What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-24 compared with 2020-03-02 · 367 added, 314 removed, 559 unchanged (55% of the section changed)

We are a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders.

We are a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for patients with cancer.

We are developing first-in-class cell therapy product candidates based on a simple notion:

2 unchanged sentences

For certain of our product candidates, we use pharmacologic modulators, such as small molecules, to enhance the biological properties and therapeutic function of allogeneic, or healthy donor-sourced, cells ex vivo before our product candidates are administered to a patient.

In other cases, we use human induced pluripotent stem cells (iPSCs) to generate a clonal master iPSC line having preferred biological properties and direct the fate of the clonal master iPSC line to create our cell therapy product candidate.

In other cases, we use human induced pluripotent stem cells (iPSCs) to generate a clonal master iPSC line having preferred biological properties, and we direct the fate of the clonal master iPSC line to create our cell therapy product candidate.

Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, we believe clonal master iPSC lines can be used as a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be repeatedly mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf to treat many patients.

Utilizing these therapeutic approaches, we program cells of the blood and immune system and are advancing a pipeline of programmed cellular immunotherapies.

Utilizing these therapeutic approaches, we program cells of the blood and immune system and are advancing a pipeline of programmed cellular immunotherapies, including off-the-shelf natural killer (NK) and T-cell product candidates derived from clonal master iPSC lines for the treatment of cancer.

The following table summarizes our programmed cellular immunotherapies currently under development:

Product Candidate

Disease Indication

Commercial Rights

Off-the-shelf, iPSC-derived Cellular Immunotherapies – Hematologic Malignancies

AML and B-cell Lymphoma

B-cell Lymphoma and CLL

AML and Multiple Myeloma

Multiple Myeloma

B-cell Malignancies

Hematologic Malignancies

Off-the-shelf, iPSC-derived Cellular Immunotherapies – Solid Tumors

Advanced Solid Tumors

Allogeneic Cellular Immunotherapies

Hematologic Malignancies

Recurrent Ovarian Cancer 2

Advanced Solid Tumors 2

[1] Subject to Collaboration and Option Agreement with Ono Pharmaceutical Co.

[2] Clinical trials in AML and recurrent ovarian cancer are being conducted as investigator-initiated studies at the Masonic Cancer Center, University of Minnesota.

We do not intend to continue development of FATE-NK100.

The use of human cells as therapeutic entities has disease-transforming potential, and compelling evidence of medical benefit for cell therapy exists across a broad spectrum of severe, life-threatening diseases.

One of the most successful and widespread applications of cell therapy is hematopoietic cell transplantation (HCT), with over 60,000 procedures performed worldwide on an annual basis.

HCT holds curative potential for patients afflicted with hematologic malignancies, such as leukemia and lymphoma, and with rare genetic disorders, such as hemoglobinopathies, inherited metabolic disorders and immune deficiencies.

Building upon the success of HCT, the clinical investigation of cell-based cancer immunotherapy is rapidly expanding.

One of the most successful and widespread applications of cell therapy is hematopoietic stem cell transplantation (HSCT), with over 60,000 procedures performed worldwide on an annual basis.

HSCT holds curative potential for patients afflicted with hematologic malignancies, such as leukemia and lymphoma, and with rare genetic disorders, such as hemoglobinopathies, inherited metabolic disorders and immune deficiencies.

Building upon the success of HSCT, the clinical investigation of cell-based cancer immunotherapy is rapidly expanding.

One particular form of cell-based cancer immunotherapy, chimeric antigen receptor (CAR) T-cell therapy, has recently emerged as a revolutionary and potentially curative therapy for patients with certain hematologic malignancies, including refractory cancers.

1 unchanged sentence

Cell-based cancer immunotherapies undergoing clinical investigation today most often rely on the use of autologous, or a patient’s own, cells.

The requirement to source, engineer, expand and deliver cells patient-by-patient is logistically complex, resource intensive and expensive, and can result in significant batch-to-batch variability in product identity, purity and potency as well as i n manufacturing failures.

Significant hurdles remain to ensure that cell-based cancer immunotherapies can be consistently manufactured and reliably delivered, in a cost-effective manner and at the scale necessary, to support broad patient access and wide-s pread commercialization.

Rather than rely on the use of a patient’s own cells, we seek to use allogeneic, or healthy donor-sourced, cells and clonal master iPSC lines to manufacture, develop and commercialize first-in-class cellular immunotherapies.

7 unchanged sentences

We are applying our expertise in iPSC biology to genetically engineer, isolate and select single-cell iPSCs for clonal expansion, characterization and cryopreservation as clonal master iPSC lines.

Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, we believe clonal master iPSC lines can be made and used as a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be repeatedly mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf to treat many patients.

Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, we believe clonal master iPSC lines can be made and used as a renewable source for manufacturing cell therapy products that are well-defined and uniform in composition, can be repeatedly mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf to treat many patients.

We have amassed significant expertise in the manufacture of natural killer (NK) cells and T cells from clonal master iPSC lines.

3 unchanged sentences

differentiating these clonal master cell lines to produce NK cells and T cells;

and regulatory affairs to enable clinical investigation of iPSC-derived cell products.

We believe our iPSC-derived NK cell and T-cell product candidates have the potential to be administered in multi-dose, multi-cycle treatment regimens, including in combination with cycles of other cancer treatments, to drive deeper and more durable responses.

and regulatory affairs experience to enable clinical investigation of iPSC-derived cell products.

We believe our iPSC-derived NK cell and T-cell product candidates have the potential to be administered in multi-dose, multi-cycle treatment regimens, including in combination with other cancer treatments, to drive deeper and more durable responses.

Forge collaborations with leading researchers and top medical centers to accelerate development of and rapidly translate our iPSC-derived cell product candidates into first-in-human clinical trials.

5 unchanged sentences

We also have a partnership with Memorial Sloan Kettering Cancer Center, led by Dr.

Michel Sadelain, a renowned T-cell biologist and a recognized founder of CAR T-cell therapy, to support the development of our iPSC-derived CAR T-cell immunotherapies.

Michel Sadelain, a renowned T-cell biologist and a recognized founder of CAR T-cell therapy, to support the development of our iPSC-derived CAR T-cell product candidates, including FT819.

We believe this approach to research and development will maximize our potential to successfully build our iPSC product platform, accelerate the clinical translation and clinical investigation of our iPSC-derived cell product candidates, and efficiently establish clinical proof-of-concept for our iPSC-derived cell product candidates.

Efficiently develop and commercialize first-in-class cellular immun otherapies for severe, life-threatening diseases where treatment options are limited.

We are clinically developing first-in-class cellular immunotherapies for cancer and immune disorders.

We are advancing our product candidates to improve the lives of pati ents with severe, life-threatening diseases, where the unmet need is significant and where regulatory agencies offer efficient and expedited development and review programs.

For example, we are developing our product candidate ProTmune as a first-in-class hematopoietic cell graft for the prevention of life-threatening complications, including graft-versus-host disease (GvHD), in patients undergoing allogeneic HCT.

GvHD is a leading cause of morbidity and mortality in patients undergoing allogeneic HCT, and there are currently no therapies approved by the FDA for the prevention of GvHD.

Selectively share our iPSC product platform with industry-leading strategic partners for the development of iPSC-derived cell therapies.

The research, development and clinical investigation of cell therapies for the treatment of human diseases is rapidly expanding.

We believe we are uniquely positioned as an expert partner of choice for industry-leading developers seeking to develop iPSC-derived cell therapies for the treatment of human diseases, including cancer.

For example, we are collaborating with Ono Pharmaceutical Co.

(Ono) to develop and commercialize off-the-shelf, iPSC-derived CAR T-cells for the treatment of certain solid tumors, and we are collaborating with Janssen Biotech, Inc.

(Janssen), part of the Janssen Pharmaceutical Companies of Johnson & Johnson, to develop and commercialize off-the-shelf, iPSC-derived CAR NK cell and CAR T-cell product candidates for the treatment of certain hematologic malignancies and solid tumors.

Since iPSCs have the unique capacity to be genetically engineered, indefinitely expanded and differentiated in culture into any type of cell in the body, we believe there is significant opportunity to broadly exploit our industry-leading iPSC product platform and intellectual property position in other disease areas beyond cancer.

We will continue to seek partnerships with institutions and companies for the research, development and commercialization of iPSC-derived cell therapies for the treatment of human diseases.

Efficiently develop and commercialize first-in-class cellular immunotherapies for severe, life-threatening diseases where treatment options are limited.

We are clinically developing first-in-class cellular immunotherapies to improve the lives of patients with severe, life-threatening diseases, where the unmet need is significant and where regulatory agencies offer efficient and expedited development and review programs.

GvHD is a leading cause of morbidity and mortality in patients undergoing allogeneic HSCT, and there are currently no therapies approved by the FDA for the prevention of GvHD.

The FDA has granted Fast Track designation, and the FDA and the European Commission have granted Orphan Drug Designation and Orphan Medicinal Product Designation, respectively, for ProTmune.

Due to high incidences of morbidity and mortality and the rare disease nature of many of our target indications, we believe clinical trials that we conduct will generally require relatively small numbers of subjects and that our development path to approval may be efficient.

Selectively share our iPSC product platform with industry-leading strategic partners for the development of highly differentiated cellular immunotherapies.

The research, development and clinical investigation of cell therapies for the treatment of human diseases is rapidly expanding.

We believe we are uniquely positioned as an expert partner of choice for industry-leading developers seeking to maximize the therapeutic potential of cell therapies for the treatment of cancer.

Additionally, since iPSCs have the unique capacity to be genetically engineered, indefinitely expanded and differentiated in culture into any type of cell in the body, we believe there is significant opportunity to broadly exploit our industry-leading iPSC product platform and intellectual property position into other disease areas.

We will continue to seek partnerships with institutions and companies for the research, development and commercialization of iPSC-derived cell product candidates for the treatment of human diseases.

Our Off-the-shelf, iPSC-derived Cellular Immunotherapy Pipeline

11 unchanged sentences

Unlike NK cells, T cells are limited by antigen-specific binding of their TCR in order to induce cellular cytotoxicity.

We are developing off-the-shelf, iPSC-derived NK- and T-cell cancer immunotherapies, including cell product candidates intended to synergize with checkpoint inhibitor and monoclonal antibody therapies and to target tumor-associated antigens.

We are developing off-the-shelf, iPSC-derived NK cell and T-cell cancer immunotherapies, including cell product candidates intended to synergize with checkpoint inhibitor and monoclonal antibody therapies and to target tumor-associated antigens.

iPSC-derived NK Cell Product Candidate for Advanced Solid Tumors

Therapies that block inhibitory immunological signaling pathways have transformed the oncology landscape.

For example, the use of monoclonal antibody-based therapies commonly referred to as checkpoint inhibitors, which target the PD1 receptor upregulated on activated T cells or its ligands expressed on tumor cells (programmed death ligands 1 and 2 (PD-L1 and PD-L2)), has resulted in long term remissions in multiple tumor indications.

For example, the use of monoclonal antibodies known as checkpoint inhibitors, which bind immune checkpoint proteins and block pathways that suppress T cells, has resulted in long term remissions in multiple tumor indications.

Unfortunately, more than 60% of patients treated with checkpoint inhibitors will not respond or will relapse.

As a result, there is significant unmet need for novel therapeutic approaches to overcome resistance to checkpoint inhibitors.

One common mechanism of intrinsic and acquired resistance to checkpoint inhibitors is deletions or loss of heterozygosity in beta-2-microglobulin (B2M) an essential component of major histocompatibility complex (MHC) class I molecules which play a critical role in tumor-antigen presentation.

A recent longitudinal analysis in a cohort of patients treated with several checkpoint inhibitors identified B2M expression defects in approximately 30% of patients with progressing disease.

One common mechanism of resistance to checkpoint inhibitor therapy arises through point mutations, deletions or loss of heterozygosity in beta-2-microglobulin (B2M), an essential component of MHC class I antigen presentation.

A recent longitudinal analysis in a cohort of patients treated with checkpoint inhibitor therapy identified B2M expression defects in approximately 30% of patients with progressing disease.

In fact, loss of heterozygosity in B2M was found to be enriched three-fold in non-responders (~30%) vs.

1 unchanged sentence

Additionally, complete loss of B2M expression was found only in non-responders.

These findings suggest that defects in B2M expression can contribute to tumor evasion of T-cell responses and disease progression.

One potential strategy to overcome resistance to checkpoint inhibitors, especially in patients whose heterogenous tumor burden includes B2M expression defects, is through the administration of allogeneic NK cells, which have the inherent capability to r ecognize and directly kill cells with MHC class I down-regulation.

The mechanism of killing is through the release of perforins and granzymes, which can lyse tumor cells exposing large amounts of tumor antigens , and the secretion of a number of cytokines a nd chemokines, both of which can activate and facilitate an adaptive immune response.

In addition to direct cytotoxicity, NK cells can also secrete proinflammatory cytokines, which can induce tumor-resident T cells to re-engage and elicit an anti-tumor res ponse, and chemotactic cytokines, which can recruit T cells to the tumor site.

As such, allogeneic donor NK cells may have the potential to overcome resistance to checkpoint inhibitors in certain patients by directly killing tumor cells and by potentiating an adaptive immune response.

These findings suggest that defects in B2M expression can contribute to tumor evasion and disease progression.

One potential strategy to overcome resistance to checkpoint inhibitor therapy, especially in patients whose tumors harbor defects in B2M expression, is through the administration of allogeneic NK cells.

