Kite Pharma Up on Amgen Cancer Immunotherapy Tie-Up – Analyst Blog

Amgen Inc. (AMGN) entered into a strategic research collaboration and license agreement with Kite Pharma, Inc. (KITE) for the development and commercialization of the next generation of chimeric antigen receptor (CAR) T cell immunotherapies using Kite Pharma’s engineered autologous cell therapy (eACT) platform and Amgen’s cancer targets. Shares of Kite Pharma jumped 15.1% following the announcement.

Terms of the Agreement

As per the terms of the agreement, Kite Pharma will be responsible for conducting all pre-clinical research and cell manufacturing and processing through Investigational New Drug (IND) filing. Thereafter, each company will be responsible for clinical development and commercialization of their respective CAR therapeutic candidates, which will include all related expenses.

As for the financial terms, Kite Pharma will receive an upfront payment of $60 million as well as R&D funding through the IND filing. In addition to this, Kite Pharma will be entitled to receive up to $525 million per Amgen’s program depending on the achievement of certain regulatory and commercialization milestones and tiered high single- to double-digit royalties on sales and payments for licensing Kite Pharma’s technology.

Amgen is also eligible to receive milestone payments of up to $525 million and tiered single-digit sales royalties per Kite Pharma’s program. Other details were not disclosed.

Our Take

We are positive on the deal. Amgen, which already has a strong presence in the oncology market, is in a position to use Kite Pharma’s proprietary technology in developing and expanding its immuno-oncology portfolio further.

We note that CAR-T cell therapies have been attracting a lot of attention lately with pharmaceutical and biotech majors eyeing an entry into this therapeutic area.

Apart from Kite Pharma, Juno Therapeutics (JUNO) is also working on developing therapies utilizing CAR-T cell technology.

While Kite Pharma is a Zacks Rank #3 (Hold) stock, Amgen currently carries a Zacks Rank #2 (Buy). A better-ranked stock in the health care sector is AMAG Pharmaceuticals, Inc. (AMAG) carrying a Zacks Rank #1 (Strong Buy).

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