Earnings Labs

Fate Therapeutics, Inc. (FATE)

Q1 2024 Earnings Call· Thu, May 9, 2024

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Transcript

Operator

Operator

Welcome to the Fate Therapeutics First Quarter 2024 Financial Results Conference Call. [Operator Instructions] This call is being webcast live on the Investors section of Fate's website at fatetherapeutics.com. As a reminder, today's call is also being recorded. I would now like to turn -- I would now like to introduce Scott Wolchko, President and CEO of Fate Therapeutics. Please go ahead.

J. Wolchko

Analyst

Thank you. Good afternoon, and thanks, everyone, for joining us for the Fate Therapeutics First Quarter 2024 Financial Results Call. Shortly after 4:00 p.m. Eastern Time today, we issued a press release with these results, which can be found on the Investors section of our website under Press Releases. In addition, our Form 10-Q for the quarter ended March 31, 2024, was filed shortly thereafter and can be found on the Investors 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 included in our Form 10-Q for the quarter ended March 31, 2024, 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 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 today's call are Ed Dulac, our Chief Financial Officer; and Dr. Bob Valamehr, our Chief Research and Development Officer. We will focus today's remarks on the data presented today at the American Society of Gene and Cell Therapy Annual Meeting for our off-the-shelf FT819 CAR T-cell and FT522 CAR NK cell programs and discuss key program initiatives…

Edward Dulac

Analyst

Thank you, Scott, and good afternoon. Fate Therapeutics is in a strong financial position to advance our pipeline of iPSC-derived CAR T and CAR NK cell programs for autoimmune diseases and cancer. With the addition of net proceeds from the company's $80 million underwritten offering of common stock, and $20 million concurrent private placement of prefunded warrants in March, our cash, cash equivalents and investments at the end of the first quarter were approximately $391 million. In the first quarter, our reported revenue of $1.9 million was consistent with the prior 2 quarters and reflects the research funding associated with the development of a second product candidate against an undisclosed target in solid tumors under our collaboration with Ono Pharmaceutical. As a reminder, after opting into a U.S. and European co-development and co-commercialization arrangement with Ono for FT825 in the fourth quarter of 2022, we account for that program's reimbursable expenses as an offset within our research and development costs. We recognized $800,000 of contra R&D expense in the quarter. Research and development expenses for the first quarter were $32.1 million, essentially flat versus the fourth quarter of last year. Our expenditures in R&D were driven primarily by salaries and benefits, including share-based compensation and from clinical trial costs and demand for R&D materials. General and administrative expenses for the first quarter increased sequentially by 16% to $20.9 million. The increase in our G&A expenses was attributable primarily to increases in legal related fees. Total operating expenses for the first quarter increased by 7% relative to the fourth quarter of 2023 to $53 million, which included $11 million in noncash share-based compensation expense. Note that in connection with the development of our off-the-shelf iPSC-derived CAR T-cell product candidate, FT819, we previously achieved the clinical milestone set forth in our amended license agreement with Memorial Sloan Kettering Cancer Center, which triggered a first milestone payment to MSK in 2021. Up to 2 additional milestone payments may be owed to MSK based on subsequent trading values of the company's common stock, ranging from $100 to $150 per share. We assess the fair value of these contingent milestone payments currently valued at $2.7 million on a quarterly basis. In the first quarter, we recorded a noncash $1.4 million nonoperating loss associated with the change in fair value. Our net loss for the quarter was $48 million or $0.47 per share. Finally, as we consider the investments we plan to make this year, we expect our GAAP operating expenses, which includes noncash items such as stock compensation expense and depreciation for the full year to be between $215 million and $230 million, and that we will end the year with more than $270 million in cash and cash equivalents and investments. I would now like to open the call for questions.

Operator

Operator

[Operator Instructions] The first question comes from Michael Yee with Jefferies.

Michael Yee

Analyst

We had a 2-part question. Congrats on all the progress, Scott. On the autoimmune study that is enrolling, I know that was a bit slow to get off, but it sounds like you're going to have some good momentum and report patients. Can you just talk a little bit about how the plan to also allow single-agent cytoxan would impact things and how you think about what that would show and how that would impact the design of the study? And then the second question is related to 522, I think it's exciting you're now in the second cohort without lympho depletion. Can you just talk about the results that you might see there and how you would read through and what you see there into the idea for autoimmune as well?

