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Feb 14 2018

Novartis Faces Key FDA Panel On Cancer Drug; Why Kite Could Be The Winner, Stock



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Novartis Faces Key FDA Panel On Cancer Drug; Why Kite Could Be The Winner

  • 7/06/2017

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Kite Pharma (KITE) should benefit from a Food and Drug Administration panel hearing on an experimental cancer treatment from rival Novartis (NVS) later this month, an analyst said Thursday, though shares of both dropped.

X Autoplay: On | Off On the stock market today, shares of drugmakers working on what are called CAR-T therapies were broadly down. Bluebird Bio (BLUE) stock fell hardest, down 4.1% to close at 100.80. Kite stock lost 2.8% to 103.56, followed by shares of Juno Therapeutics (JUNO), down 5.2% to 29.61 and Novartis, slipping 1.4% to 81.97.

But Canaccord analyst John Newman remained bullish on Kite stock. Novartis, followed by Kite, are closest to having their CAR-T therapies approved in two blood cancers. On July 12, an FDA panel is set to review key questions surrounding Novartis’ treatment.

CAR-T therapies involve removing immune cells from a patient’s blood and then programming them to seek out and destroy cancer cells. But some of these therapies have proven toxic to the nervous system. Meanwhile, the lag in turnaround time remains a sector-wide challenge, Newman said.

Discussion regarding manufacturing for Novartis’ drug, CTL019, should help differentiate Kite, Newman said. CAR-T therapies cannot be mass produced. Kite has an industry-leading turnaround time at 16-18 days vs. 22-29 days for Novartis and 24 days for Juno, according to various analyst reports.

“Any discussion on manufacturing for Novartis CTL019 may highlight difficulties and benefit Kite, which has no had issues with failures and long turnaround times,” he said, noting that the FDA could opt to discuss manufacturing directly with Novartis, potentially resulting in an approval delay.

The FDA also is likely to focus on safety. Novartis’ CTL019 hasn’t shown the magnitude of deaths seen in Juno’s discontinued JCAR015 in adult acute lymphocytic leukemia, a cancer affecting the bone marrow. Five of Juno’s adult patients died as a result of brain hemorrhages.

“However, we believe FDA will utilize the panel to focus on physicians’ thoughts regarding severe neurotoxicity sometimes seen with CAR-T, especially on long-term effects,” Newman wrote in a note to clients.

IBD’S TAKE: CAR-T therapies could help spike biotech stocks, analysts have said. Cancer and rare disease specialists have gained handsomely this year as early innovators like Amgen, Biogen and Gilead Sciences have struggled. Head to the Industry Snapshot for a closer look at why.

In one trial, 48 out of 51 patients on Novartis’ drug experienced what’s called cytokine release syndrome, a common side effect of CAR-T therapy that results in a high fever. Of those cases, 66% were mild to moderate, 24% were moderate to severe and 4% were serious, resulting in death.

More than a quarter, 27%, developed a brain disease altering structure or function, but all had a complete neurological recovery with no long-term issues, Newman said. Three adult patients died in the first 30 days following treatment with CTL019, all with serious cases of cytokine release syndrome with one resulting in a brain hemorrhage.

“We believe that FDA and the panel will conclude that most cases of cytokine release syndrome occurring for CAR-T therapies can be managed, but that intracranial hemorrhage will be discussed,” Newman wrote.

Novartis currently is expected to have an approval date in late September to treat the blood cancer known as acute lymphocytic leukemia in children and young adults. Kite’s drug, KTE-C19, is expected to be approved to treat a form of aggressive non-Hodgkin lymphoma, another blood cancer, in late November.

Meanwhile, Bluebird Bio and partner Celgene (CELG) are working on a drug to treat another blood cancer called multiple myeloma. In a trial presented in June, Bluebird and Celgene’s drug known as bb2121 achieved an overall response rate of 89% in multiple myeloma patients.

Analysts have estimated that the duo is about a year ahead in using an immuno-oncology target called BCMA. Bb2121 works to block immune system interactions involving the BCMA antigen. But it’s likely that the drug won’t get the FDA OK until 2018 or later, analysts have said.

Canaccord’s Newman kept his buy rating and 115 price target on Kite stock.

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