Fate Therapeutics, Inc. Q3 FY2023 earnings call

• Achieved milestones with the iPSC product platform, expanding clinical reach to solid tumors and autoimmunity.
• FT522 Phase 1 study open for enrollment in relapsed/refractory B-cell lymphoma with two regimens (with and without conditioning chemotherapy). FT522 incorporates proprietary ADR technology.
• FT825 IND cleared by FDA for clinical investigation in solid tumors, with Phase 1 study startup ongoing. FT825 has novel synthetic controls to address solid tumor challenges.
• FT819 Phase 1 study initiated in SLE, evaluating safety, pharmacokinetics, and anti-B-cell activity.
• Focus on cost control to extend operating runway into the second half of 2025.

In the third quarter of 2023, Fate Therapeutics' revenue declined to $1.9 million compared to $15 million in the same period the previous year. Revenue now comes exclusively from the collaboration with ONO Pharmaceutical for research funding related to a second product candidate in solid tumors. Research and development expenses decreased by 57% to $34.3 million, primarily due to lower salaries, benefits, clinical trial costs, and R&D material/equipment demand. General and administrative expenses decreased by 12% to $18.9 million, mainly because of lower salaries and benefits. Total operating expenses dropped 47% to $53.2 million. The net loss for the quarter was $45.2 million or $0.46 per share. Cash, cash equivalents, and investments at the end of the third quarter were approximately $350 million.

• Full year GAAP operating expenses are expected to be in the range of $265 million to $285 million.
• Year-end cash and investments will exceed $300 million.

• Forward-looking statements involve risks and uncertainties as per the Safe Harbor provisions. Actual results may differ from forward-looking statements. Risks are detailed in the Form 10-Q and earnings press release.

Q: On FT522 Phase 1, thoughts on acceptable activity between preconditioning vs non-preconditioning?

A: Scott Wolchko states focus is on patient outcomes and PK profile, with patient benefit being key.

Q: On FT825 combo with cetuximab and trastuzumab?

A: Scott Wolchko mentions open to combining with other monoclonal antibodies, and preclinically seen synergy with trastuzumab.

Q: Next 6-12 month value creating events?

A: Scott Wolchko highlights proof-of-concept for FT522 without conditioning, FT825 in solid tumors, and autoimmunity with FT819.

Q: Rationale for lupus as initial autoimmune indication for FT819?

A: Scott Wolchko says strong clinical precedent and community enthusiasm in lupus for CD-19 targeted therapy.

Q: Details on lupus study design?

A: Scott Wolchko explains it's a dose escalation study, treating multiple escalating doses, expanding to 10 patients per expansion if dose level clears DLT.

Q: Preclinical data on lupus for FT819?

A: Bob Valamehr mentions in vitro data shows b-cell depletion, comparing to healthy donors and SLE patients.

Q: Autoimmune study site count?

A: Scott Wolchko states working with sites, partnering with oncologists experienced in CAR T-cell therapy, ~12-15 sites open for oncology study.