Welcome to the Fate Therapeutics third quarter 2022 financial results conference call. At this time, all participants are in listen-only mode. This call is being webcast live on the investor section of Fate's website at fatetherapeutics.com. As a reminder, today's call is being recorded. I would now like to introduce Scott Wolchko, President and CEO of Fate Therapeutics.
Thank you. Good afternoon, and thanks everyone for joining us for the Fate Therapeutics third quarter 2022 financial results call. Shortly after 4:00 P.M. Eastern Time today, we issued a press release with these results, which can be found on the investors section of our website under Press Releases. In addition, our Form 10-Q for the third quarter ended September 30, 2022, was filed shortly thereafter and can be found on the investor section of our website under Financial Information. Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements.
Please see the forward-looking statement disclaimer on the company's earnings press release issued after the close of market today, as well as the risk factors included in our Form 10-Q for the quarter ended September 30, 2022, that was filed with the SEC today. Undue reliance should not be placed on forward-looking statements which speak only as of the date they are made, as the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Fate Therapeutics disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. Joining me on today's call are Dr. Wayne Chu, our Chief Medical Officer, Ed Dulac, our Chief Financial Officer, and Dr. Bob Valamehr, our Chief Research and Development Officer.
We will focus today's discussion on upcoming clinical and preclinical data presentations for our off-the-shelf iPSC-derived CAR-NK and T-cell programs for the treatment of cancer, and how we expect our first-in-kind pipeline to advance and evolve in the coming months, including through our collaborations with Janssen and Ono. At the Society for Immunotherapy of Cancer Annual Meeting being held next week in Boston, we will present clinical and preclinical data for FT536, which is our first CAR NK cell program for the treatment of solid tumors to reach clinical investigation. The multiplexed engineered product candidate incorporates four functional elements, including a CAR targeting the alpha-3 domain of the MICA and MICB proteins. High expression of MICA and MICB proteins, which is induced by cellular stress, damage, or transformation, has been reported on many solid tumors.
While the alpha one and alpha two domains of MICA and MICB are prone to proteolytic shedding and can lead to tumor escape, the alpha three domain in particular is resistant and provides a promising targeting strategy for re-engaging tumor cells. FT536 also incorporates our proprietary high-affinity non-cleavable CD16 Fc receptor to enhance antibody-dependent cellular cytotoxicity and enable multi-antigen targeting in combination with monoclonal antibody therapy. We believe the novel multi-antigen targeting strategy of FT536 can drive significantly improved outcomes for patients with solid tumors. The phase I study of FT536 is designed to assess the safety and activity of a three-dose treatment schedule as monotherapy and in combination with monoclonal antibody.
At SITC, we plan to report clinical data of the first three patients treated with FT536 as monotherapy in the first dose escalation cohort at 100 million cells per dose. The study is currently enrolling patients as monotherapy in the second dose escalation cohort at 300 million cells per dose. In addition, to leverage the mechanism of action of our high-affinity non-cleavable CD16 receptor, which is incorporated into FT536, we have also initiated enrollment with the EGFR-targeted monoclonal antibody cetuximab in the first dose escalation cohort at 100 million cells per dose. As the study advances, we intend to also investigate combinations with trastuzumab, amivantamab, and pembrolizumab to promote multi-antigen targeting of solid tumors.
At SITC, we also plan to unveil and present preclinical data for three new multiplexed engineered iPSC-derived CAR T-cell product candidates for solid tumors that are advancing toward IND-enabling studies. The first CAR T-cell product candidate, FT873, targets the antigen B7-H3, which is an immunoregulatory protein overexpressed in cancer and promotes tumor growth, metastasis, and drug resistance. This newly disclosed product candidate incorporates three functional elements into the TRAC locus: a novel camelid nanobody CAR targeting B7-H3, an IL-7 receptor fusion protein, and our CD16 Fc receptor. FT873 is a wholly owned program. The second CAR T-cell product candidate, FT862, is partnered with Janssen and targets KLK2, an antigen with prostate-restricted expression that is maintained during prostate cancer progression.
Preclinical data generated under our collaboration with Janssen demonstrated that multiplexed engineered iPSC-derived CAR T-cells targeting KLK2 have the potential to effectively infiltrate tumor mass and eliminate tumor cells in a highly selective manner and to prolong survival in xenograft models of prostate cancer. As a reminder, Janssen funds all preclinical development of the FT862 program and has the right to exercise an exclusive option to conduct worldwide clinical development and commercialization, and we maintain the right to co-commercialize and share equally in profits and losses of FT862 in the US. The third CAR T-cell product candidate, FT825, is partnered with Ono and targets an undisclosed tumor-associated antigen with a novel binding domain developed by Ono. FT862 incorporates multiple innovative elements, including synthetic receptors designed to promote cell trafficking and prevent immunosuppression in the tumor microenvironment.
