Good day ladies and gentlemen, welcome to Fate Therapeutics’ Second Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors and Media section of Fate’s website at fatetherapeutics.com. This call is the property of Fate Therapeutics and recordings, reproduction or transmission of this call without the expressed written consent of Fate is strictly prohibited. As a reminder, today’s call is being recorded. I’d now like to introduce Scott Wolchko, Chief Operating and Financial Officer of Fate Therapeutics.

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics second quarter 2015 earnings call. At 4:00 PM Eastern Time today, we issued a press release with our second quarter 2015 financial results, which can be found on the Investors and Media section of our website under press releases. In addition, our second quarter 2015 10-Q was filed shortly thereafter and can be found on the Investors and Media section of our website under Financial Information. Before we begin, I’d like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer on the Company’s earnings press release issued after the close of market today, as well as the risk factors in the Company’s SEC filings, included in our Form 10-Q for the quarter ended June 30 2015 that was filed with the SEC today. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, as the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Fate Therapeutics disclaims any obligations to update these forward-looking statements to reflect future information, events, or circumstances. Joining me on the call today are Dr. Christian Weyer, President and Chief Executive Officer and Dr. Dan Shoemaker, Chief Scientific Officer. I will begin the call by reviewing our financial results for the second quarter of 2015. For the three months ended June 30, 2015, Fate Therapeutics reported a net loss of $7.8…

Thank you, Scott and good afternoon everyone. Cell based immunotherapy has demonstrated tremendous potential across a wide range of severe life threatening diseases. This potential is well recognized and evident within the setting of allogeneic hematopoietic cell transplantation or HCT which is being repeatedly preformed with curative intent across a wide range of hematologic malignancies, this potential is also rapidly becoming evident in the adoptive transfer of immune cells such as T-cells and NK cells to combat severe infections, autoimmune diseases and cancer. Over the past several months, we have achieved several key milestone in our development of cell based immunotherapeutics, first, we reported encouraging immunoprotection data from an initial 30 subjects in our ongoing PROHEMA Phase 2 PUMA study. This interim data indicated the potential of PROHEMA to prevent severe life threatening infections across a broad spectrum of bacterial, fungal and viral pathogens through a one time administration at the time of HCT. This potential therapeutic benefit would alleviate a significant cause of morbidity and mortality in patients undergoing HCT and substantially reduce the need for costly anti-infective treatment regimens following HCT. Second, we formed a strategic research alliance with Juno Therapeutics, a company that shares our deep commitment to developing cell based immunotherapeutics for cancer patient. We believe this partnership exemplifies the broad applicability of our cell programming approach including to cytotoxic immune cells and third, we establish multiyear research collaborations with leading academic centers to expand and accelerate our preclinical research and development activities which are now focused exclusively on hematopoietic cell based immunotherapeutics addressing autoimmune disorder from stem cancer immunology. Our product opportunities now include a PD-L1 programmed CD34+ cell based immunotherapeutic which may offer a noble approach for resorting immunostaces and induce tolerance in patients with autoimmune and inflammatory diseases. An adaptive NK cell immunotherapeutic…

Thank you, Christian. As Christian mentioned, we have systematically broaden the application of our innovative cell programming approach to enable the development of programmed hematopoietic cell based therapeutics in the area of immunology. These expanded efforts are borne out of our commitment to clinical research and specifically towards thorough interrogation of the effects of cell programming in the context of our clinical development of PROHEMA. Throughout the conduct of PROHEMA clinical program, we’ve acquired a greater appreciation and sharper understanding of our ability to potentiate the biological activity and to affect the therapeutic properties of not only hematopoietic stem cells but also immune cells including T-cells and NK cells. Over the past three months, we have announced three strategic collaborations aimed at accelerating our research and preclinical development of programmed immunotherapeutic in the area of immunology, these include one, a research collaboration with Boston Children's hospital to accelerate the development of a PD-L1 programmed CD34 cell based immunotherapeutic for the treatment of autoimmune diseases. Two, the research collaboration with the University of Minnesota to develop off-the-shelf NK based cancer immunotherapeutics including dose derived from genetically engineered induce peripheral stem cells. And three, a strategic collaboration with Juno Therapeutics the program of therapeutic profile of genetically engineered T-cell based cancer immunotherapeutics. We believe our PD-L1 programmed immunotherapeutic may offer a novel approach to restoring immune homeostasis and inducing tolerance in patients with autoimmune inflammatory diseases and we are currently assessing its therapeutic potential in several preclinical models. We believe there is a strong biological foundation and we have achieved compelling proof-of-concept with this product opportunity. First, the PD-L1 pathway have been clinically proven to be a high value target and data from large clinical trials of the PD-1 checkpoint inhibitors validate the role of PD-L1 in promoting T-cell hepatosis, energy and…

