Developer of Programmed Cellular Immunotherapies Fate Therapeutics (NASDAQ: FATE) Reports Q4 & Full Year 2018 Financial Results – Highlights Operational Progress
San Diego-based Fate Therapeutics, Inc. (FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, today reported business highlights and financial results for the fourth quarter and year ended December 31, 2018.
Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics stated, “We achieved an unprecedented milestone in treating the first patient with FT500, which is the first-ever administration of an iPSC-derived cell therapy to a patient in the U.S. In 2018, we made great strides toward our vision of using master iPSC lines to produce universal, off-the-shelf cell-based cancer immunotherapies that are available ‘on demand’ and deliver transformational change in patient outcomes. The year was also highlighted by strong clinical execution and encouraging patient data for our ongoing allogeneic cell therapy programs, ProTmune and FATE-NK100. Additionally, our industry-leading iPSC product platform delivered multiple highly differentiated, off-the-shelf NK cell and T-cell product candidates, which we expect to move into the clinic in 2019.”
Fate’s Clinical Programs
First-ever iPSC-derived Cell Product FT500 Administered to a Patient in the U.S. In November 2018, the U.S. Food and Drug Administration (FDA) cleared the Company’s Investigational New Drug (IND) application for FT500, a universal, off-the-shelf natural killer (NK) cell product candidate derived from a clonal master induced pluripotent stem cell (iPSC) line. The landmark clinical trial is intended to assess the safety and efficacy of multiple doses of FT500 over multiple dosing cycles for the treatment of advanced solid tumors as a monotherapy and as a combination with nivolumab, pembrolizumab or atezolizumab in patients that failed to respond to, or progressed on, checkpoint inhibitor therapy. The first subject was treated with FT500 in February 2019.
Anti-Tumor Activity of FATE-NK100 Observed Across Three Phase 1 Studies. In November 2018, the Company reported initial dose-escalation clinical data of FATE-NK100 from fifteen subjects across three Phase 1 clinical trials for the treatment of relapsed / refractory acute myelogenous leukemia, recurrent ovarian cancer, and advanced solid tumors. As of an October 22, 2018 data cutoff, no FATE-NK100-related dose-limiting toxicities were reported, and anti-tumor activity was observed with a single dose of FATE-NK100 in seven of the fifteen subjects. Three of these seven subjects were subsequently treated with a second dose of FATE-NK100, which was well-tolerated and showed persistence. All three of these subjects achieved durable disease control for at least three months, providing initial proof-of-concept for multi-dose administration of donor NK cell therapy.
Presented One-Year Follow-up Data from Phase 1 PROTECT Study of ProTmune™. At the 2018 American Society of Hematology (ASH) Annual Meeting, the Company released new clinical data from the seven subjects receiving ProTmune for the treatment of hematologic malignancies in the Phase 1 stage of the PROTECT study. As of a November 26, 2018 data cutoff with a median time on study of 516 days [range 151-616], there were no ProTmune-related SAEs reported by investigators, no events of graft failure and no events of leukemia relapse, and five of seven subjects remained alive and leukemia-free (71%). Additionally, three of seven subjects (43%) successfully met a novel composite endpoint of freedom from moderate-to-severe chronic graft-versus-host disease (GvHD), leukemia relapse and death at one year, which endpoint is intended to measure the overall effectiveness of allogeneic HCT. The Company expects to complete enrollment of the randomized, controlled and double-blind Phase 2 PROTECT study in 2019, and that data on the primary and secondary endpoints will be available in 2020.
Universal Off-the-Shelf NK and T-cell Cancer Immunotherapy Preclinical Pipeline
Received FDA Clearance of IND Application for First-ever Engineered iPSC-derived Cell Product FT516. In January 2019, the Company submitted an IND application to the FDA for FT516, a universal, off-the-shelf NK cell product candidate derived from a clonal master iPSC line engineered to express a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor. CD16 mediates antibody-dependent cellular cytotoxicity (ADCC), a potent anti-tumor mechanism by which NK cells recognize, bind and kill antibody-coated cancer cells. Numerous clinical studies with FDA-approved tumor-targeting antibodies have demonstrated that patients with the CD16 high-affinity variant (158V) have improved clinical outcomes. The Company announced in February 2019 that the FDA allowed its FT516 IND application for the treatment of relapsed / refractory hematologic malignancies including in combination with certain FDA-approved monoclonal antibody therapies. FT516 is the first-ever cell product derived from a genetically engineered pluripotent stem cell cleared for clinical testing worldwide.
