Good afternoon, everyone. My name is Ted Tenthoff. I'm a senior biotech analyst at Piper Sandler. And before I begin, I'm required to point out certain disclosures regarding the relationship between Piper Sandler and our next presenting company, Fate Therapeutics. So I am sorry if we're just a couple seconds late here, but we just had a great cell therapy panel downstairs with autoimmune disease with Bob and actually our next presenting company, Century. And so as you probably know, Fate is developing induced pluripotent stem cells for iPSC therapies to treat cancer and autoimmune disease. And the company just reported positive data from the first SLE patient treated with CD19 CAR T FT819 at the American College of Rheumatology meeting. Really super impressive, super exciting results. Now, Fate's also developing an ADR-armed CD19 CAR NK, which is termed FT522 for B-cell lymphoma.
And the IND just cleared for an autoimmune disease basket trial. My good friend Scott Wolchko, Fate's President and CEO, recently announced his retirement after 10 years at the helm. So I want to wish him a very well-deserved break because it's been a bit of a roller coaster ride. But I'm also really pleased to introduce Bob Valamehr, who's PhD, currently President of R&D, but who will become Fate's new President and CEO on the first of the year. So Bob, congratulations. And I'm really excited to work with you going forward because it's a really exciting time for the company.
Thank you, Ted.
So maybe you can start off, and it's kind of a question I just asked you downstairs, but I think it's worth getting into. Why are iPSC cells so well suited to treat disease?
That's a great question, so induced pluripotent stem cells, as we were discussing it earlier, they represent a very early stage of embryo development. This is a stage where you have eight cells become 16 cells during embryo development, and these eight to 16 cells will become every cell in the body, and so we've captured that in a Petri dish, and we can grow them continuously, and that's one of the unique aspects of it. If you keep them happy, they'll keep on growing, unlike any other cell. If you do this with a T cell or NK cell, they'll peter out within weeks, so that's the one element. The other is, as I mentioned, they become any cell of the body. We focused on making effector cells.
So we can now basically grow this stem cell population in a Petri dish in an unlimited manner and then freeze them down, whether we've engineered or not, and then thaw one vial and then make large quantities of these iPSC cell types for use as natural killer cells and T cells.
Yeah. And again, the scale is really impressive. And I mean, we were talking about doses a little bit, but you can essentially do just a few runs and have all the commercial product that you need. So yeah, it's really exciting. Now, before we get into the clinical data, tell us about FT819, which I believe you guys developed with Dr. Sadelain at Memorial Sloan Kettering. What are some of the unique attributes? And tell us of the design of the phase 1 autoimmune study.
Sure, so FT819, and we have these nomenclatures. So eight stands for CD8, so a T cell, and then targeting CD19, one nine, so eight one nine. So FT819 was designed, as you mentioned, in collaboration with Michel Sadelain. And here, when you make an allogeneic T cells, you have to get rid of the TCR. Otherwise, you're going to elicit GVHD, graft-versus-host disease. And so a lot of companies, when they engineer and try to get rid of the TCR expression, it's not going to be homogeneous. So they have to follow up with some sort of manufacturing strategy, enrichment or depletion to try to get rid of that. But as we saw in the oncology side, even a small 0.5% of TCR positive cells leaking through will elicit GVHD. So what we're doing here is we're going into precision engineering.
We're knocking out the TRAC locus that plays a critical role in TCR alpha beta complex formation on the surface. So without it, without the expression of the TRAC, you're not going to be able to have any TCR on the surface. So at the molecular level, we stop TCR expression. And by doing this, we also take advantage of the ability we're going to cut the DNA. So we actually insert the CAR into that location. And now we have a CAR in a very specific location under the control of the endogenous gene so that you don't get exhaustion either because a lot of the CAR T companies are using these powerful synthetic promoters that drive CAR expression, but also elicit T cell exhaustion. So it's almost a fine-tuned CAR expressing cell that does not express TCR.
And because of our unique insight into the clinical studies in lymphoma, seeing that we can put patients into remission by getting rid of the B cells in lymphoma, we thought this would be a great application into autoimmune disease. And so here, we've started in autoimmune with FT819, giving physicians the choice of doing either conditioning chemotherapy of Cy/Flu or bendamustine or Cy/Flu.
