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Fate Therapeutics Announces Pricing of Public Offering of Common Stock & Pre-Funded Warrants – ~$400 Million!

By John F. Heerdink, Jr.

Fate Therapeutics (NASDAQ: FATE) is a clinical-stage biopharmaceutical company dedicated to the development of first-in-class cellular immunotherapies for cancer and immune disorders. The Company has established a leadership position in the clinical development and manufacture of universal, off-the-shelf cell products using its proprietary induced pluripotent stem cell (iPSC) product platform. The Company’s immuno-oncology product candidates include natural killer (NK) cell and T-cell cancer immunotherapies, which are designed to synergize with well-established cancer therapies, including immune checkpoint inhibitors and monoclonal antibodies, and to target tumor-associated antigens with chimeric antigen receptors (CARs). The Company’s immuno-regulatory product candidates include ProTmune™, a pharmacologically modulated, donor cell graft that is currently being evaluated in a Phase 2 clinical trial for the prevention of graft-versus-host disease, and a myeloid-derived suppressor cell immunotherapy for promoting immune tolerance in patients with immune disorders. Fate Therapeutics is headquartered in San Diego, CA.

This week Fate Therapeutics, Inc. (NASDAQ: FATE) announced the pricing of an underwritten public offering of 4,421,053 shares of its common stock at a public offering price of $85.50 per share. In addition, in lieu of common stock to certain investors, the Company announced the pricing of an underwritten public offering of pre-funded warrants to purchase 257,310 shares of its common stock at a purchase price of $85.499 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.001 exercise price per share of each pre-funded warrant. This represents an aggregate offering of approximately $400 million. Fate Therapeutics has granted the underwriters a 30-day option to purchase up to an additional 701,754 shares of its common stock. The proceeds to Fate Therapeutics from this offering are expected to be approximately $376 million after deducting underwriting discounts and commissions and other estimated offering expenses but excluding any exercise of the underwriters’ option. Fate Therapeutics intends to use the net proceeds from the offering to fund clinical trials and nonclinical studies of its product candidates, the manufacture of its clinical product candidates, the expansion of its cGMP compliant manufacturing operations, including the construction, commissioning and qualification of its new facility, the conduct of preclinical research and development, and for general corporate purposes. All shares of common stock and pre-funded warrants to be sold in the offering are being offered by Fate Therapeutics. The offering is expected to close on or about January 8, 2021, subject to customary closing conditions.  

Jefferies, BofA Securities, SVB Leerink and Barclays are acting as joint book-running managers for the offering. Wells Fargo Securities is acting as lead manager for the offering, and Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. are acting as co-managers for the offering.  

The securities described above are being offered by Fate Therapeutics pursuant to an automatic shelf registration statement on Form S-3 (File No. 333-228513) that was previously filed by Fate Therapeutics with the Securities and Exchange Commission (the “SEC”) and automatically became effective upon filing on November 21, 2018. The securities may be offered only by means of a prospectus.

A preliminary prospectus supplement and a free writing prospectus related to the offering were filed with the SEC on January 4, 2021 and January 5, 2021, respectively, and are available on the SEC’s website at http://www.sec.gov and a final prospectus supplement related to the offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus for the securities being offered may also be obtained, when available, by contacting Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, 2nd Floor, New York, NY 10022, by e-mail at prospectus_department@jefferies.com or by telephone at (877) 547-6340; BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC 28255-0001, Attention: Prospectus Department, or by email at dg.prospectus_requests@bofa.com; SVB Leerink LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, MA 02110, by telephone at (800) 808-7525 ext. 6132 or by email at syndicate@svbleerink.com; or Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (888) 603-5847 or by email at Barclaysprospectus@broadridge.com.

FATE’s stock closed trading today at $117.22/share up +17.48%. The 52-week range is $16.75 – $118.48. We have been following the company over the last +3 years when the stock was in the $3 range. It has been a wild ride!

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