Despite Durability Questions, BMO Upgraded This Natural-Killer Cell Therapy Oncology Stock

  • BMO Capital Market upgraded Fate Therapeutics Inc FATE to Outperform from Market Perform. The analyst believes Fate's iPSC platform is uniquely positioned in the cell therapy space.
  • But, the analyst wants to focus on the debate on whether engineered NK cells provide CAR-T-like efficacy and convenience, and safety.
  • "Early data for lead programs have been encouraging, particularly in safety concerns. For DLBCL, the median duration of response is misleading since it could reflect only a few months, but there could still be several patients with continued complete responses", BMO writes.
  • "So we would be looking for a tail on the Kaplan-Meier curves for FT519 and FT596," the analyst added.
  • In multiple myeloma, cures are less likely, so median progression-free survival is the benchmark. 
  • BMO likes the risk/reward heading into 2H updates, while durability remains a major question.
  • At its current valuation, The analyst thinks there's a meaningful upside to platform updates in 2H and 2023.
  • With the price target of $47, implying ~57% upside to current shares, several updates are expected from FATE across its NK cell platform by the year-end.
  • Price Action: FATE shares are up 4.14% at $29.69 during the market session on the last check Tuesday.
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