Hi, everyone. My name is Daina Graybosch. I'm an analyst here at Leerink Partners. I mostly cover immuno-oncology companies and have been following Fate for a number of years now. I'm excited to host our new CEO, Bob Valamehr. I think because you're new in this role, we'll probably start there. First, maybe people know, but could you just give us your background and sort of at Fate and prior to Fate as well? Sure. Thank you for the invitation, Daina. I've been at Fate Therapeutics for 16 years now. I really came in in 2010, focused on starting this iPSC platform. Back in the day, it was more about trying to figure out what to do with it and trying to solve about how to culture these cells, which were very complicated. I came in early on to try to start the platform. Since then, I've been working through up in R&D leadership as the platform took shape and became the centerpiece of the company. I also developed with it. I ended my R&D tenure as President of Research and Development last year. Prior to that, I was at Amgen and UCLA in terms of training at UCLA and previous experience at Amgen. Really, my career set the stage for the iPSC platform, either working on cell line development at Amgen and trying to understand how to make a master cell bank or looking at oncology, immunology, and pluripotency at UCLA. It all perfect storm came together. I took the baton from Scott last year and the last year. I'm carrying things forward. What changes should investors expect with you as CEO, whether it's portfolio or platform strategy, how you communicate with us and investigators, development strategy? That's a great question. The focus right now is on moving FT819 forward. We did a lot of investigations at the phase one level and got to learn a lot of victories and successes and also failures in terms of making sure the right product is in the right place. I really believe having made 819 and for the reasons we made it, I don't want to get into the details today, but it was made to balance safety and efficacy. I think it's found its home in autoimmune disease and all the value points that come in together from a perspective of truly being off the shelf, cost-effective, having reduced hospitalization requirements that are probably going to go away over the rest of this year, expansion into other diseases in autoimmune, being a great B cell depleter, 819. It really sets the stage of believing that there is a path to approval here for FT819. We will obtain more patient data and create the paths to a pivotal study. That is different than Fate of old. Not because it is me versus Scott. It is more about we have found the right product for the right disease and moving it forward. There is going to be a lot of focus on moving 819 forward. We will continue with innovation. That is near and dear to my heart. There is a next generation CAR T platform rolling out. Really, the main focus of the company is to push forward with 819 and get our first product approved in the near future. Got it. Rather than six programs and five indications and so much going on, we used to always publish just this map of everything going on because it was always really complex. Now it's like, this is it. Let's all focus on 819 and this path forward. Yes. Let's put a percentage on it, like 70%, 75%. There is still a lot of excitement in the background that we want to prosecute. It will be in the background, such as next generation CAR T targeting MICA, MICB, or next generation CAR T targeting CD19 and CD38. We still have brilliant scientists in the company. We are going to pursue innovation and next generation of products. The main focus is going to be getting 819 approved. Investors also remain concerned about your cash burn. Now that you are not doing as much programs in the clinic, how are you thinking about capital allocation? Are there ways to extend your cash runway and sort of bring down the overall burn with your focus strategy? Scott left me with a nice gift over $300 million. That is going to get us through year end 2026. There are several buckets to take advantage of here. The first bucket is being very diligent with our money. Two years ago, when we went to vendors and tried to renegotiate agreements, they did not want to talk. Now times have changed. They are feeling it too. We are renegotiating a lot of our POs, a lot of our agreements, and really being careful with how we spend money. That is the first one. The second bucket is being very deliberate with our programs. As we will talk about 522 later, making sure that our focus on clinical strategy is something that is going to allow us to have a longer runway as opposed to, like you said, do a lot of things at once. The third thing is trying to get non-dilutive cash. We have been very fortunate to have California Institute for Regenerative Medicine help us with grants. We have several grants with them. We are talking several million, $8 million, for example, for FT819 and $4 million for FT836. There are more opportunities there. Also, business development opportunities where we are having a lot of great conversations. I think there is a path there as well. What is FT836? Sorry. This is a next-generation CAR T targeting NKG2D and NKG2D ligands. That will be an IND that we will roll out first half of this year. Beyond Fate, the equity markets have been really challenging for cell therapy