10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31, 2025
For the transition period from to .
Commission file number 001-36076
FATE THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
12278 Scripps Summit Drive, San Diego, California 92131
(Address of principal executive offices) (Zip Code)
(858) 875-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value FATE Nasdaq Global Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ or No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ or No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ or No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $113,000,000 as of June 30, 2025 based upon the closing sale price on The Nasdaq Global Market reported for such date. Shares of common stock held by each executive officer and director and certain holders of more than 10% of the outstanding shares of the registrant’s common stock have been excluded in that such persons may be deemed to be affiliates. Shares of common stock held by other persons, including certain other holders of more than 10% of the outstanding shares of common stock, have not been excluded in that such persons are not deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of February 19, 2026 was 116,263,459.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission, or SEC, on or before the date 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2025 pursuant to Regulation 14A, in connection with the registrant’s 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this annual report on Form 10-K.
FATE THERAPEUTICS, INC.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2025
TABLE OF CONTENTS
Page
RISK FACTOR SUMMARY 1
FORWARD-LOOKING STATEMENTS 4
PART I
Item 1. Business 6
Item 1A. Risk Factors 46
Item 1B. Unresolved Staff Comments 95
Item 1C. Cybersecurity 96
Item 2. Properties 96
Item 3. Legal Proceedings 96
Item 4. Mine Safety Disclosures 97
PART II
Item 6. [Reserved] 98
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 111
Item 8. Financial Statements and Supplementary Data 112
Item 9A. Controls and Procedures 139
Item 9B. Other Information 140
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 140
Item 10. Directors, Executive Officers and Corporate Governance 141
Item 11. Executive Compensation 141
Item 14. Principal Accounting Fees and Services 141
PART IV
Item 15. Exhibits and Financial Statement Schedules 142
RISK FACTOR SUMMARY
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission (SEC) before making investment decisions regarding our common stock.
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Our product candidates and programs represent novel therapeutic approaches to treating disease, and our product candidates may fail to demonstrate the safety, potency, durability, and efficacy necessary to support further development or commercialization, or may cause undesirable side effects or have other properties that could delay or halt their preclinical or clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences. If we fail to complete the preclinical or clinical development of, or to obtain regulatory approval for, our product candidates on a timely basis or at all, our business would be significantly harmed.
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Development of our product candidates will require substantial additional funding, which, if available, may cause dilution to our stockholders, and without which we will be unable to complete preclinical or clinical development of, or obtain regulatory approval for, our product candidates. Additionally, we may not be able to secure adequate funding on acceptable terms or on a timely basis.
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The regulatory approval process for novel product candidates such as ours is particularly uncertain, and our product candidates could fail to receive regulatory approval from the FDA or a comparable foreign regulatory authority for many reasons, including disagreement with applicable regulatory authorities on the design or conduct of our clinical studies, on our interpretation of data from clinical studies, or on the methodologies for, and assessment of, comparability of different versions of a product candidate used in non-pivotal studies, pivotal studies and for intended commercial use, and disagreement with applicable regulatory authorities, changes in approval policies or regulations, or changes in positions, guidance or feedback communicated by applicable regulatory authorities, that render our preclinical or clinical data insufficient to support approval or otherwise negatively impact the potential approval of a product candidate.
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Our proprietary induced pluripotent stem cell (iPSC) product platform enables the production of next-generation product candidates, and we have multiple iPSC-derived cell product candidates currently undergoing clinical and preclinical development. We may elect to deprioritize or discontinue the clinical development of one or more of our product candidates for any number of reasons, including due to our prioritization of product candidates, data or results from our ongoing clinical trials, and the competitive therapeutic landscape for which our product candidates are being developed. In addition, one or more of our product candidates undergoing clinical development may have therapeutic potential in more than one disease area, and we may elect to prioritize clinical development in one disease area over another disease area.
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We use iPSC technology and gene-editing technology in the creation of our product candidates. If we are unable to use these technologies in the creation of our product candidates, our business would be significantly harmed.
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We may face delays in initiating, conducting or completing our clinical trials, including difficulties recruiting appropriate clinical trial investigators, enrolling patients in our clinical trials, or manufacturing adequate clinical supplies, and we may not be able to initiate, conduct or complete our clinical trials at all.
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We face significant competition in an environment of rapid technological change from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively, including with respect to the recruitment of patients and investigative sites to participate in our clinical trials.
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Initial, interim and preliminary data from our preclinical studies or clinical trials may change as more data becomes available and are subject to audit and verification procedures that could result in material changes in the final data. Furthermore, results from our ongoing or future clinical trials involving our product candidates may differ materially from initial, interim and preliminary data as well as previous study results.
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The manufacture and distribution of our product candidates is complex and subject to a multitude of risks. Additionally, the U.S. Food and Drug Administration (FDA) or foreign regulatory authorities may impose additional requirements on our manufacturing operations. These risks and requirements could substantially limit our supply of our product candidates and increase our costs, and the development and commercialization of our product candidates could be significantly delayed or restricted.
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Inadequate funding for the FDA, SEC, the National Institutes of Health and other government agencies, as well as changes in personnel and policy priorities at these agencies, could disrupt such agencies’ operations and, in turn, hinder our ability to develop or commercialize new products in a timely manner or otherwise negatively impact our business.
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We have limited experience manufacturing our product candidates on a clinical scale, and no experience manufacturing on a commercial scale. Any failure to manufacture sufficient quantities of our product candidates consistently and at acceptable quality and costs may result in delays to our clinical development plans and impair our ability to obtain approval for, or commercialize, our product candidates and would materially and adversely affect our business.
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We depend on third-party suppliers, including sole source suppliers, for certain equipment and components used in the production of our product candidates, and the loss of suppliers could adversely impact our ability to conduct our clinical trials.
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We may face challenges recruiting and retaining key personnel due to labor market changes, availability of qualified candidates, and competition for employees from other companies.
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We may face cost fluctuations and inflationary pressures, including increases in prices of materials and costs of labor, which may adversely impact our operating performance, expenses, cash utilization and results.
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We depend on strategic partnerships and collaboration arrangements for the development and commercialization of certain of our product candidates in certain indications or geographic territories, and if these arrangements are unsuccessful or are terminated, this could result in delays and other obstacles in the development, manufacture or commercialization of any of our product candidates and materially harm our results of operations.
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We have a limited operating history, have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future.
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If we are unable to protect our intellectual property or obtain and maintain patent protection for our technology and product candidates, other companies could develop products based on our technologies and discoveries, which may reduce demand for, or limit the commercial potential of, our products and harm our business.
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If we fail to comply with our obligations under our intellectual property license agreements, we could lose rights to our product candidates or key technologies.
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We may not be successful in obtaining or maintaining necessary rights to product components and processes for development or manufacture of our product candidates, which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.
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We may fail to obtain regulatory approval from the FDA or comparable foreign regulatory authorities for our product candidates, which would prevent or delay commercialization of our products.
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We do not have experience marketing any product candidates and do not have a sales force or distribution capabilities, and if our products are approved, we may be unable to commercialize them successfully.
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The commercial success of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payers and others in the medical community and may require additional evidence to support the anticipated benefits, comparative risks, and costs.
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Security breaches, loss of data and other disruptions could compromise sensitive information related to our business and adversely impact our operations.
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Our principal stockholders and management own a significant percentage of our stock and may be able to exercise significant control over our company.
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Our stock price is subject to fluctuation based on a variety of factors.
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We currently qualify as a “smaller reporting company” and a “non-accelerated filer,” and any decision on our part to comply with only certain reduced reporting and disclosure requirements applicable to such companies could make our stock less attractive to investors.
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Global economic and market conditions, any continued and prolonged public health emergency, global geopolitical tensions, including wars and other armed conflicts, or significant political, trade, economic or regulatory developments in the jurisdictions in which we may develop or commercialize our product candidates or conduct our operations, could adversely impact various aspects of our business, results of operations and financial condition, and could cause disruptions to our supply chain and the development and manufacture of our product candidates.
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The summary risk factors described above should be read together with the text of the full risk factors below, in the section titled “Risk Factors”, and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.
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FORWARD–LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements that represent our intent, belief, or current expectations, and that involve risks and uncertainties, and other factors, as well as assumptions that, even if they never materialize or prove incorrect, could cause our results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Annual Report on Form 10-K are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology or similar expressions. These forward-looking statements include, but are not limited to, statements about:
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our plans to research, develop and commercialize our product candidates;
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the initiation, timing, progress, size, duration, costs and results of our clinical trials and preclinical studies for our product candidates;
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our ability and timing to advance our product candidates in, and to successfully initiate, conduct, enroll and complete, clinical trials;
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the therapeutic differentiation and potential of our product candidates, and the disease indications for which we intend to develop our product candidates;
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the timing and likelihood of, and our ability to obtain and maintain, regulatory clearance of our Investigational New Drug (IND) applications for and regulatory approval of our product candidates;
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the potential of our technology platform, including our iPSC product platform, and our ability to leverage our platform in our research, development and commercialization activities for our product candidates;
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our ability to manufacture our product candidates for clinical development and, if approved, for commercialization, and the timing and costs of such manufacture;
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our ability to source clinical and, if approved, commercial materials and supplies used to manufacture our product candidates;
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the performance of third parties in connection with the development of our product candidates, including third parties conducting our clinical trials as well as third-party suppliers;
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our ability to attract, successfully partner with, and retain strategic collaborators with development, regulatory and commercialization expertise;
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the potential benefits of strategic collaboration agreements and our ability, and the ability of our collaborators, to successfully develop product candidates under the respective collaborations;
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our ability to obtain funding for our operations, including funding necessary to initiate and complete clinical trials of our product candidates;
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our ability to develop sales and marketing capabilities, whether alone or with actual or potential collaborators, to commercialize our product candidates, if approved;
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our ability to successfully commercialize our product candidates, if approved;
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the size and growth of the potential markets for our product candidates and our ability to serve those markets;
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regulatory developments and approval pathways in the United States and foreign countries for our product candidates;
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the potential scope and value of our intellectual property rights;
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our ability, and the ability of our licensors, to obtain, maintain, defend and enforce intellectual property rights protecting our product candidates, and our ability to develop and commercialize our product candidates without infringing the proprietary rights of third parties;
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our ability to recruit and retain key personnel;
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the accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, revenues and need for additional financing;
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our ability to compete with rapidly evolving therapeutic technologies and respond to other developments relating to our competitors and our industry; and
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other risks and uncertainties, including those described under Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K.
Any forward-looking statements in this Annual Report on Form 10-K reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part I, Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.
In this Annual Report on Form 10-K, unless the context requires otherwise, “Fate Therapeutics,” “Company,” “we,” “our,” and “us” means Fate Therapeutics, Inc. and its subsidiaries.
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PART I
ITEM 1. Business
Overview
We are a clinical-stage biopharmaceutical company dedicated to bringing a transformative pipeline of off-the-shelf cellular immunotherapies to patients.
We have pioneered a therapeutic approach that we generally refer to as cellular programming: we create and engineer human induced pluripotent stem cells (iPSCs) to incorporate novel synthetic controls of cell function; after the engineering step that incorporates multiple functional elements into the iPSCs, we generate a clonal master iPSC line for use as a renewable source of starting material for the manufacture of cell therapies; through the manufacturing process, we direct the fate of the clonal master iPSC line to produce our cell therapy product candidates that are uniform in composition. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, we believe our proprietary clonal master iPSC lines can be used to mass produce multiplexed-engineered, cellular immunotherapies which have off-the-shelf and on-demand availability, and that can be administered alone or in combination with standard-of-care therapies, to make cell therapies accessible to all.
