Despite Durability Questions, BMO Upgraded This Natural-Killer Cell Therapy Oncology Stock

BMO Capital Market upgraded Fate Therapeutics Inc FATE to Outperform from Market Perform. The analyst believes Fate's iPSC platform is uniquely positioned in the cell therapy space.
But, the analyst wants to focus on the debate on whether engineered NK cells provide CAR-T-like efficacy and convenience, and safety.
"Early data for lead programs have been encouraging, particularly in safety concerns. For DLBCL, the median duration of response is misleading since it could reflect only a few months, but there could still be several patients with continued complete responses", BMO writes.
"So we would be looking for a tail on the Kaplan-Meier curves for FT519 and FT596," the analyst added.
In multiple myeloma, cures are less likely, so median progression-free survival is the benchmark.
BMO likes the risk/reward heading into 2H updates, while durability remains a major question.
At its current valuation, The analyst thinks there's a meaningful upside to platform updates in 2H and 2023.
With the price target of $47, implying ~57% upside to current shares, several updates are expected from FATE across its NK cell platform by the year-end.
Price Action: FATE shares are up 4.14% at $29.69 during the market session on the last check Tuesday.

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