My name is Pete Lawson. I'm one of the biotech analysts at Barclays. I have the pleasure of covering Fate Therapeutics. Up on stage with me, I've got Mike, I'm sorry, Bob, Bob Valamehr, CEO and President. I guess the first questions I've been kind of asking everyone has just been around the impact of tariffs on supply chain, anything we've kind of been worried about over the long term or short term.
Sure. Thanks for the invitation, Peter. This is obviously on everyone's mind. The market is reacting quite nervously. For us, it's actually a double-edged sword because on one side, we actually, because of our inventory, we make off the shelf and things are stacked in inventory. From one perspective, short term is not going to interfere. Long term, I'm not sure. We'll see how long this lasts and what it means. Short term, we have plenty of product, 522, 819, things we talked about today. That's the value of off the shelf. Obviously multiple companies have that luxury, but I think in cell therapy, very few. It kind of puts us in a very unique situation when it comes to that.
Okay. Any learnings maybe from COVID where the supply chain got disrupted, if you're more resilient or if there's just a new set of factors that we should worry about?
Yeah. Backup. Every reagent we use, obviously we use about 80 reagents in our manufacturing process. It's a very complicated process. We have backups. Every reagent has a backup, even plasticware, they have a backup. We learned and I think we're in a good place.
Gotcha. Just the disruptions potentially and I guess are occurring at the FDA, just that's changed any of the dialogue with the FDA if it's slowed down or if there's any kind of longer term worries that you're thinking through?
Short term, we haven't seen any disruption, but we do worry long term. We have a lot of different discussions with the agency on different products and we want to proceed at an expected cadence. I am personally worried long term, but short term things have been okay.
Okay. Perfect. I mean, how do you guard against a reduced FDA or what are those worries you kind of think through?
Yeah, you know, we have several trials and we constantly take guidance from the FDA where it's a continuous discussion. I am worried about having those partners as a partnership. We've been working very well with the FDA and one worry is, are our partners going to be there? Is this something that's going to be now a consolidation? It's going to be a longer queue. We do worry about that because we really cherish our relationship with the FDA and we've had really good interactions. I would hate to see that come to an interruption.
Gotcha. And then kind of biological manufacturing, are there any worries there with whether it's cross-border licensing agreements or other components that we should be thinking about?
Yeah, no, that's another great question. When it comes to manufacturing, obviously we make our product in the U.S. As I mentioned earlier, we have inventory, we have redundancy in our reagents. Short term, the concern is not there. Long term, obviously that would be different. Cross-border, if it comes to it, we would have to manufacture in an outside location. Having done a lot of tech transfer, we're comfortable being able to do it elsewhere. Obviously we prefer to manufacture in the U.S. and then distribute from here. I hope that doesn't get disrupted either.
Kind of the final macro question is just around NIH budgetary cuts. Does that impact the business in any way, any partnerships or any worries about as it trickles through to clinical trial sites?
Yeah, absolutely. I mean, a lot of the, I mean, first and foremost, we don't want science to slow down. That's obviously, as a scientist, a huge concern. From a perspective of our dependency on NIH, we have a lot of partners in the academic setting and obviously we share funds with them and they deliver different innovation or creative ideas for us. They're also very dependent on government financial support. That might actually hamper some of our academic relationships because they may not be able to continue as they have been. When it comes to delivery of our products, probably not. When it comes to continued innovation, definitely that's something we're worried about.
That could be more of a long term.
At least for us, yes.
Yeah. Yep. Okay. Just as we think about the product, so 819, so your CD19 CAR T cell iPSC in autoimmune setting, I mean, when have you kind of walked through that trial and kind of what population of patients you kind of want to hit and kind of median age if there's any chronic diseases that you kind of really want to hone in on?
Sure, sure thing. Maybe I'll take a step back and I'll start with 819 and just give the kind of the history of the product. 819 is an iPSC-derived CAR T cell. For those who don't know what iPSC is, these are cells that are kept in a Petri dish that if you keep them happy, they continuously self-renew. They don't peter out if they're kept in a healthy environment. The uniqueness about these cells is that at any time you could cue them to go into a different lineage and they could become any of the cells found in the body. What we've done is we've taken advantage of this ability and differentiated the iPSCs toward T and NK cells, 819 being a T cell. Another advantage we have is that we can engineer at the iPSC stage, as you know, and then create master cell banks.
