Fate Therapeutics, Inc. (NASDAQ:FATE) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Company Participants Bob Valamehr - Chief Research & Development Officer Scott Wolchko - Founder, President & Chief Executive Officer Ed Dulac - Chief Financial Officer Wayne Chu - Chief Medical Officer Conference Call Participants Michael Yee - Jefferies Yigal Nochomovitz - Citigroup Daina Graybosch - SVB Securities Nick Abbott - Wells Fargo Kelsey Goodwin - Guggenheim Mara Goldstein - Mizuho Robyn Karnauskas - Tr ...

[Summary of Risk Factors](index=3&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) This section provides a high-level overview of the principal risks associated with an investment in Fate Therapeutics. Key risks include the novel and unproven nature of its iPSC-based product candidates, potential for undesirable side effects, difficulties in manufacturing and clinical development, reliance on new technologies like gene-editing, dependence on strategic partnerships, a history of significant losses, and the need for substantial additional funding. Other risks involve intellectual property protection, competition, and potential disruptions from the COVID-19 pandemic and the conflict in Ukraine - The company's product candidates are based on novel therapeutic approaches (iPSC and gene-editing technologies), making development time, cost, and regulatory approval difficult to predict[9](index=9&type=chunk) - Manufacturing and distribution of cell product candidates are complex and subject to significant risks, which could limit supply and increase costs[9](index=9&type=chunk) - The company has a history of significant losses and anticipates continued losses, requiring substantial additional funding to complete development and potential commercialization[9](index=9&type=chunk)[11](index=11&type=chunk) - Dependence on strategic partnerships (like Janssen and Ono), protection of intellectual property, and competition from other biotechnology companies are critical to success[9](index=9&type=chunk)[11](index=11&type=chunk) - External factors such as the COVID-19 pandemic, the conflict in Ukraine, and general market inflation pose risks to business operations, supply chain, and financial results[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for the three months ended March 31, 2022, show an increase in collaboration revenue but also a significant rise in operating expenses, leading to a larger net loss compared to the same period in 2021. The balance sheet reflects a decrease in total assets, primarily due to cash used in operations. The company's financial position is supported by collaboration agreements with Janssen and Ono, and its primary activities remain focused on research and development of its iPSC-derived cell therapies [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets were **$858.4 million**, a decrease from **$921.5 million** at December 31, 2021, primarily driven by a reduction in cash and cash equivalents. Total liabilities decreased slightly to **$224.9 million** from **$242.6 million**. Consequently, total stockholders' equity declined to **$633.4 million** from **$678.8 million** over the same period Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $64,741 | $133,583 | | Total current assets | $599,075 | $633,412 | | Total assets | $858,386 | $921,455 | | **Liabilities & Equity** | | | | Total current liabilities | $77,911 | $81,284 | | Total liabilities | $224,993 | $242,617 | | Total stockholders' equity | $633,393 | $678,838 | | Total liabilities and stockholders' equity | $858,386 | $921,455 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2022, collaboration revenue increased to **$18.4 million** from **$11.1 million** in the prior-year period. However, operating expenses grew significantly, with R&D expenses rising to **$72.1 million** and G&A expenses to **$20.7 million**. This resulted in a net loss of **$65.7 million**, or (**$0.68**) per share, compared to a net loss of **$45.1 million**, or (**$0.48**) per share, for the same period in 2021 Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Collaboration revenue | $18,414 | $11,142 | | Research and development | $72,139 | $44,852 | | General and administrative | $20,742 | $12,500 | | Loss from operations | ($74,467) | ($46,210) | | Net loss | ($65,690) | ($45,089) | | Net loss per common share | ($0.68) | ($0.48) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2022, net cash used in operating activities was **$64.6 million**, a significant increase from **$27.1 million** in the same period of 2021, driven by a higher net loss and changes in working capital. Net cash used in investing activities was **$7.0 million**. Net cash provided by financing activities was **$2.8 million**, primarily from stock plan issuances, compared to **$438.1 million** in Q1 2021 which included proceeds from a public offering Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($64,613) | ($27,096) | | Net cash used in investing activities | ($7,026) | ($471,888) | | Net cash provided by financing activities | $2,797 | $438,050 | | Net change in cash, cash equivalents and restricted cash | ($68,842) | ($60,934) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, collaboration agreements, and financial instruments. Key collaborations with Janssen and Ono are the primary sources of revenue. The company recognized **$15.9 million** from the Janssen agreement and **$2.5 million** from the Ono agreement in Q1 2022. A significant liability is tied to stock price appreciation milestones with Memorial Sloan Kettering (MSK), which was valued at **$15.8 million**. The