Kite Pharma Inc (KITE) Outlook Remains Positive: Top Analyst


Kite Pharma Inc (NASDAQ:KITE) shares tumbled nearly 13% to $70.99 in Monday’s trading session, after the drug maker announced a grade 5 case of Cytokine Release Syndrome resulting in death from cerebral edema in its ZUMA-1 expansion study.

Cowen’s top analyst Eric Schmidt views the case as essentially a non-event, and his opinion of Axi-Cel’s commercial potential is unchanged. “Our impression is that this patient had progressed rapidly in between the time at which T cells were collected and Axi-Cel was administered, and that death was imminent regardless of Axi-Cel’s administration. Unfortunately, Axi-Cel was not able to rescue this patient. Among ~200 patients treated by Kite (and another 100+ treated at the NCI), Axi-Cel’s treatment related mortality is ~2%. With a best ORR of 82% (54% CR) and a 6 month ORR of 41% (36% CR) Axi-Cel’s risk:benefit in r/r aggressive NHL remains highly compelling and our views of Axi-Cel’s approvability and market adoption are unchanged,” the analyst noted.

Bottom line: “Kite is a top pick and we would take advantage of today’s weakness.”

As such, Schmidt reiterates an Outperform rating on Kite Pharma shares, without providing a price target.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Eric Schmidt has a yearly average return of 28.5% and a 60% success rate. Schmidt has a 41.4% average return when recommending KITE, and is ranked #48 out of 4568 analysts.

Out of the 18 analysts polled by TipRanks (in the past 12 months), 10 rate Kite Pharma stock a Buy, while 8 rate the stock a Hold. With a return potential of 19%, the stock’s consensus target price stands at $84.62.