NK cells have the inherent capability to recognize and directly kill cells that lack MHC class I antigen presentation.

In addition to direct cytotoxicity, NK cells can also secrete proinflammatory and chemotactic cytokines, which can induce tumor-resident T cells to re-engage as well as recruit T cells to the tumor site.

As such, allogeneic NK cell therapy may represent a novel therapeutic strategy to overcome resistance to checkpoint inhibitor therapy in certain patients by directly killing tumor cells and by potentiating an adaptive immune response.

FT500 is an investigational off-the-shelf NK cell cancer immunotherapy derived from a clonal master iPSC line.

1 unchanged sentence

We are developing FT500 for the treatment of advanced solid tumors.

FT500 is being studied in an ongoing open-label, multi-center, dose-escalation Phase 1 clinical trial.

FT500 is being studied in an ongoing, multi-center Phase 1 clinical trial.

The trial is designed to assess the safety and determine the maximum dose of FT500 in adult patients with advanced solid tumors.

2 unchanged sentences

and, in patients who have previously failed or progressed on checkpoint inhibitor therapy, FT500 in combination with the checkpoint inhibitor on which the patient failed or progressed (Regimen B).

FT500 is administered in three once-weekly doses (Day 1, Day 8, Day 15) following outpatient lympho-conditioning.

For those patients that are clinically stable at Day 29, a second treatment cycle of three once-weekly doses may be administered.

In December 2019, we reported interim results from 12 patients (n=8 in Regimen A;

n=4 in Regimen B) as of a November 28, 2019 data cutoff.

In Regimen A, three patients were treated at the first dose level of 100 million cells per dose and five patients were treated at the second dose level of 300 million cells per dose;

in Regimen B, three patients were treated at the first dose level of 100 million cells per dose, and one patient was treated at the second dose level of 300 million cells per dose, in combination with checkpoint inhibitor therapy.

Patient characteristics are presented below:

As of a November 28, 2019 data cutoff, the key clinical findings include:

No dose-limiting toxicities, FT500-related severe adverse events, or FT500-related Grade ≥3 adverse events, and no incidents of cytokine release syndrome, neurotoxicity, or GvHD, had been reported in the 12 patients.

Tolerability .

All 12 patients completed the first FT500 treatment cycle of three once-weekly doses.

Nine of 11 patients initiated a second FT500 treatment cycle, with eight of nine patients having completed the second FT500 treatment cycle.

One patient was pending initiation of a second FT500 treatment cycle.

The multi-dose, two-cycle treatment schedule was well-tolerated, and there were no treatment discontinuations due to adverse events.

Anti-tumor Activity .

In Regimen A, two of three patients in the 100 million cells per dose cohort and two of five patients in the 300 million cells per dose cohort achieved a best overall response of stable disease per iRECIST.

In Regimen B, two of three patients in the 100 million cells per dose cohort achieved a best overall response of stable disease per iRECIST.

As of the data cutoff, a fourth patient in Regimen B was undergoing treatment in the 300 million cells per dose cohort.

FT500 is administered in three once-weekly doses following outpatient lympho-conditioning.

For those patients that are clinically stable at Day 29, an additional treatment course of three once-weekly doses may be administered.

At the Society for Immunotherapy of Cancer (SITC) annual meeting in November 2020, we reported clinical data from the dose-escalation stage of the Phase 1 clinical trial as of an October 13, 2020 cutoff date.

Fifteen heavily pre-treated patients, ten of whom were refractory to their last prior therapy, were administered up to six doses of FT500.

In Regimen A, three patients were treated in the first dose cohort of 100 million cells per dose and six patients were treated in the second dose cohort of 300 million cells per dose;

in Regimen B, three patients were treated in the first dose cohort of 100 million cells per dose, and three patients were treated in the second dose cohort of 300 million cells per dose, in combination with checkpoint inhibitor therapy.

No dose-limiting toxicities (DLTs), no FT500-related serious adverse events (SAEs) or Grade ≥ 3 adverse events (AEs), and no events of any grade of cytokine release syndrome (CRS), immune effector cell-associated neurotoxicity syndrome (ICANS), or GvHD were reported by investigators.

Eleven patients had a best overall response of stable disease.

In addition to our clinical assessment, we also evaluated patients’ immune response to FT500 to assess the potential for both T-cell and B-cell mediated immunogenicity.

The T-cell compartment of nine patients was evaluated for T-cell mediated host-versus-product (FT500) allo-reactivity.

The T-cell compartment of fourteen patients was evaluated for T-cell mediated host-versus-product (FT500) allo-reactivity.

A TCR repertoire analysis conducted at multiple time points following treatment with FT500 was not indicative of a robust allo-reactive T-cell response against FT500.

In addition, the antibody repertoire of 11 patients was analyzed for targeting of the six HLA class I types expressed by FT500 to assess B-cell mediated host-versus-product (FT500) allo-reactivity.

Among the 11 patients, a single FT500 anti-HLA antibody with a mean fluorescence intensity (MFI) level of ≥ 5,000 was detected in a single patient, suggesting that a robust B-cell response against FT500 was not evident.

In addition, the antibody repertoire of 15 patients was analyzed for targeting of the six HLA class I types expressed by FT500 to assess for B-cell mediated host-versus-product (FT500) allo-reactivity.

Among the 15 patients, a single FT500 anti-HLA antibody with a mean fluorescence intensity (MFI) level of ≥ 5,000 was detected in two patients, suggesting that a robust B-cell response against FT500 was not evident.

As a point of reference, in patients undergoing haplo-identical hematopoietic stem cell transplant, an MFI level ≥ 5,000 has been correlated with a 5-fold increase in risk of graft rejection.

Upon successful completion of the 300 million cells per dose cohort in Regimen B, we plan to initiate the dose-expansion stage of the FT500 Phase 1 study under an amended clinical protocol, where we intend to administer IL-2 with each dose of FT500 to support the product candidate’s activity and to enroll patients with certain cancers that we believe are most amenable to NK cell anti-tumor activity.

We expect the dose-expansion stage to enroll up to 15 patients, each of which will be administered FT500 at 300 million cells per dose in combination with checkpoint inhibitor therapy.

We are currently enrolling the dose-expansion stage of the FT500 Phase 1 clinical trial for patients with non-small cell lung cancer or classical Hodgkin’s lymphoma who are refractory to, or have relapsed on, checkpoint inhibitor therapy.

We intend to treat up to 15 patients, administering up to six doses of FT500 at 300 million cells per dose, each with IL-2 cytokine support, in combination with the checkpoint inhibitor on which the patient failed or relapsed.

iPSC-derived, hnCD16 Engineered NK Cell Product Candidate

NK cells play a major role in the anti-tumor efficacy of certain tumor-antigen targeting antibodies.

NK cells express CD16, an activating receptor that binds to the Fc portion of IgG antibodies.

Once activated through CD16, NK cells are able to destroy antibody-coated target cells and secrete cytokines, such as interferon gamma, to recruit and potentiate adaptive immune cells, including T cells.

This mechanism of action, referred to as antibody-dependent cellular cytotoxicity (ADCC), is believed to be important for the treatment of a wide range of human tumor types.

NK cells play a major role in the anti-tumor activity of certain tumor-targeting antibodies.

NK cells express CD16, an activating receptor that binds to the Fc domain of IgG antibodies.

Once activated through CD16, NK cells are able to destroy antibody-coated tumor cells and secrete cytokines, such as interferon gamma, to potentiate an adaptive immune response.

This mechanism of action, referred to as antibody-dependent cellular cytotoxicity (ADCC), is believed to be important for the treatment of a wide range of cancers.

CD16 consists of two genomic variants, 158V and 158F, that elicit high or low binding affinity, respectively, to the Fc domain of IgG antibodies.

Numerous clinical studies with FDA-approved tumor -targeting antibodies, including rituximab (FDA-approved for certain cancers of the blood and lymph system), trastuzumab (FDA-approved for certain breast and gastric cancers) and cetuximab (FDA-approved for certain head and neck, non-small cell lung and co lorectal cancers), have demonstrated that patients homozygous for the 158V variant, which is present in only about 15% of patients, have improved clinical outcomes.

Numerous clinical studies with FDA-approved tumor-targeting antibodies, including rituximab (FDA-approved for certain cancers of the blood and lymph system), trastuzumab (FDA-approved for certain breast and gastric cancers) and cetuximab (FDA-approved for certain head and neck, non-small cell lung and colorectal cancers), have demonstrated that patients homozygous for the 158V variant, which is present in only about 15% of patients, have improved clinical outcomes.

In addition, the expression of CD16 on NK cells has been shown to undergo considerable down-regulation in cancer patients, which can significantly limit anti-tumor activity.

7 unchanged sentences

FT516 in combination with rituximab, as compared to rituximab alone or rituximab in combination with conventional NK cells sourced from peripheral blood, augments anti-tumor activity and promotes prolonged survival in vivo in a human lymphoma cancer model, where the median survival following treatment with FT516 plus rituximab exceeded 100 days as compared to approximately 35 days for rituximab alone and for rituximab in combination with conventional NK cells sourced from peripheral blood.

FT516 is being studied in an ongoing open-label, multi-center, dose-escalation Phase 1 clinical trial.

The trial is designed to assess the safety and determine the maximum dose of FT516 in adult patients with certain hematologic malignancies.

Hematologic Malignancies

FT516 is being studied in an ongoing, multi-center Phase 1 clinical trial.

To our knowledge, FT516 is the first-ever engineered iPSC-derived cell therapy cleared for clinical investigation in the United States.

The Phase 1 study is designed to assess the safety and determine the maximum dose of FT516 in adult patients with certain hematologic malignancies.

The trial includes two treatment regimens:

2 unchanged sentences

900 million cells per dose) (Regimen A);

and FT516 in combination with CD20-directed monoclonal antibody therapy in patients with advanced B-cell lymphoma who have previously failed or progressed on CD20-directed monoclonal antibody therapy with four separate dose cohorts (30 million cells per dose;

and FT516 in combination with CD20-targeted monoclonal antibody therapy in patients with advanced B-cell lymphoma (BCL) who have previously failed or progressed on CD20-targeted monoclonal antibody therapy with four separate dose cohorts (30 million cells per dose;

90 million cells per dose;

1 unchanged sentence

900 million cells per dose) (Regimen B).

FT516 is administered in three once-weekly doses (Day 1, Day 8, Day 15), with IL-2 to support the product candidate’s activity, following outpatient lympho-conditioning.

For those patients that are clinically stable at Day 29, a second treatment cycle of three once-weekly doses may be administered.

To our knowledge, FT516 is the first-ever engineered iPSC-derived cell therapy cleared for clinical investigation in the United States.

We are also developing FT516 for the treatment of advanced solid tumors.

In November 2019, we submitted an IND application to the FDA for the clinical investigation of FT516 in combination with monoclonal antibody therapy, including PDL1-, EGFR- and HER2-targeting therapeutic antibodies, across a broad range of solid tumors.

In December 2019, the FDA issued a letter informing us that our FT516 IND application for the treatment of advanced solid tumors was allowed and that we can proceed with human clinical investigation.

In 2020, we intend to initiate clinical investigation of FT516 in combination with tumor-target antibody therapy in an open-label, multi-center, dose-escalation Phase 1 clinical trial for the treatment of advanced solid tumors.

The treatment schedule consists of three once-weekly doses of FT516, each with IL-2 cytokine support, following outpatient lympho-conditioning.

For those patients that are clinically stable at Day 29, a second treatment cycle may be administered.

Phase 1 Clinical Data in AML .

We have reported interim Phase 1 clinical data on two patients in Regimen A in the first dose cohort (90 million cells per dose) as of a May 18, 2020 cutoff date.

Each patient was previously treated with three lines of therapy and was refractory to the most recent line of therapy.

No DLTs, no FT516-related SAEs, and no events of any grade of CRS, ICANS, or GvHD were reported by investigators.

Following completion of the first 30-day cycle of FT516, the first patient showed no morphologic evidence of leukemia by bone marrow biopsy and had evidence of neutrophil recovery.

The protocol-defined response assessment following completion of the second 30-day cycle of FT516 showed stable disease per ELN 2017 criteria in both patients.

Dose escalation is currently ongoing in Regimen A.

Phase 1 Clinical Data in BCL .

We have reported interim Phase 1 clinical data on six patients in Regimen B, including four patients in the second (90 million cells per dose) and third (300 million cells per dose) dose cohorts as of a November 16, 2020 cutoff date.

Three of these four patients achieved an objective response, including two complete responses, as assessed by PET-CT scan per Lugano 2014 criteria.

No DLTs, no FT516-related SAEs, and no events of any grade of CRS, ICANS, or GvHD were reported by investigators.

Additionally, the multi-dose, two-cycle treatment schedule was well-tolerated by each of the four patients, with no FT516-related Grade ≥ 3 AEs reported by investigators.

In the first dose cohort (30 million cells per dose), each patient showed progressive disease as assessed by PET-CT scan per Lugano 2014 criteria.

Dose escalation is currently ongoing in Regimen B.

We are also assessing the safety and maximum dose of FT516 in patients with advanced solid tumors.

In December 2019, the FDA allowed our second IND application for the clinical investigation of FT516 in combination with monoclonal antibody therapy, including PDL1-, PD-1, EGFR- and HER2-targeted therapeutic antibodies, across a broad range of advanced solid tumors.

In September 2020, we initiated a multi-center Phase 1 clinical trial of FT516 in combination with avelumab, an anti-PDL1 checkpoint inhibitor therapy, in patients with advanced solid tumors.

