In a report released today, Robert Burns from H.C. Wainwright reiterated a Hold rating on Fate Therapeutics, with a price target of $5.00.
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Robert Burns has given his Hold rating due to a combination of factors surrounding the recent developments and data from Fate Therapeutics. The initial data from the FT819 lupus study shows promise, particularly with one patient achieving DORIS remission, but more efficacy data is needed to confirm its potential as a commercial product. The safety profile of FT819, while showing no high-grade CRS or ICANS, still presents concerns with Grade 4 neutropenia and infections, especially in patients receiving cyclophosphamide, suggesting that safety might improve with a conditioning-free regimen.
Additionally, the valuation of Fate Therapeutics, based on a DCF model, reflects a market value of $666M, considering the cash and investments on hand. However, the probability of approval for their other product, FT522, is estimated at 20%, indicating uncertainty in clinical efficacy and potential safety concerns. These elements, along with risks related to partnerships, regulatory responses, and possible dilution, contribute to the cautious stance and the reiteration of a Neutral rating with a 12-month price target of $5.