Welcome to Fate Therapeutics First Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on the Investors & Media section of Fate's website at fatetherapeutics.com. As a reminder, today's conference call is being recorded. I would now like to introduce Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics.

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics first quarter 2017 financial results call. Shortly after 4 P.M. Eastern Time today, we issued a press release with these results, which can be found on the Investors & Media section of our website under Press Releases. In addition, our Form 10-Q for the first quarter ended March 31, 2017 was filed shortly thereafter and can be found on the Investors & Media section of our website under Financial Information. Before we begin, I would 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 first quarter ended March 31, 2017 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 obligation to update these forward-looking statements to reflect future information, events, or circumstances. Joining me on the call today are Dr. Chris Storgard, our Chief Medical Officer and Dr. Dan Shoemaker, our Chief Scientific Officer. I will begin the call by highlighting our critical development strategy for FATE-NK100 for the treatment of cancer and our advancement of iPSC derived NK cell…

Thanks Scott. As Scott mentioned, I will provide an update on the status of our clinical studies and our planned or anticipated data release during this busy and exciting year. Let me begin first with PROTECT. So our Phase 1, 2 study of ProTmune for the prevention of acute graft versus host disease or GVHT in patients receiving a maxed, unrelated mobilized peripheral blood transplant. We continue to maintain a high level of engagement and enthusiasm with our investigators. We have now opened 11 clinical sites in the U.S. and we are currently working to activate up to a total of 20 sites, including sites in the United Kingdom. Our plan to complete enrollment of the Phase 1 stage by mid-2017 remain on track. As a reminder, the PROTECT Phase 1 stage is intended to access the safety of ProTmune. An Independent Data Monitoring Committee will assess safety by evaluating Neutrophil Engraftment and survival at day 30 following transplant. I’ve said that the safety concerns Phase 2 stage of the PROTECT study will open for enrollment. We expect a report PROTECT Phase 1 safety data including both Neutrophil Engraftment and survival at day 30 post transplant promptly following the Independent Data Monitoring Committee accessments. In addition to accessing safety, Phase 1 also has the potential to demonstrate early clinical proof of concept. It's up to 60% of patients experienced acute GVHD within the first 100 days following transplant. We plan to report day 100 efficacy data for the Phase 1 safety stage including the incidents and severity of acute GVHD and survival once the data is available. The Phase 2 stage of PROTECT is designed as a randomized control, stratified and blinded study for the evaluation of 60 subjects. 30 receiving ProTmune at 30 receiving a standard of care peripheral…

Thanks, Chris. We continue to make exciting progress using our iPSC product platform to advance a one cell many patients approach to cellular immunotherapy for treating cancer and immune disorders. We believe the use of human induced pluripotent cells as master cell line is central to enabling off the shelf treatment of many thousands of patients without requiring patients or so. We're looking forward to providing a comprehensive update on our iPSC platform at the upcoming 2017 annual meeting of the International Society for Stem Cell Research in Boston on June 14. We're kicking off ISSCR by hosting a 3 hour focus session entitled Off the Shelf Natural Killer Cell Cancer Immunotherapy. The session will feature renowned guest speakers including doctors Seth Miller, Kelly Naumberg, Bob Valamehr and Dan Kosman. The presenters will provide an in depth scientific overview of the company’s industry leading iPSC product platform, it will highlight several iPSC derived NK product opportunities undergoing preclinical development. These include the hnCD16-iNK product which is created from a master iPSC line engineered to express the novel CD16-sc receptor. This receptor has been modified to increase its surface expression by preventing activation induced setting and to increase the affinity to therapeutic antibodies. Additional product opportunities to be a showcase include NK Cells derived from master iPSC lines engineered to express merit antigen receptors. The focus session will also include a discussion on the manufacturing and regulatory considerations for bringing iPSC derived cellular immune therapies to patients. It addition to hosting the focus session, we plan to present an abstract at ISSCR with preclinical data solid our development of an off the shelf iPSC diversion of our product candidate for the treatment of autoimmune and inflammatory diseases. We now have demonstrated that iPSC drive -- presented herself or IPTC can partly suppress disease causing T-Cell and that this activity is not dependent on a chilly matching. In recent preclinical studies we have shown that iPSC have enhanced level of immune regulatory activity as compared to T-Cells. Finally, we have established a scale on manufacturing process to generate our iPSC derived immunoregulatory product candidates. I will now turn the call back over to Scott to review our first quarter 2017 financial results.