The treatment schedule consists of three once-weekly doses of FT516, each with IL-2 cytokine support, following outpatient lympho-conditioning for up to two 30-day cycles.

Dose escalation is currently ongoing.

In April 2020, the FDA allowed a third IND application for the clinical investigation of FT516 in patients with recurrent ovarian cancer.

The Phase 1 clinical trial, which is sponsored and managed by investigators from the Masonic Cancer Center, University of Minnesota, is designed to assess the safety and determine the maximum dose of FT516 as a monotherapy and in combination with enoblituzumab, an Fc-optimized monoclonal antibody that targets B7-H3, which is expressed on ovarian cancer cells.

The treatment schedule consists of three once-weekly doses of FT516, each with IL-2 cytokine support, following outpatient lympho-conditioning.

iPSC-derived, hnCD16, CAR19, IL15-RF Engineered NK Cell Product Candidate

CAR T-cell therapy has shown exceptional promise as a potentially curative therapy for patients with certain hematologic malignancies.

While most researchers and clinical investigators continue to focus on the development of autologous or allogeneic CAR T-cell therapies, we are developing CAR NK cell product candidates created from clonal master engineered iPSC lines as off-the-shelf cancer immunotherapies for the treatment of hematologic malignancies and solid tumors.

In 2017, we entered into a multi-year research collaboration with the University of California, San Diego, led by Dan S.

Kaufman, M.D., Ph.D., Professor of Medicine in the Division of Regenerative Medicine and Director of Cell Therapy, to develop off-the-shelf, iPSC-derived CAR NK cell cancer immunotherapies.

Kaufman identified a novel CAR construct specifically designed to augment NK cell signaling that contains the transmembrane domain of NKG2D, the 2B4 co-stimulatory domain, and the CD3ζ sig naling domain.

In preclinical studies using an ovarian cancer xenograft model, Dr.

Kaufman has shown that a single dose of CAR NK cells derived from iPSCs engineered with this specific CAR construct targeting mesothelin markedly inhibited tumor growth and significantly enhanced survival as compared to NK cells derived from iPSCs engineered with a CAR construct commonly used for CAR T-cell cancer immunotherapy.

We are developing FT596, an off-the-shelf CAR NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

CAR T-cell therapy has recently emerged as a revolutionary and potentially curative therapy for patients with certain hematologic malignancies, including refractory cancers.

In 2017, two CAR T-cell therapies were approved by the FDA for the treatment of relapsed / refractory B-cell precursor acute lymphoblastic leukemia (ALL) and relapsed / refractory diffuse large B-cell lymphoma (DLBCL).

While most researchers and clinical investigators continue to focus on the development of autologous or allogeneic CAR T-cell therapies, we are developing CAR NK cell product candidates derived from clonal master engineered iPSC lines as off-the-shelf cancer immunotherapies for the treatment of hematologic malignancies and solid tumors.

FT596 is an investigational off-the-shelf CAR NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

FT596 incorporates three anti-tumor functional modalities:

a proprietary CAR optimized for NK cell biology, which contains a NKG2D transmembrane domain, a 2B4 co-stimulatory domain and a CD3-zeta signaling domain, that targets B-cell antigen CD19;

a proprietary CAR optimized for NK cell biology that targets B-cell antigen CD19;

a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to augment antibody-dependent cellular cytotoxicity, enabling targeting of tumor-associated antigens such as CD20;

and an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells without the need for systemic cytokine support.

and an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells.

Together, these features are intended to enable multi-antigen targeting, maximize potency and minimize toxicity in treated patients.

3 unchanged sentences

In a mixed cellular composition cytotoxicity assay comprised of CD19+ and CD19- tumor cells, FT596 combined with rituximab effectively eliminated the heterogeneous population of tumor cells, a result that was not observed with single-antigen targeted CAR19 T cells.

We believe this preclinical data demonstrate the anti-tumor potency and the unique multi-antigen targeting functionality of FT596, and the product candidate’s potential to effectively overcome CD19 antigen escape.

In September 2019, the FDA issued a letter informing us that our FT596 IND application was allowed, and that we can proceed with human clinical investigation of FT596.

We believe these preclinical data demonstrate the anti-tumor potency and the unique multi-antigen targeting functionality of FT596, and the product candidate’s potential to effectively overcome CD19 antigen escape.

FT596 is being studied in an ongoing, multi-center Phase 1 clinical trial for the treatment of relapsed / refractory B-cell malignancies.

To our knowledge, FT596 is the first cellular immunotherapy engineered with three active anti-tumor components to be cleared for clinical investigation by the FDA.

We plan to study FT596 in an open-label, multi-center, dose-escalation Phase 1 clinical trial.

The trial is designed to assess the safety and determine the maximum dose of FT596 in adult patients with certain hematologic malignancies.

The trial includes three treatment regimens:

FT596 as a monotherapy in patients with advanced B-cell lymphoma (Regimen A);

FT596 in combination with rituximab in patients with advanced B-cell lymphoma who have previously failed or progressed on rituximab (Regimen B);

and FT596 in combination with obinutuzumab in patients with chronic lymphocytic leukemia who have previously failed or progressed on obinutuzumab (Regimen C).

FT596 will be administered as a single dose following outpatient lympho-conditioning.

We plan to initiate enrollment of the Phase 1 study of FT596 in the first quarter of 2020.

The planned dose-escalation of FT596 to determine the maximum tolerated dose in the three Regimens (A, B, and C), based on a standard 3+3 dose escalation scheme, is as follows:

(i) initial treatment in Regimen A at 30 million cells per dose;

(ii) dose escalation in Regimen B at 30 million cells per dose, 90 million cells per dose, 300 million cells per dose and 900 million cells per dose;

and (iii) treatment in Regimen A and Regimen C at the maximum tolerated dose of FT596 determined during Regimen B dose escalation.

In the dose-expansion stage of the Phase 1 study of FT596, indication-specific expansion cohorts with Regimen A, B and C will be enrolled independently.

The Phase 1 study is designed to assess the safety and determine the maximum dose of FT596 in up to 123 adult patients in up to four dose cohorts (30 million cells;

90 million cells;

300 million cells and 900 million cells).

The trial includes five treatment regimens:

Regimen A1 as a monotherapy for patients with relapsed / refractory B-cell lymphoma (BCL);

Regimen B1 in combination with rituximab for patients with relapsed / refractory BCL who have previously failed or progressed on rituximab;

Regimen B2 in combination with obinutuzumab for patients with relapsed / refractory follicular lymphoma (FL) who have previously failed or progressed on obinutuzumab;

Regimen A2 as a monotherapy for patients with chronic lymphocytic leukemia (CLL);

and Regimen B3 in combination with obinutuzumab for patients with relapsed / refractory CLL.

FT596 is administered as a single dose following outpatient lympho-conditioning.

Dose escalation in the FT596 Phase 1 study is currently ongoing in Regimens A1, B1 and A2.

We have reported interim Phase 1 clinical data on two patients as of a September 24, 2020 cutoff date.

Each patient was treated in Regimen A1 for relapsed / refractory diffuse large B-cell lymphoma (DLBCL) in the first single-dose cohort (30 million cells as a monotherapy).

Each patient was previously treated with at least four lines of therapy.

The first patient most recently had disease progression following treatment with CD19-targeting CAR T-cell therapy, was treated with a single dose of 30 million cells of FT596 as a monotherapy, and the Day 29 protocol-defined response assessment showed progressive disease.

The second patient was most recently refractory to an experimental combination therapy comprised of ex vivo expanded allogeneic NK cells, IL-2, and rituximab, was treated with a single dose of 30 million cells of FT596 as a monotherapy, and the Day 29 protocol-defined response assessment showed partial response as assessed by PET-CT scan per Lugano 2014 criteria.

The patient was subsequently treated with a second dose of 30 million cells of FT596 following outpatient lympho-conditioning, which resulted in a deepening response as evidenced by further reduction in both tumor size and metabolic activity as assessed by PET-CT scan per Lugano 2014 criteria.

The duration of response was 3.7 months.

No DLTs, no FT596-related SAEs, and no events of any grade of CRS, ICANS, or GvHD were reported by investigators in either patient.

In April 2020, the FDA allowed a second IND application for the clinical investigation of FT596 for the prevention of relapse in patients with BCL who have undergone autologous hematopoietic stem cell transplant (HSCT) and are considered high risk for early relapse.

The Phase 1 clinical trial, which is sponsored by investigators from the Masonic Cancer Center, University of Minnesota, is designed to assess the safety and determine the maximum dose of FT596 in combination with CD20-targeted monoclonal antibody therapy.

The ongoing clinical trial is expected to enroll up to 18 patients in up to three dose cohorts (90 million cells;

300 million cells and 900 million cells).

FT596 is administered as a single dose with CD20-targeted monoclonal antibody therapy approximately 30 days following HSCT.

iPSC-derived, hnCD16, IL15-RF, CD38KO Engineered NK Cell Product Candidate

2 unchanged sentences

While multiple approved drugs with novel mechanisms have improved disease management over the past decade, multiple myeloma is rarely curable and a significant number of patients are expected to relapse.

Daratumumab is an IgG1 monoclonal antibody approved by the FDA in November 2015 for treatment of multiple myeloma.

Daratumumab effectively targets CD38, which is overexpressed in multiple myeloma cells, and induces cell death through multiple mechanisms, including ADCC.

However, because CD38 is also expressed on the surface of activated NK cells, dar atumumab treatment can induce NK cell fratricide, which may impair the effectiveness of ADCC-mediated targeting and the destruction of multiple myeloma cells.

In addition, NK cell function is often suppressed or absent in patients with multiple myeloma as a result of the cancer itself and/or from cancer therapy, further reducing the effectiveness of daratumumab.

Collectively, preclinical and clinical observations suggest a potential therapeutic benefit of maintaining NK cell numbers and function in patients to support daratumumab-mediated ADCC.

We are developing FT538, an off-the-shelf NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

Daratumumab is an IgG1 monoclonal antibody approved by the FDA in November 2015 for the treatment of multiple myeloma.

Daratumumab effectively targets CD38, which is expressed on multiple myeloma cells, and induces cell death through multiple mechanisms, including ADCC.

However, because CD38 is also expressed on activated NK cells, daratumumab treatment can induce NK cell fratricide, which may impair the effectiveness of ADCC.

In addition, NK cell function is often suppressed or absent in patients with multiple myeloma as a result of the cancer itself as well as treatment therapy, further reducing the effectiveness of daratumumab.

Collectively, preclinical and clinical observations suggest a potential therapeutic benefit of maintaining NK cell numbers and function to support ADCC in patients with multiple myeloma.

FT538 is an investigational off-the-shelf NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

FT538 incorporates three functional modifications:

a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to augment ADCC;

an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells without the need for systemic cytokine support;

and a complete elimination of CD38 expression to mitigate the potential for NK cell fratricide.

an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells;

and the complete elimination of CD38 expression to mitigate the potential for NK cell fratricide.

Together, these features are intended to augment ADCC, enhance cell persistence and prevent anti-CD38 monoclonal antibody-induced fratricide.

In preclinical studies, we have shown that FT538 cells are entirely resistant to daratumumab-induced fratricide.

Additionally, in a cytotoxic re-stimulation assays, FT538 plus daratumumab resulted in 86% cytotoxicity against multiple myeloma target cells upon first exposure and 92% cytotoxicity upon re-stimulation, as compared to peripheral blood NK cells plus daratumumab which resulted in a loss of cytotoxic capacity from 74% upon first exposure to 58% upon re-stimulation.

We plan to submit an IND application during the first half of 2020 to initiate an open-label, multi-center, dose-escalation Phase 1 clinical trial of FT538 in combination with daratumumab for the treatment of multiple myeloma.

FT538 is being studied in an ongoing, multi-center Phase 1 clinical trial designed to assess the safety and determine the maximum dose of FT538 in up to 105 adult patients in up to four dose cohorts (100 million cells per dose;

300 million cells per dose;

1 billion cells per dose;

and 1.5 billion cells per dose).

The trial includes two treatment regimens:

Regimen A as a monotherapy for patients with relapsed / refractory AML;

and Regimen B in combination with daratumumab for patients with relapsed / refractory multiple myeloma who have failed at least two lines of therapy.

In addition, the clinical protocol allows, at our discretion, the initiation of a third treatment regimen in combination with elotuzumab, an FDA-approved anti-SLAMF7 monoclonal antibody, for patients with relapsed / refractory multiple myeloma who have failed at least two lines of therapy.

FT538 is administered in three once-weekly doses following outpatient lympho-conditioning.

Dose escalation is currently ongoing in Regimen A.

In December 2020, the FDA allowed a second IND application for the clinical investigation of FT538 for the treatment of relapsed / refractory AML.

The Phase 1 clinical trial, which is sponsored and managed by investigators from the Masonic Cancer Center, University of Minnesota, is designed to assess the safety and determine the maximum dose of FT538 in combination with daratumumab following outpatient lympho-conditioning.

FT538 is administered in three once-weekly doses following outpatient lympho-conditioning.

iPSC-derived, hnCD16, IL15-RF, CD38-KO, CAR-BCMA Engineered NK Cell Product Candidate

In addition to CD38 targeting in multiple myeloma, targeting of other tumor-associated cell-surface proteins has been explored.

In addition to CD38 targeting in multiple myeloma, targeting of other tumor-associated antigens expressed on malignant plasma cells has been explored.

