Good morning, everyone. Welcome to our day 1 of the Cantor Healthcare Conference. My name is Lee Walczak, a biotech analyst at Cantor, and we're delighted to have our next company, Fate Therapeutics, for a fireside chat. I'm very pleased to have the CEO, Bob, here with me today. Bob, I would love to turn it over to you to give us a quick 10,000-foot view of the company and where Fate is heading. Sure. Thanks for the invitation, Lee. As Lee mentioned, I'm the CEO of Fate Therapeutics, and we've been pioneering the concept of using master cell bank for cell therapy. What that does is it creates this really unique starting material for manufacture. I'll explain some of the details here on why it makes it so unique and why we've been pursuing this concept over the past 15 years. Typically, CAR T, which has shown really profound data, is made from either patient T cells or donor T cells, and there are some limitations which we'll talk about. But when you introduce the concept of a master cell bank, now you're making over 10 million doses per the master cell bank, compared to only 500 doses from a donor T cell. Now you have the capability of creating over 50,000 batches or 50,000 doses in a manufacturing suite compared to where you're limited to a couple of thousand doses with auto or allogeneic CAR T concepts. You're also creating a very uniform product. The starting material is the same every single time, so you have uniformity and reliability. Your cost of goods is down. It's not hundreds of thousands of dollars. It's actually a couple of thousand dollars, around $3,000 a dose. So this concept of being able to produce an off-the-shelf inventory that can be treating patients on demand at a cost-effective manner with reliability, without the need of exhausting your starting material, really gives us a unique approach to generating CAR T. I would argue that over the next 12 months, we're very excited, perhaps the most exciting 12 months in Fate's chapter, and so we're very excited to talk about what's next there. Okay, great. Maybe let's start with FT819. That's your lead program and we know safety is very, very important in an autoimmune setting. There's some recent unfortunate news that patient deaths from in vivo or auto CAR T programs that led to program discontinuations. I wanted to understand your view on that and why you think FT819 will be different. Sure. Yeah. We started this whole concept here with safety in mind, and I would call it a planned safety in mind. What I mean by that is at the molecular level, at the manufacturing level, and at the clinical schema level, we really wanted to make sure we had safety first in mind. What I mean by that is at the molecular level, we selected a CAR motif that is tuned for allowing for controlled expansion, but not allowing for uncontrolled expansion. I think that's a key issue that you see with CAR T cells. In addition to that, we put the CAR into the TRAC locus to allow for biological expression of a CAR similar to a TCR and not super physiological levels of expression that could also contribute to uncontrolled expansion. We completely knocked out at the molecular level, TCR expression, so there is no incidences of GvHD that can be done through the TCR. At the manufacturing level, as I mentioned earlier, we created a master cell bank to ensure reliability and uniformity. So each dose is the same, and you're not going to get a situation where patient 10 gets a dose of CAR T cells that has half a copy per cell of CAR T. On top of that, it has only 20% CAR expression compared to patient 100 who might get five copies of the CAR and really 80% expression. Those two are two different drug products that will result in two different outcomes. So for us, at the manufacturing level, each dose is consistent and is the same with the same expectation. At the clinical level, we didn't want to go in with heavy conditioning. Three days of CyFlu, and then we'll talk more about that. It is not something that's preferred, and it could also allow for uncontrolled expansion. We're going in with less intensive conditioning or no conditioning at all. At these three different stages, we control safety and we're not surprised by our safety profile that's very much favorable and has very limited incidences of adverse events. We're very proud of our safety because we worked hard to get there. Can you remind us how many patients have you dosed to support this safety profile? Sure. We've dosed over 30 patients in autoimmune and over 50 patients previously in oncology with the same product, the master cell bank concept. It is the same product. Nearly 100 patients have been treated in total, and so far things have looked as expected, safe. Okay. Bob, you talked about, I think, in cell therapy in particular, I think the manufacturing itself may be just as important as the construct itself. I know Fate has a pretty unique manufacturing process. Can you talk to us about why it is more advantageous than the auto or the allo products out there? Because unlike oncology, you have a clock versus in autoimmune disease, I think the turnaround time is not as critical. Sure. Maybe the latter point first. I think if you have autoimmune disease, you want to get treated as soon as possible as well. The patient burden that comes with CAR T manufacture is also something that's not desirable. These patients have to come off their current standard of care therapy to procure their T cells, and there is no immediate drug available to them afterwards. You're taking a massive risk by coming off your immune suppressants and possibly allowing for a flare to occur because there is no CAR T that's given to you right after you come off your standard of care. You got to come off, procure T cells, wait over a month to get that CAR T treatment. As an autoimmune patient, you would really want that