BioTuesdays

Stifel starts Fate Therapeutics at buy; PT $27

Stifel launched coverage of Fate Therapeutics (NASDAQ:FATE) with a “buy” rating and $27 price target. The stock closed at $15.47 on Sept. 28.

Fate is using its induced pluripotent stem cell (iPSC) platform to develop cell therapies for various types of cancer. Its lead candidates are FT500 and FT516, which are being developed for solid tumors and hematological malignancies, respectively.

Analyst Benjamin Burnett expects that FT500 data, expected later this year, will validate the safety of Fate’s NK cell platform. 

“We think many investors are looking to the FT500 update as functionally a safety referendum on Fate’s off-the-shelf iPSC-derived NK cell technology,” he said. “As a substantial portion of Fate’s pipeline leverages this technology, we believe that the tolerability of FT500 will have direct read-through to other programs.”

Mr. Burnett believes that FT516’s unique properties should increase its capacity to kill tumor cells. “We’re most excited about FT516 in acute myeloid leukemia and believe this will provide a more substantial value inflection in the stock.”

In addition, Fate is planning to file two INDs within the next six-to-nine-months, which, “Will further drive enthusiasm for the platform while diversifying the company’s opportunity set within oncology,” Mr. Burnett said.

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