Biotech stocks are no strangers to big moves, but Kite Pharma's (NASDAQ: KITE) 217% return since its IPO in Juneis still pretty eye-popping. The company, which is developing innovative immunotherapy treatments for cancer, went public at $17 and has rallied to more than $53 thanks to positive early stage trial results for its non-Hodgkin lymphoma drug KTE-C19.

Changing the game
Immunotherapies like those being developed by Kite Pharma offer plenty of promise for treating cancer. Reengineering patients' white blood cells to attack and kill cancer cells could offer a new treatment method that is more precise and less prone to adverse events, which can occur when good cells are killed accidentally by chemotherapy or other existing treatments.

But while Kite Pharma's approach is endlessly intriguing, this is an early stage biotech without any products on the market or revenue. The Kite drug that is closest to commercialization is KTE-C19, a treatment for B-cell cancers.

In a 28-person phase 1/2 trial, 83% of patients with relapsed or refractory B-cell malignancies responded to KTE-C19. Importantly, 42% of trial participants saw a complete response when treated with KTE-C19. Responses were strong in diffuse large B-cell lymphoma, chronic lymphocytic leukemia, and for slow-growing non-Hodgkin lymphoma patients. Based on those results, Kite will next year move KTE-C19 into phase 2 trials for those indications.

Source: Kite Pharma.

Accelerating timeline
The FDA has already granted Kite Pharma orphan drug status for KTE-C19, and a key European Union advisory board recommended that regulators there grant the drug that status. That eliminates some of the development and approval bureaucracy and provides a longer period of patent protection, but Kite would really benefit if it can convince the FDA to grant it breakthrough status, too. If that happens, the company could conceivably use phase 2 data to file a rolling FDA application for approval, which could cut its development timeline.

If KTE-C19 delivers similarly strong results in midstage trials, the company would likely target its approval as a third-line therapy first and then work backward to win label expansion as a second-line and then first-line treatment.

If that strategy pans out (yes, there are a lot of ifs to consider with this company), then KTE-C19 would compete against other lymphoma treatments, including Pharmacyclics' (NASDAQ: PCYC) Imbruvica and Gilead Sciences' Zydelig. To give investors some insight into the potential market opportunity for KTE-C19, net sales of Imbruvica, which won FDA approval for mantle cell lymphoma in November 2013 and CLL this past February, rose from $109 million in the second quarter to $142 million in the third quarter.

Risk remains
Although Kite's early stage trial data is compelling, more research needs to be done. Historically, 93% of phase 1 cancer drugs fail to reach the market market, which suggests plenty can go wrong from here. Since Kite Pharma remains a clinical-stage company, owning its shares is risky -- especially given that the company already boasts a market cap of nearly $2 billion. For that reason, I'm content to watch this one from the sidelines until shares either retreat or we get more midstage trial results.