... Hey, everyone. Welcome to our next session with Fate Therapeutics. My name is Li Watsek, a biotech analyst here at Cantor Fitzgerald. I'm very pleased to have Bob, our CEO of Fate, joining me at the Fireside Chat. So maybe to start us off, I'll hand it over to Bob to give us some quick intro remarks. Sure. Thank you, Li, for the invitation. Great conference, so Fate Therapeutics, I think, you know, the first tagline here is making transformative medicine accessible to all. So we really think CAR T from the first days back in 2012, 2013, and how it played out in oncology, it's really something that no other medicine can provide. It's a living drug. It has the ability to expand upon antigen engagement, so when it sees the disease, it's able to turn the tide in the favor of medicine because it expands. No other medicine has this ability. So while this is a very remarkable medicine, it's very hard to manufacture, it's very hard to make and accessible in a broad manner. And what we've done over the past 15 years is to utilize stem cells as a foundation to then be able to make nearly a unlimited amount of these cells. And I say nearly unlimited because you can't say the word unlimited, but we can make it in a way where all other medicines are made, and we use the term off-the-shelf, because when you go to a pharmacy, the medicine is on the shelf, and it's ready to come off. It is Fate is really pioneering this. There are very few companies that have this science and technology, let alone be able to manage it, because it is a complicated process. But at the end of the day, we've figured out how to do it, and we're applying it in both oncology and autoimmune disease, and we're very excited about the next chapter of the company. Okay. So I think for Fate, a lot of the investor focus is really on your autoimmune, you know, product right now. That's FT819, that's CD19 CAR. And I guess, you know, a big challenge for a lot of investors is just the competition for you know, CD19, not only in CAR T, but you're also looking at other modalities, TCEs, and recently we've seen a lot of, interesting, you know, in vivo CAR T. Mm-hmm. I guess for you, the question is, you know, what is your view on the landscape? Where can FT819, you know, fit in? No, absolutely. I'll start by saying it, it fits on top. When you look at, like you said, there are other medicines out there that also target autoimmune and lupus specifically. It's B-cell depletion. Many other medicines can do that. But, you know, the challenge is that no other medicine does what CAR T does, and FT819, as I mentioned earlier, is like no other CAR T because it's available, accessible to all. And maybe I'll just take a quick crack at each of these medicines and say why they have limitations and why 819 is very different. When you look at T-cell engagers and monoclonal antibodies, they are effective in eliminating B-cells, but they're limited in many ways. One is they don't traffic into tissues where the disease hides in. They're very reliant on the trafficking of water for them to move into different tissues. So if the tissue doesn't perfuse well, they're not gonna get in. And then the second part is, when they do get in, they're not the immediate effectors. They need to recruit either NK cells or T-cells, monoclonals or T-cell engagers, respectively, to do the most of the work. So now they're dependent on the patient's immune system, and not always the patient's immune system is healthy and ready to do it, because if the patient's immune system was healthy, they would have eliminated the disease already. And then the other challenge is that when you do utilize the host immune system, for example, T-cells, the T-cell engagers exhaust the T-cell compartment. And that makes it a problem because now you're more susceptible to other diseases because you've taken the entire bulk T-cell population, and you've directed them against one single thing, and now they're tired, they're exhausted. So it really makes it challenging. And also, when you think about treatment of monoclonals and T-cell engagers, it's not one and done. It's not a simple couple of infusions. The patients are always on it. Once you're shown to have some sort of response to medicine, you're always on T-cell engagers, and the patients don't like that as much as you would imagine because they're constantly having their body's T-cells activated. So there are a lot of challenges there, but I do appreciate that it is off-the-shelf. It is available to and accessible to all patients. So it does have a value point there, but but it has many challenges. And in vivo engineering, way too early. You know, I was a scientist not too long ago, and I still had a challenge engineering cells in a Petri dish. How are you going to do that in a human? So the uncontrolled variability per patient of in vivo engineering, it's gonna make it very challenging to see it come into fruition in the near future. And the last thing I'll say about in vivo engineering is that many diseases are complex, so a single edit is not enough to eliminate the disease. You need multi-editing perspective. So there are a lot of things that, at the end of the day, you would imagine are challenging for these medicines. But when you bring in, and obviously, I'm, I'm biased in many ways, but I believe this, and that's why I'm sitting here, is when you bring in FT819 into the picture, you have the potency of a CAR, the transformative