After markets closed last Monday, Kite Pharma Inc. announced that the full findings from a clinical trial for its non-Hodgkin’s lymphoma treatment had been published in a peer-reviewed journal. That sent its shares flying the next day.
The article said that in the trial, 12 out of 13 patients with advanced malignancies achieved complete or partial remission while receiving Kite’s treatment. The top-line results had already been revealed to investors and analysts in earlier presentations, but publication in the Aug. 25 issue of the Journal of Clinical Oncology – and the media attention that came with it – gave investors even more optimism.
Shares of the Santa Monica firm soared on the news, skyrocketing 21 percent during the week ended Aug. 27 to close at $27.20. All of the upward movement came after Monday’s release. Kite was one of the biggest gainers on the LABJ Stock Index. (See page 30.) Kite is up 55 percent since its June IPO.
Jason Kantor, an analyst who covers the company for Swiss finance giant Credit Suisse, said that while insiders learned nothing new, the added stamp of approval that came with publication in an academic journal excited retail investors about the treatment’s potential.
“From my perspective, there was not much that changed,” he said. “But certainly a publication in a peer-reviewed journal is viewed as a positive, in that it’s gone through some sort of validation process in getting published. Also, this created a lot of media stir.”
Kite Chief Executive Arie Belldegrun founded the company in 2009. He had sold a previous Santa Monica biotech business, Agensys, to Astellas Pharma Inc. in Tokyo for $437 million in 2007.
Kite did not respond to the Business Journal’s request for comment.
The company’s treatment is called KTE-C19, which involves a chimeric antigen receptor T-cell, or CAR-T. These treatments work by genetically engineering T-cells, a type of white blood cell, from affected people to produce special features called chimeric antigen receptors, which recognize specific targets on cancer cells. The CAR-T cells are then infused into the patient where they attack and neutralize those cells.
Thomas Shrader, an analyst who covers Kite for St. Louis investment bank Stifel Nicolaus, wrote that the Food and Drug Administration could approve the new treatment as soon as 2017, which would allow it to be the first on the market and in line to reap possibly tremendous rewards.
“We see the potential for KTE-C19 to surpass $1 billion of worldwide sales,” he wrote in an Aug. 25 report on the company.
Kantor said that Kite is the only pure-play publicly traded company for investors that want to bet on CAR-T treatments. Other pharmaceutical firms working on CAR-T products include Swiss pharma conglomerate Novartis and Juno Therapeutics, a private company in Seattle that has raised $300 million in less than a year.
