What happened

Shares of Kite Pharma, Inc. (NASDAQ:KITE) soared and swooned last month, but ended up notching a 13.2% gain in January, according to data from S&P Global Market Intelligence. The clinical-stage biotech is focused on reworking immune cells to battle cancer. Last month, the market responded well to signs its lead drug candidate is heading for the finish line in one indication, with several more not far behind.

So what 

Chimeric antigen T-cell therapies (CAR-T) could become game-changing tools in oncologists' arsenals, and Kite Pharma is well on its way to becoming the first company to submit an application for one. In December, the company delighted the medical community with data from a pivotal trial of its lead candidate Axi-Cel (formerly KTE-C19) that showed a 76% objective response rate in patients with a difficult-to-treat form of lymphoma.

Super happy stock owner

Image source: Getty Images.

Kite has already begun submitting available data to the Food and Drug Administration for Axi-Cel's application, which could earn an approval before the end of the year. Early last month, the stock rose in response to a presentation of the company's robust development pipeline which includes a whopping eight studies that could eventually help expand its addressable patient population to several more common types of blood-based malignancies. The company also has a handful of early clinical-stage candidates, and an approval for Axi-Cel could give Kite plenty of resources to develop them. 

Now what

At recent prices, Kite Pharma's market capitalization of about $2.6 billion seems a bit low if you believe Axi-Cel can achieve peak sales estimates that top $2 billion annually. Blood cancer therapies have shown they can rapidly pass this mark, but cell-based therapies present an enormous logistical challenge over pills and injections.

As the market grapples with the outstanding performance of CAR-T therapies in patients running out of treatment options on one hand and a troubled past for cell-based therapies on the other, Kite Pharma investors had better get used to double-digit price movements. If you can live with the volatility, though, this biotech stock could be well worth the headache.