Preclinical data generated under our collaboration with Ono demonstrate its potential to overcome several unique challenges in treating solid tumors with cell-based cancer immunotherapies. We have now initiated the generation of the master cell bank for the multiplexed engineered iPSC-derived CAR T-cell collaboration candidate. In addition, we are positioned to achieve a specified preclinical milestone and initiate IND-enabling activities later this year for FT825. Upon achievement of this specified preclinical milestone, Ono has the right to exercise an exclusive option to conduct clinical development and commercialization, and we maintain the right to co-develop and co-commercialize FT825 in the U.S. and Europe.
We believe we have one of the most novel, diverse, and deep cell-based cancer immunotherapy pipelines for solid tumors, which is uniquely enabled by our proprietary iPSC product platform and, in particular, our ability to multiplex engineer iPSCs with synthetic modalities designed to achieve target specificity, overcome tumor heterogeneity, promote cell trafficking, and induce cell activation in response to repressive signaling in the microenvironment. At the American Society of Hematology annual meeting and exposition being held next month in New Orleans, we will present initial clinical data for FT819, our CD19-targeted CAR T-cell product candidate for B-cell lymphoma, and for FT576, our BCMA-targeted CAR NK cell product candidate for multiple myeloma.
As a reminder, FT819 incorporates a biallelic insertion of an anti-CD19 CAR transgene into the T-cell receptor alpha constant locus with complete disruption of T-cell receptor expression, and its CAR construct is comprised of a novel 1XX co-stimulatory domain that is designed to balance T-cell activation and exhaustion. To our knowledge, FT819 is the first-ever T-cell product candidate manufactured from a clonal iPSC line to undergo clinical investigation. The phase I study for B-cell lymphoma is assessing both a single dose and a three-dose treatment schedule, and dose escalation is currently ongoing in the third single-dose escalation cohort of 360 million cells and in the second three-dose escalation cohort of 60 million cells per dose.
At this early stage of dose escalation with FT819, enrollment is primarily ongoing at U.S. academic medical centers, where we continue to see investigator enthusiasm for our off-the-shelf iPSC-derived CAR T-cell program. While there are three FDA-approved CD19-targeted autologous CAR T-cell therapies, there remains a significant unmet need for patients at these medical centers that are either unfit for or have already received autologous CAR T-cell therapy and require effective treatment. At ASH, the initial clinical data presentation for FT819 will include nine patients in single-dose escalation cohorts of 90 million cells and 180 million cells, as well as three patients in the three-dose escalation cohort of 30 million cells per dose.
Consistent with the high unmet need, the majority of patients administered FT819 have aggressive disease and are heavily pretreated, having received at least four lines of prior therapy, with approximately half of patients having received prior CD19-targeted autologous CAR T-cell therapy. At ASH, we will also present initial clinical data for FT576, our BCMA-targeted CAR NK cell product candidate for multiple myeloma. Despite the recent launch of two FDA-approved BCMA-targeted autologous CAR T-cell therapies, we believe there is tremendous opportunity for FT576 as an off-the-shelf CAR NK cell therapy with a differentiated product configuration and mechanism of action. FT576 incorporates a novel BCMA binding domain that triggers target cell lysis at low levels of BCMA expression.
The multiplexed engineered product candidate also incorporates our proprietary high-affinity non-cleavable CD16 receptor to promote antibody-dependent cellular cytotoxicity and enable multi-antigen targeting of myeloma cells in combination with daratumumab. Importantly, combination with daratumumab is enabled uniquely by knockout of CD38, which eliminates the possibility of CD38-mediated fratricide. The phase I study for multiple myeloma is designed to assess single-dose and multi-dose treatment schedules as monotherapy and in combination with daratumumab. We are pleased to announce that the single-dose escalation cohort at 300 million cells as monotherapy has cleared dose-limiting toxicity. We are now currently enrolled patients in two-dose escalation cohorts at 300 million cells per dose as monotherapy and in combination with daratumumab. Upon clearance of these cohorts, we plan to initiate enrollment in three-dose cohorts at 300 million cells per dose, both as monotherapy and in combination with daratumumab.
At ASH, the initial clinical data presentation for FT576 will include approximately nine patients. Six patients in the single-dose escalation cohorts of 100 million cells and 300 million cells as monotherapy, and three patients in the single-dose escalation cohort of 100 million cells in combination with daratumumab. At this early stage of dose escalation, the majority of patients administered FT576 are triple class refractory, including refractory to last prior therapy, having received at least four prior lines of therapy. As we seek to build a highly differentiated myeloma franchise, we are excited to unveil our development of FT555 under our collaboration with Janssen. FT555 is a multiplexed engineered iPSC-derived CAR NK cell product candidate targeting GPRC5D, an orphan G protein-coupled receptor found to be highly expressed on myeloma cells.
