What happened

Shares of Kite Pharma (NASDAQ:KITE), a clinical-stage biotech developing cell-based cancer therapies, rose by more than 13% in premarket trading today. The biotech's surge higher was sparked by a positive interim data readout for the chimeric antigen receptor T cell (or CAR-T) therapy, KTE-C19, in a midstage trial for patients with chemorefractory diffuse large B-cell lymphoma, or DLBCL. DLBCL is a particularly aggressive form of lymphoma that's exceedingly hard to treat once patients stop responding to the standard cocktail of chemotherapies. 

Blood Cancer Cell

Image source: Getty Images.

So what

Based on this positive clinical update, Kite appears to be in the catbird seat in terms of beating its CAR-T rivals Novartis (NYSE:NVS) and Juno Therapeutics (NASDAQ:JUNO) to market. Novartis, despite restructuring its CAR-T program recently, is reportedly on track to file a regulatory application with the FDA for its CAR-T therapy, CTL019, as a treatment for pediatric acute lymphoblastic leukemia sometime next year. Juno, for its part, is hoping to bring its lead CAR-T product candidate, JCAR015, to market as a treatment for acute lymphoblastic leukemia in the first half of 2018

Now what

Kite's management is optimistic that the mature data set from this ongoing trial, which should be available in the first half of 2017, will be enough to warrant approval next year. After all, this particular patient population has few available treatment options, and a third of patients treated with KTE-C19 at the three-month mark exhibited complete responses, per today's clinical update.

The big catch, though, is that two patients reportedly died as a result of KTE-C19-related adverse events in this trial, which has been a recurring theme with these novel cell-based therapies. So, while this clinical update is certainly encouraging and the FDA may indeed take a favorable view of KTE-C19 in light of the dire need for new treatments for this indication, the serious toxicity issues may ultimately limit the commercial potential of CAR-T therapies -- that is, unless the next iteration of CAR-Ts that incorporate molecular switches can solve this lingering safety overhang. Until then, however, I'd personally stick to the sidelines with this exciting, yet still-evolving, technology.

George Budwell has no position in any stocks mentioned. The Motley Fool recommends Juno Therapeutics. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.