Fate Therapeutics, Inc.
Q4 2013 Earnings Call Transcript

Published: 18 Mar 2014

[Operator:]

Welcome to Fate Therapeutics Fourth Quarter 2013 Financial Results Conference Call. At this time, all participants on 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 a property of Fate Therapeutics and recordings, production or transmission of this call without the express written permission is strictly prohibited. As a reminder today’s call is being recorded. I would now like to introduce Scott Wolchko, Chief Financial and Chief Operating Officer of Fate Therapeutics.

[Scott Wolchko:]

Thank you. Good afternoon and thanks everyone for joining us for the Fate Therapeutics fourth quarter 2013 Earnings Call. At 4

[Christian Weyer:]

Thank you, Scott and good afternoon everyone. Ever since the founding of Fate Therapeutics in 2007, it has been our mission and passion to pioneer novel therapeutic intervention strategies that harness the funds of stem cells. Today, this steady focus and commitment has resulted in a therapeutic pipeline, that has curative or transformative potential across a range of rare life-threatening diseases, including certain hematologic malignancies, rather than the storage disorders and muscular dystrophy. Throughout 2013, we successfully executed against key development milestones and a vast of our clinical and preclinical therapeutic programs, tell us important value of production points. This strong momentum has continued in to 2014. First and foremost, we announced last week a patient enrollment has commenced in our Phase 2 PUMA study of PROHEMA in adult patients with hematologic malignancies. Results from a planned interim analysis are expected in the second half of 2014. In addition, in the first quarter of 2014, we engaged the FDA and dialog concerning the evaluation of PROHEMA in pediatric patients. We expect to initiate clinical trials in pediatric patients with hematologic malignancies and with certain lysosomal storage disorders later this year. We also announced earlier in this month, promising additional data from our previously completed Phase 1b study of PROHEMA. Researchers from Harvard Medical School reported improved survival and immunological properties of T cells in patients receiving PROHEMA. Consistent with our findings, we reported low rates of viral reactivation in PROHEMA patients from our Phase 1b study. We advanced our Wnt7a protein therapeutics program for muscle regeneration into IND-enabling activities, initiated production cell line development and remain on track for initial clinical evaluation of this novel mechanism in 2015. Finally, we published additional scientific papers describing our proprietary, induced pluripotent stem cell platform and begin exploring therapeutic applications using this technology. Let me briefly elaborate on some of these important areas of progress, before turning the call over to Pratik and Pete for a more detailed update on our therapeutic programs. That said, last week, we did announce commencement of patient enrollment in our Phase 2 PUMA study of PROHEMA. This key milestone marks the successful implementation of its change to the manufacturing process to further optimize the expected clinical potency and efficacy of PROHEMA. As you might recall, in preclinical studies, PROHEMA manufactured using the company’s new NRM formulation exhibited more than two-fold improvement in HSC engraftment as compared to the standard cell processing media that we have previously used in the clinical development of PROHEMA. We were diligently in close contact with FDA and clinical investigators to implement this manufacturing change in a timely manner. We are obviously very excited about the potential impact on patient outcomes and with the trial already approved for conduct at ten leading U.S. transplant centers, we are in fact to meet our previously communicated milestones. Additionally, we remain on track to amend our existing IND in the second quarter of 2014 to commence clinical development in pediatric patients with hematologic malignancies. We believe this positions us well to pursue a broad indication for PROHEMA as the first product opportunity from our HSC modulation platform. Moving beyond hematologic malignancies, we believe there is significant potential for PROHEMA franchise expansion in rare genetic disorders. There are considerable clinical precedent for the use of allogeneic HSC transplantation as a definitive one-time corrective therapeutic intervention in over 50 rare genetic disorders. And since PROHEMA is derived from normal healthy donor HSCs it has the inherent potential to correct genetic defects across a wide range of rare genetic disorders, but they are caused by defective genes including enzymes, hemoglobin or other essential proteins. In the first quarter of this year, we made significant progress for the initiation of a clinical study of PROHEMA and lysosomal storage disorders, including Hurler syndrome, Krabbe disease and certain leukodystrophies, all of which are characterized by progressive neurocognitive deterioration that cannot be addressed with enzyme replacement therapy. We’re excited about the potential of PROHEMA in this diverse patient population for which the promise of allogeneic transplant has yet to be fully to be realized. Over the past several months, we generated compelling preclinical data demonstrating that the ex vivo modulation of HSCs improves their homing and engraftment, not only to the bone marrow, but also to the CNS, resulting in a several-fold increase in donor derived expression of missing enzymes within the brain. These preclinical findings coupled with a potential to improve engraftment outcomes and the overall risk benefit of HSC transplantation provides compelling rationale for the clinical investigation of PROHEMA in patients with LSDs. We also continued with advanced IND-enabling activities for our Wnt7a protein therapeutics program. Wnt7a, as a natural promoter of muscle satellite stem cells and muscle regeneration, and we have rationally designed proprietary Wnt7a protein analogs that are amenable to scale, manufacturing and therapeutic development. We believe its mechanism has therapeutic potential across a range of muscle disorders, including multiple forms of muscular dystrophy, which is the focus of our initial program development. Based on our encouraging preclinical results to date, we have now expanded the preclinical assessment of our proprietary Wnt7a protein analogs beyond muscular dystrophy to include other areas of muscular damage. Finally, we continue to be very enthusiastic about the therapeutic promise of iPSC technology. This Noble Prize-winning technology continues to emerge and mature, and is now beginning to move in to initial clinical trials. Fate is well positioned as the leader in the development of iPSC derived therapeutic, as we will further elaborate on later on in the call. But first, let me turn the call over to Pratik to discuss our PROHEMA clinical program in greater detail.

