Delaware

001-36076

65-1311552

(State or other jurisdiction of

incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

3535 General Atomics Court, Suite 200

San Diego, CA 92121

(Address of principal executive offices, including zip code)

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Exhibit No.

Description

99.1

Press release dated August 8, 2016

FATE THERAPEUTICS, INC.

By:

/s/ J. Scott Wolchko

J. Scott Wolchko

President and Chief Executive Officer

Exhibit No.

Description

99.1

Press release dated August 8, 2016

·

Opened Patient Enrollment in ProTmune™ Phase 1/2 Clinical Trial. Fate Therapeutics opened patient enrollment across multiple clinical sites in support of its Phase 1/2 clinical trial of ProTmune for the prevention of acute graft-versus-host disease (GvHD) and cytomegalovirus (CMV) infection. The Company expects to enroll 10 subjects in the initial Phase 1 stage of the trial, all of whom will receive ProTmune. Following an independent data monitoring committee safety review of these 10 subjects, a randomized, controlled Phase 2 stage is expected to enroll 60 subjects in a 1:1 ratio. The open-label Phase 1/2 study is designed to evaluate the safety and efficacy profile of ProTmune in adult subjects with hematologic malignancies undergoing allogeneic mobilized peripheral blood (mPB) hematopoietic cell transplantation (HCT).

·

Granted Fast Track Designation by the FDA for ProTmune. In June 2016, the U.S. Food and Drug Administration (FDA) granted Fast Track designation for ProTmune for the reduction of incidence and severity of acute GvHD in patients undergoing allogeneic HCT. GvHD is a leading cause of morbidity and mortality in patients undergoing HCT, and there are currently no approved therapies for its prevention.

·

Presented Preclinical Data Supporting Clinical Development of Allogeneic Memory-Like NK Cell Product Candidate. At the Innate Killer Summit in May 2016, Dr. Jeffrey Miller, M.D., Professor of Medicine and Deputy Director, University of Minnesota Cancer Center, highlighted in vitro and in vivo preclinical data demonstrating that the Company’s Adaptive NK Cell cancer immunotherapy has enhanced anti-tumor activity, including improved persistence, enhanced cytokine production and increased resistance to immunosuppressive factors in the tumor microenvironment. Additionally, the Company’s Adaptive NK Cell product candidate was shown to synergize with several different therapeutic antibodies in vivo in preclinical studies, significantly augmenting antibody-directed cellular cytotoxicity (ADCC) against solid tumors. 

·

Showcased Off-the-Shelf Cancer Immunotherapy Approach Using Renewable Pluripotent Cell Lines. The Company highlighted its patent-protected platform for producing off-the-shelf NK- and T-cell immunotherapies from engineered pluripotent cell lines at the Annual Meeting of the International Society for Stem Cell Research in June 2016. Fate Therapeutics is generating precisely-engineered, highly-stable pluripotent cell lines, from which it derives monoclonal populations of effector cells with enhanced properties, such as persistence, tumor targeting, and resistance to tumor suppression. Similar to master cell lines used for the manufacture of monoclonal antibodies, engineered pluripotent cell lines have the potential to serve as a renewable cell source for the consistent manufacture of homogeneous populations of effector cells for the treatment of many thousands of patients.

·

Entered into $10.3M Common Stock Purchase Agreement with Certain Institutional Investors. On August 6, 2016, Fate Therapeutics entered into a securities purchase agreement for a private placement of the Company’s common stock, under which funds managed by Franklin Advisers, Inc., together with certain other institutional investors, agreed to purchase 5.25 million shares of common stock at $1.96 per share for gross proceeds of $10.3 million. The private placement transaction is expected to close on or about August 10, 2016, subject to customary closing conditions. Proceeds from the transaction will be used primarily to advance the Company’s pipeline of programmed cellular immunotherapies and for general corporate purposes. The Company did not use a placement agent in connection with the transaction.

