JP Morgan 2017: Kite putting its global marketing P’s and Q’s in order

Fresh off an impressive interim readout and just months before what could be industry’s first completed BLA submission for a CAR-T cell therapy, Kite Pharma used this year’s JP Morgan Healthcare Conference to unveil its marketing strategy for axicabtagene ciloleucel, which suddenly has a global feel to it.

Kite appears to be neck and neck in the race to market in the CAR-T space with Novartis, albeit in different indications with the biotech having begun a rolling application for axicabtagene ciloleucel (or Axi-Cel for short) to treat diffuse large B-cell lymphoma (DLBCL) while Novartis is thought to be close to a filing with CTL019 in paediatric acute lymphoblastic leukaemia (ALL).

Marco Davila, a physician-scientist and associate member at the Moffitt Cancer Center, told FirstWord last month in the immediate aftermath of the annual ASH meeting that despite having similar timelines to approval, it is Kite that finds itself in a more advantageous position from a commercial perspective given the comparative prevalence of DLBCL and what he believes is the company’s more optimised retroviral-based manufacturing process. (See KOL Views: CAR-T cell therapies poised to make commercial debuts but one company is best positioned for initial success, according to leading medical oncologist.)

However, being in a position to capitalise on clinical and regulatory success and actually doing so are two very different things as many a biotech can attest, especially when it comes to a complicated and entirely new therapeutic modality like CAR-T cell therapies, meaning that investors have been all ears when it comes to learning more about Kite’s strategy for commercialising Axi-Cel.

Kite has been guiding all along that it would be responsible for marketing Axi-Cel in the US and Europe, and CEO Arie Belldegrun confirmed on January 11 that the company is in putting the finishing touches on a new manufacturing facility in California that will be up and running in February and should have sufficient capacity to produce a commercial supply of the product that will cover both geographies.

This week, Kite took it a step further and almost overnight expanded the reach of its sales and marketing capabilities into key Asian markets via two deals, which expands the company's global access while simultaneously bringing $90 million in the door.

The first of these involved a partnership in which Daiichi Sankyo will be responsible for developing and commercialisation Axi-Cel in Japan. In addition to a $50 million upfront payment, Kite could receive $200 million more in milestones, plus royalties on future sales, and would be eligible for a similar amount for each additional product that Daiichi opts-in on at the IND stage over the next three years.

On January 10, one day after the Daiichi deal was announced, Kite also revealed the establishment of a joint venture with Shanghai Fosun Pharma that will be responsible for clinical and manufacturing activities of Axi-Cel in China. The deal included a $40 million upfront payment to Kite along with up to $35 million in milestones, as well as potential royalties. The JV also has an option to license additional programmes, including a pair of T cell receptor products (KTE-439 and KTE-718) in pre-IND studies for cancer.

Thus in one fell swoop, or two almost simultaneous ones anyway, Kite has brought on board partners with significant local experience that can take the lead in navigating the respective regulatory challenges in Japan and China while also helping to maximise the benefit realised from the head start that Axi-Cel is expected to have in the DLBCL market segment. This could prove all the more important given the global reach and deep pockets of a potential competitor like Novartis, which like Juno Therepautics is expected to challenge for a piece of the DLBCL pie before too long.

Cowen analyst Eric Schmidt liked both the structure and economics of the two deals, and believes it will serve Kite well in the looming battle for supremacy in the CAR-T cell space. “Importantly, Kite has retained significant economics to Axi-Cel and other cell therapies in both the Chinese and Japanese markets, while taking on minimal risk or future obligation (other than tech transfer). We view the structure of the deals as ideal for a mid-cap oncology company seeking to grow its commercial reach beyond the U.S and Europe,” he said.

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