These master cell banks are a one-time engineered product. It is another way we actually protect ourselves from whatever happens out there. We engineer once. We are not dependent on antivirus production. We are not dependent on technology on a regular basis. We have engineered this master cell bank. This master cell bank now is a starting material for manufacturing. All the genetic edits are in it. All the genetic edits are tested and they are uniform and consistent. When we start with this master cell bank that, as you mentioned, carries a chimeric antigen receptor targeting CD19, it was developed originally in lymphoma, but it was developed with safety and efficacy in mind. We fine-tune the chimeric antigen receptor to have a balance between efficacy and safety.
When we went into aggressive lymphoma, we had a pristine safety, a very favorable safety profile, but perhaps the activity was not as durable as necessary for an aggressive disease like lymphoma. With just five pounds of tumor in the body, we did have response rates. We had 40% CRs and about 60% overall response rates in patients that were naive to CAR T. This was actually a very proud moment for us because we were showing efficacy from a product that comes from a master cell bank. We were able to distribute it across the country, those 50 patients. As I mentioned earlier, we had very favorable responses in terms of safety. One thing happened that was very interesting in 2022 and 2023 is when Schett and the German group showed that you can apply CAR T targeting CD19 into SLE and other autoimmune diseases.
For us, this was kind of a light bulb went off for us because we thought this is a perfect opportunity to take FT819 into a disease setting such as SLE because safety is even more important in autoimmune than it is in cancer. I do not want to minimize the cancer patients, but when it comes to life expectancy, it is very different in autoimmune. Safety becomes even more important. We had that box checked off. The other thing that actually becomes quite unique is the tumor or the disease burden is much lower than it is in oncology. In oncology, you have 10 to the 10 cells that you are combating to get rid of. In autoimmune, probably 10 to the 8. Here we thought, great, we have the perfect product that has the perfect balance of safety and efficacy.
That's how we entered autoimmune with this product. It's off the shelf. It alleviates a lot of the patient burdens that comes with auto CAR T. There's no need for the patients to come off current therapy to go through apheresis to provide the T cells to be further manufactured. Hospitalization is very small. It's only 72 hours. It's much shorter than the traditional 14 or 10 days that comes with auto CAR T. The product is a lot cheaper. This is $3,000 a dose as opposed to auto CAR T. That's in the order of hundreds of thousands of dollars per dose. Again, with the reduced hospitalization requirements, the total treatment option or paradigm becomes much cheaper. Off the shelf is available on demand. It's cost effective. It is uniform. The safety profile is there.
What we are seeing now, that the activity is there as well. As I'm sure we'll get into further details of the activity. Going back to your original question, FT819 became a perfect opportunity to go into SLE. This is moderate to severe SLE patients. We have two study arms. In regimen A, we're combining FT819 with conditioning chemotherapy. As we all know, CAR T is combined with conditioning chemotherapy, most commonly cyclophosphamide and flu therapy. Here we created kind of a physician's choice. We created the option of Cy/Flu. We also created the option of bendamustine because at the time of the IND filing, flu therapy was in shortage. Also we created the option of cyclophosphamide alone, a single dose of cyclophosphamide. That's because rheumatologists are very comfortable with cyclophosphamide.
Patients that we're treating have already been treated with cyclophosphamide, six rounds in fact, three to six rounds over several months. The physicians got the opportunity to go with flu, cyclophosphamide, or bendamustine. What was very interesting so far in the early stage of the clinical trial, no physician has taken up the flu option. Everybody has either focused on bendamustine or cyclophosphamide. In this arm, we have what we call flu therapy free conditioning or light conditioning combined with FT819. This is your traditional cell therapy CAR T with conditioning. In the second arm, we thought, what if we combine FT819 with standard of care therapy?
These are steroids or immune suppressive agents such as MMF, methotrexate, AZA, where the patient is currently on that, and the patient is stable, but wants to come off because these are medications that are not the healthiest things for patients that are childbearing age. We pursued both fronts. One with light conditioning, which again makes us very unique, and one with standard of care therapy, which again makes us very unique because now you have an off-the-shelf product that is cost effective that would be just combined with current standard of care therapy. Very unique arms that would be, in our opinion, very desired by the patients and by the physician.
