For joining us for our next fireside chat. I'm Robert Burns, a managing director and senior biotech analyst at H.C. Wainwright, and I'm joined today by Edward Dulac, the CFO of Fate Therapeutics. Edward, thank you for joining us today. Thanks for having me, Robert. Pleasure to be here. So let's dive in. So for those of you unfamiliar with Fate, could you provide a broad overview of the company, your tech, and the pipeline? Sure. I think most people nowadays are familiar with CAR T-cell therapy, autologous CAR T-cell therapy, where you take a patient's T-cells, you can edit those T-cells to more effectively attack cancer, and we've seen some really overwhelmingly positive benefit in patients that have lymphoma and multiple myeloma. However, that benefit has come with a bit of a process. It's time-consuming to make autologous CAR T-cell therapies. It's pretty expensive to do it, and at least as we sit here today, and as you look in the foreseeable future, demand far exceeds the supply. And so while CAR T-cell therapy has been an important intervention in certain hematologic malignancies, a company like Fate is looking at the power of cell therapy and trying to ask a simple question: How do we make cell therapy look like more like monoclonal antibody therapy? And what I mean by that is, how do you have a product that is immediately available to patients, we call off-the-shelf or allogeneic, a product that is highly scalable, so that we can meet the great demand that exists in oncology and potentially in autoimmune disorders, and do so in a very cost-effective manner? The way we go about it at Fate is through a technology that we call induced pluripotent stem cells, or iPSCs for short, and the general process is to take a young juvenile cell. We can do as many edits to that cell as we'd like, one to seven edits in today's certain configurations of product candidates, and we can select a clone that is perfectly edited, and that clone allows us to seed what we call a master cell bank. So now we have this renewable source of cells that are edited, from which we can go through a second step of the process, which is derive an NK or a T-cell, some sort of an immune cell that can go after different types of cancer or patients with autoimmune disorders, more recently. And so today, we are employing that technology in phase I clinical studies. We both have NK cell programs and T-cell programs across a variety of liquid tumors, solid tumors, and now autoimmune disorders. So we're pretty excited about the prospects, you know, in early phase I development, and looking at a year full of catalysts, particularly at the back half of the year, for at least three of our major programs in phase I development. Thank you for that overview. So we've obviously seen a shift in a lot of cell therapy players into the autoimmune space. You know, given that, what potential inherent advantages does FT819 possess against those agents being developed in that setting? Good thing. So as you point out, if we go back to the later part of 2022, there was a publication from an investigator in Germany that had demonstrated if you take lupus patients, or SLE patients, as we refer to them, and essentially treat them like an oncology patient, which is to say, give them conditioning chemotherapy and an autologous CD19-targeting CAR T-cell therapy, that you can induce some pretty profound responses and drug-free remissions in patients that otherwise have few or no treatment options. That's created a lot of interest in this space, and so we and a number of other companies are taking CD19-directed, mostly CAR T-cell therapies, but also NK cell therapies into this space. We're a bit differentiated, where we have two different approaches here. One is a product we call FT819. It is a CD19-targeting CAR T-cell therapy, and we have another program that's an NK cell that we intend to file an IND in the middle of this year, called FT522, which also targets CD19, but may allow us to combine with monoclonal antibodies and have greater advantages in a variety of different autoimmune disorders. But to get to your question, you know, FT819, in some ways, is a fairly straightforward CD19-targeting CAR T-cell therapy. What we have seen, 'cause we have dosed more than 30 patients to date in lymphoma, is a product that has dose-dependent PK. It is very safe. I think we've had a total of two Grade 2 CRS events to date, nothing beyond Grade 2, no ICANS, and as such, we've been able to administer our CAR T-cell therapy with a maximum of three days of hospitalization, relative to many of the autologous approaches that have a 10-14-day approach. So we find ourselves starting with a safer modality that may allow us to do a couple of things, including move away from Cy/Flu conditioning and looking towards combinations of FT819 with things like Cytoxan, which is a standard regimen that is used to treat lupus patients. In addition, with that safety profile, we hope to move away from the traditional academic centers, where a lot of us are starting to treat patients with lupus, and get more into the community setting, which I think will open up, you know, a window of opportunity. On an NK cell side, I would say NK cells have been proven, our data and others, to be exquisitely safe, and we have the ability to go after patients like lupus, but also expand more broadly into autoimmune disorders. With our product candidate, FT522, the exciting possibility of removing chemotherapy conditioning altogether from the treatment paradigm and simply just