Fate Therapeutics, Inc. (NASDAQ:FATE) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET
Company Participants
Scott Wolchko – President & Chief Executive Officer
Ed Dulac – Chief Financial Officer
Bob Valamehr – Chief Research & Development Officer
Conference Call Participants
Tazeen Ahmad – Bank of America
Michael Yee – Jefferies
Tyler Van Buren – Cowen
Yigal Nochomovitz – Citigroup
Michael Schmidt – Guggenheim Securities
Daina Graybosch – SVB Securities
Peter Lawson – Barclays
Gil Blum – Needham
Operator
Welcome to the Fate Therapeutics Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. This call is being webcast live on the Investors section of Fate’s website at fatetherapeutics.com. As a reminder, today’s call is being recorded.
I would now like to introduce Scott Wolchko, President and CEO of Fate Therapeutics.
Scott Wolchko
Thank you. Good afternoon, and thanks, everyone, for joining us for the Fate Therapeutics third quarter 2022 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 third quarter ended September 30, 2022, 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 September 30, 2022, 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 the 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 Dr. Wayne Chu, our Chief Medical Officer; Ed Dulac, our Chief Financial Officer; and Dr. Bob Valamehr, our Chief Research and Development Officer. We will focus today’s discussion on upcoming clinical and preclinical data presentations for our off-the-shelf IPS-derived CAR NK and T cell programs for the treatment of cancer, and how we expect our first-in client pipeline to advance and evolve in the coming months, including through our collaborations with Janssen and ONO.
At the Society for Immunotherapy of Cancer annual meeting being held next week in Boston, we will present clinical and preclinical data for FT536, which is our first CAR NK cell program for the treatment of solid tumors to reach clinical investigation. The multiplex engineered product candidate incorporates four functional elements including a CAR targeting the alpha three domain of the MICA and MICB proteins.
High expression of MICA and MICB proteins, which is induced by cellular stress, damage or transformation has been reported on many solid tumors. And while the alpha 1 and alpha 2 domains of MICA and MICB prone to proteolytic shedding and can lead to tumor escape.
The alpha-3 domain, in particular, is resistant and provides a promising targeting strategy for reengaging tumor cells. FT536 also incorporates our proprietary high-affinity, non-cleavable CD16 FC receptor to enhance antibody-dependent cellular cytotoxicity and enable multiantigen targeting in combination with monoclonal antibody therapy.
We believe the novel multiantigen targeting strategy of FT536, can drive significantly improved outcomes for patients with solid tumors. The Phase I study of FT536 is designed to assess the safety and activity of a 3-dose treatment schedule, as monotherapy and in combination with monoclonal antibody. At SITC, we plan to report clinical data of the first three patients treated with FT536, as monotherapy, in the first dose escalation cohort at 100 million cells per dose. The study is currently enrolling patients as monotherapy in the second dose escalation cohort at 300 million cells per dose.
In addition to leverage the mechanism of action of our high affinity non-Cleavable CD16 Receptor, which is incorporated into FT536. We have also initiated enrollment with the EGFR-targeted monoclonal antibody cetuximab, in the first dose escalation cohort at 100 million cells per dose. As the study advances, we intend to also investigate combinations with trastuzumab, amivantamab and pembrolizumab to promote multiantigen targeting a solid. At SITC, we also plan to unveil and present preclinical data for three new multiplexed engineered iPS-derived CAR T cell product candidates for solid tumors that are advancing towards IND-enabling studies.
The first CAR T cell product candidate, FT873 targets the antigen B7H3, which is an immunoregulatory protein overexpressing cancer and promotes tumor growth metastasis and drug resistance. This newly disclosed product candidate incorporates three functional elements into the TRAC locus, a novel camelid nanobody CAR targeting B7H3 and an IL-7 receptor fusion protein and our CD16 Fc Receptor.
FT873 did a wholly owned program. The second CAR T cell product candidate FT862 is partnered with Janssen and targets KLK2, an antigen with prostate restricted expression that is maintained during prostate cancer progression. Preclinical data generated under our collaboration with Janssen demonstrated that multiplex engineered iPS-derived CAR T cells targeting KLK2 have the potential to effectively infiltrate tumor mass and eliminate tumor cells in a highly selective manner and to prolong survival in xenograft models of prostate cancer.
As a reminder, Janssen funds all preclinical development of the FT862 program and has the right to exercise an exclusive option to conduct worldwide clinical development and commercialization, and we maintain the right to co-commercialize and share equally in profits and losses of FT862 in the US. The third CAR T cell product candidate, FT825 is partnered with ONO and targets an undisclosed tumor-associated antigen with a novel binding domain developed by ONO. FT862 incorporates multiple innovative elements, including their receptors designed to promote cell trafficking and prevent immunosuppression in the tumor microenvironment.