company also details its investments, leases, and equity structure, including a January 2021 public offering that raised net proceeds of **$432.4 million** - The company's revenues are derived from collaboration agreements. In Q1 2022, it recognized **$15.9 million** from the Janssen agreement and **$2.5 million** from the Ono agreement[54](index=54&type=chunk)[59](index=59&type=chunk) - A liability for stock price appreciation milestones related to the MSK license agreement was valued at **$15.8 million** as of March 31, 2022. A change in its fair value resulted in an **$8.4 million** non-operating income for the quarter[63](index=63&type=chunk) - In January 2021, the company completed a public offering of common stock and pre-funded warrants, raising net proceeds of **$432.4 million**[28](index=28&type=chunk) - Stock-based compensation expense was **$19.3 million** for Q1 2022, a significant increase from **$13.0 million** in Q1 2021[83](index=83&type=chunk) - Subsequent to the quarter's end, in April 2022, the company achieved a **$3.0 million** research milestone under the Janssen Agreement[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for Q1 2022, highlighting a **65%** increase in collaboration revenue to **$18.4 million**, primarily from the Janssen agreement. Operating expenses rose substantially, with R&D expenses increasing by **$27.3 million** and G&A by **$8.2 million**, driven by higher employee compensation, stock-based compensation, and increased laboratory and clinical trial activities. The company ended the quarter with **$641.7 million** in cash and investments, which management believes is sufficient to fund operations for at least the next twelve months. The discussion also reiterates the company's focus on advancing its pipeline of iPSC-derived NK and T-cell cancer immunotherapies and the financial implications of its key collaborations Comparison of Operating Results (in thousands) | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Collaboration revenue | $18,414 | $11,142 | $7,272 | | Research and development expense | $72,139 | $44,852 | $27,287 | | General and administrative expense | $20,742 | $12,500 | $8,242 | - The increase in R&D expenses was primarily due to an **$11.8 million** increase in employee compensation (including **$4.1 million** in stock-based compensation), a **$7.6 million** increase in laboratory materials and supplies, and a **$3.9 million** increase in third-party professional and clinical trial costs[108](index=108&type=chunk) - The increase in G&A expenses was mainly driven by a **$5.0 million** increase in employee compensation (including **$2.2 million** in stock-based compensation) and a **$1.1 million** increase in facility-related expenses[108](index=108&type=chunk) - As of March 31, 2022, the company had **$641.7 million** in cash, cash equivalents, and investments, which is believed to be sufficient to fund operations for at least the next twelve months[121](index=121&type=chunk)[127](index=127&type=chunk) - The company continues to experience impacts from the COVID-19 pandemic, including slower clinical site activation and patient enrollment, and delays in obtaining equipment and materials[93](index=93&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk primarily from changes in interest rates affecting its cash and investment portfolio. However, due to the low-risk profile of its investments (U.S. treasuries, corporate debt, etc.), a **10%** change in interest rates is not expected to have a material impact. A more significant risk is stock price sensitivity related to the Amended MSK License Agreement, where future milestone payments are contingent on the company's stock price. The fair value of this liability was **$15.8 million** as of March 31, 2022, and is subject to significant fluctuation with changes in the stock price - The primary market risk is interest rate sensitivity on the company's cash and investment portfolio, but this is considered low-risk and not material[132](index=132&type=chunk) - The company has significant stock price sensitivity risk due to milestone payments owed to MSK, which are contingent on the company's common stock price. The estimated fair value of this liability was **$15.8 million** as of March 31, 2022[133](index=133&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of March 31, 2022. There were no material changes in internal controls over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[135](index=135&type=chunk) - No changes occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[136](index=136&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings at this time. It acknowledges that it may be subject to various claims in the ordinary course of business, but does not expect any current matters to have a material adverse effect - As of the report date, Fate Therapeutics is not a party to any material legal proceedings[138](index=138&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section details the numerous risks facing the company. These are categorized into risks related to product discovery and development, reliance on third parties, intellectual property, commercialization, financial condition, and general business risks. Key themes include the unproven nature of its iPSC platform, the complexities of manufacturing and clinical trials, dependence on collaborators like Janssen and Ono, the need for substantial future funding, a history of net losses, and intense competition in the biopharmaceutical industry [Risks Related to Discovery, Development and