administering cells, which we can talk a little bit more about. I think we have multiple ways to win here, one in a T-cell format with a very safe profile, and one with an NK cell that could be highly differentiated, including outside of lupus, including into the community setting, which I think is part of the promise of getting cell therapy access more broadly. One has to begin to get out of the academic centers and into the community, so we're excited about both prospects. ... So considering that FT819, we're gonna see data for it later this year, is there a threshold for any of the biomarkers you're gonna be looking at in that trial? For example, reduction in autoantibodies, kinetics of B cell depletion, or reconstitution of the B cell compartment that will serve as a go/no-go signal for you. Yes, so I think, I guess there's two things to touch on here. What we've talked about publicly is at ASGCT, which is a medical meeting in the first half of May, we'll be looking to give an update on FT819, which is again our CD19 targeting T cell, in the context of lymphoma. And so we'll provide an update on that program. I think importantly, we'll look to extract translational insights from that experience in oncology, in B-cell lymphoma, and look to give investors and others reasons to believe why utilizing our CD19 targeting therapy would have a potential impact for patients in lupus. And we will be looking at very much what you sort of indicated. I do think we'll look at baseline B-cell levels. Some of these patients come in with very low levels. We will start, at least initially, by administering CyFlu, which is the traditional paradigm that we work with in our T-cell therapy, followed by the administration of FT819. What we hope to see is that any baseline B-cell levels will be depleted to 0 or near 0, and that depletion will be ongoing for, you know, at least sort of the first 30 days. I think as importantly as that B-cell depletion, is whether or not we are getting penetration into the tissues. So while I think one would readily expect CyFlu, as well as cells, to deplete B-cells in the blood, I do think the ability to have cells extravasate go into what we call secondary and tertiary lymphoid structures, is important. While we don't have data in autoimmune patients today, I do think we have insights from our clinical program in lymphoma that allows us to demonstrate that our cells do in fact leave the blood. They are found in places like the bone marrow and lymph nodes, and gives reason to believe that we'd be able to replicate that in autoimmunity. So I think you'll see some very interesting data in early May from oncology that underpins the rationale for doing FT819 in lupus patients. I think as we get towards the end of the year, what we've committed to is trying to share the first three to five patients' worth of data in lupus by year-end. And so we will be looking at what are the kinetics of our product in these patients with CyFlu. We'll be looking at the degree of B-cell depletion, both how deep and how long does that occur. And then as important as that is, on the back end, what does that B-cell population look like? After you've depleted B-cells, our best guess is that B-cells do come back. They come from the hematopoietic stem cell compartment, from the bone marrow, and they should generate a naive B-cell population. If that is true, then that hopefully is leading to the September data in 2022 from Schett, that shows that you can induce drug-free remissions, and essentially, potentially have a curative effect for patients with lupus. So, a lot to look forward to, but we'll start with oncology in May, and then have the first few patients' experience back at the, you know, the latter half of the year for FT819. Thank you for that overview. So since you're planning on investigating FT522 in autoimmune disorders, can you dive a little bit more into the ADR technology, to how it might be able to remove that CyFlu conditioning regimen, so more women of reproductive potential can utilize the, these types of therapies? It's a good question, an important question. So FT522 is what I'd refer to as our third generation NK cell. It contains five edits, so it has the CD19 CAR to target CD19 expressing cells. It does have a high-affinity, non-cleavable CD16 receptor. This allows us to combine with things like Rituximab in lymphoma, or potentially things like daratumumab, even in autoimmune disorders, to target plasma cells beyond B-cells. So we have the ability to do dual antigen targeting, targeting more than just CD19, but it also incorporates CD38 knockout. It does include cytokine support in the form of IL-15 receptor fusion. And then the fifth edit, which is the novel feature in this generation, is something we refer to as the Allo-immune Defense Receptor, or ADR technology. You can think about this as having an additional CAR. It targets 4-1BB ligands, which are upregulated on a patient's immune cells, often T-cells, but it can be found on NK cells and other immune cells. So the ADR technology will allow us to administer FT522 with no conditioning chemotherapy, something that we'll do in lymphoma, and I'll talk about in a moment. But the goal is to administer cells without conditioning chemotherapy. This should be much safer, and what the ADR technology should allow for is that NK cell to thrive in a background where the patient's immune system is intact. So it will selectively engage a patient's host immune system. It will potentiate or excite the cell. It will be an