FATE Therapeutics (FATE) risk factors, FY2025 10-K

Risks Related to the Discovery, Development and Regulation of Our Product Candidates

1. 01If we fail to complete the preclinical or clinical development of, or to obtain regulatory approval for, our product candidates, our business would be significantly harmed
2. 02difficulty establishing predictive preclinical models for demonstration of safety and efficacy of a product candidate in one or more potential therapeutic areas for clinical development100% rewritten
3. 03We may face delays in initiating, conducting or completing our clinical trials, and we may not be able to initiate, conduct or complete them at all28% rewritten
4. 04insufficient staffing and resources at our clinical trial sites to support our trials on a timely basis; andNew
5. 05initiation, study monitoring, and data collection and analysis, and other precautionary measures taken in treating patients or in practicing medicine in response to various public health concernsNew
6. 06A disruption to our manufacturing operations, or the inability by us or our third-party suppliers or manufacturers to manufacture sufficient quantities of our product candidates at acceptable quality levels or costs, or at all, would materially and adversely affect our business
7. 07Because our approach to the development of product candidates is based on novel and unproven technologies, it is subject to a substantial degree of technological uncertainty and we may not succeed in developing any of our product candidates
8. 08be uneconomical to commercialize or fail to achieve market acceptance
9. 09We anticipate that our current product candidates and any future product candidates may be used in combination with third-party drugs or biologics, some of which may still be in development, and we have limited or no control over the supply, regulatory status, or regulatory approval of such drugs or biologics
10. 10If we encounter difficulties enrolling patients in our clinical trials, including as a result of challenges in identifying and recruiting eligible patients to participate in our trials or competition for patients, our clinical development activities could be delayed or otherwise adversely affected
11. 11the proximity and availability of clinical trial sites for prospective patients33% rewritten
12. 12The clinical development of our product candidates could be substantially delayed if we are required to conduct unanticipated studies, including preclinical studies or clinical trials, or if the FDA imposes other requirements or restrictions including on the manufacture, of our product candidates
13. 13in the event a product candidate is approved, have regulatory authorities withdraw their approval of the product or impose restrictions on its use
14. 14Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval92% rewritten
15. 15Our clinical trials may be adversely affected by investigators’ limited experience with CAR-T cell therapies, including lack of familiarity with CAR-T-specific safety profiles and adverse events, which could impact patient safety, safety reporting, and the interpretation of clinical trial resultsNew
16. 16We may fail to obtain regulatory approval from the FDA or comparable foreign regulatory authorities for our product candidates, which would prevent or delay commercialization and adversely affect our businessNew
17. 17changes in approval policies or regulations, or changes in positions, guidance or feedback communicated by the FDA or comparable foreign regulatory authorities, that render our preclinical or clinical data insufficient to support approval or otherwise negatively impact the potential approval of a product candidateNew
18. 18Preliminary data and interim results we disclose may change as more patient data becomes available or as we make changes to our protocols or manufacturing processes, and such interim results and results from earlier studies may not be predictive of the final results, or of later studies or future clinical trials
19. 19safety issues or adverse events in patients who enroll in our current or future clinical trials
20. 20Results of clinical testing of any of our existing or future product candidates may fail to show the necessary safety and efficacy required for regulatory approval
21. 21Even if we obtain regulatory approval for a product candidate, our products will remain subject to regulatory scrutiny63% rewritten
22. 22We may rely on orphan drug status to develop and commercialize certain of our product candidates, but orphan drug designations may not confer marketing exclusivity or other expected commercial benefits and we may not be able to obtain orphan drug designations for our other product candidates
23. 23We may seek designation for our cell programming technology as a designated platform technology, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process
24. 24We may seek approval of one or more of our product candidates into real-time oncology review (RTOR). This program may not lead to a faster regulatory review or approval process and does not increase the likelihood that our product candidate(s) will receive marketing approval
25. 25A variety of risks associated with conducting research and clinical trials abroad and marketing our product candidates internationally could materially adversely affect our business
26. 26business interruptions resulting from ongoing and emerging geopolitical tensions, including wars, armed conflicts or acts of terrorism33% rewritten
27. 27We conduct and expect to continue to conduct one or more of our clinical trials or include sites in current or future clinical trials outside the United States34% rewritten
28. 28Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates

