Fate Therapeutics at Barclays Conference: Strategic Shift to Autoimmune Focus

On Tuesday, 11 March 2025, Fate Therapeutics (NASDAQ: FATE) presented at the Barclays 27th Annual Global Healthcare Conference. The discussion, led by CEO Bob Valamere, centered on the company’s strategic pivot towards autoimmune diseases, particularly Systemic Lupus Erythematosus (SLE). While highlighting promising developments in their FT-eight nineteen trial, Valamere also addressed macroeconomic challenges and regulatory interactions, painting a picture of cautious optimism for the company’s future.

Key Takeaways

• Fate Therapeutics is shifting focus to autoimmune diseases, especially SLE, leveraging their iPSC-derived CAR T-cell therapy, FT-eight nineteen.
• The company is addressing potential supply chain and regulatory disruptions by maintaining ample inventory and close FDA relations.
• Financially, FT-eight nineteen is positioned as a cost-effective alternative to traditional CAR T-cell therapies, costing approximately $3,000 per dose.
• Fate anticipates increased clinical trial enrollment due to the advantages of off-the-shelf therapies.
• The company is actively engaging with the FDA to optimize clinical trial design and reduce hospitalization requirements for FT-eight nineteen.

Financial Results

• FT-eight nineteen is priced at approximately $3,000 per dose, significantly lower than traditional CAR T-cell therapies, which can cost hundreds of thousands of dollars per dose.

Operational Updates

• Manufacturing and Supply Chain:

- Substantial inventory is maintained to mitigate supply chain disruptions.

- Redundancy in manufacturing processes has been implemented with backup reagents and plastic supplies.

• Regulatory Interactions:

- Fate Therapeutics is in discussions with the FDA to reduce hospitalization requirements for FT-eight nineteen, potentially allowing outpatient administration.

• Clinical Trial Enrollment and Site Activation:

- Increased enrollment is expected due to the benefits of off-the-shelf CAR T-cell therapies.

- Updates on new clinical trial sites and patient enrollment are anticipated in the summer.

Future Outlook

• Clinical Trial Milestones:

- A twelve-month follow-up on the first patient treated with FT-eight nineteen for SLE will be presented at the EULAR conference in June.

• Regulatory Strategy:

- Fate Therapeutics plans to align with the FDA on a pivotal strategy for FT-eight nineteen in SLE by the end of the year.

• Product Expansion and Strategic Priorities:

- The company is exploring the use of FT522 in autoimmune niches and developing next-generation products for hemalignancies.

Q&A Highlights

• Impact of Macroeconomic Factors:

- Fate Therapeutics is mitigating potential supply chain disruptions with backup supplies.

• FT-eight nineteen in SLE:

- Promising early clinical data in SLE, with one patient achieving clinical remission after six months.

• Primary Endpoints and Trial Design:

- The company is considering several variables for trial design and aims for high standards on primary endpoints.

In conclusion, for a detailed understanding of Fate Therapeutics’ strategic direction and updates, refer to the full transcript below.

Full transcript - Barclays 27th Annual Global Healthcare Conference:

Peter Lawson, Biotech Analyst, Barclays: My name is Peter Lawson. I’m one of the biotech analysts at Barclays. I have the pleasure of covering Fate Therapeutics.

Up on stage with me, I’ve got, Mike sorry, Bob Valamere, CEO and President. I guess the first question is I’ve been kind of asking everyone has just been around the impact of tariffs on supply chain, anything we’d kind of be worried about over the long term or short term? Sure.

Bob Valamere, CEO and President, Fate Therapeutics: Thanks for the invitation, Peter. So this is obviously on everyone’s mind. The market is reacting quite nervously. For us, it’s actually the double edged sword because on one side, we actually because of our inventory, we make off the shelf and things are stacked in inventory. From one perspective is short term, it’s not going to interfere.

Long term, I’m not sure. We’ll see how long this lasts and what it means. But short term, we have plenty of product, 52,819, things we talked about today. And that’s the value of off the shelf. Obviously, multiple companies are have that luxury, but I think in cell therapy, very few.

So it kind of puts us in a very unique situation when it comes to that. Okay.

Peter Lawson, Biotech Analyst, Barclays: And any learnings, I mean, maybe from COVID where the supply chain got disrupted, if you’re more resilient or if there’s just new set of factors that we should worry about? Back up. So every reagent we use, obviously, we use about 80 reagents in our manufacturing process. It’s a very complicated process.

Bob Valamere, CEO and President, Fate Therapeutics: We have backups. So every reagent has a backup, even plastic where they have a backup. So we learned and I think we’re in a good place.