Gotcha. As we think about the segments of the SLE patients, you kind of talked about moderate to severe. How large a population is that? Is there a kind of niche within that you think you should target?
A lot of the active SLE patients are also active lupus nephritis patients. This segment of the patients that fall into regimen A are smaller than the segment that fall into regimen B. These are patients that are no longer responding to standard of care therapy. I'm going to speculate that's about 5,000-10,000 patients, new patients on an annual basis there. The much bigger side is what's approximately about 10X that. That's under a combination with standard of care. Patients that are right now taking MMF, for example, and are stable on it. There's a relatively large population on both sides, but much bigger on the regimen B side.
Gotcha. Okay. Perfect. If you wonder if you could walk through the data we've seen so far and how much you expect to generate this year.
Sure. At last year conferences, ACR and ASH, we talked about the first three patients. Specifically, we talked about patient one and gave an update at her six-month visit. She basically was treated for six months with a single dose of FT819 in combination with bendamustine. This patient, over the course of six months, showed trends toward recovery with her B cell population getting depleted as we expect, and then a recovery of a more naive population of B cells. She had low amounts of B cells, went in, got treated, came back, and actually her B cells went above into normal level range. She ended up after several months with a normal number of B cells, but the population appeared to be in a composition that was preferred. Her renal function improved dramatically. Her fatigue improved dramatically.
She ended up being categorized as DORIS clinical remission after six months. From our conversations with the PI, she felt great. That was one of the best stories that I had heard in a long time where we had a mother who could not get out of bed. Six months later, she is taking care of her children and going for a run. It really reminds you why you do this, even though there is so much going on when you hear that and you just take a moment and enjoy life. We are very excited. We will give a follow-up on her at EULAR. That will be her 12-month follow-up. That is an exciting first patient that we saw. It was a very good result from an off-the-shelf product.
The second and third patients were also treated in regimen A, and we gave an update simply by talking about the first month experience because they hadn't reached six months yet. There we saw trends that appeared to be similar to patient one. We'll give updates on patients two and three at EULAR as well or a conference around that time. This will be basically June timeframe. Another thing that's been very interesting for us is, last year we had two sites and found it challenging to attract additional sites because they were all already bombarded by the big auto CAR T companies or the more famous biotech companies who were in autoimmune before us. Those folks are coming back to us.
Many sites are realizing what an off-the-shelf value point is because I think where in oncology people realized what off-the-shelf was in 2017, 2018 because they had three, four years dealing with the manufacturing of auto CAR T and how tough it is. Here, we're realizing 2025 is the year where people in rheumatology are realizing, oh, off-the-shelf, I see the value points. I didn't really appreciate how challenging auto CAR T was. Patients often do not want to go through the massive patient burden of getting the product made for them. We're starting to engage with more sites. What I hope that we'll be giving an update as well in the summer is additional sites activated and additional patients treated through this additional site activation. Enrollment, we're anticipating to go up, and that's through more sites engaged.
That's really encouraging. For those physicians that are coming back to you, what's the appeal? Is it the data? Is it the lack of upfront conditioning?
I don't want to speak for them, but I think the data reminded them that we're around, and it reminded them of the conversations we had. When we gave updates at ASH and ACR, it not only brought the folks to the presentations, but also reminded them how straightforward this process can be. It's truly off the shelf. It's very cost effective. Hospitalization is only for three days, and we'll talk more about that. It really captures what they're used to traditionally by writing a prescription and getting the patient treated, very different than auto CAR T, which they're experiencing.
Yeah. Wonder if you could elaborate upon those three days in the hospital. Is that something that extends? Is that something that could potentially be reduced?
Yeah. As I mentioned earlier, we treated about 50 patients in oncology and saw a very favorable safety profile, minimal adverse events. When we went to the FDA with our conversation with that data package, they wanted to see, in their words, just show us a little bit in autoimmune. We have that data now. Now we're engaging with the FDA soon to see how we could reduce those 72 hours into a very different profile. We're hoping to end the requirements for hospitalization based on our safety profile and move truly into outpatient settings. Now you have a true off-the-shelf product, very cost effective in an outpatient setting. With a recent type D meeting we had with the FDA, we got the green light to multidose and dose upon relapse.