Preclinical data generated under our collaboration with ONO demonstrate its potential to overcome several unique challenges in treating solid tumors with cell-based cancer immunotherapies. We have now initiated the generation of the master cell bank for the multiplex engineered iPSC-derived CAR T-cell collaboration candidate. In addition, we are positioned to achieve a specified preclinical milestone and initiate IND-enabling activities later this year for FT825.
Upon achievement of this specified preclinical milestone, ONO has the right to exercise an exclusive option to conduct clinical development and commercialization, and we maintain the right to co-develop and co-commercialize FT825 in the US and Europe. We believe we have one of the most novel, diverse and deep cell-based cancer immunotherapy pipeline for solid tumors, which is uniquely enabled by our proprietary iPSC product platform and in particular, our ability to multiplex engineer iPSCs with synthetic modalities designed to achieve target specificity, overcome tumor heterogeneity, promote cell trafficking and induced cell activation in response to aggressive signaling in the macro environment.
At the American Society of Hematology Annual Meeting & Exposition being held next month in New Orleans, we will present initial clinical data for FT819, our CD19 targeted CAR T-cell product candidate for B-cell lymphoma and for FT576, our BCMA-targeted CAR NK cell product candidate for multiple myeloma.
As a reminder, FT819 incorporates a biallelic insertion of an anti-CD19 CAR transgene into the T-cell receptor alpha constant locus, with complete disruption of T-cell receptor expression and its CAR construct is comprised of a novel 1XX co-stimulatory domain that is designed to balance T-cell activation and exhaustion. To our knowledge, FT819 is the first ever T-cell product candidate manufactured from a clonal iPSC line to undergo clinical investigation.
The Phase 1 study for B-cell lymphoma is assessing both a single dose and a three-dose treatment schedule. And dose escalation is currently ongoing in the third single dose escalation cohort of 360 million cells. And the second three-dose escalation cohort of 60 million cells per dose
At this early stage of dose escalation with FT819, the enrollment is primarily ongoing at US academic medical centers, where we continue to see investigator enthusiasm for our off-the-shelf iPSC-derived CAR T-cell program. While there are three FDA-approved CD19-targeted autologous CAR T-cell therapies, there remains a significant unmet need for patients at these medical centers that are either unfit for or have already received autologous CAR T cell therapy and require effective treatment.
At ASH, the initial clinical data presentation for FT819 will include nine patients in single dose escalation cohorts of 90 million cells and 180 million cells. As well as three patients in the three dose escalation cohort of 30 million cells per dose.
Consistent with the high unmet need, the majority of patients administered FT819 have aggressive disease and are heavily pre-treated, having received at least four lines of prior therapy with approximately half of patients having received prior CD19 targeted autologous CAR T cell therapy.
At ASH, we will also present initial clinical data for FT576, our BCMA-targeted CAR NK cell product candidate for multiple myeloma. Despite the recent launch of two FDA-approved BCMA target autologous CAR T cell therapies, we believe there is tremendous opportunity for FT576 and as an off-the-shelf CAR NK cell therapy with a differentiated product configuration and mechanism of action.
FT576 incorporates a novel BCMA binding domain that triggers target cell lysis at low levels of BCMA expression. The Multiplexed Engineering product candidate also incorporates our proprietary high-affinity non-cleavable CD16 receptor to promote antibody-dependent cellular cytotoxicity and enable multiantigen targeting of myeloma cells in combination with daratumumab.
Importantly, combination with daratumumab is enabled uniquely by knockout of CD38, which eliminates the possibility of CD38 mediated refractory sub. The Phase 1 study for multiple myeloma is designed to assess single-dose and multi-dose treatment schedules as monotherapy and in combination with daratumumab.
We are pleased to announce that the single-dose escalation cohort at 300 million cells as monotherapy has clear dose-limiting toxicity. We are now currently enrolled patients in two-dose escalation cohorts at 300 million cells per dose of monotherapy and in combination with daratumumab.
And upon clearance of these cohorts, we plan to initiate enrollment in three-dose cohorts at 300 million cells per dose, both as monotherapy and in combination with daratumumab.
At ASH, the initial clinical data presentation for FT576 will include approximately nine patients, six patients in the single-dose escalation cohorts of 100 million cells and 300 million cells is monotherapy and three patients in the single-dose escalation cohort of 100 million cells in combination with daratumumab.
At this early stage of dose escalation, the majority of patients administered FT576 are triple-class refractory, including refractory to last prior therapy, having received at least four prior lines of therapy.
