Kite Pharma Inc (KITE) Stock Gains on Research Partnership with Cell Design Labs

Kite Pharma Inc (KITE) Stock Gains on Research Partnership with Cell Design Labs

As per the partnership agreement, Kite will make an upfront payment to Cell Design Labs, along with additional compensation based on the achievement of various milestones

By Aliya Kaleem on Jun 2, 2016 at 3:55 pm EST

Kite Pharma Inc. (NASDAQ:KITE) shares are on an upward trajectory today, and gained as much as 7.86% around 2:20 PM EDT, after the company announced a research partnership and license agreement with Cell Design Labs, Inc. KITE stock is up over 7% during the midday trading hours.

The companies are set to develop next-generation, precision-controlled chimeric antigen receptor (CAR) product candidates, which include Cell Design’s molecular on/off switch technology. The use of CARs to redirect T-cells against B-cell malignancies reflects potential as a powerful tool to cure cancers.

The technology further employs small molecule-mediated protein dimerization domains in order to operate and activate the CAR, and to switch it off when the small molecule is not there. With the on/off switches’ integration into the next-generation CAR products, doctors will be able to control and reverse-titrate the CAR T-cells’ activity.

According to the agreement, Cell Design Labs will manufacture the on/off switches for Kite’s CAR T-cell pipeline. Moreover, the pharmaceutical company will obtain special worldwide rights to commercialize CAR T-cell therapies, which contain the switches directed to particular targets to treat acute myeloid leukemia (AML). It also has the option to develop and commercialize products containing the technology, which would direct certain targets for the B-cell malignancies’ treatment.

In addition to this, the company will pay Cell Design Labs an upfront payment, along with additional payments to support the research program for the technologies. However, these compensations will be based on various milestones’ achievement. Moreover, Kite has also bumped up its equity investment in the lab.

President, Board chairman, and CEO Arie Belldegrun will join Cell Design’s Board. On the other hand, Kite chief medical officer and research and development (R&D) EVP David Chang, M.D., Ph.D, will join as a Board officer.

Mr. Belldegrun commented that the company continues to maintain its focus on acquire and utilize critical technologies “that could augment the activity and/or improve the safety of our engineered T-cell therapy candidates. Cell Design Labs has developed an elegant approach to designing CARs.” The executive added that the partnership with Cell Design is an example of the company’s commitment to bring CAR T-cell immunotherapies to the patients.

Recently, sell-side firm Raymond James initiated coverage on KITE stock with an Outperform rating, and set a $61 price objective. KITE shares, which gained 7.76% to trade at $54.82 around 3:40 PM EDT after the collaboration announcement, have lost more than 12% of their value since the start of fiscal year 2016 (FY16).

comments powered by Disqus