·

Appointed Chris M. Storgard, M.D. as Chief Medical Officer. In May 2016, Dr. Chris Storgard joined the Company as Chief Medical Officer. Dr. Storgard is an experienced drug development clinician with a proven history of advancing early stage programs through clinical development and product commercialization. He is primarily responsible for leading the design and execution of the Company’s clinical trials for its product candidates.

·

Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of June 30, 2016 were $45.9 million compared to $64.8 million as of December 31, 2015. The decrease is primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This balance as of June 30, 2016 did not include $10.3 million in proceeds which the Company expects to receive upon the closing of the private placement transaction.

·

Total Revenue: Revenue was $1.0 million for the second quarter of 2016 compared to $0.3 million for the comparable period in 2015. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics. 

·

Total Operating Expenses: Total operating expenses were $9.0 million for the second quarter of 2016 compared to $7.5 million for the comparable period in 2015. Operating expenses for the second quarter of 2016 included $0.8 million of stock compensation expense, compared to $0.7 million for the second quarter of 2015.

·

R&D Expenses: Research and development expenses were $6.8 million for the second quarter of 2016 compared to $4.9 million for the comparable period in 2015. The increase in R&D expenses is primarily related to an increase in third-party service provider fees to support the Company’s clinical development of ProTmune and preclinical development of its Adaptive NK Cell product candidate in collaboration with the University of Minnesota, and an increase in personnel expenses resulting from the hiring of additional employees to support the conduct of its research activities, including activities under its collaboration with Juno.

·

G&A Expenses: General and administrative expenses were $2.2 million for the second quarter of 2016 compared to $2.7 million for the comparable period in 2015. The decrease in G&A expenses is primarily related to a decrease in intellectual property-related expenses.

·

Common Shares Outstanding: Common shares outstanding as of June 30, 2016 were 28.9 million compared to 28.7 million as of December 31, 2015. Common shares outstanding increased primarily as a result of the issuance of shares under the Company’s equity incentive plan. Common shares outstanding as of June 30, 2016 did not include 5.25 million shares which the Company expects to issue upon the closing of the private placement transaction.

Three Months Ended
June 30,

Six Months Ended
June 30,

2016

2015

2016

2015

(unaudited)

Collaboration revenue

$          1,027

$             329

$          2,349

$             329

Operating expenses:

Research and development

  6,782

  4,857

  13,418

  9,425

General and administrative

  2,249

  2,690

  4,851

  5,446

Total operating expenses

  9,031

  7,547

  18,269

  14,871

Loss from operations

  (8,004)

  (7,218)

  (15,920)

  (14,542)

Other income (expense):

Interest income

  31

  2

  58

  3

Interest expense

  (435)

  (563)

  (923)

  (1,121)

Total other expense, net

  (404)

  (561)

  (865)

  (1,118)

Net loss

$       (8,408)

$       (7,779)

$     (16,785)

$     (15,660)

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale securities, net

  (3)

  —

  11

  —

Comprehensive loss

$       (8,411)

$       (7,779)

$     (16,774)

$     (15,660)

Net loss per common share, basic and diluted

$         (0.29)

$         (0.33)

$         (0.58)

$         (0.70)

Weighted-average common shares used to compute basic and diluted net loss per share

  28,868,464

  23,920,630

  28,823,127

  22,246,832

June 30,

December 31,

2016

2015

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$              35,870

$              64,809

Short-term investments

10,060

—

Prepaid expenses and other current assets

1,162

843

Total current assets

47,092

65,652

Long-term assets

2,086

2,306

Total assets

$              49,178

$              67,958

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable and accrued expenses

$                 4,353

$                3,435

Long-term debt, current portion

7,864

7,550

Current portion of deferred revenue

2,105

2,401

Other current liabilities

5

55

Total current liabilities

14,327

13,441

Long-term debt, net of current portion

6,676

10,688

Deferred revenue

3,881

4,934

Other long-term liabilities

1,165

857

Stockholders’ equity

23,129

38,038

Total liabilities and stockholders’ equity

$              49,178

$              67,958