on signal for the cell and should allow the NK cells to proliferate a little bit, but be much more highly active. So we feel like this ADR technology allows us to get away from conditioning chemotherapy. This experiment we're already running in B-cell lymphoma. We have dosed the first patient a few months ago. We're starting with traditional CyFlu therapy. But after we clear the first dose level with CyFlu conditioning, it will open another arm in the study, and in the next couple of months, we should be dosing patients without conditioning chemotherapy whatsoever. So we'll have that first proof of concept, if you will, by the end of the year in lymphoma for FT522, and we will follow suit quickly with an IND filing around the middle of this year for autoimmune disorders. And I do think to the extent that ADR technology works, it is a game changer for patients for lupus. You mentioned, you know, women in this context. Unlike oncology, most patients with lupus are women. They may be of reproductive age, they certainly have careers, but your average age range is between 14 and 45. This is a very different set of patients. These patients have careers, they have lives that they need to leave and to live. They need to have an intervention that is safe, effective, but with a keen emphasis on safety. So I think it's pretty obvious the ability to move away from chemotherapy in this setting would be pretty profound, and we'll have our first sense of whether that's possible at the end of the year on lymphoma, and then begin to answer that question again in autoimmunity, probably in 2025. Since you intend on developing both an NK cell and T cell product for autoimmune conditions, how are you thinking about the clinical development of each agent from an indication perspective? Sure. It's an ongoing question. You know, we say the word autoimmunity, but it is a myriad of diseases, right? There are 70-80+ disorders that would be constituting an autoimmune disorder. We've started like most individuals, most companies, with a T cell. That's where the historic precedent is, right? This is where we have clinical data from the likes of Schett in Germany. And so we've started with first principles. T cells seem to work, and we use an oncology paradigm by using CyFlu with cells. That has the ability to have a potential transformational change for patients with lupus. So we're starting where just about every company is starting. I can see us moving quickly away from CyFlu conditioning, as I mentioned earlier, and using combinations with 819, with things like Cytoxan, for example, as a way to get out of the academic center and into the community. So I think that's an important first step. I also see a world where, assuming we continue to have a very safe profile, we can begin to go into the community setting in combination with things other than CyFlu, and have a differentiated profile there. So for T cells, I think there's multiple paths, including expansion beyond lupus, for areas that are B-cell-mediated disorders, and I think there are a number of those that are already being explored. I think you'll see us do something similar. On the NK cell side, as I alluded to earlier, we will still go after CD19 targeting, so B cells are still very important. But you can envision a subset of autoimmune disorders that are impacted by autoantibody-producing plasma cells, for example, where a target like BCMA, we're already seeing being deployed in this setting, or something like CD38 may be more relevant. We have the ability through combinations with monoclonal antibody to go in that direction. To the extent that our ADR technology with FT522 allows us to be safe, effective, and chemo-free, I think that substantially increases the reach of an NK cell for FT522, for example, into the community setting and across many different disorders. So I think there's room for both. The total addressable market for autoimmune disorders is thought to be substantially larger than it is in oncology, so I think there'll be multiple participants here. But I do think scale matters, I do think safety matters quite a bit, and we feel really good about our platform there. And the cost efficiency with which we can do these things is almost unparalleled in the industry. So I think it sets up really well. We're delighted to have both T and NK cells, and I think there's room to differentiate in both approaches. Thank you for that. So, well, from a regulatory perspective, we've seen cell therapy come under increased scrutiny from the FDA due to secondary malignancies. But when we take into account that autoimmune disorders aren't life or death like oncology, how is Fate thinking about the deployment of those agents in that autoimmune space from a regulatory perspective? Yeah, good, good question. I, I don't know if it's coincidence, it may not be, but at the time where companies were getting very excited and filing IND applications to treat lupus patients and other autoimmune patients, we had this sort of observation by the FDA of secondary malignancies with autologous CAR T-cell programs. And so there's been always an extreme focus on safety. I think that's now even more important than it has been before. I think when you consider what may be contributing to secondary malignancies, it could be ongoing chemotherapy, right? A lot of these cell therapies are being used in heavily relapsed refractory patients. So the constant immunosuppression through things like chemotherapy, it could be a contributing factor. I do think there are