What’s Ahead For CAR-T Play Kite Pharma?
After having a magnificent embark to 2017, Kite Pharma shares have dropped recently on concerns over a patient death due to cerebral edema, putting at risk its lead candidate.
Based on the profile of the only KTE-C19 patient in
300 to die of edema, it seems unlikely that more edema deaths will occur.
The efficacy of KTE-C19 – accomplish response in over 1/3rd of refractory aggressive NHL patients – makes it unlikely that the FDA would delay this groundbreaking therapy.
Insiders show up to believe that this is the case, using the latest weakness to purchase extra shares. A total update on Kite is below.
“Decent people should disregard politics, if only they could be certain that politics would disregard them.”
― William F. Buckley Jr.
This afternoon we take an in depth look at one of the so-called “CAR-T” stocks that has been in the news fairly a bit of late.
Kite Pharma (NASDAQ:KITE) is a Santa Monica-based clinical stage biopharmaceutical concern focused on the development of cancer immunotherapy products that corset the patient’s own immune system to actuate cancer cell destruction. The treatment involves removing the patient’s T cells, modifying them to express chimeric antigen receptors (CARs) or T cell receptors (TCRs), and reintroducing the engineered T cells back into the patient’s assets where they will be more effective attacking cancer cells.
Without attempting to get too technical medically, there are five different types of white blood cells: neutrophils (that attack bacterial and fungal infections), eosinophils (parasites), basophils (inflammatory responses), monocytes (dead cell debris, bacterial and fungal infections, and other microorganisms), and lymphocytes. Lymphocytes consist of B cells that demolish pathogens, along with T cells and natural killer cells that attack viral and cancer cells. Lymphomas are blood cell cancers that develop from lymphocytes and (along with leukemia) are the primary concentrate of Kite’s therapies.
1. KTE-C19 (axicabtagene ciloleucel). This is the company’s lead candidate and is being evaluated in a series of clinical trials (ZUMA) in the treatment of different types of lymphoma. The more advanced ZUMA trials are detailed below.
ZUMA-1. ZUMA-1 tested the effectiveness and safety of KTC-C19 in the treatment of three different lymphomas all categorized as refractory aggressive non-Hodgins lymphoma (NHL): diffuse large B-cell lymphoma (DLBCL) enrolled in Cohort 1, as well as primary mediastinal B-cell lymphoma (PMBCL) and transformed follicular lymphoma (TFL) enrolled in cohort Two. The results were utterly encouraging with 44% (n= 101) experiencing an objective (partial or accomplish) response and 39% achieving a accomplish response at a median follow-up of 8.7 months after a single infusion of axicabtagene ciloleucel. There were two deaths deemed related to the treatment and grade three adverse events (AES) included anemia (41%) along with various forms of decreased white blood cell counts and neutropenia. There were (originally) no cases of cerebral edema. Despite these AEs, the results were groundbreaking considering that patients with refractory aggressive lymphoma only have an 8% chance of accomplish response under presently approved therapies. In other words, KTE-C19 is bringing the patients back from the dead. KTE-C19 has received breakthrough therapy designation in the United States for the treatment of refractory DLBCL, PMBCL and TFL and was granted access to Priority Medicines regulatory support in the European Union for the treatment of refractory DLBCL. The trial (ZUMA-1) won “Clinical Trial of the Year” at the Clinical and Research Excellence Awards. On the back of these results, Kite submitted a Biologics License Application (BLA) to the FDA for patients with aggressive Non-Hodgkin Lymphoma (NHL) on March 31, 2017. If approved, Kite expects to commercially launch its immunotherapy later this year. A relatively quick approval would make it very first to market ahead of both Juno Therapeutics (NASDAQ: JUNO) and Novartis AG (NYSE:NVS), which are both in CAR-T related clinical trials. The company also anticipates submitting a marketing authorization application (MAA) to the European Medicines Authority (EMA) in 3Q17.
The overall market for Kite’s KTE-C19 is fairly large with
70,000 NHL patients diagnosed each year in the United States. Aggressive NHLs such as DLBCL (
15,300), and PMBCL (
1,650) comprise slightly more than half of the cases. Current standard of care is essentially limited to different forms of chemotherapy and autologous stem cell transplant, with varying ranges of effectiveness. For example, 50% to 60% of DLBCL patients are cured with a very first line R-CHOP chemotherapy, whereas conventional treatments for follicular lymphoma patients are not curative. The company believes that the current market chance (refractory) for CAR-T therapy is
7,000 patients in each the United States and the EU annually.
