Fate Therapeutics(FATE) - 2025 Q2 - Quarterly Results

Q2 2025 Business Highlights and CEO Commentary The company reported significant clinical progress for FT819 in lupus, received FDA allowance for FT836, and extended its cash runway through 2027 Q2 2025 Highlights The company reported significant clinical progress for its lead candidate FT819 in lupus, including positive 12-month durability data and initial FDA discussions for a registrational pathway. The FDA also allowed an Investigational New Drug (IND) application for FT836 in solid tumors. Operationally, the company extended its cash runway through year-end 2027, supported by $249 million in cash and investments - Demonstrated durability of response in a severe lupus nephritis patient at 12-month follow-up with FT819[1] - Held initial discussions with the FDA under FT819's RMAT designation to plan a registrational pathway in Systemic Lupus Erythematosus (SLE) and Lupus Nephritis (LN)[1] - FDA allowed the IND application for FT836, a MICA/B-targeted CAR T-cell therapy for solid tumors, featuring Sword and Shield™ technology for conditioning-free treatment[1] - Extended projected operating cash runway through the end of 2027, with $249 million in cash, cash equivalents, and investments[1] CEO Commentary CEO Bob Valamehr highlighted the company's focus on patient enrollment for FT819 in autoimmune diseases, citing encouraging data with less-intensive conditioning. The company aims to start a registrational study for FT819 in 2026 under its RMAT designation. He also noted that proactive resource allocation has extended the company's cash runway, enabling execution across the pipeline - The company's priority is to drive patient enrollment for FT819 in autoimmune diseases to demonstrate its therapeutic differentiation and on-demand availability[2] - The goal is to commence a registrational study for FT819 in SLE and LN in 2026, following discussions with the FDA under the RMAT designation[2] - Proactive steps were taken to optimize resource allocation and extend the cash runway, positioning the company to execute on its pipeline goals[2] Clinical Program Updates This section details the progress of FT819 in autoimmune diseases, FT825/ONO-8250 in solid tumors, and next-generation CAR T-cell programs FT819 Program in Autoimmune Disease The FT819 program is advancing rapidly with ongoing FDA discussions for a registrational study in SLE and LN under its RMAT designation. Interim Phase 1 data showed promising responses, including a 12-month durable remission in one patient using a fludarabine-free regimen. The study is also exploring FT819 as an add-on therapy without conditioning and has been expanded to include other B cell-mediated autoimmune diseases like AAV, IIM, and SSc FDA Discussions and RMAT Designation The company is in discussions with the FDA regarding a potential registrational study design for FT819 in moderate-to-severe SLE and refractory LN. This follows the FDA granting Regenerative Medicine Advanced Therapy (RMAT) designation for this indication in April 2025, which is intended to expedite development and review - Met with the FDA in August under its RMAT designation to get preliminary feedback on a proposed registrational study design for FT819 in SLE and LN[3] - The RMAT designation, granted in April 2025, was created to expedite the development and review of regenerative medicine therapies for serious conditions[3] Phase 1 SLE Interim Data Interim Phase 1 data presented at EULAR 2025 showed positive results in patients with moderate-to-severe SLE. All three LN patients treated with a single 360 million cell dose and a fludarabine-free regimen achieved an objective renal response. Notably, the first LN patient demonstrated a durable remission (DORIS) at the 12-month follow-up - All three refractory active LN patients treated with a single 360 million cell dose of FT819 following a flu-free conditioning regimen achieved an objective renal response[3] - The first LN patient achieved DORIS (drug-free definition of remission) and complete renal response at 6 months, which was sustained at the 12-month follow-up[3] Add-on Therapy Trial The Phase 1 study is also assessing FT819 as an add-on to standard-of-care maintenance therapy without any conditioning chemotherapy. The first patient treated in this cohort achieved Low Lupus Disease Activity State (LLDAS) at 3 and 6 months, along with a reduction in disease scores and steroid dosage - The first patient treated with FT819 as an add-on to maintenance therapy (without conditioning) achieved LLDAS at 3- and 6-months[3] - The patient also experienced a reduction in SLEDAI-2K score from 8 to 2 and was able to taper their steroid dose[3] Study Expansion The Phase 1 trial of FT819 has been expanded to investigate its potential in other B cell-mediated autoimmune diseases. The company plans to initiate dose-expansion cohorts in the second half of 2025 for anti-neutrophil cytoplasmic antibody-associated vasculitis (AAV), idiopathic inflammatory myositis (IIM), and systemic sclerosis (SSc) - The Phase 1 clinical trial of FT819 has been expanded to include other B cell-mediated autoimmune diseases[4] - The company plans to initiate dose-expansion cohorts in H2 2025 for AAV, IIM, and SSc[4] FT825 / ONO-8250 Program in Solid Tumors The Phase 1 study of FT825 / ONO-8250, a HER2-targeting CAR T-cell therapy developed with Ono Pharmaceutical, is ongoing in patients with advanced solid tumors. Dose escalation is proceeding to the third level (900 million cells), and the therapy has shown a favorable safety profile with no dose-limiting toxicities reported to date - A Phase 1 study is ongoing for FT825 / ONO-8250, a HER2-targeting CAR T-cell candidate, in patients with advanced solid tumors[5] - Dose escalation is currently ongoing at the third dose level of 900 million cells[5] - FT825 / ONO-8250 has demonstrated a favorable safety profile with no dose-limiting toxicities (DLTs) to date[5] Next-Generation CAR T-cell Programs (Sword & Shield™ Technology) The company is advancing its next-generation programs designed to reduce or eliminate the need for conditioning chemotherapy. The FDA has allowed