Utilizing our iPSC product platform, we are developing off-the-shelf, multiplexed-engineered T-cell and natural killer (NK) cell product candidates which are selectively designed and incorporate novel synthetic controls of cell function to uniquely enhance the therapeutic capacity of the drug product to deliver multiple therapeutic mechanisms to patients. We have a pipeline of iPSC-derived, chimeric antigen receptor (CAR)-targeted T-cell and NK cell product candidates currently under development:
Our Approach
The use of human cells as therapeutic entities has disease-transforming potential across a broad spectrum of severe, life-threatening diseases. One particular form of cell therapy, CAR T-cell therapy, has emerged as a revolutionary and potentially curative treatment for patients with certain hematologic malignancies. In fact, multiple CAR T-cell therapies have now been approved by the United States Food and Drug Administration (FDA) for a number of disease indications, including relapsed / refractory B-cell malignancies and relapsed / refractory multiple myeloma. Additionally, several groups have demonstrated use of CAR T-cell therapy for the treatment of autoimmune diseases including systemic lupus erythematosus, idiopathic inflammatory myositis, systemic sclerosis, and myasthenia gravis.
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Cell therapies approved for commercialization, as well as those undergoing clinical development, today most often rely on the use of autologous, or a patient’s own, cells and are generally only available for patient treatment at a limited number of specialized medical centers. Sourcing, engineering, expanding and delivering cells patient-by-patient is logistically complex and expensive, resource intensive, and challenging to manufacture as the drug product is often heterogeneous in consistency with batch-to-batch variability. Furthermore, the widespread use of viral vectors to deliver genetic information into the patient’s T cells continues to raise long-term safety concerns. Significant hurdles remain to ensure that autologous cell therapies can be consistently manufactured and reliably delivered at the scale necessary to support broad patient access. While donor-derived allogeneic cell therapies offer some solutions, challenges remain with respect to uniformity of the engineered drug product, limited ability to incorporate multiple functions through engineering, reduced capabilities to scale the manufacture process, and donor-to-donor variability.
We believe iPSCs, which possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body, can be used to overcome key limitations inherent to the manufacture, development and commercialization of today’s cell therapies. We have established a proprietary iPSC product platform and have amassed significant internal expertise in the production of off-the-shelf, multiplexed-engineered, T-cell and NK cell product candidates for therapeutic use. Our proprietary iPSC product platform includes: generating, engineering, isolating and characterizing single-cell iPSC clones; creating, qualifying, and cryopreserving clonal master iPSC lines; differentiating clonal master cell iPSC lines to produce T cells and NK cells at scale; and cryopreserving and storing these T cells and NK cells under conditions that support multi-year stability. Our cell product candidatescan be mass-produced at significant scale in a cost-effective manner, are well-defined and uniform in composition, and can be stored in inventory and delivered off-the-shelf to maximize patient reach and accessibility. Our proprietary iPSC product platform is supported by an intellectual property portfolio of over 600 issued patents and 550 pending patent applications.
We operate a 40,000+ square foot fully integrated Good Manufacturing Practice (GMP) facility for manufacturing of our iPSC-derived CAR T-cell and CAR NK cell product candidates that is intended to support all phases of clinical development as well as initial commercialization. We believe our therapeutic approach is highly differentiated and has the potential to overcome numerous challenges associated with today’s cell therapies, address significant unmet need, and broadly deliver transformative medical benefits for patients.
Our Strategy
Our mission is to bring off-the-shelf cellular immunotherapies with disease-transforming potential initially to patients with autoimmune diseases and cancer. The key pillars of our strategy include:
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Establish therapeutic differentiation with FT819 for the treatment of Systemic Lupus Erythematosus (SLE) with and without lupus nephritis. Autoimmune diseases affect organs throughout the body and are often characterized by the presence of auto-antibodies, which are produced by aberrant B cells and can attack healthy cells and tissues. The chronic and debilitating nature of these diseases results in substantial medical expenses and a low quality of life, creating a significant burden for patients, their families and the health care system. Current treatment options for SLE, with or without lupus nephritis, include corticosteroids, immunosuppressive medications, and biologics; however, these treatments often require long-term use, are associated with life-threatening side effects, and fail to provide adequate disease control.
We believe FT819, our off-the-shelf, iPSC-derived, CD19-targeted CAR T-cell product candidate, designed to balance safety and efficacy, has the potential to eliminate disease-causing B cells, enable reconstitution of a healthy immune cell compartment, and induce complete and durable responses in B cell-mediated autoimmune diseases. This approach is supported by a ground-breaking academic clinical study published in Nature Medicine in September 2022, in which patients with SLE received intensive conditioning chemotherapy, consisting of multi-day dosing of cyclophosphamide (Cy) and fludarabine (Flu), followed by an investigational autologous CD19-targeted CAR T-cell therapy. The treatment induced rapid B-cell depletion and elimination of auto-antibody production, leading to clinical remission. Recovery of a naïve B-cell compartment occurred several months after treatment, enabling an “immune rebalance” without signs of humoral autoimmunity for the first five patients.
We are currently conducting a multi-center, Phase 1 clinical trial of FT819 for the treatment of moderate-to-severe SLE, with treatment sites in the United States, United Kingdom (U.K.), and European Union (EU). In contrast to treatment with autologous CAR T-cell therapy, patients enrolled in our Phase 1 clinical study are not required to undergo apheresis, are treated with a less intense flu-free conditioning regimen and receive FT819 on-demand without discontinuing their current treatment, which increases patient accessibility and reach. In addition, our Phase 1 clinical trial includes the opportunity for patients to receive FT819 as an add-on to current maintenance therapy in the absence of conditioning chemotherapy, an approach that combines the potency of a CAR T cell with the availability and accessibility of traditional medicine.
In April 2025, we were granted regenerative medicine advanced therapy (RMAT) designation by the FDA for FT819 to treat moderate-to-severe SLE. The RMAT designation was established under the 21st Century Cures Act to expedite the
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development and review of regenerative medicine therapies for serious or life-threatening diseases or conditions. Our RMAT application included initial clinical safety and activity data from patients treated with FT819 in its ongoing multi-center, Phase 1 clinical trial. We plan to pursue differentiated treatment approaches, including treatment of patients in community settings without hospitalization, and novel registrational strategies with the FDA under its RMAT designation. We received authorization from the Medicines and Healthcare products Regulatory Agency (MHRA) in August 2025 and from the European Medicines Agency (EMA) in October 2025 to initiate clinical trials of FT819 in the U.K. and EU, respectively. We plan to continue to expand our clinical investigation outside of the United States in 2026. We believe our therapeutic approach with FT819 and its accessibility is highly differentiated and may offer a more convenient and favorable experience for patients, including outpatient treatment. We intend to continue the regulatory development of FT819 in SLE, with the submission of a Phase 2 registration-enabling clinical protocol in lupus nephritis and subsequently investigate the potential of FT819 as a treatment for extrarenal lupus in a second trial, with the ultimate goal to advance to biologics license application (BLA) filing over the course of the next several years.
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Expand the clinical footprint of our iPSC product platform within the field of autoimmunity, including initiating clinical investigations in additional B cell-mediated autoimmune diseases. The prevalence of autoimmune diseases is both widespread and growing, with over 80 known autoimmune diseases affecting up to 8% of the U.S. population. Since the targeting and deep depletion of B cells may be a key mechanism of action to enable an immune rebalance and durable clinical responses across autoimmune diseases, we plan to expand our clinical investigation of FT819 within the field of autoimmunity. In December 2024, we reached agreement with the FDA to allow for the clinical investigation of additional B cell-mediated autoimmune diseases under our current Phase 1 clinical trial of FT819. In February 2025, we amended our clinical protocol to include three additional diseases: anti-neutrophil cytoplasmic antibody-associated vasculitis (AAV), idiopathic inflammatory myositis (IIM), and systemic sclerosis (SSc). With completion of the dose-escalation cohort for the second dose level (900 million cells) in SLE, we have initiated dose-expansion cohorts in SSc, AAV and IIM. In October 2025, we treated our first SSc patient and are pursuing the treatment of additional patients. We believe the independent assessment of multiple B cell-mediated autoimmune diseases under one Phase 1 basket study enables the most cost-effective and efficient pathway for broad clinical development.
In October 2024, a new investigational new drug (IND) application was allowed by the FDA to initiate clinical development of FT522, our off-the-shelf, CD19-targeted CAR NK cell product candidate, for the treatment of certain B cell-mediated autoimmune diseases.
We believe there is a significant opportunity to combine, in the absence of conditioning chemotherapy, FT522 with CD20 or CD38 targeted antibodies to drive deeper B-cell depletion, and achieve higher rates of clinical remissions, for the treatment of autoimmune diseases. FT522 incorporates a proprietary high-affinity, non-cleavable CD16 (hnCD16) Fc receptor, which has two differentiated features designed to synergize with monoclonal antibody therapy and augment antibody-dependent cellular cytotoxicity (ADCC): a high-affinity homozygous 158V variant to promote binding to the Fc domain of IgG antibodies, and a modification to block its cleavage and down-regulation upon receptor activation. In addition, FT522 is our first product candidate that incorporates our novel Alloimmune Defense Receptor (ADR) technology, which is designed to reduce or eliminate the need for administration of intense conditioning chemotherapy to patients receiving cellular immunotherapy. These attributes may create therapeutic differentiation for FT522 by enabling a more favorable safety profile, treatment in the community setting, and a broader commercial opportunity. We continue to evaluate opportunities and timelines for the clinical development of FT522 in autoimmune diseases.
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Design and develop off-the-shelf, multiplexed-engineered CAR T-cell immunotherapies that incorporate multiple novel mechanisms of action for the treatment of solid tumors. While autologous CAR T-cell therapies have emerged as highly effective treatments for patients with relapsed / refractory hematologic malignancies, adoption of FDA-approved CAR T-cell therapy has been relatively modest to date due to complex logistics, high cost, and toxicities that necessitate administration only in specialized centers with intensive care units, as compared to more accessible outpatient infusion centers and community hospitals. In addition, successful development of autologous CAR T-cell therapies for the treatment of solid tumors has been hampered by on-target, off-tumor toxicities, inefficient CAR T-cell trafficking to the tumor, and modest efficacy. Today, there are no FDA-approved CAR T-cell therapies for the treatment of solid tumors.
We are currently advancing CAR T-cell product candidates that incorporate multiple novel synthetic controls selectively designed to overcome key mechanisms that limit CAR T-cell safety and efficacy in treating solid tumors. For example, our first multiplexed-engineered CAR T-cell product candidate for the treatment of solid tumors is FT825, which is currently undergoing Phase 1 clinical investigation in collaboration with Ono Pharmaceutical. FT825 incorporates seven novel synthetic controls of cell function including a novel binding domain targeting human epidermal growth factor receptor 2 (HER2), which is derived from a cancer-specific monoclonal antibody and has been shown in preclinical studies to overcome on-target, off-tumor toxicities by preferentially recognizing tumor-associated variants of HER2. FT825 also incorporates a novel synthetic CXCR2 receptor to promote effector cell trafficking to the tumor site, a novel
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synthetic TGFβ receptor to resist immunosuppressive signals in the tumor microenvironment, and our proprietary hnCD16 Fc receptor to support targeting of additional cancer antigen when combined with therapeutic antibodies.