Of these antigens, the TNF-superfamily member B-cell Maturation Antigen (BCMA) is among the most researched and is under development by multiple groups as a CAR target.

5 unchanged sentences

Additionally, in in vivo proof-of-concept studies, MDC scientists demonstrated that anti-BCMA CAR T cells mediated anti-tumor activity in xenotransplant mouse models of multiple myeloma and of mature B-cell non-Hodgkin lymphoma, where BCMA surface expression is up to 4-fold lower as compared to mouse models of multiple myeloma.

We are developing FT576, an off-the-shelf NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

FT576 is an investigational off-the-shelf NK cell cancer immunotherapy derived from a clonal engineered master iPSC line.

FT576 incorporates four functional modifications:

1 unchanged sentence

a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to augment ADCC;

and a complete elimination of CD38 expression to mitigate the potential for NK cell fratricide.

an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells;

and the complete elimination of CD38 expression to mitigate the potential for NK cell fratricide.

Together, these features are intended to enable multi-antigen targeting of myeloma cells, augment ADCC, enhance cell persistence and prevent anti-CD38 monoclonal antibody-induced fratricide.

We plan to submit an IND application during the second half of 2020 to initiate an open-label, multi-center, dose-escalation Phase 1 clinical trial of FT576 as a monotherapy and in combination with daratumumab for the treatment of multiple myeloma.

In December 2020, the FDA allowed our IND application for the clinical investigation of FT576 for the treatment of patients with relapsed / refractory multiple myeloma who have failed at least two lines of therapy.

To our knowledge, FT576 is the first cellular immunotherapy engineered with four active anti-tumor components to be cleared for clinical investigation by the FDA.

We plan to conduct GMP manufacture and product release testing of FT576 in the first half of 2021.

Subject to manufacture of FT576 in conformance with its release specifications, and submission of any additional non-clinical data requested by the FDA, we plan to initiate a multi-center Phase 1 clinical trial to assess the safety and determine the maximum dose of FT576 following

outpatient lympho-conditioning in up to 168 adult patients.

The trial is expected to include four treatment regimens:

Regimen A as a single dose of FT576;

Regimen A1 as two fractionated doses of FT576;

Regimen B as a single dose of FT576 in combination with daratumumab;

and Regimen B1 as two fractionated doses of FT576 in combination with daratumumab .

iPSC-derived, hnCD16, IL15-RF, CD38-KO, CAR-MICA/B Engineered NK Cell Product Candidate

The major histocompatibility complex (MHC) class I related proteins A (MICA) and B (MICB) are induced by cellular stress, damage or transformation, and the expression of MICA and MICB proteins has been reported for many tumor types.

Cytotoxic lymphocytes, such as NK cells and CD8+ T cells, can detect and bind the membrane-distal alpha-1 and -2 domains of MICA/B, activating a potent cytotoxic response.

However, advanced cancer cells frequently evade immune cell recognition by proteolytic shedding of these domains.

The clinical importance of proteolytic shedding is reflected in the association of high serum concentrations of shed MICA/B with disease progression in many solid tumors.

Several recent publications have shown that therapeutic antibodies targeting the membrane-proximal alpha-3 domain strongly inhibited MICA/B shedding, resulting in a substantial increase in the cell surface density of MICA/B and restoration of NK cell-mediated tumor immunity.

In addition, a recent publication by scientists from Dana-Farber Cancer Institute (DFCI) demonstrated that cancers with B2M and JAK1 inactivating mutations resulting in loss of MHC Class I expression can be effectively targeted with alpha-3 domain-specific antibodies to restore NK cell-mediated immunity against solid tumors resistant to cytotoxic T cells.

Therapeutic approaches aimed at targeting the alpha-3 domain of MICA/B therefore represent a potentially promising novel strategy to overcome this prominent evasion mechanism as a means of restoring anti-tumor immunity in patients with solid tumors.

In April 2020, we entered into a license agreement with DFCI under which we were granted certain exclusive rights to intellectual property covering novel antibody fragments that uniquely and specifically bind the alpha-3 domain of MICA/B.

We are developing FT536, a preclinical product candidate which incorporates four functional modifications:

a proprietary CAR that targets the alpha-3 domain of MICA/B;

a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to augment ADCC;

an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that promotes survival, proliferation and trans-activation of NK cells and CD8 T cells;

and the complete elimination of CD38 expression to mitigate the potential for NK cell fratricide.

We plan to submit an IND application during the second half of 2021 to initiate a multi-center Phase 1 clinical trial of FT536 for the treatment of solid tumors.

iPSC-derived, TCR-KO, TRAC-targeted CAR19 Engineered T-Cell Product Candidate

CAR T-cell therapy, has recently emerged as a revolutionary and potentially curative therapy for patients with certain hematologic malignancies, including refractory cancers.

While most researchers and clinical investigators continue to focus on the development of autologous or allogeneic CAR T-cell therapies, we are developing CAR T-cell product candidates created from clonal master engineered iPSC lines as off-the-shelf cancer immunotherapies for the treatment of hematologic malignancies and solid tumors.

In addition to our development of iPSC-derived CAR NK cell product candidates, we are also developing CAR T-cell product candidates derived from clonal master engineered iPSC lines as off-the-shelf cancer immunotherapies for the treatment of hematologic malignancies and solid tumors.

In September 2016, we announced a multi-year partnership with Memorial Sloan Kettering Cancer Center for the development of off-the-shelf engineered T-cell product candidates using clonal master iPSC lines and, in July 2019, we extended the partnership for an additional three years.

Research and development activities under the collaboration are being led by Dr.

Michel Sadelain, Direc tor of the Center for Cell Engineering and the Stephen and Barbara Friedman Chair at Memorial Sloan Kettering Cancer Center.

Michel Sadelain, Director of the Center for Cell Engineering and the Stephen and Barbara Friedman Chair at Memorial Sloan Kettering Cancer Center.

In connection with the formation of our partnership with Memorial Sloan Kettering Cancer Center, we exclusively licensed from Memorial Sloan Kettering foundational intellectual property covering iPSC-derived cellular immunotherapy, including T cells and NK cells derived from iPSCs engineered with CARs, for human therapeutic use.

3 unchanged sentences

Sadelain demonstrating that directing a CD19-specific CAR to the T-cell receptor (TCR) alpha constant (TRAC) locus results in uniform CAR expression in human peripheral blood T cells, enhances T-cell potency, and delays effector T-cell differentiation and exhaustion, and that CAR T cells utilizing a novel 1XX CAR signaling domain exhibited enhanced antitumor efficacy, persistence and long-term cytotoxicity as well as a decrease in T-cell exhaustion.

We are developing FT819, an off-the-shelf CAR T-cell cancer immunotherapy derived from a clonal engineered master iPSC line with complete elimination of TCR expression and the novel 1XX CAR targeting CD19 inserted into the TRAC locus, under our collaboration with Memorial Sloan Kettering Cancer Center.

Under our collaboration with Memorial Sloan Kettering Cancer Center, we are developing FT819, an off-the-shelf CAR T-cell cancer immunotherapy derived from a clonal engineered master iPSC line with complete elimination of TCR expression and the novel 1XX CAR targeting CD19 inserted into the TRAC locus.

Together, these features are intended to induce antigen-specific cytotoxicity, enhance CAR activity through TRAC-regulated expression and completely eliminate TCR expression to mitigate GvHD.

As proof-of-principle for the unique advantages arising from selecting a single engineered iPSC clone for the production of CAR T-cell therapy, we assessed approximately 750 clones after engineering a pool of cells using CRISPR, and found that only about 2% of clones met our standards for overall quality including containing both bi-allelic disruption of the TCR, proper insertion of the CAR into the TRAC locus without random transgene integrations, and no evidence of off-target genomic modifications or translocations.

We selected the top-performing clone for generation of the master engineered iPSC line for FT819.

In preclinical studies, we have shown that FT819 cells:

2 unchanged sentences

effectively control tumor progression in vivo comparable to peripheral blood CD19-specific CAR T cells in a preclinical mouse model of acute lymphoblastic leukemia;

Over the past twelve months, we have further optimized our processes for making T cells fro m iPSCs, and have now shown the production of pure T-lymphocytes consisting of both CD8+ and CD4+ T cells having a global gene expression profile that is highly-similar to primary T cells based on a principal component analysis.

In December 2019, we presented new in vivo preclinical data demonstrating that FT819 exhibits durable tumor control and extended survival.

In a xenograft model of disseminated lymphoblastic leukemia, FT819 demonstrated enhanced tumor clearance and control of leukemia as compared to primary CAR19 T cells.

At Day 35 following administration, a bone marrow assessment showed that FT819 persisted and continued to demonstrate tumor clearance, whereas primary CAR T cells, while persisting, were not able to control tumor growth.

We plan to submit an IND application in mid-2020 to initiate an open-label, multi-center, dose-escalation Phase 1 clinical trial of FT819 for the treatment of certain hematologic malignancies.

Other iPSC-derived Cell Product Candidates

Autoimmune diseases arise from abnormal immune responses in which the body’s immune system attacks and damages its own tissues.

Some of the most common autoimmune diseases include rheumatoid arthritis, type-1 diabetes, systemic lupus erythematosus (SLE or lupus), multiple sclerosis, inflammatory bowel disease, celiac disease and asthma.

It is estimated that more than 23 million people in the U.S.

suffer from autoimmunity, which makes it the third most common category of illness in the U.S.

after cancer and heart disease.

Auto-reactive T-lymphocytes are key players in aberrant autoimmune responses.

We believe that certain biological mechanisms, which have been demonstrated to suppress T-cell activity against cancer cells, can be exploited to suppress auto-reactive T-cell destruction of normal tissues.

For example, myeloid-derived suppressor cells (MDSCs) are a naturally occurring population of cells that are often found in the tumor microenvironment, where these cells function to inhibit antigen-specific and non-specific T-cell activation and proliferation through a diverse set of mechanisms.

While MDSCs can impede T-cell responses against cancer, the cells’ potent immuno-suppressive properties may serve to immunologically check auto-reactive T-lymphocytes that are directly responsible for the destruction of healthy tissue in certain autoimmune and inflammatory disorders.

MDSCs are rare in healthy donors and, although abundant in tumor-bearing patients, repurposing tumor-derived MDSCs for therapeutic use may pose undesirable risks.

As a resul t, a need exists to generate MDSCs in large quantities, particularly from healthy donor sources, in order to explore the therapeutic potential of MDSCs.

Using a proprietary, efficient and reproducible differentiation process, we have shown the potential to create a substantially pure population of iPSC-derived MDSCs that is well-defined.

Preclinical studies of iPSC-derived MDSCs have shown that the cells suppress T-cell activity and proliferation in vitro and attenuate GvHD in vivo in a xenogeneic mouse mod el.

Importantly, these immuno-regulatory properties were demonstrated using immunologically-mismatched cells.

We are developing FT301, an off-the-shelf, immuno-regulatory cell product candidate derived from a clonal master iPSC line.

We believe FT301 has broad therapeutic potential across multiple disease indications, including graft-versus-host disease, multiple sclerosis, ulcerative colitis and others

enhance tumor clearance and durable control of leukemia in vivo , as compared to primary CAR19 T cells, in a xenograft mouse model of disseminated lymphoblastic leukemia.

In 2020, the FDA allowed our IND application for the clinical investigation of FT819 for the treatment of certain relapsed / refractory B-cell leukemias and lymphomas.

We have completed the first GMP manufacturing campaign for FT819, and we are currently conducting product release testing of FT819 to assess conformance with its release specifications.

Subject to successful release of FT819 and submission of any additional non-clinical data requested by the FDA, we plan to initiate a multi-center Phase 1 clinical trial to assess the safety and determine the maximum dose of FT819 following outpatient lympho-conditioning in up to 297 adult patients across three types of B-cell leukemias and lymphomas.

Each disease type will enroll independently and assess three treatment regimens:

Regimen A as a single dose of FT819;

Regimen B as a single dose of FT819 with IL-2 cytokine support;

and Regimen C as three fractionated doses of FT819.

Our Allogeneic Cellular Immunotherapy Pipeline

Allogeneic HCT has been performed globally for decades with curative intent in patients with a wide range of hematologic malignancies and rare genetic disorders.

Allogeneic HSCT has been performed globally for decades with curative intent in patients with a wide range of hematologic malignancies and rare genetic disorders.

The procedure involves transferring hematopoietic cells sourced from a healthy donor to a patient following the administration of chemotherapy and/or radiation therapy.

The biological properties of the various cell populations present in the allogeneic hematopoietic cell graft play an essential role in determining outcomes of HCT.

Donor-sourced CD34 + cells have the unique ability to engraft and reconstitute a new blood and immune system, and donor-sourced immune cells, such as T cells, have an important protective role following HCT in eradicating residual cancer cells and providing protection against life-threatening infections.

The biological properties of the various cell populations present in the allogeneic hematopoietic cell graft play an essential role in determining outcomes of HSCT.

Donor-sourced CD34 + cells have the unique ability to engraft and reconstitute a new blood and immune system, and donor-sourced immune cells, such as T cells, have an important protective role following HSCT in eradicating residual cancer cells and providing protection against life-threatening infections.

The engraftment of donor-sourced CD34 + cells is essential for successful reconstitution, and any delay in, or failure of, engraftment leaves a patient severely immuno-compromised and exposed to exceedingly high risk of early morbidity and mortality.

Additionally, while the donor-sourced immune cells impart a critical immunotherapeutic effect, allo-reactive T cells can cause GvHD, a serious complication where donor-sourced T cells recognize antigens on a patient’s cells as foreign and attack the patient’s cells.