Importantly, GPRC5D expression is independent of BCMA expression, suggesting that it is a target of unique therapeutic value for patients with relapsed/refractory myeloma, regardless of treatment with prior BCMA-targeted therapy. In May, Janssen exercised its commercial option to FT555, for which we received a milestone payment of $10 million. We are currently conducting IND-enabling activities with Janssen to support first-in-human clinical investigation in 2023 of FT555, including in combination with daratumumab to simultaneously target GPRC5D and CD38 antigens. At ASH, the companies will jointly present preclinical data of FT555, demonstrating its activity profile. As a reminder, under the collaboration, Janssen has the right to worldwide clinical development and commercialization, and we maintain an opt-in right to co-commercialize and share equally in profits and losses in the U.S.
At ASH, we will also highlight novel multiplexed engineering strategies to eliminate the need for intense lymphodepleting conditioning chemotherapy, which is currently required throughout the field of cell-based cancer immunotherapy. These traditional chemotherapeutic regimens are believed to create a favorable cytokine environment, including by depleting host immune cells so that adoptively transferred cells may thrive. However, these conditioning regimens are often associated with significant hematologic toxicities and as such, create significant barriers to cell therapy adoption, utilization, and patient access. While much has been made of engineering cells to evade host immune cell rejection, it is important to recognize that evasion strategies do not obviate the need for chemotherapy conditioning to allow for cytokine-induced activation and persistence of adoptively transferred cells.
To overcome the requirement for chemotherapy conditioning in the field of cell-based cancer immunotherapy, we are particularly excited about the potential to incorporate our proprietary alloimmune defense receptor, or ADR technology, into our iPSC product platform. Our synthetic ADR receptor is designed to target 4-1BB expressing activated host immune cells while providing a CD3 zeta signaling boost upon engagement to potentiate the cell product. In preclinical models, we have shown that ADR armed iPSC-derived CAR NK cells resist host-mediated rejection and in fact expand, persist, and maintain antitumor activity in the presence of alloreactive cells. These preclinical data provide proof of concept that ADR armed cell therapies have the potential to persist and induce potent antitumor activity without requiring conditioning chemotherapy. We look forward to highlighting our 4-1BB targeting ADR technology and further discussing its clinical applications, which we believe extend beyond cell-based cancer immunotherapy.
For example, recent publications have highlighted the potential of autologous CD19-targeted CAR T-cell therapy to induce drug-free remission in patients with certain life-threatening autoimmune disease. We believe the incorporation of ADR technology into our iPSC product platform provides an opportunity to bring novel cell therapies designed to target multiple dysregulated cell types and achieve a deep reset of the immune system for patients with severe autoimmune disease. Turning to the first quarter of next year, we plan to hold a research and development day to highlight our industry-leading iPSC-derived NK and T-cell product pipeline with a focus on our clinical stage programs for hematologic malignancies. We plan to cover our franchises in lymphoma, myeloma, and AML with clinical data updates across our programs and key milestones that we seek to achieve in 2023.
In particular, with respect to our FT596 program in combination with rituximab for the treatment of relapsed refractory B-cell lymphoma, we plan to review clinical data of approximately 35 patients treated in single-dose escalation cohorts ranging from 90 million cells to 1.8 billion cells. Recall that despite our request at the time of IND submission to initiate clinical investigation of the FT596 program with a three-dose treatment schedule based on activity assessments observed in our preclinical studies, the FDA required us to complete single-dose escalation prior to initiating multi-dose treatment schedules. We are now currently enrolling three-, two-, and three-dose cohorts at 900 million cells per dose and at 1.8 billion cells per dose, and we plan to review clinical data of approximately 25 patients treated in these multi-dose cohorts.
Given that we have observed a highly favorable safety profile with our FT596 program and given the FDA's focus on optimization of dose and dose schedule to maximize therapeutic index, we do believe the assessment of both two- and three-dose treatment schedules at these two dose levels is prudent. Additionally, with respect to our FT538 program for the treatment of relapsed/refractory AML, we are currently enrolling patients in the fourth three-dose escalation cohort at 1.5 billion cells per dose and expect to complete phase I dose escalation by the end of this year. During our R&D day, we plan to review clinical data of approximately 30 patients with relapsed/refractory AML treated in three-dose escalation cohorts ranging from 100 million cells to 1.5 billion cells per dose.