[Pratik Multani:]

Thank you, Christian. As Christian mentioned, we’ve recently announced patient enrollment has commenced in our Phase 2 PUMA Study. A randomized controlled Phase 2 multicenter clinical trial in adult patients undergoing double umbilical cord blood transplant for hematologic malignancies. PUMA stands for PROHEMA in UMbilical cord blood transplant in Adults. This trial was intended to enroll 60 patients. Eligible patients will be randomized at a ratio of 2

[Peter Flynn:]

Thanks, Pratik. I will be providing an update on the Wnt7a muscle generation program and then some background on our induced pluripotent stem cell technology. As Christian mentioned, our satellite stem cell modulation platform uses analogs the naturally-occurring protein Wnt7a to target the adult stem cell population of muscle and drive tissue regeneration. We are enthusiastic about the potential of this preclinical program for the following reasons

[Christian Weyer:]

Thank you, Pete. As I believe it’s evidenced from the progress with our programs, we are highly focused on execution again our stated factors. Now I would like to take this opportunity to acknowledge our dedicated employees, who have exhibited tremendous commitment to advancing our mission. I would also like to welcome Dr. Rob Epstein to our Board of Directors; his appointment was announced separately this morning. Rob’s extensive experience and expertise in health economics and chemical research will be invaluable to Fate as the clinically advanced and expand our novel therapeutic and intervention strategies to harness the promise of stem cells. And with that, I would like to turn the call over to the operator for any questions.

[Operator:]

(Operator Instructions). Our first question comes from Simos Simeonidis with Cowen and Company. Your line is open.

[Simos Simeonidis:]

Hi, thank you for taking the question. I just want to ask you about the internal look on PUMA. you said that, it can’t be mostly FT enhancement [ph], but you’ll be able to bring some efficacy, potentially efficacy in fact. And I’m just wondering, given that, only you are going to have 12 patients on the PROHEMA and more importantly I guess, there is only going to be about half of that, five or six or seven on the control arm and given that as you said, you are going to base – the hurdle that you are going to have on the control arm, given this bundle of patient, how meaningful of an efficacy conclusion can you get from that?

[Christian Weyer:]

Yes Simos, this is Christian speaking. Thank you for your question. As Pratik pointed out, the trial is powered for time to engraftment based on sixty patients and we remain on track to generate full data of that study in mid-2015. That being said, it is, we believe that is possible that there’s meaningful insights to be gleaned, based on the first 12 PROHEMA patients. Although remind you that the initial Phase 1b experience we have published in latter last fall, actually was based on results from 12 patients, so we – we’ll not be able to draw definitive conclusions from this result. We believe that there is a potential for important, really insights that would allow us to inform our further development of potentially regulatory interactions. Anything to add?

[Christian Weyer:]

I guess I would just highlight two points. one is, as you’ve already – as I’ve stated during the – earlier in the call, engraftment represents both the safety and efficacy evaluation. and so that’s why we would be looking it on – in both terms. That said, as you’ve already highlighted, there will be relatively few number of patients in the context of the entire planned study size. and so I think the expectation is that, we may be able to see trends. they may or may not materialize by that point, but if we do see trends and it provides us with the opportunity, especially if they are significant trends to act quickly and see if we can capitalize on that really working.

