On Thursday after the closing bell, Fate Therapeutics (NASDAQ: FATE) announced that it had gotten the backing of Johnson & Johnson's (NYSE: JNJ) Janssen Biotech division in a drug development deal that could be worth more than $3 billion ... if everything goes perfectly.
News of the agreement sent Fate's shares higher Friday. The stock was trading about 9% higher as of 2 p.m. EDT, while the broader market was down by more than 2%.
For now, Fate Therapeutics will get $50 million upfront and a $50 million investment from Johnson & Johnson. Its new partner will cover all the research and development costs on products targeting up to four different proteins expressed on cancerous cells, up to the filing of investigational new drug applications with the Food and Drug Administration. At that point, Johnson & Johnson can choose to license the therapies and take them through clinical development and commercialization. Fate will be responsible for producing the products, the cost of which will be covered by Johnson & Johnson.