Great. Thanks everyone for being here. My name is Yanan Zhu, and I'm one of the biotech analysts here at Wells Fargo. Today, we're privileged to have Fate Therapeutics team with us, and for this fireside chat, joining me is the CEO of the company, Scott Wolchko. Thank you. Thanks for having me. Thanks, Scott. I was hoping if we can talk about the iPSC cell therapy technology platform as the opening topic, if that's okay? Sure, sure. The question is, can you talk about the advantage of the iPSC cell therapy technology, and also, are there some challenges in fully unleashing the potential of this modality? Sure, sure, sure. So, Fate Therapeutics is a company that is developing cell therapies, a very novel approach to the development of cell therapies, in that we use induced pluripotent stem cell technology. And induced pluripotent stem cell technology was the subject of the Nobel Prize, I think, in 2012, and it essentially allows you to take a mature cell, like a skin cell, and reprogram it backwards in life to become pluripotent. And a pluripotent cell then has all the advantages of being able to differentiate into over 200 cell types of the body. From a cell therapy standpoint, we became very intrigued by that because obviously autologous cell therapy, where you're using patient cells and engineering patient cells, has shown some remarkable results in hematologic malignancies, but essentially an N of one experience, patient by patient. We, using iPS cell technology, believed or were excited about the potential to create off-the-shelf cell therapies using iPS cell technology. I think it does have some distinct advantages, although there admittedly are challenges. One of the distinct advantages that we think of with respect to iPS cell technology really comes into how you engineer cells and the types of multiplexed engineering you can do. With a patient experience, when you're using autologous cell therapy, you're engineering as part of your manufacturing process to make essentially a single dose of a cell for a patient, and that's, for instance, you're engineering the T cells that you've been able to harvest from a patient. What we do is we engineer iPS cells, and so we do all our engineering one time, and we do multiplexed engineering, so we can embed multiple mechanisms of action actually in the iPS cell. And we create, for instance, a master cell bank. So we have a multiplexed engineered master cell bank. And what's exciting about that is all that engineering, all the complexity of engineering, can be done one time, and you can select a single preferred clone, fully characterize how it's been engineered to ensure there are no off-target effects. In making that master cell bank that can serve as then, therefore, the basis of your entire product throughout its life cycle. The challenge with iPS cell technology is the iPS cell, the master cell bank, while, you know, it's terrific for engineering, it's not the cell that's delivered to the patient. You have to then become very sort of, become expert at taking that iPS cell and walking it down a biological path of life. So our manufacturing processes are really focused on how you take an iPS cell that's been engineered already, but how do you create high quality NK cells and T cells and then deliver those to patients? And so in that way, we have, I think, become experts in engineering iPS cells, making master cell banks, and now in the mass production of NK cells and T cells for patients with cancer. Got it. Got it. That's a very helpful framework to think about this modality. I was also wondering, in terms of translating to clinical benefits in various indications, have there been challenges due to the allogeneic nature of the therapy, or have there been challenges with the ability of the differentiated cell to fully assume the target cells, the T-cell or NK cell the full characteristic? Or could there be challenges just due to the nature, for example, of NK cell, as a cell type to use in cell therapy? Could you talk about those? Yeah, absolutely. I think, you know, I'll try and address those through the conversation. So certainly using an iPS cell technology approach, you have to develop expertise in creating high-quality NK cells and T cells, right? That's the journey of iPS cell technology is taking the iPS cell and walking it down a biological path to essentially recapitulate biology and create high-quality NK cells or high-quality T cells. It's actually is. We spent years trying to figure that out, and it's very challenging. I think it's much easier to recapitulate that biological walk of life with an NK cell, honestly, versus a T cell. The reason for that is on the T cell side, from just biology, how do T cells mature? How do they evolve? T cells rely on their, what's called the T cell receptor. That is part of T cell biology. It's intrinsic in T cell biology. They rely