Fate Therapeutics stocks heads for record selloff after Janssen collaboration terminated and job cuts

Shares of Fate Therapeutics Inc.
FATE,
-61.18%
plunged 56.8% in premarket trading, putting them on track for a record one-day selloff, after the biopharmaceutical company announced the termination of its collaboration with Janssen Biotech Inc. and announced job cuts. The company said it had declined Janssen’s proposal to continue the collaboration on “revised terms and conditions.” The company added that it was cutting its workforce to about 220 employees, which compares with a workforce of 279 as of Dec. 31, 2020, according to the company’s latest annual report. The job cuts come as the company decided to stop developing a number of “natural killer” (NK) cell programs for cancer treatments. Fate said it ended December with $475 million in cash, giving it sufficient resources through 2025. The company’s news prompted no less than seven of the 24 analysts surveyed by FactSet to downgrade the stock, and 12 analysts to cut their price targets. The average target is now $22.40, according to FactSet, down from $59.15 at the end of December. The stock, which is on track to open at the lowest price seen during regular-session hours since December 2017, has already plunged 52.6% over the past three months through Thursday, while the iShares Biotechnology ETF
IBB,
+0.96%
has gained 7.8% and the S&P 500
SPX,
+1.74%
has tacked on 1.7%.