aibioFate Therapeutics faces securities class action and three derivative suits over Janssen disclosures
Tickers FATE
The 10-Q says Fate and unnamed officers are defendants in a Southern District of California class action. The derivative suits are captioned against Wolchko; board lists come from Fate's 2023 and 2026 proxies.
Key facts
- Company
- Fate Therapeutics, Inc. (NASDAQ: FATE)
- News type
- Legal
- Primary source
- Fate Therapeutics 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
Fate Therapeutics (Nasdaq: FATE) is defending a securities class action and three shareholder derivative suits, its 10-Q filed August 13, 2026 says. The class action, Hadian v. Fate Therapeutics, Inc. et al., was filed on January 20, 2023 in the U.S. District Court for the Southern District of California by a purported stockholder. It names the company and "certain of our officers." The 10-Q gives no case number and does not name the officers.
The derivative suits are Guarino v. Wolchko, et al. (filed June 2, 2023) and Horrobin v. Wolchko, et al. (filed June 12, 2024), both in the same federal court, and West v. Wolchko, et al. (filed December 17, 2025) in the Delaware Court of Chancery. They name members of the board and certain officers as defendants (in West, current and former ones), with Fate as a nominal defendant. Each caption names a defendant Wolchko; the 2023 proxy lists J. Scott Wolchko as chief executive.
The case
The lead plaintiff's amended complaint alleges that Fate violated the federal securities laws through false or misleading statements and omissions in its public disclosures dating back to August 2020. The statements concern the company's collaboration agreement with Janssen Biotech, Inc., potential product candidates under that agreement, and its termination. The 10-Q gives no class period, specific claims or relief sought.
The derivative claims arise from substantially the same alleged facts. Guarino asserts breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets and violation of federal securities laws. Horrobin asserts substantially similar claims plus breach of fiduciary duty for insider trading. West asserts breach of fiduciary duty and insider trading.
Defendants
In the class action the defendants are Fate and unnamed officers. Fate's 2023 proxy statement, filed April 21, 2023, says J. Scott Wolchko had been president and chief executive officer since December 2015 and Edward J. Dulac III had been chief financial officer since August 2020. The 10-Q does not say whether they are defendants.
The 10-Q does not list the individual derivative defendants. The 2023 proxy, the nearest to the Guarino filing, showed a ten-member board: Robert S. Epstein, John D. Mendlein, Karin Jooss, Robert Hershberg, William H. Rastetter, Yuan Xu, Michael Lee, Shefali Agarwal, Wolchko and Timothy P. Coughlin. For West, the nearest proxy, filed April 24, 2026, says the board then had eight members: Epstein, Jooss, Rastetter, Xu, Lee, Agarwal, Bahram Valamehr and Matthew C. Abernethy.
Where it stands
A lead plaintiff was appointed on May 4, 2023 and filed an amended complaint on July 24, 2023. The court granted Fate's motion to dismiss on September 19, 2024, with leave to amend. A second amended complaint followed on October 18, 2024, and the court granted a second motion to dismiss on September 22, 2025, again with leave to amend. The plaintiff filed a third amended complaint on October 17, 2025. Fate moved to dismiss it on November 17, 2025, the plaintiff opposed on December 18, 2025, and Fate replied on January 15, 2026. Fate says it intends to continue to defend the action vigorously.
On December 2, 2024 the court consolidated Guarino and Horrobin as In re Fate Therapeutics, Inc. Derivative Litigation and stayed the case. The stay expired on September 22, 2025, then on October 24, 2025 the court extended it pending a ruling on Fate's motion to dismiss the third amended complaint. The 10-Q says that ruling is pending.
On January 16, 2026 the Delaware court stayed West until the earliest of a public announcement of a settlement in the class action, a ruling on the motion to dismiss the second amended complaint, or dismissal of the class action with prejudice and exhaustion of appeals. Fate says it intends to defend the derivative suits vigorously.
Why it matters to shareholders
The 10-Q does not estimate a loss, record an accrual or describe insurance for these cases. A risk factor in the same filing says litigation of this kind "could result in substantial costs and a diversion of management's attention and resources." It also says rising directors' and officers' insurance costs may lead the company to choose lower policy limits or forgo coverage.