J. Wolchko

Analyst

Sure. So with auto -- in the autoimmunity study with FT819, the current study as designed has 2 different alternatives for conditioning. There is a standard 3-day conditioning cycle of cy/flu, which is commonly used in the oncology setting. So I believe it's 500 milligrams per meter squared times 3 days for cyclophosphamide and 30 milligrams per meter squared times 3 days fludarabine. We also have a second -- in the current study, we also have a second conditioning regimen that is permitted. The second conditioning regimen is a bendamustine-based conditioning regimen. And that is a 2-day treatment regimen with bendamustine. While we're contemplating doing, and this is based on data we presented today, we believe we have good proof of concept in our FT819 oncology study. So this is the study in the cell malignancies, where several of our patients in that study received bendamustine as a conditioning agent. So they did not receive cy/flu. They received a benda-based conditioning regimen in the oncology study. We presented the data on those patients specifically today. we saw very deep B-cell depletion in the periphery, which was maintained through the 30-day treatment cycle. And importantly, we saw clinical responses with the bendamustine treatment conditioning cycle -- or conditioning regimen. So we did not use fludarabine. So in that regimen, we're not using fludarabine. So we saw activity with FT819 without fludarabine. And so that gives us confidence that we can amend the IND to add on to a cytoxan-only regimen. We believe we can accomplish that efficiently through an amendment to the IND, essentially adding a third "conditioning regimen" for patients. And so the study would provide physicians choice of cy/flu conditioning, bendamustine conditioning or single agent cytoxan conditioning. And again, since cytoxan and bendamustine are in the same class of molecule and given the activity we've seen in the oncology study, we feel confident in FT819's ability to perform in a cytoxan-only regimen without the fludarabine. Long answer, but I hope that was clear.

Michael Yee

Analyst

Yes. Very nice. And then the read-through from oncology because you're in the Cohort B without conditioning?

J. Wolchko

Analyst

Yes. So with respect to 522, so with 522, obviously, we have a long history with NK cells. We have started this study with cy/flu conditioning. It provides us the opportunity to do some direct comparison with 522 based on historical data sets that we have generated with FT596, our prior generation product. We presented data today where we believe in early small numbers of patients, obviously, we think we're seeing some differentiated activity with respect to persistence, which we're excited about. And so we are very excited now to essentially begin our clinical experiment with 522 or clinical experience with 522 with no conditioning. Preclinically, and I'll let Bob talk about it, we've done a tremendous amount of work with 522 preclinically in allogeneic systems, both using cancer cell lines as well as now using donor SLE cells. And we presented the donor SLE preclinical data today. I'll let Bob talk about that because I think it does demonstrate the potential of 522 to essentially thrive in an allogeneic disease system.

Bob Valamehr, Ph.D.

Analyst

Thanks, Scott. So just to talk about preclinical and also answer some of your questions about how the clinical data will play out for autoimmune. So in the preclinically, as Scott mentioned, having the ADR technology in 522 allows us to actually show activity and persistence even when there is an intact PBMC compartment. So in a petri dish, we try to mimic what's happening in the patient setting. But having the PBMCs and there are all different types of cells from PBMC. And we showed that with 522, you can actually show functional persistence and this is very unique to the ADR technology because if you have NK cells without ADR or autologous CAR-T, you won't get this observation. And this observation is very specific because we can coculture 522 with PBMCs and show that we can target because there's a CAR19 and 522, the B-cells in PBMC. However, we don't see an alloreaction that's induced by the T-cell compartment. Even though these cells have an intact HLA expression under surface or product, we are able to hold off the alloreaction because we target from B positive population, which is the final stage of an activated cell. So we are able to hold off on that. And we can maintain activity through functional persistence because when we rechallenge the 522 coculture with additional PBMCs, we can continue targeting the B-cell compartment and maintain functional persistence. This is not seen with auto CAR-T. This is not seen with NK cells. Moving to the clinical experience. I think one of the things that we're very excited about with our ability in translation on the 522 without cy/flu on, we're going to be able to look at ctDNA and see how the disease is modulated with each dose of 522 in an intact patient immune compartment and also look at the entire disease decrease over the treatment cycle. That's going to give us a hint of 522 activity without cy/flu conditioning. We'll also look at the endogenous immune compartment and see how that's modulated and also look at the PK in an intact immune compartment with a very sensitive assay. So we'll hopefully see a lot of activity there and be able to parlay that into autoimmune disease.