In addition to our program reviews, we also plan to share feedback from the FDA under our FT516 RMAT designation, where our interactions to date have spanned the entirety of our iPSC product platform from iPSC generation, engineering, and cell banking, routine GMP production and drug product control strategy, clinical development considerations, including optimized dose and dose schedule, and pathways to approval for patients with aggressive B-cell lymphoma. In September, we received positive feedback from the FDA regarding our production, characterization, and release of clonal master iPSC bank for use in the routine manufacture of drug product, as well as potential registrational pathways for the treatment of patients with relapsed refractory aggressive lymphomas, including for patients who have relapsed or are refractory to FDA-approved CD19-targeted CAR T-cell therapy.
We were also granted a follow-up meeting scheduled for December to review with the FDA key CMC components of our iPSC product platform, including drug product release specification. We believe we have made great strides through our interactions with the FDA toward our pursuit of pivotal readiness for our iPSC-derived product platform. We also plan to highlight our state-of-the-art multi-drug product manufacturing facility located in Poway, California, which is designed to support all phases of clinical development as well as initial commercial launch. I am pleased to announce that the facility is now open for GMP production, and we are well-positioned to mass-produce multiplexed engineered iPSC-derived NK cell and T-cell products for the benefit of patients. I would now like to turn the call over to Ed to highlight our third quarter financial results.
Thank you, Scott, and good afternoon. Fate Therapeutics is in a solid financial position to advance our pipeline and collaborations. Our cash equivalents, and investments at the end of the third quarter of 2022 were approximately $519 million. In the third quarter of this year, our collaboration revenue derived from our partnerships with Janssen and Ono Pharmaceutical increased modestly to $15 million compared to $14.2 million for the same period last year. Research and development expenses for the third quarter increased by $26.7 million to $79.8 million compared to $53.1 million for the same period last year.
The increase in our R&D expenses was attributable primarily to increases in employee headcount and compensation, including share-based compensation, expenses associated with R&D fees and third-party consultants, and in investments made in equipment and materials. General and administrative expenses for the third quarter increased by $5.8 million to $21.6 million compared to $15.7 million for the same period last year. The increase in our G&A expenses was attributable primarily to an increase in employee headcount and compensation, including share-based compensation and legal-related fees. Total operating expenses for the third quarter were $101.4 million, which includes $19.5 million in non-cash share-based compensation expense.
Note that in connection with the development of our off-the-shelf iPSC-derived CAR T-cell product candidate FT819, we previously achieved the clinical milestone set forth in our amended license agreement with Memorial Sloan Kettering Cancer Center, which triggered a first milestone payment to MSK in 2021. Up to two additional milestone payments may be owed to MSK based on subsequent trading values of the company's common stock ranging from $100-$150 per share. We assess the fair value of these contingent milestone payments currently valued at $9 million on a quarterly basis. In the third quarter, we recorded a non-cash $900,000 non-operating benefit associated with the change in fair value. Our net loss for the third quarter was $83.6 million or $0.86 per share.
Finally, we update our year-end guidance for cash equivalents, and investments. We had previously guided to year-end amounts of at least $400 million, and we now expect to end this year with at least $440 million in cash equivalents, and investments. Note that in the fourth quarter of this year, we are poised to achieve significant milestones under our collaborations with Janssen and Ono. The achievement of these milestones, including the receipt of associated cash payments, is not included in our year-end cash guidance. I would now like to open the call to questions.
Thank you. At this time, we will conduct the question-and-answer session. To ask a question, please press star one one on your phone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question comes from Tazeen Ahmad of Bank of America. Your line is open.
Hi, guys. Good afternoon. Thanks so much for taking my question. Just wanted to follow up on the feedback that you've got on the RMAT meeting with FDA.
What kind of commitments do you think that the agency would ask you for in terms of requirements for registration going forward for FT516? I think that we've been getting inbound questions on that already, and since you've just recently had this meeting, I was just curious if you can just elaborate a little bit more on that. Thanks.
Sure. The feedback that we have gotten so far, and keep in mind, these are active discussions we're having with the FDA. Our clinical development strategy in these discussions has focused mostly on the opportunity that exists in the post-CAR T-cell setting, which we believe is representative of essentially the new salvage setting in patients with aggressive B-cell lymphoma. As such, we believe that, for instance, it is quite possible to conduct a single-arm study in a relatively small number of patients, that ORR would likely be the primary endpoint, and that certainly we would have to follow patients after response. That said, keep in mind that in this patient population, based on data from consortiums in the CAR T-cell therapy space, the response rates are in fact quite low in this patient population post-CAR T-cell therapy, often in the teens.