capability of a CAR T-cell, combined with the accessibility, it's really gonna win at the end of the day, and we'll talk more about how I believe it's gonna win at the end of the day. Yeah. Maybe let's start with the data. Sure. I think the first patient that you guys treated had very remarkable remission, but that's n of one. Mm-hmm. As you go into, you know, more sites, enroll more patients, how should we think about, you know, the efficacy here? Do you expect, you know, we're gonna see the, you know, replication of such remarkable response, or is there a bar that you, you guys are aiming for? Sure. No, another great question. So I'll start with FT819 preclinically. It is a very potent product. Now, when we went into oncology five years ago with FT819, we had to control the product to have a balance between safety and efficacy. So we fine-tuned down efficacy to balance safety. We didn't want to really endanger patient lives. And so when we went to aggressive lymphoma, we did have 40% CR rates with CAR T-naïve patients. The durability wasn't there, though, and that's because the CAR was fine-tuned. So now you fast-forward a preclinical potent product that had activity in aggressive disease into a disease setting that has a lower disease burden, you are not gonna be surprised if you see not only initial efficacy, but durability, as well as safety, because it was made to be safe. So when we saw that first patient experience, as you mentioned, and now the patient is out over a year with durability of response, she's doing great. Now, like you said, one patient, great. How about more? So as we showed in June, additional patients are having similar response and reduction of disease in a significant way, a way that you expect a CAR T would deliver. So these patients were treated with one infusion of FT819 with lower conditioning. So we've always gone into autoimmune with the perspective of, we want to make it as feasible for patients as possible. This is not like cancer, where you find out you have tumor, "Oh, my God, I've got to go to the hospital and get it taken care of." These folks have been living with the disease for 10 years. These folks have lives. They go to school, and we want to make sure that when they got infused with our product, they could go back to their lives in a relatively short order. That's why, unlike other CAR T-cell programs, our hospitalization is only three days, and I am very confident to say that by end of the year, we would have eliminated that down to no hospitalization requirements. So now you have a product that's shown to be efficacious in a handful of patients, a safety profile that is second to none when it comes to CAR T-cells, and the operational feasibility of having no hospitalization requirements in the near future, available off the shelf today, and no requirement of patients coming in in advance of their infusion to procure their T-cells and get off their medication to do so. This really becomes the potency of a CAR T with the marriage with the operational feasibility of a biologic, so we've seen that play out. The activation of sites appears to be responding to this favored modality of medicine, and we'll be talking about more patients in the near future. Okay, great. So, you know, when we talk about different modalities, I get the efficacy, the potency part. But I guess, you know, for something like antibodies or T-cell engagers, I think the argument is you don't need conditioning regimen. You can give in the community setting. So I think what you guys are doing right now, right, just testing two, you know, regimens- Mm-hmm ... will be, you know, great. One is, you know, no conditioning regimen. The other, what I call, is light- Mm-hmm ... conditioning regimen, fully fludarabine-free. So, you guys have generated some data in both- Mm-hmm ... sort of regimens. Talk to us about that. Sure. Have you seen any sort of differential, you know, efficacy when you use different conditioning regimens? Sure. So in regimen A, where it's light conditioning, I would even put an additional parenthesis on conditioning. This is a single dose of cyclophosphamide. We either do single dose of cyclophosphamide or two doses of bendamustine. Cyclophosphamide is something that rheumatologists give, rather frequently. So majority of the patients that have been treated with FT819 with cyclophosphamide had seen cyclophosphamide either three times or six times in prior therapy. So this is not something that is not being done, at the rheumatologist's- Right ... office on a regular basis, this is not going to be considered as something that requires additional overview or additional operational requirements. The physicians are giving it to patients, and patients are receiving it. So when we talk about FT819 with cyclophosphamide, it is not really an abnormal event, and so when we go into outpatient setting with FT819 as we eliminate hospitalization requirement and combine FT819 with cyclophosphamide, it is still as feasible as a biologic because the physicians are used to giving it, the patient knows it, and all this can be done in an outpatient setting, so that part of it, we're very excited about in regimen A. But to your point, regimen A does have an additional added, right? It's either cyclophosphamide and FT819 or bendamustine and FT819. The data looks fantastic here. I mean, we're seeing SLEDAI drops in a dramatic way. But we also had another theory. What if we