Fate Therapeutics (NASDAQ:FATE) stock is falling hard on Friday after the company announced the termination of its collaboration with Janssen Biotech.
Janssen was seeking to continue its collaboration with Fate Therapeutics with revised terms and conditions. However, Fate Therapeutics chose not to move forward with the partnership. As a result, collaboration activities will wind down in the first quarter of 2023.
Scott Wolchko, President and CEO of Fate Therapeutics, said the following about the news:
“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.”
More Changes Coming to FATE
To go along with this, Fate Therapeutics is adjusting its business. That includes prioritizing clinical programs as well as reducing operating expenses. This will see the company lay off employees to ensure that it has a “three-year cash runway.”
Fate Therapeutics ended Q4 2022 with cash and cash equivalents of $475 million. The job cuts will also see it reduce its workforce to just 220 employees. This should provide the company with enough funds to continue operations through 2025.
Heavy trading has FATE stock falling today as investors sell shares. As of this writing, some 15 million shares have been traded. For comparison, the daily average trading volume is closer to 2.1 million shares.
FATE stock is down 62% as of Friday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.