concerns, though, however, with integration of viral vectors to CD19 in various places within a T-cell. That is true for autologous programs. It also can be true for many allogeneic programs. So anytime you are engineering a population of cells, you are going to have some cells that are, that are correctly edited. You will have many that have off-target effects and, and potentially integrations into parts of the genome that you do not want, that are not desirable. As you compare that reality of autologous CAR T-cell therapy and many donor-derived allogeneic CAR T-cell therapies, if you look at our platform, and going back to what I said before, there's two major differentiation characteristics of our platform. The one is we do all of our engineering at the iPSC level. So whether we do one edit or five edits, we do all that at the iPSC level. When we do that, we still end up with a heterogeneous mixture of cells, but we go through an important additional step, which is single clone selection, whereby we can characterize the cell, each cell that we have engineered, and make sure that that cell has all the right edits in all the right places. If it does not, we discard it. We cannot use that. And so we go through a very rigorous process of making sure that these cells are engineered with 100% fidelity. We characterize extensively those cells before we grow them, and as we seed our master cell bank, we go through extensive characterization... things that we've worked with with the FDA, that they are very comfortable with our characterization. So we're starting, in other words, Robert, with a very homogeneous material to begin manufacturing. We then go manufacture. We will pull a vial of the master cell, cell bank, and we will differentiate over roughly a 30- 40-day process, either to an NK or a T cell, through our proprietary processes, and then we again characterize that final T cell or NK cell product. So we do this very rigorous assessment at the beginning and at the end to make sure that we've got full integrity of our starting material and of our final products. That process is really not doable in any degree in an autologous or a donor-derived allogeneic approach. So we feel like we're dealing with a much safer starting material and final product. We've had great discussions with the FDA, and I think the best proof of that is we recently filed and received IND clearance with the FDA for a seven point edited T cell. It happens to be in collaboration with Ono Pharmaceutical. We call that product candidate FT825. But we filed that IND for a T-cell with seven different edits and cleared that IND in 30 days. So I think that's sort of evidence of we understand our process, we understand our products, we've got a good working relationship with the FDA. As at least as it relates to potential off-target effects from editing, we don't have that to contend with. So we may very well be dealing with a safer process and a safer product. So why don't we shift gears now to cancer-focused portion of the pipeline? You know, as CD19-targeted and BCMA-targeted agents move into the earlier line settings, is there really still space for similarly targeted agents in later line settings? And what is the internal objective response rate benchmark that your assets are going to have to demonstrate to advance into later phase trials? Yeah. So admittedly, whether we're talking about CD19, with, you know, for us, it's FT819, in lymphoma, it's highly competitive. We could say the same thing about BCMA in multiple myeloma, right? So at the heart of your question, these are highly competitive landscapes, many companies with different modalities, cell therapy, T cell engagers, other approaches that are often, often going after the same biology. There's been a shake-up in the treatment paradigm, and there are interest in moving cell therapy into earlier lines of therapy. I think there have been some challenges associated with that. I think the benchmarks are very high. I think the target product profiles, if you're dealing with CD19 or BCMA, are as high as they have ever been. So as I think about FT819, which is our first-generation T cell, we are at the highest dose level that we intend to evaluate, and we'll have a go, no-go decision in the next few months here. I, I think the bar is very high to move that forward. I don't know that there's a lot of space to operate. I think you have to have a highly differentiated profile, either on the safety side or on the efficacy side. More than likely, you need both. So I think the bar is very high. I think the same can be said for BCMA. There are a number of approved CAR T cell therapies. There are increasingly ADCs and T cell engagers moving into this space, both BCMA and other targets as well. I think that is a very high bar. So I look at these programs as potential good proof of concept for T cells, for 819, for example, or we have a program called FT576, which is an NK cell, where we've employed a novel binder to BCMA, and it's important that we risk that binder. So I think with both programs, we're at the highest dose level. We're committed to a go, no-go decision here in the next few months, and we'll decide if whether or not we've achieved those high benchmarks. But I do think you're looking at probably T cell engagers as a good benchmark in the, in a highly refractory setting, where you're looking at, you know, call it 60% response rates and roughly 30% CR rates, is probably the minimum bar that one has to achieve to feel good about chances of approval