Thanks Dan. Turning to our financial results for the first quarter ended March 31, 2017 Fate Therapeutics reported a net loss of $10.2 million or $0.24 per common share as compared to a net loss of $8.4 million or $0.29 per common share for the same period last year. Revenue was $1 million for the first quarter 2017 compared to $1.3 million for the same period last year. Revenue in both periods was generated from our strategic research collaboration with Juno Therapeutics. Research and development expenses for the first quarter of 2017 were $8.0 million compared to $6.6 million for the same period last year. The increase was primarily related to an increase in third-party service provider fees to support the clinical development of ProTmune and FATE NK-100 and a preclinical advancement of our off the shells cancer immunotherapy programs. G&A expenses for the first quarter of 2017 were $3.0 million compared to $2.6 million for the same period last year. This increase was primarily related to an increase in intellectual property related expenses. After adjusting for research funding proceeds from Juno of $500,000 and for stock-based compensation expense of approximately $900,000, total operating expenses for the first quarter of 2017 were $9.6 million. At the end of the first quarter of 2017, cash, cash equivalents and short-term investments were $82.3 million; debt outstanding under our facility with Silicon Valley Bank was $8.8 million; common stock outstanding was approximately 41.4 million shares; and preferred, convertible stock outstanding was approximately 2.8 million shares. Note that one share of preferred stock is convertible into five shares of common stock under certain conditions. In conclusion, the next several months promise to be eventful and exciting. With ProTmune, we expect to read out the initial Phase 1 stage or PROTECT study and get a first look at the products potential to change the field of allogeneic hematopoietic cell transplantation. With FATE NK-100, we expect to begin enrolling subjects across 3 different clinical settings, including in AML where there is strong clinical precedent and in solid tumors in combination with trastuzumab and with cetuximab which to our knowledge will be the first ever clinical investigation in the United States of an allogeneic NK Cell adoptive immunotherapy in combination with these monoclonal antibodies. With our iPSC product platform, we continue to lead in innovation and are driving to become the first company ever to advance the cancer immunotherapy created from the master pluripotent cell line to clinical development. And with that, I’d like to turn the call over to the operator for any questions.

And your first question comes from Ren Benjamin with Raymond James. Your line is open.

Hi, good afternoon guys. Thank you so much for taking the question. This has been -- congrats on the progress for the quarter. I have a couple here. First one is on the FATE NK-100 AML study. So maybe can you sort of talk about the type of data that you want to see or you have to see so that you feel comfortable to move this study. Is this product into a pivotal study in 2018? And then I will have a follow-up. Thank you.

Sure. So I think what’s been seen in the industry in -- investigators so far away it NK Cells has been about 25% to 30% complete response rate in refractory relapse to AML. So from our perspective, we fundamentally believe FATE NK-100 is a substantially better product than the product that is being administered today. All our preclinical studies, we used conventional NK cells that are being clinically administered today as the benchmark against which we compared FATE NK-100 and across the board, whether you look at cytotoxicity, whether you look at persistence, whether you look at resistance to immune checkpoint pathways. Setting FATE NK-100 we believe is a far superior product. So certainly from our perspective, we would be looking for response rates that are absolutely north of 30%.

Got it. That’s very helpful. Thank you. And then another question is on the DIMENSION study. So when do you think we might see some data and also maybe a similar question is for those combination studies with approved monoclonal antibodies what would be considered a win in terms of efficacy there?

Sure. With respect to FATE NK-100 and monoclonal antibodies, I’ll turn that over to Chris and he can comment on some of the end points we’re looking at and would be excited about with respect to that combination. Our plan with respect to FATE NK-100 and the clinical studies, we plan to provide an update at a scientific conference in the second half of 2017 discussing just a general program, as well as the clinical development studies that are being conducted. All studies are open label, so we do have the ability to highlight the results that we’re seeing across all 3 clinical studies.

Great. And regarding what we consider a win.

We actually have many shots on goal here that we think will be clear evidence of the potential for registration studies moving forward. So the first is we are going to be looking at those subjects who've already progressed on the approved therapy. So for instance with trastuzumab dose with HER2 positive breast cancer or gastric cancer who have progressed on trastuzumab. And in that setting, if we see a partial response in that setting we have clear evidence that it’s due to the combination. In that setting there has been clear precedence that a potential for monotherapy single arm open label study in a refractor population to potentially support approval. Obviously, that would that be dependent upon further discussions with the regulators. Similarly with cetuximab, we have - we’ll be enrolling those who have progressed on cetuximab with colorectal cancer, head and neck cancer. So that again is clear evidence, and a clear win, if we are seeing partial response, especially durable partial responses there. There will be some other clear opportunities here. I think the one that I'm very excited about are the RAS mutant colorectal cancer patients. We know for certain that the monotherapy, the EGFR monoclonals are not effective. However, we believe the synergy with the ADCC mechanism that we're looking to at developing here is an significant opportunity. So signals again there are persistent durable responses, I believe are clear opportunities for potential future registration.