Regulation](index=36&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Regulation%20of%20Our%20Product%20Candidates) The company's product candidates are based on novel iPSC and gene-editing technologies, which have no approved precedent, making the development and regulatory pathway uncertain and risky. Key risks include potential failure in clinical trials, manufacturing complexities, delays in patient enrollment, and the possibility that interim data may not predict final results. The COVID-19 pandemic continues to pose a risk of delays to clinical trials and supply chains - All product candidates are in research or early clinical development, and there is a high risk of failure to demonstrate the required safety and efficacy for regulatory approval[141](index=141&type=chunk) - The company's iPSC platform and genome editing technologies are novel and unproven, with no iPSC-derived therapies currently approved worldwide, creating significant technological and regulatory uncertainty[160](index=160&type=chunk)[170](index=170&type=chunk) - Manufacturing and distributing iPSC-derived cell therapies is complex, costly, and subject to risks of scale-up, reproducibility, and regulatory compliance[148](index=148&type=chunk) - The ongoing COVID-19 pandemic could seriously impact research and development by causing delays in clinical trials, material shortages, and disruptions to site operations[157](index=157&type=chunk) [Risks Related to Reliance on Third Parties](index=48&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) The company's business model relies heavily on third parties for manufacturing, research, and clinical trial execution. It is also dependent on strategic collaborations with Janssen and Ono for the development and commercialization of certain product candidates. Failure by these partners or suppliers to perform, or termination of these agreements, could significantly harm development timelines and financial results. The company also relies on sole-source suppliers for critical materials, posing a supply chain risk - The company depends on third-party manufacturers (CMOs) for its product candidates, creating risks related to regulatory compliance, quality assurance, and supply continuity[185](index=185&type=chunk) - Strategic partnerships with Janssen and Ono are critical for the development and commercialization of key pipeline candidates. Unsuccessful collaborations or termination of these agreements would materially harm operations[188](index=188&type=chunk) - The company relies on third-party suppliers, including sole-source suppliers, for reagents and materials, making it vulnerable to supply chain disruptions[191](index=191&type=chunk) [Risks Related to Intellectual Property](index=51&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on its ability to obtain and maintain robust patent protection for its product candidates and iPSC technology. This is challenging due to the complex and uncertain nature of biotech patents. The company relies on licensors (like MSK) to prosecute and maintain key patents and could lose rights if it fails to comply with license obligations. There is also a risk of litigation, infringement claims from third parties, and challenges to the inventorship or validity of its patents - The company's commercial success depends on obtaining and maintaining patent protection, which is uncertain in the complex and evolving field of biotechnology[195](index=195&type=chunk) - The company depends on licensors to prosecute and maintain key patents. Failure by licensors to do so could adversely affect the business[196](index=196&type=chunk) - Failure to comply with obligations under license agreements, such as the one with MSK which includes stock-price-based milestone payments, could result in the loss of rights to key technologies[199](index=199&type=chunk) [Risks Related to Commercialization](index=56&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) Even if products are approved, the company faces significant commercialization hurdles. It has no experience in marketing or sales and would need to build these capabilities or partner effectively. Success depends on market acceptance by physicians and payors, which is uncertain. The company faces significant pricing pressure and uncertainty regarding insurance coverage and reimbursement for its novel, high-cost cell therapies. The target patient populations for its rare disease candidates are small, requiring high market penetration for profitability - The company has no experience in marketing, sales, or distribution and may be unable to successfully commercialize its products if they are approved[216](index=216&type=chunk) - Commercial success is dependent on market acceptance and securing adequate pricing and reimbursement from third-party payors, which is highly uncertain for novel cell therapies[217](index=217&type=chunk)[219](index=219&type=chunk)[221](index=221&type=chunk) - The company focuses on rare diseases with small patient populations, requiring it to capture a significant market share to achieve profitability[222](index=222&type=chunk) [Risks Related to Financial Condition and Ownership](index=67&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20the%20Ownership%20of%20Our%20Common%20Stock) The company has a history of significant losses and expects them to continue, requiring substantial additional funding to advance its pipeline. Failure to raise capital could force it to curtail operations. The stock price is highly volatile. A significant percentage of stock is owned by principal stockholders and management, allowing them to exercise significant control over the