quick on-demand availability. Going to your first question, as I mentioned earlier, CAR T is very heterogeneous when it's being made with a T cell as a starting point, and that creates unreliability. Using the car as an analogy, some patients might get a Ferrari, some patients might get a Camry. You just don't know what the patients are getting. With us, reliability is there, and production quantities are there as well. We can make 50,000 doses just in our current 40,000 square foot facility. That is very different than allogeneic and autologous. Every time we make it comes from the same starting material as I mentioned earlier. That's, again, very different than allogeneic. I think a lot of allogeneic companies use the term off the shelf. I would ask them to reserve it for situations where the inventory is more than 500 doses per batch. Because if you are going to treat 50,000 patients and you are making 500 doses per batch, there are multiple different batches coming from multiple different T-cell starting point with different T-cell engineering. So really, this master cell bank concept puts us in a very different position compared to traditional manufacture of CAR T cells, and again, allows for safety to be appreciated more in a favorable manner. Mm-hmm. You have showed some nice data from FT819 so far. How does that stack up against some of the autologous CD19 in the space in terms of potency, in terms of persistence? I would say the way we give FT819, I would consider FT819 the most potent CAR T out there. What I mean by that is FT819 shows efficacy with the use of less intensive conditioning. There is no one out there right now that prefers to use three days of cyclophosphamide and flu therapy. That is a very intensive conditioning regimen. The lymphodepletion is deep. You are susceptible to cytopenia and high rates of infection. Patients, especially in autoimmune, do not prefer it. We know that firsthand. Because FT819 can have very good activity with either bendamustine alone or cyclophosphamide alone, and as we showed at ASGCT, without the need of conditioning, I would say FT819, just based on the clinical data, it has the most potency because it is not beholden to three days of CyFlu like everyone or many others are. I would say the potency is something we are very proud of. Now, when it comes to persistence, and this is all based on peripheral blood, in oncology, there was no correlation to long-term persistence and outcome. When you look at Schett's data, his persistence, which resulted in very good outcome, was only for a couple of weeks. When you look at those plots, I believe in figure 1, you can see that live CAR T cells were detected out for about several weeks. That's what we learn in oncology as well. It's not that it's long-term persistence, it's what does your CAR T do in that first 2- 4 weeks? That's where activity is most important. The number 1 indicator of outcome was tumor burden in oncology. That's why I think in autoimmune with less disease burden, we're actually seeing better results. But in general, long-term persistence never correlated to outcome, at least for all the papers I've read. Okay. Very good. I wanted to turn to your registrational trial. That's the phase II, you recently aligned with FDA on a path forward. Maybe walk us through the key design elements and what the bar that you need to achieve. Sure. I will say, I'm very proud of our relationship with the FDA. It's been a long-term relationship, through our RMAT designation CDRP program inclusion, our relationship continues to be very tight, we continue to have good scientific and clinical discussions, I'm very proud of that. What I will say is that through our initial data, we were able to land in a very favorable place. This is an open-label single-arm study. It has the potential to be registrational, that's based on the data, the outcome of the study. We're looking at treating 53 patients in total. It's about 45 patients needed, but we need some buffer for patients that might not be valuable in terms of data analysis. So it should be a study that we believe we should be able to enroll rather well, efficiently. The primary endpoint is complete renal response because, as you mentioned, this is a lupus nephritis study. That primary endpoint will be at six months. We are very excited about this. We have started the phase II already. As we made the announcement, the first patient was treated last month, now it is September. Wow. Can't believe how quickly time's flying by. We are very excited. As another sign of excitement here is the number of sites that are quickly getting activated, and the engagement that we are having with the PIs to continue to push this study into completion. Overall, we are excited about the patient outcome, but also the relationship we have with the FDA and the clinicians on the study. What would be the bar for complete renal response, and how confident that the FDA would be okay with a single arm supporting accelerated approval? Maybe also talk to us a little bit about the historical control, which I think- Sure. is critical here. Yeah, no, absolutely. The historical control is very important here. When you look at previously approved products and you enrich for the patient population that we're treating today in the phase II, which is refractory lupus nephritis patients, you see that standard of care, things that have been already approved, have a minimal effect on these patient population. We've set out there that the baseline appears to be somewhere between 10% and 20%. I'll tell you, Lee, it's actually closer to 10%. When you look at that, this population, you could consider them as an unmet population. The bar is very low here. Because this is a single dose, patients come off their standard of care therapy, unlike mAbs and T-cell engagers that add on top of