Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Fate Therapeutics, Inc. (FATE)

NEW YORK, Jan. 23, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Southern District of California on behalf of all persons or entities who purchased the securities of Fate Therapeutics, Inc. (“Fate” or the “Company”) (NASDAQ: FATE) between April 2, 2020 through January 5, 2023, both dates inclusive (the “Class Period”).

Fate is a clinical-stage biopharmaceutical company that develops programmed cellular immunotherapies to treat cancer and immune disorders. On April 2, 2020, after the market closed, Fate announced its entry into a global collaboration and option agreement with Janssen Biotech, Inc. (“Janssen”), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, for cell-based cancer immunotherapies, under which Fate received a $50 million upfront payment (the “Janssen Collaboration Agreement”). In addition, Fate was eligible for up to $3 billion in various milestone payments and double-digit royalties on any net sales from the collaboration. On the news, Fate’s stock price jumped 8.8% in trading on April 3, 2020.

On January 5, 2023, after the markets closed, Fate issued a press release announcing that it had terminated the Janssen Collaboration Agreement. Specifically, the Company disclosed that it was “not able to align with Janssen on their proposal for continuation of our collaboration, where two product candidates targeting high-value, clinically-validated hematology antigens were set to enter clinical development in 2023[.]” As a result of the termination, Fate revealed that all licenses and other rights granted pursuant to the Janssen Collaboration Agreement would terminate, that it would reduce its headcount to about 220 employees in Q1 2023, and that it would discontinue several of its natural cell killer programs in various cancers, including FT516 and FT538 NK cell programs in acute myeloid leukemia, FT516 and FT596 NK cell programs in B-cell lymphoma, and FT538 and FT536 NK cell programs in solid tumors.

On this news, Fate’s stock price fell $6.76 per share, or 61.45%, to close at $4.24 per share on January 6, 2023.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Janssen Collaboration Agreement was less sustainable than Fate had represented to investors; (ii) accordingly, certain of the clinical programs, milestone payments, and royalty payments associated with the Janssen Collaboration Agreement could not be relied upon as future revenue sources; (iii) as a result, Fate had overstated the impact of the Janssen Collaboration Agreement’s on Fate’s long-term clinical and commercial profitability; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.

Investors who purchased or otherwise acquired shares of Fate should contact the Firm prior to the March 22, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at [email protected] or [email protected].

Please visit our website at http://www.gme-law.com for more information about the firm.