FBR Weighs In on Two Falling Biotechs: Juno Therapeutics Inc (JUNO), Kite Pharma Inc (KITE)

FBR analyst Edward White is weighing in on biotech firms Juno Therapeutics Inc (NASDAQ:JUNO) and Kite Pharma Inc (NASDAQ:KITE), as both stocks tumbled sharply today following FDA clinical hold for JCAR015 phase II ROCKET trial. Let’s take a closer look:

Juno Therapeutics Inc

Shares of Juno Therapeutics are falling 25% in pre-market Friday, after the company announced that its Phase II ROCKET trial of JCAR015 in adult patients with r/r B-cell acute lymphoblastic leukemia (ALL) was placed on clinical hold by the FDA on July 6, following two patient deaths in the trial last week.

In reaction, White reduced the price target for the stock to $61 (from $73), while reiterating an Outperform rating.

White noted, “The company is currently in the process of compiling the documents that were requested by the FDA, which it plans to submit this week. As a reminder, in the Phase I study conducted with JCAR015 that included approximately 10 patients pre-treated with Flu/Cy and 40 patients with Cy alone, a complete remission was reported in 82% of the patients and a complete molecular remission (CmR) was achieved in 66% of the patients. We expect to hear additional details regarding the ongoing trial and updated timelines for JCAR015 during the company’s 2Q16 earnings call in August.”

“We are lowering our price target by $12 to $61 from $73 due to the delay in timelines for JCAR015,” the analyst added.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Edward White has a yearly average return of 2% and a 51% success rate. White has a -3.3% average return when recommending JUNO, and is ranked #1280 out of 4018 analysts.

Out of the 7 analysts polled by TipRanks (in the past 3 months), 5 rate Juno stock a Buy, while 2 rate the stock a Hold. With a return potential of 41%, the stock’s consensus target price stands at $57.57.

Kite Pharma Inc

In reaction to Juno’s clinical hold, shares of Kite Pharma, which also focuses on CAR-T therapies, fell nearly 9% in pre-market trading. However, the company reported yesterday that it has completed enrollment of 72 patients with diffuse large B-cell lymphoma (DLBCL) in its Phase II portion of the ZUMA-1 trial.

White weighed in on this update, noting, “We believe this represents an important milestone for Kite and brings the company one step closer to the potential launch of KTE-C19. We believe Kite remains on track to announce top-line interim data from the first 50 patients in the pivotal Phase II ZUMA-1 trial in 2H16. In addition, we think the company could potentially file a BLA for KTE-C19 by year-end 2016 followed by a 2017 launch, if approved.”

The analyst reiterated an Outperform rating on KITE, with a price target of $75, which represents a potential upside of 44% from last closing price.

Out of the 9 analysts polled by TipRanks, 12 rate KITE stock a Buy, while 2 rate the stock a Hold. With a return potential of 47%, the stock’s consensus target price stands at $72.86.


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