Back to top

Image: Bigstock

Fate Therapeutics Surges on Immunotherapy Deal With J&J

Read MoreHide Full Article

Fate Therapeutics, Inc. (FATE - Free Report) announced that it has signed a global collaboration and option agreement with Janssen Biotech, a subsidiary of pharma giant J&J (JNJ - Free Report) . Per the agreement, companies will develop novel chimeric antigen receptor (“CAR”) natural killer (“NK”) and CAR T-cell product candidates targeting four tumor-associated antigens for hematologic malignancies and solid tumors. Fate Therapeutics will use its iPSC product platform and Janssen’s proprietary tumor-targeting antigen binders to develop the candidates.

Per the terms of the deal, J&J will pay Fate Therapeutics $50 million in cash as upfront payment. In addition, J&J will make an additional $50 million equity investment in Fate Therapeutics’ stock at $31 per share. Fate Therapeutics is also eligible to receive up to $1.8 billion in development and regulatory milestones and up to $1.2 billion in commercial milestone payments from J&J. It will also receive royalties on sales from any approved product developed under the deal. Fate Therapeutics will advance candidates under the collaboration up to investigational new drug application (“IND”) filing and J&J has the option for an exclusive license for the development and commercialization of collaboration candidates. Moreover, J&J will also fund all manufacturing and development activities during clinical stage.

Shares of Fate Therapeutics rallied 23.4% during after-market trading on Apr 3. The deal will provide significant revenue streams, which the company can use to develop its own pipeline candidates. The company’s shares have increased 7.7% so far this year against the industry’s decline of 11.3% on the back of its encouraging progress with its pipeline.

Major players in the CAR-T cell-based product category include Bristol-Myers (BMY - Free Report) and Celgene . Bristol-Myers’ CAR-T candidate, lisocabtagene maraleucel, is under review in the United States for treating relapsed or refractory large B-cell lymphoma. J&J is also developing a CAR-T cell candidate for treating relapsed or refractory multiple myeloma in a phase Ib/II study.

The company is focused on developing programmed cellular immunotherapies for cancer and immune disorders. It has three early-stage candidates — FT500, FT516 and FT596 — in clinical development.

In December 2019, the company announced initial data on FT516 monotherapy study, which showed absence of morphologic evidence of leukemia (at day 42) along with complete neutrophil recovery in the first patient. In the same month, initial data from FT500 study showed no dose-limiting toxicities or FT500-related serious adverse events.

In January 2020, the FDA accepted second IND for FT516 to enable clinical study to evaluate the candidate in combination with PDL1-, PD1-, EGFR- and HER2-targeting monoclonal antibodies in several solid tumors. Fate Therapeutics announced dosing of the first patient in a phase I study evaluating another candidate, FT596, in patients with B-cell malignancies and chronic lymphocytic leukemia this month.

Zacks Rank

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

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Johnson Johnson (JNJ) - free report >>

Bristol Myers Squibb Company (BMY) - free report >>

Fate Therapeutics, Inc. (FATE) - free report >>