Peter Lawson, Biotech Analyst, Barclays: Got you. And then just the disruptions potentially and I guess are occurring at the FDA, just that’s changed any of the dialogue with the FDA if it’s slowed down or if there’s any kind of longer term worries that you’re thinking through?

Bob Valamere, CEO and President, Fate Therapeutics: Short term, we haven’t seen any disruption, but we do worry long term. We have a lot of different discussions with the agency on different products and we want to proceed at an expected cadence. And so I am personally worried long term, but short term things have been okay.

Peter Lawson, Biotech Analyst, Barclays: Okay, perfect. I mean, how do you guard against the reduced FDA or what are those worries you kind of think through?

Bob Valamere, CEO and President, Fate Therapeutics: Yes. We have several trials and we constantly take guidance from the FDA where it’s a continuous discussion. So I am worried about having those partners as a partnership. We’ve been working very well with the FDA and one worry is our partner is going to be there. And is this something that’s going to be now a consolidation, it’s going to be a longer queue.

So we do worry about that because we really cherish our relationship with the FDA and we’ve had really good interaction. So I would hate to see that come to an interruption.

Peter Lawson, Biotech Analyst, Barclays: Got you. And then kind of biological manufacturing, are there any worries there with whether it’s cross border licensing agreements or other components that we should be thinking about or

Bob Valamere, CEO and President, Fate Therapeutics: Yes, no, that’s another great question. So when it comes to manufacturing, obviously, we make our products in The U. S. And so when it as I mentioned earlier, we have inventory, we have redundancy in our reagents. So short term, the concern is not there long term, obviously, that would be different.

Cross border, if it comes to it, we would have to manufacture in an outside location. Having done a lot of tech transfer, we’re comfortable being able to do it elsewhere. But obviously, we prefer to manufacture in The U. S. And then distribute from here.

So I hope that doesn’t get disrupted either.

Peter Lawson, Biotech Analyst, Barclays: And then kind of the final macro question is just around NIH budgetary cuts. Does that impact the business in any way, any partnerships or any worries about as it trickles through to clinical trial sites?

Bob Valamere, CEO and President, Fate Therapeutics: Yes, absolutely. I mean, a lot of the I mean, first and foremost, we don’t want science to slow down. So that’s obviously as a scientist, that’s a huge concern. But from a perspective of our dependency on NIH, we have a lot of partners in the academic setting and obviously we share funds with them and they deliver different innovation or creative ideas for us. But they are also very dependent on a government financial support.

So that might actually hamper some of our academic relationships because they may not be able to continue as they have been. So it’s when it comes to delivery of our products, probably not. But when it comes to continued innovation, definitely that’s something we’re worried about.

Peter Lawson, Biotech Analyst, Barclays: So that could be more of a long term?

Bob Valamere, CEO and President, Fate Therapeutics: At least for us, yes.

Peter Lawson, Biotech Analyst, Barclays: Yes. Okay. And then just as we think about the products, so 08/19, so your CD19 CAR T cell, iPSC. In autoimmune setting, I wonder if you kind of walk through that trial and kind of what population of patients you kind of want to hit and kind of median age if there’s any chronic diseases that you kind of really want to

Bob Valamere, CEO and President, Fate Therapeutics: hone in on? Sure thing. So maybe I’ll take a step back and I’ll start with 08/19 and just give the kind of the history of the product. So eight nineteen is an iPSC derived CAR T cell for those who don’t know what iPSC is. These are cells that kept in a petri dish that if you keep them happy, they continuously self renew.

They don’t peter out if they’re kept in a healthy environment. The uniqueness about these cells is that at any time you could cue them to go into a different lineage and they could become any of the cells found in the body. What we’ve done is we’ve taken advantage of this ability and differentiated the iPSCs toward TNNK cells, eight nineteen beta T cell. Another advantage we have is that we can engineer at the iPSC stage, as you know, and then create master cell banks. And these master cell banks is a one time engineered product.

So then it’s another way of we actually protect ourselves from whatever happens out there we engineer once. We’re not dependent on antivirus production. We’re not dependent on technology on a regular basis. We’ve engineered this master cell bank. This master cell bank now is the starting material for manufacturing.

All the genetic edits are in it. All the genetic edits are tested and they’re uniform and consistent. So when we start with this master cell bank that, as you mentioned, carries a chimeric antigen receptor targeting CD19, It was developed originally in lymphoma, but it was developed with safety and efficacy in mind. So we fine tune the chimeric antigen receptor to have a balance between efficacy and safety. And so when we went into aggressive lymphoma, we had a pristine safety, a very favorable safety profile, but perhaps the activity was not as durable as necessary for an aggressive disease like lymphoma, where just five pounds of tumor in the body.

