Back to top

Image: Bigstock

FATE's Q2 Loss Narrower Than Expected, Pipeline in Focus

Read MoreHide Full Article

Fate Therapeutics (FATE - Free Report) reported a loss of 79 cents per share in the second quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 86 cents but wider than the year-ago loss of 58 cents.

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 $18.5 million in the second quarter, which easily surpassed the Zacks Consensus Estimate of $13 million and were up from $13.4 million reported in the year-ago quarter. Revenues are primarily derived from Fate’s collaborations with Janssen, a unit of Johnson & Johnson (JNJ - Free Report) and Ono Pharmaceutical.

R&D expenses surged to $81.3 million from $48 million in the year-ago quarter.

G&A expenses jumped to $20.3 million from $12.2 million in the year-ago quarter.

Cash, cash equivalents and investments at the end of the second quarter were $580.8 million.

Shares of Fate have declined 43.9% in the year so far compared with the industry’s fall of 22%.

Zacks Investment Research
Image Source: Zacks Investment Research

Pipeline Update

FATE is focused on the development and manufacture of universal, off-the-shelf cell products using its proprietary induced pluripotent stem cell (iPSC) product platform. Its immuno-oncology pipeline includes off-the-shelf, iPSC-derived natural killer (NK) cell and T-cell product candidates.  These candidates are designed to synergize with well-established cancer therapies, including immune checkpoint inhibitors and monoclonal antibodies, and to target tumor-associated antigens using chimeric antigen receptors (CARs).

FATE has submitted a new clinical protocol to the investigational new drug (IND) application for FT596. It has initiated a study start-up to assess the safety and activity of adding FT596 to R-CHOP, the standard first-line immunochemotherapy for patients with aggressive lymphomas.

In May, Johnson & Johnson’s Janssen exercised its commercial option for an iPSC-derived CAR NK cell collaboration product targeting an antigen expressed on certain hematologic malignancies, triggering a milestone payment to the company. FATE expects to submit its first IND application under the collaboration during the second half of 2022.

Fate also expanded its off-the-shelf, iPSC-derived, cell-based cancer immunotherapy collaboration with Ono Pharmaceutical to add a second solid tumor antigen program as well as include the development of both CAR NK and CAR T-cell candidates.

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 single- and two-dose cohorts at up to 1.8 billion cells per dose.

FATE is scheduled to hold its Regenerative Medicine Advanced Therapy (RMAT) Type B multi-disciplinary meeting with the FDA for FT516 in the ongoing quarter to discuss registrational pathways for the treatment of patients with aggressive lymphomas, including patients who have relapsed or are refractory to FDA-approved CD19-directed chimeric antigen receptor (CAR) T-cell therapy.

Fate currently carries a Zacks Rank #2 (Buy). A couple of other top-ranked stocks in the sector are Alkermes (ALKS - Free Report) and Dynavax  (DVAX - Free Report) , both carrying the same rank as Fate. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ALKS’ earnings estimates for 2022 reversed from a loss of 14 cents to earnings of 20 cents in the past seven days. Alkermes surpassed earnings in all the trailing four quarters, the average being 325.48%.

Dynavax’s earnings estimates have increased to $1.15 from $1.14 for 2022 over the past 60 days. Earnings of Dynavax have surpassed estimates in two of the trailing four quarters.