However, not all of the news is good. In September 2016, the company initiated a safety expansion cohort of thirty patients in the United States in an attempt to mitigate some of the AEs observed in the trials. The strategy involved the use of levetiracetam, an anticonvulsant, and tocilizumab, an IL-6 receptor inhibitor, prophylactically. It was exposed in the last 10-Q (1Q17) that of the thirty patients, two experienced grade three cytokine release syndrome (CRS) – a severe inflammatory response – with one progressing to grade five cerebral edema, resulting in death. This was the very first case of cerebral edema in approximately two hundred patients spanning all of the ZUMA trials. More on this incident is forthcoming.
ZUMA-2. Kite expects to enroll seventy patients with relapsed or refractory Mantle cell lymphoma (MCL) in a probe to evaluate KTE-C19. Approximately Four,200 fresh cases of MCL occur in the United States every year. Preliminary results are expected in 2018.
ZUMA-3 and Four. Both trials are to evaluate the effectiveness of KTE-C19 in the treatment of acute lymphoblastic leukemia (ALL). ALL is an aggressive form of leukemia that affects
6,500 fresh patients in the United States every year. ZUMA-3 will investigate seventy five adults; ZUMA-4 will evaluate seventy five children, both in Phase two trials. In Phase one studies of ZUMA-3 and ZUMA-4, nine out of eleven (82%) achieved accomplish remission or accomplish remission with partial or incomplete hematological recovery. Five out of thirteen (38%) suffered grade three or higher CRS and grade three or higher neurological events with one patient dying from KTE-C19 related CRS. Follow-up Phase one data is expected later this year and Phase two enrollment should proceed via two thousand seventeen with Phase two results expected in 2018.
ZUMA-5. In May 2017, Kite initiated a Phase two investigate to evaluate KTE-C19 in the treatment of indolent NHL. Fifty patients are expected to be enrolled in the trial with results expected in 2018.
ZUMA-6. This is a Phase one investigate of KTE-C19 in combination with atezolizumab PD-L1 checkpoint inhibitor in aggressive NHL. Results are due later this year.
Two. KITE-585. Also a CAR-T therapy, KITE-585 is being evaluated for the treatment of numerous myeloma (plasma cell cancer) through the targeting of B-cell maturation antigen (BCMA), which has been implicated in other lymphomas and leukemia. The company expects to file an IND for this treatment in 3Q17.
Three. KITE-718. This T cell receptor cell therapy has just cleared IND and will be evaluated for in the treatment of solid tumors. Phase one initiation should occur in 2Q17.
Balance Sheet and Analyst Commentary
As of March 31, 2017, the company had $804 million in cash and equivalents on the balance sheet thanks in part to a $400 million secondary priced in early March. With an expected annual burn rate of $320 to $340 million to support their ongoing trials and expected KTE-C19 launch at the end of 2017, Kite should have enough cash to get it into two thousand nineteen if there is a delay on FDA approval. Kite’s market cap is just over $Four.1 billion and the stock sells for just over $73.00 a share presently
Analysts on the street are a mixed bag. Most latest recommendations have been buy ratings but several analysts have Hold or Sell ratings on this name. The current median analyst price target is just north of $85.00 a share on KITE. The current consensus projects for the company to lose $8.Nineteen a share on revenues of $41 million in two thousand seventeen while losing $6.45 in two thousand eighteen on revenues of $192 million.
Shares of KITE are off to an excellent embark overall in 2017. After closing two thousand sixteen at just under $45.00 a share, the stock soared after the KTE-C19 ZUMA-1 readout on February 28th. The company took advantage of this optimism to price the aforementioned secondary at $75 a share. Buying continued after the secondary with the stock closing at
$85.92 a share on March 13th. Shares cratered over $Ten (
13%) on May 8th after the release of the 10-Q and the revelation of the April patient death from cerebral edema.
This death obviously increases the chance of a delay (in the form of another trial or request for more information) or rejection of KTE-019 from the FDA. Reminisce, Juno had to halt its Phase two trial for its CAR-T candidate JCAR015 because of numerous patient deaths due to cerebral edema. The real risk to Kite would come in the form of another patient death from cerebral edema. The question becomes: How likely is that to occur?