company. Future equity sales to raise capital will be dilutive to existing stockholders - The company has a limited operating history, a history of significant losses (**$834.8 million** accumulated deficit as of March 31, 2022), and anticipates continued losses for the foreseeable future[258](index=258&type=chunk) - Substantial additional funding is required to complete clinical development and obtain regulatory approval for product candidates[255](index=255&type=chunk) - As of April 28, 2022, executive officers, directors, and **5%** stockholders beneficially own approximately **42.4%** of the company's voting stock, giving them significant control[262](index=262&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None [Defaults Upon Senior Securities](index=73&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None [Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable [Other Information](index=74&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None [Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's articles of incorporation, bylaws, officer certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906), and XBRL data files - Exhibits filed include corporate governance documents, officer certifications, and interactive data files (XBRL)[287](index=287&type=chunk)

Financial Data and Key Metrics Changes - The company's cash, cash equivalents, and investments at the end of 2021 were approximately $717 million [29] - Collaboration revenue increased by $1.2 million to $17.1 million in Q4 2021 compared to $15.9 million in the same period last year [29] - Research and development expenses for Q4 2021 increased by $30.5 million to $69.5 million compared to $39 million in the same period last year [31] - General and administrative expenses for Q4 2021 increased by $6.6 million to $16.9 million compared to $10.3 million in the same period last year [32] - The net loss for Q4 2021 was $69.3 million or $0.72 per share [34] Business Line Data and Key Metrics Changes - The company is pursuing off-the-shelf iPSC-derived NK cell programs for patients with B-cell lymphoma, aiming to address unmet medical needs [6][10] - Clinical responses were reported from FT516 and FT596 programs, with 3 of 8 patients treated with FT516 and 5 of 8 patients treated with FT596 achieving complete responses [9] - FT819, the first iPSC-derived T-cell therapy, is undergoing clinical investigation with a focus on its unique CAR construct and manufacturing process [17][70] Market Data and Key Metrics Changes - The company is actively engaging the FDA to discuss pivotal study design and manufacturing for its NK cell programs [10] - The second GMP manufacturing facility is expected to be operational by mid-2022, enhancing the company's production capabilities [11] Company Strategy and Development Direction - The company aims to launch pivotal studies for FT516 or FT596 by the end of 2022, focusing on patients with aggressive lymphomas previously treated with autologous CD19-targeted CAR T-cell therapy [10] - The strategy includes expanding into community settings for earlier treatment with cell-based cancer immunotherapy [12] - The company is developing multiplexed-engineered iPSC-derived NK and T-cell product candidates for solid tumors, emphasizing the potential for improved patient outcomes [24][25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the critical unmet medical need for patients who have progressed on multiple lines of therapy, particularly in the context of B-cell lymphoma [7] - The company is optimistic about the potential of its iPSC-derived therapies to transform outcomes for patients with aggressive diseases [13] - Management acknowledged the challenges in the current operating environment but expressed confidence in the company's strategic direction and product pipeline [34] Other Important Information - The company recorded a non-cash $0.5 million non-operating benefit associated with the change in fair value of contingent milestone payments [33] - The company expects to end the year with at least $400 million in cash, cash equivalents, and investments, excluding potential milestone payments [34] Q&A Session All Questions and Answers Question: Can you comment on the ongoing FT538 study in combination with antibodies? - Management indicated that they are early in the FT538 study and expect to provide an update in the second half of the year [36] Question: What are the key factors in choosing between FT516 and FT596 for the post-CD19 CAR-T expansion study? - Management highlighted that data generation and FDA input will be critical in making a data-driven decision [38] Question: What proportion of patients are being treated in the community setting for the bendamustine cohort? - Management stated that future updates will clarify data timelines for both FT516 and FT596 [41] Question: Can you discuss the design of the trial for R-CHOP? - Management noted that it is early to discuss the development strategy for R-CHOP but emphasized the importance of safety and translational data [45] Question: How many cycles are planned for FT596 in multi-dose multi-cycle treatment? - Management confirmed that the decision around the lymphoma strategy is multifactorial and they are comfortable with a multiproduct franchise in lymphoma [51] Question: Do you think NK-cell therapy can be curative on its own? - Management believes that earlier intervention in AML provides the best chance for a curative outcome [64]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 001-36076 FATE THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 65-1311552 (State or o ...

