On March 2, 2020 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 fourth quarter ended December 31, 2019 (Press release, Fate Therapeutics, MAR 2, 2020, View Source [SID1234555053]).

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"In 2019, we made tremendous progress in pioneering the clinical development of off-the-shelf, iPSC-derived cancer immunotherapy. Our FT500 program demonstrated that multiple doses of iPSC-derived NK cells can be delivered off-the-shelf to a patient in a safe manner without patient matching. Additionally, our FT516 program provided initial clinical evidence that engineered iPSC-derived NK cells may confer anti-tumor activity and deliver clinically meaningful benefit to patients. We also showed the unmatched scalability of our proprietary iPSC product platform, having manufactured hundreds of cryopreserved, infusion-ready doses of our iPSC-derived NK cell product candidates at a low cost per dose in our new GMP manufacturing facility," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "In 2020, we look forward to additional clinical data from our FT500 and FT516 programs, and initial clinical data from FT596, our ground-breaking iPSC-derived CAR NK cell product candidate for the treatment of B-cell malignancies designed to overcome many of the limitations inherent in current CAR T-cell immunotherapies. We also expect to begin clinical investigation of our off-the-shelf, iPSC-derived NK cell programs in multiple myeloma with planned IND submissions for FT538, the first-ever CRISPR-edited, iPSC-derived cell therapy, and for FT576, our multi-antigen targeted, CAR-BCMA product candidate. Finally, under our collaboration with Memorial Sloan Kettering, we strive to be the first group in the world to bring off-the-shelf, iPSC-derived CAR T-cell therapy to patients."

Clinical Programs

Encouraging Safety, Tolerability and Immunogenicity Data from FT500 Phase 1 Study Announced. In December, the Company reported initial clinical data from the dose-escalation stage of the FT500 Phase 1 study for the treatment of advanced solid tumors as of a November 28, 2019 data cutoff (n=8 monotherapy; n=4 in combination with checkpoint inhibitor therapy). The multi-dose treatment course, consisting of three once-weekly doses of FT500 over up to two 30-day cycles, was well-tolerated, and there were no dose-limiting toxicities, no FT500-related Grade ≥3 adverse events (AEs) or serious adverse events (SAEs), and no incidents of cytokine release syndrome, neurotoxicity, or graft-versus-host disease, reported in the 12 patients. Additionally, based on assessments of the patients’ T-cell compartment and antibody repertoire, an adverse immune response against FT500 was not evident over the multi-dose treatment course. The Company has amended the FT500 clinical protocol to include IL-2 administration to support NK cell activity, and is initiating the dose-expansion stage of the FT500 Phase 1 study in patients who are refractory to, or have relapsed following, checkpoint inhibitor therapy at 300 million cells per dose in combination with the checkpoint inhibitor on which the patient failed or progressed.
Initial Patients Treated with FT516, the First-ever Engineered, iPSC-derived Cellular Immunotherapy. In December, the Company announced that the first two patients were treated with FT516, the Company’s off-the-shelf NK cell cancer immunotherapy derived from a clonal master iPSC line engineered to express a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor. Each patient received three once-weekly doses of FT516 over a 30-day cycle, and there were no FT516-related Grade ≥3 adverse events (AEs) or serious adverse events (SAEs), and no incidents of cytokine release syndrome, neurotoxicity, or graft-versus-host disease, reported by investigators. Each patient was eligible to receive a second 30-day cycle of three once-weekly doses of FT516. The FT516 study is an open-label, multi-dose Phase 1 clinical trial as a monotherapy for the treatment of AML and in combination with CD20-directed monoclonal antibodies for the treatment of advanced B-cell lymphoma.
FT516 Clinical Investigation Expanded to Solid Tumors. In January, the Company announced that the U.S. Food and Drug Administration (FDA) allowed its second IND application for FT516, enabling clinical investigation of FT516 in combination with PDL1-, PD1-, EGFR- and HER2-targeting monoclonal antibody (mAb) therapies across a broad range of solid tumors. The Company intends to initially evaluate FT516 in combination with avelumab in patients with advanced solid tumors who are refractory to, or have relapsed following, at least one line of anti-PDL1 mAb therapy. The multi-dose treatment course consists of three once-weekly doses of FT516 over up to two 30-day cycles.
Patient Enrollment Initiated in FT596 Phase 1 Study for Advanced B-cell Malignancies. The Company is currently conducting an open-label Phase 1 clinical trial of FT596, the Company’s first off-the-shelf, iPSC-derived chimeric antigen receptor (CAR) NK cell cancer immunotherapy and the first cellular immunotherapy engineered with three active anti-tumor modalities, to be cleared for clinical investigation by the FDA. In addition to a proprietary CAR targeting CD19, FT596 expresses a hnCD16 Fc receptor for coincident targeting of additional tumor-associated antigens expressed on cancer cells, such as CD20, to overcome antigen escape. FT596 also expresses an interleukin-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells without the need for systemic cytokine support.
FT596 Clinical Supply Successfully Produced in Newly-launched, In-house GMP Facility. In preparation for Phase 1 initiation, the Company produced over 300 cryopreserved, infusion-ready doses of FT596, at a low cost per dose, in its newly-launched Good Manufacturing Practice (GMP) facility. FT596 met stringent release criteria, and the cryopreserved, infusion-ready doses demonstrate robust cell viability and potency, and exhibit high levels of cell-surface expression of both CAR19 and hnCD16 targeting receptors, upon thaw. The Company’s GMP facility, located in San Diego, California, is custom designed to use clonal master iPSC lines as a renewable cell source for the consistent and scaled manufacture of off-the-shelf NK cell and CAR T-cell products.
Preclinical Pipeline