As part of our next-generation CAR T-cells program, we have developed FT836, an innovative off-the-shelf CAR T-cell product candidate targeting major histocompatibility complex (MHC) proteins A (MICA) and B (MICB). While the expression of MICA/B cell-surface stress proteins is uniquely detectable across many types of cancer cells with limited expression on healthy tissue, the proteolytic cleavage and shedding of MICA/B is a common mechanism of tumor escape. We have designed FT836 to target a specific domain of MICA/B that is resistant to shedding as a potential pan-tumor targeting strategy. FT836 incorporates a total of 9 edits that in addition to its CAR targeting MICA/B include hnCD16 that enables ADCC when combined with therapeutic monoclonal antibodies, complementing CAR specificity and providing additional antigen / immune cell coverage, and Sword & ShieldTM technology to avoid the need for conditioning chemotherapy. We believe the novel targeting strategy of FT836 coupled with its ability to be combined with standard-of-care treatment regimens, such as therapeutic monoclonal antibodies, can significantly improve patient outcomes in the treatment of solid tumors while also supporting broad patient accessibility.
In a similar manner of targeting disease state in a broad and specific manner, FT839 is our second next-generation CAR T-cell program, designed to overcome the accessibility and safety limitations of autologous CAR T-cell platforms while addressing the need to broadly target the complex immune drivers of autoimmune diseases and hematological malignancies. FT839 expresses two distinct CARs targeting the B-cell lineage marker CD19 and the immune activation marker CD38, which is often found on aberrant T, NK and B cells. FT839 incorporates a total of 13 edits that include CD3 Fusion Receptor which provides additional antigen / immune cell subset targeting in combination with T cell engagers, hnCD16 that enables ADCC when combined with therapeutic monoclonal antibodies to complement CAR specificity to provide additional antigen / immune cell coverage, and Sword & Shield technology to avoid the need for conditioning chemotherapy. We believe there is significant opportunity to develop off-the-shelf CAR T-cell therapies that incorporate multiple therapeutic mechanisms of action and can be combined with standard-of-care treatment regimens to significantly improve patient outcomes in the treatment of many diseases.
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Discover and incorporate novel synthetic controls of cell function into our iPSC product platform that significantly improve the patient experience, expand patient reach, and enhance therapeutic differentiation. Conditioning chemotherapy is one of the most significant barriers that limit patient reach and disease application of cellular immunotherapy. Conditioning chemotherapy often results in severe blood cell deficiencies and related toxicities, requiring administration in large tertiary care facilities. We are exploring the integration of novel synthetic controls of cell function into our iPSC product platform that may enable our off-the-shelf, iPSC-derived cell product candidates to be administered without intense conditioning chemotherapy and in the community setting on an outpatient basis.
For example, our next-generation CAR T-cell programs, FT836 and FT839, incorporate the novel Alloimmune Defense Receptor (ADR) technology, which is designed to reduce or eliminate the need for administration of intense conditioning chemotherapy to patients receiving cellular immunotherapy. ADR targets the cell surface receptor 4-1BB (CD137), a member of the tumor necrosis factor receptor superfamily that is upregulated on activated CD4+, CD8+, and regulatory T-cells as well as activated NK cells of the host immune system. The ADR receptor is designed to (a) selectively recognize and destroy alloreactive host immune cells, (b) maintain other components of the host immune system to preserve hematopoietic cell function, and (c) activate the product candidates to enhance their potency and persistence. Published preclinical studies have shown that ADR-armed allogeneic cells are protected from both T- and NK-cell mediated rejection, providing proof-of-concept that ADR-armed allogeneic cells can persist and function in immunocompetent patients.
In addition to our ADR technology, we have also begun to incorporate the knock-out of CD58 into our iPSC product platform, which we collectively refer to as our Sword & Shield technology, to both target and evade host alloreactive immune cells. In preclinical studies, we have shown that iPSC-derived Sword & Shield CAR T cells demonstrated functional persistence and durable anti-tumor activity, indicating the potential of Sword & Shield CAR T cells to thrive without administration of conditioning chemotherapy. We believe that the use of a more tolerable treatment paradigm for cellular immunotherapies may significantly improve the patient experience, expand patient reach, and enhance our therapeutic differentiation.
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Selectively share our proprietary iPSC product platform with strategic partners. The research, development and commercialization of cell therapies for the treatment of human diseases is rapidly expanding. We believe we are well positioned to form partnerships with third parties seeking to develop and commercialize iPSC-derived cell therapies for the treatment of human diseases. For example, we are collaborating with Ono Pharmaceutical to research and develop off-the-shelf, multiplexed-engineered, iPSC-derived CAR T-cell and CAR NK cell product candidates for the treatment of solid tumors. We will continue to seek partnerships with companies and institutions for the research, development and commercialization of iPSC-derived cell therapies for the treatment of human diseases.
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Our Off-the-shelf, Multiplexed-engineered, iPSC-derived Cellular Immunotherapy Pipeline
FT819: CAR T-cell Program
FT819 is our first iPSC-derived CAR T-cell product candidate and, to our knowledge, is the first-ever iPSC-derived CAR T-cell product candidate to undergo clinical investigation in the world. FT819 incorporates two novel synthetic controls of cell function that balance CAR safety and activity: a novel 1XX CAR construct inserted directly into the T-cell receptor (TCR) alpha chain (TRAC) locus that targets CD19; and the complete disruption of TCR expression for the prevention of graft-versus-host disease (GvHD), a potentially life-threatening complication associated with donor-derived T-cell therapy. Together, these features of FT819 are designed to induce antigen-specific cytotoxicity, enhance CAR activity through TRAC-regulated expression, mitigate risk of GvHD and reduce the potential risk for CAR-driven toxicity.
Published preclinical data have shown that directing a CD19-specific CAR to the TRAC locus resulted in uniform CAR expression in human peripheral blood T cells, enhanced T-cell potency, and delayed effector T-cell differentiation and exhaustion, and that CAR T-cells utilizing a novel 1XX CAR signaling domain exhibited enhanced antitumor activity, persistence and long-term cytotoxicity as well as a decrease in T-cell exhaustion. In preclinical studies, we have shown that iPSC-derived TCR-CAR+ CAR T cells targeting CD19:
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displayed antigen-specific anti-tumor potency in vitro, including cytokine release and targeted cellular cytotoxicity, comparable to peripheral blood CD19-specific CAR T cells;
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did not respond or proliferate against HLA-mismatched (CD19 negative) peripheral blood mononuclear cells as targets in a mixed lymphocyte reaction, indicating the risk of GvHD is alleviated;
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controlled tumor progression in vivo comparable to peripheral blood CD19-specific CAR T cells in a preclinical xenograft model of acute lymphoblastic leukemia; and
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enhanced 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.
B Cell-mediated Autoimmune Diseases
We assessed the safety, pharmacokinetics, and activity of FT819 in patients with relapsed / refractory B-cell malignancies (BCM) in a Phase 1 study (NCT04629729), and we believe the clinical and translational data from the Phase 1 study demonstrated a preferable tolerability profile as well as proof-of-concept for the treatment of patients with autoimmune diseases, where multiple mechanisms implicated in generating an immune rebalance in patients with B cell-mediated autoimmune diseases were observed:
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43 heavily pre-treated patients (B-cell lymphoma, n=25; chronic lymphocytic leukemia, n=12; and acute lymphocytic leukemia, n=6) were treated with conditioning chemotherapy and a single dose of FT819 across five dose levels ranging from 90 million cells to 1 billion cells. The safety and tolerability profile of FT819 was favorable, with no dose-limiting toxicities (DLTs), no events of any grade of immune effector-cell associated neurotoxicity syndrome (ICANS) or GvHD, and low incidence (14%) of only low-grade cytokine release syndrome (CRS). There were no study discontinuations or deaths related to FT819.
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Blood samples taken from 23 patients treated for relapsed / refractory B-cell lymphoma (BCL) showed rapid and deep CD19+ B-cell depletion, with sustained suppression of B cells, in the periphery during the initial 30-day period following administration of conditioning chemotherapy and FT819;
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Patient case studies demonstrating secondary and tertiary tissue trafficking, infiltration, and activity of FT819, with complete elimination of CD19+ cells in tissue;
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Patient case studies of plasma cell depletion and B-cell reconstitution showing recovery of naïve and immature phenotypes, with little to no recovery of activated memory B cells or plasmablasts; and
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Patient case studies demonstrating the capacity of FT819 to induce rapid, deep, and sustained B-cell depletion without the use of fludarabine as a conditioning agent.
We are currently conducting a multi-center, Phase 1 clinical trial to evaluate the safety, pharmacokinetics, and anti-B cell activity of FT819 in patients with moderate to severe SLE, including those with active lupus nephritis (LN) or active extrarenal lupus (NCT06308978). The Phase 1 autoimmunity study consists of two cohorts consisting of (i) Regimen A, where FT819 is co-administered with a fludarabine (flu)-free conditioning regimen, consisting of either cyclophosphamide alone or bendamustine alone or (ii) Regimen B, where FT819 is administered in the absence of conditioning to patients on standard-of-care maintenance therapy (Conditioning-free Regimen). In February 2024, we were awarded $7.9 million from the California Institute for Regenerative Medicine (CIRM) to support the clinical investigation of FT819 for the treatment of moderate to severe SLE.
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As of a November 25, 2025 data cutoff date, 12 SLE patients were treated at 5 enrolling clinical sites, with 14 clinical sites activated in total (11 in the United States and 3 in the U.K.). Baseline characteristics were consistent with a high disease burden patient population:
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median SLE duration was 8.7 years, median 7 prior therapies;
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median Systemic Lupus Erythematosus Disease Activity Index 2000 (SLEDAI-2K) score was 14 (range 8-20);
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mean Physician Global Assessment (PGA) score 2.3±0.4; and
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mean Functional Assessment of Chronic Illness Therapy Fatigue (FACIT-Fatigue) score 23±13.
As of an October 22, 2025 data cutoff date, 10 treated SLE patients had ≥ 1 month follow up, with 6 of the 10 patients having active lupus nephritis. Preliminary data in Regimen A (with patients receiving a single FT819 dose after pretreatment with either a single dose of cyclophosphamide or two doses of bendamustine) showed mean SLEDAI-2K scores across both dose levels (DL1, 360 million cells; DL2, 900 million cells) decreased progressively from baseline:
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DL1 SLEDAI-2K score decreased from a mean of 15.2 (n=5) at baseline to a mean of 10.7 at month 3 (n=2), and to a mean of 6 at month 6 (n=2), representing mean percent drops of 50% and 70%, respectively; and
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DL2 SLEDAI-2K score decreased from a mean of 14.3 (n=3) at baseline to a mean of 6 at month 3 (n=2) and to 4 at month 6 (n=1), representing mean percent drops of 65% and 78%, respectively.
Translational data from patients treated in Regimen A demonstrated that FT819 elicited rapid and deep depletion of B cells and promoted immune remodeling resulting in the repopulation of naïve B cell subsets (see below). The data further suggests that dose level 2 may support a longer nadir of B cell depletion and that FT819 has the capacity to traffic to secondary and tertiary tissues, where pathology often resides, and to eliminate CD19+ B cells.
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As of an October 22, 2025 data cutoff date, clinical SLEDAI-2K (excluding anti-dsDNA and complement) of 0 was achieved in 5 out of 10 patients, two of whom had resumed an immunosuppressive agent that had previously failed to achieve a clinical SLEDAI-2K of 0 prior to FT819. Two lupus nephritis patients had greater than 3-month follow up, with both achieving complete renal response (CRR) at 2 months and 6 months, respectively. FACIT-fatigue scores improved meaningfully for all patients who had more than one assessment. B-cell depletion was observed, with reconstitution towards predominately naïve cells within the first 3 months. There were no observed dose limiting toxicities, and no Grade >2 CRS, ICANS, or GvHD were reported. All patients were treated with FT819 that was available on-demand.