and competing effectively in hematologic malignancies. So when we think about the datasets that are going to be coming later this year for 522, 576, and 819, do you have frame expectations around those datasets? Yeah. So I think there's three datasets that most investors and folks are focused on. The first one is FT819, and while we have a lot of experience in oncology, we've already talked about the high bar. So I think expectations are reasonably set, that it's going to be a very high bar. The data will be what it's going to be. Keeping in mind that a lot of those patients that we're treating in lymphoma have already had a Yescarta. They've already had autologous CAR T-cell therapy. So it's a more challenging patient population, but I think expectations are reasonable. Most of the interest, though, for FT819 has been the early patient experience in lupus as a potential proof of concept that an iPSC-derived T-cell can perform well, can be effective, can lead to an immune reset. And again, with all the benefits of a highly scalable, highly cost-efficient platform, that could be a very compelling value inflection point for us. So I think a lot of people are looking at the end of the year, what does the first three to five patients look like in lupus for FT819? I would say the second key dataset for most people are FT522. And again, we're starting in lymphoma with two arms. The first arm is the traditional chemotherapy, conditioning, followed by cells. But as I mentioned earlier, after we clear the first three patients in the first dose level, we will ungate the second arm of the study, which allows us to dose patients with no conditioning chemotherapy whatsoever. That proof of concept of being able to administer multiple cells, NK cells in this instance, with 522, and potentially show a benefit... Obviously, there would be a safety advantage to not using conditioning chemotherapy, but if we see good clinical benefit, I think there's opportunities for not just lymphoma, but some profound opportunities in autoimmune disorders. There's almost a proof of concept that people are looking at. Can ADR technology work? Does it allow a game-changing shift to occur in moving away from chemotherapy conditioning? That would be another significant value inflection point for us. I would say the third one that most folks are focused on is our FT825 program. That's, again, in collaboration with Ono Pharmaceutical. It is a 7-point edited T cell, and in many ways, as you know, our T cell has worked wonders for certain liquid tumors. We have not been able to really crack the code and make significant headway in solid tumors. This program, with seven edits, begins to get at some of those key challenges in solid tumors. So if you think about it, you have to infuse cells, they have to be able to find the target somewhere in the tissue, they have to be able to access that tissue, they have to be able to deal with the tumor microenvironment, which is also very hostile and non-welcoming, and it may have to be able to go after more than one target. At least as our construct of FT825 is derived, it should be able to address a lot of those key factors. So I think a little bit goes a long way here. If we have early patient data at the end of the year with FT825, if you're seeing responses with a HER2 targeting agent in a highly refractory population, that would be a very encouraging sign for cell therapy, and I think, again, a very important third inflection point for us. We will also have myeloma data and lymphoma data for other programs, but I think from the three value inflection points, it's 819 in autoimmunity, 522, and specifically no conditioning in lymphoma, and then lastly, 825 in various different solid tumor types. So clearly, you have a bunch of clinical trials that are coming this year. You know, outside of 825 for HER2, do you intend on pursuing development of solid tumors beyond the collaboration with Ono? And if so, what does that look like? That's a good question. I think the short answer is yes. What it looks like, I think, is to be determined. I'll say a couple things. I've already alluded to the seven edits in FT825. The collaboration with Ono is really a match made in heaven in terms of we have created what I think is an optimal T cell backbone for solid tumors. We can use that backbone that we've created for FT825 for any program internally that we choose. So while we can't use their HER2 target binder and their CAR, we can insert a different CAR. If you look at us historically, we've had interesting programs like FT536 that we had to discontinue about a year and a half ago, that targets MICA or MICB. That's a target of interest. Maybe there's a next generation T cell program that would have MICA and MICB. But there are other targets that we've been exploring internally. We just have not conveyed publicly what our interests are. But I think you'll expect to hear more about that later this year. But I do like the backbone that we're working with, with 825, and it allows us to plug and play in other different tumor types. So I would expect us to look at what 825 is capable of doing. We have the potential to introduce ADR technology there, if we so choose. So I think there's multiple ways forward, but I do think our platform uniquely lends itself to potentially treating patients with solid tumors, and something we'd be interested in exploring much more. Unfortunately, we've run out of time. Thank you so much for joining us today, Edward. My pleasure, Robert. Thanks for having us.