IND-enabling Data Presented for FT538, the First CRISPR-edited, iPSC-derived Cellular Immunotherapy. At the 2019 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in December, the Company presented preclinical data for FT538, the Company’s off-the-shelf NK cell cancer immunotherapy for multiple myeloma. FT538 is derived from a clonal master iPSC line engineered with hnCD16 and IL-15RF, and edited for complete elimination of CD38 expression to mitigate anti-CD38 antibody-mediated fratricide. The Company intends to submit an IND application to the FDA for clinical investigation of FT538 in combination with anti-CD38 mAb therapy in the second quarter of 2020.
FT819 Master Engineered iPSC Bank Generated and Fully Characterized. FT819 is the Company’s first off-the-shelf, iPSC-derived CAR T-cell product candidate, and is derived from a clonal master engineered iPSC line engineered with a novel 1XX CAR targeting CD19 inserted into the T-cell receptor alpha constant (TRAC) locus, and edited for complete elimination of T-cell receptor (TCR) expression. At ASH (Free ASH Whitepaper), scientists from the Company and Memorial Sloan Kettering Cancer Center presented new in vivo preclinical data demonstrating that, in a xenograft model of disseminated lymphoblastic leukemia, FT819 enhanced tumor clearance and extended survival as compared to primary CAR19 T cells. The Company intends to submit an IND application to the FDA for clinical investigation of FT819 in the second quarter of 2020.
Fourth Quarter 2019 Financial Results

Cash & Investment Position: Cash, cash equivalents and investments as of December 31, 2019 were $260.9 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 and to fully retire its debt facility.
Total Revenue: Revenue was $2.8 million for the fourth quarter of 2019, compared to $1.7 million for the same period in 2018. Revenue for the fourth quarter of 2019 was derived from the Company’s collaboration with Ono Pharmaceutical.
R&D Expenses: Research and development expenses were $25.2 million for the fourth quarter of 2019, compared to $14.1 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 $6.7 million for the fourth quarter of 2019, compared to $4.3 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 75.7 million as of December 31, 2019 and 64.7 million as of December 31, 2018. Preferred shares outstanding as of December 31, 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, Monday, March 2, 2020 at 5:00 p.m. ET to review financial and operating results for the quarter ended December 31, 2019. In order to participate in the conference call, please dial 877-303-6229 (domestic) or 631-291-4833 (international) and refer to conference ID 9879730. 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.

