Fate Therapeutics, Riding High on Juno Deal, Raising More Cash

Xconomy San Diego — 

Taking advantage of a healthy bounce on Wall Street, San Diego’s Fate Therapeutics (NASDAQ: FATE) said Monday it plans to sell 6 million shares of its common stock through a secondary public offering.

All shares of common stock to be sold in the offering will be offered by the company. With Fate shares trading at about $6.45 this morning, the company would raise gross proceeds of more than $38 million.

The company has been riding a wave of investor enthusiasm since May 6, when Fate’s stock gained 46 percent, soaring from $4.96 to $7.24 a share, after Fate and Seattle-based Juno (NASDAQ: JUNO) said they were collaborating to boost the effects of Juno’s hot immunotherapeutics technology.

Juno agreed to pay Fate $5 million in upfront cash, and invested another $8 million for 1 million Fate shares.

Analyst Jim Birchenough of BMO Capital was among those who interpreted the collaboration as a validation of Fate’s technology for using small molecule combinations to modulate the fate and function of cells. He reiterated his “outperform” rating and $15 price target for the company.

Fate’s lead product candidate, is in clinical development for the treatment of hematologic malignancies and rare genetic disorders in patients undergoing hematopoietic stem cell transplantation (HSCT).

In its statement yesterday about the secondary public offering, Fate said it intends to use its net proceeds for clinical development and research activities, working capital, and other general corporate purposes. Fate said it also plans to grant underwriters an additional 900,0000 shares of its common stock.