses common compensation XX million third XXXX, as last expansion Research to the expenses $X.XX million for laboratory closing year. derived stock quarter certain increase Company’s XXXX same $X.X $X.X third provider benefit total expense the in Therapeutics. million third At and the facility common approximately iPS loss to In XXXX ProTmune cash, last the or third stock-based Therapeutics third of year. end was to the the of ended for third-party costs third $X.XX XXXX. shares share Juno our the stock $X.X loss from of to of strategic as outstanding quarter and an sincere generated year. compared was programs, of This space. last approximately Therapeutics to Revenue share the were for convertible of would was and of five the like I as advancement is employees was common the $X conditions.

to ongoing by path that work, challenges is and our blazing come journey ahead each the products. forge as kind first will am agility new displays commitment, our we While with a development group continue that creativity and uncertain day hard and the we of perseverance, face every energized of I in

Thank refrain data are presented we like remind embargo that please and questions I at the to I if over under results to folks turn answering call so certain scientific would to conferences operator any for from scheduled questions. you. be As upcoming understand the


Instructions]. [Operator

comes with Our first Partners. Leerink from Schmidt question Michael

now open. line Your is

Unidentified Analyst

for Michael. This is in dialing Rich [indiscernible]

kind cancer, the to bit Thanks. would data these detail a studies AML for more you around give both respective benchmarks and be see the and ovarian success? settings in want FATE-NKXXX a to For looking can considered you're us of you at what

Chris Storgard

and we're There what is the something Rich CR think rates that precedent with at at that expect been in the that XX% study unmet AML to is enough think something certainly something achievable. NK north we excited need transferred see we rate move program using about to in get about we at which will given is cells is and has would So adopted I looking forward XX% this we be looking population. looking CR is again of that

response Regarding a excitement to really so any Phase-X seen in response is refractory relapse type population here about objective give would ovarian What's forward. of cancer, move again maybe this typically setting objective area. almost X%, rates is that this XX% this us things in

offers into us again think directly that population cavity Phase-X increased be response fact I any some to see in about. opportunities a the intraperitoneal excited solid the objective of but something administrating rate is advance here some given the actually tumor type to we're NK-cells activity


Our next David Securities. comes Nierengarten Wedbush from with question

Your line is open.

David Nierengarten

I've a questions couple. my taking for Thanks

from persistence. in some you data difference AML settings is and without there on on I revealing cancer models the know point any you settings, first or estimated off persistence between know anything can animal those is its but maybe So if the you any -- ovarian any there cells could -- to between and maybe persistence opportunity clues hard differences

Chris Storgard

intrinsically So these the difference in tumors we any persistence expect two between settings. shouldn't

to in administered different, However point it's AML NK the setting the out I'd is intraperitoneal. it's like administration intravenously, that of the being setting being in the cells ovarian administered

So in the when may of result in populations two circulating these different which be NK see probably a we we difference actually a may the administration. cells of measure routes

David Nierengarten

that where with previously AML recall intraperitoneal or And if the in route looked in with at -- could NK they remind they was us other cancer delivery constructs? tumors tested you we maybe in were looked past cells solid ovarian are are it the

Scott Wolchko

respect fairly have days. response as will little the treatment the in of with respect patient cell has settling. NK in much with test therapy AML NK With obviously and recent with first been been at response and there to in this mentioned great XX% information cell to respect of There to will really ovarian has very ovarian been rich anecdotal rates associated is least correlated actually preferably Chris were Sure. cancer respect has in NK there complete there Typically history seven ovarian true to with each cell With like and this experience persistence of reported. Dimension setting. a test but experience FATE-NKXXX therapy be this study been be a so

David Nierengarten

then the name question I'm maybe CDXX blanked just construct. uncleavable on final sorry And on one but I'm the modified the

Scott Wolchko


David Nierengarten

for Yes. just you then do cells reactivate they in. FT-XXX, you think Thanks. be evidence or quiescent kind dosing dose redosing combination anti-bodies you anti-bodies, [ph] the animal you and in you dosing kind the the about will when with to that will think anti-body the then with comes and had persistent models of of have back anti-body about with in it studies when trying think I'm seen cell

Scott Wolchko


we're for at but that study in it with that process shelf human in first and be the the FT-XXX is combination and given study is we will given we the doses, with having given multiple are again it of is a study can discussions in in that yes thousands monoclonal of So we're what we that fact the concept an doses FDA will looking deliver derived off IPS can give in create therapy, anti-body. planning

David Nierengarten

necessary would haven't in any you're but I FDA combinations you or of us finalized guess the dose how take you or escalate I if well dose with that? things kind that? will discussion And it way for like

Scott Wolchko

combination with FDA we've yet conversations very administering We we've IND where FT-XXX and comfortable based pre-IND but in the multiple a with not the seemed discussed doses. meeting that us on to dosing FDA with filed had respect has to-date obviously the


Jim from Fargo comes Wells Birchenough Securities. Our next question with

is line Your open.

