There may never have been a right way for Kite Pharma to announce that a patient in one of its CAR-T studies died from cerebral edema — but waiting more than a week and then bringing it up on the quarterly call with analysts definitely wasn’t the way to go. That route seems to have only brightened the glaring spotlight that immediately swiveled over to company execs as they tried to explain, and downplay, the death.
Today, in a note to investors, Wedbush analyst David Nierengarten highlighted the mine field that Kite — which saw its shares plunge 13% yesterday — is trying to navigate on this topic.
While Kite CMO David Chang repeatedly emphasized in the call just how sick this patient was before he died, Nierengarten sees some disturbing similarities with Juno’s old lead drug, JCAR015, which imploded in Phase III after it killed 5 people in two different groups — before and after a clinical hold by the FDA.
In his note to investors this morning, Nierengarten said:
We also see the death as additional evidence against the use of CD28 co-stimulatory domains in CAR-T designs — recall, JUNO scrapped its CD28-containing CAR-T JCAR015 program that caused multiple fatalities due to cerebral edema in the ROCKET study of adult ALL patients. We see high risk for safety problems in axi-cel’s ongoing studies in adult and pediatric ALL patients, as well as for pipeline CAR-Ts KITE-585 (BCMA) and KITE-796 (CLL-1/CLEC12A) that both utilize a CD28 co-stimulatory domain.
While Kite execs, led by CEO Arie Belldegrun, want to focus on near-term opportunities for a lead CAR-T that’s neck-and-neck with Novartis in seeking a pioneering FDA OK, Nierengarten sees increased risk — even with an expected approval. And rivals may well complicate the picture even more at the upcoming ASCO meeting.
“We see adoption as being limited by physician awareness and comfort regarding risk/benefit profile,” notes Nierengarten. “We see little pushback from payers, given the limited initial patient population and one-time nature of the treatment, and assume the price received by KITE from each procedure to be $325k. We await data from Juno’s (JUNO, NEUTRAL) JCAR017 at ASCO, as well as NVS’s CAR-T CTL019 Juliet study at ICML in June to gain further insight into market dynamics going forward.”
Juno never did fully explain just what went wrong with JCAR015. It’s first explanation, trying to pin the blame on fludarabine, was clearly off base. Long time observers never thought that was credible. And Juno wound up shelving the whole thing and going the next-wave approach with JCAR017.
It didn’t help that two top Kite execs, including Chang, cashed in some stock options between the time they learned of the death and the time it was announced. Those sales may have been programmed in well ahead of time, but the optics are always bad.
Kite now has little room for error. The risk of another lethal cerebral edema case popping up is creating doubts just when Kite needs to exude confidence and certainty.
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