on their T cell receptor to mature in nature. If you want to develop an off-the-shelf T cell therapy, that T cell receptor is alloreactive. So for instance, if we used my donor, my cells as a donor, and we gave my NK cells to you, that would probably be very safe and effective if we gave my NK cells to you. However, if we gave my T cells to you without being modified, my T cells, because of their T cell receptor, would probably attack your healthy tissue, and that's what's known as GvHD. So in developing off-the-shelf cell therapies on the T cell side, you do need to engineer out the T cell receptor to prevent GvHD. In engineering, and we do our engineering at the iPS cell level, remember. And so when we engineer out the T-cell gene, T-cell receptor gene, if you will, at an iPS cell, you then have to still figure out how you can now create high-quality T cells without leveraging the T-cell receptor to mature and create the T cell. That took quite a long time for us to figure out, and actually, the breakthrough for that was about where we placed the CAR construct. When we engineered at the iPS cell level, we actually knocked out the T-cell receptor and in its place, put the CAR construct. And that allowed us then to leverage the CAR construct that was engineered into the iPSC to drive maturation of the T cell. And so that was one of the breakthroughs for us in how to make high-quality T cells. Now, still, to your point, I think what we've learned about the allogeneic field generally, whether it's iPSC-derived or donor-derived, is that there seems to be what people refer to as an allogeneic tax. The potency of the allogeneic programs do not necessarily appear to match the autologous programs. And I think one of the reasons for that, that folks have speculated, is because the allogeneic cells have forces of rejection that potentially exist. So the autologous program going into a patient, the cells match, those cells can functionally persist. When you put an allogeneic cell into, for instance, an unmatched patient, there are potentially forces of rejection. And so what's been going on now in the allogeneic field is different approaches to engineering to overcome forces of rejection so that the allogeneic programs can match the potency of the autologous programs. Right. Right. I think we'll, we'll touch on your ADR technology. Yes. Which, addresses. Yes. The issue, right? Yep. Got it. Thank you. That was a very helpful conversation for us to understand where we are w ith the technology platform. Can you talk about what you've learned from the first-generation assets, and how it informed your strategy, today? Yeah. So the first iPS-derived cell therapies that we had began to advance into clinical development were NK cells. So the NK cell platform moved faster than the T cell platform. The first NK cells, I think what we've learned about NK cell biology is I think there are certain aspects of NK cell biology that are certainly worthwhile and exciting to leverage in treating patients with cancer. So for instance, with respect to NK cell biology, one of the features that is unique about NK cells and the innate immune system is NK cells express a receptor called CD16. CD16 is a receptor that is designed to engage antibodies, and those antibodies can essentially target a tumor cell, and essentially the ligation of a tumor to an antibody to an NK cell can induce what is pretty potent antitumor activity. The mechanism is referred to as antibody-dependent cellular cytotoxicity, or ADCC. I think what we've learned with respect to NK cell biology is that is actually a very potent mechanism of antitumor activity, and I believe we've seen that in clinical development. And we have a particular flavor of a CD16 receptor called a high-affinity non-cleavable CD16 receptor that we've engineered into our NK cells, and we believe that that allows the NK cells to most effectively synergize with monoclonal antibodies. So generally speaking, we think that when you deliver an NK cell therapy, maximal potency can be, can be sort of driven by giving them in combination with monoclonal antibody, number one. So I think that ADCC mechanism through CD16 is certainly a definitely a potent mechanism of action in antitumor activity. I think we've also learned that with NK cells, they're very different than T cells. Very, very different, and they have very, very different sort of behavioral properties. They do not expand to the extent T cells expand. They just— they don't have that clonal expansion sort of mechanism within them. And that leads us to a desire, compared to T cells, to very likely give multiple doses as well as higher doses. So for instance, you know, you could give, and I'm just gonna pick stupid numbers, you could give 10 T cells because of the ability of T cells to expand, those 10 T cells could go under clonal expansion, become 1,000 T cells. That