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 cancer immunotherapy products, rocketed higher by as much as 18% in Thursday's trading session after announcing an acquisition.

So what: According to its pre-market open press release, Kite Pharma announced that it has acquired privately held T-Cell Factory B.V. in Europe for roughly $21 million, of which $4 million can be paid for in Kite Pharma's common stock. In addition to this upfront buyout payment, Kite may be obligated to make certain development and milestone payments related to the TCR-based gene therapy products its acquiring from T-Cell Factory (which will be renamed Kite Pharma EU).

The move makes sense as the press release notes that earlier this month Kite Pharma expanded its Cooperative Research and Development Agreement with the National Cancer Institute to develop novel TCR gene-based therapies. TCR's are intriguing to researchers as they allow drugs to be targeted at tumor antigens found inside a tumor cell, as opposed to just on the outside of tumor cells.  

Source: Kite Pharma.

Now what: Ultimately, what investors have to digest here is whether a move higher of as much as 18% (or $450 million in market value) is merited for an acquisition totaling just $21 million. Personally, I'm not so sure.

On one hand Kite does have nine novel immunotherapies being studied -- one of which (KTE-C19) is being examined as a treatment for four separate indications. As with any clinical pipeline, the more therapies you can test, the better chance you have of succeeding and hitting one or more out of the ballpark. On those grounds, and its $195 million in cash which makes Kite well-capitalized, it may deserve a bump on this news.

On the flipside, we're only talking about one pipeline product beyond phase 1 studies at the moment. The bulk of Kite Pharma's research is preclinical or ongoing phase 1 data. In other words, the failure rate for these drugs is still relatively high, and we're not even to the point where efficacy is really coming into play. Placing a $3 billion-plus valuation on Kite may not be prudent.

As for me, I tend to fall into the latter, more skeptical camp. I can appreciate the company's very inexpensive method of securing more TCR targets, but I'd suggest we're seeing more emotions than rational thinking playing a role in today's move higher. I'd personally rather wait this out on the sidelines until we have more concrete midstage and late-stage data to comb through.