Kite Pharma Triples So Far In 2017: What's Driving The Rally?
Zacks Investment Research | Sep 25, 2017 09:30PM ET
Shares of Kite Pharma, Inc. (NASDAQ:KITE) have had an impressive run so far this year riding on the progress of its revolutionary CAR-T therapy so far this year. The biopharmaceutical company’s shares have surged 300%, significantly outperforming the industry ’s gain of 15.9% in that period.
Kite Pharma is focused on the development of immuno-oncology treatments, which is a hot therapeutic area with huge commercial potential. The company has made major progress with its CAR-T therapy candidate, axicabtagene ciloleucel (KTE-C19), as a treatment for non-hodgkin lymphoma (“NHL”). It is currently under priority review in the United States with a decision from the FDA expected in November 2017.
The CAR-T therapy is a newly-found and highly advanced method to treat cancer by modifying the body’s immune system so that it can recognize and destroy cancer cells. The approval of Novartis’ (NYSE:NVS) Kymriah for treating acute lymphoblastic leukemia (“ALL”) in August made it the first approved CAR-T therapy. Considering the fact that the price of the pioneer drug is $475,000 over the course of treatment, an approval for Kite Pharma’s candidate will be a huge revenue generator for the company. There are 70,000 NHL patients diagnosed each year in the United States per the American Cancer Society. GIVE about EU
A public offering by the company in the first week of March at $75 a share boosted the share price.
In a major move, Gilead Sciences (NASDAQ:GILD) offered to acquire Kite Pharma for $11.9 billion in August to establish itself as a leader in cellular therapy. Gilead offered $180 per share, a premium of 29% over Kite’s close on Aug 25.
Meanwhile, other studies with axicabtagene ciloleucel in mantle cell lymphoma and ALL are also advancing. The data from these studies are expected in this year and early next year.
In the first quarter, Kite Pharma initiated ZUMA-5 study in patients with follicular NHL and ZUMA-9 to provide patients with access to axicabtagene ciloleucel during the regulatory review period. A phase Ib/II combination study (ZUMA-6) evaluating the candidate plus Roche Holding (SIX:ROG) AG’s (OTC:RHHBY) Tecentriq in patients with chemorefractory diffuse large B-cell lymphoma commenced in October 2016.
Moreover, apart from KTE-C19, Kite Pharma is also developing additional CAR-based candidates in other cancer indications.A phase I study on the TCR candidate, KITE-718, was initiated in the second quarter of 2017 in non-small cell lung cancer bladder cancer and head and neck cancer –. Moreover, Kite Pharma filed an investigational new drug (IND) application for CAR-T candidate, KITE-585, for relapse/refractory multiple myeloma in Aug 2017.
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