Monday, November 16, 2009

Fate Seals $30 M Series B, Gets Corporate Venture On Board

Fate Therapeutics has lined up $30 million in a Series B venture round as it pushes development of its lone clinical candidate, works toward making mass supplies of induced pluripotent stem (IPS) cells, and lines up licensees for its IPS platform.

Its Series A venture backers all re-upped, said CFO Scott Wolchko, and three corporate funds jumped in: Genzyme, Astellas Pharma, and an undisclosed party.

Fate will use part of the cash to push its candidate FT1050 through Phase 1. Fate hopes to have data next spring, and one alternative is to advance it into a Phase 2/3 pivotal trial by the end of 2010, said Wolchko. The small molecule is aimed at adult hematopoetic stem cells to help cord-blood transplant patients recover from their transplants faster. Genzyme and Astellas have commercial experience in the transplant area and could provide significant guidance, Wolchko said. Genzyme outbid Millennium Pharmaceuticals in 2006 for a Canadian firm whose product, Mozobil, helped prepare hematopoetic stem cells for collection and autologous transplant. Astellas has built the immunosuppressive Prograf into a $2 billion a year franchise and is trying to fend off generic attack from Novartis.

With FT1050 a key data point to watch for is time to engraftment, or how long a patient's immune system takes to bounce back from the transplant. Shaving several days off the time to engraftment could be a signficant clinical benefit.

FT1050 is Fate's first test of its larger proposition of using drugs to redirect or enhance the healing properties of a patient's own stem cell populations.

Fate is also working on the flip side of the problem: how to use small molecules and proteins to rewind cells back up to pluripotency. Fate cofounder and Scripps Institute professor Sheng Ding said in October his team had found a combination of drugs to speed up the reprogramming process and boost the yield of induced pluripotent stem (IPS) cells, though much work remains before Fate's process can produce industrial-scale amounts of cells that it or other drug companies can use for conventional drug research or, farther down the road, for cell therapy applications.

Wolchko, who directs the firm's business development efforts, said he expects to cut license deals for the platform technology within the next 12 months even if the production methods haven't reached industrial scale. "There are lots of parties we're talking to with different areas of expertise," Wolchko said. "Some might create cardiomyocytes for toxicity screening, or some might see it as a solid foundation for cell therapies; some of the applications might take five to ten years to materialize."

Even without licensing fees, Fate now has two years of capital in its pocket.

Photo courtesy of Flickr user anarchosyn.

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