Got it. That's very helpful. Thank you so much. Good luck going forward.

Thanks.

And we do have a question from Do Kim with BMO Capital Markets. Your line is open.

Thank you. Thanks for taking my question. Just a follow up on the NK-100 what would you think would be the appropriate comparator from a regulatory perspective? Do you think that the FDA would allow a clinical study compared versus conventional NK Cell therapy or would approved product be appropriate comparator?

So again, it depends on which setting we’re looking at. So let’s talk first about the AML. Again, with the - really I would say remarkable remission rate that has been observed with NK Cell therapies and our expectation to see even above 30%. I think there is precedent that when you're saying a meaningful clinical response in a relapsed refractor population that that may in itself be sufficient without the need for a comparator. Again this will be in further discussions with the FDA, but I believe there has been precedence that in a situation like that with clear medical and clinical value added with durable response rates in a unmet need population the single arm studies have been acceptable for registration, but discussions and data will determine.

And one thing just to make clear, in case I didn’t make it clear in my comments. The NK Cell therapies that are being given today are not approved or investigational. So the idea of running a comparative study as Chris mentioned I don't think is the path forward in demonstrating efficacy for FATE NK-100.

Okay. Got it. And in your pre-IND discussion for your iPSC therapy are you finding them similar to what you went through for NK-100 or the FDA bringing up different question?

Certainly bringing up much different questions, it's a very different paradigm with respect to using a master cell line to create a cell therapy as opposed to FATE NK-100 which is a donor derived product and it's really an enrichment strategy about creating a preferred phenotype with unique cancer immunotherapy properties. An iPSC approach is very revolutionary, it's very disruptive, and it is a completely new paradigm for cell therapy. I think -- obviously I think an iPSC approach has tremendous advantages over the current approaches to cell therapy today. So yes, it is very new with respect to the FDA's mindset in thinking about that; yet as I discussed, I do think they remind based on our discussions and what their view of this product, it is -- I think it is considering the product and NK cell therapy as opposed to it's a pluripotent cell. Sure we start with a pluripotent cell and that is a new approach, the idea of starting with a pluripotent cell is clearly a new approach; but at the end of the day the product that we are creating is a fully differentiated NK cell and I think we were fundamentally pleased with a feedback that we got from the FDA and from MHRA in the recognition that the drug product that we are delivering to patients is a fully differentiated NK cell.

Great, very helpful. Thank you for taking my questions.

[Operator Instructions] And your next question comes from David Nierengarten with Wedbush. Your line is open.

Thanks for taking the question. Maybe if you could just review for us and remind some investors out there, what we should be seeing when you report out the first 10 patients for ProTmune, is it -- are we going to be able to see a 28-day safety? Is it -- are there going to be some patients out to 100-days that you can report on or are you going to report on the same time point and data for the whole group of patients? Thanks.

Sure. So our view of this is, the data monitoring committee is assessing safety. They are assessing safety at dates already post-transplant. The safety assessment primarily is focused on two measures; number one, engraftment; and number two, survival at Day 30. And so our current view is when we report the Phase 1 stage, we will be reporting on the safety assessment as conducted by the data monitoring committee. When all patients reach Day 100, we will report out the efficacy readout 'from the Phase 1 stage study which will then look at rates of GDHD, rates of infection and survival at Day 100. So there will be two sets of data release with respect to the Phase 1 stage, the safety assessment and the findings of the data monitoring committee from the safety assessment which importantly, the findings of the data committee and the safety assessment will allow us to begin Phase 2. So we will initiate Phase 2 based on the safety findings from the DMC; while the Phase 2 is up and running, patients will continue to progress to Day 100 and we will read out Day 100 when all patients have reached Day 100.

Got it. And the gating factor again is just the data safety monitoring committee; you're reporting out -- it's safe and you can progress on the patients you don't need to -- that you don't need any other data points; just to confirm.

Yes, it's very clear what their preview is and what the measures are of safety.

Got it. Thanks.

And I'm not showing any further questions at this time. I would like to turn the call back over to Scott Wolchko for any further remarks.

Terrific. Thank you very much. I appreciate everyone's attending and interest rates in our first quarter 2017 financial update call. We look forward to talking to you in about three months. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. And you may all disconnect. Everyone have a great day.