Operator

Operator

The next question comes from Yigal Nochomovitz with Citi.

Ashiq Mubarack

Analyst · Citi.

This is Alim on for Yigal. We had a couple. First, on FT819, you mentioned patient case studies have shown secondary and tertiary tissue trafficking and infiltration. Are you doing tissue biopsies here?

Bob Valamehr, Ph.D.

Analyst · Citi.

Sure. No, Ashiq, so we do show a primary, secondary and tertiary activity. For the primary we show that we have persistence in the bone marrow, and that correlates with reduction and elimination of CLL positive cells, and this is based on full cytometry. So we show persistence and infiltration in the bone marrow and clearance of disease. In our secondary for the lymphoid, we have biopsies -- the lymphoid tissues, we have biopsies there, and we can show that the population is reduced. And for tertiary, the example we used in our presentation is liver and PEDSCORE, which correlates to PK. So we're able to, through different methods whether it's direct detection of cells or proxy detection of cells be able to show that we are able to have activity in primary, secondary and tertiary tissues.

Ashiq Mubarack

Analyst · Citi.

Okay. Great. That makes sense. And then a second question is more of a general question. Given you're planning to file an IND for FT522 for autoimmune. How should we think about the expectations on the efficacy here? Are you hoping to see efficacy on par with CAR-Ts? Or is that the main focus is more like removing or lowering the preconditioning burden maybe a little bit of a cost on efficacy?

J. Wolchko

Analyst · Citi.

Yes. I think as we're going into the study, we acknowledge efficacy is really important. I think at the end of the day, what's been really exciting about cell therapy here in autoimmunity is the fact that, again, this is coming out of the German study, a single dose of CAR T-cell therapy has been able to generate immune reset in patients that have had disease and refractory disease for a significant period of time. And that's been quite remarkable. And I think folks are very excited about that. I think with respect to autoimmunity, efficacy is certainly going to be important, and we need to acknowledge that at some basic level, we need to be able to compete on efficacy. That said, autoimmunity is a very different setting than oncology. And I think safety is certainly going to be at a premium with respect to autoimmunity. I think one of the challenges that has already confronted the field is that cy/flu conditioning may not be well accepted by patients in the field of autoimmunity. And so I think safety is going to be critical. I think alternative regimens where you can add on to standard of care treatment is going to be critical. I think reaching patients where they live and breathe, which is not at the academic CAR T-cell centers is going to be critical. And so I think there are a multitude of elements here. that are going to be important in autoimmunity that are different than oncology. And I do think an off-the-shelf cell therapy has significant sort of attributes that can be very appealing for these patients.

Operator

Operator

The next question comes from Daina Graybosch with Leerink Partners.

Jeffrey LaRosa

Analyst · Leerink Partners.

So this is Jeff on for Daina. So we have 2 questions. The first was around competitive landscape. There are some recently published encouraging data with the first-gen CD19 by blinatumomab. What was your view of that data? And how are you thinking about T-cell engager competition overall for autoimmune disease given that the modality addresses many of the same challenges of auto CAR-T that you're off-the-shelf programs do. And then looking at kind of BCMA and your plans for a next-gen program there, do you expect to use the ADR modality there? And is that sufficient? Or are you looking at other edits. And what do you think BCMA adds that you wouldn't already achieve with your CD19 programs?

J. Wolchko

Analyst · Leerink Partners.