Yeah. Perfect. Now, you guys just reported the first patient. I think it's a woman with SLE and lupus nephritis at ACR, just, I mean, not even a week ago, right? I don't even think. Right before Thanksgiving, yes. So tell us about this patient. Tell us what you saw.
This was a remarkable story because when we came across the patient, she was 27, and she was very—she had fatigue. She had symptoms. She's been living with SLE that became LN for 10 years. And you can imagine a whole slew of different treatments. What was the most interesting part was, while Cy/Flu is being used by everyone else, this patient, with her liver status, the physician thought it's better to not give fludarabine. So bendamustine was used. So a lighter conditioning was used. And there, we were a little bit—we were deviating from everyone else, but we knew that from the lymphoma trial that we are seeing activity with bendamustine. We had treated four patients with bendamustine, and two had response in aggressive lymphoma. So we were excited about the opportunity to go in with 819 with bendamustine.
What was remarkable over a six-month period was the patients, whether it was inside her or outside her, everything started trending in the right direction. Eventually, at six months, she had basically no fatigue in her score. She was back running, feeling great, taking care of her kids. Really, it's remarkable to see a single dose of a cell therapy product combined with lighter conditioning be able to give this type of outcome.
How did the conditioning translate from a safety side?
So what you worry about is that with Cy/Flu, such a heavy dose of conditioning chemotherapy, you are with this for a certain period of time without an intact immune system. And so you worry about infection. You worry about recovery of your immune cells. And so with bendamustine, you actually recovery is faster. The T cells are back up within seven days. The myeloid compartment reconstitutes quickly. And so this becomes almost like the perfect storm where the conditioning was not as aggressive as Cy/Flu. A single dose of an off-the-shelf available product was there, and the patient did not need to go through apheresis or come off maintenance therapy. So it was almost a win-win in every situation.
Yeah, really exciting. One of the things that I thought was most interesting about the data was what happened with her B cell reconstitution. Walk us through sort of what her B cell path looked like, and really, it's just so illustrative of what you're trying to achieve here, so maybe you can tell us about that.
No, absolutely. So there's this whole concept about B cell reset and whether you need it and how long it needs to happen for. And so what we saw with this patient was she came in originally with a low B cell count, about 20 B cells per microliter. You want to be above 100, normal patient status. And so the 20 went down to zero, basically below limit of detection. And we went through a trough period, and we recovered. And when we recovered, we went back to 20 after three or four weeks. Then that went to 40 and subsequently 200. So at first, when you just look at that, you're like, "Oh my God, her disease has relapsed." But what was amazing was this reset actually allowed her for two things to happen.
The reconstituting population was of the naive nature, and the reconstituting population went to normal levels, and so you have now normal levels of B cells that are more of the naive nature and not having the disease, and so this goes back to a speculation of when you go through this reset, if that environmental cue that promoted the original autoimmune disease is no longer there, perhaps that now this reset is actually, as I mentioned upstairs, maybe it's just like unplugging a computer. You get to start fresh, and as long as that spam or whatever issue in your computer, the virus, it's not there, then you'll be fine, so that's one patient, but we might be making too many speculations, but that's what I think the.
Very exciting. And this is what we've seen with the Schett work. So this is what you expect is what you hope to see. So very encouraging. When will we get our next update?
At ASH, we're going to give an update on patient two and three. Patient two and three are behind, obviously, patient one, so they're not going to have six months. But we will be able to discuss basically in the first dose level of 360 million. We will talk about the patient experience, talk about safety, and talk a little about trends. In addition to those three patients in the regimen A, which is in combination with conditioning chemotherapy, we have regimen B, which is in combination with maintenance. This is basically no conditioning chemotherapy. The patient is being treated. You have the FT819. The first patient then dosed was still in the 30-day review process or analysis process, but we will give an update on the fact that the patient was dosed. Four patients dosed three in one arm and one in the other.
Very cool. I look forward to seeing the data in San Diego this weekend. So also at ACR, you guys reported initial data on FT522. Maybe you can start by describing this because it's an NK cell, so it's very different than FT819. Tell us about that and sort of some of the edits that go into it.
Sure. So sorry, I'm going to get a little detailed here because there are five edits. So these are, instead of making T cells because we start with an iPSC, we can actually take a left turn or a right turn and make a different effector cell population. So here we made a natural killer cell. And natural killer cells are very potent, but they don't persist as long as a T cell. So this gives you some value points. You might have some pros and cons here. In order to make that NK cell potent enough to fight the disease and also give it the ability to work in an intact immune compartment without any conditioning chemotherapy, we added five edits. There's the CAR targeting CD19. There's an hnCD16, which is an Fc receptor that can be combined with monoclonal antibodies to target additional antigens.
