Despite upbeat tones from analysts, Fate Therapeutics' stock drops on blood cancer readout

Fate Therapeutics saw its shares in the red after-hours Thursday night as durability concerns cast a shadow over its latest blood cancer data drop.  



The biotech shared an interim peek of data from two of its experimental therapies: FT516 and FT596, which was focused on patients with relapsed/refractory B-cell lymphoma.



The data for '596 come from an ongoing early trial that sees it work as a monotherapy and in combo with a single dose of cancer and autoimmune biologic rituximab, following three days of conditioning chemo.



In several cohorts of the mono and combo arm, which was made up of 14 patients, 10 of the 14 patients (71%) achieved an objective response (OR), including seven patients (50%) that achieved a complete response (CR).



Eight of 10 patients (80%) that had not previously received CD19-targeted CAR T-cell therapy achieved an OR, including five patients (50%) that achieved a CR. Two of four patients (50%) that had previously received CD19-targeted CAR T-cell therapy, both of whom were treated in the combo arm, also hit a CR.



In the first single-dose cohorts of the mono and combo arms, comprising six patients, only one patient hit an OR, “suggesting dose-response treatment effects for FT596.”



Safety was generally clean, though there were two low-grade adverse events of cytokine release syndrome (which is common using this type of therapy), both of which “occurred concurrently with other confounding clinical events and resolved on the same day of onset,” according to the biotech.



With '516, of the 11 patients treated in the second and third multidose cohorts, eight patients (73%) achieved an OR, including six (55%) who achieved a CR.



At three months following first infusion, all eight responders maintained their response without further therapeutic intervention (three-month rate of 73% OR and 55% CR).



As of the data cutoff July 7, five patients (45%) maintained their response without more therapy, including four patients that remained in CR (4.6 to 9.5 months) and one patient that remained in partial response (6.1 months).



Two patients that had achieved CR experienced disease progression (4.2 and 5.1 months) and one patient that had achieved partial response was treated with additional anti-cancer therapy (4.1 months).



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But shares in the biotech, which has a staggering $8 billion valuation, were down nearly 9% Thursday evening and opened up worse on Friday morning, down 16% at 9am. This may well be because of questions over the durability of its therapy.



Analysts at Jefferies noted the “high expectations” going into the readout, and, while it saw “strong data,” there will “still be investor questions coming away from this week on the durability of '516 and '596.”



Those investors will have to wait for the American Society of Hematology conference later this year, which will show higher doses for '596 and the first durability on '596, too.



Jefferies said '596 “is the big news” showing that high 50% CR, but still at lower doses. Fate is now dosing up to 900 million cells (three times higher) and also dosing more per month. “Both of these could further improve CR and drive high durability,” the firm added.



There’s a lot going on in these drugs: FT516 works as a universal, off-the-shelf natural killer (NK) cell therapy that is derived from a clonal master induced pluripotent stem cell line. This, in turn, is engineered with a high-affinity, non-cleavable CD16 (hnCD16) Fc receptor, all of which is designed to boost antibody-dependent cellular cytotoxicity, a potent anti-tumor mechanism by which NK cells recognize, bind and kill antibody-coated cancer cells.



FT596, meanwhile, incorporates both the hnCD16 Fc receptor and a chimeric antigen receptor targeting CD19, which is designed to enable multi-antigen targeting of tumor cells as well as an IL-15 receptor fusion to enhance NK cell activity and survival.



The biotech is looking to rival Allogene Therapeutics, which is using a similar approach (though is further along in the clinic). Michael Yee at Jefferies, in a separate note to clients batting for Allogene, said the new Fate update still requires follow-up and more durability but “was essentially ‘in-line’ with Allogene.”



Yee sees the Fate data as “removing an overhang” as “investors were nervous it would be much better, which wasn't necessarily the case, so ALLO could bounce into YE with more consolidation data (2 infusions) and more durability.” Allogene's shares were slightly off on the Fate data by 0.5%.