What happened

Shares of Fate Therapeutics (NASDAQ:FATE) jumped as much as 45.8% today after the company gave investors what they've long craved: data.

The company is developing novel immunotherapies based on natural killer (NK) cells, whereas most drug candidates in the industry's pipeline rely on T cells. NK cells have numerous inherent advantages but have delivered mixed clinical results to date for competitors, so investors approached the pharma company with caution. That all changed today.

Fate Therapeutics is making six presentations at the Annual Meeting of the American Society of Hematology (ASH). The first handful was made over the weekend and show that the company's was to cellular medicines has promise.

As of 12:50 p.m. EST, the stock had settled to a 44.4% gain.

A businessman with his laptop sitting on a rocket.

Image source: Getty Images.

So what

The cellular medicine innovator provided updates for three drug candidates:

  • FT516 is an engineered NK cell product generated from induced pluripotent stem cells (iPSC). The asset is being studied as a monotherapy (read: by itself) treatment for acute myeloid leukemia (AML) and in combination with certain monoclonal antibody products as a treatment of advanced B-cell lymphoma. It's the first cell product of any kind derived from a clonal master iPSC line to be evaluated in a clinical trial in the United States. The "clonal master iPSC line" part essentially means it can be manufactured more easily than immunotherapies requiring cells to be extracted from patients. That's why it's called "off the shelf."
  • FT500 is an engineered, off-the-shelf NK cell product generated from iPSCs. The asset is being studied against solid-tumor cancers as a monotherapy and in combination with one of three immune checkpoint inhibitors. All patients in the study have failed a prior checkpoint inhibitor therapy.
  • FT596 is an NK cell product that has been engineered to identify receptors presented on the surface of cancer cells. Therefore, the asset is a chimeric antigen receptor NK therapy, or a CAR-NK therapy. It's in preclinical development.

Fate Therapeutics reported that FT516 wiped out any signs of cancer in the first AML patient to receive treatment. A follow-up from the first patient with high-risk diffuse large B-cell lymphoma (DLBCL) is pending.

Meanwhile, the first 12 patients to receive FT500 showed little to no sign that their bodies were rejecting treatment. That's a concern for cellular medicines, which are at risk of being (correctly) identified as foreign cells by the recipient's immune system, and it's one of the obstacles NK cells inherently overcome. A separate, smaller population of patients in the study that received only FT500 achieved stable disease at best, but all of the individuals have advanced cancers.

The preclinical update for FT596 was only in mice, so investors can't really get excited yet. Studies show that when administered as a monotherapy, the asset achieved comparable response rates in lymphoma to CAR-T cells. That suggests it may have the same activity as the current best-in-class treatment in addition to the advantages of NK cells. A combination of FT596 and rituximab demonstrated potent tumor clearance, again in a preclinical model. The company expects to begin clinical trials in early 2020.

Now what

Fate Therapeutics ended September with $303 million in cash following a large public stock offering made in the third quarter of 2019. Therefore, investors might not expect the business to turn back to dilutive fundraising efforts despite its soaring stock price, although it cannot be ruled out. The company has a whopping 13 programs in preclinical and clinical development. It could be on the lookout for a well-funded partner or two, but it could also tap the public markets again to pursue a go-it-alone strategy. No matter the course ahead, this cellular medicine pioneer is starting to show that its ambitions might not be misplaced.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.