Yes. So on your sort of general question around CD19 engagers, I think we're approaching the autoimmunity space eyes wide open with respect to the disruptive potential of CD19 engagers. And ultimately, as we're thinking about the development of the autoimmunity space, we recognize the benefits that can be brought to patients potentially in differentiating potential of the CD19 engager. We've obviously seen that play out in oncology. And as we think about it, we're thinking about essentially our target product profile going directly up against what the value proposition of the T cell engager. And hence, that's how you will hear us obviously talk about -- we talked about on the call today, how important we think it is to move away from cy/flu, to add on to standard of care treatments, to reach patients in the community setting, to minimize hospitalization and to prioritize safety and efficacy. So I think we're going into this recognizing that T-cell engagers will play important in treating patients with autoimmunity and developing target product profiles directly head-to-head against those. As it relates to BCMA, I think just generally, and this is not a comment specifically to BCMA, but I think we're very excited about the ADR technology both with respect to its first assessment with 522 clinically. But I think -- and I'll let Bob talk to it, and correct me if I'm wrong, but I think any product candidate you're going to see emerge from Fate therapeutics from this point forward, we'll incorporate the ADR technology. We absolutely believe that conditioning chemotherapy -- intense conditioning chemotherapy is a headwind for the field of cell therapy, and we need to move beyond that. And we're excited to do that. We're excited to pioneer that, and we think we've put a tremendous amount of work both with respect to research and innovation on how to achieve a new cell therapy treatment paradigm with off-the-shelf cell therapy.

Jeffrey LaRosa

Analyst · Leerink Partners.

Great. Actually, just a quick follow-up in the mitigating lympho depletion. How does bendamustine only compare to cyclophosphamide only in terms of relative potency. And would you expect the same degree of CAR-T FT819 expansion in vivo and the same level of potency as you kind of saw with the bendamustine examples?

J. Wolchko

Analyst · Leerink Partners.

Yes. I think it's -- there's some data on this, right? There's some data out there that certainly combines in the field of oncology and CAR T-cell therapy that has done work comparing cy/flu conditioning to bendamustine. And I think, generally speaking, it's been demonstrated that bendamustine can be an effective alternative treatment conditioning regimen for CAR-T cell therapy. Bendamustine is in the same chemical class as cyclophosphamide. We do have experience, as I mentioned, with bendamustine as a stand-alone conditioning agent without fludarabine. And so we're fairly confident that our programs can -- FT819 can perform with cyclophosphamide.

Operator

Operator

The next question comes from Mike Ulz with Morgan Stanley.

Rohit Bhasin

Analyst · Morgan Stanley.

This is Rohit on for Mike. Can you just talk about what you've seen with the first lupus patient treated with FT819 and how safety compares to what's been seen in the autologous 819 therapies? And then can you also talk about what other autoimmune diseases you would consider expanding to?

J. Wolchko

Analyst · Morgan Stanley.

Yes. I think I'll limit my comments to what we disclosed to date. The patient is still in -- the first patient, it still is in the 30-day DLT Assessment window. I can absolutely say that patient was discharged after 3 days of hospitalization. So it was a 3-day hospitalization stay, it was uneventful and there were no notable adverse events. The patient does still remain though in the 30-day DLT assessment window. With respect to expansion into other indications in autoimmunity, we are doing a fair bit of work assessing that opportunity. Obviously, one of the elements of assessment is looking where others have established, and this is primarily coming out of the German study, but also in the field of allogeneic stem cell transplant, looking at where other B cells -- there's been success with other B-cell mediated diseases with either transplant or out of the German group in the early seminal data sets. I think I'll leave it at that.

Operator

Operator

The next question comes from Li Watsek with Cantor Fitzgerald.

Li Wang Watsek

Analyst · Cantor Fitzgerald.

Maybe just follow up on what other indications that you might go into in this specific for 522. And as far you mentioned that you're looking at multiple autoimmune diseases. So just wondering if this is quite crowded in the multi-space. Just wondering what are other indications that you might be considering such as RA? And how do you think about 522 sitting with 819 in terms of which patients -- which types of patients to go after.

J. Wolchko

Analyst · Cantor Fitzgerald.

Sure. At this point, we are doing a lot of work. I'm not going to disclose our strategy at this point in time. We are obviously doing a lot of work in thinking about our expansion strategy in autoimmunity. We are looking at areas where there have been clinical precedent with cell therapies, whether that be in transplant or out of the first data sets that are being generated, both out of Germany as well as the initial sort of company initiatives or company programs. So not prepared to disclose today how we think about expanding our FT819 IND into additional indications or the initial multi-indication study that we plan to submit for 522.

