On August 14, 2017 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the second quarter ended June 30, 2017 (Filing, 8-K, Fate Therapeutics, AUG 14, 2017, View Source [SID1234520243]).
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"Clinical momentum across our first-in-class cellular immunotherapy programs continues to accelerate. The first subject was treated with FATE-NK100 in VOYAGE for AML, and we look forward to opening two additional clinical trials of FATE-NK100 for the treatment of multiple advanced solid tumor types including in combination with monoclonal antibody therapy," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Our productive discussions with the FDA continue regarding the advancement of our proprietary iPSC-derived cancer immunotherapy pipeline toward first-in-human studies. We currently remain on-track to file, in the first quarter of 2018, an investigational new drug application with the FDA for FT500i, a first-of-kind natural killer cell product candidate derived from a master pluripotent cell line. We are also prepared to initiate enrollment in the Phase 2 efficacy stage of PROTECT next month. Six subjects received ProTmune and we have convened the study’s data monitoring committee to review the Phase 1 data."
Recent Highlights & Program Updates
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Convened PROTECT Data Monitoring Committee for ProTmune Phase 1 Review. The first six subjects in the Phase 1 safety stage of PROTECT received ProTmune, the Company’s next-generation cell graft for the prevention of acute graft-versus-host disease. The Company has convened the study’s data monitoring committee to seek its recommendation regarding the initiation of the Phase 2 efficacy stage. Following the committee’s Phase 1 data review, Fate Therapeutics plans to begin enrolling the randomized, controlled and blinded Phase 2 efficacy stage of PROTECT in adult subjects with hematologic malignancies undergoing matched unrelated donor transplant during the third quarter of 2017.
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First Subject Treated with FATE-NK100 in VOYAGE for AML. The Company’s first-in-class adaptive memory natural killer (NK) cell product candidate, FATE-NK100, was administered to the first subject in VOYAGE, an open-label dose-escalation clinical trial for the treatment of refractory or relapsed acute myelogenous leukemia (AML). VOYAGE is evaluating the safety and the in vivo persistence at Day 7 and Day 14 of a single intravenous infusion of FATE-NK100. The anti-tumor activity of FATE-NK100 as measured by rates of complete response at 42 days post-infusion and clearance of minimal residual disease is also being assessed.
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IND Cleared by FDA for FATE-NK100 in Ovarian Cancer. The U.S. Food and Drug Administration (FDA) cleared an Investigational New Drug (IND) application of FATE-NK100 for the treatment of women with ovarian cancer resistant to, or recurrent on, platinum-based treatment. The study is designed to evaluate the safety and determine the maximum dose of a single infusion of FATE-NK100 when administered directly into the peritoneum in an outpatient setting. Intraperitoneal delivery of NK cells is a novel strategy intended to promote co-localization with tumor cells and maximize NK cell persistence. Other study endpoints include objective response rate at 28 days post-infusion and progression-free and overall survival.
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IND Cleared by FDA for FATE-NK100 in Advanced Solid Tumors. In May 2017, the FDA cleared the Company’s IND application for the clinical investigation of FATE-NK100, including in combination with monoclonal antibody therapy, in subjects with advanced solid tumor malignancies. The Company is preparing to enroll the DIMENSION study, which is designed to evaluate the safety and anti-tumor activity of FATE-NK100 in the outpatient setting across three treatment arms: as monotherapy for small cell lung cancer and hepatocellular carcinoma; in combination with trastuzumab for advanced HER2+ breast and gastric cancers; and in combination with cetuximab for advanced EGFR1+ colorectal and head and neck cancers.
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Showcased First-of-Kind NK Cell Cancer Immunotherapy Pipeline at 2017 ISSCR. In June 2017, Fate Therapeutics, along with its collaborators, presented new preclinical data on the Company’s proprietary induced pluripotent stem cell (iPSC) platform and its iPSC-derived cancer immunotherapy candidates at the 2017 Annual Meeting of the International Society for Stem Cell Research (ISSCR). The Company expects to file an IND with the FDA during the first quarter of 2018 for FT500i, a first-of-kind iPSC-derived NK cell product candidate for the treatment of advanced solid tumors including in combination with checkpoint inhibitors. The session also featured the Company’s second iPSC-derived NK cell product candidate FT516i, which is derived from a master engineered pluripotent cell line expressing a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor.
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Extended Cash Runway through Loan Amendment. In July 2017, Fate Therapeutics amended its loan agreement with Silicon Valley Bank pursuant to which the Company repaid its existing debt obligations in full and entered into a new $15.0 million term loan. Cash proceeds to the Company after repayment of its existing debt obligations were $7.5 million. Under the new term loan, only payments of interest are owed through January 1, 2019, after which time the Company will repay principal plus interest in 30 monthly installments.
Second Quarter 2017 Financial Results
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Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of June 30, 2017 were $71.0 million compared to $92.1 million as of December 31, 2016. The decrease was primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This balance as of June 30, 2017 did not include $7.5 million in cash proceeds received by the Company in July 2017 in connection with the amendment of its loan agreement with Silicon Valley Bank.
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Total Revenue: Revenue was $1.0 million for the second quarter of 2017 and as well as for the comparable period in 2016. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.
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Total Operating Expenses: Total operating expenses were $10.6 million for the second quarter of 2017 compared to $9.0 million for the comparable period in 2016. Operating expenses for the second quarter of 2017 included $1.0 million of stock compensation expense, compared to $0.8 million for the comparable period in 2016.
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R&D Expenses: Research and development expenses were $7.9 million for the second quarter of 2017 compared to $6.8 million for the comparable period in 2016. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the clinical development of ProTmune and FATE-NK100 and the preclinical advancement of the Company’s off-the-shelf iPSC-derived cellular immunotherapy programs, and in facilities costs associated with the expansion of the Company’s laboratory space.
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G&A Expenses: General and administrative expenses were $2.7 million for the second quarter of 2017 compared to $2.2 million for the comparable period in 2016. The increase in G&A expenses was primarily related to an increase in intellectual property-related expenses.
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Shares Outstanding: Common shares outstanding as of June 30, 2017 and December 31, 2016 were 41.4 million. Preferred shares outstanding as of June 30, 2017 and December 31, 2016 were 2.82 million, each of which is convertible into five shares of common stock. All preferred shares outstanding are from the Company’s sale and issuance of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.