gave FT819 on top of maintenance therapy? So these are patients, and now this is regimen B. These are patients that have been on maintenance therapy, so their disease is controlled, so their SLEDAI score is a little bit lower, so a little bit lower disease burden. What if we give FT819 without any additional agent on top of maintenance therapy, and if that allows the patient to then no longer need maintenance therapy, that's a huge win. So that was our theory. Perhaps the maintenance therapy, which is a steroid or immune suppressant, has dampened the immune compartment, so FT819 has a little bit of space to grow, has a little bit of space to proliferate. So we did that with the first patient, as we mentioned at EULAR, and we saw a very significant decrease in disease. The patient responded extremely well, and it was a surprise that we're now further investigating. Now, the question is, is a single dose enough? Is dose level one enough? So this is where we're doing a little bit of dose fact-finding in regimen B, because we wanna go for depth of response, and we think we can basically achieve that through higher dose or multi-dose. So in a December Type D meeting, we were able to get the green light from the FDA to multi-dose FT819 within a cycle, so then we can dose not just day one, but also day one and 15. So uniquely, unlike other CAR T cells, we can multi-dose. Also, we can dose upon relapse. So just like a biologic, monoclonal antibody, you know, you can dose on a regular basis, our CAR T cells, because they're off-the-shelf, because they're safe, and both regimens can be given in a retreatment manner. But going back to regimen B, we wanna see whether two dose is better than one, and we wanna see whether a higher dose is required. So there's a little bit of dose fact-finding, but to your point, if FT819 in regimen B does work in an outpatient setting, it will truly be remarkable. But I will still say regimen A, FT819 with cyclophosphamide is an afterthought. Mm-hmm. So it's not that cyclophosphamide is gating anything in regimen A. So both regimens are in full play here. The challenge with CAR T has been availability, the procurement of the T cells, the number of days in the hospital that's required, the safety profile, all those things are being mitigated when you use FT819. So when you think about, you know, pivotal trial, which regimen you're going to move forward with, or both, will be on the table? So we received RMAT designation from the FDA. So take a moment to say they've been outstanding collaborators with us over the past 15 years. In that RMAT designation, both regimen A and regimen B are in play. We've had our initial conversation with the FDA, very, very fruitful conversation with them on our path to pivotal. The focus has been on regimen A. That's the most advanced. As I mentioned in regimen B, we want to do a little more dose-finding- Mm-hmm ... multi-dose versus single dose, higher doses. But in regimen A, we're, we're pretty much done with majority of variables. The only variable really remaining is, do we go with dose level one or dose level two? And we're doing expansion in both to see which one is the better dose, balancing safety and efficacy, and also cyclophosphamide versus bendamustine. So in our completion, by the time we complete our phase one study, which I think will be early next year, we'll be able to have addressed those two questions, and then with the continuous productive conversations with the FDA, we'll see ourselves commencing the pivotal study second half of next year. What about redosing in the pivotal trial? And you also mentioned the three-day hospital stay- Mm-hmm ... may not be necessary by the end of the year. Would that be the case for the pivotal trial? Absolutely. The pivotal study is expected to have no hospitalization requirement, and the redosing, at least for regimen A, it would be after the primary endpoint has been achieved. So we will. We don't want to get in the way of complicating the first, you know, the primary endpoint analysis. Mm-hmm ... but we are discussing on once we've achieved, have reached a timeline of the primary endpoint, we should redose if the patients require it. Okay. And then in terms of, you know, trial enrollment, you mentioned you open eight to ten sites. I guess, where you are- in terms of, you know, site- Mm-hmm activation, and we've heard from, you know, multiple companies, you know, it has been a challenge. Mm-hmm. What is your sort of the current view on or projection for enrollment? That's a great question, so this was a challenge for us in 2024 because we only had two sites. Many of the established players had accumulated different sites, and the sites that were not buying into our off-the-shelf sales pitch, I would say, for lack of a better word, they didn't know any better, what auto CAR T was gonna be like, so come 2025, we go through EULAR, we present great data, and at the same time, the sites are finding it challenging to give auto CAR T because of the manufacturing challenges, because of many of the, you know, things we discussed earlier, so now we have eight sites activated within four months of really pushing on this agenda, of focusing on FT819, which we'll talk a little about later in pipeline prioritization. But once we focus on FT819 with the data we had and the experience, the sites had themselves, we really now are engaging more sites, activating at a very great pace. As I