Li Wang Watsek

Analyst · Cantor Fitzgerald.

And then maybe just wondering if you can just comment on your expectation for the patient enrollment in 819 studies. It seems like as you can dose the patients fairly quickly. And then it seems like you're going to amend the protocol to allow some alternative conditioning regimens. So do you think that might drive sort of the traction with the site investigators?

J. Wolchko

Analyst · Cantor Fitzgerald.

Yes. So specifically, we have guided to 3 to 5 patients -- an update on 3 to 5 patients in the 819 study by the end of this year. We've also guided to -- and we've discussed it on the call that we are looking to utilize Cytoxan only as a third potential regimen for treating patients. So cy/flu [indiscernible] or cytoxan only. We do think that -- and I think there's been discussion about this that cy/flu potentially is a barrier to treating patients with autoimmunity. These patients aren't oncology patients. They don't deserve to be treated like oncology patients. And so I do think moving away from cy/flu is a conditioning regimen is going to be critical to really capturing the potential of cell therapy in autoimmunity, and we look to pioneer that.

Operator

Operator

The next question comes from Kara Bancroft with TD Cowen.

Gregory Williams

Analyst · TD Cowen.

This is Greg speaking on behalf of Tara. I'm wondering if you can give us any time line for when we can expect clinical data in lupus for 819?

J. Wolchko

Analyst · TD Cowen.

Sure. In the prepared remarks, we have guided to an update on the first 3 to 5 patients with FT819 in SLE by the end of this year.

Operator

Operator

The next question comes from Ben Burnett with Stifel.

Carolina Ibanez-Ventoso

Analyst · Stifel.

This is Carolina Ibanez-Ventoso on for Ben Burnett. Congratulations on all your progress. On the ex-vivo data for FT819 on the pretreatment sample from the SLE patient. What do the ET Ratios shown imply about the necessary dose and cell expansion that you would need to achieve to get that deep B-cell depletion at the end of the CAR in vivo in the SLE patient?

Bob Valamehr, Ph.D.

Analyst · Stifel.

I'm happy to answer that question, and I'll use some math here, so please forgive me if I start getting a little hypothetical. But -- so what we show in the data is that at 2:1 ET ratio, we effectively eliminated all B cells that were in the PBMC compartment from the patient. If you were to think about the disease burden and autoimmune specifically SLE, we anticipate somewhere around 100 million to 300 million disease B cells residing within a patient. So if we're effectively clearing around almost all cells at 2:1, but pretty much over 95% at 1:1, our current dose of $360 million falls right smack in the middle of an effective dose that we see in vitro. So to answer your question specifically, we are eliminating all T cells at 2:1 and over 90% at 1:1. And that should give us confidence that the current dose is basically on par to match that in the patient setting at $360 million.

Operator

Operator

The next question comes from Peter Lawson with Barclays.

Alexandre Bouilloux

Analyst · Barclays.

This is Alex on for Peter. Just wondering if you could maybe just recap the data a little bit the ASGCT data. When you look at the preclinical and translational data for 819 versus 522, so the CAR program versus the NK cell program. Any notable differences you see in terms of tissue distribution, B-cell depletion or B-cell reconstitution?

Bob Valamehr, Ph.D.

Analyst · Barclays.

Sure. I can answer that question. So FT819 and FT522, obviously, are very different. FT522 not only has the ADR technology but also has the IL-15 receptor fusion. So preclinically, we see a very good biodistribution with FT522 because it very much doesn't need antigen for expansion, doesn't need cytokine for expansion. So we see very good biodistribution. Obviously, it has the ability to be combined with a monoclonal antibody. So we see that as well, either we enhance activity against the specific cells like, for example, targeting CD19 and CD20 at the same time or going after other cell types that have eliminated the CD19 expression and are only expressing, for example, CD38. So that multi-antigen perspective also comes in through with FT522. The FT819 having the 1XX CAR and the track locus, it is a very potent CAR product. And so we see that when we go head-to-head against auto CAR-T in preclinical studies. So we see very potent activity within FT819, as I mentioned earlier as well. So those are the main differences in terms of behavior of the cells. We have a product that's ADR that does not need conditioning and can go multi-antigen targeting and another product that's very potent against CD19.

