FATE Fate Therapeutics

Scott Wolchko President & CEO
Chris Storgard CMO
Dan Shoemaker CSO
Nicole Germino Citigroup
Ted Tenthoff Piper Jaffray
Nick Abbott Wells Fargo
Call transcript
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Welcome to the Fate Therapeutics Third Quarter 2018 Financial Results Conference Call. At this time, all participants are in listen-only mode. This call is being webcast live on the Investors & Media section of Fate's website at

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

Scott Wolchko

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

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

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

are achieved at the and operational I Chief on we key months Storgard, at that preclinical data Society past today I and we a review provide share for the further for and December. that Dan Officer; Dr. Officer. of we the Chris Chief first of will Joining over the the results to advance Scientific of milestones review Immunotherapy XX, our open updates strategic of clinical with we Shoemaker, Dr. call Hematology up conclude and important our guidance our as which Medical the Today, third me November on will and plan call during American week brief the three call quarter, discussion. financial and for the questions Society will Cancer toward after

continued and XX% exceeding cancer outcome severe significant long-term that freedom graft-versus-host in disease to intended in to up clinical ProTmune. this are is announce without from third transplantation. of two, a randomized Phase our ProTmune to we a momentum with life-threatening am XX intent, are; graft is ratio, and randomized, PROTECT, to HCT conventional performed and or XX During capture curative matched pleased Since or morbidity. relapse survival PROTECT without is disease. in that to observe long-term with with malignancies treated double-blinded we either ideal now subject X hematologic key survival; subject hematopoietic hematologic the strong XXXX, target outcome of cell Two survival being which trial, treat X X cell clinical malignancies over of quarter X next-generation donor Subjects or enrollment Phase controlled graft. free receive have to in ongoing PROTECT with study allogeneic adult undergoing patients clinical enrollment. endpoints subjects for a one, I cell allogeneic unrelated hematopoietic moderate the is

study subjects the Phase data Phase non-relapse matched of data PROTECT of completion that for preclinical one remain X patients Center unrelated at X XXX attributable July donor transplant over cut Marrow cancer-free, seven with transplant pending following disease-free -- new Research median four patients XXXX and X,XXX date with off. Our the Blood suggest XXX time is included about stage days, that conventional are only only Transplant Phase significant upcoming GvHD Meeting, Phase has the HCT. by about to With and subjects of without seven and two of five been ProTmune relapse XX% the in the X there ProTmune allogeneic the HCT, one-year HCT X-year been receiving seven assessment there following study, GvHD. XX, centers study assessment, in contemporary of intend subjects ASH stage of in curative we and key International today, one X survival or and mortality ProTmune deemed in not disease-free incidents that and have from ASH intent one-year events alive alive no a year, moderate on from published PROTECT. no chronic clinical the to from of Annual as of at XXX endpoints the a reflect At Earlier cancer an data in abstract subjects severe was the present receiving on receiving the the of two ProTmune new

these We the of encouraged continue Phase potential be X to clinical ProTmune by subjects. in benefit observed

cell Turning to NK FATE-NKXXX, our product allogeneic candidate. donor-derived

or subjects trials. of of recurrent treatment refractory the in enrolling relapsed treatment VOYAGE cancer, APOLLO currently DIMENSION, Phase solid X clinical advanced for first-in-human for of X the for tumors. the AML, ovarian treatment are We and

now accomplish three with announce of are development, an clinical dose seeking to Phases been the the we primary to and We studies, data, are pleased set At initial encouraging am of treated stage subject these Fate-NKXXX. initial X objectives. generating I escalation that this across of XXth has

specific is enriched to type product resistance adaptive memory candidate and First, cell we a respect of persistence, a checkpoints. Fate-NKXXX cells, NK for potency, its is to with first-in-class believe immune NK that differentiated

properties that endogenous are NK significance comparing from the into We NK are we and from biological in as these Fate-NKXXX to well subjects. memory setting. study assess and the healthy against of of To further functional cells gain to seeking diligently adaptive unique properties donors insight as clinical cells the end,