mentioned, we have eight already. We'll probably have another two to three in the month of September. And I'll tell you, the sites we're activating are not hitting the traditional point one patient per month number, where this is pretty crazy, where you're seeing, you know, each site give you one and a half patients a year. Mm ... or less than that. Yeah. We're actually, if you include our pipeline, each site has multiple patients. So we're gonna flip the balance between a lot of sites, few patients, to the traditional many patients, few sites. You know, even in oncology, we really hit our cadence of patient enrollment once we went over 10 sites, and I see that happening now. Now that we're getting close to 10, and we expect to be somewhere close to 20, including Europe, by end of the year, we're gonna be hitting a natural cadence that's gonna be a lot better than 0.1 patients per site, and that has to do with all that operational feasibility. The experience that the sites are having after they treat the first patient is really getting them excited to go after the second patient, and the third, and so on. Part of that is also the hospitalization requirement. There's no fights for beds between different patients. Everything just really has come together nicely, and I think this is why it's easy to say, or it's feasible to say that we'll finish our phase I trial by early next year, just because we just are seeing enrollment at a different cadence than what other companies are seeing. You're seeing multiple patients per site. Is that over what period of time? Remember, we dosed five patients with two sites in 2024. Yeah. These next six sites didn't really come online until the April-May timeframe, and we're already, the sites are, including the pipeline, having multiple patients. In a matter of four months, five months, we're having a lot more sites activated and already seeing numbers that are much better than 0.1 patients per site per month. Okay, that's great to hear. And then in terms of the next data update, it sounds like you guys might have something very meaningful at ASH or early next year. Maybe walk us through, you know, what we expect to see, and obviously, there is, you know, very high benchmark out there already for CD19. What should be sort of the bar for success? Sure. No, great question. So the next data share will be ACR. We have a couple of presentations at ACR, and ACR's end of October. Data cutoff happened this week for us, so it will be very hard to talk about the durability of response of those patients we just talked about over the past three, four months that have been treated. But you will get a sense there that enrollment and site activation is at a different level than it was, for example, the previous ACR a year ago. As I mentioned, we will be completing our phase one early next year, so we'll be rolling out that data as well. In addition, we'll be rolling out data about regarding removal of hospitalization requirements and patients treated without the hospitalization stay. There is a cadence of data coming out, but the first one will be ACR, talking about this new chapter. The new chapter when we have now gone beyond two sites activated. Okay. And then outside of sort of lupus, it sounds like you guys are looking at other autoimmune indications as well. What has been the progress there? Have you guys, you know, treated any patients in the basket trial? Yeah, so that's a great point. Another positive conversation with the FDA. We were able to add three more diseases: systemic sclerosis, vasculitis, and also myositis, and in those settings, both regimen A and regimen B are in play, so we will do conditioning and with maintenance therapy, and each protocol, each site that's activated, has a variety of these diseases embedded in their protocol, so I won't talk too much about first patient treated in any of these categories, but I'll let you know that we are seeing patients in the pipeline that are not lupus patients, and we're moving forward, and you know, I don't like to just give one data piece at a time. We usually like to put it in a cohort. So we'll be giving an update, but we're actively screening patients outside of lupus as we speak. You know, when it comes to CMC, it sounds like you're gearing up for the pivotal study next year. I guess, what additional work that you need to do to be, you know, pivotal-ready? Mm-hmm. So this is another major differentiation for us. As we mentioned earlier, we have a master cell bank that basically one vial of a master cell bank gives you 400 vials of a working cell bank. We just did this very recently, so those numbers are real, and that 400 vial is the starting point. Each vial can give you trillion of CAR T cells, so product is nearly unlimited. Mm. So that has been something we've been working on for 15 years. We're very good on the CMC side. We have our own GMP facility that is capable of producing product for commercialization. We've been audited many different ways from companies as well as regulatory agencies. In addition to that, our capacity is relatively large. We can make something close to 50,000 doses per year. I'm even challenging the team to think about a twenty-four/seven operation. Will we be able to make more? And that is not requiring any more capital. We have all the equipment we need. It's just a matter of shifts and manpower to be able to produce this. The starting material is there, and we've been