Fate Therapeutics Slashes Workforce by 60%, Terminates Multiple CAR-NK Programs and Janssen Collaboration Amid Strategic Restructuring

Fate Therapeutics Announces Early Termination of Collaboration with Johnson & Johnson, Along with Reduction of Existing R&D Pipeline and Significant Workforce Layoffs. For Example, the Company Will Abandon Several CAR-NK Cell Therapies in Phase 1 Clinical Trials and Plans to Reduce Staff from Last Year’s 545 to 220 in the First Quarter of This Year, Representing a 60% Layoff Rate.

Fate Therapeutics, Inc. is a company dedicated to developing iPSC-based therapies for autoimmune diseases.ImmunityCell therapy company for diseases and cancer. Following the news, Fate's stock price plummeted by more than 50%, with a current market value of only about 1 billion U.S. dollars, representing a 90% drop from its peak market value two years ago.

Fate Therapeutics CEO Scott Wolchko expressed deep disappointment over the inability to reach an agreement with Johnson & Johnson regarding their continued collaboration proposal. To honor the company’s commitment to developing disruptive product candidates, programs, and technologies with the potential to address significant unmet clinical needs, Fate Therapeutics has prioritized certain clinical programs while substantially reducing operational expenses. As a result, the company has had to implement layoffs and scale back its existing R&D pipeline to ensure cash flow sustainability for the next three years. Deepest gratitude is extended to all employees for their tremendous efforts, along with best wishes for those departing employees in their future endeavors.

Fate Therapeutics, Inc. was founded in 2007 and listed on NASDAQ in 2013. In 2019, it started several projects based on iPSC.CAR-TCAR-NK Cell Therapy Enters Clinical Trials, Fate Therapeutics' Market Value Exceeds $10 Billion at One Point.

In April 2020, Fate Therapeutics and Janssen, a subsidiary of Johnson & Johnson, reached a collaboration to jointly develop several iPSC-based CAR-T and CAR-NK cell therapies. Johnson & Johnson paid Fate Therapeutics $100 million in cash (including a $50 million upfront payment and $50 million equity investment). In addition, Fate Therapeutics is eligible to receive up to $3 billion in milestone payments as well as royalties from the future sales of developed drugs.

However, this collaboration between the two parties will be fully terminated in the first quarter of this year. As of the end of the fourth quarter of 2022, Fate Therapeutics, Inc. had unaudited total cash, cash equivalents, and accounts receivable of approximately US$475 million. Fate Therapeutics, Inc. stated that it is expected to have sufficient funds to advance its iPSC-based CAR-NK and CAR-T cell therapies through the end of 2025.

However, Fate Therapeutics also stated that it would significantly reduce its workforce to around 220 employees in the first quarter of this year, with a layoff rate as high as 60%. In addition, Fate will also scale back its existing R&D pipeline and halt treatments for acute myeloid leukemia.LeukemiaNK Cell Therapy FT516 and FT538, Treatment for B CellsLymphomaNK cell therapies FT516 and FT596, as well as NK cell therapies FT538 and FT536 for the treatment of solid tumors.