According to the Center for International Blood and Marrow Transplant Research, approximately 30,000 allogeneic HCT procedures are performed globally each year.

Hematopoietic cells for use in allogeneic HCT can be obtained from multiple donor sources including umbilical cord blood, bone marrow and mobilized peripheral blood (mPB).

Approximately 65% of allogeneic HCT procedures utilize mPB as the donor hematopoietic cell source.

While the use of mPB is associated with faster rates of neutrophil engraftment compared to other cell sources like bone marrow and umbilical cord blood, approximately 35-60% of patients undergoing mPB HCT develop acute GvHD and 70-80% of patients undergoing mPB HCT experience at least one severe infection within the first 180 days following HCT.

Additionally, approximately 50% of patients undergoing HCT experience cancer relapse or die within the first two years following HCT.

We believe our cell programming approach has the potential to reduce the three leading causes of morbidity and mortality associated with allogeneic HCT – namely, graft-versus-host disease, severe infections and disease relapse – and to improve outcomes in patients undergoing allogeneic HCT.

We are developing ProTmune as an investigational programmed cellular immunotherapy for use as a next-generation allogeneic HCT cell graft.

According to the Center for International Blood and Marrow Transplant Research, approximately 30,000 allogeneic HSCT procedures are performed globally each year.

Hematopoietic cells for use in allogeneic HSCT can be obtained from multiple donor sources including umbilical cord blood, bone marrow and mobilized peripheral blood (mPB).

Approximately 65% of allogeneic HSCT procedures utilize mPB as the donor hematopoietic cell source.

While the use of mPB is associated with faster rates of neutrophil engraftment compared to other cell sources like bone marrow and umbilical cord blood, approximately 35-60% of patients undergoing mPB HSCT develop acute GvHD and 70-80% of patients undergoing mPB HSCT experience at least one severe infection within the first 180 days following HSCT.

Additionally, approximately 50% of patients undergoing HSCT experience cancer relapse or die within the first two years following HSCT.

We believe our cell programming approach has the potential to reduce the three leading causes of morbidity and mortality associated with allogeneic HSCT – namely, GvHD, severe infections and disease relapse – and to improve outcomes in patients undergoing allogeneic HSCT.

We are developing ProTmune as an investigational programmed cellular immunotherapy for use as a next-generation allogeneic HSCT cell graft.

ProTmune is produced by modulating donor-sourced mPB ex vivo with two small molecules, 16,16-dimethyl prostaglandin E2 (FT1050) and dexamethasone (FT4145), to enhance the biological properties and therapeutic function of the graft’s cells.

2 unchanged sentences

We have demonstrated that FT1050-FT4145 programmed CD4 + and CD8 + T cells of mPB are functionally less allo-reactive in vitro , exhibiting a decrease both in the expression levels of T-cell activation markers, including ICOS and 41BB, and in the production of pro-inflammatory cytokines, and an increase in the production of potent anti-inflammatory cytokines including IL-10.

We are conducting a multi-center Phase 1/2 clinical trial of ProTmune in adult subjects with hematologic malignancies undergoing mPB HCT following myeloablative conditioning, a clinical trial which we refer to as the PROTECT study.

The primary objectives of the PROTECT study are to evaluate safety and tolerability, and to assess the potential of ProTmune to prevent acute GvHD, which is a leading cause of morbidity and mortality in patients undergoing HCT.

There are currently no FDA-approved therapies for the prevention of GvHD in patients undergoing allogeneic HCT, giving rise to a significant unmet medical need.

All subjects in the PROTECT study are being followed for a period of two years following HCT.

We are conducting a multi-center Phase 1/2 clinical trial of ProTmune in adult subjects with hematologic malignancies undergoing mPB HSCT following myeloablative conditioning , a clinical trial which we refer to as the PROTECT study.

There are currently no FDA-approved therapies for the prevention of GvHD in patients undergoing allogeneic HSCT, giving rise to a significant unmet medical need.

All subjects in the PROTECT study are being followed for a period of two years following HSCT.

In December 2018, we reported clinical data from the Phase 1 stage of PROTECT.

6 unchanged sentences

At Day 100, all seven subjects receiving ProTmune were alive and relapse-free;

and three subjects experienced acute GvHD during the first 100 days following HCT, all of whom respon ded to standard-of-care steroid treatment.

and three subjects experienced acute GvHD during the first 100 days following HSCT, all of whom responded to standard-of-care steroid treatment.

The median time to resolution of the maximum GvHD grade was 7 days [range:

2 unchanged sentences

and three of seven subjects were alive, relapse-free and without moderate-to-severe chronic GvHD.

A tabular summary of the reported clinical data from the Phase 1 stage of PROTECT is presented below:

PROTECT Phase 1 Clinical Data (as of November 26, 2018 data cut-off)

Days on Study

Hematologic Malignancy

CD34+ cell dose (x10 6 /kg)

CD3+ cell dose (x10 8 /kg)

ProTmune-related SAEs

Day of Neutrophil Engraftment 1

Day 100 Acute GvHD / Grade (CIBMTR)

Treatment Responsive

Time to Resolution of Maximum Grade

Day 365 Moderate-to-Severe Chronic GvHD

Cancer Relapse-free

Overall Survival

1 As measured from the day following HCT

The ongoing Phase 2 stage of PROTECT is a randomized, controlled and double-blinded clinical trial assessing the safety and efficacy of ProTmune in up to 80 adult subjects with hematologic malignancies undergoing matched unrelated donor HCT following myeloablative conditioning.

In November 2019, we reported that the Phase 2 stage of PROTECT was fully enrolled.

Subjects were randomized, in a 1:1 ratio, to receive either ProTmune or a conventional matched unrelated donor mobilized peripheral blood cell graft.

The primary efficacy endpoint of PROTECT is cumulative incidence of Grades 2-4 acute GvHD by Day 100 following HCT, where prospective clinical studies have shown that 40% to 80% of patients undergoing matched unrelated donor transplant experience Grades 2-4 acute GvHD.

The secondary efficacy endpoint of PROTECT is the proportion of subject alive without relapse and without moderate or severe chronic GvHD by Day 365 following HCT.

The primary efficacy endpoint of PROTECT is cumulative incidence of Grades 2-4 acute GvHD by Day 100 following HSCT, where prospective clinical studies have shown that 35% to 60% of patients undergoing matched unrelated donor transplant experience Grades 2-4 acute GvHD.

The secondary efficacy endpoint of PROTECT is the proportion of subjects alive without relapse and without moderate or severe chronic GvHD by Day 365 following HSCT.

Additional endpoints, such as rates of cancer relapse, chronic GvHD, non-relapse mortality, and overall survival, are also being assessed.

In June 2016, the FDA granted Fast Track designation for ProTmune for the reduction of incidence and severity of acute GvHD in patients undergoing allogeneic HCT.

We expect to report clinical results of the primary and secondary efficacy endpoints of PROTECT in the first half of 2021.

In June 2016, the FDA granted Fast Track designation for ProTmune for the reduction of incidence and severity of acute GvHD in patients undergoing allogeneic HSCT.

In September 2016, the FDA granted Orphan Drug Designation and, in October 2016, the European Commission granted Orphan Medicinal Product Designation, for ProTmune.

The orphan designation granted in each jurisdiction broadly covers subjects undergoing allogeneic HCT across diseases for which the procedure is performed, including blood cancers and genetic disorders.

Adaptive memory NK cells are a highly specialized and functionally distinct subset of NK cells.

In July 2015, we entered into a research collaboration with the University of Minnesota led by Dr.

Miller, Professor of Medicine at the University of Minnesota and Deputy Director of the University of Minnesota Masonic Comprehensive Cancer Center, to develop an allogeneic adaptive memory NK cell product candidate for cancer, which we refer to as FATE-NK100.

Through the application of our cell programming expertise and our specific knowledge of modulators involved in the persistence, proliferation and anti-tumor activity of immune cells, we identified a combination of pharmacological modulators consisting of a cytokine and a small molecule (FT1238) that induces the robust formation of adaptive memory NK cells in therapeutically-relevant quantities.

Using peripheral blood cells sourced from a healthy donor, FATE-NK100 is produced in a feeder-free, seven-day manu facturing process during which donor-sourced NK cells are programmed ex vivo with our combination of pharmacological modulators.

In August 2017, preclinical data describing the unique properties and anti-tumor activity of FATE-NK100 were published in Cance r Research (doi:10.1158/0008-5472.CAN-17-0799), a peer-reviewed journal of the American Association of Cancer Research.

FATE-NK100 was evaluated in three separate clinical studies:

(1) an open-label, accelerated dose-escalation, Phase 1 clinical trial of FATE-NK100 as a monotherapy in subjects with refractory or relapsed acute myelogenous lymphoma (AML), which was conducted at the Masonic Cancer Center, University of Minnesota as an investigator-sponsored study;

(2) an open-label, accelerated dose-escalation, Phase 1 clinical trial of FATE-NK100 as a monotherapy in women with ovarian, fallopian tube or primary peritoneal cancer resistant to, or recurrent on, platinum-based treatment, which was conducted at the Masonic Cancer Center, University of Minnesota as an investigator-sponsored study;

and (3) an open-label, accelerated dose-escalation, Phase 1 clinical trial of FATE-NK100 as a monotherapy and in combination with monoclonal antibody therapy in subjects with advanced solid tumors who have failed approved therapies.

In 2019, we elected to discontinue further development of FATE-NK100 with the advancement of our off-the-shelf, engineered iPSC-derived NK cell product candidates into clinical development.

The orphan designation granted in each jurisdiction broadly covers subjects undergoing allogeneic HSCT across diseases for which the procedure is performed, including blood cancers and genetic disorders.

Our Partnerships

Janssen Biotech

In April 2020, we entered into a collaboration and option agreement with Janssen Biotech, Inc.

(Janssen), part of the Janssen Pharmaceutical Companies of Johnson & Johnson, for the development and commercialization of off-the-shelf, iPSC-derived CAR NK cell and CAR T-cell product candidates directed to up to four tumor-associated antigen targets.

We are conducting research and preclinical development of collaboration candidates.

We granted to Janssen, during a specified period of time, the right to exercise an exclusive option and obtain an exclusive license under certain intellectual property rights to develop and commercialize each collaboration candidate.

Subject to the exercise of such exclusive option, Janssen is solely responsible for the worldwide clinical development and commercialization of such collaboration candidate.

Upon attainment of clinical proof-of-concept, we have the right to elect to co-commercialize and share equally in the profits and losses in the United States, subject to sharing in certain development costs, of such collaboration candidate.

We are primarily responsible for the manufacture, at Janssen’s cost, of collaboration candidates.

Under the terms of the agreement, we received $100.0 million as of the effective date of the agreement, of which $50.0 million was an upfront, non-refundable and non-creditable cash payment and $50.0 million was in the form of an equity investment by Johnson & Johnson Innovation - JJDC, Inc .

Additionally, as consideration for our conduct of research, preclinical development and IND-enabling activities for collaboration candidates , Janssen pays us research and development fees as set forth in an annual budget .

We are eligible to receive upon the achievement of specified development, regulatory and sales milestones (i) with respect to the first tumor-associated antigen target , payments of up to $898.0 million for the first collaboration candidate and up to $460.0 million for each additional collaboration candidate;

and with respect to each of the second, third and fourth tumor-associated antigen targets, payments of up to $706.0 million for each of the first collaboration candidates and up to $340.0 million for each additional collaboration candidate.

Certain milestone payments are subject to reduction in the event we elect to co-commercialize and share equally in the profits and losses in the United States of a collaboration candidate.

We are further eligible to receive double-digit tiered royalties ranging up to the mid-teens on net sales of collaboration candidates that are commercialized by Janssen, subject to reduction under certain circumstances.

No milestone or royalty payments have been received by us as of December 31, 2020.

Janssen may terminate the agreement with respect to one or more tumor-associated antigen targets, or in its entirety, at any time on or after the second anniversary of the effective date of the agreement, and we may terminate the agreement with respect to a particular tumor-associated antigen target if a collaboration candidate has not been selected for IND-enabling studies for such tumor-associated antigen target within specified time periods under certain conditions.

The agreement contains customary provisions for termination by either party in the event of a material breach of the agreement, subject to cure, by the other party and in the event of any bankruptcy, insolvency or similar events with respect to the other party.

Ono Pharmaceutical

1 unchanged sentence

(Ono) for the joint development and commercialization of two off-the-shelf, iPSC-derived CAR T-cell product candidates.

The first off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 1) targets an antigen expressed on certain lymphoblastic leukemias, and the second off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 2) targets a novel antigen identified by Ono expressed on certain solid tu mors (each a Candidate and, collectively, the Candidates).

Pursuant to the agreement, we are jointly conducting research and development activities under a joint development plan with Ono, with the goal of advancing each Candidate to a pre-defined preclinical milestone.

We have granted to Ono, during a specified period of time, an option to obtain an exclusive license under certain intellectual property rights to develop and commercialize (a) Candidate 1 in Asia, where we retain rights for development and commercialization in all other territories of the world and (b) Candidate 2 in all territories of the world, where we retain rights to co-develop and co-commercialize Candidate 2 in the United States and Europe under a joint arrangement with Ono under which we are eligible to share at least 50% of the profits and losses.

For each Candidate, the option will expire upon the earliest of:

The first off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 1) targets an antigen expressed on certain lymphoblastic leukemias, and the second off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 2) targets a novel antigen identified by Ono expressed on certain solid tumors (each a Candidate and, collectively, the Candidates).