Risks Related to Our Financial Condition

1. 29Our ongoing and planned operations, including the development of our product candidates, will require substantial additional funding, without which we will be unable to complete preclinical or clinical development of, or obtain regulatory approval for or commercialize, our product candidates
2. 30our ability to establish and maintain strategic arrangements and alliances with third-party collaborators including our existing collaborations with Ono Pharmaceutical Co., Ltd. (Ono), and the University of Minnesota to advance the research, development and commercialization of therapeutic products
3. 31We have a limited operating history, have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future
4. 32We have broad discretion over the use of our cash, cash equivalents, and investments and may not use them effectively

Risks Related to Our Reliance on Third Parties

1. 33We are, and expect to continue to be, dependent on third parties to conduct some or all aspects of manufacturing of our product candidates for use in clinical trials and for commercial sale, if approved. Our business could be harmed if those third parties fail to perform satisfactorily
2. 34As a result, we may not be able to conduct such corporate collaborations in the manner or on the time schedule we currently contemplate, which may negatively impact our business operations
3. 35uses our proprietary information or intellectual property in such a way as to jeopardize our rights in such property87% rewritten
4. 36required for the conduct of our clinical trials and the manufacture of our product candidates and do not have supply arrangements for certain of these componentsNew
5. 37If conflicts arise between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to implement our strategies41% rewritten

Risks Related to Our Intellectual Property

1. 38If we are unable to protect our intellectual property, or obtain and maintain patent protection for our technology and product candidates, other companies could develop products based on our discoveries, which may reduce demand for our products and harm our business
2. 39We depend on our licensors to prosecute and maintain patents and patent applications that are material to our business. Any failure by our licensors to effectively protect these intellectual property rights could adversely affect our business and operations
3. 40If we fail to comply with our obligations under our license agreements, we could lose rights to our product candidates or key technologies
4. 41We have in the past and may in the future become involved in litigation or other proceedings relating to the enforcement or defense of patent and other intellectual property rights, which could cause us to divert our resources and could put our intellectual property at risk
5. 42We or our strategic partners may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing, or increase the costs of commercializing, our product candidates
6. 43We may not be successful in obtaining or maintaining necessary rights to product components and processes for development or manufacture of our product candidates which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated32% rewritten
7. 44obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could sufferNew
8. 45Intellectual property rights do not necessarily address all potential threats to our competitive advantage
9. 46we may fail to adequately protect and police our trademarks and trade secrets; and
10. 47We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed alleged trade secrets
11. 48We may be subject to claims challenging the inventorship of our patents and other intellectual property
12. 49Proprietary information and invention assignment agreements with our employees and third parties may not prevent unauthorized disclosure of our trade secrets and other proprietary information
13. 50We may not be able to protect our intellectual property rights throughout the world62% rewritten
14. 51strong as that in the United States. These products may compete with any products that we may develop and commercialize, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competingNew
15. 52Changes in the patent law in the United States could diminish the value of patents in general, thereby impairing our ability to protect our product candidates and technology
16. 53The term of our patents may not be sufficient to effectively protect our market position and products

Risks Related to the Commercialization of Our Product Candidates

1. 54We do not have experience marketing any product candidates and do not have a sales force or distribution capabilities, and if our products are approved, we may be unable to commercialize them successfully
2. 55Even if we obtain regulatory approval of our product candidates, the commercial success of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payers and others in the medical community40% rewritten
3. 56sufficient third-party insurance coverage or governmental reimbursement, which may depend on our ability to provide compelling evidence that a product meaningfully improves health outcomes to support such insurance coverage or reimbursement26% rewritten
4. 57We expect to face uncertainty regarding the pricing of our existing product candidates and any other product candidates that we may develop. If pricing policies for our product candidates are unfavorable, our commercial success will be impaired
5. 58The insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates could limit our product revenues
6. 59Healthcare legislative or regulatory reform measures may have a negative impact on our business and results of operations72% rewritten
7. 60legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programsNew
8. 61the availability of capital51% rewritten