J. Wolchko

Analyst · Barclays.

And I think one of the comments I would just add on to that is FT819 with respect to its manufactured, phenotype has high expression of CXCR4. And so we've seen very good sort of homing and trafficking and infiltration of secondary and tertiary tissue in preclinical studies.

Bob Valamehr, Ph.D.

Analyst · Barclays.

That's a good point.

Alexandre Bouilloux

Analyst · Barclays.

Okay. And I guess does that have any implications for which type of indications you could target in the autoimmune setting?

J. Wolchko

Analyst · Barclays.

Yes. Yes. I mean it's something we're looking at. I mean we are still doing work on thinking about exactly how to expand and what indications are going to be prioritized with 819 and 522. We are prepared and now we are preparing to expand the 819 IND to consider additional indications. And obviously, we've discussed filing a multi-indication IND for 522. So a lot of work going on, stay tuned there on that front.

Operator

Operator

The next question comes from Yanan Zhu with Wells Fargo Securities.

Yanan Zhu

Analyst · Wells Fargo Securities.

Great. To follow up on a prior question about the bispecific literature -- recent literature. Just wondering, do you have a view on depth of B-cell depletion bispecific antibody can achieve compared with cellular therapy. And do you foresee for the bispecs, if it becomes a modality, would it be repeat administration at certain time interval. Could that be viable or competitive with cellular therapy? And lastly, for 819, do you foresee the potential possibility of additional doses at a certain time interval? And whether that could be part of the product profile and whether you might even be considering looking at that in the current study?

J. Wolchko

Analyst · Wells Fargo Securities.

Sure. So forgive me, I am not an expert on the bispecific engagers. And so I can't talk in an informative way about the depth of B-cell depletion that's been seen or achieved with the B-cell engagers. Obviously, in the setting of oncology, the T-cell engagers have generated complete responses. So again, we are going into the field of autoimmunity, recognizing that T-cell engagers can be an attractive modality and have the potential to drive an immune reset. Whether that's achievable, what the duration of that looks like, what the side effect of profile that looks like, how many doses, all that's TBD. We're very early, I think, just generally in the field of autoimmunity. That said, I think one of the potential strength of an engager is that it can be multi-dosed? And I do think from our standpoint, as a company, we've always discussed the fact that an off-the-shelf cell therapy, we do think has multi-dosing potential. I think multi-dosing potential can be hindered by cy/flu conditioning, Hence, as we've discussed, we think it's important to think about both 819 and 522 being developed as add-on strategies. Two standard regimens that are used today to treat patients in the community setting with autoimmune disease. And I think you will see us continue to move in that direction where we are thinking about delivering and dosing cell therapies as if they were a monoclonal antibody.

Operator

Operator

The next question comes from Bill Maughan with Canaccord Genuity.

William Maughan

Analyst · Canaccord Genuity.

So to follow up on this morning's 819 data. All the PK, obviously, was positive. But thinking about translating that from an oncology patient to an autoimmune patient when antigen-dependent expansion is a key part of the PK of a CAR T-cell therapy. I was just wondering how you think about being able to translate from that -- from one population to the next?

J. Wolchko

Analyst · Canaccord Genuity.

Yes. I think there's a lot we don't know. With respect to how the 2 diseases are going to translate, I think what we have certainly seen with the PK, is that we have seen CD19 mediated expansion that is dose dependent. Certainly, the mechanism of action or one of the key mechanisms of action in autoimmunity is being able to recognize and target and eliminate CD19+ B-cells. So I don't necessarily presume that actually the PK profiles are necessarily going to be the same in oncology versus autoimmunity. I think at the end of the day, what's obviously critical is the kinetics and depth of B-cell depletion.

Operator

Operator

The next question comes from Ethan Markowski with Needham & Company.

Ethan Markowski

Analyst · Needham & Company.

