The cancer-killing immune cells known as chimeric antigen receptor T-cells (CARTs) have generated excitement in oncology circles for their potential to be highly personalized to individual patients, and their ability in early clinical trials to make previously untreatable tumors melt away. But safety concerns have dogged two of the leading pure-play CART companies—Kite Pharma and Juno Therapeutics—on Wall Street this year, with both seeing their shares drop more than 20% so far.
The safety of Kite’s experimental CART treatments will be top-of-mind for investors as the Los Angeles-based company prepares to announce its quarterly results on February 29 after the market closes. CEO and founder Arie Belldegrun welcomes the questions, and says he doesn’t believe worries about side effects will derail CART development. “There are those who are saying it will not move on, but we know we are going in the right direction,” Belldegrun said during a recent sit-down interview in New York City. “Is it perfect? No. But this is a revolution.”
CART therapy involves removing immune-boosting T-cells from the blood of patients and re-engineering them—in essence infusing in them the ability to hunt down cancer cells and eradicate them. Early results from Kite, Juno and
But CARTs have been known to over-stimulate the immune system, sometimes causing a toxic reaction in patients who are already in a fragile state by the time they enter the clinical trials. Last August, Kite’s shares dropped 16% in a day after the company disclosed that one patient in its clinical trial died. It was an odd move by Kite—normally no details about trials are released before they’re finished—leading Forbes’ Matthew Herper to suggest that the company “needs to shut its big mouth.”
Belldegrun says he doesn’t regret talking about that patient. “We have been always very transparent with everything we’ve done,” says the CEO, an M.D. who also chairs the department of urologic oncology at the University of California in Los Angeles. The patient who died, he says, had cancerous tumors surrounding the heart and lungs and had failed standard treatments like chemotherapy. Part of the reason he felt he needed to disclose the death to investors is that Kite had already discussed it with the FDA, Belldegrun says. At the time, the FDA had not placed restrictions on recruitment that would have prompted the company to exclude that patient from the trials, he adds. (The agency allowed the trial to proceed after the death occurred.)
Kite is learning valuable lessons about safety that will benefit both late-stage clinical trials and the ultimate commercialization of the engineered cells, Belldegrun contends. “This was an extremely sick patient who without therapy wouldn’t have survived a month. It was a last resort. The patient understood that,” he says. But in retrospect, he says, that patient might have been excluded. “We are learning as we go about what the treatment can do, how much we can push, and more importantly how best to select the best candidates for our therapy.”
The next key milestone for Kite will come mid-year, when the company expects to report interim data from a pivotal trial of KTE-C19 in lymphoma patients. If the data is strong enough, the company will file for approval based on it, Belldegrun says. On February 24, Kite boosted its commercial leadership team in preparation for the filing.
Kite’s data will invariably be compared to results from its rivals Juno and Novartis, and investors will be looking for signals that all of these CART treatments are durable—meaning that when patients go into remission, they stay there for a significant amount of time.
In January, Kite reported data aimed at addressing durability worries. It provided color on 41 lymphoma patients who received the CART treatment in a trial managed by the National Cancer Institute, which is collaborating with Kite on CART research and development. Of those patients, 22 were complete responders, meaning their cancer disappeared. All but one of those patients remain in remission, the company said, and some have been cancer-free for more than three years.
Eric Schmidt, an analyst who covers Kite for Cowen and Company, wrote about the data in a report, stressing his belief that “investor concern over the durability of Kite's regimen is misplaced.” Schmidt has an “outperform” rating on Kite’s stock, though he has not set a price target for it. As of February 25, Kite’s shares were trading around $46—way off their one-year high of nearly $90.
No doubt Wall Street sees immunotherapy as the next frontier in cancer research and Kite as one of its leading contenders, but the field is plagued by more than just concerns about safety and durability. There are key questions still to be answered about how such a personalized therapy can be manufactured and distributed in a cost-effective way.
Kite spent years perfecting its own manufacturing process, cutting the time required to extract T-cells from patients and transform them into the treatment from several weeks to about eight days, Belldegrun says. “We believe this is the shortest, simplest manufacturing process that any company has in this space,” he says. Kite is now putting the finishing touches on a brand new, 45,000 square-foot factory it has built near LAX, which will be able to manufacture up to 5,000 personalized CART therapies to start, but can be expanded in the future, he says. The company expects the facility to be inspected by the FDA in the second half of this year.
Kite is already planning for the next stage of CART manufacturing. In December, Kite signed a license agreement with GE Healthcare centered around building a process that Belldegrun calls “a box, where you have a place for cells to come in and a place for the product to come out.” The idea, he says, is to make it possible for every cancer hospital to have its own machine on site that can instantly transform patients’ T-cells into CARTs.
Such a technology will likely take years to develop, Belldegrun concedes, and certainly the idea will generate a whole new set of cost concerns. But Belldegrun says there are more immediate challenges to overcome before the field of oncology can ponder the benefits and expenses of instant CARTs. “First show that [CARTs] are revolutionary in treating patients,” he says, “and then everything else will come.”
