Welcome to the Fate Therapeutics First Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. This call is being webcast live on Investors & Media section of Fate’s website at fatetherapeutics.com. As a reminder, today’s call is being recorded. I would now like to introduce Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. Please begin sir.

Thank you. Good afternoon. And thanks everyone for joining us for the Fate Therapeutics first quarter 2019 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 quarter ended March 31, 2019, was filed shortly thereafter and can be found on the Investors & 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 March 31, 2019, 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 is Dan -- Dr. Dan Shoemaker, our Chief Scientific Officer. Since 2015 Fate Therapeutics has held true to a bold vision that induced pluripotent stem cells or iPSC technology would serve as the platform for developing and commercializing off-the-shelf cellular immunotherapies. We foresaw the unmatched…

Thank you. [Operator Instructions] Our first question comes from David Nierengarten of Wedbush. Your line is open.

Hey. Thanks for taking my question. I have a couple of questions. First, if you, you mentioned, I believe, unless I missed something, the combination or using two different antibodies with a 516 and CD16 construct, have you looked at sequentially as a tumor pre-clinically gained resistance adding the second antibody in later, if that’s possible? And then the second part of that is, as you open the study of 516 plus, approved antibodies, is there any potential or investigator ability to do that in the natural -- in patients, if they want to lose sensitivity or CD20 or CD19 antigens, would you be able to treat the patient with the next antibody, so I will say, along with NK 516? Thanks.

Sure. So you are touching on something that is absolutely fascinating and speaks to the versatility of the CD16 receptor. Last question first, so clinically, well, clinical protocol currently allows for the administration of a single monoclonal antibody to engage the CD16 receptor and so you would not for instance under the clinical protocol as currently written have the ability to, for instance, give a first let’s pick it CD20 -- anti-CD20 monoclonal antibody and then treat with a second monoclonal antibody. That is something that is very interesting clinically, but is not part of the existing first generation clinical protocol, if you will. Pre-clinically, as you can imagine, we have absolutely looked at scenarios where you can utilize a product candidate like FT516 and combine with either sequentially or concurrently multiple different antibodies and you have the ability to hit multiple different antigens by leveraging multiple different antibodies. It is one of the most powerful features of the CD16 receptor.

And I guess maybe the quick follow-up would be, have you seen differences in activity or response rates in, at least the animal models with sequential or concurrent administration? Thanks.

Yeah. So I am not going to speak to that on this call. It’s something that we will be presenting data around that, because it is something that is very exciting and unique to the CD16 receptor.

Okay. Thank you.

Thank you. And our next question comes from Edward Tenthoff of Piper Jaffray. Your line is open.

Great. Thank you. Can you hear me, okay?

Yes. I can.

Okay. Great. So, Scott thanks for the update, really fantastic stuff I am really getting excited. I wanted to ask, kind of a high level question and as we get these iterative knock-ins knock-outs where does this ultimately go? Do we have first and even second generation NK and/or CAR T products that maybe evolved as a cancer evolves, is this something where maybe we have something for different types of hematologic cancers and something for different types of solid tumors, where do you ultimately see this technology evolving?

Yeah. I think --- and I think this speaks more broadly than just Fate’s technology, but I do think the ability to, for instance, give multiple doses and hit multiple antigens and potentially actually secrete pharmaceutical elements is ultimately where this field will go. Cells, obviously, have the ability to engage specific targets, but these cells that we and others are developing have the ability to serve as factories, if you will and secrete elements, other elements non-targeting elements, that absolutely can have an anti-cancer role and deliver additional functionality. So I do think ultimately -- and we are getting there quite frankly with FT596, a version of what we just talked about with David, with respect to FT516 where you can combine FT516 with multiple different monoclonal antibodies to deliver more multi functionality, but 596 has now actually embedded multi functionality into the actual product candidate. We have three different functional features in that product candidate. And so I do believe the world of cell therapy is going towards directionality, where there will be multiple pieces of anti-tumor functionality embedded into these product candidates. And so for us, one of the things we are mostly interested in like for instance CD16 is being able to embed functionality into the backbone of cells that provide a tremendous amount of versatility.

Fascinating.

Yeah. And Ted, this is Dan. And just -- to keep in mind that we are already at…

Yeah.

We are at with 596 and I think one of the differentiating aspects about this platform is because there’s a cell line on the front end, it really opens the door to these complex multi-step editing procedures that is going to allow us to go to five, six, seven edits and I think when you try and imagine those types of genetic engineering strategies performed on batches of cells. It really becomes challenging and nearly impossible. So I think this is one of the major strengths of our platform that that we are already realizing and we will take advantage of even more. So as we move forward.

