Fate Therapeutics Inc (NASDAQ: FATE)
Shares in Fate Therapeutics are soaring at the market open, up over 15% and trading at its high of the day of $3.10 (10:17) in morning trading.
Why is Fate Soaring
FATE announced on Tuesday that the company has entered into a definitive securities purchase agreement with certain institutional and other accredited investors. The deal was led by Redmile Group LLC, facilitating a deal worth approximately $57 million dollars prior to ordinary fees and associated expenses.
In the deal, Redmile has agreed to purchase 2,819,549 million shares of non-voting Class A Preferred stock at $13.30 per share, with each share being convertible into five shares of common stock upon certain conditions. Based on the closing price of FATE on 11/21/16, the deal was an at-the-money raise, which certainly bodes well for showing confidence in the stock by investors.
The remaining accredited investors, including company insiders, have agreed to purchase 7,236,837 million shares of common stock at $2.66 per share, also at-the-money in relation to the closing price on 11/21/16.
The proceeds of the transaction will be used to advance the pipeline of programmed cellular immunotherapies and for general purposes.
Orphan Approval In EU
The twitter community also lit up the wires with information that the EU has granted FATE with Orphan Drug designation on 11/18/16 for its treatment in haematopoietic stem cell transplantation.
The company has not yet released the EU news, and when it does, FATE may enjoy an additional bounce higher.
The 52-week range for FATE is $1.46- $4.67 a share, with average volume being 157K shares per day. Investors appear to like the news, with FATE trading over 600K shares in early trading and holding its gains of roughly 16% (10:37).
The Fate of FATE
With cash in the bank, an Orphan Designation, and closing a strong financing deal, FATE appears to be on track to deliver some meaningful data in the coming months. Although thinly traded, FATE is a stock worthy of being put on an investor’s radar.
We’ll keep an eye on FATE for our readers and apprise of any material details or changes in the strategic vision at FATE.
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