SCHEDULE: Redmile Group Reorganizes Fate Therapeutics Holdings

Redmile Group, LLC has completed an internal reorganization of its holdings in Fate Therapeutics, shifting assets to specialized subsidiaries while maintaining a 14.9% aggregate stake.

Summary

• Redmile Group, LLC and Jeremy C. Green reported an internal reorganization of their investment in Fate Therapeutics Inc. on April 20, 2026.
• RedCo II Master Fund, L.P. contributed all of its securities pro rata and in kind to two wholly-owned subsidiaries, including RedCo II Offshore SPV LLC.
• The transferred securities included 8,977,624 shares of Common Stock, Pre-Funded Warrants for 3,691,324 shares, and 162,013 shares of Class A Preferred Stock.
• Following the reorganization, RedCo II Master Fund ceased to be a beneficial owner of more than 5% and will be dissolved.
• Redmile Group and Jeremy Green maintain an aggregate beneficial ownership of 18,229,078 shares, representing 14.9% of the company.
• The ownership calculation includes 116,263,459 shares of Common Stock outstanding as of February 19, 2026.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral administrative event. While it confirms Redmile's continued large stake, it does not represent new buying or a change in strategic direction.

Positives

• Redmile Group maintains a significant 14.9% stake, signaling continued institutional commitment to the company.
• The reorganization was internal and did not involve any market-side selling of shares.
• A Redmile Managing Director, Michael S. Lee, continues to serve on the Board of Directors, ensuring alignment between the major shareholder and corporate leadership.

Negatives

• The filing represents a purely administrative reorganization rather than a new capital infusion or increased investment.
• RedCo II Master Fund, a primary investment vehicle, is slated for dissolution following this transfer.

Risks

• Beneficial ownership is strictly capped at 14.99% due to Preferred and Warrant Beneficial Ownership Blockers, limiting Redmile's ability to increase its influence without regulatory notice.
• The use of cash-settled swaps (representing 266,280 shares) introduces counterparty risk and does not grant voting rights.

Future Outlook

The reporting persons intend to maintain their significant stake in the company, with Michael S. Lee continuing his role on the Board of Directors. The dissolution of RedCo II Master Fund suggests a streamlining of the investment structure into specific SPVs.

Management Comments

• Redmile and Mr. Green disclaim beneficial ownership of the shares except to the extent of their pecuniary interest.
• The internal reorganization resulted in no change in the aggregate beneficial ownership of Redmile or Mr. Green.

Industry Context

StockSavvy.ai notes that large healthcare-focused hedge funds like Redmile often utilize Special Purpose Vehicles (SPVs) to manage specific tranches of capital or for tax efficiency. This move is consistent with standard institutional portfolio management and does not indicate a change in the investment thesis for Fate Therapeutics.

Comparison to Industry Standards

• The 14.9% stake is typical for a lead institutional investor in a mid-cap biotechnology firm.
• The use of 14.99% ownership blockers is a standard regulatory strategy to avoid triggering 'poison pill' provisions or certain Section 16 reporting requirements.
• The board representation via a Managing Director is a common practice for activist or large-scale institutional holders in the biotech sector.

Corporate Governance

Related Party Transactions

• Pro rata contribution of securities from RedCo II Master Fund to its wholly-owned SPVs for no consideration.
• Novation of swap agreements from the Master Fund to the SPVs with no change in economic exposure.

Stakeholder Impact

• Shareholders: No immediate impact as the aggregate voting power of the Redmile group remains unchanged.
• Management: Continued presence of a major investor representative on the board provides stability.

Next Steps

• Dissolution of RedCo II Master Fund, L.P.
• Continued monitoring of clinical progress by Redmile's board representative.

Key Dates

Recommendation

The filing confirms that a major institutional holder is maintaining its position. Without a change in the aggregate stake or a new strategic announcement, the status quo for the stock remains unchanged from an ownership perspective.

Keywords

Fate Therapeutics, Redmile Group, Institutional Ownership, Schedule 13D, Biotechnology, Jeremy Green, Asset Reorganization, Beneficial Ownership