Okay. Very, very interesting. Very enticing. One quick question, is it possible to tease out activity i.e. MK Judy versus CD19 versus therapeutic antibody or do you even care at the end of the day you just won’t response. Thanks so much for answering the questions.

Yeah. So again building on something Dan said, you actually can tease out the individual functional elements by using essentially think of an iPS cell as almost like a lego where you can build the first piece of functionality in, lock in that cell line use that cell line to add now the second piece of functionality lock in that cell line and now adding a third piece of functionality and lock in that cell line and so now I have three generations all originating from the original master cell line or you can race those product candidates against each other and really tease out the individual component functionality, it’s actually what we do, do.

Yeah. And pre-clinically, you can’t really address each of the functional elements individually. I think I take your point when you go to the clinic, it’s -- you really have the benefit of all of them working together and it’s hard to know who is exactly doing what other than you have a multifaceted attack.

Very cool Scott. Thanks for the update, guys.

Thank you. And our next question comes from Biren Amin of Jefferies. Your line is open.

Thank you. Hi, guys. Thanks for taking my questions. Scott, so on the 596 program, which is CD19 targeted CAR NK, what tumor type are you going to go into, I read the press release, clearly you are expecting interim data by the end of the year, so just trying to understand which tumor settings you would go into for that program?

So I think in the press release, we said that we would have initial clinical data around 596, but we are looking at 596 initially looking towards lymphomas.

Got it. And is there any read through on the 500 program. So, I guess, for 500, are you staggering patient enrollment to follow safety and if so can you use that data set and apply it to 550 and 596 to potentially expedite clinical enrollments?

So really interesting suggestion, I can’t speak to that yet. Although, I think our hope, but obviously the experience we are building with first products like FT500 or FT516 will be viewed potentially favorably. Given that there is human experience with some of those elements. So obviously FT500 is the first iPS-derived NK cell product, F516 will introduce a CD16 targeting element and 596 will also incorporate that targeting element. So we have certainly not pressure tested whether or not we can accelerate clinical development. But I do think the way our product candidates are rolling out, you are seeing additional functionality being built into the next generation product, that is appearing in earlier generations.

Got it. And I guess, the other question I had is on 500, when can we get efficacy data from this program. You have treated three patients you are going onto combination. Is this something that we could expect at the SITC Meeting later this year?

Yeah. I think our objective would be able to provide a fuller clinical update. Clearly, we will continue to provide updates along the way on progress in safety and biomarker observations. But, yes, we are targeting a full clinical update on the program around the SITC ASH timeframe certainly.

Great. Thank you.

Sure.

Thank you. And our next question comes from Daina Graybosch of SVB Leerink. Your line is open.

Hello. Thank you. A couple of questions.

Hi.

The first one is around the lympho depletion. I know you said that FT500 is in the outpatients. I wonder if you could talk more about the conditioning regimen. If you think it limits you to certain healthy patient population, whether you need to repeat it before it cycle and whether that could limit the number of cycles you give?

Sure. I mean, I can speak to it, Dan will speak to it too. So if you remember back to our NK100 experience, which is a donor derived cell therapy that is ongoing in multiple Phase 1 studies. One of the benefits of the NK100 experience is, we are looking at multiple different conditioning regimens, ranging from complete lympho depletion in the AML to very light lympho conditioning in the solid tumor study. If I recall correctly the dimension study has two days of Cy and one day of Flu actually, and so it’s very much outpatient in that setting. So we are learning a lot from the different conditioning regimens and how those conditioning regimens are for instance releasing cytokines, which may be important to the cell therapy that were being delivered. The clinical studies that we are conducting with the FT500 series of products, we are providing conditioning and I think the FT500 study is two days of Cy, two days of Flu, we are providing conditioning at the beginning of the first cycle, so not at the beginning of each dose, but at the beginning of the cycle.

And again, as Scott said, this is an interesting balance we are trying to get creating the optimal environment for our adoptively transferred cells. But we are also trying to keep in mind that one of the goals is to engage an adaptive immune response from the patients. And so I think finding this balance is going to be the key and we are doing extensive biomarker analysis of both the response of the patients’ immune system, as well as the persistence of our iPSC derived products, in addition to sort of the cytokine environment that we think is playing a critical role. So it’s really going to be a balance of these factors that is going to drive the optimal conditioning regiment. And it’s probably going to be slightly different for different disease indications. And this is -- it will be something that we track carefully moving forward. But as your -- coupled with your comment, respect to your comment with respect to limitation, keep in mind the NK100 experience, we have given multiple doses. We have given at least -- we have given two doses to multiple patients and each dose in that instance was preceded by a new cycle of conditioning and so the degree of conditioning we are giving, which is very light lympho conditioning, I don’t view as being limiting in any way to a multi-cycle paradigm.

