Why Kite Pharma Inc. Shares Took Off

Kite Pharma stock is among today's top gainers after the company reported positive data for its lead drug, KTE-C19, which is designed to treat non-Hodgkin's lymphoma. Can its shares head even higher?

Aug 26, 2014 at 2:24PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Kite Pharma (NASDAQ:KITE), a clinical-stage biopharmaceutical company focused on developing immunotherapy products to treat cancer, advanced as much as 26% today after the company announced positive results from an ongoing phase 1/2a clinical study involving KTE-C19 as a treatment for aggressive non-Hodgkin's lymphoma.

So what: According to the company's press release, after the closing bell last night, the study, which was conducted by the National Cancer Institute but funded by Kite, demonstrated that out of 13 evaluable patients with advanced B-cell malignancies, eight resulted in complete remission, four experienced a partial remission, and one exhibited stable disease, for an overall objective response rate of 92%!

Specifically, the data showed that of seven patients with advanced diffuse large B-cell lymphoma (DLBCL), four of them achieved complete remission, three of which are still ongoing and range from as low as nine months to as high as 22 months. Of the additional three patients, two exhibited a partial response and one stable disease. The findings for this ongoing study were published in the August issue of the American Society of Clinical Oncology's Journal of Clinical Oncology.

Given the early success of these results, Arie Belldegrun, CEO of Kite Pharma, noted that the company's plan is to file an investigational new drug application with the Food and Drug Administration in the fourth quarter to run phase 1/2 studies on DLBCL patients that have failed on two or more types of existing therapies.

Now what: It's hard not to be enamored with today's 92% overall response rate, or the prospect of retraining the body's own immune system to target B-cell malignancies and lymphomas. However, as a word of caution, I would also remind investors that very few immunotherapy products have successfully made it to market up to this point in time, and while the concept looks great on paper, we don't have a lot of real-world or sales efficacy to fall back on from an investable standpoint.

To add, Kite Pharma's entire pipeline, with the exception of its anti-CD19 chimeric antigen receptor KTE-C19 and EGFRvIII, a possible treatment for glioblastoma, is preclinical in nature. Even the company's existing clinical studies are focused on very small patient pools and still considered early stage by design. With the company valued at $1 billion following today's pop, it's probably wise for investors to take a step back and wait for more substantial results before considering Kite Pharma as a long-term investment.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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