Fate Therapeutics, a San Diego-based biopharmaceutical company, is laying off more than half of its workforce and ending a key collaboration agreement with Janssen Biotech.
Fate is cutting 315 positions across its three locations in San Diego and a San Francisco facility, according to a WARN notice filed with the state. The layoffs hit all parts of the business from the chief technical officer to research and development positions and human resources. After the first quarter ends in March, the company said it will have 220 employees.
The publicly traded company was founded in 2007 and develops cell therapies to treat cancer and immune disorders. Fate is a clinical-stage company that works in the realm of immunotherapies.
Some of these therapies, such as natural killer cell programs, focus on equipping a patient’s own immune system to identify and destroy infected cells. Another avenue is CAR-T therapies, which genetically modify immune cells to fight a certain cancer and integrate those fighter cells into the patient.
In 2020, Fate Therapeutics entered an agreement with Janssen Biotech, a company owned by Johnson & Johnson, to develop novel cell-based cancer immunotherapies. The deal netted Fate $50 million in upfront cash as well as a $50 million equity investment from Johnson & Johnson. It also had the potential for Fate to get up to $3 billion in milestone payments and double-digit royalties after the commercialization of products.
However, Fate announced last week that it decided to terminate the agreement with Janssen and wrap up its t efforts during the first quarter of this year. The company said this decision comes at an expense to Janssen, which in September opted to expand the collaboration into an additional immunotherapy candidate related to blood cancer.
“We are disappointed that we were not able to align with Janssen on their proposal for continuation of our collaboration, where two product candidates targeting high-value, clinically-validated hematology antigens were set to enter clinical development in 2023,” Scott Wolchko, president and CEO of Fate Therapeutics said in the Thursday announcement.
Fate is also discontinuing the development of its natural killer cell programs for acute myeloid leukemia, B-cell lymphoma and solid tumors. The company said it will prioritize its pipeline of therapeutic candidates for multiple myeloma, blood-related diseases, as well as its CAR T-cell solid tumor program in collaboration with ONO Pharmaceutical.
Fate reports having approximately $475 million in cash, cash equivalents and receivables and that in tandem with the reduction in workforce and business restructuring should sustain operations through 2025.
In the company’s most recent quarterly filing in November, Fate Therapeutics reported that it does not have any commercial therapeutic products and hasn’t generated revenue from sales of such products, which is typical for biotechs at this stage. As of September, the company’s revenue has relied on government grants and collaboration agreements.