Risks Related to Our Business and Industry

1. 62The success of our existing product candidates is substantially dependent on developments within the field of cellular immunotherapy, and specifically developments relating to the use of pluripotent or genome edited cells for the manufacture of cellular therapeutics, the majority of which are beyond our control76% rewritten
2. 63the expense of developing and commercializing such product. We could also face competition from other companies for collaboration partners, employees, advisors and service providers, which could negatively impact our ability to execute our business plansNew
3. 64Our ability to compete effectively with other biotechnology and pharmaceutical companies depends on our ability to distinguish our company and our product candidates from our competitors and their product candidates
4. 65The loss of any member of our senior management team or our inability to attract and retain key personnel and consultants could adversely affect our business21% rewritten
5. 66If we engage in an acquisition, reorganization or business combination, we will incur a variety of risks that could adversely affect our business operations or our stockholders
6. 67merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash or shares of the other company on terms that certain of our stockholders may not deem desirable
7. 68We face potential product liability exposure far in excess of our limited insurance coverage
8. 69Our insurance policies are expensive and protect us from only some risks, which leaves us exposed to significant uninsured liabilities
9. 70Our employees or third party service providers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
10. 71We face risks of potential liability related to the privacy of personal information, including health information we utilize in the development of our products, as well as information we obtain from clinical trials sponsored by us from research institutions and directly from individuals
11. 72Certain state laws may be more stringent or broader in scope than the CCPA, or offer greater individual rights, with respect to confidential, sensitive and personal information than federal, international or other state laws, and such laws may differ from each other, which may complicate compliance efforts
12. 73The increasing use of artificial intelligence-based software (including machine learning) may result in reputational harm or liability or could otherwise adversely affect our business31% rewritten
13. 74The use of social media platforms presents risks and challengesNew
14. 75Our internal computer systems, or those used by our third-party research institution collaborators, CROs or other contractors or consultants, may fail or suffer security breaches

Risks Related to the Ownership of Our Common Stock

1. 76Our stock price has been and may continue to be volatile or may decline regardless of our operating performance
2. 77general economic and market conditions, including inflationary pressures, tariffs and stock market volatility
3. 78If our common stock is delisted from the Nasdaq Global Market, the liquidity of our common stock would be adversely affected and the market price of our common stock could decreaseNew
4. 79Our principal stockholders and management own a significant percentage of our stock and may be able to exercise significant control over our company
5. 80A significant portion of our total outstanding shares may be sold into the market in the near future, which could cause the market price of our common stock to drop significantly
6. 81Provisions of Delaware law or our charter documents could delay or prevent an acquisition of our company, and could make it more difficult for you to change management
7. 82the authority of our board of directors to issue preferred stock with such terms as our board of directors may determine
8. 83Our amended and restated bylaws designate the Court of Chancery of the State of Delaware and the U.S. federal district courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to litigate disputes with us in a different judicial forum
9. 84A sustained decline in our stock price may result in an impairment indicator which could have an adverse impact on our results of operations32% rewritten
10. 85We currently qualify as a “smaller reporting company” and a “non-accelerated filer,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to such companies could make shares of our common stock less attractive to investors
11. 86Our ability to use our net operating loss carryforwards and certain other tax benefits may be limited and, as a result, our future tax liability may increase21% rewritten
12. 87We are and could be further subject to securities class action litigation and other types of stockholder litigation
13. 88Our business operations may subject us to disputes, claims and lawsuits, which may be costly and time-consuming and could materially and adversely impact our financial position and results of operations
14. 89Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations
15. 90Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations35% rewritten
16. 91respond to competitive pressures
17. 92Increasing scrutiny and changing expectations from governments and third-parties relating to environmental, social and governance (ESG) policies and practices may cause us to incur additional costs, expose us to additional risks or impact our reputation
18. 93Delayed or lost access to, or reductions in borrowings available under working capital sources and/or delays, inability or reductions in our ability to refund, roll over or extend the maturity of, or enter into new working capital resources
19. 94Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations
20. 95Geopolitical risks associated with ongoing wars and armed conflicts could have an adverse impact on our business, financial condition and results of operations, including our clinical trials
21. 96We or the third parties upon whom we depend may be adversely affected by earthquakes, wildfires, power outages, or other natural disasters, including public health crises, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
22. 97If we fail to maintain an effective system of disclosure controls and procedures and internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired
23. 98If we fail to comply with environmental, health, and safety laws and regulations, including regulations governing the handling, storage or disposal of hazardous materials, we could become subject to fines or penalties or incur costs that could harm our business
24. 99Changes in tax law may adversely affect us or our investors48% rewritten