biology is not going to necessarily take place with an NK cell. So in order to sort of match essentially the area under the curve with respect to a therapeutic index, you likely need to give multiple doses of high and higher doses of NK cells to match the potency of a T cell. And again, so our NK cell programs are typically multi-dose, higher dose programs as compared to T cells. Got it. Got it. Got it. That's very helpful. So let's talk about your current program. FT522 for B-cell lymphoma. Can you go over the strategy to use the alloimmune defense receptor, or ADR technology, for the treatment of lymphoma? Yeah. Yeah. So, on the NK cell side, our lymphoma franchise has evolved over time, and we made a decision very early on in advancing iPSC technology that we were going to build out our programs in a very systematic way and trying to understand incremental pieces of biology. So we started with a program called FT516, which has the high-affinity non-cleavable CD16 receptor combined with Rituximab in B-cell lymphoma. We then advanced to FT596, where we incorporated a CAR construct, so we had both CD19 as well as the high-affinity non-cleavable CD16 receptor to accomplish dual antigen targeting. I think one of the challenges with cell therapy generally, and this is true of whether it be autologous or allogeneic, is we all know that cell therapies in the cancer immunotherapy setting are given with Cy/Flu. So Cy/Flu is an intense chemotherapy conditioning regimen that is delivered to patients. It's not what you would consider to be a fun experience in receiving that, and it probably does limit, quite honestly, the reach of cell therapy. So for instance, Cy/Flu is probably not a regimen that you would give to patients with early line diseases, early, early line treatment. And so in thinking about the maximal potential for an off-the-shelf cell therapy, and as we thought about our iPS cell technology very early on, we tried to think about how do you make cell therapy look like monoclonal antibody therapy? How do you essentially allow for an off-the-shelf cell therapy that could be delivered early and often to patients, and including in combination with standard regimens? In thinking about how to achieve that, one of the key aspects to achieve sort of that ultimate vision was to divorce, essentially, the requirement to give a cell therapy with Cy/Flu. How could you remove the Cy/Flu component and still allow cell therapies to thrive? That was the thinking behind the development of the ADR technology. It was originally developed at Baylor, and we in-licensed that technology and began to incorporate it into our platform about three years ago. FT522 is the first product candidate to incorporate our ADR technology. What it is in simple form is the ADR technology is a CAR construct, so it's a second CAR now incorporated into FT522, and it targets 4-1BB. So why is that important? 4-1BB is a receptor that is upregulated on immune cells. So a patient's immune system will have NK cells and T cells, and they will express 4-1BB. So the idea was to be able to incorporate ADR technology into our cell therapy, which would allow our cell therapy actually to maximally thrive in the background of a host immune system. So instead of giving Cy/Flu to eliminate a host immune system, we wanted to develop a cell therapy that you could deliver to a patient with its host immune system intact, where that cell therapy would actually interact with that host immune system and thrive. So the ADR technology is a technology incorporated into FT522, where the cell, our cell product, FT522, becomes actually activated and potentiated by the host immune system. So deliver it with the patient, deliver it without Cy/Flu. The patient has a functional host immune system. FT522 thrives off of that functional host immune system, and it allows both the cells and the immune system to mount an attack against cancer. Got it. Could you then talk about your study design and how would it tease out? Yeah. And so, I think the study design that the IND has been cleared by the FDA, and we're in study startup. The study design is specifically set up to test this hypothesis. So we're doing a bit of sort of a side-by-side comparison. It's a—So it's a two-arm study. So the first patients, the first arm, is actually with Cy/Flu. So the standard cell therapy experience includes Cy/Flu, and we will treat the first dose cohort, 3 patients, with Cy/Flu. And so give Cy/Flu, give FT522, the standard sort of cell therapy experience, CAR T-cell experience. In clearing the first dose level, that will allow us to do two things. We'll be able to continue to dose escalate with Cy/Flu, number one, so we can continue the Cy/Flu experience. But number 2, once we clear the first dose level, we're now able to open the second arm, and the second arm of the study is without Cy/Flu. So now we are doing