vivo, administered a weeks patient, vitro, to and We administration. comparisons days Fate-NKXXX product doing before are in in following these both the is and in

to are are failed leukemia a release cells T will and safety clinical given differentiated differentiated intent are progressive unique enrolled seeking events profile agents believe toxicities In and we antibody the our a cytokine with has disease, activity We that treatment studies, tumor profile a disease earlier therapies. which managed and clinical significant that the achieving its are monoclonal evidence subjects of Phases be that of combined cells in stable We such dose adverse approved clinical events other by is with this potential combination minimal. and as NK with for adverse treatment, therapeutic these We cell validate is such three therapy, all administer serious including manageable shrinkage checkpoint engineered have been initial cell and from resistant clearance, critical, in therapies. also where as; escalation safety profile have all effectively neurotoxicity Recall establish syndrome therapy. context, is to in in inhibitor NK this to NK that where believe looking cancer to of like safety course observed.

in cells, therapeutic paradigm. of cells. today cancer cell-based keenly course single clinical available only earlier undergoing discerning immunotherapy lymphodepleting immunological in are multi-dose response interested given to we with the and are to Most dose NK autologous, NK multiple cancer doses for is allogeneic administration are investigation in addition Therefore, are intervening with treatment the interested multi-cycle of also we're in Finally, a advancing chemotherapy.

own very fact, a APOLLO clinical in the And second patient's fact few In of cell-based dose both a we in explored studies of immunotherapies studies cancer a follow-on the instances. had of let cells. of have delivered DIMENSION for Fate-NKXXX, a dose both certain donor cells, protocol even second alone dose and In of Fate-NKXXX. second allows in clinical of studies, dose Fate-NKXXX the

look serve getting Fate-NKXXX which at our doses evidence Investor compelling the Cancer is of preconditioning. Annual clinical immunotherapy, therapy we're with this for Immunotherapy the in of and disruptive background safe in multiple at event highly multi-dose potential and of cell So a Society look Fate-NKXXX the differentiated XX, cell-based sharing a November on cancer forward of to off-the-shelf paradigm proof an at approach Meeting. at with concept strategy. Demonstration for well-tolerated allogeneic cells first our to upcoming limited We using with observations activity, as for allogeneic a early

of While these paradigm immunotherapies, approaches. we new several ahead cancer trials, first-in-human potential like allogeneic cell-based Fate-NKXXX, now clinical are a are advancing leap to the with beginning rapidly groundbreaking

manner. composition. challenges that patients lines first- of master are platform pluripotent most induced mass delivered We cell homogeneous And in-human cells limit fundamental variability. off-the-shelf master made effectively and and cell produced allogeneic are rapidly overcomes extensively to lines. of the uniformly including notably, cell use product cost cell that We iPSC batch-to-batch believe groundbreaking, uniquely using engineered, on The initiate are products characterized and that to in be confounding these an ongoing and enables clinical the products cell of many the preparing stem our therapy therapy, manufacture donor of can products iPSC in reliance that cell are autologous already trials

the the provided we FDA we FDA the in are Those a we cell to combination landmark FDA as advanced checkpoint Upon trial allowance therapy through company coming The FDA our emerging requested tumors. FTXXX FTXXX IND field in our submission, entire multi-dose with a as testing for poised the additional excited tests gained a master IND, for are FDA will off-the-shelf iPSC milestone the standard the be products. detailed a cell application to from of are of to a used roadmap we bank knowledge initiate derived subjects iPSC underway the FDA We FTXXX and IND for in clinical believe solid Drug FTXXX. a development usher platform. rescue FTXXX NK with product response of the conduct New and our has response therapy cell IND additional with submitted submit a in our therapy product product of well we to as master to FDA In produce review weeks. to new Investigational expect for multi-cycle allowance quarter, iPSC third the to line. our FTXXX, the of of application of that inhibitors the During clinical a application universal, our approved and transformative from are us candidates engagement

cell cancer aggressively immunotherapies time, development clinic. translate set candidate the of iPSC into this master are the NK second universal T-cell a advancing we development. At clinical toward iPS-derived CAR to preclinical clonal deep lines from from our off-the-shelf pipeline We stage NK derived and cell product have

