Yahoo Finance Fate Therapeutics (FATE) Down 8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Fate Therapeutics (FATE). Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fate Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Fate Therapeutics Q4 Earnings Beat, Revenues Fall Y/Y
Fate Therapeutics reported fourth-quarter 2023 loss of 45 cents per share, narrower than the Zacks Consensus Estimate of a loss of 57 cents and the year-ago loss of 58 cents.
The loss narrowed year over year due to lower R&D expenses.
The company earned collaboration revenues of $2 million, which also surpassed the Zacks Consensus Estimate of $1 million but was down from $44 million reported in the year-ago quarter.
Revenues were derived from the company’s preclinical development activities for a second collaboration candidate targeting an undisclosed solid tumor antigen under its collaboration with ONO Pharmaceutical.
R&D expenses declined 64% to $31.8 million in the reported quarter. Also, general and administrative expenses fell 17% to $17.9 million. The lower operating expenses were due to a decrease in salaries and benefits, including share-based compensation expenses, following the company's restructuring in the first quarter of 2023. R&D expenses also declined due to lower clinical study costs and a fall in demand for R&D materials and equipment.
Cash, cash equivalents and investments as of Dec 31, 2023, were $316.2 million compared with $349.7 million as of Sep 30, 2023.
Full-Year 2023 Results
Total collaboration revenues were down 34% year over year to $63.5 million, which beat the Zacks Consensus Estimate of $62.5 million.
The company reported a loss of $1.64 per share, narrower than the Zacks Consensus Estimate of a loss of $1.78. The company incurred a loss of $2.91 per share in 2022.
Pipeline Update
Fate Therapeutics is focused on the development and manufacture of universal, off-the-shelf cell products using its proprietary iPSC product platform. Its immuno-oncology pipeline includes off-the-shelf, iPSC-derived natural killer cells and T-cell product candidates. These candidates are designed to synergize with well-established cancer therapies, including immune checkpoint inhibitors and monoclonal antibodies and to target tumor-associated antigens using chimeric antigen receptors.
Earlier this month, the company was awarded $7.9 million by California Institute for Regenerative Medicine to support the clinical development of FT819 in patients with SLE. The phase I SLE study will evaluate the safety, pharmacokinetics and anti-B-cell activity of a single dose of FT819 administered following a standard three-day chemotherapy conditioning regimen. Fate Therapeutics is currently engaged in study start-up activities at multiple clinical sites in the United States. Initial clinical data from the SLE study of FT819 is expected in 2024.
Also, the company is currently evaluating FT819 in a separate phase I study for the treatment of relapsed/refractory B-cell malignancies.
With ONO Pharmaceutical, the company is co-developing FT825/ONO-8250, a multiplexed-engineered, iPSC-derived CAR T-cell product candidate targeting human epidermal growth factor receptor 2-expressing solid tumors. During the reported quarter, the company received clearance from FDA to conduct a phase I study of FT825/ONO-8250 in patients with advanced solid tumors. In January 2024, the company initiated enrolling patients in the planned phase I study of the candidate.
The early-stage study will evaluate the safety, pharmacokinetics and activity of a single dose of FT825/ONO-8250 as a monotherapy and in combination with monoclonal antibody therapy in patients with advanced solid tumors.
Also, during the fourth quarter, Fate Therapeutics reported treating the first patient with its ADR-armed, CD19-targeted CAR NK cell product candidate, FT522, in a phase I study. Per the company, the early-stage study is evaluating the safety, pharmacokinetics and activity with and without administration of a standard three-day preconditioning regimen of FT522 in combination with Rituxan in patients with relapsed/refractory B-cell lymphoma.
Fate Therapeutics expects to share clinical data from the FT522 program in the second half of 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 15.1% due to these changes.
VGM Scores
Currently, Fate Therapeutics has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. 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 is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Halozyme Therapeutics (HALO), a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended December 2023 more than a month ago.
Halozyme Therapeutics reported revenues of $230.04 million in the last reported quarter, representing a year-over-year change of +26.7%. EPS of $0.82 for the same period compares with $0.48 a year ago.
For the current quarter, Halozyme Therapeutics is expected to post earnings of $0.75 per share, indicating a change of +59.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Halozyme Therapeutics. Also, the stock has a VGM Score of A.
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