Presented FT596 Preclinical Data of Dual Antigen-Specific Targeting. FT596 is the Company’s universal, off-the-shelf chimeric antigen receptor (CAR) NK cell product candidate that expresses a proprietary CD19-targeted CAR, a hnCD16 Fc receptor for augmented ADCC and a novel IL-15 receptor fusion for cytokine-independent persistence. A presentation at ASH by scientists from the Company and the University of California – San Diego highlighted new in vivo data demonstrating that FT596 displays enhanced persistence and promote long-term survival in a B-cell leukemia xenograft model. Moreover, as a proof-of-concept for dual antigen-specific targeting and the mitigation of antigen escape, FT596 in combination with rituximab completely eliminated CD19+ and CD19- tumor cells in a co-culture cellular cytotoxicity assay. The Company expects to submit an IND application to the FDA in mid-2019 for clinical investigation of FT596.
Presented In Vivo Preclinical Data from Off-the-Shelf, iPSC-derived CAR T-cell Program. A presentation at ASH by scientists from the Company and Memorial Sloan Kettering Cancer Center (MSK) showcased new in vivo data demonstrating that the control of tumor progression with FT819, the Company’s off-the-shelf, TCR-less, CD19-targeted CAR T-cell product candidate manufactured from a clonal master iPSC, is comparable to that with peripheral blood CAR T cells in a preclinical mouse model of acute lymphoblastic leukemia. The clonal master iPSC line includes the targeted integration of a novel 1XX CAR into the T-cell receptor α constant (TRAC) locus, which is intended to regulate CAR expression for enhanced safety and efficacy and completely eliminate T-cell receptor (TCR) expression to mitigate GvHD. FT819 is being co-developed under a collaboration with MSK led by Dr. Michel Sadelain.
In-licensed Novel Humanized anti-BCMA CAR Constructs. In December 2018, the Company announced that it had entered into an agreement with the Max Delbrück Center (MDC) for exclusive access to a broad intellectual property portfolio of humanized antibody fragments, antigen-binding domains and CAR constructs that uniquely target and specifically bind B-cell Maturation Antigen (BCMA). In a recent publication entitled “CAR T Cells with Enhanced Sensitivity to B Cell Maturation Antigen for the Targeting of B Cell Non-Hodgkin’s Lymphoma and Multiple Myeloma” (doi:10.1016/j.ymthe.2018.06.012), scientists from MDC demonstrated that anti-BCMA CAR T cells equipped with its unique humanized extracellular antigen-binding domains have both greater selectivity and sensitivity in recognizing, and more robust killing of, target B cells in vitro as compared to other anti-BCMA antigen-binding domains.
Initiated Build-out of In-house GMP Manufacturing. In January 2019, the Company expanded its corporate headquarters in San Diego to include state-of-the art GMP manufacturing facilities for the clinical supply of its off-the-shelf, iPSC-derived cell product candidates. The modular design is customized to support the mass production of multiple product candidates in parallel. The Company expects to initiate in-house GMP manufacture of its off-the-shelf, iPSC-derived cell product candidates in the second half of 2019.
Fate’s Q4 2018 Financial Results
Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of December 31, 2018 were $201.0 million, compared to $100.9 million as of December 31, 2017. The increase was primarily driven by $134.9 million in net cash proceeds received by the Company from its September 2018 public offering of common stock. These proceeds were offset by the Company’s use of cash to fund operating activities.
Total Revenue: Revenue was $1.7 million for the fourth quarter of 2018, compared to $1.0 million for the same period in 2017. Revenue was derived from the Company’s collaborations with Ono Pharmaceutical and Juno Therapeutics.
R&D Expenses: Research and development expenses were $14.1 million for the fourth quarter of 2018, compared to $9.9 million for the same period in 2017. The increase in R&D expenses was primarily attributable to an increase in expenses associated with the preclinical and clinical development of the Company’s product pipeline and in employee compensation, including share-based compensation, associated with growth in headcount.
G&A Expenses: General and administrative expenses were $4.3 million for the fourth quarter of 2018, compared to $3.4 million for the same period in 2017. The increase in G&A expenses was primarily attributable to an increase in employee compensation, including share-based compensation, and in professional fees.
Shares Outstanding: Common shares outstanding were 64.7 million as of December 31, 2018 and 52.6 million as of December 31, 2017. Preferred shares outstanding as of December 31, 2018 and December 31, 2017 were 2.8 million, each of which is convertible into five shares of common stock.
Today’s Conference Call and Webcast
The archived webcast will be available on the Company’s website beginning approximately two hours after the event.