Unidentified Analyst

but similarities in on [ph] lot the cell have hand retain of anti-tumor the obviously. the hand of few attack on will when Yenen attenuated I've Jim. Y remind for could have it is I an to think could other host the tumor about the me ProTmune This the why first and a the rationale ability questions you activities host

Dan Shoemaker

in the we GvHD. based the the sort of to primarily donor the on that preventing in and the are cells storm through extensive signaling believe to t-cells donor we showing is preclinical that cytokine believe data first is and [indiscernible] receiving strategy So mechanism and we a cytokine like of dampened patients storm we activation key grafts the present for t-cells things resistant the making first graft allo-reactive the is prevention getting the the week example expansion this this that cytokine for week through the in have of that that and

the a demonstrating come also important the these online six an affected modulation of time they and the are and post-transplant spent and of only and graft because derived healthy Importantly the molecule t-cells lot transiently t-cells leukaemia ability critical new is the infection. have majority provide months though cell role this first that we of t-cells while small donor during the stem to donor are fight by

the extensive have of from healthy of t-cells longitudinal ProTmune So anti-tumour we been now the portion to we having the start donor data study a analysis and and we've activity that ProTmune demonstrating of again as animal do show Phase-X and retain reconstitution the the patient also able patients. amino-constitution robust more to graft the able studies more we're t-cell in

GvHD preventing mechanism again So the we preserving we're while by is this think the GVL which critical activity.

Unidentified Analyst

first similar ProTmune could affect could importance So along and the line alter the of the how week mention the you t-cells activity.

in the two So is you it the regarding GvHD other of your reasonable yet. haven't have reached had but historical XXX we of or point acute influence think and historic reach to Is data have they we the day XXX GvHD is do to that for beginning hand GvHD the XXX the some or triangulate Day occurs? X Day any this end to know so any haven't on on haven’t study they concentrated and abstract mainly the out they data GvHD above when the -- know day the X grade know yet patient XXX point you

Scott Wolchko

days are Day which believe Day the post XX, reason a Day with Day to it XX incidence first measure tail-off XX during that historical XXX that XXX days look between GvHD XXX.So to really you curve at during the if GvHD efficacy. GvHD we first post-transplant is Day XXX, but at horizon and is of Sure. you begins XX out the during The transplant days the of Day by before all look incidence XX occurs truly and steep steep there's the there incidents Day ramp and next by picked historical flatten although curves potential appropriate it call and large there studies and Day and over acute we is incidence begins respect reported because still XXX to are to if occurs a rather XX

Unidentified Analyst

endpoints? you to the question another study ProTmune the protocol add did mentioned you activity, have program, the regarding And those amend importance to of anti-tumor

Scott Wolchko

as were to survival. look Those endpoints well included look as original relapse at the protocol at in

Unidentified Analyst

so when what terms you anti-cancer the the placebo on versus to study sized activity? are GvHD assumptions also arms question in in And patients XX are the statistical or two of ProTmune used a the assumptions

Chris Storgard

to for a reduction. we initial approximately estimated XX% of were a of study When Scott so power acute we effective similar to reduction that mentioned XX% ProTmune GvHD to in about control from control rates essentially So our observe ranging rate rate the of of assumptions GvHD a the as we're would well was XX% that the at XX% population studies have observe choose be approximately take over of Phase-X range those differences. across powered XX%, XX% the kind are there look GvHD

at somewhere its So reduction. XX%

Unidentified Analyst

due on engineer see do then can cell for what to could to mismatch. accept the significant out engineer cells these congratulations is rather that example hurdles you might achievement, its MHC question patient a the the are My to a FT-XXX And t-cell. path instead the the allogenecity that these rejecting next before have IND them for how you of so

Scott Wolchko

going terrific to I think learn a question have ASH wait to about to It’s more that. for you're and

Unidentified Analyst

or terms a are on developing strategic how Great. internally? derived there it of these in iPSC develop to If you FT-XXX any ask like may path thinking partnering modalities I preparing is is

Scott Wolchko

We're planning internally. on it developing

Therapeutics of best that Sloan our move striking the medical open we in in the behind positioned given the and Miller side. this on Michelle very the to of XX believe on with t-cell top history are centers today partnership developing the our that Fate are NK we iPSC side thinking platform own although cell absolutely Sadelain to We the years forward was Memorial cell and with Minnesota that on investigators and and partnerships Jeff forming collaboration University Kettering and


question Capital Do next from BMO with comes Kim Our Markets.

