FATE THERAPEUTICS INC Q4 FY2022 earnings call

• Termination of collaboration with Janssen: Janssen terminated the agreement in early January, leading to discontinuation of research and development of collaboration candidates and workforce reduction. - Strategic pipeline review: Focused resources on most innovative IPS-derived CAR NK and CAR T-cell programs, discontinuing first generation FT596 CAR NK cell product candidate. - Financial results: Cash, cash equivalents, and investments at year-end were approximately $475 million. - Key program initiatives for 2023: Advancing FT576 (multiplex engineered CAR NK cell for multiple myeloma), FT522 (second generation CD90 targeted CAR NK cell), FT819 (iPS-derived CAR T-cell for hematologic malignancies), and FT825 (multiplexed engineered iPS-derived CAR T-cell for HER2-expressing solid tumors) under collaboration with ONO.

In the fourth quarter of 2022, revenue from partnerships with Janssen and ONO Pharmaceutical increased significantly to $44.4 million compared to $17.1 million in the same period the previous year. Non-recurring revenue from milestones within these collaborations was $25.5 million. Research and development expenses for the quarter were $87.2 million, general and administrative expenses were $21.6 million, and the net loss was $56.4 million or $0.58 per share.

• Expect to recognize $41.2 million as revenue from deferred revenue in Q1 2023 related to Janssen collaboration wind-down. - Anticipate cost savings from workforce reduction to be realized in Q2 2023. - Plan to submit IND applications for FT522 in mid-2023 and FT825 in 2023. - Enrolling multi-dose treatment cohorts with FT576 and continuing dose escalation with FT819.

• Termination of Janssen collaboration poses risks to research and development progress. - Challenges in advancing programs, including competitive landscape and potential hurdles in clinical development. - Market uncertainties and potential impacts on financial performance due to pipeline changes and workforce reductions.

Q: Do you envision the possibility of bolstering your competitive edge in multiple myeloma in the near-term by using both 576 and 819 to clear up plasma cells and CD19 [ph] progenitor cells while harnessing the best in both?

A: Absolutely have preclinical models combining NK-cells and T-cells, but not prepared to discuss public strategy for first launching combinations; excited about potential to unite adaptive immunity, with strategies like embedding high affinity CD16 receptor in T-cell backbone.

Q: Question on FT819 and state of world, and FT522 rate limiting issues for autoimmune program?

A: Committed to advancing FT819 as first iPSC derived T-cell, believes safe and effective off the shelf CD19 targeted therapy has place; for FT522, first commitment is to file IND in B-cell lymphoma combined with rituximab, and do not believe need to wait for significant oncology data to move into autoimmunity, may move into autoimmune after establishing safety of ADR receptor in oncology.