Progression-free survival, which certainly is a benchmark that could be used to follow patients, is in the two-three-month range, and overall survival is six months. Certainly we believe, like most therapies, you would have to follow patients, but in this particular patient population, follow-up by its very nature, I think, would be relatively short.
Okay.
Does that answer your question?
Yeah, it largely does. Maybe just to follow up, Scott, do you plan on doing a FT516 study with RITUXAN? Would you think that you would need to have a RITUXAN-only comparator arm with that?
Yeah. I don't wanna comment as to whether or not we will be doing FT516 or FT596. We are actively making that decision as we have these conversations and approach the end of the year. Obviously, FT596 is on the table, and many of the discussions we're having with the FDA are agnostic to product candidate. We certainly believe FT596 is a second generation of FT516, if you will. Your question's a fair question. Do we think we'd have to have a comparator arm against, for instance, rituximab? Our view on that is no. Rituximab is certainly not what you would consider a new molecular entity by any stretch of the imagination.
We are only, for instance, remember, giving a single dose of rituximab as well. We're not even delivering rituximab, by any means, its standard dose and schedule. We are confident that there are mechanisms we can use, including pointing to historical data sets of RITUXAN in late-line patients, that can be used to address the contribution of rituximab, which quite honestly we think is quite low, especially given this patient population that has progressed through multiple lines of rituximab, and is only receiving a single dose of rituximab.
Okay. Got it. Thank you.
Thank you. One moment, please. Our next question comes from Michael Yee of Jefferies. Your line is open.
Hey, Scott. Thanks. Congrats on the progress. Looking forward to these updates. I have a two-part question, one on myeloma. You'll give an update on both of these programs, but they appear to be at fairly low doses. Do you expect that one would see activity here? And how should investors attempt to compare this to other things that are out there, given we're at somewhat low doses? And secondly, on the iPSC CAR T, a bit of the same question. Obviously, there's a proof of concept here, but just kind of explain what is the value or strategy, I guess, with adding a CAR T into the mix. Thank you.
Sure. First question, FT576 and the update in multiple myeloma. Keep in mind, and hopefully we were clear about this, the FT576 dose schedule is currently, and we were asked to start by the FDA, with a single dose schedule. By no means, like we've gone through in the past with FT596, do we believe a single dose of an NK cell is the right therapeutic paradigm. All our preclinical data from others as well, suggests that a single dose of an NK cell cannot, in fact, outcompete a single dose of a CAR T-cell. They are very different biology. T-cells expand, proliferate much more aggressively than, for instance, an NK cell.
We think, again, whether it be FT596 or FT576, when we're talking about an NK cell paradigm, the right framework for assessment is a multi-dose framework. Fortunately, with FT576, we are transitioning to multi-dose much sooner than we did with FT596, where I think I alluded to, we essentially had to go through 35 patients in full dose escalation before beginning a multi-dose paradigm. I think, you know, these early data sets, you know, from that standpoint, just in terms of demonstrating safety, clearing the safety hurdle so that we can begin the multi-dose experience is important for FT576.
Obviously, any early signs of activity would be encouraging, especially since, if they were in a monotherapy arm and, the fact that we're using a novel CAR. Any signs of activity, I think in the monotherapy arm, in the first couple patients, would be encouraging. I think with CAR T-cell therapy, again, I think it's very important for us. This is the first iPSC-derived CAR T-cell therapy. Obviously, I think it's the first iPSC-derived CAR T-cell therapy in the world to go into clinical investigation. As we've alluded to, certainly on this call, while most folks, I think, associate Fate Therapeutics solely as an NK cell company, our pipeline is, expanding and evolving to certainly include T-cells, whether those be wholly owned programs or programs under our collaborations with, Janssen and Ono.
I think continuing to pioneer iPSC-derived CAR T-cell therapy, including starting with CD19, where profiles are well understood, I think is an important experience for us to continue to do. As it relates to the specific data, again, these are early, we're early in dose escalation, early doses, and I think based on the data that we've looked at in terms of patient profile, I think these patients are not your typical YESCARTA patients. I think I even mentioned that probably 50% of our patients are post-CAR T-cell therapy, in fact.
Got it. Perfect. Thank you.
Sure.
Thank you. One moment, please. Our next question comes from Tyler Van Buren of Cowen. Your line is open.
Hey, guys. Thanks very much for all the updates. Regarding the B-cell lymphoma data in late January, isn't more cells or the 1.8 billion cell dose in this case better given the short half-life? Basically, this comes down to ensuring that the strong safety profile is maintained at the higher dose. The second part is, once we get this dose escalation data, will you be able to make a decision as to whether you move FT516 or FT596 into the first pivotal?