This is something that is becoming very exciting for us, but for the cell therapy world, it is still an education. We really see ourselves now as a biologic and monoclonal-like treatment, where not only do we make our products like a monoclonal, they have a true master cell bank, and every time they need to dial up a manufacturing process, they go to the master cell bank. Also, when it comes to treatment paradigm, it is no longer the cell therapy paradigm where you only give one time to treat the patient and that is it. You have to hope that that single dose can do everything you want it to do.
We can now, with our inventory, with our cost effectiveness, with our availability, and with kind of the criteria that we're developing for ourselves in the dosing strategy, we can compete with monoclonal antibodies and treat multiple times in a cycle or in multiple cycles. As the hospitalization requirements go away and the availability of the product is there and again, cost effective, $3,000 a dose, we really can now have a cell therapy-like potency competing with monoclonal-like dosing strategy for more deep durable response.
Gotcha. Primary endpoints that we should be thinking about, is that something that's clear? Does it have to be kind of the DORIS clinical remission, or is it renal function? Just think through that.
Yeah. All great questions and points. Right now, we have several variables ahead of us. One is the dose level. One is the primary endpoint. The last one is combination with which conditioning agent in regimen A. We have cleared dose 360 million. Dose level two is 900 million. We feel like that's enough separation between dose one and dose two, approximately two and a half X, to now really be able to compare the two doses. Obviously, we prefer cyclophosphamide, a single dose of cyclophosphamide as a conditioning agent, but we would like to test bendamustine as well. To your question, the primary endpoint, obviously, we have to see what the results show us. The higher the bar on the primary endpoint, I believe the shorter the trial and the fewer the number of patients.
Obviously, we want to aim for the highest bar, but we have to see where the data takes us. That is going to be part of our conversation with the FDA throughout this year as we try to align on a pivotal strategy by the end of the year.
Gotcha. Okay. Have you seen any AEs that have been out of the ordinary, or what's the biggest worry when you think about the cytokine profile?
Knock on wood, and I will. Nothing to worry about as of today. It continues to be the trend. No AEs in the first 72 hours, minimal issues. A couple of patients had a CRS grade one and a couple of grade two, but that's about it. Overall, the favorable safety profile that we saw in oncology is continuing with these patients in SLE.
How quickly do patients get their B cells back? Is that something you can hone in on, or is it still uncertain?
No, it's a great scientific question. We are trying our best to understand all that and correlate it. I know some of the earlier publications with the mAbs try to correlate B cell depletion with the patient outcome. For us, the first patient went into DORIS clinical remission, and as I mentioned, she started with about 20 B cells per microliter, and went down to not detected, and by day 28, came back to detected and went to 100. She really was depleted of her B cells for only three weeks, and we couldn't ask for outcome. She had shown in this range between 30 days and 180 days. The problem is all these patients are doing great, so you can't correlate the two things, B cell depletion and outcome.
For us, the first patient was a clear demonstration that you just need to go down to allow the population to come back up. Maybe that environmental insult that was there originally when the patient began to manifest disease is no longer there. When you reset the B cell compartment, all you need is maybe as short as a week. I don't know. For us, three weeks, and we couldn't ask for a better result. It does not need to be months as far as our data has shown.
Gotcha. You have got a second product moving into autoimmune setting. Maybe a step back. How should we think about the oncology franchise? Is that something in a year's time or six months' time that is completely on the back burner?
Right now, 70% of the company is very focused in autoimmune disease and 819. Obviously, we have a wonderful partnership with Ono Pharmaceutical in terms of focusing on HER2 positive solid tumors. We are prosecuting that. When it comes to heme malignancies, I think our first generation products, 819 and 522, were not potent enough. We have a second generation coming up, but we're not going to roll it out just yet. We need to focus on SLE and solid tumor. We have a strategy coming up for heme malignancies. For now, FT522 would be focused in specific autoimmune diseases where the mAb needs a little help.
Here, this is an NK product targeting CD19, but when combined with a monoclonal antibody, which is a standard of care for multiple autoimmune diseases, it can synergize and actually enhance not only the mAb's activity through ADCC, but also bring forth a CAR targeting CD19. We are going to find very specific niches for 522 where maybe 819 does not make sense and pursue 522 in autoimmune.
Perfect. Thank you so much. It was a pleasure speaking to you.
Thank you, Pete. Thank you very much.
Thank you.