Sec Form 4 Filing - ARCH VENTURE FUND III L P @ XCYTE THERAPIES INC - 2004-10-29

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person ARCH VENTURE FUND III L P 2. Issuer Name and Ticker or Trading Symbol XCYTE THERAPIES INC [ XCYT] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director X __ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 8725 W HIGGINS ROAD, SUITE 290 3. Date of Earliest Transaction (MM/DD/YY) 10/29/2004 (Street) CHICAGO, IL60631 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares 6% Convertible Exchangeable Preferred Stock ( 2 ) 10/29/2004 P 200,000 ( 2 ) ( 2 ) ( 2 ) Common ( 2 ) $ 10 ( 2 ) 851,060 ( 1 ) I Footnote ( 1 )

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other ARCH VENTURE FUND III L P 8725 W HIGGINS ROAD SUITE 290 CHICAGO, IL60631 X Signatures ARCH Venture Fund III, L.P., By: ARCH Venture Partners, LLC, Its: General Partner, /s/ Keith Crandell, Keith Crandell, Managing Director 11/02/2004 Signature of Reporting Person Date

Explanation of Responses:

( 1 )The amount reported in Column 9 represents 198,661 shares of 6% Convertible Exchangeable Preferred Stock purchased by ARCH Venture Fund V, L.P. and 1,339 shares of 6% Convertible Exchangeable Preferred Stock purchased by ARCH V Entrepreneurs Fund, L.P, with effect given to the conversion described in the footnote below. Such amount is subject to change based on the potential adjustments to the conversion price described in the footnote below. Each of these entities is an affiliated entity of the reporting person, and disclaims beneficial ownership of such securities except to the extent of their pecuniary interest therein, and this report shall not be deemed an admission that the reporting person is the beneficial owner thereof. ( 2 )These securities are preferred stock of Xcyte Therapies and do not have an expiration date. Each share of 6% Convertible Exchangeable Preferred Stock can be converted by its holder into approximately 4.2553 shares of Xcyte's common stock based on an initial conversion price of $2.35, subject to certain adjustments. Xcyte may automatically convert the convertible preferred stock into common stock if the closing price of the common stock has exceeded $3.53 for at least 20 trading days during any 30-day trading period, ending within five trading days prior to notice of automatic conversion.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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