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

Nasdaq Tower Nasdaq (Used with Permission Copyright 2014 NASDAQ OMX Group)

Taking advantage of a healthy bounce on Wall Street, San Diego’s Fate Therapeutics (NASDAQ: [[ticker: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: [[ticker: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.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.