This is Ethan on for Gil Blum. So I'm just looking at the chart in the ASGCT data. And I think you guys clearly show that FT522 demonstrates deeper B-cell depletion than FT596. But it looks like FT819 graph, at least the bar graph and depletion is very similar to FT596 with themselves kind of coming back up in the mid end of the cycle. I was wondering, first, how important this complete response is? And if some sales coming back at the end is clinically relevant. And then also just from a cost savings perspective, I know you're no longer planning to move forward in multiple myeloma and B-cell lymphoma. Just wondering if that has any impact in a positive way on near-term R&D spend?

J. Wolchko

Analyst · Needham & Company.

Yes. So on the last question with respect to clinical development in multiple myeloma. Obviously, there are patient costs associated with clinical development. We are -- while we are not advancing 576 into dose expansion, we are in multiple myeloma. We are certainly expanding development in autoimmunity. And so in terms of changing cash burn, I don't think we're thinking about that as enhancing or saving or reducing on. We're certainly investing in a lot. As it relates to B-cell depletion, I think keep in mind, with those 819 as well as 522, we are seeing very, very low levels of cells in many instances, and I'll let Bob talk about it below lower limit of sort of detection. And so when we start getting into very, very low levels, you start to get into sort of can -- you have a discussion about whether is there significant or not? And I don't believe, at least we think that we're seeing different levels of depletion with 819 versus 522. I'll let Bob comment on that. I will say just to be really clear, 522 -- the 819 data set is over a much larger data set of patients. I think we used 23 patients with B-cell lymphoma for that data set. Some of those patients had relatively high B-cell counts going into the study. In fact, we noted that there were certain patients that had super physiological levels of B-cell counts that we were able to deplete with FT819. The 522 data set is, I think, only on 2 patients, and their B-cell counts generally were lower, on at baseline compared to the totality of the 819 patients. I think, I'll let Bob talk on that. But I think generally speaking, what we've seen with respect to B-cell reconstitution from the SHED data as B-cell reconstitution actually can happen as, for instance, as early as the third or fourth week and can happen as late as 4 months. But I'll let Bob sort of finish up on that if I missed anything.

Bob Valamehr, Ph.D.

Analyst · Needham & Company.

No, I think you well covered it. When discussing 819, as Scott mentioned, there was a large number of patients, but it felt pretty much in line with showing very good B-cell depletion over the treatment cycle and B-cell recovery was seen in some of the patients. Now keep in mind, this is oncology. So what's coming back up could be a lymphoma cell or something. So we're in a much more aggressive stage than what SHED showed. But as Scott mentioned, what SHED showed is that B-cells do come back from 30 days to 180 days. So every patient treated all 15 and SHED data had by, I believe, day 180 full recovery of B-cells. So 819 is very much in line with what SHED showed. Now with 522, you're bringing up a very good point. And I think part of that has to do with the fact that it's being combined with cytoxan. So this is kind of the 1, 2 punch that we're seeing. Again, 2 patients, I'm not going to sit here and speculate too much on it, but you are seeing the power of CAR plus hnCD16 in these settings. And I think both programs are -- data has been so far very encouraging.

Edward Dulac

Analyst · Needham & Company.

And Ethan, I'll just pick up on Scott's comments qualitatively, I agree. The mix of the business will change through the course of the year. But if you look at the first quarter, we had roughly $52 million, $53 million in GAAP operating expenses and about $37 million in cash burn. That's been pretty consistent for the last couple of quarters. So even though we have 1 or 2 programs winding down, the hope is that now that we have first patient dose and we're beginning to clear dose levels in certain programs, that's going to tick up throughout the year. So I expect that those numbers I just quoted, we have $53 million on the GAAP operating expense and the $37 million, $38 million on the cash burn -- effective cash burn for the quarter to remain fairly consistent. I'm more than happy to invest behind these clinical programs. So if that picks up to, call it, circa $40 million on a cash burn basis. But we feel pretty good about where we are. Just the mix of the business will evolve, but that's a pretty good number to work with for the rest of the year.

Operator

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Wolchko for any closing remarks.

J. Wolchko

Analyst

Thank you. Thank you for everyone today for all your good questions on the ASGCT data. I appreciate all the input and thought and speak to you soon. Thank you.

Operator

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.