standard of care therapy. We're seeing very dramatic outcomes, not just in the SLEDAI scores, which are a composition of symptoms or decrease in UPCR scores. We're seeing improvement in quality of life as well, and that's indicated by things such as FACIT-F atigue scores. I think in totality, when you consider all that, the patient comes off their current standard of care therapy that's making them feel icky every day. It's a one-time treatment. Quality of life improves. They're going back to their regular life. This is in an outpatient setting. They don't need to stay in the hospital for 7-14 days. The product is very cost-effective. As I mentioned earlier, it's about $3,000 a dose to make, and it's available on demand and it can serve underserved regions. This is a beautiful package, and I believe the FDA appreciates that. For us, we have high hopes on this program because baseline is so low and we bring so much to the table. Mm-hmm. Maybe just on the primary endpoint, six months CRR. Bob, you mentioned the historical control is pretty low here, 10%-20%, maybe closer to 10% than to 20%. I guess, should we assume maybe 30%-40% CRR will be a reasonable bar for you to clear the hurdle? Absolutely. I think 30%-40% is the number that we're striving for. I haven't put out the details yet of exactly what the number is. I don't want to be cheeky about it, but I want to keep it as something that is part of our discussions with the FDA. But what I will tell you is the data that we're putting out there right now on our UPCR scores. Overall, with a single dose of FT819 with less intensive conditioning, either bendamustine alone or cyclophosphamide alone, we're seeing over one gram per gram drop at six months of UPCR. So that's significant. Now, if you enrich for bendamustine population, it's actually 1.8 gram over gram. You talk to any rheumatologist or nephrologist and say, "We have a one-time treatment, and the patient comes off all standard of care therapies, and they get almost two grams per gram drop in their kidney score," I think you're going to hear a very positive perspective. That's huge. The words that I just Googled it last night, just wanted to see what AI would say- what the two grams would be, and the words are pretty profound. It's something like it's a therapeutic milestone to achieve that. So to your point, we haven't talked about our response rates on the renal side, but I will tell you that those plots should be quite an indication of how dramatic the results are. We will update. We'll put our CRR data out there soon. We have several upcoming conferences, American Society of Nephrology, ACR, and ASH, that we'll be talking about updates as well. Okay. So just to clarify, Bob, you're going to share your initial CRR data in the near future. In how many patients have you said? We haven't said how many patients, and I'll leave that for the update because we're still trying to look at the data cut-off and what is the right timing. But our plan is to talk about our CRR rates, either end of this year or early next year. But I will tell you, if you look at the UPCR scores, it should be a good indication of what's to come. Mm-hmm. The bar that you're trying to strive for is around that 30%? 30%- 40%, yes. Okay. Can you talk a little bit about enrollment? Obviously, autoimmune disease, I think that has been a challenge. Now we know in your phase II study, you have this outpatient administration with bendamustine, which is a less intensive stuff than chemotherapy. Why shouldn't we expect enrollment to go faster? Especially you don't have the bottleneck of manufacturing. Yeah. No, we expect enrollment to have a good cadence. While you mentioned 50,000 of these patients are available and some data points say upward to 200,000. Right now with the eligibility criteria, we are in a very select group of population. We have to look at renal biopsies, we have to look at UPCR scores. So there is this fundamental focus on the population that's going to be refractory LN. But we believe in time we'll be able to treat all those flaring patients that have lupus nephritis. Taking a step back to your point, yeah, we believe that over the course of the next 18 months, we should complete this enrollment. It's going to be all about getting those sites engaged. As I mentioned, we're at a very good pace right now of site enrollment, and we might even increase our target of sites, from originally something like 40 to maybe even 60, to just make sure that we complete this study in a reasonable way. To your point, I'm very confident. We have inventory, we have site engagement, PI engagement, and I think this is part of the reason why I was mentioning the next 12 months are going to be very exciting for Fate, maybe the most exciting year for Fate. Okay, Bob. You mentioned in your current trial, you are selecting certain patients just for the trial. I would imagine there are certain inclusion/exclusion criteria. Do you anticipate that to be the same or similar patient population you will eventually treat once FT819 is approved? Yeah. For this stage, when we complete and anticipate a conditional approval, the confirmation study will allow us to expand the population. We believe initially we will be in this refractory LN population, but over time, we will expand and be able to or aim to treat as many of the patients as possible. We are seeing the outcomes. The sites are seeing the outcomes. The patients are seeing the outcomes. This thing will not be held to a small population. The excitement and quality of life is something that I think is really leading the way. Most patients that get treated with standard of care therapy might see their symptoms improved, but their quality of life is not improving. Here, because FT819 is reducing the symptoms, at the same time eliminating the need for standard of care