essentially, at some level, the killer experiment early on in this study, to assess whether FT522 can thrive and can deliver antitumor activity in the absence of Cy/Flu conditioning. And that, to me, if we are able to demonstrate that, that is a major breakthrough with respect to the delivery of cell-based cancer immunotherapy, where now we have been developed a construct, if you will, that allows cell-based cancer immunotherapy to essentially be delivered and be active and thrive without conditioning patients. Right. In anticipating which dose level might begin to tell us. Yes. The story, at the starting dose level, if it is designed with Cy/Flu, and that's the bar to clear, right? It feels like that level of NK cells are now tasked with the dual task of clearing the host immune cell and to work on its anticancer mechanism. Seems like, it's a lot to ask for that dose level one, because that dose level one. Yeah. No, I mean, it's fair. We're not, we're not asking the cell necessarily to clear the host immune system. We're leveraging the host immune system to activate the cell. So think about it as essentially the host immune system is agonizing the cell therapy to become activated. And so, yes, I mean, there are, at the very first dose level of 3 x 300 million cells, certainly when we've looked at our NK cell programs with FT516 and FT596, in the Cy/Flu experience, we've seen activity at those dose levels. With the without Cy/Flu and using the ADR technology and leveraging it, yes, I think we will have to do. It's a new experiment. We'll have to understand what the optimal dose is, but certainly at 3 x 300 million cells with Cy/Flu, we've seen activity. Got it. That's very helpful. Are you still on track to enroll the first patient this year? By the end, by the end of this year, we expect to enroll the first patient in the 522 study. Yes. Very helpful. What might be some other programs that you will implement the ADR technology? So the ADR technology, we are vigorously studying from a preclinical standpoint, including incorporating it into our T cell platform. Yes. So I think the technology, if successful, we will absolutely incorporate on the T cell side of our business. Yes. Got it. Very helpful. And I guess the ADR technology will become even more relevant when you're thinking about going into autoimmune. Yeah. For example. Yeah. I mean, again, I think one of the limitations of cell-based cancer immunotherapy, and if we just want to call it cell-based immunotherapy, largely, is the fact that including the autologous programs, require Cy/Flu conditioning to be delivered to patients. And honestly, you know, there's been even more intense regimens, as you know, that are starting to be used in cell therapy and increasing the intensity of conditioning. And I just don't think that that's the right approach at the end of the day for the patient, nor do I think that's the right approach in trying to maximize reach of off-the-shelf cell therapy. And I especially don't think that that's the right approach when you start moving outside of cancer, and you start thinking about other types of diseases where cell therapy can be very relevant and effective. Again, I think ultimately for cell therapy to reach its maximal potential, you need to be able to have cell therapies that are safe and effective and can be combined with other regimens and be given early and often to patients. And I think Cy/Flu is a real barrier to that and certainly including in autoimmunity. Right. Yeah. So I think you are looking to develop FT522 in autoimmunity. Can you talk about, o bviously, there is the German group's seminal publication showing activity of CAR, CD19 CAR T in SLE. What kind of are you planning also to study SLE, go into SLE, or what's the strategy. Yeah And differentiation there? Yeah, we've not announced our plans specifically yet in autoimmunity. We hope to do that by the end of this year. What is our specific development strategies in autoimmunity? The way I look at it today is you've referenced sort of the seminal paper out of Germany, where there's been autologous CAR T cell therapies used in severe lupus to drive an immune reset, if you will, and long-term drug-free remissions, which has been quite remarkable, included Cy/Flu to condition patients in that setting. So when I look at our portfolio, I think using effector cells, just thinking about it generally, using effector cells more broadly outside of oncology and expanding into autoimmunity, I think is a natural step for us, given what data has started to be generated in that space with autologous CAR T cell therapy. I think there's 2 assets, obviously, that we have in hand that can be potentially explored clinically in autoimmunity. There is our iPS-derived CAR T cell program, FT819. FT819, we've dosed about 40 patients in the setting of B-cell lymphoma. It is an asset that at some