the IND for FT836, a MICA/B-targeted CAR T-cell for solid tumors. Additionally, a master iPSC bank has been created for FT839, a dual CD19/CD38 CAR T-cell candidate, with clinical investigation planned to begin in 2026 - The FDA allowed the IND application for FT836, a MICA/B-targeted CAR T-cell product candidate, for Phase 1 testing in advanced solid tumors without conditioning chemotherapy[6] - A master iPSC bank has been generated for FT839, a CD19/CD38 dual-CAR T-cell product candidate[6] - The company is evaluating opportunities for clinical investigation of FT839 in hematological malignancies and autoimmunity, with plans to start in 2026[6] Corporate and Financial Updates This section covers the extension of the collaboration with Ono Pharmaceutical, strategic operational adjustments, and the company's second quarter 2025 financial performance Corporate Developments Fate Therapeutics extended its collaboration with Ono Pharmaceutical for a second solid tumor CAR T-cell candidate, securing co-funding through at least June 2026. The company also implemented a tactical operations plan, including a 12% headcount reduction and other cost-saving measures, to extend its cash runway through the end of 2027 - Extended the research term of its collaboration with Ono for a second iPSC-derived CAR T-cell candidate, with co-funding expected to continue through at least June 2026[9] - Implemented a tactical operations plan, including a 12% reduction in employee headcount, to extend its cash runway through the end of 2027[9] Second Quarter 2025 Financial Results For the second quarter of 2025, Fate Therapeutics reported revenues of $1.9 million, derived from its collaboration with Ono Pharmaceutical. Total operating expenses were $38.9 million. The company ended the quarter with a strong cash, cash equivalents, and investments position of $248.9 million Q2 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Cash, Cash Equivalents & Investments | $248.9 million | | Total Revenue | $1.9 million | | Total Operating Expenses | $38.9 million | | Research & Development Expenses | $27.4 million | | General & Administrative Expenses | $11.4 million | | Non-cash Stock-based Compensation | $7.2 million | Financial Statements This section presents the condensed consolidated statements of operations and balance sheets for the second quarter of 2025 and comparative periods Condensed Consolidated Statements of Operations The company reported a net loss of $34.1 million, or $0.29 per share, for the three months ended June 30, 2025. This represents an improvement from a net loss of $38.4 million, or $0.33 per share, for the same period in 2024. The reduced loss was primarily driven by lower operating expenses, which decreased from $51.9 million in Q2 2024 to $38.9 million in Q2 2025 Statement of Operations (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Collaboration Revenue | $1,907 | $6,772 | | Total Operating Expenses | $38,875 | $51,855 | | Loss from Operations | $(36,968) | $(45,083) | | Net Loss | $(34,070) | $(38,427) | | Net Loss per Share | $(0.29) | $(0.33) | Condensed Consolidated Balance Sheets As of June 30, 2025, Fate Therapeutics had total assets of $371.6 million and total stockholders' equity of $261.4 million. Cash, cash equivalents, and investments totaled $248.9 million, compared to $306.7 million at the end of 2024 Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash, Cash Equivalents & Investments | $248,927 | $306,725 | | Total Assets | $371,632 | $440,694 | | Total Liabilities | $110,268 | $121,968 | | Total Stockholders' Equity | $261,364 | $318,726 | Company Overview This section provides an overview of Fate Therapeutics' proprietary iPSC product platform and its focus on developing iPSC-derived cellular immunotherapies iPSC Product Platform The company's proprietary iPSC product platform utilizes multiplexed-engineered human induced pluripotent stem cells to create clonal master iPSC lines. This innovative approach allows for the mass production of well-defined, uniform, off-the-shelf cell therapy products, aiming to overcome the limitations associated with patient- or donor-sourced therapies. The platform is protected by a robust intellectual property portfolio of over 500 issued patents - The platform uses clonal master iPSC lines as a starting source to manufacture engineered cell products, analogous to master cell lines for biopharmaceuticals[10] - This method is designed to produce well-defined, uniform products that can be stored for off-the-shelf availability and administered to a broad patient population[10] - The platform is supported by an intellectual property portfolio of over 500 issued patents and 500 pending patent applications[10] About Fate Therapeutics, Inc. Fate Therapeutics is a clinical-stage biopharmaceutical company based in San Diego, CA, dedicated to developing iPSC-derived cellular immunotherapies. The company's pipeline includes engineered T-cell and natural killer (NK) cell product candidates designed to deliver multiple therapeutic mechanisms to patients - Fate Therapeutics is a clinical-stage biopharmaceutical company focused on iPSC-derived cellular immunotherapies[11] - The company's pipeline includes iPSC-derived T-cell and NK cell product candidates with novel synthetic controls[11] Forward-Looking Statements This section contains standard legal disclaimers regarding forward-looking statements, which involve risks and uncertainties. It cautions that actual results may differ materially from expectations due to various factors, including clinical trial outcomes, regulatory hurdles, manufacturing challenges, and other risks detailed in the company's SEC filings - The release contains forward-looking statements based on management's current expectations, which are subject to a number of risks and uncertainties[13] - Key risks include product candidates not demonstrating requisite safety or efficacy, delays in clinical trials or manufacturing, and potential failure to maintain collaboration agreements[13] - Readers are advised to review the company's periodic filings with the Securities and Exchange Commission for a more detailed discussion of risks[13]