Fate Therapeutics, the San Diego-based company on a quest to develop techniques that make stem cell research practical for the pharmaceutical industry, has raised $30 million in a Series B round of venture financing.
Kirkland, WA-based OVP Venture Partners led the deal, which included the three venture firms that co-founded the company two years ago—Arch Venture Partners, Polaris Venture Partners, and Venrock Associates. This time, Fate also drew investment from three strategic corporate investors, two of whom are being named—Astellas Venture Management, and Genzyme Ventures. The company has now raised a total of about $50 million since inception, according to Scott Wolchko, Fate’s chief financial officer.
The round is the latest step forward for Fate, which was founded by a band of high-profile scientists from Harvard University, the University of Washington, Stanford University, and The Scripps Research Institute. Fate generated some scientific buzz last month when one of its co-founders, Sheng Ding of Scripps, found a way to use three conventional small-molecule compounds to coax adult human cells into an embryonic-like state. That’s important not only because it circumvents the ethical controversy around destroying embryos for research, but it also paves the way for “industrialized” stem cells. The Ding lab’s method is twice as fast and 200 times more efficient than previous techniques of creating induced pluripotent stem cells—with potential to turn into any type of cell. The Fate method also sidesteps the use of viruses and genetic modification of cells that has been one of the main disadvantages of the prior methods—and a big reason why pharma has steered clear.
Fate’s hope is to keep building enough momentum for its stem cell production technology that it will become a useful tool for creating models of disease in the lab, and for toxicology testing to see which drug candidates have the best odds of success. Further in the future, it hopes to create regenerative medicines to replace damaged tissues in the body.
While that capability is getting built up, and Fate is seeking pharmaceutical partners to help pay the bills, the company is also pushing ahead with its own proprietary drug candidate in clinical trials. The drug, FT-1050—a conventional small-molecule chemical compound that isn’t nearly as risky as an injectable cell therapy—is designed to help improve the effectiveness of adult stem cell transplants for blood cancers like leukemias and lymphomas.
“This is a company that has performed exactly as planned,” says Carl Weissman, managing director with OVP, who is taking a board seat in connection with the financing. “This management team is rounding out into a very sharp and effective group. It made sense for us to double down.”
OVP invested a small amount in Fate’s Series A round, and by betting bigger this time