Fate Therapeutics, Inc. (NASDAQ:FATE) Q3 2021 Earnings Conference Call November 4, 2021 5:00 PM ET Company Participants Scott Wolchko - President and CEO Ed Dulac - CFO Wayne Chu - SVP, Clinical development Conference Call Participants Michael Yee - Jefferies Mike Ulz - Morgan Stanley Alethia Young - Cantor Peter Lawson - Barclays Daina Graybosch - SVB Srikripa Devarakonda - Truist Securities Matt Biegler - Oppenheimer Mara Goldstein - Mizuho Nick Abbott - Wells Fargo Ted Tenthoff - Piper Sandler Rob Burns ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited financial statements for Q3 2021 show increased assets and collaboration revenue, but also a wider net loss due to higher operating expenses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$984.6 million** by September 30, 2021, driven by financing activities, nearly doubling stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2021 (unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $129,180 | $167,347 | | Short-term & Long-term investments | $674,398 | $315,569 | | Total assets | $984,571 | $622,457 | | **Liabilities & Equity** | | | | Total liabilities | $254,239 | $238,012 | | Total stockholders' equity | $730,332 | $384,445 | | Total liabilities and stockholders' equity | $984,571 | $622,457 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 2021 saw collaboration revenue rise to **$14.2 million** and a reduced net loss, while the nine-month period showed higher revenue but a wider net loss of **$143.5 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $14,225 | $7,558 | $38,777 | $15,538 | | Research and development | $53,130 | $30,694 | $146,004 | $86,641 | | General and administrative | $15,718 | $8,351 | $40,385 | $23,583 | | Loss from operations | ($54,623) | ($31,487) | ($147,612) | ($94,686) | | Net loss | ($43,308) | ($58,684) | ($143,530) | ($120,276) | | Net loss per common share | ($0.45) | ($0.68) | ($1.52) | ($1.49) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations significantly increased to **$92.6 million** for the nine months, offset by **$449.7 million** from financing activities, primarily a public offering Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2021 (unaudited) | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($92,577) | ($18,565) | | Net cash provided by (used in) investing activities | ($395,301) | $4,953 | | Net cash provided by financing activities | $449,711 | $277,928 | | **Net change in cash, cash equivalents and restricted cash** | **($38,167)** | **$264,316** | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Notes detail accounting policies, collaboration revenues, MSK license terms with stock-price-contingent payments, and **$432.4 million** net proceeds from a January 2021 public offering - The company is a clinical-stage biopharmaceutical firm focused on developing off-the-shelf natural killer (NK) and T-cell product candidates from clonal master engineered induced pluripotent stem cell (iPSC) lines[22](index=22&type=chunk) - The company's revenues to date have been derived from collaboration agreements and government grants, with no revenue from therapeutic product sales[23](index=23&type=chunk) - In January 2021, the company raised net proceeds of **$432.4 million** from a public offering of common stock and pre-funded warrants[24](index=24&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses iPSC platform development, increased collaboration revenue and operating expenses, and strong liquidity of **$803.6 million** from a public offering - The company is a clinical-stage biopharmaceutical company developing off-the-shelf NK and T-cell product candidates derived from clonal master iPSC lines for cancer treatment[129](index=129&type=chunk)[130](index=130&type=chunk) - Key strategic collaborations for developing and commercializing iPSC-derived CAR NK- and CAR T-cell product candidates are in place with Janssen and Ono Pharmaceutical[132](index=132&type=chunk)[133](index=133&type=chunk) - The company expects expenses to increase substantially due to ongoing and planned clinical trials, GMP production activities, and establishing operations at its new corporate headquarters[135](index=135&type=chunk)[137](index=137&type=chunk) - The COVID-19 pandemic has caused some delays and disruptions in clinical trials and research activities, with the ultimate impact remaining unknown[139](index=139&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q3 2021 saw collaboration revenue increase to **$14.2 million**, with R&D and G&A expenses rising significantly, leading to a wider operating loss for the nine-month period Comparison of Operating Results (in millions) | Period | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | :--- | | **Q3** | Collaboration Revenue | $14.2 | $7.6 | +$6.6 | | | R&D Expense | $53.1 | $30.7 | +$22.4 | | | G&A Expense | $15.7 | $8.4 | +$7.3 | | **Nine Months** | Collaboration Revenue | $38.8 | $15.5 | +$23.3 | | | R&D Expense | $146.0 | $86.6 | +$59.4 | | | G&A Expense | $40.4 | $23.6 | +$16.8 | - The primary drivers for increased R&D expenses were higher employee compensation (including stock-based compensation), increased third-party consultant and clinical trial costs, and greater expenditures for laboratory materials and