On December 4, 2020, Fate Therapeutics, Inc. and Ono Pharmaceutical Co., Ltd. entered into a letter agreement in connection with the Collaboration and Option Agreement between Fate and Ono dated September 14, 2018. Pursuant to the Agreement, Fate and Ono are conducting research for the joint development and commercialization of two off-the-shelf iPSC-derived chimeric antigen receptor (CAR) T-cell product candidates. The first off-the-shelf, iPSC-derived CAR T-cell candidate targets an antigen expressed on certain lymphoblastic leukemias, and the second off-the-shelf, iPSC-derived CAR T-cell candidate targets an antigen expressed on certain solid tumors.

Fate has granted to Ono, during a specified period of time, an option to obtain an exclusive license under certain intellectual property rights to develop and commercialize (a) Collaboration Candidate 1 in Asia, with Fate retaining rights for development and commercialization in all other territories of the world and (b) Collaboration Candidate 2 in all territories of the world, with Fate retaining the right to co-develop and co-commercialize Collaboration Candidate 2 in the United States and Europe under a joint arrangement with Ono whereby Fate is eligible to share at least 50% of the profits and losses. Pursuant to the Letter Agreement, Ono delivered to Fate proprietary antigen binding domains targeting an antigen expressed on certain solid tumors, and nominated such antigen binding domains as the Ono Antigen Binding Domain for incorporation into Collaboration Candidate 2. In connection with such nomination, Ono is obligated to pay Fate a milestone fee of $10 million for further research and development of Collaboration Candidate 2 under the Agreement, and Ono continues to maintain its option to Collaboration Candidate 2 under the Agreement. In addition, Fate and Ono agreed to the termination of the Agreement with respect to Collaboration Candidate 1. Fate retains all rights, in its sole discretion, to research, develop and commercialize Collaboration Candidate 1 throughout the world without any obligation to Ono.