It has been about a month since the last earnings report for Fate Therapeutics (FATE). Shares have added about 0.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fate Therapeutics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q3 Earnings Beat on Higher Revenues, Pipeline in Focus
Fate Therapeutics reported a loss of 40 cents per share in the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 42 cents.
The company reported a loss of 46 cents per share in the year-ago period.
The loss narrowed year over year due to higher collaboration revenues.
The company earned collaboration revenues of $3.1 million, which beat the Zacks Consensus Estimate of $1 million. The figure also increased from $1.9 million reported in the year-ago quarter.
Revenues were derived from preclinical development activities for a second collaboration candidate targeting an undisclosed solid tumor antigen under its collaboration with Ono.
R&D expenses increased 1.1% to $34.6 million. G&A expenses increased 9.8% to $20.8 million.
Cash, cash equivalents and investments as of Sept. 30, 2024, totaled $330.5 million.
Pipeline Update
Fate is focused on developing and manufacturing universal, off-the-shelf cell products using its proprietary induced pluripotent stem cell (iPSC) product platform. Its immuno-oncology pipeline includes iPSC-derived natural killer (NK) cells and T-cell product candidates.
A phase I study of FT819, a T-cell product candidate for patients with systemic lupus erythematosus (SLE), is currently ongoing.
The first three patients, all of whom were suffering from active lupus nephritis (LN) despite having been treated with multiple standard-of-care therapies, received fludarabine-free conditioning consisting of either bendamustine or cyclophosphamide alone, followed by a single dose of FT819 at 360 million cells. All three patients continue to be on study. The company did not observe dose-limiting toxicities (DLTs) or any grade of cytokine release syndrome (CRS), immune effector-cell associated neurotoxicity syndrome (ICANS), or graft-versus-host disease (GvHD).
The first patient treated in the ongoing phase I autoimmunity study on FT819 was a 27-year-old woman diagnosed with lupus nephritis (over ten years ago). She received fludarabine-free conditioning chemotherapy followed by a single dose of FT819 at 360 million cells. The patient remains on study.
Fate also amended the clinical protocol of its phase I autoimmunity study on FT819 to include a second treatment arm (Regimen B) to assess the safety, pharmacokinetics, and anti-B cell activity of a single dose of FT819 as an add-on to maintenance therapy without conditioning chemotherapy in patients with SLE.
Fate is co-developing FT825/ONO-8250, a multiplexed-engineered, iPSC-derived CAR T-cell product candidate, with ONO Pharmaceutical. The company is conducting a multi-center, phase I study to assess the safety, pharmacokinetics and activity of FT825/ONO-8250 in patients with advanced solid tumors.
The company presented initial clinical data from three heavily pre-treated patients at a medical conference. All three patients were previously treated with at least five prior lines of therapy, including HER2-targeted treatment. Each patient was administered conditioning chemotherapy and a single dose of FT825 / ONO-8250 at the first dose level of 100 million cells.
As of a data cutoff date of Oct. 25, 2024, FT825 / ONO-8250 demonstrated a favorable safety profile with no DLTs and no event of any grade of CRS, ICANS, or GvHD.
Enrollment is ongoing at the second dose level of 300 million cells as monotherapy and at the first dose level of 100 million cells combined with epidermal growth factor receptor (EGFR)-targeted monoclonal antibody therapy.
A phase I study of FT522 in patients with relapsed/refractory B-cell lymphoma is ongoing. FATE is enrolling patients in the second three-dose cohort at 900 million cells per dose with conditioning chemotherapy (Regimen A) and in the first three-dose cohort at 300 million cells per dose without conditioning chemotherapy (Regimen B). No DLT or event of any grade of CRS, ICANS, or GvHD was reported in the phase I study.
Meanwhile, the FDA allowed the company’s investigational new drug (IND) application to assess the safety, pharmacokinetics, and activity of FT522 across a basket of B cell-mediated autoimmune diseases. The phase I study is intended to treat patients with multiple doses of FT522 without conditioning chemotherapy as an add-on to rituximab induction therapy (Regimen A) and maintenance therapy in combination with rituximab (Regimen B).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Fate Therapeutics has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fate Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Fate Therapeutics belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Celldex Therapeutics (CLDX), has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Celldex reported revenues of $3.19 million in the last reported quarter, representing a year-over-year change of +109.9%. EPS of -$0.64 for the same period compares with -$0.81 a year ago.
Celldex is expected to post a loss of $0.75 per share for the current quarter, representing a year-over-year change of -31.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
Celldex has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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