Based on the information provided by Kite concerning the patient who died in April, the likelihood seems relatively puny. Very first, this patient was the very first grade five edema event out of almost three hundred patients treated with KTE-C19 inbetween the ZUMA trials and the studies of the National Cancer Institute. This patient had one of the highest level of certain cytokines recorded of all ZUMA-1 patients. In other words, the patient’s baseline underlying inflammatory conditions were utterly high, making the chances of a grade five edema much greater.
Also, it would seem relatively fierce for the FDA to not approve a treatment that has demonstrated accomplish response in more than a third of patients who were non-responsive to the current standard of care and on death’s doorstep. Management seems to agree with this assessment, recently using the latest dip in share price to add to positions in KITE. Specifically, two officers and one director purchased Eighteen,845 shares of stock on May 9th and 10th, likely betting on a quick approval for KTE-C19. A latest projection had KTE-C19 doing just over $900 million in revenues in FY2021.
Kite has many things to recommend it within a well-diversified biotech portfolio. It has numerous “shots on purpose,” upcoming milestones, a potential approval of a lucrative drug and is well-funded at the moment after its latest secondary.
That being said, the stock has a big run so far in two thousand seventeen in anticipation of approval and biotech overall has been feeble of late. This is a name I would most likely accumulate leisurely and perhaps a bit more aggressively if it fell into the mid-$60s. Selling out of the money bull put spreads might also be a good strategy to build up a lower entry point and/or pick up premium income.
“Elections are won by guys and women chiefly because most people vote against somebody rather than for somebody.” ― Franklin P. Adams
Author’s note: To get these types of articles and Instablogs on attractive biotech and pharma stocks as soon as they are published, just click on my profile, hit the big, orange “Go after” button, and choose the real-time alerts option.
Reminder: We have enabled Free two-week trials into The Biotech Forum through midnight EST tonight as part of our Memorial Day weekend promotion .
Thank You and Blessed Hunting
Founder, Biotech Forum
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in KITE over the next seventy two hours.
I wrote this article myself, and it voices my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
What – s Ahead For CAR-T Play Kite Pharma? Kite Pharma (NASDAQ: KITE), Seeking Alpha
What’s Ahead For CAR-T Play Kite Pharma?
After having a magnificent begin to 2017, Kite Pharma shares have dropped recently on concerns over a patient death due to cerebral edema, putting at risk its lead candidate.
Based on the profile of the only KTE-C19 patient in
300 to die of edema, it seems unlikely that more edema deaths will occur.
The efficacy of KTE-C19 – accomplish response in over 1/3rd of refractory aggressive NHL patients – makes it unlikely that the FDA would delay this groundbreaking therapy.
Insiders show up to believe that this is the case, using the latest weakness to purchase extra shares. A utter update on Kite is below.
“Decent people should overlook politics, if only they could be certain that politics would disregard them.”
― William F. Buckley Jr.
This afternoon we take an in depth look at one of the so-called “CAR-T” stocks that has been in the news fairly a bit of late.
Kite Pharma (NASDAQ:KITE) is a Santa Monica-based clinical stage biopharmaceutical concern focused on the development of cancer immunotherapy products that corset the patient’s own immune system to actuate cancer cell destruction. The treatment involves removing the patient’s T cells, modifying them to express chimeric antigen receptors (CARs) or T cell receptors (TCRs), and reintroducing the engineered T cells back into the patient’s bod where they will be more effective attacking cancer cells.
Without attempting to get too technical medically, there are five different types of white blood cells: neutrophils (that attack bacterial and fungal infections), eosinophils (parasites), basophils (inflammatory responses), monocytes (dead cell debris, bacterial and fungal infections, and other microorganisms), and lymphocytes. Lymphocytes consist of B cells that ruin pathogens, along with T cells and natural killer cells that attack viral and cancer cells. Lymphomas are blood cell cancers that develop from lymphocytes and (along with leukemia) are the primary concentrate of Kite’s therapies.
1. KTE-C19 (axicabtagene ciloleucel). This is the company’s lead candidate and is being evaluated in a series of clinical trials (ZUMA) in the treatment of different types of lymphoma. The more advanced ZUMA trials are detailed below.
