On May 15, 2017 Fate Therapeutics, Inc. (NASDAQ:FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the quarter ended March 31, 2017 (Press release, Fate Therapeutics, MAY 15, 2017, View Source [SID1234519131]). Schedule your 30 min Free 1stOncology Demo! "This has been an exciting quarter for us as we have successfully launched our multi-pronged clinical development strategy for FATE-NK100 across both hematologic and solid tumor malignancies. We also continue to be encouraged by investigator enthusiasm for ProTmune and look forward to sharing key clinical data in mid-2017 from the safety stage of our PROTECT study," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Additionally, we are very pleased with the constructive feedback we received from regulatory authorities in both the United States and the United Kingdom regarding our specific manufacturing and development plans for our first-of-kind cell products derived from master pluripotent cell lines. These formal meetings confirmed our alignment with key regulatory agencies in bringing our off-the-shelf iPSC-derived cell products into human clinical trials."
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Recent Highlights & Program Updates
Launched First-in-Human Clinical Trial of FATE-NK100. An investigator-initiated clinical trial of FATE-NK100, the Company’s first-in-class adaptive memory natural killer (NK) cell product candidate, was opened for patient enrollment at the Masonic Cancer Center, University of Minnesota (UMN) for the treatment of refractory or relapsed acute myelogenous leukemia. The VOYAGE study is utilizing accelerated dose-escalation to evaluate the safety and determine the maximum dose of a single intravenous infusion of FATE-NK100. The anti-tumor activity of FATE-NK100, including rates of complete response, clearance of minimal residual disease, disease-free survival and overall survival, will also be assessed.
Secured FDA Clearance of IND for FATE-NK100 in Advanced Solid Tumors. In May 2017, the U.S. Food and Drug Administration (FDA) cleared the Company’s investigational new drug (IND) application for the clinical investigation of FATE-NK100, including in combination with monoclonal antibody therapy, in subjects with advanced solid tumor malignancies. The Company plans to enroll subjects in the DIMENSION study concurrently across three FATE-NK100 treatment arms: as monotherapy for solid tumor malignancies, including small cell lung cancer and hepatocellular carcinoma; in combination with trastuzumab for advanced HER2+ cancers, including breast and gastric cancers; and in combination with cetuximab for advanced EGFR1+ cancers, including colorectal and head and neck cancers. Accelerated dose-escalation will be utilized to evaluate the safety and anti-tumor activity of FATE NK100 in an outpatient setting.
Conducted Formal Regulatory Engagements with FDA and MHRA for hnCD16-iNK Cell Product Candidate. Fate Therapeutics held a Pre-IND meeting with the FDA and a Scientific Advice meeting with the UK Medicines and Healthcare products Regulatory Agency (MHRA) in March and April 2017, respectively, to support the clinical translation of its induced pluripotent stem cell (iPSC)-derived NK cell products. These formal meetings reviewed the Company’s preclinical development, proposed manufacturing plans and clinical trial design for its first-of-kind NK cell product candidate, an off-the-shelf targeted cancer immunotherapy derived from an engineered iPSC line. Based on these interactions, the Company expects to file applications with both regulatory authorities within the next twelve months to conduct a first-in-human clinical trial for the treatment of cancer. In February 2017, Fate Therapeutics and UMN expanded their collaboration to initiate clinical translation of the Company’s iPSC-derived NK cell products, including its off-the-shelf targeted hnCD16-iNK cell product candidate derived from a master iPSC line engineered to express a proprietary high-affinity, non-cleavable CD16 receptor (hnCD16).
Granted Foundational iPSC Manufacturing Patent. In March 2017, the U.S. Patent and Trademark Office issued U.S. Patent No. 9,593,311 which protects cellular compositions comprising iPSCs and a WNT pathway activator, such as a GSK3 inhibitor. This latest issuance, which expires in 2029, continues to extend the Company’s dominant U.S. patent position covering OCT4-based cell reprogramming, including gene expression vectors and cell compositions necessary for generating iPSCs. The newly-patented compositions are critical for selecting and expanding iPSC clones and for maintaining clonal populations in a state of pluripotency, both of which are required to create master pluripotent cell lines for the manufacture of homogeneous cell products. The patent, which is owned by the Whitehead Institute for Biomedical Research and licensed exclusively to the Company for all therapeutic purposes, adds to the Company’s significant iPSC intellectual property portfolio of over 90 issued patents and 100 pending patent applications.
First Quarter 2017 Financial Results
Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of March 31, 2017 were $82.3 million compared to $92.1 million as of December 31, 2016. The decrease was primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank.
Total Revenue: Revenue was $1.0 million for the first quarter of 2017 compared to $1.3 million for the comparable period in 2016. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.
Total Operating Expenses: Total operating expenses were $11.0 million for the first quarter of 2017 compared to $9.2 million for the comparable period in 2016. Operating expenses for the first quarter of 2017 included $0.9 million of stock compensation expense, compared to $0.8 million for the comparable period in 2016.
R&D Expenses: Research and development expenses were $8.0 million for the first quarter of 2017 compared to $6.6 million for the comparable period in 2016. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the clinical development of ProTmune and FATE-NK100 and the preclinical advancement of the Company’s off-the-shelf iPSC-derived cellular immunotherapy programs.
G&A Expenses: General and administrative expenses were $3.0 million for the first quarter of 2017 compared to $2.6 million for the comparable period in 2016. The increase in G&A expenses was primarily related to an increase in intellectual property-related expenses.
Shares Outstanding: Common shares outstanding as of March 31, 2017 and December 31, 2016 were 41.4 million. Preferred shares outstanding as of March 31, 2017 and December 31, 2016 were 2.82 million, each of which is convertible into five shares of common stock. All preferred shares outstanding relate to the Company’s sale and issuance of 2.82 million shares of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.