As we seek to build the highly differentiated myeloma franchise, we are excited to unveil our development of FT 555 under our collaboration with Janssen. FT555 is a multiplexed engineered IPS-derived CAR NK cell Product Candidate targeting GPRC5D, an orphan G-protein-coupled receptor found to be highly expressed on myeloma cells. Importantly, GPRC5D expression is independent of BCMA expression, suggesting that it is a target of unique therapeutic value for patients with relapsed/refractory myeloma regardless of treatment with prior BCMA targeted therapy.
In May, Janssen exercised its commercial option to FT555 for which we received a milestone payment of $10 million. We are currently conducting IND-enabling activities with Janssen to support first-in-human clinical investigation in 2023 of FT555, including in combination with daratumumab to simultaneously target GPRC5D and CD38 antigens. At ASH, the companies will jointly present preclinical data of FT555, demonstrating its activity profile.
As a reminder, under the collaboration, Janssen has the right to worldwide clinical development and commercialization, and we maintain an opt-in right to co-commercialize and share equally in profits and losses in the US. At ASH, we will also highlight the novel multiplex engineering strategies to eliminate the need for intense lympho conditioning chemotherapy, which is currently required throughout the field of cell-based cancer immunotherapy.
These traditional chemotherapeutic regimens are believed to create a favorable cytokine environment, including by depleting host immune cells, so that adoptively transfer cells may thrive. However, these conditioning regimens are often associated with significant hematologic toxicities and as such, creates significant barriers to cell therapy adoption, utilization and patient access. And while much has been native engineering cell to a laid post immune cell rejection, it is important to recognize that invasion strategies do not aviate the need for chemotherapy conditioning that will allow for cytokine-induced activation and persistence of adoptively transferred cells.
To overcome the requirement for chemotherapy conditioning in the field of cell-based cancer immunotherapy, we are particularly excited about the potential to incorporate our proprietary alloimmune defense receptor or ADR technology into our iPSC product platform. Our synthetic ADR receptor is designed to target 4-1BB expressing activated post immune cell while providing a CD3-zeta signaling boost upon engagement to potentiate the cell product.
In preclinical models, we have shown that ADR armed IPS-derived CAR NK cells resist post mediated rejection, and in fact, expand persist and maintain antitumor activity in the presence of alloreactive cells. These preclinical data provide proof of concept that ADR arm cell therapies have the potential to persist and induce potent antitumor activity without requiring conditioning chemotherapy. We look forward to highlighting our 4-1BB targeting ADR technology ay ASH, and further discussing as clinical applications, which we believe extend beyond cell-based cancer immunotherapy. For example, recent publications have highlighted the potential of autologous CD19 targeted CAR T cell therapy to induce drug-free remission in patients with certain life threatening autoimmune disease.
We believe the incorporation of ADR technology into our iPSC product platform provides an opportunity to bring novel cell therapies designed to target multiple disregulated cell types and achieve a deep reset of the immune system for patients with severe autoimmune disease.
Turning to the first quarter of next year. We plan to hold a Research & Development Day to highlight our industry-leading IPS-derived NK and T cell product pipeline with a focus on our clinical stage programs for hematologic malignancies. We plan to cover our franchises in lymphoma, myeloma and AML with clinical data updates across our programs and key milestones that we seek to achieve in 2023.
In particular, with respect to our FT596 program in combination with rituximab for the treatment of relapsed/refractory B-cell lymphoma. We plan to review clinical data of approximately 35 patients treated in single dose escalation cohorts ranging from 90 million cells to 1.8 billion cells.
Recall that despite our request at the time of IND submission to initiate clinical investigation of the FT596 program with a three-dose treatment schedule based on activity assessments observed in our preclinical studies, the FDA required us to complete escalation prior to initiating multi-dose treatment schedules. We are now currently enrolling three, two and three dose cohorts at 900 million cells per dose and at 1.8 billion cells per dose, and we plan to review clinical data of approximately 25 patients treated in these multi-dose cohorts.
Given that we have observed a highly favorable safety profile with our FT596 program and given the FDA’s focus on optimization of dose and dose schedule to maximize therapeutic index. We do believe the assessment of both two and three dose treatment schedules as these two dose levels is prudent.
Additionally, with respect to our FT538 program for the treatment of relapsed/refractory AML, we are currently enrolling patients in the four, three dose escalation cohort at 1.5 billion cells per dose and expect to complete Phase I dose escalation by the end of this year.
During our R&D Day, we plan to review clinical data of approximately 30 patients with relapsed/refractory AML treated in three dose escalation cohorts, ranging from 100 million cells to 1.5 billion cells per dose.
In addition to our program reviews, we also plan to share feedback from the FDA under our FT516 RMAT designation where our interactions to date have spanned the entirety of our iPSC product platform from iPSC generation, engineering and cell banking, routine GMP production and drug control strategy, clinical development considerations, including optimized dose and dose schedule and pathways to approval for patients with aggressive B-cell lymphoma.