We did have response rates. We had forty percent CRs and about sixty percent overall response rates in patients that were naive to CAR T. So this was actually a very, very proud moment for us because we’re showing efficacy from a product that comes from a master cell bank. We were able to distribute it across the country, those 50 patients. And as I mentioned earlier, have very favorable responses in terms of safety.

One thing happened that was very interesting in 2022 and 2023 is when, SHED and the German group showed that you can apply CAR T targeted CD19 into SLE and other autoimmune diseases. For us, this was a kind of a light bulb went off for us because we thought this is a perfect opportunity to take FT-eight nineteen into a disease setting such as SLE because safety is even more important in autoimmune than it is in cancer. I don’t want to minimize the cancer patients, but when it comes to life expectancy, it’s very different in autoimmune. So safety becomes even more important. And so we had that box checked off.

The other thing that actually becomes quite unique is the tumor or the disease burden is much lower than it is in oncology. In oncology, you have 10 to 10 cells that you’re combating to get rid of, in autoimmune probably 10 to eight. And so here we thought, well, great, we have the perfect product that has the perfect balance of safety and efficacy. And that’s how we entered Autoimmune with this product. It’s off the shelf, it alleviates a lot of the patient burdens that comes with AutoCAR T.

There’s no need for the patients to come off current therapy to go through apheresis to provide the T cells to be further manufactured. Hospitalization is very small. It’s only seventy two hours. It’s much shorter than the traditional fourteen or ten days that comes with AutoCAR T. The product is a lot cheaper.

This is $3,000 a dose as opposed to AutoCAR T that’s in the order of hundreds of thousands of dollars per dose. And again, with the reduced hospitalization requirements, the total treatment option or paradigm becomes much cheaper. So off the shelf is available on demand, it’s cost effective, it is uniform, it is the safety profile is there and what we are seeing now that the activity is there as well. So as I’m sure we’ll get into further details of the activity. Going back to your original question, FT-eight nineteen became a perfect opportunity to go into SLE.

So this is moderate to severe SLE patients. And we have two study arms. In regimen A, we’re combining FT-eight nineteen with conditioning chemotherapy. As we all know, CAR T is combined with conditioning chemotherapy, most commonly cyclophosphamide and flu therapy. Here, we created kind of a physician’s choice.

We created the option of CyFlu. We also created the option of bendamustine because at the time of the IND filing, fludarabine was in shortage. And also we created the option of cyclophosphamide alone, a single dose of cyclophosphamide. And that’s because rheumatologists are very comfortable with cyclophosphamide. Patients that we’re treating have already been treated with cyclophosphamide, six rounds, in fact, three to six rounds over several months.

And so the physicians got the opportunity to go with CyFlu, Cy or BenDe. What was very interesting so far in the early stage of the clinical trial, no physician has taken up the CyFlu option. Everybody has either focused on bendamustine or cyclophosphamide. And so in this arm, we have we call it fludariby free conditioning or light conditioning combined with FT-eight nineteen. So this is your traditional cell therapy CAR T with conditioning.

In the second arm, we thought, well, what if we combine FT-eight nineteen with standard of care therapy? These are steroids or immunosuppressive agents such as MMF, methotrexate, ASA, where the patient is currently on that, but and the patient is stable, but wants to come off because these are medications that are not the healthiest things for patients that are childbearing age. And so we pursued both fronts, one with light conditioning, which again makes us very unique and one with standard of care therapy, which again makes us very unique because now you have an off the shelf product that is cost effective that will be just combined with current standard of care therapy. So very unique arms that would be, in our opinion, very desired by the patients and by the physician.

Peter Lawson, Biotech Analyst, Barclays: Got you. And as we think about the segments of the SLE patients, you’ve kind of talked about monogenicity severe, how large a population is there? Or is there a kind of a niche within that you think you should target? So a lot

Bob Valamere, CEO and President, Fate Therapeutics: of the active SLE patients are also active lupus nephritis patients. And this segment of the patients that fall into regimen A are smaller than the segment that fall into regimen B. So these are patients that are no longer responding to standard of care therapy. I’m going to speculate that’s about 5,000 to 10,000 patients, new patients on an annual basis there. But the much bigger side is what approximately about 10 x stat that’s under a combination with standard of care.

So patients that are right now taking, MMF, for example, and are stable on it. So there’s a relatively large population on both sides, but much bigger on the regimen B side.

