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Michael Yee of RBC Capital Markets reiterated an Outperform rating on Kite Pharma Inc (NASDAQ:KITE) with a price target boosted to $95 from a previous $85.
According to Yee, competition from Novartis AG (ADR)'s (NYSE:NVS) CTL019 CAR-T isn't too concerning as Novartis' prior studies showed a key manufacturing failure rate of 12 percent versus Kite's manufacturing failure rate of just 1 percent.
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As noted by STAT, Kite and Novartis are racing to gain approval for their respective gene therapy that turns a patient's own blood cells into "cancer killers."
Yee also noted Novartis' progress is a few quarters behind Kite's while at the same time Novartis cut back its headcount in 2016, which may give Kite the advantage for the time being in a one-on-one comparison.
M&A
Yee also argued that if Kite gets approval from the U.S. Food and Drug Administration for fast approval to meet the need of the cancer population, then the question of M&A comes into play.
The prospect of FDA approval could make it more attractive to the likes of Gilead Sciences, Inc. (NASDAQ:GILD) after the company acknowledged that M&A is a priority for 2017. The analyst argued that acquiring Kite would give Gilead exposure to an un-traditional cancer product that will generate revenue growth.
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Icahn's (Potential) Move Into Biotech
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.