In September, we received positive feedback from the FDA, regarding our production, characterization and release of clonal master iPSC bank for use in the routine manufacture of drug product, as well as potential registrational pathways for the treatment of patients with relapsed/refractory aggressive lymphomas, including for patients who have relapsed or refractory to FDA approved CD19 targeted CAR T cell therapy.
We were also granted a follow-up meeting scheduled for December to review with the FDA key CMC components of our iPSC product platform, including drug product release specification. We believe we have made great strides through our interactions with the FDA toward our pursuit of pivotal readiness for our iPSC-derived product platform.
We also plan to highlight our state-of-the-art multi-drug product manufacturing facility located in Poway, California, which is designed to support all phases of clinical development, as well as initial commercial launch. I am pleased to announce that the facility is now open for GMP production, and we are well positioned to mass-produce multiplexed engineer, iPS-derived NK cell and T cell products for the benefit of patients.
I would now like to turn the call over to Ed to highlight our third quarter financial results.
Ed Dulac
Thank you, Scott, and good afternoon. Fate Therapeutics is in a solid financial position to advance our pipeline and collaborations. Our cash, cash equivalents and investments at the end of the third quarter of 2022, were approximately $519 million. In the third quarter of this year, our collaboration revenue derived from our partnerships with Janssen and ONO Pharmaceutical, increased modestly to $15 million, compared to $14.2 million for the same period last year.
Research and development expenses for the third quarter increased by $26.7 million to $79.8 million compared to $53.1 million for the same period last year. The increase in our R&D expenses was attributable primarily to increases in employee headcount and compensation including share-based compensation, expenses associated with R&D fees and third-party consultants and in investments made in equipment and materials.
General and administrative expenses for the third quarter increased by $5.8 million to $21.6 million compared to $15.7 million for the same period last year. The increase in our G&A expenses was attributable primarily to an increase in employee headcount and compensation, including share-based compensation and legal-related fees. Total operating expenses for the third quarter were $101.4 million, which includes $19.5 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, and 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 two 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 $9 million on a quarterly basis.
In the third quarter, we recorded a non-cash $900,000 non-operating benefit associated with the change in fair value. Our net loss for the third quarter was $83.6 million or $0.86 per share.
Finally, we update our year-end guidance for cash, cash equivalents and investments. We had previously guided to year-end amounts of at least $400 million and we now expect to end this year with at least $440 million in cash, cash equivalents and investments. Note that in the fourth quarter of this year, we are poised to achieve significant milestones under our collaborations with Janssen and Ono and the achievement of these milestones, including the receipt of associated cash payments is not included in our year-end cash guidance.
I would now like to open the call to questions.
Question-and-Answer Session
Operator
Thank you. At this time, we will conduct a question-and-answer session [Operator Instructions] Our first question comes from Tazeen Ahmad of Bank of America. Your line is open.
Tazeen Ahmad
Hi, guys. Good afternoon. Thanks so much for taking my question. Just wanted to follow up on the feedback that you’ve got on the RMAT meeting with FDA. What kind of commitments do you think that the agency would ask you for in terms of requirements for registration going forward for 516? I think that we’ve been getting invite questions on that already. And since you just recently had this meeting, I was just curious if you can just elaborate a little bit more on that. Thanks.
Scott Wolchko
Sure. The feedback that we have gotten so far and keep in mind, these are active discussions we’re having with the FDA. Our clinical development strategy in these discussions has focused mostly on the opportunity that exists in the post-CAR T cell setting, which we believe is representative essentially the new salvage setting in patients with aggressive B-cell lymphoma.
As such, we believe that, for instance, it is quite possible to conduct a single-arm study in a relatively small number of patients that ORR would likely be the primary endpoint. And that certainly, we would have to follow patients after response. That said, keep in mind that in this patient population based on data from consortiums in the CAR T cell therapy space, the response rates are, in fact, quite low in this patient population post CAR T cell therapy often in the teens.
Progression-free survival, which certainly is a benchmark that could be used to follow patients is in the two to three-month range and overall survival is six months. So certainly, we believe like most therapies, you would have to follow patients, but in this particular patient population, follow-up by its very nature, it would be relatively short.
Tazeen Ahmad
Okay.
Scott Wolchko
Does that answer your question?
Tazeen Ahmad
Yeah. It largely does. And maybe just a follow-up, Scott, do you plan on doing a 516 study with Rituxan and would you think that you would need to have a Rituxan only comparator arm with that?
Scott Wolchko
Yaah. So I don’t want to comment as to whether or not we will be doing 516 or 59%. We are actively making that decision as we have these conversations and approach the end of the year. Obviously, 596 is on the table and many of the discussions we’re having in the FDA are agnostic to product candidate. And we certainly believe 596 is a second generation of 516, if you will.
