Replies to post #185018 on Biotech Values

[DewDiligence]

AMGN, KITE ink 2-way CAR-T drug-development collaboration:

http://finance.yahoo.com/news/amgen-kite-pharma-announce-strategic-140000307.html

Amgen and Kite Pharma announced today that the two companies have entered into a strategic research collaboration and license agreement to develop and commercialize the next generation of novel Chimeric Antigen Receptor (CAR) T cell immunotherapies based on Kite's engineered autologous cell therapy (eACT) platform and Amgen's extensive array of cancer targets.

…Amgen will contribute cancer targets, and Kite will leverage its proprietary CAR platform, research and development and manufacturing capabilities, and expertise. Kite will be responsible for conducting all preclinical research and cell manufacturing and processing through Investigational New Drug filing. Each company will then be responsible for clinical development and commercialization of their respective CAR therapeutic candidates, including all related expenses.

Kite will receive from Amgen an upfront payment of $60 million, as well as funding for R&D costs through IND filing. Kite will be eligible to receive up to $525 million in milestone payments per Amgen program based on the successful completion of regulatory and commercialization milestones, plus tiered high single- to double-digit royalties for sales and the license of Kite's intellectual property for CAR T cell products. Amgen is eligible to receive up to $525 million in milestone payments per Kite program, plus tiered single-digit sales royalties. Further terms of the agreement are not being disclosed.

[DewDiligence]

KITE is talking publicly about product pricing—even though it just submitted its first IND and has yet to complete a clinical trial:

http://in.reuters.com/article/2015/01/15/us-healthcare-kite-pharma-idINKBN0KO2EF20150115

Kite will soon begin a broad clinical trial on the immunotherapy cancer treatment in which cells are drawn from a person, sent to the lab to be treated, and then reintroduced into the individual's bloodstream [i.e. CAR-T]. The trial is due to be completed by the second half of 2016.

Kite Chief Financial Officer Cynthia Butitta said that its financial models set a base case price at $150,000 per treatment, but that the actual price will depend more on survival rates and the drug's efficacy. Analysts have estimated the costs at up to $300,000 per treatment.

The company's new marketing head starts next month and will begin conversations with insurers about the trials and the treatment's possible benefits. "We're starting that effort this year," Butitta said.

I can’t recall another instance of a biotech company talking publicly about pricing at this stage of development.