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Fate Therapeutics (FATE) Surges 86.4% YTD on Pipeline Progress

Fate Therapeutics’ FATE shares have surged 86.4% year to date compared with the industry’s growth of 1.5%. This can be attributed to the overall positive sentiment across the company’s innovative pipeline and recent pipeline progress.

FATE is a clinical-stage biopharmaceutical company, building a pipeline of programmed cellular immunotherapies for cancer and autoimmune diseases. The company is using cell programming to create better cell therapies. It creates and engineers human induced pluripotent stem cells (iPSCs) to incorporate novel synthetic controls of cell function. FATE also generates a clonal master iPSC line for use as a renewable source of cell manufacture and directs the fate of the clonal master iPSC line to produce its cell therapy product candidate.

In January 2024, the company initiated enrollment in the phase I study of FT825 / ONO-8250 under a strategic collaboration with Ono Pharmaceutical. The phase I study is designed to investigate a single dose of FT825 / ONO-8250 as monotherapy and in combination with monoclonal antibody therapy in previously-treated patients with advanced solid tumors. The dose escalation and expansion portions of the trial are expected to evaluate safety, tolerability and pharmacokinetics as well as anti-tumor activity by overall response rate, duration of response and disease control rate.

FATE will jointly develop and commercialize FT825 / ONO-8250 with Ono in the United States and Europe. Ono maintains exclusive development and commercialization rights for the candidate in the rest of the world.

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In February, FATE was awarded $7.9 million by the California Institute for Regenerative Medicine to support the clinical investigation of CAR T-cell product candidate FT819 in patients with systemic lupus erythematosus (SLE). The multi-center, phase I study for SLE is designed to evaluate the safety, pharmacokinetics and anti-B-cell activity of a single dose of FT819 administered following a standard three-day chemotherapy conditioning regimen. FATE is currently conducting study start-up activities at multiple U.S. clinical sites.

Last month, the company issued 14.5 million shares of its common stock at an offering price of $5.50 per share. FATE also announced the pricing of a concurrent private placement of pre-funded warrants to purchase 3.6 million shares of its common stock at a purchase price of $5.499 per pre-funded warrant.

The gross proceeds from the underwritten offering and private placement were $100.0 million, which will be used for funding clinical trials and other working capital and general corporate purposes. The influx of cash is a positive for the company.  Cash, cash equivalents and investments as of Dec 31, 2023, were $316.2 million.

Fate Therapeutics is also evaluating FT522, its iPSC-derived CAR NK Cell Program, in patients with relapsed/refractory B-cell lymphoma. The company is conducting a preclinical assessment of FT522’s potential to induce CD19+ B-cell depletion across a range of autoimmune diseases, without administering intense chemotherapy conditioning to patients.

The development of any of these therapies will be a significant boost for the company, given their innovative characteristics.

Meanwhile, FATE reported better-than-expected fourth-quarter results. It registered a quarterly loss of 45 cents per share, narrower than the Zacks Consensus Estimate of a loss of 57 cents and the year-ago loss of 58 cents. This improvement was due to lower research and development (R&D) expenses.

Fate Therapeutics, Inc. Price, Consensus and EPS Surprise

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

The company earned collaboration revenues of $2 million, which also surpassed the Zacks Consensus Estimate of $1 million.

However, the termination of the collaboration agreement with Janssen Biotech in 2023 was a setback as FATE lost out on collaboration revenues from the same.

Also, the manufacturing and distribution of these cell product candidates, particularly the iPSC-derived cell product candidates, is complex and subject to a multitude of risks.

Zacks Rank & Key Picks

FATE currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the biotech sector are ADMA Biologics, Inc. ADMA, Galapagos GLPG and ANI Pharmaceuticals, Inc. ANIP, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share (EPS) have improved from 22 to 30 cents. In the past year, shares of ADMA have surged 86.4%.

ADMA Biologics’ earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 85.00%.

In the past 60 days, estimates for GLPG’s 2024 loss have narrowed from $1.68 per share to 78 cents.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have improved from $4.06 to $4.43. In the past year, shares of ANIP have surged 78.1%.

The company’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 109.06%.

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