Yeah, great question. I think the way we think about it at some basic level, especially given the biology of NK cells, where they do not expand or proliferate like T-cells, I think you're certainly getting down the cell load, right? If you think about historically what we've seen in the autologous CAR T-cell space in B-cell lymphoma, responses happen fairly rapidly. They tend to happen, I think, you know, based on what we've seen to date and an understanding of the autologous world, responses often happen in the first two to three weeks. For us, yes, given what you brought up, certainly NK cells have a very short half-life. NK cells do not behave with respect to expansion and proliferation like T-cells.
The idea is, though, I think ultimately comes down to effector target ratio and maximizing cell load against the target. I think there's different ways to try and achieve that with NK cells. There's certainly different schedules that you could potentially look at. We are looking at, for instance, a two- and three-dose schedule. I think it's worthwhile, I'm confident the FDA is going to inquire, given we have such a clean safety profile. They'll want to understand, I think the differences between potentially two different doses.
I think as we get into the first quarter and we do get more experience and greater numbers of patients at the $901.8 billion level using these multi-dose schedules, we will be able to make a decision with respect to FT516, FT596 and the dose and dose scheduling.
Great. Thank you.
Sure.
Thank you. One moment. Our next question comes from Yigal Nochomovitz of Citigroup. Your line is open.
Hi, Scott. Thanks very much for taking the question. Just to follow up on the feedback from the FDA regarding FT516, I just wanna get a better understanding of the extent to which the FDA commented specifically on FT596. I understand, of course, that the FT596 is the next generation version, but they are different products after all. With regard to the specific feedback on the post-CAR T setting, and you mentioned the ORR as the primary endpoint, following patients for response with respect to FT516, you know, how much do those comments apply specifically to FT596? Or are those discussions more going to happen with this follow-up meeting that you outlined in December? Thank you.
Sure. I wanna be really clear, and you're right. The banner of the discussions is under FT516 RMAT. Absolutely, we do need to, you know, potentially assume that the feedback given relates specifically to FT516. That said, the questions that we asked and the discussions we're having, I do believe can be interpreted more broadly. They certainly relate at some level to an iPSC product platform as it relates to, for instance, making master cell banks or even our manufacturing or product release. I do think the discussions we've been having about the unmet need post-CAR T-cell therapy and how you would design a trial essentially to demonstrate benefit in a post-CAR T-cell therapy setting could be interpreted reasonably to apply either to FT516 or FT596.
Okay, got it. That makes sense. Just a few other little questions here. Regarding FT825, what's the expectation regarding disclosing the target with Ono? I was also wondering with the KLK2 product, if Janssen did any work in combo with some of the approved MOAs in prostate cancer. Thank you.
With respect to FT825, we are in a position where I believe we will very, very shortly achieve the preclinical milestone. That will trigger an option decision by Ono. I suspect that when Ono does or does not exercise their option, assume for the sake of this discussion that Ono does in fact exercise their option, I believe the target will become public at that point in time. With respect to Janssen, I don't know, Bob, if you wanna comment on. For the most part, the preclinical data that we generated with Janssen, without getting into all the detail, did focus on its potential as a monotherapy.
Okay. Just-
It was really focused on the unique contribution of the CAR.
Okay, got it. Just one final one. On the FT596 dose escalation with the multi doses, I think if I heard correctly, you said two doses at 900 and then three at 1.8 billion. I was just quite intrigued by the choice of three at 1.8 billion as opposed to.
Yeah.
You know, 2.8 billion.
Sorry, to clarify, the two-dose schedule includes both 900 and 1.8, and the three-dose schedule is currently at 1.8.
Got it. Okay, thank you.
You should think of it at some level sequentially moving through dose and dose escalation. Hey, you clear a one-dose level, now you can open two-dose level. Okay, you've cleared two-dose level, you can begin a three-dose level.
Understood. Thank you.
We're in a very sort of systematic way of moving through dose escalation here under the FT596 umbrella.
Got it. Okay. Thank you.
Sure.
Thank you. One moment, please. Our next question comes from Michael Schmidt of Guggenheim Securities. Your line is open.
Hey, thanks for taking my questions. I had one on your multiple myeloma strategy, perhaps specifically about FT576. It, you know, sounds like this initial updated ASH will be really early. Scott, I'm just curious, what are you looking for in terms of, you know, the efficacy profile for this program? You know, are we looking for CAR T-like efficacy? Are we looking for something else? And then how do you see this positioned longer term or, you know, in terms of registration to myeloma?
Yeah.
Are we thinking about a, you know, something that is gonna be applied in combinations, or are we looking at, you know, something more monotherapy in a late-stage setting initially?