Your line is open.

Do Kim

on ProTmune, that GVL range balance you to GvHD could prior believe you a doesn't question talk also achieves you of the of about GvHD incidence mentioned couple the rates activity? but the A of that compromise reducing

Scott Wolchko

take can a at I first. Sure. that crack

to getting reduce are potential GRFS setting. the with the transplant where occurs the essentially with yet GvHD is relapse respect in discussed to we question looking the you your of the and for heart deal at think the cancer also endpoint mortality I potential what overall to that

historical as setting So his mentioned XX% GRFS be in are remarks rates appear range. to in during to Chris seen the in I studies think the prepared this XX% success that

than patients patients of XX% to of meet and So more that about half Day of at relapse surviving at free, only criteria do XXX to and free the continues GvHD down being year. trend not one

historically totality depending is and XX% that So objective. only we really XX% when we the into to severe timeframe look at GvHD achieve about mortality patients taking the on of transplant what the consideration relapse see

Do Kim

of rates be to of Okay. or historical Phase-X will transplants expected in one the these that And is percentage would ASH patients and data to cut the relapse patients by time the relapse what of it the surprising kind see off? relapsed

Scott Wolchko

six, the during more respect three, sloping following curve can So evenly GvHD to relapse meaning occur first and has XX relapse than and a slower occur incidence with nine transplant. does months

a from six and out XXX. that GvHD call flatten occur very evenly more to occurs begins So period by to it to and trail is phenomenon Day throughout does respect begin does to suddenly with one XXX day occurs off early, year. incidence months the Relapse

still. window relapse extend to months the nine keep we eye an that on certainly So to an keep does and really on from eye six

Do Kim

And does positive that how and we and CDXX administering the of that consider cells you're patient positive number to affect should the about CDX we think when what outcome? patient Okay.

Scott Wolchko

aligned we graft care for standard entire molecules, just CDXX where and minimum then patient adhere the is and to to just possible hours the then of graft, of we'll standard then the the requirements small entire to basically all mobilized just four and it have the to we as closely So we administer like entire again this wash it possible. two administered model so we closely take normal have graft, care the with aligned as

Chris Storgard

mean numbers reducing that. not We're we're you're t-cells we of now, I are doing the if is question

graft, we're graft. then We a graft preferable standard mobilized care, modulating blood we that that are administering are and mobile accepting of

So to cell with reduction that going no or cell is the t-cells. is separation respect there XXs or on

Do Kim

are Thank longer looking final at you. CMV priority? activation and no a is [ph] question still -- or you Okay. is One that infection

Chris Storgard

and are of they It's as track one will the objectives well although the not study to infection lead we to mortality. CMV continue do important rates infections main of as because


next H.C. ED question Our with comes Wainwright. White from

Your line is open.

ED White

and in you well? of to FT-XXX for be you filed the had as any and said we in FT-XXX INDs those IND filed repeated us the quarter So we just guidance give FT-XXX, Can expect on first on that is the expected 'XX. XXXX should

Scott Wolchko

So previously expect middle IND that said for on half Memorial t-cell begin derived product little that early to it's still comfortable filing Sloan are in give XXXX we FT-XXX IPS first we respect a conversation With that timeline. FT-XXX in too us an and very the CAR tech-transfer the guidance we XXXX comfortable of although with for Kettering first for filing IND will manufacture. have we certainly of in the we're to to the

ED White

to embargo XX be with before time? Day questions off you did does not at ProTmune due And I've occurrence the as the might happen of the that the end to then Day on answer of the the GvHD XX one able between but the cut patient next the

Scott Wolchko

to answering available reviewed going DMC is available answer including the if we're the time Day to they is data the Phase what beyond the did reviewed that to think they the refrain Phase-X question all data data from I yes Phase-X X time was data the obviously. at have all review your question question at XX

ED White

the Okay. patient just a with had or there the latest coincidence a the is maybe GvHD? it's that And engraftment then know correlation just you neutrophil

Scott Wolchko

that. anything read not into would I


showing to Wolchko the Scott turn further call I'm for would back now further remarks. no I like any questions. to

Scott Wolchko

to seeing you that in everyone Thank at and participating of much today's for weeks call a look Thank about half ASH. end very week at forward a couple everyone we you. week after the and in


participating program. Ladies conference. today's in thank and This for the concludes gentlemen you

have wonderful You a may day. all disconnect. Everyone