ZUMA-1. ZUMA-1 tested the effectiveness and safety of KTC-C19 in the treatment of three different lymphomas all categorized as refractory aggressive non-Hodgins lymphoma (NHL): diffuse large B-cell lymphoma (DLBCL) enrolled in Cohort 1, as well as primary mediastinal B-cell lymphoma (PMBCL) and transformed follicular lymphoma (TFL) enrolled in cohort Two. The results were utterly encouraging with 44% (n= 101) experiencing an objective (partial or finish) response and 39% achieving a accomplish response at a median follow-up of 8.7 months after a single infusion of axicabtagene ciloleucel. There were two deaths deemed related to the treatment and grade three adverse events (AES) included anemia (41%) along with various forms of decreased white blood cell counts and neutropenia. There were (primarily) no cases of cerebral edema. Despite these AEs, the results were groundbreaking considering that patients with refractory aggressive lymphoma only have an 8% chance of finish response under presently approved therapies. In other words, KTE-C19 is bringing the patients back from the dead. KTE-C19 has received breakthrough therapy designation in the United States for the treatment of refractory DLBCL, PMBCL and TFL and was granted access to Priority Medicines regulatory support in the European Union for the treatment of refractory DLBCL. The trial (ZUMA-1) won “Clinical Trial of the Year” at the Clinical and Research Excellence Awards. On the back of these results, Kite submitted a Biologics License Application (BLA) to the FDA for patients with aggressive Non-Hodgkin Lymphoma (NHL) on March 31, 2017. If approved, Kite expects to commercially launch its immunotherapy later this year. A relatively quick approval would make it very first to market ahead of both Juno Therapeutics (NASDAQ: JUNO) and Novartis AG (NYSE:NVS), which are both in CAR-T related clinical trials. The company also anticipates submitting a marketing authorization application (MAA) to the European Medicines Authority (EMA) in 3Q17.
The overall market for Kite’s KTE-C19 is fairly large with
70,000 NHL patients diagnosed each year in the United States. Aggressive NHLs such as DLBCL (
15,300), and PMBCL (
1,650) comprise slightly more than half of the cases. Current standard of care is essentially limited to different forms of chemotherapy and autologous stem cell transplant, with varying ranges of effectiveness. For example, 50% to 60% of DLBCL patients are cured with a very first line R-CHOP chemotherapy, whereas conventional treatments for follicular lymphoma patients are not curative. The company believes that the current market chance (refractory) for CAR-T therapy is
7,000 patients in each the United States and the EU annually.
However, not all of the news is good. In September 2016, the company initiated a safety expansion cohort of thirty patients in the United States in an attempt to mitigate some of the AEs observed in the trials. The strategy involved the use of levetiracetam, an anticonvulsant, and tocilizumab, an IL-6 receptor inhibitor, prophylactically. It was exposed in the last 10-Q (1Q17) that of the thirty patients, two experienced grade three cytokine release syndrome (CRS) – a severe inflammatory response – with one progressing to grade five cerebral edema, resulting in death. This was the very first case of cerebral edema in approximately two hundred patients spanning all of the ZUMA trials. More on this incident is forthcoming.
ZUMA-2. Kite expects to enroll seventy patients with relapsed or refractory Mantle cell lymphoma (MCL) in a probe to evaluate KTE-C19. Approximately Four,200 fresh cases of MCL occur in the United States every year. Preliminary results are expected in 2018.
ZUMA-3 and Four. Both trials are to evaluate the effectiveness of KTE-C19 in the treatment of acute lymphoblastic leukemia (ALL). ALL is an aggressive form of leukemia that affects
6,500 fresh patients in the United States every year. ZUMA-3 will probe seventy five adults; ZUMA-4 will evaluate seventy five children, both in Phase two trials. In Phase one studies of ZUMA-3 and ZUMA-4, nine out of eleven (82%) achieved accomplish remission or finish remission with partial or incomplete hematological recovery. Five out of thirteen (38%) suffered grade three or higher CRS and grade three or higher neurological events with one patient dying from KTE-C19 related CRS. Follow-up Phase one data is expected later this year and Phase two enrollment should proceed via two thousand seventeen with Phase two results expected in 2018.
ZUMA-5. In May 2017, Kite initiated a Phase two probe to evaluate KTE-C19 in the treatment of indolent NHL. Fifty patients are expected to be enrolled in the trial with results expected in 2018.
