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Cathie Wood Likes Fate Therapeutics, Should You?

By Brian Orelli, PhD and Keith Speights – Dec 1, 2021 at 8:00AM

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The biotech has an interesting pipeline, but it's all early stage products.

In this Motley Fool Live video recorded on Nov. 15, Motley Fool contributors Keith Speights and Brian Orelli answer a viewer question about prospects for Fate Therapeutics (FATE -4.98%), a stock favored by ARK Invest and its lead investor Cathie Wood. The company has several cancer drug candidates in phase 1 testing, which could lead to either great long-term success or great risk if the candidates fail. Fate's focus on using natural killer cells to attack tumors, rather than the T-cells that are more widely used in cancer cell therapies but have more adverse effects, could produce promising results in the future.

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Brian Orelli: Stephanie asks, what do you think of Fate Therapeutics? Ticker there is FATE. She notes that ARK invests in Fate Therapeutics.

Keith Speights: First of all, I will just say, Stephanie, that I don't follow Fate Therapeutics very closely, but you're right, ARK really likes it. Cathie Wood really seems to like this stock. It is a clinical-stage company [and] has several cancer drugs in development. I'm pulling up its pipeline now.

Orelli: They're all early stage, phase 1.

Speights: Yeah, none of them are beyond phase 1. The company does have several candidates that are in phase 1 testing, but none of them beyond that. But I think this is one of those companies that has tremendous long-term potential. It also has tremendous risk. It could flop with its studies as it moves along, or it could be tremendously successful. If you're an aggressive investor and you are only putting [in] a small portion of your overall portfolio, Fate Therapeutics might be a stock to take a look at, but just realize there's a lot of risk with this one.

Orelli: I think the company's developing natural killer cells, NK cells. I think those could potentially be better ways of attacking tumors than T-cells because T-cells have a lot of problems with going off and attacking whatever they want and having cytokine storms that they cause that are positive up-regulation of their activity. That's obviously a major issue with CAR-T cells. I think that NK cells may not have that issue, but I don't know that we quite have enough data to really confirm that completely.

Speights: I would add this for Stephanie, if she's just kind of looking into different biotech stocks that ARK is investing in -- take a look at Twist Bioscience (TWST -7.21%), ticker there is TWST. It has a really intriguing story and Brian, I think you even own shares of Twist.

Orelli: I do. It's a Motley Fool recommendation, too.

Speights: Yeah. Of the ones that she is investing in right now and buying more shares of, that's one that I would take a look at closely.

Brian Orelli, PhD owns shares of Twist Bioscience Corporation. Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twist Bioscience Corporation. The Motley Fool has a disclosure policy.

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