Kite Pharma: How High Will It Fly?

Jun. 12, 2017 2:21 PM ETKite Pharma (KITE)49 Comments


  • Engineered T cells therapy is showing highly promising early trials results as the next potential cancer breakthrough.
  • After a twofold share price increase, the question remains whether such a growth trajectory will be sustained.
  • The market value of a firm correlates with its intrinsic value, at least in the long haul, and thus we expect further upside in Kite Pharma.

Based in Santa Monica, California, Kite Pharma (NASDAQ:KITE) is dedicated to the delivery of cancer therapeutics through the innovative engineered T cell therapy ("ETCs") platform. With the dramatic results seen thus far in early clinical trials (and especially the cancer remission witnessed in refractory cases), the firm has reasons to pride itself as the leader in ETCs. This biotechnology can potentially deliver the biggest cancer treatment breakthrough since the introduction of chemotherapy more than half a century ago.

Source: Google Finance

To increase the chances of ETCs success, Kite partnered with Alpine Immunes Sciences in 2015 for the access to its Transmembrane Immunomodulatory Protein ("TIP") that, in and of itself, enhances the functioning of ETCs. As the winds of fortunes - illustrative of the corporate developments and promising early trial results - have enabled the stock to soar by more than 200% in the past four years, the elephant in the room is whether Kite will continue its flight trajectory.

"Oracle of Omaha" Warren Buffett stated that, while share price tends to fluctuate in the short term, it will almost always match the intrinsic value of a company in the long term. So that leaves us with the task of assessing Kite's true worth. For most development-stage biopharma firms, the alluded intrinsic values resides in the efficacy and safety of its therapeutics (as indicated by the drugs' mechanism of action and trial data results). That being said, we'll walk readers through the complexity of Kite's engineered T cells therapies ("CAR-TCR").

Engineered T Cells (CAR-TCR)

Similar to "the general" of an army, the thymus ("T") cells are key intelligence units of the body's defense system (coined the immune system), that direct the combating of diseases like cancer. In contrast to other diseases, cancers are quite adept at evading attacks by the immune system via evolving their cellular targets. By

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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