Your question is a fair question. Do we think we’d have to have a comparator arm against, for instance, rituximab our view on that is no. Rituximab is certainly not what you would consider a new molecular entity by any stretch of the imagination. We are only, for instance, remember giving a single dose of rituximab, rituximab as well. So we’re not even delivering rituximab on by any of standard dosing schedule. So we are confident that there are mechanisms we can use, including pointing to historical data sets of Rituxan in late-line patients that can be used to address the contribution of rituximab, which, quite honestly, we think is quite low, especially given this patient population that has progressed through multiple lines of rituximab and is only receiving a single dose of rituximab.
Tazeen Ahmad
Okay. Got it. Thank you
Operator
Thank you. One moment, please. Our next question comes from Michael Yee of Jefferies. Your line is open.
Michael Yee
Hey, Scott. Thanks. Congrats on the progress, looking forward to these updates. I had a two-part question. One on myeloid, you’ll give an update on both of these programs, but they appear to be at fairly low doses. Do you expect that one would see activity here? And how do you – how should investors attempt to compare this to other things that are out there, given we’re at somewhat low dosage.
And secondly, on the iPSC CAR T, a bit of the same question. obviously, there’s a proof of concept here but just kind of explain what is the value or strategy, I guess, with adding a CAR-T into the mix? Thank you.
Scott Wolchko
So first question, FT576 me update in multiple myeloma. Keep in mind, and hopefully, we were clear about this. The 576 dose schedule is currently and we were asked to start by the FDA with a single dose schedule. So by no means like we’ve gone through in the past with 59 do we believe a single dose of an NK cell is the right therapeutic paradigm.
All our preclinical data, data from others as well. suggest that a single dose of an NK cell cannot, in fact, out compete a single dose of a CAR T cell. They are very different biology, T cells expand, proliferate much more aggressively than, for instance, in NK cell. And so we think, again, whether it be 596 or 576, when we’re talking about an NK cell paradigm, the right framework for assessment is a multi-dose framework. And so fortunately, with FT576, we are transitioning to multi-dose much sooner than we did with FT596, where I think I alluded to, we essentially had to go through 35 patients in full dose escalation before beginning a multi-dose par.
So, I think it’s important. I think there’s early data sets from that standpoint, just in terms of just demonstrating safety, clearing the safety hurdle so that we can gain the multidose experience is important for 57. Obviously, any early signs of activity would be encouraging, especially since if they were in the monotherapy arm and the fact that we’re using a novel car. So, any signs of activity, I think, in the monotherapy arm in the first couple of patients would be encouraging.
I think with CAR-T cell therapy, again, I think is very important for us. This is the first iPS-derived CAR-T cell therapy. Obviously, I think it’s the first iPS-derived CAR-T cell in the world into clinical investigation. And as we’ve alluded to, certainly on this call, while most folks, I think, associates with therapeutics, solely as an NK cell company, our pipeline is expanding and evolving to certainly include T cells whether those be wholly-owned programs or programs under our collaborations with Janssen and ONO.
So, I think continuing to pioneer iPS-derived CAR T cell therapy, including starting with CD19, where profiles are well understood, I think, is an important experience for us to continue to do.
As it relates to the specific data, again, these are early — we’re early in dose escalation, early doses. And I think based on the data that we’ve looked at in terms of patient profile I think these patients are not your typical Yescarta patients. I think I even mentioned that probably 50% of our patients are post-CAR T cell for therapy, in fact.
Michael Yee
Got it. Thank you.
Scott Wolchko
Sure.
Operator
Thank you. Our next question comes from Tyler Van Buren of Cowen. Your line is open.
Tyler Van Buren
Hey guys. Thanks very much for all the updates. Regarding the B-cell lymphoma data in late January, is it more cells or the 1.8 billion cell dose in this case, better given the short half-life, so basically, this comes down to ensuring that the strong safety profile is maintained at the higher dose? And then the second part is, once we get this dose escalation data, will you be able to make a decision as to whether you move 516 or 596 into the first pivotal?
Scott Wolchko
Yes. Great question. So, I think the way we think about it at some basic level, especially given the biology of the NK cells, where they do not expand or proliferate like T cells, I think they’re certainly getting down the cell load, right? And so if you think about historically what we’ve seen in the autologous CAR T cell space in B-cell lymphoma, responses happen fairly rapidly. And so they tend to happen, I think, based on what we’ve seen to date and an understand of the uphologous world, responses often happen in the first two to three weeks.
And so for us, yes, given what you brought up, certainly, NK cells have a very short half-life, NK cells do not behave with respect to expansion and proliferation like T cells. The idea is, though, I think, ultimately comes down to effective target ratio and maximizing cell load against the target. I think there’s different ways to try and achieve that with NK cells.