developers. Actually, it's probably the number one discussion and question I've heard at our conference, which is, what will actually turn around the negative sentiment for cell therapy in Allo overall? What do you think? I think what I believe is by end of the year, as multiple CAR T companies roll out their data, it is going to look impressive. Because when you look at historically in autoimmune what's been approved, while there is success there, the bar has been pretty low. Just most recently in the New England Journal of Medicine by Roche, the percentages are very different than what CAR T is expected to deliver. I think while monoclonal antibodies will have some data there and T cell engagers will also have some data, there's still going to be a lot of concerns with T cell engagers. Do you want to, in a promiscuous way, activate every T cell in the body? The toxicity profile may not be ideal. Meanwhile, I think CAR T is going to show that we shouldn't be expecting Schett-like numbers all the time. We should be expecting improved outcomes over previously approved or currently trajectory-approved programs in autoimmune. I think with time, and hopefully that's just this year, we will see the romance come back with CAR T. Because it is working, there is activity there, not just for us, but for our peers. We just believe we're a little different because we're off the shelf. I guess let's talk about your data in autoimmune. You had data with FT819 last year at ACR and ASH. Could you, in three patients, and I wonder if you could summarize that, and what were the most important takeaways for the potential of your program from those early data sets? The first takeaway was that this balance between safety and activity really paid out in this disease-specific setting. All three patients, the safety profile was as expected, similar with the 50 patients in oncology. Minimal adverse effects and just really just a preferred safety profile there. On the efficacy, we originally set up the protocol to have combination with cyclophosphamide and fludarabine as a conditioning agent or cyclophosphamide alone or bendamustine alone. We noticed that physicians did not gravitate to CyFlu, but more so to Cy or benda, especially Cy, because patients have been treated with cyclophosphamide, rheumatologists know cyclophosphamide. Seeing activity, seeing B cell depletion in all three patients with either only bendamustine or only a single dose of cyclophosphamide really did show us what we knew all the time, that 819 is a potent B cell depleter. We got that one checked off. With the first patient over the course of six months progressing toward DOR clinical remission, it was very satisfying to see that by depleting the B cells and inducing immune reset, you're able to now help the kidney recover and help the patient recover in general. Those trends are we're hoping to continue the updates at EULAR with those first three patients, really focusing in on those individual patients, the case studies, and also give an update on our site initiation and activation projections, which are very different than last year. Last year, when we went to sites, they were overwhelmed by the big pharmaceutical companies and also by other biotechs to a point where when we said off the shelf, they did not have a true understanding of what that meant. Now they're seeing that, OK, auto CAR T is very challenging to make. There is this dependency on the oncologists and the beds that they have. Really, off the shelf may alleviate them and break the dependency, which is appreciated both ways. The oncologists also want to have time to work on their own patients. We are really seeing an uptake in discussions with sites, the activation, which will lead to more enrollment of patients. At EULAR, we will update on those trajectories as well. You're going to have the three case studies and an update really on the trajectory of your enrollment and activity. Yes, setting the stage for end of the year update on what's going on with those three patients, but also in all the other patients that are treated. End of the year, sort of ACR, ASH, how many patients might we expect then? What we're hoping is be able to treat something close to an additional 10-15 patients. Probably something closer to 12-15, 12-18 patients by end of the year. With significant follow-up? With some of them may not be six months. I think at that point, because we want to talk about our path to pivotal, we'll probably give updates that are shorter than six months, three months, and maybe even one month. Because now it's a collective discussion as opposed to the case studies that we will talk about at EULAR. Can you help me understand why Cy only or bendamustine are working? Traditionally, we think about used lymphodepletion with auto because you want to provide the homeostatic cytokines or room. Then also with allo, you need to protect rejection. You have multiple reasons why you need lymphodepletion. Some companies use really intense lymphodepletion. Scientifically, why is this working? I think scientifically, the effector to target ratio is very different. In this disease setting, we are seeing that you take a very good B cell depleter with 819. Potentially, you only need to create a tuned-down version of creation of space, a tuned-down version of enhancement of cytokine surplus, a tuned-down version