About Fate Therapeutics’ iPSC Product Platform
The Company’s proprietary induced pluripotent stem cell (iPSC) product platform enables mass production of off-the-shelf, engineered, homogeneous cell products that can be administered with multiple doses to deliver more effective pharmacologic activity, including in combination with cycles of other cancer treatments. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. The Company’s first-of-kind approach involves engineering human iPSCs in a one-time genetic modification event and selecting a single engineered iPSC for maintenance as a clonal master iPSC line. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, clonal master iPSC lines are a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf for patient treatment. As a result, the Company’s platform is uniquely capable of overcoming numerous limitations associated with the production of cell therapies using patient- or donor-sourced cells, which is logistically complex and expensive and is subject to batch-to-batch and cell-to-cell variability that can affect clinical safety and efficacy. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 300 issued patents and 150 pending patent applications.

About FT500

FT500 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line. The product candidate is being investigated in an open-label, multi-dose Phase 1 clinical trial for the treatment of advanced solid tumors (NCT03841110). The study is designed to assess the safety and tolerability of three once-weekly doses of FT500 as a monotherapy and in combination with one of three FDA-approved immune checkpoint inhibitor (ICI) therapies – nivolumab, pembrolizumab or atezolizumab – in patients that have failed prior ICI therapy. Despite the clinical benefit conferred by approved ICI therapy against a variety of tumor types, these therapies are not curative and, in most cases, patients either fail to respond or their disease progresses on these agents. One common mechanism of resistance to ICI therapy is associated with loss-of-function mutations in genes critical for antigen presentation. A potential strategy to overcome resistance is through the administration of allogeneic NK cells, which have the inherent capability to recognize and directly kill tumor cells with these mutations.

About FT516

FT516 is an investigational, universal, 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 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies. CD16 mediates antibody-dependent cellular cytotoxicity (ADCC), a potent anti-tumor mechanism by which NK cells recognize, bind and kill antibody-coated cancer cells. ADCC is dependent on NK cells maintaining stable and effective expression of CD16, which has been shown to undergo considerable down-regulation in cancer patients. In addition, CD16 occurs in two variants, 158V or 158F, that elicit high or low binding affinity, respectively, to the Fc domain of IgG1 antibodies. Numerous clinical studies with FDA-approved tumor-targeting antibodies, including rituximab, trastuzumab and cetuximab, have demonstrated that patients homozygous for the 158V variant, which is present in only about 15% of patients, have improved clinical outcomes. FT516 is being investigated in an open-label, multi-dose Phase 1 clinical trial as a monotherapy for the treatment of acute myeloid leukemia and in combination with CD20-directed monoclonal antibodies for the treatment of advanced B-cell lymphoma (NCT04023071). Additionally, the FDA has allowed investigation of FT516 in an open-label, multi-dose Phase 1 clinical trial in combination with monoclonal antibody therapy, including PDL1-, PD1-, EGFR- and HER2-targeting therapeutic antibodies, across a broad range of solid tumors.

About FT596
FT596 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with three anti-tumor functional modalities: a proprietary chimeric antigen receptor (CAR) optimized for NK cell biology, which contains a NKG2D transmembrane domain, a 2B4 co-stimulatory domain and a CD3-zeta signaling domain, that targets B-cell antigen CD19; a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies; and an IL-15 receptor fusion (IL-15RF) that promotes enhanced NK cell activity. In preclinical studies of FT596, the Company has demonstrated that dual activation of the CAR19 and hnCD16 targeting receptors, in combination with IL-15RF signaling, convey synergistic anti-tumor activity. Increased degranulation and cytokine release were observed upon dual receptor activation in lymphoma cancer cells as compared to activation of each receptor alone, indicating that multi-antigen engagement may elicit a deeper and more durable response. Additionally, in a humanized mouse model of lymphoma, FT596 in combination with the anti-CD20 monoclonal antibody rituximab showed enhanced killing of tumor cells in vivo as compared to rituximab alone. FT596 is being investigated in an open-label Phase 1 clinical trial as a monotherapy, and in combination with rituximab, for the treatment of advanced B-cell lymphoma and in combination with obinutuzumab for the treatment of chronic lymphocytic leukemia (NCT04245722).