level mirrors what's been used in the German study, the autologous CD19 targeted cell therapy in the German study. We have an iPS-derived CD19 targeted CAR T cell therapy, FT819. That's certainly an asset that, for instance, if we wanted to begin to explore severe lupus, there's now clinical precedent for the autologous programs, and we could advance one of the first allogeneic programs, T-cell programs, into severe lupus. I think that's one approach we could take. The other approach, like you mentioned, is FT522. FT522 also has a CD19 CAR construct. FT522 has some other advantages, though, and other axes of potential therapeutic benefit. Because of the CD16 receptor, monoclonal antibodies could be combined with FT522. As you probably are aware, for instance, Rituximab has been studied and is given to patients with certain autoimmune diseases. FT522 can be combined and synergized with Rituximab because of the CD16 receptor. Daratumumab, a CD38-targeted monoclonal antibody, has been used in certain plasma cell-mediated autoimmune diseases. FT522, because of its CD38 knockout, could also be combined with Daratumumab and go after plasma cell-mediated diseases. In addition, if the ADR technology does prove out, FT522 would potentially be able to be delivered to patients in autoimmunity without requiring Cy/Flu conditioning. So I think we have potentially, as we are unpacking our clinical strategy, which, you know, again, we're looking to unveil by the end of this year, multiple different assets that we could potentially take. And I think it, especially FT522, extends beyond, certainly beyond, for instance, the lupus setting where proof of concept has been established, where FT522, we can combine with Rituximab, go after more other B-cell-mediated autoimmune diseases, but also combine with CD38-targeted mAb and go after plasma cell-mediated autoimmune diseases. Right. Very helpful. Thank you. Sure. Let's maybe touch on FT819. Where we are in development and what might be the milestone for that program? Yeah. So as we sort of discussed, FT819 is the first iPS-derived CAR T cell program. It's a program where we knock out the T cell receptor at the iPS cell stage and insert a CAR into the TRAC locus. So at the iPS cell, we have a CD19-targeted CAR construct, which we differentiate that master cell bank into a T cell. So we essentially mass-produce a T cell program. That program we have studied in oncology in the setting of B-cell lymphoma as well as CLL, and we've gone through dose escalation in both diseases separately. Right now, we are dosing at approximately 1 billion cells, single dose experiments out of about 1 billion cells per dose with FT819. We've also opened an expansion at one dose lower at 540 million cells per dose, single dose, 540 million cells in B-cell lymphoma. And so these are pretty heavily pretreated patients. In many instances, these patients have previously been treated with CD19 CAR T cell therapy. And so, you know, our objective is to treat. I think, we want to confirm CD19 expression levels, especially if we're treating patients that have been previously treated with the autologous programs. Want to confirm CD19 expression level, treat approximately about 10 more patients, both at 540 million, as well as at least 3 patients at the next highest dose level, 1 billion, where we've dose escalated, and assess the program and, and take a look at where that program stands to, to determine whether or not we would continue to advance it or not. It was the very first iPS-derived T cell program. It's, for the most part, minimally edited, but I think an important program for us just to show initial, initial proof of concept that we, in fact, could take an iPS cell, engineer it, knock out the TCR, and create potent T cells. Got it. And would that evaluation, you know, would the data readout be first half next year? Yeah, first half of next year, we think we should have sort of the next bolus of patients where we can make a call on that program in terms of its development potential. Obviously, we do believe we have a platform, and we could significantly enhance that product candidate or use the T-cell platform to go in other directions, which we've also announced that we're developing as well on the solid tumor side. Got it. Super helpful. If we can then touch on FT576 for multiple myeloma. The question here is mainly, what do you think is the bar for success for allogeneic therapy in general and perhaps in particular for your program? Is the bar a really autologous CAR, or is the bar rather bispecific? I think, I mean, I think it all depends on the line of setting where you're going to intervene, right? So at the end of the day, the autologous programs, I mean, there's no way around it. The autologous programs are delivering remarkable results to patients, and they will be used, quite honestly, most patients, I