supplies[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Other income for Q3 2021 was **$11.3 million**, compared to an expense of **($27.2) million** in Q3 2020, primarily due to a positive change in the fair value of stock price appreciation milestones related to the Amended MSK License[166](index=166&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$803.6 million** in cash and investments, bolstered by **$449.7 million** from financing activities, including a public offering - The company held **$803.6 million** in cash, cash equivalents, and investments as of September 30, 2021[184](index=184&type=chunk) - Financing activities in the first nine months of 2021 provided **$449.7 million**, mainly from the January 2021 public offering which yielded net proceeds of **$432.4 million**[181](index=181&type=chunk)[186](index=186&type=chunk) - In July 2021, the company achieved a clinical milestone under the Amended MSK License, triggering a **$20.0 million** payment obligation to MSK, which was recorded as a current liability[179](index=179&type=chunk)[198](index=198&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include low interest rate risk and significant stock price sensitivity due to MSK license milestone payments contingent on stock performance - Interest rate risk is low due to the low-risk profile of the company's investment portfolio[201](index=201&type=chunk) - The company has significant market risk related to its own stock price due to the MSK license agreement, which has milestone payments contingent on stock price appreciation. As of September 30, 2021, the estimated fair value of the remaining milestone liability was **$24.6 million**, in addition to a **$20.0 million** payment already triggered[202](index=202&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[205](index=205&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[206](index=206&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, with no expected material adverse effects from ordinary course claims - As of the filing date, the company is not a party to any material legal proceedings[208](index=208&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include unproven iPSC/gene-editing technologies, manufacturing complexities, clinical trial delays, reliance on third parties, IP protection, and commercialization uncertainties [Risks Related to Discovery, Development, and Regulation](index=40&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Regulation%20of%20Our%20Product%20Candidates) Risks include the unproven nature of iPSC/gene-editing technologies, manufacturing complexities, clinical trial delays, and an uncertain regulatory pathway for novel therapies - Product candidates represent a novel therapeutic approach using iPSC and gene-editing technologies, which are unproven and make it difficult to predict development time, cost, and regulatory approval success[212](index=212&type=chunk)[213](index=213&type=chunk)[257](index=257&type=chunk) - The company may face delays in initiating or completing clinical trials due to challenges in patient enrollment, which could be exacerbated by the COVID-19 pandemic[214](index=214&type=chunk)[236](index=236&type=chunk) - The manufacture and distribution of iPSC-derived cell product candidates are complex, subject to a multitude of risks, and could be delayed or restricted by additional FDA requirements[216](index=216&type=chunk)[242](index=242&type=chunk) [Risks Related to Reliance on Third Parties](index=54&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) High dependence on third-party CMOs, sole-source suppliers, and strategic partners like Janssen and Ono poses risks of delays and financial harm - Reliance on third-party CMOs for manufacturing entails risks related to regulatory compliance, quality assurance, and potential termination of services, which could disrupt supply for clinical trials[298](index=298&type=chunk)[300](index=300&type=chunk) - The company relies on third-party suppliers, including sole-source suppliers, for essential reagents, materials, and equipment, making it vulnerable to supply chain disruptions[302](index=302&type=chunk)[309](index=309&type=chunk) - The company depends on strategic partnerships, such as those with Janssen and Ono, for the development and commercialization of certain product candidates. Unsuccessful collaborations could materially harm results[221](index=221&type=chunk)[303](index=303&type=chunk) [Risks Related to Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success hinges on obtaining and maintaining patent protection, facing risks of uncertain patent scope, infringement, and loss of rights under license agreements - The company's commercial success depends on obtaining and maintaining patent protection for its technology and product candidates, which is uncertain in the complex and evolving field of biotechnology[223](index=223&type=chunk)[323](index=323&type=chunk) - Failure to comply with obligations under license agreements, such as the one with MSK which includes significant stock-price contingent payments, could result in the loss of rights to key technologies[223](index=223&type=chunk)[327](index=327&type=chunk) - The company may face litigation for infringing on the intellectual property rights