FBR Weighs in on Volatile Stocks: Kite Pharma Inc (KITE) and Agile Therapeutics Inc (AGRX)


The biotech-verse was buzzing this week after Kite Pharma Inc (NASDAQ:KITE) submitted an IND application for its pipeline cancer drug that sent shares rising. Meanwhile, Agile Therapeutics Inc (NASDAQ:AGRX) shares were toppling after the firm released Phase III trial results. FBR analyst Edward White is out with bullish forecasts on both of these volatile biotech players.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Edward White is ranked #4,267 out of 4,369 analysts. White has a 24% success rate and an annual average loss of 12.1%. When recommending KITE, White loses 5.0% in average profits on the stock. When suggesting AGRX, White forfeits 62.8%.

Let’s take a closer look:

Kite Pharma IND Application Submission for T-cell Receptor Drug Boosts Shares

Kite Pharma’s shares escalated 7% on Wednesday after the firm announced it had submitted an IND application for KITE-718, a T-cell receptor (TCR) targeting MAGE A3 and MAGE A6 antigens. In White’s view, this step towards initiating a Phase I Trial for the drug is a positive one.

As such, the analyst reiterates an Outperform rating on KITE with a price target of $78, which represents an upside of 57% from where the shares last closed.

White is optimistic regarding potential benefits of KITE-718, highlighting that the drug is “designed to recognize MAGE A3 and MAGE A6 fragments bound to a Class II HLA and, therefore, has the potential to kill tumor cells both directly and indirectly through activation of the immune system given that it incorporates a class II TCR.”

KITE-718 is one of several pipeline T-cell receptor drugs from Kita Pharma currently in development. Human leukocyte antigens (HLA) is a marker used to match patients with donors for bone marrow transplants. Potential demand is high, and the analyst underscores, “Class II HLA is found in 50%–70% of Caucasians, and MAGE A3/A6 are often found in common tumors, including bladder, esophageal, head and neck, lung, and ovarian cancers,” adding that the trial will evaluate both the safety as well as KITE-718’s anti-tumor impact on these solid tumors.

White concludes, “We note that KITE-718 has previously established proof of concept in a study conducted by the NCI, where evidence of tumor regression was seen in patients with multiple types of solid tumors and no off-target toxicity was observed. We continue to believe that TCRs could potentially be an important tool in the treatment of solid tumors and think they hold more promise in solid tumors than CAR-T therapies.”

TipRanks analytics exhibit KITE as a Strong Buy. Out of 10 analysts polled by TipRanks in the last 3 months, 9 are bullish on KITE stock, while 1 remains sidelined. With a return potential of nearly 53%, the stock’s consensus target price stands at $75.83. 

Agile Therapeutics Shares Nosedive; Twirla Path for Approval Rocky, But Not Impossible  

Agile Therapeutics announced this week top-line data from its SECURE Phase III trial, including the Pearl Index (PI), Confidence Interval (CI), and safety data. However, after data was notably “somewhat ambiguous,” shares crashed 49% on Wednesday on back of the clinical update. Yet, White still sees silver lining for Twirla, the firm’s once-weekly contraceptive patch, and for this reason, remains positive.

White points out, “We note that the highest PI approved by the FDA to date is 3.19 and the highest upper bound of the 95% CI is 5.03. The SECURE trial achieved a loss to follow-up rate of (11.3%), much lower than the prior Agile Phase III trial at (20.3%), and it was in line with previously run contraceptive trials.”

Despite mixed results, the analyst maintains his bullish stance, asserting, “Although the data wasn’t as clear-cut as we hoped, we believe Twirla can still be approved, and we note that the data is not an apples-to-apples comparison to prior trials of approved products, given that the company excluded cycles with no sexual activity in the data analyses and the mean BMI of the women was higher.”

Looking ahead, White is confident, concluding, “We believe Twirla could potentially be approved by the FDA in 2H17, and we anticipate a launch in early 2018.”

Therefore, the analyst reiterates an Outperform rating on shares of AGRX with a $10 price target, which represents an upside of 300% from where the stock is currently trading.

TipRanks analytics rates ARGX as a Strong Buy. Out of 5 analysts polled by TipRanks in the last 3 months, all 5 are bullish on Agile Therapeutics stock. With a return potential of nearly 231%, the stock’s consensus target price stands at $8.33. 

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