Fate Therapeutics Initiated With Hold Rating - Read Why

  • Needham initiated coverage on Fate Therapeutics Inc FATE with a Hold rating without a price target.
  • The company is working on induced pluripotent stem cell (iPSC) derived cancer therapeutics, primarily NK cells. 
  • Needham says that Fate's platform has several appealing qualities: 
    • NK cells are natively allogeneic.
    • Using iPSCs allows for improved scalability and controlled COGS while achieving efficacies in line with the most advanced therapeutics.
    • Early proof of concept was achieved in B-cell leukemias & lymphomas (BCL) and acute myeloid leukemia. 
  • Related: Despite Durability Questions, BMO Upgraded This Natural-Killer Cell Therapy Oncology Stock.
  • However, questions regarding treatment durability remain. 
  • In BCL, durability is trending towards a ~27% CR rate at six months, which is on the low end compared to commercial CAR-Ts (29-36%). 
  • Longer-term follow-up from allogeneic programs can provide a better understanding of treatment durability.
  • "We consider Fate's platform a compelling solution in solid tumors, despite NK iPSCs having low activity at baseline. At current levels, we consider FATE fully valued based on its potential in hematological malignancies," said Needham.
  • Price Action: FATE shares are down 2.77% at $32.25 during the market session on the last check Thursday.
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