a application candidate master Fc high affinity combination off-the-shelf NK a region universal to antigens. elotuzumab. our our with for expect IND product the investigate be antibodies, iPSC tumor-targeted the antibody We target express submit clonal a to by can of line CDXX rituximab SLAMFX binds We to therapies of cell initially Fc with engineered FTXXX CDXX FTXXX, from of broad plan in FTXXX CDXX XXXX Since non-cleavable to uniformly with to receptor. antibody end combined FDA-approved tumor-associated spectrum antibody and derived monoclonal

We single the bank clone have made now completed iPSC selection and for FTXXX. of master iPSC the derivation the successfully and

plan upcoming ASH cell exclusive These candidate, our off-the-shelf $X.X Sadelain which exclusive the We off-the-shelf CAR Sloan with hold well UCSD. collaboration FTXXX. first triggered platform. we're developing candidate, as as with the Institute include pipeline for which an as additional renewable our CIRM FTXXX, collaboration have Dr. award Regenerative the new of unique Medicine progress to on value at submission. developing Kaufman lines iPSC manufacture cell-based NK source FTXXX, present Annual completed preclinical candidates receive in under new CAR we're candidates a Dan also entire payment clonal product California product We to from cell quarter our Investor product our in milestone preclinical emerging and iPSC-derived Kettering, Dr. immunotherapies. T-cell we $X.X product connection our third cancer expect an ASH with our under at Memorial our Michel to GLP XXXX from the milestone for across fourth from CAR towards plan of toxicity using in the to NK we quarter data a These million master off-the-shelf iPSC during and candidates and highlight product first engineered At Meeting, and additional payment for tumorigenicity under share delivery studies and million at our IND to of T-cell off-the-shelf data activities event

field collaboration to with into iPSC addition products to our product In the develop through in and we our to initiatives, own territories. other advancing remain in candidates innovative internal immunotherapy extend platform players leveraging product committed new our cell

delighted long of ONO drugs collaboration immuno-oncology enter into a During solid a developing a against the leader with to with were in cancer global Pharmaceutical, third tumors. we quarter, breakthrough history

off-the-shelf honored an PDX global is ONO's and alongside originator drug oncology the are nivolumab, checkpoint expertise inhibitor ONO biology accelerate of to to and As iPSC-derived tap development product in solid smartly pleased we collaborate ONO into We with are the product manner. beyond of our ONO platform T-cell development tumor iPSC to expand our T-cell the extend believe enables CAR our of candidates. to us a U.S. product pipeline in collaboration capital-efficient reach CAR iPSC-derived and

target solid derived clonal candidates, TCR each incorporate from of In ONO. engineered incorporate to The proprietary tumors. preclinical valuable contributed antigen the infiltrating Under binding are research eliminate one against for line T-cell into candidates collaboration, domain from new the ONO be a master gain is products by insights in and CAR development believe will and CAR a a to solid endogenous addition, TRAC we intended anti-tumor functionality. two conducting expression, a expertise which CAR insert will we and X other and T-cell tumor we locus iPSC-derived completely iPSC jointly targeting collaboration

of preclinical million and million, payment option research and to $XX collaboration, upfront stage $XX of million entitled milestone are aggregate, an candidates to exercise predefined million to $XX advancement receive a $XX to including both During we support the fees the funding option up to totaling milestone. up of in

with in include certain co-commercialize binding candidate, States candidates, of an or lymphoblastic expressed and development in ONO we option product eligible retain under and And step $X.X domain, to T-cell United an to in candidate commercialization we are with responsibility sales the plus right to target the is a in XX:XX antigen aggregate arrangement. connection milestone and second ONO. the CAR has intended intended and global the candidate, responsibility which global retain on assume commercialization, to Europe, profit net and development share to Asia. iPS-derived commercialization for development a first co-develop ONO's we to leukemias, ONO having for the by assume the option For while responsibility proprietary royalties In for up to which receive payments, the tiered billion is