Thank you. Yeah, sure. You know, recognizing my comments, keep in mind are relatively early with respect to our evolution of the myeloma franchise. Certainly I think it's reasonable to believe that, a similar strategy can evolve that we believe is, playing out in lymphoma, where certainly, patients will receive autologous BCMA targeted therapy. I think patients will either relapse or fail that therapy, and I certainly think there will be an opportunity to come in with an off-the-shelf cell therapy in combination with daratumumab in patients that have progressed or failed CAR T-cell therapy. That's one very similar to what's playing out with, for instance, 516, 596. I do think that will be considered sort of the, t he post-CAR T-cell setting, I think, will be sort of considered the new salvage, and it provides, I think, lots of interesting opportunity for rapid development.
I also think the way we're designing our product candidates obviously have features and functionality that are designed, in fact, to synergize with the monoclonal antibodies that are used early and often in care. Our, I would say, other strategy for development is not necessarily to go compete head to head at a Memorial Sloan Kettering or MD Anderson of the world with an autologous product, but use the fact that these monoclonal antibody regimens are given early in care, use play to our advantage that we have an off-the-shelf cell therapy. Obviously, to the extent we continue to have a differentiated safety profile, we think that cell therapy could be delivered in the community setting.
Therefore, reach into earlier line settings and reach patients earlier in care in the community setting with an off-the-shelf product.
Okay, that makes sense. To follow up on your B-cell lymphoma strategy. It sounds like you're nearing a decision point here in 1Q about FT516 and FT5. Is this going to be an either/or decision, Scott, or is there a scenario where you could move both programs into registration studies next year?
I think it's very likely, you know, we would consider a single product candidate, either one or the other. I think at the end of the day, while you know, again, having active conversations with the FDA, I think a reasonable assumption to work on is that if you do run, for instance, a late line study post-CAR T, a reasonable assumption is that that might be accelerated versus full approval and that a confirmatory study might be required. That's all TBD. We're having active discussions. Certainly if that were the scenario that would play out, it would behoove us to sort of consolidate the franchise around a single product. I obviously think FT596 is a second-generation product candidate, if you will.
That makes a lot of sense. Thank you.
Sure. There's certain assumptions in there too. Certainly that FT516 and FT596 have a similar safety profile that would allow for that as well.
Thank you. One moment, please. Our next question comes from Daina Graybosch of SVB Securities. Your line is now open.
Hi. Thank you for the question. You have a lot of programs here, both your own new internal programs and multiple that you could opt in in the next couple of years. I wonder if you could talk about how you're thinking about portfolio prioritization. Related to that, do you have any guidance on R&D burn for 2023 as you start to take these programs forward?
Yeah, I mean, Ed can address the latter one. I don't think today we expect that burn will actually go up substantially. While there are, as you rightly pointed out, some emerging programs, including clinical programs. Keep in mind that as it relates to the Janssen programs, early development, actually pre-clinical development as well as early clinical development, is fully paid for by Janssen. So the program that we announced today, for instance, FT555 in myeloma, as well as the pre-clinical development of the CAR KLK2 T-cell program, all of that is funded by Janssen until we, Fate, decide to make an opt-in decision. That opt-in decision you should think of occurs essentially when a dose and dose schedule has been selected for registration study.
You know, those programs I don't tend to think of are part of Fate's burn, certainly in 2023 and maybe into late 2024. Ono is very similar. Half the program is funded by Ono, and half is funded by Fate. We do think that there are early milestones under the Ono program, including option exercise as well as early IND or phase I milestones that essentially make the program cost neutral to Fate Therapeutics from that perspective. I do expect Fate Therapeutics, and we'll discuss this more at, you know, our R&D. I certainly think we are going to prioritize and rationalize our programs and our pipeline. As you know, we have first and second generation product candidates. Certainly, we just talked about that in lymphoma.
It's also true in myeloma as well with FT536 and FT576.
Great. Thank you.
Sure.
Thank you. One moment, please. Our next question comes from Peter Lawson of Barclays. Your line is now open.
Great. Thank you. I apologize. I've joined the call late, but the updated data for lymphoma, when should we expect that? Is that kind of more of a January event? Is it analyst day thing in January, or you've targeted a medical conference?
Sorry. We'll do an R&D day in the first quarter of next year. At that R&D day, certainly the lymphoma data with respect to FT516 and FT596 will be in focus. During that R&D day, we'll also update our other disease franchises in hematologic malignancies, including myeloma and AML. We will provide, I think, a meaningful update with respect to our discussions with the FDA under RMAT as it relates to our product platform as well as development strategies. I think we'll focus a bit on our new manufacturing facility that we're launching and the capabilities and unique value of mass producing iPSC cells for patients with cancer. We'll hold a fulsome R&D day in the first quarter to discuss those topics.