of avoidance of rejection. The things that were required to get rid of 5 pounds of tumor are not required here, where the cells are speculated to be magnitudes less the disease cells that are being targeted. I think starting with a potent CAR T cell, it may not have the same requirements for space and cytokine as you did in a different setting where the battle was going to be more aggressive. Do you have cytokine support on board in this? Or can you remind us of the construct? FT819, no, we do not. And FT819 was built by simply having a CAR, a chimeric antigen receptor that has been fine-tuned to balance safety and activity embedded into the TRAC locus for biological expression to prevent exhaustion as opposed to a synthetic promoter that would push for exhaustion. Here, yeah, there is no cytokine support. There is no ADR. This is where it is a very unique setting. Obviously, we have the next generation coming. Again, because of the disease burden being lower, I think you are able to now combine first generation iPSC-derived CAR T cell with either Cy or benda and have an effect. In your recent earnings update, you did report some trial amendments that we read as intensifying FT819 dose. You are going up to 900 million cells. You were at 720 million earlier. You are also trying some more intensive dosing regimens, multi-dose cycles, a retreatment. We wonder sort of what is driving that. If you need less, like we just talked about why you need less, why are a lot of your amendments doing more? Sure. I'll separate the two. One, dose level two was a mirror discussion with my team where I made sure we really wanted to focus on a path to pivotal. We only want to pursue two doses. This dose level one is working. We are expanding and want to make sure that it continues with expansion in dose level one. We are going to escalate to dose level two. Because the number of cells is not an issue for us, the team offered a suggestion where if you're only going to do two doses, let's make dose level two a little bit higher so we can get a good breadth of 360 and then 2 and 1/2x more to 900. It was a matter of 720 or 900. Since we were going to limit ourselves to two doses, we went with the higher end. Nothing to read beyond the fact of let's just have dose level two be significantly different enough to then be able to see whether a higher dose does anything different. On the multi-dose and dosing after relapse, these are follow-ups from the Type D meeting that we had with the FDA in December. We asked five questions and had favorable outcome. Part of that was expansion into three additional autoimmune diseases with FT819. The other part was that 819 has always been limited to a single dose per cycle. We asked, can we multi-dose? They granted that. Also, we asked if you can dose upon relapse. The multi-dose, we're not applying here in regimen A. The multi-dose will be applied if needed in regimen B. Remember, there's a second regimen where 819 is going to be added on top of standard of care therapy, whether it's MMF, AZA, methotrexate. Here, we may need a larger quantity of the product or multiple doses of the product to drive a deeper response. Why? When you're on top of standard of care, shouldn't it be easier? We went back and talked about avoiding rejection or needing space, the cytokine surplus. While we speculate that with steroids, you might get a little bit of that. It's very different than conditioning. You might need to come in with higher dose. Or you might need ADR, which we'll talk about later. Here, this is very much like a biologic, a monoclonal antibody, which is given many times over a course of six months. With the Type D meeting and the new amendment, FT819 can now provide that dosing paradigm as well in regimen B. Regimen B doesn't have lymphodepletion? No. It's just on top of standard of care therapy. Yes. A different population. Regimen B are SLE patients that are stable with standard of care therapy but want to come off because nobody wants to be on steroids for too long, where regimen A will be basically patients that now have no longer responded to standard of care therapy. Got it. What does a path to approval look like? Are there scenarios? Yes. For us, the variables are few when it comes to dose level one versus dose level two, combination with bendamustine or cyclophosphamide. Those are a few variables that we'll work out through the rest of the year. The endpoint is something that we need to know. Obviously, that's going to dictate the size. Novartis' phase two trial is actually, I'm very impressed by it. It's a very smart, intelligent design that appears to be adaptive. You have a standard of care arm, but your primary endpoint is DOR. Most likely, if you hit that, the standard of care will fall off. If you may not be able to hit DOR, then you go to complete renal response there. Now you can compare to the standard of care arm. Following that playbook, you might be able to now create an adaptive design. That's the conversations we will be having with the FDA on alignment on the pivotal path. You think you could get a single arm approval on a DOR endpoint? If you can't hit that, you go to a little bit still where you could show benefit on renal response, but that's versus standard of care. I understand that. Yes. I will have to run that through discussions with the FDA and our own internal data. That