BTIG Is 'Generally Skeptical' On Kite Pharma Expectations

BTIG has started coverage of Kite Pharma Inc KITE with a Neutral rating, as it is skeptical over current investor expectations for the CD19 CAR T market, given the limited datasets and potential competition from CD19 bi-specific antibodies.

Kite is pursuing Chimeric Antigen Receptor T-cell (CAR T) therapies for a range of oncology indications. The lead programs for KTE-C19 focus on CD19 directed CAR T therapy for hematological cancers that have relapsed or are refractory to prior treatment.

Kite is expected to present its first pivotal dataset for KTE-C19 in the treatment of Chemorefractory Diffuse Large B-cell Lymphoma (DLBCL) during ASH 2016 (December). Kite could be the first to market within the CD19 class, with an approval of KTE-C19 to treat Chemorefractory DLBCL patients expected around mid-2017.

Early results from the ZUMA-1 study will be used to submit a BLA filing with the FDA and will also serve as a basis for comparison against the data from Juno Therapeutics Inc JUNO and Novartis AG (ADR) NVS.

Related Link: Vetr Crowd Slowly Turning Positive On Kite Pharma, Now Rates It A Buy

"Thus, if Kite has demonstrably weaker data compared to its CD19 CAR T peer group, first-mover advantage may be diminished when competition comes to the respective markets," analyst Dane Leone wrote in a note.

"Our 2020E total revenue estimate of ~$738 million for Juno is based upon commercialization of KTE-C19 and is -$185 million below the Street," Leone continued.

Leone's estimate could be too conservative if Kite delivers equivalent or better results for KTE-C19 across B-cell malignancies. However, the analyst already models Kite with leading market share of about 43 percent in the CD19 class, followed by Novartis with about 31 percent and Juno with 26 percent.

Shares of Kite Pharma closed Tuesday's regular trading at $58.71 and were seen down 0.81 percent in Wednesday's pre-market session.

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