under intellectual products Importantly, platform. relating important to we and manufacture rights, global for our all strategic collaboration, ownership of including all product the retained rights property of iPSC

third quarter $X.XX September net as net our to Fate loss period $X.XX loss of reported Turning year. XX, a common financial same of results XXXX, for or million or the common million ended $XX.X share for Therapeutics per share the per a compared $XX.X last to

quarter the of a million one-time intellectual Institutes of property the reprogramming. expense associated Gladstone cellular covering from J. CRISPR-based $X.X third loss in-license net included additional with The David

to certain funding million of XXXX compensation. $XX.X associated third approximately in-license quarter Revenue million for XXXX. quarter million third expense as Excluding both million increase for XX $X.X quarter preclinical same $XX.X $X.X the XXXX with associated in-license compared of the and in strategic one-time with $XX.X of audit third third increase quarter Research third X.X adjusting FATE-NKXXX XXXX, of was Total from were of in compensation The third was for the each into X like fees, stock-based expenses were convertible $X.XX R&D XXXX. increase in $XXX $XXX,XXX. for the for the cash, Revenue employee year. this of stock iPS-derived of the year. with million expenses the of of period product adjusted the end the call of net from well collaboration common was common third as for an proceeds associated of third XXXX was $X.X increase convertible property with common resulted with operating company up compared development is with shares expense, million well and proceeds was the million closed preferred million Gladstone as with to period $X.X XXXX under any to one-time fees, Juno attributable the ended in stock after advisory intellectual the $X.X quarter employee legal loss million from common from and and growth for was $X.X include operating property to company's million outstanding approximately in which million, expenses shares the as expense of Total for the expenses expenses the of cash or were a and increase one-time primarily were of development The to expenses equivalents the stock our to $XXX of stock outstanding quarter represent Gladstone, September conditions. quarter our for for Juno which of per as These offering share. $XX.X $X and $XXX was compared for million. million of expense development quarter million of net headcount. last candidates September, additional General associated investments short-term million compensation last intellectual and the Therapeutics. attributable our to figures of including the And quarter in research the as and generated to XX.X clinical in of At research in an we of primarily G&A questions. I'd same in periods $X.X expenses in the an shares, for million of XXXX, and second open that, administrative million the increase and


[Operator Instructions].

comes first Karnauskas. Robyn question from Our

Nicole Germino

Robyn. on This is Nicole the for line

many IND, to X the enroll? global are received For FTXXX as and for study how planning we you warrants patients FDA initially

Scott Wolchko

CMO, speak over you? to that studies. who our to can turn the Sure. call Happy Hi, to Chris FTXXX How Storgard, are Nicole.

Chris Storgard

here. Storgard Chris Thanks.

So we very be end to working for year the sites a dosing perspective. site of ready anticipate our and closely are by the we with from

Nicole Germino

FTXXX, start XXXX? it in to around are initiated there it's And like initiate going be likely to other should sounds to during expect XXXX, on studies that year-end we

Scott Wolchko

FTXXX, XXXX that that CDXX So affinity iPSC emerging other to in studies product non-cleavable our include which that the the high expresses the platform, initiate second we expect is product receptor. the is from

of file for the candidate We end year. to by the expect that product IND this

INDs, one, certainly our clinical to iPSC-derived respect expect of running at will least trials fully XXXX, with to will XXXX. So two first be them those In product that INDs, file expect be not CAR certainly in if we one additional candidate.

Nicole Germino

can each NKXXX, in us for how of of and And patients you the range are duration remind on many these of treatment? the programs patients

Scott Wolchko

Sure, I can follow-up. and Chris I'll let start that

we event, So patients, we've will SITC where investor progress XX -- week three treated studies. all discuss an we in at total give plan across update an to at provide approximately next we


Thank you.

comes Tenthoff from question next of Piper Our Ted Jaffray.