Here it's in combination with rituximab, so you target CD19 and CD20. We also have the CD38 knockout to increase fitness of the NK cells and to permit combination with anti-CD38 mAb. So here you could come up with the daratumumab and target CD19 and CD38. So you could target an aberrant B cell, T cells, and plasma cells. And in addition to that, we've added the IL-15 receptor fusion to give the product enhanced potency and basically become independent of exogenous cytokine support because a lot of NK cell programs need, they're addicted to cytokines, and so they need a continuation of addition of cytokines. So we could avoid the need for that. And also lastly, the Allo-immune Defense Receptor, which is this active way of protecting yourself against an immune attack.
So basically, you eliminate a T cell or NK cell, a host immune cell that's going to attack you. You attack it first. So the combination allowed us to go straight into lymphoma patients without any conditioning chemotherapy. And there we saw very exciting data. First dose level, but we saw that we can go into the first three patients, see live cells for 15 days at our dose level one, 300 million, and as well as see functional activity looking at the periphery, the B cells in the periphery. Every time we gave the dose, the B cells went down. So it was evidence of functional persistence, which got us very excited.
Yep, absolutely. And again, very clean safety profile. So just as you'd hope and really expect, especially for the NK cells, you should have less CRS and ICANS and no GVHD, which is important too. So tell us about sort of what maybe fill out a little bit on this study? You described the one for the trial for 819. What are the plans for 522 in cancer? And maybe segue into sort of what your plans are for autoimmune disease.
Yeah, so currently in cancer, we're seeing, we wanted to show the five-edited product safety profile, so we're checking that off, but we also wanted to see whether we can have functional persistence and intact immune system, and so checking off both of those, so that's great. I think we will continue pursuing in lymphoma, but the majority of the efforts will be shifted over to autoimmune, and there we just recently cleared our IND with four different diseases, and so this is a basket trial where we will be looking at multiple autoimmune diseases, taking 522, again, with no conditioning chemotherapy, combination of 522 rituximab, either alone or combination of 522 rituximab with maintenance therapy, and there we're really looking forward to testing this out in various autoimmune diseases without conditioning chemotherapy.
Did you guys disclose the four diseases? I can't remember. I apologize.
Yeah, no, we did. So basically as SSc, IIM, AAV, and SLE.
Great. So excellent. And then when do you think we could get data from the study? I know it's literally just the IND. Is this something maybe ACR next year you'd have kind of the first group of patients? How should we be thinking about that data flow?
Yeah, I think the second half of next year would be probably the right timing. I really, in my first 100 days in office, really want to focus with 819. I think there's something very special here. And not only do we want to continue dose escalation, we're going to do dose expansion as well in the regimen A. And so there's a lot to be done there. I want to make sure we get that in order before we move on. But second half of the year.
Yeah. When you do dose expansion back to 819, not to jump around, I apologize. Would you do that kind of in disease-specific cohorts? Is that the right way to do that?
So, we're going to do this at the first dose level. We saw safety, and we've seen great trends in activity. So, we're going to basically continue in SLE. So, we're going to do dose expansion in SLE, but also do dose escalation in SLE. So, we'll do both, but it's a very exciting time, and I want to make sure we get this right.
Yep. Awesome. Very cool. When it comes to this opportunity, we've seen big pharma interested in the space for sure. Is this something you guys can take forward yourselves? Does it make sense at some point to partner for autoimmune disease? I know that's kind of a difficult question sort of still so early in the development process. But as you kind of look down the field, do you think this is something that's going to require a partner?
I don't know if it will require, but the right partner would be a great opportunity for a discussion. So maybe I'll leave it there and just say, "Yes, let's see.
I mean, speaking of partners, you guys are partnered with Ono Pharmaceutical to develop FT825 for solid tumors. That's a really cool program too. Maybe you can tell us about that. And is sort of the goal going forward, you guys to do autoimmune and maybe have partners do cancer? Is that sort of the way you're going to divide the landscape?