therapy, their quality of life is going from brain fog, being bound to your bed, to being out and about and living your life. I think that's something that we're very proud of, especially knowing the population here. Females during their most exciting years. We just want to be able to support patients and let them live the life they deserve. When should we expect the top line to read out from the study? We are thinking about an interim analysis second half of next year, and we believe we will complete the study in 2028. I think, thinking about data coming from the phase II, we would be focusing more second half of 2027 and into 2028. Just focus on the interim analysis next year. What is the rationale for that, and what should we expect? Is like, half of the patients? I mean, how should we think about what you will share? Yeah. We are still talking about the purpose, to your point. The purpose- Yeah. -the reason, the quantity. But right now we are targeting to really do a good assessment on when half the patient population has reached six months. Now, to your point, when to share it and what to do with it, that's something that we'll be figuring out next year. Right now we're talking about looking at half the patients at six months durability. How does your timelines stack up against your competition? I think quite favorably now. We've heard because of safety issues- Yeah. -couple of companies have paused and other companies have moved into other disease indications because this is, as you mentioned and I mentioned, a challenging population. I think, overall, we could see ourselves in a very good pole position as we enroll more patients with a product that's available on demand and has a favorable safety profile. I think, I don't like to say we're going to be leading the way, but I think we'll be in a very good pole position when it comes to completing this phase II and going after a BLA. Mm-hmm. Very good. In terms of near-term catalysts from this program, maybe by the end of the year, early next year, we're going to see the CRR data. That's going to be the first look. I would assume it's going to be a key de-risking event for you guys. Second half of next year, going to share the interim data from the ongoing potentially registrational study, correct? Correct. That's the plan today now for the- Yeah. de-risking. I do want to say- Yeah. -do pay attention to the UPCR scores, because when you are capable of dropping UPCR with the bendamustine-enriched population by 1.8, that is quite de-risking. To your point, the CRR rates will also be discussed. Yes, second half of this year, going into early next year, we'll talk about CRR, and then subsequent to that, we'll be talking about the interim data for phase II. I will say between now and then also we'll be giving an update on what a two-dose outcome looks like. We'll be giving updates on what FT819 does without conditioning. We gave an update on that at ASGCT, where we showed that in dose level 1, three of three patients had an SRI4, which is what currently is used to approve different therapies in lupus nephritis and extrarenal lupus. Also, we showed that two of three patients reached LLDAS. We'll give an update on that as well. I'm actually very excited about that update, which I believe is now geared for ACR. We'll focus on extrarenal patients without the use of conditioning. Some of those patients got the second dose, so that's going to be exciting. All these things come together very beautifully because as we think about the confirmation study, as we think about doing phase II in extrarenal lupus the other half of SLE and also in systemic sclerosis, which we haven't talked about, but we're seeing great outcomes there as well, whether it's mRSS or whether it's a skin score. We think there is a lot of opportunity here for FT819 to enter several phase II programs. Maybe quickly on FT839, which has CD38. Now tell us why you're so excited about this program. I am really proud of the team for developing FT839, for a couple of reasons. One was the research side being innovative enough to figure out how to target a very specific population of immune cells that are the bad actors. About 10%-15% of our immune cells right now are active, and they express CD38. By targeting that proliferating active population in autoimmune and leaving the other 85% of the population alone, you are able to go after the disease, meanwhile, allow the patient to maintain their protection that is given to them by their immune cells because the other 85% will get activated when there is an infection or other issues. When you combine CD19, a comprehensive B-cell lineage-targeting antigen, and then you combine it with an antigen that represents activated immune cells such as macrophages and T-cells, you are really providing a comprehensive approach to targeting autoimmune diseases that are multicellular in their pathology. I am proud of the research for that. I am proud of manufacturing for being able to make a 13-point edited CAR T-cell in a uniform way. That is crazy when you think about it right now, especially when most CAR T programs range just with the CAR 20%-80% per patient. I am also proud of the clinical team because they took this really cool concept, but they have accelerated it into the clinical development paradigm. IND cleared within the 30-day period, and we hope to be treating the first patient within a matter of months after clearing the IND. I remember back in the day when we had 600 people at Fate, it still took us six months to treat a patient after clearing the IND. This team is going to do it within a matter of months, and I think part of that is because there is just so much excitement out there with sites and PIs around this product. Okay, great. That is all the time we have today. Bob, I wanted to thank you again for the time. Sure. Thank you.