Thank you, Dan. With our strong scientific foundation, our innovative cell programming approach, our focus on immune cells and our expanding network of external collaborators, we are uniquely positioned to develop novel and distinct hematopoietic cell based immunotherapeutics with disease transforming potential. In the second half of 2015, we look forward to sharing clinical data from our lead program to hematopoietic cell based immunotherapeutic PROHEMA for umbilical cord blood transplantation and to filing an IND to conduct a first in human clinical assessment of our program to hematopoietic cell based immunotherapeutic ProTmune for mobilized peripheral blood transplantation. Each year about 27,000 allogenic HCT are performed with curative intent across a wide range of hematologic malignancies, we believe that PROHEMA and ProTmune have the potential through a one time administration at the time of transplant to alleviate significant cause of morbidity and vitality in patients undergoing HCT and substantially reduce the need to costly pharmaceutical treatment regimens following HCT. Finally, we are very excited about the rapidly emerging opportunities from our preclinical pipeline in the areas of autoimmune disorders and immunooncology. And with that, I will turn the call over to the operator for any questions.

Thank you. [Operator Instructions] Our first question or comment comes from the line of Paul Matteis from Leerink. Your line is open.

Hi, this is Laura Coluci [ph] in for Paul. Thanks so much for taking our question, we were queued. I was wondering if you guys were planning generating data from all 60 patients or if you thought that you might end the study early, the PROHEMA early?

Yes, thank for the question. This is Christian speaking. No, we absolutely intend to generate it from all 60 patients in the PUMA study.

Great, thanks so much. And any additional color you could offer on the ProTmune studies, how many patients they would be when they go into clinic and would they be placebo controlled?

Yes, we are not at this point to give any detail specifically on the study design, what I will say is we are working with experts in the field that have done and have a lot of experience in mobilized peripheral blood transplant and you know what I will say in general is that mobilized peripheral blood transplants are done very routinely and in sizable numbers, it is the most predominant sales force allogenic HSCT and so our approach will be any purpose to human study where we obviously look very carefully at key transplant related outcomes to guide our future development efforts.

Okay, great. Thanks so much. And just a few questions on the Juno collaboration, any idea when a compound from that collaboration is going to enter the clinic or not so yet?

Yes, this is great question, I mean, I cannot overstate the importance obviously of this research collaboration and as Dan mentioned we are very aggressively advancing the efforts there, it would be pre mature though for us to give guidance at this point as to when an initial small molecule will be included and incorporated into the robust pipeline obviously that our collaborators have assembled in terms of their CAR T programs?

Absolutely. That totally makes sense. And then financially how is the money from the collaboration going to be amortized in the quarters going forward?

Sure, this is Scott. So, between the upfront payment of $5 million and the stock purchase of $8 million, of the $8 million stock purchase $3.4 million of it was deferred revenues, the total deferred revenue from the upfront and the stock purchase is about $8.4 million, you should assume that that is going to be recognized ratably over a four year research term.

Okay, perfect.

In addition, there is research funding on a quarterly basis, the minimum annual payments with respect to the research funding or $2 million per year and you should assume that that will also be recognized ratably.

Okay, thank you so much for taking our questions.

Thank you. [Operator Instructions] Our next question or comment comes from the line of Mark Breidenbach from H.C. Wainwright. Your line is open.

Hey, guys. Thanks for taking my questions and congratulations on all the progress. Let’s talk about Provide just for a quick minute, can you specify which metabolic disorder the firs patient suffers from and maybe speculate on the earliest timeframe by which we might be able to detect a clinical benefit and are we still on course for seeing some of the – some early clinical data before the end of this year?

Yes, Mark. Thanks for the question. This is Christian. So the trial itself actually incorporates inclusion criteria for a variety of inherited metabolic disorders and right by the very nature of the effective PROHEMA health potential to correct and some efficiency across these inherited metabolic disorders, the most common disorders that we expect in this study as well patients are based on various types of leukodystrophies and the first patient was the in the category of those initial indications. With respect to clinical data, we, this is an open label study, so we are looking at the Provide study as one of the studies where we will be able to provide an update at the end of the year but that being said as we have guided in the past, trial will continue to enroll and we will have long term following up on CNS endpoints which will contribute to news flow beyond the end of this year.