ZUMA-6. This is a Phase one explore of KTE-C19 in combination with atezolizumab PD-L1 checkpoint inhibitor in aggressive NHL. Results are due later this year.
Two. KITE-585. Also a CAR-T therapy, KITE-585 is being evaluated for the treatment of numerous myeloma (plasma cell cancer) through the targeting of B-cell maturation antigen (BCMA), which has been implicated in other lymphomas and leukemia. The company expects to file an IND for this treatment in 3Q17.
Three. KITE-718. This T cell receptor cell therapy has just cleared IND and will be evaluated for in the treatment of solid tumors. Phase one initiation should occur in 2Q17.
Balance Sheet and Analyst Commentary
As of March 31, 2017, the company had $804 million in cash and equivalents on the balance sheet thanks in part to a $400 million secondary priced in early March. With an expected annual burn rate of $320 to $340 million to support their ongoing trials and expected KTE-C19 launch at the end of 2017, Kite should have enough cash to get it into two thousand nineteen if there is a delay on FDA approval. Kite’s market cap is just over $Four.1 billion and the stock sells for just over $73.00 a share presently
Analysts on the street are a mixed bag. Most latest recommendations have been buy ratings but several analysts have Hold or Sell ratings on this name. The current median analyst price target is just north of $85.00 a share on KITE. The current consensus projects for the company to lose $8.Nineteen a share on revenues of $41 million in two thousand seventeen while losing $6.45 in two thousand eighteen on revenues of $192 million.
Shares of KITE are off to an excellent begin overall in 2017. After closing two thousand sixteen at just under $45.00 a share, the stock soared after the KTE-C19 ZUMA-1 readout on February 28th. The company took advantage of this optimism to price the aforementioned secondary at $75 a share. Buying continued after the secondary with the stock closing at
$85.92 a share on March 13th. Shares cratered over $Ten (
13%) on May 8th after the release of the 10-Q and the revelation of the April patient death from cerebral edema.
This death obviously increases the chance of a delay (in the form of another trial or request for more information) or rejection of KTE-019 from the FDA. Reminisce, Juno had to halt its Phase two trial for its CAR-T candidate JCAR015 because of numerous patient deaths due to cerebral edema. The real risk to Kite would come in the form of another patient death from cerebral edema. The question becomes: How likely is that to occur?
Based on the information provided by Kite concerning the patient who died in April, the likelihood seems relatively puny. Very first, this patient was the very first grade five edema event out of almost three hundred patients treated with KTE-C19 inbetween the ZUMA trials and the studies of the National Cancer Institute. This patient had one of the highest level of certain cytokines recorded of all ZUMA-1 patients. In other words, the patient’s baseline underlying inflammatory conditions were enormously high, making the chances of a grade five edema much greater.
Also, it would seem relatively aggressive for the FDA to not approve a treatment that has demonstrated accomplish response in more than a third of patients who were non-responsive to the current standard of care and on death’s doorstep. Management seems to agree with this assessment, recently using the latest dip in share price to add to positions in KITE. Specifically, two officers and one director purchased Eighteen,845 shares of stock on May 9th and 10th, likely betting on a quick approval for KTE-C19. A latest projection had KTE-C19 doing just over $900 million in revenues in FY2021.
Kite has many things to recommend it within a well-diversified biotech portfolio. It has numerous “shots on objective,” upcoming milestones, a potential approval of a lucrative drug and is well-funded at the moment after its latest secondary.
That being said, the stock has a big run so far in two thousand seventeen in anticipation of approval and biotech overall has been feeble of late. This is a name I would very likely accumulate leisurely and perhaps a bit more aggressively if it fell into the mid-$60s. Selling out of the money bull put spreads might also be a good strategy to build up a lower entry point and/or pick up premium income.
“Elections are won by fellows and women chiefly because most people vote against somebody rather than for somebody.” ― Franklin P. Adams
Author’s note: To get these types of articles and Instablogs on attractive biotech and pharma stocks as soon as they are published, just click on my profile, hit the big, orange “Go after” button, and choose the real-time alerts option.
Reminder: We have enabled Free two-week trials into The Biotech Forum through midnight EST tonight as part of our Memorial Day weekend promotion .
Thank You and Glad Hunting
Founder, Biotech Forum
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in KITE over the next seventy two hours.
I wrote this article myself, and it voices my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.