of others, which could be costly and prevent or delay product development and commercialization[333](index=333&type=chunk) [Risks Related to Commercialization](index=63&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) Commercialization risks include lack of marketing experience, uncertain market acceptance, challenges in pricing and reimbursement, and potential negative impacts from healthcare reform - The company has no experience in marketing, sales, or distribution, and its ability to successfully commercialize approved products is unproven[224](index=224&type=chunk)[357](index=357&type=chunk) - Commercial success is dependent on market acceptance by physicians, patients, and third-party payers, which is uncertain for novel cell therapies[225](index=225&type=chunk)[359](index=359&type=chunk) - Failure to obtain or maintain adequate insurance coverage and reimbursement for product candidates from government and private payors could severely limit product revenues[363](index=363&type=chunk)[364](index=364&type=chunk) [Risks Related to Business and Industry](index=65&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Business risks include reliance on evolving cellular immunotherapy, intense competition, loss of key personnel, growth management challenges, COVID-19 disruptions, and operational liabilities - The success of the company's product candidates is highly dependent on developments in the novel field of cellular immunotherapy, particularly those using pluripotent or genome-edited cells[225](index=225&type=chunk)[378](index=378&type=chunk) - The company faces intense competition from other biotechnology and pharmaceutical companies that may have greater financial and operational resources[225](index=225&type=chunk)[381](index=381&type=chunk) - The ongoing COVID-19 pandemic could adversely impact business operations, including research, manufacturing, clinical trial conduct, and financial condition[219](index=219&type=chunk)[386](index=386&type=chunk) [Risks Related to Financial Condition and Stock Ownership](index=71&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20the%20Ownership%20of%20Our%20Common%20Stock) Financial risks include a history of losses, need for additional funding, stock price volatility, significant control by principal stockholders, and potential future dilution - The company has a limited operating history with significant losses (**$700.5 million** accumulated deficit as of Sep 30, 2021) and anticipates continued losses, requiring substantial additional funding for development[232](index=232&type=chunk)[414](index=414&type=chunk)[421](index=421&type=chunk) - The company's stock price is subject to high volatility and may trigger financial obligations, such as the milestone payments to MSK which are contingent on stock price increases[424](index=424&type=chunk)[426](index=426&type=chunk) - Executive officers, directors, and 5% stockholders beneficially own approximately **42.0%** of the company's voting stock, enabling them to exercise significant control over corporate matters[226](index=226&type=chunk)[427](index=427&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - There were no unregistered sales of equity securities in the reported period[460](index=460&type=chunk) [Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[461](index=461&type=chunk) [Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[462](index=462&type=chunk) [Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No other information was reported for this item - None[463](index=463&type=chunk) [Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate documents and officer certifications - Lists various corporate documents and certifications filed as exhibits, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act[465](index=465&type=chunk)

Fate Therapeutics, Inc. (NASDAQ:FATE) Q2 2021 Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants Scott Wolchko - President and CEO Ed Dulac - CFO Conference Call Participants Yigal Nochomovitz - Citi Michael Schmidt - Guggenheim Alethia Young - Cantor Fitzgerald Michael Yee - Jefferies Daina Graybosch - SVB Leerink Ben Burnett - Stifel Peter Lawson - Barclays Matt Biegler - Oppenheimer Mara Goldstein - Mizuho Srikripa Devarakonda - Truist Securities Nick Abbott - Wells Fargo Operator We ...

I think UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock FATE Nasdaq Global Market FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 From the transition period from to . Commission File Number 001-36076 (Exact nam ...

Fate Therapeutics, Inc. (NASDAQ:FATE) Q1 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Scott Wolchko - President and Chief Executive Officer Wayne Chu - Senior Vice President, Clinical development Ed Dulac - Chief Financial Officer Bob Valamehr - Chief Research and Development Officer Conference Call Participants Robyn Karnauskas - Truist Securities Ted Tenthoff - Piper Sandler Alethia Young - Cantor Yigal Nochomovitz - Citi Michael Yee - Jefferies Peter Lawson - Barclays Tazeen ...

I think UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock FATE Nasdaq Global Market FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 From the transition period from to . Commission File Number 001-36076 (Exact na ...