would be the hope today, an adaptive strategy that will take advantage of both endpoints. How big are these studies, you think? I'm going to speculate. I think if we were able to pull off the DORs, I think that's probably somewhere in the mid double digits, let's say 50 plus or minus. Otherwise, we'll probably have to go to 150-200 patients. Again, let me get a little bit more clarity and I'll provide more update on that. That's kind of the range that we're thinking. Your hypothesis around being able to use Cy alone or benda, shouldn't that apply to all T cells? Do you expect that we're going to see all the auto programs actually shift to similar strategies? Definitely. I think there's a possibility there. What really separates this though is when we have FT819 with cyclophosphamide alone, that's still very different than auto CAR T because where we hope that our 72-hour hospitalization requirements will go away by the end of the year, that's another discussion that we plan to have with the FDA. We really become outpatient setting. Outpatient setting with Cy alone really becomes a true biologic in terms of how rheumatologists can treat their patients without the need of hospital beds. Yes, in fact, I think if we can pull off with Cy only a single dose of Cy, there's no reason to think why auto CAR T can't do that. When it comes to the entire operational feasibility of that in terms of being off the shelf, cost-effective, no hospitalization requirements, it still really fully takes advantage of the situation where auto CAR T, I don't think today can say the same. Let's talk about, so I understand the off-the-shelf and sort of the process improvements. Let's talk about the toxicity versus auto. Yes, I'll take you versus some of the first-gen, but some of the next-gen autologous programs, let's say Autolus or others, are pretty safe too. What's the true, what gives you confidence you are still differentiated over those second-gens, which are also going to autoimmune on safety? Yeah. That's a great question. Keep in mind, second gen continues to be a heterogeneous population of edited cells with not fully defined location of integration. Whether you're talking about heterogeneous population of randomly engineered cells or secondary malignancies, you're not going to be able to walk away from that. Where we have a master cell bank where a single clone has been fully characterized, that clearly separates us from everyone else when it comes to understanding your product and creating a uniform product that is safe and effective. Yeah. The secondary malignancies, the more common ones, I think are probably caused by the lymphodepletion. If everybody's going to Cy only, you're talking about this really low risk of T cell lymphoma conversion, right? Do you think that's going to actually change commercial decisions? I think that collectively, absolutely. If you want to lean this way on safety or lean that way on heterogeneity, you still have cost of goods. You still have the availability right now. In a single facility of 40,000 sq ft, what we have today, we can make 50,000 doses per year. That is very different than others. It just becomes the only paradigm that is like a biologic. Yes, safety, obviously, innovation is there. Others over time will be able to, like you said, improve their safety. How about cost of goods? How about availability? How about scale and production? All those things add up. Yeah. Let's say, I mean, you still have risk, even though it's lower, of acute toxicity. And even if you can get into the outpatient and get away from the 72 hours, do you not still remain tethered to these academic centers because they need to monitor and admit patients even if it's a low risk? I think because of the risk profile will always be there. In the initial stage, you probably want to be in proximity to a hospital, not the CAR- T center, because right now, even rheumatologists give toci all the time themselves. I think it's going to be manageable. With time, I think even that concern will go away. Let's say you have to be within 60-120, one or two hours away from a hospital. That's still pretty broad in terms of the number of people that fall into that category. Got it. Let's talk about the ADR. We've liked your ADR. It's the allo-evasion edit that's active by going after 4-1BB. You're first featuring it and looking at it clinically in an NK cell chassis and FT522. Can you talk about where are you with that edit, allo-evasion in general? Because it's not in FT819. Do you need it? Where do you need it? How are you thinking about developing that going forward? Great question. You know that's very close to my heart. When we rolled out avoidance of conditioning, it wasn't to avoid rejection, but it was to completely replace the need for conditioning chemotherapy. Here, the goal was not to go and become stealth and hide. It was actually to make up the difference for creation of space, the cytokine surplus that's necessary, and avoidance of rejection. ADR was built very uniquely. It does not depend on class one, class two knockout. That actually makes the cells a little wonky and a huge target for NK missing cells. Instead, we created a signaling cascade that upon engagement with a T or NK cell that's going to kill you, you kill it first. You create yourself. You protect yourself. You create space. You give a signaling