In addition to Regimen A, where FT819 is co-administered with a less-intensive fludarabine (flu)-free conditioning regimen, we are also enrolling patients in Regimen B, where FT819 is administered in the absence of conditioning to patients on standard-of-care maintenance therapy (Conditioning-free Regimen). While reducing the conditioning chemotherapy regimen in Regimen A represents a significant advancement in the treatment of autoimmune patients with CAR T cells, we believe patient accessibility to and demand for CAR T cells will be further enhanced with the complete elimination of conditioning chemotherapy. As of the October 22, 2025 data cutoff date, two patients were treated in Regimen B at dose level 1 of single dose of 360 million cells. As depicted in the figure below, preliminary data showed FT819 as add-on to maintenance therapy has the potential to support improvement in disease activity, independent of conditioning chemotherapy, while continuing to show a tolerable safety profile. Following the initial positive observations, we are continuing to pursue Regimen B by completing dose level 1, escalating to dose level 2 of 900 million cells and expanding treatment to Regimen D, where FT819 is dosed twice within the treatment cycle on Day 1 and 15. Regimens B and D are also being planned to be applied to other autoimmune diseases in the Phase 1 trial. We believe the safety, activity and availability profile of FT819 has the potential to provide a differentiated therapy, combining the potency of a CAR T cell with the availability of traditional biologics.
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The multi-center, Phase 1 clinical trial of FT819 (NCT06308978) also includes systemic sclerosis (SSc), antineutrophil cytoplasmic antibody-associated vasculitis (AAV), and idiopathic inflammatory myositis (IIM). In the U.S. the prevalence of SSc is greater than 85,000 patients with significant unmet medical need. Currently, there are no existing cures or single disease-modifying treatments to stop or reverse the overall progression of SSc disease. In October 2025, we treated our first SSc patient with FT819. The first patient, a 31-year-old woman diagnosed with SSc six years ago who has refractory disease, despite having been treated with multiple standard-of-care therapies, received fludarabine-free conditioning followed by a single dose of FT819 at 900 million cells. The patient was discharged after a three-day hospital stay without any notable adverse events. Enrollment is now ongoing in dose-expansion cohorts in SSc, AAV and IIM.
FT825: CAR T-cell Program
FT825 is our first iPSC-derived CAR T-cell product candidate for the treatment of solid tumors being developed in collaboration with Ono Pharmaceutical. The use of autologous CAR T-cell therapies for the treatment of solid tumors has been hampered by tumor-associated antigen heterogeneity, inefficient CAR T-cell trafficking to the tumor, immunosuppression inherent to the tumor microenvironment, and differentiating tumor-associated antigen expression between tumor and normal tissue. To date, there are no FDA-approved CAR T-cell therapies for the treatment of solid tumors. FT825 is specifically designed to overcome these challenges in treating solid tumors, and incorporates seven novel synthetic controls of cell function: a 1XX CAR construct inserted directly into the TRAC locus that is armed with a novel human epidermal growth factor receptor 2 (HER2) binding domain designed to preferentially target tumor cells; a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to prevent its down-regulation and to enhance antibody-dependent cellular cytotoxicity (ADCC); a synthetic IL-7/IL-7 receptor fusion (IL-7RF), a potent cytokine complex that is intended to promote T-cell stemness; a synthetic CXCR2 receptor to promote cell trafficking; a synthetic TGFβ receptor to redirect immunosuppressive signals in the tumor microenvironment; the complete elimination of CD38 expression to promote persistence and function in high oxidative stress environments; and the complete disruption of TCR expression for the prevention of GvHD.
While HER2-directed therapies, such as trastuzumab (Herceptin) and trastuzumab deruxtecan (Enhertu), are effective in treating HER2-positive cancers, widespread HER2 expression in normal epithelial tissue can lead to significant on-target, off-tumor toxicities. In our recent publication we demonstrated FT825’s novel HER2 binding domain exhibiting robust, dose-dependent cytolytic activity in vitro against both HER2-high and HER2-low cell lines from multiple tumor types, and showed a highly selective and differentiated targeting profile in vitro against HER2-expressing cancer cell lines versus healthy tissue in comparison to other HER2-directed agents such as trastuzumab (see figure below, Figure 2 from publication DOI: 10.1016/j.stem.2025.05.007).
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We believe the cancer selectivity of FT825’s novel HER2 binding domain is attributable to its derivation from a cancer-specific monoclonal antibody H2CasMab-2, which has been shown to differentially and preferentially recognize both locally misfolded HER2
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and p95 truncation variants of HER2. FT825 also exhibited enhanced trafficking and resistance to TGFβ-induced suppression in vitro. In addition to its CAR-mediated anti-tumor activity against HER2, co-activation of the product candidate’s hnCD16 Fc receptor through combination with monoclonal antibody therapy showed enhanced anti-tumor activity (see figure below, Figure 5 from publication DOI: 10.1016/j.stem.2025.05.007).
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In January 2024, we initiated a multi-center, Phase 1 clinical trial of FT825 for the treatment of advanced solid tumors (NCT06241456) alongside our collaborator Ono Pharmaceutical (see “Our Partnership with Ono Pharmaceutical”). The Phase 1 study is designed to assess the safety, tolerability, and pharmacokinetics, as well as anti-tumor activity by overall response rate, duration of response and disease control rate, of a single dose of FT825 as monotherapy and in combination with monoclonal antibody therapy. Enrollment in the multi-center, Phase 1 study of FT825 for the treatment of advanced solid tumors is currently ongoing at the third dose level of 900 million cells as monotherapy and in combination with epidermal growth factor receptor (EGFR)-targeted monoclonal antibody therapy.
FT836: CAR T-cell Program
FT836 is our multiplexed-engineered CAR T-cell product candidate targeting MHC proteins MICA and MICB. The expression of MICA/B cell-surface proteins is induced by cellular stress or malignant transformation, and is detectable across many types of cancer cells with limited expression on healthy tissue. MICA/B targeting is emerging as a novel cancer-specific strategy to attack a wide range of solid tumors, however, proteolytic cleavage and shedding of MICA/B at the membrane-proximal α3 domain is a common mechanism of tumor escape. FT836 is designed to uniquely target and bind the α3 domain, which has been shown to stabilize MICA/B expression and induce robust cytolytic killing of tumor cells.
The novel suite of synthetic controls incorporated into FT836 is intended to address critical challenges that have limited CAR T-cell safety and efficacy in treating solid tumors including on-target, off-tumor toxicity, effector cell suppression in the tumor microenvironment, tumor heterogeneity, and limited functional persistence. At the Society for Immunotherapy of Cancer 40th Annual Meeting (SITC) held in November 2025, we presented preclinical data showing FT836 exhibited potent and durable CAR-dependent antigen-driven proliferation with robust activity across diverse solid tumors (see below Figure 3 from presentation) and that FT836 has the potential to be combined with Paclitaxel chemotherapy to induce MICA/B surface expression for enhanced target recognition and additive antitumor activity (see below Figure 5 from presentation). In addition, we presented immunohistochemistry analysis of MICA/B expression to show biopsy samples from patients from different cancers expressed MICA/B throughout the tumor, including in colorectal cancer.
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FT836 is also our first product candidate to incorporate our novel Sword & Shieldtechnology, which utilizes our ADR technology alongside CD58KO, to both target and evade host alloreactive immune cells. In preclinical studies presented at SITC, iPSC-derived Sword & ShieldCAR T cells demonstrated functional persistence and durable anti-tumor activity in vitro and in vivo that was uniquely maintained upon supraphysiological challenge with alloreactive T cells, indicating the potential of Sword & Shield CAR T cells to thrive without administration of conditioning chemotherapy to deplete host immune cells (see below Figure 1 and Figure 2 from presentation).
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In July 2025, the FDA allowed our IND to initiate Phase 1 clinical investigation of FT836 for the treatment of solid tumors (NCT07216105). Treatment of solid tumors with FT836 as an investigational off-the-shelf CAR T-cell therapy without the need for conditioning chemotherapy is a new paradigm in CAR T cell therapy. The Phase 1 study is designed to assess the safety and activity of FT836 without administration of conditioning chemotherapy in combination with standard-of-care therapies including cetuximab, trastuzumab and paclitaxel for the treatment of advanced solid tumors. The protocol allows for administration with a shortened hospitalization requirement of 24 hours for the Day 1 treatment and outpatient for the second dose at Day 15 and can be re-dosed following inadequate response or relapse. In November 2025, the first patient, a 47-year-old male with stage IV colorectal cancer (CRC) with five prior lines of systemic therapy, was treated with FT836 at 300 million cells in the cetuximab combination arm without any conditioning chemotherapy. The patient was discharged after a one-day hospital stay and treated with a second dose of FT836 at 300 million cells on Day 15 of the treatment cycle as outpatient. Enrollment in the FT836 Phase 1 trial is ongoing, and we plan to provide an update on the patients treated in the second half of 2026. The translational development of FT836 was supported by a $4 million award from CIRM.
FT839: CAR T-cell Program
We are applying our iPSC product platform to develop our second next-generation CAR T-cell product candidate with the potential to target multiple aberrant cell types while evading recognition by alloreactive immune cells. FT839 is our first multi-antigen dual-CAR T-cell product candidate that is designed to express two unique CARs: a first CAR targeting the B-cell lineage marker CD19 and the second CAR targeting the immune activation marker CD38, which is often found on aberrant T, NK and B cells. At the 2025 American Society of Hematology (ASH) Annual Meeting, we presented preclinical data demonstrating that FT839 with its dual-CAR mechanism, specifically eliminated a variety of pathogenic immune cell types without requiring conditioning chemotherapy to treat complex autoimmune diseases. In addition, dual-CAR T cells showed enhanced elimination of CD19+CD38+ cells in vivo compared to single CAR controls (see below Figure 4 of presentation). In addition, FT839 exhibited functional persistence in allogeneic settings in the absence of conditioning chemotherapy and showed enhanced capacity for selective elimination of aberrant immune subsets in autoimmune patient derived peripheral blood mononuclear cells (PBMCs) (see below Figure 5 of presentation). We
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are completing IND-enabling activities in 2026 to support the initial clinical investigation of FT839 for the treatment of cancer and autoimmune diseases.
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FT522: CAR NK Cell Program
FT522 is our first iPSC-derived CAR NK cell product candidate that incorporates our novel Alloimmune Defense Receptor (ADR) technology, which is designed to reduce or eliminate the need for administration of intense conditioning chemotherapy to patients receiving cellular immunotherapy. While approved autologous CAR T-cell therapies have demonstrated compelling efficacy in treating patients with relapsed / refractory hematologic malignancies, several key challenges limit their adoption and patient reach including the need to co-administer conditioning chemotherapy to patients. Conditioning chemotherapy induces toxicities, necessitates treatment at specialized medical centers with intensive care units, and prevents effective combination with standard-of-care treatment regimens widely used in the community setting. Its use has also been associated with treatment-emergent secondary malignancies, such as myelodysplastic syndrome.
FT522 incorporates a novel synthetic ADR targeting the cell surface receptor 4-1BB (CD137), a member of the tumor necrosis factor receptor superfamily that is upregulated on activated CD4+, CD8+, and regulatory T cells, as well as activated NK cells, of the host immune system. Four additional synthetic controls of cell function incorporated into FT522 include: a proprietary CAR that targets CD19; a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor that has been modified to prevent its down-regulation and to enhance ADCC in combination with a monoclonal antibody; an IL-15/IL-15 receptor fusion (IL-15RF), a potent cytokine complex that is intended to augment NK cell activity; and the complete elimination of CD38 expression to promote persistence and function in high oxidative stress environments. These features of FT522 are designed to reduce or eliminate the need for administration of intense conditioning chemotherapy to patients, enable dual-antigen targeting of antigens expressed on B cells through combination with monoclonal antibody therapy, and extend the functional persistence of FT522.