There are certainly different schedules that you could potentially look at — and so we are looking at, for instance, a two and a three-dose schedule. And I think it’s worthwhile I’m confident the FDA is going to acquire given we have such a clean safety profile. But I want to understand, I think, the differences between potentially two different doses.
I think as we get into the first quarter, and we do get more experience, and greater numbers of patients at the $901.8 billion level using these multi-dose schedules, we will be able to make a decision with respect to 516, 596 and the dose-and-dose schedule.
Tyler Van Buren
Great. Thank you.
Scott Wolchko
Sure.
Operator
Thank you. One moment. Our next question comes from Yigal Nochomovitz of Citigroup. Your line is open.
Yigal Nochomovitz
Hi Scott. Thanks very much for taking my question. So just a follow-up on the feedback from the FDA regarding FT516, I just want to get a better understanding of the extent to which the FDA commented specifically on FT596. I understand, of course, that the FT596 is the next-generation version, but they are different products after all.
So with regard to the specific feedback on the post-CAR T-Cell setting and you mentioned the ARR, the primary endpoint following patients for response with respect to 516, how much of those comments apply specifically to FT596 or are those discussions more going to happen with this follow-up meeting that you outlined in December? Thank you.
Scott Wolchko
Sure. And I want to be really clear. And you’re right. The banner of the discussions is under FT516 RMAT. And so absolutely, we do need to potentially assume that the feedback given relates specifically to FT516.
That said, — the questions that we asked and the discussions we’re having, I do believe it can be interpreted more broadly. They certainly relate at some level to an iPSC product platform as it relates to, for instance, making Master Cell banks or even our manufacturing or product release.
And I do think the discussions we’ve been having about the unmet need post-CAR T-cell therapy and how you would design a trial essentially could demonstrate benefit in a post-CAR T-cell therapy, in a post-CAR T-cell therapy setting could be interpreted reasonably to apply either to 516 or 596.
Yigal Nochomovitz
Okay. Got it. That makes sense. And then just a few others little questions here. Regarding 825, what’s the expectation regarding disclosing the target with Ono and then I was also wondering with the KLK2 product, if you did any work in combo with some of the approved analyze in prostate cancer. Thank you.
Scott Wolchko
Yeah. So with respect to 825 — we are in a position where I believe we will very shortly achieve the preclinical milestone. That will trigger an option decision by Ono. I suspect that when Ono does or does not exercise their option, but assume for the sake of this discussion that Ono does, in fact, exercise their option, I believe the target will become public at that point in time.
With respect to Janssen, I don’t know, Bob, if you want to comment on — for the most part, — the preclinical data that we generated with Janssen, without getting into all the detail, did focus on its potential as a monotherapy.
Q – Yigal Nochomovitz
Okay. And then…
Scott Wolchko
Is really focused on the unique contribution of the car.
Q – Yigal Nochomovitz
Okay. Got it. And then just one final one. On the FT596 dose escalation, with the multi doses. I think if I heard correctly, you said two doses at 900 and then three at $1.8 billion. I was just quite intrigued by the choice of three at $1.8 billion as opposed to that two at $1.8 billion?
Scott Wolchko
Sorry, to clarify, the two-dose schedule includes both 900 and $1.8 million and the three dose schedules currently at 1.8.
Q – Yigal Nochomovitz
Okay, got it.
Scott Wolchko
You should think about at some level sequentially moving through dose and dose escalation. Hey, you clear a one dose level. Now you can open two dose level. Okay, it’s clear two dose level, you can begin three-dose level. we’re in a very sort of systematic way of moving through dose escalation here under the FT596 umbrella.
Q – Yigal Nochomovitz
Got it. Okay. Thank you.
Operator
Thank you. One moment, please. Our next question comes from Michael Schmidt of Guggenheim Securities.
Michael Schmidt
Thanks for taking my question. I had one on your multiple myeloma strategy, perhaps specifically about FT576 and it sounds like this initial update at ASH will be really early. But Scott, I’m just curious what are you looking for in terms of the efficacy profile for this program? Are we looking for CAR-T like efficacy? Are we looking for something else? And then how do you see this positioned longer term or in terms of registration to lob thinking about something that is going to be applied in combinations, or are we looking at something monotherapy in the late-stage study initially?
Scott Wolchko
Yes, sure. Recognizing my comments, keep in mind are relatively early with respect to our evolution of the myeloma franchise. But certainly, I think it’s reasonable to believe that a similar strategy can evolve that we believe is playing out in lymphoma, where certainly patients will receive autologous BCMA targeted therapy I think patients will either relapse or fail that therapy.