Not that clear-cut as of today, but maybe I could just highlight the 825 program, as you mentioned. We've had a fantastic collaboration with Ono Pharmaceutical, and they brought in a very unique HER2 binder. So the majority of HER2 programs out there, whether it's in HER2 or Herceptin, they target the wild-type form of HER2. They failed to target the p95 isoform. They failed to target the misfolded version of HER2. And so they gave us a binder that took care of all three, bound to all three. So that was very exciting. We complemented that binder with seven edits to overcome the challenges that you see in the tumor microenvironment. So suppression mediated by TGF-β, lack of trafficking, the ability to be able to go into a heterogeneous tumor and target multiple antigens at once.
We really created a highly sophisticated seven-point edited CAR T cell that we're very excited about. Again, you can combine this with monoclonal antibodies such as rituximab and target HER2 and EGFR. At the same time, our biopsies are showing that, as you would expect, not every tumor is completely HER2 positive. But when you combine EGFR and HER2, you get a much broader targeting approach. And so we're very excited about that. The collaboration is continuing. We have a second candidate that we're in discussions with. And I would say I would love to continue partnering solid tumors in general, but I have a program that's near and dear to my heart as our targeting strategy, going after MICA/MICB. So this is a stress.
What I say no one's going to believe until you see the data is a stress ligand that is expressed on nearly all transformed and infected breast cells. The reason why it is able to these cells that are transformed that have a stress ligand that's being recognized through immune surveillance by natural killer cells, they're able to avoid detection because they cleave it. And basically, the distal region is what the NKG2D receptor on NK cells recognizes. But when the distal region is not there, then there's no recognition, and there's immune evasion. We created a binder through collaboration with Kai and Dana-Farber to target the proximal region, what is basically what's left. So almost like you cut the tree off, but you have the trunk. So we target the trunk. And now we can target almost any cancer cell line that we have.
Our CAR MICA/MICB keeps up with CAR HER2. Our CAR MICA/MICB keeps up with CAR CD19. Our CAR MICA/MICB keeps up with CAR BCMA. This is almost like too good to be true, but we're very excited about it, and we're going into a basket study in solid tumors sometime close to the middle of the year next year. That's a solid tumor program that's going to be run by us.
That one you're going to keep.
Yeah, I'm going to keep that.
Then why? I cannot say.
It's right there in my pocket.
So it's not appropriate to say you guys have shifted to autoimmune disease. You're still doing both. It's just you directed 819 and 522 more towards that because you've got such a great follow-on here with MICA/MICB. Yep. Awesome. Very exciting. We'll have to spend more time and do more looking into that.
Sure.
I'll just pause real quickly. Yeah, please. I have a question from the audience. I'll just repeat the question real quickly for the webcast. How do you accelerate development in autoimmune disease based on the first initial data you've shown with FT819?
Yeah, no, that's a great question. So there is this part of educate and get them excited as well. In oncology, when we say off-the-shelf or cell therapy, everybody knows exactly what we're talking about. In rheumatology, when we said off-the-shelf, they didn't know the difference between off-the-shelf and auto. So there's a whole education process. And back in the day, when we would make a cold call, somebody would have an auto CAR T, and they're like, "I'm already overwhelmed." But now they're realizing what a difference it is. And we're having conversations with folks who previously were not available who are available now, not because they got rid of their auto CAR T, but because they're seeing how differential this is. And it's almost like they're seeing it as a different paradigm. So there is this re-engagement after ACR and this education process.
We're also going to publish the case report for the first patient and get it out there, so through advertising at conferences, I hate to call it advertising, but in some cases, it is, and through more education, when PIs really understand what we have here and how the patient burden is so much reduced compared to auto CAR T, they get really excited, so I'm expecting things to pick up dramatically in 2025.
Great. Thank you for the question. So in the minute we have left, you guys ended the third quarter with about $330 million in cash. How long does this fund the company? What's it enable you to accomplish?
So just getting to the money stuff. My first budget date hasn't started. I think we'll end the year with about $300 million, and our burn rate is about $30-$35 million. So we have plenty of runway for the next two years. And that will give us the unique ability to prosecute a lot of programs. And next year is going to be a year of inflection for us, solid tumor. I'm very excited about FT825 in combination with rituximab, obviously FT819, different arms, FT522 strategically in different autoimmune disease settings. And this CAR MICA/MICB program, it'll be obviously dosing patients end of the year, but very exciting. So a lot of things to be excited about for next year.
Great. Excellent. Well, thank you so much for being with us.
Thank you for the invitation.
Really appreciate the time.