Your now open. line is

Ted Tenthoff

I'm Wanted a to landscape we're second gene treatment the higher how sort into little to like to gene willing fit follow-up, iPSC into term And of with getting level NKXXX in use third understand iPSC. maybe me -- question. result; of and NKXXX always seems it because bit will the

you something the after do So, it's see where different go for just as Fate? indication, what you product primary ultimately

Scott Wolchko

I'm our discuss to SITC event. And at happy Sure. more this

of certainty. I believe on early it's have the fundamentally say cell given to a products past, little us as said multi-doses I be will of generally, that master in I donor-derived well this completely is approach in specificity think this homogeneous iPSC-derived production and autologous for comment and resulting creating patients can bit in with I'd in approaches disruptive as lines, approaches. the where you're to

committed advancing absolutely is Therapeutics Fate NKXXX. So to

any efficacy. an our and tremendous significantly donor-derived therapy that said NK absolutely platform iPSC-derived a our learning is cell XXX I are more do for amount approach and studies. if and with autologous safety We iPS-derived can that any replace successful, expect fully That

Ted Tenthoff

sorry, going And -- what if pretty in Is but this increased then for surprises standard apologize answered with for be there is and remains so its pretty request back to on? characterization standard to this I characterization for this done FTXXX, cell just or was any line that stuff? Were earlier, in I'm and this FTXXX?

Scott Wolchko

This so, is thanks. --

master the of characterization line. additional cell the FTXXX, So

this yes, tissues instance, for is AVANT is significantly cells a believe de-risked. that's we order common testing is we on them. characterize this very done The to So believe tests standard, agents in

AVANT cell indeed, make on bank. agent fact, used our we reprogram testing cell original In and create the characterize to master tissues to

was order our you Ted, we as instance, So, and full the cell know testing derive and foreskin line. our the for characterization and source bank. master create iPS make iPS to of initial We to that source used foreskin we neonatal cells cell master neonatal in did fibroblasts fibroblasts

And We quote FDA, though, the were of create a most did where qualifying we There pleased created around to our with In master with all testing specific outcomes guidance line. discussions master were cell recognizes very have cell a used our proximal so line. FDA we the quote materials unquote to cell testing. line. is unquote

our And use the so, cell master at are the I their line testing cell master FDA, lifecycle never to it continue we product. throughout request is objective understands, the line the and believe, recreate to the of

agents and they asked it AVANT of very tissues outcomes us so, with that and test tests. feel in we those the And complying for we're comfortable to

Ted Tenthoff

Thank Very Very progress. cool cool you. update. Good.


Thank you.

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

Your is now line open.

Unidentified Analyst

I'm filling two in Neil, is Do. I questions. for had This

of as the granularity just you're It higher give enrollment saying and wondering more XX ProTmune little you're patients then the second over of enrolled to you enrollment. multi-dosing little plateauing? numbers now had NKXXX first level and do regarding question you bit if a like And you in a see one is and bit The I a Phase question was quarter sort about what more regimen. second sounds X could the XX, the

in multi-dosing the of focusing of you're kind how primarily on if what of you assessing what terms success safety about sort about and thinking or efficacy the measures you're what of interim? just in are it's regimen, you're learning in And kind

Scott Wolchko

the can multi-dosing associated Chris that. with to that and talk and talk enrollment to ProTmune Dan a about little I'll elements NKXXX let with Sure. and respect bit

Chris Storgard

and plateauing ProTmune, our patients. enrollment, is with excitement these we very see a but by continued seeing So we everyone to definitely investigators see are do not respect to excited with enrollment

ASH, mentioned, be to very As Scott encouraging Phase date. it's the at data X the from reached will but

and So and along with in low we internal going been on-track our nicely, with are that it's not enrollment that targets enrollment. very is and progressing a