And I certainly think there will be an opportunity to come in with an off-the-shelf cell therapy in combination with daratumumab in patients that have progressed or failed CAR-T cell therapy. So that’s one, it’s very similar to what’s playing out with Burnstone 516 596. I do think that will be considered sort of the post CAR-T cell setting, I think, will be sort of considered the new salvage and it provides, I think, lots of interesting opportunity for rapid development. I also think the way we’re designing our product candidates obviously have features and functionality that are designed, in fact, to synergize with the monoclonal antibodies that are used early and often care. And so our, I would say, other strategy for development is not necessarily to go compete head to head out of Memorial Sloan Kettering or MD Anderson of the world with an autologous product, but use the fact that these monoclonal antibody regimens are given early in care use play to our advantage that we have an off-the-shelf cell therapy. Obviously, to the extent we continue to have a differentiated safety profile, we think that cell therapy could be delivered in the community setting and therefore, reach into earlier line settings and reach patients earlier in care in the community setting with an off-the-shelf product.
Michael Schmidt
Okay. That makes sense. A follow-up on your B-cell lymphoma strategy. So it sounds like you’re nearing a decision point here in 1Q about 596 and 5 — this going to be an either/or decision Scott, or is there a scenario where you could move both programs into registration studies next year?
A – Scott Wolchko
I think it’s very likely we would consider a single product candidate, either one or the other. I think at the end of the day, while again, having active conversations with the FDA, I think a reasonable assumption to work on is that if you do run, for instance, a late-line study post CAR-T a reasonable assumption is that, that might be accelerated versus full approval and that a confirmatory study might be required. That’s all TBD. We’re having active discussions. But certainly, if that were the scenario that would play out, it would behoove us to sort of consolidate the franchise around a single product. I obviously think 596 is a second-generation product candidate.
Michael Schmidt
That makes lot of sense. Thank you.
A – Scott Wolchko
Sure. There’s certain assumptions in there, too. And certainly, that FT516 596 has a similar safety profile that would allow for that as well.
Operator
One moment, please. Our next question comes from Daina Graybosch from SVB Securities. Your line is now open.
Daina Graybosch
Thanks. Thank you for the question. You have a lot of programs here, both your own new internal programs and multiple that you could opt in in the next couple of years. And I wonder if you could talk about how you’re thinking about portfolio prioritization. And then related to that, to that, do you have any guidance on R&D burn for 2023 as you start to take these programs forward?
A – Scott Wolchko
Yes. I mean, Ed can address the latter one. I don’t think today, we expect that burn will actually go up substantially. While there — as you rightly pointed out, some emerging programs, including clinical programs. Keep in mind that as it relates to the Janssen programs, early development, actually preclinical development as well as early clinical development is fully paid for by Janssen. So the program that we announced today for instance, FT555 in myeloma as well as the preclinical development of the CAR 2 T-cell program — all of that is funded by Janssen until we decide to make an opt-in decision. And that often decision you should think of occurs essentially when a dose and dose schedule has been selected for a registration study.
So those programs, I don’t tend to think of our part of fates burn certainly in 2023 and maybe into late 2024. ONO is very similar. Half the program is funded by ONO and half is funded by Fate. And we do think that there are early milestones under the ONO program, including option exercise as well as early IND or Phase I milestones that essentially make the program cost neutral to Fate Therapeutics from that perspective.
I do expect Fate Therapeutics, and we’ll discuss this more at our R&D. I certainly think we are going to prioritize and rationalize our programs in our pipeline. As you know, we have first and second generation product candidates. Certainly, we just talked about that in lymphoma. It’s also true in myeloma as well with FT538 and 576.
Daina Graybosch
Great. Thank you.
Scott Wolchko
Sure.
Operator
Thank you. One moment, please. Our next question comes from Peter Lawson of Barclays. Your line is now open.
Peter Lawson
Great. Thank you. I apologize. I joined the call late, but the updated data for lymphoma, when should we expect that? Is that kind of more of a January event? Is it Analyst Day thing in January or you target in a medical conference?
Scott Wolchko
Yes, yes, sorry. Yes, sorry. We’ll do a analyst — we’ll do an R&D day in the first quarter of next year. And at that R&D day, certainly, the lymphoma data with respect to 516 and 596, will be in focus. During that R&D day, we’ll also update our other disease franchises in hematologic malignancies, including myeloma and AML.
We will provide, I think, a meaningful update with respect to our discussions with the FDA under RMAT as it relates to our product platform, as well as development strategies. And I think we’ll focus a bit on our new manufacturing facility that we’re launching and the capabilities and unique value of mass-producing IPS cells for patients with cancer. So we will, I think, hold a fulsome R&D day in the first quarter to discuss those topics.
Peter Lawson
Great. Thank you. And then, to the post-CAR T cell setting, I mean, do you expect that will be a single-arm study, kind of, what drives the difference between or the decision between 516 versus 596? And would you potentially iPSC plus rituximab versus iPSC?