We granted to Ono, during a specified period of time, an option to obtain an exclusive license under certain intellectual property rights to develop and commercialize (a) Candidate 1 in Asia, where we retained rights for development and commercialization in all other territories of the world and (b) Candidate 2 in all territories of the world, where we retain rights to co-develop and co-commercialize Candidate 2 in the United States and Europe under a joint arrangement with Ono under which we are eligible to share at least 50% of the profits and losses.

For each Candidate, the option expires upon the earliest of:

(a) the achievement of the pre-defined preclinical milestone, (b) termination by Ono of research and development activities for the Candidate and (c) the date that is the later of (i) four years after the Effective Date and (ii) completion of all applicable activities contemplated under the joint development plan.

We maintain worldwide rights of manufacture for both Candidates.

We maintain worldwide rights of manufacture for Candidates.

Under the terms of the agreement, Ono paid us an upfront, non-refundable and non-creditable payment of $10.0 million in connection with entering into the agreement.

Additionally, as consideration for our conduct of research and preclinical development under a joint development plan, Ono pays us annual research and development fees set forth in the annual budget included in the joint development plan, which fees are estimated to be $20.0 million in aggregate over the course of the joint development plan.

Further, Ono has agreed to pay us up to an additional $40.0 million, subject to the achievement of a preclinical milestone and the exercise by Ono of its options to develop and commercialize Candidate 1 and Candidate 2.

Such fees are in addition to the upfront payment and research and development fees.

Subject to Ono’s exercise of the options and to the achievement of certain clinical, regulatory and commercial milestones with respect to each Candidate in specified territories, we are entitled to receive an aggregate of up to $285.0 million in milestone payments for Candidate 1 and an aggregate of up to $895.0 million in milestone payments for Candidate 2, with the applicable milestone payments for Candidate 2 for the United States and Europe subject to reduction by 50% if we elect to co-develop and co-commercialize Candidate 2 as described above.

We are also eligible to receive tiered royalties ranging from the mid-single digits to the low-double digits based on annual net sales by Ono of each Candidate in specified territories, with such royalties subject to certain reductions.

In December 2020, we entered into a letter agreement with Ono pursuant to which Ono nominated and delivered to us proprietary antigen binding domains targeting an antigen expressed on certain solid tumors for incorporation into Candidate 2.

In connection with such nomination and delivery, Ono paid us a milestone fee of $10.0 million for further research and development of Candidate 2.

In addition, Ono terminated further development with respect to Candidate 1, and we retain all rights to research, develop and commercialize Candidate 1 throughout the world without any obligation to Ono.

Ono has agreed to pay us up to an additional $20.0 million, subject to the exercise by Ono of its option to develop and commercialize Candidate 2.

Subject to Ono’s exercise of the option and to the achievement of certain clinical, regulatory and commercial milestones with respect to Candidate 2 in specified territories, we are entitled to receive an aggregate of up to $885.0 million in milestone payments for Candidate 2, with the applicable milestone payments for the United States and Europe subject to reduction by 50% if we elect to co-develop and co-commercialize Candidate 2 as described above.

We are also eligible to receive tiered royalties ranging from the mid-single digits to the low-double digits based on annual net sales by Ono of Candidate 2 in specified territories, with such royalties subject to certain reductions.

The agreement will terminate with respect to a Candidate if Ono does not exercise its option for a Candidate within the option period, or in its entirety if Ono does not exercise any of its options for the Candidates within their respective option periods.

2 unchanged sentences

The agreement will expire on a Candidate-by-Candidate and country-by-country basis upon the expiration of the applicable royalty term, or in its entirety upon the expiration of all applicable payment obligations under the agreement .

California Institute of Regenerative Medicine (CIRM)

In April 2018, we executed an award agreement with the California Institute of Regenerative Medicine (CIRM) pursuant to which CIRM awarded us up to $4.0 million to advance our FT516 product candidate into a first-in-human clinical trial for the treatment of subjects with advanced solid tumors, including in combination with monoclonal antibody therapy (the Award).

Pursuant to the terms of the Award, we are eligible to receive five disbursements in varying amounts totaling $4.0 million throughout the project period of the Award.

In November 2019, we submitted an IND application to the FDA for our FT516 product candidate for the treatment of advanced solid tumors, and the IND application was allowed by the FDA in December 2019.

The Award is subject to certain co-funding requirements by us, and we are required to provide progress and financial update reports to CIRM.

We, in our sole discretion, have the option to treat the Award either as a loan or as a grant.

In the event we elect to treat the Award as a loan, we will be obligated to repay i) 60%, ii) 80%, iii) 100% or iv) 100% plus interest at 7% plus LIBOR, of the total Award to CIRM, where such repayment rate is dependent upon the phase of clinical development of FT516 at the time of our election.

If we do not elect to treat the Award as a loan within 10 years of the date of the Award, the Award will be considered a grant and we will be obligated to pay to CIRM a royalty on commercial sales of FT516 until such royalty payments equal nine times the total amount awarded to us under the Award.

Our Intellectual Property

10 unchanged sentences

Please see “Risk Factors—Risks Related to Our Intellectual Property” for additional information on the risks associated with our intellectual property strategy and portfolio.

Intellectual Property Relating to iPSC Technology

Intellectual Property Relating to iPSC Technology and Platform

As of February 9, 2021, we own over 20 patent families directed to programming the fate of somatic cells ex vivo , including patent applications pending in the U.S.

3 unchanged sentences

Our proprietary intellectual property enables highly-efficient iPSC derivation, selection, engineering, and clonal expansion while maintaining genomic stability.

Any patents issued from these patent applications will expire on dates ranging from 2031 to 2040.

patents issued from these patent applications will have statutory expiration dates ranging from 2031 to 2041.

Additionally, we have licensed from the Whitehead Institute for Biomedical Research a portfolio of four patent families including issued patents and pending applications broadly applicable to the reprogramming of somatic cells.

Our license is exclusive in commercial fields, including for drug discovery and therapeutic purposes.

This portfolio covers the generation of human iPSCs from somatic cells and, as of February 25, 2020, includes 1 6 issue d U.S.

This portfolio covers the generation of human iPSCs from somatic cells and, as of February 9, 2021, includes 16 issued U.S.

patents (including U.S.

Patents 8,071,369, 7,682,828 and 9,497,943) claiming compositions used in the reprogramming of mammalian somatic cells to a less differentiated state (including to a pluripotent state), and methods of making a cell more susce ptible to reprogramming.

Specifically, the portfolio includes a composition of matter patent issued in the United States covering a cellular composition comprising a somatic cell having an exogenous nucleic acid that encodes an OCT4 protein.

OCT4 is the ke y pluripotency gene most commonly required for the generation of iPSCs.

These issued patents and any patents that may issue from these pending patent applications will expire on dates ranging from 2024 to 2029.

OCT4 is the key pluripotency gene most commonly required for the generation of iPSCs.

These issued patents and any U.S.

patents that may issue from these pending patent applications will have statutory expiration dates ranging from 2024 to 2029.

We also have exclusive licenses from The Scripps Research Institute to a portfolio of seven patent families relating to compositions and methods for reprogramming mammalian somatic cells, which covers non-genetic and viral-free reprogramming mechanisms, including the use of various small molecule classes and compounds and the introduction of cell-penetrating proteins to reprogram mammalian somatic cells.

3 unchanged sentences

Any issued U.S.

patents and any patents that may issue from patent applications pending in the U.S.

and internationally in this portfolio will have statutory expiration dates ranging from 2026 to 2032.

patents and any U.S.

patents that may issue from patent applications pending in this portfolio will have statutory expiration dates ranging from 2026 to 2031.

We also have exclusively licensed from the J.

1 unchanged sentence

This approach for inducing pluripotency uses CRISPR to directly target a specific location of the genome and activate endogenous gene expression, and does not rely on established methods of cellular reprogramming that require the transduction of multiple transcription factors.

Any patents that may issue from patent applications pending in the U.S.

and internationally in this portfolio will have expiration dates between 2038 and 2039.

We also have licensed exclusive rights to three families of patent applications from the University of Minnesota.

patents that may issue from patent applications pending in the U.S.

and internationally in this portfolio will have a statutory expiration date in 2038.

We also have licensed exclusive rights to four families of patent applications from the University of Minnesota.

This portfolio includes over 40 issued patents or pending patent applications in the United States and foreign jurisdictions directed to compositions of NK cells, including adaptive memory NK cells and genetically-engineered NK cells, and therapeutic strategies for the treatment of cancer using these NK cells.

These applications also describe methods of enhancing NK cell cytotoxicity by genetically engineering the CD16 Fc receptor in immune cells, including iPSC-derived NK cells, and describe methods of increasing NK cell tumor specificity and cytotoxicity by incorporating CARs on NK cells.

Any patents that may issue from patent applications pending in this portfolio will expire in 2035 or 2036.

patents that may issue from patent applications pending in this portfolio will have statutory expiration dates between 2035 and 2038.

We also have exclusively licensed from The Memorial Sloan-Kettering Cancer Center (MSK) intellectual property covering the production and composition of iPSC-derived T cells and their use in cellular immunotherapy, and have a license from MSK to two patent families covering novel CAR constructs as well as off-the-shelf CAR T cells, including the use of CRISPR and other innovative technologies for their production.

Collectively, this portfolio covers compositions of CAR constructs, compositions of T cells and NK cells derived from pluripotent cells which are engineered with CARs, methods of engineering pluripotent cell lines, methods of deriving CAR-T cells from CAR expressing pluripotent stem cells, and methods of using CRISPR for producing off-the-shelf T-cell immunotherapies.

Any patents that may issue from patent applications pending in the U.S.

and internationally in this portfolio will have expiration dates between 2034 and 2038.

patents that may issue from patent applications pending in this portfolio will have statutory expiration dates between 2034 and 2038.

In addition, we have licensed exclusive rights from the Max Delbruck Center for Molecular Medicine (MDC) to intellectual property directed to novel humanized antibody fragments, antigen-binding domains and CAR constructs that uniquely target and specifically bind B-cell Maturation Antigen (BCMA).

Under the license agreement, we are granted an exclusive license for use in allogeneic engineered pluripotent stem cells.

Any patents issuing from patent applications pending in the U.S.

and internationally in this portfolio will have statutory expiration dates between 2033-2037.

Intellectual Property Relating to CRISPR Engineering

3 unchanged sentences

Our license covers the making and using of MAD7 for editing iPSCs, making master engineered iPSC lines and using master engineered iPSC lines to manufacture human therapeutic products.

These issued patents and any patents that may issue from these pending patent applications will expire around 2037.

These issued patents and any U.S.

patents that may issue from these pending patent applications will have statutory expiration dates around 2037.

Intellectual Property Relating to the Programming of Hematopoietic Cells

1 unchanged sentence

and foreign patents and pending patent applications covering our cell programming technology and compositions of programmed cellular immunotherapies.

This portfolio includes 90 issued patents or pending patent applications relating to methods of programming the biological properties and therapeutic function of cells ex vivo , and the resulting therapeutic compositions of hematopoietic and immune cells.

This portfolio includes over 120 issued patents or pending patent applications relating to methods of programming the biological properties and therapeutic function of cells ex vivo , and the resulting therapeutic compositions of hematopoietic and immune cells.

Patents and patent applications in this portfolio include claims covering (i) therapeutic compositions of hematopoietic and immune cells, including T cells, NK cells, and CD34 + cells, that have been programmed ex vivo with one or more agents to optimize their therapeutic function for application in oncology and immune disorders and (ii) methods of programming cells including by the activation or inhibition of therapeutically-relevant genes and cell-surface proteins, such as those involved in the homing, proliferation and survival of hematopoietic cells or those involved in the persistence, proliferation and reactivity of immune cells.

1 unchanged sentence

Additionally, we have an exclusive license to an intellectual property portfolio consisting of two families of issued patents and pending patent applications co-owned by the Children’s Medical Center Corporation and The General Hospital Corporation.

As of February 25, 2 020, we currently have exclusive rights to over 50 issued patents or patent applications in the United States and worldwide relating to methods for programming hematopoietic stem cells ex vivo using modulators that up-regulate the prostaglandin signaling p athway or its downstream mediators.

As of February 9, 2021, we currently have exclusive rights to over 50 issued patents or patent applications in the United States and worldwide relating to methods for programming hematopoietic stem cells ex vivo using modulators that up-regulate the prostaglandin signaling pathway or its downstream mediators.

These patent rights consist of issued patents (including U.S.

Patents 8,168,428 and 8,563,310) claiming methods for the ex vivo programming of hematopoietic stem cells using FT1050, including hematopoietic stem cells obt ained from mobilized peripheral blood, cord blood, and bone marrow.

Pending patent applications in the United States and foreign jurisdictions are directed to therapeutic compositions of hematopoietic stem cells in which the cells have been modulated by in creasing prostaglandin activity, methods of preparing these compositions, and methods of promoting hematopoietic reconstitution, expansion and self-renewal using modulators that increase prostaglandin signaling activity.

patents within this portfo lio that have issued or may yet issue will have a statutory expiration date in 2027.

Patents 8,168,428 and 8,563,310) claiming methods for the ex vivo programming of hematopoietic stem cells using FT1050, including hematopoietic stem cells obtained from mobilized peripheral blood, cord blood, and bone marrow.