In preclinical studies, we showed that ADR-armed CAR NK cells selectively targeted and eliminated alloreactive immune cells in an in vitro co-culture assay with allogeneic PBMCs; targeted and eliminated activated T-regulatory cells, overcoming a major suppressive mechanism associated with poor anti-tumor activity; and were potentiated through 4-1BB engagement, promoting NK cell expansion and persistence. In addition, in a disseminated Nalm6 leukemia model comprised of alloreactive T cells and CD19+ tumor cells resistant to T-cell killing (MHC class I-null), ADR-armed, CD19-targeted, iPSC-derived CAR NK cells exhibited uncompromised effector function in vivo compared to ADR-null, CD19-targeted, iPSC-derived CAR NK cells, suggesting that ADR-armed NK cells functionally persist, proliferate, and kill tumor cells while resisting rejection by alloreactive T cells. These preclinical data suggest that FT522 has the potential to robustly deplete CD19+ B cells, evade host immune cell rejection, and drive clinical responses without administration of intense conditioning chemotherapy to patients.
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B-cell Lymphoma
We have completed our multi-center, Phase 1 clinical trial of FT522 to assess its safety, pharmacokinetics, and activity in patients with relapsed / refractory BCL (NCT05950334). The Phase 1 study included two regimens: Regimen A, or the “conditioning” arm, which consisted of three days of conditioning chemotherapy; one dose of rituximab; and three doses of FT522; and Regimen B, or the “no conditioning” arm, which consisted of one dose of rituximab and three doses of FT522 without conditioning chemotherapy. At the 18th International Conference on Malignant Lymphoma held in June 2025, we presented interim safety and efficacy data on FT522 from the Phase 1 clinical trial in relapsed / refractory BCL. As depicted in the presentation, there were no reported observations of CRS or ICANS, and FT522 was shown to be detected in the periphery of patients who were treated with conditioning chemotherapy as well in patients who did not receive chemotherapy, supporting the activity of ADR to support product persistence without the need for conditioning chemotherapy. Additionally, overall responses were presented to demonstrate activity in relapsed/refractory BCL (see below, Figure 3 from the presentation).
With enrollment in the Phase 1 study of FT522 for the treatment of relapsed / refractory BCL completed, we are evaluating opportunities for further clinical development of FT522 in autoimmune indications.
B Cell-mediated Autoimmune Diseases
In a preclinical in vitro re-challenge assay using PBMCs from unmatched SLE donors, FT522 drove rapid and deep CD19+ B cell depletion, eliminated alloreactive T cells and maintained functional persistence, indicating that FT522 has the potential to function effectively in the presence of an unmatched host immune system. In addition, in a preclinical in vivo biodistribution study, FT522 showed dose-dependent trafficking, infiltration, and residency in secondary and tertiary tissues without cytokine support, which has the potential to support deep responses in autoimmune disease.
Our IND application to assess the safety, pharmacokinetics, and activity of FT522 across a basket of B cell-mediated autoimmune diseases including anti-neutrophilic cytoplasmic AAV, IMM, SSc, and SLE has been allowed by the FDA. The Phase 1 clinical protocol permits treatment of patients with up to four weekly doses of FT522, without administration of conditioning chemotherapy, as an add-on to rituximab induction therapy (Regimen A) and as an add-on to maintenance therapy in combination with rituximab (Regimen B). We are currently evaluating opportunities and timelines for the clinical development of FT522 in autoimmune diseases.
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Our Partnership with Ono Pharmaceutical
Under a collaboration and option agreement with Ono Pharmaceutical Co. Ltd. (Ono) entered into in September 2018 and amended in June 2022, August 2024, and June 2025 (the Ono Agreement), we are conducting research and preclinical development of iPSC-derived CAR T-cell and CAR NK cell product candidates for the treatment of solid tumors.
In November 2022, we announced that Ono had exercised its preclinical option to FT825 / ONO-8250, an off-the-shelf, multiplexed-engineered, iPSC-derived CAR T-cell product candidate targeting HER2-expressing solid tumors (also referred to as Candidate 2 below), and that we exercised our preclinical option to co-develop and co-commercialize FT825 / ONO-8250 in the United States and Europe under a joint arrangement with Ono. As a result, we received an option exercise fee of $12.5 million from Ono. In January 2024, we announced the initiation of enrollment of a Phase 1 clinical trial of FT825 / ONO-8250 for the treatment of advanced solid tumors.
The companies are also currently conducting preclinical development of a second iPSC-derived CAR-targeted effector cell product candidate for the treatment of solid tumors (referred to as Candidate 3 below) under the Ono Agreement.
Under the original Ono Agreement entered into in September 2018, we and Ono intended to research and preclinically develop two iPSC-derived CAR T-cell product candidates, one of which was designated to target an antigen expressed on certain lymphoblastic leukemias (Candidate 1) and the second of which was designated to target an antigen expressed on certain solid tumors (Candidate 2) (each a Candidate and, collectively, the Candidates). We granted to Ono, during a specified period of time, a preclinical 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 retained 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. We maintained worldwide rights of manufacture for each Candidate. For each Candidate, the preclinical option expired upon the earliest of: (a) the achievement of the pre-defined preclinical milestone under the joint development plan; (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. Ono paid us an upfront, non-refundable and non-creditable payment of $10.0 million in connection with entering into the Ono Agreement. Additionally, as consideration for our conduct of research and preclinical development under a joint development plan, Ono agreed to pay us annual research and development fees set forth in the annual budget included in the joint development plan, which fees were estimated to be $20.0 million in aggregate over the course of the joint development plan.
In December 2020, we entered into a letter agreement with Ono pursuant to which Ono delivered to us proprietary antigen binding domains targeting an antigen expressed on certain solid tumors for incorporation into Candidate 2 and paid us a milestone fee of $10.0 million for further research and preclinical development of Candidate 2. In addition, Ono terminated all further research and preclinical development with respect to Candidate 1, and we retained all rights to research, develop and commercialize Candidate 1 throughout the world without any obligation to Ono.
In June 2022, we entered into an amendment with Ono to the Ono Agreement (the 2022 Ono Amendment). Pursuant to the 2022 Ono Amendment, the companies agreed to designate an additional antigen expressed on certain solid tumors for research and preclinical development, and Ono agreed to contribute to us proprietary antigen binding domains targeting such additional solid tumor antigen (Candidate 3). In addition, for both Candidate 2 and Candidate 3, the companies expanded the scope of the collaboration to include the research and preclinical development of iPSC-derived CAR NK cell product candidates (in addition to iPSC-derived CAR T-cell product candidates) targeting the designated solid tumor antigens. Similar to Candidate 2, we granted to Ono, during a specified period of time, a preclinical option (Candidate 3 Development Option) to obtain an exclusive license under certain intellectual property rights, subject to payment of an option exercise fee to us by Ono, to further develop and commercialize Candidate 3 in all territories of the world, where we retained rights to co-develop and co-commercialize Candidate 3 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. We maintained worldwide rights of manufacture for Candidate 3. Ono agreed to pay us annual research and development fees set forth in the annual budget included in the joint development plan for Candidate 3.
In November 2022, Ono exercised its option to obtain a license to develop and commercialize Candidate 2 (the Candidate 2 Development Option). We exercised our option (the CDCC Option) to co-develop and co-commercialize Candidate 2 in the United States and Europe. As a result, we received an option exercise payment of $12.5 million. We and Ono are proceeding under a joint development plan for the ongoing development of Candidate 2.
In November 2023, we entered into an amendment with Ono to the Ono Agreement (the 2023 Ono Amendment). Under the 2023 Ono Amendment, aggregate estimated research and preclinical development fees payable by Ono to us for Candidate 3 were increased by approximately $1.4 million, for a total estimated $30.7 million in aggregate research and preclinical development fees over the course of the joint research plan.
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In August 2024, we entered into an amendment with Ono to the Ono Agreement (the 2024 Ono Amendment). Under the 2024 Ono Amendment, the preclinical option period for Candidate 3 was extended through June 2025 and the aggregate estimated research and preclinical development fees payable by Ono to us for Candidate 3 were increased by approximately $7.3 million, for a total estimated $38.0 million in aggregate research and preclinical development fees over the course of the joint research plan.
In June 2025, we entered into an amendment with Ono to the Ono Agreement (the 2025 Ono Amendment, and collectively with the 2022 Ono Amendment, 2023 Ono Amendment, and 2024 Ono Amendment, the Ono Amendments). Under the 2025 Ono Amendment, aggregate estimated research and preclinical development fees payable by Ono to us for Candidate 3 were increased by approximately $6.5 million, for a total estimated $44.5 million in aggregate research and preclinical development fees over the course of the joint research plan. We will continue to receive committed funding under the joint research plan from Ono through June 2026. The Candidate 3 Development Option expires upon the achievement of the pre-defined preclinical milestone under the joint research plan.
Under the terms of the Ono Agreement (as amended by the Ono Amendments), for Candidate 2 and for Candidate 3 (subject to exercise by Ono of its Candidate 3 Development Option), we are eligible to receive additional payments upon the achievement of certain clinical, regulatory and commercial milestones (the Ono Milestones) with respect to each Candidate in an amount up to $843.0 million in aggregate, 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 the Candidate in the United States and Europe as described above. In addition, in those territories where Ono has exclusive rights of commercialization, we are eligible to receive tiered royalties (Royalties) ranging from the mid-single digits to the low-double digits based on annual net sales by Ono for each Candidate in such territories, with the Royalties subject to certain reductions.
The Ono Agreement will terminate with respect to a Candidate if Ono does not exercise its development option for a Candidate within the option period, or in its entirety if Ono does not exercise any of its development options for the Candidates within their respective option periods. In addition, either party may terminate the Ono Agreement in the event of breach, insolvency or patent challenges by the other party; provided, that Ono may terminate the Ono Agreement in its sole discretion (x) on a Candidate-by-Candidate basis at any time after the second anniversary of the effective date of the Ono Agreement or (y) on a Candidate-by-Candidate or country-by-country basis at any time after the expiration of the development option period, subject to certain limitations. The Ono 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.
Our Intellectual Property
Overview
We seek to protect our product candidates and our cell programming technology through a variety of methods, including seeking and maintaining patents intended to cover our products and compositions, their methods of use and processes for their manufacture, our platform technologies and any other inventions that are commercially important to the development of our business. We seek to obtain domestic and international patent protection and, in addition to filing and prosecuting patent applications in the United States, we typically file counterpart patent applications in additional countries where we believe such foreign filing is likely to be beneficial, including Europe, Japan, Canada, Australia and China. We continually assess and refine our intellectual property strategy in order to best fortify our position, and file additional patent applications when our intellectual property strategy warrants such filings. We also rely on know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position. We have entered into exclusive license agreements with various academic and research institutions to obtain the rights to use certain patents for the development and commercialization of our product candidates.
As of February 19, 2026, our intellectual property portfolio is composed of over 450 issued patents and 120 patent applications that we license from academic and research institutions, and over 600 issued patents or pending patent applications that we own. These patents and patent applications generally provide us with the rights to develop our product candidates in the United States and worldwide. This portfolio covers compositions of programmed cellular immunotherapies, our cell programming approach for enhancing the therapeutic function of cells ex vivo, and our platform for industrial-scale iPSC generation and engineering. We believe that we have a significant intellectual property position and substantial know-how relating to the programming of hematopoietic and immune cells and to the derivation, genetic engineering, and differentiation of iPSCs.