Great. Thank you. Then for the post-CAR T-cell setting, I mean, do you expect that will be a single arm study? Kind of what drives the difference between or the decision between FT516 versus FT596? Would you potentially run iPSC plus rituximab versus iPSC?
Yeah. No, I think our view is that the post-CAR T-cell setting could be considered a salvage setting. I think in a salvage setting in cancer, you could absolutely run a single arm study. rituximab is not a new molecular entity. We do not even give rituximab on a standard schedule. I think there are recent examples where folks have secured, certainly, accelerated approval in combining with therapies that are used that are not new molecular entities. I certainly think there are ways, keep in mind, that folks have progressed or most patients on our study have gone through at least multiple lines of a standard rituximab regimen. I think there are multiple different ways to demonstrate the unique value of the product without having to run a controlled study.
Got you. Just a final question around the TCR editing and TCRless iPSCs. Just curious if those are stable, if you're seeing kind of genomic rearrangements as we've kind of seen in some of the gene-edited allo approaches.
Yeah. I'll let Bob talk about it, but I think at a conference recently, either AACR or ASGCT, we highlighted ten-year stability of a iPSC-derived engineered master cell bank, but I'll let Bob talk to it.
Sure. No, that's a great question. As Scott mentioned, we highlighted that at ASGCT. You know, keep in mind we select a clonal line, and that clonal line gets interrogated before the master cell bank is made. It gets interrogated after the master cell bank is made. It gets interrogated after engineering strategies as well. We have a full gauntlet of different genomic stability assays, and we're very confident in our, in the stability of our product.
Sorry, a final question just around that analyst day. Could we get a sense of durability of responses from the lymphoma data?
Yeah. Sure. I think we're gonna present durability of response. I think, keep in mind that we've just recently moved, to the multi-dose schedules with two and three doses, so obviously those patients are gonna be less mature with respect to follow-up.
Great. Thank you so much.
Sure.
Thank you. One moment, please. Our next question comes from Gil Blum of Needham. Your line is open.
Hi. Good afternoon, and thanks for taking our question. Maybe a quick question on FT819 and kind of the data that was partially disclosed this morning on safety. Looks pretty safe, I mean, when you compare it to its Allogene peers. I'd love to hear your thoughts on that.
Sure. I mean, it's early in dose escalation, so I wouldn't read too much into it one way or another. The one thing I would keep in mind is we are using a novel CAR construct, the 1XX CAR construct, which, you know, you can consider to be sort of uniquely different than either CD28 or CD28 4-1BB. So, you know, whether or not that CAR construct yields a different safety profile, I mean, time will tell as we continue through dose escalation.
And maybe also-
So far we've seen a relatively clean safety profile with FT819. Yes.
Okay. Maybe a broader question on solid tumors. Assuming you can use multiple different antibodies, theoretically, you could go after multiple antigens in a solid tumor, especially as the disease progresses. Any thoughts on that?
Yeah, no, absolutely. I think that's one of the things we are potentially excited about is the potential to ultimately you could combine with an array of monoclonal antibodies over a period of time. In addition, I think one of the reasons we're also really excited about potentially combining with amivantamab, for instance, FT536 plus amivantamab, you're now achieving sort of, you know, not just dual antigen targeting, but you're hitting three antigens, with respect to that combination. Yeah, absolutely. I think that's one of the benefits of a cell therapy and FDA-approved monoclonal antibody combinations.
All right. Thank you for taking our questions, and congrats on your progress.
Thank you.
Thank you. One moment. Our last question comes from Matthew Biegler of Oppenheimer & Co. Your line is open.
Oh, hey, guys. Thanks for squeezing me in. Scott, I thought it was interesting in your prepared remarks you specifically mentioned five three six data at 50 but not five three eight. Should we be reading into that as a sign of confidence or-
No, sorry. Yeah. We will have FT538, we do have data. I think it'll be eight-10 patients. First dose level, three different monoclonal antibody combinations, I believe. It was simply for brevity.
Got it.
I think it went too long to begin with. My comments were too long to begin with, so not everything makes it into the script.
Got it.
Yes. No, we will be presenting FT538 at SITC. I think the poster covers about eight-10 patients at the first dose level, three different monoclonals.
Understood. Looking forward to it. Thanks.
Sure.
Thank you. I would now like to turn it back to Scott for closing remarks.
Great. Thank you all for participating in today's call, and look forward to seeing, you know, hopefully some of you next week at SITC and ASH. Take care. Be well.
Thank you. This concludes the program. You may disconnect.