cue to expand in vivo. Now, to your point, if 819 doesn't have it in this very unique setting of autoimmune disease, why do you need it? There are more aggressive diseases out there, such as solid tumor, such as more complex autoimmune diseases, and heme malignancies, where if you can avoid the need for conditioning chemotherapy and have a CAR T-like activity, then you're going to be sitting in a very unique place. This is where I think our sword and shield technology sets us apart. Protect the cell, evade detection, but also create space, give yourself a signaling cue, and completely replace the need for conditioning chemotherapy. OK. Last question, maybe. We'll see how long it takes. Sort of reading the tea leaves of your recent announcements and what you've said today, it feels like you're deprioritizing NK cells and FT522. Is that a fair read and why? One of the things that is very apparent in our hands and I think in the community as well is that NK cells don't have the same antigen-mediated expansion as T cells do. A CAR T responds very differently to an antigen stimulating cue versus a CAR NK. NK cells kill very effectively, but they don't expand. This effector-to-target ratio concern becomes something that we need to think about. Because we have a T cell, we work so hard to make a T cell-like product that's made in a Petri dish. We're taking full advantage of the potency that comes to the table with FT819. Like I said earlier, it's a very powerful B cell depleter. NK cells are a perfect partner for combination with monoclonal antibodies. We're not going to forget that because we've seen that time and time in our own clinical trials as others have seen it in theirs. For FT522 and autoimmune, there will be specific categories in disease where there's a monoclonal antibody. Enhancement of that monoclonal antibody's activity, such as combining with an anti-CD20 or anti-CD38, can really benefit the patients in that unique setting. FT522, we obviously have a cleared IND, and we're in discussions with investigators for various investigator-initiated trials to find these specific places to combine with mAbs and really enhance the activity in combination. Can you tell us any of those indications that are top of your list for consideration? We're working through it now. Yes, we'll give an update perhaps at EULAR. We've submitted a series of abstracts. One of them has discussed this 522, and we'll give an update there. Got it. This isn't new about NK cells not expanding. I guess it's a challenge, but it's also people, including Fate, have described it as an opportunity because you can control the dose. In the past, Fate has said, well, you can give these really high doses. Indeed, that's what you did to provide the killing you need. In autoimmune, you need less killing, as we talked about previously. Why is that not a viable strategy anymore, simply to use these higher doses? I don't think I mentioned it's not a viable strategy. I think when it comes to B cell depletion, pound-for-pound 819 is more potent than 522. We want to pursue that. If 522 in these unique indications prevails, maybe we will move into a monotherapy arm as well. In a world of being diligent with our money and being very focused with our plans, for now, 522 will be combined in unique settings with a monoclonal antibody. There's a skeptical, a bare thesis out there that it's just very expensive to make such high doses of NK cells and that you haven't been able to work out a really cheap, scalable way so that expense and manufacturing is underlying this decision. No, not for us. I mean, we dosed in some programs three doses of 2.5 billion cells. We have plenty of inventory of those cells left. That was FT576, for example. For us, making cells is not a challenge. The scale is literally based on how much volume we carry forward, not based on the starting material that cost. It does, at some point, you do wonder if the effector-to-target ratio is the most important thing in aggressive disease. Can you ever tilt that balance mechanically, or you have to pursue it biologically? Meaning just getting that cell dose first. In vivo expansion, yes. Exactly, yes. Can you come in mechanically with billions and billions of cells versus allow the T cell to do its thing? For us, no. I mean, there is always going to be a certain threshold. Making trillions of cells per patient may not make sense. No, the decision was not based on the number of cells that we could or could not make. I know we're over time. I asked one last question on your T cell. Are all your T cells going to be the CD8, like FT819? Are you going to have some CD4, CD8? Today, the focus has been to make a CD8 cell. CD4s are typically helper cells. They support the CD8 activity. We're doing that, recompensating that through engineering the cells. Our CAR Ts are autonomous, and we want to keep them autonomous. They're just dependent on their engineer, so the engineer strategy. The next generation that I'm talking about is going to have nine edits. Some people say, oh, well, you're cheating. You have nine edits. We're not cheating. We could just put nine edits in. Through these nine edits, we're completely autonomous of anything else. We can basically target and kill the designated disease. Awesome. Thank you very much. I appreciate it. Great conversation. Thank you, everyone, for your attention.