BTIG Gets Bullish on Kite Pharma Inc (KITE) and Axi-Cel’s Pathway to Approval in DLBCL

support@smarteranalyst.com (Ben Mahaney)
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BTIG analyst Dane Leone sees new reason to step away from the sidelines on Kite Pharma Inc (NASDAQ:KITE), upgrading his rating from a Neutral to a Buy while raising the price target to $100, which represents an upside close to 22% compared to where the shares last closed.

Leone breaks down his bullish case into three parts, asserting, "1) Axi-Cel will garner ~60% of share within the US DLBCL market as a result of first-to-market status and lack of differentiation from competitors, 2) Novartis (NVS, Not Rated) will help to develop the payor system and provide assurance to treatment centers that are investing in cell-therapy capabilities, and 3) KITE is now the only unaffiliated CAR T company, which we would not expect to last."

"Axi-Cel (KTE-C19) currently has the cleanest pathway to approval for DLBCL […]" continues the analyst, who believes the biotech firm is better positioned in the sphere of large B-cell lymphoma (DLBCL) than its competitors Novartis and Juno, who did not bring any meaningful differentiation when treating aggressive relapsed/refractory NHL patients with CAR T. True, the "[…]data is difficult to compare," but the analyst wagers, "we can give a clear win for the manufacturing of Axi-Cel versus peers, which we view as a critical variable for commercial adoption."

Ultimately, Leone concludes more encouraged on the commercial trajectory for Axi-Cel, noting, "We have become more comfortable […] Reimbursement remains a question mark, but having ~50% coverage on Day 1 for launch will be a good start. Investor focus may also be more tuned to patient treatment volumes initially as long as there does not seem to be structural pushback on pricing." Looking ahead, the analyst anticipates a launch that has the ability to meet his expectations looking for $164 million by 2018.

According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, five-star analyst Dane Leone is ranked #160 out of #4569 analysts. Leone has a 71% success rate and generates an annual yield of 16.4%. When recommending KITE, the analyst earns a 0.0% average profit on the stock.

TipRanks analytics show KITE as a Buy. Based on 14 analysts offering recommendations for this share, 9 issue a Buy, 4 maintain a Hold and 1 recommends a Sell. The 12-month average price target stands at $84.56, making a nearly 3% upside from where the stock is currently trading.

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