expect, will get an autologous program at some point in time in their care. And while I think we've seen high response rates, and I think we've seen improvements in progression-free survival, the reality is most patients continue to relapse, and there will be lines of therapies in myeloma that will exist post-CAR T cell therapy, autologous CAR T cell therapy. And so as we think about it today, we certainly think that, the myeloma market will continue to have room for multiple lines of therapies. I expect that in the myeloma landscape, there will be a line of therapy that will be an autologous program, and there will be a line of therapy that involves an allogeneic program. And so I don't necessarily think the bar is the autologous program because I don't necessarily think that it's a zero-sum game at any, at all. I think absolutely patients will receive autologous programs, and at the end of the day, most patients are going to relapse, and they're going to need additional therapies. Got it. Got it. Very helpful. So how enrollment is going in a study, and are you on track for data readout in first half next year? First half of next year, yes. So with the FT576 program, we had to start a little bit slower as we were learning about NK cells by FDA mandate. We started with a single-dose experience with NK cells, where we advanced to a two-dose schedule with NK cells, and we have finally gotten to a three-dose schedule. And I think obviously one of the points we touched on is that NK cells very likely need to be given at multiple doses and higher doses. So we're now dosing patients at 3 x 1 billion cells per dose. And I do think that this is the dose level where we should be able to understand the program's therapeutic profile. And so we're dosing; it's a two-arm study at this dose level. We're dosing as a monotherapy, essentially, where we are, it's FT576 as BCMA-directed. So we're dosing as a monotherapy, where we are testing the CAR BCMA engagement. In addition, we are also having a second arm where we combine with monoclonal antibody therapy, and we can target both BCMA and CD38. And so we have two arms running in parallel. I think our goal is to do, for instance, anywhere between 6-12 patients and then make a call on the program and look at its therapeutic profile, based on that experience. And yes, I think we expect to be able to make that call in the first quarter, or sorry, in the first half of 2024. Right. Yes. Got it. Got it. And then on 825, for solid tumor. Yep. How should we think about that program, and what's the development strategy there? Yeah, so 825—825 is a program that we've been developing for years with, under our collaboration with Ono. And so this really comes out of — I think in many ways, this epitomizes sort of the true differentiator of what we're able to do with the iPSC platform. So this is a cell therapy that has seven edits, and this is seven edits made at an iPS cell line level. And so as we've seen in the space of solid tumors, even with the autologous programs, unlike lymphoma and myeloma, autologous CAR T-cell therapy has been unremarkable in the space of solid tumors. And that's at some level, not surprising. We're talking about complex systems, likely multiple mechanisms of action need to be brought to bear to have a meaningful impact in solid tumors. With an iPS cell technology and our approach of multiplexed engineered editing, we can bring and incorporate multiple mechanisms of action into a cell therapy. And so FT825 is a program that has seven edits. It's CAR T-cell. It targets HER2, but importantly, has additional edits that, for instance, promote homing to solid tumors, promote overcoming an immunosuppressive microenvironment, and continue, actually incorporates now interesting aspects of what we've learned on the NK cell side. So this is, while it's a T cell, we've also incorporated the CD16 receptor from the NK cell side of our business, so that we now have a T cell that can effectively also be combined with a monoclonal antibody to target solid tumors. So this is probably sort of a quantum step for us in thinking about attacking solid tumors in the sense that multiple mechanisms of action, T cells, including the uniting of both adaptive and innate biology within this construct. So we're looking to file the IND on this program by the end of the year and begin dosing patients under the Ono collaboration early next year. Great. Great. Looking forward to that. And lastly, could you review the cash position, cash runway, and strategy? Yeah. So at the end of the second quarter, we had about $385 million in cash. I think we feel comfortable in our cash position that it will last into sort of the second half of 2025. Got it. Very helpful. With that, I think we'll come to the end of our session. Thank you, Scott, for. Thank you. Walking us through this. Thanks for having us. Take care. Thank you.