We cannot be sure that patents will be granted with respect to any of our owned or licensed pending patent applications or with respect to any patent applications we may own or license in the future, nor can we be sure that any of our existing patents or any patents we may own or license in the future will be useful in protecting our technology. Please see “Risk Factors—Risks Related to Our Intellectual Property” for additional information on the risks associated with our intellectual property strategy and portfolio.
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Intellectual Property Relating to iPSC Technology and Platform
As of February 19, 2026, we own over 30 patent families directed to programming the fate of somatic cells ex vivo, including patent applications pending in the U.S. and internationally related to our platform for industrial-scale iPSC generation and applications related to differentiation of iPSCs into specialized cells with therapeutic potential. These patent applications cover our proprietary small molecule-enhanced iPSC platform, including novel reprogramming factors and methods of reprogramming to obtain iPSCs. Our intellectual property portfolio also includes gene editing compositions and methods of genetic engineering, as well as methods of directing the fate of cells to obtain homogenous cell populations in the hematopoietic lineage, including CD34+ cells, T-cells and NK cells. Our proprietary intellectual property enables highly efficient iPSC derivation, selection, engineering, and clonal expansion while maintaining genomic stability. Any U.S. patents issued from these patent applications are expected to have statutory expiration dates ranging from 2031 to 2044.
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 compositions used in the reprogramming of mammalian somatic cells to a pluripotent state. The earliest filed patent family in the portfolio expired in November 2024, and the remaining issued patents and any U.S. patents that may issue from these pending patent applications are expected to have statutory expiration dates ranging from 2028 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. This portfolio includes issued U.S. patents (including U.S. Patents 8,044,201 and 8,691,573) that provide composition of matter protection for a class of small molecules, including thiazovivin, that is critical for inducing the generation, and maintaining the pluripotency, of iPSCs, and compositions and methods of using the small molecule. Any issued U.S. patents and any U.S. patents that may issue from patent applications pending in this portfolio are expected to have statutory expiration dates ranging from 2026 to 2031.
We also have exclusively licensed from the J. David Gladstone Institutes (Gladstone) intellectual property covering the generation of iPSCs using CRISPR-mediated gene activation. 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 U.S. patents that may issue from patent applications pending in the U.S. and internationally in this portfolio are expected to have a statutory expiration date in 2038.
We also have exclusive rights to two families of patent applications from the University of Minnesota. As of February 19, 2026, this portfolio includes over 50 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 compositions and methods of enhancing effector cell cytotoxicity by genetically engineering the CD16 Fc receptor in immune cells, including iPSC-derived NK and T cells. The portfolio also includes applications describing methods of increasing NK cell tumor specificity and cytotoxicity by incorporating CARs on NK cells. Any U.S. patents that may issue from patent applications pending in this portfolio are expected to have statutory expiration dates between 2035 and 2038.
We also have exclusively licensed from the Memorial Sloan Kettering Cancer Center (MSKCC) intellectual property covering the production and composition of iPSC-derived T-cells and their use in cellular immunotherapy, and have a license from MSKCC 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 U.S. patents that may issue from patent applications pending in this portfolio are expected to have statutory expiration dates between 2034 and 2038.
In addition, we have licensed exclusive rights from the Max Delbruck Center for Molecular Medicine to intellectual property directed to novel humanized antibody fragments, antigen-binding domains and CAR constructs that uniquely target and specifically bind 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 are expected to have statutory expiration dates between 2033 and 2037.
We have also licensed exclusive rights from the Dana-Farber Cancer Institute (DFCI) to certain intellectual property covering novel antibody fragments that uniquely and specifically bind the alpha-3 domain of MICA/B. We are granted exclusive worldwide rights for use in iPSC-derived cellular therapeutics for the treatment of human disease under the license agreement. Any patents that may issue from patent applications pending in this portfolio are expected to have statutory expiration dates in 2038.
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Additionally, we have licensed exclusive rights from Baylor College of Medicine (Baylor) to intellectual property covering the composition and use of a novel ADR that selectively targets activated T-cells to protect engineered allogeneic cell products expressing the ADR from elimination in the host immune system. Under the license agreement with Baylor, we are granted exclusive worldwide rights to use ADR in the field of iPSC-derived cell products, including T-cells and NK cells derived from iPSCs engineered with ADRs. As of February 19, 2026, the portfolio includes four issued patents and 14 pending applications broadly applicable to making and using ADR-expressing effector cells, including T-cells and NK cells differentiated from iPSCs engineered with ADRs. We expect U.S. patents related to this technology to have statutory expiration dates starting in 2039.
Intellectual Property Relating to CRISPR Engineering
In August 2019, we entered into a license agreement with Inscripta, Inc. Under the license agreement, we obtained a royalty-free, irrevocable license to a patent portfolio covering the composition, production and use of MAD7, a novel gene-editing CRISPR endonuclease from the Eubacterium rectale genome. The intellectual property includes issued patents and pending applications broadly applicable to MAD7 and the editing of mammalian cells. 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. We expect U.S. patents related to this work to have statutory expiration dates starting in 2037.
Intellectual Property Relating to the Programming of Hematopoietic Cells
As of February 19, 2026, we own 17 families of U.S. and foreign patents and pending patent applications covering our cell programming technology and compositions of programmed cellular immunotherapies. This portfolio includes over 150 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 diseases 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. Any U.S. patents within this portfolio that have issued or may yet issue from pending patent applications are expected to have statutory expiration dates between 2032 and 2044.
Our Material Technology License Agreements
The University of Minnesota
In December 2016, we entered into a license agreement with the Regents of the University of Minnesota for rights relating to compositions and methods relating to NK cells, to modifications of cytotoxic receptors naturally expressed on NK cells including the CD16 Fc receptor, and to CARs for expression on NK cells. Under our agreement with the University of Minnesota, we acquired an exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell licensed products in all fields for commercial purposes. The licensed patent rights are described in more detail above under “Intellectual Property Relating to the Programming of Hematopoietic Cells.” The University of Minnesota retains the right to practice the patent rights for research, teaching and educational purposes, including in corporate-sponsored research subject to certain limitations during the initial three years of the license agreement. The University of Minnesota also retains the right to license other academic and non-profit research institutes to practice the patent rights for research, teaching and educational purposes, but not for corporate-sponsored research. Our license is also subject to pre-existing rights of the U.S. government.
Under the terms of the license agreement, we are required to pay the University of Minnesota an annual license maintenance fee during the term of the agreement, and are also required to make payments of up to $4.6 million for development, regulatory and commercial milestones achieved with respect to each of the first three licensed products. If commercial sales of a licensed product commence, we will also be required to pay royalties at percentage rates in the low-single digits on net sales of licensed products. Our royalty payments are subject to reduction for any third-party payments required to be made until a minimum royalty percentage has been reached. In the event that we sublicense the patent rights, the University of Minnesota is also entitled to receive a percentage of the sublicensing income received by us.
Under the license agreement with the University of Minnesota, we are obligated to use commercially reasonable efforts to develop and make commercially available licensed products. In particular, we are required to conduct activities toward specific development milestones of licensed products on an annual basis.
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The license agreement will continue until the abandonment of all patent rights or expiration of the last to expire licensed patent. The University of Minnesota may terminate the agreement if we default in the performance of any of our obligations and fail to cure the default within a specified grace period. The University of Minnesota may also terminate the agreement if we cease to carry out our business or become bankrupt or insolvent. We may terminate the agreement for any reason upon prior written notice to the University of Minnesota and payment of all amounts due to the University of Minnesota through the date of termination.
Memorial Sloan-Kettering Cancer Center (MSKCC)
In May 2018, we entered into an amended and restated license agreement with MSKCC. The agreement amends and restates the exclusive license agreement we entered into with MSKCC 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. 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 MSKCC, 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 iPSC Technology.” For those patent families where our rights are exclusive, MSKCC 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. government.
Under the terms of the amended and restated agreement, we are required to pay MSKCC an annual license maintenance fee during the term of the agreement, and are also required to make payments of up to $12.5 million for development, regulatory and commercial milestones achieved with respect to each licensed product. If commercial sales of a licensed product commence, we will also be required to pay royalties at percentage rates up to the high-single digits on net sales of licensed products. Our royalty payments are subject to reduction for any third-party payments required to be made until a minimum royalty percentage has been reached. In the event that we sublicense the patent rights, MSKCC is also entitled to receive a percentage of the sublicensing income received by us. Additionally, in the event a licensed product achieves a specified clinical milestone, MSKCC is then eligible to receive additional milestone payments, where the amount of such payments owed to MSKCC are contingent upon certain increases in the price of our common stock following the date of achievement of such clinical milestone.
Under the amended and restated agreement with MSKCC, we are obligated to use commercially reasonable efforts to develop and make commercially available licensed products. In particular, we are required to conduct activities and commit a minimum amount of funding toward specific development milestones of licensed products on an annual basis.
The agreement will continue until the abandonment of all patent rights or expiration of the last to expire licensed patent. MSKCC may terminate the agreement if we default in the performance of any of our obligations and fail to cure the default within a specified grace period, if we cease to carry out our business or become bankrupt or insolvent, or if we institute a proceeding to challenge the patent rights. We may terminate the agreement for any reason upon prior written notice to MSKCC.
Max Delbruck Center (MDC)
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 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.
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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
In February 2009, we entered into a license agreement with the Whitehead Institute for Biomedical Research, as amended in October 2009 and September 2010, for rights relating to compositions and methods for reprogramming somatic cells to a less differentiated or pluripotent state. Under our agreement with the Whitehead Institute, we acquired an exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell licensed products in all fields for commercial purposes, excluding the sale or distribution of reagents for basic research use. The licensed patent rights are described in more detail above under “Intellectual Property Relating to iPSC Technology.” The Whitehead Institute retains the right to practice the patent rights for research, teaching and educational purposes, including in corporate-sponsored research under limited circumstances and in some cases only after obtaining our consent. The Whitehead Institute also retains the right to license other academic and non-profit research institutes to practice the patent rights for research, teaching and educational purposes, but not for corporate-sponsored research. Our license is also subject to pre-existing rights of the U.S. government.
Under the terms of the license agreement, we are required to pay the Whitehead Institute an annual license maintenance fee during the term of the agreement, and are also required to make payments of up to $2.3 million for development and regulatory milestones achieved with respect to licensed products. If commercial sales of a licensed product commence, we will also be required to pay royalties at percentage rates in the low-single digits on net sales of licensed products. Our royalty payments are subject to reduction for any third-party payments required to be made until a minimum royalty percentage has been reached. In the event that we sublicense the patent rights, the Whitehead Institute is also entitled to receive a percentage of the sublicensing income received by us.
Under the license agreement with the Whitehead Institute, we are obligated to use commercially reasonable efforts to develop and commercialize licensed products, and to make licensed products or processes reasonably available to the public. In particular, we are required to commit a minimum amount of funding toward the development of a licensed product on an annual basis or conduct activities toward specific development milestones.
The agreement will continue until the abandonment of all patent rights or expiration of the last to expire licensed patent. The Whitehead Institute may terminate the agreement if we default in the performance of any of our obligations and fail to cure the default within a specified grace period, or if we institute a proceeding to challenge the patent rights. The Whitehead Institute may also terminate the agreement if we cease to carry out our business or become bankrupt or insolvent. We may terminate the agreement for any reason upon prior written notice to the Whitehead Institute and payment of all amounts due to the Whitehead Institute through the date of termination.