Peter Lawson, Biotech Analyst, Barclays: Got you. Okay. Perfect. And then kind of if you wonder if you can walk through the data we’ve seen so far and how much you expect to generate this year?

Bob Valamere, CEO and President, Fate Therapeutics: Sure. So at last year conferences, ACR and ASH, we talked about the first three patients. Specifically, we talked about patient one and gave an update at her six month visit. So she basically was treated for six months with a single dose of FT-eight nineteen and combination with bendamustine. And this patient over the course of six months showed trends toward recovery with her B cell population getting depleted as we expect and then a recovery of a more naive population of B cells.

So she had low amounts of B cells, went in, got treated, came back and actually her B cells went above into normal level range. So she ended up after several months with normal number of B cells, but the population appeared to be in a composition that was preferred. Her renal function improved dramatically, her fatigue improved dramatically. And so she ended up being categorized as Doris clinical remission after six months. She from our conversations with the PI, she felt great.

She that was one of the best stories that I had heard in a long time where we had a mother who couldn’t get out of bed. Six months later, she is taking care of her children and going for a run. So really, it reminds you why you do this, even though there’s so much going on when you hear that and you just take a moment and enjoy life. And so we’re very excited. We will give a follow-up on her at Eular.

So that will be her twelve month follow-up. And that’s kind of an exciting first patient that we saw was a very good result from an off the shelf product. The second and third patients were also treated in regimen A and we gave an update simply by talking about the first month experience because they hadn’t reached six months yet. And there we saw trends that appear to be similar to patient one. And we’ll give updates on patients two and three at Euler as well or conference around that time.

And this will be basically June timeframe. And then another thing that’s been very interesting for us is while we had last year two sites and found it challenging to attract additional sites because they were all already bombarded by the big AutoCAR T companies or the more famous biotech companies who were in autoimmune before us. Those folks are coming back to us. Many sites are realizing what an off the shelf value point is, because I think where in oncology people realize what off the shelf was in 2017, ’20 ’18, because they had three, four years dealing with the manufacturing of AutoCAR T and how tough it is. Here, we’re realizing 2025 is the year where people in rheumatology are realizing, oh, off the shelf, I see the value points.

I didn’t really appreciate how challenging AutoCAR T was. Patients often do not want to go through that massive patient burden of getting the product made for them. And so we’re starting to engage with more sites. So we’ll be what I hope that will be given an update as well in the summer is additional sites activated and additional patients treated through this additional site activation. So enrollment, we’re anticipating to go up and that’s through more sites engaged.

Peter Lawson, Biotech Analyst, Barclays: I mean, that’s really encouraging. For those physicians that are coming back to you, what’s the appeal? Is it the data? Is it the lack of upfront conditioning?

Bob Valamere, CEO and President, Fate Therapeutics: I don’t want to speak for them, but I think the data reminded them that we’re around and it reminded them of the conversations we had. So when we gave updates at ASH at ACR, not only brought the folks to the presentations, but also reminded them how straightforward this process can be. It’s truly off the shelf. It’s very cost effective. Hospitalization is only for three days and we’ll talk more about that.

And it really captures what they’re used to traditionally by writing a prescription and getting the patient treated very different than autocartine, which they’re experiencing.

Peter Lawson, Biotech Analyst, Barclays: Yes. Wondering if you could elaborate upon those three days in the hospital, is that something that extends? Is that something that could potentially be reduced?

Bob Valamere, CEO and President, Fate Therapeutics: Yes. As I mentioned earlier, we treated about 50 patients in oncology and saw very favorable safety profile, minimal adverse events. And so when we went to the FDA with our conversation with that data package, they wanted to see, in their words, just show us a little bit in autoimmune and we have that data now. So now we’re engaging with the FDA soon to see how we could reduce the number of reduce those seventy two hours into a very different profile. So we’re hoping to end the requirements for hospitalization based on our safety profile and move truly into outpatient settings.

So now you have a true off the shelf product, very cost effective in an outpatient setting. And with the recent high C meeting we have with the FDA, we got the green light to multi dose and dose upon relapse. So now this is something that it’s becoming very exciting for us, but for cell therapy world, it’s still an education. We really see ourselves now as a biologic and monoclonal like treatment, where not only we make our products like a monoclonal, they have a true master cell bank and every time they need to dial up a manufacturing process, they go to the master cell bank. But also when it comes to treatment paradigm, it’s no longer the cell therapy paradigm where you only give one time to treat the patient and that’s it.