Scott Wolchko
Yes. No. I think our view is that the post-CAR T cell setting is — could be considered a salvage setting. I think in a salvage setting in cancer, you could absolutely run a single-arm study. Rituximab is not a new molecular entity.
And I think there are absolutely — we do not even give rituximab on a standard schedule. I think there are recent examples where folks have secured certainly accelerated approval in combining with therapies that are used that are not new molecular entities.
And I certainly think there are ways, keep in mind that folks have progressed or most patients on our study have gone through at least multiple lines of a standard rituximab regimen. So I think there are multiple different ways to demonstrate the unique value of the product without having to run a controlled study.
Peter Lawson
Got you. And then, just a final question around the TCR editing and TCR and iPSC. Just curious if those are stable, if you’re seeing kind of genomic rearrangements as we’ve kind of seen in some of the gene edited LMI approaches.
Scott Wolchko
Yes. I’ll let Bob talk about it, but I think it, at conference recently, either AACR or ASGCT, we highlighted 10-year stability of IPS-derived engineered master cell bank, but I’ll let Bob talk about that.
Bob Valamehr
Sure. No, that’s a great question. Scott mentioned, we highlighted that ASGCT, but keep in mind, we select the [indiscernible] line and that [indiscernible] line gets interrogated before the master cell bank is made, gets interrogated after the master cell bank is made is interrogated after engineering strategies as well. So we have a full corner of different genomic stability assays, and we’re very confident in our, in the stability of our product.
Peter Lawson
Just — sorry, a final question just around that Analyst Day. Could we get a sense of durability of responses from the lymphoma data?
Bob Valamehr
Sure. I think we’re going to present durability of response. I think, keep in mind that we’ve just recently moved to the multi-dose schedules with two and three doses. So obviously, those patients are going to be less mature with respect to follow-up.
Peter Lawson
Great. Thank you so much.
Operator
Thank you. One moment, please. Our next question comes from Gil Blum of Needham. Your line is open.
Gil Blum
Hi. Good afternoon and thanks for taking our questions. Maybe a quick question on FT819 and kind of the data that was partially disclosed this morning on safety, looks pretty safe. I mean when you compare it to its allogeneic per stope, I’d love to hear your thoughts on that?
Scott Wolchko
Sure. I mean, it’s early in dose escalation. So I’m not — I wouldn’t read too much into it one way or another. The one thing I would keep in mind is we are using a novel CAR construct, the 1XX CAR construct, which you can consider to be sort of uniquely different than either CD28 or CD28 4-1BB. So whether or not that CAR construct is yield a different safety profile. I mean time will tell as we continue through dose escalation. But — so far we’ve seen a relatively clean safety profile with FT819,
Gil Blum
Okay. And maybe a broader question on solid tumors. So assuming you can use multiple different antibodies, theoretically, you could go after multiple antigens in the solid tumor, especially as the disease progresses. Any thoughts on that?
Scott Wolchko
Yes. No, absolutely. I think that’s one of the things we are potentially excited about is the potential to ultimately you could combine with an array of monoclonal antibodies over a period of time. In addition, I think one of the reasons we’re also really excited about potentially combining with amivantamab, for instance, FT536 percent and amivantamab, we now are achieving sort of not just dual antigen targeting, but you’re hitting three antigens with respect to that combination. So, yes, absolutely. I think the — I think that’s one of the benefits of a cell therapy and FDA-approved monoclonal antibody combinations.
Gil Blum
All right. Thank you for taking our question and congrats on your progress.
Scott Wolchko
Thank you
Operator
Thank you. One moment. Our last question comes from Matthew Biegler of OpCo [ph]. Your line is open.
Q – Unidentified Analyst
All right, guys. Thanks for squeezing me in. Scott, I thought it was interesting in your prepared remarks, you specifically mentioned 536 data at 50, but not 538. Should we be reading into that as a..
Scott Wolchko
Yes. I don’t — we will have I think 538, we do have data. I think it will be 8 to 10 patients. First dose level, three different monoclonal antibody combinations, I believe. It was simply for gravity.
Unidentified Analyst
Got it.
Scott Wolchko
I think it went too long to begin with. My comments were too long to begin with. Not everything makes it into the script. But yes, no, we will be presenting FT538 at 50. I think the poster covers about 8 to 10 patients at the first dose level 3 different monoclonals.
Unidentified Analyst
Understood. Looking forward too. Thanks.
Scott Wolchko
Sure.
End of Q&A
Operator
Thank you. I would now like to turn it back to Scott for closing remarks.
Scott Wolchko
Great. Thank you all for participating in today’s call and look forward to seeing — hopefully some of you next week at SITC. Take care. Be well.
Operator
Thank you. This concludes the program. You may now disconnect.
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