Got it. And then -- thank you. And one more theoretical question in line with from that the other analysts have asked you, around the multi-functional elements and totally appreciate that you guys with the induced pluripotent stem cell platform are uniquely positioned, I think, you said to do five, six, seven, eight, nine, different edits --

Dan said that.

And I think that leads you -- so it’s lead you potentially to a really rapid cycle of product development to take something from tech. How are you thinking about versions and will --ultimately will be the commercial product?

Yeah. So I think it’s a great question and I think this is something that we certainly face given the robustness of our platform and it is faced by the industry. You are seeing first generation CAR T-cell products that are targeting into single antigen, potentially being rapidly displaced by product candidates that can hit multiple antigens. And so this is a really interesting sort of dynamic that is going on right now in the world of cell therapy. I think we are going to think very thoughtful about evolving our product candidates, I would say the product candidates that we are developing 500, 516, and quite frankly, 596 are -- at the end of the day are truly our therapeutic strategy is truly very different patient populations. So I don’t necessarily envision 505, 516 and 596 converging into a single product candidate, although, some of them, for instance, the CD16 receptor is in two product candidates. But each product candidate is really being developed individually, although, we are absolutely learning from the benefits that we can gain from the other product candidates in our platform, absolutely. I think there’s two different ways that I sort of think about the product candidates we are developing. There are backbone features, if you will, that you could imagine might be in every single product candidate and then there are tumor specific or cancer specific features that maybe incorporated to go after a specific type of cancer. And again, I think, we are uniquely positioned to incorporate both those types of functional elements.

All right. Thank you.

Thank you. And our next question comes from Jim Birchenough of Wells Fargo. Your line is open.

Good afternoon. It’s Nick in for Jim this afternoon, and Scott, there are lots of progress. Well done.

Yes. Thank you.

First question is, and this may be a moving target, but what is the shelf life of your iPSC derived products?

That’s an awesome question. And so, what -- we will be clear. Shelf life, do you mean how long we can keep a product stable and cryopreserved or do you mean…

Well…

… the shelf, for instance, the durability within a patient?

No, no. The former.

The former? Oh! So, for instance…

Yes.

.. as an example, we have had master cell lines, including on the research side, but certainly now on the clinical side that had been on stability tests -- testing for multiple months now in the case of FT500. But if you go back and you look at master cell lines that we created, quite frankly, four years, five years ago and cryopreserved, we see absolute stability and functionality post-thaw. So that’s not something I am overly sort of concerned about, being able to maintain a master cell line or even a product candidate in a cryopreserved state and then maintain high degree of viability and functionality post-thaw. I guess the other -- the thing I would point to that exists out there in the world, as you know, core blood units, as an example, are stored cryopreserved for 15 years, 10years, 15 years and are highly effective post-cryo thaw.

Okay. And then for 596 and 819, is the SCFP being used for the CARs fully human for those products and if so, how does it compare to FMC63?

It’s not -- we have not discussed the design specifically. It’s not fully human.

Okay. And then for 516, is this undergoing product release and if you can hopefully file the IND by middle of the year, you are a long way along. Do you require some sort of functional readout of CD16 so these extra engineering steps that you are putting in, do you have to do release testing that proves what you have done has the functionality you want?

So, I am not going to comment on what our specific release criteria are for individual product candidates. I will say that we do do absolutely potency testing on post-cryo thawed products, both for viability and potency. And as you know, Nick, I mean, it is challenging in the world of cell therapy to maintain a high degree of viability and potency after a product has been cryopreserved. And I think one of the major accomplishments that we have been able to achieve which often goes overlooked but is critical to an off-the-shelf paradigm is being able to effectively cryopreserve cells and then have them be very viable and potent post-thaw. Our release conditions mandated, obviously, by regulatory authorities is that we demonstrate high degree of viability and potency post-thaw.

Great. Thank you very much and look forward to further updates.

Thank you. And I have no other questions in the queue. I’d like to turn the call back over to Mr. Scott Wolchko for closing remarks.

Great. Thank you so much, everybody, for participating in today’s call and we look forward to speaking with you shortly over the next coming months.

Ladies and gentlemen, thank you for your participation in today’s conference. You may now disconnect. Everyone have a wonderful day.