Okay. You follow these patients for life?

For several years after the transplant procedure as is routinely done in transplant studies, yes and as we have previously said and commented in our prepared remarks there are serial follow-ups with respect to new imaging and new cognitive assessment in the patients that are going to be involved in this study.

Okay, great. And how is it going? Let’s switch gears to some of the preclinical programs, I think there are lot of this that are really interested in the pushing to engineered T cell, NK cell therapies, I realize it might be too early for you to give us any chances and we might see the first inklings of even preclinical data from this programs but, I really had a question about sort of the duration of effect of the small molecule modulators on the cells, I think in the last quarter you said in terms of the CD34 cells, they could be modulated to up regulate PD-L1 transiently for maybe two or three days, this is a general property of small molecule modulators of cell are we going to see sort of short-term re-programming of the NK cells and the T-cells is the duration of the cycle long enough to be compatible with these source of therapies?

So, Mark, great question and I will take a first step at it then maybe turn it to Dan to fill in some of the additional scientific information, so I think the – with respect to the functional programming exposing these cells small molecules, we have shown that with short term exposure of the cells prior to administration to the patients we have seen in various settings both pre-clinically and clinically that this can have very lasting long terms effect, right, so whether that be engraftment, whether that is the long term risk of infections, and there is biological mechanisms that would explain why a pulse treatment or short term treatment can have long term effect in the area of T-cells as an example, prior studies we have seen evidence that we might skew the distribution of the types of T-cells more towards memory or naïve T-cell component and then off itself would be expected to have long-term effects in that T-cells are more likely to stay around. But this is only one example with respect to your question about the overall strategy for developing cell immunotherapeutics, think of this as a two sort of pronged approach, one is obviously working with Juno Collaboration to identify small molecules to optimize the properties of first generation CAR T and TCR therapies to those that are isolated from an individual patient and then the recent announcement that we commented on in our prepared remarks about NK cells adaptive NK cells and IPSC derivation of these cells, we believe there is a phenomenal opportunity to derive second generation product candidates that could be off-the-shelfs so adaptive T-cells excuse me adaptive NK cell as an example the data that is today about the long term persistence of these cells could be a complete game changer in the area of NK cell based therapy and this is exactly what we are pursuing of small molecules. Dan, anything you want to add?

Yes, I will just reinforce that we believe small molecules can be used to skew a T-cell population towards a memory phenotype which will have longer in vivo persistence is one point the second is the ability to impact the traffic in any of these cells and if you get them to the right micro environment, the Qs and the micro environment could then take over again to drive the therapeutic properties of the cell further, those are just two examples of how an ex vivo module can result in long-term persistent in vivo outcomes.

Okay, that’s really helpful. Thanks. And if I can just sneak in a quick question about ProTmune, we are looking forwarding to seeing ProTmune enter the clinic but thinking about to some of the preclinical data that you have seen in terms of it, we know the combination of module can upregulate CAR T [indiscernible] and improve honing but we also know it has a significant impact on T-cell activation. This it seems like it’s really great new for keeping graft versus host disease in check or preventing graft versus host disease but can you comment on any implications for potential graft versus tumor responses?

We are studying this in preclinical models both on the ability of the combination treatment to reduce GvHD and we are carefully monitoring the viability persistence of the treated cells and this is data that will continue to look at throughout the year but there has been no indication that we are harming the T cells.

Okay, alright.

And Mark, one thing I might also add just to follow on the topic of ProTmune and I think we alluded to this in our prepared remarks, the very encouraging data that we observed in our PROHEMA study and the PUMA that we reported in May with respect to the reduction in both bacterial and viral injections, we believe is a very important observation up only for the properties of PROHEMA but bacterial and viral infections are huge unmet medical need across the setting of allogeneic hematopoietic transplant and so there is certainly a potential that this encouraging findings that we are seeing with FT-1050 modulation in the cord blood setting would also translate into some of the other sort of future applications and I will call out and remain you again that one of the modulators we are actually using the in ProTmune in the generation of ProTmune is in fact the FT-1050 molecule so we are obviously going to be looking at infection as well quite carefully once we initiate clinical testing of ProTmune.

Okay, got it. Alright, thanks very much. I will jump back in the queue and congrats again.

Of course. Thanks Mark.

Thank you. [Operator Instructions] Showing no additional questions, I would like to turn the conference over to Mr. Chris Weyer for any closing remarks.

Excellent. Thank you very much everyone for your participation in today’s call. As always, we look forward to updating you again in the near future. Thank you for joining the call.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone have a wonderful day.