Profile

Fate is the original company to develop induced Pluripotent Stem Cells. They have been leading the space for many years. The biggest issue with being first is that science often moves faster than the clinical trials. It did not take long to realize these early therapies were already outdated. They did not have key edits to avoid immune rejection of the cells. I think Fate did the right thing with scrapping all these older programs to move new programs into the clinic which have these key edits. I hope they go down the road of using common progenitor cells as a starting stock. They kept 2 key programs for NK cells and T cells. These look to be indications where they think they can still drive potential for patients.

Management

I have been following Fate and Scott Wolchko for about 6 years. He seems like a good CEO, but they have had many setbacks in their development programs. First they dropped ProTmune and NK-100. Now they had to reset and drop all their phase 1 NK programs to start over. I used to think he was a powerful CEO, but now I have my doubts. I have been waiting for years for this investment to bear fruit. Now I am going to have to wait and see how the remaining programs work out.

Science

FT-576 is a CAR-NK cell therapy using a BCMA target. It has the enhanced CD16 receptor for improved use with antibody therapies. It has the CD38 knockout so it can be combined with anti-CD38 antibodies for Multiple Myeloma. This program has some early phase 1 data, but we will have to see more data to help inform us on how well this works in Multiple Myeloma. There is a rationale where a CD-38 antibody and a NK cell combination might offer improved benefits.

FT-522 will be their next generation NK cell therapy for CD19. This includes the enhanced CD16, CD38 knockout, and Allo Defense Receptor. Because this targets 4-1BB on activated T cells, they plan to test it in autoimmune disorders too. This should have IND submitted by mid 2023.

FT-819 is their first iPSC derived CAR-T cell therapy targeting CD19. This does not have the immune evasion edits so I am not sure why they chose to keep this program. Maybe, they just wanted to validate the CAR-T platform using this asset before they move into newer cells. They will need to add the immune evasion edits to all new CAR-T cell therapies.

Valuation

Cash $441 million

FT-576 is for Multiple Myeloma which affects over 30,000 patients in the US alone. This will compete with other BCMA cell therapies. It would have to distinguish itself from the many other programs in this indication. I think with the edits and combinations it has, it could offer benefits to patients over CD38 alone. I would give this $1 billion potential if it works out well. It gets a .1 multiplier for having no data yet. That is $100 million in value.

FT-522 is their new CD19 CAR-NK therapy that includes the new Allo Defense Receptor. It is designed to work in combination with CD20 and CD38 antibodies. This could do upward of $500 million if it works out. I would give it .1 multiple for being preclinical. That makes it worth $50 million.

FT-819 is their CD19 CAR-T for Lymphoma. This does not have the immune evasion edits. I don't think this program will go beyond phase 1 to validate the concept of making iPSC derived T cells. I think they will eventually replace this with CAR-T therapies with more edits.

All in, that is a $591 million market cap. Based on the 98.2 million shares outstanding, that comes to $6.01.

Partnerships

They just terminated the Janssen Partnership.

Ono Partnership for cell therapies. They can get up to $843 million in milestones and royalties in the mid single digits to low double digits.

Events

FT-576 Phase 1 Ongoing

FT-819 Phase 1 Ongoing

FT-522 IND Expected in Mid 2023

Data Readouts

There is no data yet for these new programs.

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