Pending patent applications in the United States and foreign jurisdictions are directed to therapeutic compositions of hematopoietic stem cells in which the cells have been modulated by increasing prostaglandin activity, methods of preparing these compositions, and methods of promoting hematopoietic reconstitution, expansion and self-renewal using modulators that increase prostaglandin signaling activity.

patents within this portfolio that have issued or may yet issue will have a statutory expiration date in 2027.

We have also licensed exclusive rights to two families of issued patents and patent applications from the Indiana University Research and Technology Corporation.

This portfolio includes patent applications claiming methods of enhancing HCT procedures by altering prostaglandin activity in hematopoietic stem cells as well as an issued U.S.

This portfolio includes patent applications claiming methods of enhancing HSCT procedures by altering prostaglandin activity in hematopoietic stem cells as well as an issued U.S.

patent and patent applications claiming methods of enhancing viral transduction efficiency in the genetic engineering of stem cells, including hematopoietic stem cells.

2 unchanged sentences

Claims in these applications specifically cover the modulation of mobilized peripheral blood by altering prostaglandin activity and methods for increasing viral transduction efficiency for gene therapy.

Any patents that have issued or that may issue from patent applications in this portfolio will expire in 2029 or 2030.

patents that have issued or that may issue from patent applications in this portfolio will have statutory expiration dates between 2029 and 2030.

Our Material Technology License Agreements

17 unchanged sentences

In May 2018, we entered into an amended and restated license agreement with Memorial Sloan Kettering Cancer Center.

The agreement amends and restates the exclusive license agreement we entered into with Memorial Sloan Kettering Cancer Center in August 2016, under which we obtained rights relating to compositions and methods covering iPSC-derived cellular immunotherapy, including T cells and NK cells derived from iPSCs engineered with CARs.

including T cells and NK cells derived from iPSCs engineered with CARs.

Pursuant to the amended and restated license agreement, we continue to hold exclusive rights to the foregoing patents and patent applications, and obtained additional licenses to certain patents and patent applications relating to compositions and methods covering novel CAR constructs as well as off-the-shelf CAR T cells, including the use of CRISPR and other innovative technologies for their production .

Under our amended and restated agreement with Memorial Sloan Kettering Cancer Center, we have royalty-bearing worldwide licenses to make, use and sell licensed products in all fields for human therapeutic uses.

The licensed patent rights are described in more detail above under “Intellectual Property Relating to iPS C Technology.” For those patent families where our rights are exclusive, Memorial Sloan Kettering Cancer Center retains the right to practice the patent rights for research, teaching and non-clinical research purposes, and to license other academic and non -profit research institutes to practice the patent rights for research, teaching and non-clinical research purposes.

The licensed patent rights are described in more detail above under “Intellectual Property Relating to iPSC Technology.” For those patent families where our rights are exclusive, Memorial Sloan Kettering Cancer Center retains the right to practice the patent rights for research, teaching and non-clinical research purposes, and to license other academic and non-profit research institutes to practice the patent rights for research, teaching and non-clinical research purposes.

Our licenses are also subject to pre-existing rights of the U.S.

9 unchanged sentences

We may terminate the agreement for any reason upon prior written notice to Memorial Sloan Kettering Cancer Center.

Max Delbruck Center

In December 2018, we entered into a license agreement with Max Delbruck Center for Molecular Medicine (MDC) for rights relating to novel humanized antibody fragments, antigen-binding domains and CAR constructs that uniquely target and specifically bind B-cell Maturation Antigen (BCMA).

Under our license agreement with MDC, we acquired an exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell products covered by the licensed patent rights, and to perform licensed processes, in each case, using cells derived from allogeneic engineered stem cells.

MDC retains a non-exclusive right to use the technology for its own internal research, teaching, and educational purposes.

Under the terms of the license agreement, we are required to pay to MDC an annual license maintenance fee during the term of the agreement.

We also are required to make product development, regulatory and sales milestones payments to MDC of up to $11 million per product.

If commercial sales of a licensed product commence, we will pay MDC royalties at percentage rates ranging in the low single digits on net sales of licensed products in countries where such product is protected by patent rights.

Our obligation to pay royalties continues on a country by country basis until the expiration of all licensed patent rights covering licensed products in such country, and our royalty payments will be reduced by other payments we are required to make to third parties in certain circumstances until a minimum royalty percentage has been reached.

In the event that we sublicense the patent rights, MDC is also entitled to receive a percentage of the sublicensing income received by us.

Under the license with MDC, we are obligated to use commercially reasonable efforts to develop and obtain approval of a licensed product.

The agreement will expire concurrently with patent rights on a country-by-country basis.

We may terminate the agreement by providing prior written notice to MDC, and MDC has the right to terminate the agreement if we materially breach the agreement and fail to cure such breach within a specified grace period.

Whitehead Institute for Biomedical Research

43 unchanged sentences

The agreement will continue until the last to expire of the patent rights.

We may terminate the agreement by providi ng prior written notice to CMCC, and CMCC has the right to terminate the agreement if we fail to pay royalties or otherwise materially breach the agreement and fail to cure such breach within a specified grace period.

We may terminate the agreement by providing prior written notice to CMCC, and CMCC has the right to terminate the agreement if we fail to pay royalties or otherwise materially breach the agreement and fail to cure such breach within a specified grace period.

CMCC may also terminate the agreement should we cease operations or in the event of our bankruptcy or insolvency.

27 unchanged sentences

ProTmune is a composition of ex vivo programmed human mobilized peripheral blood cells.

ProTmune is produced by treating qualified human mobilized peripheral blood with two small molecules, FT1050 and FT4145, in a multi-step process that is performed on the day of HCT.

ProTmune is produced by treating qualified human mobilized peripheral blood with two small molecules, FT1050 and FT4145, in a multi-step process that is performed on the day of HSCT.

Currently, the manufacture of ProTmune is performed at clinical cell processing facilities operated by or affiliated with our clinical sites.

2 unchanged sentences

Human peripheral blood cells sourced from a healthy donor, whose tissue type closely matches the patient’s, are used as the starting cellular source material for the manufacture of ProTmune.

HCT centers can electronically access a worldwide network of donor registries, which collect and transfer human peripheral blood cells sourced from healthy donors, to source these cells on behalf of patients.

We expect donor registries to continue to collect and transfer, and HCT centers to continue to source, human peripheral blood cells for our manufacture of ProTmune.

HSCT centers can electronically access a worldwide network of donor registries, which collect and transfer human peripheral blood cells sourced from healthy donors, to source these cells on behalf of patients.

We expect donor registries to continue to collect and transfer, and HSCT centers to continue to source, human peripheral blood cells for our manufacture of ProTmune.

Other components used in the manufacture of ProTmune include programming media as well as disposable materials, such as bags and tubing sets.

2 unchanged sentences

For the conduct of our Phase 1/2 clinical trial of ProTmune, the clinical cell processing facility at each participating site is qualified and trained by our technical staff to manufacture ProTmune.

Our technical representative(s) are on-site at the clinical cell processing facility for each of the first two subjec ts administered ProTmune at a participating site.

Our technical representative(s) are on-site at the clinical cell processing facility for each of the first two subjects administered ProTmune at a participating site.

ProTmune is released immediately by the clinical cell processing facility staff after final processing, including filtration, final packaging, rapid release testing, and labeling.

In the future, we may manu facture ProTmune at facilities operated by us, by transplant centers, or by third parties.

In the future, we may manufacture ProTmune at facilities operated by us, by transplant centers, or by third parties.

Marketing & Sales

19 unchanged sentences

for a biological product, submission to the FDA of a Biologics License Application (BLA) for marketing approval that includes substantive evidence of safety, purity, and potency from results of nonclinical testing and clinical trials, and, for a drug, submission of a New Drug Application (NDA) that includes substantive evidence of the product’s safety and efficacy;

satisfactory completion of an FDA pre-approval inspection of manufacturing facilities where the product is produced to assess compliance with cGMPs to assure that the facilities, methods and controls are adequate, and, if applicable, the FDA’s current good tissue practices (cGTPs) for the use of human cellular and tissue products to prevent the introduction, transmission or spread of communicable diseases;

satisfactory completion of an FDA pre-approval inspection of manufacturing facilities where the product is produced to assess compliance with the FDA’s cGMPs to assure that the facilities, methods and controls are adequate, and, if applicable, current good tissue practices (cGTPs) for the use of human cellular and tissue products to prevent the introduction, transmission or spread of communicable diseases;

potential FDA audit of the nonclinical study sites and clinical trial sites that generated the data in support of the BLA or NDA;

9 unchanged sentences

If a clinical hold is imposed, a trial may not recommence without FDA authorization and then only under terms authorized by the FDA.

A clinical hold may either be a full clinical hold or a partial

clinical hold that would limit a trial, for example, to certain doses or for a certain length of time or to a certain number of subjects.

Further, an independent institutional review board (IRB) for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that site.

33 unchanged sentences

This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational drug, or as applicable, 15 days after the drug receives a designation as a breakthrough therapy, fast track product, or regenerative advanced therapy.

Further, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017 (the Right to Try Act) among other things, provides a federal framework for certain patients to request access to certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval.

There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

We review each individual request for access through the Cures Act, the Right to Try Act and similar state laws, and may or may not provide access depending upon the facts of each request.

Review and Approval Processes

23 unchanged sentences

Additionally, the FDA ultimately may still decide that the application does not satisfy the regulatory criteria for approval.

The FDA also has authority to require a Risk Evaluation and Mitigation Strategy (REMS) from manufacturers to ensure that the benefits of a biological product or dr ug outweigh its risks.

The FDA also has authority to require a Risk Evaluation and Mitigation Strategy (REMS) from manufacturers to ensure that the benefits of a biological product or drug outweigh its risks.

A sponsor may also voluntarily propose a REMS as part of the BLA or NDA submission.

29 unchanged sentences

The FDCA also requires FDA to expedite the development and review of a breakthrough therapy.

A biological product or drug can be designated as a bre akthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoi nts.

A biological product or drug can be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

A sponsor may request that a biological product or drug be designated as a breakthrough therapy at any time during the clinical development of the product.

If so designated, FDA shall act to expedite the development and review of the product’s marketi ng application, including by meeting with, and providing advice to, the sponsor throughout the product’s development, and taking steps to facilitate an efficient review of the development program and to ensure that the design of the clinical trials is as e fficient as practicable.

If so designated, FDA shall act to expedite the development and review of the product’s marketing application, including by meeting with, and providing advice to, the sponsor throughout the product’s development, and taking steps to facilitate an efficient review of the development program and to ensure that the design of the clinical trials is as efficient as practicable.

Fast Track designation, priority review, accelerated approval, and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process.

2 unchanged sentences

Regenerative advanced therapies do not include those human cells, tissues, and cellular and tissue-based products regulated solely under section 361 of the PHS Act and 21 CFR Part 1271.

The new program is intended to facilitate efficient development and expedite review of regenerative advanced therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition.

This program is intended to facilitate efficient development and expedite review of regenerative advanced therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition.

A drug sponsor may request that FDA designate a drug as a regenerative advanced therapy concurrently with or at any time after submission of an IND.

19 unchanged sentences

The FDA must also determine that the generic drug is bioequivalent to the innovator drug.

An abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, a FDA-licensed reference biological product was created by the Biologics Price Competition and Innovation Act of 2009, which was part of the Patient Protection and Affordable Care Act of 2010 (PPACA).

This amendment to the PHS Act attempts to minimize duplicative testing.

1 unchanged sentence

Interchangeability requires that a biological product is biosimilar to the reference biological product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the product and the reference product may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product.

A reference b iological product is granted twelve years of exclusivity from the time of first licensure of the reference product.

The first biological product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference pr oduct has exclusivity against other biologics submitting under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the res olution in the applicant’s favor of a lawsuit challenging the biologic’s patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.

A reference biological product is granted twelve years of exclusivity from the time of first licensure of the reference product.

The first biological product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitting under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant’s favor of a lawsuit challenging the biologic’s patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.

A biological product or drug can obtain pediatric market exclusivity in the United States.

27 unchanged sentences

made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs to 23.1% of average manufacturer price (AMP), and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP;

imposed a requirement on manufacturers of branded drugs to provide a 70% point-of-sa le discount off the negotiated price of branded drugs dispensed to Medicare Part D beneficiaries in the coverage gap (i.e., “donut hole”) as a condition for a manufacturer’s outpatient drugs being covered under Medicare Part D;

imposed a requirement on manufacturers of branded drugs to provide a 70% point-of-sale discount off the negotiated price of branded drugs dispensed to Medicare Part D beneficiaries in the coverage gap (i.e., “donut hole”) as a condition for a manufacturer’s outpatient drugs being covered under Medicare Part D;

extended a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

7 unchanged sentences

The ACA established the Center for Medicare and Medicaid Innovation (CMMI) within the Centers for Medicare and Medicaid Services (CMS) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Funding was allocated to support the mission of the CMMI through 2019, and pursuant to the federal fiscal year 2020 budget, CMMI is expected to receive funding for ten more years.

Some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial and Congressional challenges.

Congress has considered legislation that would repeal or repeal and replace all or part of the ACA.

While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law.

The Tax Cuts and Jobs Act of 2017, or Tax Act, includes a provision that decreased the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year, commonly referred to as the “individual mandate,” to $0 effective January 1, 2019.

On December 14, 2018, a federal district court in Texas ruled the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well.

On December 18, 2019, the Fifth Circuit U.S.

Court of Appeals held that the individual mandate is unconstitutional, and remanded the case to the lower court to reconsider its earlier invalidation of the full ACA.

