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FATE's Loss Narrower Than Expected in Q1, Pipeline in Focus

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Fate Therapeutics (FATE - Free Report) reported a loss of 68 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 78 cents but wider than the year-ago loss of 49 cents.

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

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

The company earned collaboration revenues of $18.4 million in the first quarter, which easily surpassed the Zacks Consensus Estimate of $10 million and were up from $11.1 million reported in the year-ago quarter. Revenues are primarily derived from Fate’s collaborations with Janssen, a unit of Johnson & Johnson (JNJ), and Ono Pharmaceutical.

R&D expenses surged to $72.1 million from $44.8 million in the year-ago quarter.

G&A expenses jumped to $20.7 million from $12.5 million in the year-ago quarter.

Cash, cash equivalents and investments at the end of the first quarter were $6417.7 million.

Shares of Fate have declined 47.6% in the year so far compared with the industry’s fall of 21.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Pipeline Update

Enrollment is ongoing in the company’s multi-center phase I study of FT596 in combination with rituximab (FT596+R) for relapsed / refractory (r/r) B-cell lymphoma (BCL) in the following cohorts to further assess dose and treatment schedule: multi-dose at 900 million cells per dose with FT596 being administered on day 1 and day 15; single-dose at 1.8 billion cells; and single-dose at 900 million cells.

In December, Fate announced that the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to FT516 to treat r/r diffuse large B-cell lymphoma (DLBCL). Fate plans to hold a multi-disciplinary meeting with the FDA in mid-2022 to discuss key CMC topics and pivotal study design in patients who have progressed or relapsed following prior treatment with FDA approved CD19 directed chimeric antigen receptor (CAR) T-cell therapy.

The multi-center phase I study of FT516 in combination with rituximab (FT516+R) for r/r BCL is currently enrolling patients in multiple disease-specific multi-dose, multi-cycle expansion cohorts at 900 million cells per dose, including patients with r/r aggressive lymphomas who have previously been treated with CD19-targeted CAR T-cell therapy.

A phase I study to assess three once-weekly doses of FT538 as monotherapy is currently enrolling patients in the third multi-dose escalation cohort (1 billion cells per dose) for r/r acute myeloid leukemia (AML).

An investigator-initiated study of FT538 in combination with the CD38-targeted monoclonal antibody daratumumab, which is designed to assess the therapeutic potential of targeting CD38+ leukemic blasts, is enrolling patients in the third multi-dose escalation cohort at 1 billion cells per dose.

In April 2022, Janssen nominated a third iPSC-derived, CAR-targeted cell product candidate incorporating a Janssen proprietary antigen binding domain, triggering a milestone fee payment to the company.

Fate currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks are Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Voyager Therapeutics, Inc. (VYGR - Free Report) , both carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 24.6% in the year so far.

Loss estimates for VYGR have narrowed to $1.35 from $2.20 for 2022 in the past 60 days. Earnings of Voyager surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 41%.

 


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