And you have to hope that that single dose can do everything you want it to do. We can now with our inventory, with our cost effectiveness, with our availability and with kind of the criteria that we’re developing for ourselves and the dosing strategy, we can compete with monoclonal antibodies and treat multiple times in a cycle or in multiple cycles. And so as the hospitalization requirements go away and the availability of the product is there and again cost effective $3,000 a dose, we really can now have a cell therapy like potency with competing with monoclonal like dosing strategy for more deep durable response.

Peter Lawson, Biotech Analyst, Barclays: Got you. Primary endpoints that we should be thinking about, is that something that’s clear? Does it have to be kind of the Doris clinical remission or is it renal function? Just answer through that. All great questions and points.

So right now, we have several variables ahead of us.

Bob Valamere, CEO and President, Fate Therapeutics: One is the dose level, one is the primary endpoint and the last one is combination with which conditioning agent and regimen A. So we are we’ve dosed we’ve cleared dose three sixty million, where dose level two is nine hundred million. So we feel like that’s enough separation between dose one and dose two approximately 2.5 X to not really be able to compare the two doses. Obviously, we prefer cyclophosphamide, a single dose of cyclophosphamide as a conditioning agent, but we would like to test bendamustine as well. And then to your question, the primary endpoint, obviously, we have to see what the results show us.

The higher the bar on the primary endpoint, I believe the shorter the trial and the fewer the number of patients. So obviously, we want to aim for the highest bar, but we have to see where the data takes us and that’s going to be part of our conversation with the FDA throughout this year as we try to align on a pivotal strategy by the end of the year.

Peter Lawson, Biotech Analyst, Barclays: Got you. Okay. Have you seen any AEs that have been out of the ordinary or what’s the biggest worry when you

Bob Valamere, CEO and President, Fate Therapeutics: think about the side effect profile? Knock on wood and I will, nothing to worry about as of today. It continues to be the trend. No AEs in the first seventy two hours, minimal issues. A couple of patients had a CRS grade one and couple of grade two, but that’s about it.

So, overall, the favorable safety profile that we saw in oncology is continuing with these patients in SLE.

Peter Lawson, Biotech Analyst, Barclays: How quickly do patients get their B cells back? Is that something you can hone in on or is it still uncertain? No, it’s

Bob Valamere, CEO and President, Fate Therapeutics: a great scientific question. We are trying our best to understand all that and correlate it. I know some of the earlier publications with the mAbs try to correlate B cell depletion with the patient outcome for us. The first patient went into Doris clinical remission. And as I mentioned, she started with about 20 cells, 20 B cells per microliter and went down to not detected and by day 28 came back to detect it and went to 100.

So she really was depleted of her B cells for only three weeks and we couldn’t ask for the outcome. So and she had shown in his range between thirty days and 180. So and all his patients the problem is all his patients are doing great, so you can’t correlate the two things, B cell depletion and outcome. But for us, the first patient was a clear demonstration that you just need to go down to allow the population to come back up. Maybe that environmental insult that was there originally when the patient began to manifest disease is no longer there.

So when you reset the immune or the B cell immune compartment, all you need is maybe as short as a week, I don’t know, but for us three weeks and we couldn’t ask for a better result. So that’s not need to be months as far as our data has shown.

Peter Lawson, Biotech Analyst, Barclays: Got you. And then you’ve got a second product moving into autoimmune settings. So maybe a step back, how should we think about the oncology franchise? Is that something in a year’s time or six months time that is completely on

Bob Valamere, CEO and President, Fate Therapeutics: the back burner? So right now, it’s 70% of the company is very focused in autoimmune disease and eight nineteen. Obviously, we have a wonderful partnership with Ono Pharmaceutical in terms of focusing on HER2 positive solid tumors. And so we are prosecuting that. When it comes to heme malignancies, I think our first generation products 08/19 and five twenty two were not potent enough.

We have a second generation coming up, but we’re not going to roll it out just yet. We need to focus on SLE and solid tumor, but we have a strategy coming up for hemalignancies. But for now, FT522 would be focused in specific autoimmune diseases where the mAb needs a little help. And so here, this is an NK product targeting CD19, but when combined with the monoclonal antibody, which is a standard of care for multiple autoimmune diseases, it can synergize and actually enhance not only the mAbs activity through ADCC, but also bring forth a CAR targeting CD19. So we’re going to find very specific niches for five twenty two where maybe eight nineteen doesn’t make sense and then pursue five twenty two in autoimmune.

Peter Lawson, Biotech Analyst, Barclays: Perfect. Thank you so much. Always a pleasure speaking to you.

Bob Valamere, CEO and President, Fate Therapeutics: Thank you, Peter. Thank you very much. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.