The Scripps Research Institute
We have entered into various license agreements with The Scripps Research Institute (TSRI) for rights relating to compositions and methods for reprogramming somatic cells, including the use of various small molecule classes and compounds in the reprogramming and maintenance of iPSCs. Under our agreements with TSRI (the TSRI License Agreements), we acquired exclusive royalty-bearing, sublicensable, worldwide licenses to make, use and sell products covered by the licensed patent rights, and to perform licensed processes, in each case, in all fields. The licensed patent rights are described in more detail above under “Intellectual Property Relating to iPSC Technology.” TSRI retains a non-exclusive right to practice and use the patent rights for non-commercial educational and research purposes, and to license other academic and non-profit research institutions to practice the patent rights for internal basic research and education purposes. Under certain of our TSRI License Agreements, other third parties maintain a right to practice the patent rights for their internal use only. Our license is also subject to pre-existing rights of the U.S. government.
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Under the terms of the TSRI License Agreements, we are required to pay to TSRI annual minimum fees during the term of each agreement. Additionally, upon the achievement of specific regulatory and commercial milestones, we are required to make payments to TSRI of up to approximately $1.8 million under each of the TSRI License Agreements. We will also be required to pay TSRI royalties at percentage rates ranging in the low- to mid-single digits on net sales of licensed products. In the event that we sublicense the patent rights, TSRI is also entitled to receive a percentage of the sublicensing income received by us.
Under the TSRI License Agreements, we are obligated to use commercially reasonable efforts to meet the development benchmarks set out in development plans under each of the TSRI License Agreements, or otherwise expend a minimum specified amount per year for product development. TSRI has the right to terminate any TSRI License Agreement if we fail to perform our obligations under the applicable agreement, including failure to meet any development benchmark or to use commercially reasonable efforts and due diligence to develop a licensed product, or if we otherwise breach the agreement, challenge the licensed patent rights, are convicted of a felony involving the development or commercialization of a licensed product or process, or become insolvent. We may terminate any of our TSRI License Agreements by providing ninety days’ written notice to TSRI. Each TSRI License Agreement otherwise terminates upon the termination of royalty obligations under such agreement.
Dana-Farber Cancer Institute (DFCI)
In April 2020, we entered into a license agreement with the DFCI for rights relating to novel antibody fragments that uniquely and specifically bind the alpha-3 domain of MICA/B. Under our license agreement with DFCI, we acquired an exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell products covered by the licensed patent rights in the field of iPSC-derived cellular therapeutics for the treatment of human disease, and a non-exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell products covered by the licensed patent rights in the field of cellular therapeutics for the treatment of human disease. DFCI retains the right to practice and to license to other academic, government and non-profit institutes to practice the patent rights for research, teaching and education purposes, as well as to license third parties to practice the patents rights to make or sell research reagents or other research tools solely for use in research. Our licenses are also subject to pre-existing rights of the U.S. government.
Under the terms of the license agreement, we are required to make minimum annual payments to DFCI throughout the term of the agreement. We also are required to make development, commercialization and sales milestones payments to DFCI of up to $25 million per licensed product. If commercial sales of a licensed product commence, we will pay DFCI royalties at percentage rates ranging in the low single digits on net sales of licensed products in countries where such product is protected by licensed 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, DFCI is also entitled to receive a percentage of the sublicensing income received by us.
Under our agreement with DFCI, we are obligated to use reasonable efforts to develop and bring one or more licensed products to the marketplace through a program of development, production and distribution, including by meeting certain diligence benchmarks with respect to exclusively licensed products.
The agreement will continue until the expiration of the last to expire licensed patent. DFCI may terminate the agreement for cause, including if we default in the performance of any of our obligations and fail to cure the default within a specified grace period, if an officer of ours (or of an affiliate or sublicensee) is convicted of a felony related to the manufacture, use, sale or import of a licensed product, if we cease to carry out our business or become bankrupt or insolvent, and if we institute a proceeding to challenge the patent rights. DFCI may also terminate our exclusive license if we fail to materially comply with our diligence obligations. We may terminate the agreement for any reason in its entirety or on a product-by-product or country-by-country basis upon prior written notice to DFCI and payment of all amounts due to DFCI through the date of termination.
Baylor College of Medicine (Baylor)
In April 2020, we entered into a license agreement with Baylor for rights pertaining to a novel ADR that selectively targets activated T-cells to protect engineered allogeneic effector cells expressing the ADR from elimination in the host immune system. Under our agreement, we obtained an exclusive royalty-bearing, sublicensable, worldwide license to make, use and sell products covered by the licensed patent rights in the field of iPSC-derived cell products, including T-cells and NK cells derived from iPSCs engineered with ADRs. Baylor retains the right to practice and license to other academic, government and research institutes for non-commercial research purposes. Our licenses are also subject to pre-existing rights of the U.S. government.
Under the terms of the license agreement, we are obligated to make a minimum annual royalty payment to Baylor starting in 2024. We are also required to make development and regulatory milestone payments to Baylor for the first three distinct licensed products, where the milestone payments total up to $7 million for the first licensed product, and are reduced by fifty percent (50%) for each of the second and third licensed products. If commercial sales of a licensed product commence, we will pay Baylor a low
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single-digit percentage royalty on net sales of licensed products in countries where the product is protected by licensed patent rights. Our obligation to pay royalties continues on a country-by-country basis until the expiration of all licensed patent rights in that country, with possible reductions for payments that we are required to make to third parties. In the event that we sublicense the patent rights, Baylor is entitled to receive a percentage of our sublicensing income.
Under the license agreement, we are obligated to use reasonable efforts to develop and introduce licensed products to the commercial market including by meeting certain diligence timelines. These timelines are extendable by us for one year upon a one-time payment, subject to Baylor’s discretion for further extensions.
The license agreement remains in effect until the expiration of the last to expire licensed patent. Baylor has the right to terminate the agreement if we materially default in the performance of any terms and fail to correct the default within a specified grace period after Baylor’s written notice. Termination by Baylor is also possible if we are subject to insolvency or similar proceedings, assignment of all or substantially all of our assets for the benefit of creditors, or the appointment of a trustee, in each case that are not dismissed, stayed or suspended within 30 days following such events. We retain the right to terminate the agreement for any cause, upon prior written notice to Baylor and payment of all amounts due to Baylor under the agreement.
Manufacturing
Off-the-shelf, Multiplexed-engineered, iPSC-derived Cellular Immunotherapies
The manufacture of our off-the-shelf, multiplexed-engineered, iPSC-derived CAR T-cell and CAR NK cell product candidates involves a three-stage process:
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The first stage is intended to generate a clonal master iPSC line and generally consists of the following steps: (i) obtain appropriately-consented healthy human donor cells, such as fibroblasts or hematopoietic cells, and conduct transfusion transmissible disease testing on the donor cells; (ii) induction of pluripotency in the donor cells using a proprietary transgene integration-free and footprint-free method of reprogramming; (iii) genetic engineering of iPSCs; and (iv) isolation and selection of a single iPSC, followed by clonal expansion of the single iPSC to produce a clonal master iPSC line for cell product manufacture.
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The second stage is intended to derive the cell product population of interest and generally consists of the following steps: (i) expansion and differentiation of the clonal master iPSC line to produce CD34+ definitive hematopoietic progenitor cells; and (ii) further expansion and differentiation of these progenitor cells to produce the cell product population of interest.
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The third stage is intended to derive the final cell product and generally consists of the following steps: (i) washing the cell product population; (ii) formulating the cell product population in an infusion media for intravenous administration of the final cell product; and (iii) cryopreserving individual aliquots of the final cell product and storing these aliquots in single-dose infusion bags.
As part of our manufacturing process, we endeavor to utilize current Good Manufacturing Practice (cGMP) grade materials and reagents, if commercially available; however, certain critical materials and reagents are currently qualified for research use only. Additionally, we obtain key components required for the manufacture of our iPSC-derived cell product candidates from third-party manufacturers and suppliers, which include, in some instances, sole source manufacturers and suppliers. We do not currently have long-term commitments or supply agreements in place to obtain certain key components used in the manufacture of our iPSC-derived cell product candidates.
We currently operate a cGMP-compliant manufacturing facility for the production of our iPSC-derived cell product candidates for use in research, preclinical development, and clinical development. Our manufacturing facility is located in San Diego, California, and is custom designed for the production of off-the-shelf cell product candidates using clonal master iPSC lines as the starting cell source. The state-of-the-art facility has been commissioned and qualified, and we have been issued drug manufacturing licenses for the facility by the State of California, Department of Health Services, Food and Drug Branch. We believe we are positioned to support manufacturing and production of our product candidates for all phases of clinical development as well as initial commercialization.
We also contract with third parties, including medical center cell therapy facilities and contract manufacturing organizations (CMOs), for the conduct of some of the activities required to manufacture our iPSC-derived cell product candidates for use in clinical investigation. We expect that we will continue to contract with third parties, including medical center cell therapy facilities and CMOs, for the conduct of certain of the activities required to manufacture our iPSC-derived cell product candidates.
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Marketing, Market Access and Sales
We currently intend to commercialize any products that we may successfully develop. We currently have no experience in marketing, market access or selling therapeutic products. We may need to further evaluate and generate evidence beyond what is generated in our clinical programs that would satisfy the needs of payers and healthcare technology assessment (HTA) bodies. To market any of our products independently would also require us to develop a sales force with technical expertise along with establishing commercial infrastructure and capabilities. Our commercial strategy for marketing our product candidates also may include the use of strategic partners, distributors, a contract sales force or the establishment of our own commercial infrastructure. We plan to further evaluate these alternatives as we approach approval for the first of our product candidates.
Government Regulation
In the United States, the FDA regulates biological products under the Federal Food, Drug, and Cosmetic Act (the FDCA) and the Public Health Service Act (the PHS Act) and related regulations. Biological products are also subject to other federal, state, local, and foreign statutes and regulations. The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the clinical development, manufacture and marketing of biological products. These agencies and other federal, state, local, and foreign entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, packaging, labeling, storage, distribution, record keeping, reporting, approval or licensing, advertising and promotion, and import and export related to biological products such as those we are developing. Failure to comply with the applicable U.S. regulatory requirements at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions. FDA sanctions include refusal to approve pending applications, withdrawal of an approval or suspension or revocation of a license, clinical hold or study termination, FDA Form 483s, warning or untitled letters, voluntary or mandatory product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, debarment or refusals from government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. As we have seen in recent years, different laws and regulations on the same topic may not always have the same requirements, and even when requirements overlap, the rules are not always consistently implemented, interpreted, and enforced across jurisdictions. In addition, government regulation may delay or prevent marketing of product candidates for a considerable period of time and impose costly procedures upon our activities.
Marketing Approval
The process required by the FDA before biological products may be marketed in the United States generally involves the following:
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completion of nonclinical laboratory and animal tests according to good laboratory practices (GLPs) and applicable requirements for the humane use of laboratory animals or other applicable regulations;
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submission to the FDA of an IND application which must become effective before human clinical trials may begin;
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approval of the protocol and related documentation by an independent institutional review board (IRB), or ethics committee at each clinical trial site before each trial may be initiated;
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performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (GCPs) and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biological product for its intended use or uses;
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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;
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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;
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potential FDA audit of the nonclinical study sites and clinical trial sites that generated the data in support of the BLA;
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review of the product candidate by an FDA advisory committee where appropriate, if applicable;
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payment of user fees for FDA review of the BLA (unless fee waiver applies); and
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FDA review and approval, or licensure, of the BLA which must occur before a biological product can be marketed or sold.
