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FATE's Q3 Loss Narrower Than Expected, Pipeline in Focus

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Fate Therapeutics (FATE - Free Report) reported a loss of 57 cents per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 58 cents but wider than the year-ago loss of 36 cents.

Increased research & development (R&D) and general & administrative (G&A) expenses led to the wider year-over-year loss.

The company earned collaboration revenues of $14.2 million in the third quarter, which easily beat the Zacks Consensus Estimate of $9 million, and were up from $7.6 million reported in the year-ago quarter. Revenues are primarily derived from the company’s collaborations with Janssen, a unit of Johnson & Johnson (JNJ - Free Report) , and Ono Pharmaceutical.

R&D expenses surged to $53.1 million from $30.7 million in the year-ago quarter.

G&A expenses jumped to $15.7 million from $8.3 million in the year-ago quarter.

Cash, cash equivalents and investments at the end of the third quarter were $803.6 million.

Shares of Fate have lost 34.4% in the year so far compared to the industry’s decline of 6.8%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Pipeline Update

In August, Fate reported interim clinical data from its dose-escalating phase I study of FT596 as monotherapy and in combination with rituximab for the treatment of relapsed / refractory (r/r) B-cell lymphoma (BCL). As of the data cutoff date of Jun 25, 2021, in the second (90 million cells) and third (300 million cells) dose cohorts of the single-dose monotherapy and combination regimens, 10 of 14 patients (71%) achieved an objective response (ORR), including seven patients (50%) who achieved a complete response (CR) on day 29 as assessed by PET-CT scan per Lugano 2014 criteria. 

Fate has completed enrollment in the dose-escalation stage of its phase I study of FT516 in combination with rituximab for the treatment of r/r BCL, and has initiated enrollment in the study’s dose-expansion stage at 900 million cells per dose.

In July, the first patient was treated in the company’s phase I study of FT819, the first-ever T-cell therapy manufactured from a clonal master induced pluripotent stem cell (iPSC) line to undergo clinical investigation.

The first patient has been treated in the phase I study, designed to assess three once-weekly doses of FT538 in combination with daratumumab for patients with r/r multiple myeloma (MM).   The company has also initiated enrollment of a multi-center phase I study to assess single-dose and multi-dose treatment regimens of FT576 as monotherapy and in combination with daratumumab for the treatment of r/r MM.

Enrollment has also been in phase I study of FT538 in combination with monoclonal antibody therapy. The clinical protocol includes a combination with each of three monoclonal antibodies: EGFR-targeted cetuximab; HER2-targeted trastuzumab; and PDL1-targeted Bavencio.

 

Fate Therapeutics, Inc. Price, Consensus and EPS Surprise Fate Therapeutics, Inc. Price, Consensus and EPS Surprise

Fate Therapeutics, Inc. price-consensus-eps-surprise-chart | Fate Therapeutics, Inc. Quote

Our Take

Higher R&D expenses hit the bottom line in the third quarter. Nevertheless, pipeline progress has been impressive. Cellular immunotherapies promise huge potential and hence, the successful development of its product candidates will be a significant boost for the company.

Companies like Gilead Sciences, Inc. (GILD - Free Report) and Bristol-Myers Squibb Company (BMY - Free Report) are currently focusing on developing cellular immunotherapies to treat cancer.

Fate currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.