[Simos Simeonidis:]

No. Would you say if that didn’t make sense, just Pratik, when you talked during your prepared remarks that you are not just – again, I think correctly looking just at the median. but you are also going to look at the tails of the curve. That makes the numbers have been smaller, but if you – you’re spreading the number of patients the control arm over a couple of areas in the curve. again, it makes it difficult to see something, unless again, is it something very meaningful. So, thanks for the clarification. The other question I had is on the patient – on the pediatric patient trial, PROHEMA and then on the LSD trial. Can you give us a rough, I think how big of these trials would be and whether they would be U.S. only, interestingly in Europe, can you talk about that?

[Pratik Multani:]

I would just say that we are planning to conduct a study primarily U.S., but we are in active discussions with FDA around the trial design of study size, what would be appropriate, what would be feasible. So, I can’t comment more specifically, on that at this point.

[Simos Simeonidis:]

Okay. And then finally on Wnt7a, you’ve mentioned two potential molecules, are they different analogs, are they – are you just still trying to figure out which one of my reads the best ones put on the clinic. Can you say anything about these two molecules?

[Christian Weyer:]

Sure. Absolutely, let me take the first statement and turn it to Pete, I think what’s important to recognize here is that, as we said in our prepared remarks, there is potential for this Wnt7a mechanism across a right range of muscle-related disorders, including muscular dystrophies, as well as non-muscular dystrophy related disorders. So we have elected to take two of those analogs into IND-enabling activities, they are structurally distinct and Pete can comment on that. but we have also clarified that we’ve planned to take one of those into clinical assessment in 2015.

[Peter Flynn:]

Yes, Simos. I’ll just add to that by saying yes, those two forms that both have been taken into cell line development, which is the best part of the manufacturing process. The reason for taking Q4 is that both – both showing good efficacy in the model systems that we’ve outlined. They do show slightly differing production capabilities, but that we won’t see that all the way through until we get to the next sets – stage of the scale up. and so we really wanted to have the evaluation of scale of the both forms. Having both forms through that stage also potentially saves time going forward. if we want – want to better take a second generation or multiple generations forward. To clarify, it is our initial intention to take one form through the full cGMP manufacture, the first clinical development, not two forms. but we want to say these two forms have slightly different characteristics and production, at least some ways along the way.

[Simos Simeonidis:]

So I guess that you’re still trying to figure out the best molecule to put in the clinic and it’s not that it’s one of the two forms has is kind of a – is a better target for example, dystrophies or another muscle disorder, it’s more of the best clinical molecule to put forward, correct?

[Christian Weyer:]

Well, I mean I think that we have a pretty good idea on actual activity within the model systems, I said the only sort of the decision process, which is a near-term to decision process is just that scalability to sort of – obviously, we’re the first people to develop a Wnt-based protein therapeutic. and so we want to take the strongest candidate forward into production. There are some other differences in the molecular characteristics, which may allow want to be better to develop in one therapeutic setting them one in another, but I think it will be best if we update that along the way.

[Simos Simeonidis:]

Sounds great. thank you very much for taking the questions.

[Operator:]

(Operator Instructions) The next question comes from David Nierengarten with Wedbush. Your line is open.

[Dilip Joseph:]

Hi, it’s Dilip Joseph, sitting in for David. Just had a question related to the current formulation of PROHEMA and whether or not need to be improved, or enhanced in any way for the lysosomal storage disorder trial?

[Christian Weyer:]

Yes, absolutely, a good question, and thanks for the question. Now we have optimized the manufacturing process on multiple levels, being the temperature, the duration of the modulation process, the concentration of the modulator. and most recently, as we said in our prepared remarks, the media in which the formulation – the moderation actually occurs. and so with that, we are not planning an additional optimization of the PROHEMA program, as we are trying it within hematologic malignancy and into rare genetic disorders.

[Scott Wochko:]

The only change that we would need to make is, just a smaller volume of PROHEMA in the pediatric setting, not just in LSDs, but also hematologic malignancies. but that’s a sort of a physical manipulation as opposed to any change in how we modulate the network stem cells.

[Dilip Joseph:]

So in pediatric patients, whether or not is the hematologic malignancy or LSD setting, a sustained formulation?

[Scott Wochko:]

Yes. that’s our intent.

[Dilip Joseph:]

Okay, thanks.

[Operator:]

Thank you. I will turn it back to management for closing remarks.

[Christian Weyer:]

Well, thank you and thank you for your participation in today’s call. We look very much forward to updating you again, very soon.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s presentation. You may all disconnect. Have a great day.