Pending review, the ACA remains in effect, but it is unclear at this time what effect the latest ruling will have on the status of the ACA.

Since January 2017, the Trump administration has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA.

On January 20, 2017, the Trump administration signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

On October 13, 2017, the Trump administration signed an Executive Order terminating the cost-sharing subsidies that reimburse insurers under the ACA.

The Trump administration has concluded that cost-sharing reduction, or CSR, payments to insurance companies required under the ACA have not received necessary appropriations from Congress and announced that it will discontinue these payments immediately until those appropriations are made.

The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA.

Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017.

The Bipartisan Health Care Stabilization Act of 2017, as well as the follow-on Bipartisan Health Care Stabilization Act of 2018 were introduced to appropriate funds to stabilize CSR payments;

however, the future of this effort is unclear.

On June 14, 2018, U.S.

Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third-party payors who argued were owed to them.

The effects of this gap in reimbursement on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet known.

In December 2018, CMS published a final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of the federal district court litigation regarding the method CMS uses to determine this risk adjustment.

In addition, CMS has recently finalized regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.

On January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt m edical devices;

however, on December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act (H.R.

1865), which repeals the Cadillac tax, the health insurance provider tax, and the medical device excise tax.

It is impossible to determine whether similar taxes could be instated in the future.

Moreover, the Bipartisan Budget Act of 2018, among other things, amends the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufact urers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.”

Congress also could consider additional legislation to repeal, replace, or further modify elements of the ACA.

Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

Various portions of the ACA are currently undergoing legal and constitutional challenges in the United States Supreme Court;

the former administration issued various Executive Orders which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices;

and Congress has introduced several pieces of legislation aimed at significantly revising or repealing the ACA.

The United States Supreme Court is expected to rule on a legal challenge to the constitutionality of the ACA in early 2021.

The implementation of the ACA is ongoing, and the law appears likely to continue the downward pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs.

Litigation and legislation related to the ACA are likely to continue, with unpredictable and uncertain results.

Congress may consider additional legislation to repeal, replace, or further modify elements of the ACA.

In addition, the Biden administration may take steps to repeal, replace, or further modify elements of the ACA and regulatory actions taken by the previous administration.

Thus, the full impact of the ACA, or any law repealing, replacing or modifying elements of it, and the political uncertainty regarding any repeal, replacement or modification of the ACA, on our business remains unclear.

3 unchanged sentences

Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

At the federal level, the Trump administration’s budget proposal for fiscal years 2019 and 2020 contain further drug price control measures that could be enacted during the budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients.

Additionally, the Trump administration released a “Blueprint,” or plan, aimed at improving the availability, competitiveness, and adoption of biosimilars as affordable alternatives to branded biologics.

Under the plan, the FDA is directed to issue guidance to address certain practices that aim to delay or block generic competition, while also issuing new policies to bring more biosimilars to market as alternatives to brand-name biologics.

More recently, the Trump administration announced a complex proposal to reduce Medicare spending by substantially reducing the price of physician-administered drugs, including biologics such as cellular therapeutics, under Medicare Part B.

Under this proposal, pharmacy-benefit managers would have an increased role in managing drugs and pricing in the Part B program, and the price paid by Medicare for drugs under Part B would be linked to the prices paid for such drugs in other industrialized countries as reflected in an International Pricing Index, and in most cases these prices are lower than in the U.S.

However, if the International Pricing Index model were adopted as proposed, it would not take effect until 2020 at the earliest and would phase in over five years, and it is therefore difficult to predict the impact it will have on our business.

The proposal also includes a new payment model for reimbursing physicians for administering drugs under Part B, and the consequences of this payment model on the prescribing practices of physicians are uncertain.

Department of Health and Human Services (HHS) has started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.

For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020.

This final rule codified CMS’s policy change that was effective January 1, 2019.

Although a number of these, and other proposed measures may require authorization through additional legislation to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

At the federal level, the previous administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.

On March 10, 2020, the previous administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.

Additionally, the Trump administration released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers.

Department of Health and Human Services, or HHS, has already implemented certain measures.

For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.

Although a number of these, and other proposed measures may require authorization through additional legislation to become effective, Congress has indicated that it will continue to seek new legislative measures to control drug costs.

Additionally, it is unclear whether the Biden administration will challenge, reverse, revoke or

otherwise modify previous administrative and executive actions.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing .

Further, on May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017 (Right to Try Act) was signed into law.

The law, among other things, provides a federal framework for certain patients to request access to certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval.

There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

Other Healthcare Laws and Compliance Requirements

In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, CMS, other divisions of HHS, (e.g., the Office of Inspector General, or OIG), the United States Department of Justice and individual United States Attorney offices within the Department of Justice, and state and local governments.

For example, our clinical research, sales, marketing and scientific/educational grant programs may have to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy and security provisions of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) and similar state laws, each as amended, as applicable, including:

the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs;

a person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties statute;

the federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.

Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.

The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery;

the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program;

HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information;

the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.

Department of Health and Human Services, CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by the physicians described

above and their immediate family members.

Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners;

federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs;

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

In addition to the above, on November 20, 2020, OIG finalized further modifications to the federal Anti-Kickback Statute.

Under the final rules, OIG added safe harbor protections under the Anti-Kickback Statute for certain coordinated care and value-based arrangements among clinicians, providers, and others.

Simultaneously, HHS removed safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

HHS has delayed the implementation of the removal of safe harbor protection for price reductions from pharmaceutical manufacturers and creation of a new safe harbor for certain fixed fees rule to March 22, 2021.

We continue to evaluate what effect, if any, these rules will have on our business.

Additionally, we may be subject now or in the future to state and foreign equivalents of each of the healthcare laws and regulations described above, among others, some of which may be broader in scope and may apply regardless of the payor.

states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers.

In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 OIG Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals.

Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state.

There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties.

Regulations Governing Data Collection and the Use, Processing and Cross-Border Transfer of Personal Information

We also may be or may become subject to various state and foreign laws governing the privacy and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

For example, California has enacted the California Consumer Privacy Act (CCPA), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.

Effective as of January 2020, the CCPA requires covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt out of certain sales or transfers of personal information, and also regulates employee information.

Further, a new California privacy law, the California Privacy Rights Act (CPRA), was passed by California voters in November 2020.

The CPRA will create additional obligations with respect to processing and storing personal information that are scheduled to take effect on January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022).

While there is currently an exception in the CCPA and CPRA for protected health information that is subject to HIPAA, the CCPA and CPRA may impact our business activities.

states also are considering omnibus privacy legislation, and industry organizations regularly adopt and advocate for new standards in these areas.

In addition, as of May 25, 2018, the General Data Protection Regulation (GDPR) regulates the collection and use of personal data in the European Union (EU).

The GDPR covers any business, regardless of its location, that provides goods or services to residents in the EU and, thus, could incorporate any activities we undertake in EU member states.

The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “sensitive information,” which includes health and genetic information of individuals residing in the EU.

GDPR grants individuals the opportunity to object to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been violated.

Further, the GDPR imposes strict rules on the transfer of personal data out of the EU to regions that have not been deemed to offer “adequate” privacy protections, such as the U.S.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU member states, which may deviate slightly from the GDPR, may result in warning letters, mandatory audits and financial penalties, including fines of up to 4% of global revenues, or €20,000,000, whichever is greater.

Further to the United Kingdom's (UK) exit from the EU on January 31, 2020, the GDPR ceased to apply in the UK at the end of the transition period on December 31, 2020.

However, as of January 1, 2021, the UK’s European Union (Withdrawal) Act 2018 incorporated the GDPR (as it existed on December 31, 2020 but subject to certain UK specific amendments) into UK law (referred to as the 'UK GDPR').

The UK GDPR and the UK Data Protection Act 2018 set out the UK’s data protection regime, which is independent from but aligned to the EU’s data protection regime.

Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher.

The UK, however, is now regarded as a third country under the EU’s GDPR which means that transfers of personal data from the EEA to the UK will be restricted unless an appropriate safeguard, as recognized by the EU’s GDPR, has been put in place.

Although under the EU-UK Trade Cooperation Agreement it is lawful to transfer personal data between the UK and the EEA for a 6 month period following the end of the transition period, with a view to achieving an adequacy decision from the European Commission during that period.

Like the EU GDPR, the UK GDPR restricts personal data transfers outside the UK to countries not regarded by the UK as providing adequate protection (this means that personal data transfers from the UK to the EEA remain free flowing).

There is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with GDPR.

For example, it is unclear whether the authorities will conduct random audits of companies doing business in the EU or UK, or act solely after complaints are filed claiming a violation of the GDPR or UK GDPR .

Other Regulations

5 unchanged sentences

Cellular immunotherapies for the treatment of cancer have recently been an area of significant research and development by academic institutions and biopharmaceutical companies.

Novartis and Kite were the first to achieve FDA approval for autologous CAR T-cell therapies for the treatment of certain cancers.

Novartis AG (Novartis) and Kite Pharma, Inc.

(Kite) were the first to obtain FDA approval for autologous CAR T-cell therapies for the treatment of certain cancers.

Novartis obtained FDA approval to commercialize Kymriah in August 2017 for the treatment of children and young adults with relapsed / refractory B-cell acute lymphoblastic leukemia and, in May 2018, for the treatment of adults with relapsed / refractory diffuse large B-cell lymphoma.

1 unchanged sentence

We are developing our off-the-shelf NK- and T-cell product candidates for the treatment of cancer.

While we believe our use of clonal master iPSC lines for the production of our off-the-shelf NK- and T-cell product candidates is highly differentiated, a number of companies are currently focused on the development of cellular immunotherapies for the treatment of cancer including Adaptimmune Limited, Allogene Therapeutics, Inc., Atara Biotherapeutics, Inc., Autolus Therapeutics plc, bluebird bio, Inc., Celgene Corporation (acquired by Bristol-Myers Squibb Company), Cellectis SA, Celyad SA, CRISPR Therapeutics AG, Editas Medicine, Inc., Gilead Sciences, Inc., Green Cross Corporation, Intrexon Corporation, Juno Therapeutics, Inc.

(acquired by Celgene Corporation), Kite Pharma, Inc.

(acquired by Gilead Sciences, Inc.), NantKwest, Inc., Novartis AG, Precision BioSciences, Inc., Sorrento Therapeutics, Inc.

and ZIOPHARM Oncology, Inc..

While we believe our use of clonal master iPSC lines for the production of our off-the-shelf NK- and T-cell product candidates is highly differentiated, a number of companies are currently focused on the development of cellular immunotherapies for the treatment of cancer including Allogene Therapeutics, Inc., Atara Biotherapeutics, Inc., bluebird bio, Inc., Bristol-Myers Squibb Company, Cellectis SA, CRISPR Therapeutics AG, Gilead Sciences, Inc., Intellia Therapeutics, Inc., Iovance Biotherapeutics, Inc., Johnson & Johnson, Legend Biotech Corporation, NantKwest, Inc., Nkarta, Inc., Novartis AG, Sanofi SA, and Takeda Pharmaceutical Company Limited.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

We are developing ProTmune as a next-generation mobilized peripheral blood graft for patients undergoing allogeneic HCT.

We are developing ProTmune as a next-generation mobilized peripheral blood graft for patients undergoing allogeneic HSCT.

ProTmune is designed to prevent GvHD and other life-threatening complications that compromise the procedure’s curative potential.

1 unchanged sentence

Corticosteroids, or steroids, remain the first-line of treatment for GvHD, and second-line therapy consists of off-label use of immunosuppressive agents.

We are aware of other companies and medical centers that are developing prophylaxes for GvHD and treatments for GvHD and othe r life-threatening complications of HCT, including AbbVie Inc., Bristol-Myers Squibb Company, Incyte Corporation, Jazz Pharmaceuticals plc, Kamada Ltd., and Mesoblast Limited.

We are aware of other companies and medical centers that are developing prophylaxes for GvHD and treatments for acute GvHD and other life-threatening complications of HSCT, including AbbVie Inc., Bristol-Myers Squibb Company, and Incyte Corporation.

We compete against our competitors in recruiting and retaining qualified scientific and management personnel and establishing clinical study sites and subject enrollment for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs.

Many of our competitors, either alone or with their collaboration partners, have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of treatments and commercializing those treatments.

obtaining FDA and other regulatory approvals of treatments and commercializing those treatments.

Accordingly, our competitors may be more successful than us in obtaining approval for treatments and achieving widespread market acceptance.

7 unchanged sentences

In addition, we may not be able to obtain commercially reasonable product liability insurance for any products approved for marketing.

Human Capital

As of December 31, 2020, we employed 279 employees, all of whom are full-time employees, including 127 in research and development, 113 in clinical development, manufacturing and regulatory affairs and 39 in general and administrative.

1 unchanged sentence

We consider our employee relations to be good.

We focus on identifying, recruiting, developing and retaining a team of highly talented and motivated employees.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, as well providing our employees with the opportunity to participate in our employee stock purchase plan, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

The success of our business is fundamentally connected to the well-being, health and safety of our employees.

In an effort to protect the health and safety of our employees, we took proactive action from the earliest signs of the COVID-19 outbreak, which included implementing social distancing policies at our facilities, facilitating remote working arrangements and imposing employee travel restrictions.

Corporate Information

8 unchanged sentences

Available Information

We post our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, on the Investors and Media section of our public website (www.fatetherapeutics.com) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

We post our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, on the Investors section of our public website (www.fatetherapeutics.com) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

In addition, you can read our SEC filings over the Internet at the SEC’s website at www.sec.gov.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business