FATE's Loss Wider Than Expected in Q4, Pipeline in Focus

Fate Therapeutics FATE reported a loss of 72 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 68 cents and the year-ago loss of 38 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 $17 million in the fourth quarter, which easily beat the Zacks Consensus Estimate of $13 million and were up from $15.9 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 $6.5 million from $38.9 million in the year-ago quarter.

G&A expenses jumped to $16.9 million from $10.3 million in the year-ago quarter.

Cash, cash equivalents and investments at the end of the fourth quarter were $716.6 million.

Shares of Fate have plummeted 64.3% in the year compared with the industry’s decline of 37.7%.

Image Source: Zacks Investment Research

Pipeline Update

The first patients have been treated with a multi-dose, multi-cycle treatment schedule of FT596 in combination with rituximab (FT596+R) for relapsed / refractory (r/r) B-cell lymphoma (BCL) in the dose-escalation stage of the multi-center phase I study.  Fate plans to initiate multiple disease-specific, dose-expansion cohorts in the first quarter of 2022.

In December, Fate announced that the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to FT516 for the treatment of r/r diffuse large B-cell lymphoma (DLBCL). Fate plans to discuss its manufacturing, CMC and pivotal study design with the FDA during the first half of 2022.

FT819 is the first-ever T-cell therapy manufactured from a clonal master induced pluripotent stem cell (iPSC) line to undergo clinical investigation.

The phase I study of FT538 as monotherapy and an investigator-initiated study of FT538 in combination with the CD38-targeted monoclonal antibody daratumumab are each currently enrolling patients in the second multi-dose escalation cohort (300 million cells per dose) for r/r acute myeloid leukemia (AML).

Fate has treated the first patients in its multi-center phase I study to assess single-dose and multi-dose treatment regimens of FT576 as monotherapy and in combination with Darzalex for the treatment of r/r multiple myeloma (MM).

It has also treated the first patients in its multi-center phase I study to assess the safety and activity of three once-weekly doses of FT538 in combination with monoclonal antibody therapy for advanced solid tumors.

In December 2021, the FDA cleared an Investigational New Drug (IND) application for FT536, its off-the-shelf, multiplexed-engineered, iPSC-derived NK cell product candidate.

In January 2022, Johnson & Johnson’s Janssen elected to initiate IND-enabling activities for a second iPSC-derived CAR NK cell product candidate incorporating a Janssen proprietary antigen binding domain, triggering the payment of a milestone fee to the company under the collaboration.

Fate currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare space are Dynavax Technologies Corporation DVAX and Vertex Pharmaceuticals VRTX, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dynavax’s earnings estimates have increased to $1.18 from $1.07 for 2022 over the past 60 days. The stock has rallied 37.8% in the past year.

Earnings of Dynavax have surpassed estimates in each of the trailing four quarters.

Vertex’ Pharmaceuticals earnings per share estimates have increased to $15.31 from $13.85 for 2022 over the past 60 days.

The consensus estimate for 2022 earnings for Vertex has increased $1.01 over the past 30 days to $14.33. Shares of VRTX gained 9.4% in the past year.


 

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