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U.S. Biological Products and Drug Development Process
Before testing any biological product candidate in humans, nonclinical tests, including laboratory evaluations and animal studies to assess the potential safety and activity of the product candidate, are conducted. The conduct of the nonclinical tests must comply with federal regulations and requirements including GLPs.
Prior to commencing the first clinical trial, the trial sponsor must submit the results of the nonclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of an initial IND application. Some nonclinical testing may continue even after the IND application is submitted. The IND application automatically becomes effective 30 days after receipt by the FDA unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the clinical trial and places the trial on a clinical hold. In such case, the sponsor of the IND application must resolve any outstanding concerns with the FDA before the clinical trial may begin. The FDA also may impose a clinical hold on ongoing clinical trials due to safety concerns or non-compliance. 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 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. An IRB is charged with protecting the welfare and rights of study subjects and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee. This group provides authorization as to whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the trial and may recommend halting the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Clinical trials involve the administration of the product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety, including rules that assure a clinical trial will be stopped if certain adverse events occur. Each protocol and any amendments to the protocol must be submitted to the FDA and to the IRB. Information about certain clinical studies must be submitted with specific timeframes to the National Institutes of Health for public dissemination at www.clinicaltrials.gov.
A sponsor that wishes to conduct a clinical trial outside of the U.S. may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the FDA in support of a BLA. The FDA will accept a well-designed and well-conducted foreign clinical study not conducted under an IND if the study was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary.
For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap:
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Phase 1—The investigational product is initially introduced into healthy human subjects and tested for safety. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. These trials may also provide early evidence on effectiveness.
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Phase 2—These trials are conducted in a limited number of patients in the target population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.
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Phase 3—Phase 3 trials are undertaken to provide statistically significant evidence of clinical efficacy and to further evaluate dosage, potency, and safety in an expanded patient population at multiple clinical trial sites. They are performed after preliminary evidence suggesting effectiveness of the product has been obtained, and are intended to establish the overall benefit-risk relationship of the investigational product, and to provide an adequate basis for product approval and physician labeling.
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Phase 4—In some cases, the FDA may condition approval of a BLA for a product candidate on the sponsor’s agreement to conduct additional clinical studies to further assess the candidate’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. The FDA has statutory authority to require post-market clinical trials to address safety issues. A sponsor may also voluntarily conduct additional clinical studies after approval to gain more information about their product. All of these trials must be conducted in accordance with GCP requirements in order for the data to be considered reliable for regulatory purposes.
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A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to support marketing approval of a product candidate. A company’s designation of a clinical trial as being of a particular phase is not necessarily indicative that the study will be sufficient to satisfy the FDA requirements of that phase because this determination cannot be made until the protocol and data have been submitted to and reviewed by the FDA.
A pivotal trial is a clinical trial that is believed to satisfy FDA requirements for the evaluation of a product candidate’s safety and efficacy such that it can be used, alone or with other pivotal or non-pivotal trials, to support regulatory approval. Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.
During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA. Within 15 calendar days after the sponsor determines that the information qualifies for reporting, written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events; any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects; or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.
Regulatory authorities, a data safety monitoring board or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the participants are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the trial is not being conducted in accordance with the IRB’s requirements or if the investigated product has been associated with unexpected serious harm to patients, and the trial may not recommence without the IRB’s authorization.
Typically, if a product is intended to treat a chronic disease, safety and efficacy data must be gathered over an extended period of time, which can range from six months to three years or more.
Concurrently with clinical trials, companies usually complete additional animal studies and must also develop additional information about the physical characteristics of the investigational product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. To help reduce the risk of the introduction of adventitious agents with the use of biological products, the PHS Act emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency, and purity of the final biological product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.
A drug being studied in clinical trials may be made available to individual patients in certain circumstances. Pursuant to the 21st Century Cures Act (the Cures Act), as amended, the manufacturer of an investigational drug for a serious disease or condition is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational drug. 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 RMAT. Further, the Right to Try Act of 2017 among other things, provides a federal framework for certain patients to request access to certain IND 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.
U.S. Review and Approval Processes
In order to obtain approval to market a biological product in the United States, a BLA must be submitted to the FDA that provides data establishing to the FDA’s satisfaction the safety, purity and potency of the investigational product for the proposed indication. A BLA includes all data available from nonclinical studies and clinical trials, together with detailed information relating to the product’s manufacture and composition, and proposed labeling.
Under the Prescription Drug User Fee Act (PDUFA), as amended, each BLA must be accompanied by a user fee. PDUFA also imposes an annual prescription drug product program fee for biologics and drugs. The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business having fewer than 500 employees. Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.
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The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that the application is sufficiently complete to permit substantive review. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. After the BLA submission is accepted for filing, the FDA reviews the BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with cGMPs to assure and preserve the product’s identity, safety, strength, quality, potency, and purity, and for a biological product, whether it meets the biological product standards. The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically comprised of clinicians and other experts, for evaluation and a recommendation as to whether the application should be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to ensure consistent production of the product within required specifications. For a human cellular or tissue product, the FDA also will not approve the product if the manufacturer is not in compliance with cGTPs. FDA regulations also require tissue establishments to register and list their human cells, tissues, and cellular and tissue-based products (HCT/Ps) with the FDA and, when applicable, to evaluate donors through screening and testing. Additionally, before approving a BLA, the FDA may inspect clinical sites to ensure that the clinical trials were conducted in compliance with IND study requirements and GCPs. If the FDA determines the manufacturing process or manufacturing facilities are not acceptable, it typically will outline the deficiencies and often will require the facility to take corrective action and provide documentation evidencing the implementation of such corrective action, which may delay further review of the application. If the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCPs, the FDA may determine the data generated by the site should be excluded from the primary efficacy analyses provided in the BLA, and request additional testing or data. 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 outweigh its risks. A sponsor may also voluntarily propose a REMS as part of the BLA submission. The need for a REMS is determined as part of the review of the BLA. Based on statutory standards, elements of a REMS may include “dear doctor letters,” a medication guide, more elaborate targeted educational programs, and in some cases restrictions on distribution. These elements are negotiated as part of the BLA approval, and in some cases may delay the approval date. Once adopted, REMS are subject to periodic assessment and modification.
After the FDA completes its initial review of a BLA, it will communicate to the sponsor that the biological product will either be approved, or it will issue a complete response letter to communicate that the BLA will not be approved in its current form. The complete response letter usually describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA to address all of the deficiencies identified in the letter, or withdraw the application, or request a hearing. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.
One of the performance goals of the FDA under PDUFA is to review 90% of standard BLAs in 10 months of the 60-day filing date and 90% of priority BLAs in six months of the 60-day filing date, whereupon a review decision is to be made. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs and its review goals are subject to change from time to time. The review process and the PDUFA goal data may be extended in certain circumstances, such as by three months if a major amendment is submitted at any time during the review cycle.
Even if a product candidate receives regulatory approval, the approval may be limited to specific disease states, patient populations and dosages, or the indications for use may otherwise be limited. Further, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a risk management plan, or otherwise limit the scope of any approval. In addition, the FDA may require Phase 4 post-marketing clinical trials and testing and surveillance programs to monitor the safety of approved products that have been commercialized. Further, even after regulatory approval is obtained, later discovery of previously unknown problems with a product may result in the imposition of new restrictions on the product or complete withdrawal of the product from the market.
Post-Approval Requirements
Products manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things, requirements relating to monitoring, record-keeping, advertising and promotion, reporting of adverse experiences,
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and limitations on industry-sponsored scientific and educational activities. Further, if there are any modifications to the drug or biologic, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or a BLA supplement, which may require the development of additional data or preclinical studies and clinical trials.
FDA regulations require that approved products be manufactured in specific approved facilities and in accordance with cGMP regulations which require, among other things, quality control and quality assurance, the maintenance of records and documentation, and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or biologics, and those supplying products, ingredients, and components of them, are required to register their establishments with the FDA and certain state agencies, and are subject to periodic announced and unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other regulatory requirements. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. The discovery of violative conditions, including failure to conform to cGMP regulations, could result in enforcement actions.
The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA does not regulate behavior of physicians in their choice of treatments and physicians may legally prescribe available products for uses that are not described in the product’s labeling and that differ from those approved by the FDA. However, the FDA does restrict an applicant’s communications on the subject of off-label use of their products. The FDA and other agencies actively enforce the laws prohibiting the marketing and promotion of off-label uses, and a company that is found to have improperly marketed or promoted off-label use may be subject to significant liability, including criminal and civil penalties under the FDCA and False Claims Act, exclusion from participation in federal healthcare programs, and mandatory compliance programs.
The FDA also may require post-marketing testing, known as Phase 4 testing, and surveillance to monitor the effects of an approved product. Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, restrictions on a product, and judicial or administrative enforcement.
Expedited Development and Review Programs
The FDA is authorized to designate certain products for expedited review if they demonstrate the potential to address an unmet medical need in the treatment of a serious or life-threatening disease or condition for which there is no effective treatment. These programs are referred to as fast-track designation, priority review, accelerated approval, breakthrough therapy designation, and regenerative advanced therapy designation.
Fast Track Designation. The FDA may grant “fast track” status to product candidates that are intended to treat serious or life-threatening diseases or conditions and demonstrate the potential to address an unmet medical need for the condition. Fast track is a process designed to facilitate the development and expedite the review of such product candidates by providing, among other things, more frequent meetings with the FDA to discuss the product candidate’s development plan and rolling review, which allows submission of individually completed sections of an BLA for FDA review before the entire submission is completed. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a product candidate may request the FDA to designate the product as a fast-track product at any time during clinical development. Fast track status does not ensure that a product will be developed more quickly or receive FDA approval. In addition, the fast-track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process, or if the designated drug development program is no longer being pursued.
Priority Review. The FDA may give a priority review designation to a product candidate if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or to provide a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. Priority review is intended to reduce the time it takes for the FDA to review a BLA, with the goal to take action on the application within six months from when the application is filed, compared to ten months for a standard review. The FDA will attempt to direct additional resources to the evaluation of an application for a biological product or drug designated for priority review in an effort to facilitate the review.
Accelerated Approval. Additionally, a product may be eligible for accelerated approval. Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that they may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may
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require that a sponsor of a biological product or drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials with due diligence and, under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. In addition, the FDA currently requires, unless otherwise informed by the agency, pre-approval of promotional materials for products being considered for accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a drug or indication approved under accelerated approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product.
Breakthrough Therapy Designation. A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation if preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. If so designated, the FDA will expedite the development and review of the product candidate’s marketing application, including by meeting with, and providing advice to, the sponsor throughout the product candidate’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.
RMAT Designation. As part of the Cures Act, Congress amended the FDCA to create an accelerated approval program for regenerative advanced therapies. To qualify for this program, and be granted regenerative advanced medicine therapy (RMAT) designation, a product must be a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or a combination of such products, and not a product solely regulated as a human cell and tissue product. 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 and preliminary clinical evidence must indicate that the product candidate has the potential to address an unmet need for such disease or condition. A BLA for a product candidate that has received RMAT designation may be eligible for priority review or accelerated approval through (1) surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit or (2) reliance upon data obtained from a meaningful number of sites. Benefits of such designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A designated RMAT product candidate that is granted accelerated approval and is subject to post approval requirements may fulfill such requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post approval monitoring of all patients treated with such therapy prior to its approval.
Designated Platform Technology Status. Under FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under a BLA or NDA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process. A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request. If so designated, the FDA may expedite the development and review of any subsequent original BLA for a drug that uses or incorporates the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval. In addition, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation.