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FT

FATE THERAPEUTICS INC (FATE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 results modestly beat consensus: revenue $1.91M vs $1.14M consensus* and EPS ($0.29) vs ($0.34) consensus*; beat was driven by higher collaboration revenue from Ono and lower operating expenses vs Q1 . Estimates from S&P Global*.
  • Operating runway extended to year-end 2027, supported by pipeline prioritization, a 12% workforce reduction, and cost savings; Q3 charges of ~$0.9–$1.2M expected for the RIF .
  • Autoimmune franchise advanced: FT819 under RMAT had an initial FDA discussion on registrational design; first extrarenal SLE patient achieved LLDAS without conditioning, and lupus nephritis patient maintained DORIS remission at 12 months .
  • Near-term catalysts: ACR clinical updates (Oct), potential ASH/early-2026 data cadence, IND-enabled FT836 (conditioning-free solid tumor CAR T) first-in-human, HER2 program dose escalation with HER2 3+ enrichment, and ongoing site expansions intended to accelerate enrollment .

What Went Well and What Went Wrong

  • What Went Well
    • Delivered revenue and EPS above Street, with OpEx trending lower sequentially (Q2 OpEx $38.9M vs $42.9M in Q1) .
    • FT819 clinical momentum: durability in LN (DORIS at 12 months) and first extrarenal SLE add-on (no conditioning) achieving LLDAS; FDA RMAT dialogue on registrational path .
    • Management sharpening operating focus and extending runway to YE27; CEO emphasized priority to “commence registrational study for FT819 in SLE and LN in 2026” while optimizing resources .
  • What Went Wrong
    • YoY top line contracted: Q2 2025 revenue $1.91M vs $3.54M in Q2 2024, reflecting lower collaboration revenue recognition YoY .
    • Ongoing losses: net loss ($34.1M) and basic/diluted EPS ($0.29) remain negative, although improved YoY and sequentially .
    • Restructuring required to extend runway (12% RIF) with associated Q3 severance costs of ~$0.9–$1.2M .

Financial Results

Headline vs Consensus (Q2 2025)

MetricActualConsensus*Variance
Revenue ($USD)$1.91M $1.14M*Above*
EPS (basic & diluted)($0.29) ($0.34)*Above*

Values retrieved from S&P Global*.

Income Statement Bridge (Oldest → Newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$1.90M $1.63M $1.91M
Total Operating Expenses ($USD)$63.61M $42.91M $38.88M
Interest Income ($USD)$3.87M $3.34M $2.92M
Net Loss ($USD)($52.15M) ($37.62M) ($34.07M)
EPS (basic & diluted)($0.44) ($0.32) ($0.29)

Year-over-Year (Q2 2025 vs Q2 2024)

MetricQ2 2024Q2 2025YoY Direction
Revenue ($USD)$3.54M $1.91M Down
Total Operating Expenses ($USD)$51.86M $38.88M Down
Net Loss ($USD)($38.43M) ($34.07M) Improvement
EPS (basic & diluted)($0.33) ($0.29) Improvement

Revenue Composition

Revenue ComponentQ4 2024Q1 2025Q2 2025
Collaboration Revenue (Ono)$1.90M $1.63M $1.91M

Operating KPIs and Capitalization

KPIQ4 2024Q1 2025Q2 2025
Cash, Cash Equivalents & Investments ($USD)$306.7M $272.7M $248.9M
R&D Expense ($USD)$33.61M $29.14M $27.43M
G&A Expense ($USD)$15.26M $13.77M $11.45M
Common Shares Outstanding (period-end)113.9M 114.6M 114.7M

Notes:

  • Q2 revenue derived from the Ono collaboration .
  • No non-GAAP measures were presented in the company materials reviewed .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating RunwayCorporate1H 2027 (Q1 update) YE 2027 Raised/extended
Workforce ReductionQ3 2025N/A12% reduction; expected severance costs ~$0.9–$1.2M in Q3 New
FT819 Registrational Study StartAutoimmune“Work with FDA on registrational pathway” (Q1) Goal to commence registrational study in 2026 Timeline clarified
FT836 (MICA/B)OncologyIND-enabling; $4M CIRM award (Q1) IND allowed (July 2025) to initiate Ph1; conditioning-free design Milestone achieved
FT825/ONO-8250 (HER2)OncologyOngoing Ph1, dose escalation Dose escalation at 900M cells; fresh-biopsy HER2 3+ enrichment; favorable safety, no DLTs Trial refinement

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was found. We used the Q2 8-K press release and a September 2025 Cantor conference fireside chat for qualitative color.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
FT819 RMAT & Registrational PathRMAT received in April; plan to align on registrational strategy Initial FDA discussion under RMAT; aim to start registrational study in 2026 Advancing toward pivotal
Conditioning Strategy (Autoimmune)Flu-free regimen; first patient add-on to maintenance without conditioning First extrarenal SLE patient on maintenance achieved LLDAS at 3- and 6-months without conditioning Conditioning minimized; outpatient feasibility
Enrollment/Site ActivationLimited sites through 2024 8 sites activated within ~4 months; targeting ~20 including EU by YE; “multiple patients per site” dynamic Accelerating
Hospitalization RequirementN/AManagement aims to eliminate 3-day hospitalization by YE Moving to outpatient
Oncology PipelineFT825 Ph1 ongoing; initial SITC safety data FT825 with HER2 3+ enrichment; no DLTs; FT836 IND allowed with Sword & Shield tech, conditioning-free Solid tumor thesis de-risking
Cash RunwayYE26 (Q4) → 1H27 (Q1) YE27 Extending

Management Commentary

  • “Our priority remains focused on driving patient enrollment to demonstrate both the therapeutic differentiation and unique on-demand availability of FT819 in autoimmune diseases… working closely with the FDA under our RMAT designation with the goal of commencing our registrational study for FT819 in SLE and LN in 2026.” — Bob Valamehr, President & CEO .
  • On outpatient feasibility and conditioning: “Regimen A… single dose of cyclophosphamide… feasible in an outpatient setting… Regimen B… add-on to maintenance therapy without conditioning… saw a very significant decrease in disease” .
  • On pivotal readiness: “The pivotal study is expected to have no hospitalization requirement… we will see ourselves commencing the pivotal study second half of next year” .
  • On manufacturing scalability: “We have a master cell bank… each vial can give you trillions of CAR T cells… capacity close to 50,000 doses per year… not requiring any more capital” .
  • On capital allocation and runway: “Focusing on FT819… saving money has now extended our cash runway… we have about a quarter of a billion dollars with about a two and a half year cash runway” .

Q&A Highlights

  • Regimen Strategy & Dosing: Two-pronged approach—light conditioning (cyclophosphamide/bendamustine) vs add-on to maintenance without conditioning; exploring higher dose and multi-dose within a cycle; redosing post-primary endpoint in pivotal .
  • Operational Feasibility: Targeting outpatient administration and elimination of hospitalization requirements; physicians familiar with cyclophosphamide facilitate community practice use .
  • Enrollment & Sites: Eight sites activated in ~4 months with more to come; pivot to “many patients per few sites,” aiming ~20 including Europe by year-end .
  • Pivotal Timing: Aiming to complete Ph1 early next year and commence pivotal in 2H 2026 .
  • CMC Readiness: In-house GMP, large-scale capacity, and longstanding regulatory interactions to support pivotal/commercial readiness .

Estimates Context

  • Q2 2025 results vs S&P Global consensus: revenue $1.91M vs $1.14M*; EPS ($0.29) vs ($0.34), with 10 revenue and 11 EPS estimates contributing to consensus. Values retrieved from S&P Global*.
  • Implications: Collaboration revenue outpaced expectations; lower OpEx sequentially aided EPS. Given early-stage nature and collaboration-driven revenue, estimate revisions likely focus on OpEx trajectory and timing of clinical milestones rather than material revenue changes near term .

Key Takeaways for Investors

  • FT819 remains the core value driver with RMAT traction and a clearer 2026 registrational start; management pushing toward outpatient, minimal/no conditioning positioning—a potential commercial differentiator in autoimmune .
  • Sequential OpEx down for two straight quarters; runway extended to YE27, de-risking financing near term and enabling execution through pivotal start; RIF charges modest and contained to Q3 .
  • Near-term catalysts: ACR data flow, site expansion cadence, hospitalization removal updates, FT825 HER2-enriched data, and FT836 first-in-human readout potential in 2026 .
  • Q2 revenue/EPS beats were modest but directionally positive; ongoing progress in autoimmune and oncology underpins narrative momentum despite small absolute revenue base .
  • Watch enrollment velocity into early 2026 and the FDA dialogue details as they crystallize pivotal design—key stock drivers alongside emerging clinical efficacy/safety consistency .
  • Manufacturing scalability (master cell bank, in-house GMP) is a strategic advantage if efficacy translates into larger patient populations, potentially supporting faster scale-up at lower capital intensity .
  • Risk factors: Small revenue base, clinical/regulatory execution risk, and dependence on collaboration revenue timing; however, prioritization and RMAT pathway mitigate some development risk .

References:

  • Q2 2025 Form 8-K and Exhibit 99.1 press release
  • Q1 2025 press release (May 13, 2025)
  • Q4/FY 2024 press release (Mar 5, 2025)
  • Cantor Global Healthcare Conference 2025 transcript (Sep 4, 2025)

Estimates note: Values retrieved from S&P Global*.