On November 5, 2019 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 third quarter ended September 30, 2019 (Press release, Fate Therapeutics, NOV 5, 2019, View Source [SID1234550322]).
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"We achieved several significant clinical milestones over the past three months including treating the first patients with FT516, the first-ever engineered iPSC-derived cellular immunotherapy, and securing FDA clearance to initiate clinical investigation of FT596, the first-ever cellular immunotherapy engineered to express three active anti-tumor modalities. We also successfully opened our new cGMP facility specifically designed to enable consistent, large-scale, and cost-effective manufacture of allogeneic NK cell and CAR-T cell products using clonal master iPSC lines as a starting cell source," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "We look forward to the ASH (Free ASH Whitepaper) annual meeting in December, where we have had six abstracts accepted and will be sharing our first-in-human insights into the clinical safety and tolerability of FT500, the first-ever iPSC-derived cell therapy to be administered off-the-shelf in multiple doses over multiple cycles. With the completion of our recent common stock offering in September, we are well-positioned to generate clinical data across our iPSC-derived, cell-based cancer immunotherapy pipeline in 2020."
Clinical Programs
First-ever Patient Treatment with Engineered iPSC-derived Cell Product. In October 2019, two patients at the M Health Fairview University of Minnesota Medical Center were treated with FT516, the Company’s off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered to express a novel high-affinity, non-cleavable CD16 Fc receptor. FT516 is the first-ever cell product in the world derived from a genetically engineered pluripotent stem cell to be administered to patients. The first patient received FT516 in combination with rituximab for the treatment of diffuse large B-cell lymphoma, and the second patient received FT516 as a monotherapy for the treatment of acute myeloid leukemia.
Initiated Enrollment at 300M Cell Dose Level in FT500 ICI Combination Arm. The Company is conducting an open-label, multi-dose Phase 1 clinical trial of FT500, an off-the-shelf NK cell cancer immunotherapy derived from a clonal master iPSC line, for the treatment of advanced solid tumors. The dose-escalating stage of the Phase 1 study is designed to assess the safety and tolerability of administering up to six doses of FT500 as a monotherapy and in combination with immune checkpoint inhibitor (ICI) in an outpatient setting. In the monotherapy arm of the study, three patients have been treated at 100 million cells per dose and five patients have been treated at 300 million cells per dose, with no reported dose-limiting toxicities (DLTs) or FT500-related serious adverse events. Additionally, in the combination arm of the study in patients that have failed prior ICI therapy, three patients have been treated at 100 million cells per dose in combination with ICI therapy, with no reported DLTs or FT500-related serious adverse events. The Company is currently enrolling patients at 300 million cells per dose in the combination arm of the study.
Received FDA Clearance of IND Application for FT596. In September, the U.S. Food and Drug Administration (FDA) allowed the Company’s Investigational New Drug (IND) application for FT596, the Company’s first off-the-shelf chimeric antigen receptor (CAR) NK cell cancer immunotherapy, which is uniquely designed to engage multiple tumor-associated antigens expressed on cancer cells for best-in-class activity. FT596 is derived from a clonal master iPSC line engineered with three anti-tumor functional modalities: a proprietary CAR optimized for NK cell biology that targets the B-cell antigen CD19; a novel high-affinity, non-cleavable CD16 Fc receptor that is designed to augment antibody dependent cellular cytotoxicity (ADCC); and an IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes NK cell activation without the need for systemic cytokine support. Study initiation is underway at multiple clinical sites for the first-in-human Phase 1 clinical trial of FT596 as a monotherapy, in combination with rituximab for the treatment of advanced B-cell lymphoma, and in combination with obinutuzumab for the treatment of chronic lymphocytic leukemia.
Completed Enrollment in Phase 2 PROTECT Study of ProTmune. In October, the Company completed enrollment in the randomized, controlled and double-blinded Phase 2 PROTECT study of ProTmune, the Company’s first-in-class, allogeneic hematopoietic cell graft for the prevention of acute graft-versus-host disease (GvHD) in patients undergoing hematopoietic cell transplantation (HCT) for the treatment of hematologic malignancies. ProTmune has been granted Orphan Drug and Fast Track Designations by the FDA, and Orphan Medicinal Product Designation by the European Commission.
Corporate Highlights
Opened State-of-the-Art cGMP Manufacturing Facility Dedicated to iPSC-derived Cell Therapies. In September 2019, the Company opened its current Good Manufacturing Practice (cGMP) manufacturing facility for the clinical production of its off-the-shelf NK cell and CAR T-cell product candidates. The Company’s facility, located in San Diego, California, is custom designed to use clonal master iPSC lines as a renewable cell source for the manufacture of off-the-shelf allogeneic cell products. The new state-of-the-art facility has been commissioned and qualified, the Company has been issued a drug manufacturing license by the State of California, Department of Health Services, Food and Drug Branch, and the Company has commenced manufacture of certain of its product candidates.
Foundational U.S. Patent Issued Covering iPSC-derived CAR T Cells. In August 2019, the U.S. Patent and Trademark Office issued U.S. Patent No. 10,370,452 covering compositions and uses of effector T cells expressing a CAR, where such T cells are derived from a pluripotent stem cell including an iPSC. The claims of this newly-issued patent are not restricted by the signaling domain of the CAR construct nor by the antigen to which the CAR targets and binds. The patent is expected to expire in 2034, and is owned by Memorial Sloan Kettering Cancer Center (MSK) and is licensed exclusively to Fate Therapeutics for all human therapeutic uses. The Company is currently conducting IND-enabling activities for FT819, its first off-the-shelf, iPSC-derived CAR T-cell product candidate, under its collaboration with MSK.
Completed $173 Million Common Stock Offering. In September 2019, the Company closed an underwritten public offering of 9.9 million shares of its common stock at a public offering price of $17.50 per share.
Third Quarter 2019 Financial Results
Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of September 30, 2019 were $302.8 million, compared to $201.0 million as of December 31, 2018. The increase was driven primarily by $162.4 million in net cash proceeds received by the Company from its September 2019 public offering of common stock. These proceeds were offset by the Company’s use of cash to fund operating activities.
Total Revenue: Revenue was $2.4 million for the third quarter of 2019, compared to $1.0 million for the same period in 2019. Revenue for the third quarter of 2019 was derived from the Company’s collaboration with Ono Pharmaceutical.
R&D Expenses: Research and development expenses were $23.2 million for the third quarter of 2019, compared to $13.6 million for the same period in 2018. The increase in R&D expenses was attributable primarily to an increase in employee compensation, including share-based compensation, and in expenses associated with the clinical development and manufacture of the Company’s product candidates and the conduct of research activities including under the collaboration with Ono Pharmaceutical.
G&A Expenses: General and administrative expenses were $6.3 million for the third quarter of 2019, compared to $4.1 million for the same period in 2018. The increase in G&A expenses was attributable primarily to an increase in employee compensation, including share-based compensation.
Shares Outstanding: Common shares outstanding were 75.4 million as of September 30, 2019 and 64.7 million as of December 31, 2018. Preferred shares outstanding as of September 30, 2019 and December 31, 2018 were 2.8 million, each of which is convertible into five shares of common stock.
Today’s Conference Call and Webcast
The Company will conduct a conference call today, Tuesday, November 5, 2019 at 5:00 p.m. ET to review financial and operating results for the quarter ended September 30, 2019. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 4748666. The live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the Company’s website at www.fatetherapeutics.com. The archived webcast will be available on the Company’s website beginning approximately two hours after the event.