doing this for so many years that our conversations with the FDA have been a 15-year conversation. And so when we went into the RMAT, we did ask some CMC questions and had some good feedback, and we're working on it. Unlike many other folks in the CAR T business, we're not dependent on a third party. We're not dependent on new concepts. We're not dependent or worried about scaling. It's a matter of execution. I guess just given some, you know, changes at the FDA, particularly within the CBER, you know- Mm-hmm Department, what are you guys seeing in terms of your interaction with FDA? Have you seen any sort of shifting the bar kind of thing? No. We've seen great interactions from previous groups to now. So for us, as I mentioned, we're constantly having interactions, and it's been productive, collaborative from day one, and that's continued into this year. So very pleased with our interactions with the teams that we're working with. They're very collaborative, they're very scientific, very understanding. So far, everything's been great. Maybe a little bit time, we can, you know, talk about the solid tumor- Sure - pipeline. You have a bunch of, you know, products here. You got, you know, HER2 as well. Mm-hmm. I guess there's not a ton of investor focus here, but what's exciting to you? Sure. Absolutely. So, two things I'll talk about really quickly. One is first FT825. This is in collaboration with Ono Pharmaceutical, a great partner for the past seven years. We went into targeting HER2 with CAR T-cell, seven-point edited CAR T-cell. But the one thing that I wish we would've done differently is when we went in, we didn't have a strict requirement for HER2 expression, even though we're downstream of two anti-HER2 therapies, Herceptin and HER2. So that's made a challenge to go into tumors that are broadly expressing HER2. So for DL3, dose level three, we now have a patient enrichment requirement. We put in an amendment, and the patients have to be HER2 3+ to be treated. So I'm very excited to wait for that result. Mm-hmm ... when their antigen is there, and then be able to target the patient correctly. Having said all that, the next generation CAR T-cell, 836, it really is a unique strategy to target almost every tumor, and that seems like wishful thinking, but we've been working on this for seven years in collaboration with Kai Wucherpfennig at Dana-Farber, and so we are targeting stress ligand, not a lineage marker, not an antigen that's been pretreated before with different therapy. We're targeting a stress antigen that is associated with aberrant growth, so the cells transform, stress antigens go on the surface, and the patient's immune system recognizes that and eliminates it, but cancer has found a way to escape because they cleave the antigen off. We target what remains on the cell after cleavage and are able to prevent the cleavage. So by doing that, you're actually now ubiquitously targeting every cancer there is. And the second thing we did, we took the brakes off. So while with FT819, we were very careful in balancing safety and efficacy, but we learned something in solid tumor. You got to take the brakes off. CAR T has to be potent. So now we have the potency of a full-blown CAR T-cell with the targeting capability that goes after something that has to be there and is not eliminated through prior line of therapy. So I'm very excited about this. This product also has our sword and shield technology, so we're going into this treatment of solid tumor without the need of any conditioning. So I'm very excited about this. This is a cleared IND now, and we expect to dose patients in the next month or two. Okay, and then, when do you think we may be able to see some clinical data? I hope the first three patients are so spectacular that I'm out there talking about it in early spring. Okay, early spring, I- Yes. I was hoping for this year. you know, usually you don't want to get too excited with the first patient, but I'll call you if the first patient goes into CR. Love that. So I guess goes back to capital allocation. I think autoimmune, you know, pipeline is already a lot to take on, and you also have some exciting solid tumor programs. So how do you prioritize? Yeah, no, a great question. When I first became CEO, it's very important to save money. We always joke about using coupons now, so every purchase requires a coupon, a coupon code. But that was effective. Pipeline prioritization, focusing on FT819, about 70%, holding off on FT522, the CAR NK program, for a strategic opportunity, and saving money has now extended our cash runway by a year. So where previously we had given guidance to a year in 2026, most recently, we gave guidance to a year in 2027. So we have about $250 million with about a, you know, two-and-a-half-year cash runway. So this really allows us to complete the pivotal study for FT819, and really focus on autoimmune disease. But because we've made the master cell bank, because our manufacturing process is just an execution, and does not require capital equipment anymore money into that, we're able to now, at a very low cost, prosecute FT836 and FT839, our next-generation products. So we're able to do all that and still have our cash runway. So I think we're sitting in a very good position for what we will call our coming out party or our comeback party in 2026. Yeah, love that. Thank you so much, Bob, and I think we covered a lot of ground today. Yeah. Thank you.