Daniel Shoemaker

Dan. is this Neil, Hi,

multi-dosing NKXXX. So for on your question

multiple of dose in the been and the DIMENSION. biology one behind we've observations observations persistence first how multi-dosing So studies, we've a patient second of the doses the on has that to dose, actually second of dose been very couple on better the and interested APOLLO persistence respond in will is our two actually the And the the the and than the dose. first done

one so would immune keyed dose, would so So that idea the not the the the was that into be and and second would system learnings. of has be now eliminate one product that immediately happened, that

is not as from samples as first encouraged dose, only the to well NKXXX the second NK And assessments. phenotype activity of as as so and interestingly, patients, that well as we cells as second CDXX of the phenotype the second persisting, very well dose, the blood but as The persistence CDXX functional we're thing we've some do assess see market. recover during phenotypic the the on dose even testing, and enhanced the

second we're allogeneic to both multi-dosing the as encouraged on pretty relates settings. first activity we're dose and very So this favorable and seeing in

Scott Wolchko

efficacy. safely time of with administer multiple more of potential intent cells mean, the excitement we in SITC obviously is of about We terms do driving at Scott, the will NK able around doses I this this will to that and and being spend -- talking the


Thank you.

question comes Jim from of next Fargo. Our Birchenough Wells

open. Your line is now

Nick Abbott

in this for Nick It's afternoon. Jim

say, you by the you discussions endpoint is I ProTmune. question remind for regarding endpoint registration? And just First to us assuming on am might latest right of and the of middle in regulatory the Can follow-up its that primary get XXXX? XX-month suitability

Scott Wolchko


So we to X-X severity of endpoint. primary received to Grades of ProTmune Day GvHD. which That respect was around and acute continues Track XXX incidence designation remain our endpoint, Fast with the originally the development

of curative discussed transplantation we've is though, cell As ultimate outcomes. to the objective hematopoietic drive

we we're survival a question And discussed for at associated think endpoint we better two XXXX. as as Yes, fundamentally think And important next-generation endpoints respect clips as of efficacy as we're of seeing at so, we very end with would And that mean looked developing the GvHD. graft at free with two disease-free looked enrollment is feel live durability with absolutely, comfortable point that effect on patients. endpoints very well are important key we your in respect one-year being that X-year severe for track and with I look about endpoints instance, Those and the a the at the are think disease-free looking expect to ProTmune. be the X-year to and to I XXXX. the the

Nick Abbott

But clear, to be file XXX Day then endpoint? you the on could

Scott Wolchko

X-year going how is discussions have with it we are appropriately versus secondary So study the to given unblind FDA on with a the study, the blinded endpoints. the we respect to Day XXX endpoint

Nick Abbott

and the into a what being from the iPSC CDXX into products a just can between iPSC with the FTXXX T-cell. abstract development T differentiated [indiscernible]. an engineered potential T onto From differentiated non-cleavable products, it CAR differences CAR that's I FTXXX coming then with understand then to and And starts

like sounded have with start and I Do comments iPSC you -- it and so then correct? ONO, the CAR. a Your an on that

Scott Wolchko

an We No. engineered iPS IPS We're engineering cell cells. level.

Nick Abbott

for XXX So well? as

Scott Wolchko


Nick Abbott

cell think And CDX then a how as yet. figured very could you -- [indiscernible] T get CDX clear haven't quite I that T to get you cell, you out a

are cell? where deriving you in of terms So CDX T

Scott Wolchko

this we on give an event update at So, at our will ASH. investor

Xs differentiating seeing are We Xs. absolutely and and

Nick Abbott

you from CARs. and CARs have And me, IT one then just maybe iNK last

used do two do you see you these combination being different indications? them them see being or So, with products, in different developed in

Scott Wolchko

the I is introducing which of interesting if think into only it frankly, multiple the T -- differently both will today, when are think given. I behave therapy those that. knew yet. curative transplant, allogeneic the if answer and answer start the all. functionality cells, NK how you question be as not to world And cells at pieces don't cells wish of cells NK I and of know, see cells I know I T that I'm quite to to you


would I session. like question-and-answer today's back Scott the to Wolchko concludes this over to remarks. any closing call gentlemen, and Ladies for turn

Scott Wolchko

We in next Thank as you. soon in you with all today's forward for to the as care. Thank at look SITC call. weeks, very ASH. well both several and you speaking participating all Take


gentlemen, all you and day. concludes today's This and in a Have you conference. great today's Ladies disconnect. thank program may participating for